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CMYK RED HERRING PROSPECTUS Please read Section 60B of the Companies Act, 1956 Dated November 21, 2005 100% Book Building Issue PVR LIMITED (Incorporated under the Companies Act, 1956 on April 26, 1995 as Priya Village Roadshow Limited and obtained certificate of commencement of business on December 4, 1995. On June 28, 2002 the name of our Company was changed from Priya Village Roadshow Limited to PVR Limited. For details of change in name, please see the section titled “History and Certain Corporate Matters” beginning on page 105.) Registered Office: Changed from 50, West Regal Building, Connaught Place, New Delhi 110 001, India to 61, Basant Lok, Vasant Vihar, New Delhi 110 057, India with effect from August 5, 2005. Tel: +91 11 5166 3787; Fax: +91 11 5166 5787. Corporate Office: Block 2A, 2nd Floor, DLF Corporate Park, DLF Qutab Enclave - III, Gurgaon 122 002, Haryana, India. Tel: +91 124 2549 300; Fax: +91 124 5063 273. Contact Person: Mr. N.C. Gupta; Tel: +91 124 2549 300 E-mail: [email protected]; Website: www.pvrcinemas.com Public Issue of 7,700,000 Equity Shares of Rs. 10 each for cash at a price of Rs. [] per Equity Share aggregating Rs. [] million (the “Issue”), by PVR Limited (“PVR Cinemas”, the “Company” or “the Issuer”), consisting of a Fresh Issue of 5,700,000 Equity Shares of Rs. 10 each, and an Offer for Sale of 2,000,000 Equity Shares of Rs. 10 each by The Western India Trustee and Executor Company Limited (“WITEC” or the “Selling Shareholder”), in its capacity as trustee of India Advantage Fund – I, a trust registered under the Indian Trusts Act, 1882 acting through its investment manager ICICI Venture Funds Management Company Limited. The Issue comprises of Promoter’s Contribution of 300,000 Equity Shares brought in by our Promoter, PEPL, a reservation for Employees of 150,000 Equity Shares of Rs. 10 each and a net issue to the public of 7,250,000 Equity Shares of Rs. 10 each (the “Net Issue”). The Issue will constitute 33.66% of the fully diluted post-Issue capital of our Company. PRICE BAND: RS. 200 TO RS. 240 PER EQUITY SHARE OF FACE VALUE RS. 10. ISSUE PRICE IS 20 TIMES THE FACE VALUE AT THE LOWER END OF THE PRICE BAND AND 24 TIMES THE FACE VALUE AT THE HIGHER END OF THE PRICE BAND. 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 10 working days. Any revision in the Price Band and the revised Bidding/ Issue Period, if applicable, will be widely disseminated by notification to the National Stock Exchange of India Limited (“NSE”) and The Bombay Stock Exchange Limited (“BSE”), by issuing a press release, and also by indicating the change on the website of the Book Running Lead Managers and at the terminals of the Syndicate. The Issue is being made through the 100% Book Building Process wherein upto 50% of the Net Issue to the public shall be allocated on a proportionate basis to Qualified Institutional Buyers, out of which 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remaining QIB 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 Issue Price. Further, at least 15% of the Net Issue to the public shall be available for allocation on a proportionate basis to Non-Institutional Bidders and at least 35% of the Net Issue to the public 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. Further, upto 150,000 Equity Shares shall be available for allocation to the Employees, subject to valid Bids being received at or above the Issue Price and subject to a maximum Bid Amount of Rs. 2,500,000 by each Employee. RISK IN RELATION TO FIRST ISSUE This being the first issue of the Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares is Rs. 10 and the Issue 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 Managers, 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 and/ or sustained trading in the Equity Shares of the Company or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue, including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of this Red Herring Prospectus. Specific attention of the investors is invited to the section titled “Risk Factors” beginning on page xi. COMPANY AND SELLING SHAREHOLDER’S ABSOLUTE RESPONSIBILITY The Company and the Selling Shareholder, having made all reasonable inquiries, accept responsibility for and confirm that this Red Herring Prospectus contains all information with regard to the Company and the Issue, which is material in the context of the Issue, that the information contained in this 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 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 Red Herring Prospectus are proposed to be listed on the NSE and the BSE. We have received in-principle approval from the NSE and the BSE for the listing of our Equity Shares pursuant to letters dated November 7, 2005 and November 4, 2005, respectively. BSE shall be the Designated Stock Exchange. BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE ICICI SECURITIES LIMITED KOTAK MAHINDRA CAPITAL COMPANY LIMITED KARVY COMPUTERSHARE PRIVATE LIMITED ICICI Centre, H.T. Parekh Marg, Bakhtawar, 3rd Floor, 229, Nariman Point, Karvy House, 46, Avenue 4, Street no.1, Banjara Hills, Churchgate, Mumbai 400 020, India. Mumbai 400 021, India. Hyderabad 500 034, India. Tel: + 91 22 2288 2460 Tel: +91 22 5634 1100 Tel: +91 40 2343 1546/49 Fax: + 91 22 2283 7045 Fax: +91 22 2284 0492 Fax: +91 40 2343 1551 E-mail: [email protected] E-mail: [email protected] E-mail: [email protected] Website: www.iseconline.com Website: www.kotak.com Website: www.karvycomputershare.com BID / ISSUE PROGRAMME BID/ISSUE OPENS ON : THURSDAY, DECEMBER 8, 2005 BID/ISSUE CLOSES ON : WEDNESDAY, DECEMBER 14, 2005 CMYK TABLE OF CONTENTS DEFINITIONS AND ABBREVIATIONS .................................................................................................................................... i PRESENTATION OF FINANCIAL AND MARKET DATA .................................................................................................... ix FORWARD-LOOKING STATEMENTS ..................................................................................................................................... x RISK FACTORS ............................................................................................................................................................................ xi SUMMARY ................................................................................................................................................................................... 1 THE ISSUE ..................................................................................................................................................................................... 5 SUMMARY FINANCIAL AND OPERATING INFORMATION ............................................................................................ 6 GENERAL INFORMATION ....................................................................................................................................................... 10 CAPITAL STRUCTURE .............................................................................................................................................................. 19 OBJECTS OF THE ISSUE ............................................................................................................................................................ 31 TERMS OF THE ISSUE ............................................................................................................................................................... 38 BASIS FOR ISSUE PRICE ............................................................................................................................................................ 40 STATEMENT OF TAX BENEFITS ............................................................................................................................................