MAYAJAAL ENTERTAINMENT LIMITED (Originally Incorporated Under the Companies Act, 1956 As West Bank Garden Farm Clubs Private Limited on 9Th July, 1997

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DRAFT RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated 14th January, 2009 (The Draft Red Herring Prospectus will be updated upon ROC filing) 100% Book Built Issue MAYAJAAL ENTERTAINMENT LIMITED (Originally incorporated under the Companies Act, 1956 as West Bank Garden Farm Clubs Private Limited on 9th July, 1997. The name of our Company was changed to Hotel Whales Private Limited w.e.f. 28th December, 1999. The name of our Company was further changed to Mayajaal Entertainment Private Limited w.e.f. 11th January, 2001. Our Company was subsequently converted to a public limited company and the name was changed to Mayajaal Entertainment Limited, pursuant to a resolution passed at a shareholders meeting held on 22nd April, 2002.) Our corporate and registered office is presently located at No. 34/1,35, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kancheepuram District–603112, Tamil Nadu. Tel: +91-44-27472860; Fax: +91-44-27472870; Website:www.mayajaal.com; E-mail:[email protected] (For details of changes in our registered office, see the section titled “Our History and Corporate Structure” on Page 120 of this Draft Red Herring Prospectus.) Contact Person & Compliance Officer: Mr. Subramanian Ganesan, Compliance Officer/Company Secretary; E-mail:[email protected]

INITIAL PUBLIC OFFERING OF 1,21,00,000 EQUITY SHARES OF Rs. 10 EACH (“EQUITY SHARES”) FOR CASH AT A PRICE OF RS [] PER EQUITY SHARE AGGREGATING RS. [] LAKHS, COMPRISING OF A FRESH ISSUE OF 99,00,000 EQUITY SHARES BY MAYAJAAL ENTERTAINMENT LIMITED AND AN OFFER FOR SALE OF 22,00,000 EQUITY SHARES BY THE SELLING SHAREHOLDER. THE FRESH ISSUE AND THE OFFER FOR SALE ARE JOINTLY REFERRED TO AS THE “ISSUE”.1,00,000 EQUITY SHARES OF RS. 10 EACH WILL BE RESERVED IN THE ISSUE FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (REFFERED TO AS THE “EMPLOYEE RESERVATION PORTION”) AND 7,00,000 EQUITY SHARES OF RS. 10 EACH WILL BE RESERVED FOR THE ELIGIBLE SHAREHOLDERS OF OUR PROMOTER AND PROMOTER GROUP COMPANY (REFERRED TO AS THE “SHAREHOLDERS OF THE PROMOTER AND ITS GROUP COMPANY PORTION”). THE OFFER OF EQUITY SHARES OTHER THAN THE EMPLOYEE RESERVATION PORTION AND SHAREHOLDERS OF THE PROMOTER AND ITS GROUP COMPANY PORTION SHALL BE CALLED THE “NET ISSUE.” THE NET ISSUE IS OF 1,13,00,000 EQUITY SHARES OF RS. 10 EACH CONSTITUTING 25.36% OF OUR POST ISSUE CAPITAL. PRICE BAND: RS. [] TO RS. [] PER EQUITY SHARE OF FACE VALUE RS. 10 THE FLOOR PRICE IS [] TIMES OF THE FACE VALUE AND THE CAP PRICE IS [] TIMES OF THE FACE VALUE In case of revision in the Price Band, the Bidding/Issue Period will be extended for three additional working days after revision of the Price Band 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, will be widely disseminated by notification to the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”), by issuing a press release, and also by indicating the change on the website of the Book Running Lead Manager and at the terminals of the Syndicate Members. This Issue is being made through a 100% Book Building Process wherein not more than 50% of the Net Issue shall be allotted on a proportionate basis to Qualified Institutional Buyers (“QIBs”) (including 5% of the QIBS Portion that would be specifically reserved for mutual funds on a proportionate basis), subject to valid Bids being received at or above the Issue Price. Further, at least 15% of the Net Issue shall be available for allocation on a proportionate basis to Non- Institutional Bidders and at least 35% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price.

RISK IN RELATION TO THE FIRST ISSUE TO THE PUBLIC This being the first issue of the Equity Shares of our Company, there has been no formal market for the Equity Shares of our Company. The face value of the Equity Shares is Rs. 10 and the Floor Price is [] times of the face value and the Cap Price is [] times of the face value. The Issue Price (as determined by the Company and the Selling Shareholder in consultation with the Book Running Lead Manager, on the basis of assessment of market demand for the Equity Shares by way of Book Building), 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 or sustained trading in the Equity Shares 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 our 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 Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page 13 of this Draft Red Herring Prospectus. COMPANY’S AND SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY Our Company and the Selling Shareholder, having made all reasonable inquiries, accept responsibility for and confirm that this Draft Red Herring Prospectus contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in this Draft Red Herring Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Red Herring Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The Equity Shares offered through this Draft Red Herring Prospectus are proposed to be listed on the BSE and the NSE. We have received in-principle approval from the BSE and the NSE for the listing of our Equity Shares pursuant to letters dated [] and [] respectively. BSE shall be the Designated Stock Exchange for the purpose of this Issue. IPO GRADING Our Company has appointed CARE Limited for IPO Grading. CARE Limited has assigned [] Grade to the Initial Public Offering of our Company. The rationale furnished by the grading agency for its grading will be updated at the time of filing of the Red Herring Prospectus with RoC.

BOOK RUNNING LEAD MANAGER REGISTRARS TO THE ISSUE COMFORT SECURITIES PRIVATE LIMITED CAMEO CORPORATE SERVICES LIMITED A-301, Hetal Arch, Opp. Natraj Market, "Subramaniam" Building, S.V. Road, Malad (West), No. 1, Club House Road, Mumbai - 400 064. Chennai - 600 002 Tel : 022 - 28449765; Fax: 022 - 28892527 Tel No. 044 - 2846 0390; Fax: 044 - 2846 0129 Email:[email protected] Contact Person: Mr. R. D. Ramaswami Website: www.comfortsecurities.co.in Website: www.cameoindia.com Contact Person: Mr. Sarthak Vijlani E- Mail: [email protected] SEBI Regn. No: INM 000011328 SEBI Regn. No.: INR 000003753

ISSUE PROGRAMME BID/ISSUE OPENS ON : [] BID/ISSUE CLOSES ON : []

C M Y K TABLE OF CONTENTS

SECTION TITLE PAGE NO

I GENERAL DEFINITION AND ABBREVIATIONS 1 PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA 9 HISTORY & BACKGROUND OF OUR PROMOTER 10 FORWARD LOOKING STATEMENTS 12 II RISK FACTORS 13 III INTRODUCTION SUMMARY 26 SUMMARY OF FINANCIAL DATA 31 ISSUE DETAILS IN BRIEF 33 GENERAL INFORMATION 34 CAPITAL STRUCTURE 42 OBJECTS OF THE ISSUE 54 BASIC TERMS OF THE ISSUE 67 BASIS FOR ISSUE PRICE 69 STATEMENT OF TAX BENEFITS 71 IV ABOUT OUR COMPANY INDUSTRY OVERVIEW 81 OUR BUSINESS 96 KEY INDUSTRY REGULATIONS AND POLICIES 116 OUR HISTORY AND CORPORATE STRUCTURE 120 OUR MANAGEMENT 124 OUR PROMOTER 139 OUR PROMOTER GROUP / GROUP COMPANIES / ENITITIES 143 RELATED PARTY TRANSACTIONS 151 DIVIDEND POLICY 152 V FINANCIAL INFORMATION FINANCIAL INFORMATION 153 MANAGEMENT DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF 180 OPERATIONS VI LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS 189 GOVERNMENT & OTHER APPROVALS 201 OTHER REGULATORY AND STATUTORY DISCLOSURES 215 VII ISSUE RELATED INFORMATION TERMS OF THE ISSUE 226 ISSUE STRUCTURE 229 ISSUE PROCEDURE 232 ASBA PROCESS 265 VIII MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 270 IX OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 282 DECLARATION 284

SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

DEFINITIONS Term Description "MEL", "Mayajaal Entertainment Limited", Mayajaal Entertainment Limited a public limited company "Mayajaal" or "our Company" incorporated under the Companies Act, 1956. "We" or "us" and "our" Unless the context otherwise require, refers to Mayajaal Entertainment Limited.

Conventional / General Terms Terms Description AOA/Articles/ Articles of Articles of Association of Mayajaal Entertainment Limited Association Auditors The statutory auditors of Mayajaal Entertainment Limited being R. Subramanian & Co. , Chartered Accountants, Chennai Bankers to our Company Andhra Bank Kotak Mahindra Bank Repco Bank Limited. Board of Directors / Board The Board of Directors of Mayajaal Entertainment Limited BSE Bombay Stock Exchange Limited (the designated stock exchange) CARE Credit Analysis & Research Limited Companies Act The Companies Act, 1956 Depositories Act The Depositories Act, 1996 Director(s) Director(s) of Mayajaal Entertainment Limited, unless otherwise specified Equity Shares Equity Shares of our company of face value of Rs. 10 each unless otherwise specified in the context thereof EPS Earnings Per Share Esoftcom Esoftcom (Mauritius) Limited GIR Number General Index Registry Number Promoter & Group ESoftcom (Mauritius) Limited, Pentamedia Graphics Limited, Pentasoft Companies Technologies Limited, Pentafour Software Employee Welfare Foundation, NUM TV Limited (Mauritius), and Vesa Holdings Private Limited Promoter Group Company Pentasoft Technologies Limited / PSTL HUF Hindu Undivided Family Indian GAAP Generally Accepted Accounting Principles in India IPO Initial Public Offering LuxSE Luxembourg Stock Exchange MOA/ Memorandum/ Memorandum of Association of Mayajaal Entertainment Limited Memorandum of Association Non Resident A person resident outside India, as defined under FEMA.

Non-Resident Indian/ NRI A person resident outside India, who is a citizen of India or a Person of Indian Origin as defined under FEMA Regulations NSE The National Stock Exchange of India Limited Overseas Corporate Body / OCB/Overseas Corporate Body - Overseas Corporate Body means and includes OCB an entity defined in clause (xi) of Regulation 2 of the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate Bodies (OCB’s) Regulations 2003 and which was in existence on the date of the commencement of these Regulations and immediately prior to such commencement was eligible to undertake transactions pursuant to the general permission granted under the Regulations. OCBs are not allowed to invest in

Terms Description this Issue. Person or Persons Any individual, sole proprietorship, unincorporated association, unincorporated organization, body corporate, corporation, company, partnership, limited liability company, joint venture, or trust or any other entity or organization validly constituted and/or incorporated in the jurisdiction in which it exists and operates, as the context requires. PSEW Pentafour Software Employees Welfare Foundation PSTL Pentasoft Technologies Limited Promoter(s)/PMGL Pentamedia Graphics Limited Qualified Institutional Public financial institution as defined in section 4A of the Companies Act, Buyers or QIBs 1956, scheduled commercial bank, mutual fund registered with the SEBI, foreign institutional investor and sub-account registered with SEBI ( other than a sub-account which is a foreign corporate or foreign individual ), multilateral and bilateral development financial institution, venture capital fund registered with SEBI, foreign venture capital investor registered with SEBI, state industrial development corporation, insurance company registered with the Insurance Regulatory and Development Authority, provident fund with minimum corpus of Rs. 250 Million, pension fund with minimum corpus of Rs. 250 Million and National Investment Fund set up by resolution no. F. No. 2/3/2005-DDII dated 23 rd November, 2005 of Government of India published in the Gazette of India. Registered Office of our 34/1, 35, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kancheepuram Company District– 603112, Tamil Nadu. SEBI The Securities and Exchange Board of India constituted under the SEBI Act SEBI Act Securities and Exchange Board of India Act, 1992 SEBI DIP Guidelines SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued by SEBI on 27 th January, 2000, as amended, including instructions and clarifications issued by SEBI from time to time. SEBI Takeover Regulations Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, as amended. Stock Exchanges BSE & NSE, referred to as collectively U.S. GAAP Generally Accepted Accounting Principles in the United States of America VHPL Vesa Holdings Private Limited

Issue Related Terms

Terms Description Allotment Issue of Equity Shares pursuant to the Issue to the successful Bidders as the context requires. Allottee The successful bidder to whom the Equity Shares are being / have been issued. Application Supported by Means an application for subscribing to an issue containing an authorization to Blocked Amount (ASBA) block the application money in a bank account ASBA Investors means an Investor who intends to apply through ASBA process and (a) is a "Resident Retail Individual Investor"; (b) is bidding at cut-off, with single bid option as to the number of shares bid for; (c) is applying through blocking of funds in a bank account with the SCSB; (d) has agreed not to revise his/her bid; (e) is not bidding under any of the reserved categories. " ASBA Form Bid cum Application form for Resident Retail Individual Investor intending to subscribe through ASBA Escrow Bankers to the Issue [•] Bid An indication to make an offer during the Bidding Period by a prospective

Terms Description investor to subscribe to or purchase our Equity Shares at a price within the Price Band, including all revisions and modifications thereto. Bid Amount The highest value of the optional Bids indicated in the Bid-cum-Application Form and payable by the Bidder on submission of the Bid in the Issue. Bid Closing Date/ Issue The date after which the members of the Syndicate will not accept any Bids Closing date for the issue, which shall be notified in an English National Newspaper, a Hindi national Newspaper and a Regional Newspaper, all with wide circulation. Bid cum Application Form/ The form used by a Bidder to make a Bid and which will be considered as the Bid Form application for Allotment for the purposes of this Red Herring Prospectus and the Prospectus. Bid Opening Date/ Issue The date on which the members of the Syndicate will accept Bids for the issue, Opening Date which shall be notified in an English National Newspaper, a Hindi National Newspaper and a Regional Newspaper, all with wide circulation. Bidder Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus. Bidding Period/ Issue The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date Period inclusive of both days and during which prospective Bidders may submit their Bids. Book Building Process Book Building route as provided under Chapter XI of the SEBI DIP Guidelines, in terms of which the Issue is being made. BRLM/Book Running Lead Book Running Lead Managers to the Issue being Comfort Securities Private Manager Limited. CAN/ Confirmation of Means the note or advice or intimation of allocation of Equity Shares sent to Allocation Note the Bidders who have been allocated Equity Shares in the Book Building Process. Cap Price The higher end of the Price Band, above which Issue Price will not be finalized and above which no Bids will be accepted. Cut-off Price The Issue Price finalized by our company in consultation with the BRLM. A Bid submitted at Cut-off Price is a valid Bid at all price levels within the Price Band. Depository Act The Depositories Act, 1996. Depository A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996. Depository Participant A depository participant as defined under the Depositories Act Designated Date The date on which funds are transferred from the Escrow Account to the Public Issue Account after the Prospectus is filed with the RoC, following which the Board of Directors shall allot the Equity Shares to successful Bidders. Designated Stock Exchange Bombay Stock Exchange Limited Draft Red Herring This Draft Red Herring Prospectus filed with SEBI, which does not have Prospectus complete particulars on the price at which the Equity Shares are offered and size of the Issue. Eligible Employees Permanent Employees of our Company who are Indian Nationals, are based in India and are physically present in India on the date of submission of the Bid- cum-Application form excluding members of our Promoter Group. Employee Reservation The Portion of Issue being up to 1,00,000 Equity Shares available for allocation Portion to Eligible Employees. Eligible Shareholders of our Eligible Shareholders of our Promoter and Promoter Group Company means the Promoter and Promoter public category shareholders of our Promoter i.e. Pentamedia Graphics Limited Group Company and Promoter Group Company i.e. Pentasoft Technologies Limited during the period commencing from the date of filing the Red Herring Prospectus with RoC and the Bid/Issue Closing Date who are Indian Nationals, are based in India and are physically present in India on the date of submission of the Bid- cum- Application Form.

Terms Description Escrow Account Account opened with the Escrow Collection Bank(s) and in whose favour the Bidder will issue cheques or drafts in respect of the Bid Amount when submitting a Bid. Escrow Agreement Agreement entered into amongst our company, Syndicate Members, the Registrar, the Escrow Collection Bank(s) and the BRLM for collection of the Bid Amounts and for remitting refunds (if any) of the amounts collected to the Bidders on the terms and conditions thereof. Escrow Collection Bank(s) The banks, which are clearing members and registered with SEBI as Bankers to the Issue at which bank the Escrow Account of our company, will be opened. First Bidder The Bidder whose name appears first in the bid cum application form or revision form. Floor Price The price advertised by our Company prior to the Bid/Issue Opening Date, below which the Issue Price will not be finalized and below which no Bids will be accepted. Fresh Issue Fresh Issue of 99,00,000 Equity Shares by our Company Issue Issue of 1,21,00,000 Equity shares comprising of a fresh issue of 99,00,000 Equity Shares of our Company and an Offer for Sale of 22,00,000 Equity Shares by the Selling Shareholders Issue Price The final price at which the Equity Shares will be allotted in terms of the Red Herring Prospectus, as determined by our Company in consultation with BRLM on the Pricing Date Issue Account / Public Issue Account opened with the Bankers to the Issue to receive monies from the Account Escrow Account for the Issue on the Designated Date Issue Period The period between the Bid / Issue Opening Date and Bid / Issue Closing Date including both these dates Margin Amount The amount paid by the Bidder at the time of submission of the Bid, being 10% to 100% of the Bid Amount. Members of the Syndicate Syndicate Members Memorandum of The arrangement entered into on 21 st October, 2008 between our Company, Understanding the Selling shareholder, and BRLM pursuant to which certain arrangements are agreed in relation to the Issue. Mutual Fund portion 5% of QIB portion or 2,82,500 Equity Shares available for allocation to Mutual Funds only, out of QIB portion. Net Issue The Issue of Equity Shares other than Equity Shares included in Employee Reservation Portion & Shareholders of the Promoter & its Group Company Portion i.e. 113,00,000 Equity Shares of Rs.10/- Each Non-Institutional Portion The portion of Net Issue being up to 15% of the Net Issue or 16,95,000 Equity Shares at the issue price available for allocation to Non-Institutional Bidders Non-Institutional Bidders All Bidders that are not eligible Qualified Institutional Buyers for this Issue, including affiliates of BRLM and Syndicate Members, or Retail Individual Bidders and who have bid for an amount more than Rs. 100,000. Offer for Sale Transfer of 22,00,000 Equity Shares pursuant to Red Herring Prospectus Pay-in-Date Bid Closing Date or the last date specified in the CAN sent to Bidders, as applicable Pay-in-Period Means: (i) With respect to Bidders whose Margin Amount is 100% of the Bid Amount, the period commencing on the Bid/ Issue Opening Date and extending until the Bid/Issue Closing Date; and (ii) With respect to QIBs, whose Margin Amount is 10% of the Bid Amount, the period commencing on the Bid/Issue Opening Date and extending until the closure of the Pay- in-Date. Price Band Being the price band of a minimum price of Rs. [O] per Equity Share (Floor Price) and the maximum price of Rs. [O] per Equity Share (Cap Price)(both

Terms Description inclusive), and including revision thereof. Pricing Date Means the date on which our Company, in consultation with the BRLM, finalizes the Issue Price Prospectus The Prospectus, filed with the RoC containing, inter alia, the Issue Price that is determined at the end of the Book Building Process, the size of the Issue and certain other information. Public Issue/ Issue Initial Public Offering of 1,21,00,000 Equity Shares of Rs.10 each ("Equity Shares") for cash at a price of Rs [•] per Equity Share aggregating Rs. [•] Lakhs, comprising of a Fresh Issue of 99,00,000 Equity Shares by Mayajaal Entertainment Limited and an Offer for Sale of 22,00,000 Equity Shares by the Selling Shareholder. The Fresh Issue and the Offer for Sale are jointly referred to as the "Issue". 1,00,000 Equity Shares of Rs. 10 each will be reserved in the issue for subscription by Eligible Employees (referred to as the "Employee Reservation Portion") and 7,00,000 Equity Shares of Rs. 10 each will be reserved for the Eligible Shareholders of our Promoter and Promoter Group Company (referred to as the "Shareholders of the Promoter and its Group Company Portion"). The offer of equity shares other than the Employee Reservation Portion and Shareholders of the Promoter and its Group Company Portion shall be called the "Net Issue." The Net Issue is of 1,13,00,000 equity shares of Rs. 10 each constituting 25.36 % of our post issue capital. Public Issue Account Account opened with Bankers to the Issue for the purpose of transfer of monies from the Escrow Account on or after the Bid / Issue Opening Date. QIB Portion Consists of 56,50,000 Equity Shares of Rs. 10 each aggregating at a price of Rs. [O] for cash aggregating Rs [O] Lakhs being up to 50% of the Net Issue, available for allocation to QIBs. 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. Red Herring Prospectus or Document issued in accordance with Section 60B of the Companies Act and RHP does not have complete particulars on the price at which the Equity Shares are offered and the size of the Issue. It carries the same obligations as are applicable in case of a Prospectus and will be filed with RoC at least three days before the Bid/ Issue Opening Date. It will become a Prospectus after filing with RoC after the pricing and allotment. Registrar/Registrar to the Registrar to the Issue being Cameo Corporate Services Limited, "Subramaniam” Issue Building, No. 1, Club House Road, Chennai – 600 002. RoC / Registrar of Registrar of Companies, Tamil Nadu at Chennai Companies Retail Portion Consists of 39,55,000 Equity Shares of Rs. 10 each aggregating Rs. [O] Lakhs, being upto 35% of the Net Issue, available for allocation to Retail Individual Bidder(s). Retail Individual Bidders Individual Bidders (including HUFs and NRIs) who have made their bid for Equity Shares for a cumulative amount of not more than Rs. 100,000. Reserved Categories Means the reservation in the Issue for Eligible Employees of our Company and for the Eligible Shareholders of our Promoter and Promoter Group Company. Revision Form The form used by the Bidders to modify the quantity of Equity Shares or the Bid Price in any of the Bid options as per their Bid-cum-Application Form and as modified by their subsequent Revision Form(s), if any. SEBI The Securities and Exchange Board of India constituted under the SEBI Act. SEBI Act Securities and Exchange Board of India Act, 1992. SEBI DIP Guidelines SEBI (Guidelines for Disclosure and Investor Protection) 2000 issued by SEBI effective from 27 th January, 2000, as amended, including instructions and clarifications issued by SEBI from time to time. Selling Shareholder Anchor Constructions Private Limited Shareholders of the The Portion of Issue being up to 7,00,000 Equity Shares available for allocation

Terms Description Promoter and Its Group to Eligible Shareholders of our Promoter and Promoter Group Company. Company Portion Syndicate Agreement Agreement to be entered into amongst the BRLM, Syndicate Member(s) and our Company in relation to the collection of Bids in the Issue. Syndicate Members Intermediaries registered with SEBI and eligible to act as underwriters. Syndicate Members are appointed by the BRLM and in this case, being [•] TRS or Transaction The slip or document registering the Bids, issued by the Syndicate Members to Registration Slip the Bidder as proof of registration of the Bid on submission of the Bid cum Application Form in terms of this Red Herring Prospectus. Underwriters The BRLM and the Syndicate Members Underwriting Agreement The Agreement among the Underwriters and our Company to be entered into on or after the Pricing Date

Glossary of Company / Industry related Terms:

Terms Description ARR Average Room Rental calculated by dividing the total room revenue by the number of rooms occupied. A ratio that indicates average room rate, and to what extent rooms are being Average Room Rate up-sold or discounted; calculated by dividing room’s revenue by number of rooms sold. Also called average daily rate or ADR. Acre Equals 43,560 sq. ft. Content Refers to live action, animation films, TV series and other audio visual software. DVD Digital Video Disc e.joy The FEC of our Company comprising of the Multiplex, Games Arcade, Food Courts and Shopping Mall ESIC Employee’s State Insurance Corporation F&B Food and Beverage FHRAI Federation of Hotel and Restaurant Associations of India Food Court A plaza that is contiguous with the counter of multiple food vendors FEC Family Entertainment Centre comprising but not limited to Multiplex, mall, games arcade, food courts, restaurant Footfalls Customers visiting our FEC i.e. e.joy FICCI Federation of Indian Chambers of Commerce and Industry HRACC Hotel Restaurant Approval and Classification Committee IT Information Technology Live Action Films Feature films acted out by human actors Lifestyle Products/ Products that meet way of living centered around certain activities. Lifestyle Merchandise Multiplexes/ Multiplex An integrated theatre with two (2) or more screens or such number of screens Theatre and seating capacity as may be specified by the relevant state legislation. The State of Tamil Nadu considers a theatre to be as a Multiplex, which has two (2) or more screens having a minimum total seating capacity of more than 800 and complying with the Government Order No. (GO) 1265 dated 31 st December, 2006. MIS Management Information System MP3 A compressed audio format Occupancy Total number of room days occupied divided by the total number of room days available or the percentage of available rooms occupied for a given period. Onshore Resort The leisure cum health resort of our Company

Terms Description Project Expansion of the Family Entertainment Centre, Expansion of the Content Creation & Delivery Division, Setting up of Studio Floors, Expansion of Onshore Resort. Proposed Scheme of Means the proposed Composite Scheme of Amalgamation, Arrangement and Amalgamation Compromise between Pentamedia Graphics Limited and Pentasoft Techonolgies Limited and their respective shareholders and creditors. Scheme of Amalgamation Means the Composite Scheme of Amalgamation, Arrangement and Compromise between PMGL, Mayajaal Entertainment Limited, Media Dreams Limited, Kris Srikkanth Sports Entertainment Limited and Intelivision Limited and their respective shareholders and creditors. As part of the Scheme, the Animation and Web Entertainment business of PMGL was demerged with our Company. The High Court of Madras sanctioned the Scheme by an Order dated 8 th November 2004. The above Order was further modified, by an Order dated 29 th November 2007. Sq. ft. Square Feet Sports Village The sports complex of our Company i.e "The Champ" Theatre One (1) or more screen(s) displaying cinema along with components such as audio & video equipment, chairs, carpeting etc. VCD Video Compact Disc VAT Value added tax VHS Video home system, a trademark used for a video tape format.

Star Ratings : Five Star Hotel Luxury hotels; expensive hotels/resorts; having various first class facilities and amenities etc.

Four Star Hotel First class hotels; and providing various luxury facilities and amenities

Three Star Hotel Middle class hotels; moderately priced; providing standard facilities for lodging and boarding services Two Star Hotel Budget hotels; providing basic facilities One Star Hotel Low budget hotels; providing standard facilities for lodging and boarding

Abbreviations of General Terms

Abbreviation Full Form AS Accounting Standards as issued by the Institute of Chartered Accountants of India A/c Account ASBA Application Supported by Blocked Amount BSE Bombay Stock Exchange Limited (BSE) CDSL Central Depository Services (India) Limited EPS Earning Per Share EGM Extraordinary General Meeting FCNR Account Foreign Currency Non Resident Account FIPB Foreign Investment Promotion Board FY / Fiscal/Financial Year Period of twelve (12) months ended 31 st March of that particular year, unless otherwise stated FEMA Foreign Exchange Management Act, 1999, and the regulations framed there under FII FII defined under SEBI (FII) Regulation, 1999 and registered with S EBI under

Abbreviation Full Form applicable laws in India GoI/Government Government of India GIR Number General Index Registry Number HUF Hindu Undivided Family I.T. Act / Income Tax Act Income Tax Act, 1961, as amended MoF Ministry of Finance, GOI MOU Memorandum of Understanding NAV Net Asset Value NPV Net Present Value NRIs Non Resident Indians NRE Account Non Resident External Account NRO Account Non Resident Ordinary Account NSDL National Securities Depository Limited NSE National Stock Exchange of India Limited. P.A., p.a. Per annum P/E Ratio Price/Earnings Ratio PAN Permanent Account Number RBI The Reserve Bank of India RoC Registrar of Companies, Tamil Nadu of Chennai ROE Return on Equity RONW Return on Net Worth SCRR Securities Contracts (Regulation) Rules, 1957 SCRA Securities Contract (Regulation) Act, 1956, as amended USD/US$ United States Dollar

PRESENTATION OF FINANCIAL, INDUSTRY AND MARKET DATA

Financial Data

Unless otherwise stated, the financial data in this Draft Red Herring Prospectus is derived from the restated financial statements of Mayajaal Entertainment Limited as of and for the five (5) years ended 31 st March,2008, 31 st March,2007, 31 st March, 2006, 31 st March, 2005 and 31 st March, 2004 and half year ended 30th September, 2008 prepared in accordance with Indian GAAP, audited by the Auditors and restated in accordance with the applicable SEBI DIP Guidelines.

There are significant difference between Indian GAAP, US GAAP and the International Financial Reporting Standards (IFRS). Our Company has not attempted to explain those differences or quantify their impact on the financial data included herein, and our Company urges you to consult your own advisor regarding such differences and their impact on our financial data. Accordingly, the degree to which Indian GAAP financial statements included in this Draft Red Herring Prospectus will provide meaningful information is entirely dependent on the reader’s level of familiarity with Indian accounting practices, Indian GAAP, the Companies Act and the SEBI DIP Guidelines. Any reliance by persons not familiar with Indian accounting practices; Indian GAAP, the Companies Act and the SEBI DIP Guidelines should accordingly be limited.

In this Draft Red Herring Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding-off.

Currency of Presentation

All references to "Rupees" or "Rs." or "INR" are to Indian Rupees, the official currency of the Republic of India. All references to "$", "US$", "USD", "U.S.$", "U.S. Dollar(s)" or "U.S. Dollar(s)" are to United States Dollars, if any, the official currency of the United States of America. This Draft Red Herring Prospectus contains translations of certain U.S. Dollar and other currency amounts into Indian Rupees (and certain Indian Rupee amounts into U.S. Dollars and other currency amounts). These have been presented solely to comply with the requirements of Clause 6.9.7.1 of the SEBI DIP Guidelines. These translations should not be construed as a representation that such Indian Rupee or U.S. Dollar or other amounts could have been, or could be, converted into Indian Rupees, at any particular rate, or at all.

In this Draft Red Herring Prospectus, throughout all figures have been expressed in Lakhs. The word "Lakhs" or "Lakh" or "Lakhs" means "One hundred thousand".

Any percentage amounts, as set forth in "Risk Factors", "Business", "Management's Discussion and Analysis of Financial Conditions and Results of Operation" and elsewhere in this Draft Red Herring Prospectus, unless otherwise indicated, have been calculated based on our financial statement prepared in accordance with Indian GAAP.

Industry & Market Data

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

The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends on the reader’s familiarity with and understanding of the methodologies used in compiling such data.

For additional definitions, please refer the section titled "Definitions and Abbreviations" on page 1 of this Draft Red Herring Prospectus.

HISTORY & BACKGROUND OF OUR PROMOTER

The Promoter of our Company i.e. Pentamedia Graphics Limited (PMGL) was incorporated as Pentagon Agency Private Limited in the year 1976. The name of our Promoter was changed to Pentafour Software Export Limited in the year 1991 and it went public in the year 1992.

Our Promoter was one of the first companies in the Information Technology (IT) sector to be listed on the Stock Exchanges in India. Our Promoter during the period 1994 to 2001 was a pioneer in many fields of IT including high end software training, software product development, on-site consulting. Our Promoter was one of the first companies in India to offer special effects and animation products & services under one roof. Our Promoter was the highest software exporter of the country for a period of three (3) consecutive years from 1996–1999 and received various awards and recognitions from the Government of India.

Our Promoter in the year 1999 felt the need to split the company into two (2) corporate entities to drive focus into two (2) different verticals namely software and media related activities. Subsequently, our Promoter ( then known as Pentafour Software and Exports Limited ) demerged the software related activities with Pentafour Communications Limited ( a listed entity ) and changed its name to Pentasoft Technologies Limited with a focus on software training, product development & on-site consulting. At the same time our Promoter ( Pentafour Software and Exports Limited ) was renamed as Pentamedia Graphics Limited (hereinafter referred to as PMGL ) with focus on media related activities.

As a part of its media growth strategy PMGL acquired a slew of companies in the year 2000 including Mayajaal Entertainment Limited through which it then proposed to offer various kinds of entertainment product and services like films, themed, sports, web, tv & studio all under one roof.

PMGL produced animation feature films using motion capture technology and distributed its films through independent distributors around the world. Some of PMGL’s films including ‘Alibaba & Forty Thieves’, ‘The Legend of Buddha’ and ‘Gulliver’s Travel’ qualified for the nominations to the OSCAR Awards. PMGL produced and distributed six (6) animation films worldwide between the period 1998 to 2004.

However, after the World Trade Centre attacks in the US in the year 2001, commonly known as ‘9/11’, PMGL and its overseas subsidiaries faced difficulty in distribution of its animation films in the overseas markets as the content of these films was region specific and could not be exploited to their fullest extent. PMGL subsidiaries, which had entered into distribution agreements with overseas distributors and its distributors which had acquired distribution rights of its animation films filed for bankruptcy/ dissolution under U.S. law. PMGL was forced to scale down operations leading to a liquidity crisis.

In the year 2004 a Composite Scheme of Amalgamation, Arrangement and Compromise between PMGL, Mayajaal Entertainment Limited, Media Dreams Limited, Kris Srikkanth Sports Entertainment Limited and Intelivision Limited and their respective shareholders and creditors was sanctioned by the High Court of Madras by an Order dated 8 th November 2004. The Order was further modified by the High Court by a further Order dated 29 th November 2007. As a part of this Scheme, the animation and web entertainment business of PMGL was demerged into Mayajaal Entertainment Limited.

With the scheme coming into effect Mayajaal became one of the few companies in the world to offer all forms of entertainment including themed, sports, Web, TV & Studio entertainment all under one (1) roof with production and exhibition activities.

Post 2004, PMGL has been settling its liabilities with lenders and creditors, including banks and financial institutions, by way of sale of its movable & immovable assets and transfer of equity shares of its subsidiaries including Mayajaal Entertainment Limited, to set-off certain other debts.

In the year 2005, SEBI passed an Order against PMGL and its directors, its then subsidiary Mayajaal and its directors, S. Chandrasekaran ( Former CFO, PMGL and also Ex-Director of Mayajaal Entertainment Limited ), prohibiting them from accessing capital markets or dealing in securities, in any manner, directly or indirectly

till May, 2007. For further details on the SEBI Order, please refer to the section on "Risk Factors" on page 13 of this Draft Red Herring Prospectus.

PMGL is presently undergoing a restructuring exercise by way of a proposed Composite Scheme of Amalgamation, Arrangement and Compromise between Pentamedia Graphics Limited and Pentasoft Techonolgies Limited ( a listed group company of PMGL ), and their respective shareholders and creditors. The scheme has been approved by the BSE by its letter dated 25 th November, 2008. PMGL filed the company application before the High Court of Madras for an order to convene the meeting of its shareholders and creditors which is scheduled to be held on 11 th February, 2009 for their approval.

The restructuring exercise proposes a significant reduction in the debt burden on the merged entity i.e. Pentamedia Graphics Limited. In terms of this arrangement the entire undertaking of PSTL will be transferred and vested in PMGL as a "going concern" effective from 1st October, 2008. The equity shareholders of PSTL will be allotted one (1) equity shares of Re. 1/- each fully paid up of PMGL for every five (5) equity shares of Rs. 10/- each in PSTL. The scheme further proposes to convert a debt of Rs.136,41,35,845 owed by PSTL into equity shares of Re.1/- each of PMGL with effect from 1 st October, 2008 i.e. the Appointed Date of the Scheme.

For further details on our Promoter, please refer to the section "Our Promoter" on page 139 of this Draft Red Herring Prospectus.

FORWARD-LOOKING STATEMENTS

Our Company has included statements in this Draft Red Herring Prospectus, that contain words or phrases such as "will", "aim", "will likely result", "believe", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "project", "shall", "contemplate", "seek to", "future", "objective", "goal", "project", "should", "will continue", "will pursue" and similar expressions or variations of such expressions that are "forward-looking statements". However, these words are not the exclusive means of identifying forward-looking statements. All statements regarding our company objectives, plans or goals, expected financial condition and results of operations, business, plans and prospects are also forward-looking statements.

These forward-looking statements include statements as to business strategy, revenue and profitability, planned projects and other matters discussed in this Draft Red Herring Prospectus regarding matters that are not historical fact. These forward-looking statements and any other projections contained in this Draft Red Herring Prospectus (whether made by us or any third party) involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or other projections.

All forward-looking statements are subject to risks, uncertainties and assumptions 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 expectations include, among others: • Our ability to successfully implement strategy, growth and expansion plans; • Our dependence on key personnel; • Government approvals; • Our ability to comply with the financial conditions and other covenants of our borrowings; • General economic and business conditions in India and other countries; • Changes in political conditions in India; • Occurrence of natural disasters or calamities affecting our areas of operations; • A slowdown in economic growth in India; • Changes in the foreign exchange control regulations in India and fluctuations in foreign exchange rates; • Changes in the regulatory framework governing us; • Any downgrading of India’s debt rating by an independent agency.

For further discussion of factors that could cause Company’s actual results to differ, see the section titled "Risk Factors" on page 13 of this Draft Red Herring Prospectus. By their nature, certain risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Our Company, the Book Running Lead Manager(s), the members of the Syndicate, and their respective affiliates do not have any obligation to, and do not intend 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, our Company and the BRLM will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges.

SECTION II: RISK FACTORS

An Investment in equity involves a higher degree of risks. Prospective investors should carefully consider the risks described below, in addition to the other information contained in this Draft Red Herring Prospectus before making any investment decision relating to the Equity Shares. The occurrence of any of the following events could have a material adverse effect on the business, results of operation, financial condition and prospects and cause the market price of the Equity Shares to decline and you may lose all or part of your investment.

Prior to making an investment decision, prospective investors should carefully consider all of the information contained in this Draft Red Herring Prospectus, including the sections titled "Our Business", "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and the " Financial Information" included in this Draft Red Herring Prospectus beginning on pages 96, 180 and 153 respectively. The occurrence of any of the following events could have a material adverse effect on our business, results of operation, financial condition and prospects and cause the market price of the Equity Shares to fall significantly.

Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any of the risks mentioned herein.

INTERNAL RISK FACTORS

1. Our Company, Promoters, Group Companies and directors thereof are involved in various litigation, the outcome of which could adversely affect our business and financial operations.

Summary of litigation are given below:

No. Particulars No. of Amount involved cases / where quantifiable disputes (Rs. In Lakhs) LITIGATION BY AND AGAINST OUR COMPANY

Litigation filed by our Company 1. Civil cases filed by our Company 1 9.00 Litigation against our Company 1. Civil cases against our Company 1 175.24 Direct tax proceedings filed against our Company 1. Income tax proceedings 1 55.99# LITIGATION BY AND AGAINST OUR PROMOTER Litigation against our Promoter 1. Consumer cases against our Promoter 1 4.59* 2. Civil cases against our Promoter 5 15,874.85* Direct & Indirect Tax proceedings filed against our Promoter 1. Income Tax proceedings 7 14,300.00# 2. Sales Tax proceedings 1 52.40# 3. Excise cases 1 200.00# LITIGATION BY AND AGAINST OUR GROUP COMPANIES/ ENTITIES

Litigation filed by our Group Companies/ Entities 1. Civil cases filed by our Group Companies/ Entities 1 2.94 Litigation filed against our Group Companies/ Entities 2. Cases filed against Pentasoft Technologies Limited, Vesa 11 11,908.25* Holdings Private Limited and Pentafour Software Employee

No. Particulars No. of Amount involved cases / where quantifiable disputes (Rs. In Lakhs) Welfare Foundation. Direct Tax proceedings filed against our Group Companies 1. Income tax proceedings 7 9,594.58#

*The above claims are subject to payment of interest in the event a decree is passed against our Promoter. #The above tax liabilities are subject to interest charges and penalty imposed by the Department, if any. *For details of the above litigation, please refer to the section titled "Outstanding Litigation" appearing on page 189 of this Draft Red Herring Prospectus.

2. There are various litigations and revenue proceedings pending against our Promoter and certain Group Companies.

Certain lenders and creditors of our Promoter and Group Companies have filed litigations such as winding up petitions, recovery proceedings before the DRT and suits before civil courts to recover their dues which presently are pending at various stages for adjudication. In addition to the civil proceedings, the revenue authorities like the Income Tax Department have initiated proceedings against our Promoter and Group Companies for statutory dues. Adverse orders and decrees passed against our Promoter and Group Companies may force our Promoter and Group Companies to liquidate their movable and immovable assets which may affect the business prospect and financial stability of our Company. For details of the aforesaid litigation, please refer to the section titled “Outstanding Litigation” appearing on page 189 of this Draft Red Herring Prospectus.

3. SEBI Order against, our Company, our Promoter and Directors

In September, 2003, PMGL issued certain equity shares on preferential basis at Rs.11.36 per share to Vijay Advertising Private Limited (VAPL) and Sathya Securities Private Ltd. ("Sathya"). On a preliminary enquiry, SEBI found that two (2) sets of physical share certificates covering 34,00,000 equity shares each, issued in the name of VAPL existed at the same time bearing the same distinctive numbers. One set of share certificate, in physical form, was pledged with Oriental Bank of Commerce (OBC) by VAPL apparently to secure the dues payable by PMGL to OBC. VAPL through its depository participant made a dematerialization request to PMGL’s RTA & STA enclosing another set of physical share certificates pertaining to the same distinctive numbers as those pledged with OBC. It appeared that either the shares pledged by VAPL with OBC were fake or the shares sent to the STA for dematerialization and subsequently sold in the market were fake.

Apparently, VAPL had sold the demat shares in the market, even though another set of original shares in the name of VAPL and pertaining to the same distinctive number continued to remain pledged in physical form with OBC. PMGL and its directors prima facie appeared to have actively assisted VAPL in the above fraud by simultaneously issuing shares bearing the same distinctive numbers without cancelling the earlier issued shares. SEBI found PMGL and its directors guilty of violation of Regulation 3 and Regulation 4 (2)(h) of SEBI (Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.

In view of the findings of the preliminary enquiry as narrated hereinabove SEBI by an ex-parte interim order dated 27 th May, 2005 restrained PMGL from accessing capital market and from issuing any further shares or altering its share capital in any manner, and also prohibited PMGL, including its directors from dealing in securities market, till further directions.

In respect of the preferential issue by PMGL to VAPL and Sathya, SEBI observed that the funds for subscription aggregating to Rs.10,83,20,000 was provided by PMGL through its then subsidiary, Mayajaal Entertainment Limited. In the process SEBI found PMGL and Mayajaal Entertainment Limited, including their management, to have violated Regulation 3(b),(c) and (d) of SEBI (Fraudulent and Unfair Trade Practices) Regulations, 2003 and Section 77 of Companies Act, 1956. Further, PMGL and its management were found guilty by SEBI of various violations under SEBI (Disclosures for Investor Protection) Guidelines, 2005 and Listing Agreement. SEBI issued Show Cause Notice dated 22 nd December, 2005 to nineteen (19) entities including PMGL and Mayajaal.

In the light of the facts of the case, as brought out by SEBI investigation, PMGL and its directors, violated Regulation 3(b), (c), (d) and 4(2) (h) of SEBI (Fraudulent and Unfair Trade Practices) Regulations 2003. Mayajaal and its directors, Sri S. Chandrasekaran (Former CFO, PMGL and Ex- Director of Mayajaal Entertainment Limited), violated Regulation 3(b), (c) and (d) of SEBI (Fraudulent and Unfair Trade Practices) Regulations, 2003.

SEBI, accordingly passed an Order against PMGL and its directors, Mayajaal and its directors, S. Chandrasekaran (Former CFO, PMGL and also Ex-Director of Mayajaal Entertainment Limited), prohibiting them from accessing capital market or dealing in securities, in any manner, directly or indirectly, for a period of twenty four (24) months. For the purpose of reckoning the same, the period of prohibition already undergone by ex-parte ad interim order dated 27th May, 2005 and the post-decisional Order dated 3rd October, 2005 were taken into account.

However, SEBI excluded the implementation of the Order to PMGL and Mayajaal in so far as the Composite Scheme of Amalgamation, Arrangement and Compromise approved by the High Court of Madras. The Order further directed PMGL, Mayajaal and their directors not to divest, transfer, sell or alienate in any way the shares received/to be received by them due to the implementation of the Scheme of Amalgamation, Arrangement and Compromise for a period co-terminus with the period of prohibition imposed above.

PMGL, our Company, our present Managing Director Mr. Udeep Bogollu and Non-Executive Director Ms. Sumathi Sridharan named in the SEBI Order have fully abided by the above Order.

In addition to the above, SEBI filed a criminal complaint under Section 181 of the Indian Penal Code against our Promoter, Dr. V Chandrashekharan and others before the Chief Metropolitan Magistrate, Chennai. However, there have been no summons issued against the Promoter by the Court.

4. We have substantial indebtedness and will continue to have debt service obligations following the Issue.

The total amounts outstanding and payable by us as principal and interest on account of the loan arrangements with various banks and financial institutions as on 30 th September, 2008 is Rs.2287.88 Lakhs. For further information on the financing and loan agreements along with the total amounts outstanding and the details of the repayment schedule see Annexure-9 of section titled Financial information on page 153 of this Draft Red Herring Prospectus.

In addition to the above, our Company has issued a corporate guarantee and further created an equitable mortgage by deposit of title deeds of our immovable property admeasuring 20.97 acres of land situated at No. 35, Kanathur Reddy Kuppam Village, Chengalput Taluk and District for securing loan facilities availed by PMGL from Bank of India in the year 1996, currently assigned to Kotak Mahindra Bank and its nominee Pegasus Asset Reconstruction Private Limited (Pegasus). PMGL has defaulted in the repayment of the loan and a recovery suit has been filed before the DRT, Chennai for the recovery of a sum of Rs. 3964.91 Lakhs, together with interest thereon at the rate of 17.50% p.a against PMGL and others including our Company. For details of the above litigation, please refer to the section titled "Outstanding Litigation" appearing on page 189 of this Draft Red Herring Prospectus.

5. We have entered into certain related party transactions and may continue to do so.

We have entered into related party transactions with our Promoters, Group Companies, Directors and related entities. While we believe that all such transactions have been conducted on the arms length basis, however it is difficult to ascertain whether more favorable terms would have been achieved had such transactions been entered with unrelated parties. Furthermore, it is likely that we will enter into related party transactions in the future. For details of these transactions, please refer to section titled "Related Party Transactions" at page no. 151 of this Draft Red Herring Prospectus.

6. There is no standard valuation methodology or accounting practices in the entertainment and related industries. The financials of our Company are not comparable with other players in the industry.

There is no standard valuation methodology or accounting practices in the entertainment and related industry. The financials of one company may not be comparable with the other players in the industry. Valuation in the entertainment industry may presently be high and may not be sustained in the future and also may not be reflective of future valuations of the industry.

7. Our business is dependent on a continuing relationship with our clients/customers.

Our business envisages running of Family Entertainment Centre, production of animation & Live Action Films, resorts operation and web entertainment. Our business is therefore significantly dependent on developing and maintaining relationships with various corporates/customers and we also require cooperation of walking guests for FEC & Resorts, distributors for animation & live action contents, advertisers for television and subscribers for our web entertainment business. Our business will be adversely affected if we are unable to develop and maintain relationships with our clients/customers. The loss of clients/customers may have a material adverse effect on our operations.

8. Our Insurance coverage may not adequately protect us against certain operating risks and this may have a material adverse impact on our business.

We believe that the Insurance coverage maintained, would reasonably cover all normal risks associated with the operation of our business, there can be no assurance that any claim under the insurance policies maintained by us will be met fully, in part or on time. In the event we suffer loss or damage that is not covered by insurance or exceeds our insurance coverage, our results of operations and cash flow may be adversely affected.

9. Our Company depends on its senior management team and the loss of team members may adversely affect its business.

Our Company maintains conducive work environment and provides adequate motivation to perform. However senior management team members or key personnel may chose to leave the organisation in which case operations of our Company may be affected. However in such eventuality we will promptly fill the vacancy through either fresh recruitment or internal promotion.

10. Failure to keep abreast with the latest trends in technology may adversely affect our cost competitiveness and may affect our financial condition adversely.

Our Company cannot assure that it would successfully implement new technology effectively or adapt to emerging industry standards. If our Company is unable to upgrade itself due to technical, financial, legal and/or other reasons to adapt in timely manner to the changing market conditions, its business, financial performance could be adversely affected. Centres

11. We have no control over distributors/ producers of the films and our business of film exhibition may be adversely affected if our access to motion pictures is limited or delayed.

We rely on distributors / producers of motion pictures, over whom we have no control, for the films that we exhibit. Major motion picture distributors normally offer and license film to exhibitors, including us, on a film-by-film and theatre-by-theatre basis. Consequently, we cannot assure ourselves of a supply of motion pictures by entering into long-term arrangements with major distributors, but must compete for our licenses on a film-by-film and theatre-by-theatre basis. Our business depends on maintaining good relations with the distributors and producers so as to obtain licenses on commercially favourable terms and conditions. In the event we are unable to obtain exhibition rights of popular films for exhibition in our Multiplex, our results of operations may be adversely affected. Further, we do not have any long-term arrangements with the distributors and producers for film exhibition.

12. Our film exhibition business is dependent on the popularity of the films we exhibit which may consequently result in variations in our revenues and profits from quarter to quarter.

Our ability to attract patrons to our Multiplex is dependent amongst other factors, on the popularity and appeal of the films we display on our screens. Although the Indian film industry produces a large number of films every year, only a few amongst them become box office hits and consequently if the films we exhibit are not popular, the number of our patrons may decline, which could adversely affect our business and results of operations.

13. Content piracy would affect the business adversely.

Our Company is into exhibition, Content creation and Content delivery. Piracy of the Content produced by our Company may impact our profit potential as the same may be available illegally through various media such as CD, DVD, web and such other mediums. Piracy of films which we exhibit would affect viewership at our Multiplexes and our box office collections. With several pirated websites offering similar audio video Content which we stream through numtv.com for free or lesser subscription cost may impact the subscription revenue and traffic to our portal. Therefore, individually or aggregately the above factors may affect our business and financials of our Company.

14. Withdrawal of any tax exemptions currently granted to the entertainment industry may significantly affect our operations.

A crucial consideration affecting our decision for the expansion plans are the fiscal incentives such as entertainment tax exemptions available for exhibition of films named in Tamil by the Tamil Nadu Government. In future, if the State Government withdraws such benefits, it may affect our margins due to an increase in ticket prices and reduction in viewership

15. We may be exposed to claims for infringement of intellectual property rights of third parties.

While we believe that, we observe reasonable precaution in developing Content and entering into necessary arrangements with various agencies for production of Content, however, we are not certain in the future, there may any infringement proceedings against us for any infringement of copyright / intellectual property rights. Such proceedings as and when they occur, may materially affect our operational performance and results of operations.

16. Our lenders have charge over our movable and immovable properties in respect of finance availed by us.

We have secured our lenders by creating a charge over our movable and immovable properties In the event we default in repayment of the loans availed by us and any interest thereof, our properties may be forfeited by lenders For further information on the financing and loan agreements along with

the total amounts outstanding and the details of the repayment schedule please refer to Annexure-9 of section titled "Financial information" on page 153 of this Draft Red Herring Prospectus.

17. Our indebtedness and the conditions and restrictions imposed by our financing arrangements could adversely affect our ability to conduct our business and operations.

We have entered into agreements with certain banks and financial institutions for short-term and long-term borrowings. Some of these agreements contain restrictive covenants, including, but not limited to, requirements that we obtain written consent from lenders prior to issuing new shares, incurring further debt, creating further encumbrances on our assets, effecting any scheme of amalgamation or restructuring, undertaking guarantee obligations, declaring dividends, undertaking new projects or making investments. There can be no assurance that we will be able to comply with these covenants or that we will be able to obtain the consents necessary to take the actions we believe are required to operate and grow our business. Certain of our loans may be called at any time by our lenders pursuant to terms of the relevant agreements. An event of default under any of these loan arrangements, if not cured or waived, could have a material adverse effect on us.

18. Our Company’s television channel SPLASH TV has not been in operation since November 2004.

Our Company launched India’s first 24 hour "Free To Air" children’s television channel in English namely Splash TV in 1998. Splash TV offered programmes on edutainment, infotainment and entertainment in English. It has produced more than 1000 hours of Content and also has acquired several hours of Content from various production houses around the globe. Our Company has discontinued the broadcast of this channel since November 2004 due to a dispute with VSNL in relation to the fees payable towards uplinking and teleport services. For further details on this dispute/ litigation please refer to the section “Outstanding Litigation and Material Developments” on page 189 of this Draft Red Herring Prospectus. However, the Content owned by our Company is currently broadcast on television channels and is also distributed over the web on a revenue sharing as well as on fixed fee basis.

19. Any further issuance of Equity Shares may dilute your shareholding and sale of our Equity Shares by our Promoter or other major shareholders may adversely affect the trading price of the Equity Shares.

Any future equity issuance by us, including in a primary offering, may lead to the dilution of investors’ shareholding in our Company. Any future equity issuances by us or sales of our Equity Shares by our Promoter or other major shareholders may adversely affect the trading price of the Equity Shares. In addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares.

20. The proceeds from the Offer for Sale will not be available to us.

Since our Issue also consists of an Offer for Sale component, the proceeds received pursuant to the Offer for Sale by the Selling Shareholder, i.e., Anchor Constructions Private Limited shall be remitted back to them and to that extent we will not benefit from the Offer for Sale proceeds of the Issue.

21. Upon completion of the Issue, our Promoter / Promoter Group may continue to retain significant control over us, which will allow them to influence the out come of matters submitted to the shareholders for approval.

Upon completion of this Issue, our Promoter / Promoter Group will continue to own majority of our Equity Shares on a fully diluted basis. As a result, our Promoter / Promoter Group will have the ability to exercise significant influence over all matters requiring shareholder approval, including the election of directors and approvals of significant corporate transactions. Our Promoter / Promoter Group will also be in a position to influence any shareholder action or approval requiring a majority

vote, except where it is required by applicable laws or where they abstain from voting. Such a concentration of ownership may also have the effect of delaying or deterring a change in control.

22. The Footfalls pattern at our Family Entertainment Centre is sensitive to variations between weekdays and weekends / public holidays.

The Footfall pattern at our FEC is broadly split into three (3) segments which are High Footfall days during weekends and Holidays, Medium Footfall days during vacation time including Summer and festive season and Low Footfall days during the weekdays. Our financial results are affected by the pattern of Footfalls at our Family Entertainment Centre

23. The success of production of Content depends upon artists and technicians such as directors, scriptwriters, music directors, animators and effect specialists and their loss or unavailability could adversely affect our business.

Content production and its commercial success largely depend upon creativity and individual skills of few people like the artists and technicians such as directors, scriptwriters, music directors, animators and effect specialists, which are not readily replaceable. Thus, the entire success of our Content depends upon the creativity of these few peoples. Unavailability of these technicians could delay our projects Content. Further, in case of any dispute with or loss of any of these technicians for any reason in the course of production of Content may adversely effect the completion of our Content related project.

24. Our ability to acquire and develop desired creative Content may be adversely affected by cost overruns.

The success of our Content creation & delivery division would depend largely upon the quality of our Content created at a reasonable cost. Inability to produce and develop high quality Content at competitive cost may adversely affect our financials and business condition.

25. Any failure in our information technology systems could adversely affect our business.

The day-to-day operations of our Family Entertainment Centre, Onshore Resorts, Sports Village, and Content creation & delivery business along with the corporate activities such as processing of financial & accounting information or engaging in normal business activities depends on the functioning of our information technology systems. Although we believe that we have effective backup systems in place, any disruption of an information technology related component could affect our business.

26. Our operations of Family Entertainment Centre, Onshore Resorts and Sports Village are subject to hazards such as theft and other risks, and could expose us to liabilities, loss in income and increased expenses.

Our operations of running Family Entertainment Centre, Onshore Resort and Sports Village are subject to hazards inherent in our services, such as risks of theft, vandalism, work accidents, fire or explosion, including hazards that may cause injury and loss of life, severe loss and damage to and destruction of property and environment. Some of such incidents, which may or may not be caused because of negligence or fault of ours, could also result in imposition of civil or criminal penalties on us. In addition, such events could affect our business, reputation, financial condition or results of operations.

27. Accidents in our Family Entertainment Centre, Onshore Resort and Sports village may lead to public liability consequences. Further, the value of our brand, and our revenue could be diminished if we are associated with negative publicity.

Our business is dependent on the trust our customers have in the quality of our service. Any negative publicity regarding our Company, including those arising from a drop in quality of service at our FEC, Onshore Resort and Sports Village, mishaps at our FEC, Onshore Resort and Sports Village, or any other unforeseen events could adversely affect our reputation and our results from operations. We believe that, we have in place a system of effective safety regulations and disaster management in case of any fire outbreaks or other accidents at all our premises. However, in the event of any accident, we and our directors and key managerial employees may be exposed to civil, criminal, and tortuous liabilities.

28. Disruptions or lack of basic infrastructure such as our electricity, water supply and transport could adversely affect our operations.

Any disruption in basic infrastructure such as supply of electricity, water and transportation could affect the operations of our FEC, Onsore Resort and Sports Village, the services to our guests and increase in our operating costs, and, as a result, could have an adverse effect on our business, results of operations and financial condition.

29. We undertake risks in the development of our Family Entertainment Centre, Onshore Resort and Studio Floors.

We intend to contract with third-party contractors to construct additional rooms at our Onshore Resort, addition of new screens, development of Shopping Complex and Studio floors for Content production and, accordingly their compliance with our construction schedules and budgets is not fully under our control. Our construction activities are also subject to risks relating to:

• the inability to obtain, or delays in obtaining, all necessary governmental and local regulatory permits and authorizations; • construction costs or delays may exceed original estimates which could make the development uneconomical or unprofitable; • the possibility of fines and penalties being imposed on us due to non-compliance of statutory norms by the contractor; and

Any of the above risks, should they occur, could have an adverse effect on our business, results of operation and financial condition.

30. We have incurred losses in F.Y.2005-06 & F.Y. 2006-07

We have incurred losses of Rs.9.12 Lakhs in F.Y. 2005-06 as per our restated financial statements. Such loss was attributed to high provision for deferred tax amounting to Rs. 58.30 Lakhs. However, the operations of our Company were in fact profitable. Further, we have incurred losses of Rs.180.19 Lakhs in F.Y 2006-07 and the reason for such loss is attributed to sale of our immovable property at a loss of Rs. 298.03 Lakhs as the property was affected by Tsunami in the year 2004. Considering the fact this loss was extraordinary in nature our core operations were profitable during the F.Y. 2006- 07. Although our existing operations are profitable we cannot guarantee that we will not make losses in the future.

31. One of our Group Company i.e. Vesa Holdings Private Limited has incurred losses in the preceding three(3) financial years and registered negative Net Worth for the same period. The following statement showing losses incurred by them during the preceding three (3) financial years: (Rs. in Lakhs) Particulars 31 Mar- 08 31-Mar-07 31-Mar-06 Profit After Tax (1.07) (1.13) (1.12)

Particulars 31 Mar- 08 31-Mar-07 31-Mar-06 Net Worth (1340.66) (1339.63) (1338.55)

32. There were shortfall in the performance of Pentasoft Technologies Limited (Formerly: Pentafour Communications Limited), our Promoter Group companies, when compared to promises made in its last Public Issue.

Pentasoft Technologies Limited, our Promoter Group Company, undertook a public offering in 1995. There were shortfalls in the performance of the offering when compared against the projections made in the offer documents. For more details please refer to "Promises versus Performance" on page 223 of this Draft Red Herring Prospectus

33. One of the Objects of the Issue is to acquire land at Coimbatore and Madurai for setting up new Family Entertainment Centres. Our Company has not yet identified the locations for the same.

Our Company plans to acquire / establish Family Entertainment Centre in Coimbatore and Madurai. We are yet to identify the location for all of those projects. We may not be able to acquire suitable land in these cities if favorable terms are not offered to us by land-owners. For details please refer to "Objects of the Issue" appearing on page 54 of the Draft Red Herring Prospectus.

34. We have not entered into any agreement with the contractors / suppliers for development of the Project.

We have identified Cheralathan Associates- Architects and Consultants as the sole architect and consultant for the infrastructure development of the Project. This consultant has also built the present FEC, Onshore Resort and Sports Village of our Company. We have also not placed orders for most of the equipments for the proposed theatres and studio complex, which is proposed to be funded from the Issue proceeds. We are subject to risks of cost escalation due to Project overruns, which may require us to raise additional funds by way of debt or equity.

35. Our Company may face risks of delays/non-receipt of the requisite regulatory/statutory approvals or licenses for any of our Objects arising out of the Issue. Any delay in receipt or non-receipt of licenses or approvals could result in cost and time overrun.

We would be applying for various licenses, approvals, registrations at various stages of implementation for the Project. Any delay in receipt or non-receipt of licenses or approvals that may be required for the Project could result in cost and time overrun, and accordingly adversely affecting our operations and profitability. For details, please refer to section titled "Government & other Approvals" on page 201 of this Draft Red Herring Prospectus.

36. Delay in raising funds from the IPO could adversely impact the implementation schedule

The expansion of our proposed Project is to be largely funded from the proceeds of this IPO. We have not identified any alternate source of funding and hence any failure or delay on our part to mobilize the required resources or any shortfall in the Issue proceeds may delay the implementation schedule. We therefore, cannot assure that we would be able to execute the expansion Project within the given timeframe, or within the costs as originally estimated by us. Any time overrun or cost overrun may adversely affect our growth plans and profitability.

37. There is no monitoring agency appointed by our Company and the deployment of funds is at the discretion of our Management and our Board of Directors, though it shall be monitored by the Audit Committee.

As per SEBI DIP Guidelines, appointment of monitoring agency is required only for Issue size above Rs. 50000 Lakhs. Hence, we have not appointed a monitoring agency to monitor the utilization of Issue proceeds. However, the Audit Committee of our Board, will monitor the utilization of Issue proceeds. Further, our Company shall inform about material deviations in the utilization of issue proceeds to the stock exchange and shall also simultaneously make the material deviations / adverse comments of the Audit Committee public through advertisement in newspapers.

EXTERNAL RISK FACTORS

38. Global recession and market conditions could cause our business to suffer.

The developed economies of the world viz. US, Europe, Japan and other are on the verge of a major recession which is affecting the economic condition and markets of not only these economies but also the economies of the emerging markets like Brazil, Russia, India and China. General business and consumer sentiment has been adversely affected due to the global slowdown and there can be assurance whether these developed economies will see good economic growth in the near future. Consequently, this has also affected the global stock and commodity markets.

39. A slowdown in economic growth in India could cause our business to suffer.

Our performance and growth is directly related to the performance of the Indian economy. The performance of the Indian Economy is dependent among other things on the interest rate, political and regulatory actions, liberalization policies, commodity and energy prices etc. A change in any of the factors would affect the growth prospects of the Indian economy, which may in turn adversely impact our results of operations, and consequently the price of our Equity Shares.

40. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely affect our business and the Indian financial markets.

Public places like theatres, resorts, hotel, malls could and have in the past been targets for terrorist attacks and rioting. Any violence in public places could cause damage to life and property, and also impact customer sentiment and their willingness to visit such places, which would have a material adverse effect on our results of operations. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse impact on our business and the price of our Equity Shares.

41. The price of the Equity Shares may be volatile, and you may be unable to resell your Equity Shares at or above the Issue Price or at all.

Prior to the Issue, there has been no public market for our Equity Shares, and an active trading market on the Stock Exchanges may not develop or be sustained after the Issue. The Issue Price of our Equity Shares may bear no relationship to the market price of the Equity Shares after the Issue. The market price of the Equity Shares after this Issue may be subject to significant fluctuations in response to, among other factors, our results of operations and performance, subsequent corporate actions taken by us, performance of our competitors, market conditions specific to the entertainment industry, and the market perception about investments in the film exhibition industry.

42. You will not be able to sell or transfer any of our Equity Shares till such time until the listing of our Equity Shares.

Under the SEBI DIP Guidelines, we are permitted to allot Equity Shares within fifteen (15) days of the closure of the Public Issue. Consequently, the Equity Shares you purchase in this Issue may not be credited to your book or demat account, with Depository Participants within fifteen (15) days of the closure of the Public Issue. You can start trading in the Equity Shares only after they have been

credited to your demat account and listing and trading permissions are received from the Stock Exchanges There can be no assurances that the Equity Shares allotted to you pursuant to this Issue would be credited to your respective demat accounts, or that the trading in our Equity Shares will commence within the specified time period.

43. Any downgrading of India’s debt rating by an independent agency may have a material impact on our operations.

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

44. Natural calamities could have a negative impact on the Indian economy and cause our business to suffer.

India has experienced natural calamities such as earthquakes, Tsunami, floods and droughts in the past few years. The extent and severity of these natural disasters determines their impact on the Indian economy. For example, in December 2004, Southeast Asia, including the eastern coast of India, experienced a massive tsunami and in October 2005, the State of Jammu and Kashmir experienced an earthquake, both these events caused significant loss of life and property damage. Unforeseen circumstances, such as prolonged spells of below normal rainfall and other natural calamities, could have a negative impact on the Indian economy, especially on the rural areas, which could adversely affect our business, financial condition, results of operation and the price of our Equity Shares.

45. Future sales of our Equity Shares may negatively affect our Equity Share price.

Future sales of substantial amounts of our Equity Shares in the public market, or even the potential for such sales, could adversely affect the price of our Equity Shares and could impair our ability to raise capital. All of the shares sold in this offering, will be freely tradable without restriction. The Equity Shares owned by our Promoters are subject to lock-in as detailed under the section titled "Capital Structure" beginning on page no. 42 of this Draft Red Herring Prospectus. We cannot assure you that they will retain ownership of our Equity Shares after the lock-in period following this offering. Sales or distributions by our Promoters or other shareholders of substantial amounts of our Equity Shares in the public market could adversely affect prevailing market prices for our Equity Shares.

46. The Equity markets and prices of Equity Shares are generally highly volatile.

The prices of our Equity Shares on the Stock Exchanges may fluctuate after this Issue as a result of several factors including: • Volatility in Indian and global securities market; • Our operations performance & financial results; • Performance of our competitors and perception in the Indian market about the entertainment sector; • Changes in the estimates of our performance or recommendations by financial analysts; • Significant development in India’s economics liberalization and de-regulation policies; and • Significant development in India’s fiscal and environmental regulations

There has been no public market for our Company’s Equity Shares till now and the prices of the Equity Shares may fluctuate after this Issue. There can be no assurance that an active trading market for the Equity Shares will develop or be sustained after this.

NOTES TO THE RISK FACTORS :

1) SIZE OF THE ISSUE :

Initial Public Offering of 1,21,00,000 Equity Shares of Rs. 10/- each ("Equity Shares") for cash at a price of Rs [•] per Equity Share aggregating Rs. [•] Lakhs, comprising of a Fresh Issue of 99,00,000 Equity Shares by Mayajaal Entertainment Limited and an Offer for Sale of 22,00,000 Equity Shares by the selling shareholder. The Fresh Issue and the Offer for Sale are jointly referred to as the "Issue". 1,00,000 Equity Shares of Rs. 10/- each will be reserved in the issue for subscription by Eligible Employees (referred to as the "Employee Reservation Portion") and 7,00,000 Equity Shares of Rs. 10/- each will be reserved for the Eligible Shareholders of our Promoter and Promoter Group Company (referred to as the "Shareholders of the Promoter and its Group Company Portion"). The offer of Equity Shares other than the Employee Reservation Portion and Shareholders of the Promoter and its Group Company Portion shall be called as the "Net Issue". The Net Issue is of 1,13,00,000 Equity Shares of Rs. 10/- each constituting 25.36 % of our post issue capital.

2) The average cost of acquisition of Equity Shares by the Promoter:

Name of the Promoter Average Cost of Acquisition (Rs.) per share of face value of Rs.10/- per share Pentamedia Graphics Limited 128.36*

* Promoter has valued the Equity Shares of our Company at Rs. 22.50 per share of face value of Rs. 10/- as per the Book Value of our Company due to non-listing of Equity Shares of Mayajaal pursuant to Composite Scheme of Amalgamation, Arrangement & Compromise. For more information on the Composite Scheme of Amalgamation, Arrangement & Compromise, see the section titled "Our History and Corporate Structure" beginning on page 120 of this Draft Red Herring Prospectus.

3) The Net worth of our Company as on 30 th September, 2008 is Rs. 7620.44 Lakhs

4) The Book -Value per share of our Company as on 30 th September, 2008 is Rs. 21.99

5) Investors may please note that in the event of over subscription, allotment shall be made on proportionate basis in consultation with the Bombay Stock Exchange Limited, the Designated Stock Exchange. For more information, please refer to "Basis of Allotment" on page 256 of the Draft Red Herring prospectus.

6) Investors are advised to refer to the paragraph on "Basis for Issue Price" on page 69 of this Draft Red Herring Prospectus before making an investment in this issue.

7) No part of the Issue proceeds will be paid as consideration to Promoter, Promoter Group, Directors, key management employee, associate companies, or Group Companies.

8) Investors may contact the BRLM or the Compliance Officer for any complaint/clarifications/information pertaining to the Issue. For contact details of the BRLM and the Compliance Officer, refer the front cover page.

9) Other than as stated in the section titled “Capital Structure” beginning on page 42 of this Draft Red Herring Prospectus, our Company has not issued any Equity Shares for consideration other than cash.

10) Trading in Equity Shares of our Company for all the Investors shall be in dematerialized form only.

11) The Issue is being made through a 100% Book Building Process wherein up to 50% of the Net Issue will be allocated on a proportionate basis to Qualified Institutional Buyers ("QIBs") (including 5% thereof to be allocated to Mutual Funds). Further, atleast 15% of the Net Issue will be available for allocation

on a proportionate basis to Non-Institutional bidders and atleast 35% of the Net Issue will be available for allocation on a proportionate basis to the Retail Individual Bidders, subject to valid bids being received at or above the Issue Price.

12) Except as disclosed in the sections titled “Our Promoter” or “Our Management” beginning on pages 139 and 124 of this Draft Red Herring Prospectus, none of our Promoters, our directors and our key managerial employees have any interest in our Company except to the extent of remuneration and reimbursement of expenses and to the extent of the Equity Shares held by them or their relatives and associates or held by the companies, firms and trusts in which they are interested as directors, member, partner and/or trustee and to the extent of the benefits arising out of such shareholding. For Related Party transactions refer to the section entitled “Related Party Transactions” on page 151 of this Draft Red Herring Prospectus. For details relating to loans and advances, please refer to section entitled “Financial Information” on page 153 of the Draft Red Herring Prospectus.

13) Any clarification or information relating to the Issue shall be made available by the BRLM and our Company to the investors at large and no selective or additional information would be available for a section of investors in any manner whatsoever. Investors may contact the BRLM for any complaints pertaining to the Issue. Investors are free to contact the BRLM for any clarification or information relating to the Issue who will be obliged to provide the same to the investor.

14) For transactions in Equity Shares of our Company by the Promoter Group and directors of our Company in the last six (6) months, please refer to paragraph under the section entitled "Capital Structure" on page 42 of this Draft Red Herring Prospectus.

15) Our Company and the BRLM shall update this DRHP in accordance with the Companies Act, 1956. All information shall be made available by our Company and the BRLM to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever.

16) There are no contingent liabilities as on 30 th September, 2008, except as mentioned in the section entitled "Financial Information" on page 153 of this Draft Red Herring Prospectus.

17) For details of any hypothecation, mortgage or other encumbrances on the movable and immovable properties of our Company please refer to the section entitled "Financial Information" on page 153 of this Draft Red Herring Prospectus.

SECTION III: INTRODUCTION

SUMMARY

This is only the summary and does not contain all information that you shall consider before investing in Equity Shares. You should read the entire Draft Red Herring Prospectus, including the information on “Risk Factors” and related notes on page13 of this DRHP before deciding to invest in Equity Shares.

THE INDUSTRY OVERVIEW

The Indian Entertainment Industry

The Indian Entertainment and Media (E&M) industry is poised to grow at 18% compound annual growth rate (CAGR) to reach Rs.1 trillion by 2011 from its present size of Rs.437 billion, according to the 2007 annual edition of the FICCI - PricewaterhouseCoopers report Indian Entertainment and Media Industry – A Growth Story Unfolds. This coupled with technological advancements, policy initiatives taken by the Indian Government that are encouraging the inflow of investment and initiative by private media companies, will prove to be the key drivers for the entertainment and media industry. The industry has been forecast to outperform the economic growth in each year, till 2011. [ Source: PricewaterhouseCoopers Annual Report on Indian Entertainment and Media Industry 2007 ]

A) Family Entertainment Centre

1. Multiplex Development

Buoyed by positive regulatory changes, booming consumerism and multiple revenue streams, the nation’s multiplex industry is set for an unprecedented boom. So much so that the number of screens alone is expected to record a three-fold jump from 500 now to over 1500 by the fiscal 2010. This will drive the industry growth at 62 per cent CAGR over the same period to Rs 4,000 Cr, thus contributing 28 percent of the total theatrical sales for the film industry (Source: Systematix Institutional Research)

Due to lower entertainment tax in Tamil Nadu (no e-tax on Tamil content) and Andhra Pradesh (15% tax on Telugu content), there has been large-scale investment in cinema infrastructure in these two states. The two states account for 41% of total theatres in the country.

Among the major factors driving the growth of multiplex industry are also favorable demographic changes, retail boom and the emergence of a mall culture. For instance, a number of mall developers are considering movies/theatres and entertainment outlets as the key elements attracting Footfalls to the malls, and thus multiplexes are fast emerging as one of the key anchor tenants for most organized retail outlets in India.

2. Mall Development

India has witnessed the emergence of a mall culture and development of malls over the past few years. Significant investments have been channelized into development of organized retail outlets.

Increasingly, a number of mall developers are considering movies/theaters and entertainment outlets like food courts, gaming zones, shopping arcade etc as the key elements attracting Footfalls to the malls. This is being reflected in the attractive rental rates offered to such outlets, in comparison to other categories of outlets in malls. As a result, Multiplexes are fast emerging as one of the key anchor tenants for most organized retail outlets in India.

B) Hospitality- Resort

Hospitality is all about offering warmth to someone who looks for help at a strange or unfriendly place. It refers to the process of receiving and entertaining a guest with goodwill. Hospitality in the commercial context refers to the activity of hotels, restaurants, catering, inn, resorts or clubs who make a vocation of treating tourists.

Today hospitality sector is one of the fastest growing sectors in India. It is expected to grow at the rate of 8% between 2007 to 2016 (Source : The Travel and Tourism Economic Research 2006).Nowadays the travel and tourism industry is also included in hospitality sector. The boom in travel and tourism has led to the further development of hospitality industry.

C) Sports Club Development

From a recreational activity to a full-fledged career option, sports in India have evolved into a viable alternative. Therefore enormous emphasis is laid on building a sports club providing various facilities and infrastructure such as open ground for promotion of out door sports like cricket, football, volleyball, basketball etc., and rooms/halls for indoor games like carom, gymnasium, chess, table tennis etc.

D) Content Creation & Delivery

Animation Industry

With global players like Walt Disney, Imax, and Warner Bros. signing contracts with Indian animation companies for outsourcing and co-production, it is expected that the animation industry in India could touch Rs38 billion by 2009. In the next five years a 27% CAGR is expected. The cost of half an hour of animation work in India averages US$60,000. In the US and Canada the same work costs approx. US$400,000.

(Source: FICCI FRAMES, 2008)

Local animation studios are framing content mostly based on mythology. However, a few studios have ventured into animated films, based on fiction ( The Sultan, produced by Adlabs and Ocher Studios).

Live Action Films

The Indian film industry has been one of the oldest segments of the Indian entertainment and media industry. The Indian film industry comprises of a cluster of regional film industries, like Hindi, Telugu, Tamil, Kannada, Malayalam, Bengali, etc. This makes it one of the most complex and fragmented national film industries in the world. The Indian film industry has been performing exceedingly well in the past four years, having grown by 17% in the period 2004-2007. In 2007 the Indian film industry registered a growth of 14% over the previous year, marginally lower than the forecasted growth of 15%. On an overall basis, the Indian film industry stood at Rs. 96 billion in 2007, up from Rs. 85 billion in 2006. (Source: The Indian Entertainment and Media Industry Sustaining Growth, FICCI Price Waterhouse Coopers, 2008)

E) Web Entertainment

Our Company has a presence on the web entertainment platform through its twentyfour (24) hour live online multilingual entertainment portal URL http://www.numtv.com , covering over thirty (30) television channels, radio channels, films, print, stage shows and events both live and recorded. NUM TV offers entertainment through broadband connection mostly to countries other than India. Apart from web content aggregator and distributor, http://www.numtv.com offers wide range of B2C services. Since there is no market data available on web entertainment, we have restricted the information to our Company.

F) Television Entertainment

The Indian television market is on the threshold of a major technological change. New distribution technologies – such as digital cable, DTH are planning to hit the market soon and broadcasters and cable operators are voluntarily opting for addressable cable systems. In fact, all spheres of the industry – content, broadcasting, distribution and regulation – are witnessing technological changes. The Telecom Regulatory Authority of India (TRAI), which was appointed as the regulator for the industry in 2004, has already begun putting major policy framework in place.

The global television network market is estimated to be $204 billion in 2009, growing at a compound annual rate of 6 percent from 2004. Latin America is projected to be the fastest-growing market, with a compound annual increase of 8 percent. Asia Pacific is expected to expand at a 7.1 percent compound annual rate followed by 6.4 percent growth in the United States, 5.4 percent in Canada, and 4.8 percent in Europe, Middle East and Africa (EMEA).

(Source: FICCI – PWC Report)

BUSINESS OVERVIEW

Our Company was originally incorporated as a private limited company in the year 1997 and was converted to a public limited company in the year 2002.

Our Company developed the Family Entertainment Centre in 2001 comprising of Mall & Multiplex "e.joy". In 2003, our Company developed the Sports Village "The Champ" which is a stadium cum facility centre for organizing various sports event such as cricket, snooker, squash etc. Our Company further in 2005 constructed "Onshore Resort" which is leisure cum health resort. The above facilities are spread out over an area of 26.82 acres in a single campus away from the bustle of the city, on the scenic East Coast Road near Chennai.

Our Company in the year 2000 became a 100% subsidiary of PMGL as a part of PMGL’s growth and diversification strategy.

By way of a Composite Scheme of Amalgamation, Arrangement and Compromise (the "Scheme") , PMGL subsidiaries i.e. Media Dreams Limited, Kris Srikkanth Sports Entertainment Limited and Intelivision Limited (herein after collectively referred as the “ Merged Entities” ) merged with our Company. As part of the Scheme, the Animation and Web Entertainment business of PMGL was demerged into our Company. The High Court of Madras sanctioned the Scheme by an order dated 8th November 2004, which was further modified, by an order dated 29 th November 2007.

Pursuant to the Scheme, in addition to "e-joy", "The Champ" Sports Village and "Onshore Resort" the merged entity i.e. our Company diversified into the following business activities: a) Content Creation and Delivery of Animation Films (demerged from Pentamedia Graphics Limited) b) Production of Live Action Films ( carried on by Media Dreams Limited ) c) Web Entertainment ( demerged from Pentamedia Graphics Limited ) d) Television Entertainment ( carried on by Intelivision Limited ) e) Sports related Content (from Kris Srikkanth Sports Entertainment Limited )

I. Family Entertainment Centre

Our Company, in the first phase of development of e.joy developed an area of 5 acres with a 1,00,000 sq. ft. centrally air conditioned dome which was open to public in 2001. e.joy puts together under a single roof a wholesome entertainment arena for family amusement. E.joy is equipped with over a 1000 plus car parking space and has the following facilities:

• 10 screens Multiplex • 8 lane bowling alley • Video games arcade • Console games and pool • Food Court • e.joy Bar • Maya Mall Shopping complex • Conference Hall

II. Onshore Resort: Our Company constructed a leisure cum health resort spread over an area of 5 acres and commenced operations in the year 2005. A three (3) star categorized resort dwells into the realms of leisure, entertainment, sport, business and a host of other activities with a scenic view. The resort comprises of the following:

• 40 spacious rooms, suites & cottages • Forest Themed Bar & Multi-Cuisine Restaurant

• 3 Conference Halls • Multipurpose Convention Centre • Spa Pool & Artificial Waterfall

III. "The Champ": The Sports Village is spread over an area of 17 acres and commenced operations in the year 2003. The salient features of the Sports Village are:

• Cricket Stadium with 10,000 sq.ft. of pavilion space and gallery • Billiards, Snooker, Table Tennis & Shuttle • Indoor- Cricket Ground & Squash Court • Sports Bar and Restaurant • Swimming pool, & Gymnasium • Conference Hall • Sports Lawn

Content Creation and Delivery: Our Company is a "One-Stop" production house from concept to completion of animation Content with facilities for pre-production, production and post-production activities. The division comprises of an animation studio producing 2D & 3D animated Content for the film, television, and the internet. The studio was considered to be amongst the first in Asia to produce 3D animated feature films and 2D animated feature films. Our Company also has a production division for Live Action Films, TV serials and internet Content.

Web Entertainment: Our Company has a twenty four (24) hours live online multilingual entertainment portal with over thirty (30) television channels, multilingual radio channels, multilingual press, interactive events, live events and stage plays all on the Internet at its website URL http://www.numtv.com . NUM TV offers entertainment through broadband connection mostly to countries other than India. NUM.TV commenced its operations in the year 1999 and as on date has a registered user base of two (2) Million and a subscription of 9,000 users per month.

Television Entertainment: This division consist of India’s first twenty four (24) hours “Free To Air” childrens’s television channel in English namely Splash TV which commenced its operations in 1998. Splash TV offered programmes on edutainment, infotainment and entertainment in English. The target age group was 2–16 years with live action and animated Content. It has produced more than 1000 hours of Content and has acquired several hours of Content from various production houses around the globe. Our Company has discontinued the broadcast of this channel since November 2004. However, the Content owned by our Company is currently broadcast on various television channels and is also distributed over web on a revenue sharing as well as on fixed fee basis.

Our Competitive Strengths

We believe that the following are our competitive strengths:

1. A unique multiplex of its kind, with all family entertainment under one roof 2. Strategic location 3. Resort, sports and convention facility 4. Web casting through numtv.com 5. Cross promotional and marketing synergies between the divisions 6. Our Management and key managerial personnel 7. Wide customer base 8. Presence in all entertainment segments

SUMMARY OF FINANCIAL DATA

The following tables set forth summary financial information derived from our restated financial statements for the financial years ended March 31, 2008, 2007, 2006, 2005, 2004 and period ended 30 th September, 2008.

STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED (Rs. In Lakhs) Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Assets Fixed Assets-Gross Block 12,402.91 12,261.96 11,445.63 10,571.30 13,314.04 3,549.45 Less: Depreciation 5,829.66 5,724.26 5,533.34 5,341.61 5,758.61 226.38 Net Block 6,573.25 6,537.70 5,912.29 5,229.69 7,555.43 3,323.07 Less: Revaluation Reserve ------Net Block after adjustment for 6,573.25 6,537.70 5,912.29 5,229.69 7,555.43 3,323.07 Revaluation Reserve (i) Capital Work in Progress / Pre 543.11 565.38 441.88 1,708.30 7,580.88 2,015.70 Operative Expenses (ii) Total (A) = (i+ii) 7,116.36 7,103.08 6,354.17 6,937.99 15,136.31 5,338.77 Investments (B) - - 310.92 - - - Current Assets, Loans and Advances Inventories 1,296.85 1,290.21 1,296.22 1,297.49 10,521.45 14.20 Receivables 686.10 326.22 298.68 162.11 2,571.78 1.36 Cash & Bank Balances 21.98 19.67 58.95 14.05 4.27 106.89 Loans & Advances 1,739.38 1,037.18 906.54 1,180.33 5,014.48 132.72 Total Current Assets ( C ) 3,744.31 2,673.28 2,560.39 2,653.98 18,111.98 255.17 Total Assets (D) = (A) + (B) + ( C ) 10,860.67 9,776.36 9,225.48 9,591.97 33,248.29 5,593.94 Liabilities & Provisions Loan Funds: Secured Loans 2287.88 1,677.65 1,313.26 1,575.50 800.00 - Unsecured Loans ------Share Application Money - - - - - 1,300.00 Current Liabilities & Provisions : Current Liabilities 471.85 360.25 349.64 258.21 1,111.11 627.73 Provisions 43.00 15.00 50.07 44.19 55.12 1.65 Deferred Tax Liability 437.50 290.42 331.90 353.27 294.97 55.07 Total Liabilities & Provisions (E) 3,240.23 2,343.32 2,044.87 2,231.17 2,261.20 1,984.45 Net Worth (D) - (E) 7,620.44 7,433.04 7,180.61 7,360.80 30,987.09 3,609.49 Represented By: Share Capital 3,464.92 3,464.92 3,364.92 3,364.92 3,364.92 924.95 Reserves & Surplus 4,155.52 3,987.58 3,987.58 3,995.88 27,622.64 2,742.16 Less: Revaluation Reserve ------Reserves (Net of Revaluation 4,155.52 3,987.58 3,987.58 3,995.88 27,622.64 2,742.16 Reserve) Less : Misc. expenditure not written off - - - - 0.47 57.62 Less: Accumulated Losses - 19.46 171.89 - - - Total Net Worth 7,620.44 7,433.04 7,180.61 7,360.80 30,987.09 3,609.49

STATEMENT OF PROFIT AND LOSS ACCOUNT, AS RESTATED (Rs. In Lakhs) Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Income Operating Income: Income from FEC 880.17 1292.03 1003.71 872.99 860.88 479.09 Income from Onshore Resort & Sports 167.13 334.21 244.57 136.25 - - Village Income from content creation & delivery 802.63 389.33 325.88 808.92 1,422.03 - Other Income 23.14 25.82 21.19 14.21 21.18 24.14 Total 1,873.07 2,041.39 1,595.35 1,832.37 2,304.09 503.23 Expenditure Cost of Sales 542.40 427.13 258.94 749.27 492.32 39.44 Administration Expenses 638.86 946.38 772.54 755.50 742.29 314.41 Staff Expenses 74.65 137.40 61.79 33.52 180.57 16.27 Other Expenses 2.52 5.14 0.59 1.29 5.71 - Miscellaneous/ Deferred Revenue - - - 0.47 0.29 28.81 expenditure written off Total 1,258.43 1,516.05 1,093.86 1,540.05 1,421.18 398.94 Profit before Depreciation, Interest and 614.64 525.34 501.49 292.32 882.91 104.29 Tax Less: Depreciation 105.41 190.92 191.73 135.76 253.28 93.86 Profit before Interest & Tax 509.23 334.42 309.76 156.56 629.63 10.43 Interest 129.75 204.50 195.83 97.88 - - Net Profit before Tax 379.48 129.92 113.93 58.68 629.63 10.43 Less: Provision for Tax-Current Tax 43.00 15.00 15.00 5.00 42.37 0.90 Deferred Tax 147.09 (41.48) (21.37) 58.30 49.96 4.86 Fringe Benefit Tax 2.00 3.98 2.46 4.50 - - Net Profit After Tax & Before 187.39 152.42 117.84 (9.12) 537.30 4.67 Extraordinary Items Extraordinary Items (Net of Tax) : Loss on Sale of Assets - - (298.03) - - - Prior Period Items (Refer Annexure-3) - - - - 164.12 - Net Profit After Extraordinary Items 187.39 152.42 (180.19) (9.12) 701.42 4.67 Amount transferred from General Reserve 22,965.74 Exceptional Items (Refer Annexure-3) - - - (23,617.65) - - Profit Brought Forward (19.47) (171.89) 8.30 669.33 (32.09) (36.76) Profit Carried to Balance Sheet 167.92 (19.47) (171.89) 8.30 669.33 (32.09)

ISSUE DETAILS IN BRIEF

Issue : 1,21,00,000 Equity Shares

Which Comprises: Fresh Issue: 99,00,000 Equity Shares Offer for Sale: 22,00,000 Equity Shares Of which: Employees Reservation Portion 1,00,000 Equity Shares Shareholders of the Promoter and its Group 7,00,000 Equity Shares Company Portion

Net Issue: 1,13,00,000 Equity Shares

Of which Qualified Institutional Buyers Portion Up to 56,50,000 Equity Shares (Allocation on a proportionate basis)

Out of the above 56,50,000 Equity Shares 2,82,500 Equity Shares shall be available for allocation to Mutual Funds

The balance 53,67,500 Equity Shares shall be available to all QIBs, including Mutual Funds

Non Institutional Portion 16,95,000 Equity Shares

Retail Portion 39,55,000 Equity Shares

Equity Shares outstanding prior to the Issue 3,46,50,000 Equity Shares

Equity Shares outstanding after the Issue 4,45,50,000 Equity Shares

Objects of the Issue Please see the section entitled “Objects of the Issue” on page 54 of this Draft Red Herring Prospectus.

Under subscription, if any, in the reserved portion will be added back to the Net Issue and the proportionate allocation of the same would be at the sole discretion of our Company in consultation with the BRLMs.

Under subscription, if any, in any of the categories, would be allowed to be met with spill over inter se from any other category, at the sole discretion of our Company in consultation with the BRLMs.

GENERAL INFORMATION

MAYAJAAL ENTERTAINMENT LIMITED

(Originally incorporated as West Bank Garden Farm Clubs Private Limited on 9 th July, 1997 under the Companies Act, 1956. The name of our Company was changed to Hotel Whales Private Limited on 28 th December, 1999. The name of our Company was then changed to Mayajaal Entertainment Private Limited on 11 th January, 2001. Our Company was subsequently converted to a public limited company and the name was changed to Mayajaal Entertainment Limited, pursuant to resolutions passed at a shareholders meeting held on 22 nd April, 2002.)

Registered & Corporate Office : No. 34/1, 35, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kancheepuram District– 603112, Tamil Nadu.

Contact Person: – Mr. Subramanian Ganesan, Company Secretary & Compliance Officer. Email:[email protected]

Our Company’s Company Identification Number is (CIN):U55101TN2000PLC046361 and is registered with the Registrar of Companies, Tamilnadu, Chennai, having its address at Block No.6, B-Wing, 2 nd Floor Shastri Bhawan 26, haddows Road, Chennai - 600034.

Board of Directors :

Our Board of Directors comprise of the following members:

Name Designation Status Mr. Udeep Bogollu Managing Director Executive & Non Independent Ms. Anita Chandrasekaran Whole time Director Executive & Non Independent Ms. Sumathi Sridharan Director Non Executive & Non Independent Mr. Mahesh Shankar Independent Director Independent & Non Executive Mr. Harsha Lakshmikanth Independent Director Independent & Non Executive Mr. Shriram Pathanjali Independent Director Independent & Non Executive Mr. Arun Sultania Independent Director Independent & Non Executive

For further details of Management of our Company, please refer to section titled "Our Management" on page 124 of this Draft Red Herring Prospectus.

Company Secretary & Compliance Officer

Mr. Subramanian Ganesan Mayajaal Entertainment Limited No. 34/1, 35, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kancheepuram District– 603112, Tamil Nadu, India; Tel: +91-44-27472860; Fax: +91-44-27472870; Website: www.mayajaal.com; E-mail:[email protected]

Investors can contact our Compliance Officer in case of any pre-Issue or post-Issue related matters such as non-receipt of letters of allotment, credit of allotted shares in the respective beneficiary account, refund orders etc . BOOK RUNNING LEAD MANAGER

Comfort Securities Private Limited A-301, Hetal Arch, Opposite Natraj Market, S.V.Road, Malad (West), Mumbai- 400 064. Tel: 022 - 28449765 Fax: 022 - 28892527 Email: [email protected] Website: www.comfortsecurities.co.in Contact Person: Mr. Sarthak Vijlani SEBI Regn. No: INM 000011328

LEGAL ADVISOR TO THE ISSUE Rajani Associates Advocates & Solicitors, 204-207 Krishna Chambers, 59 New Marine Lines Tel: 022 40961000 Fax: 022 40961010 E-mail: [email protected]

BANKERS TO OUR COMPANY

Andhra Bank Mount Road Branch 95 Anna Salai, Chennai – 600 002 Tel No. 044-28600200 Fax: 044-24993518 Website: www.andhrabank.in

Kotak Mahindra Bank 3, Das India Tower, 2nd Floor, 2 nd Line Beach Parrys, Chennai – 600 001. Tel No. 044 45002500 Fax: 044 45002510 Website: www.kotak.com

Repco Bank Limited. Repco Tower, No. 33, North Usman Road, T.N.Nagar Chennai – 600 017. Tel No. 044 28340715 Fax: 044 28344037 Website: www.repcobank.com

APPRAISAL OF THE PROJECT

Repco Bank Limited. Repco Tower, No. 33, North Usman Road, T.N.Nagar Chennai – 600 017. Tel No. 044 28340715 Fax: 044 28344037 Website: www.repcobank.com Contact Person: Mr. Isbella

REGISTRAR TO THE ISSUE

CAMEO CORPORATE SERVICES LIMITED "Subramaniam" Building, No. 1, Club House Road, Chennai – 600 002 Tel No. 044 2846 0390, Fax: 044 2846 0074 Website: www.cameoindia.com E- Mail: [email protected] Contact Person: Mr. R. D. Ramaswami

ESCROW COLLECTION BANKERS TO THE ISSUE

[•]

SYNDICATE MEMBER (S)

[•]

IPO GRADING

Credit Analysis & Research Limited 4th Floor, Godrej Coliseum, Somaiya Hospital Road, Off Eastern Express Highway, Sion (East), Mumbai - 400 022. Tel: 022 6754 3499 Fax: 022 6754 3457 E-mail: [email protected] Website: www.careratings.com Contact Person: Mr. Naveen Sharma

We have appointed above-mentioned IPO Grading Agency for grading of proposed Initial Public Offering of our Company. This IPO Grading Agency has assigned [•] Grade to the Initial Public Offering of our Company. The rationale of the IPO Grading Agency for assigning [•] Grade is as under: [•]

IPO Grading concept is relatively new and the investors should carefully consider all of the information provided in this Draft Red Herring Prospectus including IPO Grading Information and should make their own judgement prior to making any investment in this Issue. This IPO Grading does not take cognizance of the Issue Price of our Equity Shares and it is not a recommendation to buy, sell or hold our Equity Shares.

Credit Rating

As the Issue is of Equity shares, credit rating is not mandatory.

Trustees

As the Issue is of Equity Shares, the appointment of Trustees is not mandatory.

Brokers to the Issue

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

Monitoring Agency

As the net proceeds of the Issue will be less than Rs.50000 Lakhs, under the SEBI DIP Guidelines it is not required that a monitoring agency be appointed by our Company.

Inter-se allocation of Responsibilities

Comfort Securities Private Limited being the sole Book Running Lead Manager, shall be responsible for the following: 1. Capital structuring with the relative components and formalities such as type of instruments. 2. Due diligence of our Company including our operations, management and business plans. Drafting and design of the Draft Red Herring Prospectus and statutory advertisement including memorandum containing salient features of the Prospectus. The BRLM shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges, the RoC and SEBI including finalization of Prospectus and the RoC filing of the same. 3. Drafting and approval of all publicity material other than statutory advertisement as mentioned in (2) above including corporate advertisement, brochure, road show presentations, FAQs and corporate films. 4. Appointment of other intermediaries namely, Registrar, printers, advertising agency and Bankers to the Issue. 5. Institutional marketing of the Issue, which will cover, inter alia, a. Finalizing the list and division of investors for one to one meetings; and b. Finalizing road show schedule and investor meeting schedules 6. Non-Institutional and retail marketing of the Issue, which will cover, inter alia, a. Formulating marketing strategies, preparation of publicity budget; b. Finalizing media and public relations strategy; c. Finalizing centres for holding conferences; d. Finalizing collection centres; e. Follow-up on distribution of publicity and Issue material including form, prospectus and deciding on the quantum of the Issue material; f. Co-ordination with Stock Exchanges for book building software, bidding terminals and mock trading; and g. Finalization of pricing and institutional allocation in consultation with our Company. 7. Follow – up with the bankers to the issue to get quick estimates of collection and advising the issuer about closure of the issue, based on the correct figures. 8. The post bidding activities including management of escrow accounts, coordination of non- institutional allocation, intimation of allocation and dispatch of refunds to Bidders etc. The post issue activities will involve essential follow up steps, which include the finalization of listing of instruments and dispatch of certificates and demat delivery of shares, with the various agencies connected with the work such as the Registrar to the Issue and Bankers to the Issue and the bank handling refund business. The merchant banker shall be responsible for ensuring that these agencies

fulfill their functions and enable it to discharge this responsibility through suitable agreements with our Company.

Book Building Process

Book Building, with reference to this Issue, refers to the process of collection of Bids on the basis of the Red Herring Prospectus within the Price Band. The Issue Price is finalized after the Bid/Issue Closing Date. The principal parties involved in the Book Building Process are:

Our Company The Selling Shareholders Book Running Lead Managers; Syndicate Members who are intermediaries registered with SEBI or registered as brokers with the stock exchange (s) and eligible to act as underwriters. Syndicate Members are appointed by the BRLM; Escrow Collection Banks; and Registrars to the Issue

SEBI through its Guidelines has permitted an issue of securities to the public through the 100% Book Building Process, wherein up to 50% of the Net Issue shall be available for allocation to QIBs on a proportionate basis out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the Qualified Institutional Buyers Portion shall be available for allocation on a proportionate basis to all Qualified Institutional Buyers, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Net Issue shall be available for allotment on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Net Issue shall be available for allotment on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Further 1,00,000 Equity Shares shall be available for allotment on a proportionate basis to Eligible Employees, subject to valid Bids being received at or above the Issue Price and further 7,00,000 Equity Shares shall be available for allotment on a proportionate basis to Eligible Shareholders of our Promoter and Promoter Group Company, subject to valid Bids being received at or above the Issue Price.

In accordance with SEBI DIP Guidelines, QIBs are not allowed to withdraw their Bid(s) after the Bid/Issue Closing Date. For further details see section titled “Issue Structure” on page 229 of the Draft Red Herring Prospectus.

The process of book building, under SEBI DIP Guidelines, is relatively new and the investors are advised to make their own judgement about investment through this process of book building prior to making a Bid(s) in the Issue.

We will comply with the Guidelines issued by SEBI for this Issue. In this regard, we have appointed Comfort Securities Private Limited, as BRLM to manage the issue and to procure subscriptions to the Issue.

Illustration of Book Building and Price Discovery Process (Investors should note that this example is solely for illustration purpose and is not specific to the Issue)

Bidders can bid at any price within the price band. For instance, assume a price band of Rs. 20 to Rs. 24 per share with issue size of Rs. 3,000 equity shares and five bids are received from bidders. Out of which one bidder has bid for 500 shares at Rs. 24 per share while another bid for 1,500 shares at Rs. 22 per share. A graphical representation of the consolidated demand and price would be made available at the bidding centres during the bidding period. The illustrative book as shown below shows the demand for the shares of our company at various prices and is collated from bids from various investors.

Bid Quantity Bid Price (Rs.) Cumulative Quantity Subscription

500 24 500 16.67% 1000 23 1500 50.00% 1500 22 3000 100.00% 2000 21 5000 166.67% 2500 20 7500 250.00%

The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the desired number of shares is the price at which the book cuts off i.e. Rs. 22 in the above example. The issuer, in consultation with the BRLM, will finalize the issue price at or below such cut off price i.e. at or below Rs. 22. All bids at or above this issue price and cut-off bids are valid bids and are considered for allocation in the respective categories.

Steps to be taken by the Bidders for bidding:

Check eligibility for bidding (please refer to the section “Issue Procedure – Who Can Bid” on page no. 232 of this Draft Red Herring Prospectus; Bidder necessarily needs to have a demat account; and Ensure that the Bid-cum-Application Form/ASBA Form is duly completed as per instructions given in the Red Herring Prospectus and in the Bid-cum-Application Form / ASBA Form.

Withdrawal of the Issue

Our Company, in consultation with the Book Runners, reserves the right not to proceed with the Issue at any time after the Bid/Issue Opening Date but before the Board meeting for Allotment, without assigning any reason thereof. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment and (ii) the final RoC acknowledgement of the Prospectus after it is filed with the RoC. Under the SEBI DIP Guidelines QIBs are not allowed to withdraw their Bids after the Bid/Issue Closing Date.

BID/ISSUE PROGRAMME

Bidding Period/Issue Period

Bid/Issue Opens on: [•]

Bid/Issue Closes on: [•]

Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time) during the Bidding Period as mentioned above at the bidding centres mentioned on the Bid-cum- Application Form except that on the Bid/Issue Closing Date, Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time) and uploaded till (i) 5.00 p.m. in case of Bids by QIB Bidders, Non- Institutional Bidders where the Bid Amount is in excess of Rs. 1,00,000 and (ii) till such time as permitted by the NSE and the BSE, in case of Bids by Retail Individual Bidders where the Bid Amount is up to Rs. 1,00,000. Due to limitation of time available for uploading the Bids on the Bid/Issue Closing Date, the Bidders are advised to submit their Bids one day prior to the Bid/Issue Closing Date and, in any case, no later than 3.00 p.m. (Indian Standard Time) on the Bid/Issue Closing Date. Bidders are cautioned that in the event a large number of Bids are received on the Bid/Issue Closing Date, as is typically experienced in public offerings, which may lead to some Bids not being uploaded due to lack of sufficient time to upload, such Bids that cannot be uploaded will not be considered for allocation under the Issue. Bids will only be accepted on working days.

Investors please note that as per letter no. List/smd/sm/2006 dated 3 rd July, 2006 and letter no. NSE/IPO/25101-6 dated 6 th July, 2006 issued by BSE and NSE respectively, Bids and any revision in Bids shall not be accepted on Saturdays and holidays as declared by the Stock Exchanges.

Any revision in the Price Band and the revised Bid/ Issue Period, if applicable, will be duly disseminated by notification to the BSE and NSE by issuing a press release and by indicating the change on the website of the BRLM and at the terminals of the Members of the Syndicate.

Our Company reserves the right to revise the Price Band during the Bidding Period in accordance with SEBI DIP Guidelines. The cap on the Price Band should not be more than 20% of the floor of the Price Band. Subject to compliance with the immediately preceding sentence, the floor of the Price Band can move up or down to the extent of 20% of the floor of the Price Band advertised at least one day prior to the Bid Opening Date/Issue Opening Date.

In case of revision of the Price Band, the Issue Period will be extended for three (3) additional days after revision of the Price Band, subject to the total Bid/Issue Period not exceeding ten (10) working days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the BSE and the NSE, by issuing a press release and by indicating the changes on the websites of the BRLM and on the terminals of members of the Syndicate.

UNDERWRITING AGREEMENT

After the determination of the Issue Price and prior to filing of the Prospectus with RoC, we will enter into an Underwriting Agreement with the Underwriters for our Equity Shares proposed to be issued through the Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the BRLM shall be responsible for bringing in the amount devolved in the event that the Syndicate Members do not fulfill their underwriting obligations in terms of the Underwriting Agreement.

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

Name and Address of the Underwriters Indicative Number of Amount Underwritten Equity shares to be (Rupees In Lakhs) Underwritten COMFORT SECURITIES PRIVATE LIMITED [•••] [•••] A-301, Hetal Arch, Opposite Natraj Market, S.V.Road, Malad (West), Mumbai- 400 064. Tel : 022 28449765 Fax: 022 28892527 Email: [email protected] Website: www.comfortsecurities.co.in Contact Person: Mr. Sarthak Vijlani SEBI Regn. No: INM 000011328

[•] [•••] [•••]

Total [•••] [•••]

The above-mentioned amount is an indicative of underwriting and this would be finalized after pricing and actual allotment. The above Underwriting Agreement is dated [•••]

In the opinion of the Book Running Lead Manager(s) and the Board of Directors acting through the Managing Director, based on a certificate given to them by the Underwriters, the resources of the Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. All the above- mentioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the stock exchange(s). The above Underwriting Agreement has been accepted by the Board of Directors acting through the Managing Director of our Company and has issued letters of acceptance to the Underwriters.

Allocation among Underwriters may not necessarily be in proportion to their underwriting commitments. Notwithstanding the above table, the BRLM and the Syndicate Members shall be severally responsible for ensuring payment with respect to Equity Shares allocated to investors procured by them. In the event of any default in payment, the respective Underwriter, in addition to other obligations to be defined in the Underwriting Agreement, will also be required to procure/subscribe to the extent of the defaulted amount.

CAPTAL STRUCTURE (Rs. In Lakhs)

Aggregate Nominal Aggregate value Value at Issue Price (A) Authorized Share Capital 4,50,00,000 Equity Shares of Rs.10/- each 4500.00 (B) Issued, Subscribed and Paid-up Equity Capital 3,46,50,000 Equity Shares of Rs.10/- each (fully paid up) 3465.00 (C) Present Issue in terms of this Draft Red Herring Prospectus Fresh Issue of Equity Shares 990.00 [•] 99,00,000 Equity Shares of Rs.10/- each Offer for Sale 220.00 22,00,000 Equity Shares of Rs.10/- each Out of Which (D) Employee Reservation Portion: 1,00,000 Equity Shares of Rs.10/- each (fully paid up) 10.00 [•] (E) Shareholders of the Promoter and its Group Company Portion: 7,00,000 Equity Shares of Rs.10/- each (fully paid up) 70.00 [•] (F) Net Offer to the Public 113,00,000 Equity Shares of Rs.10/- each (fully paid up) 1130.00 [•] Of which Qualified Institutional Buyers Portion Of Up To 56,50,000 Equity 565.00 [•] Shares: Non Institutional Portion of at least 16,95,000 Equity Shares 169.50 [•] Retail Portion of at least 39,55,000 Equity Shares 395.50 [•] (G) Issued, Subscribed and Paid-up Equity Capital after the Issue 4,45,50,000 Equity Shares of Rs.10/- each (fully paid up) 4455.00 [•] (G) Share Premium Account Before the Issue 3988.69 After the Issue [•]

Offer for Sale by Selling Shareholders:

The Issue comprises an Offer for Sale of 22,00,000 Equity Shares by Anchor Constructions Private Limited.

The Equity Shares constituting the Offer for Sale were acquired by the Selling Shareholder pursuant to the Scheme of Amalgamation in lieu of the invested capital, which had been in existence for a period of more than one year prior to the restructuring exercise.

DETAILS OF INCREASE IN AUTHORISED CAPITAL

Date Authorised Capital (Rs.) Face Value No. of Particulars Date of (Rs.) Shares AGM/ EGM 09.07.1997 Rs. 100 Lakhs 10/ 10,00,000 Incorporation -----

Date Authorised Capital (Rs.) Face Value No. of Particulars Date of (Rs.) Shares AGM/ EGM 29.10.1999 From Rs.100 Lakhs to Rs. 1500 10/ 1,50,00,000 Increase 29.10.1999 Lakhs 22.12.2000 From Rs.1500 Lakhs to Rs. 2000 10/- 2,00,00,000 Increase 22.12.2000 Lakhs 26.09.2003 Rs.2000 Lakhs 1/- 20,00,00,000 Subdivision of 26.09.2003 Share Capital From Rs.10/- to Re.1/- each 12.10.2004 From Rs.2000 Lakhs to Rs 4000 1/- 40,00,00,000 Increase 12.10.2004 Lakhs # 15.10.2008 Rs.4000 Lakhs 10/- 4,00,00,000 Consolidation 15.10.2008 of Share capital from Re.1/-to Rs.10/- each 15.10.2008 From Rs.4000 Lakhs to Rs 4500 10/- 4,50,00,000 Increase 15.10.2008 Lakhs

# Pursuant to the sanction of the Scheme of Amalgamation

NOTES FORMING PART OF THE CAPITAL STRUCTURE:

1. Equity Share Capital History of our Company

Date of No. of Face Cumulative Issue Conside ration Remarks Securities Cumulative Allotment Equity Value no. of shares Price (Cash or Premium Share Shares (Rs.) (Rs.) Other than Account Premium(Rs. Cash) (Rs. in in Lakhs) Lakhs) 09.07.1997 2000 10 2000 10 Cash Subscription to Nil Nil Memorandum of Association 27.11.2000 92,47,500 10 92,49,500 40 Cash Further issue 2774.25 2774.25 of Equity Shares to Sri Aurobindo Finance and Hire Purchase Private Limited and Tarachantini Services Private Limited 26.09.2003 ----- 1 9,24,95,000 N.A N.A Subdivision of Nil 2774.25 Share Capital from face value of Rs. 10/- each to Re.1/- each 13.02.2008 24,39,97,081 1 33,64,92,081 N.A. NA Further issue Nil 2774.25 of Equity Shares pursuant to sanction of the Scheme of Amalgamation* 31.03.2008 1,00,00,000 1 34,64,92,081 1 Cash Further issue Nil 2774.25 of Equity Shares to our Directors, Viji Kannan, K. Mani Prasad, R. Kalyanaraman, R. Rajgopalan. 15.10.2008 7,919 1 34,65,00,000 15 Cash Further issue 1.11 2775.36 of Equity Shares to Anchor Construction Private Limited and group entities 15.10.2008 ----- 10 3,46,50,000 N.A N.A Consolidation Nil 2775.36

*For more information on the Composite Scheme of Amalgamation, Arrangement & Compromise, please refer to the section titled "History and Corporate Structure" beginning on page 120 of this Draft Red Herring Prospectus.

2. SHAREHOLDING OF OUR PROMOTERS

Following is the build up of Promoter Shareholdings:

Name of Date of Considerat No. of shares Face Issue Remarks Pre- Post the Allotment / ion Value Price/ Issue Issue Promoter acquisition / (Rs.) Purch Shareh Share ase olding holdi Price % ng % (Rs.) 22.12.2000 Swap of 92,49,500 10 75 Swap of - - Pentamedi shares in equity a Graphics the ratio of shares of Limited. 100:15 (15 PMGL for equity the Equity shares of Shares of PMGL for our 100 Equity Company Shares of held by the our erstwhile Company) shareholder s 26.09.2003 (92,49,500) 10 Subdivision N.A. 9,24,95,000 1 of Share Capital from face N.A value of Rs. 10/- Each to Re.1/- each 13.02.2008 N.A. 21,84,24,105 1 N.A Issue of Equity Shares pursuant to the Scheme of Amalgamati on

Name of Date of Considerat No. of shares Face Issue Remarks Pre- Post the Allotment / ion Value Price/ Issue Issue Promoter acquisition / (Rs.) Purch Shareh Share ase olding holdi Price % ng % (Rs.) sanctioned by the High Court of Madras 07.03.2008 Cash (5,00,00,000) 1 2.25 Transfer of Equity Shares to Anchor Constructio n Private Limited for the settlement of PMGL’s outstanding dues. 25.03.2008 Cash (7,90,19,105) 1 2.25 Transfer of Equity Shares to Anchor Constructio n Private Limited and for the settlement of outstanding dues of PMGL and PSEW 24.09.2008 Cash (1,31,22,000) 1 2.25 Transfer of Equity Shares for the settlement of outstanding dues and transfer of equity shares for redemption of preference shares of PMGL held by PSEW N.A (16,87,78,000) 1 Consolidati

Name of Date of Considerat No. of shares Face Issue Remarks Pre- Post the Allotment / ion Value Price/ Issue Issue Promoter acquisition / (Rs.) Purch Shareh Share ase olding holdi Price % ng % (Rs.) 15.10.2008 1,68,77,800 10 on of Share N.A. Capital from face value of Re. 1/- each to Rs.10/- each TOTAL 1,68,77,800 10 48.71 37.89

3. PROMOTER CONTRIBUTION AND DETAILS OF LOCK IN a) Share Capital Locked-in for Three Years

Pursuant to the SEBI DIP Guidelines, an aggregate of 20% of the fully diluted Post-Issue capital of our Company held by the Promoter shall be locked in by the Promoters as minimum Promoters’ contribution. Such lock in shall commence from the Date of Allotment in the Issue and shall continue for a period of three (3) years from the Date of Allotment in the Issue. The Equity Shares, which are being locked in, are not ineligible for computation of Promoter’s Contribution under Clause 4.6 and 4.11 of SEBI DIP Guidelines. Equity Shares offered by Promoter for minimum Promoter Contribution are not subject to pledge. The details of such lock-in are set forth in the table below:

Name Date of Nature of No. of shares Face Issue % of Post Issue Lock in Allotment / consideration locked in value Price / Paid up Equity period acquisition (Rs.) Purchase capital and when Price made fully (Rs. per paid-up share) Pentamedia 22.12.2000 Share Swap for 87,49,500 10/- Rs.75/- 19.64 3 years Graphics acquisition of Limited. Equity Sh ar es of our Company by PMGL from the erstwhile shareholders Pentamedia 13.02.2008 Allotted under 1,60,500 10/- N.A 0.36 3 years Graphics the Scheme of Limited. Amalgamation Total 89,10,000 20.00 3 years b) Share Capital Locked-in for one year

Pursuant to the SEBI DIP Guidelines, in addition to the lock-in of the Promoter’s Contribution specified above, our entire pre-Issue issued Equity Share capital of our Company (other than the Equity Shares being offered through the Offer for Sale as a part of the Issue), will be locked-in for a period of one year from the Date of Allotment in this Issue. The total number of Equity Shares, which are locked-in for one (1) year, is 2,57,40,000 Equity Shares of face value of Rs.10/- each.

In terms of Clause 4.14.1 of the SEBI DIP Guidelines, in addition to 20% of the post-issue shareholding of our Company held by the Promoter and locked in for three (3) years as specified above, the entire pre-issue share capital of our Company will be locked in for a period of one (1) year from the Date of Allotment in this Issue. c) Other requirements in respect of lock-in

Further, in terms of Clause 4.15.1 of the SEBI DIP Guidelines, the locked in Equity Shares held by our Promoter, can be pledged only to banks or financial institutions as collateral security for loans granted by such banks or financial institutions provided that the pledge of the Equity Shares is one of the terms of the sanction of such loans. Further, the Equity Shares constituting 20% of the fully diluted post-issue capital of our Company held by our Promoter that are locked in for a period of three (3) years from the Date of Allotment of Shares may be pledged only if, in addition to complying with such conditions, is when the loan granted by such loan should have been granted by banks or financial institutions for the purpose of financing one or more of the Objects of the Issue.

Our Promoter has pledged 5,00,000 Equity Shares for availing the cash credit limit of Rs. 225 lakhs from Repco Bank Limited and these shares are not part of minimum Promoter Contribution.

In terms of Clause 4.16.1(a) of the SEBI DIP Guidelines, the Equity Shares held by persons other than the Promoter prior to the Issue may be transferred to any other person holding the Equity Shares which are locked-in as per Clause 4.14 of the SEBI DIP Guidelines, subject to continuation of the lock in the hands of the transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as applicable.

Further, in terms of Clause 4.16.1(b) of the SEBI DIP Guidelines, Equity Shares held by the Promoter may be transferred to and among the Promoter Group or to a new promoter or persons in control of our Company subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as applicable.

In addition, the Equity Shares subject to lock-in will be transferable subject to compliance with the SEBI DIP Guidelines, as amended from time to time.

We have obtained the written consent of our Promoter and pre issue shareholders (other than the Equity Shares being offered through the Offer for Sale as a part of the Issue) for inclusion of their Equity Shares under lock-in.

4. The Equity Shares forming part of Promoters’ Contribution do not consist either of any private placement made by solicitation of subscription from unrelated persons, directly or through any intermediary.

5. The aggregate shareholding of the Promoter Group and of the directors of the Promoter is 67.97% of the pre-issue paid up capital of our Company as on the date of the filing of the Draft Red Herring Prospectus which is equivalent to 2,35,52,224 Equity shares of our Company.

6. Our Promoter, Promoter Group and directors of Promoter have not purchased or sold any Equity Shares during the period of six (6) months preceding the date on which the Draft Red Hearing Prospectus is filed with SEBI, except as under:

Date of Transferor Transferee No. of Equity Face Value Transfer Remarks Transfer Shares Price 24.09.2008 Pentamedia Anchor 1,01,22,000 1 2.25 For Graphics Construction settlement Limited Private Limited of dues

Date of Transferor Transferee No. of Equity Face Value Transfer Remarks Transfer Shares Price 24.09.2008 Pentamedia Pentafour 30,00,000 1 2.25 Equity Graphics Software Shares of Limited Employees our Welfare Company Foundation issued in lieu of redemption of Preference Shares of PMGL held by PSEW 24.09.2008 Anchor Pentafour 15,00,000 1 12.40 Sale of Construction Software Equity Private Employees Shares Limited Welfare Foundation 26.12.2008 Pentafour Vesa Holdings 16,94,424 10 22 Transfer of Software Private Limited Equity Employees Shares for Welfare the Foundation repayment of debt 26.12.2008 Pentafour Mr. V. 22,80,000 10 22 Transfer of Software Chandrasekran Equity Employees Shares for Welfare the Foundation repayment of debt 26.12.2008 Pentafour Ms. Nirmala 13,00,000 10 22 Transfer of Software Chandrasekran Equity Employees Shares for Welfare the Foundation repayment of debt owed to Vesa Holdings Private Limited 26.12.2008 Pentafour Ms. Anita 10,00,000 10 22 Transfer of Software Chandrasekaran Equity Employees Shares for Welfare the Foundation repayment of debt owed to Vesa Holdings Private Limited

7. Locked-in Equity Shares held by the Promoter can be pledged only with banks or financial institutions as collateral security for loans granted by such banks or financial institutions provided that the pledge of the Equity Shares is one of the terms of the sanction of the loan.

8. Shareholding Pattern of our Company:

The table below represents the shareholding pattern of our Company before the proposed issue and adjusted for this issue as on 14 th January 2009

Particulars No. of Equity % of Pre- No. of Equity % of Pre-Issue Shares held Issue Capital Shares Capital prior the Issue Promoters Pentamedia Graphics Limited 16877800 48.71 16877800 37.89 Sub-Total 16877800 48.71 16877800 37.89

Promoters Group Vesa Holdings Private Limited 1694424 4.89 1694424 3.80 Udeep Bogollu 200000 0.58 200000 0.45 Sumathi Sridharan 200000 0.57 200000 0.45 Anita Chandrasekaran 1300000 3.75 1300000 2.92 V. Chandrasekran 2280000 6.58 2280000 5.12 Nirmala Chandrasekran 1000000 2.89 1000000 2.24 Sub-Total 6674424 19.26 6674424 14.98

Others Viji Kannan 200000 0.58 200000 0.45 R. Kalyanraman 150000 0.43 150000 0.34 K. Mani Prasad 150000 0.43 150000 0.34 R. Rajagopalan 100000 0.29 100000 0.22 Anchor Construction Pvt Limited 10497776 30.30 10497776 18.63 Sub-Total 11097776 32.03 11097776 19.97

Public in the Issue (Including - - 12100000 27.16 Eligible Shareholders of our Promoter and Promoter Group Company and Eligible Employees) Sub-Total - - 12100000 27.16 Grand Total 34650000 100.00 44550000 100.00

9. Details of Top ten Shareholders of our Company

(a) Top ten shareholders as on the date of filing the Draft Red Herring Prospectus

No. Name of Shareholders No. of Equity shares held % of pre-issue shareholding 1. Pentamedia Graphics Limited 16877800 48.71 2. Anchor Construction Private Limited 10497776 30.30 3. V. Chandrasekaran 2280000 6.98 4. Vesa Holdings Private Limited 1694424 4.89 5. Anita Chandrasekaran 1300000 3.75 6. Nirmala Chandrasekaran 1000000 2.89

No. Name of Shareholders No. of Equity shares held % of pre-issue shareholding 7. Udeep Bogollu 200000 0.58 8. Sumathi Sridharan 200000 0.58 9. Viji Kanan 200000 0.58 10. R. Kalyanraman 150000 0.43 Total 34400000 99.69

(b) Top ten shareholders, ten (10) days prior to filing of Draft Red Herring Prospectus

No. Name of Shareholders No. of Equity shares held % of holding

1. Pentamedia Graphics Limited 16877800 48.71 2. Anchor Construction Private Limited 10497776 30.30 3. V. Chandrasekaran 2280000 6.98 4. Vesa Holdings Private Limited 1694424 4.89 5. Anita Chandrasekaran 1300000 3.75 6. Nirmala Chandrasekaran 1000000 2.89 7. Udeep Bogollu 200000 0.58 8. Sumathi Sridharan 200000 0.58 9. Viji Kanan 200000 0.58 10. R. Kalyanraman 150000 0.43 Total 34400000 99.69

No. Name of Shareholders No. of Equity shares held % of holding

1. Pentamedia Graphics Limited 9249500 100 Total 9249500 100

10. The securities, which are subject to lock-in, shall carry the inscription "non-transferable" and the non-transferability details shall be informed to the depositories. The details of lock-in shall also be provided to the stock exchanges, where the shares are to be listed, before the listing of the securities.

11. The Promoters Contribution brought-in by the Promoter was more than the specified minimum lot as defined under SEBI Guidelines.

12. There is no "Buyback", "Standby", or similar arrangement for the purchase of equity shares by our Company/ its Promoters/Directors/BRLM for purchase of Equity Shares offered through the Draft Red Herring Prospectus.

13. Our Company has not raised any bridge loans against the proceeds of this Issue.

14. Investors may note that in case of over-subscription, allotment will be on proportionate basis as detailed in Paragraph on "Basis of Allotment" on page 256 of this Draft Red Herring Prospectus.

15. An over-subscription to the extent of 10% of the Net Offer to Public can be retained for the purpose of rounding off while finalizing the basis of allotment to the nearest integer during finalizing the allotment, subject to minimum allotment lot.

Consequently, the actual allotment may go up by a maximum of 10% of the Net Issue to Public, as a result of which, the post-issue paid up capital after the Issue would also increase by the excess

amount of allotment so made. In such an event, the Equity Shares held by the Promoter and subject to lock-in shall be suitably increased; to ensure that 20% of the Post Issue paid-up capital is locked- in.

16. In terms of Clause 4.16.1(a) of the SEBI DIP Guidelines, the Equity Shares held by persons, other than our Promoters prior to the Issue, may be transferred to any other person holding the Equity Shares which are locked-in as per Clause 4.14 of the SEBI DIP Guidelines, subject to continuation of the lock in the hands of the transferees for the remaining period and compliance with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as applicable.

The Equity Shares held by the Promoters under lock-in period shall not be sold/hypothecated/transferred during the lock in period. In terms of Clause 4.16.1(b) of the SEBI DIP Guidelines, the Equity Shares held by our Promoters may be transferred to and amongst the Promoter group or to new Promoters or persons in control of our Company subject to continuation of the lock in the hands of the transferees for the remaining period and compliance with SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as applicable.

17. As on date of filing of this Draft Red Herring Prospectus with SEBI, the entire issued Share Capital of our Company is fully paid-up. The Equity Shares offered through this Public Issue will be fully paid up.

18. On the date of filing the Draft Red Herring Prospectus with SEBI, there are no outstanding financial instruments or any other rights that would entitle the existing Promoters or shareholders or any other person any option to receive Equity Shares after the Issue.

19. Our Company has not issued any Equity Shares out of revaluation reserves.

20. There will be only one denomination of the Equity Shares of our Company unless otherwise permitted by law, our Company shall comply with such disclosure, and accounting norms as may be specified by SEBI from time to time.

21. There will be no further issue of capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner during the period commencing from submission of this Draft Red Herring Prospectus with SEBI until the Equity Shares to be issued pursuant to the Issue have been listed.

22. Except as disclosed in DRHP, our Company presently does not have any intention or proposal to alter its capital structure for a period of six (6) months from the date of opening of the issue, by way of spilt/consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into Equity Shares) whether preferential or otherwise. However, during such period or a later date, it may issue Equity Shares or securities linked to Equity Shares to finance an acquisition, merger or joint venture or for regulatory compliance or such other scheme of arrangement if an opportunity of such nature is determined by its Board of Directors to be in the interest of our company.

23. At any given point of time, there shall be only one denomination for a class of Equity Shares of our Company.

24. Our Company does not have any ESOS/ESPS scheme for our employees and we do not intend to allot any shares to our employees under ESOS/ESPS scheme from the proposed Issue. As and when, options are granted to our employees under the ESOP scheme, our Company shall comply with the SEBI (Employee Stock Option Scheme and Employees Stock Purchase Plan) Guidelines 1999.

25. Our Company has reserved 1,00,000 Equity Shares for Eligible Employees and 7,00,000 Equity Shares for the Eligible Shareholders of our Promoter and Promoter Group Company on competitive basis. Unsubscribed portion in the reserved category may be added back to the Net Offer to the Public.

26. In the Issue, in case of over-subscription in all categories, upto 50% of the Issue shall be available for allocation on a proportionate basis to QIBs out of which up to 5% of the QIB portion shall be available for allocation on a proportionate basis to Mutual Funds and the balance of the QIB portion to QIBs including Mutual Funds, a minimum of 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and a minimum of 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Under-subscription, if any, in any category would be met with spill over from other categories at the sole discretion of our Company in consultation with the BRLM.

27. An investor cannot make a Bid for more than the number of Equity Shares offered in this Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of investor.

28. No payment, direct, indirect in the nature of discount, commission, and allowance, or otherwise shall be made either by us or by our Promoter to the persons who receive allotments, if any, in this issue.

29. Our Company has twelve (12) members as on the date of filing of this Draft Red Herring Prospectus.

OBJECTS OF THE ISSUE

The Net Proceeds of the Fresh Issue after deducting underwriting and lead managers fees, selling fees and all other issue related expenses is estimated to be Rs. [•] Lakhs. We will receive no proceeds from the Offer for Sale of the Equity Shares by the Selling Shareholder.

We intend to utilize the proceeds of the net proceeds of the Fresh Issue for the following purpose:

Expansion of the Family Entertainment Centre near Chennai Expansion of the Content Creation & Delivery Division Setting up of Studio Floors Expansion of the Onshore Resort Land acquisition at Coimbatore and Madurai for setting up FEC General Corporate Purposes Issue expenses

The main object clause of our Memorandum of Association and objects incidental to the main objects enable us to undertake our existing activities and the activities for which funds are being raised by us through this Issue.

The fund requirements and the intended use of the Net Proceeds as described herein are based on management estimates, our current business plan, and various quotations received by us from different suppliers/architects/contractors/consultants. We may have to revise our expenditure and fund requirements as a result of variations in the cost structure, changes in estimates and external factors, which may not be within the control of our management. This may entail rescheduling, revising or canceling the planned expenditure and fund requirements and increasing or decreasing the expenditure for a particular purpose from its planned expenditure at the discretion of our management. In addition, the estimated dates of completion of various projects as described herein are based on management’s current expectations and are subject to change due to various factors, some of which may not be in our control.

The fund requirement is proposed to be raised mainly through IPO proceeds and the proceeds from the Initial Public Offering / IPO would be crystallized on finalization of the Issue Price on conclusion of the Book Building Process. Any shortfall in meeting the Objects of the Issue on determination of Issue price on conclusion of the Book Building Process would be met from internal accruals and/or debt. Further, the amount that is in excess of the funds required for the Objects and Issue expenses will be utilized for general corporate purposes, which would be in accordance with the policies of our Board made from time to time.

COST OF THE PROJECT:

The total project cost for the above-mentioned objects as per our Company’s estimate is as follows: (Rs. In Lakhs) No. Particulars Amount I. Expansion of the Family Entertainment Centre A. Addition of five (5) screens to the existing FEC 1979.06 B. Setting up a Convention Centre 1050.12 C. Shopping Mall Expansion 302.96

II. Expansion of Content Creation & Delivery Division A. Setting up of Studio Complex 1853.99 B. Production of Movies 1000.00

III. Setting up of Studio Floors 300.00

IV. Expansion of the Onshore Resort

No. Particulars Amount 1. Setting up 60 rooms & 6 cottages 2542.97

V. Land acquisition at Coimbatore and Madurai for setting up FEC 1000.00

VI. General Corporate Purposes [•]

VII. Issue Expenses [•]

TOTAL [•]

MEANS OF FINANCE (Rs. in Lakhs) Particulars Amount Initial Public Offering [•] Internal Accruals [•] Total [•]

The entire fund requirement towards the aforesaid Objects of the Issue are proposed to be funded through the Net Proceeds from the Fresh Issue. In the event of a shortfall in raising the requisite capital from the proceeds of the Fresh Issue, towards meeting the Objects of the Issue, the extent of the shortfall will be met by internal accruals and/or from fresh debt.

Details of Utilization of Issue Proceeds

I. Expansion of the Family Entertainment Centre

We propose to expand our existing Family Entertainment Centre located at the scenic East Coast Road near Chennai and the cost for expansion is estimated as below: (Rs. inLakhs) No. Particulars Amount A Setting up of five (5) new screens to the existing FEC 1979.06 B Setting up of Convention Centre 1050.12 C Shopping Mall Expansion 302.96 TOTAL (A) 3332.14

A) Addition of five (5) new screens to the existing FEC: Our Company has felt the dearth of high quality multiplex theatres for the release of new movies due to the immense love for movies In Tamil Nadu by the people where the movies are considered a necessity rather than a mode of entertainment.

Therefore, in addition to the existing ten (10) screens with a seating capacity of 1583 seats, an additional five (5) screens are proposed to be added with each seating capacity of 230 seats at the "e.Joy" taking the total theatres to fifteen (15) and seating capacity at the multiplex to 2733. Two (2) of the screens out of five (5) would be set up with "Box" facility enhancing the comfort feel of the theatre. This makes the Multiplex amongst the single largest in India in terms of number of screens at a single location.

Setting up of five (5) new screens would require additional car parking space as compared to the existing car parking space available for about 1000 cars. Therefore, our Company also proposes to set up car parking facility with a capacity for parking for around 1500 cars taking the total car parking space for around 2500 cars at “e.joy”.

Our Company also benefits from the availability of Entertainment Tax Exemption for all fifteen (15) screens including additional five (5) new screens for Tamil named movies, which will enhance our Company’s revenue generating capacity.

The detailed cost of setting up of five (5) new screens is as follows: (Rs. in Lakhs)

No. Particulars Amount 1 Civil and structural related works including 1161.80 General builders work, plumbing and sanitary work, electrical work, air conditioning systems etc. 2 Plant ,Machinery & Equipments 430.00 3 Interior works 309.81 4 Miscellaneous Expenses including fees for statutory 77.45 approvals, consultants and project management fees TOTAL 1979.06

While we have estimated the cost of the required plant, machinery and other services and equipment based on the rates in our existing contracts and projects and our anticipated scope of work in the new screens, the actual costs could vary in the course of implementation.

For the projects listed above, we will apply for necessary statutory and governmental approvals at appropriate stages of the development of the Project. For details pertaining to this, please refer to "Government & other Approvals" on page 201 of this Draft Red Herring Prospectus.

The following is the list of quotations received for plant, machinery & equipments from the various suppliers for the purposes of setting up of five (5) new screens as aforesaid:

No. Equipment Date Qty Name of Supplier Cost (In Rs.) 1 DLP Cinema Projector 12/09/2008 5 Real Image Media 1,01,25,000.00 Technologies Private Limited 2 2K Digital Cinema 12/09/2008 5 Real Image Media 28,60,000.00 Player Technologies Private Limited 3 2K DLP Cinema 12/09/2008 5 Real Image Media 6,17,980.00 Projector & Qube XP-D Technologies Private Limited server 4 QSC DCA 3422 29/08/2008 5 MRH Digital Systems Private 4,74,500.00 Limited 5 QSC DCA 1222 29/08/2008 15 MRH Digital Systems Private 6,15,000.00 Limited 6 QSC DCA 2422 29/08/2008 25 MRH Digital Systems Private 17,05,000.00 Limited 7 QSC DCM-30 29/08/2008 5 MRH Digital Systems Private 6,00,000.00 CROSSOVER Limited 8 AUDIO TRACK 29/08/2008 5 MRH Digital Systems Private 1,20,000.00 Limited 9 DC EXCITER SUPPLY 29/08/2008 5 MRH Digital Systems Private 42,500.00 Limited 10 ULTRA STEREO JSD 80 29/08/2008 5 MRH Digital Systems Private 9,75,000.00 PROCESSOR Limited 11 STEREO CELL KIT 29/08/2008 5 MRH Digital Systems Private 45,000.00 Limited 12 QSC SC-424 4 WAY 29/08/2008 15 MRH Digital Systems Private 21,30,000.00

No. Equipment Date Qty Name of Supplier Cost (In Rs.) STAGE SPEAKER Limited 13 QSC SB-7218 29/08/2008 15 MRH Digital Systems Private 9,67,500.00 Limited 14 QSC SR 18 SURROUND 29/08/2008 60 MRH Digital Systems Private 7,56,000.00 SPEAKER Limited 15 8 Passenger Lift 11/06/2008 1 Johnson Lifts Private Limited 9,35,000.00 16 45 KVA UPS System 04/07/2008 30 Flipper Clipp Power Systems 6,30,000.00 Private Limited 17 109TR water cooled 22/08/2008 3 Trane India Limited 59,40,000.00 screw chiller 18 1010 KVA Diesel 01/09/2008 1 GMMCO Limited 61,00,000.00 Generator Set 19 Existing Lift Room 07/07/2008 1 OTIS Elevator Company 4,37,305.00 Expansion (India) Limited 20 800Amps TPN ACB of 16/08/2008 2 Dynamic Switichgears 3,16,000.00 50kA of L& T 21 1250Amps 4Pole ACB of 16/08/2008 4 Dynamic Switichgears 7,60,000.00 50 kA of L& T 22 1000Amps 4Pole ACB of 16/08/2008 4 Dynamic Switichgears 6,88,000.00 50 kA of L& T 23 400Amps 4Pole 16/08/2008 4 Dynamic Switichgears 6,00,000.00 Motorized MCCB of ABB 24 800Amps 4Pole 16/08/2008 4 Dynamic Switichgears 8,00,000.00 Motorized MCCB of ABB 25 RYB Indicating Lamps 16/08/2008 1 Dynamic Switichgears 3,80,000.00 of LED Clustered Type 26 RYB Indicating Lamps 16/08/2008 1 Dynamic Switichgears 2,40,000.00 of LED Clustered Type 27 RYB Indicating Lamps 16/08/2008 1 Dynamic Switichgears 1,28,000.00 of LED Clustered Type 28 1600Amps 4Pole ACB of 16/08/2008 2 Dynamic Switichgears 4,40,000.00 50kA of L& T 29 1250Amps 4Pole ACB 16/08/2008 2 Dynamic Switichgears 40,000.00 30 RYB Indicating Lamps 16/08/2008 2 Dynamic Switichgears 7,00,000 of LED Clustered Type 31 1600Amps TPN 16/08/2008 8 Dynamic Switichgears 1,16,000.00 Fabricated Type Bus Duct-INDOOR Type 32 1600Amps TPN 16/08/2008 6 Dynamic Switichgears 96,000.00 Fabricated Type Bus Duct-OUTDOOR Type 33 Supplying, fixing & 16/08/2008 4 Dynamic Switichgears 32,000.00 connecting Flexible Joints 34 Right Angle bends- 16/08/2008 4 Dynamic Switichgears 58,000.00 INDOOR TYPE 35 Right Angle bends- 16/08/2008 4 Dynamic Switichgears 64,000.00 OUTDOOR TYPE 36. Contingencies & 14,66,000.00 Installation Charges TOTAL 42999785.00 TOTAL (Rs.in Lakhs) 430.00

Implementation Schedule:

The status of implementation as per our current business strategy is as follows:

Particulars FEC Capacity Area (in sq Expected date of Expected date feet) [built Commencement of of Completion up area] the Project Screen/Theatre 1 First Floor 230 seats 6893 January 2009 December 2009 2 First Floor 230 seats 6893 January 2009 December 2009 3 First Floor 230 seats 6892 January 2009 December 2009 4 Second Floor 230 seats 6873 January 2009 December 2009 5 Second Floor 230 seats 6873 January 2009 December 2009 Car Parking Facility 1 Lower Ground 1500 cars 23552 January 2009 December 2009 Floor

B) Setting up of Convention Centre: Our Company proposes to set up a hi-tech Convention Centre of around 25,000 sq. ft., columnless hall and having a seating capacity of 5,000 people at any given point of time. Tamilnadu has been fast emerging as one of the progressive state in the industrial map of India. Chennai the capital city has seen a dramatic rise in international business operations and trade promotion activities. To meet the ever – growing needs of the international trade and business, our Company proposes to set up this Convention Centre. The Convention Centre will be located on ground floor at the "e.joy".

This Convention Centre would be one of the largest in South India. It will serve as a multipurpose hall to host, conventions, seminars, exhibitions, trade shows, corporate events, weddings, get-togethers, workshops, company specific fairs and training programmes.

The break-up of the cost for setting up the Convention Centre is as follows: (Rs. In Lakhs) No. Particulars Amount 1 Civil and structural related works, plumbing and sanitary works, 787.59 electrical works, equipment, air conditioning systems etc. 2 Interior works 210.02 3 Fees for statutory approvals, consultants and project management 52.51 fees etc. TOTAL 1050.12

The Convention Centre is located within the same premises having the e.joy FEC, Onshore Resort and The Champ Sports Village giving it a competitive edge to the business of our Company. It would be equipped with state-of-the-art facilities, audio and video equipment and other auxiliary services required to attract clients/customers.

Implementation Schedule

The status of implementation as per our current business strategy is as follows:

No. Activity Start Date Completion Date 1 Land and Site Development Commenced & Completed 2 Building Plans and Drawings November 2008 January 2009 3 Civil work January 2009 July 2009 4 Interiors and electrical August 2009 October 2009

No. Activity Start Date Completion Date 5 Commercial Operations October 2009 -

C) Shopping Mall Expansion : Retail and entertainment industry compliment each other. Our Company has an existing shopping mall namely "Maya Mall" spread over an area of 30,000 sq feet. In addition to the above shopping facility, our Company proposes to expand the existing area of the shopping mall to 60,000 sq feet. The mall would contain a mix of designer, lifestyle & budget products, which would include apparels, FMCG, electronics, accessories, fashion, books, consumer durables etc.

The break-up of the cost for setting up shopping mall is as follows: (Rs. In Lakhs) No. Proposed Activity Amount 1 Civil and structural related works including 227.22 plumbing and sanitary works, electrical works, equipments, air conditioning systems etc. 2 Interior works 60.59 3 Fees for consultants and project management fees etc 15.15 TOTAL 302.96

Implementation Schedule

The status of implementation as per our current business strategy is as follows:

No. Activity Start Date Completion Date 1 Land and Site Development Commenced & Completed 2 Building Plans and Drawings Commenced & Completed 3 Civil Work September 2008 November 2008 4 Interiors and electrical November 2008 January 2009 5 Commercial Operations March 2009 -

II. Expansion of the Content Creation & Delivery Division

We propose to expand our Content Creation & Delivery Division in the following ways and the cost for expansion is estimated as below:

(Rs. In lakhs) No Particulars Amount 1 Studio Complex 1853.19 2 Production of Films 1000.00 TOTAL 2853.19

Studio Complex: The demand for animation programming, production of live actions films and the business of animation production have expanded dramatically over the past decade. Animation is an attractive investment because of its longevity, its ability to travel, and the potential to create ancillary revenue streams from home video, publishing and toys to other licensing activities.

Our Company proposes to set up a studio complex spread over 40,000 sq. feet area. This Complex will facilitate the pre-production, production and post- production activities for creating software for film & TV. This set-up would enable us to deliver two (2) animation films and approximately fifteen (15) Live Action Films in a year.

Our Company proposes to use this facility for its home production ventures as well as provide this facility to the film fraternity both domestic and overseas. The area will also include a working space for the complete creative team.

The break-up of the cost for setting up the studio complex is as follows: (Rs. In Lakhs) No. Proposed Activity Amount 1 Civil and structural related works including 1234.58 plumbing and sanitary works, electrical works, air conditioning systems etc. 2 Interior works 329.22 3 Fees for statutory approvals, consultants and project 82.31 management fees etc 4 Equipment (Hardware and Software) 207.08 TOTAL 1853.19

The breaks up of equipments are as below:

Software Components

Our Company would need various licenses of Autodesk and miscellaneous software for creating software for film & TV. All these licenses would be procured from Sniper Systems & Solutions situated at Chennai.

The break – up of the cost is given herein below :

No. Details of Invoices Quantity Cost(inclusive of taxes) 1 Autodesk Maya Unlimited 2009 Commercial 35 9192820.00 New SLM 2 Autodesk Maya Unlimited Commercial 35 2979731.00 Subscription Partner Gold Support 3 Sniper Premium Support 35 235956.00 TOTAL 12408507.00 (Rs. In Lakhs) 124.09

Hardware Components

Our Company requires forty (40) units of the following hardware components for the purpose of creating software for film & TV. All these components would be procured from Sniper Systems & Solutions situated at Chennai.

The break – up of the cost is given herein below:

No. Details of Invoices Quantity Cost (inclusive of taxes) 1 High End- XW 6600- Intel Processor, XP-64 Bit, 8 GB 40 8299200.00 Ram, 160 GB Hard Disk, DVD RW- Dual, Nivida Quadra FX 4600, Optical Mouse, USB Key Board TOTAL 40 8299200.00 (Rs. In Lakhs) 82.99

Implementation Schedule

The status of implementation as per our current business strategy is as follows:

No. Activity Start Date Completion Date 1 Land and Site Development Commenced & Completed 2 Building Plans and Drawings December 2008 January 2009 3 Civil works March 2009 November 2009 4 Interiors and electrical October 2009 December 2009 5 Equipment Arrival (Hardware & Software) December 2009 January 2010 5 Commercial Operations January 2010 -

B. Production of Films: Our Company intends to produce three (3) films out of which two (2) films would be Live Action Films in Tamil and the one (1) would be an animation movie. The script for the animation movie is identified and the film would be titled “Cathy in Space.” We are in the process of identifying the scripts for the Tamil films.

The total cost for producing three (3) films would be Rs. 1000 Lakhs. The detailed cost for production of these movies is as under:

1. Animated Film- Cathy in Space

It would be an English animated film of 90 minutes and the cost of the film is given herein below:

Particulars Cost in Particulars Cost in Particulars Cost in Total Pre-Production Rs. Lakhs Production Rs. Lakhs Post Production Rs. Lakhs Rs. Lakhs Story, Script 35.00 Modeling 32.00 Compositing 15.00 Art & Visualizations 28.00 Texturing 27.00 Color Correction 9.00 Content Treatment at 23.00 Key Frame Animation 48.00 Editing 18.00 Hollywood Voice Over & Theme FX 25.00 In-between Key framing 27.00 Film Recording 21.00 3D Effects 25.00 Music & Dubbing 46.00 Rendering 21.00

Pre-Prod Total 111.00 Production Total 180.00 Post Production Total 109.00 400.00

2. Untitled Tamil Film- 1

It would be a Tamil Live Action Film of 140 minutes and the cost of the film is given herein below:

Particulars Cost in Particulars Particulars Total Rs. Cost in Cost in Pre-Production Lakhs Production Rs. Lakhs Post Production Rs. Lakhs Rs. Lakhs Scripting 6.00 Artists 74.00 Digital Intermediate 15.00 Storyboard 4.50 Technicians 45.00 Editing 20.00 Casting 5.00 Locations 25.00 Dubbing 10.00 Music 25.00 Production 120.00 Special Effects 7.00 Location Scouting & Scheduling 10.00 Special equipment 15.00 Background Score 10.00 Mixing & Mastering 8.00 Misc. Exp. 0.50 Pre-Prod Total 50.50 Production Total 279.00 Post Production Total 70.50 400.00

3. Untitled Tamil Movie- 2

It would be a Tamil Live Action Film of 130 minutes and the cost of the film is given herein below:

Particulars Cost in Particulars Cost in Particulars Cost in Total Rs. Rs. Rs. Rs. Pre-Production Lakhs Production Lakhs Post Production Lakhs Lakhs Scripting 3.00 Artists 25.00 Digital Intermediate 12.00 Storyboard 2.00 Technicians 30.00 Editing 5.00 Casting 3.00 Locations 15.00 Dubbing 10.00 Music 10.00 Production 60.00 Special Effects 3.00 Location Scouting & Scheduling 4.00 Special equipment 5.00 Background Score 6.00 Mixing & Mastering 5.00 Misc. Contingencies 2.00 Post Production Pre-Prod Total 22.00 Production Total 135.00 Total 43.00 200.00

Implementation Schedule

The status of implementation as per our current business strategy is as follows:

No. Films Commencement of Completion and Project Release 1. Animated Film- “Cathy in Space” April 2009 April 2010 2. Untitled Tamil Film-1 May 2009 December 2009 3. Untitled Tamil Film-2 April 2009 October 2009

III. Setting up of Studio Floors: There is a dearth of air-conditioned Studio Floors in and around Chennai as the amount of production, work has escalated due to the boom in the Television and film industry.

Our Company proposes to set up two (2) studio floors of 10,000 sq.ft. and 20,000 sq.ft. respectively which would be centrally air-conditioned with ceiling height upto 60 feet. These Studio Floors will be rented out to production houses to make films in addition to captive usage.

These Studio Floors would enable us to generate additional revenue for the Onshore resort and The Champ Sports Village.

The break-up of the cost for setting up of the Studio Floors is as follows: (Rs. In Lakhs) No. Proposed Activity Amount 1 Civil and structural related works including 225.00 plumbing and sanitary works, electrical works, air conditioning systems etc. 2 Interior works 60.00 3 Fees for statutory approvals, consultants and project 15.00 management fees etc. TOTAL 300.00

Implementation Schedule

The status of implementation as per our current business strategy is as follows:

No. Activity Start Date Completion Date 1 Land and site development Commenced & Completed 2 Building plans and drawings January 2009 March 2009 3 Civil works April 2009 July 2009 4 Interiors and electrical August 2009 October 2009 5 Commercial operations November 2009 -

IV. Setting up of 60 rooms and 6 cottages at Onshore Resort: The tourism and hospitality industry is gaining recognition in India. There has been a pent up demand for rooms in the hospitality industry for a while now. Onshore Resort having close proximity to old Mahabalipuram Road at Chennai, which is an IT hub and also located on the entertainment highway (East Coast Road) has created demand for such resorts.

Our Company proposes to add forty (40) rooms in an adjoining block to the existing Onshore Resort, which would spread over an area of 39348 sq. feet. Further, our Company intends to add twenty (20) rooms by constructing additional floor to the existing block of Onshore Resort admeasuring 26540 sq. feet. Our Company also proposes to construct six (6) cottages spread over an area of 3150 sq. feet.

The break-up of the cost for setting up of sixty (60) rooms and six (6) cottages is as follows:

(Rs. In Lakhs) No. Proposed Activity Amount 1 Civil and structural related works including 1907.23 plumbing and sanitary works, electrical works, air conditioning systems etc. 2 Interior works 508.59 3 Fees for statutory approvals, consultants and project 127.15 management fees etc TOTAL 2542.97

Implementation Schedule

The status of implementation as per our current business strategy is as follows:

No. Activity Start Date Completion Date 1 Land and site development Commenced & Completed 2 Building plans and drawings January 2009 March 2009 3 Civil works April 2009 November 2009 4 Interiors and electrical December 2009 January 2010 5 Commercial operations February 2010 -

V. Land acquisition at Coimbatore and Madurai : These cities have witnessed rapid growth in standards of living. Our Company desires to exploit the potential of these cities in relation to the FEC business. Our Company proposes to acquire land for development of FEC at Coimbatore and Madurai. Our Company is in the process of identifying a suitable land for the proposed FEC. Our Company will develop the acquired lands into an FEC from internal accruals or by availing fresh loans.

The following table explains the estimated cost of purchase of land:

No. Land Location Area (in acres) Estimated Cost (Rs. In Lakhs) 1 Coimbatore 3 700.00

2 Madurai 7 300.00 TOTAL 10 1000.00 Our Company proposes to purchase land measuring approximately 10 Acres with estimated cost of Rs. 2000 Lakhs in totality. The Estimated Cost would be inclusive of Stamp Duty and Registration charges.

Implementation Schedule

The status of implementation as per our current business strategy is as follows:

No. Activity Start Date Completion Date 1. Land at Coimbatore February 2009 May 2009 2. Land at Madurai March 2009 June 2009

VI. General Corporate Purpose

Our Company in accordance with the policies set up by our Board, will have flexibility in applying the remaining Net proceeds of this issue aggregating [•] lakhs, for general corporate purpose towards margin for additional working capital, financing normal capital expenditure, strategic initiatives, expanding into new geographies, pre-operative expenses, brand building exercise and strengthening our marketing capabilities.

VII. Issue Expenses

The total estimated expenses are Rs. [ •] lakhs which is [ •] % of Issue Size. The details of Issue expenses are tabulated below: (Rs. In lakhs) % of Total % of Issue No. Particulars Amount Issue size Expenses 1 Issue Management Fees [•] [•] [•] 2 Registrars fees [•] [•] [•] 3 IPO Grading Expenses [•] [•] [•] 3 Fee for Legal Counsel [•] [•] [•] 4 Printing and Distribution of Issue Stationery [•] [•] [•] 5 Advertising and Marketing expenses [•] [•] [•] 6 Other expenses (stamp duty, initial listing fees, [•] [•] [•] depository fees, charges for using the book building software of the exchanges and other related expenses) 7 Contingencies [•] [•] [•] Total [•] [•] [•]

We have appointed Cheralathan Associates- Architects and Consultants as the sole architect and consultant for our Project. They would be responsible for:

1. Expansion of the FEC 2. Setting up of Studio Floors 3. Setting up of Studio Complex 4. Expansion of the Onshore Resort 5. Shopping Mall Expansion

The total cost estimated for the aforesaid is Rs.7589 Lakhs as evaluated by Cheralathan Associates and certified by their letter dated 11 th October, 2008.

The procurement of certain plant, machinery & equipments for the Theatres and Studio Complex will be done from various suppliers and the quotations received from them are explained above.

Proposed quarter-wise deployment of funds:

The overall cost of the proposed Project and the proposed quarter wise break up of deployment of funds are as under:

(Rs. In Lakhs) Particulars Already FY 2008 – FY 2009 - 10 Total Incurred 09 Quarter 4 Quarter Quarter Quarter Quarter 1 2 3 4 Setting up of 5 screens at FEC Nil 5.00 371.02 653.09 534.35 415.60 1979.06 Setting up of a Convention Centre Nil 105.01 420.05 420.05 105.01 Nil 1050.12 Shopping Mall Expansion 98.42 143.36 61.18 Nil Nil Nil 302.96 Setting up of Studio Complex Nil 65.40 639.12 778.68 222.70 148.09 1853.99 Production of Movies Nil Nil 300.00 300.00 200.00 200.00 1000.00 Setting up of Studio Floors Nil 3.00 135.00 132.00 30.00 Nil 300.00 Setting up of 60 rooms & 6 cottages Nil 5.00 376.45 762.89 890.04 508.59 2542.97 Land acquisition at Coimbatore and Madurai for setting up FEC Nil Nil 100.00 700.00 200.00 Nil 1000.00 General Corporate Purposes Nil [•] [•] [•] [•] [•] [•] Issue Expenses 28.85 [•] [•] [•] [•] [•] [•] Total 127.27 [•] [•] [•] [•] [•] [•]

Details of funds already deployed till date and sources of funds deployed

The funds deployed upto 31 st December, 2008 pursuant to the object of this Issue on the Project as certified by the Auditors of our Company, viz. R Subramanian & Co., Chartered Accountants pursuant to their certificate dated 2nd January, 2009 is given below:

(Rs. in Lakhs) Deployment of Funds Amount Shopping Mall Expansion 98.42 Public Issue Expenses 28.85 Total 127.27

(Rs. in Lakhs) Sources of Funds Amount Internal Accruals 127.27 Total 127.27

Appraisal by Appraising Agency

The Project has been appraised by Repco Bank Limited., as per their report dated 26 th November, 2008 .The scope and purpose of the appraisal was to study the Techno – Economic feasibility of the Project and to assess the financial viability of the proposed capital expenditure plan. Appraisal by Repco Bank Limited. has been used as a basis for this Draft Red Herring Prospectus wherever required. Repco Bank Limited, by their letter dated 28 th November, 2008 have given their consent for their name being included as appraising agency and for their appraisal report being used in this document. However, the appraiser has not made any financial commitments for the Project expansion nor have they been appointed as the monitoring agency for the deployment of funds.

Shortfall of Funds

Any shortfall in meeting the Project cost will be met through by way of internal accruals and/ or through additional funding by banks and/ or unsecured loans.

Monitoring of Utilization of Funds:

As the Net Proceeds of the Issue will be less than Rs. 50,000 Lakhs, under the SEBI DIP Guidelines it is not mandatory for us to appoint a monitoring agency

Our Company undertakes to disclose the utilization of proceeds in its financial statements. We will disclose the utilization of proceeds under a separate head in our Company’s balance sheet for fiscal year 2009 and 2010 clearly specifying the purpose for which such proceeds have been utilized. We, in our balance sheet for fiscal year 2009 and 2010, provide details, if any, in relation to all such proceeds of the Issue that have not been utilized thereby also indicating investments, if any, of such unutilized proceeds of the Issue.

No part of the proceeds of this Issue will be paid as consideration to our Promoters, directors, key managerial employees, or companies promoted by our Promoters.

Interim Use of Proceeds

Pending utilization for the purposes described above, we intend to temporarily invest the funds in high quality liquid instruments including money market mutual funds, deposit with banks for necessary duration as may be approved the Board of Directors or a Committee thereof. We also intend to apply part of the proceeds of the Issue, pending utilization for the purposes described above, to temporarily reduce our working capital borrowings from banks and financial institutions. In case we utilize the funds towards temporary reduction in utilization of short-term working capital facilities, we undertake that we would ensure consistent and timely availability of the issue proceeds, so temporarily deposited in the working capital facilities to timely meet the fund requirement of the Project.

BASIC TERMS OF THE ISSUE

Principal Terms and Conditions of the Issue

The Equity Shares being issued are subject to the provisions of the Companies Act, the Memorandum and Articles of Association of our Company, the terms of this Draft Red Herring Prospectus, Red Herring Prospectus, Prospectus and Bid-Cum-Application Form, the Revision Form, the CAN and other terms and conditions as may be incorporated in the allotment advice, and other documents/certificates that may be executed in respect of this Issue. The Equity Shares shall also be subject to laws as applicable, guidelines, notifications and regulations relating to this Issue of capital and listing and trading of securities issued from time to time by SEBI, Government of India, Reserve Bank of India, Stock Exchanges, Registrar of Companies and/or other authorities, as in force on the date of this Issue and to the extent applicable.

Ranking of Equity Shares

The Equity Shares being issued shall be subject to the provisions of the Companies Act and our Memorandum and Articles and shall rank pari passu in all respects with the existing Equity Shares of our Company including rights in respect of dividend. The allottees will be entitled to dividend or any other corporate benefits, if any, declared by our Company after the Date of Allotment. Please refer to section titled "Main Provisions of Articles of Association" beginning on page 270 for a description of the Articles of Association of this Draft Red Herring Prospectus.

Face Value and Issue Price

The Equity Shares with a face value of Rs. 10/- each are being issued in terms of this Draft Red Herring Prospectus at a Issue price of at the lower end of the Price Band is Rs [•] per Equity Share and at the higher end of the Price Band is Rs. [•] per Equity Share. At any given point of time, there shall be only one denomination for the Equity Shares of our Company, subject to applicable laws.

Rights of the Equity Shareholders

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 be allotted bonus shares, if announced;

Right to receive surplus on liquidation subject to any statutory and other preferential claims being satisfied;

Right of free transferability; and

Such other rights, as may be available to a shareholder of a listed public company under the Companies Act, the terms of the listing agreement executed with the Stock Exchanges, and Company’s Memorandum and Articles.

For further details on the main provisions of our Company’s Articles of Association dealing with voting rights, dividend, forfeiture and lien, transfer and transmission and/or consolidation/splitting, please refer section titled “Main Provisions of Articles of Association” beginning on page 270 of this Draft Red Herring Prospectus.

Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Fresh Issue, including devolvement of underwriters within sixty (60) days from the Bid/Issue Closing Date, our Company shall forthwith refund the entire subscription amount received. If there is a delay beyond eight (8) days after our Company becomes liable to pay the amount, our Company shall pay interest prescribed under Section 73 of the Companies Act.

Further, in accordance with Clause 2.2.2A of the SEBI Guidelines, our Company shall ensure that the number of Allottees under the Issue shall not be less than 1,000.

The requirement for minimum subscription is not applicable to the Offer for Sale. In case of under subscription in the Issue, the Equity Shares in the Fresh Issue will be issued prior to the sale of Equity Shares in the Offer for Sale.

Terms of Payment

Applications should be for minimum of [•] Equity Shares and in multiples of [•] Equity Shares thereafter. The entire Issue price of the Equity Shares of Rs. 10/- per share is payable on application. In case of allotment of lesser number of Equity Shares than the number of shares applied for, our Company shall refund the excess amount paid on application, subject to minimum allotment size being the minimum application size.

Period of Subscription

The subscription list for public issue shall remain open for at least three (3) working days and not more than ten (10) working days.

Reservations

1,,00,000 Equity shares of Rs 10/- each reserved for Eligible Employees at a price of Rs [•] per share 7,00,000 Equity shares of Rs 10/- each reserved for Eligible Shareholders of our Promoter and Promoter Group Company on competitive basis at a price of Rs [•] per share.

BASIS FOR ISSUE PRICE

The issue price will be determined by our Company in consultation with the BRLMs based on assessment of market demand for the Equity Shares offered by way of book building.

Investors should read the following summary with the Risk Factors included from page number 13 to 25 and the details about our Company and its financial statements included on page 96 and 153 respectively in this Draft Red Herring Prospectus. The trading price of the Equity Shares of our Company could decline due to these risks and you may lose all or part of your investments.

Qualitative Factors:

• Our Promoters have experience in the entertainment industry.

• Our Company is presently having existing client base for our operations. Hence, we are in a position to leverage on existing client base to achieve further growth in the business.

• Our Company has already established operations of Family Entertainment Centre (including exhibition of films), Onshore Resort & Sport Village, Animation and Live Action, Content creation and Web Entertainment Segment.

• We have a presence in all possible types of entertainment sectors viz Studio, Media, Family Entertainment Centres, Sports, Web Entertainment which carves for over selves a niche in the industry

• We are enriched with enormous land bank.

• Existing profit making company.

• We have qualified and experienced key management personnel.

• The Current Market Value of the immovable properties is valued at Rs. 35215.00 Lakhs by JMR Consultants, Chartered Engineers and Registered Valuers and the digital content owned by our Company is valued at Rs. 22912.00 Lakhs by Mr. Sundaram S.,the specialized valuers hence the aggregate current valuation of immovable properties and digital contents owned by our Company is Rs. 58127.00 Lakhs which is 7.63 times of our book value of Net Worth

Quantitative Factors:

1. Adjusted Earning Per Equity Share

Earning per Share Year Weight (Rs.) FY 2005-06 (0.03) 1 FY 2006-07 0.35 2 FY 2007-08 0.45 3 Weighted Average 0.34 Audited 6 months ended 30 th September, 0.54* 2008 * The EPS is actual and if annualized EPS works out to 1.08 per share.

• The Earning per Equity Share has been computed based on adjusted Profits & Losses for the respective years/periods after considering the impact of accounting changes and prior period adjustments/regroupings pertaining to the earlier years.

• EPS Calculations have been done in accordance with Accounting Standard 20-“Earning per Share” issued by the Institute of Chartered Accountants of India

• The denominator considered for the purpose of calculating earning per share is the weighted average number of Equity Shares outstanding during the period.

2. Price / Earning Ratio (P/E) in relation to the Issue Price [•]

a) Based on fiscal year as on 31 st March, 2008 EPS is Rs. 0.45 b) Based on six (6) months ended 30 th September, 2008 EPS is Rs. 1.08 (Annualized) c) P/E for Industry – Not Applicable as there are no other listed companies engaged in the similar activities

At the lower band of Rs. At the upper band of Particulars [•] Per Equity Share Rs. [•] Per Equity Share Based on 31 st March, 2008 EPS Rs.0.45 [•] [•] Based on the weighted average EPS Rs. 0.34 [•] [•] Based on half year ended 30 th September, 2008, EPS [•] [•] Rs.0.54

3. Return on Net Worth

Year RONW (%) Weight FY 2005-06 (0.12) 1 FY 2006-07 1.64 2 FY 2007-08 2.05 3 Weighted Average 1.55

4. Minimum RONW to maintain the Pre-issue EPS is [ •] a) At the Floor price of Rs. [O] per share is ____% b) At the Cap price of Rs. [O] per share is ____%

5. Net Asset Value per Equity Share

Particulars NAV (In Rs.) a) As on 31 st March, 2008 21.45 b) As on 30 th September, 2008 21.99 c) After Issue [T] d) Issue Price [T]

6. Peer Group Comparison of Accounting Ratios.

As there are no other listed companies engaged in the similar activities, the peer group comparisons have not been incorporated in this Draft Red Herring Prospectus.

7. The face value of our shares is Rs.10/- per share and the Issue Price is of Rs. [O] per share is [•] times of the face value.

8. BRLMs believe that the Issue Price of Rs. [•] is justified in view of the above qualitative and quantitative parameters. The investors may also want to peruse the risk factors and our financials as set out in the Auditors Report in the Draft Red Herring Prospectus to have a more informed view about the investment proposition.

STATEMENT OF TAX BENEFITS

The Board of Directors, Mayajaal Entertainment Limited 34/1, 35, Kanathur Reddy Kuppam Village, Chengalput Taluk, ancheepuram District– 603112, Tamil Nadu

Dear Sirs,

We hereby confirm that the enclosed statement, prepared by the Company, states the possible tax benefits available to MAYAJAAL ENTERATAINMENT 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 or its shareholders fulfilling the conditions prescribed under the relevant provisions of the relevant tax laws. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on the business imperatives, the Company may or may not choose to fulfill.

The benefits discussed in the enclosed statement are not exhaustive and the preparation of the contents stated is the responsibility of the Company's management. We are informed that this statement is only intended to provide general information to the investors and hence is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences, the changing tax laws and the fact that the Company will not distinguish between the shares offered for subscription and the shares offered for sale by the selling shareholders, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue.

Our confirmation is based on the information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and the interpretation of the current tax laws in force in India.

We do not express any opinion or provide any assurance as to whether:

• The Company or its shareholders will continue to avail these benefits in future; or • The conditions prescribed for availing the benefits, where applicable have been/would be met.

For R. Subramanian & Co. Chartered Accountants

Sd/- N. Krishna Murthy Partner Dated : 12.11.2008

STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO MAYAJAAL ENTERTAINMENT LIMITED (“THE COMPANY”) AND ITS SHAREHOLDERS

I. SPECIAL TAX BENEFIT AVAILABLE TO THE MAYAJAAL ENTERTAINMENT LIMITED AND ITS SHAREHOLDERS:

(i) The Company being operating film exhibition business and as per Tamil Nadu Entertainment Tax Act, 1939 is exempted from levy of entertainment tax for Tamil films which carries `Tamil' titles.

(ii) The web entertainment division of company i.e. Num TV Division of company is Export Oriented Unit u/s 10B of Income Tax Act, 1961 and entire Profits of this unit is exempted from Income Tax till the end of 31 st March, 2010.

No other special tax benefits are available to the Mayajaal Entertainment Limited and its shareholders.

II. GENERAL TAX BENEFITS AVAILABLE TO ALL COMPANIES OR TO THE SHAREHOLDERS OF ANY COMPANY, AFTER FULFILLING CERTAIN CONDITIONS AS REQUIRED IN THE RESPECTIVE ACT.

1. Benefits to the Company under the Income Tax Act, 1961 (“The Act”):

The Company will be entitled to deduction under the sections mentioned hereunder from its total income chargeable to Income Tax.

1.1. Dividends exempt under Section 10(34)

Under Section 10(34) of the Act, the Company will be eligible for exemption of income by way of dividend from domestic company referred to in Section 115-O of the Act.

1.2. Income from units of Mutual Funds exempt under Section 10(35)

The Company will be eligible for exemption of income received from units of mutual funds specified under Section 10(23D) of the Act, income received in respect of units from the Administrator of specified undertaking and income received in respect of units from the specified company in accordance with and subject to the provisions of Section 10(35) of the Act.

1.3. Computation of capital gains

1.3.1. Capital assets may be categorized into short term capital assets and long term capital assets based on the period of holding. Shares in a company, listed securities or units of UTI or unit of Mutual Fund specified under Section 10(23D) or a zero coupon bond will be considered as long term capital assets if they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets held for more than 12 months are considered as “long term capital gains.” Capital gains arising on sale of these assets held for 12 months or less are considered as “short term capital gains.”

1.3.2. 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, it offers a benefit by permitting substitution of cost of acquisition/improvement with the indexed cost of acquisition/improvement, which adjusts the cost of acquisition/improvement by a cost inflation index as prescribed from time to time.

1.3.3. As per the provisions of Section 112 of the Act, long term gains as computed above that are not

exempt under section 10(36) or 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge and education cess).

1.3.4. As per the provisions of Section 111A of the Act, short-term capital gains on sale of equity shares or units of an equity oriented fund where the transaction of sale is chargeable to Securities Transaction tax (“STT”) shall be subject to tax at a rate of 15 per cent (plus applicable surcharge and education cess).

1.3.5. Exemption of capital gain from income tax

• Under Section 10(36) of the Act, long term capital gains arising on eligible equity share in a company (acquired on or after the 1st day of March 2003 and before the 1st day of March 2004) sold through a recognized stock exchange in India will be exempt from tax.

• Under Section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or unit is chargeable to STT. However, such income shall be taken into account in computing the book profit tax payable under Section 115JB.

• According to the provisions of Section 54EC of the Act and subject to the conditions specified therein, long term capital gains not exempt under Section 10(38) shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the capital gain is so reinvested, the exemption shall be allowed proportionately. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the bonds are transferred or converted into money.

1.4. Other specified deductions

Subject to fulfillment of conditions, the Company will be eligible, inter alia, for the following specified deductions in computing its business income:-

1.4.1. Section 35(1)(i) and (iv) of the Act, in respect of any revenue or capital expenditure incurred, other than expenditure on the acquisition of any land, on scientific research related to the business of the Company.

1.4.2. Section 35(1)(ii) and (iii) of the Act, in respect of any sum paid to a Scientific Research Association which has as its object, the undertaking of scientific research or to any approved university, college or other institution to be used for scientific research or for research in social sciences or Statistical Research to the extent of a sum equal to one and one fourth times the sum so paid subject to the Scientific Research Association, university, college or other institution to be approved and notified for the purposes of said clauses.

1.4.3. Subject to compliance with certain conditions laid down in Section 32 of the Act, the Company will be entitled to deduction for depreciation:

• In respect of tangible assets (being buildings, machinery, plant or furniture) and intangible assets (being know-how, patents, copyrights, trademarks, licenses, franchises or any other

business or commercial rights of similar nature acquired on or after 1st day of April, 1998) at the rates prescribed under the Income-tax Rules, 1962;

• In respect of any new machinery or plant which has been acquired and installed after 31st March 2005 by an assessee engaged in the business of manufacture or production of any article of thing, a further sum of 20% of the actual cost of such machinery or plant;

1.4.4. As per the provision of sub- section 1(A) of section 115-O of the Act which related to dividend distribution tax that the amount of dividend received from the subsidiary by a domestic company on which tax is payable under section 115-O, will be reduced from amount of dividend declared/distributed for calculation of dividend distribution tax, if the subsidiary has paid dividend distribution tax on such dividend and such domestic company is not a subsidiary of any other company.

1.4.5. Under Section 115 JAA (1A) of the Act, tax credit shall be allowed of any tax paid (MAT) under Section 115 JB of the Act. Credit eligible for carry forward is the difference between MAT paid and the tax computed as per the normal provisions of the Act. Such MAT credit shall not be available for set-off beyond 7 years succeeding the year in which the MAT becomes allowable.

2. Benefits available to resident shareholders

2.1. Dividends exempt under Section 10(34)

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. Computation of capital gains

2.2.1. Capital assets may be categorized into short term capital assets and long term capital assets based on the period of holding. Shares in a company, listed securities or units of UTI or unit of Mutual Fund specified under Section 10(23D) of the Act or a zero coupon bond will be considered as long term capital assets if they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets held for more than 12 months are considered as “long term capital gains.” Capital gains arising on sale of these assets held for 12 months or less are considered as “short term capital gains.”

2.2.2. 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, it offers a benefit by permitting substitution of cost of acquisition / improvement with the indexed cost of acquisition / improvement, which adjusts the cost of acquisition /improvement by a cost inflation index as prescribed from time to time.

2.2.3. As per the provisions of Section 112 of the Act, long term gains as computed above that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge and education cess).

2.2.4. As per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares where the transaction of sale is chargeable to STT shall be subject to tax at a rate of 15 per cent (plus applicable surcharge and education cess).

2.2.5. Exemption of capital gain from income tax

• Under Section 10(38) of the Act, Long term Capital Gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or unit is chargeable to STT . • According to the provisions of Section 54EC of the Act and subject to the conditions specified therein, long term capital gains not exempt under section 10(38) shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the capital gain is so reinvested, the exemption shall be allowed proportionately. In such a case, the cost of such long term specified asset will not qualify for deduction under section 80C of the Act. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the bonds are transferred or converted into money.

• According to the provisions of section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a Hindu Undivided Family (‘HUF’), gains arising on transfer of a long term capital asset (not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately.

For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.

2.3. Deduction of securities transaction tax under section 36(1(xv)

Section 36(1) (xv) provides that securities transaction tax paid during the previous year in respect of taxable securities transactions entered into in the course of his business during the previous year shall be allowed as deduction provided that such income arising from such taxable securities transactions is included in the income computed under the head “profits and gains from business or profession”

3. Benefits available to Non-Resident Indian shareholders (Other than FIIs and Foreign venture capital investors)

3.1. Dividends exempt under Section 10(34)

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.

3.2. Computation of capital gains

3.2.1. Capital assets may be categorized into short term capital assets and long term capital assets based on the period of holding. Shares in a company, listed securities or units of UTI or unit of Mutual Fund specified under Section 10(23D) of the Act or a zero coupon bond will be considered as long term capital assets if they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets held for more than 12 months are considered as “long term capital gains.” Capital gains arising on sale of these assets held for 12 months or less are considered as “short term capital gains.”

3.2.2. Section 48 of the Act contains special provisions in relation to computation of capital gains on transfer of shares of an Indian company by non-residents. Computation of capital gains arising on transfer of shares in case of non-residents has to be done in the original foreign currency, which was used to acquire the shares. The capital gain (i.e., sale proceeds less cost of acquisition/ improvement) computed in the original foreign currency is then converted into Indian Rupees at the prevailing rate of exchange. According to the provisions of Section 112 of the Act, long term gains as computed above that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess).

3.2.3. In case investment is made in Indian rupees, the long-term capital gain is to be computed after indexing the cost. According to the provisions of Section 112 of the Act, long term gains as computed above that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long- term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge and education cess).

3.2.4. As per the provisions of Section 111A of the Act, short-term capital gains on sale of equity shares where the transaction of sale is chargeable to STT shall be subject to tax at a rate of 15 per cent (plus applicable surcharge and education cess).

3.2.5. Options available under the Act

Where shares have been subscribed to in convertible foreign exchange – Option of taxation under Chapter XII-A of the Act:

Non-Resident Indians [as defined in Section 115C(e) of the Act], being shareholders of an Indian Company, have the option of being governed by the provisions of Chapter XII-A of the Act, which inter alia entitles them to the following benefits in respect of income from shares of an Indian company acquired, purchased or subscribed to in convertible foreign exchange:

• According to the provisions of Section 115D read with Section 115E of the Act and subject to the conditions specified therein, long term capital gains arising on transfer of shares in an Indian company not exempt under Section 10(38), will be subject to tax at the rate of 10 percent (plus applicable surcharge and education cess), without indexation benefit.

• According to 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 shall not be chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period of six months in any specified asset. If part of such net consideration is invested within the prescribed period of six months in any specified asset the exemption will be allowed on a proportionate basis. For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. Further, if the specified asset in which the investment has been made is transferred within a period of three years from the date of investment, the amount of capital gains tax exempted earlier would become chargeable to tax as long term capital gains in the year in which such specified asset or savings certificates are transferred.

• 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 source of income is only investment income and / or long term capital gains defined in Section 115C of the Act,

provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act.

• Under Section 115H of the Act, where the Non-Resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer, along with his return of income for that year under Section 139 of the Act to the effect that the provisions of the Chapter XII-A shall continue to apply to him in relation to such investment income derived from any foreign exchange asset being asset of the nature referred to in sub clause (ii), (iii), (iv) & (v) of Section 115C(f) for that year and subsequent assessment years until such assets are converted into money.

• As per the provisions of Section 115-I of the Act, a Non-Resident Indian may elect not to be governed by the provisions of Chapter XII-A for any assessment year by furnishing his return of income for that assessment year under Section 139 of the Act, declaring therein that the provisions of Chapter XII-A shall not apply to him for that assessment year and accordingly his total income for that assessment year will be computed in accordance with the other provisions of the Act.

3.2.6. Exemption of capital gain from income tax

• According to the provisions of Section 54EC of the Act and subject to the conditions specified therein, capital gains not exempt under Section 10(38) and arising on transfer of a long term capital asset shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the capital gain is so reinvested, the exemption shall be allowed proportionately. In such a case, the cost of such long term specified asset will not qualify for deduction under Section 80C of the Act. However, if the said bonds are transferred or converted into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long-term capital gains in the year in which the bonds are transferred or converted into money.

• According to the provisions of section 54F of the Act and subject to the conditions specified therein, in the case of an individual, gains arising on transfer of a long term capital asset (not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. For this purpose, net consideration means full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer.

3.3. Deduction of securities transaction tax under section 36(1(xv)

4. Benefits available to other Non-resident Shareholders (Other than FIIs and Foreign venture

capital investors)

4.1. Dividends exempt under Section 10(34) 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.

4.2. Computation of capital gains

4.2.1. Capital assets may be categorized into short term capital assets and long term capital assets based on the period of holding. Shares in a company, listed securities or units of UTI or unit of Mutual Fund specified under Section 10(23D) of the Act or a zero coupon bond will be considered as long term capital assets if they are held for a period exceeding 12 months. Consequently, capital gains arising on sale of these assets held for more than 12 months are considered as “long term capital gains.” Capital gains arising on sale of these assets held for 12 months or less are considered as “short term capital gains.”

4.2.2. Section 48 of the Act contains special provisions in relation to computation of capital gains on transfer of shares of an Indian company by non-residents. Computation of capital gains arising on transfer of shares in case of non-residents has to be done in the original foreign currency, which was used to acquire the shares. The capital gain (i.e., sale proceeds less cost of acquisition/ improvement) computed in the original foreign currency is then converted into Indian Rupees at the prevailing rate of exchange. As per the provisions of Section 112 of the Act, long term gains as computed above that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess).

4.2.3. In case investment is made in Indian rupees, the long-term capital gain is to be computed after indexing the cost. As per the provisions of Section 112 of the Act, long term gains as computed above that are not exempt under section 10(38) of the Act would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess). However, as per the proviso to Section 112(1), if the tax on long term capital gains resulting on transfer of listed securities or units or zero coupon bond, calculated at the rate of 20 percent with indexation benefit exceeds the tax on long-term gains computed at the rate of 10 percent without indexation benefit, then such gains are chargeable to tax at a concessional rate of 10 percent (plus applicable surcharge and education cess).

4.2.4. As per the provisions of section 111A of the Act, short-term capital gains on sale of equity shares, where the transaction of sale is chargeable to STT, shall be subject to tax at a rate of 15 per cent (plus applicable surcharge and education cess).

4.2.5. Exemption of capital gain from income tax

• According to the provisions of Section 54EC of the Act and subject to the conditions specified therein, long term capital gains not exempt under section 10(38) shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the capital gain is so reinvested, the exemption shall be allowed proportionately.

In such a case, the cost of such long term specified asset will not qualify for deduction under Section 80C of the Act. However, if the assessee transfers or converts the notified bonds into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money.

• According to the provisions of Section 54F of the Act and subject to the conditions specified therein, in the case of an individual or a HUF, gains arising on transfer of a long term capital asset (not being a residential house) are not chargeable to tax if the entire net consideration received on such transfer is invested within the prescribed period in a residential house. If only a part of such net consideration is invested within the prescribed period in a residential house, the exemption shall be allowed proportionately. 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.

4.3. Deduction of securities transaction tax under section 36(1(xv)

5. Benefits available to Foreign Institutional Investors (‘FIIs’)

5.1. Dividends exempt under section 10(34)

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.

5.2. Taxability of capital gains

5.2.1. Under Section 10(38) of the Act, long term capital gains arising out of sale of equity shares or a unit of equity oriented fund will be exempt from tax provided that the transaction of sale of such equity shares or unit is chargeable to STT.

5.2.2. The income by way of short term capital gains or long term capital gains [in cases not covered under section 10(38) of the Act] realized by FIIs on sale of shares of the company would be taxed at the following rates as per section 115 AD of the Act-

• Short term capital gains, other than those referred to under section 111A of the Act shall be taxed @ 30% (plus applicable surcharge & education cess). In case such transaction of sale is entered on a recognized stock exchange in India and is liable to STT then short-term capital gain shall be taxed @ 15% ((plus applicable surcharge & education cess).

• Short term capital gains, referred to under section 111A of the Act shall be taxed @ 15% (plus applicable surcharge and education cess)

• Long Term capital gains @ 10% (plus applicable surcharge and education cess) (without cost indexation)

It may be noted here that the benefits of indexation and foreign currency fluctuation protection as provided by section 48 of the Act are not applicable.

5.2.3. According to the provisions of Section 54EC of the Act and subject to the conditions specified therein, long term capital gains not exempt under Section 10(38) shall not be chargeable to tax to the extent such capital gains are invested in certain notified bonds within six months from the date

of transfer. If only part of the capital gain is so reinvested, the exemption shall be allowed proportionately. However, if the assessee transfers or converts the notified bonds into money within a period of three years from the date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term capital gains in the year in which the bonds are transferred or converted into money.

5.3. Deduction of securities transaction tax under section 36(1(xv)

6. Benefits available to Mutual Funds

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 there under, Mutual Funds set up by public sector banks or public financial institutions or authorized by the Reserve Bank of India would be exempt from income tax. However, the Mutual Funds shall be liable to pay tax on distributed income to unit holders under Section 115R of the Act.

7. Venture Capital Companies / Funds

In terms of section 10(23FB) of the Act, all Venture capital companies/funds registered with Securities and Exchange of India, subject to the conditions specified, are eligible for exemption from income tax on all their income, including profit on sale of shares of the Company.

8. Tax Treaty benefits

An investor has an option to be governed by the provisions of the Act or the provisions of a Tax Treaty that India has entered into with another country of which the investor is a tax resident, whichever is more beneficial.

9. Benefits available under the Wealth-tax Act, 1957

Shares of the Company held by the shareholder will not be treated as an asset within the meaning of section 2(ea) of Wealth Tax Act, 1957, hence no Wealth Tax will be payable on the market value of shares of the Company held by the shareholder of the Company.

10. Benefits Available under the GIFT tax ACT, 1958

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

Notes:

1. All the above possible benefits are as per the current tax law as amended by the Finance Act, 2008. 2. The stated benefits will be available only to the sole / first named holder in case the shares are held by joint holders. 3. In view of the individual nature of tax consequences, each investor is advised to consult his/her own tax advisor with respect to specific tax.

SECTION IV: ABOUT OUR COMPANY

INDUSTRY OVERVIEW

Disclaimer : Pursuant to the requirements of the SEBI DIP Guidelines, the discussion on the business overview in this Draft Red Herring Prospectus consists of disclosures pertaining to industry grouping and classification as per our Company's own understanding and perception and such understanding and perception could be substantially different or at variance from the views and understanding of third parties. Our Company acknowledges that certain products described in the Draft Red Herring Prospectus could be trademarks, brand names and/or generic names of products owned by third parties and the reference to such trademarks, brand names and/or generic names in the Draft Red Herring Prospectus is only for the purpose of describing the products.

The information presented in this section has been obtained from publicly available documents from various sources including officially prepared materials from the Government of India and its various ministries, industry websites and from publications and company estimates. Industry websites and publications generally state that the information contained therein has been obtained from sources believed to be reliable but their accuracy and completeness are not guaranteed and their reliability cannot be assured. Although we believe industry, market and government data used in this Draft Red Herring Prospectus is reliable, these have not been independently verified.

The Indian Entertainment Industry - An Overview

The Entertainment and Media (E&M) industry is now in a phase of steady growth ably supported by the stable economic growth. With no surprises, the performance of the Indian E&M industry has surpassed the performance of the Indian economy as well as most other industries in 2007. In 2007, the E&M industry recorded a growth of 17% over the previous year, higher than the forecasted growth of 15% projected in the previous year. The industry reached an estimated size of Rs. 513 billion in 2007, up from Rs. 438 billion in 2006. In the last four years 2004-2007, the industry recorded a cumulative growth of 19% on an overall basis, as tabulated below.

(Source: The Indian Entertainment and Media Industry Sustaining Growth, FICCI Price Waterhouse Coopers, 2008)

The Past and the Future:

Over the past decade, India has been the second fastest growing economy in the world. In 2004, it grew by 8.2 percent, breaching the psychological 8 percent barrier for the first time. In terms of purchasing power parity, it is already the fourth largest economy in the world. Most major global companies are of the opinion that it will become a key market in the years to come. Consistent commitment to economic reform over the last decade has spurred the steady growth of the Indian economy. The emphasis on creating an enabling environment for investment and the inherent potential of the Indian economy have together pushed India's annual Gross Domestic Product (GDP) growth rate beyond 8 percent.

While India's GDP ranks eleventh in the world in absolute terms, it ranks among the top five economies of the world when assessed in terms of purchasing power parity. It is the growing consuming class with the proclivity to spend that will drive the growth of the Indian entertainment industry. Adding to this positive outlook is the fact that the average Indian is getting younger and is showing a greater propensity to indulge and entertain himself.

As the Indian economy continues growing, the Indian middle class will also expand significantly. Compared to other nations, the 3000 lakhs strong Indian middle class allocates a higher percentage of its monthly expenditure on entertainment. The increasing consumerism of middle-class India is seen from the sharp growth in the sales for various products like automobiles, color television sets and mobile phones and the burgeoning increase in credit cards and personal loans. Rising income levels and consumerism bred from the country’s strong economic growth are creating a growing demand for entertainment.

The Indian Entertainment and Media Industry is one of the fastest growing sectors in India. It is rising on the back of economic growth and rising income levels that India has been experiencing in the past decade, India is one of the fastest growing economies in the world. In terms of purchasing power parity, it is already the fourth largest economy in the world. An added boost to the entertainment and media industry in India is from the demographic point of view where the consumer spending is rising due to increasing disposable incomes on account of sustained growth in income levels and reduction of personal income tax over the last decade.

Moreover, there are over 20 million Indians living abroad who are increasingly opting for India-oriented entertainment, as the availability of such content increases. Globally, a clutch of international films with Indian content, themes and performers are receiving wide visibility and acclaim. This broad acceptance of Indian entertainment is likely to give a further fillip to the expansion of this industry. To be able to appreciate the contours of this industry, it would be useful to take a closer look at the key drivers of the entertainment sector.

Further, the following classification can be made for Mayajaal Entertainment Limited within the Indian Entertainment Industry.

A) Family Entertainment Centre

1. Multiplex Development

Though the number of admissions is the highest in the world, when compared to the number of screens available for India’s population, the average is relatively low as compared with other countries. With around 12,900 theatres in the country that are 95% single-screen, the average screen density works out to be only 12 screens per 10 lakh population. In contrast, the US average is about 117 screens (per 10 lakh population) and the UK average is 30 screens (per 10 lakh population). Even if a gap of just 8 screen average (as per the UNESCO Report of 2001, quoted in the CII-KPMG Report 2005) is considered, there is a potential demand of about 8,000 additional screens in the country.

Further, about 60 percent of the theatres in the country are situated in the four Indian southern states of Andhra Pradesh, Tamil Nadu, Kerala and Karnataka servicing 22% of the Indian population. Andhra Pradesh has more than 2,800 cinema halls compared to 900 in Maharashtra and 1,100 in Uttar Pradesh. In 2004, there were around 250 Hindi films but 485 South Indian films.

The major regional film industries are Tamil and Telugu, which together earn around INR 15 billion, followed by Malayalam, Bengali and Punjabi.

Most of the theatres in India are single-screen theatres and not the highest quality, which has resulted in lower occupancy rates and lower ticket prices. This provided an opportunity for companies to take over such theatres on lease/contract basis (most of such theatres are owned by individuals who are running into losses and hence are willing to enter into such contracts) for up- gradation or conversion to multiplexes. Such up-gradation and conversions to multiplexes is resulting in higher occupancy rates and thereby the opportunity for exhibitors to charge higher ticket prices. This growth of the multiplexes has resulted in the average ticket prices to rise by more than five (5) times. Further, average occupancy levels have also steadily risen resulting in higher box office collections. Such companies also retain the right to monitor the ticket collections and having retained a share are able to recover their investments faster than if they opted to set-up a new theatre.

The conversion of standalone, poorly maintained single-screen theatres to sophisticated multi screen theatres, in addition to the new multiplexes within or around shopping malls and family entertainment centres, is an emerging trend in urban India today. Multiplexes, though a recent urban phenomenon, have shown the way forward in increasing domestic theatrical revenues. The reasons for their success are: -

• They enjoy an average of 50-60 percent occupancy per screen as opposed to 30-35 percent of standalone theatres

• The customer is willing to pay more for the enhanced viewing experience

• The government has accorded various tax rebates for multiplexes. The entertainment taxes in South India are amongst the lowest. Entertainment tax is levied on various modes of entertainment such as on film tickets, cable television, live entertainment etc. The rates of entertainment tax payable by theatre owners vary form 0 percent in Andhra Pradesh to 130 percent in Assam. India has one of the highest rates of entertainment tax across the globe. Recently, some states have granted exemption from entertainment tax to multiplexes. Due to lower entertainment tax in Tamil Nadu (no e-tax on Tamil content) and Andhra Pradesh (15% tax on Telugu content), there has been large-scale investment in cinema infrastructure in these two states. The two states account for 41% of total theatres in the country.

• They increase Footfalls in shopping malls by 40-50 percent. As a result, several major malls have multiplexes in or near them. The present retail boom has led to a significant rise in the number of multiplexes.

The advent of multiplex chains is expected to usher in a new era of film exhibition, apart from just an enhanced viewing experience. Some of the expected changes are:

• Dedicated marketing teams to leverage state-of-the-art technology to address the programming needs of exhibitors

• Marketing team to work out Content-to-customer matches on the basis of consumer surveys and other metrics.

• Developing synergistic marketing strategies in conjunction with Content producers, broadcasters, music companies, etc.

Offering better terms to producers based on

• Presence across multiple locations • Significantly higher transparency • The strength of their balance sheet

These activities of the multiplexes could to lead to a possible shakeout and consolidation among the standalone theatres.

Buoyed by positive regulatory changes, booming consumerism and multiple revenue stream, the nation’s multiplex industry is set for an unprecedented boom. So much so that the number of screens alone is expected to record a three-fold jump from 500 now to over 1500 by the fiscal 2010. This will drive the industry growth at 62 per cent CAGR over the same period to Rs 4,000 Cr, thus contributing 28 percent of the total theatrical sales for the film industry (Source: Report by Systematix Institutional Research)

2. Mall Development

India has witnessed the emergence of a mall culture and development of malls over the past few years. Significant investments have been channelized into development of organized retail outlets.

Increasingly, a number of mall developers are considering Movies/Theaters and Entertainment outlets like food courts, gaming zones, shopping arcade etc as the key elements attracting footfalls to the malls. This is being reflected in the attractive rental rates offered to such outlets, in comparison to other categories of outlets in malls. As a result, Multiplexes are fast emerging as one of the key anchor tenants for most organized retail outlets in India.

Future direction: Positives

• AT Kearney has estimated India’s total retail market at US$ 202.6 billion, which is expected to grow at a compounded 30 per cent over the next five years. (Source: AT Kearney)

• With the organized retail segment growing at the rate of 25-30 per cent per annum, revenues from the sector are expected to triple from the current US$ 7.7 billion to US$ 24 billion by 2010.

• The share of modern retail is likely to grow from its current 2 per cent to 15-20 percent over the next decade

• Over next two years India will see several Indian retail businesses attaining a critical mass as growth in the industry picks up momentum driven by two key factors: – Availability of quality real estate and mall management practices – Consumer preference for shopping in new environments

Retail and real estate compliment each other. The current growth trends in Indian retail market present large prospects in the retail real estate segment. Indian retail enjoys the status of representing one of the 10 largest retail markets in the world. If the progress forecasted for retail sector in India keeps moving like this, then, by the end of 2008, a supply of 66 million sq ft. of new retail space will be developed in the eight largest Indian cities.

(Source : AT Kearney, Forrester Research, KPMG-FICCI Report)

Outlined below is the future scenario of retail sector in India

Source: http://www.indianrealtynews.com/real-estate-trends/a-view-on-mall-development-in- india.html

Chief hosting spots to see the major retail development are NCR, Mumbai, Bangalore, Kolkata, Hyderabad, and Chennai. However, the mall culture is likely to hit 60 more cities. In Chennai, an additional retail space of 81 lakh square feet spread over 20 malls has been slated for inauguration in the next three years as against the existing three malls spread across 8 lakh square feet. Retailers are targeting it on the growing cosmopolitan population of our city. International brands such as Body Shop will set foot in Chennai in the near future.

B) Hospitality- Resort

Helped with unique efforts by government and all other stakeholders, including hotel owners, resort managers, tour and travel operators and employees who work in the sector, Indian hospitality industry has gained a level of acceptance world over. It has yet to go miles for recognition as a world leader of hospitality. Many take Indian hospitality service not for its quality of service but India being a cheap destination for leisure tourism.

With unlimited tourism and untapped business prospects, in the coming years Indian hospitality is seeing green pastures of growth. Availability of qualified human resources and untapped geographical resources give great prospects to the hospitality industry. The number of tourists coming to India is growing year after year. Likewise, internal tourism is another area with great potentials.

Hospitality is about serving the guests to provide them with "feel-good-effect". "Athithi devo bhavha" (Guest is God) has been one of central tenets of Indian culture since times immemorial. In India, the guest is treated with utmost warmth and respect and is provided the best services.

Today hospitality sector is one of the fastest growing sectors in India. It is expected to grow at the rate of 8% between 2007 and 2016 (Source : The Travel and Tourism Economic Research 2006).Nowadays the travel and tourism industry is also included in hospitality sector. The boom in travel and tourism has led to the further development of hospitality industry.

India occupies forty-sixth position among the sixty tourist destinations in the world. A flourishing economy helped boost demand for the industry. To encourage the tourism sector, the government is planning to propose a conditional 10-year tax holiday for all tourism projects in the country. Companies will enjoy full tax exemption up to 50% of profits, but will qualify for tax benefits for the remaining amount only if they re-invest it in tourism projects. The Centre and States are also working out a PPP (Public-Private-Partnership) model to increase hotel capacity. Efforts to diversify tourist attractions by offering new products such as wellness tourism, medical tourism and golf tourism are expected to have a positive effect on both foreign tourist arrivals and domestic tourism.

According to the 2002 estimates of the World Tourism Organization (WTO), international tourist inflow in India by 2020 would be 10 million, which means the tourist influx has to grow at a CAGR of 6.5% for the next 14 years. This makes the country one of the fastest growing tourist destinations in the world second only to China. As of FY08, the increase in the tourist arrivals is well inline with the WTO estimates.

India accounts for 0.5% of world tourism. Strong GDP growth, improving infrastructure, confidence in the country's economic prospects, open sky policy and the 'Incredible India' campaign has improved the outlook for India. This positive outlook would increase the tourist arrival in the country and the hotel industry is expected to be the major beneficiary. Even domestic tourism is gaining momentum. Rising disposable incomes, cheaper airfares and better connectivity would continue to increase the demand for rooms.

The Planning Commission's High Level Group on services sector has pegged the room shortage in the country at 150,000 rooms by 2010, out of which more than 100,000 will be in the budget category. Not only the Indian hotel majors, but even international players have lined up huge capex plans. Investments of US$ 11 bn over the next 2 years are expected to be earmarked for the hotel industry in India. Further, new segments like budget hotels, service apartments and management contracts are witnessing increasing interest

Though the government is taking necessary steps, many more things need to be done to improve the infrastructure.

The number of tourists visiting India is estimated to touch the figure of 4.4 million. With this huge figure, India is fast becoming the hottest tourist destination in the region. The visitors include business travelers, leisure travelers and persons of Indian origin with foreign passports. Growth is expected to continue over the next few years. It is being predicted that India may achieve an average growth of 12% per annum in tourism for many years to come. Apart from international tourists, the domestic tourist market, including business and leisure travelers, is also flourishing. This market is estimated at around 300 millions tourists per year. The industry also expects a boom in spiritual and medical tourism in the domestic sector at a growth rate of 10% to 15% over the next few years. Growth in tourism will definitely lead to a boom in hotels and restaurants. Though there is a shortage of rooms at present, it is going to be over soon enough, as top international players are heading towards India to establish themselves here. A steady growth of about 10% in new hotel projects is expected for the next few years.

For the past few years, the growth in India’s Hospitality industry has been fuelled by a favorable economic and political situation. The GDP growth averaged 7.6 per cent per annum during the Tenth Five year Plan (2002-03 – 2006-07) which is the fastest increase in any Five Year Plan period so far. [Source: Report on “Mid year review 2007-08” - Ministry of Finance]

Tourism has rapidly emerged as a significant segment of the Indian economy. With active government participation, higher disposable incomes of the population, better positioning of India as an international tourist destination and synergized efforts of all industries towards it, the outlook for

tourism in India is expected to remain buoyant in the long term. According to estimates of the World Travel & Trade Council (WTTC) , Indian tourism demand will grow at 8.8% from 2004-13. [Source: Report on “Progress and Priorities” World Travel & Trade Council]

C) Sports Club Development

Recreation is currently one of the most thrilling sectors in India. The industry is still at an early stage of development. But, with the increasing entry of some of the more established Indian entrepreneurs and corporate housed, the industry could be worth USD 1.06 billion per annum within the next 2 - 3 years. The recreation industry is already worth USD 213 million per annum. Industry experts agree that the sector has a great potential. Leisure consultants are experiencing a boom in demand for their services. Cultural attitudes within India are changing. The increasing incidence of Cable TV is exposing the population to a wider range of recreation pursuits. And the idea of an annual family holiday to the home village is being overtaken by more frequent weekend visits to recreation facilities within and around the cities.

The current size of the consumer market for the recreation and amusement sector is estimated at 25-30 million. This reflects a middle upper class with a monthly disposable income in excess of USD 106. But with a population of 1 billion, 30% of which is under 20 years, and economic growth set to continue at 6% per annum, the number of consumers can only increase. The sector is developing throughout India but the major projects are planned in the metropolitan cities, their suburbs and other major cities in western and northern India. The major cities in southern states like Hyderabad, Bangalore, Mysore, Cochin and Tiruvananthapuram are also showing increased activity. However, projects in eastern India are limited to Kolkata in West Bengal and Bhubneshwar in Orissa.

From a recreational activity to a full-fledged career option, sports in India have evolved into a viable alternative. Therefore enormous emphasis is laid on building a Sports Club providing various facilities and infrastructure such as open ground for promotion of out door sports like cricket, football, volleyball, basket ball etc and rooms/halls for indoor games like carom, gymnasium, chess, table tennis etc.

D) Content Creation & Delivery

Animation Industry

With global players like Walt Disney, Imax, and Warner Bros. signing contracts with Indian animation companies for outsourcing and co-production, it is expected that the animation industry in India could touch Rs38bn by 2009. In the next five years a 27% CAGR is expected. The cost of half an hour of animation work in India averages US$60,000. In the US and Canada the same work costs approx. US$400,000.

(Source: FICCI FRAMES, 2008)

Local animation studios are framing Content mostly based on mythology. However, a few studios have ventured into animated films, based on fiction ( The Sultan, produced by Adlabs and Ocher Studios).

Key findings of the NASSCOM Study on Animation and Gaming Industry in India

• The latest NASSCOM report on Animation and Gaming industry in India - estimates the global market size (demand perspective) of industry will witness a CAGR of eight percent and is expected to reach USD 75 billion by 2009. Based on this, the global animation market (from the developers’ perspective) is expected to increase to USD 35 billion by 2009 from USD 25 billion in 2005.

• The size of the Indian animation market (from the developers’ perspective) was estimated at USD 285 million in 2005. It is expected to witness a CAGR of 35 percent from 2005-2009 and increase to USD 950 million by 2009

• According to the report, the market for gaming is expected to witness a CAGR of 78 percent and reach USD 300 million by 2009 from USD 30 million in 2005

Table 1

Demand perspective Developers perspective Market size for Animation World USD 75 billion by 2009 USD 35 billion by 2009 India USD 950 million by 2009 Market size for Gaming World USD 36 billion by 2009 USD 11 billion by 2009 India USD 300 million by 2009

The Indian animation industry is set to grow to US$ 993.38 million from US$ 283.82 million by 2009. Its revenues are expected to grow two fold to nearly US$ 1.5 billion by 2010. Though the Indian animation market is presently merely around 1 per cent of the global market of the US$ 1,125 billion, it is projected to grow about 35 per cent in the next few years. (Source: Indian Brand Equity Foundation 28 th July, 2008) India is increasing presenting itself as a favorable destination for the animation industry, particularly in post-production and 3D content development activity. As of today, India has about 200 animation, 40 VFX and 35 game development studios.

Currently, activities at the production stage form a major portion of outsourcing, with postproduction accounting for a small share. The share of post-production activities is expected to increase in future. The entertainment sector contributes as much as 68 percent of the total Indian animation market (from the developers' perspective). In entertainment, the share of fully animated movies is expected to increase significantly, from 15 percent in 2005 to 28 percent by 2009. (Source: NASSCOM study on animation)

In the last decade we have been witnessing an increasing participation from the Indian IT industry in the burgeoning media and entertainment sectors, which are becoming significant consumers of technology. From large global motion picture companies and animation shops outsourcing their sophisticated work to India, to leading Indian software organizations creating gaming solutions for mobile phones, to an increasing use of special effects solutions by premier film production firms in the country—the Indian animation market is set to take off.

Services Off shored to India

In the initial stages, the Indian animation industry provided support services in 2D post-production such as cleaning-up, in-betweening and scanning. These were typically labor-intensive services, with minimal need for domain knowledge or highly specialized skill-sets. However, over the years, the industry has graduated to providing higher-end, skill-based services, especially in 3D animation. The shift from 2D to 3D services has been distinct, and has facilitated better penetration into the global market. The table below lists services offshored to India:

Segments Services 2-D services Creative Development (rarely offshored), Shot layout/Storyboarding (rarely

offshored), Animatics, Clean-up / inbetweening, Character design, Set/BG Design, Modeling, Rigging, Lighting, Texturing, Shading, Character Animation, Particle Effects, Cro wd Animation, Matte Painting, MEL Scripting, Compositing, Rendering Character Modeling, Sets/ Props Modeling, Match Moving, Rigging, Key Frame 3-D services Animation, Motion Capture Animation, Texturing, Lighting, Compositing, 3D SFX Wire & Rig removal, Green Matte removal, Digital clean-up, Pre-viz, Digital Film Restoration, Rotoscopy, Titles, Matte Painting & Background, Morphing, Visual effects & Transition Effects, Color Correction / Touch-Ups, Particle Effects, CGI, Digital Compositing, Atmospherics, Digital Opticals, Natural Phenomena, Compositing intermediary Multi-layered & Blue-Green shots, On-Set VFX Supervision, Camera Match Moves (CMM) Game asset creation, Character Modeling, Set Design & Modeling, Game Gaming Cinematics, Matte Painting, Quein g, Games Testing, Gamers help desk, Audio, Texturing

Source: Value Notes Research The global gaming market, on the other hand, logged in revenues of US$ 21 billion in 2006 and is expected to touch US$ 42 billion by 2010, at a CAGR of around 18 percent during 2006-2010. From the perspective of developers, the worldwide gaming content market was estimated to be around US$ 7 billion in 2006. The segment is expected to notch up a CAGR of 17 percent, to achieve a turnover of US$ 13 billion during the 2006-2010 period. Within the gaming segment, it will be mobile and online gaming that will create the maximum impact, recording CAGRs of around 30 and 25 percent respectively. (Source: NASSCOM study on animation)

Government support for the Animation industry: the crucial helping hand

While a strong case for building relevant manpower exists for the Animation and gaming industry in India, there is an equally strong need for Government intervention, to make the market more robust and globally competitive.

The Indian Government will need to take a leaf out of the book of nations such as France, Singapore, China, Korea, Canada and Philippines, where the Government introduced policies that greatly benefited the broadcast (including animation) industries.

The Government can participate in making the Indian Animation industry successful by offering assistance in manpower development, infrastructure provisioning, direct and indirect investments and promoting industry recognition. Broadcasting policy regulations encouraging the growth in the production and use of local content will further catalyze the growth of the domestic Animation industry.

In this way, the Animation industry could be driven to perform at its optimum and emerge as a sunrise segment for the Indian IT-BPO sector.According to NASSCOM, the global animation market was estimated to be around $59 b in 2006 and is expected to grow by 8% per annum to reach $80 b by 2010. Further, the association estimates a 35% growth rate for animation outsourcing to India going forward. Currently, there are over 300 India-based vendors together in the animation and gaming segment. Over the last few years, vendors have developed capabilities to start co-production and have also entered the original content creation space. With traction in collaborative arrangements, lot more action is expected in the animation outsourcing space .

India’s animation studios are catering to the requirements of various end user segments such as feature films, TV programs, advertisements/commercials and computer games. Animation solutions

are also finding a place in niches such as film titling, special effects, Web entertainment programs; TV broadcast graphics, 3D modeling and background development. In each of these areas the extent or scope of services for an animation production company include offering services in animation production services, co-production and content creation.

India is home to a financially and technically strong film industry. The sector is getting more versatile day by day and is already making its mark around the globe. Animation will provide a whole new stage for Indian film producers searching for new avenues in the highly competitive market. Producers will not only undertake more such investments but also showcase Indian creativity around the world.

Live Action Films

Domestic box office collections continue to be the largest contributor to the revenues of the industry at 74%, though this share has reduced in the last four years by 4%. Domestic box office collections are estimated at Rs. 72 billion 2007, up from Rs. 64 billion in 2006, translating into a growth of 12% from the previous year. Overseas collections is steadily becoming an important component and continues to be the second largest contributor to the revenues of the industry at 9% with an incremental change in the last four years. In 2007, the overseas collections are estimated at Rs. 8.5 billion 2007, up from Rs. 7 billion in 2006, translating into a growth of 21% from the previous year.

Due to the vast and varied segments comprising the ancillary revenues and the evolving nature of the same, on an overall basis, the ancillary revenues are estimated to command an equal share as that of overseas collections and the higher than the home video segment. Ancillary revenues are estimated to have grown by 19% over the last four years and 21% in the last year itself. In 2007, on an overall basis, the ancillary revenues are estimated to be Rs. 8.5 billion, up from Rs. 7 billion in 2006.

(Source: The Indian Entertainment and Media Industry Sustaining Growth, FICCI Price Waterhouse Coopers, 2008)

The Indian film industry is the largest in the world in terms of ticket sales and number of films produced annually (877 feature films and 1177 short films were released in the year 2003 alone and 1146 films are released in the year 2007). Movie tickets in India are among the cheapest in the world. India accounts for 73% of movie admissions in the Asia-Pacific region, and earnings are currently estimated at US$8.9 billion. The industry is mainly supported by the vast cinema going Indian public. (Source: The Indian Entertainment and Media Industry Sustaining Growth, FICCI Price Waterhouse Coopers, 2008)

The major regional film industries are Tamil and Telugu, followed by Malayalam, Bengali and Punjabi film industry. The average cost of production of a regional film, keeping in view, its limited market (compared to a Hindi film) and lower revenue potential, is only a fraction of that of a mainstream Bollywood film. With increased viewer exposure to a plethora of entertainment options on satellite television, the number of regional films produced annually has seen a decline from around 800, three years ago, to around 650 currently.

South Indian Film Industry

South India churns out more reels a year than Bollywood and its north and West Indian cousins put together. On an average, Telugu, Tamil, Kannada and Malayalam studios produce between 500 and 550 films a year, which also have the highest number of theatres in India, with the count being more than 6200. About 65 per cent of the theatres in the country are situated in the four Indian southern states of Andhra Pradesh, Tamil Nadu, Kerala and Karnataka servicing 22 per cent of the Indian population.

(Sources: Industry estimates & PwC analysis)

Telugu: Andhra Pradesh has the highest number of theatres in the country at over 2,800. On an average, the Telugu film industry churns out more than 200 films a year in the big, medium and small budget categories. Small budget movies account for approximately half the total productions. Big films featuring stars have budgets in the range approximating Rs 15 to 20 crore. Medium budget films range between Rs 5 crore and Rs 7 crore, and the small budget films are made at about Rs 1.5 crore.

Tamil: The second biggest film industry in the South India, the Tamil film industry churns out approximately 150 films a year. After Bollywood, Tamil films have always dominated the overseas market. The presence of a large number of Tamilians in South East Asia (Malaysia, Singapore etc) and South Africa, besides Sri Lanka, has always offered an assured market for Tamil films overseas. The market for Tamil films also exist in US and UK, driven more by long settled Tamil population and Canada, which is a stronghold of Sri Lankan Tamils.

Kannada: The Kannad film industry is much smaller, compared with the neighboring Telugu and Tamil industries, with an average of 100 films produced every year.

Malayalam: The Malayalam industry rolls out between 70 and 90 films a year. A large population of Keralites settled in the Gulf have always offered the industry a ready overseas market.

Future Outlook

The Indian film industry is projected to grow by 13% over the next five years, reaching to Rs. 176 billion in 2012 from the present Rs. 96 billion in 2007, nearly double its present size. The relative shares of the film industry are expected to shift marginally from the traditional revenues to the new emerging revenues. The share of the domestic box office is projected to reduce to 70% in 2012, primarily in favour of overseas and ancillary revenues.

(Source: The Indian Entertainment and Media Industry Sustaining Growth, FICCI Price Waterhouse Coopers, 2008)

E) Web Entertainment

Our Company has a presence on the web entertainment platform through its twenty our (24) hour live online multilingual entertainment portal URL http://www.numtv.com , covering over thirty (30) television channels, radio channels, films, print, stage shows and events both live and recorded. NUM TV offers entertainment through broadband connection mostly to countries other than India. Apart from web content aggregator and distributor, http://www.numtv.com offers wide range of B2C services. Since there is no credible market data available on web entertainment, we have restricted the information to our Company.

F) Television Entertainment

The Indian television market is on the threshold of a major technological change. New distribution technologies – such as digital cable, DTH are planning to hit the market soon and broadcasters and

cable operators are voluntarily opting for addressable cable systems. In fact, all spheres of the industry – content, broadcasting, distribution and regulation – are witnessing technological changes. The Telecom Regulatory Authority of India (TRAI), which was appointed as the regulator for the industry in 2004, has already begun putting major policy framework in place.

(Source: FICCI – PWC Report)

Compound Annual Growth rate (CAGR) (%)

(Source: FICCI – PWC Report)

TV distribution: Station, cable, and satellite

The global television distribution market, on the other hand, is expected to increase from $146 billion in 2004 to $210 billion in 2009, a compound annual growth rate of 7.4 percent during the ﬁve- year forecast period. Asia Paciﬁc and EMEA are the fastest-growing regions, at 13.3 percent and 10.5 percent, respectively, followed by Latin America at 9.8 percent. Canada is expected to grow at a projected 5 percent rate, and the United States by 4.7 percent compounded annually.

(Source: FICCI-PWC Report)

OUR BUSINESS

OVERVIEW

Our Company was originally incorporated as a private limited company in the year 1997 and was converted to a public limited company in the year 2002.

Our Company developed the Family Entertainment Centre in 2001 comprising of Mall & Multiplex "e.joy". In the year 2003 our Company developed the Sports Village "The Champ" which is a stadium cum facility centre for organizing various sports event such as cricket, snooker, squash etc. Our Company further in the year 2005 constructed “Onshore Resort” which is leisure cum health resort. The above facilities are spread out over an area of 26.82 acres in a single campus away from the bustle of the city, on the scenic East Coast Road near Chennai.

Our Company in the year 2000 became a 100% subsidiary of PMGL as a part of PMGL’s growth and diversification strategy.

By way of the Scheme of Amalgamation, PMGL subsidiaries i.e. Media Dreams Limited, Kris Srikkanth Sports Entertainment Limited and Intelivision Limited (herein after collectively referred as the "Merged Entities") merged with our Company. As part of the Scheme of Amalgamtion, the Animation and Web Entertainment business of PMGL was demerged into our Company. The High Court of Madras sanctioned the Scheme by an order dated 8 th November 2004 which was further modified by an order dated 29 th November 2007.

Pursuant to the Scheme, in addition to "e.joy", "The Champ" and "Onshore Resort" the merged entity i.e. our Company diversified into the following business activities: a) Content Creation and Delivery of Animation Films (demerged from Pentamedia Graphics Limited) b) Production of Live Action Films ( carried on by Media Dreams Limited ) c) Web Entertainment ( demerged from Pentamedia Graphics Limited ) d) Television Entertainment ( carried on by Intelivision Limited ) e) Sports related Content (from Kris Srikkanth Sports Entertainment Limited )

BUSINESS OPERATIONS

Our Business Operations can broadly be classified in the following segments:

I. Family Entertainment Centre, Resorts, Sports Village II. Content Creation and Delivery III. Web Entertainment IV. Television Entertainment

I. OUR FEC, RESORT AND SPORTS VILLAGE

Our Company started e.joy in the year 2001, Sports Village in the year 2003 and Onshore Resort in the year 2005.

OPERATIONS

A) e.joy (Family Entertainment Centre): Our Company in the first phase developed an area of 5 acres into “e.joy”. e.joy has a 1,00,000 sq. feet centrally air conditioned dome under which various forms of entertainment are offered.

The FEC has the following facilities:

1. Ten (10) Screens Multiplex: Our Multiplex is the largest in Tamilnadu. It comprises of ten (10) screens with an overall seating capacity of 1583 seats spread over an area of 32,000 sq feet. Our Multiplex exhibits films including Hindi, English, Tamil, Telegu, Malyalam & Kannada. Our Multiplex has the unique facility of screening more than fifty (50) shows per day with a single print. Our Multiplex contributes around 35% to the revenues of our Company.

The following constitutes the operations of our Multiplex:

• Exhibition Programming: Programming is the key activity for film exhibition business. The main objective of the programming activity is to source right films for the target audience, at the most competitive terms, and screen the films in a manner and at the show that enables maximization of revenues from each film. Programming decisions are based on local factors including tastes and preferences of patrons with a right mix of local, Hindi and English films. Programming is usually done on every Monday after a careful assessment of the collections of the previous week and current week releases and also keeping in mind forthcoming releases.

• Box office and Tele-Sales: Our Multiplex provide a single window service for sale of tickets through computerized system. To support the box office there is a well trained tele sales team that provides the patrons the facility to book tickets from home. Our Multiplex also offers facility to book tickets through Internet, mobile and Interactive Voice Response System (IVRS).

• Refreshment Counters: Our Multiplex offers multiple refreshment counters such as popcorn and aerated drinks (like colas) and other food and beverages, which is called e.joy concession.

• Ushering: This activity handles the task of coordinating the movement of patrons within the multiplex.

• Projection: This activity involves screening of films as per the schedule provided by the programming team and shall ensure quality viewing experience to the audience.

• Support Services: The support services comprising of HR, training, engineering, housekeeping and accounts enables the smooth functioning of the Multiplex.

The current occupancy levels of the theatres are around 80% during the weekends and around 25% during the weekdays.

2. Eight (8) Lane Bowling Alley: Our Company has Chennai’s largest and the only eight (8) lane Bowling Alley along with a service lane. Our Company frequently conducts tournaments and events to promote this entertaining sport.

3. Video Games Arcade: e.joy comprises of a gaming parlor consisting around 100 different popular and latest games from around the world catering to toddlers, teens & adults.

4. Food Court: The e.joy Food Court has a seating capacity of 500 seats and is spread over an area of 20,000 sq. feet. It comprises of different cuisines including South Indian, North Indian, Chettinadu, Chinese, Thai, Italian, American served by leading brands such as Baskin Robbins, Marry Brown, Coffee Day Express, US Pizza, Drive Inn, Noodle Shop amongst others.

5. Maya Mall Shopping: It is a four (4) level shopping arcade spread over an area of 36000 sq feet. This shopping mall displays variety of range from apparel, fashion, jewellery, home care, foot wear, edible items, toys, music DVD’s and CD’s, books & stationery, electronics etc.

6. Convention Hall : The “Oscar Hall” has a seating capacity of 400 people to meet appropriate occasions like weddings, receptions, conferences, seminars, banquets, get togethers.

7. Car Parking : The FEC has the facility to accommodate parking of around 1000 cars.

B) Onshore Resort: The leisure cum health resort spread over an area of 5 acres started its operations in 2005. A 3 star categorized resort dwells into the realms of leisure, entertainment, sport, business and a host of other activities with a scenic view. The resort is set in a picturesque land scape surrounded by Buckingham Cannel from behind, e.joy Dome on one side and the Sports Village on the other side, making it all the more a, ‘Most apt destination’ for tourists, businessmen & leisure travelers. Onshore Resort has the potential to service over 5,000 people at any given point of time, for various events.

The Onshore Resort is highly patronized by corporate clients, walk-in guests for stay, food and sports with a spacious car parking facility spread over an area of 20913 sq feet. The Onshore Resort comprises of the following:

1. Spacious rooms, Suites & Cottages: The Resort consists of forty (40) rooms and the break up of which is given below:

Type of Room Area (in sq feet) Number of Rooms Comfort 350 10 Studio 375 18 Chalet 450 8 Suite 600 4 TOTAL 1775 40

All the rooms are equipped with facilities like LCD TV with DTH, A/C, Wi-Fi Connectivity, STD/ISD calling facility, Electronic safe vault, Refrigerator.

2. Forest Themed Bar : The "Amazon Bar" launched in the year 2006 spanning 1517 sq. feet with a seating capacity of 70-80 people. It gives a unique ambience of an Amazon forest theme to the Bar and is popular amongst young crowd apart from our hotel guests. It serves food along with a wide range of beverages.

3. Multi-Cuisine Restaurant : The "Riviera Multi-Cuisine Restaurant" is spread over an area of 1080 sq feet. It is a fine dining restaurant and offering elaborate cuisines. This restaurant is known for its Punjabi and Chinese cuisine and is popular among our guests.

4. Conference & Convention Halls: The Onshore Resort has three conference halls in operation and the details of which are given below:

Name Capacity (seats) Facilities Pluto Hall 25 To conduct conferences, seminars, board meetings, presentations Galaxy Hall 100 To conduct Banquets, Get Together, conferences, seminars Park Lawn 500 To conduct conventions, weddings, Banquets, get together

The other facilities available at the onshore resort are a swimming and SPA pool & artificial waterfall.

C) The Champ: The Sports Village is spread over an area of 17 acres has been operating since 2003. The Champ is a "first of its kind" facility which combines the thrill & excitement of sports with a dose of Entertainment. The Champ’ is open twenty four (24) hours a day and seven (7) days a week. It offers a range of stimulating indoor and outdoor games, health club and expert coaching facilities on a variety of sports. The sports club offers permanent, temporary and walk-in membership schemes.

This Sports Village comprises of:

1. Cricket Ground : The Cricket Ground with three (3) International Turf Wickets was inaugurated by former India Cricket Captain Kapil Dev in 2003, meets the international standards. It is spread over

an area of 137227 Sq feet and has been hosting tournaments of corporates, BCCI, TNCA, Sports Associations and ICL.

2. Indoor games Sports Complex: This Complex is spread over an area of 1684 Sq feet. It provides a range of stimulating indoor games like Table Tennis, Snooker & Billiards, Carom. It additionally offers sports like squash, bandminton and a unique facility for indoor cricket.

3. Champ Gallery : The Champ Gallery is set up for the spectators to view the cricket matches being played at the cricket ground.

Type of Seating Area (in Sq Feet) Capacity(seats) Cricket Pavilion 10,000 300 Ground Seating 84,000 5000

4. Conference Halls: The Champ has a conference halls in operation and an open garden lawn, the details of which are given below:

Name Capacity (seats) Facilities Sobers Hall 200 To conduct Banquets, Get Together, conferences, seminars

The Sports Village lawn offers a seating of more than 10,000 for any outdoor events such as concerts, melas and get togethers.

5. Tennis Court: The Tennis Court is spread over an area of 28800 sq feet at “The Champ" offering high quality clay courts, which are maintained regularly by professionals to give the ace feeling.

6. Other Facilities: Apart from facilities mentioned above, The Champ is also well equipped with value added facilities such as:

Particulars Facilities Multi Cuisine Restaurant The Multicusine restaurant of the Champ gives high quality food with back drop of the cricket stadium. Health Club Well equipped health club with a Gym, Jacuzzi, Steam Room and a SPA parlor. Swimming Pool Pool with well trained coach.

COMPETITIVE STRENGTHS

We believe that the following are our competitive strengths in our FEC, Resort and Sports Complex Business:

1. Unique multiplex of its kind, with all family entertainment under one roof: It is a unique one stop entertainment providing complete range of entertainment services like multiplex, Food Courts, Resorts & Hotel, Shopping Malls, Bowling, Sports Village & Club, Hi tech Games.

2. Strategic Location: It is located 15 Kms away from the bustle of the Chennai city on the scenic East Coast Road which is declared an entertainment highway and also having the potential to attract the Footfalls from surrounding areas including South Chennai, Chennai’s IT Super Corridor, Mahabalipuram Tourist crowd and also the residents of the Union Territory Puducherry.

3. Strong association with film fraternity and leading corporate: We believe that our position as one of the leading exhibition players in Chennai have helped us to build strong relationships with both Indian and foreign film distributors. We believe this gives us an edge in accessing Content – both in terms of quality of Content and terms of engagement. We also have strong association with leading

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corporates like ICICI Bank Limited, HP, Hyundai Motors, Hindustan Lever, IBM, Johnson & Johnson amongst others for stay, food and sports.

4. Group strength & experience: Our Company is managed by a team of experienced and professional managers having background of entertainment & hospitality industry in the areas of marketing and operations. Our management has been providing a congenial and motivating environment for the staff. The members of the staff are given adequate opportunities by deputing them to regular in- house training sessions and to other professional institutions to improve and road base their skills, from time to time.

5. Unique Convention Facility: Our convention facility is available at the e.joy, Onshore Resort and The Sports Village. This facility attracts clientele due to wide variety of conference halls and open lawn catering to business meetings, weddings, seminars, conferences adding to our income.

6. Strong brand equity in South India: Our brand “Mayajaal” is one of the most recognizable brands in South India. We are one of the first players in South India to introduce the concept of Family Entertainment Centre catering to the diversified needs of the people.

7. Strong project execution capabilities: We have an in-house specialized team for design and development of our property. Our strong relationships with various suppliers help us in timely execution of projects and in maintaining tight control on costs and quality.

8. Opportunities available at Sports Village: The Champ apart from providing thrill and entertainment, also gives a chance for the show case of talents through participation in cricket camps and various tournaments held at the Sports Village.

BUSINESS STRATEGY

We adopt the following business strategies which enable us to achieve our business objectives and goals.

1. Expand our presence in other major cities: We presently operate our FEC at Chennai. We further intend to establish our presence in major cities in South India which are exhibiting current growth and future potential by way of new business and industrial ventures and development of leisure industry. In line with this endeavor, we plan to set up a FEC at Coimbatore and Madurai .

2. Achieve growth by increasing capacities to our existing business: We propose to expand our existing multiplex by making an addition of five (5) new theatres which will increase the number of Footfalls at the e.joy. We also propose to make an addition of sixty (60) rooms and six (6) cottages at the Onshore Resort which will inturn increase in food sales and also the banqueting sales for our Company. In long run our Company also proposes to set up a golf course and connect floodlights to the cricket ground located at “The Champ”.

3. Focus on Corporate Clients: We will continue to maintain primary focus on providing our Onshore Resort to the corporate clients. These clients to conduct their meet, seminars and conference book the resort which inturn leads to cross promotion of the Sports Village and the e.joy.

4. Focusing on a niche segment having the maximum buying power: We will continue to focus on niche segment of audience having the maximum "buying power" to ensure maximum revenue.

SALES AND MARKETING SET UP

We have a sales and marketing team which manages the sales and marketing activities of this business. We have appointed AGM- Multiplex who is responsible for organizing promotions, events, campaigns and contests to attract patrons to the multiplexes. He is also responsible for our branding alliances, and meeting our advertising revenue targets. Another way of promoting the multiplex is done through Star visits which makes

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the movie experience for patrons memorable, thereby attracting the crowd and increase box office collections.

We have appointed AGM- Resort & Food Court who is responsible of marketing of our resort room at the Resort. He also responsible for marketing of the food counters at the food court. The presence of corporate clients at the Resort and visitors at the Multiplex with good brand value enable us to conduct joint promotions with other corporate clients and visitors to increase Footfalls.

We have appointed Manager- Sports Marketing who is responsible for marketing of various facilities at The Champ such as getting memberships, contracts with sports association for hosting tournaments and camps.

KEY EQUIPMENTS

Key equipments at e.joy include, among others, projection equipments (including projection screens and sound equipments), generators, HVAC System(air- conditioning equipments), IT Equipments (computer hardware and software), Escalator and lifts, surveillance camera system, automatic hydrant & sprinkler systems. Procurement of other equipments is done locally.

Key Equipments at Onshore Resort include, among others, generators, air conditioning equipments, hipath digital communication system. Procurement of equipments is done locally.

Key Equipments at the Sports Village include, among others, gym equipments, indoor and outdoor games tools. Procurement of equipments is done locally.

II. OUR CONTENT CREATION AND DELIVERY BUSINESS

Our Company is a ‘One-Stop’ production house from concept to completion for pre-production, production and post production activities. We use the animation studio of our Promoter to carry out the production activities for animation Content.

OPERATIONS OF ANIMATION FILMS

The Promoter of our Company commenced its multimedia operations in 1993 through the supply of multimedia content to their software clients. Since then have developed a reputation for producing quality animation.

The Animation films produced by PMGL are:

• ‘Sinbad – Beyond the Veil of Mists’ (1999)

This was the First 3D Animated feature Film from India and Asia and first of its kind in the world to use state-of-the-art 3D motion capture technique. This film made the world’s media and major production houses to look towards India for possible quality animation outsourcing business. It was released and distributed by Trimark Pictures (Lion’s Gate), Fries and was prestigiously aired on the FOX Network, USA.

• ‘Pandavas – The Five warriors’ (2000)

This is the second 3D animated feature film from the studio. This film won the Indian National Award in 2001 and the second best animated feature film award in 2001 at the Vancouver Effects & Animation Film Festival, Canada

• ‘Alibaba & 40 Thieves ’ (2001)

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This is the third 3D animated feature Film produced by the PMGL that redefined the art of story telling with the use of 3D animation technology that produced an absolute fantasy of characters and sets. The movie includes a set of songs that formed an album which was distributed by Universal Studios . This movie was nominated for the Oscar Award, 2002 under the animation category.

• ‘Son of Aladdin’ (2003)

Son of Aladdin is the fourth 3D animated feature film from the stable that exhibited enhanced art of 3D motion Capture and the use of more realistic Animation characters. This movie claims many world’s ‘First’ technological success and was termed as a ‘Hybrid’ film by the media, press & animation film festivals.

• The Legend of Buddha’ (2004)

This is the first ever 2D animated feature film from the studio with true international class. This film was produced with the support of economic development Board of Singapore. This movie is also contended at the Oscars, 2005 under animation category. This movie has received appreciation from world’s media exhibitions and events.

Our Company has acquired the animation division of PMGL through Scheme of Amalgamation and the following Animation Films has been produced under the flagship of “Mayajaal Entertainment Limited”:

• Gulliver’s Travel’ (Christmas 2005)

The seventy four (74) minute computer animated “Gulliver’s Travels” was considered one of the pioneers of the Indian animation industry. Immediately recognizing the opportunity to work with India’s rising animators, Echelon Studios President and CEO Eric Louzil acquired “Gulliver’s Travels” .The fortuitous collaboration resulted in consideration for an Oscar nomination for Best Animated Feature in 2005.

• Jai Vigneshwar (October 2008)

The film is unique in being one of the first exclusive digital platform releases across India and is 2D Flash Animation Movie. The film is a pioneering effort in being able to adapt the Flash based animation technique to theatrical feature Film. Being an exclusive digital platform theatrical release, the audio video quality of the film is very good. The film opened across India on 2 nd October, 2008 at all the Digital Screens of PVR, INOX & ADLABS multiplex chains and at Mayajaal, Sathyam and Abirami in Chennai.

OPERATIONS OF LIVE ACTION FILMS

The operation of Live Action Films was vested in to our Company through the Scheme of Amalgamation from the erstwhile Media Dreams Limited, which was a subsidiary of Pentamedia Graphics Limited and used to develop software for television and motion pictures, distribution of film & TV content and also handles media marketing. The various projects of the erstwhile Media Dreams Limited of production of Live Action Films were:

1. Bharathi- Winner of 4 National Awards 2. Nilaa Kalam- Winner of 1 National Award 3. Pandavar Bhoomi- Winner of a State Award 4. Little John- Tamil, Hindi & English 5. Krishna Krishna 6. Pammal K Sambandam 7. Whistle

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It has been involved in production and marketing of television series for leading TV channels in Tamil and Telugu.

As explained earlier, in the course of restructuring exercise, the erstwhile Media Dreams Limited was merged with Mayajaal Entertainment Limited.

Our Company is currently producing a Tamil film titled “Kulir 100 degrees” in co- production with Ms. Anita Chandresekran, which is scheduled to release in 2009 and we intend to produce two Live Action Films in Tamil out of the proceeds of this Issue.

BUSINESS PROCESS FOR ANIMATION FILMS

The Process carried out to produce 2D and 3D Animation Films is explained herein below: 1. Pre-Production

This is the stage that conceives an idea and sees it through the various initial stages of its development. The process starts with a concept developed into a story. After this comes the screenplay. Based on the script or background description, a concept drawing is done, which becomes the base for the storyboard. Once the latter is ready, background layout and finally the background art is completed. Costume, appearance, models and props are designed, while simultaneously a storyboard of angles, shots, dialogues and sound is prepared. The last process that takes place in the pre production studio is that of animatics, which involves a basic coordination between frames and background voice, etc.

2. Motion Capture Technology

Optical motion capture involves tracing and capturing the movements of an object and feeding it to a system generated 3D model, thus animating it. Our motion capture set up is equipped with high- speed falcon cameras which emit infrared rays that are reflected off special scotch brite markers fitted on to the object's body. The reflected data is read by the cameras at speeds ranging from 60 to 240 frames per second. The plant has 20ft X 20 ft of effective capturing volume. Our expert technicians then work on the collected data and give out the final output in a format that is convenient for usage by software packages like 3DS max, Maya and Soft image.

3. 2D Animation

Traditional 2D animation involves drawing out every detail of an action into separate cell sheets, and then running them together at a very high speed so that an illusion of motion is created on screen. The 2D animation studio, boasts of state-of-the-art equipment that includes sophisticated hardware & software from the leading vendors and a digital ink and paint facility. The skilled creative team includes; traditional artists, key animators, background designers, ink and paint experts, computer professionals, design and model professionals, visualizers and compositors - a team that is fully equipped to turn out high quality movies, home videos and ad films.

4. 3D Animation

3 dimensional animation involves three specific stages: modeling, texturing and animation. The process starts with "modeling" or building the characters and sets that go into the movie. In the next stage which is "texturing,” life-giving touches like color, texture etc. are added to the character model. The last stage is animation, where movement is introduced into the model. Animation can be done either through motion capture, or through key framing. The 3D-animation team uses high end silicon graphics hardware and software like Maya, Softimage and 3DSMax, to come out with visually stunning animation and sets for customers worldwide. 3D division pioneered the world's first 3D- animation movie to be fully animated using motion capture - "Sinbad: Beyond the Veil of Mists" followed by Pandavas and Alibaba and Son of Aladdin, Gullivers Travel.

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5. Post Production

Post-production activities comprise of scanning, non-linear editing and recording. Voices are recorded, often with several different cuts and then a selection of the best fits will be made. Music and other sound effects are worked on. The scenes are polished and shading, lighting and illumination added to give a deep and realistic feel to the animation, and finally they are "rendered" - all the layers of technical information are put together to form the frames. Any remaining technical issues are resolved at this stage, and the final film is ready for release.

ADDITIONAL FACILITIES AVAILABLE WITH US FOR PRODCUTION OF ANIMATED MOVIES

BLUE SCREEN

We see sequences in movies that are in reality too dangerous, or even impossible, to shoot live. Take, for instance, a shot where a man jumps off a cliff or out of an explosion. These shots are obviously too risky to perform. These shots are filmed using what is known as the "blue mat" or "blue screen" technique. Here, the actor performs the required action in front of a blue screen background; the blue is later keyed out, and the action is merged with the required background. Where the viewer is concerned, there is nothing on screen that betrays manipulation.

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BUSINESS PROCESS FOR LIVE ACTION FILMS

(1) (2) (3) (4) (5) DEVELOPMENT PRE – PRODUCTION PRODUCTION POST - PRODUCTION DISTRIBUTION

IDEA EXECUTION OF

CONCEPTUALI- SHOOTING EDITING RELEASE PUBLICITY SATION PLANNING

FINALISATION OF BUILDING A SOUND TRACK SCREENPLAY SCENES MASTER FILE DISTRIBUTION SCRIPT CREATION OF A COVERAGE FILM MASTER COPY • RIGHTS OF THE FILM • DVD & VCD FINAL THEATRICAL RELEASE PRINT MOVIE PITCH

The basic elements of the above Business process are broadly explained as below:

Development

The idea is fleshed out into a viable script and a synopsis is prepared describing the story, its mood and characters. The screenplay is then written which is assessed through a process called Script Coverage. On viability of the assessment, a movie pitch is prepared and presented to potential financers. On approval of the pitch, the process moves on to the second process which is Pre Production.

Pre Production

a) Planning: The movie is designed and planned in this stage. The producer will hire a crew and contract a director for film. The project is further developed with shooting schedule, photography of the film, locations, preparation of production sets, music, and choreography. The casting of the film is done by the casting director.

b) Master File: A production budget is drawn up to cost the film. A preliminary cost and revenue projection is done. Time lines are drawn with reference to the duration of the shooting schedule. A final budget file is created and sealed.

Production or Project Execution

The movie is created and shooting begins. As per the shooting schedule each working day is allotted with scenes. The director of the film will review daily scenes and on approval of it, the movie will move on to the next days shooting schedule by sending a daily progress report to the production office and final film is created. The project is regularly monitored for compliance with timelines and budgets.

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Post Production The film is assembled by the film editor. On completion of the editing, the film moves on to the sound department to build up a sound track. The sound track and picture are combined together to create a master copy. The film recorder is used to convert this master copy to a final theatrical release print.

Distribution & Exhibition This is the final stage, where the movie is released to cinemas .The movie is duplicated as required for theatrical distribution. Press kits, posters, and other advertising materials are published and the movie is advertised. The movie is usually launched with a launch party, press releases, interviews with the press, premiers. It is also common to create a website to accompany the movie. DVD and VCD is typically released a few days later. The distribution rights for the film, DVD and VCD are also sold for worldwide distribution.

COMPETITIVE STRENGTHS

We believe that the following are our competitive strengths in our Content Creation and Delivery Business:

1. Experience in live and animation movie production: In animation industry, employees are the key value assets of the organisation. Therefore, we invest heavily to recruit highly skilled and qualified employees. Our whole time director Ms. Anita Chandrasekaran who apart from being qualified in this field also has a vast experience in this field heads our animation division.

2. Strong association with independent producers of Animations Films: Due to development of strong association with independent distributors around the world by working with them directly, it has enabled us to target directly the major animation Content distributors and also move a step closer to the ultimate consumer.

3. Technological Expertise: The personnel working in the animation department has a high level of technological expertise. Our in-house research and development team has developed proprietary cutting edge tools and plug-ins that enable us to improve the productivity and functionality of our products.

4. Experience in creating content at optimal cost: Our ability to produce animation films at a reduced cost enable us to obtain better margins. It also enables our customers to out source work to us without the need to engage independent intermediaries. This enables us to market our services more competitively.

BUSINESS STRATEGY

We adopt the following business strategies which enable us to achieve our business objectives and goals.

1. Continue to develop our presence in the market for animation services: Animation effects such as motion capture, facial animation are increasingly blurring the line between the real and the imaginary and have expanded the target audience for animation films from children towards teenagers and adults. Therefore, we expect to benefit from the growth of the animation industry arising out of the tremendous viewer response to the animation films.

2. Focus on Big, Small and Personal Screens: We would continue to focus on implementing projects across the big screen (theatres), small screen(televisions) and personal screen(personal computers) and selectively target each such medium in our marketing and sales efforts.

3. Retaining highly qualified professionals: Since professionals are considered to be most valuable assets in an animation industry, we would continue to focus on framing suitable policies for the employees which would help us to retain our employees. This will ensure us continuous growth in our animation division.

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4. Creating and Developing popular characters and programs: We intend to create popular characters and programs which will create substantial value in many areas of exploitation such as international distribution, licensing and merchandising, feature film and interactive rights, They also enhance the value of our library and may provide additional opportunities for exploitation in the future.

5. Production of Live Action Films: We intend to penetrate into production activity to produce Live Action Films which will cater to the choice of viewers in India and enhance our position as a leading production house with continuous innovation in the process and better understanding of the viewer ship trend.

SALES AND MARKETING SET UP

Promotion and marketing of a film is an integral and essential part for the success of the film. The function of marketing and promotion is to bridge the gap between the audience and the film. It is to drive the filmgoers to buy the ticket of films and view them. It also provides information and creates excitement and demand in the trade for our films.

We will have two-pronged strategy to encompass production and distribution. We will devise strategies for Pre- Release and Post–Release marketing to maximize the value of product at each stage of its production and distribution successfully.

KEY EQUIPMENTS

Key equipments include, among others Windows Media Encoder, Satellite Receivers, CISCO Router, UPS, modem, flash, maya, back up tapes, HUB, Ataboy2, DAT Drives. Procurement of other equipments is being done locally.

III. OUR WEB ENTERTAINMENT BUSINESS

The Promoter of our Company commenced the operations of the Web Entertainment division in 1999 in the name and style of New Millennium Television. Through the Scheme of Amalgamation, Web entertainment division was demerged to our Company.

Our Company has a twenty four (24) hours live online multilingual entertainment portal with over thirty (30) television channels, multilingual radio channels, multilingual press, interactive events, live events and stage plays all on the internet on its website URL http://www.numtv.com . NUM TV offers entertainment through broadband connection mostly to countries other than India. NUMTV.com commenced its operations in the year 1999 and as on date has a registered user base of two (2) Million and a subscription of 9,000 users per month. It offers entertainment through broadband.

OPERATIONS

Numtv.com currently offers around thirty (30) TV channels, regional radio, E-books, stage shows & more than 2500 regional movies on demand. It also offers range of in-house contents on various topics categorized as under:

• NUM Cricket • NUM Medicine • NUM Kids/Games • NUM Music & Dance • NUM Learn

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We carry out our operations of Numtv.com in the following manner:

Our data network interconnects with our IP backbones globally. The IP network operates through a combination of satellite aths. The networks are hetrogenically connected to our centralized data centre.

There are three (3) types pf connectivity:

via Fiber Cable

• Our Networks connects all the NoCs and international PoPs through our leased fibre network. We can provide our customers with unparalleled benefits in route diversity and network resilience.

via Satellite

• Currently we leverage on our service partners’ transponders, on multiple satellites, which enable us to provide huge satellite bandwidth to our customer around the world. • We also closely work with all Major ISPs in India and leverage their points of presence.

Secure Network

• Encrypted Data Transfer • Private Circuit

The following chart explains the target audience of NUM TV across the globe:

Country Wise Registration & Consumer Language based Distribution Distribution 14% Tamil 10% USA 2% 2% Telugu 5% 3% Canada Hindi 2% 43% 5% UK 6% Malyalam

Australia 10% Kanada

English 78% Singapore 21% others others

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COMPETITIVE STRENGTHS

We believe that the following are our competitive strengths in our Web Entertainment Business:

1. One of the very few Web Casting Portal providing services to NRI’s: Numtv.com provides valuable services to NRI’s in the form of streaming film and TV entertainment, E-Learning, E-Shopping, Web Hosting services amongst others.

2. Diversified services of Numtv.com enhancing the revenue earning capacity: Numtv.com provides various field of services like E-Learning, Web Entertainment etc. Hence the source of income is not confined to a single activity rather it is spread in chain of activities which are strategic revenue generation streams for the Company.

3. Target audience not restricted solely to a particular region, language, or age group: NUM TV has successfully made its presence in different parts of the globe, imparting Web Contents in English and a range of Indian regional languages catering to all age group.

BUSINESS STRATEGY

We adopt the following business strategies, which enable us to achieve our business objectives and goals.

1. Marketing Strategy: Numtv.com would continue to focus on IT and media services through partners, Infrastructure solution to corporate and institutions and value added services.

2. Distribution Policy: Our Company would focus on tie-up with major broadband providers. It would also lay emphasis on education services. It will continue to provide flat fee based monthly subscription and focus on advertisement revenue.

3. Infrastructure Approach: Our Company has upgraded servers in proportion to the increase in subscription base across the world at strategic places. It has established a distributed server network with the Numtv.com distributors whereby the servers in various countries are managed by the local distributor. It also provides digital Content distribution over the Internet for films, TV & theaters. All these approaches towards infrastructure development will be continued by us to achieve our business objective.

4. Content stratagem: This stratagem would be achieved by partnering with international & domestic software companies providing ASP Services in order to spread its base to various parts of the globe.

SALES AND MARKETING SET UP

Numtv.com would enhance its market penetration through local distributions & tie-ups. Our Company has association with various business partners and associates in related field, which helps it to get associated with international advertisement marketing agencies. It markets through agencies, advertisements on contents distributed in India and Internet through various online portals & websites.

KEY EQUIPMENTS

Key equipments include, among others windows media encoder, windows media file Indexing, FTP Server, satellite receivers, CISCO Router, UPS, modem, HUB,. Procurement of other equipments is being done locally.

IV. OUR TELEVISION ENTERTAINMENT

This division consist of India’s first twenty four (24) hours “Free To Air” childrens’s television channel in English namely Splash TV which commenced its operations in 1998. We have acquired this segment

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from Intelivision Limited through the Scheme of Amalgamation. Splash TV offered programmes on edutainment, infotainment and entertainment in English. The target age group was 2–16 years with live action and animated Content. It has produced more than 1000 hours of Content and has acquired several hours of Content from various production houses around the globe. Our Company has discontinued the broadcast of this channel since November 2004. However, the Content owned by our Company is currently used by various television channels and is also distributed over web on a revenue sharing as well as on fixed fee basis.

HUMAN RESOURCES

Manpower

The details of total existing manpower employed as on 30 th November, 2008 is as under:

Sr.No. Category Person 1 FEC 35 2 Onshore Resort 28 3 Sports Village 5 4 Mall 6 5 Finance & Admin 14 6 Project & Maintenance 12 7 Content Creation & Delivery Division 40 TOTAL 140

The details of manpower to be employed by our Company pursuant to the proposed expansion is as under:

No. Particulars Person 1 FEC 15 2 Onshore Resort 25 3 Mall 5 4 Project & Maintenance 4 5 Administration 6 6 Content Creation & Delivery Division 25 TOTAL 80

Apart of the manpower detailed above, we also avail the services of outsourced work force.

COMPETITION

FEC being a unique concept by itself and being biggest in South India, we do not have potential competitors for this division. However, considering individually, the segment of the FEC i.e. Film Exhibition we face competition with large market players like PVR, INOX and other Mutiplex at surrounding areas and for our hospitality business we face competition from resorts and hotels situated at surrounding areas.

In our animation division, we experience intense competition with respect to animated feature film, animation products and software due to primary competitive factors like talent, price, product quality, technology etc. Our major competitors in this field are ILM, Disney Pixar, Dreamworks animation etc.

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among others. With a number of corporate houses, diversifying into film production and distribution and liberalization of FDI norms in film industry the competition may significantly increase.

In our Web Entertainment division, there is huge competition with established players due to technical know how, superior infrastructure facilities and investment capabilities.

COLLABORATIONS

We have not entered into any technical or other collaboration.

EXPORT POSSIBILITIES AND EXPORT OBLIGATIONS

Since we are in the business of exhibition of movies, hospitality services through Onshore Resort and Sports Village, export possibilities do not possibly exists for our Company. But as far as animation and Live Action Content are concerned, there subsists export prospect for our Company. Our Numtv.com division has its subscribed user base in various parts of the globe i.e. UK, USA, Canada, Singapore, and Australia amongst others. There are no export obligations of our Company.

PROPERTY

The details of property occupied / owned by our Company is as follows:

No Particulars Area Nature of Ownership 1 Property situated at Kanathur Reddy 26.82 Acres Owned Kuppam Village, Chengalput Taluk, Kancheepuram District– 603112, Tamil Nadu where Registered Office, FEC, Resort and Sports Village of the Company is situated.

2 Property situated at Rajan Gardens, 38,400 sq. feet Owned East Coast Road, Tamil Nadu.

INTELLECTUAL PROPERTY RIGHTS

The details for our Company trademarks as follows:

No Application / Trade Mark No. Class Logo / Brand Valid Upto 1 947778 28 e.joy 14 th August, 2010 2 1288316 42 MAYAJAAL Application filed as on 4th June, 2004

Domain Name Registration

Our Company has registered the domain name www.numtv.com on. The same is valid till 7th December, 2009

INSURANCE

We maintain an insurance coverage to the tune of Rs. 4737.95 lakhs for standard fire and special perils policy, which provides insurance cover against loss or damage by fire, explosion, riot and strikes, terrorism, burglary, theft and robbery, which we believe is in accordance with customary industry practices.

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However, the amount of our insurance coverage may be less than the replacement cost of all covered property and may not be sufficient to cover all financial losses that we may suffer should a risk materialize. Further, there are many events that could cause significant damages to our operations, or expose us to third-party liabilities, whether or not known to us, for which we may not be adequately insured. If we were to incur a significant liability for which we were not fully insured, it could have a material adverse effect on our results of operations and financial position.

PURCHASE OF PROPERTY

Except as stated in the section titled "Objects of the Issue", there is no property which our Company has purchased or acquired or proposes to purchase or acquire which is to be paid for whole, or in part, from the Proceeds of the Fresh Issue or the purchase or acquisition of which has not been completed on the date of this Draft Red Herring Prospectus other than property in respect of which:

The contracts for the purchase or acquisitions were entered into in the ordinary course of the business and the contracts were not entered into in contemplation of the issue nor in the issue contemplated in consequence of the contracts, or the amount of the purchase money is not material or the relevant disclosure in this Draft Red Herring Prospectus have been made.

We have not purchased any property in which any of our Promoter/Group companies and/ or directors, have any direct or indirect interest in any payments made thereof.

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KEY INDUSTRY REGULATIONS AND POLICIES

The following description is a summary of the relevant regulations and policies as prescribed by the Government of India. The regulations set below are not exhaustive, and is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional legal advice. Sets forth below are certain significant legislations and regulations which generally govern this industry in India:

Exhibition related Legislations :

1. The Cinematograph Act, 1952 and The Cinematograph (Certification) Rules, 1983

The Cinematograph Act provides for the certification of the films, which are used for the purposes of public exhibition, so as to regulate its intended viewership. An exhibitor of a film is required to make an application to the Board of Film Certification (the“Board ”) for the said certificate. The examining committee is appointed by the Regional Officer and makes a determination for the grant of the said certificate, based on the appropriateness of viewership by different categories of viewers. On its recommendation, the Board issues the certificate, which is valid for a period of 10 years from the date on which it is granted. The exhibitor is required to ensure that it shall not contravene any restrictions specified by the Board. A person aggrieved by the decision of the Board has a right to appeal to the Appellate Tribunal.

Films certified for public exhibition may be re-examined by the Board if any complaint is received in respect of the same. All advertisements of films displayed by the producer/ distributor/ exhibitor in any form including hoardings, handbills, newspapers and trailers are required to indicate that the film has been certified for public exhibition. If films are exhibited contrary to restrictions specified by the Board, the exhibitor is liable for punishment with imprisonment and/or a fine.

The certificate may provide restrictions in respect of viewership or, the Board may direct the applicant to carry out any modifications, as it may think fit. The obligation to obtain such certificate is on the producer of a film. The duplicate copy of the same has to be provided to the distributor or the exhibitor according to the Cinematograph (Certification) Rules, 1983.

2. The Cinematograph Film Rules, 1948 (the "Cinematograph Rules")

The Cinematograph Rules provide for grant of license for storage of films. The license granted under the Rules is valid for a period of one year and may be renewed annually. The licensee may, at any time before the expiry of the license, apply for permission to transfer the said license to another person. The licensing authority is also empowered to cancel a license in the event any provision of the Petroleum Act, 1934 is contravened. The Cinematograph Rules ensure compliance in respect of transportation, storage and handling of films.

3. The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981

The Act provides for the regulation of conditions of employment of certain cine workers and cinema theatre workers and for matters connected therewith. The Act makes the Payment of Gratuity Act, 1972, and the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 applicable to the employees of cinema theatres in which five or more persons are employed.

4. The Tamil Nadu Cinemas (Regulations) Act, 1955

The Tamil Nadu Cinemas (Regulation) Act, 1955 provides that no person can give a cinematograph exhibition elsewhere than in a place licensed under the Tamil Nadu Cinemas (Regulation) Act, 1955. Licenses to cinemas are granted by the local District Collector, upon being satisfied that the rules under the said Act have been complied with and adequate safety precautions have been taken in the

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cinema. In addition, licenses may contain such terms and conditions as the licensing authority deems fit.

5. The Tamil Nadu Entertainment Tax Act, 1939

The Tamil Nadu Entertainments Tax Act, 1939 being administered by the Commercial Tax Department, Government of Tamil Nadu, imposes taxes on “entertainment” in the state of Tamil Nadu, which term has been defined to include cinematography exhibitions to which persons are admitted on payment. The tax is levied on admission charges.

Legislations related to the hospitality industry :

1. Public Performance License

The Copyright Act, 1957 specifies that for the purposes of public performance of Indian or international music a public performance license must be obtained else it will invite criminal action. All those who play pre-recorded music in the form of gramophone records, music cassettes or compact discs in public places have to obtain permission for sound recordings. In India, Phonographic Performance Limited (“PPL”) is the sole authority to administer the broadcasting, telecasting and public performance rights on behalf of the music industry. PPL, which is registered with the Government of India, has among its members almost all major music publishing companies in India. These companies have assigned their performing rights in sound recordings to PPL by virtue of which it is the sole designated authority to issue public-performance licenses in the country.

2. Luxury Tax

Under the provisions of the state luxury tax legislations, luxury tax is applicable to service providers of luxury goods. Luxury tax levied by the state government forms part of the "room charges" as the customer is required to pay these taxes to the hotel. State luxury tax legislations provide for registration of the service provider under its provisions, and require monthly returns to be filed for such tax with relevant authorities. They also regulate the computation of taxes due to the state, the mechanism of collection of taxes and penalties for not paying the luxury tax on time.

3. The Prevention of Food and Adulteration Act, 1954

The Prevention of Food and Adulteration Act is a central legislation and provides provisions for the prevention of adulteration of food. The State Governments have adopted the Central Act which requires any person/ entity manufacturing / storing/ selling food articles to be registered under the provisions of the Act.

Intellectual Property Laws :

1. Copyright Act, 1957

The Copyright Act, 1957 governs the law relating to copyright in India and defines infringement and provides remedies for the same. Copyright means the exclusive right to do or authorise others to do certain acts in relation to original (1) literary, dramatic or musical works, not being a computer programme, (2) computer programme, (3) artistic work, (4) cinematograph film and (5) sound recording. The object of copyrights is to protect the author of a copyrighted work from any unlawful reproduction or exploitation. Copyright subsists during the life of the author/creator of the work and 60 years thereafter in case the author is a natural person. In all other cases, copyright subsists for 60 years from the date of publication of the work concerned.

2. Trade Marks Act, 1999

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The Indian law on trademark is enshrined in the Trade Marks Act of 1999. Under the existing Act, a trademark is a mark used in relation to goods and/or services so as to indicate a connection between the goods or services being provided and the proprietor or user of the mark. A ‘Mark’ may consist of a word or invented word, signature, device, letter, numeral, brand, heading, label, name written in a particular style, the shape of goods other than those for which a mark is proposed to be used, or any combination thereof or a combination of colours and so forth. The trademark once it is applied for is advertised in the trademarks journal, oppositions, if any, are invited and after satisfactory adjudication of the same, is given a certificate of registration. The right to use a mark can be exercised either by the registered proprietor or a registered user. The present term of registration of a trademark is ten years, which may be renewed for similar periods on payment of prescribed renewal fees.

Labour Laws :

1. The Payment of Gratuity Act, 1972

The Payment of Gratuity Act, 1972 was enacted with the objective to regulate the payment of gratuity, to an employee who has rendered for his long and meritorious service, at the time of termination of his services. Gratuity is payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years:

a) On his/her Super annuation; or b) On his/her retirement or resignation; or c) On his/her death or disablement due to accident or disease (in this case the minimum requirement of five years does not apply).

2. The Payment of Bonus Act, 1965

The Payment of Bonus Act, 1965 was enacted with the objective of providing of payment of bonus to employees on the basis of profit or on the basis of productivity. This Act ensures that a minimum annual bonus is payable to every employee regardless of whether the employer has made a profit or a loss in the accounting year in which the bonus is payable. Every employer is bound to pay to every employee, in respect of the accounting year, a minimum bonus which is 8.33% of the salary or wage earned by the employee during the accounting year or Rs. 100, whichever is higher.

3. Employees' Provident Funds and Miscellaneous Provisions Act, 1952

Employees' Provident Funds and Miscellaneous Provisions Act, 1952 was introduced with the object to institute provident fund for the benefit of employees in factories and other establishments. It empowers the Central Government to frame the "Employee's Provident Fund Scheme", "Employee's Deposit linked Insurance Scheme' and the "Employees' Family Pension Scheme" for the establishment of provident funds under the EPFA for the employees. It also prescribes that contributions to the provident fund are to be made by the employer and the employee.

Environmental Laws :

1. The Environmental Protection Act, 1986

The Environmental Protection Act, 1986 is an "umbrella" legislation designed to provide a framework for co-ordination of the activities of various central and state authorities established under various laws. The potential scope of the Act is broad, with "environment" defined to include water, air and land and the interrelationships which exist among water, air and land, and human beings and other living creatures, plants, micro-organisms and property.

2. The Water (Prevention and Control of Pollution) Act, 1981

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The Water (Prevention and Control of Pollution) Act, 1981 prohibits the use of any stream or well for disposal of polluting matter, in violation of standards set down by the State Pollution Control Board.

3. The Air (Prevention and Control of Pollution) Act, 1981

The Air (Prevention and Control of Pollution) Act, 1981 provides for the prevention, control and abatement of air pollution. No person operating any industrial plant, in any air pollution control area shall discharge or cause emission of any air pollutant in excess of the standards prescribed by the State Board in this regard.

Service Tax

1. Service Tax Act, 1994

The service tax gains its authority from item No 97 in the Union List of Seventh Schedule to the Constitution of India. Section 64 to 96 – I of the Finance Act, 1994, as amended from time to time. Service Tax had been imposed as an indirect tax which is demanded from one person on the expectation and intention that such person shall indemnify at the expense of other person who is consuming such service. The tax is levied on services and not on income or profits, thus carrying thus carrying the tax to the point of consumption.

The rate of service tax was enhanced to 12% by Finance Act, 2006 w.e.f. 18.4.2006. Finance Act, 2007 has imposed a new secondary and higher secondary cess of one (1) per cent on the service tax w.e.f. 11.5.2007, increasing the total education cess to three (3) per cent and a total levy of 12.36 per cent.

Foreign Investment Regime :

1. Foreign Exchange Management Act, 1999

Foreign investment in India is governed primarily by the provisions of the Foreign Exchange Management Act ("FEMA"), and the rules, regulations and notifications there under, as issued by the RBI from time to time, and the policy prescribed by the Department of Industrial Policy and Promotion, which provides for whether or not approval of the Foreign Investment Promotion Board (" FIPB ") is required for activities to be carried out by foreigners in India. The RBI, in exercise of its power under the FEMA, has notified the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 ("FEMA Regulations") to prohibit, restrict or regulate, transfer by or issue security to a person resident outside India. As laid down by the FEMA Regulations, no prior consents and approvals is required from the RBI, for FDI under the "automatic route" within the specified sectoral caps. In respect of all industries not specified as FDI under the automatic route, and in respect of investment in excess of the specified sectoral limits under the automatic route, approval may be required from the FIPB and/or the RBI. At present, foreign investment in the Company falls under the RBI automatic approval route for FDI/NRI investment upto 100%.

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OUR HISTORY AND CORPORATE STRUCTURE

History & Background

Our Company was originally incorporated as West Bank Garden Farm Clubs Private Limited and a Certificate of Incorporation No.181-8018 on 9 th July, 1997 was issued by the Registrar of Companies, Coimbatore, Tamil Nadu. The name of our Company was changed to Hotel Whales Private Limited with effect from 28 th December, 1999. The name of our Company was further changed to Mayajaal Entertainment Private Limited with effect from 11 th January, 2001. Our Company became a public limited company with effect from 22 nd April, 2002 and name of our Company has been changed to Mayajaal Entertainment Limited.

Our Company is registered under the Companies Act, 1956 with registration no. U55101TN2000PLC046361.

Our Company was promoted by Shri M Sankaran, Shri S Aniruddh, Shri R.Rajagopal, Shri Koshy Varughese and corporates like Tarachantini Services Private Limited and Sri Aurobindo Finance & Hire Purchase Private Limited. Our Promoter i.e. Pentamedia Graphics Limited acquired 92,49,500 equity shares of Rs.10/- each of our Company on 31 st October, 2000 and consequently became the parent company of Mayajaal.

In the year 2004, our Company underwent a restructuring exercise under a Scheme of Amalgamation, whereby three (3) promoter group companies viz. Media Dreams Limited, Kris Srikkanth Sports Entertainment Limited and Intelivision Limited and our Promoter’s animation and Web Entertainment division viz. numtv.com were merged with our Company with effect from 1 st January, 2004. The High Court of Madras sanctioned the Scheme of Amalgamation by order dated 8 th November 2004 and further modified the same in terms of the no objection letter of BSE dated 31 st October, 2007. Some of the salient features of the restructuring exercise are as below:

The equity shareholders of MDL were allotted thirty (30) Equity Shares of Re. 1/- each fully paid up in Mayajaal for every twenty five (25) equity shares of Rs.2/- each in MDL.

The equity share holders of Intelivision were allotted thirty (30 ) Equity Shares of Re.1/- each fully paid up in Mayajaal for every twenty two (22) equity shares of Rs.10 each fully paid up and held by them in Intelivision.

The equity shareholders of KSSEL were allotted three (3) equity shares of Re.1/- each fully paid up in Mayajaal for every five (5) equity shares of Re. 1 each fully paid up and held by them in KSSEL

In respect of Num and Animation Division of PMGL which is demerged with Mayajaal, Mayajaal has allotted 14,68,52,475 shares of Re. 1/- each to PMGL and also allotted six (6) Equity Shares of Re.1/- each fully paid up in Mayajaal for every ten (10) nos. of 6% Cumulative optionally convertible redeemable preference shares of Rs.10/- each fully paid up and held by them in PMGL

The outstanding AMOUNT under “ Advances against Equity” in the books of Mayajaal were converted into 86,66,670 equity shares of Rs.1 each in Mayajaal:

(a). Advance against equity from Pentamedia Graphics Limited Rs. 1000 Lakhs. (b). Advance against equity from Anchor construction Private Limited Rs.300 Lakhs

Synergies of the Restructuring exercise

All production & exhibition activities are now carried under Mayajaal Entertainment Limited All the marketing and Distribution related activities are presently carried by Pentamedia Graphics Limited

Mayajaal has penetrated in to all types of Entertainment Sectors viz Studio, Media, Family Entertainment Centres, Sports, Web Entertainment

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The Registered Office of our Company is situated at No. 34/1, 35, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kancheepuram District, Tamil Nadu, 603112.

Details of changes in the Registered Office of our Company since inception:

From To Date 64, Thangaperumal Street, Periyar - At the time of District Incorporation 64, Thangaperumal Street, Periyar 30/3, North Boag Road, T.N.Nagar, Chennai- 11 th January, 1999 District 600017 30/3, North Boag Road, T.N.Nagar, No. 51 (Old No. 23), B.N.Reddy Road, 15 th December, 2000 Chennai-600017 T.N.Nagar, Chennai-600017 No. 51 (old No. 23), B.N.Reddy No. 34/1, 35, Kanathur Reddy Kuppam 5th September, 2001 Road, T.N.Nagar, Chennai-600017 Village, Chengalput Taluk, Kancheepuram District, Tamil Nadu, 603112

Milestones

Year Particulars 1997 Incorporated as West Bank Garden Farm Clubs Private Limited 1999 Acquisition of land located at the East Coast Road near Chennai with a total area of 26.82 Acres 2000 Registration of Trade Mark "e.joy" 2001 Commencement of operations of 6 theatres at "e.joy" 2003 Commencement of operations of Sports Village and launched by Kapil Dev 2004 Registration of Trade Mark "Mayajaal" Conducting India Vs Australia Women ODI Cricket Match at “The Champ” and was telecast live by Doordarshan Carried out restructuring exercise pursuant to the Scheme of Amalgamation

2005 The animation film “Gullivers Travels” was qualified for nomination for the Oscar under the animation category Commencement of operations of Onshore Resort Commencement of the Maya Mall Shopping located at e.joy 2006 3 Star rating for Onshore Resort received from India Tourism-Chennai, Government of India 2007 Indian Cricket League - Essel Group Tournaments (50/50) tournaments conducted at “The Champ” The Registered Base of numtv.com touched the two (2) million mark 2008 Commencement of operations of four (4) additional Screens at the FEC and larger Food Court 2008 Setting a record of screening forty eight (48) shows of the Tamil film “Dasavatharam” on a single day, with a single print

MAIN OBJECTS OF OUR COMPANY:

The Object clauses of the Memorandum of Association of our Company enable us to undertake the activities for which the funds are being raised in the present issue. Furthermore, the activities of our Company has been carrying out until now are in accordance with the objects of the Memorandum. The objects for which our Company is established are:

1. To buy lands and develop small farms, build cottages and sell the same and maintain garden and the farm by employing laborers.

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2. To build and maintain Clubs, Hotels, Resorts, Rooms and let and lease the premises.

3. To carry on the business of Clubs, Hotels, restaurant, Bar refreshment rooms, Holiday camps, Health Clubs, Recreational club, Sports Club, Entertainment place, swimming pools including theme park and other connected businesses and activities.

4. To carry on the business of producing films including Live Action animation films in all languages for both domestic and overseas market either on its own or jointly with other agencies in similar activities and to carry all activities in the business of producing and distributing serials and episodes.

5. To conduct sports and other series in radio, television and other publicity media and to carry all activities incidental thereto.

6. To manufacture the various gadgets presently called set top boxes and merchandise the same and impart training to professionals and aspiring professionals in the various fields of mass communication techniques.

7. To relay and broadcast audio/video programmes including children’s entertainment and education programmes through any mode of communication including television / radio and audio/video tapes to provide facility for Internet and Video Conferencing through Electronic Computer Medium and for this purpose buy, sell , take on lease or hire and give on lease / sub-lease or hire any radio or audio reply stations or any other reply center through or from Government or Agencies either in or outside India.

8. To carry on as advisors, consultants, contractors to any persons, firms, associations, corporates requiring knowledge, expertise or know-how in the filed of information technology, computer software and hardware, data processing, internet net linking, enterprise resources planning, modern scientific techniques of information and all things used in connection therewith and to organize importing training in areas of banking, insurance, Multimedia, internet enterprise resources planning, by use of computer and animation & multimedia equipment for clients in India or in any part of the World.

9. To carry on the business of manufacturers, producers, exhibition, exporters, financiers and digital / cinematographic films and pictures and in particular to produce, buy, sell import, export, design, develop, deliver, distribute, exhibit, record, duplicate, or otherwise deal in cinematographic films, animation films, television films, tele serials, tele movies, short movies, corporate films, advertisement films, documentary films, cartoons, video films & cassettes, audio cassettes, albums, compact discs (CD ROMS) connected with the above and dealt with all types of connected rights with reference to the above in and outside India.

10. To import, export purchase or sell, manufacture and deal in all kinds of communication / electronics / computer peripherals, accessories, equipment and electronic storage devices and carry on the business of making, producing, distributing, and otherwise dealing in motion pictures of all kinds and perform all animation 2d/3d effect and related production services for all motion pictures, television, production of films, broadcasting and other entertainment / education projects / media by using associated computer hardware and software of all kinds, animation equipment and other equipment.

11. To utilize the contents including in-house an acquired contents in television, sports, studio, multimedia, web, theme and other media entertainment.

Changes in the Memorandum of Association and Articles of Association:

The following changes have been made in the Memorandum of Association and Articles of Association of our Company since inception:

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Date Amendment 29.10.1999 Increase in Authorized Share Capital from Rs. 10 lakhs to Rs. 150 lakhs 28.12.1999 Change of name from West Bank Garden Farm Clubs Private Limited to Hotel Whales Private Limited 22.12.2000 Increase in Authorized Share Capital from Rs. 150 Lakhs to Rs. 200 Lakhs 11.01.2001 Change of name from Hotel Whales Private Limited to Mayajaal Entertainment Private Limited 04.05.2001 Amendment to the incidental or ancillary objects in the Memorandum of Association 22.04.2002 Conversion of our Company from private limited to public limited and consequent change in name to Mayajaal Entertainment Limited 26.09.2003 Sub-division in the face value of our Equity Shares from Rs. 10/- to Rs. 1/- 25.02.2004 Amendment of the Main Objects Clause 12.10.2004 Increase in Authorized Share Capital from Rs. 2000 Lakhs to Rs. 4000 Lakhs pursuant to the Scheme of Amalgamation 15.10.2008 Consolidation of face value of the Equity Share capital from Rs.1/- to Rs.10/- Increase of Authorised Capital from Rs.4000 Lakhs to Rs.4500 Lakhs Amendment of the Articles of Association 31.12.2008 Amendment to the Articles of Association

Subsidiaries of our Company:

There are no subsidiaries of our Company

Shareholders Agreement:

Our Company has not entered into any Shareholders agreements.

Other Agreements:

Our Company has not entered into any other agreements, other than disclosed in the Draft Red Herring Prospectus.

Strategic Partners:

At present, our Company does not have any strategic partners.

Financial Partners:

At present, our Company does not have any financial partners

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OUR MANAGEMENT

Board of Directors

Under our Articles of Association, our Company is required to have not less than three directors and not more than twelve directors. Our Company currently has seven (7) directors on our Board. The following table sets forth current details regarding our Board of Directors:

Name, Father’s name, Address Age Nature of Date of Appointment Other & Occupation, Date of Birth & Directorship Directorships DIN

Mr. Udeep Bogollu 31 Managing Appointed as Whole NIL S/o Mr. Mohan Reddy Bogollu Yrs Director Time Director on No:21, Venkateshwara Nagar, 1st November 2004 till 17 th Cross Street, Kottivakkam 31 st October 2007. Chennai 600041 Re-appointed as Tamil Nadu, INDIA Whole Time Director Occupation :Business for a period of five (5) Nationality: Indian years w.e.f 1 st DOB – 30-12-1977 November, 2007. DIN – 00055496 Changed the Designation to Managing Director w.e.f 12 th September 2008 for a period of five (5) years. Ms. Anita Chandrasekaran 30 Yrs Whole Time Appointed as whole time NIL D/o Mr. V. Chandrasekaran Director director for a period of No:21, Venkateshwara Nagar, five (5) 17 th Cross Street, Kottivakkam years w.e.f. 20 th Chennai 600041 October, 2008 Tamil Nadu, INDIA Occupation: Business Nationality: Indian DOB -29-06-1978 DIN- 02395259 Ms. Sumathi Sridharan 46 Non- Executive Appointed as Director on 1. Pentamedia D/o Mr. Natesan Yrs Director 1st November 2004 till Graphics Limited Balasubramaniam 31 st October, 2007. 2. Pentasoft Flat No.149, Door No. 2 Re-appointed as Technologies 16 th Street, Chowdhury Nagar Whole Time Director Limited Valasaravakkam for a period of three (3) 3. NUMTV Limited Chennai 600087 years w.e.f. 1st (Mauritius) Tamil Nadu, INDIA November, 2007. 4. Esoftcom Occupation: Service Change the designation (Mauritius) Nationality: Indian to Non Executive w.e.f. Limited DOB – 02-06-1962 20 th October, 2008 DIN – 00162055 Mr. Mahesh Shankar 32 Yrs Independent Appointed as a Director NIL s/o Mr. N. Shankar Director on 12 th September, 2008. 421 Radcliff Dr Santa Clara CA 95051 Occupation: Service

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Name, Father’s name, Address Age Nature of Date of Appointment Other & Occupation, Date of Birth & Directorship Directorships DIN

Nationality: Indian DOB – 29/12/1976 DIN – 02354976

Mr. Harsha Lakshmikanth 31 Yrs Independent Appointed as a Director 1. LGB Forge s/o Kris Lakshmikanth Director on 12 th September, Limited G A, Raintree Hall Apartments, 2008.. 2. Head Hunters 16, Rhenius Street, Langford Town, Bangalore, Karnataka- 560025, INDIA. Occupation: Service Nationality: Indian DOB – 24/08/1977 3. DIN – 02238793 Placements.com Mr. Shriram Pathanjali 31 Independent Appointed as a Director NIL s/o Mr. Thachakadu Yrs Director on 12 th September, 2008. Ananthanarayanan Pathanjali E-5, H.I.G Flat, Adyar Apartments, Kotturpuram, Chennai-600085, Tamil Nadu, INDIA Occupation: Service Nationality: Indian DOB – 14/11/1977 DIN – 02333305 Mr. Arun Sultania 43 Independent Appointed as a Director Honey Metals & s/o Mr. Ramdeo Prasad Sultania Yrs Director on 12 th September, 2008. Chemicals Private 52, Sembudoss Street, 2 nd Floor, Limited Chennai-600001, Tamil Nadu, INDIA Occupation: Practicing Chartered Accountant Nationality: Indian DOB – 12/08/1965 DIN – 00920098

Details of Directors

Mr. Udeep Bogollu , aged 31 years, is the Managing Director of our Company. He is qualified as a Master in Science from University of Southern California – Los Angeles and Bachelor in Engineering from University of Madras. He has over four (4) years of experience as product specialist at Cisco Systems – San Francisco, United States. On returning to India In 2002, Mr. Bogollu headed www.numtv.com . He then moved on to Mayajaal in the year 2004. As the Managing Director of our Company, he is actively involved in its day to day operations and in developing strategies for future growth and expansion.

Ms. Anita Chandrasekaran, aged 30, is the Whole Time Director of our Company. She has completed her B.E. in Engineering from University of Madras, Chennai and also holds a three (3) years master Degree MFA in Film & TV Production from Loyola Marymount University in Los Angeles. This gives her dual strength of technical and creative outlook. Prior to joining our Company, she has worked with Steven Spielberg’s Dreamwork LLC in Los Angeles and has directed Live Action animation films. At present, she is directing and co-producing a

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Tamil film titled "Kulir 100 degrees" which is scheduled to release in 2009. She is also a talented singer and has won various awards across her career. She is the proprietrix of N-Viz Entertainment a film production concern. As the Whole Time Director of our Company, she is responsible for the Content creation and delivery divisions of our Company.

Ms. Sumathi Sridharan , aged 46 years, is the Non-Executive Director of our Company. She has completed her Masters in Engineering (Computer Science) from REC – Trichy and Bachelor in Engineering from Anna University. Apart from academic qualifications, she has also acquired knowledge as an IBM Certified Trainer specialising in IBM AS/400 Application Development. She has over twenty three (23) years of professional experience in various fields such as software development, education and training in IT Industry. Ms. Sumathi Sridharan joined our Promoter Group in the year 1993.

Mr. Mahesh Shankar, aged 32 years , is the Independent Director of our Company. He has completed his Bachelor in Engineering (B.E.) in Electronics and Communication Engineering from University of Madras and Masters in Computer Networking from North Carolina State University at Raleigh, North Carolina, USA. He has also studied film music composition at the University of California, Los Angeles (UCLA). He is a music producer/composer and a technopreneur living in California. On the creative side, he has scored the music for three (3) feature films, three (3) short films and one (1) music album.

Mr. Harsha Lakshmikanth, aged 31 years , is the Independent Director of our Company. He holds a Bachelor in Engineering (B.E.) in Electronics and Communication Engineering from University of Madras and has completed his Masters in Computer Engineering from University of Texas at A&M. He has worked for Next Hop Technologies based in Michigan. He on the board of directors of Head Hunters India Private Limited and LGB Forge Limited and Placements.com.

Mr. Shriram Pathanjali, aged 31 years , is the Independent Director of our Company. He holds a Bachelor of Engineering (B.E.) in Mechanical Engineering from the University of Madras and a Master of Science (M.S.) in Industrial and Systems Engineering from the University of Southern California, Los Angeles and finished an Executive program in Business Management from Indian Institute of Management, Calcutta. He has over nine (9) years of experience in the areas of product management, solutions & business development across a range of business domains. He started his career with Conexant (Formerly Rockwell Semiconductors) in Newport Beach, California. He has worked for leading MNCs like Fujitsu Microelectronics, Innova Solutions (Now Ness Technologies) in the USA.

Mr. Arun Sultania , aged 43 years , is the Independent Director of our Company. He is a qualified Chartered Accountant and also holds a Diploma in Information Security Audit from the ICAI. He has over more than twenty one (21) years of experience in the fields of audit, taxation and accounting. He is also the Chairman of the Audit Committee.

Borrowing Powers of the Directors

By a resolution passed at the Extra Ordinary General Meeting of our company held on 4 th May , 2001 consent of the members of our Company was accorded to the Board of Directors of our Company pursuant to Section 293(1)(d) of the Companies Act, 1956 for borrowing from time to time any sum or sums of money on such security and on such terms and conditions as the Board may deem fit, notwithstanding that the money to be borrowed together with the money already borrowed by our Company (apart from temporary loans obtained from our Company’s bankers in the ordinary course of business) may exceed in the aggregate, the paid-up capital of our Company and its free reserves, provided however, the total amount so borrowed in excess of the aggregate of the paid-up capital of our Company and its free reserves shall not at any time exceed Rs.50,00,00,000 (Rupees 5000 Lakhs only).

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Terms of Appointment and Compensation of our directors

Mr. Udeep Bogollu

The members of our Company have by a resolution passed in the meeting held on 1 st November, 2004 approved the appointment and remuneration of Mr. Udeep Bogollu as the Whole Time Director of our Company for a period of three (3) years with effect from 1st November, 2004 on the following terms and conditions:

1. Consolidated salary including perquisites- Rs. 50000/- p.m.

The members of our Company by a resolution passed in the meeting held on 31 st October , 2007 has approved the re-appointment and increase in the remuneration of Mr. Udeep Bogollu, the Whole time Director of our Company, for a period of five years with effect from 1 st November, 2007 on the following terms and conditions:

1. Basic Salary : Rs. 60,000/- p.m. 2. House Rent Allowance : Rs. 30,000/-p.m.

The members of our Company by a resolution passed in the meeting held on 15 th October, 2008 has changed the designation of Mr. Udeep Bogollu to Managing Director of our Company with effect from 12 th September, 2008 on the following terms & conditions.

1. Basic Salary : Rs. 70,000/- p.m. 2. Perquisites : Maximum of 100% of basic salary per month. (This would include reimbursements of house rent allowance, telephone, medical, conveyance, driver & servant salary.)

Ms. Anita Chandrasekaran

The Board of Directors of our Company by a resolution passed in the meeting held on 20 th October, 2008 has approved the appointment and remuneration of Ms. Anita Chandrasekaran as the Whole Time Director of our Company for a period of five (5) years with effect from 20 th October, 2008 subject to approval of members in ensuing general meeting, on the following terms and conditions:

1. Basic Salary : Rs.50,000/- p.m. 2. Perquisites : Maximum of 100% of basic salary per month. (This would include reimbursements of house rent allowance, telephone, medical, conveyance, driver & servant salary.)

The Company pays Rs. 5500/- to its Non-Executive Director/Independent Directors for every meeting attended by them as sitting fees.

Corporate Governance

We have complied with the requirements of the applicable regulations, including the Listing Agreement to be executed with the Stock Exchanges and the SEBI DIP Guidelines, in respect of corporate governance including constitution of the Board and Committees thereof. The corporate governance framework is based on an effective independent Board, separation of the Board’s supervisory role from the executive management team and constitution of the Board Committees, as required under law.

We have a Board constituted in compliance with the Companies Act and the Listing Agreement in accordance with best practices in corporate governance. The Board functions either as a full Board or through various committees constituted to oversee specific operational areas. Our executive management provides the Board detailed reports on its performance periodically.

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Currently our board has seven (7) Directors. The Chairman of the Board is nominated by the Directors of the Board at each meeting. We have two (2) Executive Directors and one (1) Non-Executive Director and four (4) Independent Directors. The constitution of our Board is in compliance with the requirements of Clause 49 of the Listing Agreement.

The following committees have been formed in compliance with the Corporate Governance norms:

A) Audit Committee B) Investor Grievance Committee C) Remuneration Committee

AUDIT COMMITTEE

Our Company has constituted an Audit Committee, as per the provisions of Section 292A of the Companies Act by a meeting of the Board of Directors held on 20th October, 2008.

The terms of reference of Audit Committee complies with the requirements of Clause 49 of the Listing Agreement, which will be entered into with the Stock Exchange in due course. The committee currently comprises following three(3) directors. Mr. Arun Sultania is the Chairman of the Audit Committee. The Company Secretary is the Secretary of our Audit Committee.

No. Name of the Director Status Nature of Directorship 1 Mr. Arun Sultania Chairman Independent Director 2 Ms. Sumathi Sridharan Member Non Executive & Non Independent Director 3 Mr. Sriram Patanjali Member Independent Director

Role of Audit Committee

The Terms of reference of the Audit Committee are given below:

1. To investigate any activity within its terms of reference.

2. To seek information from any employee.

3. To obtain outside legal or other professional advice.

4. To secure attendance of outsiders with relevant expertise, if it considers necessary.

5. Oversight of the company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient, and credible.

6. Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.

7. Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

8. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to:

(a) Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956

(b) Changes, if any, in accounting policies and practices and reasons for the same

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(d) Significant adjustments made in the financial statements arising out of audit findings

(e) Compliance with listing and other legal requirements relating to financial statements

(f) Disclosure of any related party transactions

(g) Qualifications in the draft audit report.

9. Reviewing, with the management, the quarterly financial statements before submission to the board for approval

10. Reviewing, with the management, the statement of uses / application of funds raised through an issue (public issue, rights issue, preferential issue, etc.), the statement of funds utilized for purposes other than those stated in the offer document/prospectus/notice and the report submitted by the monitoring agency monitoring the utilization of proceeds of a public or rights issue, and making appropriate recommendations to the Board to take up steps in this matter.

11. Reviewing, with the management, performance of statutory and internal auditors, and adequacy of the internal control systems.

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

13. Discussion with internal auditors any significant findings and follow up there on.

14. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board.

15. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

16. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non-payment of declared dividends) and creditors.

17. To review the functioning of the Whistle Blower mechanism, in case the same is existing.

18. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

19. Mandotarily reviews the following information:

(a) Management discussion and analysis of financial condition and results of operations;

(b) Statement of significant related party transactions (as defined by the audit committee), submitted by management;

(d) Internal audit reports relating to internal control weaknesses; and

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(e) The appointment, removal and terms of remuneration of the Chief internal auditor shall be subject to review by the Audit Committee

20. Review the Financial Statements of its subsidiary company.

21. Review the composition of the Board of Directors of its Subsidiary Company.

22. Review the use/application of funds raised through an issue (public issues, right issues, preferential issues etc) on a quarterly basis as a part of the quarterly declaration of financial results. Further, review on annual basis statements prepared by the Company for funds utilized for purposes other than those stated in the offer document.

And to carry out such other functions/powers as may be delegated by the Board to the Committee from time to time.

SHAREHOLDERS / INVESTOR GRIEVANCE COMMITTEE

Our Company has constituted an Investor Grievance Committee to redress the complaints of the shareholders. The Shareholders/ Investor Grievance Committee was constituted by a meeting of the Board of Directors held on 20 th October, 2008. The committee currently comprises of three (3) Directors. Ms. Sumathi Sridharan is the Chairman of the Shareholders/ Investor Grievance Committee.

No. Name of the Director Status Nature of Directorship 1 Ms. Sumathi Sridharan Chairman Non Executive & Non Independent Director 2 Mr. Udeep Bogollu Member Executive & Non Independent Director 3 Mr. Shriram Pathanjali Member Independent Director

Role of Investor Grievance Committee

The Shareholders / Investor’s Grievance Committee of our Board looks into: • the redressal of investor’s complaints viz. non-receipt of annual report, dividend payments etc. • matters related to share transfer, issue of duplicate share certificate, dematerializations • also delegates powers to the executives of our Company to process transfers etc.

The status on various complaints received / replied is reported to the Board of Directors as an Agenda item.

The Board of Directors of our Company have delegated the powers of approving transfer of securities to our Company’s Registrars under the supervision and control of Compliance Officer, subject to placing of summary statement of Transfer / Transmission etc., of securities of our Company at the meetings of the said Committee.

REMUNERATION COMMITTEE

Our Company has constituted a Remuneration Committee. The Remuneration Committee was constituted by a meeting of the Board of Directors held on 20 th October, 2008. The Committee currently comprises of three (3) Directors. Ms. Sumathi Sridharan is the Chairman of the Remuneration Committee.

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The Remuneration Committee is vested with all necessary powers and authority to ensure appropriate disclosure on the Remuneration of the Directors and to deal with all elements of the Remuneration package of all the directors including but not restricted to the following:

1. To review, assess and recommend the appointment and remuneration of Whole time Directors.

2. To review the remuneration package including the retirement benefits, payable to the Directors periodically and recommend suitable revision / increments, whenever required, to the Board of Directors.

IPO COMMITTEE

Our Company has constituted an IPO Committee. It was constituted by a meeting of the Board of Directors held on 20 th October, 2008 in order to look upon various strategic decisions pertaining to the Initial Public Offering of our Company. The committee currently comprises of three (3) Directors and Mr. Udeep Bogollu is the Chairman of the IPO Committee.

No. Name of the Director Status Nature of Directorship 1 Mr. Udeep Bogollu Chairman Managing Director 2 Ms. Anita Chandrasekaran Member Whole time Director 3 Ms. Sumathi Sridharan Member Non Independent & Non Executive Director

The IPO Committee has been vested with powers and authority to take all decisions relating to the Issue and do all such acts and things as may be necessary and expedient for, incident and ancillary to the Issue.

Policy on Disclosures and Internal Procedure for Prevention of Insider Trading.

The provisions of Regulation 12 (1) of the SEBI (Prohibition of Insider Trading) Regulations, 1992 will be applicable to our Company immediately upon the listing of its Equity Shares on the Stock Exchanges. We shall comply with the requirements of the SEBI (Prohibition of Insider Trading) Regulations, 1992 on listing of our Equity Shares on stock exchanges. Further, Board of Directors have approved and adopted the policy on insider trading in view of the proposed public issue.

Mr. Subramanian Ganesan, Compliance Officer is responsible for setting forth policies, procedures, monitoring and adherence to the rules for the preservation of price sensitive information and the implementation of the code of conduct under the overall supervision of the board.

Shareholding details of the Directors in our Company

As per the Article of Association of our Company, a Director is not required to hold any qualification shares. The following table details the shareholding of our Directors as at the date of this Draft Red Herring Prospectus:

Name of Director Number of Equity Shares % of Pre-Issue Paid up Share Capital Mr. Udeep Bogollu 2,00,000 0.58% Ms. Anita Chandresekran 13,00,000 3.75% Ms. Sumathi Sridharan 2,00,000 0.58% TOTAL 17,00,000 4.91%

Interest of Directors

All the Directors of our Company may be deemed to be interested to the extent of sitting fees and/or other remuneration if any, payable to them for attending meetings of the Board or a committee thereof as well as

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to the extent of reimbursement of expenses if any payable to them under the Articles of Association. All the Directors may also be deemed to be interested in the Equity Shares of our Company, if any, held by them, their relatives or by the companies or firms or trusts in which they are interested as directors / members / partners or that may be subscribed for and allotted to them, out of the present Issue in terms of the Draft Red Herring Prospectus and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares.

All the Directors may be deemed to be interested in the contracts, agreements/arrangements entered into or to be entered into by our Company with any other company in which they have direct /indirect interest or any partnership firm in which they are partners.

Except as stated under the Related Party Transaction on page 151 of the Draft Red Herring Prospectus, our Company has not entered into any contract, agreements or arrangement during the preceding two (2) years from the date of this Draft Red Herring 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.

Changes in our Board of Directors during the last three (3) years

The changes in the directors during last three (3) years are as follows:

Name Date of Date of Change in Reason Appointment cessation Designation Mr. T.V. Krishnamurthy 8th February, - - Appointed as an 2006 additional director of our Company - - 1st November, Change in designation Ms. Sumathi Sridharan 2007 from Independent to Whole time Director Mr. Rajagopalan 21 st January, - - Appointment as Director Kalyanaraman 2008 Mr. Viji Kannan - 24 th January, - Resignation due to 2008 personal reasons Mr. Rajagopalan - 12 th September , - Resignation due to Kalyanaraman 2008 personal reasons Mr. Udeep Bogollu - - 12 th Change in designation September , from Whole time 2008 Director to Managing Director Mr. Harsha Lakshmikanth 12 th - - Appointed as an September , Additional Director 2008 Mr. Mahesh Shankar 12 th - - Appointed as an September , Additional Director 2008 Mr. Shriram Pathanjali 12 th - Appointed as an September , - Additional Director 2008 Ms. Sumathi Sridharan - - 20 th October, Change in designation 2008 from Whole time Director to Non Independent and Non Executive Director Ms. Anita Chandrasekaran 20 th October, - - Appointed as a Whole

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Name Date of Date of Change in Reason Appointment cessation Designation 2008 Time Director of our Company Mr. Arun Sultania 20 th October, - - Appointed as an 2008 Additional Director

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MANAGEMENT ORGANISATION STRUCTURE

Board of Directors

Managing Director

WTD - Content, Creation & Delivery

Company Chief Content Creative Secretary Financial Consultant Consultant Officer

Story & Manager - Script Web AGM AGM AGM AGM AGM Consultant Entertmt. Multiplex Resort Retail Sports Project Manager s & Finance Food & Pre Production - Court Accounts Executives Developer Floor & Retail Manager Theatre F& B Manager manager Manager Manager Admin Live Action Executive Production Executives Executive Team Executive Front Executive s Office Animators Manager Manager Project

Executive

Post Manager Production- Maintenance Executives

Executive

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Key Managerial Personnel

Our Company is managed by its Board of Directors, assisted by qualified professionals, with vast experience in the field of production/finance/ distribution/marketing and corporate laws. The following key personnel assist the management: Compensation Date of Functional Previous Name Designation Qualification Paid during Joining Responsibilities Employment F.Y.2007-08 Mr. James 1st April, Creative Consultancy- B.Sc – Visual Pentamedia - Clifford 2008 Consultant Animation Communication Graphics Division Limited Mr. S. 1st August, Content Content • B.A, Doordarshan - - Murugavel 2008 Consultant Development • Diploma in Chennai Software Technology Mr. Meenakshi 6th July, AGM - Content • B.Sc-Physics Grand 2,28,000 Sundaram 2005 Multiplex Acquisition & • CA (Inter) Alliance Firm Opserations Co. Mr. M. Ravi 5th Manager- Administration Diploma in Teejan & 1,74,000 September, Administration Automobile Aujan 2007 Engineering Marketing Co.

Mr. Francis Yesupatham 1st AGM- Resort & Management of B.A- History First City 1,44,000 December, Food Court Resorts & Foods Country Spa 2006 Mr. B 10 th Overall Diploma in Various 2,04,000 Ramoorthy October, AGM – Engineering Electrical and 2002 Projects & Maintenance Electronic Engineering Engineering

Mr. Vivek S 28 th July, S55ports B.Sc (Hotel Tata Ginger - 2008 Manager- Marketing & Management) Hotels - Sports Operations Chennai Marketing

Mr. Gopinaath 14 th July, Finance & • B.A(Corporate Smarthaas - P 2008 Manager- Accounts Secretary Management Finance & ship) Services Accounts • CA(Inter) Private Limited Mr. K. 29 th Business B.Com Sri Krishna - Gopalakrishnan August, Manager- Development Collections 2008 Retail and operations of mall Mr. Krishnan 30 th Overall Finance Bachelors in VCO N.A Eswaran September, Chief & Accounts Physics, Consultants 2008 Financial Certified in Private Officer Indian Institute Limited of Bankers Mr. 20 th Company Secretarial & M.Com, L.L.B, R.R.Industries N.A Subramanian October, Secretary & Legal ACS Limited Ganesan 2008 Compliance Compliance Officer

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Brief Profile of Key Managerial Personnel

1. Mr. James Clifford Jogan, aged 36, is the creative consultant. He has completed his graduation in Science with specialization in Visual Communication (Major: Multimedia & Animation) from Loyola College- Chennai. He has worked in leading multimedia companies including Pentamedia Graphics Limited for over thirteen (13) years in field of animation, which includes areas like pre-production, productions and post productions. As a creative consultant of our Company, he is responsible for overall consultancy and functioning of the animation division.

2. Mr. S. Murugavel, aged 34, is the content consultant of our Company. He has graduated in arts from University of Madras and has done Diploma in Software technology and System Management. He has over ten (10) years experience in television media, radio and in print media. He has good understanding of web media.

3. Mr. Meenakshi Sundaram, aged 32, is the AGM – Multiplex. He is a B.Sc graduate and a CA(Inter) by qualification and has over eight (8) years of industry experience in movie exhibition and distribution business. He has been with our Company for three (3) years and is responsible for the overall operations of our Multiplex.

4. Mr. M. Ravi, aged 44, is the Manager- Administration. He is a Diploma holder in Automobile Engineering by qualification and has over twenty (20) years of national and international experience in administration. He has great exposure to logistic systems, inventory control mechanisms and other related administration duties. He is with our Company since 2007 and is responsible for the overall administration of our Company.

5. Mr. Francis Yesupatham, aged 37, is the AGM- Resort & Food Court. He is a M.A. graduate from University of Madras and has worked at various leading hotel chains in Chennai & Madurai. He has over fourteen (14) years of industry experience in hospitality and food & beverage businesses. He has experience in operating both club class properties and star hotels. He has been with our Company for the last three (3) years and is responsible for the food & beverage area including banqueting for large-scale conventions and get-togethers.

6. Mr. B. Ramoorthy, aged 30, is the AGM – Projects & Engineering. He has a diploma in Electrical and Electronic Engineering from Tamil Nadu Technical Institute. He has over eight (8) years of experience in various projects including paper mills, atomic power station electrical installations & Kancheepuram Tamil Nadu Electricity Board related work. He has executed projects across verticals including hospitality sector and multiplexes. He has been with our Company for over five (5) years and is responsible for the overall engineering maintenance and various allied services projects our Company.

7. Mr. Vivek S, aged 25, Manager- Sports Marketing. He is a graduate with B.Sc. in Hotel Management hospitality industry and is pursuing his MBA in sales and marketing . He has over three (3) years of experience in leading hotels of Chennai. He joined our Company in 2008 and is responsible for sports marketing & operations of The Champ.

8. Mr. Gopinaath P, aged 40, Manager- Finance & Accounts. He is a B.A. (Corporate Secretary ship) and CA (Inter) by qualification. He has over fifteen (15) years of industry experience in finance and accounts in various sectors including publishing, manufacturing, broking, finance BPO amongst others. He joined our Company in 2008 and is responsible in various functions in finance and accounts.

9. Mr. K.Gopalakrishnan, aged 43, manager- Retail. He has graduated in commerce from University of Madras, Chennai. He has over twenty (20) years of industry experience in retail sector. He is well versed with the logistics involved in retail segments with a specialization on apparel and fashion. He

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joined our Company in 2008 and is responsible for the business development initiatives and operational matters of the Maya Mall.

10. Mr. Krishnan Eswaran, aged 61, Chief Financial Officer. He has graduated in Physics from A. M. Jain College affiliated to Madras University and is certified by the Indian Institute of Bankers. He has over thirty seven (37) years of experience in a leading public sector bank. He joined our Company in 2008 and is responsible for the overall finance & accounts department of our Company.

11. Mr. Subramanian Ganesan, aged 43, Company Secretary & Compliance Officer. He has completed his post graduation from University of Madras, Chennai, L.L.B from Bangalore University, Bachelor of General Law from Madurai Kamaraj University and Company Secretary from the Institute of Company Secretaries of India. He has over eighteen (18) years of professional experience in various management positions primarily with public limited companies in India. He joined our Company in 2008 and is responsible for overall secretarial and legal compliances of our Company.

Shareholding of the Key Managerial Personnel

As on date, none of the key managerial persons are holding any Equity Shares of our Company.

Bonus or Profit Sharing Plan for the Key Managerial Personnel

There is no Profit sharing plan for the Key Managerial Personnel. Our Company makes bonus payments to the employees based on their performances, which is as per their terms of appointment

Loans to Key Managerial Personnel

There are no loans outstanding against key managerial personnel as on 31 st December, 2008.

Changes in Key Managerial Personnel during the last three (3) years

The changes in our key managerial employees during the last three (3) years are as follows:

Name Date of Appointment Date of Cessation Reason Mr. Gopikumar - 31 st March, 2007 Resigned due to personal reasons Mr. Sriram - 30 th July, 2007 Resigned due to personal reasons Mr. Ganeshparamesh - 29 th June, 2007 Resigned due to personal reasons Mr. Francis Yesupatham 1st December, 2006 - Appointment Mr. M. Ravi 5th September, 2007 - Appointment Mr. James Clifford 1st April, 2008 - Appointment Mr. Gopinath P 14 th July, 2008 - Appointment Mr. S. Murugavel 1st August, 2008 - Appointment Mr. K. Gopalakrishnan 29 th August, 2008 - Appointment Mr. Vivek S 28 th July, 2008 - Appointment Mr. Krishnan Eswaran 30 th September, 2008 - Appointment Ms. Anita Chandrasekaran - 20 th October, 2008 Resigned to be appointed as Whole time Director of our Company Mr. Subramanian 20 th October, 2008 - Appointment Ganesan

Employees Stock Option Scheme

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Our Company does not have any Employee Stock Option Scheme/ Employee Stock Purchase Scheme as of the date of filing of this Draft Red Herring Prospectus.

Payment or Benefit to our Officers

Except for the payment of normal remuneration for the services rendered in their capacity as employees of our Company, no other amount or benefit has been paid or given within the two (2) preceding years or intended to be paid or given to any of them.

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OUR PROMOTER

Pentamedia Graphics Limited (PMGL) is the promoter of our Company. Following are the brief details of our Promoter:

Date of Incorporation May 05, 1976 Nature of Activities Multimedia namely consultancy, training, sale of digital content, services for pre & post production, special / visual effects and distribution Registered Office No 25, ”Taurus”, First Main Road, United India Colony, Kodambakkam, Chennai 600 024, Tamil Nadu Registration Number L74210TN1976PLC007142 PAN No. AAACP1647B Bank Account No C.A No 000105005147, ICICI Bank Limited, Cenetop Road, Chennai C.A No 0462010001916, Address of ROC Block No.6, B-Wing, 2 nd Floor Shastri Bhawan 26 Haddows Road, Chennai – 600034 Listing* The equity shares of PMGL are listed on BSE and MSE and the GDRs of PMGL are listed on LuxSE.

* The equity shares of PMGL are listed on BSE and MSE and the GDRs are listed on LuxSE. Due to thin volume of trading and as a cost cutting measure, PMGL has applied voluntary for getting delisted its shares from the NSE and MSE. The member’s approval regarding this was sought at the Annual General Meeting held on 29 th August, 20008 at the Registered Office of PMGL. PMGL has not yet received approval for delisting of shares on the floor of MSE. The equity shares of PMGL have been delisted from NSE with effect from 9 th January, 2009.

The shareholding pattern as on 31 st December, 2008 is as under:

Share Description as on No of Shares % of Holding Holders Indian (Promoter & Group) Bodies Corporate 4004500 1.62 3 Total of Promoter (A) 4004500 1.62 3 (B) Public Shareholding (1) Institutions Mutual Funds / UTI 550 - 3 Financial Institutions / Banks 794029 0.32 22 Central Government / State Governments 100 - 1 Foreign Institutional Investors 181487 0.07 7 Public Shareholding (Institution) B (1) 976166 0.39 33 (2) Non Institutions Bodies Corporate 28998295 11.70 2691 Individuals holding nominal share capital up to Rs. 1 lakh 172140650 69.48 165559 Individuals holding nominal share capital in excess of Rs. 1 lakh 30806573 12.43 87 Clearing Members 1070074 0.44 81 Hindu Undivided Families 6981951 2.82 2795 NRIs/Foreign Individuals/Foreign Nationals 2727678 1.1 1833 Overseas Corporate Bodies 18401 - 5 Trusts 29727 0.02 11

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Share Description as on No of Shares % of Holding Holders Public Shareholding (Non-Institution) B(2) 242773349 97.99 173062 Total Public Shareholding B [B (1) + B(2)] 243749515 98.38 173095

Shares Held By Custodians against which Depository Receipts have been issued (C) 110 - 1 Grand Total (A+B+C+D) 247754125 100.00 173099

Board of Directors as on 14 th January 2009

Name of the Director Nature of Directorship Dr. V Chandrasekaran Chairman & CEO Mr. S.D. Viswanathan Director Mr. R Balaji Director Ms. Sumathi Sridharan Director

Changes in the Management of PMGL

There has been no change in the management of PMGL in the last six (6) months prior to the filing of this Draft Red Herring Prospectus.

Financial Performance

The standalone financial results for PMGL for fiscal 2005-06, fiscal 2006-07 and fiscal 2007-08 are as follows:

(Rs. in Lakhs)

Financial Performance 31-Mar-08 31-Mar-07 31-Mar-06 Equity Share Capital 2447.54 2447.54 2447.54 6% Non Cumulative optionally convertible Preference 50.00 50.00 50.00 Share capital Share application money 227.19 - - Reserves (excluding revaluation reserves) 9857.57 17229.36 17130.70 Net worth 12122.94 23014.35 19430.23 Total income 878.10 8316.69 2528.10 Profit After Tax 167.30 98.66 116.02 Face Value Per Share (Rs.) 1.00 1.00 1.00 EPS (Rs.) 0.06 0.04 0.05 NAV (Rs.) 4.95 9.40 7.94 Source: Annual report

Information about Share Price

PMGL’s shares are listed on Bombay Stock Exchange. The stock market data of equity shares of face value of Re.1/- each for the past six (6) months is as under:

Month High (Rs.) Low (Rs.) No. of Shares Traded December 2008 1.98 1.22 3686451 November 2008 1.80 1.00 3258579

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October 2008 2.45 1.20 4413859 September 2008 3.19 1.80 4241644 August 2008 3.58 2.60 3989428 July 2008 3.40 2.56 6340401

Current Market Price Rs. 1.59 as on 14 th January, 2009

(Source: BSE website www.bseindia.com)

Investors Grievances Mechanism:

PMGL follows investment grievance mechanism as per the listing agreement. For redressal of investor grievances, it has nominated its Company Secretary as the compliance officer. The compliance officer is responsible for attending to investor queries and complaints. PMGL received eighteen (18) complaints during the period from 1st April, 2007 to 31 st March, 2008 and all the complaints were resolved to the satisfaction of the investors. There were no queries pending to be replied / addressed as at 31 st March 2008.

Litigation/ Defaults:

For details relating to legal proceedings involving our Promoter and members of the Promoter Group, please refer to the section titled "Outstanding Litigation and Material Developments" beginning on page 189 of this Draft Red Herring Prospectus.

Common Pursuits

PMGL do not have any interest in any venture that is involved in any activities carried out by our Company. We shall adopt the necessary procedures and practices as permitted by law to address any conflict situations as and when they may arise.

Interest of Promoter in our Company

The Promoters are interested in our Company to the extent of their shareholding, for which they are entitled to receive the dividend declared, if any, by our Company. For details of transactions with Promoter Company, refer to the section on "Related Party Transactions" appearing on page 151 of this Draft Red Herring Prospectus.

Payment or Benefit to Promoters

Except as stated in the sections "Related Party Transactions" beginning on page 151 of this DRHP, no amount or benefit has been paid or given to any Promoter within the two (2) preceding years from the date of filing of this Draft Red Herring Prospectus or is intended to be paid.

Declaration

Our Promoter has submitted its PAN details, its bank account number(s), its registration number and the address of the registrar of companies where it is registered, to the stock exchanges, along with this Draft Red Herring Prospectus.

Salient features of the Proposed Scheme of Amalgamation, Arrangement and Compromise between PSTL and PMGL and their respective shareholders and creditors

PMGL is proposing a restructuring exercise by way of the Proposed Scheme of Amalgamation with one of its listed group company, Pentasoft Technologies Limited (PSTL). The Scheme proposes the merger of PSTL with PMGL and a compromise with the lenders and creditors of PSTL. PMGL has received the approval of BSE in

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terms of Clause 24(f) of the Listing Agreement by letter dated 25 th November, 2008. PMGL and PSTL have filed the Scheme with High Court of Madras for its approval. The Court has convened a meeting of the shareholders and creditors of PMGL and PSTL on 11 th February, 2009.

The salient features of the Scheme are as follows:

The Equity Shareholders of PSTL will be allotted 1 equity share of Re. 1/- each fully paid up in PMGL for every 5 equity shares of Rs. 10/- each in PSTL;

A sum of Rs. 136,41,35,845/- owed by PSTL to its ten (10) secured creditors would stand converted into equity shares of Re. 1/- each.

The Appointed Date of the Scheme is 1 st October , 2008.

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OUR PROMOTER GROUP/ GROUP COMPANIES / ENTITIES:

A. Listed companies within our Group: 1. Pentasoft Technologies Limited

B. Unlisted companies within our Group: 1. Vesa Holdings Private Limited 2. Num TV Limited 3. Esoftcom (Mauritius) Limited 4. Pentafour Software Employees Welfare Foundation

A. DETAILS OF LISTED COMPANIES WITHIN OUR GROUP

1. PENTASOFT TECHNOLOGIES LIMITED

Date of Incorporation April 5, 1995 CIN L45204TN1995PLC030831 ’TAURUS’, No.25, First Main Road, United India Colony, Kodambakkam, Registered Office Chennai- 600 024. PAN No. AAACP1895R State Bank of India, Ambica Complex, 32, Arcot Road, Kodambakkam, Chennai-600 024 A/c No: 10710429347

Karur Vysya Bank, First Main Road, United India Colony, Kodambakkam, BANK Account Details Chennai-600 024 A/c No: 11551158593

Kotak Mahindra Bank, Anna Salai, Chennai-600 002 A/c No: 04622010001903 Block No.6, B-Wing, 2 nd Floor Shastri Bhawan 26 Haddows Road, Chennai – Address of Roc 600034 Nature of Activities Engaged in the business of Computer Software training & solutions Listing Status PSTL is listed on BSE*

* PSTL was listed on BSE, NSE and MSE. Due to thin volume of trading and as a cost cutting measure, PSTL has applied for voluntary delisting of its shares from the NSE and MSE. The member’s approval regarding this was sought at the Annual General Meeting held on 29 th August 2008 at the Registered Office of PSTL. PSTL is yet to receive approval for delisting of shares on the floor of MSE. The equity shares of PSTL have been delisted from NSE with effect from 9th January, 2009.

Board of Directors as on 14 th January 2009

Name Designation Dr. V. Chandrasekaran Director Ms. Sumathi Sridharan Director Mr. Joseph Jerome Director Mr. R. Balaji Director

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FINANCIAL PERFORMANCE

The brief financials of PSTL for the last three (3) years based on audited financial statements are as under:

(Rs. in Lakhs except per share data) Particulars 31 Mar- 08 31-Mar-07 31-Mar-06 Equity Share Capital 19476 19476 19476

Reserves (excluding revaluation reserves) 4834.45 8664.14 7938.61 Net Worth 24310.42 28140.14 27414.61 Total income 884.08 1181.49 1632.12 Profit After Tax 71.85 40.42 71.19 E.P.S. (Rs.) 0.04 0.02 0.04 N.A.V. (Rs.) 12.48 14.45 14.08 Face Value per share (in Rs.) 10 10 10

Listed data:

PSTL came out with its Initial Public Offering (IPO) on 15 th December, 1995 and equity shares of PSTL were listed at BSE, NSE and MSE. Due to thin volume of trading and as a cost cutting measure, PSTL has applied for voluntary delisting of its equity shares from the NSE and MSE. The member’s approval regarding this was sought at the Annual General Meeting held on 29 th August, 2008 at the registered office of PSTL. PSTL has not yet received approval for delisting of shares on the floor of MSE. The equity shares of PSTL are delisting from NSE with effect from 9th January, 2009.

The shareholding pattern as on 31 st December, 2008 is as under:

Share Description as on No of Shares % of Holding Holders Indian (Promoter & Group) Bodies Corporate 5103098 2.62 6 Total of Promoter (A) 5103098 2.62 6 (B) Public Shareholding (1) Institutions Mutual Funds / UTI 381564 0.19 2 Financial Institutions / Banks 929100 0.48 13 Central Government / State Governments - - - Foreign Institutional Investors 2423312 1.24 3 Public Shareholding (Institution) B (1) 3733976 1.92 18 (2) Non Institutions Bodies Corporate 21000902 10.78 1514 Individuals holding nominal share capital up to Rs. 1 lakh 87280812 44.81 70297 Individuals holding nominal share capital in excess of Rs. 1 lakh 70406432 36.15 2266 Clearing Members 87448 0.05 28 Hindu Undivided Families 5456599 2.80 1091 NRIs/Foreign Individuals/Foreign Nationals 1648692 0.86 285

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Share Description as on No of Shares % of Holding Holders Overseas Corporate Bodies 18141 - 4 Trusts 23900 0.01 4 Public Shareholding (Non-Institution) B(2) 185922926 95.46 75489 Total Public Shareholding B [B (1) + B(2)] 189656902 97.38 75507 Shares Held By Custodians against which Depository Receipts have been issued (C) - - - Grand Total (A+B+C+D) 194760000 100.00 75513

PSTL’s shares are listed on Bombay Stock Exchange. The stock market data of Equity Shares of face value of Rs.10/- each for the past six (6) months is as under:

Month High (Rs.) Low (Rs.) No. of Shares Traded December 2008 0.91 0.71 2205808 November 2008 0.90 0.66 2147074 October 2008 1.08 0.56 3850984 September 2008 1.30 0.90 365 8245 August 2008 1.44 1.10 3734409 July 2008 1.35 1.03 5513763

Current Market Price is Rs. 0.72 as on 14 th January, 2009

(Source: BSE website www.bseindia.com)

PSTL has not come with public or rights issue within the preceding three (3) years from the date of the filing of the Draft Red Herring Prospectus.

PSTL is a listed Company and neither is a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is under winding up.

Investors Grievances Mechanism:

PSTL follows investment grievance mechanism as per the Listing Agreement. For redressal of investor grievances, it has nominated its Company Secretary as the compliance officer. The compliance officer is responsible for attending to investor queries and complaints. PSTL received eighteen (18) complaints during the period from 1 st April, 2007 to 31st March, 2008 and five (5) complaints during the period from 1 st April, 2008 to 30 th September, 2008 and all the complaints were resolved to the satisfaction of the investors. There were no queries pending to be replied / addressed as at 31 st March 2008 and 30 th September, 2008.

B. DETAILS OF UNLISTED COMPANIES WITHIN OUR GROUP

1. VESA HOLDINGS PRIVATE LIMITED

Date of Incorporation 22 nd October, 1997 CIN U65993TN1997PTC039297 ’TAURUS’, No.25, First Main Road, United India Colony, Kodambakkam, Registered Office Chennai- 600 024. PAN No. AAACV4872C

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HDFC Bank Limited,759, Anna Salai, ITC Center, Chennai-600 002 A/c No: 0040330003514

BANK Account Details Oriental Bank of Commerce, 63, Dr. Radha Krishnan Salai, Mylapore, Chennai-600 002 A/c No: 1300102038

Block No.6, B-Wing, 2 nd Floor Shastri Bhawan 26 Haddows Road, Chennai – Address of Roc 600034 VHPL is an investment company incorporated for the purpose of investment Nature of Activities in shares, stocks, bonds and allied securities.

Board of Directors as on 14 th January 2009

Name Designation Mr. R. Kalyanraman Director Mr. V. Venkataramanan Director

FINANCIAL PERFORMANCE

The brief financials of VHPL for the last three (3) years based on audited financial statements are as under:

(Rs. in Lakhs except per share data) Particulars 31 Mar- 08 31-Mar-07 31-Mar-06 Equity Share Capital 200.00 200.00 200.00 Reserves (excluding revaluation reserves) (1540.66) (1539.59) (1538.46) Net Worth (1340.66) (1339.63) (1338.55) Total income Nil Nil 0.04 Profit After Tax (1.07) (1.13) (1.12) E.P.S. (Rs.) (0.05) (0.06) (0.06) N.A.V. (Rs.) (67.03) (66.98) (66.93) Face Value per share (in Rs.) 10 10 10

SHAREHOLDING PATTERN AS ON 31 st DECEMBER, 2008

No . Particulars No of Shares % of holding 1 Ms. Nirmala Chandrasekaram 10,00,000 50% 2 Ms. Anita Chandrasekaran 10,00,000 50% TOTAL 20,00,000 100%

VHPL is an unlisted Company and is neither a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is under winding up.

2. NUM TV LIMITED (MAURITIUS)

Date of Incorporation February 10, 2000 C/O Intercontinental Trust Limited. Level 3, Alexander House, 35, Registered Office Cybercity, Ebene

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HSBC , Singapore BANK Account Details A/c No. 260-294574-178 Consultancy Services for 2D/3D Animation Projects and distribution of Nature of Activities contents for film, TV and Internet.

Board of Directors as on 14 th January 2009

Name Designation Ms. Sumathi Sridharan Director Mr. R. Hariharan Director

FINANCIAL PERFORMANCE

The brief financials of Num TV for the last three (3) years based on audited financial statements are as under:

(Rs. in Lakhs except per share data) Particulars 31 Mar- 08 31-Mar-07 31-Mar-06 Equity Share Capital 1982.54 1982.54 1982.54 Reserves (excluding revaluation reserves) 6686.96 22769.23 22011.73 Net Worth 8564.49 24691.98 24071.27

Total income 3518.16 5541.00 1061.51 Profit After Tax 294.16 772.06 996.14 E.P.S. (Rs.) 6.38 16.77 21.63 N.A.V. (Rs.) 182.96 536.64 522.71 Face Value per share (in USD.) $1 $1 $1

SHAREHOLDING PATTERN AS ON 31St December, 2008

No . Particulars No of Shares % of holding 1. Pentamedia Graphics Limited 46,05,000 100% TOTAL 46,05,000 100%

Num TV Limited has not come out with any public issue or right issue during preceding three (3) years from the date of filing of this Draft Red Herring Prospectus.

Num TV Limited is an unlisted Company and is neither a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is under winding up.

3. ESOFTCOM (MAURITIUS) LIMITED

Date of Incorporation 11 th February, 2000 C/O Intercontinental Trust Limited. Level 3, Alexander House, 35, Registered Office Cybercity, Ebene Amas Bank (Switzerland) Limited, Geneva, Switzerland BANK Account Details A/C No: 010432

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Consultancy, project and product training in Banking, Insurance & Nature of Activities Enterprise Resource Planning areas in various hardware & software systems.

Board of Directors as on 14 th January 2009

Name Designation Ms. Sumathi Sridharan Director Mr. R. Hariharan Director

FINANCIAL PERFORMANCE

The brief financials of Esoftcom (Mauritius) Limited for the last three (3) years based on audited financial statements are as under: (Rs. in Lakhs except per share data) Particulars 31 Mar- 08 31-Mar-07 31-Mar-06 Share Capital 7462.26 7462.26 7462.26 Reserves (excluding revaluation reserves) 2404.95 5374.08 3732.70 Net Worth 9867.21 12836.34 11194.96 Total income 626.78 1254.29 1832.54 Profit After Tax 35.90 53.38 118.61 E.P.S. (Rs.) 0.22 0.33 0.74 N.A.V. (Rs.) 61.66 80.22 69.96 Face Value per share (in USD.) $1 $1 $1

SHAREHOLDING PATTERN AS ON 31 St December, 2008

No. Particulars No of Shares % of holding 1. Pentasoft Technologies 1,60,01,000 100% Limited TOTAL 1,60,01,000 100%

Esoftcom has not come out with any public issue or right issue during preceding three (3) years from the date of filing of this Draft Red Herring Prospectus.

Esoftcom is an unlisted Company and the company is neither a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1985 nor is under winding up

4. PENTAFOUR SOFTWARE EMPLOYEES WELFARE FOUNDATION

Date of Incorporation 22 nd January, 1997 CIN U74999TN1997NPL037365 ’TAURUS’, No.25, First Main Road, United India Colony, Kodambakkam, Registered Office Chennai- 600 024. PAN No. AAACP8885H

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HDFC Bank Limited, 759, Anna Salai, ITC Center, Chennai-600 002 A/c No: 0042230000915

BANK Account Details Oriental Bank of Commerce, 63, Dr. Radha Krishnan Salai, Mylapore, Chennai 600 002 A/c No: 10851010012590 Block No.6, B-Wing, 2 nd Floor Shastri Bhawan 26 Haddows Road, Chennai - Address of Roc 600034 PSEW is a company registered u/s 25 of Companies Act, 1956 and was Nature of Activities incorporated with the object of providing medical aid and other facilities to in the employees of PMGL

Board of Directors as on 14 th January 2009

Name Designation Ms. Sumathi Sridharan Director Mr. R. Hariharan Director

FINANCIAL PERFORMANCE

The brief financials of PSEW for the last three (3) years based on audited financial statements are as under:

(Rs. in Lakhs except per share data) Particulars 31 Mar- 08 31-Mar-07 31-Mar-06 Trust Fund 42.92 42.92 42.92 Trust Income Nil Nil Nil Surplus of Income over Expenditure (0.54) (0.52) (1.19)

Litigation/ Defaults

For details relating to legal proceedings involving the Promoters and members of the Promoter Group, see the section titled “Outstanding Litigation and Material Developments” beginning on page 189 of this Draft Red Herring Prospectus

Disassociation with Companies/Firms by the promoter of our company during the preceding three (3) years

There are no Companies/ Firms with which the promoter of our Company have disassociated themselves during the preceding three (3) years.

Common Pursuit

There are no Common pursuits between our company and Promoter & Promoter Group Companies.

Related business transaction within the group and significance on financial performance

There are no business transaction between our Company and the Group Companies; hence, significance of these transactions on the financial performance of the Companies does not exist.

Sale or Purchase between the Issuer Company and our Promoter Group companies

There are no sales or purchases between our Company and any company in the Promoter Group exceeding 10% of the sales or purchases of our Company.

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Companies for which an application have been made for striking off name

There are no companies in our group which have made an application to the Registrar of Companies for striking off their names from the Register in India. However, in the year 2004 and 2005, PMGL’s overseas subsidiaries viz.(i) Pentamedia Corporation Inc. (ii) Improvision Corporation Inc. and (iii) Animasia International PTE Limited have been dissolved/ struck off from the Register under the respective US and Singapore laws.

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RELATED PARTY TRANSACTIONS

For details on Related Party Transactions of our Company, please refer to Annexure 13 of restated financial statement under the section titled “Financial Information” on page 153 of the Draft Red Herring Prospectus.

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DIVIDEND POLICY

The declaration and payment of dividends will be recommended by the Board of Directors and approved by the shareholders of our Company, at their discretion, and will depend on a number of factors, including but not limited to the profits, capital requirements and overall financial condition. The Board may also from time to time pay interim dividend.

Our Company has not yet declared any dividend

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SECTION V: FINANCIAL INFORMATION

AUDITOR’S REPORT

The Board of Directors, MAYAJAAL ENTERTAINMENT LIMITED 34/1, 35, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kancheepuram District– 603112, Tamil Nadu

Dear Sirs,

1. We have examined the financial information of MAYAJAAL ENTERTAINMENT LIMITED (“the Company”), for the financial year ended March 31, 2004, 2005, 2006, 2007, 2008 and for the half year ended September 30, 2008 as attached to this report, stamped and initialed by us for identification and as approved by the Board of Directors of the Company & Audit Committee of Board of Directors, prepared in terms of the requirements of :

a. Part II of Schedule II to the Companies Act, 1956 (‘the Act’);

b. The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000, (‘the SEBI DIP Guidelines’) issued y the Securities & Exchange Board of India in pursuance to section 11 of the Securities & Exchange Board of India Act, 1992 and related clarifications, and the amendments from time to time thereto, to the extent applicable; and

c. The Guidance Note on Reports in Company Prospectuses and Guidance Note on audit Reports / Certificates on Financial information in Offer Documents Issued by the Institute of Chartered Accountants of India (ICAI).

d. Our terms of reference received from the Company, requesting us to carry our work, proposed to be included in the Offer Document in connection with its proposed Rights Issue of Equity Shares.

2. This information has been extracted by the Management from the financial statements for the years ended March 31, 2004, 2005, 2006, 2007, 2008 and for the half year ended 30 th September, 2008. These statements were prepared by the Management and approved by the Directors & Audit Committee of the Board of Directors for the purpose of disclosure in the offer document of the Company mentioned in paragraph (1) above.

The financial information for the above period was examined to the extent practicable, for the purpose of audit of financial information in accordance with the Auditing and Assurance Standards issued by the Institute of Chartered Accountants of India. Those standards require that we plan and perform our audit to obtain reasonable assurance, whether the financial information under examination is free of material misstatement.

Based on the above, we report that in our opinion and according to the information and explanations given to us, we have found the same to be correct and the same have been accordingly used in the financial information appropriately.

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3. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Companies Act, 1956, the SEBI Guidelines and terms of our engagement agreed with you, we further report that:

(a) The Restated Summary Statement of Assets and Liabilities of the company as at 31 st March, 2004, 2005, 2006, 2007, 2008 and as at half year ended 30 th September, 2008, examined by us, as set out in Annexure 1 to this report are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies, Notes and Changes in Significant Accounting Policies as appearing in Annexure 3

(b) The Restated Summary Statement of Profit or Loss of the Company for the years ended 31 st March, 2004, 2005, 2006, 2007, 2008 and for the half year ended 30 th September, 2008, examined by us, as set out in Annexure 2 to this report are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies, Notes and Changes in Significant Accounting Policies as appearing in Annexure 3 .

(c) The Restated Summary Statement of Cash flows of the Company for the years ended 31 st March, 2004, 2005, 2006, 2007 and 2008 and for the half year ended 30 th September, 2008, examined by us, as set out in Annexure 4 to this report are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies, Notes and Changes in Significant Accounting Policies as appearing in Annexure3 .

(d) Based on the above, we are of the opinion that the restated financial information have been made after incorporating:

(i) Adjustments for any material amounts in the respective financial years to which they relate except as mentioned in Annexure-3 appended to this report; and

(ii) Extra-ordinary items that need to be disclosed separately in the accounts and audit qualifications requiring adjustments, if any.

(iii) Adjustments/Rectifications for all incorrect accounting practices or failures to make provisions, if any.

(iv) Recomputation of Financial Statements in accordance with the correct accounting policies

(v) There was no change in accounting policies, which needs to be adjusted in financial statements.

(vi) There are no revaluation reserves, which need to be disclosed separately in the “Restated Summary Statements.”

(e) We have also examined the following other financial information set out in Annexures, prepared by the Management and approved by the Board of Directors & Audit Committee of Board of Directors, for the years ended 31 st March, 2004, 2005, 2006, 2007, 2008 and 30 th September, 2008.

(i) Notes to Statements of Assets & Liabilities & Profit & Loss as appearing in Annexure 3 to this report. (ii) Statement of Cash Flows as appearing in Annexure 4 to this report (iii) Statement of Dividends in Annexure 5 to this report. (iv) Mandatory Accounting Ratios as appearing in Annexure 6 to this report

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(v) Capitalization Statement as at September 30, 2008 as appearing in Annexure 7 to this report. (vi) Statement of Tax Shelters as appearing in Annexure 8 to this report. (vii) Statement of Secured Loans as appearing in Annexure 9 to this report (viii) Statement of Details of Investment as appearing in Annexure 10 to this report (ix) Statement of Sundry Debtors as appearing in Annexure 11 to this report (x) Statement of Other Income as appearing in Annexure 12 to this report (xi) Statement of Related Party Disclosures as appearing in Annexure 13 to this report.

4. In our opinion, the financial information of the Company as stated above, read along with the Significant Accounting Policies and Notes, after making adjustments / restatements and regroupings as considered appropriate, has been prepared in accordance with Part II of Schedule II to the Act and the SEBI Guidelines.

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

6. This report should not be in any way be constructed as a reissuance or redating of any of the previous audit reports issued by us or by any other firm of Chartered Accountants, nor should this report be constructed as a new opinion on any of the financial statements referred to herein.

For and on behalf of

For R. Subramanian & Co. Chartered Accountants

Sd/- N. Krishna Murthy Partner M. No.: 19339

Place: Chennai Date: 12.11.2008

ANNEXURES TO THE AUDITORS’ REPORT

Annexure 1 Summary Statement of Assets and Liabilities Annexure 2 Statement of Profit And Loss Annexure 3 Significant Accounting Policies and Notes on Restated Financial Statements Annexure 4 Statement of Cash Flow as Restated Annexure 5 Statement of Dividends Annexure 6 Accounting Ratios Annexure 7 Capitalization Statement Annexure 8 Statement of Tax Shelters Annexure 9 Statement of Secured Loans Annexure 10 Details of Investments Annexure 11 Details of Sundry Debtors Annexure 12 Statement of Other Income Annexure 13 Statement of Related Party Transactions

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Annexure-01

STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED (Rs. In Lakhs) Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Assets Fixed Assets-Gross Block 12,402.91 12,261.96 11,445.63 10,571.30 13,314.04 3,549.45 Less: Depreciation 5,829.66 5,724.26 5,533.34 5,341.61 5,758.61 226.38 Net Block 6,573.25 6,537.70 5,912.29 5,229.69 7,555.43 3,323.07 Less: Revaluation Reserve ------Net Block after adjustment for 6,573.25 6,537.70 5,912.29 5,229.69 7,555.43 3,323.07 Revaluation Reserve (i) Capital Work in Progress / Pre 543.11 565.38 441.88 1,708.30 7,580.88 2,015.70 Operative Expenses (ii) Total (A) = (i+ii) 7,116.36 7,103.08 6,354.17 6,937.99 15,136.31 5,338.77 Investments (B) - - 310.92 - - - Current Assets, Loans and Advances Inventories 1,296.85 1,290.21 1,296.22 1,297.49 10,521.45 14.20 Receivables 686.10 326.22 298.68 162.11 2,571.78 1.36 Cash & Bank Balances 21.98 19.67 58.95 14.05 4.27 106.89 Loans & Advances 1,739.38 1,037.18 906.54 1,180.33 5,014.48 132.72 Total Current Assets ( C ) 3,744.31 2,673.28 2,560.39 2,653.98 18,111.98 255.17 Total Assets (D) = (A) + (B) + ( C ) 10,860.67 9,776.36 9,225.48 9,591.97 33,248.29 5,593.94 Liabilities & Provisions Loan Funds: Secured Loans 2287.88 1,677.65 1,313.26 1,575.50 800.00 - Unsecured Loans ------Share Application Money - - - - - 1,300.00 Current Liabilities & Provisions : Current Liabilities 471.85 360.25 349.64 258.21 1,111.11 627.73 Provisions 43.00 15.00 50.07 44.19 55.12 1.65 Deferred Tax Liability 437.50 290.42 331.90 353.27 294.97 55.07 Total Liabilities & Provisions (E) 3,240.23 2,343.32 2,044.87 2,231.17 2,261.20 1,984.45 Net Worth (D) - (E) 7,620.44 7,433.04 7,180.61 7,360.80 30,987.09 3,609.49 Represented By: Share Capital 3,464.92 3,464.92 3,364.92 3,364.92 3,364.92 924.95 Reserves & Surplus 4,155.52 3,987.58 3,987.58 3,995.88 27,622.64 2,742.16 Less: Revaluation Reserve ------Reserves (Net of Revaluation Reserve) 4,155.52 3,987.58 3,987.58 3,995.88 27,622.64 2,742.16 Less : Misc. expenditure not written - - - - 0.47 57.62 off Less: Accumulated Losses - 19.46 171.89 - - - Total Net Worth 7,620.44 7,433.04 7,180.61 7,360.80 30,987.09 3,609.49

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Annexure- 02

STATEMENT OF PROFIT AND LOSS ACCOUNT, AS RESTATED (Rs. In Lakhs)

Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Income Operating Income: Income from FEC 880.17 1292.23 1003.71 872.99 860.88 479.09 Income from resort & sports village 167.13 334.21 244.57 136.25 - - Income from Content creation & delivery 802.63 389.33 325.88 808.92 1,422.03 - Other Income 23.14 25.82 21.19 14.21 21.18 24.14 Total 1,873.07 2,041.39 1,595.35 1,832.37 2,304.09 503.23 Expenditure Cost of Sales 542.40 427.13 258.94 749.27 492.32 39.44 Administration Expenses 638.86 946.38 772.54 755.50 742.29 314.41 Staff Expenses 74.65 137.40 61.79 33.52 180.57 16.27 Other Expenses 2.52 5.14 0.59 1.29 5.71 - Miscellaneous/ Deferred Revenue - - - 0.47 0.29 28.81 expenditure written off Total 1,258.43 1,516.05 1,093.86 1,540.05 1,421.18 398.94 Profit before Depreciation, Interest and 614.64 525.34 501.49 292.32 882.91 104.29 Tax Less: Depreciation 105.41 190.92 191.73 135.76 253.28 93.86 Profit before Interest & Tax 509.23 334.42 309.76 156.56 629.63 10.43 Interest 129.75 204.50 195.83 97.88 - - Net Profit before Tax 379.48 129.92 113.93 58.68 629.63 10.43 Less: Provision for Tax-Current Tax 43.00 15.00 15.00 5.00 42.37 0.90 Deferred Tax 147.09 (41.48) (21.37) 58.30 49.96 4.86 Fringe Benefit Tax 2.00 3.98 2.46 4.50 - - Net Profit After Tax & Before 187.39 152.42 117.84 (9.12) 537.30 4.67 Extraordinary Items Extraordinary Items (Net of Tax) : Loss on Sale of Assets - - (298.03) - - - Prior Period Items (Refer Annexure-3) - - - - 164.12 - Net Profit After Extraordinary Items 187.39 152.42 (180.19) (9.12) 701.42 4.67 Amount transferred from General Reserve 22,965.74 Exceptional Items (Refer Annexure-3) - - - (23,617.65) - - Profit Brought Forward (19.47) (171.89) 8.30 669.33 (32.09) (36.76) Profit Carried to Balance Sheet 167.92 (19.47) (171.89) 8.30 669.33 (32.09)

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ANNEXURE- 03

SIGNIFICANT ACCOUNTING POLICIES AND NOTES ON ACCOUNT FOR PREPARATION OF RESTATED FINANCIAL STATEMENT

A. Significant Accounting Policies:

1. Basis of preparation of Financial Statements

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles in India and the provision of the Companies Act, 1956 and the applicable Accounting Standards prescribed by ICAI.

2. Use of Estimate

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

3. Revenue Recognition

a. Admission fees, Entertainment fees, Parking Fees and revenue from sale of shopping items are recognized on cash basis.

b. Revenue from sale of cinema tickets (theatre income) is accounted on cash basis and the expenditure towards distributor’s share of theatre income is accounted based on the agreement entered into with them

c. Advertisement income is recognized based on the agreements entered into with various parties.

d. Sponsorship fee is recognized on the basis of agreements entered into with various parties

e. Revenue from sale of films is recognized on actual collection in case of own production and distribution when the rights of the films are transferred.

f. For Tele serials the sale is recognized on the telecast of the episode.

g. Revenue from Multimedia business (for sale of digital content on fixed price basis) is recognized based on the milestones reached.

h. Revenue from Interest is recognized on a time proportion basis taking in to account outstanding and rate applicable

i. Revenue from dividend is recognized as and when received

4. Fixed Assets & Depreciation

Fixed Assets are stated at cost net of modvat / cenvat on construction and includes proportionate financial cost till commencement of production less accumulated depreciation and impairment loss, if any. The cost of an asset comprises of purchase price and any directly attributable cost of bringing the assets to its present condition for intended use.

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Depreciation has been provided under Straight line method at the rates specified in schedule XIV of the Companies Act, 1956, In respect of addition made during the year assets whose unit cost is less than Rs.5000/- have been fully depreciated in compliance with schedule XIV of the Companies Act, 1956.

Digital Assets / Contents are written off over a period of ten years.

5. Inventories

a. Inventories consist of Gift & Shopping items, Stationeries, Maintenance items, Sports items etc. are valued at cost or net realizable value which ever is lower

b. Inventories comprising of banking of time from various TV channels are valued based on the average net realization of per second or cost per second whichever is lower.

c. Stock of cassettes and programming contents are valued at cost or net realizable value whichever is lower

d. Project in progress are valued based on the actual expenditure incurred on the project.

6. Investments

Current Investments are valued at lower of cost or net releasable value. Long Term Investments are valued at cost.

7. Foreign Currency Transaction

Transactions in foreign currency are accounted at prevailing rates. Monetary items denominated in foreign currencies to the extent not covered by forward contract are re-stated at the rate of exchange on Balance sheet date. Gain or Loss arising out of fluctuation in exchange rates is recognized in Profit and loss account.

8. Employee Retirement Benefits

The company provides for gratuity, a defined benefit plan in accordance with the rules of company based on valuation carried by management of the company at the balance sheet date for the eligible employees. Contribution payable to the employees benefits charged to profit and loss account as and when incurred and other retirement benefit to employees viz, provident fund, family pension fund and leave encashment are accounted on accrual basis.

9. Earning per Share.

Basic EPS is computed using the weighted average number of equity shares outstanding during the year.

10. Taxes on Income

Income Tax is accounted for in accordance with Accounting standard 22 on “Accounting for taxes on Income” Taxes comprises both Current and Deferred Tax. Current tax is measured at the amount expected to be paid/ recovered from the revenue authorities, using the applicable tax rates and laws.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as deferred tax assets or

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deferred tax liability. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable will be available against which the deferred tax assets can be realized.

11. Impairment of Assets

The company assesses at each balance sheet date whether there is any indication that an assets may be impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the asset belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost.

12. Provision, Contingent Liabilities and contingent assets

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

B. Notes on Accounts:

1. The Disclosure as required by the Accounting Standard -18 (Related Party Disclosure) are given in the Annexure 13 of the Restated Financial Statement.

2. Details of Deferred Tax assets and liabilities:

In view of the Accounting Standard 22 issued by Institute of Chartered Accountants of India, the significant component and classification of deferred tax liability/asset because of timing difference comprises of the following: (Rs. 000’s) Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Deferred Tax Liabilities: On account of Difference 47454 40304 33368 35495 29497 19069 between book and Tax Depreciation Deferred Tax Assets 3704 11262 178 168 0 13563 Deferred Tax Liabilities 43750 29042 33190 35327 29497 5506 (Net)

3. As per the information available with the company in response to the enquires from all existing suppliers with whom company deals, none of the suppliers are registered with the micro, small & medium Enterprises Development Act, 2006.

4. In the opinion of the Board, sundry debtors, loans and advances and other current assets are approximately of the value stated if realized in the ordinary course of business. The provisions for all known liabilities is adequate and not in excess of the amount reasonably necessary. Some of balances are subject to confirmation and reconciliations.

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5. The company has not complied with Accounting standard -15 as the provisions for retirement benefit are based on management valuations and no actuarial valuation has been conducted to arrive the provisions for retrial benefits to its employees

6. Composite Scheme of Amalgamation, Arrangement and Compromise:

a. Pursuant to the composite scheme of Amalgamation, Arrangement and compromise between M/s. Pentamedia Graphics Limited. (PMGL), Media Dreams Limited (MDL), Krish Srikanth Sports Entertainment Limited (KSSEL), Intelivision Limited (Intelivision) the Transferor companies and Mayajaal Entertainment Limited. (Mayajal) the Transferee Company and their respective creditors and Shareholders sanctioned by the Honorable High court of Madras by its orders dated 12 th October 2004, 8 th November 2004 and finally approved by High court vide final and Conclusive order Dated 29th November 2007, certified copies of which have been filed with Registrar of Companies, Tamil Nadu, Chennai, the entire undertaking of MDL, KSSEL, Intelivision and Num and Animation division of PMGL were transferred and vested in Mayajaal as a “Going Concern” effective from 1 st January 2004.

b. Pursuant to be above scheme, the Equity shareholders of MDL has been allotted 30 Equity shares of Rs. 1 each fully paid up in Mayajaal for every 25 equity shares of Rs.2 each fully paid up and held by them in MDL.

The equity shareholders of Intelivision has been allotted 30 Equity Shares of Rs.1 each fully paid up in Mayajaal for every 22 equity shares of Rs.10 each fully paid up and held by them in Intelivision.

The equity shareholders of KSSEL has been allotted 3 Equity Shares of Rs.1 each fully paid up in Mayajaal for every 5 equity shares of Rs. 1 each fully paid up and held by them in KSSEL

In respect of Num TV and Animation Division of PMGL which is demerged with Mayajaal, Mayajaal has allotted 14,68,52,475 Equity Shares of Rs. 1/- each to PMGL and also allotted 6 Equity Shares of Rs.1 each fully paid up in Mayajaal for every 10 nos. of 6% Cumulative optionally convertible redeemable preference shares of Rs.10/- each fully paid up and held by them in PMGL

c. Also as per the said scheme, the following amount outstanding under “ Advances against Equity” in the books of Mayajaal shall stand converted into 86,66,670 Equity Shares of Rs.1 each in Mayajaal:

(a) Advance against equity from Pentamedia Graphics Limited Rs.10 crores. (b) Advance against equity from Anchor construction Private Limited Rs.3 crores

d. Pending sanction of scheme by Honorable High court, business of transferor companies and also the demerged divisions of Pentamedia Graphics Limited. for and on account of trust for Mayajaal Entertainment Limited and hence Net assets of transferor companies and demerged divisions as on 1 st January, 2004 has been taken over in fiscal 2004-2005 and the effect of results of those transferor companies and demerged divisions for the period 1st January, 2004 to 31 st March, 2004 has been reflected as prior period items in fiscal 2004-2005

e. The excess of book value of the assists over the liabilities of the Transferor companies / Demerged Division of PMGL as at 1 st January, 2004 vested in Mayajaal pursuant to the above Scheme and recorded in the Books of account of Mayajaal is credited to General Reserve Account in the books of Mayajaal in the fiscal 2005 . The details of Net Assets taken over and the resultant General Reserve are given as below: (Rs. In Lakhs)

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Particulars Media Intelvision Limited Kris Srikanth Sports NUM TV and Dreams Limited. Entertainment Animation Limited Division of PMGL Net Assets taken over 2117.67 942.46 670.59 22477.87 Purchase Consideration General Reserve (A) Purchase Consideration 434.78 120.00 300.00 1498.52 / face Value of Equity shares allotted by Mayajaal (B)

General Reserve (A-B) 1682.90 822.46 370.59 20979.35

f. The excess of advance against equity outstanding in the books of Mayajaal, over and above the face value of shares allotted has been reflected under Capital Reserve and the details for the same are as under: (Rs. In Lakhs) Advance against Equity / Share application outstanding in the books of Mayajaal (A) 1300.00 Face Value of Equity shares allotted by Mayajaal (B) 86.67 Resultant Capital Reserve (A-B) 1213.13

7. Confirmation of balances / Reconciliation is pending in respect loans and advances / sundry debtors / sundry creditors and other liabilities. Adjustments if any which may arise upon completion of confirmation/ reconciliation will be dealt with upon confirmation / completion of reconciliation

8. The Reconciliation of subsidiary records with general ledger is in progress relating to Fixed Assets / capital work in progress and inventories and correlation of individual items of inventory relating the digital Content and the value thereof is pending completion. Adjustments if any which may arise upon confirmation / reconciliation of above items are unascertainable at this stage, and are not provided for.

9. Contingent Liabilities

Following are the contingent liabilities as on 30 th September, 2008. (Rs in Lakhs) No. Particulars Amount 1. Income Tax Demand for Assessment Year 2005-06 55.99 (Contested and Appealed) 2. Claim of VSNL against company for facilities provided 175.24 (Contested and Appealed) 3. Corporate Guarantee in favour of Pegasus Asset 3964.91 Reconstruction Pvt. Ltd. for securing the debt of Pentamedia Graphics Limited Total 4196.14

10. Total Reserves & Surplus of Rs.27622.64 Lakhs as at financial year ended 31 st March,2005 represents the items as detailed below. (Rs in Lakhs) General Reserve on Amalgamation 23855.29 Less: Intangible assets written off (889.56) Capital Reserve 1213.33

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Securities / Share Premium 2774.25 Surplus of Profit & Loss Account 669.33 Reserves & surplus as at 31.03.2005 27622.64

11. Extraordinary items in the fiscal 2007 represents Loss on sale of assets of amounting Rs.298.03 Lakhs during the year 31 st March, 2007 represents Loss on sale of Land & Buildings and such huge loss is being witnessed due to such property been affected in Tsunami and extraordinary in nature.

12. Exceptional Items of Rs.23617.65 Lakhs during the financial year ended 31st March, 2006 represents as detailed below.

Inventories written off Rs. 9128.18 Lakhs Loans & Advances written off Rs. 3776.36 Lakhs Discarded assets / capital WIP written off Rs. 9025.73 Lakhs Debtors written off Rs. 1687.38 Lakhs

13. Amount transferred from General Reserve of Rs.22965.74 Lakhs during the year 31 st March, 2006 represents General Reserve on Amalgamation.

14. Segmental Report

As on 30 th September, 2008 the company has primarily three segments viz. “Family Entertainment Centre (FEC)”, “ Resorts & Sports village” and “Content creation & delivery”

(Rs. In Lakhs) Particulars Revenue Profit before interest & Capital Employed Taxes FEC 903.30 246.65 4540.64 Resorts & Sports village 167.13 52.29 2457.87 Content creation & delivery 802.63 210.49 3347.32 Total 1873.06 509.23 10345.83

15. Previous year figures have been reworked, regrouped, rearranged and reclassified where ever necessary for the purpose of comparison. Figures as on 30 th September, 2008 are for the 6 months periods and therefore, are not strictly comparable with previous year figures in restated profit & loss A/c.

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ANNEXURE -04

STATEMENT OF CASH FLOW, AS RESTATED (Rs. In Lakhs) PARTICULARS 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 CASH FLOW FROM OPERATING ACTIVITIES Net Profit After tax and before extra ordinary items 187.39 152.42 117.84 (9.12) 537.30 4.67 Adjustment For: Add: Prior period profits - - - - 164.12 - Add: Depreciation 105.41 190.92 191.73 135.76 253.28 93.86 Add: Depreciation for Prior Periods - -- - 499.22 - Add: Interest Paid & financial charges 129.75 204.50 195.83 97.88 - - Less: Interest Received (2.76) (5.95) (0.11) - (2.31) - Less: Dividend Received - (8.19) (10.92) - - - Less: Profit on sale of Assets - - - - (0.96) (17.56) Add: Loss on sale of Assets - - - 1.66 0.17 - Add: Amortization of deferred revenue /preliminary - - - 0.47 0.29 28.81 expenses Operating profit before working capital changes 419.79 533.70 494.37 226.65 1451.11 109.78 Adjustments for : Decrease (Increase) in Trade & Other receivables (359.89) (27.54) (136.57) 722.29 (2570.42) 2.69 Decrease (Increase) in Inventories (6.64) 6.01 1.27 95.78 (10507.25) (2.41) Decrease (Increase) in Other Current Loan & Adv. (702.19) (130.64) 273.79 57.79 (4881.76) (21.04) Increase (Decrease) in Current liabilities 139.60 (24.46) 97.31 (863.83) 536.85 (247.96) Increase (Decrease) in deferred tax liability 147.08 (41.48) (21.37) 58.30 239.90 4.86 Net Changes in working capital (782.04) (218.11) 214.43 70.33 (17,182.68) (263.86) Net cash flow from operating activities (A) (362.25) 315.59 708.80 296.98 (15,731.57) (154.08)

CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets (140.95) (816.32) (1132.65) (14.48) (5103.88) (40.92) Capital work in progress 22.27 (123.50) 346.71 (951.83) (5565.18) (487.77) Sale of fixed assets - - 880.00 1.49 119.81 145.89 Interest Received 2.76 5.95 0.11 - 2.31 - Dividend Received - 8.19 10.92 - - - Investments (Purchased) / Sold - 310.92 (310.92) - - - Preliminary / deferred revenue expenditure incurred / - - (832.72) - acquired through merger Net cash flow for investing activities (115.92) (614.76) (205.83) (964.82) (11,379.66) (382.80)

CASH FLOW FROM FINANCING ACTIVITIES Issue of Share Capital (Including Premium & Reserves) - 100.00 - - 27,508.59 - Share Application Money - - - - (1300) 643.12 Secured Loan Taken / (Repaid) 610.23 364.39 (262.24) 775.50 800 (2.28) Interest paid (129.75) (204.50) (195.83) (97.88) - - Net Cash Flow From Financing Activities 480.48 259.89 (458.07) 677.62 27008.59 640.84 Net Increase / (Decrease) in Cash & Cash Equivalents 2.31 (39.28) 44.90 9.78 (102.64) 103.96 Cash & Cash Equivalents beginning of the year / period 19.67 58.95 14.05 4.27 106.89 2.94 Cash & Cash Equivalents at the end of year / period 21.98 19.67 58.95 14.05 4.27 106.89

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Annexure 05

STATEMENT OF DIVIDENDS

(Rs. in Lakhs) Particulars 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Equity Share Capital (Face Value Rs.1/-) 3,464.92 3,364.92 3,364.92 3,364.92 924.95 Rate of Dividend Nil Nil Nil Nil Nil Amount of Dividend Nil Nil Nil Nil Nil Corporate Dividend Tax Nil Nil Nil Nil Nil

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ANNEXURE -06

ACCOUNTING RATIOS (Rs. in Lakhs) Particulars 30.09.08 * 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Networth ( A ) 7,620.44 7,433.04 7,180.61 7,360.80 30,987.09 3,609.49 Adjusted Profit after Tax ( B ) 187.39 152.42 117.84 (9.12) 537.30 4.67 No. of Shares outstanding at the 34,649,200 34,649,200 33,649,200 33,649,200 33,649,200 9,249,500 end [F.V Rs.10] ( C ) Weighted average number of 34,649,200 33,676,597 33,649,200 33,649,200 33,649,200 9,249,500 shares outstanding [F.V Rs.10]( D ) Earnings per Share (EPS) (B / D) 0.54 0.45 0.35 (0.03) 1.60 0.05 (Rs.) * 6 months Return on Networth (B / A) * 6 2.46% 2.05% 1.64% -0.12% 1.73% 0.13% months Net Assets Value per Share (A / C) 21.99 21.45 21.34 21.88 92.09 39.02

Definitions of key ratios: (to be in conformity with the relevant accounting standards)

I. Earnings per share (Rs.): Net Profit attributable to equity shareholders / weighted average number of equity shares outstanding as at the end of the year / period. Earnings per share are calculated in accordance with Accounting Standard 20 "Earnings per Share" issued by the Institute of Chartered Accountants of India.

II. Return on Net Worth (%): Net Profit after tax / Networth as at the end of the year / period.

III. Net Asset Value (Rs.): Net Worth at the end of the year / Number of equity shares outstanding at the end of the year / period.

IV. Net Profit, as appearing in the statement of restated profits and losses, has been considered for the purpose of computing the above ratios.

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ANNEXURE -07

CAPITALISATION STATEMENT (Rs. in Lakhs) Particulars Pre-issue as at Post Issue * 30.09.08

Borrowing Short - Term Debt 600.00 * Long - Term Debt 1,687.88 * Total Debt 2,287.88 * Shareholders' Funds * Share Capital * - Equity 3464.92 * Less: Calls - in - arrears - * - Preference - * Share Premium - * Reserves & Surplus 4155.52 * Less: Miscellaneous Expenditure not written off - * Total Shareholders Funds 7,620.44 * Long - Term Debt / Shareholders Fund 0.22 *

* The Post Issue Capitalization will be determined only after the completion of the book building process and allotment of equity shares

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ANNEXURE -08

STATEMENT OF TAX SHELTERS (Rs. in Lakhs) Particulars 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Profit before tax as per Restated P/L 129.92 113.93 58.68 629.63 10.43 Corporate Tax Rate 33.99% 33.66% 33.66% 36.59% 35.88% Tax at Notional Rate 44.16 38.35 19.75 230.38 3.74 Adjustments Difference between Tax Depreciation and Book 174.79 168.00 146.71 381.31 122.38 Depreciation Adjustment on account of Profit on sale of Land 17.56 Exempted Export Profits (10B of Income Tax - - - 502.36 - Act, 1961) Other Items (25.22) (20.10) 18.01 (102.83) (29.43) Exceptional Items (Refer Annexure-3) 23,617.65 - Set off of Business Losses / Unabsorbed - - - - Depreciation Net Adjustments 149.58 147.90 23,782.37 780.83 110.50 Tax Saving thereon 50.84 49.78 8,005.15 285.71 39.65 Tax Saving to the extent of Tax at Notional 44.16 38.35 19.75 230.38 3.74 Rate Tax Payable [A] - - - - - Tax Payable on Extraordinary Items [B] - - - - 0.40 Total Tax Payable [C=A+B] - - - - 0.40 Tax Payable under MAT (115JB of Income Tax 14.27 - - 0.80 Act, 1961) [D] Net Tax Payable [Higher of C & D] 14.27 - - - 0.80

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ANNEXURE - 09

SECURED LOANS (Rs. in Lakhs) Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Term Loan - - - - 100.00 - Term Loan - REPCO 698.29 738.85 676.33 725.50 700.00 - Term Loan - Andhra Bank 397.77 456.93 636.93 850.00 - - Term Loan - Kotak Bank 326.91 444.74 - - - - Term Loan - Kotak Bank 600.00 - - - - - Working Capital-REPCO 214.82 - - - - - Working Capital-Kotak 50.09 37.13 - - - - Total 2,287.88 1,677.65 1,313.26 1,575.50 800.00 -

Principal Terms of Secured Loans & Assets Charged As Security, as on 30.09.2008 (Rs. in Lakhs) Lender Type of Sanctioned Outstanding Rate of Repayment Details of Security Facility Amount as on Interest Terms 30.09.08 Andhra Bank Term Loan 1,000.00 397.77 12.75% Quarterly Equitable mortgage of land and buildings, consisting of sports complex and resorts located at 34-1, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kanchipuram District including the additions proposed under the present sanction. Kotak Mahindra Bank Term Loan 500.00 326.91 16% Monthly Primary collateral of Property belonging to Pentasoft Technologies Limited , 1. (i) Property bearing Door No.25/1, within build up area of 2016.23 sq. ft. in the basement floor in United India Colony, First Main Road, Kodambakkam, Comprised in T.S.No.32, Block No.41, Puliyur

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Lender Type of Sanctioned Outstanding Rate of Repayment Details of Security Facility Amount as on Interest Terms 30.09.08 Village with UDS of 2016/50 100 of land. (ii) Property bearing Door No.25/5, within built up area of 2255.82 sq. ft.in the ground floor in United India Colony, First Main Road, Kodambakkam, Comprised in T.S.No.32, Block No.41, Puliyur Village with UDS of 2256/50 100 of land. (iii) Property bearing Door No.25/9, within built up area of 4412.52 sq. ft.in the First Floor in United India Colony, First Main Road, Kodambakkam, Comprised in T.S.No.32, Block No.41, Puliyur Village with UDS of 4413/50 100 of land. 2. 4690/50 100 undivided shares & interests in the land bearing Plot No.46, Old Door No.10, First Cross Street, United India Colony, Kodambakkam, Madras - 24, T.S.No.32, Block No.41, Puliyur Village of an extent of 6 grounds 2,256 sq. ft. within the registration

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Lender Type of Sanctioned Outstanding Rate of Repayment Details of Security Facility Amount as on Interest Terms 30.09.08 district of Madras Central and Sub- District of Kodambakkam along with proportionate constructed area. 3. 2020/50 100 undivided shares & interests in the land bearing Plot No.46, Old Door No.10, First Cross Street, United India Colony, Kodambakkam, Madras - 24, T.S.No.32, Block No.41, Puliyur Village of an extent of 6 grounds 2,256 sq. ft. within the registration district of Madras Central and Sub- District of Kodambakkam along with proportionate constructed area. Kotak Mahindra Bank Short Term 600.00 600 20% Quarterly 1. Property being Loan 2nd, 3rd, 4th and 5th floor in T.S.No.39 Block No.41, Door No.25, United India Colony, 1st Main Road, Puliyur Village, Kodambakkam, Chennai - 24. 2. Property being Door No.25/1, 25/5 & 25/9, with a total built up area of 15395 sq. ft. in Kodambakkam, Chennai. 3. Extension of lien on Fixed Deposit of

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Lender Type of Sanctioned Outstanding Rate of Repayment Details of Security Facility Amount as on Interest Terms 30.09.08 Rs.4.25 crores. 4. Personal Guarantee of V.Chandrasekaran. 5. Corporate Guarantee of Penta Media Graphics Limited. and Pentasoft Technologies Limited. REPCO Bank Term Loan 700.00 698.29 13% Monthly a) Land measuring 585 cents comprised in S.No.34/1 and 34/2, Kanathur Village, Reddikuppam, Chengalpattu Taluk, Kanchipuram District together with an entertainment complex known as Mayajaal comprising within Cineplex, Bowling Alley, Food Court, Play Stations etc. b) Hypothecation of Plant & Machinery, Furniture and Fittings, Accessories, equipments etc. in the Mayajaal Complex. Kotak Mahindra Bank Over Draft 50.00 50.09 11.10% Monthly Fixed Deposit with Kotak Mahindra Bank, Rs.60 Lakhs

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Lender Type of Sanctioned Outstanding Rate of Repayment Details of Security Facility Amount as on Interest Terms 30.09.08 REPCO Bank Cash Credit 225.00 214.82 13.50% Monthly Land Measuring 5.85 Acres comprised in S.No.34/1, (3.85 acres) and S.No.34/2 (2 acres) together building consisting of an Entertainment Complex together with fixture known as "MAYAJAAL" near East Coast Road Tolgate in between VGP Golden Beach and M.G.M., Kanathur Reddikuppam Village, Chengalpattu Taluk, Kancheepuram District, situated within the Sub- Registration District of Tiruporur and Registration District of Chennai, Bounded on the North by - S.No.54 & 55, Village Road, South by - S.No.32 & 33, East by - East Coast Road (New Mahabalipuram Road) & West by - Balance land belonging to Mayajaal. The Entertainment complex "MAYAJAAL" consists within a Cineplex, Bowling Alley, Food court, Shopping Market, Play Stations etc. ii) Hypothecation of Plant &

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Lender Type of Sanctioned Outstanding Rate of Repayment Details of Security Facility Amount as on Interest Terms 30.09.08 Machinery, Furniture & Fittings, Accessories, Equipments, etc. in the Mayajaal Complex. iii) Pledge of 5,00,000 shares of face value of RS.10/- of M/s.Mayajaal Entertainment Limited pledged by PMGL.

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Annexure- 10

DETAILS OF INVESTMENTS (Rs. in Lakhs) Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04

Investment in Group ------Companies Investment in Units of HDFC - - 300.00 - - - Cash Management Fund - Savings Plan - Daily Dividend Reinvestment - (28,23,714.27 Units) Dividend on the above has 10.92 been reinvested Total - - 310.92 - - -

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Annexure- 11

DETAILS OF SUNDRY DEBTORS

(Rs. in Lakhs)

Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 (A) Less than six months Considered good 506.11 146.50 61.93 42.16 24.79 1.35 Others ------(B) More than six months Considered good 179.99 179.72 236.75 119.95 2,546.99 - Others ------Total 686.10 326.22 298.68 162.11 2,571.78 1.35

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Annexure 12

DETAILS OF OTHER INCOME (Rs. in Lakhs) Particulars 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Shooting Fees - 3.63 - - 1.06 0.20 Commission - - - - - 1.50 Rent Received 2.16 6.87 5.14 3.57 - - Profit on Sale of Land - - - - - 17.56 Dividend - 8.19 10.92 - - - Interest 2.76 5.95 0.11 - 2.31 - Profit on Sale of Assets - - - - 0.96 - Sundry Balances W/back 11.10 - 0.58 2.66 12.13 - Subscription Income - - - 6.01 - - Insurance Claims - - 1.99 - - - Exchange Fluctuation Gain - 0.59 - - - - EB Charges Recovery 5.09 - - - - - Royalty Income-Films 1.95 - - - - - Miscellaneous Receipts 0.08 0.59 2.45 1.97 4.72 4.88 Total 23.14 25.82 21.19 14.21 21.18 24.14

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Annexure 13

STATEMENT OF RELATED PARTY TRANSACTIONS

Transaction with related party as identified by the management in accordance with Accounting Standard 18 “Related party disclosures” issued by The Institute of Chartered Accountants of India, are as follows:

(I) List of Related Parties

30.09.2008 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Promoter Company Pentamedia Pentamedia Pentamedia Pentamedia Pentamedia Pentamedia Graphics Limited Graphics Graphics Graphics Graphics Graphics Limited Limited Limited Limited Limited Group Company Pentasoft Pentasoft Pentasoft Pentasoft Pentasoft Pentasoft Technologies Technologies Technologies Technologies Technologies Technologies Limited. Limited. Limited. Limited. Limited. Limited. Key Managerial Personnel Mr. Udeep Mr. Udeep Mr. Udeep Mr. Udeep Mr. Udeep ------Bogollu Bogollu (Whole Bogollu (Whole Bogollu (Whole Bogollu (Whole (Managing time Director) time Director) time Director) time Director) Director) Mrs. Sumathi Mrs. Sumathi Mrs. Sumathi Mrs. Sumathi Mrs. Sumathi ------Sridharan Sridharan Sridharan Sridharan Sridharan (Wholetime (Wholetime (Wholetime (Wholetime (Wholetime Director) Director) Director) Director) Director) Relative of Key Managerial Personnel Mrs. Anita Mrs. Anita Mrs. Anita Mrs. Anita Mrs. Anita ------Chandrasekaran Chandrasekaran Chandrasekaran Chandrasekaran Chandrasekaran Enterprise controlled or managed by key management personnel or their relatives M/s Mohan M/s Mohan M/s Mohan M/s Mohan M/s Mohan ------Associates Associates Associates Associates Associates M/s Mohan M/s Mohan M/s Mohan M/s Mohan M/s Mohan ------Architects Architects Architects Architects Architects Private Limited. Private Limited. Private Limited. Private Limited. Private Limited. N Viz Entertainment (Proprietrix: Anita Chandrasekaran) ------

(II) Details of Transactions with Related party: (Rs. in Lakhs) Nature of Relationship 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Transaction Remuneration / Key Salary Managerial Personnel 8.40 12.25 9.00 9.50 2.50 Nil Consultancy Charges Relatives of Key Managerial 3.00 6.00 6.00 Nil Nil Nil

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Nature of Relationship 30.09.08 31.03.08 31.03.07 31.03.06 31.03.05 31.03.04 Transaction Personnel Architectural & Enterprise supply of various controlled or equipment Contacts managed by key management personnel or their relatives 7.90 112.06 Nil Nil Nil 1.60 Advertisement Enterprise Income controlled or managed by key management personnel or their relatives Nil Nil Nil Nil 0.19 Nil Advances given for Enterprise Production of Live controlled or Action film under co- managed by production key management personnel or their relatives 116.20 Nil Nil Nil Nil Nil Advances given / Promoter repaid in cash or Company kind 631.53 277.72 297.04 61.78 604.72 1962.45 Advances Taken / Promoter Received back in cash Company or kind 12.25 136.24 Nil 56.11 113.43 2141.53 Sale of Land Promoter Company Nil Nil Nil Nil Nil 145.89 Land Development Promoter expenses paid / Company adjusted Nil Nil 552.18 Nil Nil Nil Advances given / Group repaid in cash or Company kind 18.04 49.1 34.95 1.00 15.00 Nil Advances Taken / Group Received back in cash Company or kind Nil Nil Nil 2.00 15.00 Nil Misc. Equipment Group Purchase Company Nil Nil Nil Nil Nil 0.06 Advertisement Group Nil Income Company Nil 0.01 0.03 Nil Nil

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

The investors should read the following discussion of our financial condition and results of operations together with our audited financial statements for the financial years 2004, 2005, 2006, 2007 and 2008 and period of half year ended 30 th September, 2008 including the notes thereto and the reports thereon which appear in the section titled “Financial Information” beginning on page no 153 of this Draft Red Herring Prospectus.

The Financial statements have been prepared in accordance with Indian GAAP, the Companies Act and the SEBI DIP Guidelines and restated as described in the report of our statutory Auditor viz. R. Subramanian & Co., Chartered Accountants, dated 12 th November, 2008 in the section titled “Financial Information” beginning on page no.153 of this Draft Red Herring Prospectus.

The fiscal year of our Company ends on 31 st March of each year, so all references to a particular fiscal year are to the twelve (12) month period ended 31 st day of that year.

OVERVIEW OF THE BUSINESS

Our Company was originally incorporated as a private limited company in the year 1997 and its constitution was changed to a public limited company in the year 2000. Our Company developed the Family Entertainment Centre in 2001 comprising of Mall & Multiplex “e.joy”. In the year 2003, our Company developed the Sports Village “The Champ” which is a stadium cum facility centre for organizing various sports event such as cricket, snooker, squash etc. Our Company further in the year 2005 constructed “Onshore Resort” which is leisure cum health resort. The above facilities are spread out over an area of 26.82 acres in a single campus away from the bustle of the city, on the scenic East Coast Road near Chennai.

Our Company in the year 2000 became a 100% subsidiary of PMGL as a part of PMGL’s growth and diversification strategy.

By way of a Composite Scheme of Amalgamation, Arrangement and Compromise (the "Scheme"), PMGL subsidiaries i.e. Media Dreams Limited, Kris Srikkanth Sports Entertainment Limited and Intelivision Limited (herein after collectively referred as the “ Merged Entities”) merged with our Company. As part of the Scheme, the Animation and Web Entertainment business of PMGL was demerged into our Company. The High Court of Madras sanctioned the Scheme by an order dated 8 th November 2004, which was further modified, by an order dated 29 th November 2007.

Pursuant to the Scheme, in addition to "e.joy,” "The Champ" and "Onshore Resort" the merged entity i.e. our Company diversified into the following business activities: a) Content Creation and Delivery of Animation Films (demerged from Pentamedia Graphics Limited) b) Production of Live Action Films ( carried on by Media Dreams Limited ) c) Web Entertainment ( demerged from Pentamedia Graphics Limited ) d) Television Entertainment ( carried on by Intelivision Limited ) e) Sports related Content ( from Kris Srikkanth Sports Entertainment Limited )

The business of our Company is briefly explained here below:

FEC (e.joy): Our Company, in the first phase of development of e.joy developed an area of 5 acres with a 1,00,000 sq. ft. centrally air conditioned dome which was open to public in 2001. e.joy puts together under a single roof a wholesome entertainment arena for family amusement. e.joy is equipped with over a 1000 plus car parking space, 10 screen multiplex, bowling alley, food court, game parlor, shopping mall etc.

Onshore Resort: Our Company constructed a leisure cum health resort spread over an area of 5 acres and commenced operations in the year 2005. A three (3) star categorized resort dwells into the realms of leisure,

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entertainment, sport, business and a host of other activities with a scenic view. The resort comprises of spacious rooms, suites, cottages, restaurants, conference halls, convention centre etc

The Champ: The sports complex is spread over an area of 17 acres has been operating since 2003. The salient features of the sports complex are a cricket stadium, facilities for games like Billiards, Snooker, Table Tennis, Gymnasium, Swimming Pool, Restaurant etc.

Content Creation and Delivery: Our Company is a ‘One-Stop’ production house from concept to completion of animation content with facilities for pre-production, production and post-production activities. The division comprises of an animation studio producing 2D & 3D animated content for the film, television, and the internet. The studio was considered to be amongst the first in Asia to produce 3D animated feature films and 2D animated feature films. Our Company also has a production division for Live Action Films, TV serials and internet content.

Web Entertainment: Our Company has a 24 hour live online multilingual entertainment portal with over thirty television channels, multilingual radio channels, multilingual press, interactive events, live events and stage plays all on the Internet at its website URL http://www.numtv.com .

Television Entertainment: This division consist of India’s first 24 hr “Free To Air” Children’s Television Channel in English namely Splash TV which commenced its operations in 1998. Splash TV offered programmes on edutainment, infotainment and entertainment in English. The target age group was 2–16 years with live action and animated Content. It has produced more than 1000 hours of Content and has acquired several hours of Content from various production houses around the globe. Our Company has discontinued the broadcast of this channel since November 2004. However, the Content owned by our Company is currently used by various television channels and is distributed over web on a revenue sharing as well as on fixed fee basis.

Significant developments

There are no such significant developments that have taken place from the date of the last financial statement, which materially and adversely affect or is likely to affect the trading or profitability of the Issuer Company, or the value of its assets, or its ability to pay its liabilities within the next twelve (12) months.

Industry Overview

The Indian Entertainment Industry

Family Entertainment Centre

Multiplex Development

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Mall Development

India has witnessed the emergence of a mall culture and development of malls over the past few years. Significant investments have been channelized into development of organized retail outlets. Increasingly, a number of mall developers are considering Movies/Theaters and Entertainment outlets like food courts, gaming zones, shopping arcade etc as the key elements attracting Footfalls to the malls.

Hospitality- Resort

Hospitality sector is one of the fastest growing sectors in India. It is expected to grow at the rate of 8% between 2007 and 2016 (Source : The Travel and Tourism Economic Research 2006). Nowadays the travel and tourism industry is also included in hospitality sector. The boom in travel and tourism has led to the further development of hospitality industry.

Sports Club Development

From a recreational activity to a full-fledged career option, sports in India have evolved into a viable alternative. Therefore, enormous emphasis is laid on building a Sports Club providing various facilities and infrastructure.

Content Creation & Delivery

Animation & Live Action Films Industry

With global players like Walt Disney, Imax, and Warner Bros. signing contracts with Indian animation companies for outsourcing and co-production, it is expected that the animation industry in India could touch Rs38bn by 2009. In the next five years a 27% CAGR is expected. The cost of half an hour of animation work in India averages US$60,000.

Web Entertainment

Our Company has a presence on the web entertainment platform through its twenty-four (24) hour live online multilingual entertainment portal URL http://www.numtv.com , covering over thirty (30) television channels, radio channels, films, print, stage shows and events both live and recorded. NUM TV offers entertainment through broadband connection mostly to countries other than India. Apart from web content aggregator and distributor, http://www.numtv.com offers wide range of B2C services. Since there is no market data available on web entertainment, we have restricted the information to our Company.

Television Entertainment

Key Factors that may affect our operations (Key Factors):

• The behavior pattern and the spending capacity of patrons visiting our FEC; • Cost of maintenance of FEC, Onshore Resort, The Champ and studio complex;

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• Variations of Footfalls at FEC between weekdays and weekends / public holidays; • Popularity of films that we exhibit; • Harmony with distributor and production house of films which we exhibit; • Operating expenses including food & beverage cost, employee compensation and power and fuel cost; • Demand & supply of hotel accommodation at the place where our resort is located ; • Seasonality of hospitality industry; • Viewership pattern of patrons for our multiplex; • Animation and other live action films which we produce and the contents which we screen through Num TV; • The popularity of sports and the clientele for the sports village ; • General business and economic business conditions in India and other countries; • Regulatory changes relating to industries in which we operate; • Our Company’s ability to sustain and perseverance towards successful implementation of its strategy and its growth and expansion plans; • The occurrence of natural disaster & calamities; • Changes in the foreign exchange control regulations, interest rates and tax laws in India; • Ability to attract and retain skilled personnel; • Mismatch of cash flows and maintaining the profit margins; • Legal complexities and our inability to pay statutory dues.

Discussion on Results of Operation:

The following discussion on results of operations should be read in conjunction with the restated financial results of our Company for the years ended 2004, 2005, 2006, 2007 and 2008 and period of half year ended 30 th September, 2008

For the half year ended 30 th September, 2008

Particulars 6 Months % of Total (Rs. In Lakhs) Income Total Income 1873.07 100.00 Expenditure (Excluding Depreciation ,Interest & Tax) 1258.43 67.19 Depreciation 105.41 5.63 Interest 129.75 6.93 Net Profit before Tax 379.48 20.26 Taxes 192.09 10.25 Net Profit after Taxes 187.39 10.00

Result of operations as % of Income

We had recorded the total income of Rs. 1873.07 Lakhs and the expenditure has accounted 67.19% of total income and represented a total amount of Rs. 1258.43 Lakhs. The depreciation and interest charges have accounted 5.63% and 6.93% of total income respectively and taxes have accounted 10.25% of total income. Our Company has recorded a net profit after tax of Rs.187.39 Lakhs during the half year ended 30 th September, 2008.

Analysis on Results of Operation

Considering the various Key Factors affecting our income and expenditure, our results of operations may vary from period to period. The following table sets forth certain information with respect to our results of

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operations for the periods indicated read together with notes to accounts, accounting polices and auditors report as appearing in this Draft Red Herring Prospectus.

(Rs.in Lakhs) Particulars 31.3.08 31.3.07 31.3.06 31.3.05 Income Operating Income: Income from FEC 1292.03 1003.71 872.99 860.88 Increase/ (Decrease) (%) 28.73% 14.97% 1.41% ------Income from resorts & sports village 334.21 244.57 136.25 - Increase/ (Decrease) (%) 36.65% 79.50% ------Income from Content creation & delivery 389.33 325.88 808.92 1422.03 Increase/ (Decrease) (%) 19.47% (59.71%) (43.12%) ------Operative Income 2015.57 1574.16 1818.16 2282.91 Increase/ (Decrease) (%) 28.04% (13.42%) (20.36%) ----- Other Income 25.82 21.19 14.21 21.18 Increase/ (Decrease) (%) 21.85% 49.12% (32.91%) ---- Total Income 2041.39 1595.35 1832.37 2304.09 Increase/ (Decrease) (%) 27.96% (12.94%) (20.47%) ------Expenditure Cost of Sales 427.13 258.94 749.27 492.32 Increase/ (Decrease) (%) 64.95% (65.44%) 52.19% ------Administration Expenses 946.38 772.54 755.50 742.29 Increase/ (Decrease) (%) 22.50% 2.26% 1.78% ----- Staff Expenses 137.40 61.79 33.52 180.57 Increase/ (Decrease) (%) 122.38% 84.34% (81.44%) ----- Other Expenses 5.14 0.59 1.29 5.71 Miscellaneous/Deferred Revenue - - 0.47 0.29 expenditure written off Total Expenditure 1516.05 1093.86 1540.05 1421.18 Increase/ (Decrease) (%) 38.60% (28.97%) 8.36% ----- Profit before Depreciation, Interest & 525.34 501.49 292.32 882.91 Tax Increase/ (Decrease) (%) 4.76% 71.56% (66.89%) ----- Less: Depreciation 190.92 191.73 135.76 253.28 Increase/ (Decrease) (%) (0.42%) 41.23% (46.40%) ---- Profit before Interest & Tax 334.42 309.76 156.56 629.63 Increase/ (Decrease) (%) 7.96% 97.85% (75.13%) ---- Interest 204.50 195.83 97.88 - Increase/ (Decrease) (%) 4.43% 100.07% ----- Net Profit before Tax 129.92 113.93 58.68 629.63 Less: Provision for Tax – Current tax 15.00 15.00 5.00 42.37 Deferred tax (41.48) (21.37) 58.30 49.96 Fringe Benefit Tax 3.98 2.46 4.50 - Net profit After Tax & before 152.42 117.84 (9.12) 537.30 Extraordinary Items Increase/(Decrease) (%) 29.34% 1392.11% (101.70%) ---- Extraordinary Items (Net of Tax) Loss on Sale of Assets - (298.03) - - Prior Period Items (Refer Annexure -3) - - - 164.12 Net profit after Extraordinary Items 152.42 (180.19) (9.12) 701.42 Increase/(Decrease) (%) 184.59% (1875.77%) (101.30%)

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COMPARISON OF FINANCIAL YEAR ENDED 31 st MARCH, 2008 WITH FINANCIAL YEAR ENDED 31 st MARCH, 2007

Operative Income: Our total operative income for the financial year ended 31 st March, 2008 was Rs. 2015.57 Lakhs as against the total of Rs.1574.16 Lakhs for the fiscal 2007 with an increase of 28.04% and such increase was attributed to rise in all segments of revenue primarily with increase in FEC and resort & sports village, which has accounted the increase of 28.73% and 36.65% respectively. The rise in revenue for FEC segment has been attributed to the increase of Footfalls at e.joy and such increase in footfall also led to overall growth in revenues from multiplex, shopping mall, Food Court and gaming arcade. The growth in footfall at e.joy also aided to increase the occupancy levels at Onshore resorts and various cricket & sports activities conducted at The Champ, which has also contributed to increase in revenue for our resort & sports village segment.

Other Income : Other income of our Company for fiscal year 2007 is Rs. 21.19 Lakhs and for fiscal year 2008 is Rs.25.82 Lakhs recording an increase of 21.85% mainly due to the additional advertisement income.

Expenditure: The cost of sales accounted for 21.20% of operative income during the financial year ended 31 st March, 2008 was at Rs. 427.13 Lakhs as compared to 16.45% of operative income at Rs.258.94 Lakhs for the fiscal 2007, while the administrative expenses has registered the increase of 22.50% at Rs. 946.38 Lakhs in fiscal 2008 as compared to Rs.772.54 Lakhs for the fiscal 2007 due to higher base of revenue and the staff cost has registered the increase of 122.38% from Rs. 61.79 Lakhs in fiscal 2007 to Rs. 137.40 Lakhs in fiscal 2008 and the steep increase in staff cost was attributed to the additional manpower deployed by the company in its Content creation & delivery division for its production of 2D flash animation film ‘Jai Vigneshwara’ during the fiscal 2008.

Depreciation: Depreciation has declined to Rs. 190.92 Lakhs in fiscal 2008 as compared to Rs. 191.73 Lakhs for fiscal 2007.

Interest Charges: The interest cost of company has registered the increase of 4.43% for the financial year 2008 at Rs.204.50 Lakhs as against of Rs.195.83 Lakhs for the financial year 2007 and such rise is attributed to higher interest rates prevailing in fiscal 2008.

Taxation: The Company has made provision of current income tax of Rs. 15.00 Lakhs for the financial year ended 31 st March, 2008 as of same of Rs. 15.00 Lakhs for the financial year ended 31 st March, 2007.

Profits after Taxes (PAT): PAT of company has recorded a jump of 29.34% with Rs. 152.42 Lakhs for fiscal 2008 as against Rs. 117.84 Lakhs for fiscal 2007 due to higher base of revenue and optimizing the overheads activities.

COMPARISON OF FINANCIAL YEAR ENDED 31 st MARCH, 2007 WITH FINANCIAL YEAR ENDED 31 st MARCH, 2006

Operative Income: Our total operative income for the financial year ended 31 st March, 2007 was Rs. 1574.16 Lakhs as against the total of Rs. 1818.16 Lakhs for the fiscal 2006 registering the decline of 13.42 % and such decline was mainly attributed to slide in the business of Content creation & delivery which has witnessed the decline in revenue of 59.71 % from Rs. 808.92 Lakhs for the financial year ended 31 st March, 2006 to Rs. 325.88 for the financial year ended 31 st March, 2007 as our Content creation & delivery division has earned the revenue from Content produced in earlier years and from NumTV as the new Content were in the stage of production. However we have recorded the growth in revenue from FEC by 14.97% and also we have achieved steep growth in revenue from resort & sports village by 79.50% due to continue support rendered by our corporate and individual guests visiting the resorts as recently developed in financial year 2005-06.

Other Income : Other income of company has recorded an increase of 49.12% from amounting Rs. 14.21 Lakhs in fiscal 2006 to Rs.21.19 Lakhs in fiscal 2007. The increase in other income is mainly attributed to dividend income which has accounted Rs. 10.92 Lakhs in financial year 2007.

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Expenditure: The cost of sales accounted for 16.45% of operative income during the financial year ended 31 st March, 2007 was at Rs. 258.94 Lakhs as compared to 41.21% of operative income at Rs. 749.27 Lakhs for the fiscal 2006 registering the decline of 65.44% due to slide in revenue , while the administrative expenses has registered the increase of 2.26% at Rs. 772.54 Lakhs in fiscal 2007 as compared to Rs.755.50 Lakhs for fiscal 2006 and the staff cost has registered the increase of 84.34% from Rs. 33.52 Lakhs in fiscal 2006 to Rs. 61.79 Lakhs in fiscal 2007 . With our 2D animation film “Jai Vigneshwara” under the stage of pre-production, there was in increase in the staff strength attributing to increase in manpower cost of company. However marketing and other direct costs of the company have been reduced leading to a reduction in cost of sales. Footfalls at FEC were witnessing a higher patronage leading to an increase in the administrative cost, which also lead to increase in staffing to cater the additional patrons.

Depreciation: Depreciation has increased from Rs. 135.76 Lakhs in fiscal 2006 to Rs. 191.73 Lakhs in fiscal 2007 due to addition in line of fixed assets.

Interest Charges: The interest cost of company has registered the stride of 100.07% which was at Rs.195.83 Lakhs for the financial year 2007 as against of Rs. 97.88 Lakhs for the financial year 2006. This is due to the servicing of loan from financial institution in the middle of FY 2005-2006 towards setting up of additional screens at the multiplex and additional food court area at e.joy.

Taxation: The Company has made provision of current Income tax of Rs. 15.00 Lakhs for the financial year ended 31 st March, 2007 as compared to Rs. 5.00 Lakhs for the financial year ended 31 st March, 2006 due to addition in line of profits.

Profits after Taxes (PAT): PAT of company was for the fiscal 2007 was Rs. 117.84 Lakhs as against the loss of Rs. 9.12 Lakhs for fiscal 2006 due to higher charge of deferred tax in fiscal 2006 and cost effectiveness.

COMPARISON OF FINANCIAL YEAR ENDED 31 st MARCH, 2006 WITH FINANCIAL YEAR ENDED 31 st MARCH, 2005

Operative Income: Our total operative income for the financial year ended 31 st March, 2006 was Rs. 1818.16 Lakhs as against the total of Rs. 2282.91 Lakhs for the fiscal 2005 registering the decline of 20.36 % and such decline was mainly attributed to slide in the business of content creation & delivery which has witnessed the decline in revenue of 43.12 % from Rs. 1422.03 Lakhs for the financial year ended 31 st March, 2005 to Rs. 808.92 for the financial year ended 31 st March, 2006. The reason for such reduction in the revenue of Content creation & delivery division as the completion of production in various Content in 2005 and the income from the same has been recognized on the basis of their release in the fiscal 2005 as well as 2006. However the revenue from FEC has seen a steady growth with the rise of 1.41% in financial year 2005-2006 and the operations of resorts has recorded the revenue of Rs. 136.25 Lakhs being the initial year of operation.

Other Income : Other income of company has witness the fall of 32.91% from amounting Rs. 21.18 Lakhs in fiscal 2005 to Rs.14.21 Lakhs in fiscal 2006. The main reason for such decrease is attributed to impact of written back of sundry balances of Rs. 12.91 in the fiscal 2005 as compared to Rs. 2.66 Lakhs in fiscal 2006.

Expenditure: The cost of sales accounted for 41.21% of operative income during the financial year ended 31 st March, 2006 was at Rs. 749.27 Lakhs as compared to 21.57% of operative income at Rs. 492.32 Lakhs for the fiscal 2005 registering the increase of 52.19% being the initial year of operation of resorts and cost overruns, while the administrative expenses has registered the increase of 1.78 % at Rs. 755.50 Lakhs in fiscal 2006 as compared to Rs.742.49 Lakhs for fiscal 2005 and the staff cost has registered the fall of 81.44% from Rs. 180.57 Lakhs in fiscal 2005 to Rs. 33.52 Lakhs in fiscal 2006 as there was no signification production of Content in the financial year 2005-2006 and consequently there was no remuneration burden to various temporary staff usually employed for Content Production.

Depreciation: Depreciation has declined to Rs. 135.76 Lakhs in fiscal 2006 as compared to Rs. 253.28 Lakhs for fiscal 2005 due to amortization of various assets during the fiscal 2006.

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Interest Charges: The interest cost of company was at Rs.97.88 Lakhs for the financial year 2006 as against of Rs. Nil for the financial year 2005 due to fresh borrowings in financial year 2006.

Taxation: The Company has made provision of Current Income tax of Rs. 5.00 Lakhs for the financial year ended 31 st March, 2006 as compared to Rs. 42.37 Lakhs for the financial year ended 31 st March, 2005 due to deep decline in profits.

Profits after Taxes (PAT): Company has recorded the post tax loss of Rs. 9.12 Lakhs in fiscal 2006 as against the post tax profit of Rs. 537.30 Lakhs due to higher charge of deferred tax in fiscal 2005.

Information required as per clause 6.10.5.5 of SEBI (DIP) Guidelines

• Unusual or infrequent events or transactions

There are no unusual or infrequent events or transactions that have significantly affected operations of the Company.

• Significant economic changes that materially affected or are likely to affect income from continuing operations

There are no significant economic changes that materially affected Company’s operations or are likely to affect income from continuing operations.

• Known trends or uncertainties that have had or are expected to have a material adverse impact on sales, revenue or income from continuing operations.

Apart from the Risks disclosed under the section titled “Risk Factors” no known trends or uncertainties are envisaged or are expected to have a material adverse impact on sales, revenue or income from continuing operations to Company’s knowledge.

• Future changes in relationship between costs and revenues in case of events such as future increase in Labour or material cost or prices that will cause material change are known.

According to our knowledge, there are no future relationship between cost and income that would be expected to have a material adverse impact on our operations and revenues.

• The extent to which material increases in net sales / revenue is due to increase in sales volume, introduction of new products or services or increased sales prices

The increase in revenues is by and large linked to increases in volume of all the activities carried out by the company.

• Total turnover of each major industry segment in which the Company operated (Rs. In Lakhs) Particulars 31.03.08 31.03.07 31.03.06 31.03.05 Income from Multiplex 744.20 706.58 697.39 696.29 Income from Food Court 346.26 221.85 109.50 102.94 Income from games arcade 113.81 63.72 61.54 59.05 Income from shopping mall 87.76 11.56 4.56 2.60 Income from resort & sports village 334.21 244.57 136.25 - Income from Content creation & delivery 389.33 325.88 808.92 1,422.03 Total 2015.57 1574.16 1818.16 2282.91

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• Status of any publicly announced New Products or Business Segment

The Company has not announced any new products or business segment.

• The extent to which our Company’s business is seasonal.

Our Resorts operation business is seasonal as the revenues in the hospitality industry are generally higher during the second half (October to March) of each fiscal year as compared to the first half (April to September) of the fiscal year. However the impact of this is mitigated to some degree from our corporate cliental having seminars and training camps and various residential programs at our resort and our diversified nature of business activities.

• Any significant dependence on a single or few suppliers or customers

Our company is not under threat of dependence from any single supplier or customer.

• Competitive conditions

FEC being a unique concept by itself and being biggest in South India, we do not have potential competitors for this division. However, considering individually, the segment of the FEC i.e. Film Exhibition we face competition with large Market players like PVR, INOX and other Mutiplex at surrounding areas and for our hospitality business we face competition from resorts and hotels situated at surrounding areas.

The Indian film industry is competitive. We would face competition from both corporate film Production houses and other players in the film industry. We would also face competition from other segment of entertainment media including but not limited to television channels, radio, and print among others. With a number of corporate houses, diversifying into film production and distribution and liberalization of FDI norms in film industry the competition may significantly increase.

In our Web Entertainment Division, there is huge competition with established players due to technical know how, superior infrastructure facilities and investment capabilities.

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SECTION VI: LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

Except as stated herein, there are no outstanding or pending litigation, suits, civil prosecution, criminal proceedings or tax liabilities against our Company, our Directors, our Promoters and Promoter Group and there are no defaults, non-payment of statutory dues, over dues to banks and financial institutions, defaults against bank and financial institutions and there are no outstanding debentures, bonds, fixed deposits or preference shares issued by our Company; no default in creation of full security as per the terms of the issue, no proceedings initiated for economic or other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part I of Schedule XIII of the Companies Act, 1956), and no disciplinary action has been taken by SEBI or any stock exchanges against our Promoters, our Directors or Promoter Group companies.

Further, as stated below, there are no show-cause notices, claims served on our Company, our Promoters, our Directors or Promoter Group companies from any statutory authority / revenue authority that would have a material adverse affect on our business.

I. Actions taken by SEBI against our Company, its promoters and directors :

In September, 2003, PMGL issued certain equity shares on preferential basis at Rs.11.36 per share to Vijay Advertising Private Limited (VAPL) and Sathya Securities Private Limited(" Sathya "). On a preliminary enquiry, SEBI found that two (2) sets of physical share certificates covering 3400000 equity shares each, issued in the name of VAPL existed at the same time bearing the same distinctive numbers. One set of share certificate, in physical form, was pledged with Oriental Bank of Commerce (OBC) by VAPL apparently to secure the dues payable by PMGL to OBC. VAPL through its depository participant made a dematerialization request to PMGL’s RTA & STA enclosing another set of physical share certificates pertaining to the same distinctive numbers as those pledged with OBC. It appeared that either the shares pledged by VAPL with OBC were fake or the shares sent to the STA for dematerialization and subsequently sold in the market were fake.

Apparently, VAPL had sold the demat shares in the market, even though another set of original shares in the name of VAPL and pertaining to the same distinctive number continued to remain pledged in physical form with OBC. PMGL and its directors prima facie appeared to have actively assisted VAPL in the above fraud by simultaneously issuing shares bearing the same distinctive numbers without canceling the earlier issued shares. SEBI found PMGL and its directors guilty of violation of Regulation 3 and Regulation 4 (2)(h) of SEBI (Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003.

In respect of the preferential issue by PMGL to VAPL and Sathya, SEBI observed that the funds for subscription aggregating to Rs.1083.20 Lakhs was provided by PMGL through its then subsidiary, Mayajaal Entertainment Limited. In the process SEBI found PMGL and Mayajaal Entertainment Limited, including their management, to have violated Regulation 3(b),(c) and (d) of SEBI (Fraudulent and Unfair Trade Practices) Regulations, 2003 and Section 77 of Companies Act, 1956. Further, PMGL and its management were found guilty by SEBI of various violations under SEBI (Disclosures for Investor Protection) Guidelines, 2005 and Listing Agreement. SEBI issued Show Cause Notice dated 22 nd December, 2005 to nineteen (19) entities including PMGL and Mayajaal.

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In the light of the facts of the case, as brought out by SEBI investigation, PMGL and its directors, violated Regulation 3(b), (c), (d) and 4(2) (h) of SEBI (Fraudulent and Unfair Trade Practices) Regulations 2003. Mayajaal and its directors, Sri S. Chandrasekaran (Former CFO, PMGL and Ex- Director of Mayajaal Entertainment Ltd., violated Regulation 3(b), (c) and (d) of SEBI (Fraudulent and Unfair Trade Practices) Regulations, 2003.

SEBI, accordingly passed an Order against PMGL and its directors, Mayajaal and its directors, S. Chandrasekaran (Former CFO, PMGL and also Ex-Director of Mayajaal Entertainment Ltd), prohibiting them from accessing capital market or dealing in securities, in any manner, directly or indirectly, for a period of twenty four (24) months. For the purpose of reckoning the same, the period of prohibition already undergone by ex-parte ad interim order dated 27th May, 2005 and the post- decisional Order dated 3rd October, 2005 were taken into account.

PMGL, our Company, our present Managing Director Mr. Udeep Bogollu and Non-Executive Director Ms. Sumathi Sridharan named in the SEBI Order have fully abided by the above Order.

II. Cases filed by our Company

Civil Cases

1. Our Company has filed an Arbitration Application under section 9 of the Arbitration and Conciliation Act, 1996 before the Chengalpattu District Court against Arusuvai Arasu Private Limited. Arusuvai Arasu Private Limited entered into an agreement with our Company to set up and operate a vegetarian restaurant near the FEC of our Company in the year 2002. The parties entered into a fresh agreement dated 1st September, 2008 under which Arusuvai Arasu Private Limited agreed to pay our Company a fixed amount of Rs.3.00 Lakhs per month. However, Arusuvai Arasu Private Limited defaulted in payment of the sum to our Company in terms of the agreement and there are pending dues of Rs.9.00 Lakhs as of December, 2008. The matter is likely to come up for hearing by the end of January, 2009. The proceedings before the Arbitrator shall commence on 22 nd January, 2009. Arusuvai Arasu Private Limited had also filed a suit (O.S. 331 of 2008) for before the Chengalpattu District Court to restrain our Company from disturbing its possession over the restaurant premises and its business activity. The application for injunction was dismissed by the District Court as the parties had agreed to refer their disputes to Arbitration under the agreement.

Criminal Cases

There are no criminal proceedings filed by our Company against any Person.

III. Cases filed against our Company

Civil proceedings

2. Videsh Sanchar Nigam Limited (VSNL) filed a claim against the erstwhile Intelivision Limited ( merged with our Company pursuant to the Scheme of Amalgamation sanctioned by the Madras High Court )

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claiming a sum of Rs. 175.24 Lakhs in relation to the teleport facilities provided by VSNL for the purpose of uplinking the TV Channel "The Splash Channel". VSNL and the erstwhile Intelivision had entered into a Multi Channel Per Carrier (MCPC) Agreement dated 14 th June, 2002 setting out the uplinking facilities and the charges payable by Intelivision. The matter is before an Arbitral Tribunal and VSNL has filed its Statement of Claim. Our Company has filed its Reply to the Statement of Claim disputing the claim of VSNL. Our Company has also made a counter-claim of Rs. 122 Lakhs against VSNL. The parties presented their arguments before the Arbitration Tribunal on 9 th January, 2009 and Award of the Arbitrator is awaited.

DRT Proceedings

3. Bank of India had filed Recovery Suit ( O.A. 237 of 2003 ) before the Debt Recovery Tribunal, Chennai against PMGL, Dr. V. Chandrasekaran, Mr. V. Ramakrishnan for the recovery of a sum of Rs. 3964.91 Lakhs, together with interest thereon at the rate of 17.50% p.a. To secure repayment of the loan by PMGL, our Company issued certain letters of guarantee and created an equitable mortgage by deposit of title deeds of its immovable property aggregating to 20.97 acres of land situated at No. 35, Kanathur Redikuppam Village, Chingleput Taluk and District. Bank of India assigned the loan to Kotak Mahindra Bank and its nominee Pegasus Assets Reconstruction Private Limited in December 2006. The next date of hearing before the DRT, Chennai is 27 th January, 2009. For further details of this recovery suit, please see litigation No. 9 under the caption " Litigations by and against our Promoter ".

IV. Income tax proceedings against our Company

4. A.Y. 2005-2006

Our Company has filed an Appeal before the Commissioner of Income Tax (Appeals)–V, Chennai (" CIT(A) ") against the order issued under Section 143(3) of the Income Tax Act dated 31 st December, 2007 passed by the Assistant Commissioner of Income Tax Company Circle IV(1), Chennai (" ACIT ") raising a demand of Rs. 55.99 Lakhs (Rs.55,98,519 ). The Department has further issued a notice dated 31 st December, 2007 initiating penalty proceedings under Section 271(1)(c) of the Income Tax Act. Our Company has deposited Rs.15 Lakhs (Rs.15,00,000 ) towards the aforementioned demand. Our Company has filed the said Appeal since the ACIT in its order dated 31 st December, 2007 has ignored the unabsorbed losses and depreciation amounting to Rs. 269.15 Lakhs (Rs.2,69,15,286 ) of the three companies merged with our Company under the Scheme of Amalgamation sanctioned by the Madras High Court available for set off in the assessment of our Company. The Department has considered the income in relation to Num TV and Animation division of PMGL in respect of which our Company had claimed an exemption under Section 10B of the Income Tax Act which has been disallowed. The matter is currently pending before the CIT(A), Chennai.

V. Litigations involving our Promoters

Civil Proceedings filed against our Promoter

5. L. Vijaylaxmi devi and L. Nagabhushanam, shareholders of PMGL filed a Consumer Compliant ( CD. No. 100 of 2000 ) before the District Consumer Forum-II, Vijaywada, Krishna District in relation to non- credit of bonus shares declared by PMGL in the year 1999. The shareholders are claiming an amount of Rs. 4.59 Lakhs with interest at the rate of 9% on the basis that the shareholders would have sold the bonus shares in the market when they were trading at a high of Rs.2,324 per share. The District Forum by an order dated 10 th December, 2002 directed PMGL to pay the above amount to the shareholders. PMGL contested the order of the District Forum before the A.P. State Consumer Disputes Redressal Commission, Hyderabad but the State Commission declined the appeal and upheld the order of the District Forum. PMGL filed a Revision Petition (No.711 of 2005) before the National Consumer Disputes Redressal Commission against the order of the State Commission and obtained a stay on the order of the State Commission subject to PMGL depositing Rs. 0.50 Lakhs with the State

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Commission. PMGL has deposited Rs. 0.50 Lakhs with the State Commission as directed by the National Commission. The matter shall come up for hearing in the normal course.

6. New Skies Satellites N.V., a company based in The Hague, Netherlands filed a suit against PMGL before the District Court of The Hague ( Cause List No. 03/1694 ) claiming a sum of USD 45.28 Lakhs (equivalent to Rs. 22,05,02,785 at the rate of Rs. 48.70 as on 14 th January 2009 ) with arrears under the Service Ordering Agreement entered with PMGL. By judgments dated 15 th October, 2003 and 18 th December, 2002 the District Court disposed of the suit in favour of New Skies Satellites. An Appeal was filed by PMGL before the Court of Appeal in The Hague contesting the judgment of the District Court. The Court of Appeal by a judgment dated 28 th June, 2006 upheld the judgments of the District Court and also ordered PMGL to pay the costs of the proceedings. In the meantime, PMGL filed a suit before the Madras High Court for a declaration that the letter of termination dated 3rd June, 2002 issued by New Skies Satellites was illegal, null and void and contrary to certain terms of the Service Ordering Agreement and other reliefs. The Madras High Court by an order dated 20 th August, 2004 declared the letter of termination dated 3rd June, 2002 issued by New Skies Satellites as illegal, null and void and contrary to certain terms of the Service Ordering Agreement and further restrained New Skies Satellites by way of a permanent injunction from implementing the letter of termination and releasing or publishing any advertisement or article or news item in respect of the purported termination. However, the suit is pending and shall come up before the Madras High Court in the normal course.

DRT Proceedings

7. Axis Bank Limited has filed a Recovery Suit ( O.A. 7 of 2004 ) before the Debt Recovery Tribunal -1, Chennai against PMGL and Dr. V. Chandrasekaran for the recovery of a sum of Rs. 3432.88 Lakhs together with interest thereon at the rate of 17.50% p.a. with monthly rest from 14 th April, 2005. The above sum is due from PMGL for Bill Discounting and other facilities provided by Axis Bank. PMGL has disputed the claim of Axis Bank and the matter is posted for hearing on 2 nd February, 2009.

8. Axis Bank Limited has filed a Recovery Suit ( O.A. 76 of 2005 ) before the Debt Recovery Tribunal -1, Chennai against PSTL, PMGL, Dr. V. Chandrasekaran and Vesa Holdings Private Limited for the recovery of a sum of Rs. 2953.22 Lakhs together with interest thereon at the rate of 17.50% p.a. with monthly rest from 14 th April, 2005. PMGL is a party to this recovery suit as it had issued a corporate guarantee to secure the repayment of the loan by PSTL and has been referred to in litigation No. 29 under the caption " Litigations by and against our Group Companies/Entities ".

9. Bank of India had filed Recovery Suit ( O.A. 237 of 2003 ) before the Debt Recovery Tribunal, Chennai against PMGL, Dr. V. Chandrasekaran, Mr. V. Ramakrishnan and our Company for the recovery of a sum of Rs. 3964.91 Lakhs together with interest thereon at the rate of 17.50% p.a. Bank of India assigned the loan to Kotak Mahindra Bank and its nominee Pegasus Assets Reconstruction Private Limited in December 2006. The next date of hearing before the DRT, Chennai is 27 th January, 2009.

Winding up Petition

10. The Export Import Bank of United States (" Exim Bank ") has filed a winding up petition ( C.P. no.243/2008 ) under Section 433(e) & (f), Section 434(1)(a) and 439(1)(b) of the Companies Act, 1956 before the Madras High Court against PMGL claiming that PMGL was indebted to the Exim Bank for sum of USD 68,14,597.33 as on 6 th June, 2008 (equivalent to Rs. 33,18,70,890 at the rate of Rs.48.70 as on 14 th January 2009 ) and that PMGL was unable to pay its debts. PMGL had executed two (2) promissory notes amounting to USD 51,92,235 in favour of First International Bank (" FIB ") to secure the repayment of loan facilities amounting to USD 51,13,494.42 which was further secured inter alia by a continuing unlimited guarantees dated 6 th February, 2002 and 18 th September, 2002 of Dr. V. Chandrasekaran. The loan was further guaranteed by Exim Bank pursuant to credit insurance polices (CIPs) executed between Exim Bank and FIB. Subsequently, PMGL defaulted in its obligations and as a result pursuant to the CIPs, Exim Bank paid UPS Capital Business Credit (" UPS Capital ")( the successor

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in interest to FIB ) an amount of USD 51,71,919.94 and UPS Capital assigned all of its rights, title and interest in and to the loan, the promissory notes, the guarantees and the related documents to Exim Bank. Exim Bank has received only an amount of USD 3,596.21 from PMGL on 5 th January, 2005 towards the repayment of the loan. The matter is pending before the Madras High Court and shall come up for hearing in the normal course.

VI. Income tax proceedings against PMGL

11. A.Y. 2000-2001

PMGL has filed an Appeal bearing No. ITA No.134/06-07 before the Commissioner of Income Tax (Appeals)–V, Chennai (" CIT(A) ") against the order issued under Section 143(3) of the Income Tax Act dated 31 st March, 2003 passed by the Deputy Commissioner of Income Tax Central Circle III,Chennai (" DCIT "). PMGL has filed the said Appeal for the following:

(i) The DCIT has erred in determining the total income of PMGL at Rs. 16,492.64 Lakhs (Rs. 1,64,92,63,742 ) by including a sum of Rs. 12,667 Lakhs (Rs. 1,26,67,00,000 ) notionally as goodwill; (ii) Erroneous conclusion to include goodwill as a part of transfer agreement executed between PMGL and PSTL for transfer of tangible business assets and specified IPRs/ trade marks; (iii) To claim exemption under section 10B which provide for 100% exemption of profits in respect of 100% EOUs; and (iv) Charging capital gains on Rs.27,979 Lakhs (Rs. 2,79,79,00,000 ) being the receipts towards transfer of IPRs/ trademarks and non compete fee which was done on the basis of the valuation report and no part of the above consideration can be attributed towards transfer of goodwill.

The matter is currently pending before the CIT(A), Chennai.

12. A.Y. 2000-2001

PMGL has filed an Appeal bearing No. ITA No. 156 /07-08 before the Commissioner of Income Tax (Appeals)–V, Chennai (" CIT(A) ") against the order issued under Section 143(3) r.w.s. 263 of the Income Tax Act dated 31 st March, 2006 passed by the Income Tax Officer (OSD) Company Circle V(2) Chennai (" AO "). PMGL has filed the said Appeal for the following:

(i) The AO has erred in concluding that the consideration amounting to Rs.27,979 lakhs ( Rs. 2,79,79,00,000 ) received towards "non-compete fees" included a portion for goodwill; (ii) The AO has erred in determining capital gains on Weighted Average Value (WDV). Since PMGL being a 10B company, depreciation is not charged off on assets during the period for which 10B exemption is available and hence the capital gains shall be determined on the difference between the sale consideration for the fixed assets transferred and the gross cost of these assets and not on WDV; (iii) PMGL has also contended that since the consideration amounting to Rs.27,979 Lakhs (Rs. 2,79,79,00,000 ) received is towards "non-compete fees", it shall not attract tax liability. Further, the same shall not be taxable under the Income Tax Act till A.Y. 2002-2003;and (iv) To claim exemption under section 10B which provide for 100% exemption of profits in respect of 100% EOUs.

The matter is currently pending before the CIT(A), Chennai.

13. A.Y. 2001-2002

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PMGL has filed an Appeal bearing No. ITA No. 155/07-08 before the Commissioner of Income Tax (Appeals)–V, Chennai (" CIT(A) ") against the order issued under Section 143(3) of the Income Tax Act dated 29 th March, 2004 passed by the Assistant Commissioner of Income Tax Company Circle V(2) (" ACIT "). PMGL has filed the said Appeal for the following:

(i) The ACIT has erred in allowing the claim of exemption under Section 10B for interest income amounting to Rs. 1,705.31 lakhs ( Rs. 17,05,31,000 ) and miscellaneous receipts amounting to Rs. 51.17 lakhs ( Rs. 51,16,887 );and (ii) The ACIT has erred in determining the total turnover, export turnover and eligible deductions as claimed thereunder.

The matter is currently pending before CIT(A), Chennai.

14. A.Y. 2002-2003

PMGL had filed an Appeal bearing No. ITA NO.06/2005-2006 before the Commissioner of Income Tax (Appeals)–V, Chennai (" CIT(A) ") against the order issued under Section 143(3) of the Income Tax Act dated 28 th February, 2005 passed by the Deputy Commissioner of Income Tax, Company Circle-V(2), Chennai (" DCIT "). The CIT(A) has partly allowed the appeal by a order dated 26 th August, 2005 to which the Assessing Officer (" AO ") has passed an order under Section 154 of the Income Tax Act for amendment of order passed by the CIT(A) dated 26 th August, 2005 and to give effect to the same. PMGL has further filed an Appeal bearing No. ITA Nos. 2148 & 554 & 0227 (MDS) 2007 before the Income Tax Appellate Tribunal, Chennai Bench ‘B’, Chennai (" ITAT ") against the order dated 24 th May, 2007 passed by the CIT(A) for:

(i) claiming deduction under Section 10B on the export turnover; (ii) excluding bank interest amounting to Rs. 82.23 Lakhs (Rs. 82,23,130 ) from the profits of the export undertaking; and (iii) excluding consultancy charges as a part of miscellaneous income amounting to Rs. 50.51 Lakhs (Rs. 50,50,571 ) from the profits of the 100% EOU on the ground that this income was not derived from export business.

The said Appeal filed before ITAT has been partly allowed and pending issues have been remanded back to the AO. The AO has passed an order dated 3rd July, 2008 under Section 154 of the Income Tax Act for amendment of order passed by the ITAT dated 24 th March, 2008 whereby PMGL is liable to pay an amount of Rs. 674.83 Lakhs (Rs. 6,74,83,108 ) towards tax and to give effect to the same. Further, PMGL has been issued an order dated 31 st October, 2008 under Section 271(1)(c) in relation to levy of penalty whereby the AO has levied a penalty amounting to Rs. 1,901.57 Lakhs (Rs. 19,01,57,121 ). The matter is currently pending to give effect to the order passed by the ITAT, Chennai.

15. A.Y. 2003-2004

PMGL had filed an Appeal bearing No. ITA No. 133/2006-2007 before the Commissioner of Income Tax (Appeals)–V, Chennai (" CIT(A) ") against the order issued under Section 143 (3) r.w.s. 92 CA (4) of the Income Tax Act dated 27 th March, 2006 passed by the Income-tax officer (" AO "). The CIT(A) has partly allowed the appeal by an order dated 17 th November, 2006. Further, PMGL has received the order passed under Section 154 of the Income Tax Act dated 17 th October, 2007 issued by the AO giving effect to the order passed by the CIT(A) whereby PMGL is liable to pay an amount of Rs. 638.54 Lakhs (Rs. 6,38,53,764) towards tax. The matter is currently pending before the AO to give effect to the order passed by the CIT(A), Chennai.

16. A.Y. 2004-2005

PMGL had filed an Appeal bearing No. ITA No. 655/05-06 before the Commissioner of Income Tax (Appeals)–V, Chennai (" CIT(A) ") against the order issued under Section 143(3) r.w.s. 147 of the

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Income Tax Act dated 8th December, 2006 passed by the Income Tax Officer (OSD) Company Circle V(2) Chennai (" AO "). The CIT(A) has partly allowed the appeal by an order dated 11 th January, 2008. Further, PMGL has received the order dated 12 th September, 2008 issued by the AO giving effect to the order passed by the CIT(A) whereby the tax liability has been reduced to Rs. 1,357.27 Lakhs (Rs. 13,57,26,644 ) as against Rs. 1,853.15 Lakhs (Rs. 18,53,14,951 ) as per the AO order dated 8th December, 2006. The AO is yet to give effect to the depreciation claimed amounting to Rs. 3,730.82 Lakhs ( Rs. 37,30,82,000 ) in relation to the demerger of animation and NUM TV division under the Scheme of Amalgamation sanctioned by the Madras High Court. PMGL is yet to submit the required documents to claim the aforementioned depreciation. The matter is currently pending to give effect to the order passed by the CIT(A), Chennai.

17. A.Y. 2005-2006

PMGL has filed an Appeal before the Commissioner of Income Tax (Appeals)–V, Chennai (" CIT(A) ") against the order issued under Section 143(3) of the Income Tax Act dated 28 th December, 2007 passed by the Income Tax officer, Company Circle V(2), Chennai (" AO "). PMGL has filed the said Appeal for the following:

(i) Disallowance of depreciation amounting to Rs. 6473.02 lakhs ( Rs.64,73,01,885 ) by ignoring the provision of Explanation 5 of Section 32 on business income; (ii) Disallowance of benefit of Section 10B deduction on interest receipts amounting to Rs. 852.58 lakhs ( Rs.8,52,58,281 ) holding that the same shall be charged under the head "Income from other sources"; (iii) The AO has erred in holding that miscellaneous receipts amounting to Rs. 23.59 lakhs ( Rs. 23,58,924 ) are not exempted under Section 10B of the Income Tax Act; (iv) The AO has erred in reduction of deduction under Section 10B from Rs. 570.13 lakhs ( Rs. 5,70,12,743 ) to Rs. 40.34 lakhs ( Rs. 40,33,886 ) by pegging the inward remittance at Rs. 108.30 lakhs ( Rs. 108,30,000 ) as against the actual inward remittance of Rs. 1,961.31 lakhs (Rs. 19,61,31,000 ); (v) Disallowance of Rs. 1,193.46 lakhs ( Rs. 11,93,45,557 ) under Section 43B of Income Tax Act;and (vi) Disallowance of Rs. 42.62 lakhs ( Rs. 42,62,400 ) as deduction under Section 35DDA of the Income Tax Act.

The matter is currently pending before the CIT(A), Chennai.

VII. Indirect tax proceedings against PMGL

Sales Tax Proceedings

18. A.Y. 1996-1997

PMGL had filed an appeal before the Appellate Assistant Commissioner against the order dated 31 st December, 2001 passed by the Commercial Tax Officer ("CTO "). PMGL had filed the appeal for revision of assessment including levy of penalty amounting to Rs. 52.40 Lakhs (Rs. 52,40,141 ) order of which has been passed by the Appellate Assistant Commissioner (CT)-VI, Chennai (" AAT ")dated 5th April, 2002 in favour of PMGL. The Department has filed an Appeal dated 4th September, 2002 bearing appeal no. 25/02 before the Sales Tax Appellate Tribunal, Chennai Bench (" STAT ") against the aforementioned order dated 5th April, 2002 passed by the AAT for cancellation of the order passed by the AAT and to restore the order of the CTO. The matter is currently pending before the STAT, Chennai.

Excise Proceedings

19. Period: July 30, 1996 to December 24, 1996

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PMGL has filed a Writ Petition ( W.P. 16786 of 2004 ) before the Madras High Court against the Misc. Order No. 100/2004 dated 5th March, 2004 passed by the Customs, Excise & Gold (Control) Appellate Tribunal, South Zonal Bench (" CESTAT "). The Commissioner of Central Excise (the " Commissioner ") by a order dated 29 th June, 1998 has raised a demand of Rs. 20.19 Lakhs (Rs.20,18,901 ) and further imposing a mandatory penalty of Rs. 16.39 Lakhs (Rs. 14,38,561+ Rs. 2,00,000 ). The Commissioner further directed to adjust the aforementioned demand and penalty imposed against the payment of Rs. 20 Lakhs (Rs. 20,00,000 ) made by PMGL. The said matter is pertaining to demand of excise duty on CD software products wherein the CD content is provided by the client to PMGL and PMGL adds software to the content and gives it back to the client who in turn sells the same to the end customer. PMGL has filed the said petition since the Department has claimed excise duty on the selling market price of the CD software to the end customer and not on the selling price of PMGL to its client. The matter is pending before the Madras High Court.

VIII. Litigations by and against our Group Companies/Entities (Pentsoft Technologies Limited, Vesa Holdings Private Limited and Pentafour Software Employees Welfare Foundation)

Civil Proceedings

20. PSTL has filed a suit (O.S. no.6286 of 1999) before the VII Asst. City Civil Judge at Chennai against Powerset India Private Limited (Powerset) for the return of Rs. 2.94 Lakhs paid to Powerset for supply of diesel generator sets to PSTL. Powerset has disputed the claim of PSTL and the matter is pending at the trial stage and shall come up for hearing on 19 th January, 2008.

21. Dikpal Multimedia Private Limited (" DMPL ") had filed a suit ( S.C.S. No. 706 of 2002 ) before the Pune Court of the District Judge against PSTL for a sum of Rs. 29.21 Lakhs in relation to franchise fees for Multimedia Training Centre and E-Commerce Training and Education Centres. By an order dated 16 th April, 2007 the Court has party decreed the suit directing PSTL to pay an amount of Rs. 7.50 Lakhs with interest at the rate of 12% from the date of the suit till realisation along with payment of proportionate costs of the decretal amount to DMPL aggregating to Rs. 12.75 Lakhs. DMPL filed an Execution Application ( E.P. No.554 of 2008 ) before the Xth Asst. City Civil Judge at Madras for the execution of the decree passed by the Pune Court. PSTL has filed an appeal (F.A. No. 29829 of 2007) before the Bombay High Court to set aside the order of the Pune Court. The Bombay High Court has stayed further proceedings in the matter by an order dated 24 th October, 2008 and the matter shall come up for hearing in the normal course.

22. Mr. R. Srinivasan has filed a suit ( O.S. No. 5804 of 2007 ) against PSTL and its former CMD and CEO (Mr. D. Kannan ) before the City Civil Court at Chennai for a sum of Rs. 2.66 Lakhs along with interest at the rate of 18% p.a. The claim pertains to the full and final settlement of certain salary dues and other benefits pursuant to his resignation from PSTL. PSTL has filed its reply to the suit and disputed the claim of the Plaintiff. The matter is pending at the trial stage before the court and shall come up for hearing 22 nd January, 2009.

23. Mr. S. Chidambaram has filed a suit ( O.S. No. 5385 of 2004 ) against PSTL before the City Civil Court at Chennai for a sum of Rs. 0.36 Lakhs. The claim pertains to the full and final settlement of certain salary dues and other benefits pursuant to his resignation from PSTL. PSTL has filed its reply to the suit and disputed the claim of the Plaintiff. The matter is pending before the court at the trial stage and shall come up for hearing on 27 th January, 2009.

24. Mr. G. Jaya Prakash had filed a suit ( O.S. No. 2507 of 2005 ) before the Court of the Madras City Civil Court against PSTL for a sum of Rs. 1.15 Lakhs in relation to dues of salary. By an order dated 26 th July, 2006 the Court decreed the suit directing PSTL to pay an amount of Rs. 1.88 Lakhs including interest. Mr. G. Jaya Prakash filed an Execution Application ( E.P. No.[799] of 2008 ) before the Madras City Civil Court for the execution of the decree. PSTL has filed an application before the City Civil Judge, Madras for a stay of the ex-parte order and the proceedings to enable PSTL file a civil

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revision petition before the Court. The matter has been posted for hearing before the Court on 22 nd January, 2009.

Winding up Petition

25. Khandelwal Infotech Limited (" KIL ") has file a winding a petition (C.P. no.135/2004) under Section 434 of the Companies Act, 1956 before the Madras High Court against PSTL claiming that the PSTL was indebted to KIL for sum of Rs. 36.78 Lakhs and PSTL was unable to pay its debts. KIL has alleged that a Franchise arrangement was entered between KIL and PSTL for setting up computer education centre in Mumbai. KIL has alleged that the above amount was due to KIL from PSTL under the terms of the Franchise arrangement. The PSTL in its reply has disputed the claim of KIL and submitted to the court that the claim was in effect for damages and could not be a subject matter of a winding up petition. The matter is pending before the court and shall come up for hearing in the normal course.

26. Mr. S.N. Singhvi has filed a winding a petition ( C.P.No.176 of 2007 ) under section 433 (e) read with Section 434(1)(a), 439(1)(b) and 443 (1)(d) of the Companies Act, 1956 before the Madras High Court against PSTL claiming that PSTL was indebted to the Petitioner for sum of Rs. 20.19 Lakhs and was awarded a judgment and decree dated 21 st January, 2006 in the Summary Suit ( CS. No. 212 of 2003 ) filed before the Madras High Court. The parties have entered into a full and final settlement of the dispute for an amount of Rs. 17.00 Lakhs payable by PSTL in installments over a period of time (before February, 2009). By an order dated 21 st July, 2008, the Court has closed the matter with liberty to the Petitioner to revive the petition in the event of a default by PSTL.

27. Compu Data Systems Private Limited filed a winding a petition ( C.P.No.249 of 2007 ) under section 433 read with Section 434 of the Companies Act, 1956 before the Madras High Court against PSTL claiming that PSTL was indebted to the Petitioner for sum of Rs. 23.00 Lakhs and that PSTL was unable to pay its debts. The parties entered into a full and final settlement of the dispute for an amount of Rs. 16.00 Lakhs payable by PSTL in installments over a period of time and applied to the Court for closure of the matter.

28. Dallah Albaraka (Ireland) Limited, a company based in the Isle of Man, has filed a winding up petition (C.P.No.134 of 2008 ) under section 433 (e) and (f) read with Section 434(1)(a) of the Companies Act, 1956 before the Madras High Court against PSTL for sum of Rs. 5328.93 Lakhs. Dallah Albaraka filed a Suit ( Claim no. 2006 Folio 1140 ) before the High Court of Justice, Queen’s Bench Division, Commercial Courts, England & Wales which awarded a judgment and decree in favour of Dallah Albaraka. The claim arises from facility granted by the Petitioner which was secured by a guarantee and indemnity given by PSTL under a Muabaha Trade Finance Agreement. The Petition has been dismissed by the Madras High Court in December, 2008 on the ground that the Petition was not maintainable.

DRT Proceedings

29. Axis Bank Limited has filed a Recovery Suit ( O.A. 76 of 2005 ) before the Debt Recovery Tribunal -1, Chennai against PSTL, PMGL, Mr. Chandrasekaran and Vesa Holdings Private Limited (" Vesa Holdings ") for the recovery of a sum of Rs. 2953.22 Lakhs together with interest thereon at the rate of 17.50% p.a. with monthly rest from 14 th April, 2005. The above sum is due from PSTL for Bill Discounting and other facilities provided by Axis Bank Limited. Vesa Holdings is a party to this recovery suit as it had issued a corporate guarantee to secure the repayment of the loan by PSTL. PSTL has disputed the claim of Axis Bank and the matter is pending before the DRT for hearing. The matter shall come up for hearing on 22 nd February, 2009.

30. Kotak Mahindra Bank Limited has filed a Recovery Suit ( O.A. 211 of 2003 ) before the Debt Recovery Tribunal, Chennai against PSTL, Dr. V Chandrasekaran and Vesa Holdings Private Limited for the recovery of a sum of Rs. 2450.22 Lakhs together with interest thereon at the rate of 16.50% p.a. with monthly rest. The above sum is due from PSTL for a Lease Finance Facility provided by Kotak

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Mahindra Bank. The defendants have negotiated a settlement with the Bank and consent terms are proposed to be filed with the DRT. The matter is scheduled for hearing before the DRT on 27 th January, 2009 for filing consent terms.

31. The Dhanlakshmi Bank Limited has filed a Recovery Suit ( O.A. 211 of 2003 ) before the Debt Recovery Tribunal, Chennai against PSTL, Dr. V Chandrasekaran and Mr. D. Kannan (Ex-Director and CEO) for the recovery of a sum of Rs. 1080.95 Lakhs together with interest. The above sum is due from PSTL for a Foreign Usance Bill Discounting Facility provided by Dhanlakshmi Bank Limited. The matter is at the stage of trial and shall come up for hearing before the DRT on 13 th February, 2009.

IX. Income tax proceedings against PSTL

32. A.Y. 1999-2000

PSTL has filed an Appeal before the Income Tax Appellate Tribunal, Chennai (" ITAT ") against the order dated 10 th October, 2006 passed by the Commissioner of Income Tax (Appeals)-VI, Chennai. PSTL by a refund order dated 31 st May, 2007 is due to receive an amount of Rs. 155.69 Lakhs (Rs. 1,55,69,254 ) from the Income Tax Authorities. The ITAT has passed an order dated 15 th February, 2008 whereby the following issues have been remanded back to the Assessing Officer (" AO "):

(i) Reduction of 90% of the interest income from the profits and gains of business for the purpose of computation of deduction under Section 80HHE; (ii) Whether training activity carried out by PSTL forms a integral part of the business and whether there exist a nexus between the business income of the 100% EOU and the training programme carried out by PSTL.

The matter is currently pending before the AO.

33. A.Y. 2001-2002

PSTL and the Department had filed cross Appeals before the Income Tax Appellate Tribunal, Chennai, Bench B (" ITAT ") against the order dated 30 th November, 2006 passed by the Commissioner of Income Tax (Appeals)-V, Chennai (" CIT(A) "). The ITAT by order dated 14 th March, 2008 (" Order 1 ") for the cross appeals have partly allowed the appeal filed by PSTL as well the department. The Deputy Commissioner of Income Tax, Central Circle–III(4), Chennai (" DCIT ") has filed a counter appeal before the ITAT against the order dated 6th September, 2007 passed by the CIT(A). Further, PSTL has filed a Petition on 10 th October, 2007 under Section 154 of the Income Tax Act for amendment of order passed by the CIT(A) dated 6th September, 2007 and to give effect to the same. The AO is yet to pass an order in relation to the same. The ITAT has passed a joint order dated 13 th June, 2008 (the " Order 2") for the assessment years 2000-2001 to 2003-2004. The ITAT by Order 1 and Order 2 above has remanded the following issues to the Assessing Officer (" AO ") for consideration and for issuing fresh orders for the said assessment year:

(i) Inclusion of income from foreign exchange fluctuation amounting to Rs. 1,250.83 Lakhs (Rs. 12,50,82,360 ) for the purpose of deduction; (ii) Exemption under Section 43(B) claimed by PSTL amounting to Rs. 6.75 Lakhs (Rs. 6,75,000 ); (iii) Examination of the issue in relation to allowability of interest as expenditure; and (iv) Deduction under Section 10B of the Income Tax Act in relation to Miscellaneous receipts amounting to Rs. 33.37 Lakhs (Rs. 33,37,093 ).

The matter is currently pending before the AO.

34. A.Y. 2002-2003

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PSTL and the Department had filed cross Appeals before the Income Tax Appellate Tribunal, Chennai, Bench B (" ITAT ") against the order dated 27 th February, 2006 passed by the Commissioner of Income Tax (Appeals)-V, Chennai for the A.Y. 2002-2003. The ITAT by order dated 6th February, 2008 for the cross appeals has partly allowed the appeal filed by PSTL as well as the Department and has remanded the following issues to the Assessing Officer (" AO ") for consideration and then after issue fresh orders for the said assessment year:

(i) Double addition of Miscellaneous income amounting to Rs. 4.36 Lakhs (Rs. 4,36,383 ); (ii) Whether the valuation of Intellectual Property Rights and non-compete fee can be arrived at by considering two (2) years pre-acquisition and three (3) years post-acquisition profits of the transferee as against the claim of two (2) years pre-acquisition profits of the transferor and three (3) years post-acquisition profits of the transferee.

The matter is currently pending before the AO.

35. A.Y. 2000-2001

The Department has filed an appeal before the Income Tax Appellate Tribunal, Chennai Bench (" ITAT ") against the order dated 25 th May, 2007 passed by the Commissioner of Income Tax (Appeals), (" CIT(A) "). The Department has filed an appeal for various omissions and errors made by the CIT(A) in directing the Assessing Officer. The CIT(A) has erred in deleting various disallowances viz. depreciation, miscellaneous income, income expenditure etc. and further by allowing PSTL's claim for expenditure and treat certain incomes as incomes entitled for exemption under Section 10A of the Income Tax Act. The matter is currently pending before the ITAT, Chennai.

36. A.Y. 2003-2004

The Department has filed an Appeal before the Income Tax Appellate Tribunal, Chennai, Bench B (" ITAT ") against the order dated 24 th May, 2007 passed by the Commissioner of Income Tax (Appeals)- V, Chennai for the A.Y. 2003-2004. The ITAT by order dated 24 th March, 2008 (the " Order ") has dismissed the departmental appeal. Further, pursuant to the order dated 31 st October, 2008, PSTL is eligible to claim a refund amounting to Rs. 71.59 Lakhs (Rs.71,59,202 ). The ITAT by the above Order has remanded the matter in relation to allowability of depreciation on the STP Unit to the Assessing Officer (" AO ") for consideration and then after issue fresh orders for the said assessment year. The matter is currently pending before the AO.

37. A.Y. 2004-2005

PSTL has filed an Appeal before the Commissioner of Income Tax (Appeals)-V, Chennai (" CIT(A) ") against the order dated 22 nd December, 2006 passed by the Assessing Officer (" AO "). PSTL has filed the said Appeal since PSTL had filed its return of income admitting a loss of Rs. 2,663.57 Lakhs (Rs.26,62,56,653 ) after claiming exemption of Rs.1,218.81 Lakhs (Rs. 12,18,81,158 ) under Section 10A of the Income Tax Act. The AO completed the assessment under Section 143(3) of the Income Tax Act declaring a total income of Rs. 3,414.16 Lakhs (Rs. 34,14,15,708 ) as against a loss amounting to Rs. 2,663.57 Lakhs (Rs. 26,62,56,653 ) admitted by PSTL. The AO has added income by disallowing various deductions claimed by PSTL and adding certain amounts as income amounting to Rs. 2,563.81 Lakhs (Rs. 25,63,81,251 ) towards business income and Rs. 850.34 Lakhs (Rs. 8,50,34,457 ) towards income from other sources. The matter is currently pending before CIT(A), Chennai.

38. A.Y. 2005-2006

PSTL has filed an Appeal before the Commissioner of Income Tax (Appeals)-V, Chennai (" CIT(A) ") against the order dated 31 st December, 2007 passed by the Assessing Officer (" AO "). The AO has issued a demand notice under Section 156 of the Income Tax Act raising a demand of Rs. 229.53 Lakhs (Rs. 2,29,52,789 ). PSTL has filed a stay Petition under Section 220(6) of the Income Tax Act to

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stay the payment of the demand raised by the AO amounting to Rs. 229.53 Lakhs (Rs. 2,29,52,789 ) till the disposal of the appeal filed before the CIT(A). PSTL has further requested the AO by a letter dated 4th February, 2008 to keep the penalty proceedings under Section 271(1)(c) of the Income Tax Act in abeyance till the disposal of the appeal filed before the CIT(A). PSTL has filed the said Appeal since PSTL had filed its return of income admitting a loss of Rs. 252.04 Lakhs (Rs. 2,52,03,660 ) after claiming exemption of Rs. 729.20 Lakhs (Rs. 7,29,20,000 ) under Section 10A of the Income Tax Act. The AO completed the assessment under Section 143(3) of the Income Tax Act declaring a total income of Rs. 477.16 Lakhs (Rs. 4,77,16,146 ) as against a loss amounting to Rs. 252.04 Lakhs (Rs. 2,52,03,660 ) admitted by PSTL. The AO has declared the aforementioned income by disallowing deduction under Section 10A amounting to Rs. 729.20 Lakhs (Rs. 7,29,20,000 ); not granting depreciation ( amount to be calculated by the AO ) for the Software Technology Park Unit and treating interest on bank deposits of Rs. 66.90 Lakhs (Rs. 66,90,836 ) as income from other sources. The matter is currently pending before CIT(A), Chennai.

X. Litigations by and against our Directors

SEBI passed an Order dated 22 nd December, 2006 against our Managing Director, Mr. Udeep Bogollu and our Non-Executive Director, Ms. Sumathi Sridharan. For further details, please refer to serial number 1 under the caption "Action taken by SEBI against our Company, Promoter and Directors" on page 189 of this Draft Red Herring Prospectus.

MATERIAL DEVELOPMENT

In the opinion of the Board of Directors of our Company, there have not arisen, since the date of the last audited financial statements disclosed in this prospectus, any circumstances that materially or adversely affect or are likely to affect our profitability or value of assets or our ability to pay material liabilities within the next twelve (12) months. In accordance with SEBI requirements, our Company and the BRLM will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges.

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GOVERNMENT AND OTHER APPROVALS

On the basis of the indicative list of approvals provided below, our Company can undertake this Issue and its current business activities. Our Company will not require any other major approval from any Government or regulatory authority to undertake the Issue or continue these activities. Unless otherwise mentioned below, these approvals are valid as of the date of this Draft Red Herring Prospectus.

I. Approvals for the Issue

The following approvals have been obtained or will be obtained in connection with the Issue:

1. The Board of Directors has, pursuant to a resolution adopted at its meeting held 12 th September, 2008, authorized the Issue, subject to the approval of the shareholders of the Company under Section 81(1A) of the Companies Act, and such other authorities as may be necessary.

2. The shareholders of the Company have, pursuant to a resolution under Section 81(1A) of the Companies Act, adopted at a general meeting held on 15 th October, 2008 authorized the Issue.

3. Our Company has obtained in-principle listing approvals dated [•] and [•] from the BSE and NSE, respectively.

4. ISIN No.: INE775G01024.

II. Approvals obtained by our Company

No. Issuing Nature of License / Registration/ License Date of Validity Authority Approval No. granting License/ Approval General Approvals 1. Registrar of Certificate of 181-8018 9th July, 1997 One Time Companies, Incorporation. Registration Tamil Nadu, Chennai

2. Registrar of Fresh Certificate of -- 28 th December, -- Companies, Incorporation 1999 Tamil Nadu, pursuant to the Chennai change of name from West Bank Garden Farm Clubs Private Limited to Hotel Whales Private Limited.

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No. Issuing Nature of License / Registration/ License Date of Validity Authority Approval No. granting License/ Approval

3. Registrar of Fresh Certificate of (CIN) 11 th January, -- Companies, Incorporation U55101TN2000PLC046361 2001 Tamil Nadu, pursuant to the Chennai change of name from Hotel Whales Private Limited to Mayajaal Entertainment Private Limited.

4. Registrar of Our Company was -- 22 nd April, -- Companies, subsequently 2002 Tamil Nadu, converted to a public Chennai limited company and the name was changed to Mayajaal Entertainment Limited, pursuant to a resolution passed at a shareholders meeting held on 22 nd April, 2002

5. Income Tax Permanent Account AAACH7469P 9th July, 1997 One Time Department Number (PAN). Registration

6. Income Tax Tax Deduction CHEH02212A 17 th August, One Time Department Account Number 2000 Registration (TAN).

7. Service Tax Service Tax AAACH7469PST001 14 th August, One Time Department Registration 2007 Registration Certificate (Form ST – 2) for payment of service tax on services of Membership of clubs, mandap keeper and renting of immovable property services.

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No. Issuing Nature of License / Registration/ License Date of Validity Authority Approval No. granting License/ Approval 8. Commercial Tax Taxpayer 33351602436 1st January, One Time Department, Identification Number 2007 Registration Government of (TIN) certifying that Tamil Nadu our Company has been registered as a dealer under the Tamil Nadu Value Added Tax Act, 2006.

9. Tax Collector Professional Tax. -- -- One Time Registration

10. Commercial Tax Certificate of CST/764880 12 th January, One Time Officer, registration in Form B 2001 Registration Chegulpet certifying that our Taluka Company has been registered under section 7(1)/7(2) of the Central Sales Tax Act, 1956.

III. Approvals obtained by our Company for its Operations/Business Activities

No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval 1. Divisional Government order GO No. 516 21 st One Time Officer, to convert December, Approval housing and agricultural land 2000 Urban (survey no 34/1 Development and 34/2) into Department Entertainment Zone.

Approvals for Onshore Resort 2. Commercial Certificate of TNTLH&LH 7001/2004-05 24 th 31 st March, Tax Officer registration in December, 2009 Form X certifying 2004 (renewable

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval that our Company from year to has been registered year on under section 9-A payment of of the Tamil Nadu requisite Tax on Luxuries in fees) Hotel and Lodging House Rules, 1981.

3. Tamil Nadu Renewal of consent KPM088/DEE/TNPCB/KPM/2008 5th March, 31 st March, Pollution under the Water 2008 2009 Control Board (P&CP) Act, 1974 and Air (P&CP) Act, 1981.

4. Commissioner License under the F.L.3 No. 14/2007-08 4th July, 31 st March, of Prohibition Tamil Nadu Liquor 2008 2009 and Excise (License and Permit) Rules, 1981 to our Company to possess and sell liquor for consumption within the licensed room or into the rooms of the hotel to which this license has been granted.

5. Government of Star Classification INDTOUR/CHENNAI/HRACC/2006 20 th 19 th October, India Southern Order awarding a (TN)/604 October, 2011 Regional rating of 3 star to 2006 Office, India the hotel (Onshore tourism, resort). Chennai

6. The Indian Certificate for GL:KAN:00003 1st August, 31 st July, Performing musical works 2008 2009 Right Society under Copyright Limited Society (section 33(3) of Copyright Act, 1957).

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval

7. Panchayat License for 0007 12 th 31 st March, President industries and December, 2009 factories for 2008 Onshore resort for the purpose of hotels, restaurant, boarding and lodging.

8. Panchayat License for 0008 12 th 31 st March, President industries and December, 2009 factories for 2008 Onshore resort for the purpose of Flag Day.

Approvals for NUM TV and SPLASH TV 1. Deputy Ministry of 1404/2 (ii)/2001- TV(I) 15 th June, 14 th June, Director for Information and 2001 2011 Indian National Broadcasting Satellite Approval for uplinking of channels SPLASH TV and NUM TV through VSNL.

Approvals for Food Court at Family Entertainment Centre 1. Deputy No objection 2135/52/2008 9th May, One Time Director of certificate and 2008 Approval Health blue print approval services, for the Saidapet construction of Food Court at Kanthur.

2. Secretary, Building Approvals 461/04 MLPA 24 th One Time Mahabalipuram from Planning November, Approval Planning Committee to 2005 Committee approve the construction plan.

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval

3. President Permission to 1/2001 18 th January, -- Panchayat, construct food 2001 Kanthur court, theatre, shop.

4. Secretary, Approval of plan 567/00 8th January, -- Mahabalipuram for hotels, shops 2001 Planning and theatre. Committee

5. Panchayat License for 0010 12 th 31 st March, President industries and December, 2009 factories for 2008 operating the food court.

6. Panchayat License for 0009 12 th 31 st March, President industries and December, 2009 factories for our 2008 Company for the Food & Beverages served at Onshore Resort.

Approvals for our Family Entertainment Centre 7. Divisional Fire Service 971/A/2008 30 th January, 29 th January, Officer, Fire License under 2008 2009 and Rescue section 13 of the Services Tamil Nadu Fire Service Act, 1985 to run FEC

8. District License for 1117/2001/M1 29 th March, 22 nd January, Collector, Exhibition under 2001 2010 Kancheepuram The Tamil Nadu Cinemas (Regulation) Act, 1955 in Form C for Mini Theatre No. 1 to Theatre No. 6.

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval

9. Entertainment Certificate of 001/2001/2002 1st April, One Time Tax Officer registration in 2001 Registration Form I-C certifying that our Company has been registered under Rule 21-D (3) of the Tamil Nadu Entertainment Tax Rules, 1939.

10. Inspector of License to work a 115/EI/KPM/T/Lift/2001 4th May, 3rd May, 2009 lifts lift under sub- 2008 (renewed section (3) of annually) section 5 of the Tamil Nadu Lifts Act, 1997.

11. Commercial Permission to 41034/2000/M1 24 th July, -- Officer construct theatre 2000 under the Tamil Nadu Theatre (Regulation) Act, 1957.

12. Divisional Government order GO No: 72 22 nd July, -- Officer for exemption from 2006 entertainment tax for only Tamil named movies and for all other movie names in Hindi, English and other language 10% tax.

13. Divisional Fire Service 972/A/2008 30 th January, 29 th January, Officer, Fire License under 2008 2009 and Rescue section 13 of the Services Tamil Nadu Fire Service Act, 1985 for additional four

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval (4) theatres at Family Entertainment Centre.

14. Superintending Letter approving Letter No. 5th February, One Time Engineer, the seating plans P&D/AE.IV/65M/2008/43M 2008 Approval PWD, Planning for the four (4) and Designs additional Circle, theatres. Chennai.

15. Collector, No objection 2764/2008/M1 8th February, One Time Kancheepuram certificate for the 2008 Approval construction of four additional theatre (7 to 10) at Kanthur.

16. Secretary, Plan of approval 801/2006/MVTK 1st One Time Mahabalipuram for four theatres (7 November, Approval Planning to 10). 2007 Committee

Theatre I 17. Branch Certificate under 2631 5th 30 th Manager, Films Ministry of September, September, Division, Information and 2008 2009 Government of Broadcasting for India Exhibition of "Approved Films" for Theatre Screen -1.

18. Electricity Safety certificate 34/2007 8th January, 30 th January, officer from Tamil Nadu 2007 2010 Electricity Department under Tamil Nadu Theatre (Regulation) Act,

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval 1957 for theatre 1.

Theatre II 19. Branch Certificate under 2628 5th 30 th Manager, Films Ministry of September, September, Division, Information and 2008 2009 Government of Broadcasting for India Exhibition of "Approved Films" for Theatre Screen -2.

20. Electricity Safety certificate 35/2007 8th January, 30 th January, officer from Tamil Nadu 2007 2010 Electricity Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 2.

Theatre III 21. Branch Certificate under 2627 5th 30 th Manager, Films Ministry of September, September, Division, Information and 2008 2009 Government of Broadcasting for India Exhibition of "Approved Films" for Theatre Screen -3.

22. Electricity Safety certificate 36/2007 8th January, 30 th January, officer from Tamil Nadu 2007 2010 Electricity Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 3.

Theatre IV

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval 23. Branch Certificate under 2632 5th 30 th Manager, Films Ministry of September, September, Division, Information and 2008 2009 Government of Broadcasting for India Exhibition of "Approved Films" for Theatre Screen -4.

24. Electricity Safety certificate 37/2007 8th January, 30 th January, officer from Tamil Nadu 2007 2010 Electricity Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 4.

Theatre V 25. Branch Certificate under 2630 5th 30 th Manager, Films Ministry of September, September, Division, Information and 2008 2009 Government of Broadcasting for India Exhibition of "Approved Films" for Theatre Screen -5.

26. Electricity Safety certificate 38/2007 8th January, 30 th January, officer from Tamil Nadu 2007 2010 Electricity Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 5.

Theatre VI 27. Branch Certificate under 2629 5th 30 th Manager, Films Ministry of September, September, Division, Information and 2008 2009

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval Government of Broadcasting for India Exhibition of "Approved Films" for Theatre Screen -6.

28. Electricity Safety certificate 39/2007 8th January, 30 th January, officer from Tamil Nadu 2007 2010 Electricity Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 6.

Theatre VII 29. Branch Certificate under 2333 14 th January, 31 st January, Manager, Films Ministry of 2008 2009 Division, Information and Government of Broadcasting for India Exhibition of "Approved Films".

30. District License for 2764/2008/M1 29 th March, 30 th January, Collector, Exhibition under 2008 2011 Kancheepuram the Tamil Nadu Cinemas (regulations) Act, 1955 in Form C for Theatre No. 7.

31. Electricity Safety certificate 43/2008 13 th 12 th officer from Tamil Nadu February, February, Electricity 2008 2011 Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 7.

Theatre VIII

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval 32. Branch Certificate under 2334 14 th January, 31 st January, Manager, Films Ministry of 2008 2009 Division, Information and Government of Broadcasting for India Exhibition of "Approved Films".

33. District License for 2764/2008/M1 8th February, 30 th January, Collector, Exhibition under 2008 2011 Kancheepuram the Tamil Nadu Cinemas (regulations) Act, 1955 in Form C for Theatre No. 8. to 10.

34. Electricity Safety certificate 40/2008 31 st January, 30 th January, officer from Tamil Nadu 2008 2011 Electricity Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 8.

Theatre IX 35. Branch Certificate under 2335 14 th January, 31 st January, Manager, Films Ministry of 2008 2009 Division, Information and Government of Broadcasting for India Exhibition of "Approved Films".

36. Electricity Safety certificate 41/2008 31 st January, 30 th January, officer from Tamil Nadu 2008 2011 Electricity Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 9.

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No. Issuing Nature of License Registration/ License No. Date of Validity Authority / Approval granting License/ Approval

Theatre X 37. Branch Certificate under 2336 14 th January, 31 st January, Manager, Films Ministry of 2008 2009 Division, Information and Government of Broadcasting for India Exhibition of "Approved Films". 38. Electricity Safety certificate 42/2008 31 st January, 30 th January, officer from Tamil Nadu 2008 2011 Electricity Department under Tamil Nadu Theatre (Regulation) Act, 1957 for theatre 10.

IV. Approvals obtained for the Objects of the Issue

Our Company has obtained the approvals required for expansion of shopping complex, which are set out below:

No. Issuing Nature of License / Registration/ License Date of Validity Authority Approval No. granting License/ Approval 1. Secretary, Building Approvals 461/04 MLPA 24 th One Time Mahabalipuram from Planning November, Approval Planning Committee to approve 2005 Committee the construction plan. 2. Local Panchayat Approval for 86/2005-06 15 th One Time permission to December, Approval construct as per 2005 approved plan. 3. Divisional Fire Service License 971/A/2008 30 th January, 29 th January, Officer, Fire under section 13 of 2008 2009 and Rescue the Tamil Nadu Fire Services Service Act, 1985 to run FEC

Approvals to be obtained for the Objects of the Issue

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No. License and Approval

Approvals required for opening new theatres

1. Building Approval from Planning Committee to approve the construction plan. 2. Local Panchayat Approval seeking permission to construct as per approved plan. 3. Fire No Objection Certificate and Fire License under Tamil Nadu Fire Service Act, 1985. 4. Film Division License (Form C) under the Tamil Nadu Cinemas (Regulation) Act, 1955. 5. Certificate for exhibition from Films division under Ministry of Information and Broadcasting. 6. Electricity Safety Certificate and License under the Tamil Nadu Theatre (Regulation) Act, 1957. 7. Stability Certificate from Public Works Department. 8. License to work a lift under the Tamil Nadu Lifts Act, 1997. Approvals required for opening Convention Centre

9. Building Approvals from Planning Committee to approve the construction plan. 10. Local Panchayat Approval seeking permission to construct as per approved plan. 11. Fire No Objection Certificate and Fire License under Tamil Nadu Fire Service Act, 1985. 12. License to work a lift under the Tamil Nadu Lifts Act, 1997. 13. Stability Certificate from Public Works Department. Approvals required for opening Studio Complex

14. Building Approvals from Planning Committee to approve the construction plan. 15. Local Panchayat Approval seeking permission to construct as per approved plan. 16. Fire No Objection Certificate and Fire License under Tamil Nadu Fire Service Act, 1985. 17. License to work a lift under the Tamil Nadu Lifts Act, 1997. 18. Stability Certificate from Public Works Department. Approvals required for opening Studio Floors

19. Building Approvals from Planning Committee to approve the construction plan. 20. Local Panchayat Approval seeking permission to construct as per approved plan. 21. Fire No Objection Certificate and Fire License under Tamil Nadu Fire Service Act, 1985. 22. Stability Certificate from Public Works Department. Approvals required for expansion of the Resort

23. Building Approvals from Planning Committee to approve the construction plan. 24. Local Panchayat Approval seeking permission to construct as per approved plan. 25. Fire No Objection Certificate and Fire License under Tamil Nadu Fire Service Act, 1985. 26. License to work a lift under the Tamil Nadu Lifts Act, 1997. 27. Stability Certificate from Public Works Department. Approvals required for expansion of Shopping Complex*

28. Building Approvals from Planning Committee to approve the construction plan. 29. Local Panchayat Approval seeking permission to construct as per approved plan. 30. Fire No Objection Certificate and Fire License under Tamil Nadu Fire Service Act, 1985. * Our Company has already obtained the necessary approvals required for the expansion of shopping complex.

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

Our Board of Directors have, pursuant to resolution passed at its meeting held on 12 th September 2008 authorised the Issue subject to the approval by the shareholders of our Company under Section 81(1A) of the Companies Act.

The Shareholders had approved the present Issue by a special resolution in accordance with Section 81(1A) of the Companies Act, 1956, passed at the Extra –Ordinary General Meeting of our Company held on 15 th October 2008 at Chennai.

The Board pursuant to its resolution dated 20 th October 2008 has authorized a committee of its Directors referred to as the IPO Committee to take decisions on behalf of the Board in relation to the Issue. The IPO Committee has approved and authorized the Draft Red Herring Prospectus pursuant to its resolution dated 14 th January 2009, the Red Herring Prospectus pursuant to its resolution dated [•] and the Prospectus pursuant to its resolution dated [•].

Our Board has approved this Draft Red Herring Prospectus at a meeting held on 14 th January 2009

From the Selling Shareholder

Selling Shreholder i.e Anchor Constructions Private Limited by a resolution of the Directors dated 20 th October 2008 resolved to Offer for Sale of 22,00,000 Equity Shares in the proposed Initial Public Offer of our Company.

The Selling Shareholders assume no responsibility for any of the statements made by our Company in this Draft Red Herring Prospectus relating to our Company, its business and related disclosures, except Statements with relation to them as Selling Shareholder.

Prohibition by SEBI

At present, We, our Promoter, our Company’s directors, any of our Group Companies, and the companies or entities with which our directors are associated, as directors or promoters, have not been prohibited from accessing or operating in the capital market nor restrained from buying, selling or dealing in securities under any order or directions passed by SEBI.

None of our Promoter, their relatives, our Company or the Promoter Group Companies have not been detained as willful defaulters by RBI/ government authorities and there are no proceedings relating to violations of securities laws pending against them.

Prohibition by RBI

Our Company, our Promoter, promoting companies, their relatives, group concerns and associate companies have not been detained as willful defaulters by the RBI or any other government authorities.

Eligibility for the Issue

Our Company is eligible for the Issue as per Clause 2.2.1 of the SEBI DIP Guidelines, as confirmed by the Auditors of our Company:

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• Our Company has net tangible assets of atleast Rs. 300.00 lakhs in each of the 3 preceding full years (of 12 months each) of which not more than 50% is held in monetary assets. • Our Company has a pre-issue net worth of not less than Rs. 100.00 lakhs in each of the three preceding full years (of 12 months each). • Our Company has a track record of distributable profits as per Section 205 of the Companies Act, 1956, for atleast three out of the immediately preceding five years. • The proposed Issue size would not exceed five (5) times the pre-issue net worth of the Company as per the audited accounts for the year ended 31 st March, 2008. • Our Company has not changed its name within the last one year.

The net tangible assets, monetary assets, distributable profits and net worth as derived from the restated financial statements prepared in accordance with SEBI DIP Guidelines, for the last five financial years ended 31 st March, 2008 is set forth below: (Rs. in Lakhs) Particulars 31.03.2008 31.03.2007 31.03.2006 31.03.2005 31.03.2004 Net Profit 152.42 117.84 (9.12) 537.30 4.67 Net Worth 7433.04 7180.61 7360.80 30987.09 3609.49 Net Tangible Assets (a) 9401.11 8825.77 9289.57 32082.06 4964.56 Monetary Assets (b) 83.70 58.95 14.05 4.27 106.89

The monetary asset in each of the three years does not exceed 50% of the net tangible assets amount. a) Net Tangible assets is defined as the sum of fixed assets (including capital work in progress and excluding revaluation reserve), trade investments, current assets (excluding deferred tax assets) less current liabilities (excluding deferred tax liabilities and long term liabilities). b) Monetary assets include cash in hand and deposit with bank. c) The distributable profits of the company as per section 205 of the Companies Act have been calculated from the restated Financial Statements. d) Net Worth includes equity share capital and reserves (net off miscellaneous expenditure not written off, if any)

In addition, we shall ensure that number of allottees getting Equity Shares is not less than one thousand in number.

SEBI DISCLAIMER CLAUSE

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING PROSPECTUS. THE BOOK RUNNING LEAD MANAGER i.e. COMFORT SECURITIES PRIVATE LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI DIP 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 ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE OUR COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE BOOK RUNNING LEAD MANAGER COMFORT SECURITIES PRIVATE LIMITED IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT OUR COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN

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THIS BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS COMFORT SECURIIES PRIVATE LIMITED HAVE FURNISHED TO SEBI, DUE DILIGENCE CERTIFICATE DATED 14 th JANUARY 2009 IN ACCORDANCE WITH SEBI (MERCHANT BANKERS) REGULATIONS, 1992, WHICH READS AS FOLLOWS:

(I) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS ETC. AND OTHER MATERIALS IN CONNECTION WITH THE FINALISATION OF THE DRAFT RED HERRING PROSPECTUS PERTAINING TO THE SAID ISSUE.

(II) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN THE ANNEXURE AND OTHER PAPERS FURNISHED BY OUR COMPANY,

WE CONFIRM THAT:

(A) THE DRAFT RED HERRING PROSPECTUS FORWARDED TO SEBI IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE;

(B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND

(C) THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, the SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 AND OTHER APPLICABLE LEGAL REQUIREMENTS;

(III) WE CONFIRM THAT BESIDE OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH SEBI AND TILL DATE SUCH REGISTRATION IS VALID;

(IV) WHEN UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE WORTH OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS.

(V) WE CERTIFY THAT WRITTEN CONSENT FROM THE PROMOTER HAS BEEN OBTAINED FOR INCLUSION OF THEIR EQUITY SHARES AS PART OF THE PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE EQUITY SHARES PROPOSED TO FORM PART OF THE PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN WILL NOT BE DISPOSED OR SOLD OR TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS WITH SEBI UNTIL THE DATE OF COMMENCEMENT OF THE LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS.

(VI) WE CERTIFY THAT CLAUSE 4.6 OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000, WHICH RELATES TO SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS' CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE CLAUSE HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS.

(VII) WE UNDERTAKE THAT CLAUSES 4.9.1, 4.9.2, 4.9.3 AND 4.9.4 OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION AND SUBSCRIPTION FROM ALL FIRM ALLOTTEES WOULD BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’ CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE

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TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO OUR COMPANY ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. – NOT APPLICABLE

(VIII) WHERE THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION IS NOT APPLICABLE TO THE ISSUER, WE CERTIFY THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION UNDER CLAUSE 4.10 {SUB- CLAUSE (A), (B) OR (C), AS MAY BE APPLICABLE} ARE NOT APPLICABLE TO THE ISSUER. – NOT APPLICABLE

(IX) WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

(X) WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3) OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. –NOTED FOR COMPLIANCE

(XI) WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT, COMMISSION, ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE ISSUER OR THE PROMOTERS, DIRECTLY OR INDIRECTLY, TO ANY PERSON WHO RECEIVES SECURITIES BY WAY OF FIRM ALLOTMENT IN THE ISSUE. – NOT APPLICABLE

(XII) WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE. – NOT APPLICABLE

(XIII) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS:

(a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY; AND

(b) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.”

THE FILING OF THE DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER, ABSOLVE OUR COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR 68 OF THE COMPANIES ACT, 1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI, FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE BOOK RUNNING LEAD MANAGER (S), (MERCHANT BANKERS) ANY IRREGULARITIES OR LAPSES IN DRAFT RED HERRING PROSPECTUS.

ALL PUBLICITY MATERIALS / ADVERTISEMENTS SHOULD NOT CONTAIN MATTERS EXTRANEOUS TO THE INFORMATION CONTAINED IN THE OFFER DOCUMENT. ATTENTION SPECIALLY DRAWN TO THE PROVISIONS OF SECTION 68 OF THE COMPANIES ACT, 1956

ALL LEGAL REQUIREMENTS PERTAINING TO THE ISSUE WILL BE COMPLIED WITH AT THE TIME OF FILING OF THE RED HERRING PROSPECTUS WITH THE ROC IN TERMS OF SECTION 60B OF THE COMPANIES ACT, 1956. ALL LEGAL REQUIREMENTS PERTAINING TO THE ISSUE WILL BE COMPLIED WITH AT THE TIME OF

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REGISTRATION OF THE PROSPECTUS WITH THE ROC IN TERMS OF SECTIONS 60 AND 60B OF THE COMPANIES ACT.

Disclaimer from the issuer, Selling Shareholders and the Book Running Lead Manager

Our Company, its Directors, the Selling Shareholder and the Book Running Lead Managers accept no responsibility for statements made otherwise than in this Draft Red Herring Prospectus or in the advertisements or any other material issued by or at the instance of the Issuer and that anyone placing reliance on any other source of information, including our Company’s web site www.mayajaal.com would be doing so at his or her own risk.

The Book Running Lead Manager accepts no responsibility, save to the limited extent as provided in the Memorandum of Understanding entered into between the Book Running Lead Manager, Mayajaal Entertainment Limited and the Selling Shareholder and the Company and the Underwriting Agreement to be entered into between the Underwriters, Mayajaal Entertainment Limited and between the Selling Shareholder.

All information shall be made available by Mayajaal Entertainment Limited, the Selling Shareholder and the Book Running 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, at collection centres or elsewhere.

Mayajaal Entertainment Limited, the Selling Shareholder and the Book Running Lead Manager shall not be liable to the Bidders for any failure in downloading the Bids due to faults in any software / hardware system or otherwise.

Investors that bid in the Issue will be required to confirm and will be deemed to have represented to the Company, the Selling Shareholder, the Underwriters and their respective directors, officers, agents, affiliates and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company. The Company, the Selling Shareholder, the Underwriters and their respective directors, officers, agents, affiliates and representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Equity Shares of the Company.

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, 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) or Trusts registered under the applicable Trust law and who are authorized under their constitution to hold and invest in shares, permitted insurance companies and pension funds and to permitted non residents including NRIs, FIIs and other eligible Foreign Investors (viz. Foreign Venture Capital Funds registered with SEBI, multilateral and bilateral Development Financial Institutions). The Draft Red Herring Prospectus does not, however, constitute an invitation to subscribe to Equity Shares issued hereby in any other jurisdiction to any person to whom it is unlawful to make an invitation in such jurisdiction. Any person into whose possession this Draft Red Herring Prospectus comes is required to inform him or herself, about and to observe, any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Chennai (India) only.

No action has been or will be taken to permit a public offering in any jurisdiction where action would be required for that purpose, except that this Draft Red Herring Prospectus has been filed with SEBI for observations and SEBI has given its observations. Accordingly, the Equity Shares, represented thereby may not be offered or sold, directly or indirectly, and this Draft Red Herring Prospectus may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither

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the delivery of this Draft Red Herring Prospectus nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in our affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date.

Disclaimer Clause of CARE

A copy of this Draft Red Herring Prospectus has been submitted to CARE. The Disclaimer clause as intimated by CARE to us, post scrutiny of this Draft Red Herring Prospectus shall be included in Red Herring Prospectus prior to Roc filing.

Disclaimer Clause of Bombay Stock Exchange Limited (the Designated Stock Exchange)

A copy of this Draft Red Herring Prospectus has been submitted to BSE. The Disclaimer clause as intimated by BSE to us, post scrutiny of this Draft Red Herring Prospectus shall be included in Red Herring Prospectus prior to Roc filing.

Disclaimer Clause of National Stock Exchange of India Limited

A copy of this Draft Red Herring Prospectus has been submitted to NSE. The Disclaimer clause as intimated by NSE to us, post scrutiny of this Draft Red Herring Prospectus shall be included in Red Herring Prospectus prior to Roc filing.

Filing of Prospectus with the Board and the Registrar of Companies

1. A copy of this Draft Red Herring Prospectus has been filed with SEBI at Corporation Finance Department, SEBI Bhavan, Plot No. C-4A, G Block, Bandra Kurla Complex, Bandra (East), Mumbai– 400 051.

2. A copy of the Red Herring Prospectus along with the documents required to be filed under section 60B of the Companies Act would be delivered for registration to the RoC, Chennai, Block No.6, B-Wing, 2 nd Floor Shastri Bhawan26, haddows Road, Chennai - 600034 atleast three (3) days before the issue opening date. The final Prospectus would be filed with the Corporate Finance Department of SEBI and the ROC at the respective aforesaid addresses upon closure of this issue and on finalization of this issue price. We will comply with all legal requirements applicable till the filing of Prospectus with RoC.

Listing

Initial listing applications have been made to Bombay Stock Exchange Limited, (Designated Stock Exchange) and the National Stock Exchange of India Limited. (NSE) for permission to list Equity Shares and for an official Quotation of the Equity Shares of our company.

In case, the permission for listing and or dealing & official quotation 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 eight (8) days after the day from which the Issuer becomes liable to repay it, then our Company and every director of our company who is an officer in default shall, on and from expiry of eight (8) days, be jointly and severally liable to repay that money with interest as prescribed under Section 73 of the Companies Act, 1956.

Our Company together with the Book Running Lead Manager shall ensure that all the steps for the completion of the necessary requirements for Listing and Commencement of trading at all the Stock Exchanges mentioned above are taken within seven (7) 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 68A of

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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, 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 (5) years."

Consents

The written consents of Directors, Company Secretary & Compliance Officer, Book Running Lead Manager to the Issue, Legal Advisor to the Issue, Registrar to the Issue, Auditors, Bankers to our Company, Grading agency, Appraising agency, Bankers to the Issue, the Syndicate Members and Underwriters to act in their respective capacities.

The said consents would be filed along with a copy of the Red Herring Prospectus with the RoC, Chennai, Tamil Nadu as required under Sections 60 and 60B of the Companies Act, 1956 and such consents have not been withdrawn up to the time of delivery of the Red Herring Prospectus, for registration with the RoC Tamil Nadu at Chennai. R. Subramanian & Co. Statutory Auditors, have also given their consent to the inclusion of their report as appearing hereinafter in the form and context in which it appears in this Draft Red Herring Prospectus and also tax benefits accruing to our Company and to the members of our Company and such consent and report have not been withdrawn up to the time of delivery of this Draft Red Herring Prospectus for registration with the Registrar of Companies, Tamil Nadu at Chennai.

Expert Opinion

Our Company has not obtained any expert opinions related to the present Issue, except the opinion of the Auditor, R. Subramanian & Co, Chartered Accountants on the tax benefits available to our Company, Selling Shareholders & investors.

Public Issue Expenses

Public Issue expenses are estimated as follows:

No. Particulars Amount (Rs. In Lakhs) 1. Fees of Lead Manager, Registrar, Legal Advisor, Auditors, Tax Auditors, etc. [O] 2. Printing & Stationery, Distribution, Postage, etc [O] 3. Underwriting Commission, Brokerage & Selling Commission [O] 4. Advertisement & Marketing Expenses [O] 5. Other Expenses (incl. Filing Fees, Listing Fees, Depository Charges, etc.) [O] 6. IPO Grading Expenses [O] 7. Contingencies [O] Total [O]

Details of Fees Payable

Particulars Amount (Rs. in % of Total Issue Expenses % of Total Issue Size Lakhs) Lead Manager/s to the Issue [O] [O] [O] Registrar to the Issue [O] [O] [O]

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Particulars Amount (Rs. in % of Total Issue Expenses % of Total Issue Size Lakhs) Bankers to the issue [O] [O] [O] Others [O] [O] [O] Total [O] [O] [O]

Fees Payable to Book Running Lead Manager/s to the Issue

The total fees payable to the Lead Manager will be as per the Engagement Letters from our Company to the BRLM and Memorandum of Understanding signed with the Lead Manager, copy of which is available for inspection at the Registered Office of our Company.

Fees Payable to Registrar to the Issue

The total fees payable to the Registrar to the Issue will be as per the Memorandum of Understanding signed with the Registrar, copy of which is available for inspection at the Registered Office of our company.

Adequate funds will be provided to the Registrar to the Issue to enable them to send refund order(s) / letter(s) of allotment / share certificate(s) by registered post.

Commission and Brokerage paid on previous Equity Issues by us since this is the Initial Public Offer of our Company, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of our Equity Shares and Warrants since our inception.

Particulars regarding Public or Rights Issues during the Last Five Years

There has been no previous Public or Rights Issue of our Equity Shares.

Issues otherwise than for Cash

Except as stated in “Notes to the Capital Structure” on page 44 of this Draft Red Herring prospectus, we have not issued any Equity Shares for consideration otherwise than for cash

Commission and Brokerage paid on previous issues of our Equity Shares

There has not been any previous public issue of our Equity Shares

PARTICULARS REGARDING ISSUER COMPANY (LAST 3 ISSUES)/LISTED COMPANIES UNDER THE SAME MANAGEMENT WITHIN THE MEANING SECTION 370 (1)(B) OF THE COMPANIES ACT, 1956 WHICH MADE ANY CAPITAL ISSUE DURING THE LAST THREE YEARS

We do not have any other company under the same management within the meaning of erstwhile Section 370 (1B) of the Companies Act, save and except for the Promoter Group companies mentioned in the section titled “Our Promoter Group/ Group Companies/ Entities” beginning on page 143 of this Draft Red Herring Prospectus.

Listed Ventures of Promoters

Except Pentamedia Graphics Limited & Pentsoft Technologies Limited, our Promoters do not have any Listed Ventures.

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Promise vis-à-vis Performance – Last One Issue of Group / Promoter Companies

1. Pentamedia Graphics Limited Pentamedia Graphics Limited has come with a rights issue of 37,95,000 equity shares of Rs.10/- each for cash at premium of Rs.15/- per share on right basis to existing shareholders of the company aggregating Rs. 9,48,75,000 and 18,600 equity shares of Rs.10/- each for cash at a premium of Rs. 15/- per share to the permanent employees of the company aggregating Rs. 4,65,000.

The issue opened on 10 th November, 1993 and closed on 10 th December, 1993. The objects of the issue was to raise resources to finance the capital expenditure and for the expansion programme for software development and training in mini and main frame computers including state-of-the-art applications such as multimedia, image processing and CAD/CAM applications. The proceeds of the issue was deployed for purpose it was raised.

The Promise versus Performance in respect of the right issue was as under:

(Rs. in Lakhs) 1993-1994 1994-1995 1995- 1996 Particulars Projected Performance Projected Performance Projected Performance Total Income 2375.12 3218.94 3972.26 6021.90 4800.83 11326.17 Profit Before Tax 460.19 808.67 761.43 1590.22 1002.25 3103.03 Profit After Tax 420.99 801.17 708.48 1565.22 933.59 3038.03 Dividend 22% 30% 25% 37% 25% 40%

2. Pentasoft Technologies Limited

Pentasoft Technologies Limited has come with a public issue of 12,75,000 equity shares of Rs. 10/- each for cash at par aggregating to Rs. 127.50 Lakhs. The issue opened on 15th December, 1995 and closed on 26th December, 1995. The objects of the issue was to part finance the cost of project in the areas viz. product support, value added telecom services, training of telecom professionals and development and marketing of communication system software and also to finance the working capital.The proceeds of the issue was deployed for purpose it was raised.

The Promise versus Performance in respect of the public issue was as under:

(Rs. in Lakhs) 1995-1996 1996-1997 1997-1998 Particulars Projected Performance Projected Performance Projected Performance Total Income 632.71 626.48 2041.13 1888.68 3215.00 4103.84 Profit Before Tax 152.04 149.32 615.33 401.35 965.86 759.29 Profit After Tax 151.50 144.32 437.38 349.35 653.26 678.29 Dividend 20% 20% 30% 23% 40% 30%

Reasons for deviation in Promise versus Performance

1995-1996: The variation between the projected and actual figures is attributable to the deviation in Interest cost which was Rs. 5.22 Lakhs as compared to Rs. 1.55 Lakhs depicted in projected financials as well as due to deviation on account of provision for tax which was Rs. 5.00 Lakhs in fiscal 1996 as compared of Rs. 0.54 Lakhs depicted in projected financials.

1996-1997: The variation has resulted due to cost overruns and marginal decline in revenue as compared to amounts depicted in projected financials.

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1997-1998: The variation between the projected and actual figures is attributable to the deviation in Interest cost, which was Rs. 142.93 Lakhs as compared to Rs. 33.25 Lakhs, depicted in projected financials.

Previous Rights and Public Issues

We have not made any public issue Equity Shares and Warrants and rights issue either in India or abroad in the five (5) years preceding the date of this Prospectus.

Outstanding Debentures or Bond Issues

As on date of filing of this Draft Red Herring Prospectus with SEBI, our Company does not have any Outstanding Debentures or Bonds.

Outstanding Preference Shares

Our Company since its Incorporation has not issued any Redeemable Preference shares or other Instruments.

Stock Market Data for our Equity Shares

This being an Intial Public Offering of the Equity Shares of our Company, the Equity Shares are not listed on any stock exchange.

Mechanism for Redressal of Investor Grievances

The Memorandum of Understanding between the Registrar to the Issue, the Selling Shareholder and us, provides for retention of records with the Registrar to the Issue for a period of at least one (1) year from the last date of dispatch of letters of Allotment, demat credit, refund orders to enable the investors to approach the Registrar to the Issue for redressal of their grievances.

All grievances relating to the issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, application number, number of shares applied for, amount paid on application, Depository Participant, and the bank branch or collection center where the application was submitted.

Disposal of Investor Grievances by our Company

We estimate that the average time required by us or the Registrar to the Issue for the redressal of routing investor grievances shall be seven (7) days from the date of receipt of the compliant. In case of non-routing complaints and complaints where external agencies are involved, our company and the selling shareholder will seek to redress these complaints as expeditiously as possible.

The Registrar to the issue will handle the Investor grievances in co-ordination with Compliance Officer of our company. All grievances relating to the present issue may be addressed to the registrar with a copy to the Compliance Officer, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount paid on application and Bank branch where the application was submitted. Our company will monitor the work of the Registrar to ensure that the grievances are settled expeditiously and satisfactorily. In case of any pre-issue or post-issue related problems contact at the following address:

Mr. Subramanian Ganesan Compliance Officer & Company Secretary Mayajaal Entertainment Limited No. 34/1, 35, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kancheepuram District– 603112, Tamil Nadu, India ;

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Tel: 044 27472860 ; Fax: 044 27472870; Website:www.mayajaal.com; E-mail:[email protected] Disposal of investor grievances by listed companies under the same management as the Company

We do not have any other company under the same management within the meaning of erstwhile Section 370 (1B) of the Companies Act except as disclosed under the section "Our Promoter Group/ Group Companies/ Entities" on page 143 of this Draft Red Herring Prospectus.

Other Disclosures

Except as disclosed in this Draft Red Herring Prospectus on page 48 under section "Notes to Capital Structure", the Promoter Group, the directors of the Promoters or the Promoter Group Companies or the Directors of our Company and its Subsidiaries have not purchased or sold any securities of our Company during a period of six (6) months preceding the date on which this Draft Red Herring Prospectus is filed with SEBI.

Changes in Auditors during the last five Years and Reasons thereof

There has been the no change in the statutory Auditors in the last five (5) years.

Capitalisation of Reserves or Profits (during last five (5) years)

Our Company has not capitalized any reserve during last five (5) years.

Revaluation of Assets, if any (during last five (5) years)

None of the assets of our Company has been revalued during last five (5) years.

Payment or Benefit to Officers of our Company

Except statutory benefits upon termination of their employment in our Company, no officer of our Company is entitled to any benefit upon termination of his employment in our Company or superannuation.

Except as stated in the section titled "Related Party Transactions" beginning on page 151 of this Draft Red Herring Prospectus, none of the beneficiaries of loans and advances and sundry debtors are related to the directors of our Company.

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SECTION VII: ISSUE RELATED INFORMATION

TERMS OF THE ISSUE

Principal Terms and Conditions of the Issue

Authority for the Issue

Our Board of Directors have, pursuant to resolution passed at its meeting held on 12 th September, 2008 authorised the Issue subject to the approval by the shareholders of our Company under Section 81(1A) of the Companies Act. The Shareholders of our Company had approved the present Issue vide a resolution passed at the EGM held on 15 th October, 2008.

Anchor Constructions Private Limited vide resolution of the Directors dated 20 th October 2008 resolved to Offer for Sale of 22,00,000 Equity Shares in the proposed initial public offer of our Company.

Our Company has received a clarification from the FIPB Unit, Department of Economic Affairs, Ministry of Finance in relation to Foreign investment in this IPO through letter dated 14 th January, 2009 stating that approval shall not be required for the proposed IPO and our Company will have to obtain no-objection from FIPB, in the event of our Company proposes to commence broadcasting activities.

Ranking of Equity Shares

The Equity Shares being issued shall be subject to the provisions of our Memorandum and Articles and shall rank pari passu in all respects with the existing Equity Shares of our Company including rights in respect of dividend. The allottees will be entitled to dividend or any other corporate benefits, if any, declared by our Company after the date of Allotment. See the section titled “Main Provisions of Articles of Association” beginning on page 270 for a description of the Articles of Association of this Draft Red Herring Prospectus.

Mode of Payment of Dividend

The declaration and payment of dividend will be as per the provisions of the Companies Act and recommended by the Board of Directors and the shareholders at their discretion, and will depend on a number of factors, including but not limited to earnings, capital requirements and overall financial condition of our Company.

Face Value and Issue Price

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end of the Price Band is Rs. [•] per Equity Share. At any given point of time, there shall be only one denomination for the Equity Shares of our Company, subject to applicable laws.

Compliance with SEBI DIP Guidelines

We shall comply with all disclosure and accounting norms as specified by SEBI from time to time.

Rights of the Equity Shareholders

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 be allotted bonus shares, if announced;

Right to receive surplus on liquidation subject to any statutory and other preferential claims being satisfied;

Right of free transferability; and

Market Lot and Trading Lot

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

Since trading of our Equity Shares is in dematerialized form, the tradable lot is one (1) Equity Share. Allocation and Allotment through this Issue will be done only in electronic form in multiples of one Equity Shares to the successful Bidders subject to a minimum Allotment of [•] Equity Shares. For details of Allocation and Allotment, please refer to the section titled “Issue Procedure” on page 232 of this DRHP.

Jurisdiction

Exclusive jurisdiction for the purpose of this Issue is with the competent courts/authorities in Chennai, Tamil Nadu.

Nomination Facility to Investor

In accordance with Section 109A of the Companies Act, the sole or first Bidder, along with other joint Bidders, may nominate any one person in whom, in the event of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act, be entitled to the same advantages to which he or she

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would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale/transfer/alienation of Equity Share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the Registered Office of our Company or to the Registrar and Transfer Agent of our Company. In accordance with Section 109B of the Companies Act, any Person who becomes a nominee by virtue of Section 109A of the Companies Act, shall upon the production of such evidence as may be required by the Board, elect either: a) To register himself or herself as the holder of the Equity Shares; or b) To make such transfer of the Equity Shares, as the deceased holder could have made. Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of ninety (90) days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys 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 form, there is no need to make a separate nomination with our Company. Nominations registered with respective Depository Participant of the applicant would prevail. If the investors require changing their nomination, they are requested to inform their respective Depository Participant.

Minimum Subscription

Further, in accordance with Clause 2.2.2A of the SEBI Guidelines, the Company shall ensure that the number of Allottees under the Issue shall not be less than 1,000.

The requirement for minimum subscription is not applicable to the Offer for Sale. In case of under subscription in the issue, the Equity Shares in the fresh issue will be issued prior to the sale of Equity Shares in the Offer for Sale.

Application by Eligible NRIs, FIIs and FVCIs

It is to be distinctly understood that there is no reservation for Eligible NRIs or FIIs or FVCIs. Eligible NRIs, FIIs and FVCIs will be treated on the same basis as other categories for the purpose of Allocation. As per the RBI regulations, OCBs cannot participate in the Issue.

Arrangements for disposal of Odd Lots

Since the market lot for our Equity Shares will be one, no arrangements for disposal of odd lots are required.

Restriction on transfer of shares

There are no restrictions on transfers and transmission of shares/ debentures and on their consolidation/ splitting except as provided in our Articles. See “Main Provisions of our Articles of Association” on page 270 of this Draft Red Herring Prospectus.

Withdrawal of the Issue

Our company, in consultation with the BRLM, reserves the right not to proceed with the Issue at anytime including after the Bid Closing Date, without assigning any reason thereof.

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ISSUE STRUCTURE

The Present issue of 1,21,00,000 Equity Shares comprising of fresh issue of 99,00,000 Equity Shares and an Offer for Sale of 22,00,000 Equity Shares at a price of [•] per Equity Share, The issue includes a reservation for Eligible Employees of 1,00,000 Equity Shares and reservation of 7,00,000 Equity Shares for the Eligible shareholders of our Promoter & Promoter Group Company aggregating Rs. [O] Lakhs.

This Issue is being made through a 100% book building process and the details of the Issue Structure are as follows.

Particulars Employees Shareholders QIBs Non- Retail Reservation of the Institutional individual Portion Promoter and Bidders Bidders its Group Company Portion Number of Up to 1,00,000 Up to 7,00,000 Upto 56,50,000 Atleast Atleast Equity Shares* Equity Shares. Equity Shares. Equity Shares 16,95,000 Equity 39,55,000 Shares. Equity Shares. Percentage of Up to 0.83% of Up to 5.78% of Upto 50% of Net Minimum of 15% Minimum of Issue Size the size of the the size of the Issue to the of Net Issue to 35% of Net Available for issue. issue. Public or Net the Public or Net Issue to the allocation Issue less Issue less Public or Net allocation to allocation to QIB Issue less Non-Institutional Bidders and allocation to Bidders and Retails Individual QIB Bidders Retail Individual Bidders and Non- Bidders with 5% Institutional compulsory to Bidders mutual funds. Basis of Proportionate Proportionate Proportionate Proportionate Proportionate Allocation if respective category is oversubscribed Minimum Bid# [•] Equity Shares [•] Equity Such number of Such number of [•] Equity and in multiples Shares and in Equity Shares Equity Shares shares and in of [ •]Equity multiples of that the Bid that the Bid multiples of [ •] Shares thereafter [•]Equity Amount exceeds Amount exceeds Equity Share Shares Rs. 1,00,000 and Rs. 1,00,000 and thereafter thereafter in multiples of in multiples of [•] Equity Shares [•] Equity Shares thereafter. thereafter Maximum Bid Not exceeding Not exceeding Such number of Such number of Such number of 1,00,000 Equity 7,00,000 Equity Shares Equity Shares Equity Shares Shares reserved Equity Shares not exceeding not exceeding whereby the for Eligible reserved for the Net Issue, the Net Issue, Bid amount Employees Eligible subject to subject to does not aggregating to Shareholders applicable applicable exceeds Rs. Rs. [O] Lakhs of Our limits. limits. 1,00,000 Promoter and Promoter Group Company

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Particulars Employees Shareholders QIBs Non- Retail Reservation of the Institutional individual Portion Promoter and Bidders Bidders its Group Company Portion aggregating to Rs. [O] Lakhs Mode of Compulsorily in Compulsorily Compulsorily in Compulsorily in Compulsorily in Allotment dematerialized in dematerialized dematerialized dematerialized mode dematerialized mode mode mode mode Trading Lot One One One One One Who can Eligible Eligible Public financial Resident Indian Individuals apply** employees Shareholders of institutions, as individuals, HUF (including NRIs Our Promoter specified in (in the name of and HUFs) and Promoter Section 4A of the Karta), applying for Group company Companies Act, companies, Equity Shares scheduled corporate such that the commercial bodies, NRIs, Bid amount banks, mutual scientific does not funds, foreign institutions, exceeds Rs. institutional societies and 1,00,000 in investors trusts. value. registered with SEBI, multilateral and bilateral development financial institutions, venture capital funds registered with SEBI, foreign venture capital investors registered with SEBI and state Industrial Development Corporations, permitted insurance companies registered with the Insurance Regulatory and Development Authority, provident funds with minimum corpus of Rs. 250 million and pension funds with minimum

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Particulars Employees Shareholders QIBs Non- Retail Reservation of the Institutional individual Portion Promoter and Bidders Bidders its Group Company Portion corpus of Rs. 250 million in accordance with applicable laws. Terms of Margin Money Margin Money Margin Money Margin Money Margin Money Payment applicable to applicable to applicable to applicable to applicable to Employees’ Shareholders QIBs at the time Non-institutional Retail Reservations of the of submission of Bidders at the Individual Portion at the Promoter and Bid cum time of Bidders at the time of its Group Application Form submission of Bid time of submission of Bid Company to the Syndicate cum Application submission of cum Application portion for at Members. Form to the Bid cum Form to the the time of Syndicate Application Syndicate submission of Members. Form to the Members. Bid cum Syndicate Application Members.*** Form to the Syndicate Members. Margin Amount Full Bid amount Full Bid 10% of the Bid Full Bid amount Full Bid on Bidding amount on Amount on on Bidding amount on Bidding bidding. Bidding

* Subject to valid bids being received at or above the Issue Price. Under-subscription, if any, in any portion, would be allowed to be met with spillover from any other portions at our Company’s discretion, in consultation with the BRLM.

** In case the Bid cum Application Form is submitted in Joint names, the investors should ensure that the demat account is also held in the same joint names and are in the same sequence in which they appear in the Bid cum Application Form.

*** Resident Retail Individual Investor is also eligible to apply through `, for details please refer Section “ASBA Process” on page 265 of Draft Red Herring Prospectus.

# The minimum number of Equity Shares for which Bids can be made by Bidders and the multiples of Equity Shares in which the Bids can be made, shall be advertised at least one (1) day prior to the Bid Opening Date/Issue Opening Date, in [ •], an English language newspaper, in [ •], a Hindi language newspaper and in [•], a Regional newspaper, all with wide circulation; and also on the websites of the BRLM and our Company, as appearing on the cover page.

Withdrawal of the Issue

Our Company, in consultation with the Book Runners, reserves the right not to proceed with the Issue at any time after the Bid/Issue Opening Date but before the Board meeting for Allotment, without assigning any reason thereof. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment and (ii) the final RoC acknowledgement of the Prospectus after it is filed with the RoC. Under the SEBI Guidelines QIBs are not allowed to withdraw their Bids after the Bid/Issue Closing Date.

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ISSUE PROCEDURE

BOOK BUILDING PROCEDURE

The Issue is being made through the 100% Book Building Process wherein up to 50% of the Net Issue shall be available for allocation on a proportionate basis to QIBs, including upto 5% of the QIB Portion which shall be available for allocation to Mutual Funds only. Further, not less than 35% of the Net Issue shall be available for allocation on a proportionate basis to the Retail Individual Bidders and not less than 15% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders, subject to valid Bids being received at or above the Issue Price. It may be noted that the bids received in the Employee Reservation Portion and Shareholders of the Promoter and its Group Company Portion shall not be considered for the purpose of determining the Issue Price through Book Building Process.

Bidders are required to submit their Bids through the Syndicate. Our Company, in consultation with the BRLM, may reject any Bid procured from QIBs, by any or all members of the Syndicate, for reasons to be recorded in writing provided that such rejection shall be made at the time of acceptance of the Bid and the reasons therefore shall be disclosed to the Bidders. In case of Non-Institutional Bidders and Retail Individual Bidders, our Company would have a right to reject the Bids only on technical grounds.

Investors should note that allotment of Equity Shares to all successful Bidders will only be in the dematerialized form. Bidders will not have the option of getting allotment of the Equity Shares in physical form. The Equity Shares on allotment shall be traded only in the dematerialized segment of the Stock Exchanges.

BID CUM APPLICATION FORM

Bidders shall only use the specified Bid cum Application Form bearing the stamp of a member of the Syndicate for the purpose of making a Bid in terms of this Draft Red Herring Prospectus. The Bidder shall have the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not be considered as multiple Bids. Upon the allocation of Equity Shares, dispatch of the CAN, and filing of the Prospectus with the RoC, the Bid cum application Form shall be considered as the Application Form. Upon completing and submitting the Bid cum Application Form to a member of the Syndicate, the Bidder is deemed to have authorised our Company to make the necessary changes in this Draft Red Herring Prospectus and the Bid cum Application Form as would be required for filing the Prospectus with the RoC and as would be required by RoC after such filing, without prior or subsequent notice of such changes to the Bidder.

The prescribed color of the Bid cum Application Form for various categories, is as follows:

Category Color of Bid-cum- Application Form Indian Nationals or NRIs applying on a non-repatriation basis White NRIs or FIIs or Foreign Venture Capital Funds registered with SEBI, Multilateral and Blue Bilateral Development Financial Institutions applying on a repatriation basis Eligible Employees & Shareholders of our Promoter and Promoter Group Company Pink

Note: There will be a separate ASBA Form for the Resident Retail Individual Investor applying through ASBA process. For details, please refer section “ASBA Process” on page 265 of Draft Red Herring Prospectus.

WHO CAN BID

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• Indian nationals resident in India who are majors, or in the names of their minor children as natural/legal guardians, in single or joint names (not more than three);

• Hindu Undivided Families or HUFs, in the individual name of the Karta . The Bidder should specify that the Bid is being made in the name of the HUF in the Bid cum Application Form as follows: “Name of Sole or First bidder: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta ”. Bids by HUFs would be considered at par with those from individuals;

• Companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in the Equity Shares;

• Indian Mutual Funds registered with SEBI;

• Indian Financial Institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission, as applicable);

• Venture Capital Funds registered with SEBI;

• Foreign Venture Capital Investors registered with SEBI;

• State Industrial Development Corporations;

• Trusts/societies registered under the Societies Registration Act, 1860, as amended, or under any other law relating to Trusts and who are authorised under their constitution to hold and invest in equity shares;

• NRIs and FIIs on a repatriation basis or a non-repatriation basis subject to applicable laws;

• Scientific and/or Industrial Research Organizations authorised to invest in equity shares;

• Insurance Companies registered with Insurance Regulatory and Development Authority;

• Provident Funds with minimum corpus of Rs. 250 million and who are authorised under their constitution to hold and invest in equity shares;

• Pension Funds with minimum corpus of Rs. 250 million and who are authorised under their constitution to hold and invest in equity shares;

• Any other QIBs permitted to invest, subject to compliance with all applicable laws, rules, regulations, guidelines and approvals in the Issue.

• Multilateral and Bilateral Development Financial Institutions; and

Pursuant to the existing regulations, OCBs are not eligible to participate in the Issue .

Note : The BRLM and Syndicate Members shall not be entitled to subscribe to this Issue in any manner except towards fulfilling their underwriting obligation.

The information below is given for the benefit of the Bidders. Our Company and the Book Runners do not accept responsibility for the completeness and accuracy of the information stated. Our Company and the Book Runners are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are advised to make their

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independent investigations and ensure that the number of Equity Shares Bid for does not exceed the limits prescribed under laws or regulations.

Participation by associates of the Book Runners and the Syndicate Members

The Book Runners and Syndicate Members shall not be entitled to subscribe to this Issue in any manner except towards fulfilling their underwriting obligations. However, associates and affiliates of the Book Runners and Syndicate Members may subscribe for Equity Shares in the Issue, including in the QIB Portion and Non-Institutional Portion where the allocation is on a proportionate basis. Such bidding and subscription may be on their own account or on behalf of their clients.

Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as specified in this Draft Red Herring Prospectus.

APPLICATION BY MUTUAL FUNDS

An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual Funds Portion. In the event that the demand is greater than 2,82,500 Equity Shares, Allocation shall be made to Mutual Funds on proportionate basis to the extent of the Mutual Funds Portion. The remaining demand by Mutual Funds shall, as part of the aggregate demand by QIB Bidders, be made available for allocation proportionately out of the remainder of the QIB Portion, after excluding the allocation in the Mutual Funds Portion.

As per the current regulations, the following restrictions are applicable for investments by mutual funds :

No mutual fund scheme shall invest more than 10% of its net asset value in 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 funds. No mutual fund under all its schemes should own more than 10% of any company’s paid-up share capital carrying voting rights. These limits would have to be adhered to by the mutual funds for investment in the Equity Shares.

In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made.

Application by FIIs

In accordance with the current regulations, the following restrictions are applicable for investments by FIIs: The issue of Equity Shares to a single FII should not exceed 5% of our post-Issue issued capital (i.e. 10% of 44,55,000 Equity Shares). In respect of an FII investing in our Equity Shares on behalf of its Sub-Accounts, the investment on behalf of each Sub-Account shall not exceed 10% of our total issued capital. As of now, the aggregate FII holding in our Company cannot exceed 24% of our total issued capital. The said 24% limit can be increased up to 100% by passing a resolution by the Board followed by passing a special resolution to that effect by the shareholders of our Company. Our Company has not obtained board or shareholders approval to increase the FII limit to more than 24%.

Subject to compliance with all applicable Indian laws, rules, regulations guidelines and approvals in terms of regulation 15A(1) of the SEBI (Foreign Institutional Investor) Regulations, 1995, an FII or its Sub-Account may issue, deal or hold, off shore derivative instruments such as “Participatory Notes”, equity-linked notes or any other similar instruments against underlying securities listed or proposed to be listed on any stock exchange in India only in favour of those entities which are regulated by any relevant regulatory authorities in the countries of their incorporation or establishment subject to compliance of “know your client” requirements.

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An FII or Sub-Account shall also ensure that no further downstream issue or transfer of any instrument referred to hereinabove is made to any person other than a regulated entity. Associates and affiliates of the Underwriters, including the BRLMs, that are FIIs or its Sub-Account may issue offshore derivative instruments against Equity Shares allocated to them in the Issue.

APPLICATION BY NRIs

• Bid cum Application Forms have been made available for NRIs at the registered Office of the Company.

• NRI applicants may please note that only such applications as are accompanied by payment in free foreign exchange shall be considered for allotment under the NRI category. The NRIs who intend to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians (white in color).

APPLICATION BY SEBI REGISTERED VENTURE CAPITAL FUNDS AND FOREIGN VENTURE CAPITAL INVESTORS:

The Securities and Exchange Board of India (Venture Capital Funds) Regulations, 1996, as amended and the Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000, as amended prescribe investment restrictions on VCFs and FVCIs. Accordingly, the holding by any individual venture capital fund registered with SEBI in one company should not exceed 25% of the corpus of the venture capital fund. Further, Venture Capital Funds can invest only up to 33.33% of the investible funds by way of subscription to an initial public offer.

The above information is given for the benefit of the Bidders. The Bidders are advised to make to their own enquiries about the limits applicable to them. Our Company and the BRLM do not accept any responsibility for the completeness and accuracy of the information stated hereinabove. Our Company and the BRLM are not liable for any amendments or modification or changes in applicable laws or regulations, which may happen after the date of the Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure that the number of Equity Shares bid for do not exceed the applicable limits under laws or regulations.

Bids by ASBA Investor

For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus .

MAXIMUM AND MINIMUM BID SIZE

(a) For Retail Individual Bidders: The Bid must be for a minimum of [•] Equity Shares and in multiples of [•] Equity Share thereafter, so as to ensure that the Bid Amount payable by the Bidder does not exceed Rs. 100,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid Amount does not exceed Rs. 100,000. In case the Bid Amount is over Rs. 100,000 due to revision of the Bid or revision of the Price Band or on exercise of Cut-off option, the Bid would be considered for allocation under the Non-Institutional Bidders portion. The Cut-off option is an option given only to the Retail Individual Bidders indicating their agreement to Bid and purchase at the final Issue Price as determined at the end of the Book Building Process.

(b) For Other Bidders (Non-Institutional Bidders and QIBs): The Bid must be for a minimum of such number of Equity Shares in multiples of [•] Equity Share such that the Bid Amount exceeds Rs. 100,000 and in multiples of [•] Equity Shares thereafter. A Bid cannot be submitted for more than the Issue Size. However, the maximum Bid by a QIB investor should not exceed the investment limits prescribed for them by applicable laws. Under the existing SEBI DIP Guidelines, a QIB Bidder cannot withdraw its Bid after the Bid/Issue Closing Date and is required to pay QIB Margin upon submission of Bid.

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(c) For Bidders in the Employees Reservation Portion: The Bid must be for a minimum of [•] Equity Shares and in multiples of [•] Equity Share thereafter.

(d) For Bidders in the Shareholders of the Promoter and its Group Company Portion: The Bid must be for a minimum of [•] Equity Shares and in multiples of [•] Equity Share thereafter.

In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure that the Bid Amount is greater than Rs. 100,000 for being considered for allocation in the Non-Institutional Portion. In case the Bid Amount reduces to Rs. 100,000 or less due to a revision in Bids or revision of the Price Band, Bids by Non-Institutional Bidders who are eligible for allocation in the Retail Portion would be considered for allocation under the Retail Portion. Non-Institutional Bidders and QIBs are not allowed to Bid at ‘Cut-off’.

Information for the Bidder:

1. Our Company will file the Red Herring Prospectus with the RoC at least 3 (three) days before the Bid/Issue Opening Date. 2. The members of the Syndicate will circulate copies of the Red Herring Prospectus along with the Bid cum Application Form to potential investors. 3. Any investor (who is eligible to invest in our Equity Shares) who would like to obtain the Red Herring Prospectus along with the Bid cum Application Form can obtain the same from our Registered office or from any of the members of the Syndicate. 4. Eligible investors who are interested in subscribing for the Equity Shares should approach any of the BRLM or Syndicate Members or their authorised agent(s) to register their Bids. 5. The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum Application Forms should bear the stamp of the member of the Syndicate. Bid cum Application Forms, which do not bear the stamp of a member of the Syndicate, will be rejected. 6. For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

METHOD AND PROCESS OF BIDDING

1. Our Company and the BRLM shall declare the Bid/Issue Opening Date, the Bid/Issue Closing Date and Price Band in the Red Herring Prospectus to be filed with RoC and publish the same in two (2) widely circulated newspapers (one each in English and Hindi) and in a regional newspaper. This advertisement shall contain the disclosures as prescribed under the SEBI DIP Guidelines. This advertisement, subject to the provisions of Section 66 of the Companies Act shall be in the form prescribed in Schedule XX–A of the SEBI DIP Guidelines, as amended by SEBI Circular No. SEBI/CFD/DIL/DIP/17/2005/11/11 dated 11 th November, 2005. The BRLM and Syndicate Members shall accept Bids from the Bidders during the Bidding/Issue Period.

2. The Bidding/Issue Period shall be a minimum of three (3) working days and shall not exceed seven (7) working days. In case the Price Band is revised, the revised Price Band and Bidding/Issue Period will be published in two (2) national newspapers (one each in English and Hindi) and in a regional newspaper and also by indicating the change on the website of the BRLM and at the terminals of the members of the Syndicate and the Bidding/Issue Period may be extended, if required, by an additional three (3) working days, subject to the total Bidding/Issue Period not exceeding ten (10) working days.

3. During the Bidding/Issue Period, investors who are interested in subscribing to our Equity Shares should approach the members of Syndicate or their authorised agents to register their Bid.

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4. Each Bid cum Application Form will give the Bidder the choice to Bid for up to three (3) optional prices (for details refer to the paragraph titled “Bids at Different Price Levels” on page 237 within the Price Band and specify the demand (i.e., the number of Equity Shares Bid for) in each option. The price and demand options submitted by the Bidder in the Bid cum Application Form will be treated as optional demands from the Bidder and will not be cumulated. After determination of the Issue Price, the maximum number of Equity Shares Bid for by a Bidder at or above the Issue Price will be considered for allocation and the rest of the Bid(s), irrespective of the Bid price, will become automatically invalid.

5. The Bidder cannot Bid on another Bid cum Application Form after Bid(s) once one Bid cum Application Form has been submitted to any member of the Syndicate. Submission of a second Bid cum Application Form to either the same or to another member of the Syndicate will be treated as multiple bidding and is liable to be rejected either before entering the Bid into the electronic bidding system, or at any point of time prior to the Allotment of Equity Shares in this Issue. However, the Bidder can revise the Bid through the Revision Form, the procedure for which is detailed under the paragraph “Build up of the Book and Revision of Bids” on page 240.

6. The members of the Syndicate will enter each Bid option into the electronic bidding system as a separate Bid and generate a TRS, for each price and demand option and give the same to the Bidder. Therefore, a Bidder can receive up to three TRSs for each Bid cum Application Form.

7. Along with the Bid cum Application Form, all Bidders will make payment in the manner described under the paragraph “Terms of Payment and Payment into the Escrow Account” on page 239.

8. During the Bidding/Issue Period, Bidders may approach the members of the Syndicate to submit their Bid. Every member of the Syndicate shall accept Bids from all clients/investors who place orders through them and shall have the right to vet the Bids subject to the terms of the Syndicate Agreement and the Draft Red Herring Prospectus.

9. For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus

BIDS AT DIFFERENT PRICE LEVELS

1. The Price Band has been fixed at Rs. [O] to Rs. [O] per Equity Share, Rs. [O] being the floor of the Price Band and Rs. [O] being the cap of the Price Band. The Bidders can Bid at any price within the Price Band in multiples of Re. 1/-

2. Our Company in consultation with the BRLM can revise the Price Band during the Bidding/Issue Period, in which case the Bidding/issue Period shall be extended further for a period of three (3) additional working days, subject to the total Bidding/Issue Period being a maximum of ten (10) working days. The cap on the Price Band should not be more than 20% of the floor of the Price Band. Subject to compliance with the immediately preceding sentence, the floor of the Price Band can move up or down to the extent of 20% of the floor of the Price Band disclosed in the Red Herring Prospectus.

3. Any revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely disseminated by notification to BSE and NSE, by issuing a public notice in two (2) national newspapers (one each in English and Hindi) and in a regional newspaper, and also by indicating the change on the website of the BRLM and at the terminals of the members of the Syndicate.

4. Our Company, in consultation with the BRLM can finalize the Issue Price within the Price Band without the prior approval of, or intimation to, the Bidders.

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5. The Bidder has to Bid for the desired number of Equity Shares at a specific price. The Bidder can Bid at any price within the Price Band in multiples of Re.1/- Retail Individual Bidders may Bid at Cut-off Price. However, bidding at Cut-off Price is prohibited for QIB Bidders or Non-Institutional Bidders and such Bids from QIBs and Non-Institutional Bidders shall be rejected.

6. Retail Individual Bidders, who Bid at Cut-off Price agree that they shall purchase the Equity Shares at any price within the Price Band. Retail Individual Bidders bidding at Cut-Off Price shall submit the Bid cum Application Form along with a cheque/demand draft for the Bid Amount based on the Payment Method based on the cap of the Price Band with the members of the Syndicate. In the event the Bid Amount is higher than the subscription amount payable by the Retail Individual Bidders, who Bid at Cutoff Price, shall receive the refund of the excess amounts from the respective Refund Account.

7. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had bid at Cut-off Price could either (i) revise their Bid or (ii) make additional payment based on the cap of the revised Price Band (such that the total amount i.e. original Bid Amount plus additional payment does not exceed Rs. 100,000 if the Bidder wants to continue to bid at Cut-off Price), with the member of the Syndicate to whom the original Bid was submitted. In case the total amount (i.e. original Bid Amount plus additional payment) exceeds Rs. 100,000, the Bid by a Retail Individual Bidder will be considered for allocation under the Non-Institutional Portion in terms of this Draft Red Herring Prospectus. If, however, the Bidder does not either revise the Bid or make additional payment and the Issue Price is higher than the Cap Price prior to revision, the number of Equity Shares bid for shall be adjusted downwards for the purpose of allotment, such that no additional payment would be required from the Bidder and the Bidder is deemed to have approved such revised Bid at Cut-off Price.

8. In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders who have Bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of bidding would be refunded from the respective Refund Account.

9. In the event of any revision in the Price Band, whether upwards or downwards, the minimum application size shall remain [O] Equity Shares irrespective of whether the Bid Amount payable on such minimum application is not in the range of Rs. 5,000 to Rs. 7,000.

10. For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

ESCROW MECHANISM

Our Company and the members of the Syndicate shall open Escrow Accounts with one or more Escrow Collection Banks in whose favour the Bidders make out the cheque or demand draft in respect of his or her Bid and/or revision of the Bid. Cheques or demand drafts received for the full Bid Amount from Bidders in a certain category would be deposited in the Escrow Accounts. The Escrow Collection Banks will act in terms of this Draft Red Herring Prospectus and the Escrow Agreement. The monies in the Escrow Accounts shall be maintained by the Escrow Collection Banks for and on behalf of the Bidders. The Escrow Collection Banks shall not exercise any lien whatsoever over the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the Designated Date, the Escrow Collection Banks shall transfer the monies from the Escrow Accounts to the Public Issue Account and the Refund Account as per the terms of the Escrow Agreement and this Draft Red Herring Prospectus.

The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an arrangement between us, the Syndicate, the Escrow Collection Bank(s) and the Registrar to the Issue to facilitate collections from the Bidders.

For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

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TERMS OF PAYMENT AND PAYMENT INTO THE ESCROW COLLECTION ACCOUNTS

Each Bidder, shall pay the applicable Margin Amount, with the submission of the Bid-cum-Application Form by way of a cheque or demand draft in favour of the Escrow Account (for details please see the section titled “Payment Instructions” on page 249 of this Draft Red Herring Prospectus) and submit the same to the member of the Syndicate to whom the Bid is being submitted. Bid-cum-Application Forms accompanied by cash shall not be accepted.

The members of the Syndicate shall deposit the cheque or demand draft with the Escrow Collection Bank(s), which will hold the monies for the benefit of the Bidders till the Designated Date. On the Designated Date, the Escrow Collection Bank(s) shall transfer the funds equivalent to the size of the Issue from the Escrow Account, as per the terms of the Escrow Agreement, into the Issue Account. The balance amount after transfer to the Issue Account shall be transferred to the Refund Account.

On the Designated Date and no later than fifteen (15) days from the Bid/Issue Closing Date, the Escrow Collection Bank(s) shall dispatch all refund amounts payable to unsuccessful Bidders and also the excess amount paid on bidding, if any, after adjustment for Allotment to the Bidders

Each category of Bidders i.e., QIB Bidders, Non-Institutional Bidders and Retail Individual Bidders would be required to pay their applicable Margin Amount at the time of the submission of the Bid-cum-Application Form. The Margin Amount payable by each category of Bidders is mentioned under the section titled “Issue Structure” on page 229 of this Draft Red Herring Prospectus. Where the Margin Amount applicable to the Bidder is less than 100% of the Bid Amount, any difference between the amount payable by the Bidder for Equity Shares allocated/allotted at the Issue Price and the Margin Amount paid at the time of Bidding, shall be payable by the Bidder no later than the Pay in-Date. QIBs will be required to deposit a margin of 10% at the time of submitting of their Bids.

If the payment is not made favoring the Escrow Account within the time stipulated above, the Bid of the Bidder is liable to be cancelled. However, if the applicable Margin Amount for Bidders is 100%, the full amount of payment has to be made at the time of submission of the Bid-cum- Application Form.

Where the Bidder has been allocated lesser number of Equity Shares than he or she had bid for, the excess amount paid on bidding, if any, after adjustment for allotment, will be refunded to such Bidder within fifteen (15) days from the Bid /Issue Closing Date, failing which we shall pay interest at 15% per annum for any delay beyond the periods as mentioned above.

For ASBA process, please refer section “ASBA Process” on page no 265 of the Draft Red Herring Prospectus.

ELECTRONIC REGISTRATION OF BIDS

1. The members of the Syndicate will register the Bids using the on-line facilities of NSE and BSE. There will be at least one on-line connectivity in each city, where a stock exchange is located in India and where Bids are being accepted.

2. NSE and BSE will offer a screen-based facility for registering Bids for the Issue. This facility will be available on the terminals of the members of the Syndicate and their authorised agents during the Bidding/Issue Period. The members of the Syndicate can also set up facilities for off-line electronic registration of Bids subject to the condition that they will subsequently upload the off-line data file into the on-line facilities for book building on a regular basis. On the Bid/Issue Closing Date, the members of the Syndicate shall upload the Bids till such time as may be permitted by the Stock Exchanges.

3. BSE and NSE will aggregate demand and price for Bids registered on their electronic facilities on a regular basis and display graphically the consolidated demand at various price levels. This

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information can be accessed on BSE’s website at www.bseindia.com or on NSE’s website at www.nseindia.com

4. At the time of registering each Bid, the members of the Syndicate shall enter the following details of the investor in the on-line system:

Name of the investor (Investors should ensure that the name given in the Bid-cum-Application form is exactly the same as the Name in which the Depository Account is held. In case, the Bid-cum-Application Form is submitted in joint names, investors should ensure that the Depository Account is also held in the same joint names and are in the same sequence in which they appear in the Bid-cum-Application Form) Investor Category such as Individual, Corporate, FII, NRI, Mutual Fund, etc. Number of Equity Shares Bid for Bid price Bid–cum-Application Form number Whether Margin Amount has been paid upon submission of Bid-cum-Application Form and Depository Participant Identification Number and Client Identification Number of the beneficiary account of the Bidder

5. A system generated TRS will be given to the Bidder as a proof of the registration of each of the bidding options. It is the Bidder’s responsibility to obtain the TRS from the members of the Syndicate. The registration of the Bid by the member of the Syndicate does not guarantee that the Equity Shares shall be allocated either by the members of the Syndicate or our Company.

6. Such TRS will be non-negotiable and by itself will not create any obligation of any kind.

7. In case of QIB bidders, members of the syndicate also have the right to accept the bid or reject it. However, such rejection should be made at the time of receiving the bid and only after assigning a reason for such rejection in writing. In case of Non-Institutional Bidders and Retail Individual Bidders who Bid, Bids would not be rejected except on the technical grounds listed on page 252.

8. It is to be distinctly understood that the permission given by NSE and BSE to use their network and software of the Online IPO system should not in any way be deemed or construed to mean that the compliance with various statutory and other requirements by our Company or the BRLM are cleared or approved by NSE and BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of compliance with the statutory and other requirements nor does it take any responsibility for the financial or other soundness of our Company, the Promoter, the management or any scheme or project of our Company.

9. It is also to be distinctly understood that the approval given by NSE and BSE should not in any way be deemed or construed that this Draft Red Herring Prospectus has been cleared or approved by NSE or BSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Draft Red Herring Prospectus; nor does it warrant that our Equity Shares will be listed or will continue to be listed on NSE and BSE.

10. For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

BUILD UP OF THE BOOK AND REVISION OF BIDS

1. Bids registered by various Bidders through the members of the Syndicate shall be electronically transmitted to NSE or BSE mainframe on a regular basis in accordance with market practice.

2. The book gets built up at various price levels. This information will be available with the BRLM on a regular basis.

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3. During the Bidding/Issue Period, any Bidder who has registered his or her interest in the Equity Shares at a particular price level is free to revise his or her Bid within the Price Band using the printed Revision Form, which is a part of the Bid cum Application Form.

4. Revisions can be made in both the desired number of Equity Shares and the Bid price by using the Revision Form. Apart from mentioning the revised options in the revision form, the Bidder must also mention the details of all the options in his or her Bid cum Application Form or earlier Revision Form. For example, if a Bidder has Bid for three options in the Bid cum Application Form and he is changing only one of the options in the Revision Form, he must still fill the details of the other two options that are not being changed in the Revision Form. Incomplete or inaccurate Revision Forms will not be accepted by the members of the Syndicate.

5. The Bidder can make this revision any number of times during the Bidding Period. However, for any revision(s) in the Bid, the Bidders will have to use the services of the same member of the Syndicate through whom he or she had placed the original Bid. Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be made only in such Revision Form or copies thereof.

6. Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for the incremental amount, if any, to be paid on account of the upward revision of the Bid. The excess amount, if any, resulting from downward revision of the Bid would be returned to the Bidder at the time of refund in accordance with the terms of this Draft Red Herring Prospectus.

7. When a Bidder revises his or her Bid, he or she shall surrender the earlier TRS and get a revised TRS from the members of the Syndicate. It is the responsibility of the Bidder to request for and obtain the revised TRS, which will act as proof of his or her having revised the previous Bid.

8. Only Bids that are uploaded on the online IPO system of the NSE and BSE shall be considered for allocation/allotment. In the event of discrepancy of data between the Bids registered on the online IPO system and the physical Bid cum Application Form, the decision of our Company in consultation with the BRLM, based on the physical records of Bid/cum Application Forms, shall be final and binding on all concerned.

9. Revision option is not available to ASBA investor. For details, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

PRICE DISCOVERY AND ALLOCATION

1. After the Bid /Issue Closing Date, the BRLM will analyze the demand generated at various price levels.

2. Our Company in consultation with the BRLM, shall finalize the “Issue Price” and the number of Equity Shares to be allocated in each investor category.

3. The allocation to Non-Institutional Bidders and Retail Individual Bidders of not less than 15% and 35% of the Net Issue respectively, the allocation to QIBs for up to 50% of the Net Issue, Eligible Employees Bidding under the Employees Reservation Portion, Eligible Shareholders of our Promoter and Promoter Group Company under Shareholders of the Promoter and its Group company portion would be on proportionate basis, in the manner specified in the SEBI DIP Guidelines and this Draft Red Herring Prospectus, in consultation with Designated Stock Exchange, subject to valid Bids being received at or above the Issue Price.

4. Under-subscription, if any, in any category of the Issue would be allowed to be met with spill over from any of the other categories at the discretion of our Company in consultation with the BRLM. However, if the aggregate demand by Mutual Funds is less than 2,82,500 Equity Shares, the balance

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Equity Shares available for allocation in the Mutual Funds Portion will first be added to the QIB Portion and be allocated proportionately to the QIB Bidders.

5. The allocation under the Issue shall be on proportionate basis, in the manner specified in the SEBI DIP Guidelines and this DRHP and in consultation with Designated Stock Exchange.

6. The BRLM, in consultation with us, shall notify the members of the Syndicate of the Issue Price and allocations to their respective Bidders, where the full Bid Amount has not been collected from the Bidders.

7. We reserve the right to cancel the Issue any time after the Bid/Issue Opening Date but before the Allotment without assigning any reasons whatsoever.

8. Allocation to FIIs and eligible NRIs on repatriation basis will be subject to the applicable law.

9. In terms of the SEBI DIP Guidelines, QIB Bidders shall not be allowed to withdraw their Bid after the Bid/Issue Closing Date.

10. For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

SIGNING OF UNDERWRITING AGREEMENT AND ROC FILING

1. Our Company the Selling Shareholder, the BRLM and the Syndicate Members shall enter into an Underwriting Agreement on finalization of the Issue Price and allocation(s) to the Bidders.

2. After signing the Underwriting Agreement, our Company would update and file the updated Red Herring Prospectus with RoC, which then would be termed ‘Prospectus’. The Prospectus would have details of the Issue Price, Issue size, underwriting arrangements and would be complete in all material respects.

FILING OF THE PROSPECTUS WITH THE ROC

We will file a copy of the Prospectus with the Registrar of Companies, Chennai, Tamil Nadu in terms of Section 56, Section 60 and Section 60B of the Companies Act.

ANNOUNCEMENT OF PRE-ISSUE ADVERTISEMENT

Subject to Section 66 of the Companies Act, our Company shall after receiving final observations, if any, on this Draft Red Herring Prospectus from SEBI, publish an advertisement, in the form prescribed by the SEBI DIP Guidelines in an English national daily with wide circulation, one Hindi National newspaper and a regional language newspaper with wide circulation at Chennai.

ADVERTISEMENT REGARDING ISSUE PRICE AND RED HERRING PROSPECTUS

We will issue a statutory advertisement after the filing of the Prospectus with the RoC. This advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate the Price Band along with a table showing the number of Equity Shares and the amount payable by an investor. Any material updates between the date of Red Herring Prospectus and the date of Prospectus will be included in such statutory advertisement.

ISSUANCE OF CONFIRMATION OF ALLOCATION NOTE (CAN)

Subject to “Allotment Reconciliation and Revised CANs” as set forth below:

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1. Upon approval of the Basis of Allotment by the Designated Stock Exchange, the BRLM or Registrar to the Issue shall send to the members of the Syndicate a list of their Bidders who have been allocated Equity Shares in the Issue. The approval of the basis of allocation by the Designated Stock Exchange for QIB Bidders may be done simultaneously with or prior to the approval of the basis of allocation for the Retail Individual and Non-Institutional Bidders. However, Bidders should note that our Company shall ensure that the date of Allotment of the Equity Shares to all Bidders, in all categories, shall be done on the same date.

2. The BRLM or members of the Syndicate would dispatch a CAN to their Bidders who have been allocated Equity Shares in the Issue. The dispatch of a CAN shall be deemed a valid, binding and irrevocable contract for the Bidder to pay the entire Issue Price for all the Equity Shares allocated to such Bidder. Those Bidders who have not paid the entire Bid Amount into the Escrow Account at the time of bidding shall pay in full the Allocation Amount payable into the Escrow Account by the Pay-in Date specified in the CAN.

3. Bidders who have been allocated Equity Shares and who have already paid the Bid Amount into the Escrow Account at the time of bidding shall directly receive the CAN from the Registrar to the Issue subject, however, to realization of his or her cheque or demand draft paid into the Escrow Account. The dispatch of a CAN shall be deemed a valid, binding and irrevocable contract for the Bidder to pay the entire Issue Price for the allotment to such Bidder.

4. The issue of a CAN is subject to "Notice to QIBs: Allotment Reconciliation and Revised CANs" as set forth below.

Notice to QIBs: Allotment Reconciliation and Revised CANs

After the Bid/Issue Closing Date, an electronic book will be prepared by the Registrar on the basis of Bids uploaded on the BSE/NSE system. Based on the electronic book, QIBs may be sent a CAN, indicating the number of Equity Shares that may be allocated to them. This CAN is subject to the basis of final Allotment, which will be approved by the Designated Stock Exchange and reflected in the reconciled book prepared by the Registrar. Subject to SEBI DIP Guidelines, certain Bid applications may be rejected due to technical reasons, non-receipt of funds, cancellation of cheques, cheque bouncing, incorrect details, etc., and these rejected applications will be reflected in the reconciliation and basis of Allotment as approved by the Designated Stock Exchange. As a result, a revised CAN may be sent to QIBs, and the allocation of Equity Shares in such revised CAN may be different from that specified in the earlier CAN. QIBs should note that they may be required to pay additional amounts, if any, by the Pay-in Date specified in the revised CAN, for any increased allocation of Equity Shares. The CAN will constitute the valid, binding and irrevocable contract (subject only to the issue of a revised CAN) for the QIB to pay the entire Issue Price for all the Equity Shares allocated to such QIB. The revised CAN, if issued, will supersede in entirety the earlier CAN.

DESIGNATED DATE AND ALLOTMENT OF EQUITY SHARES

1. Our Company will ensure that the allotment of Equity Shares is done within fifteen (15) days of the Bid/Issue Closing Date. After the funds are transferred from the Escrow Account to the Public Issue Account on the Designated Date, we would allot the Equity Shares to the allottees. Our Company would ensure the credit to the successful Bidders depository account. Allotment of the Equity Shares to the allottees shall be within two (2) working days of the date of allotment. In case, our Company fails to make allotment or transfer within fifteen (15) days of the Bid/Issue Closing Date, interest would be paid to the investors at the rate of 15% per annum.

2. In accordance with the SEBI DIP Guidelines, Equity Shares will be issued and allotment shall be made only in the dematerialized form to the allottees

3. After the funds are transferred from the Escrow Accounts to the Public Issue Account on the Designated Date, the Company will allot the Equity Shares to the Allottees.

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4. Successful Bidders will have the option to rematerialize the Equity Shares so allotted/transferred if they so desire as per the provisions of the Companies Act and the Depositories Act, rules, regulations and bye laws of the Depositories.

INVESTORS ARE ADVISED TO INSTRUCT THEIR DEPOSITORY PARTICIPANT TO ACCEPT THE EQUITY SHARES THAT MAY BE ALLOCATED TO THEM PURSUANT TO THIS ISSUE.

GENERAL INSTRUCTIONS

DO’s:

1. Check if you are eligible to apply; 2. Read all the instructions carefully and complete the Resident Bid cum Application Form (white in color) or Non-Resident Bid cum Application Form (blue in color) and Employee Reservation Portion & Shareholder of the Promoter and Its Group Company Portion Bid cum application form (pink in color) as the case may be; 3. Ensure that the details about Depository Participant and beneficiary account are correct as allotment of Equity Shares will be in the dematerialized form only; 4. Investor must ensure that the name given in the Bid cum Application Form is exactly the same as the Name in which the Depository Account is held. In case the Bid cum Application Form is submitted in joint names, it should be ensured that the Depository Account is also held in the same joint names and are in the same sequence in which they appear in the Bid cum Application Form; 5. Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a member of the Syndicate; 6. Ensure that you have been given a TRS for all your Bid options; 7. Submit revised Bids to the same member of the Syndicate through whom the original Bid was placed and obtain a revised TRS; 8. Ensure that the Bid is within the Price Band; 9. Ensure that you mention your Permanent Account Number (PAN) allotted under the I.T. Act . The copy of the PAN card or the PAN allotment letter should be submitted with the application form; 10. Ensure that Demographic details (as defined herein below) are updated true and correct in all respects.

DON’Ts:

1. Do not Bid for lower than the minimum Bid size; 2. Do not Bid/ revise Bid Amount to less than the lower end of the Price Band or higher than the higher end of the Price Band; 3. Do not Bid on another Bid cum Application Form after you have submitted a Bid to the members of the Syndicate; 4. Do not pay the Bid Amount in cash; 5. Do not send Bid cum Application Forms by post; instead submit the same to a member of the Syndicate only; 6. Do not Bid at Cut Off Price (for QIB Bidders, Non-Institutional Bidders) ; 7. Do not Bid at Bid Amount exceeding Rs 100,000 (for Retail Individual Bidders); 8. Do not fill up the Bid cum Application Form such that the Equity Shares bid for exceeds the Issue Size and/ or investment limit or maximum number of Equity Shares that can be held under the applicable laws or regulations or maximum amount permissible under the applicable regulations; 9. Do not submit Bid accompanied with Stock invest. 10. Do not submit GIR number instead of PAN as Bid is liable to be rejected on this ground. 11. Do not submit the Bid without the QIB Margin Amount, in case of a Bid by a QIB.

Instructions for Completing the Bid cum Application Form

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Bidders can obtain Bid cum Application Forms and / or Revision Forms from the members of the Syndicate. For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

BIDS AND REVISIONS OF BIDS

Bids and revisions of Bids must be:

1. Made only in the prescribed Bid cum Application Form or Revision Form, as applicable (white color for Resident Indians, blue color for NRI, FII or foreign venture capital fund registered with SEBI applying on repatriation basis). 2. Completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained herein, in the Bid cum Application Form or in the Revision Form. Incomplete Bid cum Application Forms or Revision Forms are liable to be rejected. 3. For Retail Individual Bidders, the Bid must be for a minimum of [•] Equity Shares and in multiples of [•] thereafter subject to a maximum Bid Amount of Rs. 100,000. 4. For Bidders under the Employees Reservation Portion, the Bid must be for a minimum of [•] Equity Shares and in multiples of [•] thereafter subject to a maximum of 100,000 Equity Shares 5. For Bidders under the Shareholders of the Promoter and its Group Company Portion, the Bid must be for a minimum of [•] Equity Shares and in multiples of [•] thereafter subject to a maximum of 700,000 Equity Shares 6. For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of Equity Shares that the Bid Amount exceeds Rs.100,000 and in multiples of [•] Equity Shares thereafter. Bids cannot be made for more than the Issue size. Bidders are advised to ensure that a single Bid from them should not exceed the investment limits or maximum number of shares that can be held by them under the applicable laws or regulations. 7. In single name or in joint names (not more than three, and in the same order as their Depository Participant details). 8. Thumb impressions and signatures other than in the languages specified in the Eighth Schedule to the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official seal.

Bids by Eligible Employees in the Employees Reservation Portion

Bids under Employees Reservation Portion by employees shall be made only in the prescribed Bid cum Application Form or Revision Form (i.e. pink color) form. Eligible Employees applying in the Employees Reservation Portion should mention their employee number in the Bid cum Application Form. The following may be noted in respect of Bids by Employees in the Employees Reservation Portion:

• In case of joint Bids, the sole/first Bidder should be an Employee. Only those Bids by Employees that are at or above the Issue Price would be considered for Allocation. • Employees who Bid for Equity Shares of or for a value of not more than Rs. 100,000 in any of the bidding options can apply at the Cut off Price. • The maximum Bid in this category by any Employee cannot exceed 100,000 Equity Shares. • Employees can Bid in the Net Issue to the public portion and such Bids shall not be treated as multiple Bids • Employees should be physically present in India on the date of submission of the Bid-cum-Application Form. • If the aggregate demand in this category is less than or equal to 100,000 Equity Shares at or above the Issue Price, full Allocation shall be made to the Employees to the extent of their demand. Under subscription, if any, in the Employees Reservation Portion will be added back to the Net Issue to the public, and the under subscription can be met with spill over from any other category at the discretion of the Company, in consultation with the BRLM. • If the aggregate demand in this category is greater than 100,000 Equity Shares at or above the Issue Price, the allocation shall be made on a proportionate basis. For a description of the proportionate

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basis of Allocation please see the section titled “Basis of Allotment” beginning on page 256 of this Draft Red Herring Prospectus.

Bids by Eligible Shareholders of our Promoter and Promoter Group Company under the Shareholders of the Promoter and its Group Company Portion

Bids under Shareholders of the Promoter and its Group Company Portion shall be made only in the prescribed Bid cum Application Form or Revision Form (i.e. pink color) form. Shareholders applying in the Shareholders of the Promoter and its Group Company Portion should mention their folio number in the Bid cum Application Form. The following may be noted in respect of Bids by Shareholders in the Shareholders of our Promoter and Promoter Group Company Portion:

• In case of joint Bids, the sole/first Bidder should be an Shareholder. Only those Bids by Shareholder that are at or above the Issue Price would be considered for Allocation. • Shareholders who Bid for Equity Shares of or for a value of not more than Rs. 1,00,000 in any of the bidding options can apply at the Cut off Price. • The maximum Bid in this category by any Shareholder cannot exceed 7,00,000 Equity Shares. • Shareholders can Bid in the Net Issue to the public portion and such Bids shall not be treated as multiple Bids • Shareholders should be physically present in India on the date of submission of the Bid-cum- Application Form. • If the aggregate demand in this category is less than or equal to 7,00,000 Equity Shares at or above the Issue Price, full Allocation shall be made to the Shareholders to the extent of their demand. Under subscription, if any, in the Shareholders of our Promoter and Promoter Group Company Portion will be added back to the Net Issue to the public, and the under subscription can be met with spill over from any other category at the discretion of our Company, in consolation with the BRLM. • If the aggregate demand in this category is greater than 7,00,000 Equity Shares at or above the Issue Price, the allocation shall be made on a proportionate basis. For a description of the proportionate basis of Allocation please see the section titled “Basis of Allotment” beginning on page 256 of this Draft Red Herring Prospectus.

BIDS UNDER POWER OF ATTORNEY

1. In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of the Memorandum of Association and Articles of Association and/or bye laws must be lodged along with the Bid cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefore. 2. In case of Bids made pursuant to a power of attorney by FIIs, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of their SEBI registration certificate must be lodged along with the Bid cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefore. 3. In case of Bids made by insurance companies registered with the Insurance Regulatory and Development Authority, a certified copy of certificate of registration issued by Insurance Regulatory and Development Authority must be lodged along with the Bid cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefore. 4. In case of Bids made by provident funds with minimum corpus of Rs. 250 million (subject to applicable law) and pension funds with minimum corpus of Rs. 250 million, a certified copy of certificate from a chartered accountant certifying the corpus of the provident fund/ pension fund must be lodged along with the Bid cum Application Form. Failing this, our Company reserve the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefore.

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5. In case of Bids made by Mutual Fund registered with SEBI, venture capital fund registered with SEBI and foreign venture capital investor registered with SEBI, a certified copy of their SEBI registration certificate must be submitted with the Bid cum Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason. 6. Our Company in its absolute discretion, reserves the right to relax the above condition of simultaneous lodging of the power of attorney along with the Bid cum Application form, subject to such terms and conditions that our Company, and the BRLM may deem fit.

Bids by Insurance Companies

In the case of Bids made by insurance companies registered with the Insurance Regulatory and Development Authority, a certified copy of certificate of registration issued by the Insurance Regulatory and Development Authority must be lodged along with the Bid-cum-Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason thereof.

Bids by Provident Funds and Pension Funds

In the case of Bids made by provident funds, subject to applicable law, with a minimum corpus of Rs.25 crore and pension funds with a minimum corpus of Rs.25 crore, a certified copy of a certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged along with the Bid-cum- Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason thereof.

Bids by Mutual Funds, VCFs and FVCIs

In the case of Bids made by Mutual Funds, VCFs and FVCIs, a certified copy of their SEBI registration certificate must be submitted with the Bid-cum-Application Form. Failing this, our Company reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason thereof.

Our Company, in its absolute discretion, reserves the right to relax the above condition of simultaneous lodging of the power of attorney along with the Bid-cum-Application Form, subject to such terms and conditions that our Company and the Book Runners may deem fit.

Our Company, in its absolute discretion, reserve the right to permit the holder of the power of attorney to request the Registrar to the Issue that, for the purpose of printing particulars on the refund order and mailing of the refund order/CANs/allocation advice, the Demographic Details given on the Bid-cum- Application Form should be used (and not those obtained from the Depository of the Bidder). In such cases, the Registrar to the Issue shall use Demographic Details as given on the Bid-cum- Application Form instead of those obtained from the Depositories.

BIDDER’S BANK DETAILS

Bidders should note that on the basis of name of the Bidders, Depository Participant’s name, Depository Participant- Identification number and Beneficiary Account Number provided by them in the Bid cum Application Form, the Registrar to the Issue will obtain from the Depository the Bidders bank account details. These bank account details would be printed on the refund order, if any, to be sent to Bidders. Hence, Bidders are advised to immediately update their bank account details as appearing on the records of the depository participant. Please note that failure to do so could result in delays in credit of refunds to Bidders at the Bidders sole risk.

BIDDER’S DEPOSITORY ACCOUNT DETAILS

IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT

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IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE BID CUM APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE BID CUM APPLICATION FORM.

These Demographic Details would be used for all correspondence with the Bidders including mailing of the refund orders/ CANs/allocation advices and printing of bank particulars on the refund order and the Demographic Details given by Bidders in the Bid cum Application Form would not be used for any other purpose by the Registrar to the Issue. Hence Bidders are advised to update their Demographic Details as provided to their Depository Participants.

By signing the Bid cum Application Form, the Bidder would be deemed to have authorised the depositories to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on its records.

In case of Bidders receiving refunds through electronic transfer of funds, delivery of refund orders/allocation advice/CANs may get delayed if the same once sent to the address obtained from the depositories are returned undelivered. In such an event, the address and other details given by the Bidder in the Bid cum Application Form would be used only to ensure dispatch of refund orders. Please note that any such delay shall be at the Bidders sole risk and neither our Company, nor the Registrar, Escrow Collection Bank(s) nor the BRLM shall be liable to compensate the Bidder for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay.

In case no corresponding record is available with the Depositories, which matches three parameters, namely, names of the Bidders (including the order of names of joint holders), the Depository Participant’s identity (DP ID) and the beneficiary’s identity, then such Bids are liable to be rejected.

Our Company in its absolute discretion, reserve the right to permit the holder of the power of attorney to request the Registrar that for the purpose of printing particulars on the refund order and mailing of the refund order/CANs/allocation advice/ refunds through electronic transfer of funds, the Demographic Details given on the Bid cum Application Form should be used (and not those obtained from the Depository of the Bidder).In such cases, the Registrar shall use Demographic Details as given in the Bid cum Application Form instead of those obtained from the depositories.

BIDS BY NON RESIDENTS, NRIS, FIIS AND FOREIGN VENTURE CAPITAL FUNDS REGISTERED WITH SEBI ON A REPATRIATION BASIS

Bids and revision to Bids must be made:

1. On the Bid cum Application Form or the Revision Form, as applicable (blue in color), and completed in full in BLOCK LETTERS in ENGLISH in accordance with the instructions contained therein. 2. In a single name or joint names (not more than three). 3. NRIs for a Bid Amount of up to Rs. 100,000 would be considered under the Retail Portion for the purposes of allocation and Bids for a Bid Amount of more than Rs. 100,000 would be considered under Non-Institutional Portion for the purposes of allocation; by FIIs for a minimum of such number of Equity Shares and in multiples of [•] thereafter that the Bid Amount exceeds Rs. 100,000.For further details, please refer to the sub-section titled ‘Maximum and Minimum Bid Size’ on page 235 of this Draft Red Herring Prospectus. In the names of individuals, or in the names of FIIs but not in the names of minors, OCBs, firms or partnerships, foreign nationals (excluding NRIs) or their nominees. 4. Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only and net of bank charges and / or commission. In case of Bidders who remit money through Indian Rupee drafts purchased abroad, such payments in Indian Rupees will be converted into US Dollars or any other freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the

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time of remittance and will be dispatched by registered post or if the Bidders so desire, will be credited to their NRE accounts, details of which should be furnished in the space provided for this purpose in the Bid cum Application Form. Our Company will not be responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency. 5. Our Company has received a clarification from the FIPB Unit, Department of Economic Affairs, Ministry of Finance in relation to Foreign investment in this IPO through letter dated 14 th January, 2009 stating that approval shall not be required for the proposed IPO and our Company will have to obtain no-objection from FIPB, in the event of our Company proposes to commence broadcasting activities.

There is no reservation for Non Residents, NRIs, FIIs and foreign venture capital funds and all Non Residents, NRI, FII and foreign venture capital funds applicants will be treated on the same basis with other categories for the purpose of allocation.

Equity Shares have not been registered under the US Securities Act and are not being sold in the US. The Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “US Securities Act”), or any state securities laws in the United States and may not be offered or sold within the United States,(as defined in Regulation S under the US Securities Act) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. Accordingly, the Equity Shares will be offered and sold only outside the United States in offshore transactions in compliance with Regulations and the applicable laws of the jurisdiction where those offers and sales occur.

PAYMENT INSTRUCTIONS

Our Company shall open Escrow Accounts with the Escrow Collection Bank(s) for the collection of the Bid Amounts payable upon submission of the Bid cum Application Form and for amounts payable pursuant to allocation in the Issue. Each Bidder shall draw a cheque or demand draft for the amount payable on the Bid and/or on allocation as per the following terms:

PAYMENT INTO ESCROW ACCOUNT

Each Bidder shall pay the applicable Margin Amount at the time of submission of the Bid cum Application Form by way of a cheque or demand draft in favour of the Escrow Account as per the below terms.

1. The members of the Syndicate shall deposit the cheque or demand draft with the Escrow Collection Bank(s), which will hold the monies for the benefit of the Bidders till the Designated Date. On the Designated Date, the Escrow Collection Bank(s) shall transfer the funds equivalent to the size of the Issue from the Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account. The balance amount after transfer to the Public Issue Account shall be transferred to the Refund Account.

2. Each category of Bidders i.e. QIB Bidders, Non Institutional Bidders and Retail Individual Bidders would be required to pay their applicable Margin Amount at the time of the submission of the Bid cum Application Form by way of a cheque or demand draft for the maximum amount of his/ her Bid in favour of the Escrow Account of the Escrow Collection Bank(s). (For details please see the section titled “Issue Procedure” beginning on page 232 and submit the same to the member of the Syndicate to whom the Bid is being submitted. The Margin Amount payable by each category of Bidders is mentioned in the section titled “Issue Structure” beginning on page 229. Bid cum Application Forms accompanied by cash shall not be accepted. The maximum Bid Price has to be paid at the time of submission of the Bid cum Application Form based on the highest bidding option of the Bidder.

3. Where the Margin Amount applicable to the Bidder is less than 100% of the Bid Amount, any difference between the amount payable by the Bidder for Equity Shares allocated at the Issue Price and the Margin Amount paid at the time of Bidding, shall be payable by the Bidder no later than the

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Pay-in-Date. If the payment is not made favoring the Escrow Account within the time stipulated above, the Bid of the Bidder is liable to be cancelled.

4. Where the Bidder has been allocated lesser number of Equity Shares than he or she had bid for, the excess amount paid on bidding, if any, after adjustment for Allotment, will be refunded to such Bidder in terms of the Draft Red Herring Prospectus.

5. The payment instruments for payment into the Escrow Account should be drawn in favour of:

a. In case of Resident QIB Bidders: “Escrow Account – MEL- IPO – QIB – R” b. In case of non resident QIB Bidders: “Escrow Account – MEL IPO – QIB – NR” c. In case of Resident Retail and Non-Institutional Bidders: “Escrow Account – MEL IPO – R” d. In case of Non-Resident Retail and Non-Institutional Bidders: “Escrow Account – MEL IPO – NR” e. In Case of Eligible Employees: Escrow Account – “MEL IPO – Employees” f. In Case of Eligible Shareholders of our Promoter and Promoter Group Company: “MEL IPO – Shareholders”

6. In case of Bids by Eligible NRIs applying on repatriation basis, the payments must be made through Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in NRE accounts or 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 Bidder bidding on a repatriation basis. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to NRE or FCNR account.

7. In case of Bids by FIIs, the payment should be made out of funds held in special Rupee Account along with documentary evidence in support of the remittance. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to a special rupee Account.

8. On the Designated Date and not later than fifteen (15) days from the Bid/Issue Closing Date, the Escrow Collection Banks shall refund all amounts payable to unsuccessful Bidders and the excess amount paid on Bidding, if any, after adjusting for allocation to the Bidders.

Payments should be made by cheque, or demand draft drawn on any bank (including a co-operative bank), which is situated at, and is a member of or sub-member of the bankers’ clearing house located at the centre where the Bid cum Application Form is submitted. Outstation cheques/bank drafts drawn on banks not participating in the clearing process will not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. Cash/Stock invest/money orders/postal orders will not be accepted.

PAYMENT BY STOCK INVEST

In terms of the Reserve Bank of India Circular No. DBOD No. FSC BC 42/24.47.00/2003-04 dated 5th November, 2003, the option to use the stock invest instrument in lieu of cheques or bank drafts for payment of Bid money has been withdrawn. Hence, payment through stock invest would not be accepted in this Issue.

PAYMENT INSTRUCTIONS FOR ASBA INVESTOR

For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus

SUBMISSION OF BID CUM APPLICATION FORM

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All Bid cum Application Forms or Revision Forms duly completed and accompanied by account payee cheques or drafts shall be submitted to the members of the Syndicate at the time of submission of the Bid. Separate receipts shall not be issued for the money payable on the submission of Bid cum Application Form or Revision Form. However, the collection centre of the members of the Syndicate will acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum Application Form for the records of the Bidder.

For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

OTHER INSTRUCTIONS

Joint Bids in the case of Individuals

Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments will be made out in favour of the Bidder whose name appears first in the Bid cum Application Form or Revision Form. All communications will be addressed to the First Bidder and will be dispatched to his or her address.

Multiple Bids

A Bidder should submit only one (1) Bid (and not more than one) for the total number of Equity Shares required. Two or more Bids will be deemed to be multiple Bids if the sole or First Bidder is one and the same. In this regard, the procedures which would be followed by the Registrar to the Issue to detect multiple applications are given below:

1. All applications with the same name and age will be accumulated and taken to a separate process file which will serve as a multiple master document. 2. In this master, a check will be carried out for the same PAN numbers. In cases where the PAN numbers are different, the same will be deleted from this master. 3. The addresses of all these applications from the multiple master will be strung from the address master. This involves including the addresses in a single line after deleting non-alpha and non- numeric characters, i.e., commas, full stops, hashes etc. Sometimes, the name, the first line of the address and pin code will be converted into a string for each application received and a photo match will be carried out among all the applications processed. A print-out of the addresses will be made to check for common names. Applications with the same name and same address will be treated as multiple applications. 4. The applications will be scanned for similar Depository Participant’s identity (DP ID) and client identity numbers. If applications bear the same numbers, these will be treated as multiple applications. 5. After the aforesaid procedures, a print-out of the multiple master will be taken and the applications physically verified to tally signatures and also father’s/husband’s names. Upon completion of this exercise, the applications will be identified as multiple applications. In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. We, in consultation with the BRLM, reserve the right to reject, in our absolute discretion, all or any multiple Bids in any or all categories.

PERMANENT ACCOUNT NUMBER OR PAN

The Bidders or in the case of a Bid in joint names, each of the Bidders, should mention his/her Permanent Account Number (PAN) allotted under the I.T. Act . Applications without this information will be considered incomplete and are liable to be rejected. It is to be specifically noted that Bidders should not furnish the GIR number instead of the PAN as the Bid is liable to be rejected on this ground . Unique Identification Number (“UIN”) – MAPIN Pursuant to circulars dated 27 th April, 2007 (No. MRD/DoP/Cir-05/2007) and 25 th

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June, 2007 (No. MRD/DoP/Cir-08/2007) issued by SEBI, the requirement of UIN under the SEBI (Central database of Market Participants) Regulations, 2003 has been discontinued and irrespective of the amount of transaction, PAN has been made the sole identification number for all participants in the securities market. REJECTION OF BIDS

In case of QIB Bidders, our Company in consultation with the BRLM and/or their affiliates may reject Bids provided that the reason for rejecting the same shall be provided to such Bidders in writing. In case of Non- Institutional Bidders and Retail Individual Bidders, we have the right to reject Bids based on technical grounds only. Consequent refunds shall be made by cheque or pay order or draft and will be sent to the Bidder’s address at the Bidder’s risk.

GROUNDS FOR TECHNICAL REJECTIONS

Bidders are advised to note that Bids are liable to be rejected inter alia on the following technical grounds: 1. Amount paid does not tally with the amount payable for the highest value of Equity Shares bid for; 2. Age of First Bidder not given; 3. In case of partnership firms Equity Shares may be registered in the names of the individual partners and no firm as such shall be entitled to apply; 4. Bid by persons not competent to contract under the Indian Contract Act, 1872 including minors, insane persons; 5. PAN photocopy/PAN communication/ Form 60 or Form 61 declaration along with documentary evidence in support of address given in the declaration, not given; 6. Bank account details for refund are not given; 7. Bids for lower number of Equity Shares than specified for that category of investors; 8. Bids at a price less than lower end of the Price Band; 9. Bids at a price more than the higher end of the Price Band; 10. Bids at Cut Off Price by Non-Institutional and QIB Bidders; 11. Bids for number of Equity Shares which are not in multiples of [•]; 12. Category not ticked; 13. Multiple Bids as defined in this Draft Red Herring Prospectus; 14. In case of Bid under power of attorney or by limited companies, corporate, trust etc., relevant documents are not submitted; 15. Bids accompanied by Stock invest/money order/postal order/cash; 16. Signature of sole and / or joint Bidders missing; 17. Bid cum Application Forms does not have the stamp of the BRLM, or Syndicate Members; 18. Bid cum Application Forms does not have Bidder’s depository account details; 19. Bid cum Application Forms are not delivered by the Bidders within the time prescribed as per the Bid cum Application Forms, Bid/Issue Opening Date advertisement and this Draft Red Herring Prospectus and as per the instructions in this Draft Red Herring Prospectus and the Bid cum Application Forms; 20. In case no corresponding record is available with the Depositories that matches three parameters namely, names of the Bidders (including the order of names of joint holders), the Depositary Participant’s identity (DP ID) and the beneficiary’s identity; 21. Bids for amounts greater than the maximum permissible amounts prescribed by the regulations; 22. Bids by US persons other than “qualified institutional buyers” as defined in Rule 144A of the Securities Act; 23. Bids for amounts greater than the maximum permissible amounts prescribed by the regulations, please refer the section titled "Issue Procedure- Maximum & Minimum Bid Size" at page 235 of this Draft Red Herring Prospectus; 24. Bids not duly signed by the sole/joint Bidders; 25. Bids accompanied with Stock invests; 26. Bids by OCBs ; or 27. Bids by U.S. residents or U.S. persons other than “qualified institutional buyers” as defined in Rule 144A of the U.S. Securities Act of 1933. 28. If GIR number is mentioned instead of PAN Number.

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EQUITY SHARES IN DEMATERIALISED FORM WITH NSDL OR CDSL

As per the provisions of Section 68B of the Companies Act, the Equity Shares in this Issue shall be allotted only in a dematerialized form, (i.e., not in the form of physical certificates but be fungible and be represented by the statement issued through the electronic mode). In this context, two tripartite agreements have been signed among us, the respective Depositories and the Registrar to the Issue: (a) an agreement dated 3rd January, 2005 between NSDL, us and Registrar to the Issue; (b) an agreement dated [•] between CDSL, us and Registrar to the Issue.

Bidders will be allotted Equity Shares only in dematerialized mode. Bids from any Bidder without relevant details of his or her depository account are liable to be rejected.

1. A Bidder applying for Equity Shares must have at least one beneficiary account with the Depository Participants of either NSDL or CDSL prior to making the Bid. 2. The Bidder must necessarily fill in the details (including the beneficiary account number and Depository Participant’s identification number) appearing in the Bid cum Application Form or Revision Form. 3. Equity Shares Allotted to a successful Bidder will be credited in electronic form directly to the beneficiary account (with the Depository Participant) of the Bidder. 4. Names in the Bid cum Application Form or Revision Form should be identical to those appearing in the account details with the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details with the Depository. 5. If incomplete or incorrect details are given under the heading ‘Bidders Depository Account Details’ in the Bid cum Application Form or Revision Form, it is liable to be rejected. 6. The Bidder is responsible for the correctness of his or her Demographic Details given in the Bid cum Application Form vis-à-vis those with his or her Depository Participant. 7. 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. All the Stock Exchanges where our Equity Shares are proposed to be listed have electronic connectivity with CDSL and NSDL. 8. The trading of the Equity Shares would be in dematerialized form only for all investors in the Demat segment of the respective Stock Exchanges.

COMMUNICATIONS

All future communications in connection with Bids made in this Issue should be addressed to the Registrar to the Issue quoting the full name of the sole or First Bidder, Bid cum Application Form number, Bidders Depository account details, number of Equity Shares applied for, date of bid form, name and address of the member of the Syndicate where the Bid was submitted and cheque or draft number and issuing bank thereof. Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or post- Issue related problems such as non-receipt of letters of allotment, credit of allotted shares in the respective beneficiary accounts, refund orders etc.

PRE-ISSUE AND POST ISSUE RELATED PROBLEMS, GRIEVANCES, COMPLAINTS

We estimate that the average time required by us or the Registrar to the Issue for the redressal of routine investor grievances shall be seven days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, we seek to redress these complaints as expeditiously as possible.

We have appointed Mr. Subramanian Ganesan, as the Compliance Officer and he may be contacted in case of any pre-Issue or post-Issue-related problems. He can be contacted at the following address: Mr. Subramanian Ganesan Mayajaal Entertainment Limited 34/1, 35, Kanathur Reddy Kuppam Village,

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Chengalput Taluk, Kancheepuram District– 603112, Tamil Nadu, India ; Tel: 044 27472860; Fax: 044 27472870 E-mail:[email protected] Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of allotment, credit of allotted shares in the respective beneficiary accounts, refund orders, etc.

Procedure and Time Schedule for Transfer of Equity Shares

Our Company reserves, at its absolute and uncontrolled discretion and without assigning any reason thereof, the right to accept or reject any Bid in whole or in part In the case of Retail and Non-Institutional Bidders, the rejection of any Bid is only on grounds of technical non-compliance with the specified procedure. In case a Bid is rejected in full, the whole of the Bid Amount will be refunded to the Bidder within fifteen (15) days of the Bid/Issue Closing Date. In case a Bid is rejected in part, the excess Bid Amount will be refunded to the Bidder within fifteen (15) days of the Bid/Issue Closing Date. Our Company will ensure the allotment of the Equity Shares within fifteen (15) days from the Bid/Issue Closing Date. Our Company shall pay interest at the rate of 15% per annum (for any delay beyond the periods as mentioned above), if allotment is not made, refund orders are not dispatched and/ or dematerialized credits are not made to investors within two (2) working days from the date of allotment.

Disposal of Applications and Applications Money

We shall ensure dispatch of allotment advice and/or refund orders/refund advice (in case refunds made through ECS/ Direct Credit, RTGS, NEFT) as the case may be giving credit to the Beneficiary Account of the Bidders with their respective Depository Participant and submission of the allotment and listing documents to the Stock Exchanges within two (2) working days of finalization of the basis of allotment of Equity Shares. The mode of dispatch of refunds shall be as mentioned in the paragraph titled “Mode of Making Refunds” beginning on page 261 of this Draft Red Herring Prospectus. Where refunds are made through electronic transfer of funds, a suitable communication will be sent to the Bidders within fifteen (15) days of closure of the issue, giving details of the Bank where refund will be credited along with amount and expected date of electronic credit of refund.

The bank account details for ECS, Direct Credit, RTGS, National Electronic Funds Transfer (NEFT) credit will be directly taken from the depositories’ database and hence Bidders are required to ensure that bank details including the nine digit MICR code (Magnetic Ink Character Recognition) maintained at the depository level are updated and correct.

We will provide adequate funds required for dispatch of refund orders/advice or allotment advice to the Registrar to the Issue.

No separate receipts shall be issued for the money payable on the submission of Bid-cum-Application Form or Revision Form. However, the collection centre of the Syndicate Member will acknowledge the receipt of the Bid-cum-Application Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid-cum-Application Form for the records of the Bidder.

Save and except refunds effected through the electronic mode i.e. ECS, NEFT, direct credit or RTGS, refunds will be made by cheques, payorders, or demand drafts drawn on a bank appointed by us, as a refund bank, and payable at par at places where Bids are received, except for Bidders who have opted to receive refunds through the electronic facility. Bank charges if any, for encashing such cheques, payorders or Demand drafts at other centres will be payable by the Bidder. DISPOSAL OF APPLICATIONS AND APPLICATIONS MONEY AND INTEREST IN CASE OF DELAY

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Our Company shall ensure dispatch of allotment advice, transfer advice or refund orders and give benefit to the beneficiary account with Depository Participants and submit the documents pertaining to the allotment to the Stock Exchanges within fifteen (15) working days of the Bid/Issue Closing Date. Our Company shall dispatch refunds above Rs.1,500, if any, by registered post or speed post at the sole or first Bidder’s sole risk, except for Bidders who have opted to receive refunds through the ECS facility or RTGS or Direct Credit.

Our Company shall use its best efforts to ensure that all steps for completion of the necessary formalities for allotment and trading at all the Stock Exchanges where the Equity Shares are proposed to be listed are taken within seven working days of the finalization of the basis of Allotment.

In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Guidelines, we further undertake that:

Allotment of Equity Shares only in dematerialized form shall be made within fifteen (15) working days of the Bid/Issue Closing Date;

Dispatch refund orders, except for Bidders who have opted to receive refunds through the ECS facility, shall be made within fifteen (15) working days of the Bid/Issue Closing Date; and

Our Company shall pay interest at 15% per annum for any delay beyond fifteen (15) day time period as mentioned above, if allotment is not made or if, in a case where the refund or a portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner, and/or demat credits are not made to investors within fifteen (15) day time period prescribed above as per the Guidelines issued by the Government of India, Ministry of Finance, pursuant to their letter No. F/8/S/79 dated 31 st July, 1983, as amended by their letter No. F/14/SE/85 dated 27 th September, 1985, addressed to the stock exchanges, and as further modified by SEBI's Clarification XXI dated 27 th October, 1997, with respect to the SEBI Guidelines.

Our Company will provide adequate funds required for dispatch of refund orders or allotment advice to the Registrar to the Issue.

No separate receipts shall be issued for the money payable on the submission of Bid-cum-Application Forms or Revision Forms. However, the collection center of the Syndicate Members will acknowledge the receipt of the Bid-cum-Application Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid-cum-Application Form for the records of the Bidder.

Save and except refunds effected through the electronic mode, i.e., ECS, NEFT, direct credit or RTGS, refunds will be made by cheques, pay orders or demand drafts drawn on a bank appointed by us, as an Escrow Collection Bank and payable at par at places where Bids are received, except for Bidders who have opted to receive refunds through the ECS facility. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

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

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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 (5) years.”

INTEREST ON REFUND OF EXCESS BID AMOUNT

The Company shall pay interest at the rate of 15% per annum on the excess Bid Amount received if refund orders are not dispatched within fifteen (15) working days from the Bid/Issue Closing Date as per the Guidelines issued by the GoI, Ministry of Finance pursuant to their letter No.F/8/S/79 dated 31 st July, 1983, as amended by their letter No. F/14/SE/85 dated 27 th September, 1985, addressed to the stock exchanges, and as further modified by SEBI’s Clarification XXI dated 27 th October, 1997, with respect to the SEBI DIP Guidelines.

BASIS OF ALLOTMENT

A. For Retail Individual Bidders

1. Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together to determine the total demand under this portion. The Allotment to all the successful Retail Individual Bidders will be made at the Issue Price. 2. The Issue size less Allotment to Non-Institutional Bidders and QIB Bidders shall be available for Allotment to Retail Individual Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price. 3. If the aggregate demand in this portion is less than or equal to 39, 55,000 Equity Shares at or above the Issue Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their demand. 4. If the aggregate demand in this category is greater than 39, 55,000 Equity Shares at or above the Issue Price, the allocation shall be made on a proportionate basis up to a minimum of [O] Equity Shares and in multiples of one (1) Equity Share thereafter. For the method of proportionate basis of allocation, refer below.

B. For Non-Institutional Bidders

1. Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to determine the total demand under this portion. The Allotment to all successful Non-Institutional Bidders will be made at the Issue Price. 2. The Issue size less allocation to QIB Bidders and Retail Individual Bidders shall be available for allocation to Non-Institutional Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price. 3. If the aggregate demand in this category is less than or equal to 16,95,000 Equity Shares at or above the Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand. 4. In case the aggregate demand in this category is greater than 16,95,000 Equity Shares at or above the Issue Price, allocation shall be made on a proportionate basis up to a minimum of [O] Equity Shares and in multiples of one Equity Share thereafter. For the method of proportionate basis of allocation refer below.

C. For QIB Bidders

1) Up to 50% of the Issue Size shall be available for allocation to the QIB Bidders. 2) Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to determine 3) The total demand under this category. The Allotment to all the QIB Bidders will be made at the Issue Price.

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4) The Issue size less allocation to Non-Institutional Portion and Retail Portion shall be available for proportionate allocation to QIB Bidders who have bid in the Issue at a price that is equal to or greater than the Issue Price. 5) However, eligible Bids by Mutual Funds only shall first be considered for allocation proportionately in the Mutual Funds Portion. After completing proportionate allocation to Mutual Funds for an amount of up to 2,82,500 Equity Shares (the Mutual Funds Portion), the remaining demand by Mutual Funds, if any, shall then be considered for allocation proportionately, together with Bids by other QIBs, in the remainder of the QIB Portion (i.e. after excluding the Mutual Funds Portion). For the method of allocation in the QIB Portion, see the paragraph titled “Illustration of Allotment to QIBs” appearing below. If the valid Bids by Mutual Funds are for less than 2,82,500 Equity Shares, the balance Equity Shares available for allocation in the Mutual Funds Portion will first be added to the QIB Portion and allocated proportionately to the QIB Bidders. 6) Allotment shall be undertaken in the following manner: a) In the first instance allocation to Mutual Funds for 5% of the QIB Portion shall be determined as follows: i) In the event that Mutual Fund Bids exceeds 5% of the QIB Portion, allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion. ii) In the event that the aggregate demand from Mutual Funds is less than 5% of the QIB Portion then all Mutual Funds shall get full allotment to the extent of valid bids received above the Issue Price. iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds shall be available to all QIB Bidders as set out in (b) below; b) In the second instance allocation to all QIBs shall be determined as follows: i) In the event that the oversubscription in the QIB Portion, all QIB Bidders who have submitted Bids at or above the Issue Price shall be allotted Equity Shares on a proportionate basis for up to 95% of the QIB Portion. ii) Mutual Funds, who have received allocation as per (a) above, for less than the number of Equity Shares Bid for by them, are eligible to receive Equity Shares on a proportionate basis along with other QIB Bidders. iii) Under-subscription below 5% of the QIB Portion, if any, from Mutual Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis.

D. For Eligible Employees

1) Bids received from the Employees at or above the Issue Price shall be grouped together to determine the Total demand under this category. The Allotment to all the Employees will be made at the Issue Price. 2) If the aggregate demand in this category is less than or equal to 100,000 Equity Shares at or above the Issue Price, full allotment shall be made to the Employees to the extent of their demand. 3) In case the aggregate demand in this category is greater than 100,000 Equity Shares at or above the Issue Price, allocation shall be made on a proportionate basis up to a minimum of [O] Equity Shares and in multiples of [O] Equity Shares thereafter. For method of proportionate basis of allocation, refer below.

E. For Eligible Shareholders of our Promoter and Promoter Group Company

1) Bids received from the Eligible Shareholders of our Promoter and Promoter Group Company at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all the Shareholders of Group Companies will be made at the Issue Price. 2) If the aggregate demand in this category is less than or equal to 7,00,000 Equity Shares at or above the Issue Price, full allotment shall be made to the Employees to the extent of their demand. 3) In case the aggregate demand in this category is greater than 7,00,000 Equity Shares at or above the Issue Price, allocation shall be made on a proportionate basis up to a minimum of [O] Equity Shares and in multiples of [O] Equity Shares thereafter. For method of proportionate basis of allocation refer below.

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PROCEDURE AND TIME OF SCHEDULE FOR ALLOTMENT AND ISSUE OF CERTIFICATES

The Issue will be conducted through a “100% book building process” pursuant to which the members of the Syndicate will accept bids for the Equity Shares during the Bidding/Issue Period. The Bidding/Issue Period will commence on [O], 2008 and expire on [O], 2008. Following the expiration of the Bidding/Issue Period, the Company, in consultation with the BRLM, will determine the Issue Price, and, in consultation with the BRLM, the basis of allocation and entitlement to Allotment based on the bids received and subject to confirmation by the BSE/NSE. Successful Bidders will be provided with a confirmation of their allocation (subject to a revised confirmation of allocation) and will be required to pay any unpaid amount for the Equity Shares within a prescribed time. The SEBI DIP Guidelines require the Company to complete the Allotment to successful Bidders within fifteen (15) days of the expiration of the Bidding/Issue Period. The Equity Shares will then be credited and Allotted to the investors’ demat accounts maintained with the relevant depository participant. Upon approval by the Stock Exchanges, the Equity Shares will be listed and trading will commence.

METHOD OF PROPORTIONATE BASIS OF ALLOTMENT

In the event of the issue being over-subscribed, we shall finalise the basis of allotment to Retail Individual Bidders and Non-Institutional Bidders in consultation with the Designated Stock Exchange. The Executive Director or Managing Director (or any other senior official nominated by them) of the Designated Stock Exchange along with the BRLM and the Registrars to the issue shall be responsible for ensuring that the basis of allotment is finalized in a fair and proper manner.

Bidders will be categorized according to the number of Equity Shares applied for by them.

(a) The total number of Equity Shares to be allotted to each portion as a whole shall be arrived at on a proportionate basis, being the total number of Equity Shares applied for in that portion (number of Bidders in the portion multiplied by the number of Equity Shares applied for) multiplied by the inverse of the over-subscription ratio.

(b) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate basis, being the total number of Equity Shares applied for by each Bidder in that portion multiplied by the inverse of the over-subscription ratio.

(c) If the proportionate allotment to a Bidder is a number that is more than [ •] but is not a multiple of one (which is the market lot), the decimal would be rounded off to the higher whole number if that decimal is 0.5 or higher. If that number is lower than 0.5 , it would be rounded off to the lower whole number. Allotment to all Bidders in such categories would be arrived at after such rounding off.

(d) In all Bids where the proportionate allotment is less than [ •] Equity Shares per Bidder, the allotment shall be made as follows:

o Each successful Bidder shall be Allotted a minimum of [ •] Equity Shares; o The successful Bidders out of the total Bidders for a portion shall be determined by draw of lots in a manner such that the total number of Equity Shares Allotted in that portion is equal to the number of Equity Shares calculated in accordance with (b) above; and

(e) Number of Equity Shares to be allotted to the successful Bidders will be arrived at on a proportionate basis which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse of the over-subscription ratio in that category subject to minimum allotment of [•] Equity Shares. The minimum allotment lot shall be the same as the minimum application lot irrespective of any revisions to the Price Band.

Illustration of Allotment to QIBs and Mutual Funds ("MF")

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Issue details

Particulars Issue Details

Net Issue 20 crore Equity Shares Allocation to QIB (not more than 50% of the Issue) 10 crore Equity Shares

Out of which: a) Reservation for Mutual Funds (5%) 0.5 crore Equity Shares b) Balance for all QIBs including Mutual Funds 9.5 crore Equity Shares Number of QIB applicants 10 Number of equity shares applied for 50 crore Equity Shares

Details of QIB Bids

No. Type of QIBs No. of shares bid for (in crores)

1. A1 5 2. A2 2 3. A3 13 4. A4 5 5. A5 5 6. MF1 4 7. MF2 4 8. MF3 8 9. MF4 2 10. MF5 2 TOTAL 50 *A1 – A5: (QIBs other than Mutual Funds), MF1 – MF5: (QIBs which are Mutual Funds) Details of Allotment to QIB Applicants

Type of QIB Shares bid Allocation of 5% equity Allocation of 95% equity Aggregate for shares shares allocation to (see Note 2 below ) (see Note 4 below ) Mutual Funds (I) (II) (III) (IV) (V) (No. of equity shares in crores) A1 5 0 0.960 0 A2 2 0 0.384 0 A3 13 0 2.495 0 A4 5 0 0.960 0 A5 5 0 0.960 0 MF1 4 0.1 0.748 0.848 MF2 4 0.1 0.748 0.848 MF3 8 0.2 1.497 1.697 MF4 2 0.05 0.374 0.424 MF5 2 0.05 0.374 0.424 50 0.5 9.5 4.241

Notes:

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1. The illustration presumes compliance with the requirements specified in this Draft Red Herring Prospectus in the section "Issue Structure" beginning on page 229 of this Draft Red Herring Prospectus.

2. Out of 10 crore Equity Shares allocated to QIBs, 0.5 crore (i.e., 5%) will be Allotted on a proportionate basis among five Mutual Fund applicants who applied for 20 crore Equity Shares in the QIB Portion.

3. The balance 9.5 crore Equity Shares ( i.e., 10 – 0.5 available for Mutual Funds only) will be Allotted on a proportionate basis among 10 QIB Bidders who applied for 50 crore Equity Shares (including 5 Mutual Fund applicants who applied for 20 crore Equity Shares).

4. The figures in the fourth column entitled "Allocation of 95% equity shares" in the above illustration are arrived at as explained below:

For QIBs other than Mutual Funds (A1 to A5) = Number of equity shares Bid for (i.e., in column II of the table above) × 9.5/49.5

For Mutual Funds (MF1 to MF5) = (No. of shares bid for (i.e., in column II of the table above) less equity shares Allotted (i.e., column III of the table above) × 9.5/49.5

The numerator and denominator for arriving at the allocation of 10 crore equity shares to the 10 QIBs are reduced by 0.5 crore shares, which have already been Allotted to Mutual Funds in the manner specified in column III of the table above.

LETTERS OF ALLOTMENT OR REFUND ORDERS OR INSTRUCTIONS TO SELF CERTIFIED SYNDICATE BANKS IN ASBA PROCESS

Our Company shall give credit to the beneficiary account with depository participants within two (2) working days from the date of the finalization of basis of allotment. Applicants residing at 68 centres where clearing houses are managed by the RBI, State Bank of India, Punjab National Bank, State Bank of Indore, Union Bank of India, Andhra Bank, Corporation Bank, Bank of Baroda, State Bank of Travancore, Central Bank of India, Canara Bank, Oriental Bank of Commerce, United Bank of India, State Bank of Hyderabad and State Bank of Bikaner and Jaipur, will get refunds through ECS only except where applicant is otherwise disclosed as eligible to get refunds through direct credit and RTGS. We shall ensure dispatch of refund orders, if any, of value up to Rs. 1,500, by “Under Certificate of Posting”, and shall dispatch refund orders above Rs. 1,500, if any, by registered post or speed post at the sole or first Bidder’s sole risk within fifteen (15) days of the Bid/Issue Closing Date. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post, intimating them about the mode of credit of refund within fifteen (15) days of closure of Bid / Issue. In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI DIP Guidelines, the Company further undertakes that:

1) Allotment of Equity Shares shall be made only in dematerialized form not later than fifteen (15) days of the Bid/Issue Closing Date; 2) Refunds shall be made within fifteen (15) days of the Bid/Issue Closing Date at the sole or First Bidder’s sole risk, except for Bidders who have opted to receive refunds through Direct Credit, NEFT, RTGS or ECS; 3) The Company shall pay interest at 15% per annum if allotment letters/ refund orders have not been dispatched to the applicants or if, in a case where the refund or portion thereof is made in electronic manner through Direct Credit, NEFT, RTGS or ECS, the refund instructions have not been given to the clearing system in the disclosed manner within fifteen (15) days of the Bid/Issue Closing Date. 4) The Company will provide adequate funds required for dispatch of refund orders or allotment advice to the Registrar to the Issue. 5) Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by us, as Escrow Collection Banks and payable at par at places where Bids are received except where the

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refund or portion thereof is made in electronic mode/manner. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

PAYMENT OF REFUNDS

Bidders must note that on the basis of name of the Bidders, Depository Participant’s name, DP ID, Beneficiary Account number provided by them in the Bid-cum-Application Form, the Registrar will obtain, from the Depositories, the Bidders’ bank account details, including the nine digit Magnetic Ink Character Recognition (“MICR”) code as appearing on a cheque leaf. Hence, Bidders are advised to immediately update their bank account details as appearing on the records of the Depository Participant. Please note that failure to do so could result in delays in dispatch of refund order or refunds through electronic transfer of funds, as applicable, and any such delay shall be at the Bidders’ sole risk and neither the Company, the Registrar, Escrow Collection Bank(s), Bankers to the Issue nor the BRLM shall be liable to compensate the Bidders for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay.

Mode of making refunds

The payment of refund, if any, would be done through various modes in the following order of preference

1. Direct Credit – For investors having their Bank Account with the Refund Bankers, the refund amount would be credited directly to their Bank Account with the Refund Banker.

2. NEFT - Payment of refund shall be undertaken through NEFT wherever the applicants’ bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC Code of that particular bank branch and the payment of refund will be made to the applicants through this method.

3. RTGS – Applicants having a bank account at any of the below mentioned sixty-eight centres and whose refund amount exceeds Rs. 10 Lakhs, have the option to receive refund through RTGS. Such eligible applicants who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the Bid-cum-application Form. In the event the same is not provided, refund shall be made through ECS. Charges, if any, levied by the applicant’s bank receiving the credit would be borne by the applicant.

4. ECS - Payment of refund would be done through ECS for Bidders having an account at one of the following centres:

1. Ahmedabad 2. Nashik 3. Sholapur 4. Gorakhpur 5. Bangalore 6. Panaji 7. Ranchi 8. Jammu 9. Bhubaneshwar 10. Surat 11. Tirupati (non-MICR) 12. Indore 13. Kolkata 14. Trichy 15. Dhanbad(non-MICR) 16. Pune 17. Chandigarh 18. Trichur 19. Nellore (non- MICR) 20. Salem 21. Chennai 22. Jodhpur 23. Kakinada(non- MICR) 24. Jamshedpur 25. Guwahati 26. Gwalior 27. Agra 28. Visakhapatnam

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29. Hyderabad 30. Jabalpur 31. Allahabad 32. Mangalore 33. Jaipur 34. Raipur 35. Jalandhar 36. Coimbatore 37. Kanpur 38. Calicut 39. Lucknow 40. Rajkot 41. Mumbai 42. Siliguri (non- MICR) 43. Ludhiana 44. Kochi/Ernakulam 45. Nagpur 46. Pondicherry 47. Varanasi 48. Bhopal 49. New Delhi 50. Hubli 51. Kolhapur 52. Madurai 53. Patna 54. Shimla (non- MICR) 55. Aurangabad 56. Amritsar 57. Thiruvananthapuram 58. Tirupur 59. Mysore 60. Haldia (non- MICR) 61. Baroda 62. Burdwan (non-MICR) 63. Erode 64. Vijaywada 65. Dehradun 66. Durgapur (non- MICR) 67. Udaipur 68. Bhilwara

This would be subject to availability of complete Bank Account Details including MICR code wherever applicable from the depository. The payment of refund through ECS is mandatory for Bidders having a bank account at any of the 68 centres as mentioned in SEBI circular no. SEBI/CFD/DIL/DIP/29/2008/01/02 dated 1st February, 2008 named herein above, except where Bidder is otherwise disclosed as eligible to get refunds through NEFT or Direct Credit or RTGS.

In case of all or any of the aforesaid modes of refund, charges, if any, levied by the Refund Bank(s) for the same would be borne by such applicant opting for RTGS as a mode of refund. Charges, if any, levied by the applicant’s bank receiving the credit would be borne by the applicant.

For all the other applicants except for whom payment of refund is not possible through I, II, III and IV, the refund orders would be dispatched “Under Certificate of Posting” for refund orders less than Rs. 1500 and through Speed Post/Registered Post for refund orders exceeding Rs. 1500. Such refunds will be made by cheques, pay orders or demand drafts drawn on the Refund Banks and be payable at par at places where Bids are received. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

For ASBA process, please refer section “ASBA Process” on page 265 of the Draft Red Herring Prospectus.

Interest in Case of Delay in Dispatch of Allotment Letters/Refund Orders

In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI DIP Guidelines, the Company undertakes that:

1. Allotment shall be made only in dematerialized form within fifteen (15) days from the Bid/Issue Closing Date; 2. Dispatch of refund orders shall be done within fifteen (15) days from the Bid/Issue Closing Date; and 3. Our Company shall pay interest at 15% per annum, if Allotment is not made, refund orders are not dispatched to the applicant or if, in a case where the refund or portion thereof is made in electronic mode/manner, the refund instructions have not been given to clearing members and/or demat credits are not made to investors within the fifteen (15) days time period prescribed above. Our Company will provide adequate funds required for dispatch of refund orders or Allotment advice to the Registrar. Refunds will be made by cheques, pay orders, or demand drafts drawn on the Escrow Collection Banks and payable at par at places where Bids are received, except where the refund or portion thereof is made in electronic mode/manner. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

UNDERTAKINGS BY OUR COMPANY

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We undertake as follows: 1. that the complaints received in respect of this Issue shall be attended to by us expeditiously and satisfactorily; 2. that all steps will be taken for the completion of the necessary formalities for listing and 3. commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be listed within seven (7) working days of finalization of the basis of Allotment; 4. that funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be made available to the Registrar to the Issue by us; 5. that where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within fifteen (15) days of closure of the issue, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund 6. that the refund orders or allotment advice to the Non Residents shall be dispatched within specified time; and 7. that no further issue of Equity Shares shall be made till the Equity Shares offered through this Draft Red Herring Prospectus are listed or until the Bid monies are refunded on account of non-listing, under subscription etc. 8. That adequate arrangements shall be made to collect all Applications Supported by Blocked Amount (ASBA) and to consider them similar to non-ASBA applications while finalizing the basis of allotment.

UTILISATION OF ISSUE PROCEEDS

Our Board of Directors certifies that:

1. all monies received out of the Issue shall be credited/transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Companies Act; 2. details of all monies utilized out of Issue referred above shall be disclosed under an appropriate separate head in our balance sheet indicating the purpose for which such monies have been utilized; and 3. Details of all unutilized monies out of the Issue, if any shall be disclosed under the appropriate separate head in our balance sheet indicating the form in which such unutilized monies have been invested. We shall not have recourse to the Issue proceeds until the approval for trading of the Equity Shares from all the Stock Exchanges where listing is sought has been received.

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

Foreign investment in Indian securities is regulated through the Industrial Policy and FEMA. While the Industrial Policy prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is freely permitted in all sectors of Indian economy up to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures for making such investments. We are in the business of Exhibition of movies, mall development, resorts development, production of Live Action and animation content, web entertainment and television entertainment.

By way of Circular No. 53 dated 17 th December, 2003, the RBI has permitted FIIs to subscribe to shares of an Indian company in a public offer without prior RBI approval, so long as the price of equity shares to be issued is not less than the price at which equity shares are issued to residents. In our Company, as of date the aggregate FII holding cannot exceed 49% of the total issued share capital.

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SUBSCRIPTION BY NON-RESIDENTS

The Equity Shares have not been and will not be registered under the Securities Act or any state securities laws in the United States and may not be offered or sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the Equity Shares are only being offered and sold outside the United States to certain persons in offshore transactions in compliance with Regulation S under the Securities Act and the applicable laws of the jurisdiction where those offers and sales occur. There is no reservation for any FIIs or Eligible NRIs and such FIIs or Eligible NRIs will be treated on the same basis with other categories for the purpose of allocation.

As per the current regulations, the following restrictions are applicable for investments by FIIs:

No single FII can hold more than 10% of our post-issue issued capital. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of our total issued capital. As of now, the aggregate FIIs holding in our Company cannot exceed 49% of the total issued capital of our Company.

As per the current regulations, the following restrictions are applicable for investments by SEBI registered VCFs and FVCIs:

The SEBI (Venture Capital Funds) Regulations, 1996, and the SEBI (Foreign Venture Capital Investor) Regulations, 2000, prescribe investment restrictions on venture capital funds and foreign venture capital investors registered with SEBI. Accordingly, the VCF or FVCI can invest only up to 33.33% of the investible funds by way of subscription to an initial public offer.

As per the current regulations, OCBs cannot participate in this Issue.

The above information is given for the benefit of the Bidders. Our Company and the BRLM are not liable for any amendments or modification or changes in applicable laws or regulations, which may happen after the date of this Draft Red Herring Prospectus. Bidders are advised to make their independent investigations and ensure that the number of Equity Shares bid for do not exceed the applicable limits under laws or regulations. However, we shall update this Draft Red Herring Prospectus and keep the public informed of any material changes in matters concerning our business and operations till the listing and commencement of trading of the Equity Shares.

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ASBA PROCESS

Important information/instructions for ASBA Investors

Background: In its continuing endeavour to make the existing public issue process more efficient SEBI has introduced a supplementary process of applying in public issues, viz: the “Applications Supported by Blocked Amount (ASBA)” process. Accordingly SEBI (DIP) Guidelines 2000 has been amended for ASBA process.

The salient features of circular no. SEBI/CFD/DIL/DIP/31/2008/30/7 dated 30 th July, 2008 available on SEBI website for “ Additional mode of payment through Applications Supported by Blocked Amount (hereinafter referred to as “ASBA”) are mentioned below for understanding the ASBA process:

1. Meaning of ASBA: ASBA is an application for subscribing to an issue, containing an authorisation to block the application money in a bank account.

2. Self Certified Syndicate Bank (SCSB): SCSB is a bank which offers the facility of applying through the ASBA process. The list of SCSBs will be displayed by SEBI on its website at www.sebi.gov.in from time to time. ASBAs can be accepted only by SCSBs, whose names appear in the list of SCSBs displayed in SEBI”s website and available at the back of this form. RETAIL INDIVIDUAL INVESTORS MAINTAINING THEIR ACCOUNT IN ANY OF THESE BANKS MAY USE ASBA FACILITY SUBJECT TO FULL FILLING ALL THE TERMS AND CONDITIONS STIPULATED IN THIS REGARDS. The details of these banks and branches wherein ASBA investor can approach are given below.

These Banks deemed to have entered into an agreement with the issuer and shall be required to offer the ASBA facility to all its account holders for all issues to which ASBA process is applicable.

A SCSB shall identify its Designated Branches (DBs) at which an ASBA investor shall submit ASBA and shall also identify the Controlling Branch (CB) which shall act as a coordinating branch for the Registrar to the Issue, Stock Exchanges and Merchant Bankers. The SCSB, its DBs and CB shall continue to act as such, for all issues to which ASBA process is applicable. The SCSB may identify new DBs for the purpose of ASBA process and intimate details of the same to SEBI, after which SEBI will add the DB to the list of SCSBs maintained by it. The SCSB shall communicate the following details to Stock Exchanges for making it available on their respective websites. These details shall also be made available by the SCSB on its website:

(i) Name and address of the SCSB (ii) Addresses of DBs and CB and other details such as telephone number, fax number and email ids. (iii) Name and contact details of a nodal officer at a senior level from the CB.

3. Eligibility of Investors: An Investor shall be eligible to apply through ASBA process, if he/ she :

(i) is a “Resident Retail Individual Investor”; (ii) is bidding at cut-off, with single option as to the number of shares bid for; (iii) is applying through blocking of funds in a bank account with the SCSB; (iv) has agreed not to revise his/her bid; (v) is not bidding under any of the reserved categories.

Such investors are hereinafter referred as “ASBA investors”.

4. ASBA Process in brief: An ASBA investor shall submit an ASBA physically or electronically through the internet banking facility, to the SCSB with whom the bank account to be blocked, is maintained. The SCSB shall then block the application money in the bank account specified in the ASBA, on the basis of an authorisation to this effect given by the account holder in the ASBA. The application money

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shall remain blocked in the bank account till finalization of the basis of allotment in the issue or till withdrawal/ failure of the issue or till withdrawal/ rejection of the application, as the case may be. The application data shall thereafter be uploaded by the SCSB in the electronic bidding system through a web enabled interface provided by the Stock Exchanges. Once the basis of allotment is finalized, the Registrar to the Issue shall send an appropriate request to the SCSB for unblocking the relevant bank accounts and for transferring the requisite amount to the issuer’s account. In case of withdrawal/ failure of the issue, the amount shall be unblocked by the SCSB on receipt of information from the pre-issue merchant bankers.

5. Obligations of the Issuer: The issuer shall ensure that adequate arrangements are made by the Registrar to the Issue to obtain information about all ASBAs and to treat these applications similar to non- ASBA applications while finalizing the basis of allotment, as per the procedure specified in the Guidelines.

6. Applicability of ASBA process: ASBA process shall be applicable to all book-built public issues which provide for not more than one payment option to the retail individual investors.

7. Withdrawal of Application Form: In case an ASBA investor wants to withdraw his/ her ASBA during the bidding period, he/ she shall submit his/ her withdrawal request to the SCSB, which shall do the necessary, including deletion of details of the withdrawn ASBA from the electronic bidding system of the Stock Exchange(s) and unblocking of funds in the relevant bank account.

In case an ASBA investor wants to withdraw his/her ASBA after the bid closing date, he/ she shall submit the withdrawal request to the Registrar to the Issue. The Registrar shall delete the withdrawn bid from the bid file.

Other Information for ASBA Investors:

1. SCSB shall not accept any ASBA after the closing time of acceptance of bids on the last day of the bidding period.

2. SCSB shall give ASBA investors an acknowledgment for the receipt of ASBAs.

3. SCSB shall not upload any ASBA in the electronic bidding system of the Stock Exchange(s) unless – (i) it has received the ASBA in a physical or electronic form; and (ii ) it has blocked the application money in the bank account specified in the ASBA or has systems to ensure that Electronic ASBAs are accepted in the system only after blocking of application money in the relevant bank account opened with it.

4. SCSB shall ensure that the details of a particular ASBA are uploaded only once in the electronic bidding system of any one of the Stock Exchange(s). SCSB shall be solely responsible for the completion and accuracy of all details entered/ uploaded on the electronic bidding system of the Stock Exchange(s).

5. In case of withdrawal of bids by ASBA investors during the bidding period, SCSB shall ensure deletion of the withdrawn ASBA from the electronic bidding system of the Stock Exchange(s) and unblocking of funds in the relevant bank account within the timelines specified in the ASBA process.

6. SCSB shall ensure that information about revision in the bidding period or price band, as and when received, is communicated and effected to in its systems promptly, for information of ASBA investors.

7. SCSB shall ensure that complaints of ASBA investors arising out of errors or delay in capturing of data, blocking or unblocking of bank accounts, etc. are satisfactorily redressed.

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8. SCSB shall be liable for all its omissions and commissions in discharging responsibilities in the ASBA process.

9. Registrar to the Issue shall act as a nodal agency for redressing complaints of ASBA and non-ASBA investors, including providing guidance to ASBA investors regarding approaching the SCSB concerned.

10. The Stock Exchange(s) shall ensure that an issue specific code is generated from the electronic bidding system, so that SCSBs does not face any problem in segregating the ASBA issue-wise.

11. In case of withdrawal of ASBA during the bidding period, the Stock Exchange(s) shall provide the facility of enabling SCSBs to –

(i) delete the ASBA from the electronic bidding system or mark the withdrawal individually against the original bid uploaded; or

(ii) upload withdrawal of the ASBA in batch mode, in the electronic bidding system.

The ASBA process is presented in a tabular form as under:

Sr. Details of ASBA process Timeline/ No. Due date 1. An ASBA investor, intending to subscribe to a book built public issue, shall Bidding submit a completed ASBA form1 to a Self Certified Syndicate Bank (SCSB) , period with whom the bank account to be blocked, is maintained, through one of the following modes –

(i) Submit the form physically with the Designated Branches (DBs) of the SCSB (“Physical ASBA”); Or (ii) Submit the form electronically through the internet banking facility offered by the SCSB (“Electronic ASBA”).

2. The SCSB shall give an acknowledgement specifying the application number to the Bidding ASBA investor, as a proof of having accepted his/ her ASBA in a physical or electronic period mode.

3. If the bank account specified in the ASBA does not have sufficient credit Bidding 172 Bidding balance to meet the application money, the ASBA shall be rejected by the SCSB. period

4. A. After accepting a Physical ASBA, the SCSB shall block funds available in the bank account specified in the Physical ASBA, to the extent of the application money specified in the ASBA. The SCSB shall then capture/ upload the following details in the electronic bidding system provided by the Stock Exchange(s) for the particular public issue: (i) Application number (ii) DP ID, Client ID (iii) Bid Quantity (iv) PAN

B. In case of an Electronic ASBA, the ASBA investor himself/ herself shall fill in all the abovementioned details, except the application number which shall be system generated. The SCSB shall thereafter upload all the abovementioned details in the electronic bidding system provided by the Stock Exchange(s).

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5. The SCSB (Controlling Branch (CB) or DBs) shall generate a Transaction Bidding Registration Slip/ Order number, confirming upload of ASBA details in the Period electronic bidding system of the Stock Exchange(s). The Transaction Registration Slip/Order number shall be given to the ASBA investor as a proof of uploading the details of ASBA, only on demand.

6. In case an ASBA investor wants to withdraw his/ her ASBA during the bidding period, Bidding he/ she shall submit his/ her withdrawal request to the SCSB, which shall do the Period necessary, including deletion of details of the withdrawn ASBA from the electronic bidding system of the Stock Exchange(s) and unblocking of funds in the relevant bank account.

7. The Stock Exchange(s) shall make available the updated electronic bid file to the Bidding Registrar to the Issue. Period

8. The SCSB shall send the following aggregate information to the Registrar to the Issue T+1 (where T after closure of the bidding period: stands for (i) Total number of ASBAs uploaded by the SCSB closing date (ii) Total number of shares and total amount blocked against the uploaded of the ASBAs. bidding period) 9. The Registrar to the Issue shall reconcile the compiled data received from the Stock Exchange(s) (as explained in para 7 above) and all SCSBs (as explained in para 8 above) (hereinafter referred to as the “reconciled data”).

10. The Registrar to the Issue shall then match the reconciled data with the depository’s database for correctness of DP ID, Client ID and PAN. In case any DP ID, Client ID or PAN mentioned in the bid file for ASBAs does not match with the one available in the depository’s database, such ASBA shall be rejected by the Registrar.

11. The Registrar to the Issue shall inform each SCSB about errors, if any, in the bid T to T+11 details, along with an advice to send the rectified data within the time as specified by the Registrar.

12. In case an ASBA investor wants to withdraw his/her ASBA after the bid closing date, he/ she shall submit the withdrawal request to the Registrar to the Issue. The Registrar shall delete the withdrawn bid from the bid file.

13. The Registrar to the Issue shall reject multiple ASBAs determined as such, based on common PAN.

14. The Registrar to the Issue shall finalise the basis of allotment and submit it to the T+12 Designated Stock Exchange for approval.

15. Once the basis of allotment is approved by the Designated Stock Exchange, the T+13 Registrar to the Issue shall provide the following details to the CB of each SCSB, along with instructions to unblock the relevant bank accounts and transfer the requisite money to the issuer’s account within the timelines specified in the ASBA process:

(i) Number of shares to be allotted against each valid ASBA

(ii) Amount to be transferred from the relevant bank account to the issuer’s account, for each valid ASBA

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(iii) The date by which the funds referred to in sub-para (ii) above, shall be transferred to the issuer’s account

(iv) Details of rejected ASBAs, if any, along with reasons for rejection and details of withdrawn/ unsuccessful ASBAs, if any, to enable SCSBs to unblock the respective bank accounts.

16. SCSBs shall unblock the relevant bank accounts for: T+14

(i) Transfer of requisite money to the issuer’s account against each valid ASBA.

(ii) Withdrawn/ rejected/ unsuccessful ASBAs.

The CB of each SCSB shall confirm the transfer of requisite money against each successful ASBA to the Registrar to the Issue. 17. The Issuer shall make the allotment. T+15

18. The Registrar to the Issue shall credit the shares to the demat account of the T+15 successful ASBA investors.

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SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION

MAIN PROVISIONS OF ARTICLES OF ASSOCIATION

Pursuant to Schedule II of the Companies Act and the SEBI DIP Guidelines, the main provisions of the Articles of Association relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. Please note that each provision herein below is numbered as per the corresponding article number in the Articles of Association and capitalized/defined terms herein have the same meaning given to them in the Articles of Association.

The Regulations contained in Table ‘A’ in Schedule I to the Companies Act 1956,(hereinafter referred to as tables ‘A’)shall apply to this company in so far as they are applicable to a public limited company to extent they are not expressly excluded or modified by the following Articles.

AMOUNT OF CAPITAL

Article 3 provides that, a. The company is a public limited company within the meaning of section 3 of the Act, the minimum paid up capital shall be Rs.5 Lakh or such higher amount as may be prescribed from time to time and b. The Authorised Capital of the company is Rs. 45,00,00,000(Rupees forty five Cores Only) divided into 4,50,00,000( Four Crores Fifty Lakhs) of Rs. 10/- (Rupees Ten) each with power to consolidate or subdivide into such classes and to increase and to reduce the capital whenever the circumstances “warrant”

ADDITIONAL CAPITAL TO FORM PART OF EXISTING CAPITAL

Article 5 provides that,

Except so far as otherwise provided by the conditions of issue or by these presents, Any capital raised by the creation of new shares, shall be considered as part of the existing capital, and shall be subject to the provisions herein contained, with reference to the payments of calls and installments, forfeiture, lien, surrender, transfer and transmission, voting and otherwise.

REDEEMABLE PREFERENCE SHARES

Articles 6 provides that,

Subject to the provisions of section, 80 of the Act Company shall have the power to issue Preferential shares, which are or at the option of the company are to be liable to be redeemed and the resolution authorizing such issue shall prescribe the manner, terms and conditions of redemption.

REDUCTION OF CAPITAL

Article 7 (a) provides that,

The Company may (subject to the provisions of sections 78,80,100 to 105 inclusive, of the act) from time to time by Resolution, reduce its capital and any Capital Redemption Reserve Account or share premium accounts in any manner for the time being authorized by law, and in particular, capital may be paid off on the footing that it may be called up again or otherwise. This Article is not to derogate from any power the Company would have if it were omitted.

BUY BACK OF SHARES

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Article 176 provides that,

The Company shall be entitled to purchase its own shares or other securities, subject to such limits, upon such terms and conditions and approvals as required under section 77A and other applicable provisions of the Companies Act, 1956,the Securities and Exchange Board of India (Buy back of securities ) regulations,1998 and any amendment, modification, re-promulgation or re-enactment thereof.

VARIATION OF RIGHTS

Article 9 provides that,

If at any time the share capital is divided into different classes of shares, all or the rights and privileges attached to the shares of any class may subject to the provisions of sections 106 and 107 of the Act be varied, commuted, affected, dealt with or abrogated with the consent in writing of the holders of not less than three-fourth of the issued shares of that class or with the sanction of a special Resolution at a separate meeting of the holders of the issued shares of that class.

SUB-DIVISION CONSOLIDATION AND CANCELLATION OF SHARES

Article 11(a) provides that,

Subject to the provisions of section 94 of the Act, the Company in General Meeting may from time to time, sub-divide or deconsolidate its shares, or any of them, and the resolution whereby any share is sub- divided, may determine that, as between the holders of the shares resulting from such sub-division one or more of such share shall have some preference or special advantage as regards dividend, capital or otherwise over or as compared with the other or others. Subject as aforesaid the Company in General Meeting may also cancel shares, which have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of shares so cancelled. The cancellation of shares in pursuance of this Article shall not be deemed to be a reduction of the share capital.

FURTHER ISSUE OF CAPITAL

Article 3 provides that,

The Company in General Meeting, may from time to time, increase its capital by the creation of new shares, such increase to be of such aggregate amount and to be divided in to shares of such amounts as the resolution shall prescribe. Subject to the provisions of the act, any share of the original or increased capital shall be issued upon such terms and conditions and with such rights and privileges annexed thereto, as the General Meeting resolving upon the creation there of shall prescribes and if no direction be given, as the Directors shall determine and in particulars, such share may be issued with a preferential or qualified right to dividends, and in to distribution of assets of the Company and with a right of voting at General Meetings of the company has been increased under the provisions of these Articles, the Directors shall comply with the provisions of section 97 of the Act.

Article 3A provides that,

1. Where at the time after the expiry of two years from the formation of the company or at any time after the expiry of one year from the allotment of shares in the company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares either out of the unissued capital or out of the increased share capital then:

(a) Such further shares shall be offered to the persons who at the date of the offer, are holders of the equity shares of the company, in proportion, as near as circumstances admit, to the capital paid up on those shares at the date.

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(b) Such offer shall be made by a notice specifying the number of shares offered and limiting a time not less than thirty days from the date of the offer and the offer if not accepted, will be deemed to have been declined.

(c) The offer aforesaid shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to them in favour of any other person and the notice referred to in sub clause (b) hereof shall contain a statement of this right. PROVIDED THAT the Directors may decline, without assigning any reason to allot any shares to any person in whose favour any member may, renounce the shares offered to him.

(d) After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the person to whom such notice is given that the declines to accept the shares offered, the Board of Directors may dispose off them in such manner and to such person(s) as they may think, in their sole discretion fit.

2. Notwithstanding anything contained in sub-clause (1) thereof, the further shares aforesaid may be offered to any persons (whether or not those persons include the persons referred to in clause (a) of sub-clause (1) hereof) in any manner whatsoever.

(a) If a special resolution to that effect is passed by the company in General Meeting, or

(b) Where no such special resolution is passed, if the votes cast (whether on a show of hands or on a poll as the case may be) in favour of the proposal contained in the resolution moved in the general meeting (including the casting vote, if any, of the chairman) by the members who, being entitled to do so, vote in person, or, where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by members, so entitled and voting and the Central Government is satisfied, on an application made by the Board of Directors in this behalf that the proposal is most beneficial to the company.

3. Nothing in sub-clause (c) of (1) hereof shall be deemed:

(a) To extend the time within which the offer should be accepted; or

(b) To authorize any person to exercise the right of renunciation for a second time on the ground that the person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.

4. Nothing in this Article shall apply to the increase of the subscribed capital of our company caused by the exercise of an option attached to the debenture 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 (whether such option is conferred in these Article or otherwise).

PROVIDED THAT the terms of issue of such debentures or the terms of such loans include a term providing for such option and such term:

(a) Either has been approved by the Central Government before the issue of the debentures or the raising of the loans or is in conformity with rules if any made by that Government in this behalf; and

(b) In the case of debentures or loans or other than debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has also been

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approved by a special resolution passed by the company in General Meeting before the issue of the debentures or raising of the loans.

Article 68 provides that,

Any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and may be issued on condition that they or any part of them shall be Convertible into shares of any denomination, and with any privileges and conditions as to redemption, surrender, drawing, allotment of the shares and attending (but not voting ) at General Meetings, appointment of Directors and otherwise. Debentures with a rights to convention or allotment of shares shall be issued only with the consent of the company in General Meeting accorded by a special resolution.

ISSUE OF FURTHER SHARES NOT TO AFFECT THE RIGHT OF SHARES ALREADY ISSUED

Article 10 provides that,

The rights conferred upon the holders of the shares of any class issued with preferred or any other rights shall not, unless otherwise expressly provided by the terms of issue of that class, be deemed to be varied by the creation the creation or issue of further shares ranking paripassu therewith.

SHARE UNDER CONTROL OF DIRECTORS

Subject to the provisions of these Articles and the Act, the shares in the capital of the Company for the time being (including any shares forming part of any increased capital of the Company) shall be under the control of the Directors who may issue, allot or otherwise dispose of the same or any one of them to such persons in such proportion and on such terms and conditions and either at a premium or at par or (subject to compliance with the provisions of the Act) at a discount and at such times as they may from time to time think fit and proper and with the sanction of the Company in General Meeting to give to any person the option to call for or allotted shares of any class of the Company either at par or at premium or subject as aforesaid at a discount during such time and for such consideration and such option being exercisable at such time as the Directors think fit; 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. The Board shall cause to be filed the returns as to allotment provided for in section 75 of the Act. Provided that the option or right to call of shares shall not be given to any person, except with the sanction of the company in the General Meeting.

ALLOTMENT OTHERWISE THAN FOR CASH

Article 4 provides that,

Subject to the provisions of the Act and these Articles, the Directors may allot and issue shares in the capital of the Company as payment or part-payment for any property or assets of any kinds whatsoever, sold or to be sold or transferred or to be transferred or for goods or machinery supplied or to be made available to the Company services rendered or for technical assistance or know-how made or to be made available to the company or the conduct of its business and shares which may be so allotted may be issued as fully or partly paid as the case may be.

ACCEPTANCE OF SHARES

Article 14 provides that,

Any application signed by, or on behalf of, an applicant for shares in the Company followed by an allotment of any shares therein, shall be an acceptance of shares within the meaning of these

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Articles; and every person who thus or otherwise accepts any shares and whose name is entered in its Register of Members shall, for the purpose of these Articles, be a member of the Company.

SHARE CERTIFICATES

Article 17 provides that,

a) The share certificates shall be issued in market lots and where share certificates are issued in either more or less than market lots, sub-division or consolidation of share certificates into market lots shall be done free of charge. b) Any two or more joint allottees of a share shall, for the purposes of this Article, be treated as a single Member, and the certificate of any share which may be the subject of joint ownership, may be delivered to any one of such joint owners on behalf of all of them. For any further certificate, the Board shall be entitled but shall not be bound, to prescribe a charge not exceeding Rupees One. The Company shall comply with the provisions of Section 113 of the Act. c) A Directors may sign a share certificate by affixing his signature thereon by means of any machine, equipment or other mechanical means, such as engraving in mental or lithography, but not by means of a rubber stamp, provided that the Director shall be responsible for the safe custody of such machine, equipment or other material used for the purpose.

RENEWAL OF SHARE CERTIFICATES

Article 17 provides that,

f) No fee shall be charged for issue of new share certificates in replacement of those, which are old, decrepit, worm –out or where the cages on the reverse of the share certificates for recording transfer have been fully utilized.

g) When a new share certificate has been issued in pursuance of clause (f) of this Articles, it shall state on the face of it and against the stub or counterfoil to the effect that it is “Issued in lieu of share Certificate No…………sub-divided/replaced on consolidation of share.”

h) If a share certificate is lost or destroyed ,a new certificate in lieu thereof shall be issued only with the prior consent of the Board and on payments of such fee, not exceeding Rupees two as the Board may from time to time fix, and on such terms, if any ,as to evidence and indemnity as to payment of such out-of packet incurred by the company in investigating evidence, as the board thinks fits.

i) When a new share certificate has been issued in pursuance of clause (h)of this Articles ,it shall state on the face of it and against the stub or counterfoil to the effect that it is “a duplicate issued in lieu of share certificate No………….”.The word “duplicate” shall be stamped or punched in bold letter across the face of the share certificate.

j) When a new share certificate has been issued in pursuance of Clause (f) or Clause (h) of this Articles particulars of every such share certificate shall be entered in a Register of Renewed and Duplicate certificates indicating against the name or names of the person or persons to whom the Certificate issued the number and date of issue of the share certificate in lieu of which the new certificate is issued, and the necessary changes indicated in resisted of Members by suitable cross reference in the “Remarks” column.

REGISTERED HOLDERS ONLY THE OWNER OF THE SHARES

Article 21 provides that,

Save as herein or by the law otherwise expressly provided, the Company shall be entitled to treat the registered holder of any share as the absolute owner thereof, and accordingly shall not except as

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ordered by a Court of competent jurisdiction, or as by law required, be bound to recognize any equitable, contingent, future, partial, or other claim to or interest in any share, on the part of any other person whether or not it shall have express or implied notice thereof, provisions of the Act shall apply and save as aforesaid, no notice of any trust expressed, implied or constructive shall be entered in the Register. The Directors shall, however be at liberty, at their sole discretion to register any share in the joint names of any two or more persons, and the survivor or survivors of them.

UNDERWRITING COMMISSION AND BROKERAGE

Article 24 provides that,

Subject to the provisions of section 76 of the Act, the Company may at any time pay a commission to any persons, in consideration of his subscribing or agreeing to subscribe (whether absolutely or conditionally ) for any shares or debentures of the Company, or procuring, or agreeing, to procure subscriptions (whether absolute or conditional) for any shares or debentures in the Company, but so that the commission shall not exceed in case of shares five percent of the price at which the shares are issued and in case of debentures two and a half percent of the price at which the debentures are issued. The company shall also pay a higher rate of commission over and above the said percentage if so authorised by the Act.

Subject to the provision of section 76 of the Act, the Company may at any time pay a commission to any person in consideration his subscribing or debentures in the company or procuring, or agreeing to procure subscribing (whether absolute or conditional) of any share or debentures in the company, but so that the commission shall not exceeding in the case of shares five percent of the price at which the shares are issued and in the case of debentures two and a half percent of the price at which the debentures two and a half percent of the price at which the debentures are issued. Such commission may be satisfied by payment of cash or by allotment of fully or partly paid shares or partly in one way and partly in the other. DEMATERIALIZATION OF SECURITIES

Article 17(d) provides that,

The Company shall be entitled to dematerialize its shares, debentures and other securities and rematerialize its shares, debentures and other securities held in the Depositories and/or to offer its fresh shares in a dematerialized form pursuant to the Depositories Act, 1996.

DIRECTORS MAY MAKE CALLS

Article 27 provides that,

The Board may from time to time, subject to the terms on which any shares may have been issued and subject to the conditions of allotment, by a resolution passed at a meeting of the board (and not by circular resolution) make such calls as it thinks fit upon the Members in respect of all monies unpaid on the shares held by them respectively and each member shall pay the amount of every call so made on him to the person or persons and at the time and place appointed by the board. A call may be made payable by installments.

Article 28 provides that,

Thirty days notice in writing of any call shall be given by the company specifying the time and place of payment, and the person or persons to whom such calls shall be made.

Article 29 provides that,

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A call shall be deemed to have been made at the time when the resolution authorizing such call was padded at a meeting of the Board.

Article 30 provides that,

A Call may be revoked or postponed at the discretion of the Board.

CALLS TO CARRY INTEREST

Article 33 provides that,

If any member fails to pay any call due from him on the day appointed for payment thereof, or any such extension thereof as aforesaid, he shall be liable to pay interest on the same from the day appointed for the payment thereof to the time of actual payment at such relate as shall from time to time be fixed by the board by nothing in this Article shall render if obligatory for the Board to demand or recover any interest from any such member and the Board shall be at liberty to waive payment of such interest either wholly or in part.

PAYMENT OF UNPAID SHARE CAPITAL IN ADVANCE

Article 37 provides that,

a) The board may if it thinks fit, subject to the provisions of the Act, agree to and received from any Member willing to advance the same, either in money or moneys worth the whole or any party of the amount remaining unpaid on the shares held by him beyond the sum actually called up and upon the moneys so paid or satisfied in advance, or so much thereof, as from time to time and at any time thereafter exceeds the amount of the calls then made, upon and due in respect of the shares on account of which such advances have been made, the board may pay or allow interest at such rate as the Member paying such advance and the board agree upon provided always that if at any time after the payment of any such money the rate of interest so agreed to be paid to any such Member appears to the Board to excessive, if shall be lawful for the Board from time to time to repay to such Member so much of such money as shall then exceed the amount of the calls made upon such shares, unless there be an express agreement to the contrary; and after such repayment such member shall be liable to pay and such shares shall be charges with the payment of all futures calls as if no such advance had been made; provided also that if at any time after the payment of any money so paid in advance, the company shall go into liquidation ,either voluntary or otherwise, before the full amount of the money so advance shall go into liquidation, either voluntary or otherwise, before the full amount of the money so advanced shall have become due by the members to the Company, on installments or calls, or in any other manner, the maker of such advance shall be entitled (as between himself and the other members ) to received back from the Company the full balance of such moneys rightly due to him by the company in priority to any payment to members on account of capital.

b) No member paying any such sum in advance shall be entitles to any voting rights, dividend or right to participate in profits in respect of money so advance by him until the same would but for such payment become presently payable.

COMPANY’S LIEN ON SHARES

Article 47 provides that,

The Company shall have a first and paramount lien upon all the shares, not being fully paid-up shares, registered in the name of each Member (Whether solely or jointly with another or others), and upon the proceeds of sale thereof, for all moneys (whether presently payable or not) called or

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payable at a fixed time in respect of such shares and no equitable interest in any share shall be created except upon the footing and condition that Article 21 hereof is to have full effect. Any such lien shall extent to all dividends from time to time declared in respect of such shares. Unless otherwise agreed, the registration of a transfer of shares shall operate as a waiver of the Company’s lien if any on such shares. The Board of Directors may at any time declare any shares to be exempt, wholly or partially from the provisions of this Article.

FORFEITURE OF SHARES

Article 38 provides that,

If any Member fails to pay any call or installment of call on or before the day appointed for the payment of the same or any such extension thereof as aforesaid, the board may, at any time thereafter, during such time as the call or installment remains unpaid, give notice to him requiring him to any the same together with any interest that may have accrued and all expenses that may have been incurred by the Company by reasons of such non-payment.

Article 39 provides that,

The notice shall name a day (not being earlier than the expiry of fourteen days from the date of service of notice) and a place or places on and at which such call or installment and such interest thereon at such rate as the Directors shall determine from the day on which such call or installment ought to have been paid and expenses as aforesaid are to be paid. The notice shall also state that, in the event of the non-payment at or before the time and the place appointed, the share in respect of which the call was made or installment is payable will be liable to be forfeited.

Article 40 provides that,

If the requirements of any such notice as aforesaid are not complied with, every or any share in respect of which such notice has been given. may at any time thereafter, but before payment of all calls or installments, interest and expenses due in respect thereof, be forfeited by a resolution of the Board to that effect. Such forfeiture shall include all dividends and bonuses declared in respect of the forfeited shares and not actually paid before the forfeiture.

Article 41 provides that,

When any share have been so forfeited, notice of the forfeiture shall be given to the Member in whose name it stood immediately prior to the forfeiture or to any of his legal representatives, or to any of the persons entitled to the shares by transmission and an entry of the forfeiture, with the date thereof , shall forthwith be made in the Register of Members but no forfeiture, shall be in any manner invalidated by any omission or neglect to give such notice or to make such entry as aforesaid.

Article 42 provides that,

Any share so forfeited shall be deemed to be the property of the Company and may be sold, re- allotted or otherwise disposed of, either to the original holder thereof or to any other person, upon such terms and such manners as the Board shall think fit.

Article 43 provides that,

Any member whose shares have been forfeited shall, notwithstanding the forfeiture, be liable to pay, and shall forthwith pay to the Company on demand all calls, amounts, installments interest and expenses owing upon or in respect of such shares at the time of the forfeiture, together with interest

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thereon form the time of the forfeiture, until payment, at such rate as the board may determine and the Board may enforce the payment thereof if it thinks fit.

Article 44 provides that,

The forfeiture of share shall involve extinction, at the time of forfeiture, of all interest in and of all claims and demands the Company, in respect of the share, and all other rights incidental to the share, except only such of those rights as by these Articles are expressly saved.

Article 45 provides that,

The directors may subject to the provisions of the Act, accept a surrender of any shares from or by any Member desirous of surrendering them on such terms as they think fit.

Article 46 provides that,

A declaration in writing that the declarent is a Director or Secretary of the Company and that a share in the Company has been duly forfeited in accordance with these Articles on the date stated in the declaration, shall be conclusive evidence of the facts therein stated as against all persons claiming to be entitled to the share.

FORM OF TRANSFER

Article 54 provides that,

A) Shares in the Company shall be transferred by an instrument of transfer in writing in such form as prescribed under section 108 of the companies Act, 1956, or under rules made there under from time to time.

B) Nothing contained in the forgoing Article shall apply to transfer of security effected by the transferor and the transferee both of whom are entered as beneficial owners in the records of a Depository.

DIRECTORS MAY REFUSE TO REGISTER TRANSFERS

Article 56 provides that,

Subject to the provisions of section 111 of the Act, the board, may at its own absolute and uncontrolled discretion, and without assigning any reason, decline to register or acknowledge any transfer of shares whether fully paid or not, ( notwithstanding that the proposed transferee be already a Member), but in such cases it shall, within one month from the date on which the instrument of transfer was lodged with the company, send to the transferee and the transferor notice of refusal to register such transfer. Provided that registration of a transfer shall not be refused on the ground that the transferor being either alone or jointly with any other person or persons indebted to the company on whatsoever except on shares.

DEATH OF ONE OR MORE JOINT HOLDERS OF SHARES

Article 59 provides that,

Subject to the provisions of Act relating to nomination of shares, in case of the death of any one or more of the persons named in the Register of Members as the joint holders of any share, the survivor or survivors shall be the only persons recognized by the company as having any title to or interest in such share, but nothing herein contained shall be taken to release the estate or a deceased joint holder for any liability on shares held by him jointly with any other person.

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TITLE TO SHARES OF DECEASED MEMBER

Article 60 provides that,

Subject to the provisions of Act relating to nomination of shares. The executors or administrators or holders of a succession Certificate or the legal representatives of a deceased Member ( not being one of two or more joint-holders ) shall be the only person recognized by the Company as having any title to the shares registered in the name of such Member, and the company shall not be bound to recognize such executors or administrators or holders of a succession Certificate or the legal representatives unless such executors or administrators or legal representatives shall have first obtained probate or letter of Administration or succession Certificate, as the case may be, from a duly constituted court in the Union of India provided of probate or letters of Administration or succession Certificate, upon such terms as to indemnity or otherwise as the Board in its absolute discretion may think necessary and under Article 59 register the name of any person who claims to be absolutely entitled to shares standing in the name of a deceased Member, as a Member.

NO TRANSFER TO INSOLVENT , ETC.,

Article 61 provides that,

No share shall in any circumstance, be transferred to any insolvent person of unsound mind.

FEE ON TRANSFER OR TRANSMISSION

Article 64 provides that,

No fee shall be charges for transfer and, transmission of shares, debentures and bonds or for registration of any of power of attorney, probate, letter of administration or other similar documents and for sub-division of pronounceable letters of right.

THE PAYMENT OR REPAYMENT OF MONEIS BORROWED

Article 67 provides that,

The payment or repayment of monies borrowed as a aforesaid may be secured in such manner and upon such terms and conditions in all respect as the board may think fit, and in particular by a resolution passed at a meeting of the Board (and not by Circular Resolution) by the issue of debentures of the company, charged upon all or any part of the property of the company (both present and future) includes its uncalled capital for the time being, and debentures,and other securities may be made assignable free from any equities between the Company and the person to whom the same may be issued.

POWER TO ISSUE SHARE WARRANTS

Article 71 provides that,

The Company may issue share warrants subject to , and in accordance with the provisions of Sections 114 and 115 of the Act, and accordingly the board may in its discretion, with respect to any share which is fully paid-up on application in writing signed by the persons registered as holder of the share, and authenticated, by such evidence ( if any ) as the 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 amount of the stamp duty on the warrant and such fee as the Board may from time to time require, issue a share warrant.

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CONVERSION OF SHARE INTO STOCK AND RECONVERSION OF SHARES MAY BE CONVERTED INTO STOCK

Article 75 provides that,

The Company in General Meeting may convert any paid-up shares into stock; and when any shares have been converted into stock, the several holders of such stock may thenceforth transfer their respective interest therein, or any part of such interest, in the said manner and subject to the same regulations as , and subject to which shares from which the stock arose might have been transferred if no such conversion had taken place, or as near thereto as circumstance will admit. The Company may at any time reconvert any stock into paid-up shares if any denomination.

DIVISION OF PROFITS

Article 151 provides that,

The profits of the Company, subject to any special rights relating thereto created or authorised to be created by these Articles, shall be divisible among the, Members in proportion to the amount of capital paid-up or credited as paid-up and to the period during the year for which the capital is paid-up on the shares held by them respectively.

THE COMPANY IN GENERAL MEETING MAY DECLARE DIVIDENDS

Article 152 provides that,

Subject to the provisions of Section 205 of the Companies Act, 1956 the Company in General Meeting may declare dividends, to be paid to its Members according to their respective rights but no dividends shall exceed the amount recommended by the Company in General Meeting may declare a smaller dividend.

INTERIM DIVIDEND

Article 153 provides that,

The Board may, from time to time, pay to the members such interim dividend as in their judgement the position of the Company justifies.

INTEREST OF DIVIDENDS

Article 161 provides that,

No unpaid dividend shall bear interest as against the Company. No unclaimed dividend shall be forfeited by the Board unless the claim thereto becomes barred by law and the Company shall comply with all the provisions of Section 205A of the Companies Act, 1956 in respect of unclaimed dividend.

CAPITALISATION OF PROFITS

Article 162 provides that,

1) The company in General Meeting may, upon the recommendation of the Board, resolve:-

i. that it is desirable to capitalize any part of the amount for the time being standing to the credit of any of the Company’s reserve accounts or to the credit of the profit and loss account, or otherwise available for distribution; and

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ii. that such sum be accordingly set free for distribution in the manner specified in clause (2) amongst the members who would have been entitled thereto, if distributed by way of dividend and in the same proportions.

2) The sum aforesaid shall not be paid in cash but shall be applied, subject to the provisions contained in clause (3), either in or towards:-

i) paying up any amounts for the time being unpaid on any shares held by such member 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 proportions aforesaid; or iii) pay in the way specified in sub-clause (1) and partly in that specified in sub clause(ii)

3) A share premium account and a capital redemption reserve account 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.

Article 163 provides that,

1) whenever such a resolution as aforesaid shall have been passed, the Board shall- a) make all appropriation and application of the undivided profits resolved to be capitalized thereby, and all allotment and issue 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 issue of fractional certificates or by payment in cash or otherwise, as it think fit, for the case of share or debenture becoming distributable in fraction and also b) to authorize any person to enter, on behalf of all members entitled thereto, in to an agreement with the Company providing for the allotment to them respectively. Credited as fully paid up, of any further shares to which they may be entitled upon such capitalization 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 capitalized, of the amounts or any part of the amounts remaining unpaid on their existing shares.

3) Any agreement made under such authority shall be effective and binding on all such members.

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SECTION IX: OTHER INFORMATION

LIST OF MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by our Company or entered into more than two years before the date of this Draft Red Herring Prospectus) which are or may be deemed material have been entered into by our Company. These contracts, copies of which have been attached to the copy of this Draft Red Herring Prospectus, delivered to the Registrar of Companies, Tamil Nadu, Chennai for registration and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of our Company situated at: 34/1, 35, Kanathur Reddy Kuppam Village, Chengalput Taluk, Kancheepuram District 603112, Tamil Nadu from 10.00 am to 4.00 pm on any working days from the date of this Draft Red Herring Prospectus until the Bid Closing Date / Issue Closing Date.

MATERIAL CONTRACTS

1. Engagement Letter dated 27 th August 2008 appointing Comfort Securities Private Limited as Book Running Lead Managers to the Issue.

2. Memorandum of Understanding dated 21 st October 2008 amongst our Company, Selling Shareholders, and the BRLMs

3. Memorandum of Understanding dated 15 th October 2008 entered into with Cameo Corporate Services Limited appointing them as the Registrar to the Issue.

4. Copy of tripartite agreement dated 3rd January, 2005 between NSDL, our Company Cameo Corporate Services Limited

5. Copy of tripartite agreement dated [•] between CDSL, our Company and Cameo Corporate Services Limited

6. Escrow Agreement dated [ ] between our Company, Selling Shareholders, BRLMs, Escrow Collection Bank and the Registrar to the issue.

7. Syndicate Agreement dated [ ] between our Company, Selling Shareholders, BRLMs, and the Syndicate Members.

8. Underwriting Agreement dated [O] between our Company, Selling Shareholders, BRLMs, and the Syndicate Members.

DOCUMENTS FOR INSPECTION

1. Memorandum and Articles of Association of our Company as amended from time to time

2. Copy of the resolution passed at the meeting of the Board of Directors held on 12 th September, 2008, authorizing the issue.

3. Copy of the resolution passed by the shareholders of our Company under section 81 (1A) at the Extra Ordinary General Meeting held on 15 th October 2008.

4. Authorizations from the Selling Shareholders by way of Board Resolution dated 20 th October 2008 authorizing the Issue

5. Copy of shareholders resolution dated 12 th September, 2008 appointing Mr. Udeep Bogollu as the Chairman & Managing Director of our Company.

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6. Copy of board resolution dated 20 th October, 2008, appointing Ms. Anita Chandrasekaran as the Wholetime Director of our Company.

7. Consents of the Directors, Company Secretary, Compliance Officer, Auditors, Book Running Lead Manager(s) to the Issue, Legal Advisors to the Issue, Bankers to our Company, Appraising agency, IPO grading agency, statutory Auditors and Registrars to the Issue, to include their names in the Draft Red Herring Prospectus to act in their respective capacities.

8. Valuation Report on Immovable Properties by JMR Consultants, Chartered Engineers & Regd. Valuers dated 25 th September 2008

9. Valuation Report of Digital Assets by Mr. Sundaram S., Specialized Valuers dated 5 th November 2008

10. Copies of Annual Reports of our Company for the last five (5) financial years viz 2003-04, 2004-05, 2005-06, 2006-07, 2007-08

11. Audit report issued by our statutory auditors R Subramanian & Co., Chartered Accountants, dated 12 th November 2008 included in the Draft Red Herring Prospectus and copies of Balance Sheet referred to in the said report.

12. Letter dated 12 th November, 2008 from the statutory Auditors of our Company, R Subramanian & Co., Chartered Accountants detailing the tax benefits.

13. Copy of certificate from the statutory Auditors of our Company, R Subramanian & Co., Chartered Accountants, dated 2 nd January 2009 regarding the sources and deployment of funds as on 31 st December 2008

14. Copy of certificate from the statutory Auditors of our Company, R Subramanian & Co., Chartered Accountants, dated 2 nd January 2009 regarding the Eligibility of the Issue.

15. Board Resolution dated 14 th January 2009 for approval of Draft Red Herring Prospectus.

16. Resolution passed by the IPO Committee dated 14 th January, 2009 for approval of the Draft Red Herring Prospectus.

17. Due Diligence Certificate dated 14 th January 2009 to SEBI from Book Running Lead Manager viz Comfort Securities Private Limited.

18. Power of Attorney executed by Directors viz. Ms. Anita Chandrasekaran, Ms. Sumathi Sridharan, Mr. Mahesh Shankar, Mr. Harsha Lakshmikanth, Mr. Shriram Pathanjali & Mr. Arun Sultania in favor of Managing Director i.e. Mr. Udeep Bogollu for signing and making necessary changes in the Draft Red Herring Prospectus

19. Copy of in-principle listing approval dated [•] from BSE.

20. Copy of in-principle listing approval dated [•] from NSE.

21. SEBI Observation letter no [•] dated [•].

Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or modified at any time, if so required, in the interest of our Company or if required by the other parties, without reference to the shareholders, subject to compliance of the provisions contained in the Companies Act and other relevant statutes.

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DECLARATION

All the relevant provisions of the Companies Act, 1956 and the guidelines issued by the Government of India or the guidelines issued by the Securities and Exchange Board of India, established under Section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in this Draft Red Herring Prospectus is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or rules made or guidelines issued thereunder, as the case may be. We further certify that all statements in this Draft Red Herring Prospectus are true and correct.

SIGNED BY ALL THE DIRECTORS

Mr. Udeep Bogollu

Ms. Anita Chandrasekaran*

Ms. Sumathi Sridharan*

Mr. Mahesh Shankar*

Mr. Harsha Lakshmikanth*

Mr. Shriram Pathanjali*

Mr. Arun Sultania*

* indicates signed by their respective Power of Attorney

SIGNED BY THE CHIEF FINANCIAL OFFICER

Mr. Krishnan Eswaran

SIGNED BY THE COMPANY SECRETARY & COMPLIANCE OFFICER

Mr. Subramanian Ganesan

SIGNED BY SELLING SHAREHOLDER For Anchor Constructions Private Limited

Chakravarthi Varadachari Ravi (Director)

Date: 14.01.2009

Place: Chennai

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