Ram Kaashyap Investment Limited

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LETTER OF OFFER (For Equity Shareholders-Beneficial Owners of the Company only) Dated- October 26, 2010

RAM KAASHYAP INVESTMENT LIMITED (Our Company was incorporated on 3 rd December, 1993 as Ram Kaashyap Investment Limited under the Companies Act, 1956 as a Public Limited Company with the Registrar of Companies, Tamil Nadu at Chennai and received the Certificate for Commencement of Business on 27 th December, 1993.) (For further details, please refer to the chapter titled “History and Corporate Structure on page 93 of this Letter of Offer) Registered Office : No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamil Nadu, India (For further details of changes in registered office, please refer to the chapter titled “History and Corporate Structure on page 93 of this Letter of Offer) Tel No: 91 44 2499 4243; Fax: 91 44 4344 2016; Email: [email protected] ; Website: www.ramkaashyap.com; Contact Person: Mr. K. J. Chandra Mouli, Compliance Officer & Company Secretary Tel No: 91 44 2499 4243; Fax: 91 44 4344 2016; Email: [email protected] ; website: www.ramkaashyap.com ; THE PROMOTERS OF OUR COMPANY ARE MR. A. VENKATRAMANI AND MR. JUDE JEYAPRAKASH FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF THE COMPANY ONLY LETTER OF OFFER ISSUE OF 3,51,60,000 EQUITY SHARES OF RS.10/- EACH FOR CASH AT PAR AGGREGATING TO RS. 3516 LAKHS (RUPEES THIRTY FIVE HUNDRED AND SIXTEEN LAKHS ONLY) TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF 4 (FOUR) EQUITY SHARES FOR EVERY 1 (ONE) EQUITY SHARE HELD ON RECORD DATE I. E. NOVEMBER 8, 2010.

THE FACE VALUE OF THE EQUITY SHARE IS RS.10/- AND ISSUE PRICE IS 1 (ONE) TIME THE FACE VALUE. FOR FURTHER INFORMATION, PLEASE REFER TO CHAPTER “TERMS OF THE ISSUE” ON PAGE 185 OF THIS LETTER OF OFFER. GENERAL RISKS Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this offer 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 offering. For taking an investment decision, investors must rely on their own examination of the Issuer and the Offer including the risks involved. The securities have not been recommended or approved by Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to “Risk Factors” on page 10 of this Letter of Offer before making an investment in this offer. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Letter of Offer is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this document as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING ARRANGEMENTS The existing Equity Shares of Our Company are listed on the Bombay Stock Exchange Limited (“BSE”) (Designated Stock Exchange) and the Madras Stock Exchange Limited (“MSE”). Accordingly, Our Company proposes to list the Equity Shares issued under this Letter of Offer on BSE & MSE. Our Company has received the in-principle approval from BSE vide its letter No. DCS/PREF/JA/IP-RT/1636/09-10 dated February 18, 2010 and from MSE vide its letter No. MSE/LD/PSK/738/084/10 dated February 24, 2010 for listing of the equity shares being issued in terms of this Letter of Offer.

LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE VIVRO FINANCIAL SERVICES PVT. LTD. KNACK CORPORATE SERVICES PVT. LTD. SEBI Regn. No.: INM000010122 SEBI Regn. No.: INR000000957 1st Floor, Manu Mansion, 16/18, 17/9, Thiruvengadam Street, Shahid Bhagatsingh Road, Mandaveli, Chennai – 600 028 Opp. Old Custom House, Fort, Mumbai - 400 023 Tel.: 91- 44 – 2461 5006/ 4210 0092 Tel.: +91-22-2265 7364, Fax: 91- 44 – 2461 1917 Fax: +91-22-2265 8406 E-mail: [email protected] Website: www.vivro.net , E-mail: [email protected] Contact Person: Mr. R. Chandrasekaran Contact Person: Mr. Ashok Mehta ISSUE SCHEDULE ISSUE OPENS ON LAST DATE FOR RECEIVING REQUESTS FOR SPLIT ISSUE CLOSES ON APPLICATION FORMS NOVEMBER 18, 2010 NOVEMBER 25, 2010 DECEMBER 02, 2010 T A B L E O F C O N T E N T S Section Contents Page No. I DEFINITIONS AND ABBREVIATIONS 3 Conventional and General Terms 3 Issue Related Terms 4 Issuer and Industry Related Terms 5 Abbreviations 6 Forward Looking Statements 8 II RISK FACTORS 10 Prominent Notes 24 III INTRODUCTION (A) Summary 25 (I) Industry Summary 25 (II) Business Summary 27 (III) Issue Details 30 (IV) Summary of Financial Information 31 (B) General Information 33 (C) Capital Structure 38 IV PARTICULARS OF THE ISSUE (A)Objects of the Issue 47 (B)Cost of Project / Funds Requirement 47 (C) Means of Finance 50 (D) Basic Terms of the Issue 52 (E) Basis for the Issue Price 53 (F) Statement of Tax Benefits 55 V ABOUT OUR COMPANY (A) Industry Overview 62 (B) Business Overview 74 (C) Key Industry Regulations 91 (D) History of Our Company and Other Corporate Matters 93 (E) Management 105 (F) Promoters 116 (G) Presen tati on of Fi nanc ial I nfor mati on and use of Ma rket Da ta 120 (H) Dividend Policy 120 VI FINANCIAL STATEMENTS (A) Financial Statements of the Issuer 121 (B) Financials of Group Concerns 153 (C)Management Discussion and Analysis 162 VII LEGAL AND OTHER INFORMATION (A) Outstanding Litigations and Material Developments 168 (B) Government Approvals or Licensing Arrangements 175 VIII REGULATORY AND STATUTORY DISCLOSURES Authority for the Present Issue 176 Disclaimer Clause 176 Filing 180 Stock Market Data 182 IX OFFERING INFORMATION (A) Terms of the Issue 185 (B) Issue Procedure 189 (C) Description of Equity Shares and Terms of the Articles of Association 211 X OTHER INFORMATION Material Contracts and Documents for inspection 216 Declarations 217 SECTION – I - DEFINITIONS AND ABBREVIATIONS

Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this Letter of Offer.

Term Description “Ram Kaashyap Investment Unless the context otherwise requires, refers to Ram Kaashyap Limited”, “RKIL”, “the company” Investment Limited, a public limited company incorporated “our company”, “the issuer”, under the provisions of the Companies Act, 1956. “we”, “us” and “our” Group Concerns 1. Kaashyap Technologies Limited (KTL) 2. Space Computer and Systems Limited (SCSL) 3. Space Hospitals Limited (SHL) 4. Kaashyap Interserve Technologies Limited (KITL) 5. AVR Talkies Pvt. Ltd.(ATPL)

Subsidiary Companies 1. Tamil Box Office (India) Private Limited - TBO (India) 2. Tamil Box Office Singapore Pte. Limited (Step-down Subsidiary) - (TBO - Singapore) 3. Pix Aalaya Studios Private Limited (PSPL)

Conventional and General Terms

Term Description Articles/Articles of Association Articles of Association of our Company. ASBA Application Supported by Blocked Amount The Statutory Auditors of our Company, being M/s. R. Auditors Ravindran & Associates 14, Ashtalakshmi Street, Muthulakshmi Nagar, Chitlapakkam, Chennai - 600 064 The Board of Directors of our Company or a Committee Board of Directors thereof. Companies Act The Companies Act, 1956, as amended. Director(s) Director(s) of our Company unless otherwise specified. Equity Shares of our Company of face value of Rs. 10/- each Equity Shares unless otherwise specified in the context thereof. FCNR Foreign Currency Non Resident Account Foreign Exchange Management Act, 1999, as amended from FEMA time to time and the regulations framed there under. Period of twelve months ended on March 31 of that particular Financial Year/Fiscal/FY year. Foreign Institutional Investor (as defined under SEBI (Foreign FII Institutional Investors) Regulations, 1995) registered with SEBI under applicable laws In India. Indian GAAP Generally Accepted Accounting Principles in India. Insurance Act Insurance Act, 1938, as amended I.T. Act The Income Tax Act, 1961, as amended I.T. Rules The Income Tax Rules, 1962, as amended Memorandum of Association The Memorandum of Association of our company as amended A person who is not an NRI or an FII and is not a person Non-Resident resident in India. NOC No Objection Certificate NR Non- Resident A person resident outside India, as defined under FEMA and NRI/Non-Resident Indian who is a citizen of India or a Person of Indian Origin under FEMA (Deposit) Regulations, 2000. NRE Account Non Resident External Account NRO Account Non Resident Ordinary Account RBI Reserve Bank of India constituted under the RBI Act RBI Act The Reserve Bank of India Act, 1934 as amended 3 Registered Office of Our No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Company Alwarpet, Chennai – 600 018, Tamilnadu, India Scheme of Arrangement Scheme of Arrangement with the Depositors of Kaashyap Technologies Limited (“KTL”) (formerly known as Kaashyap Radiant Systems Limited) “KRSL”) and Kaashyap Radiant Systems Limited and Ram Kaashyap Chits Private Limited (“RKCPL”) and Ram Kaashyap Investment Limited (“RKIL”) and Ram Kaashyap Chits Andhra Limited (“RKCAL”) as sanctioned by Hon’ble High Court of Madras vide order dated November 3, 2004 Securities and Exchange Board of India constituted under the SEBI SEBI Act. Securities and Exchange Board of India Act, 1992, as SEBI Act amended SEBI (Issue of Capital and Disclosure Requirements) “SEBI (ICDR) Regulations” or Regulations, 2009, as amended from time to time, includi ng “Regulations” instructions and clarifications issued by SEBI from time to time.

Issue Related Terms

Term Description Allotment/Allotment of Equity Unless the context otherwise requires, the issue and the Shares allotment of Equity Shares, pursuant to the Issue. Allottee(s) The applicants to whom the Equity Shares are being / have been allotted Application Supported by Means an application for subscribing to an issue containing an Blocked Amount (ASBA) authorization to block the application money in a bank account Banker(s) to the Issue HDFC Bank Ltd. BSE The Bombay Stock Exchange Limited Composite Application Form / The form used by an investor to make an application of CAF allotment of Equity share. Compliance Officer and Company Mr. K.J. Chandra Mouli Secretary The Draft Letter of Offer dated May 12, 2010 filed with the Draft Letter of Offer SEBI on May 17, 2010. Designated Stock Exchange Bombay Stock Exchange Limited. Equity Shares of Our Company of the face value Rs. 10/- each, Equity Shares unless otherwise specified in the context thereof Issue/Offer/Rights Issue ISSUE OF 3,51,60,000 EQUITY SHARES OF RS. 10/- EACH FOR CASH AT PAR AGGREGATING TO RS 3516 LAKHS (RUPEES THIRTY FIVE HUNDRED AND SIXTEEN LAKHS ONLY) TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF 4 (FOUR) EQUITY SHARES FOR EVERY 1 (ONE) EQUITY SHARE HELD ON RECORD DATE I. E. NOVEMBER 08, 2010. The shareholders of our Company on the record date i.e. Investor(s) November 08, 2010 and the renouncees. Issue Closing Date December 02, 2010 Issue Opening Date November 18, 2010 The period between the Issue Opening date and issue Closing Issue Period date and includes Both these dates Issue Proceeds The proceeds of the Issue that are available to our Company KMP Key Managerial Personnel means the officers vested with executive powers and the officers at the level immediately below the Board of Directors of the issuer and includes any other person whom the issuer may declare as key managerial personnel. 4 Lead Manager Vivro Financial Services Private Limited Letter of Offer to be sent to the eligible Shareholders of our Letter of Offer Company with respect to this Issue in accordance with SEBI (ICDR) Regulations The Issue Proceeds less the Issue expenses. For further information about use of the Issue Proceeds and the Issue Net Proceeds Expenses see “Objects of the Issue” on page 47 of this Letter of Offer Promoter(s) Mr. A. Venkatramani and Mr. Jude Jeyaprakash Rights Issue Account In accordance with Section 73 of the Companies Act, 1956, an account opened with the Banker(s) to the Issue to receive monies from the Bank Account for the Issue on the Designated Date Record Date November 08, 2010 Registrar to the Issue Knack Corporate Services Private Any person(s) who has/have acquired Rights Entitlements from Renouncee(s) the Shareholders of our Company. The number of Equity Shares that a Shareholder is entitled to in Rights Entitlement proportion to the number of Equity Shares held by the Shareholder on the Record Date. Self Certified Syndicate Bank SCSB is a Banker to an Issue registered under SEBI (Bankers to (SCSB) an Issue) Regulations, 1994 and which offers the service of making an application supported by Blocked Amount and recognized as such by SEBI The BSE and the MSE where the Equity Shares of our Company Stock Exchange are presently listed, and where the Equity Shares to be issued pursuant to the Issue are proposed to be listed.

Issuer and Industry Related Terms

Term Description ATPL AVR Talkies Pvt. Ltd. Board Board of Directors of our Company Committee of Directors Committee of the Board of Directors of our Company C&S Cable & Satellite 3D Three-Dimensional DIPP Department of Industrial Promotion & Planning DTH Direct to Home DTU Direct to User ERP Enterprise Resource Planning IIP Index of Industrial Production IP Intellectual Property IPTV Internet Protocol TV IT Information Technology ITES Information Technology Enabled Services IPR Intellectual Property Rights KITL Kaashyap Interserve Technologies Limited KTL Kaashyap Technologies Limited PSPL Pix Aalaya Studios Private Limited SCSL Space Computer and Systems Limited SHL Space Hospitals Limited TBO - India Tamil Box Office (India) Private Limited TBO - Singapore Tamil Box Office Singapore Pte. Limited TV Television OTS One Time Settlement

5 Abbreviations

Term Description AGM Annual General Meeting AS Accounting Standards as issued by the Institute of Chartered Accountants of India ASBA Application Supported by Blocked Amount BIFR Board for Industrial and Financial Reconstruction BM Meeting of Board of Directors BSE Bombay Stock Exchange Limited BG/LC Bank Guarantee / Letter of Credit CDSL Central Depository Services (India) Limited CMIE Center for Monitoring of Indian Economy EGM Extra Ordinary General Meeting NSDL National Securities Depository Limited DP Depository Participants ECS Electronic Clearing System EGM Extra Ordinary General Meeting EPS Earnings Per Equity Share FCNR Foreign Currency Non Resident Account FDI Foreign Direct Investment FIPB Foreign Investment Promotion Board FI Financial Institution FY / Fiscal Period of twelve months ending on March 31 GDP Gross Domestic Product GIR General Index Registry Number GOI/Government Government of India Hon’ble Honorable HUF Hindu Undivided Family OCB Overseas Corporate Bodies ICD Inter Corporate Deposit INR Indian Rupees, the legal currency of the Republic of India Ltd. Limited MICR Magnetic Ink Character Recognition MOU Memorandum of Understanding MSE Madras Stock Exchange Limited NA Not Applicable NAV Net Asset Value No. Number NRE Account Non Resident External Account NRO Account Non Resident Ordinary Account NSDL National Securities Depository Limited P/E ratio Price/Earnings Ratio PA Per annum PAN Permanent Account Number PAT Profit After Tax PBDT Profit Before Depreciation and Tax PBIDT Profit Before Interest, Depreciation and Tax PBT Profit Before Tax RBI Reserve Bank of India ROC Registrar of Companies, Tamil Nadu at Chennai ROI Return on Investment RONW Return on Net worth SCRR Securities Contracts (Regulations) Rules, 1957 as amended Stock Exchanges i.e. Bombay Stock Exchange Limited and the Madras Stock SE/ Stock Exchange Exchange Limited SEBI(SAST) SEBI ( Substantial Acquisition of shares and Takeovers) Regulations, 1997 Regulations Security/ ies Equity Shares 6 Rs./Rupees Indian Rupees, the legal currency of the Republic of India USD/ $/ US$ United States Dollar being the legal currency of the United States of America

7 OVERSEAS SHAREHOLDERS

NO OFFER IN THE UNITED STATES

The rights and the securities of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), or any U.S. state securities laws and may not be offered, sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof (the “United States” or “U.S.”) or to, or for the account or benefit of, “U.S. persons” (as defined in Regulation S under the Securities Act (“Regulation S”), except in a transaction exempt from the registration requirements of the Securities Act. The rights referred to in this Letter of Offer are being offered in India, but not in the United States. The offering to which this Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any Equity Shares or rights for sale in the United States or as a solicitation therein of an offer to buy any of the said Equity Shares or rights. Accordingly, the Letter of Offer and the enclosed CAF should not be forwarded to or transmitted in or into the United States at any time.

Neither the Company nor any person acting on behalf of the Company will accept subscriptions or renunciation from any person, or the agent of any person, who appears to be, or who the Company or any person acting on behalf of the Company has reason to believe is, either a “U.S. person” (as defined in Regulation S) or otherwise in the United States when the buy order is made. Envelopes containing a CAF should not be postmarked in the United States or otherwise dispatched from the United States or any other jurisdiction where it would be illegal to make an offer under the Letter of Offer, and all persons subscribing for the Equity Shares and wishing to hold such Equity Shares in registered form must provide an address for registration of the Equity Shares in India. The Company is making this issue of Equity Shares on a rights basis to Equity Shareholders of the Company and the Letter of Offer and CAF will be dispatched to Equity Shareholders who have an Indian address. Any person who acquires rights and the Equity Shares will be deemed to have declared, represented, warranted and agreed, (i) that it is not and that at the time of subscribing for the Equity Shares or the Rights Entitlements, it will not be, in the United States when the buy order is made, (ii) it is not a “U.S. person” (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States, and (iii) is authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations.

8 FORWARD LOOKING STATEMENTS

We have included statements in this Letter of Offer which contain words or phrases such as "will", "aim", "is likely to result", "believe", "expect", "will continue", "anticipate", "estimate", "intend", "plan", "contemplate", "seek to", "future", "objective", "goal", "project", "should", "will pursue" and similar expressions or variations of such expressions, that are "forward- looking statements".

All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include but are not limited to:

General economic and business conditions in the markets in which we operate and in the local, regional, national and international economies; • Changes in laws and regulations relating to the industries in which we operate; • Increased competition in or other factors affecting the industry segment in which we operate; Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and implement various projects and business plans for which funds are being raised through this Issue; • Our ability to meet our capital expenditure requirements; • Fluctuations in interest rates and operating costs; • Our ability to attract and retain qualified personnel; • Changes in technology; Changes in political and social conditions in India or in countries that we may enter, the monetary and interest rate policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; Any adverse outcome in the legal proceedings in which we are involved.

The other factors discussed in this Letter of Offer, including those set forth under “Risk Factors”.

For further discussion of factors that could cause Company’s actual results to differ, please see the sections titled “Risk Factors”, “Business Overview” and “Management’s Discussion and Analysis of Financial Condition and Result of Operations” of this Letter of Offer. By their nature, certain market 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. Neither our Company, its Directors and Officers nor the Lead Manager nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI / Stock Exchange requirements, our Company and Lead Manager will ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchange.

In the light of inherent risks and uncertainties, the forward looking statements, events and circumstances discussed in this Letter of Offer might not occur and not guarantee of future performance.

9 SECTION II – RISK FACTORS

RISK ENVISAGED BY MANAGEMENT AND MANAGEMENT PERCEPTIONS THEREOF

Any investment in Equity Shares involves a high degree of risk and so you should carefully consider all of the information in this Letter of Offer including the risks and uncertainties described below before you make an investment decision. Risks have been quantified, wherever possible. If any of the following risks actually occur, our business, financial condition and results of operations could suffer, the trading price of our Equity Shares could decline and you may lose all or part of your investment.

The financial and other implications of material impact of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below. However there are few risk factors where the impact is not quantifiable and hence the same has not been disclosed in such risk factors. The numbering of risk factors has been done to facilitate ease of reading and reference and does not in any manner indicate importance of one risk factor over another.

Market data used throughout this Letter of Offer was obtained primarily from internal company reports, data, industry publications. The information contained in the Letter of Offer has been obtained from sources believed to be reliable, but their accuracy and completeness and underlying assumptions are not guaranteed and their reliability cannot be assured. Although, the Company believes that the market data used in this Letter of Offer is reliable, it has not been independently verified. Similarly, internal Company reports and data, while believed to be reliable, have not been verified by any independent source.

Materiality

The Risk factors have been determined on the basis of their materiality. The following factors have been considered for determining the materiality:- a) Some events may not be material individually but may be found material collectively. b) Some events may have material impact qualitatively instead of quantitatively. c) Some events may not be material at present but may be having material impacts in future.

Note: - Unless specified or quantified in the relevant risk factors below, we are not in a position to quantify the financial or other implications of any of the risks described in this section.

RISK FACTORS INTERNAL TO OUR COMPANY

1. Our Company has defaulted in repayment of public fixed deposits in the past.

Our Company was engaged in the business of retail financing and accepted fixed deposits from public in the normal course of business. Our NBFC registration was cancelled by RBI vide its order No. DNBS (Ch) / 2642/ Che 00053/99-2000 dated November 1, 1999, in view of various reasons like inadequate capital structure, insufficient net owned funds, realizable value of assets being less than the outside liabilities, inadequate liquidity ratio, payment of brokerage in excess of limits, non-adherence to prudential norms guidelines in respect of asset classification, provisioning and non-recognition of income in respect of loans and advances, bills discounted / purchased, default in repaying fixed deposits, excess holding of fixed deposit and excess exposure in real estate. In view of cancellation of NBFC registration by RBI, our Company had to stop retail financing business, which further accentuated the default in repayment of public fixed deposits.

2. Our Company, Promoters and promoter group companies are involved in certain legal and regulatory proceedings that, if determined against us, could have an adverse impact.

The following table sets out the summary details of pending litigation against our Company and our Promoter Group Companies:

10 Our Company

Category No. of Litigation Aggregate amount Involved Civil (against the company) 3 116 lakhs Civil (filed by the company) 1 623 lakhs

Against Promoter / Director

Category No. of Litigation Aggregate amount Involved Civil 1 Claims are not quantifiable and in view of this, not ascertainable Criminal 1 Claims are not quantifiable and in view of this, not ascertainable

Promoter Group Company

Category No. of Litigation Aggregate amount Involved Civil 9 1119 lakhs Criminal 2 3050 lakhs

For further details, please refer to the section titled “Outstanding Litigation and Material Developments” on page [.] of this Letter of Offer.

3. Our NBFC license was cancelled by RBI due to defaults in repayment of fixed deposits and non- compliance with certain NBFC norms issued by RBI.

In 1997, Reserve Bank of India notified revised guidelines for registration of companies as NBFC in India. These guidelines were made applicable to all the then existing registered NBFC companies. Consequently our Company was also required to make an application for re-registration and RBI was to examine the applications for granting such registrations. RBI examined the applications and granted registration to some companies and de-registered remaining companies. The registration of our NBFC status was cancelled by RBI and the reasons for rejection of application for re-registration with RBI as a NBFC include inadequate capital structure, insufficient net owned funds, realizable value of assets being less than the outside liabilities, inadequate liquidity ratio, payment of brokerage in excess of limits, non- adherence to prudential norms guidelines in respect of asset classification, provisioning and non- recognition of income in respect of loans and advances, bills discounted / purchased, default in repaying fixed deposits, excess holding of fixed deposit and excess exposure in real estate.

4. Our Company has defaulted in repayment of Dues to Banks in past and has entered into One Time Settlement with certain Banks.

Our Company has borrowed funds for long-term and short-term purposes from Karnataka Bank, Bank of Baroda, State Bank of Mysore, State Bank of Hyderabad and Bank of Rajasthan in past and the aggregate outstanding amount on the basis of Consolidated Financial Statements as on September 30, 2010 is Rs. 649.85 Lakhs. We have defaulted in payment of our dues to these banks due to the financial difficulties faced by us arising out of non-recovery of retail loans made to our customers and losses incurred. We are settling our outstanding dues with Bank of Baroda, Karnataka Bank, State Bank of Hyderabad by way of One Time Settlement (OTS) and are in the process of complying with the terms and conditions of respective OTS. We are yet to reach OTS with State Bank of Mysore where the outstanding dues as per the books of account are Rs. 412.99 lakhs.

Bank of Rajasthan has seized some of the assets of our Company charged to Bank and we believe that the said bank has recovered the outstanding loan amount from sale of the assets. However, we are yet to receive the intimation for realization of asset and set off of outstanding liability towards principal and interest.

The liabilities towards principal and interest of each bank have been worked out by us internally and there may be possibility that the actual outstanding and overdue amount as per the bank records may be different. Further, Banks reserve the right to withdraw the concessions granted under OTS and forfeit the amount of money paid towards principal and interest worked out as per OTS in the event of non- fulfillment or delayed fulfillment of terms and conditions as agreed in One Time Settlement.

Further, in the event of default for repayment or late payment of availed bank facilities including interest, charges, penalties, or any other dues, banks in addition to other rights have, legal right to seize, take possession, sell /lease the assets charged by our Company, Directors and Promoters of our Company by virtue of various loan documents executed by our Company, Directors and Promoters.

For further details as to the outstanding litigation filed by or against Banks / Financial Institutions, please refer to the page 168 of the “Legal and other information” of this letter of offer.

5. Our Company was originally incorporated as an investment company and appeared in the list of defaulting companies on the website of CIBIL.

Our Company had defaulted in repayment of fixed deposits of about Rs.2.35 crores during 2001 – 02. Kaashyap Technologies Ltd., doing the business under the same brand name, took over the liabilities of the three companies, namely, our Company, RKCAL and RKCPL with a bonafide intention to save its brand name “Kaashyap, though it did not have any commitment or responsibility towards the liabilities of the said three companies.” Pursuant to such takeover, KTL acknowledged the liabilities of the subscribers and depositors of the said companies and agreed to pay dues on a certain date. Due to unforeseen circumstances, KTL was not able to honour the commitment stated above on the due dates. Therefore, KTL formulated a scheme of arrangement with all the depositors and got appropriate sanction from Hon’ble High Court, Madras, in C.P.No. 204 of 2003, vide order dated 03.11.2004 to repay the fixed deposits over a period of 5 years. As per the Certificate of R. Ravindran, Chartered Accountants, dated 22 nd June 2010, KTL is yet to pay Rs. 25 lakhs to depositors.

6. Loan Agreements with bankers contain several restrictive covenants. This could adversely affect our ability to conduct our business.

Our Company has borrowed funds for long-term and short-term purposes from Karnataka Bank, Bank of Baroda, State Bank of Mysore, State Bank of Hyderabad and Bank of Rajasthan in past and the aggregate outstanding amount on the basis of Consolidated Financial Statements as on September 30, 2010 is Rs. 649.85 Lakhs. Most of our loans have been secured by way of a hypothecation charge on vehicles and book debts. Bank Loan Agreements generally contain restrictive covenants and as borrowers, we are subject to restrictive covenants in agreements entered into with our Bankers for our short-term loans and long-term borrowings. Summary of the major restrictive covenants of loan agreements are as under:

Create any charge, encumbrance or otherwise dispose of or remove assets offered as security, Declare any dividend on our share capital except out of profits relating to that year after making all due and Necessary provisions and we should not have failed to meet our obligations to pay the interest and/or Commission and/or installment or other money payable to the said bank, Make any major change in the management involving transfer of ownership; and Enter into any scheme of merger, amalgamation, reconstruction or consolidation or any scheme of arrangement or compromise for the benefit of our creditors.

We have defaulted in payment of our dues to these banks due to the financial difficulties faced by us arising out of non-recovery of retail loans made to our customers and losses incurred. As a part of the recovery proceedings initiated by Banks, Our Company has entered in to One Time Settlement (OTS) to clear the outstanding dues with Bank of Baroda, Karnataka Bank and State Bank of Hyderabad and are in

12 the process of complying with the terms and conditions of respective OTS arrangements. Under the revised terms of payment by way of OTS, the aforesaid banks have agreed to the terms mutually decided in OTS arrangement, hence the aforesaid restrictive covenants may not be applicable in respect of respective banks except in case of breach of terms of OTS arrangement.

We are yet to reach OTS with State Bank of Mysore where the outstanding dues as per the books of account are Rs. 412.99 lakhs. Bank of Rajasthan has seized some of the assets of our Company charged to Bank and has recovered the outstanding loan amount from sale of the assets.

Failure to meet these conditions or obtain these consents could have significant consequences for our business.

7. We have no operating history in entertainment business and might not be able to operate our business or implement our growth strategies successfully.

We have forayed into entertainment business on December 30, 2009 by acquiring 100% shares of Tamil Box Office (India) Private Limited (TBO-India), which has a wholly owned subsidiary company in Singapore viz. Tamil Box Office Singapore Pte. Ltd. (TBO Singapore). The 24 x 7 Tamil Movie and Movie based Entertainment Channel, TBO, is operated through TBO-Singapore. TBO-Singapore has acquired this movie Channel from Pixel Box Office Pte. Ltd., Singapore in October 2009. We have also acquired 100% shares of Pix Aalaya Studios Private Limited on December 30, 2009, a Company intending to engage into Webstreaming of movie content on internet portal. We also propose to enter in to distribution of overseas rights of South Indian movies.

However, our promoters have exposure of more than 15 years in Entertainment and Media Industry. Our Promoter Mr. A. Venkatramani has been associated with Entertainment and Media Industry since 1994 and has been associated with leading South Indian Television Channels like Sun TV, Jaya TV and Raj TV, etc. by producing Television serials and distributing Tamil movies through its group concerns and companies where he has served as a director. Mr. Jude Jeyaprakash, who has joined as a Co-promoter has been in entertainment and media industry and has considerable experience. For detailed profile of our promoters, please refer to the Section titled “Promoters” of this Letter of Offer. Therefore, based on the past experience, our promoters would be in a position to carry out the business in Entertainment and Media sector.

In view of the pre-occupancy of Mrs. Usha Venkatramani in her other business ventures, M/s. Kaashyap Productions has become a non functional firm for the purpose of production of tele-serials for last 7-8 years, however the firm has been carrying on the consultancy services business .

8. Our Company did not have any operation during the period from 1999 – 2006.

During the years 1999 to 2006, the Issuer Company was engaged in recovering its old outstanding receivables. During the years 2007 to 2009, the Issuer Company was engaged into Consultancy Services, Software Development and Trading of Securities.

9. The shares of our Company were suspended from BSE during the period from October 1, 2002 to June 9, 2008 due to non-compliances of various provisions of Listing Agreement.

On cancellation of NBFC registration by RBI, Our Company was going through a worse phase with virtually no business. Number of key managerial personnel left the Company creating a vacuum in 13 various operational areas leading to non compliance of submission of various periodical reports like financial results, corporate governance reports, etc. On account of non compliance of various provisions of the Listing Agreement, the shares of our Company were suspended for trading from BSE w.e.f. October 1, 2002. We complied with all the pending statutory requirements as required under the Listing Agreement and obtained revocation of suspension from BSE w.e.f. June 9, 2008.

10. History and chronology of original subscription/ allotment made during the period prior to year from inception to 2007 are not traceable.

Our Company had lost certain details and records viz. Form No. 5 for effecting the increase in authorised capital, Form No. 2 for return of allotments, etc. with respect to history and chronology of increase in authorised capital, subscription/ allotment made prior to year 2007. However, ownership of these equity shares as of now has no ambiguity and all of our pre-issue equity shares are duly listed on BSE and MSE and have been properly recorded with Registrar of Companies.

11. All the Key Management Personnel have been in the employment of the company since October 2009 only.

Our Company has forayed into entertainment business on December 30, 2009 by acquiring 100% shares Tamil Box Office (India) Private Limited (TBO-India), which has a wholly owned subsidiary company in Singapore viz. Tamil Box Office Singapore Pte. Ltd.(TBO Singapore). The 24 x 7 Tamil Movie and Movie based Entertainment Channel, TBO, is operated through TBO-Singapore. TBO-Singapore has acquired this movie Channel from Pixel Box Office Pte. Ltd., Singapore in October 2009. We have also acquired 100% shares of Pix Aalaya Studios Private Limited on December 30, 2009, a Company intending to engage into Webstreaming of movie content on internet portal.

In view of acquisition of aforesaid companies, our Company employed Key Managerial Personnel to operate and manage the business. Our success depends on the continued services and performance of the members of the senior management team and key employees. Competition for senior and experienced personnel in the industry is intense at present. The loss of the services of our senior management or key personnel could seriously impair our ability to continue to manage and expand our business, which may adversely affect our financial condition.

12. We have not registered our brand i. e. ‘TBO’ Movie Channel and we do not have a registered trademark.

We operate our 24 x 7 Tamil Movie Television channel in the name of “TBO” through our step down subsidiary company i.e. Tamil Box Office (Singapore) Pte. Ltd. “TBO” is not yet registered as brand or trademark with the appropriate authority. In the event of non registration of “TBO” brand, it may be difficult to protect our brand from unauthorized use which may adversely affect our business operations, financial results and future prospects.

13. We do not have IPR protection for the entertainment programmes produced by our Subsidiary i.e. Tamil Box Office India Pvt. Ltd.

Our wholly owned subsidiary Company i.e. Tamil Box Office India Pvt. Ltd. has produced Tamil movie related entertainment programmes comprising of about 1914 hours as on September 30, 2010 like song shows, comedy shows, short movie shows, review shows, interactive shows, talent shows, competition shows, etc. These programmes are broadcasted in TBO channel at regular intervals. We believe that our programmes are the unique identity of our channel and help us to reach our target audience. We have so far not made application for registering the IPR rights of these programmes and in the event of non- registration, it may be difficult to prevent unauthorized parties from infringing upon or misappropriating our programmes which may result into reduction in financial and qualitative value of the programme for our company.

14 Risk Factors – specific to Project

14. The success of our business is highly dependent on our ability to attract viewers to our Channel.

We cannot predict the economic success of our TV Channel business as the revenue derived from telecast of our “TBO” movie channel depends primarily upon its acceptance by the public, which cannot be accurately predicted. The economic success also depends on other factors e.g. Tamil speaking population in particular country/region, viewer preferences, and programme format etc.

The economic success of movie channel also depends upon the public‘s acceptance of competing productions and the availability of alternative forms of entertainment and leisure time activities, all of which can change and cannot be predicted with certainty.

TBO India is engaged in production of movie based entertainment programmes and as on September 30, 2010 has produced programme content of 1914 hours comprising of song shows, comedy shows, short movie shows, review shows, interactive shows, talent shows and competition shows. TBO Singapore is subsidiary of TBO India and engaged in broadcasting of its 24 hours channel TBO. Channel TBO has been in operation since 2006. The Channel has focused on providing content comprising of Tamil Movies, movie clippings, songs, trailers and movie based entertainment programmes.

Presently we telecast our “TBO” movie channel in countries like Sri Lanka, Middle East and Malaysia. If we are unable in the future to continue to exploit the available movie library or other programme content adequately, it could have a material adverse effect on our business, prospects, financial condition and results of operations.

15. There is no proven formula for success of an entertainment program / serial in Television Industry.

The success of business depends on ability to consistently create entertainment programs of substance and quality and telecast them to meet the changing preferences of the broad consumer market internationally.

16. Our future expansion plans are aggressive and failure to pursue future expansion plans shall affect our business growth & future revenues.

We operate 24 x 7 Tamil Movie and movie based entertainment programme Channel through a Step- down subsidiary company in Singapore viz. Tamil Box Office Singapore Pte. Ltd. and telecasts 24 x 7 Tamil movies and movie based entertainment programmes in countries like Sri Lanka, Malaysia and Middle East. We cater to Tamil Diaspora residing in these countries. Our TBO Channel is telecast in these countries on fixed fees contracts as well as on subscription based contracts. We plan to expand our reach by telecasting our channel in US, Canada, UK, Europe, Australia and New Zealand, where Tamil population is significantly large.

The above strategies should be on a continuous basis and marketing of channel is also very important. If we fail to pursue the same, our business would become stagnant or even decline. If we are unable in the future to continue to exploit the available movie library or other programme content adequately, it could have a material adverse effect on our business growth and future revenues.

17. The revenues of the channel are based on subscription & fixed fee contract. Hence, our Company’s growth & profitability is dependent on subscription nos. and fixed fee contracts.

We have adopted different revenue models for broadcasting our channel which are vogue in different territories. In Middle East region, we receive a share in the subscription revenues from our distributor. Subscription revenues are determined based on the number of subscribers and the subscription rate per connection.

In Malaysia and Sri Lanka, we have fixed fee contract with MEASAT Broadcast Network Systems and Voice of Asia Networks Ltd. respectively and receive revenues on monthly basis. We do not receive any part of advertisement income earned by our distributors in these territories.

15 In the event of our channel not being popular, the number of subscribers may not grow or remain stagnant or even reduce which would adversely affect our business, operations and profitability. In case, we are unable to revise our fixed fee contracts favourably, we may not be able to recover our fixed and variable costs and may incur losses.

18. We are new to Overseas Rights Distribution business and we intend to deploy significant portion of the proceeds of the Issue for Overseas Rights Distribution.

We do not have experience in the Overseas Rights Distribution business and commercial success of this business depends on our ability to procure rights of movies, which will be a commercial success, at competitive prices where we can generate returns from the investments made. We cannot assure that we will be able to identify right partners or distributors for exploiting the theatrical and VCD/DVD rights of the movies, that we acquire, in the major territories like Singapore, Malaysia, Middle East, Canada, Sri Lanka, USA and South Africa, Moreover the overseas rights market is dominated by handful of players, we may not be able to compete with them in acquisition of rights of the films from the producers and at right price. .We propose to utilize appx. Rs. 2078.50 lakhs being 59.12% of the Issue proceeds towards the acquisition of overseas rights of southern Indian movies.

However, we believe that the promoters Mr. A.Venkataramani and Mr.Jude Jeyaprakash have experience of more than 15 years in the entertainment and media industry and expect that we would be able carry out our business in overseas rights distribution effectively.

19. Piracy of film content, including digital and Internet piracy, may decrease revenue received from the exploitation of our overseas rights.

Piracy of motion pictures and content is extensive in many parts of the world and is made easier by technological advances and the conversion of motion pictures into digital formats, which facilitates the creation, transmission and sharing of high quality unauthorized copies of motion pictures in theatrical release, on videotapes and DVDs, from pay-per-view through set top boxes and other devices and through unlicensed broadcasts on free TV and the Internet. The proliferation of unauthorized copies and piracy of these products may have an adverse affect on our business because these products would reduce the revenue that we would receive from the exploitation of overseas rights.

Piracy and revenue losses at the last-mile are the bane of the entertainment industry. They prevent the rightful owners of the content from realising its full value. All sectors of the industry, except radio, suffer from these twin predicaments in some way or the other. In India typically 70 percent is collected over three months, after which piracy catches up and virtually nullifies any further theatre revenue potential. There are a large number of video rental shops across the country, many of which thrive on pirated videos. It is difficult to estimate the combined revenues of these rental shops but the impact it has on eroding theatrical revenues is significant. Currently, such losses are estimated at INR 4.3 billion, which amounts to over 40 percent of the industry's total revenues. (Source: India Entertainment Industry Focus 2010: Dream to Reality CII-KPMG Report)

Existing and upcoming technological or legal protection measures may or may not reduce unlicensed replication and distribution of film content. If the above measures are not successful we may lose an indeterminate amount of additional revenue as a result of piracy.

20. We intend to repay part of the outstanding liabilities towards secured and unsecured creditors out of the funds proposed to be raised from this Issue.

Our Company intends to utilize approx. Rs.350 Lakhs from the proceeds of this Rights Issue towards part repayment of outstanding liabilities with secured and unsecured creditors. In the event of any shortfall in using the net proceeds of the rights issue as described in the objects of the Issue, our Company will reduce the amount of repayment. In the event of any surplus, the management, in accordance with the policies established by the Board, will have flexibility in applying such surplus towards repayment. For further details, please refer to the section titled “Objects of the Issue” on page 47 of this Letter of offer.

16 21. As per the restated accounts certified by our Statutory Auditor, we have incurred losses in the last 5 years immediately preceding the date of Letter of Offer.

For the reasons mentioned under Chapter titled “Business Overview” beginning on page 74 of this document and in the absence of proper business activities, our Company has incurred losses in last 5 years immediately preceding the date of Letter of Offer and has accumulated losses of Rs.1708.19 lakhs as on 31 st March 2010 and Rs.1697.95 lakhs as on September 30, 2010 respectively. (Rs. in Lakhs) For the period For the year ended ended Particulars September 30, March 31, March 31, March 31, March 31, March 31, 2010 2010 2009 2008 2007 2006 (Consolidated) (Consolidated) Profit / (Loss) 10.24 (36.38) (90.93) (87.81) (93.78) (115.29) Accumulated Balance in P & L (Debit Balance) outstanding as at year end (1,697.95) (1,708.19) (1,667.55) (1,576.62) (1,488.81) (1,395.03)

22. Our group concerns have made losses in the recent years.

Our Group Entities Kaashyap Technologies Ltd., Space Computer and Systems Ltd., Space Hospitals Ltd. and Kaashyap Interserve Technologies Limited have incurred losses in any of the three years immediately preceding the date of filing of this Letter of Offer with SEBI. The details of profits/- (losses) after tax of these companies in the preceding three years are provided below. (Rs. In Lakhs) Sl. Particulars Year ended Year ended Year ended No. March 31, March 31, March 31, 2008 2009 2010 1. Kaashyap Technologies Limited 731.54 (723.44) (344.81) 2. Space Computer and Systems Limited 16.34 2.10 1.58 3. Space Hospitals Limited 91.83 (136.72) (106.72) 4. Kaashyap Interserve Technologies Limited (0.06) (0.06) (0.06)

For further details in this regard, please refer to the chapter titled ―”Financial Statements”, Part B Financial Information of Group Concerns on page no.[.] of this Letter of Offer.

There can be no assurance that these or any other of our Group Entities will not incur losses in future periods.

23. Our Company has failed to generate positive cash flows from its operating activity, investing activity and financial activity for the financial year 2004-05 to 2009-10 and for the period ended September 30, 2010.

For the reasons mentioned under Chapter titled “Business Overview” beginning on page 74 of this document and in the absence of proper business activities, we have had negative cash flows from operating activity, investing activity and financing activity during financial year 2004-05 to 2009-10 and for the period ended September 30, 2010, as indicated in the table below: (Rs. in lakhs) For the period ended 2009-10 2005- Particulars 2008-09 2007-08 2006-07 Sep 30, 2010 (Consolidated) 06 (consolidated) Net Cash Flow from Operating Activities (69.29) 31.41 (62.60) (16.62) 78.43 (1.57) Net Cash Flow from Investing Activities 34.14 (369.32) (0.49) (11.25) - - Net Cash Flow from Financing Activities 37.93 349.47 60.50 28.80 (75.48) 1.57

17 24. The Company might have contingent liabilities if the banks annul the OTS arrangements.

The Company has entered into OTS arrangements with three of its bankers. There are delays in the payment of installments as envisaged in the OTS Arrangements. In case, the bankers annul the OTS arrangements citing non-compliance with the OTS Terms, the liability of the Company may go up which at present is not quantifiable.

In the event that any of these contingent liabilities materialize, our financial condition may be adversely affected. For further information, please refer to Annexure 14 of our restated financial statements as on September 30, 2010, on page 121 of this Letter of Offer.

25. If we are unable to obtain the necessary funds for our growth plans, our business and operations will be adversely affected.

We require comparatively large funds for our business as proposed herein. Our ability to finance these plans is subject to a number of risks, contingencies and other factors, some of which are beyond our control, including general economic and capital markets conditions and our ability to obtain financing on acceptable terms.

There can be no assurance that debt or equity financing or our internal accruals will be available or sufficient to meet the funding of our growth plans. Our ability to obtain required capital on acceptable terms is subject to a variety of uncertainties, including:

Limitations on our ability to avail additional debt, including as a result of prospective lenders’ evaluations of our creditworthiness and pursuant to restrictions on incurrence of debt in our existing and anticipated credit facilities; Investors' and lenders' perception of, and demand for, debt and equity securities of Entertainment company as well as the offerings of competing financing and investment opportunities in India by our competitors; Whether it is necessary to provide credit support or other assurances from our Promoter on terms and conditions and in amounts that are commercially acceptable to them; Limitations on our ability to raise capital in the capital markets and conditions of the Indian, U.S. and other capital markets in which we may seek to raise funds; and Our future results of operations, financial condition and cash flows.

Any inability on our part to raise funds for our growth plans may adversely affect our business operations. However, for details about the “Objects of the Issue”, “Cost of the Project / Fund Requirements and Means of Finance” and “Details of the use of Rights Issue Proceeds”, please refer to Section IV entitled “Particulars of the Issue” beginning on page 47 of this Letter of Offer.

26. The issue of rights shares for funding the business plans may not be a right managerial decision in a loss making company.

The existing promoters and management have been trying to perform necessary duties in meeting out the statutory and commercial obligations in the company since it’s de-registration as an NBFC. The shareholders of the company have not gained from their investment in the company during this period of time. The existing promoters and management have explored profitable business activities for the company. The debt restructuring, deposit repayment arrangement and losses have brought equity subscription as the option for funding business plans. In view of the above, giving an opportunity to the existing shareholders for participating in the future business of the company should be considered as right managerial decision for the company. The promoters have also given undertaking for bringing or arranging the minimum subscription in the rights issue of shares.

27. We will face competition from other established companies and future entrants into the industry.

Our Company will be competing with the existing channels like Astro Box Office Movie Thanggathirai (24 hrs pay-per view Tamil channel) in Malaysia, Vannathirai - a 24hr movie channel in Singapore, DAN TV, Nethra TV, Shakthi TV, Vasantham TV in Srilanka, Tamil One and Tamil Vision

18 International Cable TVs in Canada, Cee I TV in UK, Ayngaran TV, Deepam TV, GTV (Global Tamil Vision), globally.

In the past few years, there has been increase in number of Tamil channels. This additional supply of channels in various markets will affect the viewer subscription and views per viewer. Our profit margin may reduce in case of fall in subscription, which would have an impact on our share prices. However, competition also brings market, overall public awareness, distribution strength and quality in the content which is considered as good for the public.

28. Our success significantly depends on our management and operational teams and other skilled professionals. If we fail to retain, motivate and/or attract such personnel, our business may be unable to grow and our revenues could decline, which may decrease the value of our Equity Shares.

Our success depends on the continued services and performance of the members of the senior management team and key employees. Competition for senior and experienced personnel in the industry is intense at present. The loss of the services of our senior management or key personnel could seriously impair our ability to continue to manage and expand our business, which may adversely affect our financial condition.

29. Our company has not declared any dividends for the past 5 years. Our ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

In view of continued losses, our Company has not declared any dividends for the past 5 years. The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital requirements and capital expenditures. There can be no assurance that we will be able to pay dividends. Additionally, we may be restricted by the terms of any future debt financing in relation to the payment of dividends.

30. Our management will have flexibility in applying the Net Proceeds for the Objects of the Issue.

We intend to use the Net Proceeds that we receive from the Issue for the purposes described in Objects of the Issue on page 47 of Letter of Offer. Our management may determine that it is appropriate to revise our estimated costs, funding requirements and deployment schedule owing to certain factors. Further, in the event of any shortfall of funds for any purposes of the “Objects of the Issue”, we may decide to reallocate the Net Proceeds from other purposes of the “Objects of the Issue” where such shortfall has arisen.

However pending utilization of the Net Proceeds of the Issue and other financings during intermediate period, we intend to invest such Net Proceeds in interest-bearing liquid instruments including money market mutual funds and bank deposits, as approved by our Board of Directors. Although the utilization of the Net Proceeds and other financing will be monitored by the Board of Directors, there are no limitations on interim investments that we can make using the Net Proceeds. In addition, any balance amount from the Net Proceeds which may be allocated to general corporate purposes will be used at the discretion of our management.

31. The promoters of our Company control less than 25% shareholding in our Company and may not be able to effectively control the operations of the Company.

Our promoter shareholders will hold approximately 11.68% of our post issue equity share capital. The promoters of our Company have given undertaking to subscribe to their portion of entitlement in this rights issue as well as subscribe for additional shares or subscription for any remaining unsubscribed portion of the rights issue either through themselves or by arranging funds from others. So long as our promoter shareholders along with the entities / body corporates controlled by them owns less than 51% of equity share capital of our Company, they may not be able to effectively control the composition of Board of Directors and Management of our Company. In view of the limited shareholding of our promoters in our Company, we may also face threats like hostile takeover bids, management buy outs, etc. Further, our existing promoters may not effectively take decisions in regard to election of our entire Board of Directors and control most matters affecting us, any determinations with respect to mergers, 19 business combinations and acquisitions or dispositions of assets.

32. The equity shares of our Company are not frequently traded / or are illiquid.

The equity shares of our company are infrequently traded i.e. the annualized trading turnover is less than 5% of the paid-up equity share capital. As the shares are infrequently traded, there is limited trading of our Equity Shares. There can be no assurance that an active trading market for our Equity Shares will develop or be sustained after this Issue, or that the prices at which our Equity Shares are initially traded will correspond to the prices at which our Equity Shares will trade in the market subsequent to this Issue. Our share price is likely to be volatile and may decline post issue. Our Equity Shares may experience price and volume fluctuations or an active trading market for our Equity Shares may not develop.

33. The Equity Shares of Kaashyap Technologies Limited were suspended from Trading for a period of 5 days from the Bombay Stock Exchange Ltd. during September 2006.

The Securities of Kaashyap Technologies Limited (KTL), one of our group company, were suspended from Trading for 5 days by the Bombay Stock Exchange Limited in September 2006 since KTL had not complied with certain requirements of the Listing Agreement with BSE. However, it had complied with all such requirements before even the suspension period had commenced. Therefore, instead of suspending the securities of the company for indefinite period, BSE suspended the securities of KTL from trading for a period of 5 trading days from 20th September 2006 to 26th September 2006.

34. Termination of our distribution contracts in different countries may have a material effect on our business, financial conditions and results of operations

TBO Singapore has received a Letter of Intent from ASTRO, Television Broadcaster in Malaysia i.e. Measat Broadcast Network Systems SDN BHD for grant of exclusive rights by TBO - Singapore to broadcast or otherwise make available the programmes included in the Channel which have been produced by or for the TBO – India. Voice of Asia Network (Private) Ltd. (VOA) has entered into Strategic Alliance Agreement with TBO Singapore to rebroadcast TBO Channel within the territory of Sri Lanka through the Terrestrial Network of VOA being Cable Television Systems, Satellite Television Systems, IPTV, Internet to TV via broadband DSL or FTTH distribution on ‘exclusive’ basis co-branded under the VOA brand Vettri TV on fixed fees basis. Our Company has entered into an agreement with Channel 2 Group Corporation having office at Dubai for distribution of our TBO Channel on the Arab Digital Distribution (ADD) platform by DTH route.

The promoters have taken due care about business risk management by spread out distribution arrangement yet any termination of contracts may have adverse affect on our business, operations and finances.

35. We have entered into certain related party transactions in Past.

We have entered, and may continue to enter, into transactions with related parties. We also rely on our Promoters, Group Entities, subsidiaries, associates and enterprises controlled by our Directors for certain activities of our Organization. In fiscal 2009, we entered into related party transactions with our promoters, directors, subsidiaries companies, group concerns and associate concerns. The details of transactions with related parties are given in Section-“Restated Financial Statements” at Annexure-15.

All our related party transactions have been conducted on an arm’s length basis, we cannot assure you that we could not have achieved more favorable terms had such transactions been entered into with unrelated parties. We may or may not enter into transactions with related parties and such transactions may result in additional tax liabilities by relevant tax authorities.

36. We have received qualifications in the auditors’ reports on our financial statements.

Our Company has received qualifications in the auditor’s reports on our financial statements for the last five financial years ended March 31, 2010 and period ended on September 30, 2010. The qualifications relates to non-maintenance of proper records for fixed assets, non-existence of internal control system, 20 non-payment of statutory dues, non-adherence of repayment schedule of bank loans, etc. Our restated financial statements have been adjusted for the auditors’ qualifications in respective financial years. However, the auditors’ qualifications, which are of qualitative nature, do not require restatement and hence has not been dealt with. For further details on auditors’ qualifications and how the same has been dealt with in our restated financial statements, please refer to Annexure – 4 and 5 of restated financial statements on page 121.

RISK FACTORS EXTERNAL TO OUR COMPANY

37. The market value of your investment may fluctuate due to the volatility of the Indian securities Market.

Indian securities markets may be more volatile than the securities markets in other developed countries. The Stock Exchanges have, in the past, experienced substantial fluctuations in the prices of listed securities.

The Stock Exchanges have experienced problems, inter alia, including temporary exchange closures, broker defaults, settlement delays and strikes by brokers and/or other intermediaries in the securities market. If such or similar problems were to continue or recur, could affect the market price and liquidity of the securities of Indian companies, including the Rights Equity Shares. In addition, the governing bodies of the Stock Exchanges have from time to time imposed restrictions on trading in certain securities, limitations on price movements and margin requirements. These all may affect the investments made in the Market.

38. Political instability or changes in the policies formulated by the Government of India from time to time could affect the liberalization of the Indian economy and adversely affect our business, results of operations and financial condition.

We are incorporated in India and a significant portion of our fixed assets and human resources are located in India. Our business, and the market price and liquidity of the Equity Shares may be adversely affected by changes in foreign exchange rates and regulations, interest rates, government policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India.

The rate of economic liberalization in India could change in future, and statutory/regulatory requirements and/or policies the general economic environment in India, foreign investment, the securities market, currency exchange and other matters affecting our business and/or investment in our securities could change as well. Any significant change in liberalization and deregulation of policies in India could adversely affect business and economic conditions in India generally and our business, operations and profitability in particular.

39. Natural calamities could have a negative impact on the Indian economy and harm our business.

India has experienced natural calamities such as earthquakes, floods, drought and a tsunami in recent years. The extent and severity of these natural disasters determines their impact on the Indian economy. Prolonged spells of abnormal rainfall and other natural calamities could have an adverse impact on the Indian economy which could adversely affect our business and the price of our Equity Shares in future.

40. A slowdown in the economic growth in India or in the economy globally could significantly affect our growth rates.

Our operations, control and administration are primarily located in India and our business operations and performance are dependent on the overall economy, the gross domestic product (“GDP”) growth rate and the economic cycle in India. The Indian economy could be adversely affected by a number of factors. Any slowdown in the Indian economy or volatility in global commodity prices, could adversely affect the Indian economy. The Indian economy could also be adversely affected by a general rise in interest rates and unfavorable weather conditions adversely affecting agriculture. A slowdown in the Indian economy could adversely affect our business and results of operations.

21 41. Terrorist attacks, civil disturbances, regional conflicts and other acts of violence in India and abroad may disrupt or otherwise adversely affect our Company’s business and its profitability.

Certain events that are beyond the control of our Company, such as terrorist attacks and other acts of violence or war, including those involving India, the United Kingdom, the United States or other countries, may adversely affect worldwide financial markets and could potentially lead to a severe economic recession for some time, which could adversely affect our Company’s business, results of operations, financial condition and cash flows, and more generally, any of these events could lower confidence in India’s economy. Southern Asia has, from time to time, experienced instances of civil unrest and political tensions and hostilities among neighboring countries.

For example, India recently witnessed a major terrorist attack in Mumbai on November 26, 2008, which led to an escalation of political tensions between India and Pakistan. Political tensions could create a perception that there is a risk of disruption of services provided by India-based companies, which could have an adverse effect on our Company’s business, future financial performance and price of our Equity Shares. Furthermore, if India were to become engaged in armed hostilities, particularly hostilities that are protracted or involve the threat or use of nuclear weapons, Our Company’s operations might be significantly affected.

India has from time to time experienced social and civil unrest and hostilities, including riots, regional conflicts and other acts of violence. Events of this nature in the future could have a material adverse effect on our Company’s ability to develop its business. As a result, our Company’s business, results of operations and financial condition may be adversely affected.

42. Shareholders will bear the risk of fluctuations in the price of our Equity Shares.

The price of our Equity Shares on the Indian stock exchanges may fluctuate after this offering as a result of several factors, including: volatility in the Indian and global securities market; operations and performance of our Company; performance of our competitors; adverse media reports on our Company; changes in the estimates of our Company’s performance or recommendations by financial analysts; significant developments in India’s economic liberalization and deregulation policies; and significant developments in India’s fiscal and environmental regulations. There can be no assurance that the prices at which our Equity Shares are initially traded will correspond to the prices at which our Equity Shares will trade in the market subsequently.

43. Future issuances or sales of our Equity Shares could significantly affect the trading price of our Equity Shares, and may dilute your shareholding in Our Company.

The future issuances of Equity Shares by our Company or the disposal of Equity Shares by any of the major shareholders of our Company or the perception that such issuance or sales may occur may significantly affect the trading price of our Equity Shares. Further, any issuance of any Equity Shares pursuant to the conversion or exchange of securities of our Company, or otherwise, may dilute your shareholding in our Company. There can be no assurance that our Company will not issue further Equity Shares or that our Promoters will not dispose of, pledge or otherwise encumber their Equity Shares.

44. Foreign investors are subject to foreign investment restrictions under Indian law that limit our Company’s ability to attract foreign investors, which may adversely impact the market price of our Equity Shares.

Under the foreign exchange regulations currently in force in India, transfers of Equity Shares between non-residents and residents are freely permitted (subject to certain restrictions) if they comply with the pricing guidelines and reporting requirements specified by the RBI. If the transfer of Equity Shares, which are sought to be transferred, is not in compliance with such pricing guidelines or reporting requirements or falls under any of the exceptions referred to above, then the prior approval of the RBI will be required. Additionally, shareholders who seek to convert the Rupee proceeds from a sale of Equity Shares in India into foreign currency and repatriate that foreign currency from India will require a no objection/ tax clearance certificate from the income tax authority. Our Company cannot assure

22 investors that any required approval from the RBI or any other statutory and/or regulatory authority or agency can be obtained on any particular terms or at all.

23 Prominent Notes

RIGHTS ISSUE:

ISSUE OF 3,51,60,000 EQUITY SHARES OF RS.10/- EACH FOR CASH AT PAR AGGREGATING TO RS. 3516 LAKHS (RUPEES THIRTY FIVE HUNDRED AND SIXTEEN LAKHS ONLY) TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF 4 (FOUR) EQUITY SHARES FOR EVERY 1 (ONE) EQUITY SHARE HELD ON RECORD DATE I. E. NOVEMBER 08, 2010.

1) Our net worth was Rs.770.73 lakhs and Rs.773.98 lakhs, as per the restated consolidated audited financial statements of our Company as at September 30, 2010 and March 31, 2010 respectively disclosed in the section titled “Financial Statements” beginning on page 121 of this Letter of Offer.

2) The book value per share of our Company is Rs. 8.77 and Rs.8.81 as per the restated consolidated audited financial statements of our Company as at September 30, 2010 and March 31, 2010 respectively disclosed in the section titled “Financial Statements” beginning on page 121 of this Letter of Offer.

3) The average cost of acquisition of equity shares to the promoters of our Company is Rs.13.72 per share.

4) Our Company has not entered into any related party transactions in the last one year preceding the date of filing of this Letter of Offer.

5) There are no financing arrangements whereby our Promoter Group, the Directors of companies forming a part of our Promoters, our Directors and their relatives, (“Financier”), have financed the purchase by any other person of securities of our Company other than in the normal course of the business of the Financier during the period of six months immediately preceding the date of filing this Letter of Offer with SEBI.

6) All information shall be made available by the Lead Manager and our Company to the existing shareholders of our Company and no selective or additional information would be available only to a section of the investors in any manner whatsoever.

7) The lead manager and our Company shall update this Letter of Offer and keep the shareholders and the public informed of any material changes till the listing and trading commencement, and our Company shall continue to make all material disclosures as per the terms of the listing agreement.

8) The promoters, Directors and Group companies have not purchased or sold any Equity shares in the twelve months preceding the date of filing of this Letter of Offer with SEBI except for the following transactions:

Sl. Name of the Promoter Share No. of Share Date of Mode of No. and Director holding shares holding Purchase Purchase or before Purchased after or Sale Sale Purchase (P) or Sold Purchase or Sale (S) or Sale 1. Mr. A. Venkatramani 4,92,610 1,00,000(P) 5,92,610 August 7, Off Market Promoter 2009 Purchase 2. Mr. A. Venkatramani 5,92,610 4,92,610(S) 1,00,000 August 11, Off Market Promoter 2009 Sale 3. Mr. Jude Jeyaprakash Nil 5,20,000(P) 5,20,000 December Preferential Whole-time Director 30, 2009 Allotment 4. Mr. A. Venkatramani 1,00,000 4,06,800 (P) 5,06,800 March 31, Off Market Promoter 2010 Purchase

9) Investors may contact Compliance Officer or the Lead Manager for any complaints pertaining to the Issue.

24 SECTION III – INTRODUCTION The Industry information presented in this section has been extracted from company sources, publicly available documents from various sources, including officially prepared materials and has not been prepared or independently verified by the Issuer or the Lead Manager.

I. INDUSTRY SUMMARY

Indian Film Industry India’s Film industry is one of the largest in the world with more than 1000 movie releases and over 3 billion movie goers annually. The filmed entertainment sector is estimated to have grown at a CAGR of 17.7 percent over the past 3 years. The industry is estimated to reach INR 109.9 billion in size in 2008, a growth of over13.4 percent over 2007. The industry is expected to grow at the CAGR of 9.1 percent over the next 5 years and reach the size of INR 168.6 billion by 2013. (Source: -FICCI- KPMG Report 2009 )

South Indian Film Industry

The South Indian film industry has a long and rich history. It is a key contributor to the overall Indian film industry, in terms of number of films produced, revenues earned and employment generated. It has by far, the largest share in the total number of films released per year. The industry comprises four sub-segments — Tamil, Telugu, Malayalam and Kannada.

No. of Films Certified and released

2004 2005 2006 2007 2008 Certified 120 132 135 146 173 Tamil Released 97 100 103 110 120 Certified 189 272 251 226 271 Telugu Released 124 130 109 97 136 Certified 70 68 72 86 84 Malayalam Released 69 59 60 62 63 Certified 73 82 75 106 159 Kannada Released 80 74 69 89 114 Certified 452 554 533 564 687 Total South India Released 370 363 341 358 433 (Source - FICCI –EY Report - 2009– From Script to Screen)

Market size The aggregate market size of the Tamil, Telugu, Malayalam and Kannada film industry segments in FY09 in terms of total revenues generated by films is estimated to be around INR17.3 billion. Of the aggregate market size, the Telugu segment contributes around INR7.7 billion, the Tamil segment INR7.7 billion, the Malayalam segment INR1.4 billion and the Kannada segment INR0.5 billion.

Tamil film Industry

Market size by revenue stream The Tamil film industry is heavily dependent on domestic theatrical revenues, which contribute four-fifths of the total revenues earned by films (INR6.2 billion). The other significant revenue streams are C&S television rights (INR0.8 billion) and international theatrical rights (INR0.5 billion). All other revenue streams (music rights, domestic home video rights and internet and mobile rights), in aggregate, contribute only INR0.1 billion to the total market size. (Source: FICCI –EY Report - 2009– From Script to Screen)

Note: Others include music rights, domestic home video rights, and mobile and internet rights Source: Ernst & Young primary research and analysis

International theatrical market The Tamil population of Indian origin residing overseas has been growing consistently over the past few years, with the boom in the information technology sector. Besides the number of Tamil speaking people from other countries such as Sri Lanka, who have settled abroad, has also grown. These factors have driven up the international demand for Tamil film content. However, while the international theatrical market has increased in prominence as a revenue stream, it still is not a big contributor to the total revenues of a film; revenues from the sale of international theatrical rights contribute only around 6% of the total Tamil film industry market size. While for a large budget film, the international theatrical market is about 10-15% of the total Tamil Nadu theatrical market, the corresponding figures for a medium budget film and a small budget film are 7.5-10% and 5-10% respectively. (Source - FICCI –EY Report - 2009– From Script to Screen)

26 (II) BUSINESS SUMMARY

We are one of the South Indian Media and Entertainment Companies in Chennai, India. We are engaged in broadcasting of Tamil Movies and Movie based entertainment programmes through 24 hours channel “TBO” owned by our subsidiary Company TBO Singapore Pte. Ltd. in countries like Sri Lanka, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates (Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimeh, Umm Al Quwain, Sharjah) and Yemen. We propose to enter in to business of distribution of overseas rights of South Indian movies and entertainment content in overseas markets like US, Canada, UK, Europe, Australia, New Zealand, etc. having significant South Indian population. We also plan to enter in to web streaming of Tamil movies on portal through our subsidiary company Pix Aalaya Studios Private Limited

Background:

Our Company was originally engaged in the business of retail financing and was registered with Reserve Bank of India as Non Banking Finance Company.

Consequently, the Company had altered its Object Clause by deleting the entire objects carrying NBFC business and inserted other new objects relating to purchase, own, acquire or take on lease TV Channels, radio and TV Serials in or outside India, produce TV Serials and to exhibit movies or serials or film on Satellite, Internet, Cable Net or any other means of communication. We have forayed into the television broadcasting business by acquiring 100% shares of Tamil Box Office (India) Private Limited (TBO-India) on December 30, 2009. TBO India is engaged in production of movie based entertainment programmes and as on September 30, 2010 has produced programme content of 1914 hours comprising of song shows, comedy shows, short movie shows, review shows, interactive shows, talent shows and competition shows. . TBO Singapore is subsidiary of TBO India and engaged in the broadcasting of its 24 hours channel TBO. Channel TBO has been in operation since 2006. The Channel has focused on providing content comprising of Tamil Movies, movie clippings, songs, trailers and movie based entertainment programmes. Our Company has also acquired 100% shares of Pix Aalaya Studios Private Limited, a Company intending to engage into Webstreaming of movie content on portal. Pix Aalaya Studios Private Limited has developed a Webstreaming technology (Pixstream) having E-Commerce Platform, which enables it to webcast digital content on internet. The new technology has security features to prevent piracy or duplication/copying and to collect the webcasting charges from the user through a Secure Payment Gateway System.

Our plan to engage in to business of distribution of overseas rights of South Indian movies and entertainment content would include theatrical and non theatrical rights, television (including pay television) and computer rights, exploitation rights for home use by Video copyrights including video on demand rights and video cassette rights, DVD rights / HDDVD rights / Blueray DVD rights, VCD rights, CD-ROM software rights, advertisement package rights, publishing rights, title rights, recording rights, cable TV rights (including pay cable), terrestrial television rights, satellite television broadcast rights(including satellite pay channel), IPTV (Internet Protocol TV) Rights, high seas rights, airborne rights, internet rights, broadband rights, in-flight rights, DTH rights, pay per view rights, multimedia rights, direct-to-user (DTU) rights and laser disc rights.

Experience of our promoters and Promoter group in South Indian Media and Entertainment Industry

The promoter of our Company, Mr. A Venkatramani is having more than 15 years experience in South Indian Entertainment and Media industry. He along with his wife Mrs. Usha Venkatramani have been involved in production of television serials for Tamil TV Channels, producing and assisting in production of Tamil movies and distribution of Tamil movies in India and abroad.

27 (i) Experience in Production of Television Serials:

From the year 1994 onwards Mr. A. Venkatramani got involved in creation of Tamil TV serial content which later got aired through Sun TV and Jaya TV under Kaashyap Productions, a proprietorship firm of his wife Mrs. Usha Venkatramani.

The firm produced “Nill Gavani Crazy” – a popular Tamil serial which ran successfully in Sun TV for more than 63 episodes from December 1996 to March 1998, written and directed by Mr. Crazy Mohan who is one of the popular dramatist and film dialogue writer who is known for his Tamil Drama works namely Drama Troupe “Crazy Dreams” and movies including movies of Kamal Hasan namely like Michael Madana Kama Rajan , Avvai Shanmughi, Apporva Sagodharargal and Panchathanthiram. Under the firm’s production banner, the promoter also produced “Agni Pravesam”, a mega soap opera in Tamil which was aired for more than 250 episodes in Jaya TV. As the promoter grew more in his corporate set up of business, Kaashyap Productions has become a non-functional firm for last about 7-8 years.

Mr. Venkatramani was also involved in the production of following serials - “Vazha Ninaithaal Vazhalam”, which was aired in Sun TV for 16 episodes in the year 1995 “Panchayat Kadhaighal”, which was aired in Sun TV for 26 episodes in the year 1996-97 “Geethaigal Palavidham” and “Vedha Upadesam” which contained discourses by Holy Guru of Kanchi Mutt was aired in Jaya TV under a programme titled “Bakthi Peruvizha” for 16 episodes and 13 episodes respectively. “Geethaigal Palavidham” and “Vedha Upadesam” were aired in 1997 and 2001 respectively.

(ii) Experience in Production of Tamil Movies:

Mr. A. Venkatramani was involved in the production of a Tamil Movie “Indru” about 6 years back. In his capacity as Director of G V Films, he was actively involved in various aspects of film making such as story finalization, theme presentation, casting, suitable key locations for shooting etc in films namely “Ullam Ketkume”, “Urchaagam”, “Thirudi”, “Kai Vandha Kalai”, “Dhanam”, “TN07 AL 4777” and “Manjal Veyyil”. Few projects in the pipeline which are being executed through AVR Talkies Pvt. Ltd. are “Kulasekaranum Koolipadaiyum”, “Naan”. and “Patta Patti”. In “Patta Patti”, Indian Ex - Test Cricketer Sadagopan Ramesh is the lead actor.

(iii) Experience in Distribution of Tamil Movies in India and Overseas:

Mr. A. Venkatramani is a Director on the Board of G V Films Ltd. There he has been involved in distribution of movies “Bheema”, “Shivaji”, “The Messenger”, “The Rambo IV”, “M 14 – Invisible Target”. When he was Chairman on the Board of Sanraa Media Ltd he had also been involved in distribution of movies like Shinjoku Incident (English movie – starring Jackie chan) and “Manjal Veyyil”.

(iv) Experience in Conducting Cultural Events and Programmes:

Our promoter was also involved in conducted cultural programme like South Indian Cinematographer’s Association awards called SICA awards etc. Since 1994 our promoters are associated and gained expertise in southern entertainment and media industry in terms of people, talent, contacts, network, technical knowledge and distribution network.

Experience of Mr. Jude Jeyaprakash in Entertainment and Media Industry:

Mr. Jude Jeyaprakash, has worked as Programme Manager in Jaya TV, a popular Tamil Satellite channel based at Chennai. His production experience includes management and planning of Television programmes and coordination of television crew in the execution and completion of television programmes.

The details of Key Projects handled by Mr. Jude Jeyaprakash:

Andrum Indrum Endrum - credited with organizing the first show of music maestro Ilayaraja on the small screen as a Programme Manager of Jaya TV. It has been an achievement making a giant show with 25 cameras, 4 Akila cranes and many more techno works. The stars of the Tamil film industry like 28 Kamalahasan, Rajinikanth, Vijay, Surya and many others participated in the mega event. This show was aired in Jaya TV during October 2005.

Kollywood Vs Tollywood - Star Cricket - Live

For the first time in the history of Tamil channel a live telecast of “Kollywood Vs Tollywood” Cricket Match could have been made possible. This Live cricket game was telecast on 4th Feb, 2006. It was an experience handling the game through the cameras, the slow motion VTR’s, the graphic consoles and the commercials between the game.

This was a 30 overs Day & Night match at the prestigious M A Chidambaram Stadium (Chepauk) in Chennai. Apart from the star players, a galaxy of celebrities and leading artists from Tamil film world watched the game.

Kalakka Povathu Yaaru Show – A Kamal Haasan Event

Kamal Hassan featured in this show together with host Ramesh Arvind. Guests stars included S.P.Balasubramaniam, Manorama, S.Janaki, Chitra, Bharadwaj, Vithayasagar. The show mainly focused on discussion with universal hero of Tamil industry. This show was a unique feature as it showed the best of Kamal Haasan’s super hits, he reminisced on the old hits from his films, and the interesting events relating to old hits, his experiences while working with various music directors, and his relationships in the industry.

This programme titled Kalaka Povathu Yaaru was aired as Diwali Special during 2004.

Owing to the success achieved in entertainment and media sector, the promoters of the Company planned to foray into entertainment and media sector.

Our Business Model and Business Divisions:

We carry out our business primarily through our wholly owned subsidiary companies viz. Tamil Box Office India Pvt. Ltd., Pix Aalaya Studios Pvt. Ltd. Tamil Box Office India Pvt. Ltd. has a wholly owned subsidiary company in Singapore viz. TBO Singapore Pte. Ltd. Our business model and business divisions can be schematically presented as under:

Business Model of Our Company

Ram Kaashyap Investment Limited (RKIL)

Tamil Box Pix Aalaya 100% Subsidiary Office India of RKIL Studios Pvt. Pvt. Ltd. Ltd. Sale of Overseas TBO Singapore 24 x 7 Tamil Rights of Pte. Ltd. (100% Channel Web South Indian subsidiary of Broadcasting streaming Movies Operations TBO-India)

29 (III) ISSUE DETAILS

Issue of 3,51,60,000 Equity Shares of Rs.10/- each for cash at par to the existing Shareholders, aggregating Rs.3516 lakhs.

Equity Shares proposed to be 3,51,60,000 issued by our Company Rights Entitlement 4 (Four) Equity Shares for every 1 (One ) Equity Share held Record Date November 08, 2010 Issue Price per Equity Share Rs.10/-

Equity Shares outstanding prior 87,90,000 to the Issue Equity Shares outstanding after 4,39,50,000 the Issue Use of Issue proceeds Please see section entitled “Objects of the Issue” on Page No. 47 under section Particulars of the Issue of this Letter of Offer for information. Terms of the Issue For more information, see “Terms of Issue” on Page No. 185 under section Offering Information of the Letter of Offer

For details refer to the section ‘Terms of the Issue’ on page 185 of this Letter of Offer

IMPORTANT NOTES:

1. This Issue is applicable to such Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of our Company at the close of business hours on November 08, 2010 (Record Date). 2. The Equity Shares are presently listed and traded on BSE and only listed on MSE. 3. Your attention is drawn to the section on Risk Factors starting from Page No. 10 of this Letter of Offer . 4. Please ensure that you have received the CAF with this Letter of Offer. 5. Please read the Letter of Offer and the instructions contained herein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully followed. An application is liable to be rejected for any non-compliance of the Letter of Offer or the CAF. 6. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrar to the Issue, quoting the Registered Folio number/DP and Client ID number and the CAF number as mentioned in the CAF. 7. The Lead Manager and our Company shall make all information available to the Equity Shareholders and no selective or additional information would be available for a section of the Equity Shareholders in any manner whatsoever including any presentation, research note or sales reports etc. after filing of the Letter of Offer with SEBI. 8. All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock Exchange have been complied with.

30 IV. FINANCIAL SUMMARY

The following summary of financial data has been prepared in accordance with the Companies Act and the SEBI Regulations and restated as described in the Auditors’ Report of M/s. R. Ravindran & Associates, Chartered Accountants, Chennai dated October 22, 2010 in the section titled "Financial Information of our Company". You should read this financial data in conjunction with our Company’s financial statements for each of fiscal 2006 to 2009 and Consolidated financial results for twelve months ended on March 31, 2010 and for the six months period ended on September 30, 2010, including the Notes thereto and the Reports thereon, which appears on page 121 under sub-heading "Restated Financial Statements" in this Letter of Offer, and "Management’s Discussion and Analysis of Financial Condition as reflected in the Financial Statements" on page 121 of this Letter of Offer.

Consolidated Restated Statement of Profit and Loss Account

Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Particulars Period Year Year Year Year Year ending ending ending ending ending ending 30/09/2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Income : Income from operations 547.74 597.25 314.96 171.91 45.02 - Other Income 8.74 71.28 - - - - Closing Stock & Work-in-progress 140.52 154.34 Total Income 697.00 822.87 314.96 171.91 45.02 -

Expenditure: Opening Stock & Work-in-progress 154.34 114.51 Operational Expenses 390.03 556.88 258.82 117.11 24.86 - Administration Expenses 72.16 63.36 29.48 17.44 2.65 0.56 Public Issue/Other Expenses W/O - - - - - Bad debts W/O - - - - - Total Expenditure 616.53 734.74 288.30 134.55 27.51 0.56 Net Profit before Interest, Depreciation, Tax and Extraordinary Items 80.47 88.13 26.65 37.37 17.51 (0.56) Interest 12.61 11.30 4.36 13.68 - 1.01 Depreciation 56.33 109.97 111.69 111.23 111.25 113.72 Net Profit before Tax and Extraordinary Items 11.53 (33.14) (89.41) (87.55) (93.75) (115.29) Provision for Taxation Current Tax 2.66 3.00 - - - - Fringe benefit tax - 1.53 0.26 0.03 - Deferred Tax (1.38) 0.24 - - - - Net Profit after Tax and before Extraordinary Items 10.24 (36.38) (90.93) (87.81) (93.78) (115.29) Extraordinary Items - - - - - Net Profit after Extraordinary Items 10.24 (36.38) (90.93) (87.81) (93.78) (115.29)

The above statement should be read with the significant accounting policies and notes to the accounts for restated financial statements as appearing in the Annexure – 4 and 5 to the Auditors’ Report.

Consolidated Restated Statement of Assets and Liabilities Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) As at As at As at As at As at As at PARTICULARS 30/09/2010 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006

Fixed Assets Gross Block 1,430.48 1,466.61 1,241.90 1,241.90 1,230.65 1,230.65 Net Block (please refer Annexure-4 & 5) 594.58 652.83 473.02 584.72 684.70 795.95 Less: Revaluation Reserve - - - - - Total Fixed Assets (A) 594.58 652.83 473.02 584.72 684.70 795.95

Investments (B) 110.31 146.24 0.49 - - -

Current Assets, Loans and Advances: Stock & Work-in-progress 182.02 195.84 Sundry Debtors 615.78 173.13 280.81 122.45 15.93 - Cash and Bank Balances 19.04 16.25 1.66 4.25 3.32 0.38 Loans and Advances (Please refer Annexure-13) 1,036.74 1,195.36 966.00 966.00 966.00 966.00 Other Current Assets - 10.01 8.96 2.48 - - Total (C) 1,853.58 1,590.59 1,257.43 1,095.17 985.25 966.38

Liabilities and Provisions : Share Application Money 43.20 49.70 Secured Loans (please refer Annexure- 5 and 14) 649.85 645.95 979.82 975.47 977.79 1,221.29 Unsecured Loans 116.75 76.22 52.74 35.60 4.47 803.26 Current Liabilities 929.13 795.00 582.93 501.19 432.32 344.62 Provisions 50.00 48.64 44.41 44.67 44.59 44.41 Total (D) 1,788.93 1,615.51 1,659.90 1,556.92 1,459.17 2,413.58

Deferred Tax Liability (E) (1.20) 0.18 - - - -

Net Worth (A+B+C-D-E) 770.73 773.98 71.04 122.97 210.78 (651.25)

Represented by Equity Share Capital 879.00 879.00 579.00 540.00 540.00 540.00 Preference Share Capital - - - - 76.70 Reserves and Surplus 1,603.58 1,603.58 1,159.58 1,159.58 1,159.58 127.08 Less: Revaluation Reserve - - - - - Adjusted Reserves 1,603.58 1,603.58 1,159.58 1,159.58 1,159.58 127.08 Misc. Exp. To the extent not w/off 13.90 0.41 - - - - 2,468.68 2,482.17 1,738.58 1,699.58 1,699.58 743.78 Debit Balance in P & L (1,697.95) (1,708.19) (1,667.55) (1,576.62) (1,488.81) (1,395.03) Net Worth 770.73 773.98 71.04 122.97 210.78 (651.25)

32 (B) GENERAL INFORMATION

RAM KAASHYAP INVESTMENT LIMITED (CIN - L65991TN1993PLC026312) (Our Company was incorporated on 3 rd December, 1993 as Ram Kaashyap Investment Limited under the Companies Act, 1956 as Public Limited Company with the Registrar of Companies Tamil Nadu at Chennai and received the Certificate for commencement of business on 27 th December, 1993.) (For further details, please refer to the chapter titled “History and Corporate Structure on page 93 of this Letter of Offer)

Registered Office: No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamil Nadu, India Tel No: 91 44 2499 4243; Fax: 91 44 4344 2016 Email: [email protected] Website: www.ramkaashyap.com (For further details of changes in registered office, please refer to the chapter titled “History and Corporate Structure on page 93 of this Letter of Offer)

Address of the Registrar of Companies: Our Company is registered with the Registrar of Companies, Tamil Nadu, Chennai situated at the following address: Block No.6, B Wing, 2nd Floor, Shastri Bhawan 26, Haddows Road, Chennai – 600 034 Tel: 044-2827 7182, 2827 2676; Fax: 044-2823 4298

Compliance Officer and Company Secretary : Mr. K. J. Chandra Mouli No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamil Nadu, India Tel No: 91 44 2499 4243; Fax No: 91 44 4344 2016 Email: [email protected] ; Website: www.ramkaashyap.com

ISSUE DETAILS Pursuant to the resolution passed by the Board of Directors at its meeting held on August 28, 2009 and subsequent Board Meeting dated January 21, 2010, it has been decided to make the following Offer to the Equity Shareholders, with a right to renounce.

ISSUE OF 3,51,60,000 EQUITY SHARES OF RS.10/- EACH FOR CASH AT PAR AGGREGATING TO RS.3516 LAKHS (RUPEES THIRTY FIVE HUNDRED AND SIXTEEN LAKHS ONLY) TO THE EXISTING EQUITY SHAREHOLDERS ON RIGHTS BASIS IN THE RATIO OF 4 (FOUR) EQUITY SHARES FOR EVERY 1 (ONE) EQUITY SHARE HELD ON RECORD DATE I. E. NOVEMBER 08, 2010.

IMPORTANT: 1. This Issue is applicable to such Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of our Company at the close of business hours on November 08, 2010 (Record Date). 2. The Equity Shares are presently listed and traded on Bombay Stock Exchange Limited and also listed on the regional stock exchange i.e. Madras Stock Exchange Limited. 3. Your attention is drawn to the section on Risk Factors starting from Page No. 10 of this Letter of Offer. 4. Please ensure that you have received the CAF with this Letter of Offer. 5. Please read the Letter of Offer and the instructions contained herein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are an integral part of this Letter of Offer and must be carefully followed. An application is liable to be rejected for any non-compliance of the Letter of Offer or the CAF. 6. All enquiries in connection with this Letter of Offer or CAF should be addressed to the Registrar to the Issue, quoting the Registered Folio number/DP and Client ID number and the CAF number as mentioned in the CAF. 7. The Lead Manager and our Company shall make all information available to the Equity Shareholders and 33 no selective or additional information would be available for a section of the Equity Shareholders in any manner whatsoever including any presentation, research note or sales reports etc. after filing of the Letter of Offer with SEBI. 8. All the legal requirements as applicable till the filing of the Letter of Offer with the Designated Stock Exchange have been complied with.

BOARD OF DIRECTORS

Our Board of Directors comprise of the following:

Sl. No. Name of the Director Designation Status DIN 1 Mr. Jude Jeyaprakash Whole-time Director Executive 02725303 2 Mr. Adapa Srinivas Independent Director Non Executive 00372497 3 Mr. T. V. Balachandran Independent Director Non Executive 02880699 4 Mr. S. Krishna Kumar Independent Director Non Executive 01963609

For further details of the Board of Directors of the company, please refer to the section titled “ABOUT THE MANAGEMENT” on Page No. 105 of this Letter of Offer.

ISSUE MANAGEMENT TEAM

COMPLIANCE OFFICER

Mr. K. J. Chandra Mouli Compliance Officer & Company Secretary Ram Kaashyap Investment Limited No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamilnadu, India Tel No: 91 44 2499 4243 Fax: 91 44 4344 2016 Email: [email protected] Website: www.ramkaashyap.com

Note: Investors are advised to contact the Compliance Officer in case of pre-issue or post-Issue related problems such as non-receipt of letter of allotment/ share certificates/ credit of securities in depository’s beneficiary account/ refund orders, etc.

LEGAL ADVISOR TO THE ISSUE

RUGAN & ARYA, LAW FIRM No.1A, Stone Link Avenue, Raja Annamalai Puram, Chennai - 600 028 Tel: 91 44 2435 0501/ 2435 0506 Fax: 91 44 4281 5283 E-mail: [email protected] Website: www.ruganandarya.com Contact Person- Ms. R. Revathy

BANKERS TO OUR COMPANY STATE BANK OF TRAVANCORE Balavinayagar Building, No. 4/1, Eldams Road, Alwarpet, Chennai – 600 018 Ph. No.: 044 – 2434 0096 Contact Person: Mrs. Thara

HDFC Bank Ltd. Branch : R, A Puram, No.10, Third Cross Street, R A Puram , Chennai -600 028, Tamilnadu Tel no. (044) 6600 3333 Contact Person: Mr. Rupesh

LEAD MANAGER TO THE ISSUE

VIVRO FINANCIAL SERVICES PRIVATE LIMITED 1st Floor, Manu Mansion 16/18, Shahid Bhagatsingh Road Opp. Old Custom House, Fort, Mumbai - 400 023 Tel: 022-2265 7364, Fax: 022-2265 8406 Contact Person: Mr. Ashok Mehta E-mail: [email protected] Website: www.vivro.net

REGISTRAR TO THE ISSUE

KNACK CORPORATE SERVICES PVT. LTD. 17/9, Thiruvengadam Street, Mandaveli, Chennai – 600 028 Tel.: 91- 44 – 2461 5006/ 4210 0092 Fax: 91- 44 – 2461 1917 Email: [email protected] Contact Person: Mr. R. Chandrasekaran

BANKERS TO THE ISSUE

HDFC BANK LTD. Lodha – OPS Department, O-3 Level, Next to Kanjurmarg Railway Station Kanjurmarg (East), Mumbai – 400042 Tel: 022- 30752928 Fax: 022- 25799801 Email: [email protected] Website: www.hdfcbank.com Contact Person: Mr. Deepak Rane

SELF CERTIFIED SYNDICATE BANKS

The list of banks that have been notified by SEBI to act as SCSBs for the ASBA process and details relating to the Designated Branches of SCSBs collecting the ASBA Bid-cum-Application Forms are available at http://www.sebi.gov.in .

STATUTORY AUDITORS OF OUR COMPANY

M/S. R. RAVINDRAN & ASSOCIATES Chartered Accountants Membership No.: 23829 14, Ashtalakshmi Street, 35 Muthulakshmi Nagar Chitlapakkam, Chennai - 600 064. Telefax.: 91 44 2228 1564 E-mail ID - [email protected] Contact Person: Mr. R. Ravindran

INTER SE ALLOCATION OF RESPONSIBILITIES AMONGST THE LEAD MANAGERS

Since the Issue is managed by one Lead Manager, the entire responsibilities shall vest with the Lead Manager.

CREDIT RATING

This being Rights Issue of Equity Shares, no Credit Rating is required.

GRADING OF ISSUE

This being Rights Issue of Equity Shares, no grading is required.

TRUSTEES

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

MONITORING AGENCY

Not Applicable.

APRAISING AUTHORITY

The project has not been appraised by any authority.

MINIMUM SUBSCRIPTION a. If our Company does not receive minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the issue, or if the subscription level falls below 90% after the closure of the issue on account of cheques having being returned unpaid or withdrawal of applications, our Company shall forthwith refund the entire subscription amount received. b. If there is a delay in the refund of subscription by more than 8 days after our Company becomes liable to pay the subscription amount (i.e. 15 days after the closure of the issue), our Company will pay interest for the delayed period, at the rates prescribed in sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

IMPERSONATION

Attention of the applicants is specifically drawn to the provisions of Sub-Section (1) of Section 68A of the Companies Act, 1956 which is reproduced below: "Any person who- a. makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares therein, or b. otherwise induces a Company to allot or register any transfer of shares therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years."

UNDERWRITING OF THE ISSUE

The issue is not underwritten.

36 ISSUE DETAILS

ISSUE OPENS ON November 18, 2010 LAST DATE FOR RECEIVING REQUEST FOR SPLIT APPLICATION November 25, 2010 ISSUEFOR M SCLOSES ON December 02, 2010

PRINCIPAL TERMS OF LOANS AND ASSETS CHARGED AS SECURITY

Based on Restated Consolidated Financial Statements (Rs. in Lakhs) SL. BANK NAME NATURE OF BALANC DETAILS OF SECURITY NO. LOAN E AS ON 30.09.2010 1 Bank of Baroda Cash Credit 42.50 Hypothecation of book debts, assignment of HP/Lease documents covering motor vehicles 2 Bank of Rajasthan Cash Credit 75.00 Hypothecation of book debts, assignment of HP/Lease documents covering motor vehicles 3 Karnataka Bank Cash Credit 32.70 Assignment of HP/Lease documents covering motor vehicles and hypothecation of book debts 4 State Bank of Hyderabad Cash Credit 25.00 Assignment of HP/Lease documents covering motor vehicles and hypothecation of book debts 5 State Bank of Mysore Cash Credit 350.00 Hypothecation of book debts, bills, securities 6 Union Bank of India Cash Credit 3.56 Hypothecation of book debts 7 HDFC Bank Limited H P 12.19 Hypothecation of Vehicle 8 Interest Accrued -Bank of Baroda 5.85 - Bank of Rajasthan 13.50 - Karnataka Bank 24.24 - State Bank of Hyderabad 2.31 - State Bank of Mysore 63.00 Grand Total 649.85

37 (C) CAPITAL STRUCTURE OF OUR COMPANY

The Capital Structure of our Company as on date of filing of this Letter of Offer with SEBI and Stock Exchanges is as follows: (Rs. in Lakhs) Nomi nal Agg regate Number of Shares Description of Shares Value (Rs) Value (Rs) A. Authorized Capital 5,00,00,000 Equity Shares of Rs. 10/- each 5,000.00 5,000.00 B. Existing Issued, Subscribed and Paid up Capital before Issue 87,90,000 Equity Shares of Rs. 10/- each 879.00 879.00 C. Present Rights Issue in terms of this Letter of Offer 3,51,60,000 Equity Shares of Rs. 10/- each for cash at par on 3516.00 3516.00 Rights basis to the existing shareholders of our Company in the ratio of 4 Equity Share for every 1 Equity Share held as on the Record date November 08, 2010 Subscribed and Paid up Capital after Rights Issue D. (assu ming ful l subsc rip tio n) 4,39,50,000 Equity Shares of Rs. 10/- each fully paid up 4395.00 4395.00 E. Share Premium Account - Before the Rights Issue 206.00 206.00 - After the Rights Issue 206.00 206.00

Notes to Capital Structure

1. Changes in Authorized Capital of our Company

Financial Amount Particulars Remarks year ended (Rs.) 03.12.1993 15,00,000 Equity shares of Rs.10 each 1,50,00,000 No Change 31.03.1995 50,00,000 Equity shares of Rs.10 each 5,00,00,000 Increased Authorized share capital from Rs. 150 lakhs to Rs.500 Lakhs. 31.03.1996 80,00,000 Equity shares of Rs.10 each 8,00,00,000 Increased Authorized share 2,00,000 Redeemable Preference capital from Rs. 500 lakhs to share of Rs.100 each 2,00,00,000 Rs.1000 lakhs.

Total 10,00,00,000 31.03.1997 1,00,00,000 Equity shares of Rs.10 10,00,00,000 2,00,000 Un-issued Redeemable each Preference share of Rs.100 each has been re-classified as 20,00,000 Equity share of Rs.10 each by passing resolution in AGM held on August 07, 1996. 31.03.1998 1,50,00,000 Equity shares of Rs.10 Increased Authorized share each 15,00,00,000 capital form Rs.1000 lakhs to Rs. 10,00,000 15% Redeemable 2500 lakhs

cumulative Preference shares of

Rs.100 each 10,00,00,000 Total 25,00,00,000

38 Financial Amount Particulars Remarks year ended (Rs.) 31.03.2008 2,00,00,000 Equity shares of Rs.10 20,00,00,000 5,00,000 Un-issued Redeemable each Cumulative Preference share of 5,00,000 Redeemable cumulative Rs.100 each has been re- 5,00,00,000 classified as 50,00,000 Equity Preference shares of Rs.100 each share of Rs.10 each by passing resolution in EGM held on December 24, 2007. Total 25,00,00,000 31.03.2009 5,00,00,000 Equity shares of Rs.10 50,00,00,000 Increase in Authorized share and later each capital from Rs.2500 lakhs to Rs.5000 lakhs and Reclassification of 5,00,000 Redeemable Cumulative Preference shares of Rs. 100 /- each to 50,00,000 equity shares of Rs.10 /- by passing resolution in the EGM held on December 8, 2009.

History and chronology of original subscription/ allotment made during the period prior to year from inception to 2007 are not available with us and the statutory records pertaining to increase in Authorized Capital and Allotment of equity shares for the intervening period are not traceable. Ownership of these equity shares as of now has no ambiguity; only certain statutory records of original subscription/ allotment are not available. All of our pre-issue equity shares are duly listed on BSE and MSE and have been properly recorded with Registrar of Companies.

2. Details of Paid-up Equity Share Capital

Date on Conside- which Cumulative ration Cumulative Equity No. of Face Issue Nature of / Cumulative Securities (Cash or Paid-up shares were Equity Value Price Reason for No. of Premium other Capital (Rs. allotted and Shares (Rs.) (Rs.) Allotment Shares (Rs.in than in Lakhs) made fully Lakhs) Cash) paid up 3.12.1993 80 10 10 Cash Subscriber to 80 0 - the MoA & AoA 10.03.1994 301,900 10 10 Cash Private 301,980 30 - Placement 18.05.1994 93,000 10 10 Cash Private 394,980 39 - Placement 23.06.1994 24,000 10 10 Cash Private 418,980 42 - Placement 29.07.1994 7,500 10 10 Cash Private 426,480 43 - Placement 21.09.1994 474,500 10 10 Cash Private 900,980 90 - Placement 28.09.1994 372,500 10 10 Cash Private 1,273,480 127 - Placement 3.02.1995 226,520 10 10 Cash Private 1,500,000 150 - Placement 3.02.1995 600,000 10 10 Cash Public Issue - 2,100,000 210 - NRI's Firm Basis

39 3.02.1995 350,000 10 10 Cash Public Issue - 2,450,000 245 - Mutual Fund Firm Basis 3.02.1995 150,000 10 10 Cash Public Issue - 2,600,000 260 - Mutual Fund Competitive Basis 3.02.1995 4,000 10 10 Cash Public Issue - 2,604,000 260 - Allotment to Employees 3.02.1995 1,396,000 10 10 Cash Public Issue - 4,000,000 400 - Allotment to Public 6.11.1996 1,400,000 10 14 Cash Preferential 5,400,000 540 56 Allotment to Directors, Friends & Associates 31.12.2008 3,90,000 10 10 Cash Preferential 57,90,000 579 56 Allotment to Eyelight Events Promotions India Pvt. Ltd. and P. Thirumalai Kumar 30.12.2009 6,00,000 10 15 Cash Preferential 63,90,000 639 86 Allotment to Others 30.12.2009 13,00,000 10 15 Other Preferential 76,90,000 769 151 than Allotment to Cash Shareholders of Tamil Box Office (India) Pvt. Ltd. 30.12.2009 11,00,000 10 15 Other Preferential 87,90,000 879 206 than Allotment to Cash Shareholders of Pix Aalaya Studios Pvt. Ltd.

Explanation:

(A) On 30 th December 2009, our Company has issued 6,00,000 equity shares to following individuals on preferential basis for a cash consideration of Rs. 15 per share (including a Premium of Rs. 5 /- per share)

Name of Allottee No. of Shares Ms. D. Banumathy 200000 Mr. K. Viswanathan 75000 Mr. M. Shankar 75000 Mr. A. Ashok 75000 Mr. M. Jaisankar 75000 Ms. G. Padmapriya 100000 TOTAL 600000

40 ISSUE OF SHARES FOR CONSIDERATION OTHER THAN CASH

Cumula Date on Conside- tive which Equity ration Cumulative Securiti No. of Face Issue Cumulative shares were (Cash or Nature of/ Reason Paid-up es Equity Value Price No. of allotted and other for Allotment Capital (Rs. Premiu Shares (Rs.) (Rs.) Shares made fully than In Lakhs) m (Rs. paid up Cash) In Lakhs) 30.12.2009 13,00,000 10 15 Other Preferential 76,90,000 769 251 than Cash Allotment to Shareholders of Tamil Box Office (India) Pvt. Ltd. 30.12.2009 11,00,000 10 15 Other Preferential 87,90,000 879 306 than Cash Allotment to Shareholders of Pix Aalaya Studios Pvt. Ltd.

(B) On 22 nd October 2009, our Company entered into a Share Purchase Agreement with the shareholders of Tamil Box Office (India) Pvt. Ltd. to acquire 100% shareholding of Tamil Box Office Private Limited and in turn our Company has issued 13,00,000 equity shares of our Company on 30 th December 2009 at a price of Rs. 15 per share (including premium of Rs. 5 per share) on preferential basis as consideration aggregating to Rs 195 lakhs. In this regard, our Company has received the listing and trading permission from Bombay Stock Exchange Limited vide its letter no.DCS/PREF/DMN/FIP/1557/09-10 dated January 29, 2010.

(C) On 22 nd October 2009, our Company entered into a Share Purchase Agreement with the shareholders of Pix Aalaya Studios Private Limited (PSPL) to acquire 100% shareholding of Pix Aalaya Studios Private Limited and has in turn issued 11,00,000 equity shares of our Company on 30 th December 2009 at a price of Rs. 15 per share (including premium of Rs. 5 per share) on preferential basis as consideration aggregating to Rs. 165 lakhs. In this regard, our Company has received the listing and trading permission from Bombay Stock Exchange Limited vide its letter no.DCS/PREF/DMN/FIP/1557/09-10 dated January 29, 2010.

Other Explanations:

(D) Our Company has not issued or allotted any shares in terms of Scheme of Arrangement under Section 391-394 of the Companies Act, 1956.

3. Promoters Contribution and Lock in

As per Regulation 34(c) of the Regulations, the present issue being a rights issue, provisions relating to Minimum Promoters’ contribution and lock-in are not applicable.

Mr. A. Venkatramani, the promoter, has constantly been exploring the business opportunities which the company could commence for its profits and growth. Considering his exposure in media and entertainment business for more than 15 years, he and his management team identified entertainment and media as a sector in which the company could systematically enter into and commence a profitable business venture.

In order to achieve this objective, in the month of October 2009, two companies namely Tamil Box Office India Private Limited [ TBO India] and Pix Aalaya Studios Private Limited [PASPL] were identified for acquisition. For further details, refer Section titled as “Business Overview” on page no. 74 of this Letter of Offer.

The issuer Company acquired 100% equity shares in PASPL and TBO India in December 2009 and allotted its 11,00,000 equity shares and 13,00,000 equity shares to the shareholders of PASPL and TBO India respectively as consideration.

41 The swap of equity shares was beneficial and in the interest of all three companies as PASPL and TBO India were having the business content and technology without having arrangement of the desired level of funds to grow their business further. While, our Company is confident to arrange the need based funds and was looking for a potentially profitable business opportunity to exploit, we believe that the participation in each other’s equity shareholding has brought the shareholders of all the companies in a position to leverage out the available business and funding options in the best possible interest to achieve the growth in the respective business.

In order to strengthen the management and formulate the business plans, Mr. Jude Jayprakash the main promoter of TBO India have been considered as Promoter and Promoter Group within the meaning of Regulation 2(za)(ii) of SEBI (ICDR) Regulations, 2010. We believe that entering in to the entertainment and media business with the knowledge and experience of Mr. Jude Jeyaprakash and his inclusion as Promoter in the Company would be in the interest of our Company and shareholders as it would strengthen the favourable business prospects for the company.

Mr. A. Venkatramani and Mr. Jude Jeyaprakash would fully guide and facilitate our company in getting into the business systematically and operate it profitably. They have also undertaken to subscribe to their entitlements in the proposed Rights issue and that they would ensure arrangement of additional funds in case the proposed rights issue getting under subscribed.

4. Present Rights Issue

Type of Face No. of Issue Price Consideration Ratio Instrument Value Shares (Amount in Rs.) (Amount in Rs.) 4 equity shares for every 1 Rs.10/-(R s.) 3,51,60,000 10/- 35,16,00,000 Equity Shares equity shar e held

5. Our Promoters have confirmed that they along with each of their relatives and the companies controlled by them (hereinafter referred to as “Promoters” in this clause) intend to subscribe to the full extent of their entitlement in the Issue. As per regulation 2 (za)(ii) of SEBI (ICDR) Regulations, Mr. Jude Jeyaprakash, who is instrumental in the formulation of business plan and who shall be considered as a part of the promoter and promoter group of our Company for the purpose of this Rights Issue and thereafter, arrange funds for additional Equity Shares in the Issue such that at least 90% of the Issue Size is subscribed.

As a result of this subscription and consequent allotment, the Promoter Group may acquire shares over and above their entitlement in the Issue, which may result in an increase of their shareholding being above the current shareholding. This subscription and acquisition of additional Equity Shares by the Promoters through this Issue, if any, will not result in change of control of the management of our Company and shall be exempt in terms of provision under Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. As such, other than meeting the requirements indicated in this section on “Objects of the Issue”, there is no other intention / purpose for this Issue, including any intention to delist our Company, even if, as a result of allotment to the Promoters, in this Issue, the Promoter’s shareholding in our Company exceeds their current shareholding. The Promoter Group shall subscribe to such unsubscribed portion as per the relevant provisions of the law. Allotment to the Promoter Group of any unsubscribed portion, over and above their entitlement shall be done in compliance with clause 40A of the Listing Agreement and other applicable laws prevailing at that time relating to continuous listing requirements.

Though the existing shareholding pattern does not warrant such situation , still our Promoters have given an undertaking that in case the subscription by them to the unsubscribed portion results in the public shareholding falling below the permissible minimum level as specified in the listing condition agreement (25% in our case), they will undertake necessary steps to maintain the minimum public shareholding in such manner and within such period as specified in Clause 40A of the Listing Agreement.

42 6. Pre and Post issue shareholding pattern of our Company assuming full subscription in the rights issue, subject to the contents of (5) above, is given below (the pre and post issue shareholding may undergo change). Pre-Issue as on September No. Category 30, 2010 Post-Issue holding % of % of No of Shares Holding No of Shares Holding A Promoter's Holding 1 Promoters – Indian 10,26,800 11.68% 51,34,000 11.68% a. Individuals/ Hindu Undivided Family Mr. A. Venkatramani 506,800 5.77% 2,534,000 5.77% Mr. Jude Jeyaprakash 5,20,000 5.91% 26,00,000 5.91% b. Bodies Corporate - - - - Sub-Total (1) 10,26,800 11.68% 51,34,000 11.68% 2 Promoters – Foreign - - - - a. Bodies Corporate - - - - Sub-Total (2) - - - - Total Shareholding of Promoter and Promoter (Sub Total 1+Sub Total 2) (A) 10,26,800 11.68% 51,34,000 11.68% B Public Shareholding 1 Institutional Investors a. Mutual Funds / UTI 11,600 0.13% 58,000 0.13% b. Financial Institutions / Banks 300 0.00% 1,500 0.00% c. Foreign Institutional Investors Sub-Total (1) 11,900 0.13% 59,500 0.13% 2 Others a. Bodies Corporate 1,852,580 21.08% 9,262,900 21.08% b. Individuals (Upto 1 Lakh nominal value) 2,177,935 24.78% 10,889,675 24.78% c. Individuals (above 1 Lakh nominal value) 3,677,744 41.84% 18,388,720 41.84% c. Clearing Members 8,141 0.09% 40,705 0.09% d. Non Resident Indians 34,900 0.40% 174,500 0.40% Sub-Total (2) 77,51,300 88.19% 387,56,500 88.19% Total Public Shareholding (Sub Total 1 + Sub Total 2) (B) 77,63,200 88.32% 388,16,000 88.32%

TOTAL (A)+(B) 8,790,000 100.00% 43,950,000 100.00% Note: Post Issue holding is computed assuming that all shareholders, subscribe to their rights entitlements in full

7. The pre-issue shareholding pattern of the promoter(s) is as detailed below.

Shareholder’s Name Total No. of Shares Shareholding % Mr. A Venkatramani 5,06,800 5.77% Mr. Jude Jeyaprakash 5,20,000 5.91% Total 10,26,800 11.68%

8. The promoters, Directors and Group companies have not purchased or sold any Equity shares in the twelve months preceding the date of filing of this Letter of Offer with SEBI except for the following 43 transactions:

Share Share Name of the holding No. of shares holding Date of Mode of Sr. Promoter and before Purchased(P)or after Purchase or Purchase or No. Director Purchase Sale(S) Purchase Sale Sale or Sale or Sale 1 Mr. A. Venkatramani 4,92,610 1,00,000(P) 5,92,610 August 7, Off Market Promoter 2009 Purchase 2 Mr. A. Venkatramani 5,92,610 4,92,610(S) 1,00,000 August 11, Off Market Promoter 2009 Sale 3 Mr. Jude Jeyaprakash Nil 5,20,000(P) 5,20,000 December 30, Preferential Whole-time Director 2009 Allotment and Promoter 4 Mr. A. Venkatramani 1,00,000 4,06,800(P) 5,06,800 March 31, Off Market Promoter 2010 Purchase

9. Top Ten Shareholders

(i) Top ten shareholders on the date of filing of the Letter of Offer with SEBI:

% of Pre-Issue Sl. No. Name of Shareholder No. of Shares Share Capital 1 Mr. S. Sukumar 825000 9.39 2 Maharashtra Apex Corporation ltd 625000 7.11 3 Mr. Jude Jeyaprakash 520000 5.92 4 Mr. A Venkatramani 506800 5.76 5 Videocon Industries Ltd 400000 4.55 6 Mr. P. Thirumalai Kumar 279900 3.18 7 Mr. S. Govindaraj 260000 2.96 8 Ms. Vasumathy Vasudevan 260000 2.96 9 Mr. Uma Karthikeyan 260000 2.96 10 Ms. D. Banumathi 200000 2.28

(ii) Top ten shareholders (two years prior to the date of filing of the Letter of Offer with the Stock Exchange) as on September 30, 2008.

% of Pre-Issue Sl. No. Name of Shareholder No. of Shares Share Capital 1 Maharashtra Apex Corporation ltd 625000 7.11% 2 Mr. A Venkatramani 492610 5.60% 3 Videocon Industries Ltd 400000 4.55% 4 Reckoner Infra Pvt. Ltd. 190800 2.17% 5 Mr. Jayprakash Mady S 188000 2.14% 6 Mr. Murugan T. 175000 1.99% 7 Vijay Growth Financial Services Ltd. 150000 1.71% 8 Mr. Swaminathan 102000 1.16% 9 Mrs. Usha Venkataramani 100000 1.14% 10 Swathi Packaging Pvt. Limited 100000 1.14%

(iii) Top ten shareholders (ten days prior to the date of filing of the Letter of Offer with the Stock Exchanges).

% of Pre-Issue Sl. No. Name of Shareholder No. of Shares Share Capital 1 Mr. S. Sukumar 825,000 9.39 2 Maharashtra Apex Corporation ltd 625,000 7.11 3 Mr. Jude Jeyaprakash 520,000 5.92 4 Mr. A Venkatramani 506,800 5.76 5 Videocon Industries Ltd 400,000 4.55 6 Mr. P. Thirumalai Kumar 279,900 3.18 7 Mr. S. Govindaraj 260,000 2.96 8 Ms. Vasumathy Vasudevan 260,000 2.96 9 Mr. Uma Karthikeyan 260,000 2.96 10 Ms. D. Banumathi 200,000 2.28

10. Our Company has not availed any bridge loans to be repaid from the proceeds of the issue.

11. The Average cost of promoter shareholding is Rs.13.72 per Equity Share.

12. Our Company has 9281 Shareholders as on September 30, 2010.

13. The terms of Issue to Non-Resident Equity Shareholders / Applicants have been presented under the “Terms of the Issue” Section of this Letter of Offer.

14. The Issue will remain open for 15 days. However, the Board will have the right to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue Opening Date.

15. The equity shares of our Company are of face value of Rs.10/- and the marketable lot is 1 (one) equity share. At any given time, there shall be only one denomination of the Equity Shares. Our Company shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time.

16. The Shareholders of the Company do not hold any warrant, options, convertible loan or any debenture, which would entitle them to acquire further Shares of our Company.

17. Our Company has not re-valued its assets since inception.

18. Our Company has not granted ESOP/ ESOS to its employees.

19. Our Company has not issued any equity shares out of revaluation reserves or for consideration other than cash except as described in “Details of Paid-up Equity Share Capital” in point No.2.

20. No shares have been allotted / transferred on firm basis or through private placement in the last three years nor has our Company bought back its equity shares in the last six months except the allotments made , as appearing in paragraph 2 (A), (B) and (C) explanation above.

21. Our Company has not issued any shares at a price lower than the issue price during the preceding one year.

22. No further issue of capital by way of issue of bonus Equity Shares, Preferential Allotment, Rights Issue or Public Issue or in any other manner which will affect the capital of our Company, shall be made during the period commencing from the filing of the Letter of Offer with the SEBI till the 45 Equity Shares issued under this Letter of Offer have been listed or application moneys are refunded on account of the failure of the Issue.

23. We presently do not have any intention, to alter the equity capital structure by way of split/ consolidation of the denomination of the shares or a preferential issue or an issue of bonus or rights or public issue of shares or any other securities for a period of six months from the date of opening of the present Issue.

24. For Equity Shares being offered on rights basis under this Issue, shareholders are entitled to the allotment of 4 equity share for every 1 equity share held.

The Promoters, Directors and Lead Manager to the Issue have not entered into any buy-back, standby or similar arrangements for the securities being issued through this Letter of Offer.

46 IV. PARTICULARS OF THE ISSSUE

(A) OBJECTS OF THE ISSUE

The objects of the Issue are to raise funds for:

1) Acquisition of Satellite Rights of Tamil Movies; 2) Acquisition of Overseas Rights of South Indian Movies; 3) Office Infrastructure; 4) Part repayment towards outstanding dues with secured and unsecured creditors of our Company; 5) General Corporate Purposes; and 6) Meet Issue Expenses.

The main objects and objects incidental or ancillary to the main objects set out in the Memorandum enable us to undertake the existing activities and the activities for which funds are being raised by us through the Issue.

Proceeds of the Issue:

The net proceeds of the issue after deducting all issue related expenses are approximately Rs. 3426 Lakhs:

(B) COST OF THE PROJECT / FUNDS REQUIREMENT

Sl. Amount Particulars No. (Rs. In Lakhs) 1) Acquisition of Satellite Rights of Tamil Movies 812.50 2) Acquisition of Overseas Rights of South Indian Movies 2078.50 3) Office Infrastructure 85.00 4) Part repayment towards outstanding dues with secured and unsecured creditors 350.00 5) General Corporate Purposes 100.00 6) Issue Expenses 90.00 Total 3516.00

The fund requirement and deployment are based on internal management estimates and have not been appraised by any bank or financial institution. These are based on the current circumstances of our business and are subject to change in light of variations in external circumstances or costs, competitive pressures, variations in viewer preferences and other external factors which may not be within our control, or otherwise as a result of changes in our financial condition, results of operations, business or strategy. Our management, in response to the competitive and dynamic nature of the industry, will have the discretion to revise business plan from time to time and consequently our funding requirements and deployment of funds may also change. This may entail revising the proposed utilization of the Net Proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilization of the Net Proceeds.

DETAILS OF USE OF RIGHTS ISSUE PROCEEDS

1) Acquisition of Satellite Rights of Tamil Movies

We intend to utilize Rs. 812.50 lakhs for acquisition of satellite rights of Tamil Movies. This is in line with our growth plans and will help us expand our presence in the South Indian entertainment Industry.

Presently, our business activities include running 24 x 7 Tamil Movie and movie based entertainment programme Channel in countries like Malaysia, Sri Lanka and Middle East. The Channel telecast movies and movie based entertainment content.

We believe that in Television industry, content is important and viewers are more sensitive and tend to follow latest movie releases, upcoming movie releases or launch of new movies, interviews with leading star casts, new genre programmes, etc.

47 We have built programming content of 1914 hours as on September 30, 2010 consisting of movie and current affairs based programmes. We hold the satellite rights for over 475 full-length Tamil movies on non- exclusive basis. From the proceeds of this Rights Issue, we propose to acquire a significant proportion of recently released movies in Tamil language, including movies which have had huge commercial success at the box office.

The break up of acquisition cost is as under:

Particulars 2010-11 Satellite Rights Purchases (Tamil) New Movies – Nos. 200 Average Rate per Movie 250,000 Cost of New Movies 50,000,000

Old Movies – Nos. 625 Average Rate per Movie 50,000 Cost of Old Movies 31,250,000

Total Rights Purchases / Production Costs 81,250,000

2) Acquisition of Overseas Rights of Southern Indian Movies

We intend to utilize Rs. 2078.50 lakhs for acquisition of Overseas rights of Southern Indian Movies.

The overseas population of South Indian origin has been growing consistently over the past few years. Besides, the number of Southern Indian language speaking people from other countries such as Sri Lanka, Singapore, Malaysia, who have settled abroad, has also grown. These factors have driven up the international demand for southern Indian film content. (For details of South Indian population and historical details of movies distributed outside India, please refer Section titled “Industry Overview” on page no. 62.

We intend to engage into distribution of overseas rights of South Indian movies and entertainment content in overseas markets like US, Canada, UK, Europe, Australia, New Zealand, etc. having significant South Indian population. The Overseas Rights would include Theatrical and non theatrical rights, television (including pay television) and computer rights, exploitation rights for home use by Video copyrights including video on demand rights and video cassette rights, DVD rights /HDDVD rights/ Blueray DVD rights, VCD rights, CD-ROM software rights, advertisement package rights, publishing rights, title rights, recording rights, cable TV rights (including pay cable), terrestrial television rights, satellite television broadcast rights(including satellite pay channel), IPTV (Internet Protocol TV) Rights, high seas rights, airborne rights, internet rights, broadband rights, in-flight rights, DTH rights, pay per view rights, multimedia rights, direct-to-user (DTU) rights, laser disc rights.

The break up of acquisition cost is as under:

Worldwide Rights of Tamil and Telugu Movies FY 2010-11 TAMIL MOVIES No. of movies for which overseas rights are to be purchased (Tamil) 9 Average cost of acquisition per movie (Tamil) – (Rs.) 10,000,000 Cost of Acquisition of Tamil Movies during the year - ………. (A) 90,000,000 Assumed satellite rights value in terms of % in the overseas rights 25% Assumed satellite rights portion of Overseas Rights – Tamil – Rs. 22,500,000 Cost of overseas rights acquired of Tamil movies other than Sate. Rights 67,500,000 TELUGU MOVIES 48 No. of movies for which overseas rights are to be purchased (Telugu) 4 Average cost of acquisition per movie (Telugu) – Rs. 10,000,000 Cost of Acquisition of Telugu Movies during the year – Rs. ………. (B) 40,000,000

Cash flow for purchase of overseas rights: Acquisition of Overseas Rights of Tamil and Telugu Movies-2010-1(A+B) 130,000,000 Advance money to be paid in 2010-11 for Acquisition of Rights for Tamil and Telugu Movies in 2011-12 (Advance money as a 50% of next year cost of acquisition) 50% of (Tamil-10,50,00,000+Telugu-5,25,00,000) 78,750,000 Total 208,750,000

Our Company plans to purchase satellite rights of Tamil Movies and make them available to its step down subsidiary Tamil Box Office Singapore Pte. Ltd. for exploitation. As per the Company’s internal estimates, the revenue from exploitation of satellite rights through its step down subsidiary in the year 2010 – 11 could be about Rs.400 lakhs.

3) Office Infrastructure

A principal component of our strategy is to expand our reach in newer territories and platforms. This growth strategy will place significant demand on our management, financial and other resources.

We estimate a total expenditure of approximately Rs.85 lakhs towards our infrastructure facilities. The expenditure estimates includes the cost of hardware equipments like workstations and servers, storage, networking, etc. The estimates also include the cost of civil work, electrical work and air-conditioning work Our estimates of the break up of the costs based on the quotations received from various suppliers are as follows:

Sr. No. Particulars Name of Supplier Amount in lakhs 1 Estimate of Cost of civil work, flooring work, Architerior- 77.00 falseceiling work, carpentry work, electrical Designers & Space work, air-conditioning work, plumbing work, Planner, Chennai painting work and misc. work as per the quotation received inclusive of all taxes and duties 2 Proliant ML 350G6 Server, Desktop Computer, Shri Omkar Systems, 8.00 Laptops, UPS, etc. inclusive of Taxes Chennai Total 85.00

The Architerior – Designers & Space Planners and Shri Omkar Systems, Chennai, the suppliers for office infrastructure are not related to the promoters.

4) To make part repayment of Outstanding liabilities towards secured and unsecured creditors

Our Company intends to utilize approx. Rs.350 Lakhs from the proceeds of this Rights Issue towards part repayment of outstanding liabilities to secured and unsecured creditors. This amount consists of fixed deposit liabilities of our Company taken over by KTL, Advances/ secured loans given to our Company by KTL after adjusting the receivables of our Company transferred to KTL and payment to bankers under OTS arrangement. In the event of any shortfall in using the net proceeds of the rights issue as described in the objects of the Issue, our Company will reduce the amount of repayment. In the event of any surplus, the management, in accordance with the policies established by the Board, will have flexibility in applying such surplus towards repayment.

49 5) For General Corporate Purposes

We intend to deploy the balance issue proceeds Rs. 100 lakhs towards the general corporate purposes, including but not restricted to brand building exercises, investment in other segments of the industry or any other purposes as approved by our Board of Directors.

6) To meet Issue Expenses

The expenses for the rights issue includes fee of the Lead Manager, Registrar, Legal Advisor, Banker, Statutory Auditors’ Certification, Statutory fees payable to SEBI and Stock Exchanges and expenses on Printing and distribution, advertisement, stamp duty, etc. and the depository charges among others. The total expenses for this issue are estimated to be Rs. 90 Lakhs, which is approximately 2.56 % of the Issue Size.

Sr. Particulars Rs. In Lakhs % of the Issue No. Size 1. Lead Manager, Legal Advisor and Other Fees 40 1.14 2. Statutory Fees payable to SEBI and Stock 5 0.14 Exchanges, Registrar and Depository Charges 3. Advertising, Marketing, Printing, Stationery, Stamp Duty & Postage expenses (including transportation 35 1.00 costs) 4. Misc. Exps. 10 0.28 TOTAL 90 2.56

The details of the means of finance are provided below:

Particulars Amount (Rs. In Lakhs) Proceeds of the Rights Issue 3516 Total 3516

The objects of the Issue are proposed to be financed entirely through the net proceeds of the Issue. In case of any increase in the actual utilization of funds earmarked for the above activities, such additional funds for a particular activity will be met from a combination of internal accruals of our Company, additional equity or debt infusion. If the actual utilization towards any of the aforesaid objectives is lower than what is stated above, such balance will be used for future growth opportunities and general corporate purposes.

As at the date of this Letter of Offer, we have not deployed any amount for the objects stated above.

APPRAISAL

The object of the Issue has been formulated by Board of Directors of our Company and has not been appraised by any appraising agency.

SCHEDULE OF IMPLEMENTATION

The proceeds of the Issue would be utilized for the objects specified above. As estimated by our management, the entire proceeds received from the rights issue would be utilized in the financial year 2010- 11 and 2011-12.

MONITORING OF FUNDS

Our Board will monitor the utilization of the Issue proceeds. We will disclose the details of the utilization of the Issue proceeds, including interim use, under a separate head in our financial statements for FY 2011 and FY 2012 specifying the purpose for which such proceeds have been utilized or otherwise disclosed as per the disclosure requirements of our listing agreements with the Stock Exchange. As per Clause 49 of the listing 50 agreements with the Stock Exchanges, we shall disclose to the Audit Committee, the uses / applications of funds on a quarterly basis as a part of our quarterly declaration of financial results.

Further, we shall, on a quarterly basis, prepare a statement indicating material deviations, if any, in the use of Issue proceeds. Such statement shall be furnished to the Stock Exchanges along with the interim and / or annual financial statements and shall be published in the newspapers simultaneously with the interim or annual financial results, after placing it before our Audit Committee.

In view of the above, there seems to be no legitimate requirement for a monitoring agency in terms of Regulation 16 (1) of the SEBI Regulations, 2009.

DEPLOYMENT OF FUNDS

We have not deployed any funds on any objects of the issue immediately preceding the date of Letter of Offer.

INTERIM USE OF ISSUE PROCEEDS

Pending any use as described above, we intend to invest the proceeds of this Issue in high quality, interest / dividend bearing short term liquid instruments including deposits with banks for the necessary duration. Such investments would be in accordance with the investment policies as approved by the Board of Directors from time to time.

Except for the repayment of outstanding liabilities to secured and unsecured creditors (including our group concerns), we will pay no part of the Issue proceeds as consideration to Promoters, Directors, key management personnel, subsidiaries, group companies, etc.

51 D) BASIC TERMS OF THE ISSUE

The Equity Shares, now being issued, are subject to the terms and conditions of this Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of our Company, the approvals from the GOI, FIPB and RBI, if applicable, the provisions of the Companies Act, 1956, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and/ or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the allotment advice or letter of allotment or Security Certificate and rules as may be applicable and introduced from time to time.

52 E) BASIS FOR ISSUE PRICE

The following factors have been considered while arriving at the Issue price of Rs. 10/- per Equity Share.

Investors should read the following summary with the Risk Factors included from Page No. [•] to [•] and the details about our Company and its financial statements included in this Letter of Offer. The trading price of the Equity Shares of Our Company could decline due to these risks and the investor may lose all or part of his investment.

A. QUALITATIVE FACTORS

We are one of the latest entrants in the Southern Indian Regional Entertainment sector operating in Television Media Segment through telecasting 24 x 7 Tamil Television channel and production of movie based entertainment content focusing and concentrating on regional language i.e. Tamil.

B. QUANTITATIVE FACTORS

Information presented in this section is derived from our Consolidated Financial Statements prepared in accordance with Indian GAAP.

1. Adjusted Basic Earning Per Share (EPS)

Period Amount (In Rs.) Weight Year ended March 31, 2008 (1.63) 1 Year ended March 31, 2009 (1.57) 2 Year ended March 31, 2010 (0.56) 3 Half year ended on September 30, 2010 0.12 Weighted Average NA

2. Price/Earning (P/E) ratio in relation to Issue Price of Rs. 10/- per equity share.

As the EPS for the year ended March 31, 2010 is negative, it is not possible to work out Price Earning ratio in relation to Issue price.

3. Return on Net worth (RONW)

Period % Weight Year ended March 31, 2008 Negative 1 Year ended March 31, 2009 Negative 2 Year ended March 31, 2010 Negative 3 Half year ended on September 30, 2010 0.01 Weighted Average NA

4. Minimum Return on Increased Net Worth to maintain pre-issue EPS : 1.23%

5. Net Asset Value (NAV) per share

NAV as on March 31, 2010 is Rs. 8.81 per equity share NAV as on September 30, 2010 is Rs. 8.77. per equity share NAV after the Issue will be Rs. 9.75.

6. Industry P/E

(i) Highest 158.70 (ii) Lowest 11.60 (iii) Industry Composite- Entertainment/ Multi Media 32.40 Source: Dalal Street Vol. XXV. No. 22 DATED October 24, 2010 53

7. Comparison with the Peer group companies.

Sr. Period Parameters No. Name of the Company Ended Face Book Price as on Value Value RONW EPS P/E 01-10-10 (Rs.) (Rs.) % (Rs.) Ratio (Rs.) March 31, 1 TV 18 India 2010 5 54 -3.30 -1.80 - 94.40 UTV Software March 31, 2 Communication 2010 10 245 5.90 14.50 20.70 529.35 183.65(Price March 31, as on Oct 22, 3 Eros International Media Ltd. 2010 10 33.26 31.6 11.52 15.94 2010) (Source: Dalal Street Vol. XXV. No. 22 DATED October 24, 2010)

8. The Face Value of the Equity Shares is Rs.10/- per Equity Share and the Issue Price is 1 (one) time of the Face Value.

The last traded price as on October 24, 2010 was Rs. 11.39 per Equity Share on BSE. The Lead Manager believes that the Issue Price of Rs.10/- per Equity Share for cash at par is justified in view of the above qualitative and quantitative parameters. The investors may want to peruse the risk factors and the financials of our Company including important profitability and return ratios, listed out in the Auditors’ Report in Financial Information of the Letter of Offer to have a more informed view of the investment proposition.

54 (F) STATEMENT OF TAX BENEFITS

The Board of Directors Ram Kaashyap Investment Ltd. No. 33/8, B. R. Complex, II Floor C. P. Ramasamy Road Alwarpet, Chennai – 600 018 Tamilnadu, India

Dear Sirs,

We hereby certify that the enclosed annexure states the possible tax benefits available to Ram Kaashyap Investment Limited (the “Company”) and to the Shareholders of the Company under the provisions of the Income Tax Act, 1961 (provisions of Finance Act, 2010), and other direct and indirect 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 tax laws. Hence, the ability of the Company or its Shareholders to derive tax benefits is dependent upon fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill.

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

The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. A shareholder is advised to consider in his/her/its own case, the tax implications of an investment in the equity shares particularly in view of the fact that certain recently enacted legislation may not have a direct legal precedent or may have a different interpretation on the benefits, which an investor can avail. We do not express any opinion or provide any assurance as to whether:

• The Company or its shareholders will continue to obtain these benefits in future; or • The Conditions prescribed for availing the benefits have been / would be met with.

This report is intended solely for your information and for the inclusion in the offer document in connection with the rights issue of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

Thanking you,

For R Ravindran & Associates, Chartered Accountants,

R. Ravindran, Proprietor M. No. 23829

Place: Chennai Date: October 22, 2010

55 TAX BENEFITS

The tax benefits listed below are the possible benefits available under the current tax laws in India. Several of these benefits are dependent on the Company or its Shareholders fulfilling the conditions prescribed under the relevant tax laws. Hence the ability of the Company or its Shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives it faces in the future, it may not choose to fulfill.

I. SPECIAL TAX BENEFITS

There are no such special tax benefits available to Ram Kaashyap Investment Limited and its Shareholders.

II. GENERAL TAX BENEFITS

As per the existing provisions of the IT Act and other laws, as applicable for the time being in force, the following general tax benefits and deductions are and will, inter alia, be available to the Company and its prospective shareholders:

A. BENEFITS AVAILABLE UNDER THE INCOME TAX ACT, 1961

(i) TO THE COMPANY:

1. Dividends exempt under Section 10(34)

Dividend income (whether interim or final), in the hands of the company as distributed or paid by any other Company, on or after April 1, 2003 is completely exempt from tax in the hands of the Company, under section 10(34) of the IT Act.

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.

3. Premium Paid on Health Insurance under Section 36(1)(ib)

In terms of section 36(1)(ib) of the Act, with effect from April 1, 2007, the amount of any premium paid by cheque by the assessee as an employer to effect or to keep in force an insurance on the health of his employees under a scheme framed in this behalf by:

a) the General Insurance Corporation of India formed under section 9 of the General Insurance Business (Nationalisation) Act,1972 and approved by the Central Government; or b) any other insurer and approved by the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999 is deductible expenditure and will accordingly apply in relation to the assessment year 2009-10 and subsequent years.

4. Exemption of Long-Term Capital Gain under Section 10(38)

According to section 10(38) of the Act, long-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 exempt from tax. However, the aforesaid income shall be taken into account in computing the Book profit and income tax payable under section 115JB.

56 5. Preliminary Expenses under Section 35D

In accordance with and subject to the provisions of section 35D of the Income tax Act, the company will be entitled to amortise, over a period of five years, all expenditure in connection with the proposed rights issue subject to the overall limit specified in the said section.

6. Exemption of Long Term Capital Gain under Section 54EC

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, subject to a ceiling of Rs. 50 lakhs, within six months from the date of transfer. 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.

7. Lower Tax Rate under Section 111A on Short-Term Capital Gains

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).

8. Lower Tax Rate under Section 112 on Long-Term Capital Gains

As per the provisions of Section 112 of the Act, long-term gains 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, 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).

9. Set off and carried forward losses

Loss arising from Business can be carried forward and set off against business profits in future for a period of eight years

10. Benefits under Section 115JAA

Under Section 115JAA(1A) of the Act, tax credit shall be allowed of any tax paid (MAT) under Section 115JB 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 10 years succeeding the year in which the MAT becomes allowable.

11. Minimum Alternate Tax (MAT) under Section 115JB

Under Section 115JB of the Act, in case of a company, if the tax payable on the total income as computed under the normal provision of Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the April 1, 2001 is less than seven and one half per cent of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable for the relevant previous year shall be seven and one-half per cent of such book profit. For Assessment Year 2009-10, if the tax payable on the total income as computed under the Income-tax Act is less than 15% of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable shall be fifteen percent of such book profit. However, with effect from April 1,2010 i.e., in relation to the Assessment Year 2010-11 and subsequent years, if the tax payable on the total income as computed under the Income-tax Act in respect of any previous year relevant to the assessment year commencing on or after the April 1, 2010 is less than 18% of its book profit, such book profit shall be deemed to be the total income of the assessee and the tax payable for the relevant previous year shall be ten per cent of such book profit.

57 (ii) BENEFITS AVAILABLE TO RESIDENT SHAREHOLDERS:

1. Exemption under Section 10(34)

Dividend (whether interim or final) declared, distributed or paid by the Company is completely exempt from tax in the hands of the shareholders of the Company as per the provisions of section 10(34) of the IT Act.

2. Exemption of Long-Term Capital Gain under Section 10(38)

Under Section 10(38) of the Act, long term capital gain arising to the shareholder from transfer of a long term capital asset being an equity share in the company or unit of an equity oriented mutual fund (i.e. capital asset held for the period of twelve months or more) entered into in a recognized stock exchange in India and being such a transaction, which is chargeable to Securities Transaction Tax, shall be exempt from tax.

3. Exemption of Long Term Capital Gain under Section 54EC

4. Exemption of Long term Capital Gain under Section 54F

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 covered by sections 10(38)) and 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.

5. Lower Tax Rate under Section 111A on Short-Term Capital Gains

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 Securities Transaction Tax shall be subject to tax at a rate of 15% plus applicable surcharge and education cess).

6. Lower Tax Rate under Section 112 on Long-Term Capital Gains

As per the provisions of Section 112 of the Act, long term gains 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).

7. Set off and carried forward Loss

Under the Income Tax Act, Short term Capital Loss arising from transfer of shares shall be carried forward and set off against Short term and Long term capital gains for a period of Eight years. Similarly, Long term Capital Loss arising from transfer of shares shall be carried forward and set off against Long term capital gains for a period of Eight years.

58 (iii) BENEFITS AVAILABLE TO NON RESIDENTS/ NON-RESIDENT INDIAN SHAREHOLDERS (OTHER THAN MUTUAL FUNDS, FIIS AND FOREIGN VENTURE CAPITAL INVESTORS)

1. Exemption 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. Exemption under Section 10(38)

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 Securities Transaction Tax.

3. Exemption of Long Term Capital Gain under Section 54EC

4. Exemption of Long Term Capital Gain under Section 54F 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 covered by sections and 10(38)) and 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.

5. Lower Tax Rate under Section 111A on Short-Term Capital Gains

Under section 111A of the Act and other relevant provisions of the Act, short-term capital gains (i.e., if shares are held for a period not exceeding 12 months) arising on transfer of equity share in the Company would be taxable at a rate of 15% (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to securities transaction tax. Short-term capital gains arising from transfer of shares in a Company, other than those covered by section 111A of the Act, would be subject to tax as calculated under the normal provisions of the Act.

6. Set off and carried forward Loss

7. Lower Tax Rate under Section 112 on Long-Term Capital Gains

Under section 112 of the Act and other relevant provisions of the Act, long term capital gains, (other than those exempt under section 10(38) of the Act) arising on transfer of shares in the Company, would be subject to tax at a rate of 20 percent (plus applicable surcharge and education cess) after indexation. The amount of such tax should however be limited to 10% (plus applicable surcharge and education cess) without indexation, at the option of the shareholder, if the transfer is made after listing of shares.

59 Where shares of the Company have been subscribed in convertible foreign exchange, Non- Resident Indians (i.e. an individual being a citizen of India or person of Indian origin who is not a resident) 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:

8. Under section 115E, where the total income of a non-resident Indian includes any income from investment such income shall be taxed at a concessional rate of 20 per cent (plus applicable surcharge and education cess). Also, where shares in the company are subscribed for in convertible foreign exchange by a Non-Resident India, long-term capital gains arising to the nonresident Indian shall be taxed at a concessional rate of 10 percent (plus applicable surcharge and education cess). The benefit of indexation of cost and the protection against risk of foreign exchange fluctuation would not be available.

9. Under provisions of section 115F of the Act, long term capital gains (in cases not covered under section 10(38) of the Act) arising to a non-resident Indian from the transfer of shares of the Company subscribed to in convertible Foreign Exchange shall be exempt from Income tax, if the net consideration is reinvested in specified assets or in any savings certificates referred to in section 10(4B), within six months of the date of transfer. If only part of the net consideration is so reinvested, the exemption shall be proportionately reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified assets are transferred or converted into money within three years from the date of their acquisition.

10. Under provisions of section 115G of the Act, it shall not be necessary for a Non- Resident Indian to furnish his return of income under section 139(1) if his income chargeable under the Act consists of only investment income or long term capital gains or both; arising out of assets acquired, purchased or subscribed in convertible foreign exchange and tax deductible at source has been deducted there from as per the provisions of Chapter XVII-B of the Act.

11. As per Section 90(2) of the Act, provisions of the Double Taxation Avoidance Agreement between India and the country of residence of the Non-Resident/ Non- Resident India would prevail over the provisions of the Act to the extent they are more beneficial to the Non-Resident/ Non-Resident India.

(iv) BENEFITS AVAILABLE TO FOREIGN INSTITUTIONAL INVESTORS (‘FIIs’)

1. 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. 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 Securities Transaction Tax. However, the aforesaid income shall be taken into account in computing the Book profit and income tax payable under section 115JB.

3. 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, subject to a ceiling of Rs. 50 lakhs, within six months from the date of transfer. 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.

4. 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 securities 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). • 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) 60

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. As per section 90(2) of the Act, provisions of the Double Taxation Avoidance Agreement between India and the country of residence of the FII would prevail over the provisions of the Act to the extent they are more beneficial to the FII.

(v) 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.

B. 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.

Notes:

1. The above Statement of Possible Direct Tax Benefits sets out the provisions of law in a summary manner only and is not a complete analysis or listing of all potential tax consequences of the purchase, ownership and disposal of equity shares;

2. The above Statement of Possible Direct Tax Benefits sets out the possible tax benefits available to the Company and its shareholders under the current tax laws as amended by the Finance Act, 2009 presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant tax laws;

3. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences, the changing tax laws, 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;

4. In respect of non-residents, the tax rates and the consequent taxation mentioned above shall be further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between India and the country in which the non-resident has fiscal domicile; and

5. The stated benefits will be available only to the sole/first named holder in case the shares are held by joint shareholders.

6. 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 consequences of his/her participation in the issue.

Thanking you,

For R Ravindran & Associates, Chartered Accountants,

R. Ravindran Proprietor M. No. 023829

Place: Chennai Date: October 22, 2010 61

SECTION V. ABOUT THE COMPANY

(A)Industry Overview The information presented in this section has been obtained from publicly available documents from various sources including industry websites and publications and from Government 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 Letter of Offer is reliable and that website data is as current as practicable, these have not been independently verified.

Disclaimer - Indian entertainment and media outlook, In the interval... But ready for the next act – FICCI-KPMG Media and Entertainment Industry Report, FICCI, KPMG, February 2009 (the “FICCI- KPMG Report 2009”):The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such in formation is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation .

Disclaimer - Indian entertainment down South – From script to screen, FICCI, Ernst & Young (the “FICCI –EY Report – 2009 – From Script to Screen”): Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. Ernst & Young Pvt. Ltd. accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material.

World Economy

The global economy is showing increasing signs of stabilization. The growth outlook in virtually all economies is being revised upwards steadily, with the Asian region experiencing a relatively stronger rebound. Global trade is gradually picking up, but other indicators of economic activity, particularly capital flows and asset and commodity prices are more buoyant. However, even as most of the forecasts on recovery are generally optimistic, significant risks remain.

The recovery in many economies is driven largely by government spending, with the private sector yet to begin playing a significant part. There are signs that high levels of global liquidity are contributing to rising asset prices as well as rising commodity prices. Emerging market economies (EMEs) are generally recovering faster than advanced economies. But they are also likely to face increased inflationary pressures due to easy liquidity conditions resulting from large capital inflows. (Source: - Third Quarter Review of Monetory Policy 2009-10 issued by Reserve Bank of India on January 29, 2010)

Global Growth

Global economic performance improved during the third and fourth quarters of 2009, prompting the IMF to reduce the projected rate of economic contraction in 2009 from 1.1 per cent made in October 2009 to 0.8 per cent in its latest World Economic Outlook (WEO) Update released on January 26, 2010. The IMF has also revised the projection of global growth for 2010 to 3.9 per cent, up from 3.1 per cent ( Table 1 ). The IMF expects the growth performance, which will be led by major Asian economies, to vary considerably across countries and regions, reflecting different initial conditions, external shocks, and policy responses.

Table 1: Projected Global GDP Growth (%)* Country/Region 2009 2010 US (-) 2.5 2.7 UK (-) 4.8 1.3 Euro Area (-) 3.9 1.0 Japan (-) 5.3 1.7

62 China 8.7 10.0 India 5.6 7.7 Emerging and Developing Economies 2.1 6.0 World (-)0.8 3.9 Source: World Economic Outlook Update, IMF, January 26 . 2010

The IMF has also revised upwards its projection of the real GDP growth of emerging and developing economies for 2009 to 2.1 per cent from its earlier number of 1.7 per cent. The estimates are even more optimistic for 2010. The growth of emerging and developing economies is now projected at 6.0 per cent, up from 5.1 per cent earlier. The growth in EMEs such as China and India and other emerging Asian economies is expected to be robust. Commodity-producing countries are likely to recover quickly in 2010 on the back of a rebound in commodity prices. (Source: -Third Quarter Review of Monetory Policy 2009-10 issued by Reserve Bank of India on January 29, 2010)

Indian Economy

The Indian industry has recovered swiftly from the shock of the Global Liquidity Crisis. The Index of Industrial Production rose by a healthy 6.5 per cent in the first half of 2009-10, after reporting a meager growth of 0.3-0.5 per cent in the second half of 2008-09. The interim results of the manufacturing companies also suggest that they have started building inventories in anticipation of a rise in demand. Looking at the healthy trend in the industrial activity so far, we have scaled up forecast for industrial growth in 2009-10 to 7.7 per cent from 7.2 per cent. (Source - CMIE)

It is expected that industrial production to grow by 9.4 per cent in 2010-11, on top of a 9.6 per cent growth expected for 2009-10. Consumption demand will grow by a healthy 8.6 per cent, backed by a 12.2 per cent rise in corporate wages and a 10.9 per rise in salaries of government employees. The restructuring of income tax slabs in the Union Budget 2010-11 will also increase the disposable income in the hands of the urban consumer. Besides, rural income will rise, due to an expected rise in the agricultural crop and healthy allocation of funds to the NREGS.

The companies will easily be able to meet the rising demand as a 7.1 per cent rise in agricultural crop production and increase in availability of electricity and natural gas will ensure that there are no supply constraints. The industry has seen a lot of capacity addition in the last two years and will see historically high capacity additions worth Rs.6.5 crore in 2010-11. Hence, a majority of the sectors will not face any capacity constraints in 2010-11. (Source-CMIE)

South Indian Economy

The South Indian region comprises of four states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. Together, these states account for 21% (240 million) of the Indian population and 24% (INR7,405 billion) of the country’s Gross Domestic Product. The region has high income levels as well. The per capita GDP of the four states is more than or marginally below the country’s per capita GDP

(Source - FICCI –EY Report - 2009– From Script to Screen)

63 Indian Media and Entertainment Industry

The Indian media and entertainment industry stood at INR 584 billion in 2008, a growth of 12.4 percent over the previous year. Over the next five years, the industry is projected to grow at a CAGR of 12.5 percent to reach the size of INR 1052 billion by 2013. ( Source: -FICCI- KPMG Report 2009)

(Source: -FICCI- KPMG Report 2009 )

The following table shows the growth of various sectors of the Indian media and entertainment industry.

(Source: - FICCI- KPMG Report 2009 )

Targeting Mainstream Global Audience

Dedicated TV programming for local audiences abroad

Apart from targeting the NRI population by beaming Indian content in other countries, broadcasters have now begun to take things to the next level, and are starting to offer dedicated programming for the local audiences in these countries.

Zee Network, for example, has Zee Astro which is broadcast in the South-East Asia in the local Bahasa language. NDTV too has launched two channels specifically for markets outside India–Astro Awani in South-East Asia in 2006 and NDTV Arabia in the Middle East. While NDTV Arabia is in English, Astro Awani is primarily in Bahasa.9. Both channels carry locally relevant infotainment programming.

64 Films: Looking beyond the diaspora

It’s no longer just the NRIs that have a taste for Bollywood movies. Increasingly, non Indian movie audiences in different parts of the world are discovering the charm of Bollywood song-and-dance routines and melodramas. The striking popularity of Indian films among non Indian audiences in Asia, the Middle East and Europe show that Hindi films reach beyond the barriers of language, culture, and religion, and are a truly global media. Key markets for the film industry include India’s neighboring and culturally similar countries such as Pakistan, Sri Lanka and Bangladesh. Besides the Indian diaspora in these countries, there is a great demand for Bollywood content among the local audience there. Pakistan, for example, has a 165 million strong population that has a keen interest in Bollywood films. With Pakistan relaxing laws against the theatrical release of Indian films, the country has emerged as very big potential market for Hindi film industry. Indian films are already popular there and people understand the language as well. Similarly, countries like Bangladesh (147 million strong Bengali speaking population), Sri Lanka (3.8 million Tamils), Malaysia (2.3 million Tamil speakers), Singapore, UAE, and Fiji also have good potential for different regional Indian films, as has been proven by the popularity of Indian television channels in these countries.

Indian Film Industry

India’s Film industry is one of the largest in the world with more than 1000 movie releases and over 3 billion movie goers annually. The filmed entertainment sector is estimated to have grown at a CAGR of 17.7 percent over the past 3 years. The industry is estimated to reach INR 109.9 billion in size in 2008, a growth of over13.4 percent over 2007. The industry is expected to grow at the CAGR of 9.1 percent over the next 5 years and reach the size of INR 168.6 billion by 2013. ( Source: -FICCI- KPMG Report 2009 )

(Source: -FICCI- KPMG Report 2009 )

South Indian Film Industry

No. of Films Certified and released

Market size

The aggregate market size of the Tamil, Telugu,Malayalam and Kannada film industry segments in FY09 in terms of total revenues generated by films is estimated to be around INR17.3 billion. Of the aggregate market size, the Telugu segment contributes around INR7.7 billion, the Tamil segment INR7.7 billion, the Malayalam segment INR1.4 billion and the Kannada segment INR0.5 billion.

Market size of South Indian film industry by language segments (%)

(Source - FICCI –EY Report - 2009– From Script to Screen)

Market size by revenue streams

Among the various revenue streams, domestic theatrical revenues is, by far, the most dominant, accounting for nearly three-fourths (around INR12.6 billion) of the total revenues earned. Revenues from cable and satellite (C&S) television rights come next in the list, contributing around INR3 billion (17% of the total revenue pie), followed by revenues from international theatrical rights, which contribute around INR0.9 billion or 5% of the total revenue pie. Other revenue streams, namely, music rights, domestic home video rights, Internet and mobile rights, etc., contribute, in aggregate, around INR0.8 billion or 5% of the total revenues earned. (Source - FICCI –EY Report - 2009– From Script to Screen)

Market size of South Indian film industry by revenue streams (%)

Note: Others include music rights, domestic home video rights, and mobile and internet rights (Source: Ernst & Young primary research and analysis)

Few revenue streams of the South Indian Movies

International theatrical revenues

This represents the box office collections of a film in the international theatrical market. A part of this, after deduction of the shares of the local exhibitors, comes back to the international distributor of the film. Typically, the international distributor acquires the theatrical rights from the producer of the film and distributes it in countries/ regions which has a network of theatres, for other countries/ regions he sells the rights to local distributors. This revenue stream can be significant for films with a reputed star-cast; for other films, it just generates revenues. (Source - FICCI –EY Report - 2009– From Script to Screen)

67 Mobile and Internet properties

Producers can also create mobile and Internet-based properties around big budget films, such as games, wall- papers and other audio-visual content. As the film becomes popular, these properties too gain popularity and generate revenues through downloads

DTH PPV and Video on Demand

As mentioned earlier, these are new release platforms for films. As they gain more traction in the future, they are likely to become significant revenue streams for a film. Typically, the producer may sell these rights on an outright basis or have a revenue-sharing agreement.

Tamil film Industry

Note: Others include music rights, domestic home video rights, and mobile and internet rights Source: Ernst & Young primary research and analysis

International theatrical market

The Tamil population of Indian origin residing overseas has been growing consistently over the past few years, with the boom in the information technology sector. Besides the number of Tamil speaking people from other countries such as Sri Lanka, who have settled abroad, has also grown. These factors have driven up the international demand for Tamil film content. However, while the international theatrical market has increased in prominence as a revenue stream, it still is not a big contributor to the total revenues of a film; revenues from the sale of international theatrical rights contribute only around 6% of the total Tamil film industry market size. While for a large budget film, the international theatrical market is about 10-15% of the total Tamil Nadu theatrical market, the corresponding figures for a medium budget film and a small budget film are 7.5-10% and 5-10% respectively. (Source - FICCI –EY Report - 2009– From Script to Screen)

Structure

The international theatrical market for Tamil films is reasonably well-organized. Generally, the producer of a film sells the international theatrical rights for all countries as a bundle to a single international distributor. The international distributor sells the theatrical rights for different countries to separate local distributors. These distributors then release the film in the local theatres through exhibitors. There are only a couple of international distributors for Tamil films, of which one operates only on a small scale. Hence, it is practically a single buyer market for international theatrical rights. Generally, the international home video rights too are sold along with the theatrical rights as a bundle to the international distributor. (Source: FICCI –EY Report - 2009– From Script to Screen) 68 Key territories

The key territories in the international theatrical market for Tamil films are Malaysia, Singapore, Sri Lanka, the Middle East, the US and Canada, and the UK, Europe and Australia- New Zealand. Table below provides details of the contribution of various territories to the total international theatrical revenues for a typical Tamil film. For a big budget film with a well-known star cast, the US and Canada territory contributes 20% of the international revenues while the UK, Europe and Australia-New Zealand territory contributes another 20%. For a medium budget film, these two territories together contribute only 10% of international revenues. Small budget films are not released at all in theatres in these markets.

Table: Key territories in the international theatrical market Contribution (% of Territory international theatrical) Malaysia 35-40 Singapore 5-10 Sri Lanka 10 Middle East 10 US and Canada 5-20 UK, Europe and Australia-New Zealand 5-20 (Source - FICCI –EY Report - 2009– From Script to Screen)

Inter se agreements The international theatrical rights and international home video rights are sold by the producer to the international distributor on an outright basis for a fixed sum, before the domestic release of the film. In markets where the international distributor releases the film through a third party owned theatre network, the third party retains his exhibitor share from the net box office collections (usually 50%) and passes on the rest to the distributor. In markets where the international distributor does not have access to a theatre network, he sells the theatrical rights to local distributors on an outright basis.

Telugu Film Industry

Market size by revenue stream Domestic theatrical revenues account for the dominant share of the Telugu film market, contributing two- thirds of the total revenues earned by films (INR5.1 billion). The other significant revenue stream is C&S television rights (INR1.8 billion). International theatrical rights and other revenue streams (music rights, domestic home video rights and Internet and mobile rights in aggregate) contribute around INR0.4 billion each to the total market size (Source: FICCI –EY Report - 2009– From Script to Screen)Market size of Telugu film industry by revenue streams (%)

Note: Others include music rights, domestic home video rights, and mobile and internet rights (Source - Ernst & Young primary research and analysis)

69 International theatrical market

The Telugu-speaking population residing overseas has been growing consistently over the past few years, with the boom in the information technology sector. This has driven up the international demand for Telugu film content. There is a good demand for large budget films with a good star cast. As a result, the international theatrical market has increased in prominence as a revenue stream. However, the growth has been slow and below potential. For instance, the Telugu population in the US is more than the Tamil population; still the market for Telugu films in the US is lesser than that for Tamil films. Revenues from the sale of international theatrical rights contribute only around 5% of the total Telugu film industry market size. The international theatrical market primarily comprises the US, especially the west and east coast regions. The market is under-tapped because it is highly unorganized, with theatrical rights being purchased by a few software professionals, who do not carry out this business on a steady and sustained basis. Unlike the Tamil industry, there are no players in the organized sector who have tie-ups with local distributors and exhibitors to release Telugu films in the international market. International theatrical rights are sold on an outright basis. (Source - FICCI –EY Report - 2009– From Script to Screen)

Malayalam Film Industry

Market size by revenue streams Like its Tamil and Telugu counterparts, the Malayalam industry too is heavily dependent on domestic theatrical revenues, which contribute nearly three-fourths of the total revenues earned by films (INR0.98 billion). C&S television rights make up the other significant revenue stream (INR0.29 billion). International theatrical rights and other revenue streams (music rights, domestic home video rights and Internet and mobile rights) contribute only INR55 million and INR43 million respectively to the total market size (Source: FICCI –EY Report - 2009– From Script to Screen)

Market size of Malayalam film industry by revenue streams (%)

Note: Others include music rights, domestic home video rights, and mobile and internet rights (Source - Ernst & Young primary research and analysis)

International theatrical market The Malayali population residing in the Middle East is the principal target market for films. Although this population has grown over the years, the value of international theatrical rights has practically remained static in the range of INR1.0–2.5 million. International theatrical rights contribute only around 4% of the total revenues earned by films (refer Exhibit 25 above). The principal reason for this is the nature of the Middle East market; there is one single buyer who controls all the theatres in the region. As a result, producers are not able to realize the true value of international theatrical rights, even for films starring the leading actors. The rights are sold on an outright basis for perpetuity, along with the international home video rights. (Source - FICCI –EY Report - 2009– From Script to Screen)

70 About Kannada Film Industry

Market size

The market size of the Kannada film industry segment is estimated to be around INR500 million, in terms of total revenues generated by films in FY09. However, the total cost of making films is much higher and hence the industry is making losses at present. The Kannada film industry depends mainly on domestic theatrical revenues, like its Tamil, Telugu and Malayalam counterparts. Domestic theatrical revenues contribute half of the total revenues earned by films (INR250 million). The other major revenue stream is C&S television rights (INR125 million), while other revenue streams such as home video rights, music rights and international theatrical form the balance. International rights are a miniscule portion as compared to the other two. (Source - FICCI –EY Report - 2009– From Script to Screen)

Kannada films market size by revenue streams (%)

Note: Others include music rights, domestic home video rights, and mobile and internet rights (Source - Ernst & Young primary research and analysis)

Unexploited national and international market

The geographical reach of Kannada movies is limited to the state of Karnataka, with a few producers exploring certain selected parts of the West and Northern India, while hardly 1-2 movies actually get distributed in the international market. Kannada-speaking population is present outside of Karnataka as well as countries such as Australia, the US and pockets of Middle East. However, these markets are not exploited, like in the case of Tamil and Telugu movies. (Source - FICCI –EY Report - 2009– From Script to Screen)

The Way Forward

The South Indian film industry is an integral segment of the overall Indian film industry. It accounts for the largestshare of films produced in the country and also contributes a significant portion of the revenues of the Indian film industry. The industry has a number of strengths to its credit. It is immensely talented, both in terms of acting skills as well as technical skills. The industry can boast of possessing some of the finest actors, directors and technicians in the country, whose skills are sought by the Hindi film industry as well. The industry has a vibrant theatrical market comprising a large theatre-going population. FICCI-EY analyzes the challenges and possible solutions that may help the industry achieve its true potential.

Tamil Population outside India is as listed below

Country Population Country Population Sri Lanka 3,600,000 United States 100,000 Malaysia 2,000,000 France 60,000 South Africa 500,000 Germany 60,000 Canada 200,000 Australia 40,000 71 Singapore 410,000 Switzerland: 50,000 United Kingdom 300,000 Norway 12,000 Italy 100,000 Sweden 10,000 Denmark 7,000 (Source- Wikipedia)

Under-exploitation of the international theatrical market

The international theatrical market for South Indian films is under-tapped, especially for Telugu and Malayalam films. The industry can take a few initiatives to exploit this market better:

More organized international distribution network The international distribution network for South Indian films is not well-organized and robust. There are very few players in the market as well. Some of the large integrated players can consider expanding into international distribution and setting up a network in overseas markets.

Expansion of target viewership: South Indian films can be made palatable for non-Indian viewers by using cosmopolitan themes and English subtitles for films. Japanese and Korean films are good examples here. The films can be marketed on international satellite channels that target the Asian community. Another initiative could be to participate extensively in international film festivals to increase awareness about South Indian films. (Source: FICCI –EY Report - 2009– From Script to Screen)

Internationalization

No longer are the Indian media and entertainment players confining themselves to domestic shores for their target consumers; they are increasingly reaching out to global audiences. Indian media companies, especially in the television and film segments continue to target the 25 million NRI diaspora1 settled in various parts of the world. (Source: - FICCI- KPMG Report 2009

( Source: -FICCI- KPMG Report 2009 )

However, now that the industry has few established players who have the necessary capital and are eager to increase their scale of operations, media companies have begun to produce content not just for the NRIs but also for the mainstream global audience in other countries.

At the same time, global demand for media services from India is also growing. Animation has been at the forefront, with India emerging as a major outsourcing destination due to its cost advantage. Film post production has also shown potential in this regard.

Finally, year 2008 witnessed one of the biggest landmarks in Indian media and entertainment industry when two of the biggest Indian media players acquired media properties abroad. The move was significant since the acquisitions were not merely aimed at providing synergies to Indian operations or targeting the Indian

72 population but establishing a distinct brand identity abroad. These acquisitions reiterated the increasing global ambitions of Indian Media Inc. (Source: -FICCI- KPMG Report 2009 )

Targeting NRI Diaspora

TV: Broadcasting across Foreign Shores

With more than 25 million NRIs spread across the globe, the international market is an important source for Indian broadcasters to augment their domestic revenues. Today, leading Indian broadcasters typically have a presence in foreign markets through distribution tie ups. For instance, Indian broadcaster Zee has channel bouquets in Europe, North America, Africa, Middle East and South East Asia. Apart from Zee, some of the other Indian broadcasters beaming to different parts of the world are NDTV, UTV Global Broadcasting (UGBL), TV18, Aaj Tak and regional language players like Sun, Eenadu and Asianet. (Star and Sony too have global distribution networks but they are in any case part of multinational media companies). (Source: -FICCI- KPMG Report 2009 )

Tamil Television Channels outside India

Sr.No. Country Tamil TV Channels 1. Singapore Vasantham, Sun Network, Kalaignar TV Network, Makkal TV, Tamilan TV, Raj TV Network, Angel TV, Imayam TV, SS Music, Win TV Tamil, Mega TV, Vasanth TV, Moon TV, Jaya TV Network, DD Podhigai, Polimer TV 2. Malaysia RTM 2, Astro Vaanavil, Astro Vellithirai, Sun Network, Kalaignar TV Network, Makkal TV, Tamilan TV, Raj TV Network, Angel TV, Imayam TV, SS Music, Win TV Tamil, Mega TV, Vasanth TV, Moon TV, Jaya TV Network, DD Podhigai, Polimer TV 3. Sri Lanka Nethra TV, Shakthi TV, Aarti TV, Vettri TV, Vasantham TV, ITN, Sun Network, Star Vijay, Aaseervatham TV, Angel TV, Raj TV Network, Tamilan TV, Win TV Tamil, Makkal TV, Mega TV, Vasanth TV, Kalaignar TV Network, Moon TV, Imayam TV, Polimer TV 4. Canada TVI Tamil Vision, Omni.2, Tamil One, ATN Tamil, Sun TV 5. Middle Sangamam TV, Global Tamil Vision, Deepam TV, Cee(I)TV Tamil, Kalaignar- East Ayngaran TV, Sun Network, Rainbow TV, Angel TV, Holy God, NLM TV, Jaya TV, Raj TV Network, Tamilan TV, Win TV Tamil, Makkal TV, Mega TV, Vasanth TV, Kalaignar TV Network, Moon TV, DAN Tamil Ozhi 6. UK & Global Tamil Vision, Deepam TV, Cee(I)TV Tamil, Kalaignar-Ayngaran TV, Sun Europe TV, KTV, Adithya TV,Sun Music, Chutti TV, Rainbow TV, Angel TV, Living God TV, Holy God, NLM TV, DAN Tamil Ozhi 7. USA MBN, Sun TV, KTV, Star Vijay, TVI Tamil Vision 8. Australia Global Tamil Vision, Sun TV, Makkal TV, Tamilan TV, Raj TV Network, Angel TV, & New Win TV Tamil, Mega TV, Vasanth TV, Moon TV, Imayam TV Zealand 9. Africa Sun TV, KTV (Source : - www.mediaworldasia.dk )

73 BUSINESS OVERVIEW

Background:

Our Company was originally engaged in the business of retail financing and was registered with Reserve Bank of India as Non Banking Finance Company.

Consequently, the Company had altered its Object Clause by deleting the entire objects relating to NBFC business and inserted new objects relating to purchase, own, acquire or take on lease TV Channels, radio and TV Serials in or outside India, produce TV Serials and to exhibit movies or serials or film on Satellite, Internet, Cable Net or any other means of communication. We have forayed in the television broadcasting business by acquiring 100% shares of Tamil Box Office (India) Private Limited (TBO-India) on December 30, 2009. TBO India is engaged in production of movie based entertainment programmes and as on September 30, 2010 has produced programme content of 1914 hours comprising of song shows, comedy shows, short movie shows, review shows, interactive shows, talent shows and competition shows. . TBO Singapore is subsidiary of TBO India and engaged in the broadcasting of its 24 hours channel TBO. Channel TBO has been in operation since 2006. The Channel has focused on providing content comprising of Tamil Movies, movie clippings, songs, trailers and movie based entertainment programmes. Our Company has also acquired 100% shares of Pix Aalaya Studios Private Limited, a Company intending to engage into Webstreaming of movie content on portal. Pix Aalaya Studios Private Limited has developed a Webstreaming technology (Pixstream) having E-Commerce Platform, which enables it to webcast digital content on internet. The new technology has security features to prevent piracy or duplication/copying and to collect the webcasting charges from the user through a Secure Payment Gateway System.

Experience of our promoters and Promoter group in South Indian Media and Entertainment Industry

(i) Experience in Production of Television Serials:

Mr. A. Venkatramani has produced a Tamil Movie “Indru” about 6 years back. In his capacity as Director of G V Films, he was actively involved in various aspects of film making such as story finalization, theme presentation, casting, suitable key locations for shooting etc in films namely “Ullam Ketkume”, “Urchaagam”, “Thirudi”, “Kai Vandha Kalai”, “Dhanam”, “TN07 AL 4777” and “Manjal Veyyil”. Few projects in the pipeline which are being executed through AVR Talkies Pvt. Ltd. are “Kulasekaranum Koolipadaiyum”, “Naan”. and “Patta Patti”. In “Patta Patti”, Indian Ex - Test Cricketer Sadagopan Ramesh is the lead actor.

(iii) Experience in Distribution of Tamil Movies in India and Overseas:

(iv) Experience in Conducting Cultural Events and Programmes:

Our promoter was also involved in conducting cultural programme like South Indian Cinematographer’s Association awards called SICA awards etc. Since 1994 our promoters are associated and gained expertise in southern entertainment and media industry in terms of people, talent, contacts, network, technical knowledge and distribution network.

Experience of Mr. Jude Jeyaprakash in Entertainment and Media Industry:

The details of Key Projects handled by Mr. Jude Jeyaprakash:

Andrum Indrum Endrum - credited with organizing the first show of music maestro Ilayaraja on the small screen as a Programme Manager of Jaya TV. It has been an achievement making a giant show with 25 75 cameras, 4 Akila cranes and many more techno works. The stars of the tamil film industry like Kamalahasan, Rajinikanth, Vijay, Surya and many others participated in the mega event. This show was aired in Jaya TV during October 2005.

Kollywood Vs Tollywood - Star Cricket - Live

Kalakka Povathu Yaaru Show – A Kamal Haasan Event

This programme titled Kalaka Povathu Yaaru was aired as Diwali Special during 2004.

Based on the audited accounts of our Company for the last 5 years, the performance of the Company is not satisfactory in view of the cancellation of NBFC license by RBI. However, the promoters of our company have been performing well. The promoters of our company have adequate experience in the entertainment and media industry. Based on the experience of the promoters, the Company has formulated the business strategies to implement the proposed business plan in the entertainment industry.

76 Our Business Model and Business Divisions:

Ram Kaashyap Investment Limited (RKIL)

Competitive Strengths

Advertisements

Advertisement revenues are expected to contribute substantially to the revenues of the webstreaming operations. Revenues would come from the ads displayed on the site, ads which will be placed while the

89 movie is being played, ads which will be placed interrupting the movie after a predetermined time gap. Revenues are also expected to come from search engines like Google, Yahoo etc.

Marketing for Webcasting Business:

PSPL would primarily target and give thrust to the large population of NRIs and PIOs spread across various countries. Indian viewers will also be covered in the marketing plans of our Company. PSPL’s strategy is to attract large number of NRIs and PIOs settled in a number of countries by undertaking marketing campaign. Competition

The Company proposes to acquire new movie content to attract the viewers to our channel. Further, the outlays for the programmes produced by us will also be increased to make them much more attractive. We propose to hold star shows in the respective territories to popularise and increase the number of subscribers to the channel. The channel would also produce programmes with the local talent and the programmes will also be shot in the respective territories.

Technology

We have production studio at the office of our Subsidiary (TBO-India) in Chennai. We have an arrangement with RRSat Global Communication Network Ltd. for uplinking of our Channel to Satellite and transferring all the content from Chennai to Israel. We have linear technology for the acquisition, editing and layout of our production content which facilitates us in audio-video mixing, editing, expeditious production, template- driven generation of graphics by the system and real-time modification and updation. We have provisioned for redundancies while planning our information technology systems. We maintain complete back up for all our critical equipment and servers.

Human Resources:

As of October 1, 2010, the number of people employed by our Company are 8. There has been no employee unrest in our Company that has had material adverse effect on the operations and business of our Company. We believe we enjoy good relations with our employees. There has not been any material claim of unfair practices, with respect to the employees at any of our facilities till date. We have 22 employees in Tamil Box Office (India) Pvt. Ltd., 1 employee in Tamil Box Office (Singapore) Pte. Ltd. and 4 employees in Pix Aalaya Studios Pvt. Ltd.

Insurance:

The fixed and current assets of our company are not covered by any insurance policies.

Intellectual Property:

For conducting our business, we own intellectual property rights over our programmes in the nature of copyright. However, we have yet not made any application for registration of such programmes. We have satellite rights of over 475 movies on Non-exclusive basis for a period of 3-5 years.

Properties:

We operate from our registered office at No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamilnadu, India, which is a leased premises. We own residential flat in Third floor bearing Flat no. 7, Plot no. 117, Door No. 34 (New No. 10), Fourth Main Road, Raja Annamalaipuram, Chennai - 600028.

90 (C) KEY INDUSTRY REGULATIONS

REGULATIONS AND POLICIES

The following description is a summary of the relevant regulations and policies as prescribed by the Government of India. The information detailed in this chapter has been obtained from publications available in the public domain. The regulations set out below are not exhaustive or complete, and are only intended to provide general information to the investors and are neither designed nor intended to be a substitute for professional legal advice.

Statutes affecting the business of our Company are detailed below

1. Copyrights Act, 1957

Copyright is the right of literary property as recognized and sanctioned by positive law. It is an intangible, in corporal right granted by statue to author or originator of certain literary or artistic productions, whereby he is invested for a specified period, with the sole and exclusive privilege or multiplying copies of the same and publishing and selling them. Copyright is an exclusive right to reproduce or authorize another to reproduce artistic, dramatic, literary or musical works by Copyright Act. It also extends to sound broadcasting. Cinematograph films and television broadcasts including cable television.

2. Trade Marks Act, 1999

Under the Trade Marks Act, 1999 any company/person using any mark which may be graphically represented and is capable of distinguishing the goods or services of one from another may register the same as a trade mark with the Registrar of Trade Marks as per the provisions of the Trade Marks Act, 1999. Any attempt by any person or company to use the same or a deceptively similar mark amounts to an infringement of the Trade Mark and is a criminal offense. However, an unregistered mark can not be infringed. Nevertheless, an action for ―passing off may be brought so as to prevent the person from continuing use of the mark and pass off his goods/services as that of the owner of the unregistered mark. Both the registered and the unregistered marks may be assigned.

Other Applicable General laws

In addition to the above, the Company is required comply with other applicable General, Financial, Forex and Labour Laws and Regulations, which include the following and the details of which are provided in the section entitled ―Government Approvals on page no. 175 of this Letter of Offer.

(a) FEMA Regulations

Foreign investment in India is governed primarily by the provisions of the FEMA which relates to regulation primarily by the RBI and the rules, regulations and notifications there under, and the policy prescribed by the Department of Industrial Policy and Promotion, Government of India, the implementation of which is regulated by the FIPB. 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 as amended (“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 are required from the RBI for FDI under the “automatic route” within the specified sectoral caps. In respect of all industries not specified 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.

(b) Labour and Industrial Laws

The company is required to comply with labour and industrial laws, including Industrial Disputes Act, 1947 as amended, the Employees’ Provident Funds and Miscellaneous Provisions, Act 1952 as amended, the Employee State Insurance Act, 1948, as amended, the Minimum Wages Act, 1948 as

91 amended, the Payment of Bonus Act, 1965 as amended, Workmen Compensation Act, 1923 as amended, the Payment of Gratuity Act, 1972 as amended, the Payment of Wages Act, 1936 as amended, wherever applicable.

In accordance with the Income Tax Act, 1961, as amended, any income earned by way of profits by a company incorporated in India is subject to tax levied on it in accordance with the tax rate as declared as part of the Annual Finance Acts.

92 (D) HISTORY OF OUR COMPANY AND OTHER CORPORATE MATTERS

History

Our Company was incorporated on 3 rd December, 1993 as Ram Kaashyap Investment Limited under the Companies Act, 1956 as Public Limited Company with the Registrar of Companies, Tamilnadu at Block No.6, B Wing 2 nd Floor, Shastri Bhawan 26, Haddows Road, Chennai - 600034 and received the Certificate for commencement of business on 27 th December, 1993. The CIN (Corporate Identity Number of our Company is (L65991TN1993PLC026312).

Our Company was classified as Loan Company by RBI vide their letter No. DFC (BG/ NO. BG/TNLC/R198) dated 21-09-1994 and registered as a Loan Company - Non Banking Finance Company in the year 1994 and had been carrying on the business of Retail financing.

Our company came out with a public issue of 25,00,000 Equity Shares in the year 1994 and the capital after the issue then was Rs. 400 lakhs divided into 40,00,000 Equity Shares of Rs.10/- each. The equity shares of our company are listed on The Bombay Stock Exchange Limited and on the regional Stock Exchange i.e. The Madras Stock Exchange Ltd. The company had also availed various credit facilities from various banks as well as public deposits to carry on the NBFC business.

The company was doing profitable NBFC business from the year 1994 till the year 1998. The summary of performance during these years are as under:

Past Financials of RKIL (Rs. in Lakhs) Particulars 1997-98 1996-97 1995-96 1994-95 1993-94 Total Income 783.69 807.39 478.76 147.64 2.87 Profit After Tax 24.13 145.68 120.52 57.84 0.63 (Source: Audited Annual Reports of the company)

Cancellation of NBFC Registration by RBI

In January 1997, Reserve Bank of India notified revised guidelines for registration of companies as NBFC in India. These guidelines were made applicable to all the then existing registered NBFC companies. In other words, they were also required to make an application for re-registration and RBI was to examine the applications for granting such registrations. These applications were to be made by July 1997. Thereafter, RBI examined the applications and granted registration to some companies and de-registered remaining companies. In view of cancellation of NBFC registration of RKIL by RBI vide its order No. DNBS (Ch) / 2642/ Che 00053/99-2000 dated November 1, 1999, the company had to stop its retail financing business. During the years 1999 to 2006, the Issuer Company was engaged in recovering its old outstanding receivables. During the years 2007 to 2009, the Issuer Company has ventured into Consultancy Services, Software Development and Trading of Securities. In December 2009, the Company has ventured into entertainment industry by making an acquisition of 100% equity stake of TBO-India Pvt. Ltd. and Pix Aalaya Studios Pvt. Ltd. The Company now proposes to venture into telecasting of TBO Channel owned by its chain Subsidiary i.e. TBO Singapore Pte. Ltd. to other countries having significant Tamil Population and distribution of Overseas rights of Southern Indian Movies in Overseas markets.

Effect of RBI Order for cancellation of Registration

(a) Undertaking new line of business activities

Consequently, the Company had altered its Object Clause by deleting the entire objects carrying NBFC business and inserted new objects on 29 th April, 2007 with a view to undertake the business of acquiring TV channels, produce tele serials and to exhibit movies, serials or any film on satellite, internet, cable or any means of communication.

93 (b) Arrangement of repayment of Public Deposits

Consequent to the discontinuance of NBFC activity, the company was unable to make the timely repayment to the banks as well as the depositors. However, company had done the business in the nature of software development and other IT and allied services in minuscule level.

Ram Kaashyap Investment Limited (RKIL), Ram Kaashyap Chits Private Limited (RKCPL) and Ram Kaashyap Chits Andhra Limited (RKCAL) carried on business with a common brand name “Kaashyap” . They were unable to carry on their business effectively.

KTL, doing business under the same brand name, took over the liabilities of the three companies, namely, RKIL, RKCAL and RKCPL with a bonafide intention to save its brand name “Kaashyap, though it did not have any commitment or responsibility towards the liabilities of the said three companies. Pursuant to such takeover, KTL acknowledged the liabilities of the subscribers and depositors of the said companies and agreed to pay on a certain date. Due to unforeseen circumstances, KTL was not able to honour the commitment stated above on the due dates. Therefore, KTL formulated a scheme of repayment to all the depositors and got appropriate sanction from Hon’ble High Court, Madras, in C.P.No. 204 of 2003, vide order dated 03.11.2004.

The arrangement between KTL and RKIL for the payments of deposits and the basis of such arrangement.

RKIL had defaulted in repayment of fixed deposits of about Rs.2.35 crores during 2001 – 02. Kaashyap Technologies Ltd., doing the business under the same brand name, took over the liabilities of the three companies, namely, RKIL, RKCAL and RKCPL with a bonafide intention to save its brand name “Kaashyap”. Pursuant to such takeover, KTL acknowledged the liabilities of the subscribers and depositors of the said companies and agreed to pay on a certain date. Due to unforeseen circumstances, KTL was not able to honour the commitment stated above on the due dates. Therefore, KTL formulated a scheme of arrangement with all the depositors and got appropriate sanction from Hon’ble High Court, Madras, in C.P.No. 204 of 2003, vide order dated 03.11.2004 to repay the fixed deposits over a period of 5 years.

All repayment of deposits pertaining to the Issuer Company are as per the Schedule of Arrangement approved by the order of the High Court. As per the Certificate of R. Ravindran, Chartered Accountants, dated 22 nd June 2010, KTL is yet to pay Rs. 25,33,600 to depositors.

KTL has put necessary efforts to repay this balance amount. KTL is of the opinion that the chief reason for these unclaimed deposits could be change of addresses of depositors. However, the Issuer Company and KTL continue to do all it can to reach these depositors for repayment of the deposits.

As per the scheme of arrangement finalized, the collection of the receivables would be done in a phased manner. The leading NBFC in south M/s. Shriram Group came forward with a proposal to collect the receivables and deposit the same in Escrow account. As Shriram Group was having wide network in Southern India, it has been taking care of the responsibility of collection of receivables and amounts thus collected were utilized for the repayment of the deposits from time to time.

KTL has since then been making payments in accordance with the approved scheme and the scheme period runs till May 2010. Pursuant to the scheme, KTL has till date-cleared claims whose aggregate maturity value is more than Rs.6.5 crores.

The scheme came to an end on 31 st May, 2010.

94 (c) Settlement with Banks

Further the company had also persuaded all the banks from whom the loans were availed and entered into one time settlement (OTS) scheme with 3 banks viz. Karnataka bank, Bank of Baroda, State Bank of Hyderabad out of 5 banks. The company is in the process of finalizing the OTS with State bank of Mysore where outstanding amount is Rs. 3.5 Crores as on September 30, 2010. The company has been repaying the said loans to the banks as per the settlement scheme entered into.

In the process of recovery of loans, Bank of Rajasthan has seized some of the assets of the Company which are charged to it and has recovered the loan amount for which intimation for realization of asset and set off of outstanding liability towards principal and interest is yet to be received by the Company.

Company is willing to partly settle the dues of banks out of the proceeds of the Rights Issue as all the OTS are decided considering the regular cash flows in the Company.

Entry in Media and Entertainment business and acquisition of companies.

The entertainment and media business are generally considered profitable and gives reasonable return on the investment. However, it demands the experienced management and execution team.

The promoter of our Company, Mr. A Venkatramani has more than 15 years of exposure in South Indian Entertainment and Media industry. He along with his wife Mrs. Usha Venkatramani have been involved in production of television serials for Tamil TV Channels, production and assistance of Tamil movies and distribution of Tamil movies in India and abroad. For further details of experience of our promoters, refer Section titled “Business Overview” on page no. 74 of this Letter of Offer.

Our Company was looking forward for acquisition of a profitable business venture in the Entertainment and Media activities. In October, 2009 our management decided to acquire Tamil Box Office India Pvt. Ltd., (TBO - India) and Pix Aalaya Studios Private Limited.

Tamil Box Office India Pvt. Ltd. (TBO - India):

Tamil Box Office India Pvt. Ltd., (TBO - India) (formerly known as Pixel Box Office (India) Private Limited) was incorporated in the year 2007. The Company is engaged in production of various film related entertainment programmes for Tamil Channels. It has a wholly owned subsidiary company in Singapore, viz. TBO Singapore Pte. Ltd. (TBO - Singapore). Presently the company is catering to the programme needs of its 100% subsidiary in Singapore. TBO- India was engaged in production of programmes and taking care of part of the transmission work from Chennai for Tamil Movie channel “TBO” which is run by the subsidiary.

P. Neelkamal, Chartered Accountant, Chennai vide its certificate dated 19 th October, 2009 valued the business of TBO –India at Rs. 101.42 Lacs without considering the value of investments in its subsidiary company. The value of TBO Singapore Pte. Ltd. is Rs. 93.78 Lacs therefore the value of TBO – India after considering the value of investments in TBO- Singapore is Rs. 195 Lacs for acquisition of 100% shareholding by RKIL. The valuation was based on audited accounts as on 30 th September, 2009.

RKIL entered into Share Purchase Agreement with the shareholders of TBO-India Pvt. Ltd. to allot 13,00,000 equity shares on preferential basis at the price of Rs. 15/- per share (including premium of Rs. 5 per share) for a consideration of Rs. 195 Lacs

95 The major highlights of the valuation report of P Neelkamal, Chartered Accountant:

Valuation Summary – Tamil Box Office (India) Pvt. Ltd.

Issuer of Valuation P. Neelkamal, Chartered Accountant, Chennai Report Subject of The entire shareholdings of Tamil Box Office (India) Pvt. Ltd. Appraisal Business Activity Engaged in production of various film related entertainment programmes for Tamil TV Channel. It has a wholly owned subsidiary company in Singapore viz. Tamil Box Office Singapore Pte. Limited Purpose of Valuation is required in connection with the proposed acquisition of 100% shares Appraisal of Tamil Box Office (India) Pvt. Ltd. by Ram Kaashyap Investments Ltd. Premise of Value The Company is valued on a going concern basis, as opposed to a liquidation basis of value. Basis of Value Buy out of 100% stake in Tamil Box Office (India) Pvt. Ltd. Date of Value September 30, 2009 Value Conclusion The Fair Value of 5, 00,000 equity shares of Rs. 10/- each is Rs. 1,95,00,000 and the fair value per share is Rs. 39/- Value of Tamil Box without considering investment in its subsidiary company…(1) Value per Share Weighted Valuation Method (Rs.) Weightage Value Net Asset Value Method 19.91 1 19.91 Profit Earning Capacity Value Method 0.4 2 0.8 Discounted Cash Flow Method 40.35 2 80.7 Weighted Average Value per Share (Rs.) 20.28 Number of Shares 500,000 Total Value of 4,00,000 equity shares (Rs.) 10,141,982

Value of Wholly owned subsidiary Company, Tamil Box Office Singapore Pte. Ltd….(2) Valuation Method Value (Rs.) Discounted Cash Flow Method 9,377,965

Total Value (1+2) (Rs.) 19,519,947 Say 19,500,000

Pix Aalaya Studios Private Limited:

Pix Aalaya Studios Private Limited was incorporated in the year 2004. The company had been engaged in the gaming and animation segments. The company also started developing a software engine for web streaming. There was huge potential in web streaming of Tamil movies with increasing speeds on the internet and reducing costs of communication. It is also involved in research and development work in the area of e- learning and e-leaning modules for schools.

P. Neelkamal, Chartered Accountant, Chennai vide its certificate dated 19 th October, 2009 valued the business of PSPL at Rs. 165 Lacs for acquisition of 100% shareholding by RKIL. The valuation was based on audited accounts as on 30 th September, 2009.RKIL entered into Share Purchase Agreement with the shareholders of Pix Alalya Studios Private Limited to allot 11,00,000 Equity Shares on preferential basis at the price of Rs. 15/- per share (including premium of Rs. 5 per share) for a consideration of Rs. 165 Lacs.

96 The major highlights of the valuation report of P Neelkamal, Chartered Accountant:

Valuation Summary – Pix Aalaya Studios Pvt. Ltd.

Issuer of Valuation P. Neelkamal, Chartered Accountant, Chennai Report Subject of The entire shareholdings of Pix Aalaya Studios Pvt. Ltd. Appraisal Business Activity Gaming and Animation, e-learning and Webstreaming of Tamil movies Purpose of Valuation is required in connection with the proposed acquisition of 100% shares Appraisal of Pix Aalaya Studios Pvt. Ltd. by Ram Kaashyap Investments Ltd. Premise of Value The Company is valued on a going concern basis, as opposed to a liquidation basis of value. Basis of Value Buy out of 100% stake in Pix Aalaya Studios Pvt. Ltd. Date of Value September 30, 2009 Value Conclusion The Fair Value of 4, 00,000 equity shares of Rs. 10/- each is Rs. 1,65,50,000 and the fair value per share is Rs. 41.25 Value per Valuation Method Share (Rs.) Weightage Weighted Value Net Asset Value Method 0.98 1 0.98 Profit Earning Capacity Value Method 11.68 2 23.36 Discounted Cash Flow Method 91.22 2 182.44 Weighted Average Value per Share (Rs.) 41.25 Number of Shares 400,000 Total Value of 4,00,000 equity shares (Rs.) 16,500,000

For further details, please refer ‘”Our Subsidiary Companies” beginning on page no. 100 of this Letter of Offer.

Considering the promoter’s exposure in media and entertainment business for more than 15 years and existing technical and execution personnel in the subsidiaries, Company is confident of perusing the proposed business which can fetch better return to the Company and enhance the worth of the shareholders.

Our company has not changed its name since inception.

Major Corporate Events

Important Events happened in the history of our Company Year Important Events 1993 Incorporation of our Company 1994 Classification by RBI as Loan Company 1994 Initial Public Offer of 25,00,000 Equity Shares made by our Company 1994 Listing of Equity Shares on BSE and MSE 2004 KTL took over the outstanding liabilities and hire purchase receivables of our Company 2008 BSE revoked the suspension of trading of equity shares of our Company by restoring the trading of equity shares of our Company in Category - ‘T’. 2009 • Acquired 100% equity stake of Pix Aalaya Studios Private Limited • Acquired 100% equity stake of Tamil Box Office India Private Limited

97 Changes in our registered office

Our Registered office is situated at No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamil Nadu. Since incorporation following changes have taken place in our registered office:

Date of passing From To of Resolution No. 53, Bishops’ Garden, (off) Greenways Flat No. 7, Green Corner Apartments, 16-01-1999 Road, R.A. Puram, Chennai – 600 023 III Floor, No. 10, Fourth main Road, R.A. Puram, Chennai – 600 028 Flat No. 7, Green Corner Apartments, III No. 66, Second Main Road, R.A. 03-09-2001 Floor, No. 10, Fourth main Road, R.A. Puram, Chennai – 600 028 Puram, Chennai – 600 028 No. 66, Second Main Road, R.A. Puram, No. 33/8, B. R. Complex, II Floor, 02-07-2003 Chennai – 600 028 C. P. Ramasamy Road, Alwarpet, Chennai – 600 018.

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. Presently, the objects of our Company are:

1. To manufacture and deal in computers, computer peripherals, spares, electronic equipments and process control machines, maintain and service computer, computer peripheral, micro processors and electronic equipments and process control machines, provide or make available knowledge in financial management development, technical, computer programming and systems designing either directly or otherwise and establish necessary institutions for the purpose of conducting, coaching and training peoples, develop computer software programme, application and to provide computer data processing, systems and data center services, design new programme packages, provide information system, information services based on the use of computers and furnish to the users systems help, know how programmes and other software relating to the use of such machines and allied peripherals.

2. To develop implement and maintain software, computer systems and related hardware, peripherals, communication equipments and other accessories for the use of telecommunications and networking technology, collaborate with Indian and foreign universities, research organizations, other foundations in the above referred areas, ensure rapid accesses to all including remote areas by means of telecommunications and information technologies for providing facilities for and conduct post graduate or research courses, providing staffing solution including placing professionals in India or abroad.

3. To carry on the business of an investment company including Forex Management and for that purpose to invest in, acquire, deal, underwrite, subscribe, or hold shares, bonds, stocks, securities, Commodities, derivatives, debenture stocks issued or guaranteed by any company constituted and act as stock broker, carrying on business of Registry and Share Transfer Agent, Portfolio Management Services in India or elsewhere any government, state dominions, sovereign, central or provincial commissioners, any trust, public body or authority, supreme, municipal, local or otherwise whether in India or elsewhere.

4. To purchase, own acquire or take on lease TV Channels, radio and TV Stations in or outside India, produce Tele serials and to exhibit movies or serials or any film on Satellite, Internet, cable net or any other means of communications and to establish and carry on in India and abroad the business to acquire, undertake, promote, run, mortgage, own, lease, convert, build, commercialize, handle, operate, renovate, construct, maintain, improve, exchange, furnish, recondition, hire, let on hire, develop, consolidate, subdivide, organize and the business of running of state of the art Entertainment Township which will contain the best of Theme parks, Multiplex and Leisure resorts 98 in one roof including 3D Virtual Zoo, 4D attraction – Underwater world Space Walker, Cricket Theme, Game Shows, Digital Disco Floors, 5, 4 and 3 Star Hotels and also the business of developers of Urban and rural immovable properties, builders, engineers, Surveyors, architects, consulting engineers, building experts and advisors, decorators, designers, planners, house owners and house sellers of flats, mansionnettes, dwelling houses, shops, offices, hotels, recreational complexes, stadium, industrial estates, lessees of lands, flats and other immovable properties wherever situated, or right and interest therein or connected therewith and to lay out roads and pleasure gardens and recreation and play grounds, fair and exhibition grounds, to plant, drain, otherwise improve the land or any part thereof.

5. To purchase, own, construct, take on lease or otherwise acquire lands, buildings, premises resorts or any other property to conduct the business of operating, managing, building or otherwise dealing in hotels, motels, lodges, hostels, resorts, club houses, health centers, entertainment township, refreshment rooms, bars, pubs, discos, eateries, food parlour, ice cream parlour, bakeries, flight kitchens and catering services or otherwise enter into any arrangement by way of turnkey projects involving information, knowledge and expertise and so much undertake for and on behalf client to set up any projects in or outside India related to hotel management, catering technology and other hospitality related areas.

Changes in the Memorandum of Association of our Company

The following changes have been made in the Memorandum of Association of our Company since inception:

Nature of No. Particulars Date of Meeting Meeting 1 Change in the Registered office of our Company from No. 16-01-1999 Board Meeting 53, Bishops’ Garden, (off) Greenways Road, R.A. Puram, Chennai – 600 023 to Flat No. 7, Green Corner Apartments, III Floor, No. 10, Fourth main Road, R.A. Puram, Chennai – 600 028 2 Change in the Registered office of our Company from Flat 03-09-2001 Board Meeting No. 7, Green Corner Apartments, III Floor, No. 10, Fourth main Road, R.A. Puram, Chennai – 600 028 to No. 66, Second Main Road, R.A. Puram, Chennai – 600 028 3 Change in the Registered office of our Company from No. 02-07-2003 Board Meeting 66, Second Main Road, R.A. Puram, Chennai – 600 028 to No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018. 4 Changes in the Main object Clause of the Memorandum of 29-04-2007 EGM Association of our Company. 5 Increase in Authorised Capital of our Company from 150 # EGM Lakhs to 500 Lakhs 6 Increase in Authorised Capital of our Company from 500 # EGM Lakhs to 1000 Lakhs (divided into 80,00,000 Equity Shares of Rs. 10/- each and 2,00,000 Preference Shares of Rs. 100/- each) 7 Re-classification of 2,00,000 un issued Redeemable 07-08-1996 AGM Preference shares of Rs. 100 each as 20,00,000 Equity Shares of Rs. 10 each 8 Increase in Authorised Capital of our Company from 1000 # EGM Lakhs to 2500 Lakhs (divided into 1,50,00,000 Equity Shares of Rs. 10/- each and 10,00,000 Redeemable Cumulative Preference Shares of Rs. 100/- each) 9 Re classification of Authorised Capital from 1,50,00,000 24-12-2007 EGM Equity Shares of Rs. 10/- each and 10,00,000 Redeemable Cumulative Preference shares of Rs. 100/- each to 2,00,00,000 Equity Shares of Rs. 10/- each and 5,00,000 Redeemable Cumulative Preference Shares of Rs. 100/- 99 each. 10 Increase in authorised capital of our Company from Rs. 8-12-2009 EGM 2500 lakhs to Rs. 5000 Lakhs and further re classification of 5,00,000 un issued Redeemable Cumulative Preference shares of Rs. 100/- each to 50,00,000 Equity Shares of Rs. 10/- each

# Some of the records pertaining to the increase in authorised capital from Rs. 150 Lakhs (1993) to Rs. 1500 Lakhs are not traceable, and hence the individual date wise details are not furnished.

Listing

The existing equity shares of our company are listed on the Bombay Stock Exchange Limited (BSE) and Madras Stock Exchange Limited (MSE). Our shares were suspended for trading from BSE with effect from October 1, 2002. Suspension in trading of equity shares of the company was revoked w.e.f. June 9, 2008 vide Notice No. 20080603-22 dated June 3, 2008. Our listing details on BSE are:

Scrip Code: 511652

Abbreviated name on BOLT System: Ram Kaashyap Scrip ID on BOLT System: RAMKASH ISIN No. INE736I01014

We have complied with the requirements under the Listing Agreement of BSE and MSE. We have paid the requisite annual listing fee to BSE and MSE for the period 2009-10. No disciplinary action has been initiated by the regional Stock Exchange against us or our Directors.

Our Subsidiary Companies

Our Company has two subsidiary Companies and one step down subsidiary company. 1. Pix Aalaya Studios Private Limited 2. Tamil Box Office (India) Private Limited 3. Tamil Box Office Singapore Pte. Limited- Step Down Subsidiary Company

1. Pix Aalaya Studios Private Limited (PSPL)

The Company was originally incorporated on 18 th February, 2004 with Registrar of Companies, Tamil Nadu at Chennai. The Registered office of the Company is situated at No. 9/1, Thiruvengadam Street, Mandaveli, Chennai – 600 028.

The company plunged into developing a software engine for web streaming. This area was taken up as the company saw huge potential in web streaming of Tamil Movies with increasing speeds on the internet and reducing costs of communication. The company intends to start marketing its e-Learning kits from the next academic year 2010-11. The company is also preparing itself to get back into its original core area of animation and gaming from the next financial year.

Capital Structure

Share Capital as on September 30, 2010 (Rs. in Lakhs)

Share Capital No. of Equity Shares Amount Authorized Equity Capital 4,00,000 Equity Shares of Rs. 10 each/- 40.00 Issued, Subscribed, and Paid Up 4,00,000 Equity Shares of Rs. 10 each/- 40.00

Shareholding Pattern as on September 30 , 2010

PSPL is a wholly owned subsidiary of our company.

100 Financial Performance – (Rs. In Lakhs)

Period ended Year ended Year ended Year ended Particulars September 30, March 31, March 31, March 31, 2010 2010 2009 2008 Sales 15.20 30.67 - 74.93 Other Income 1.23 0.23 50.65 3.20 PAT/(Loss) 1.27 3.99 20.16 4.87 Share Capital 40.00 40.00 40.00 40.00 Reserves & Surplus 11.98 10.71 6.72 (13.44) NAV 12.93 12.60 11.59 6.53 EPS 0.32 1.00 5.04 1.22

2. Tamil Box Office (India) Private Limited

Tamil Box Office (India) Private Limited (formerly Pixel Box Office (India) Private Limited) was originally incorporated on 5 th October, 2007 with Registrar of companies at Chennai, Tamil Nadu.

The registered office of the Company is situated at No. 41 D, North Phase, Thiru-vi-ka Industrial Estate, Ekkattuthangal, Chennai – 600 097.

The company is mainly engaged in the production of various film related entertainment programmes for Tamil Channels.

The Company had recently formed its subsidiary TBO Singapore in the month of September 2009. At present the Company is catering to the programme needs of its 100% subsidiary in Singapore, namely, Tamil Box Office Singapore Pte. Limited (TBO Singapore).

Since its inception, the company was engaged in production of programmes and taking care of part of the transmission work from Chennai for the Tamil Movie Channel ‘TBO’ which was being run by Pixel Box Office Pte. Limited, Singapore (PBO Singapore) from Singapore.

Capital Structure Share Capital as on September 30, 2010 (Rs. in Lakhs)

Share Capital No. of Equity Shares Amount Authorized Equity Capital 5,00,000 Equity Shares of Rs. 10/- each 50.00 Issued, Subscribed, and Paid Up 5,00,000 Equity Shares of Rs. 10/- each 50.00

Shareholding Pattern as on September 30, 2010

Tamil Box Office (India) Private Limited is wholly owned subsidiary of our company.

Financial Performance – (Rs. In Lakhs)

Particulars Period ended Year ended Year ended Year ended September 30, 2010 March 31, 2010 March 31, March 31, (Consolidated) (Consolidated) 2009 2008 Sales 90.93 98.41 12.80 7.23 Other Income 8.20 6.57 - - PAT/(Loss) 6.22 13.60 0.15 0.06 Share Capital 50.00 50.00 22.50 1.00 Reserves & Surplus 69.03 62.81 21.72 0.06 NAV 23.79 22.54 19.58 8.34 EPS 1.24 2.72 0.07 0.63

101

3. Tamil Box Office Singapore Pte. Limited - (Step Down Subsidiary Company)

The Company was incorporated on 15 th September, 2009 as a closely held private limited company with Registration No. (200917265D) with ACRA – (Accounting and Corporate Regulatory Authority) in Singapore.

The registered office of the Company is situated at 408, BEDOK NORTH AVENUE 2 # 07-44, Singapore – 460 408.

The Company is engaged in TV broadcasting (Cable, DTH, & Terrestrial TV).

Capital Structure

Share Capital as on September 30, 2010

Share Capital No. of Shares Share Type Amount Issued, Subscribed, and Paid Up Capital 1 Singapore 1 (Ordinary) Ordinary Dollars

Shareholding Pattern as on September 30, 2010

Nationality/Place of Shareholder ID Incorporation/Origin No. of Shares

Tamil Box Office (India) Pvt. Ltd. T09UF2287B India 1 (Ordinary)

Board of Directors

Position Date of Name ID Nationality Held Appointment Mr. Subramanian Govindaraj A9385789 Indian Director 01/10/2009 Mr. Rathinam Dakshinamurthy F3928496 Indian Director 15/09/2009 Ms. Anita Sharmeeli Sudhagar S7485658F Singapore P. R. Director 15/09/2009

Shareholders’ Agreement

Our Company has not entered into any kind of Shareholders’ Agreement till date.

Other Agreements entered into by the Company

Extracts of the Agreements entered into by the Company:

1. Share Purchase Agreement entered on 22 nd October, 2009 by and between RKIL and Mr. S. Sukumar, Mr. R. Baskaran, and Mr. D. Prakash, (the share holders of Pix Aalaya Studios Pvt. Ltd.) and Pix Aalaya Studios Private Limited for acquisition of the entire business Our Company had agreed to purchase from the shareholders their entire equity holding of 4,00,000 Equity Shares in Pix Aalaya Studios Pvt. Ltd. at a consideration of Rs. 165 Lakhs. The consideration would be paid by RKIL to the share holders by way of issuing the shares under preferential allotment for a value of Rs. 165 lakhs by issuing 11,00,000 Equity shares of Rs. 10/- each at a premium of Rs. 5/- (at the issue price of Rs. 15/-) of RKIL.

The above consideration was settled by issuing 11,00,000 Equity shares of Rs. 10/- each at a premium of Rs. 5/- (at the issue price of Rs. 15/-) of RKIL on 30-12-2009.

102 Important clauses of the Share Purchase Agreement between RKIL and Pix Aalaya Studios Pvt. Ltd.

Parties Ram Kaashyap Investment Limited (Purchaser) & Pix Aalaya Studios Private Limited (Sellers) Mr. D Prakash, Mr. S. Sukumar and Mr. R. Baskaran (Shareholders of Pix Aalaya Studios Pvt. Ltd.) Date of Agreement 22/10/2009 Sale & Purchase Of 4,00,000 Equity shares of Rs 10 Each Shares Consideration In Rs Rs. 1,65,00,000 Discharge of • By issue of RKIL shares under the preferential allotment for a value of Rs. Consideration 1,65,00,000 • Shares to be allotted in accordance with ICDR regulations • Stamp duty will be born by the purchaser Pre Closing • Majority Directors Appointed by the Purchaser Arrangement • Day to Day management handled by the Purchaser • Sellers aggress to commit not act in any manner which detrimentally affect the assets of the PIX AALAYA Closing of sale and Sale & Purchase will be completed before 31/12/2009 Purchase Payment of Issue of 11,00,000 shares of RKIL at Rs 15 in proportion to their shareholding Consideration Termination • At any time prior to the closing date by the mutual consent of the shareholders of PIX AALAYA • By the share holders of RKIL on or before 31/12/2009 • By the purchaser, if any, of the representations and warranties are not true • An event of Default Occurs, which is not cured by the PIX AALAYA as case may be

2. Share Purchase Agreement entered on 22 nd October, 2009 by and between RKIL and Mr. Jude Jeyaprakash, Mr. S. Govindaraj, and Ms. V. Vasumathy and Mrs. Uma Karthikeyan (the share holders of Tamil Box Office (India) Pvt. Ltd.) and Tamil Box Office (India) Pvt. Ltd. for acquisition of the entire business Our Company had agreed to purchase from the shareholders their entire equity holding of 5,00,000 Equity Shares in Tamil Box Office (India) Pvt. Ltd. at a consideration of Rs.1,95,00,000/-.The consideration would be paid by RKIL to the share holders by issuing 13,00,000 equity shares of Rs. 10/- each at a premium of Rs. 5/- (at the issue price of Rs. 15/-) of RKIL under preferential allotment

The above consideration was settled by issuing 13,00,000 Equity shares of Rs. 10/- each at a premium of Rs. 5/- (at the issue price of Rs. 15/-) of RKIL on 30-12-2009.

Important clauses of the Share Purchase Agreement between RKIL and Tamil Box Office India Private Limited

Parties Ram Kaashyap Investment Limited (Purchaser) & Tamil Box Office India Private Limited (Sellers ) Mr. Jude Jeyaprakash, Mr. S. Govindaraj and Ms. V. Vasumathy (Shareholders of Tamil Box Office India Private Limited) Date of Agreement 22/10/2009 Sale & Purchase Of Shares 5,00,000 Equity shares of Rs 10 Each Consideration In Rs Rs. 1,95,00,000 Discharge of Consideration • By issue of RKIL shares under the preferential allotment for a value of Rs. 1,95,00,000 • Shares to be allotted in accordance with ICDR regulations

103 • Stamp duty will be born by the purchaser Pre Closing Arrangement • Majority Directors Appointed by the Purchaser • Day to Day management handle by the Purchaser • Sellers aggress to commit not act in any manner which detrimentally affect the assets of the TBO Closing of sale and Purchase Sale & Purchase will be completed before 31/12/2009 Payment of Consideration Issue of 13,00,000 shares of RKIL at Rs 15 in proportion to their shareholding Termination • At any time prior to the closing date by the mutual consent of the shareholders of RKIL on or before 31/12/2009 • By the purchaser, if any, of the representations and warranties are not true • An event of Default Occurs, which is not cured by the TBO as case may be

Strategic Partners / Financial Partner

Our Company does not have any strategic / financial partner as on date of filing of this Letter of Offer.

104 (E) MANAGEMENT

Board of Directors

The day-to-day affairs of our Company are managed by the Whole-time Director, subject to the superintendence and control of the Board of Directors of our Company. We presently have 4 Directors on our Board. Details of the members of the Board of Directors are:

Name, Designation, Date of Other Qualification, Total Date of Expiration of Age Directorships in Address, DoB, DIN, Experience Appointment Current Term of other Companies* PAN, Occupation office Mr. Jude 37 More than 08-12-2009 Appointed as AVR Talkies Pvt. Jeyaprakash Years 14 years Whole-time Ltd. Whole-time Director Director for a B.E., M.C.J., period of five D -160, Hindu Colony years i.e. Nanganallur, Chennai 07-12-2014 – 600 061

DoB: 14-06-1973 DIN: 02725303 PAN No: ADSPJ1980D Occupation: Service Mr. T. V. 49 More than 09-12-2009 Liable to retire by Sanraa Media Balachandran Years 26 years rotation Limited Independent Director B.Com, CWA, CS, CFA (Member of USA & UAE) Chandas Sara, First Floor, 6/22, New Central School Street, Gill Nagar, Choolaimedu, Chennai – 600 094

DoB: 07-11-1961 DIN: 02880699 PAN No: AJJPB5646F Occupation: Service Mr. S. Krishna 47 More than 31-12-2008 Liable to retire by Eyelight HR Kumar years 17 years rotation Solutions Pvt. Ltd. Independent Director Paradigm Shift MBA, B. Sc. Consultancy Old No.7/A, New No. Services Pvt. Ltd. 16, Madura Kavi Street, Nava Yukthi East Tambaram, Consultancy Pvt. Chennai – 600 059 Ltd.

DoB: 01-05-1964 DIN: 01963609 PAN No: AHWPK1132G Occupation: Service

105 Name, Designation, Date of Other Qualification, Total Date of Expiration of Age Directorships in Address, DoB, DIN, Experience Appointment Current Term of other Companies* PAN, Occupation office Mr. Adapa Srinivas 47 More than 05-03-2006 Liable to retire by Kaashyap Independent Director years 20 years rotation Interserve B.Com. Technologies Ltd Plot. No. 36, House. No. 71/1, Sai Chandra Colony Pammaiguda Keesara Mandal, R.R. District Hyderabad – 500 060

DoB: 17-04-1964 DIN: 00372497 PAN No: AGZPA6654M Occupation: Service * Other than the companies disclosed above, the directors do not hold directorship in any other companies.

BRIEF PROFILE OF DIRECTORS

Mr. Jude Jeyaprakash, B.E., M.C.J

Mr. Jeyaprakash holds a Bachelors degree in Electronics and Communication Engineering, a Masters in Communication and Journalism. In addition to above, he holds a Certification in Oracle as Application Developer, and he is strong in SQL and PL/SQL programming, which he has effectively used while working in the television domain. He has experience of more than 15 years in media and wide practical knowledge in all related areas from pre-production to post-production.

He has organised and managed several live programmes like Andrum Indrum Endrum, Kollywood Vs Tollywood-Star Cricket-Live. He has handled several live programmes as well as production of entertainment content for various Television channels. His ability to create and manage the entertainment content would enhance the viewer base of our Television channel.

Mr. T V Balachandran, CFA

Mr. Balachandran is a CFA Charter holder and a Member of CFA Institute, USA and CFA Emirates, UAE. He is a Cost Accountant, Company Secretary with Commerce background. Currently, Governing Council Member for the PGDBA program conducted by the Indo-German Chamber of Commerce.

He has experience of more than 26 years and has held senior positions in the field of Media and Entertainment, Power Generation Companies and Information Technology sectors etc. He has served at senior levels in companies like Sanraa Global Green Energy Limited, Malaysia-based SCOMI Group, Pinaka Infomatics, Sanraa Media Limited, Paterson Consulting Group Private Limited., Al Mal Investments, Kuwait, TTG Group and Hi-Tech Ingrafts Private Limited.

Mr. S. Krishna Kumar

Mr. S. Krishna Kumar, aged 47 years, MBA and Bachelor of Science, is the Independent Director of our Company with experience of 17 years in handling administration in diverse industries.

Mr. Adapa Srinivas

Mr. Adapa Srinivas, aged 47 years, Bachelor of Commerce, is the Independent Director of our Company. He is having more than 25 years of experience in Finance and Accounts.

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RELATIONSHIP AMONG DIRECTORS

None of the present directors are having family relationship with each other.

ARRANGEMENTS WITH MAJOR SHAREHOLDERS, CUSTOMERS, SUPPLIERS OR OTHERS

There is no arrangement or understanding with major shareholders, customers, suppliers or others, pursuant to which of any Director was appointed as a Director or member of senior management of our Company.

SERVICE AGREEMENTS ENTERED INTO BETWEEN OUR COMPANY AND OUR DIRECTORS:

The service contracts entered into with our Whole Time Director does not provide for any benefit upon termination of employment except the retirement benefits payable to them as Provident Fund, Superannuation and Gratuity as per the rules of our Company. Except as provided herein below our Company has not entered into any service agreement with any Director:

COMPENSATION TO DIRECTORS

Our company has appointed and agreed to pay the Compensation to Mr. Jude Jeyaprakash, the Whole- time Director of our Company w.e.f. December 8, 2009 is as follows:

Basic Salary

Rs. 30,000/ - (Rupees Thirty Thousand) per month.

Commission Subject to the overall limits laid down in Sections 198 and 309 of the Companies Act, 1956 such percentage of net profits of our Company or such quantum as may be decided by the Board of Directors for each financial year. Perquisites and Whole Time Director shall be entitled to all perquisites and other benefits Allowance listed herein below in addition to the salary. House Rent Allowance of Rs.15,000/- (Rupees Fifteen Thousand) per month Medical reimbursement / allowance: Reimbursement of actual expenses for self and family to the extent of Rs.1250/- (Rupees One Thousand Two Hundred and Fifty Only) per month Other Allowance: Rs.7,950/- (Rupees Seven Thousand Nine Hundred and Fifty Only) per month Conveyance Allowance: Rs.800/- (Rupees Eight Hundred Only) per month Petrol Reimbursement: Reimbursement of actual expenses to the extent of Rs.20,000/- (Rupees Twenty Two Thousand Only) per month

Terms of Appointment of Whole-time Director:

The general terms of appointment of the Whole-time Director are as below:

• Mr. Jude Jeyaprakash has been appointed as Whole-time Director for a period of five years vide resolution passed by the members of our Company w.e.f. December 8, 2009 subject to terms and conditions and subject to the remuneration as approved by the Board and the remuneration committee. • The Whole Time Director shall be the President of TV Broadcasting. He is responsible for the overall administration of our Company and its activities. • The Whole Time Director will be in overall charge of the business, administration and other affairs of our Company’s business. • The Whole Time Director shall exercise and perform such powers and duties as the Board of Directors of our Company shall, from time to time, determine and subject to any directions and 107 restrictions, from time to time, given and imposed by the Board and further subject to the superintendence, control and direction of the Board, he shall have the general control, management and superintendence of the business of our Company with power to appoint and to dismiss employees and to enter into contracts on behalf of our Company in the ordinary course of business and to do and perform all other acts, deeds and things, which in the ordinary course of business, he may consider necessary or proper or in the interest of our Company, provided however, that nothing shall be done by the Whole Time Director which by the Act or the Articles of our Company shall be transacted at a meeting of the Board by resolution or which shall not be effective unless approved by the Board or which are not expressly provided. • The Whole Time Director shall not, during the continuance of his employment with our Company, divulge or disclose to any person, firm, company or body corporate whomsoever or make any use whatever for his own or for whatever purpose, of any confidential information or knowledge obtained by him during his employment as to the business or affairs of our Company or as to any trade secrets or secret processes of our Company and the Whole Time Director shall, during the continuance of his employment hereunder, also use his best endeavors to prevent any other person, firm, Company or body corporate concerned from doing so. • Either party shall terminate this agreement by giving to the other advance notice of three months, provided that our Company may waive the notice by giving in cash the remuneration for three months which the Whole Time Director would have received had he remained in office for the said three months. • The Whole Time Director shall not solicit the customers of our Company for his own interest and shall not directly or indirectly be interested in other business. • This agreement and the terms and conditions hereof shall be subject to the approval of the Central Government under the relevant provisions of the Companies Act, 1956 if necessary.

SHAREHOLDING OF DIRECTORS IN OUR COMPANY

The following table details the shareholding of the Directors of our Company in their personal capacity and either as sole or first holder as on date of this Letter of Offer.

Sl. Number of Equity % of the Pre Name of the Director No. Shares (Pre-Issue) Issue share capital 1 Mr. Jude Jeyaprakash 5,20,000 5.92%

The Articles of Association do not provide for any qualification shares to be held by the Directors.

The Company has complied with the requirements stipulated in terms of SEBI (SAST) Regulations and also with all the clauses of the Listing Agreement as regards to the preferential allotment of shares to Mr. Jude Jeyaprakash.

CHANGE IN BOARD OF DIRECTORS DURING THE LAST THREE YEARS

The changes, which took place in the Board of Directors since April 2006, are as follows:

Sl. Date of Date of Name Designation No. Appointment Resignation 1 Mr. R. Dakshinamurthy Director 06-02-1999 10-04-2008 2 Mr. D. Janakiramaiah Director 07-02-2001 05-03-2006 3 Mr. K. Lakshminarayanan Director 05-06-2002 05-03-2006 4 Mr. Adapa Srinivas Director 05-03-2006 N. A. 5 Mr. M. Shankar Director 05-03-2006 14-03-2007 6 Mr. A. Srinivasan Director 14-03-2007 10-04-2008 7 Mr. P. Thirumalaikumar Director 05-01-2008 09-12-2009 8 Mr. A. Kumar Reddy Director 10-04-2008 31-12-2008 108 9 Mr. K. Gopalaswami Director 25-09-2008 07-10-2008 10 Mr. S. Krishna Kumar Independent Director 31-12-2008 N. A. 11 Mr. Govindaraj Subramanian Independent Director 05-01-2009 06-02-2009 12 Mr. Jude Jeyaprakash Whole-time Director 08-12-2009 N. A. 13 Mr. T V Balachandran Independent Director 09-12-2009 N. A.

DETAILS OF BORROWING POWER OF DIRECTORS

Pursuant to a resolution passed by our shareholders in their meeting held on 29 th September, 2008 in accordance with the provision of the Companies Act, 1956, our Board is authorized to borrow, from time to time, as they may consider fit, any sum of money, on such terms and conditions as the Board may deem fit notwithstanding that the monies to be borrowed together with monies already borrowed by the Company (apart from temporary loans obtained from the Company’s Bankers in the ordinary course of business) may exceed the aggregate of the paid up share capital of the Company and its free reserves, that is to say, reserves not set apart for any specific purpose so that the total amount of monies so borrowed at any time shall not exceed the sum of Rs.100 Crores.

The Board was also authorized to do all such acts, deed and things as may be required for the purpose of giving effect to the above resolution.

INTEREST OF DIRECTORS

All the Directors of our Company may be deemed to be interested to the extent of fees, if any, payable to them for attending meetings of the Board and reimbursement of expenses. All the directors may also be deemed to be interested to the extent of equity shares, if any, already held by them and /or by their friends /relatives in our Company that may be subscribed for or allotted to them in the present offer 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 also be deemed to be interested to the extent of normal transactions, if any, with our Company. The Directors may also be regarded as interested in the equity shares, if any, held or that may be allotted to the companies, firms and trust in which they are interested as directors, members, partners and or trustees. Mr. Jude Jeyaprakash, Whole-time Director, may be deemed to be interested to the extent of remuneration paid/payable to him.

CORPORATE GOVERNANCE

Corporate governance is administered through our Board and the Committees of the Board. In compliance with Clause 49 of the Listing Agreement with the Stock Exchanges, we have formed the Audit Committee, Shareholder Grievance Committee and Remuneration Committee. However, the primary responsibility for upholding corporate governance and providing necessary disclosures within the framework of legal provisions and institutional conventions with commitment to enhance shareholders’ value vests with our Board.

As a listed company we are in compliance with the applicable provisions of the Listing Agreements pertaining to corporate governance, including appointment of Independent Directors and constitution of Committees. We have complied with the requirements of Corporate Governance contained in the Listing Agreement, particularly those relating to composition of Board of Directors, constitution of committees such as Audit Committee, Shareholder Grievance Committee and Remuneration Committee.

COMPOSITION OF THE BOARD OF DIRECTORS AND BOARD COMMITTEES Our company’s board consists of 4 directors and the Composition of the Board of the Directors, as on date of filing the letter of offer, is given below: Sl. No. Name Representing Type of Directorship* 1. Mr. Jude Jeyaprakash Whole -time Director Whole -time Director 2. Mr. T V Balachandran Independent Director Non Exe cuti ve Independe nt 3. Mr. S Krishna Kumar Independent D irector DirectorNon Exe cuti ve I ndepende nt 4. Mr. Adapa Srinivas Independent Director DirectorNon Exe cuti ve Independe nt * As per Clause 49 of the Listing Agreement Director 109 BOARD COMMITTEES

I. Audit Committee

The audit committee of our company comprises of three independent Non executive directors of our Company, the details of same are as follows:-

Sl. Name of the Director Designation Status No. 1 Mr. T. V. Balachandran Chairman Independent Non-Executive Director 2 Mr. Adapa Srinivas Member Independent Non-Executive Director 3 Mr. S. Krishna Kumar Member Independent Non-Executive Director

The Audit Committee Meetings were held on

1. May 4, 2009 2. June 30, 2009 3. July 30, 2009 4. October 30, 2009 5. January 30, 2010 6. May 31, 2010 7. August 14, 2010 8. October 22, 2010

II. Shareholder’s/ Investor grievance Committee:

Our company’s board has constituted the Shareholder’s/ Investor grievance Committee. The committee looks into the redressal of Shareholder’s complaints and oversees the performance of the Registrar and Transfer Agent and recommends measure for overall improvement.

The details of the committee constitution are as follows:-

Sl. Name of the Director Designation Status No. 1 Mr. S. Krishna Kumar Chairman Independent Non-Executive Director 2 Mr. Adapa Srinivas Member Independent Non-Executive Director 3 Mr. T V Balachandran Member Independent Non-Executive Director

The Shareholders’ / Investor Grievance Committee Meetings were held on

1. April 3, 2009 2. June 30, 2009 3. July 30, 2009 4. October 30, 2009 5. January 30, 2010 6. May 31, 2010 7. August 14, 2010 8. October 22, 2010

III. Composition of Remuneration Committee The remuneration committee consists of the following: Sl. Name of the Director Designation Status No. 1 Mr. Jude Jeyaprakash Chairman Whole-time Director 2 Mr. Adapa Srinivas Member Independent Non-Executive Director 3 Mr. S. Krishna Kumar Member Independent Non-Executive Director

The Remuneration Committee Meetings were held on November 09, 2009 and March 11, 2010.

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BOARD PROCEDURE

The Board of Directors meets at least once in a quarter and there will be not less than 4 meetings in a year. The Agenda for the meeting together with the relevant notes are circulated in advance.

DECLARATION OF OPERATING RESULTS

We declare the Quarterly operating results which are reported to the Stock Exchange as per the Listing Agreement. The Un-audited/Audited quarterly results are declared and published in the national dailies and in regional newspapers as per Clause 41 of the Listing Agreement.

REPORT ON CORPORATE GOVERNANCE

We are compliant with the provisions of the clause 49 of the Listing Agreement of the exchange.

COMPLIANCE CERTIFICATE ON CORPORATE GOVERNANCE

Certificates from our statutory Auditors confirming compliance with all the conditions of the corporate governance, as stipulated in clause 49 of the listing agreement of the stock exchange are in place.

COMPLIANCE WITH LISTING AGREEMENT

We are listed on The Bombay Stock Exchange Limited (BSE) and have complied with the requirements under the Listing Agreement of BSE. We have paid the requisite annual listing fee to the BSE for the period 2009 -10 and 2010-11. No disciplinary action has been initiated by the Stock Exchange against us or our Directors except as stated below:

Our shares were suspended from BSE with effect from October 1, 2002 and we again got the order of BSE vide Notice No. 20080603-22 dated June 3, 2008 w.e.f. June 9, 2008 for revocation of the suspension and currently trading of our shares are regular on BSE platform in “T” category.

In view of cancellation of NBFC registration by RBI, RKIL was going through a worse phase with virtually no business. Number of key managerial personnel left the Company creating a vacuum in various operational areas leading to non compliance of submission of various periodical reports like financial results, corporate governance reports, etc. On account of non compliance of various provisions of the Listing Agreement like Clause 15, 16, 31, 40B, 41, 47, 49 for different periods, the shares of RKIL were suspended for trading from BSE w.e.f. October 1, 2002. RKIL complied with all the pending statutory requirements as required under the Listing Agreement and obtained revocation of suspension from BSE w.e.f. June 9, 2008.

Compliance with Corporate Governance Norms:

The Company is in compliance with the Listing Agreements, SEBI (SAST) Regulations, 1997 and SEBI (Prohibition of Insider Trading) Regulations, 1992 and has complied during the financial year immediately preceding the date of the Letter of Offer with respect to the following: a) Provisions of the Listing Agreement with respect to reporting and compliance under Clauses 35, 40A, 41 and 49; b) Provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, with respect to reporting in terms of Regulation 8 (3) pertaining to disclosure of changes in shareholding and Regulation 8A pertaining to disclosure of pledged shares; and; c) Provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992, with respect to reporting in terms of Regulation 13.

111 ORGANIZATIONAL STRUCTURE

Board of Directors

Mr. Jude Mr. V. Ms. Kasthuri Mr. K. J. Jeyaprakash, Muraliraman, Shankar, Chandra Mouli, WTD & President Head – Head – Compliance – Overseas Movie Marketing and Officer and TV Broadcasting Rights / Finance Distribution Company Secretary

Mr. A. L. Arunkumar, Executing Head

The execution of business plans of the top management and monitoring of ongoing business work related to TV broadcasting and distribution of overseas film rights is streamlined in the company hierarchy. Mr. Jude Jeyaprakash is a Whole time Director - President for TV serial production in TBO Singapore Pte Ltd and Mr. Muraliraman is Head of Media activities related to distribution of film rights and finance. Mr. A. L. Arunkumar, whose details are provided here under separate para, is assisting the execution of both these activities and is reporting to the respective heads Mr. Jude Jeyaprakash and Mr. Muraliraman.

112 KEY MANAGERIAL PERSONNEL

As on the date of filing of Letter of Offer, we employ following key managerial personnel (KMP) in various capacities and the summarized data for such KMPs is given below:

Designation / Shareholding Experience Last Name Qualification Date of in our in years Employment Appointment Company Mr. V. B.Sc.(Maths) Head – 17 years Polimer Media Nil Muraliraman M.A. (Mass Overseas Pvt. Ltd. Communication) Movie DFT Rights/Finance / 01/01/2010 Mr. A L B. A. (History) Head – Media 14 years Polimer Media Nil Arunkumar Division / Pvt. Ltd. 01-12-2009 Mr. K J B. A. Compliance 4 years Balasubramanian Nil Chandra (Corporate), C. S. Officer & Co. Mouli &Company Secretary / 10-10-2009 Ms. Kasthuri B.L., MBA Head- 14 years G.V. Films Ltd. Nil Shankar Marketing & Distribution / 1- 10-2010

Profile of Key Managerial Personnel:

1. MR. V. MURALIRAMAN

Mr. V. Muraliraman is Master of Arts in Mass Communication & Journalism. He holds a bachelors in Science, Diploma in Film & Television Technology, and a Diploma in Computer Application, He has obtained technical expertise in Satellite Up-Link at GSI Long Island New York USA, Jan 2005, with chronicled success of over 17 years with renowned TV channel in audio-visual media industry. The key areas of expertise include Creative Solutions, Channel Operations, Chanel Programming, Production/Content Management, Event Management, Client/ Celebrity Relations Mgmt.

He brings with him diverse experience in Media & Entertainment industry, and has held positions across industry in various capacities namely Chief Executive officer of Polimer TV, Chennai, Vice President – Programmes & Operations at Jaya TV, Chennai, General Manager of Silver Stars International Ltd. (a group company of VPS Communications Pvt Ltd, United Kingdom), Creative Director and Consultant for Astro Vaanavil, Malaysia, Ess Pee Associates, New Delhi, Programme Manager of JJ TV, Chennai , Chief Producer and Programme Co-ordinator, Jain Television (Tamil Wing), Chennai, Assistant Manager – Programming - Sun TV, Chennai, etc.

Mr. V. Muraliraman has been instrumental in spearheading entire operations of a TV channel, providing cross functional leadership across all functional domains including – programming, production, content management, advertising, event management, marketing, human resource, overseas telecast and financial management, developed strong and productive rapport with industry talent and secured their constant support whenever the need arose, Successfully managed several overseas telecast deals in countries like Canada, Singapore, Malaysia, Gulf countries and the United Kingdom. Mr. Muraliraman was paid Rs. 3 lakhs as remuneration during the FY 2009-10.

2. MR. A. L. ARUNKUMAR

Mr. A.L. Arunkumar, aged 39 years, has joined our Company on December 1, 2009. He is the head of Media Division of our Company. He is having vast experience of 14 Years in Media & Entertainment Industry. His major task includes acquisition of films and in-charge for Channel content. 113

He has worked as Creative Head of Polimer Media Private Limited for around 2 years (2007-09). As a Creative Head of Polimer T.V, he was responsible for acquisition of about 25 films (consisting of dubbing of Telugu, Malayalam, Kannada Movies into Tamil), 9 tele serials each with over 100 Episodes. He was responsible for quality check & in the decision making process in buying a film, which includes roles of reviewing the Story, Screenplay, Music, and other quality checks that would be required in this aspect.

He is a self inspiring person and has floated his own production house, Classic Productions and has done tele serials in a span of 2 years during 2005-07. He has produced teleserials based on family subjects titled “Alaipaayudhe” (Jaya TV) and “Keladi Kanmani” (Vasanth TV) which has tagged 305 episodes and 210 episodes respectively. He has been a creative head of a Cricket Game Show “Kalakkal Cricket” which was aired in Sun TV in 15 one hour episodes. He has been the producer of a Comedy Tele Serial “Poi Solla Porom” which was aired for 200 episodes in Jaya TV. In this proprietory production venture, he had roles of a Creative Head, Producer, Programme Designer.

He has also worked as Head of Television Division with AVM Productions Pvt. Ltd. a Leading South Indian Movies Production and Distribution Company. His tenure of service at this well known production house was 10 years (1998-2005). He was responsible for the production of teleserials such as “Roja”, “Geethanjali”, “Ippadikku Thendral”, “Girija” etc., with combined run of over 3000 Episodes. His role as a Head of Television Division was in selection of stories for tele serials, co-ordination with artistes, selection of technicians for executing the tele serials, negotiations, execution and monitoring.

He has worked with JJ TV (Jaya T.V) at Bangalore and was in-charge of Bangalore & South Tamilnadu territories. Responsible for overall content selling (all programmes, channel branding, liasoning with Cable Operators etc.,)

He has worked as a General Manager of Akash Audio & Video for a period of 2 years (1994-96). He was responsible for acquisition of Audio Rights.

He has also worked with Chamundeeswari Studio Film Laboratories as Lab in-charge (Technical Staff) for an year and was responsible for Lab Processing. He has been a part of lab processing for about 50 Films. Mr. Arun Kumar was paid Rs.2 lakhs as Remuneration during the FY 2009-10.

3. Mr. K J CHANDRA MOULI

Mr. K J Chandra Mouli, aged 27 years, has the joined our Company on October 10, 2009 as the Compliance Officer of the Company and had assumed the post of a Company Secretary of our Company from April 12, 2010. He is qualified as B A (Corporate) and Company Secretary. He is having 4 years’ experience in Secretarial Work and possesses wide knowledge in Corporate & Regulatory Compliances (Companies act, 1956, FEMA, RBI, MRTP, NI and various other Industrial laws). He is responsible for various statutory compliances of our Company and its group companies which involve filing various e-forms with the Ministry of Company Affairs, maintain statutory registers and preparing minutes of the meetings, responsible for the Stock Exchange compliances; involving filing the quarterly Shareholding pattern, Corporate Governance report and other compliances as per the listing agreements viz. half yearly Disclosure, code of conduct compliances etc. Mr. Mouli was paid Rs. 1.50 lakhs as remuneration during the FY 2009-10.

4. MS. KASTHURI SHANKAR

Ms. Kasthuri Shankar is a Head – Marketing and Distribution of our Company. She holds Bachelors in Law from Madras University and MBA from Phoenix University. She joined our Company on 1 st October 2010. She was previously employed with G V Films Limited as Vice President, International Business. She has more than 14 years of experience in handling marketing and distribution of Tamil Movies in Overseas Markets. She has also undertaken several corporate brand launches and has participated in Television Programs. She has also played lead in more than 30 south movies and hosted several television programs. She did not draw any remuneration from our Company during the fiscal year 2009-10.

114

The persons whose names appear as key management personnel are on the rolls of our Company as permanent Employees. There is no arrangement or understanding with major shareholders, customers, suppliers or others pursuant to which any person was selected as director or member of senior management. None of the key managerial personnel have any relationship with the promoters or directors of our Company.

Changes in the key managerial personnel in the last three year:

Date of Sl. Appointment/ Name Designation Appointment No. Resignation / Resignation 1 Mr. A L Arunkumar Head – Media Division Appointment 01-12-2009 2 Mr. K J Chandra Mouli Compliance Officer & Appointment 10-10-2009 Company Secretary 3 Mr. V. Muraliraman Head – Overseas Movie Appointment 01-01-2010 Rights/Finance 4 Ms. Kasthuri Shankar Head- Marketing and Appointment 01-10-2010 Distribution

Bonus/ Profit Sharing of Key Managerial Personnel in the last one year:

We have no Bonus / Profit sharing plan for Key Managerial Personnel.

Employee Stock Options

We do not have any Employee Stock Options Scheme for our employees.

Other benefits to Officers of our Company

There are no non salary/ benefits extended to any of our officer.

115 (F) PROMOTERS The details of the Promoters of Our Company are as under:

Directorship held in Details of the Promoters other Companies Mr. A. Venkatramani − Kaashyap Technologies The promoter of our Company, Mr. A Venkatramani is Limited having more than 15 years experience in South Indian − G. V. Films Limited Entertainment and Media industry. He along with his − Eyelight Events and wife have been involved in production of television Promotion (India) serials for Tamil TV Channels, Tamil movies and Private Limited distribution of Tamil movies in India and abroad. He has worked with various renowned companies like HLL (Unilever), Hindustan Computers Limited, Shriram Group etc. Later, he has been at the forefront of the I.T., media and entertainment sectors.

Address : New No. 61, Old No. 30, 3 rd Street, East Abiramapuram, Mylapore, Chennai – 600 004 DoB : 07-04-1958 DIN : 01141847 PAN: AABPV3960F Passport No: G1231064 Driving License: F/TN/07X/004640/2001 Voter ID No: LWN2249183 Mr. Jude Jeyaprakash AVR Talkies Pvt. Ltd.

He holds a Bachelors degree in Electronics and Communication Engineering, Masters in Communication and Journalism. In addition, he holds a Certification in Oracle as Application Developer. He has experience of over 15 years in media and wide practical knowledge in all related areas from pre production to post production. His production experience includes management and planning of Television programmes and coordination of television crew in the execution and completion of television production.

Address : D-160, Hindu colony, Nanganallur, chennai- 600 061 DOB : June 14, 1973 DIN : 02725303 PAN : ADSPJ1980D Passport No : G7339474 Driving License : TN0920020006989

Profile of the promoters

1) Mr. A. Venkatramani

From the year 1994 onwards Mr. A. Venkatramani got involved into creation of Tamil TV serial content which later got aired through Sun TV and Jaya TV under Kaashyap Productions, a proprietorship firm of his wife Mrs Usha Venkatramani.

116 The firm produced “Nill Gavani Crazy” – a popular Tamil serial which ran successfully in Sun TV for more than 63 episodes from December 1996 to March 1998, written and directed by Mr. Crazy Mohan.one of the popular dramatist and film dialogue writer who is known for his Tamil Drama works namely Drama Troupe “Crazy Dreams” and movies including movies of Kamal Hasan namely like Michael Madana Kama Rajan , Avvai Shanmughi, Apporva Sagodharargal and Panchathanthiram. Under the firm’s production banner, the promoter also produced “Agni Pravesam”, a mega soap opera in Tamil which was aired for more than 250 episodes in Jaya TV. As the promoter grew more in his corporate set up of business, Kaashyap Productions has become a non-functional firm for last about 7-8 years.

Mr. Venkatramani was also involved in the production of following serials – “Vazha Ninaithaal Vazhalam”, which was aired in Sun TV for 16 episodes in the year 1995 “Panchayat Kadhaighal”, which was aired in Sun TV for 26 episodes in the year 1996-97 “Geethaigal Palavidham” and “Vedha Upadesam” which contained discourses by Holy Guru of Kanchi Mutt was aired in Jaya TV under a programme titled “Bakthi Peruvizha” for 16 episodes and 13 episodes respectively. “Geethaigal Palavidham” and “Vedha Upadesam” were aired in 1997 and 2001 respectively.

The firm has produced a Tamil Movie “Indru” about 6 years back. In his capacity as Director of G V Films Mr Venkatramani was actively involved in various aspects of a film making such as story finalization, theme presentation, casting, suitable key locations for shooting etc in films namely “Ullam Ketkume”, “Urchaagam”, “Thirudi”, “Kai Vandha Kalai”, “Dhanam” and “TN07 AL 4777”.

Mr. Venkatramani has played a major part in conducting various cultural programmes including South Indian Cinematographer’s Association awards of 2009 at Chennai.

He is fully versed with the media industry in terms of its system, culture, relationship with key persons, networking including technical knowledge and distribution work. He is well connected to most of the leading producers like Aascar Films, leading directors like Mr. K. S. Ravikumar and leading actors and other artists like editors, musicians, etc. The promoters are also networked with the owners / management of more than 600 cinema screens in South India, and with many prospective distribution partners elsewhere in India and abroad.

Through GV Films, the promoter has also been involved in establishing a successful marketing network in association with Mr. Jayavel Murugan, owner of Narmada Media, one of the leading distributor of Tamil movies in United States.

Mr. Venkatramani has few more projects on the pipeline which are: “Patta Patti” with Indian Ex- Test Cricketer Sadagopan Ramesh as the hero, which is produced under the banner of AVR Talkies. “Kulasekaranum Koolipadaiyum” with Cast being Sathiyaraj, Prakash Raj, Seethi and others, which is produced under the banner of AVR Talkies. “Naan” which AVR Talkies is co-producing where the famous music director Mr. Vijay Antony is being cast as hero for the first time. Mr. Venkatramani is involved in media projects worth about Rs 50 crores in the areas of South Indian content, Production, Distribution in domestic and international markets of movies.

117 2) Mr. Jude Jeyaprakash

Mr. Jude Jeyaprakash holds a Bachelors degree in Electronics and Communication Engineering, a Masters in Communication and Journalism. In addition to above, he holds a Certification in Oracle as Application Developer, and he is strong in SQL and PL/SQL programming, which he has effectively used while working in the television domain. He has over 15 years’ of media experience and comprehensive practical knowledge in all key areas from pre-production to post-production of programmes. He has worked as Programme Manager in Jaya TV, a popular Tamil Satellite channel based at Chennai. His production experience includes management and planning of Television programmes and coordination of television crew in the execution and completion of television production. The range of tasks he coordinated includes selection of topics for production, designing of television shows and maintaining telecast deadlines, coordination with the various production and post production teams. He also holds thorough knowledge on-air equipments used in the television industry.

The details of Key Projects handled by Mr. Jude Jeyaprakash:

Andrum Indrum Endrum – credited with organizing the first show of music maestro Ilayaraja on the small screen as a Programme Manager of Jaya TV. It has been an achievement making a giant show with 25 cameras, 4 Akila cranes and many more techno works. The stars of the tamil film industry like Kamalahasan, Rajinikanth, Vijay, Surya and many others participated in the mega event. This show was aired in Jaya TV during October 2005.

Kollywood Vs Tollywood – Star Cricket – Live

For the first time in the history of Tamil channel a live telecast of “Kollywood Vs Tollywood” Cricket Match could have been made possible. This Live cricket game was telecast on 4 th Feb, 2006. It was an experience handling the game through the cameras, the slow motion VTR’s, the graphic consoles and the commercials between the game.

Kalakka Povathu Yaaru Show – A Kamal Haasan Event

This programme titled Kalaka Povathu Yaaru was aired as Diwali Special during 2004.

Note:

Mr. A. Venkatramani, the promoter, has constantly been exploring the business opportunities which the company could commence for its profits and growth. In order to achieve this objective, in the month of October 2009, Mr. Jude Jeyaprakash joined as a co-promoter in the Company by making Tamil Box Office India Private Limited [TBO India] and Pix Aalaya Studios Private Limited [PASPL] as a 100% subsidiary of our Company. (For further details, refer Section titled as “Business Overview” on page no. 74 of this Letter of Offer)

118 In order to strengthen the management and formulate the business plans, Mr. Jude Jeyaprakash and Mr. S. Sukumar the main promoters of TBO India and respectively, have been considered as Promoter and Promoter Group within the meaning of Regulation 2(za)(ii) of SEBI (ICDR) Regulations, 2010. We believe that entering in to the entertainment and media business would require the knowledge and experience of Mr. Jude Jeyaprakash and his inclusion as Promoter in the Company would be in the interest of our Company and shareholders.

The promoters of our company, Mr. A. Venkatramani is not related to GV Films Ltd. and Ennore Coke Ltd. except that he is a non-executive director on the board of GV Films Ltd. Mr. Jude Jeyaprakash, co-promoter post this rights issue, is not related to GV Films Ltd. and Ennore Coke Ltd.

DECLARATION

We confirm that the Permanent Account Number, Bank Account Numbers, Passport Number have been submitted to the recognized Stock Exchanges on which the specified securities are proposed to be listed at the time of filing the offer document with them.

Further, the Promoters / their relatives (as per Companies Act, 1956) have not been detained as willful defaulters by the Reserve Bank of India or any other Government authority and there are no violations of securities laws committed by the Promoters in the past or any such proceedings are pending against the Promoters.

CORPORATE PROMOTERS:

There are no Corporate Promoters in our Company.

INTEREST OF PROMOTERS / DIRECTORS

Promoters are interested to the extent of their shareholding for which they are entitled to receive dividend declared, if any, by our Company.

All Directors of our Company may be deemed to be interested to the extent of remuneration / sitting fees, if any, payable to them for attending meetings of the Board or a Committee. The Whole-time Director will be interested to the extent of remuneration paid to him for services rendered by him as officer of our Company. All our Directors may also be deemed to be interested to the extent of Equity Shares, if any, already held in our Company by them or their relatives or companies, firms and trust, in which they are interested as directors, members, partners and / or trustees, or that may be subscribed for and allotted to them, under the present Issue and also to the extent of any dividend payable to them and other distributions in respect of the said Equity Shares.

119 (G) PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

Unless stated otherwise, the financial information used in this Letter of Offer is derived from our Company’s financial statements as of fiscal 2010, 2009, 2008, 2007, 2006 prepared in accordance with Indian GAAP and the Companies Act, 1956 and restated in accordance with applicable SEBI (ICDR) Regulations, as stated in the report of M/s. R. Ravindran & Associates, Chartered Accountants, included in this Letter of Offer.

In this Letter of Offer, unless the context otherwise require, all references to one gender also refers to another gender and the word “Lakh” or “Lac” means “one hundred thousand” and the word “million” means ten lakhs and the word “Crore” means “ten million”. Unless stated otherwise, throughout this Letter of Offer, all figures have been expressed in Lakhs, except in the section titled “ABOUT THE ISSUER” of this Letter of Offer where certain figures have been expressed in absolute numbers or in Lakhs or Lacs.

All numbers presented in this Letter of Offer have been rounded off to two decimal places. Any discrepancies in any table between total and sum of the amounts listed are due to rounding off. All references to “India” contained in this Letter of Offer are to the Republic of India. Our fiscal year commences on April 1 and ends on March 31 of the next year. Unless stated otherwise, reference herein to a fiscal year (e.g. Fiscal 2009), is to the fiscal year ended March 31 of a particular year. All references to “Rupees” or “Rs.” or “INR” are to Indian Rupees, the official currency of the Republic of India and all references to “U.S. dollars”, and “US$”, are to the legal currency of the United States.

Market and industry data used in this Letter of Offer, has been obtained from industry publications and governmental sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable and that their accuracy and completeness is not guaranteed and their reliability cannot be assured. Although we believe market data used in this Letter of Offer is reliable, it has not been independently verified.

(H) DIVIDEND POLICY

Dividend is intended to be declared based on the quantum and availability of future profits and will be disbursed based on shareholders’ approval upon recommendation of the Board of Directors. We have not declared any dividends since last five years in view of inadequacy of profits and non availability of any declarable surplus.

120 SECTION VI. FINANCIAL STATEMENTS

(A) Restated Standalone Financial Statements of Ram Kaashyap Investment Limited

The Board of Directors Ram Kaashyap Investment Ltd. No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamilnadu, India

A. 1. We have examined the annexed financial information of Ram Kaashyap Investment Ltd. (‘the Company’) for the five financial years ended 31 st March 2010 and half year ended 30 th September 2010 being the last date to which the accounts of the Company have been made up and audited.

The Company was incorporated on 3 rd December, 1993 as Ram Kaashyap Investment Limited under the Companies Act, 1956 as Public Limited Company with the Registrar of Companies, Tamilnadu at Block No.6, B Wing 2nd Floor, Shastri Bhawan 26, Haddows Road, Chennai - 600034 and received the Certificate for commencement of business on 27 th December, 1993.

The financial information is based on the accounts audited by Statutory Auditors for the five financial years ended 31 st March 2010 and half year ended 30 th September 2010 and approved by the Board of Directors of the Company for the purpose of disclosure in the Letter of Offer being issued by the Company in connection with the Rights Issue of Equity Shares in the Company (referred to as ‘the Issue’)

2. In accordance with the requirements of:

(i) Paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 (‘the Act’);

(ii) Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 issued by the Securities and Exchange Board of India (‘SEBI’) on September 3, 2009 in pursuance to Section 11 of the Securities and Exchange Board of India Act, 1992 (‘SEBI Act, 1992’) and related amendments; and

(iii) Our terms of reference with the Company dated 10 th November 2009 requesting us to carry out work in connection with the Letter of Offer as aforesaid.

2.1 We report that the restated financial statements of the Company for the five financial years ended 31st March 2010 and half year ended 30 th September 2010 are set out below;

These profits/losses have been arrived at after charging all operating and management expenses, including depreciation and after making such adjustments/restatements and regroupings as in our opinion are appropriate and are subject to the Accounting Policies and Notes thereon given in Annexure – 4 and 5 below.

2.2 We report that restated assets and liabilities of the Company for the above periods are as set out below after making such adjustments/restatements and regroupings as in our opinion are appropriate and are subject to the Accounting Policies and Notes thereon given below.

B. We have examined the following financial information relating to the Company proposed to be included in the Letter of Offer, as approved by the Board of Directors and annexed to this report.

121 Sl. Statements Annexure No. No. 1. Statement of Profit and Losses as Restated Annexure – 1 2. Statement of Assets and Liabilities as Restated Annexure – 2 3 Statement of Restated Cash Flow Annexure – 3 4 Note on Adjustments for Restated Financial Statements Annexure – 4 5. Statement of Accounting Policies for the Restated Accounts Annexure – 5 6. Statement for Investments Annexure –6 7. Statement of Dividend Paid Annexure – 7 8. Statement of Accounting Ratios Annexure – 8 9. Statement of Capitalization Annexure – 9 10. Statement of Tax Shelter Annexure – 10 11. Statement of Other Income Annexure – 11 12. Statement of Sundry Debtors Annexure – 12 13. Statement of Loans and Advances Annexure – 13 14. Statement of Secured and Unsecured Loans Annexure – 14 15 Statement of Related Party Disclosures Annexure – 15

C. 1. In our opinion the financial information of the Company as stated in Para A and B above read with respective significant accounting policies, after making groupings, adjustments/restatements as were considered appropriate by us and subject to non adjustments of certain matters as stated in Notes to Accounts, has been prepared in accordance with Part II of Schedule VI of the Companies Act, 1956 and the SEBI (ICDR) Regulations, 2009.

2. The statement of Tax Benefits states the tax benefits available to the Company and its shareholders under the provisions of the Income Tax Act, 1961 and other direct tax laws presently in force in India. The contents of this statement are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and the Income Tax Laws of India as of date.

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

For, R. Ravindran & Associates Chartered Accountants Firm Registration No. 003222S

R. Ravindran Membership No. 023829 Place: Chennai Date: October 22, 2010

122 Annexure 1: Restated Statement of Profit & Loss Account (Rs. In Lakhs) Period Year Year Year Year Year Particulars ending ending ending ending ending ending 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Income : Income from operations 441.61 551.58 314.96 171.91 45.02 - Other Income - 64.80 - - - - Total Income 441.61 616.38 314.96 171.91 45.02 -

Expenditure: Operational Expenses 362.84 521.02 258.82 117.11 24.86 - Administration Expenses 16.75 44.34 29.48 17.44 2.65 0.56 Public Issue/Other Expenses W/O ------Bad debts W/O ------Total Expenditure 379.58 565.36 288.30 134.55 27.51 0.56 Net Profit before Interest, Depreciation, Tax and Extraordinary Items 62.02 51.02 26.65 37.37 17.51 (0.56) Interest 8.21 8.30 4.36 13.68 - 1.01 Depreciation 52.16 107.89 111.69 111.23 111.25 113.72 Net Profit before Tax and Extraordinary Items 1.66 (65.17) (89.41) (87.55) (93.75) (115.29) Provision for Taxation Current Tax ------Fringe benefit tax - - 1.53 0.26 0.03 - Deferred Tax (1.09) - - - - - Net Profit after Tax and before Extraordinary Items 2.76 (65.17) (90.93) (87.81) (93.78) (115.29) Extraordinary Items ------Net Profit after Extraordinary 2.76 (65.17) (90.93) (87.81) (93.78) (115.29) Items Balance brought forward (1,732.72) (1,667.55) (1,576.62) (1,488.81) (1,395.03) (1,279.74) Profit/(Loss) Carried to Balance Sheet (1,729.96) (1,732.72) (1,667.55) (1,576.62) (1,488.81) (1,395.03)

Note : The above statement should be read with the significant accounting policies and notes to the accounts for restated financial statements as appearing in the Annexure – 4 and 5 to the Report

123

Annexure 2: Restated Statement of Assets and Liabilities ( Rs. Lakhs) As at As at As at As at As at As at PARTICULARS 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Fixed Assets Gross Block 1,102.92 1,143.60 1,241.90 1,241.90 1,230.65 1,230.65 Net Block (please refer Annexure-4 291.10 349.72 473.02 584.72 684.70 795.95 & 5) Less: Revaluation Reserve - - - - - Total Fixed Assets (A) 291.10 349.72 473.02 584.72 684.70 795.95

Investments (B) 360.49 396.43 0.49 - - -

Current Assets, Loans and

Advances: Sundry Debtors 470.70 90.65 280.81 122.45 15.93 - Cash and Bank Balances 8.99 8.22 1.66 4.25 3.32 0.38 Loans and Advances (Please refer 1,010.94 1,036.00 966.00 966.00 966.00 966.00 Annexure-13) Other Current Assets - 8.98 8.96 2.48 - - Total (C) 1,490.63 1,143.85 1,257.43 1,095.17 985.25 966.38

Liabilities and Provisions : Secured Loans (please refer 634.10 628.01 979.82 975.47 977.79 1,221.29 Annexure-5 and 14) Unsecured Loans 70.00 4.47 52.74 35.60 4.47 803.26 Current Liabilities 704.21 511.42 582.93 501.19 432.32 344.62 Provisions 44.92 45.23 44.41 44.67 44.59 44.41 Total (D) 1,453.23 1,189.14 1,659.90 1,556.92 1,459.17 2,413.58

Deferred Tax Liability (E) (1.09) - - - - -

Net Worth (A+B+C-D-E) 690.08 700.87 71.04 122.97 210.78 (651.25)

Represented by Equity Share Capital 879.00 879.00 579.00 540.00 540.00 540.00 Preference Share Capital - - - - 76.70 Reserves and Surplus 1,554.58 1,554.58 1,159.58 1,159.58 1,159.58 127.08 Less: Revaluation Reserve - - - - - Adjusted Reserves 1,554.58 1,554.58 1,159.58 1,159.58 1,159.58 127.08 Miscellaneous Exp. to the extent not 13.55 - - - - - w/off 2,420.04 2,433.58 1,738.58 1,699.58 1,699.58 743.78 Debit Balance in P & L (1,729.96) (1,732.72) (1,667.55) (1,576.62) (1,488.81) (1,395.03) Net Worth 690.08 700.87 71.04 122.97 210.78 (651.25)

124

Annexure 3 : Restated Cash Flow Statement

(Rs. Lakhs) Period Year Year Year Year Year Particulars ending ending ending ending ending ending 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Cash Flows from Operating Activities Net Profit Before tax 1.66 (65.17) (89.41) (87.55) (93.75) (115.29) Adjustments for: Depreciation 52.16 107.89 111.69 111.23 111.25 113.72 Miscellaneous Expenditure W/O ------Loss on Sale of Assets 3.72 7.62 - - - - Bad debts W/O - - - - -

Operating Profit before Working 57.54 50.34 22.29 23.69 17.51 (1.57) Capital Changes Change in Debtors (380.04) 190.16 (158.36) (106.52) (15.93) - Change in other Current Assets 8.98 (0.02) (6.48) (2.48) - - Change in Loans & Advances 25.07 (70.00) - - - - Change in Current Liabilities 178.93 (70.68) 81.48 68.95 76.88 - (excluding Provn. For Tax) Net Cash Flow from Operating Activities Before Tax & Extra - (109.53) 99.80 (61.07) (16.36) 78.46 (1.57) Ordinary Items Less: Tax Paid - 1.53 0.26 0.03 - Net Cash Flow from Operating (109.53) 99.80 (62.60) (16.62) 78.43 (1.57) Activities

Cash Flow from Investing Activities Change in Fixed Assets - (2.07) (11.25) - Change in Investments 35.94 (395.94) (0.49) - - Receipts from Sale of Assets 2.75 9.85 - - - - Net Cash Flow used in Investing 38.69 (388.15) (0.49) (11.25) - - Activities

Cash Flows from Financing Activities Change in Share Capital & Share 450.00 39.00 - (76.70) - Premium Change in Secured Loans 6.09 (106.81) 4.36 (2.33) - - Change in Unsecured Loans 65.53 (48.27) 17.14 31.13 1.22 - Net Cash Flow from Financing 71.62 294.92 60.50 28.80 (75.48) - Activities

Net increase in cash and cash 0.78 6.56 (2.59) 0.92 2.95 (1.57) equivalents Cash and Cash Equivalents (Opening Balance) 8.22 0.08 2.67 1.75 (1.20) 0.38 (Closing Balance) 8.99 6.65 0.08 2.67 1.75 (1.20)

125 Annexure 4 : Notes on Adjustments for Restated Financial Statements

Higher depreciation due to depreciating Brand Equity of Rs.1000 lakhs over a period of 10 years starting 50 100.00 100.00 100.00 100.00 100.00 with FY 2003-04 (Please Refer Note 1 below) Deferred tax (Refer Note 2 below) 1.09 0.18 0.55 0.58 12.08) -

Interest Waiver (Refer Note 3 below) 64.80

Tax Impact of Adjustments (Refer - - - - - Note 4 below)

Note 1: The company carries Brand ‘Kaashyap' in its books of account from the year 1996 for a value of Rs.1000 lakhs. The management is of the opinion that the brand has immense value even now and will continue to have good value for years to come. According to Accounting Standard 26 on Intangible Assets (AS 26) issued by the Institute of Chartered Accountants of India, which has become mandatory in FY 2003- 04, self generated brand cannot be recognised in the books of account. AS 26 further states that Intangible Assets are to be normally amortized over a period of 10 years unless there is persuasive evidence to prove that the useful life of the intangible asset is more than 10 years. As the Brand, being an Intangible Asset was recognized well before AS 26 came into effect; the same is written off over a period of 10 years starting with 2004-05.

Note 2: Due to the higher book depreciation arising out of depreciating Brand Equity, the book depreciation was substantially higher than the depreciation under income tax rules and resulting in deferred tax assets in all the years considered in the restated accounts. However, as a matter of prudence and also considering the absence of virtual certainty of future profits, deferred tax liability/asset accounted for in earlier years are now appropriately reversed.

Note:3 The lenders have waived interest of Rs. 64.80 lakhs due to them by the Company and it has been accounted as income in the year ending on March 31, 2010. As no workings were made available by lenders about how these figures are arrived at, the Company is unable to restate the same although it relates to more than one year.

Note 4: There is no tax impact, as the company had huge brought forward business losses and depreciation in all these years and did not have any tax liability and these additional amortization/depreciation would increase the carry forward losses/depreciation, if the income tax department allows such write offs

Note 5: Summarized information on Qualifications on Audited Accounts given by Auditors is given below. However, none of these qualifications require restatement of financial statements.

a) The auditors have mentioned about non-maintenance of proper records for quantitative information and situation of Fixed Assets and the Non-verification of Assets at regular periodical intervals in their reports pertaining to financial years 2005-06, 2006-07, 2007-08, 2009-10 and 6 months ended on September 2010 b) In the report pertaining to financial year 2008-09, the auditors have referred to the inadequacy of physical verification of fixed assets on a regular basis. c) Inadequate internal control procedures were referred to by the auditors in their report for the financial years 2005-06 and 2006-07 126 d) In their report for the financial year 2005-06, the auditors have pointed about the non- existence of internal audit system e) Default in scheduled repayment of borrowings by the company was commented upon by the auditors in their reports pertaining to financial year 2008-09 and also the half yearly ending 30 September 2010. f) For the financial year 2007-08 the auditors have mentioned about the non-provision of interest on cash credit g) The auditors have in their report, pertaining to financial year 2008-09 and 2009-10 mentioned about non-payment of certain statutory dues.

127 Annexure 5 : Significant Accounting Policies and Notes to Accounts for the Restated Accounts;

SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting

i) The Financial Statements have been prepared under the historical cost convention on a going concern basis and in accordance with the requirements of the Companies Act, 1956 and applicable accounting standards.

ii) The Company follows a mercantile system of accounting and recognizes income and expenditure on accrual basis.

2. Use of Estimates;

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates.

3. Borrowing Cost

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of such asset till such time as the asset is ready for its intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

4. Investments

Long-term Investments are stated at cost. Provision for diminution is being made if necessary to recognize a decline, other than temporary in the value thereof.

5. Fixed Assets

Fixed assets are stated at their original cost of acquisition including taxes, freight and other incidental expenses related to acquisition and installation of the concerned assets less depreciation till date.

6. Depreciation/Amortization

i) Depreciation is recognised only in respect of Fixed Assets put to use.

ii) Depreciation on other Fixed Assets have been provided on written down value on a pro rata monthly basis at the rates specified in Schedule XIV of the Companies Act, 1956 from the year 2004-2005.

iii) The company had been following policy of charging depreciation under the Straight Line Method upto the year 2003-2004.

iv) Brand Equity of Rs.1000 lakhs has so far not been amortized. However, this intangible asset is now being amortized, equally over a period of 10 years from FY 2003-04. This writes off is given effect to in these restated accounts.

128 7. Inventory

Inventory represents Contents of Television shows and films produced as on balance sheet date. Work in progress represents production expenses in respect of incomplete shows.

8. Revenue Recognition

i) Revenue from sale of stock & shares are recognised at the time of transfer of stock & shares.

ii) Revenue from consultancy services is recognised on accrual basis upon completion of services.

iii) Revenue from software development is recognised on accrual basis at the time of delivery of services.

iv) Finance charges on Hire Purchase Contracts have not been recognized during the year in the absence of their virtual certainty.

9. Deferred Tax

i) Deferred tax represents the effect of timing difference between taxable income and accounting income for the reporting period that originate in one period and are capable of reversal in one or more subsequent periods.

ii) Deferred tax assets is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of assets.

10. Provisions, Contingent Liabilities and Contingent Assets

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

The Company has not provided interest on loan accounts with the banks in view of its negotiations towards “One Time Settlement” with them.

11. Impairment of Assets;

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to Profit & Loss Account in the year in which the asset is impaired and the impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

12. Leases;

Operating lease payments are recognized as expenses in the profit and loss account as per the terms of the agreements which are representative of the time pattern of the users’ benefit.

13. Amortisation of Preliminary Expenses

Preliminary Expenses are amortised over a period of 10 years.

129 A. NOTES ON ACCOUNTS

1. Share Capital

During the year 2009-2010, the Company raised fresh equity share capital of Rs. 300 lakhs by issue of 30,00,000 equity shares of Rs. 10/- each on a preferential basis.

During the year 2008-2009, the Company raised fresh equity share capital of Rs. 39 lakhs by issue of 3,90,000 equity shares of Rs.10/- each on a preferential basis.

During the year 2007-2008, the authorised Share Capital of the Company be altered by re-classifying the existing capital by converting 5,00,000 (a part of) un issued preference shares of Rs.100/- each to 50,00,000 equity shares of Rs.10/- each.

The Preference shares, if any, which have fallen due for redemption is recognised as current liability in the respective year.

2. Acquisition of Shares

The company has acquired 100% shares in Pix Aalaya Studios Pvt Ltd for a consideration of Rs. 1,65,00,000/- by allotment of 11,00,000 equity shares of the company at Re. 10/- with a Premium of Rs. 5/- each to the shareholders of Pix Aalaya Studios Pvt Ltd.

Also, the company has acquired 100% shares in Tamil Box Office (India) Pvt Ltd for a consideration of Rs. 1,95,00,000/- which is settled by allotment of 13,00,000 equity shares of the company at Re. 10/- with a Premium of Rs. 5/- each to the shareholders of Tamil Box Office (India) Pvt Ltd.

3. Employee Benefits

Accrued gratuity and Leave encashment liability upto 31.03.2009 has not arisen and was recognised on actuarial valuation as on 31.03.2010

4. Loans

i) The Company had borrowed an amount of Rs. 200 lakhs from Bank of Baroda. Due to financial crisis, the company was not able to fulfill its commitments. Therefore, the company has entered into a One Time Settlement with Bank of Baroda in September 2009 and the same was accepted by the bank. Based on bank acceptance letter dated 24 th September 2009, the company has written off Rs. 125 lakhs towards principal and Rs. 35.99 lakhs towards interest. The write back of Rs. 125 lakhs towards principal is treated as capital reserve.

ii) Secured Loans are represented by hire purchase dues against hypothecation of specific assets of the company.

iii) Karnataka Bank Limited have agreed for a one time settlement of Rs. 62.50 lakhs (Rupees Sixty Two Lakhs and Fifty Thousand only) against principal outstanding of Rs. 250 lakhs (Rupees Two Crores Fifty Lacs only). The said bank have also waived repayment of interest of Rs. 44.99 lakhs (Rupees Forty Four Lakhs Ninety Nine Thousand Eight Hundred and Twenty Eight only)

iv) Similarly, during the financial year 2006 07, promoter’s contribution of Rs. 800 lakhs (Rupees Eight Crores Only), which was classified as unsecured loan, consequent on the promoter agreeing to waive its repayment has been transferred to capital reserve. The reduction of these liabilities together with (b) above has been taken to Capital Reserve, during the year.

v) In respect of Secured loans of Rs. 628 lakhs as on September 30, 2010, the Company has not made any provision of interest for the same as the Company is negotiating a One Time Settlement with lenders. In absence of crystallization of amount required to be paid under One 130 Time Settlement, no provision of Interest / charges / liquidated damages has been made for all past five years.

5. Contingent Liabilities: The Company has entered into One Time Settlement (OTS) arrangement with three of its bankers. There are delays in the payment of installments as envisaged in these OTS arrangements. In case, the bankers annul the OTS arrangements citing non compliance with the OTS terms, the liability of the company may go up which at present is not quantifiable.

6. Remuneration or sitting Fees has been paid to Whole time Directors for the Year 2009-2010 and 1 st April, 2010 to September 2010.

131 Annexure 6: Statement of Investments (Quote and Unquoted) fully paid for the company (Rs. In Lakhs) Period Year Year Year Year Year Particulars ending ending ending ending ending ending 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Long Term Investments ------Book Value of quoted ------investment in shares Book Value of unquoted 360.49 396.43 - - - - investment in shares Total 360.49 396.43 - - - -

Annexure 7 : Restated Statement of Dividends Paid/Proposed

The Company has not paid dividends in the last five years and six months ended on September 30, 2010.

Annexure 8 : Statement of Accounting Ratios (Rs. In Lakhs) Period Year Year Year Year Year Particulars ending ending ending ending ending ending 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Net worth (A) 690.08 700.87 71.04 122.97 210.78 (651.25) Restated net profit after tax (B) 2.76 (65.17) (90.93) (87.81) (93.78) (115.29) Shares outstanding at the end of 8,790,000 8,790,000 5,790,000 5,400,000 5,400,000 5,400,000 the year (C ) Weighted average no. of shares outstanding at the end of the year 8,790,000 6,540,000 5,790,000 5,400,000 5,400,000 5,400,000 (for Basic EPS) (D) Weighted average no. of shares outstanding at the end of the year 8,790,000 6,540,000 5,790,000 5,400,000 5,400,000 5,400,000 (for Diluted EPS) (E) Basic Earning per Share (B/D) 0.03 (1.00) (1.57) (1.63) (1.74) (2.13) Diluted Earning per Share (B/E) 0.03 (1.00) (1.57) (1.63) (1.74) (2.13) Return on Net worth Ratio (%) 0.00 (0.09) (1.28) (0.71) (0.44) (0.18) Net Asset value per equity share 7.85 7.97 1.23 2.28 3.90 (12.06)

Annexure 9 : Statement of Capitalization (Rs. In Lakhs) Pre Issue as at Particulars Post Issue 30.09.2010 Borrowings Short Term Debt (including current liabilities) 704.21 354.21 Long Term Debt 704.10 704.10 Total Debt 1,408.31 1,058.31

Shareholders Funds Share Capital 879.00 4,395.00 Reserves and Surplus 1,554.58 1,554.58 Less: Debit balance in P & L Account 1,729.96 1,729.96 Total Shareholders Funds 703.62 4,219.62 Long Term Debt/Equity Ratio 2.00 0.25

132 Annexure 10 : Statement of Tax Shelter (Rs. In Lakhs) Period Year Year Year Year Year Financial Year ending ending ending ending ending ending ending 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Profit/Loss before tax 1.66 (65.17) (89.41) (87.55) (93.75) (115.29)

Tax Rate including surcharge and education cess (%) 33.22% 33.99% 33.99% 33.99% 33.66% 33.66% Tax at Notional Rate ------Adjustments: Difference in Book and IT 50.55 103.57 101.78 101.87 104.30 105.70 Dep. Miscellaneous Expenditure ------W/off Unabsorbed (50.55) (103.57) (101.78) (101.87) (104.30) (105.70) Losses/Depreciation

Net Adjustments ------

Tax Saving Thereon ------MAT provision ------Total Taxation ------Taxation on extra-ordinary ------Items Tax on Profits before extra------ordinary items

Annexure 11 : Details of Other Income (Rs. In Lakhs) Period Year Year Year Year Year Particulars ending ending ending ending ending ending 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Waiver of Interest arising under One Time Settlement - 64.80 - - - - Scheme with the bankers

Total - 64.80 - - - -

Annexure 12 : Statement of Sundry Debtors (Rs. In Lakhs) As at As at As at As at As at As at Particulars 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 (Unsecured, considered good) - Outstanding for a period 380.29 62.34 230.27 122.45 15.93 - less than six months - Outstanding for a period 90.40 28.31 50.54 - - - exceeding six months Total 470.70 90.65 280.81 122.45 15.93 -

133 Annexure 13 : Statement of Loans and Advances (Rs. In Lakhs) As at As at As at As at As at As at Particulars 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Trade Advances/Inter

Corporate Advances Other Advances - Less than 6 months 44.93 70.00 - - - - - More than 6 months* 966.00 966.00 966.00 966.00 966.00 966.00 Total 1,010.94 1,036.00 966.00 966.00 966.00 966.00

*Represents amounts advanced towards Hire Purchase transactions to various customers when the company was carrying on NBFC activities. The Company is of the opinion that the banks to whom these `stock on hire' were offered as security would have resorted to repossession of assets from the customers directly and also collected some monies from the customers directly, Pending collection of information from various banks, these accounts are remain unadjusted in the books. The amounts due to the banks are under dispute and cases are pending at Debt Recovery Tribunal.

134 Annexure 14 : Secured and Unsecured Loans

SECURED LOANS (Rs. in Lakhs) BAL. AS SL. NATURE OF BANK NAME ON DETAILS OF SECURITY NO. LOAN 30.09.2010 1 Hypothecation of book debts, Bank of Baroda Cash Credit 42.50 assignment of HP/Lease documents covering motor vehicles 2 Hypothecation of book debts, Bank of Rajasthan Cash Credit 75.00 assignment of HP/Lease documents covering motor vehicles 3 Assignment of HP/Lease documents Karnataka Bank Cash Credit 32.70 covering motor vehicles and hypothecation of book debts 4 Assignment of HP/Lease documents State Bank of Hyderabad Cash Credit 25.00 covering motor vehicles and hypothecation of book debts 5 Hypothecation of book debts, bills, State Bank of Mysore Cash Credit 350.00 securities 6 Interest Accrued -Bank of Baroda 5.85 - Bank of Rajasthan 13.50 - Karnataka Bank 24.24 - State Bank of Hyderabad 2.31 - State Bank of Mysore 63.00 Grand Total 634.10

UNSECURED LOANS: (Rs. in lakhs) As at As at As at As at As at As at Particulars September March March 31, March 31, March 31, March 30, 2010 31, 2010 2009 2008 2007 31, 2006 Kaashyap Technologies Ltd. 5.05 31.13 - - Nava Yukthi Consultancy 38.03 - - - Private Limited Mind Kriya Soft Tech Private 5.19 - - - Limited Tamil Box Office (India) Pvt Ltd Mr. A. Venkatramani 4.47 4.47 4.47 4.47 803.25 Mr. Ramanlal Vakharia 70.00 Total 70.00 4.47 52.74 35.60 4.47 803.25

135 Annexure-15 : Related Party Transactions (Rs. in Lakhs) As at As at As at As at As at As at Particulars September March March March March March 30, 2010 31, 2010 31, 2009 31, 2008 31, 2007 31, 2006 Loans/Advances: Mind Kriya Soft Tech

Private Limited - - a. Opening Balance - - 2.72 Dr - - -

b. Advanced during the - - - year/period - - -

c. Amounts received / - - 7.91 Advances repaid - - - a. Closing Balance - - 5.19 Cr. - - -

Nava Yukthi Consultancy Private Limited a. Opening Balance - - 3.22 Dr - - -

b. Advanced during the - - year/period - - 10.00 -

c. Amounts received / - - Advances repaid - - 51.25 - a. Closing Balance - - 38.03Cr. - - -

136 (B) Restated Consolidated Financial Statements of Ram Kaashyap Investment Limited

The Board of Directors Ram Kaashyap Investment Ltd. No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamilnadu, India

A 1. We have examined the annexed financial information of Ram Kaashyap Investment Ltd. (‘the Company’) for the four financial years ended 31 st March 2009 and Consolidated financials for the year ended 31 st March 2010 and half year ended 30 th September, 2010 being the last date to which the accounts of the Company have been made up and audited.

The financial information is based on the accounts audited by Statutory Auditors for the four financial years ended 31st March 2009 and Consolidated financials for the year ended 31st March 2010 and half year ended 30th September, 2010 and approved by the Board of Directors of the Company for the purpose of disclosure in the Letter of Offer being issued by the Company in connection with the Rights Issue of Equity Shares in the Company (referred to as ‘the Issue’)

2. In accordance with the requirements of:

(i) Paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 (‘the Act’);

2.1 We report that the restated financial statements of the Company for the four financial years ended 31 st March 2009 and Consolidated financials for the year ended 31 st March 2010 and half yearly ended 30 th September, 2010 are set out below;

B We have examined the following financial information relating to the Company proposed to be included in the Letter of Offer, as approved by the Board of Directors and annexed to this report.

137

Sr. Statements Annexure No. No. 1. Statement of Profit and Losses as Restated Annexure – 1 2. Statement of Assets and Liabilities as Restated Annexure – 2 3 Statement of Restated Cash Flow Annexure – 3 4 Note on Adjustments for Restated Financial Statements Annexure – 4 5. Statement of Accounting Policies for the Restated Accounts Annexure – 5 6. Statement for Investments Annexure –6 7. Statement of Dividend Paid Annexure – 7 8. Statement of Accounting Ratios Annexure – 8 9. Statement of Capitalization Annexure – 9 10. Statement of Tax Shelter Annexure – 10 11. Statement of Other Income Annexure – 11 12. Statement of Sundry Debtors Annexure – 12 13. Statement of Loans and Advances Annexure – 13 14. Statement of Secured and Unsecured Loans Annexure – 14 15 Statement of Related Party Disclosures Annexure – 15

C a) In our opinion the financial information of the Company as stated in Para A and B above read with respective significant accounting policies, after making groupings, adjustments/restatements as were considered appropriate by us and subject to non adjustments of certain matters as stated in Notes to Accounts, has been prepared in accordance with Part II of Schedule VI of the Companies Act, 1956 and the SEBI (ICDR) Regulations, 2009.

b) The statement of Tax Benefits states the tax benefits available to the Company and its shareholders under the provisions of the Income Tax Act, 1961 and other direct tax laws presently in force in India. The contents of this statement are based on information, explanations and representations obtained from the Company and on the basis of our understanding of the business activities and operations of the Company and the Income Tax Laws of India as of date.

c) This report is intended solely for your information and for inclusion in the Letter of Offer in connection with the specific Rights Issue of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For, R. RAVINDRAN & ASSOCIATES Chartered Accountants Firm Registration No.003222S

R. Ravindran Membership No. 23829 Place: Chennai Date: October 22, 2010

138 Annexure-1 Consolidated Restated Statement of Profit and Loss Account Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Particulars Period Year Year Year Year Year ending ending ending ending ending ending 30/09/2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Income : Income from operations 547.74 597.25 314.96 171.91 45.02 - Other Income 8.74 71.28 - - - - Closing Stock & Work-in- progress 140.52 154.34 Total Income 697.00 822.87 314.96 171.91 45.02 -

Expenditure: Opening Stock & Work-in- progress 154.34 114.51 Operational Expenses 390.03 556.88 258.82 117.11 24.86 - Administration Expenses 72.16 63.36 29.48 17.44 2.65 0.56 Public Issue/Other Expenses W/O - - - - - Bad debts W/O - - - - - Total Expenditure 616.53 734.74 288.30 134.55 27.51 0.56 Net Profit before Interest, Depreciation, Tax and Extraordinary Items 80.47 88.13 26.65 37.37 17.51 (0.56) Interest 12.61 11.30 4.36 13.68 - 1.01 Depreciation 56.33 109.97 111.69 111.23 111.25 113.72 Net Profit before Tax and Extraordinary Items 11.53 (33.14) (89.41) (87.55) (93.75) (115.29) Provision for Taxation Current Tax 2.66 3.00 - - - - Fringe benefit tax - 1.53 0.26 0.03 - Deferred Tax (1.38) 0.24 - - - - Net Profit after Tax and before Extraordinary Items 10.24 (36.38) (90.93) (87.81) (93.78) (115.29) Extraordinary Items - - - - - Net Profit after Extraordinary Items 10.24 (36.38) (90.93) (87.81) (93.78) (115.29) Balance brought forward (1,708.19) (1,671.81) (1,576.62) (1,488.81) (1,395.03) (1,279.74) Profit/(Loss) Carried to Balance Sheet (1,697.95) (1,708.19) (1,667.55) (1,576.62) (1,488.81) (1,395.03)

The above statement should be read with the significant accounting policies and notes to the accounts for restated financial statements as appearing in the Annexure – 4 and 5 to the Report.

139 Annexure-2 Consolidated Restated Statement of Assets and Liabilities Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) As at As at As at As at As at As at PARTICULARS 30/09/2010 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006

Investments (B) 110.31 146.24 0.49 - - -

Deferred Tax Liability (E) (1.20) 0.18 - - - -

Net Worth (A+B+C-D-E) 770.73 773.98 71.04 122.97 210.78 (651.25)

140 Annexure-3 Consolidated Restated Cashflow Statement Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Particulars Period Year Year Year Year Year ending ending ending ending ending ending 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Cash Flows from Operating Activities Net Profit Before tax 11.53 (33.14) (89.41) (87.55) (93.75) (115.29) Adjustments for: Depreciation 56.33 109.97 111.69 111.23 111.25 113.72 Miscellaneous Expenditure Written Off 0.06 0.12 - - - - Loss on Sale of Assets 3.72 7.62 - - - - Bad debts W/O - - - - -

Operating Profit before Working 71.64 84.57 22.29 23.69 17.51 (1.57) Capital Changes Change in Stock/ WIP 13.82 (88.38) Change in Debtors (442.66) 116.63 (158.36) (106.52) (15.93) - Change in other Current Assets 2.15 (6.48) (2.48) - - Change in Loans & Advances 168.63 (218.16) - - - - Change in Current Liabilities (excluding Provn. For Tax) 119.28 134.60 81.48 68.95 76.88 - Net Cash Flow from Operating Activities Before Tax & Extra - Ordinary Items (69.29) 31.41 (61.07) (16.36) 78.46 (1.57) Less: Tax Paid 1.53 0.26 0.03 - Net Cash Flow from Operating Activities (69.29) 31.41 (62.60) (16.62) 78.43 (1.57)

Cash Flow from Investing Activities Change in Fixed Assets (4.54) (30.23) (11.25) - Change in Investments 35.94 (348.94) (0.49) - - Receipts from Sale of Assets 2.75 9.85 - - - - Net Cash Flow used in Investing Activities 34.14 (369.32) (0.49) (11.25) - -

Cash Flows from Financing Activities Change in Share Capital & Share Pre. - 505.00 39.00 - (76.70) - Change in Share application money (6.50) 49.70 Change in Secured Loans 3.90 (92.43) 4.36 (2.33) - - Change in Unsecured Loans 40.53 (112.80) 17.14 31.13 1.22 1.57 Net Cash Flow from Financing Activities 37.93 349.47 60.50 28.80 (75.48) 1.57

Net increase in cash and cash equivalents 2.78 11.57 (2.59) 0.92 2.95 0.00 Cash and Cash Equivalents (Opening Balance) 16.25 5.69 4.25 3.32 0.38 0.38 Cash and Cash Equivalents (Closing Balance) 19.04 17.25 1.66 4.25 3.32 0.38

141 Annexure 4 : Consolidated Notes on adjustments for restated financial statements

Consolidated for the period ended September 30, 2010 & Year ended March 31, 2010

The following adjustments have been made to the audited financial statement of Ram Kaashyap Investment Limited to arrive at the restated figure of profit & loss and accumulated profit & loss. (Rs. In Lakhs) PARTICULARS As at As at As at As at As at As at 30/09/2010 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 Higher depreciation due to depreciating Brand Equity of Rs.1000 lakhs over a period 50.00 100.00 100.00 100.00 100.00 100.00 of 10 years starting with FY 2003-04 (Please Refer Note 1 below) Deferred tax (Refer Note 2 1.38 0.18 0.55 0.58 (12.08) - below)

Other Income (Refer Note 3 - 64.80 - - - - below)

Tax Impact of Adjustments - - - - - (Refer Note 4 below)

Note 1: The company carries Brand ‘Kaashyap' in its books of account from the year 1996 for a value of Rs.1000 lakhs. The management is of the opinion that the brand has immense value even now and will continue to have good value for years to come. According to Accounting Standard 26 on Intangible Assets (AS 26) issued by the Institute of Chartered Accountants of India, which has become mandatory in FY 2003- 04, self generated brand cannot be recognized in the books of account. AS 26 further states that Intangible Assets are to be normally amortized over a period of 10 years unless there is persuasive evidence to prove that the useful life of the intangible asset is more than 10 years. As the Brand, being an Intangible Asset was recognized well before AS 26 came into effect; the same is written off over a period of 10 years starting with 2004-05.

Note 3: The lenders have waived interest of Rs. 64.80 lakhs due to them by the Company and it has been accounted as income in the year ending on March 31, 2010. As no workings were made available by lenders about how these figures are arrived at, the Company is unable to restate the same although it relates to more than one year.

Note 5: Summarized information on Qualifications on Audited Accounts given by Auditors is given below. However, none of these qualifications require restatement of financial statements.

h) The auditors have mentioned about non-maintenance of proper records for quantitative information and situation of Fixed Assets and the Non-verification of Assets at regular periodical intervals in their reports pertaining to financial years 2005-06, 2006-07, 2007-08, 2009-10 and 6 months ended on September 2010 i) In the report pertaining to financial year 2008-09, the auditors have referred to the inadequacy of physical verification of fixed assets on a regular basis. 142 j) Inadequate internal control procedures were referred to by the auditors in their report for the financial years 2005-06 and 2006-07 k) In their report for the financial year 2005-06, the auditors have pointed about the non-existence of internal audit system l) Default in scheduled repayment of borrowings by the company was commented upon by the auditors in their reports pertaining to financial year 2008-09 and also the half yearly ending 30 September 2010. m) For the financial year 2007-08 the auditors have mentioned about the non-provision of interest on cash credit n) The auditors have in their report, pertaining to financial year 2008-09 and 2009-10 mentioned about non-payment of certain statutory dues.

143 Annexure-5 Significant Accounting Policies and Notes to Accounts for the Restated Accounts

SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting

iii) The Financial Statements have been prepared under the historical cost convention on a going concern basis and in accordance with the requirements of the Companies Act, 1956 and applicable accounting standards.

iv) The Company follows a mercantile system of accounting and recognizes income and expenditure on accrual basis.

2. Use of Estimates;

3. Borrowing Cost

4. Investments

Long-term Investments are stated at cost. Provision for diminution is being made if necessary to recognize a decline, other than temporary in the value thereof.

5. Fixed Assets

6. Depreciation/Amortization

v) Depreciation is recognised only in respect of Fixed Assets put to use.

vi) Depreciation on other Fixed Assets have been provided on written down value on a pro rata monthly basis at the rates specified in Schedule XIV of the Companies Act, 1956 from the year 2004-2005.

vii) The company had been following policy of charging depreciation under the Straight Line Method upto the year 2003-2004.

viii) Brand Equity of Rs.1000 lakhs has so far not been amortized. However, this intangible asset is now being amortized, equally over a period of 10 years from FY 2003-04. This writes off is given effect to in these restated accounts.

144 7. Inventory

Inventory represents Contents of Television shows and films produced as on balance sheet date. Work in progress represents production expenses in respect of incomplete shows.

8. Revenue Recognition

v) Revenue from sale of stock & shares are recognised at the time of transfer of stock & shares.

vi) Revenue from consultancy services is recognised on accrual basis upon completion of services.

vii) Revenue from software development is recognised on accrual basis at the time of delivery of services.

viii) Finance charges on Hire Purchase Contracts have not been recognized during the year in the absence of their virtual certainty.

9. Deferred Tax

iii) Deferred tax represents the effect of timing difference between taxable income and accounting income for the reporting period that originate in one period and are capable of reversal in one or more subsequent periods.

iv) Deferred tax assets is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of assets.

10. Provisions, Contingent Liabilities and Contingent Assets

The Company has not provided interest on loan accounts with the banks in view of its negotiations towards “One Time Settlement” with them.

11. Impairment of Assets;

12. Leases;

Operating lease payments are recognized as expenses in the profit and loss account as per the terms of the agreements which are representative of the time pattern of the users’ benefit.

13. Amortisation of Preliminary Expenses

Preliminary Expenses are amortised over a period of 10 years.

145 B. NOTES ON ACCOUNTS

1. Share Capital

During the year 2009-2010, the Company raised fresh equity share capital of Rs. 300 lakhs by issue of 30,00,000 equity shares of Rs. 10/- each on a preferential basis.

During the year 2008-2009, the Company raised fresh equity share capital of Rs. 39 lakhs by issue of 3,90,000 equity shares of Rs.10/- each on a preferential basis.

The Preference shares, if any, which have fallen due for redemption is recognised as current liability in the respective year.

2. Acquisition of Shares

3. Employee Benefits

Accrued gratuity and Leave encashment liability up to 31.03.2009 has not arisen and was recognised on actuarial valuation as on 31.03.2010

4. Loans

vi) The Company had borrowed an amount of Rs. 200 lakhs from Bank of Baroda. Due to financial crisis, the company was not able to fulfill its commitments. Therefore, the company has entered into a One Time Settlement with Bank of Baroda in September 2009 and the same was accepted by the bank. Based on bank acceptance letter dated 24 th September 2009, the company has written off Rs. 125 lakhs towards principal and Rs. 35.99 lakhs towards interest. The write back of Rs. 125 lakhs towards principal is treated as capital reserve.

vii) Secured Loans are represented by hire purchase dues against hypothecation of specific assets of the company.

viii) Karnataka Bank Limited have agreed for a one time settlement of Rs. 62.50 lakhs (Rupees Sixty Two Lakhs and Fifty Thousand only) against principal outstanding of Rs. 250 lakhs (Rupees Two Crores Fifty Lacs only). The said bank have also waived repayment of interest of Rs. 44.99 lakhs (Rupees Forty Four Lakhs Ninety Nine Thousand Eight Hundred and Twenty Eight only)

ix) Similarly, during the financial year 2006 07, promoter’s contribution of Rs. 800 lakhs (Rupees Eight Crores Only), which was classified as unsecured loan, consequent on the promoter agreeing to waive its repayment has been transferred to capital reserve. The reduction of these liabilities together with (b) above has been taken to Capital Reserve, during the year.

x) In respect of Secured loans of Rs. 628 lakhs as on September 30, 2010, the Company has not made any provision of interest for the same as the Company is negotiating a One 146 Time Settlement with lenders. In absence of crystallization of amount required to be paid under One Time Settlement, no provision of Interest / charges / liquidated damages has been made for all past five years.

6. Remuneration or sitting Fees has been paid to Whole time Directors for the Year 2009-2010 and 1 st April, 2010 to September 2010.

147 Annexure-6 Consolidated Significant Investments (Quoted and Unquoted) fully paid

Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Period Year Year Year Year Year ending ending ending ending ending ending Particulars 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Long Term Investments Book Value of quoted investment in shares - - - - - Book Value of unquoted investment in shares 110.31 146.24 - - - - Total 110.31 146.24 - - - -

Annexure 7: Consolidated Restated Statement of Dividends Paid/Proposed

Consolidated for the period ended September 30, 2010 & Year ended March 31, 2010

The Company has not paid dividends in the last five years and six months period ended on September 30, 2010.

Annexure 8: Consolidated Statement of Accounting Ratios

Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 Period Year Year Year Year Year ending ending ending ending ending ending Particulars 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006 Net worth (A) (Rs. In Lakhs) 770.73 773.98 71.04 122.97 210.78 (651.25) Restated net profit after tax (B) (Rs. In Lakhs) 10.24 (36.38) (90.93) (87.81) (93.78) (115.29) Shares outstanding at the end of the year (C ) 8,790,000 8,790,000 5,790,000 5,400,000 5,400,000 5,400,000 Weighted average no. of shares outstanding at the end of the year (for Basic EPS) (D) 8,790,000 6,540,000 5,790,000 5,400,000 5,400,000 5,400,000 Weighted average no. of shares outstanding at the end of the year (for Diluted EPS) (E) 8,790,000 6,540,000 5,790,000 5,400,000 5,400,000 5,400,000 Basic Earning per Share (B/D) 0.12 (0.56) (1.57) (1.63) (1.74) (2.13) Diluted Earning per Share (B/E) 0.12 (0.56) (1.57) (1.63) (1.74) (2.13) Return on Net worth (%) 0.01 (0.05) (1.28) (0.71) (0.44) (0.18) Net Asset value per equity share 8.77 8.81 1.23 2.28 3.90 (12.06)

148 Annexure 9: Consolidated Statement of Capitalization Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Particulars Pre Issue as Post Issue at 30.09.2010 Borrowings Short Term Debt (including current liabilities) 929.13 579.13 Long Term Debt 766.60 766.60

Total Debt 1,695.73 1,345.73

Shareholders Funds Share Capital 879.00 4,395.00 Reserves and Surplus 1,603.58 1,603.58 Less: Debit balance in P & L Account 1,697.95 1,697.95

Total Shareholders Funds 784.63 4,300.63

Long Term Debt/Equity Ratio 2.16 0.31

Annexure 10: Consolidated Statement of Tax Shelter Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Period Year Year Year Year Year ending ending ending ending ending ending Financial Year ending 30.09.2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 31.03.2006

Profit/Loss before tax 11.53 (33.14) (89.41) (87.55) (93.75) (115.29)

Tax Rate including surcharge and education cess (%) 33.22% 33.99% 33.99% 33.99% 33.66% 33.66% Tax at Notional Rate ------Adjustments: Difference in Book and Income Tax Depreciation 51.84 100.88 101.78 101.87 104.30 105.70 Miscellaneous Expenditure W/off ------Unabsorbed Losses/Depreciation (51.84) (100.88) (101.78) (101.87) (104.30) (105.70)

Net Adjustments ------

Tax Saving Thereon ------MAT provision ------Total Taxation ------

Taxation on extra-ordinary Items ------Tax on Profits before extraordinary items ------

149 Annexure 11: Consolidated Statement of Other Income Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Period Year Year Year Year ending Year ending ending ending ending ending 31.03.2007 31.03.2006 Particulars 30.09.2010 31.03.2010 31.03.2009 31.03.2008 Waiver of Interest arising under One Time - Settlement Scheme with the bankers 64.80 - - - - Miscellaneous Income 8.74 6.48 - - - - Total 8.74 71.28 - - - -

Annexure 12: Consolidated Statement of Sundry Debtors Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Particulars As at As at As at As at As at As at 30/09/2010 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 (Unsecured, considered good) - Outstanding for a period less than six months 469.12 104.81 230.27 122.45 15.93 - - Outstanding for a period exceeding six months 146.67 68.31 50.54 - - -

Total 615.78 173.13 280.81 122.45 15.93 -

Annexure 13: Consolidated Statement of Loans and Advances Consolidated for the period ended on September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Particulars As at As at As at As at As at As at 30/09/2010 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 Trade Advances/Inter Corporate Advances Other Advances - Less than 6 months 70.74 229.36 - More than 6 months* 966.00 966.00 966.00 966.00 966.00 966.00 Total 1,036.74 1,195.36 966.00 966.00 966.00 966.00 *Represents amounts advanced towards Hire Purchase transactions to various customers when the company was carrying on NBFC activities. The Company is of the opinion that the banks to whom these `stock on hire' were offered as security would have resorted to repossession of assets from the customers directly and also collected some monies from the customers directly, Pending collection of information from various banks, these accounts are remain unadjusted in the books. The amounts due to banks are under dispute and cases are pending at Debt Recovery Tribunal.

150 Annexure-14 Consolidated Secured and Unsecured Loans

Consolidated for the period ended September 30, 2010 & Year ended March 31, 2010

SECURED LOANS (Rs. in Lakhs) NATURE BALANC SL. BANK NAME OF E AS ON DETAILS OF SECURITY NO. LOAN 30.09.2010 Hypothecation of book debts, 1 Bank of Baroda Cash Credit 42.50 assignment of HP/Lease documents covering motor vehicles Hypothecation of book debts, 2 Bank of Rajasthan Cash Credit 75.00 assignment of HP/Lease documents covering motor vehicles Assignment of HP/Lease documents 3 Karnataka Bank Cash Credit 32.70 covering motor vehicles and hypothecation of book debts Assignment of HP/Lease documents 4 State Bank of Hyderabad Cash Credit 25.00 covering motor vehicles and hypothecation of book debts Hypothecation of book debts, bills, 5 State Bank of Mysore Cash Credit 350.00 securities 6 Union Bank of India Cash Credit 3.56 Hypothecation of book debts 7 HDFC Bank Limited H P 12.19 Hypothecation of Vehicle 8 Interest Accrued -Bank of Baroda 5.85 - Bank of Rajasthan 13.50 - Karnataka Bank 24.24 - State Bank of Hyderabad 2.31 - State Bank of Mysore 63.00 Grand Total 649.85

UNSECURED LOANS: (Rs. in lakhs) As at As at As at As at As at As at Particulars 30/09/2010 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 Kaashyap Technologies Ltd. - - 5.05 31.13 - - Nava Yukthi Consultancy - - 38.03 - - - Pvt. Ltd. Mind Kriya Soft Tech Pvt. - - 5.19 - - - Ltd. Macle Capital Private 46.75 71.75 Limited Mr. A. Venkatramani - 4.47 4.47 4.47 4.47 803.25 Mr. Ramanlal Vakharia 70,00 - - - - - Total 116.75 76.22 52.74 35.60 4.47 803.25

151 Annexure-15 Consolidated Related Party Transactions (Rs. in Lakhs) As at As at As at As at As at As at Particulars 30/09/2010 31/03/2010 31/03/2009 31/03/2008 31/03/2007 31/03/2006 Finance Loans/Advances: Mind Kriya Soft Tech

Pvt. Ltd. - a. Opening Balance - 2.72 Dr - - -

b. Advanced during the - - - year/period - -

c. Amounts received / - - 7.91 Advances repaid - - a. Closing Balance - 5.19 Cr. - - -

Nava Yukthi Consultancy Pvt. Ltd. a. Opening Balance - 3.22 Dr - - -

b. Advanced during the - - year/period - 10.00 -

c. Amounts received / - - Advances repaid - 51.25 - a. Closing Balance - 38.03Cr. - - -

152 (B) FINANCIAL INFORMATION OF GROUP CONCERNS

Our Promoters have direct ownership control of all the Indian group entities described herein. a) Company in which 10% or more of the share capital is held by our Promoters or their immediate relatives; b) Company in which a company specified above holds 10% or more, of the share capital; c) Company promoted by our Promoters.

The companies that form part of our Promoter Group are as follows –

1) Kaashyap Technologies Ltd. (KTL) 2) Space Computer and Systems Ltd. (SCSL) 3) Space Hospitals Ltd. (SHL) 4) Kaashyap Interserve Technologies Ltd. (KITL) 5) AVR Talkies Pvt. Ltd.

Note: Other than the companies mentioned herein, there are no other companies / ventures promoted by the Promoters.

DETAILS OF LISTED GROUP CONCERNS WITHIN OUR GROUP

1) Kaashyap Technologies Limited (KTL)

Incorporation -

The Company was originally incorporated on 21 st May, 1997 as Kaashyap Institute of Information Technology Private Limited with Registrar of Companies, Tamil Nadu at Chennai. The name of the company was changed to Kaashyap Radiant Systems Private Limited vide fresh certificate of incorporation issued on 14 th May, 1998 by Registrar of Companies, Tamil Nadu at Chennai. The Company was subsequently converted in to a public limited Company in the year 1998 by the name Kaashyap Radiant Systems Limited and the fresh certificate of incorporation consequent upon conversion was issued by the Registrar of Companies, Tamil Nadu at Chennai on 08 th September, 1998. The name of the Company was further changed to Kaashyap Technologies Limited vide fresh certificate of Incorporation issued by the Registrar of Companies, Tamil Nadu at Chennai dated 01 st may, 2006.

The company is listed with Bombay Stock Exchange Limited and Madras Stock Exchange Limited. Application along with all necessary papers filed for delisting of scrip from Calcutta Stock Exchange Association Ltd., and Hyderabad Stock Exchange Ltd.

The Registered office of the company is situated at B.R. Complex, II Floor, No.33/8, B. R. Complex, II Floor, C.P. Ramasamy Road, Alwarpet, Chennai – 600 018.

Business - The company is engaged in the business of Computer Education & Training, Projects and Consultancy activities. KTL has a 10-year track record in IT services, Strategic consulting and advisory practice. It offers solutions for SAP projects, Software Development, Service Oriented Architecture (SOA), Industry specific requirements and much more. For offshore outsourcing and on-site outsourcing, clients can get the advantage of innovation, efficiency and expertise of an experienced team of KTL.

Capital Structure

Share Capital as on September 30, 2010 (Rs. in Lakhs) Share Capital No. of Equity Shares Amount Total Authorised 900,000,000 equity shares of Rs. 1/- each 9000.00 10000.00

9,90,000 11% Redeemable Preference 153 Shares of Rs. 100/- each 990.00

10,000 15% Cumulative Redeemable Preference Shares of Rs. 100/- each 10.00

Issued, Subscribed and Paid-up 44,51,94,638 Equity Shares of Re. 1/- each 4451.95 6978.32 fully paid up

4,00,000 11% Redeemable Preference 400.00 Shares of Rs.100/- each

5,570 15% Cumulative Redeemable 5.57 Preference Shares of Rs.100/- each

21,20,80,000 Equity Shares of Re.1/- each 2120.80 upon issue of 2,20,000 GDRs@ USD 20 per GDR (Allotted on October 9, 2009)

Issue of Global Depository Receipts (GDRs)

1. Kaashyap Technologies Limited, has in its Board Meeting held on December 6, 2006 approved to raise funds up to USD 25 Million to meet the project cost and Capital expenditure of the Company through issue of GDRs/ ADRs/ FCCBs, which was subsequently approved by the shareholders of the Company in their Extra-Ordinary General Meeting held on January 5, 2007 to issue GDRs/ ADRs/ FCCBs by way of cash or stock swap or towards acquisition of business or a combination thereof at such time in one or more tranches. Based on this the Board had made following GDRs Allotments in three tranches:

Issued 9,90,00,000 Equity shares of Re.1 each at a premium of Rs.1.50 each upon issue of 3,00,000 GDR @ USD 20 per GDR aggregating USD 6 Million on May 25, 2007 and listed on the Bombay Stock Exchange Ltd. w.e.f. June 06, 2007 and on Madras Stock Exchange Ltd. w.e.f. March 12, 2008.

Issued 4,12,50,000 Equity shares of Re.1 each at a premium of Rs1.50 each upon issue of 1,25,000 GDR @ USD 20 per GDR aggregating USD 2.5 Million on July 2, 2007 and listed on the Bombay Stock Exchange Ltd. w.e.f. July 20, 2007 and on Madras Stock Exchange Ltd. w.e.f. March 31, 2008.

Issued 16,25,25,000 Equity shares of Re.1 each at a premium of Rs.3 each upon issue of 4,92,500 GDR @ USD 33.50 per GDR aggregating USD 16.5 Million on December 27, 2007 and listed on the Bombay Stock Exchange Ltd. w.e.f. January 4, 2008 and on Madras Stock Exchange Ltd. w.e.f. April 15, 2008.

2. Kaashyap Technologies Limited, has in its Board Meeting on April 9, 2009 discussed the business prospects of Logistics Solutions Inc., USA, the consulting division of USA and decided to acquire 49% stake in Logistics Solutions Inc., USA through issue of Global Depository Receipts (GDRs) in lieu of cash consideration amounting not more than USD 6 Million. The company after taking the decision of the same, taken the valuation report and negotiated the stake value to be USD 4.4 million and decided to issue 2,20,000 GDRs represented by 21,20,80,000 Equity Shares of Re.1/- each on October 9, 2009 to the share holders of Logistic Solutions Inc., USA for acquiring 49% stake. The said GDRs were listed on the Luxembourg Stock Exchange on October 9, 2009 and also successfully got the 21,20,80,000 underlying Equity Shares listed on the Bombay Stock Exchange Ltd. w.e.f. October 27, 2009 and on Madras Stock Exchange w.e.f. October 28, 2009.

154 Shareholding Pattern of the company as on September 30, 2010 is as follows –

% of Category of Shareholder No. of Shares Shareholding (A) Shareholding of Promoter and Promoter Group (1) Indian 5,852,542 0.89 (2) Foreign - - Total (A) 5,852,542 0.89 (B) Public Shareholding (1) Institutions 15,67,67,316 23.85 (2) Non-Institutions 49,46,54,885 75.26 Total (B) 65,14,22,201 99.11 Total (A + B + C) 65,72,74,908 100.00

Board of Directors –

S. No. Name of Director Designation 1. Mr. A. Venkatramani Chairman & Managing Director 2. Mr. A. Ganesan Director 3. Mr. Raghuram Tandra Director 4. Mr. R. Gopalan Director 5. Mr. S. Thiruvengadam Director

Financial Performance – (Rs. in Lakhs)

Year ended Year ended Year ended Year ended Period Particulars March 31, March 31, March 31, March 31, ended June 2007 2008 2009 2010 30, 2010 Sales 212.00 5843.09 4002.78 4268.73 707.00 Other Income - 3.84 509.62 7.04 0.00 PAT/(Loss) 62.22 731.54 (723.44) (344.81) (116.90) Share Capital 968.78 3996.53 4857.52 6972.75 6572.75 Reserves & Surplus (152.92) 7485.45 6801.01 6656.20 6945.80 NAV (Rs.) 0.73 3.08 2.62 2.07 2.06 EPS (Rs.) 0.11 0.35 (0.16) (0.05) (0.02)

Quotes for the last six months at the Bombay Stock Exchange Limited (BSE) –

Month Price High Low March 2010 0.59 0.48 April 2010 0.67 0.57 May 2010 0.61 0.54 June 2010 0.54 0.51 July 2010 0.70 0.53 August 2010 0.75 0.53 September 2010 0.66 0.52 (Source: BSE Website) There has been no public or rights issue in the preceding three years made by KTL.

KTL is neither a Sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1995 nor is under winding up.

155 KTL has not entered into any related party transactions with our Company except as mentioned in Annexure- 15 “Related Parties Transactions given in section- Financial Statements of the Company on page 121 of this Letter of Offer.

2) Space Computer and Systems Limited (SCSL)

Incorporation -

The Company was incorporated on 21 st September, 1990 as Space Computer and Systems Private Limited under the provisions of the Companies Act, 1956, with Registrar of Companies at Tamil Nadu, Chennai. The Company was subsequently converted into a public limited company vide revised certificate of incorporation issued by the Registrar of Companies, Tamil Nadu at Chennai on 27 th December, 1999 and the word private was deleted and name was changed to Space Computer and Systems Limited.

The Registered office of the company is situated at No. 132, “Whispering Height”, St. Mary’s Road, Alwarpet, Chennai – 600 018.

Business -

Space Computer and Systems Ltd. offer a full range of services to support the lifecycle of software products, designed to meet the unique requirements of start-ups, Web-based businesses, and companies with mature software product lines.

The company provides services in Software Applications Research & Development, Web enabled Applications, Applications customization, Component Design /Development / Integration, Product & Application support, Multimedia, Data Progressing, Full testing cycle, Documentation Development, etc. The Company has a software development center at Chennai. The Company has developed products mainly for library automation, student management software & has also developed mini ERP solution to medium range manufacturing industries and migration of application from DOS based to GUI based application. Space Computer and Systems Ltd. serves enterprises in industries including healthcare, manufacturing, education and training, and marketing and advertising.

Capital Structure

Share Capital as on September 30, 2010 (Rs. In Lakhs)

Share Capital No. of Equity Shares Amount Authorized 4,00,00,000 Equity Shares of Rs. 10/- each 4000.00 Issued, Subscribed and Paid Up 80,33,700 Equity Shares of Rs. 10/- each 803.37

Shareholding Pattern of the company as on September 30, 2010 is as follows:

% of Category of Shareholder No. of Shares Shareholding (A) Shareholding of Promoter and Promoter Group (1) Indian 4,048,890 50.40 (2) Foreign - - Total (A) 4,048,890 50.40 (B) Public Shareholding (1) Institutions 13,500 0.17 (2) Non-Institutions 3,971,310 49.43 Total (B) 3,984,810 49.60 Total (A + B + C) 80,33,700 100%

156 Board of Directors –

Sl. No. Name of Director Designation 1. Dr. G. Ravichanderan Whole time Director 2. Mr. Sunil Raheja Director 3. Mrs. Geetha Muraliraman Director 4. Mr. R. Gopalan Director 5. Mr. R. Chandrasekaran Director

Financial Performance - (Rs. In Lakhs)

Year ended Year ended Year ended Year ended Particulars March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010 Sales 161.12 285.33 73.48 77.39 Other Income - - - - PAT/(Loss) (5.76) 16.34 2.10 1.58 Share Capital 803.37 803.37 803.37 803.37 Reserves & Surplus 248.31 264.64 266.75 268.33 NAV 13.09 13.30 13.32 13.34 EPS (0.07) 0.20 0.03 0.02

There has been no public or rights issue in the preceding 3 years made by SCSL.

SCSL is neither a Sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1995 nor is under winding up.

SCSL has not entered into any related party transactions with our Company except as mentioned in Annexure-15 “Related Parties Transactions given in section- Financial Statements of the Company on page 121 of this Letter of Offer.

The company is listed with Madras Stock Exchange Limited (MSE), Bangalore Stock Exchange Limited (BgSE) and Hyderabad Stock Exchange Limited (HSE). However, there is no trading of shares on these Stock Exchanges. The Company in General Meeting has passed resolution for delisting of shares from Bangalore Stock Exchange Limited and Hyderabad Stock Exchange Limited. However, application is yet to be made with this stock exchanges.

DETAILS OF UNLISTED GROUP CONCERNS WITHIN OUR GROUP

3) Space Hospitals Ltd. (SHL)

Incorporation -

Space Hospitals Ltd. was incorporated in Chennai on 23 rd September, 2005 with Registrar of Companies at Tamil Nadu, Chennai The Certificate for commencement of Business was received on April 28, 2006.

The Registered office of the company is situated at No. 132, Whispering Heights, St. Mary's Road, Chennai – 600 018.

Business -

The company is primarily engaged in telemedicine activities. The services of the company enable easy flow of medical information & knowledge across network, enables storage of patient health record electronically in a secured server for easy access of information by the specialists, connects specialists and experienced medical professionals with rural health care units for immediate medical attention, ensures accurate and

157 timely diagnosis, Reduces critical healthcare delivery times by scheduling proper treatment and follow-up, Effectively save lives and bring down the cost of modern healthcare delivery.

Capital Structure -

Share Capital as on September 30, 2010

Share Capital No. of Equity Shares Rs. In Lakhs Authorised Capital 7,00,00,000 Equity Shares of Rs. 1/- each 700.00 Issued, Subscribed and Paid Up 7,00,00,000 Equity Shares of Rs. 1/- each 700.00

Shareholding Pattern of the company as on September 30, 2010 is as follows

SHL is a wholly owned subsidiary of KTL

Board of Directors –

No. Name of Director Designation 1. Ms. Usha Venkatramani Director 2. Mr. Eravamannattil Padmanabhan Director 3. Mr. Shankar Munuswamy Director

Financial Performance – (Rs. in Lakhs)

Year ended Year ended Year ended Year ended Particulars March 31, 2007 March 31, 2008 March 31, 2009 March 31, 2010 Sales 82.48 329.80 34.89 15.23 Other Income - - - - PAT/(Loss) (78.16) 91.83 (136.72) (106.72) Share Capital 200.00 700.00 700.00 700.00 Reserves & Surplus (78.28) 13.55 (123.17) 229.90 NAV 0.61 1.02 0.82 0.67 EPS (0.58) 0.12 (0.20) (0.15)

There has been no public or rights issue in the preceding 3 years made by the Company.

Space Hospitals Ltd. is neither a Sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1995 nor is under winding up.

SHL has not entered into any related party transactions with our Company except as mentioned in Annexure- 15 “Related Parties Transactions given in section- Financial Statements of the Company on page 121 of this Letter of Offer.

4) Kaashyap Interserve Technologies Limited (KITL)

Incorporation -

Kaashyap Interserve Technologies Private Limited was incorporated on 11 th September, 1998 with Registrar of Companies at Tamil Nadu, Chennai. The Company was subsequently converted into a public limited company vide revised certificate of incorporation issued by the Registrar of Companies, Tamil Nadu at Chennai on 17 th December, 1999 and the word private was deleted and name was changed to Kaashyap Interserve Technologies Limited.

The Registered office of the company is situated at No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018.

158 Business -

The company offers internet & web-related services. The company is engaged in providing information technology services such as o Website development and design, o Hosting and Maintenance, o Marketing, and analysis, o Website Renovations & upgrades, o LAN & WAN installation, o Intranet setup and installation, o Internet access service for all large & small scale business, o Application Development (i.e. Chatrooms, Message boards, Online polling, Live-feed audio/video, etc. o Result based website marketing.

Capital Structure –

Share Capital as on September 30, 2010 (Rs. in Lakhs) Amount Share Capital No. of Equity Shares (Rs.) Authorised Capital 12,000,000 Equity Shares of Rs. 10/- each 1200 Issued, Subscribed, and Paid Up 12,000,000 Equity Shares of Rs. 10/- each 1200

Shareholding Pattern of the company September 30, 2010 is as follows –

Category of Shareholder No. of Shares % of Shareholding Directors/ Promoters & relatives 70,000 0.58 % Public 3,77,900 3.27 % Bodies Corporates 1,15,52,100 96.27 % Total 1,20,00,000 100%

Board of Directors –

Sl. No. Name of Director Designation 1. Mr. Adapa Srinivas Director 2. Mr. Chandrasekaran Rajaiah Director 3. Mr. R. S. Ravichandran Director

Financial Performance – (Rs. in Lakhs)

Year ended Year ended Year ended March Year ended March Particulars March 31, 2007 March 31, 2008 31, 2009 31, 2010 Sales - - - Other Income - - - PAT/(Loss) (0.06) (0.06) (0.06) (0.06) Share Capital 580.52 1,200 1,200 1,200 Reserves & Surplus 62.23 62.18 58.19 58.24 NAV (Rs.) 11.07 10.52 10.52 10.52 EPS (Rs.) 0.00 0.00 0.00 0.00

There has been no public or rights issue in the preceding 3 years made by the Company.

159 Kaashyap Interserve Technologies Ltd. is neither a Sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1995 nor is under winding up.

KITL has not entered into any related party transactions with our Company except as mentioned in Annexure-15 “Related Parties Transactions given in section- Financial Statements of the Company on page 121 of this Letter of Offer.

5) AVR Talkies Pvt. Ltd.

Incorporation -

AVR Talkies Private Limited was incorporated on February 17, 2010 with Registrar of Companies at Tamil Nadu, Chennai.

The Registered office of the company is situated at No. 19/9, Thiruvengadam Street, Mandaveli, Chennai - 600028

Business - Company is in the business of film production. The following projects of the company are in the pipeline

“Patta Patti” with famous cricketer Sadagopan Ramesh as the hero, which is produced under the banner of AVR Talkies. “Kulasekaranum Koolipadaiyum” with Cast being Sathiyaraj, Prakash Raj, Seethi and others, which is produced under the banner of AVR Talkies. “Naan” which AVR Talkies is co-producing where the famous music director Mr. Vijay Antony is being cast as hero for the first time.

Capital Structure –

Share Capital as on September 30, 2010 (Rs. in Lakhs) Amount Share Capital No. of Equity Shares (Rs.) Authorised Capital 10,000 Equity Shares of Rs. 10/- each 1.00 Issued, Subscribed, and Paid Up 10,000 Equity Shares of Rs. 10/- each 1.00

Shareholding Pattern of the company as on September 30, 2010 is as follows –

Name of the Shareholder No. of Shares % of Shareholding Sanraa Media Limited 3,000 30% Mr. A. Venkatramani 3,000 30% Ms. Usha Venkatramani 3,000 30% Ms. Geetha Vaidhyanathan 400 4% Mr. V. Muraliraman 300 3% Mr. Jude Jeyaprakash 300 3% Total 10,000 100%

Board of Directors –

Sl. No. Name of Director Designation 1. Mr. V. Muraliraman Director 2. Mr. Jude Jeyaprakash Director

160 Financial Performance –

As the company has not carried on any business during the financial year 2009-10, no financial statements have been prepared.

There has been no public or rights issue in the preceding 3 years made by the Company.

AVR Talkies Pvt. Ltd. is neither a Sick Company within the meaning of Sick Industrial Companies (Special Provisions) Act, 1995 nor is under winding up.

ATPL has not entered into any related party transactions with our Company except as mentioned in Annexure-15 “Related Parties Transactions given in section- Financial Statements of the Company on page 121 of this Letter of Offer.

161

C) MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS AS REFLECTED IN THE FINANCIAL STATEMENTS:

The investors should read the financial conditions and results of operations together with the restated audited financial statements of our Company, each for the financial year/ period ending March 31, 2010, 2009, 2008 and 2007 (all 12 months periods) and Six months period ended on September 30, 2010 including the notes thereto and the reports thereon, which appear in the section titled “Financial Statements” beginning on the page no. 121 of this Letter of Offer. All references to a particular fiscal period/ year are for the figures of that precise fiscal year/ period only.

BUSINESS OVERVIEW

We have recently entered into the Southern Indian Entertainment sector and are operating in Television Media through telecasting 24 x 7 Tamil Television channel in select territories other than India and production of movie based entertainment content focusing and concentrating on regional language i.e. Tamil.

Primarily, we carry out our operations in entertainment industry in following segments: 1. Running of 24 x 7 Tamil Movie Channel in select territories other than India 2. Production of Tamil Movie based entertainment programmes 3. Distribution of Tamil Movie and movie based entertainment programmes in select countries. 4. We have drawn plans to get into the segments of distribution of Overseas Rights of Southern Indian movies and Web-streaming of Tamil Movie on portal

Restated Statement of Assets and Liabilities Consolidated for the period ended September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) As at As at As at As at As at PARTICULARS 30/09/2010 31/03/2010 31/03/2009 31/03/2008 31/03/2007

Fixed Assets Gross Block 1,430.48 1,466.61 1,241.90 1,241.90 1,230.65 Net Block (please refer Annexure-4 & 5) 594.58 652.83 473.02 584.72 684.70 Less: Revaluation Reserve - - - - Total Fixed Assets (A) 594.58 652.83 473.02 584.72 684.70

Investments (B) 110.31 146.24 0.49 - -

Current Assets, Loans and Advances: Stock & Work-in-progress 182.02 195.84 Sundry Debtors 615.78 173.13 280.81 122.45 15.93 Cash and Bank Balances 19.04 16.25 1.66 4.25 3.32 Loans and Advances (Please refer Annexure- 13) 1,036.74 1,195.36 966.00 966.00 966.00 Other Current Assets - 10.01 8.96 2.48 - Total (C) 1,853.58 1,590.59 1,257.43 1,095.17 985.25

Liabilities and Provisions : Share Application Money 43.20 49.70 Secured Loans (please refer Annexure-5 and 14) 649.85 645.95 979.82 975.47 977.79 Unsecured Loans 116.75 76.22 52.74 35.60 4.47 Current Liabilities 929.13 795.00 582.93 501.19 432.32 Provisions 50.00 48.64 44.41 44.67 44.59 Total (D) 1,788.93 1,615.51 1,659.90 1,556.92 1,459.17

162 Deferred Tax Liability (E) (1.20) 0.18 - - -

Net Worth (A+B+C-D-E) 770.73 773.98 71.04 122.97 210.78

Represented by Equity Share Capital 879.00 879.00 579.00 540.00 540.00 Preference Share Capital - - - - Reserves and Surplus 1,603.58 1,603.58 1,159.58 1,159.58 1,159.58 Less: Revaluation Reserve - - - - Adjusted Reserves 1,603.58 1,603.58 1,159.58 1,159.58 1,159.58 Misc. Exp. To the extent not w/off 13.90 0.41 - - - 2,468.68 2,482.17 1,738.58 1,699.58 1,699.58 Debit Balance in P & L (1,697.95) (1,708.19) (1,667.55) (1,576.62) (1,488.81) Net Worth 770.73 773.98 71.04 122.97 210.78

Restated Statement of Profit and Loss Account Consolidated for the period ended September 30, 2010 and year ended on March 31, 2010 (Rs. In Lakhs) Particulars Period Year Year Year Year ending ending ending ending ending 30/09/2010 31.03.2010 31.03.2009 31.03.2008 31.03.2007 Income : Income from operations 547.74 597.25 314.96 171.91 45.02 Other Income 8.74 71.28 - - - Closing Stock & Work-in-progress 140.52 154.34 Total Income 697.00 822.87 314.96 171.91 45.02

Expenditure: Opening Stock & Work-in-progress 154.34 114.51 Operational Expenses 390.03 556.88 258.82 117.11 24.86 Administration Expenses 72.16 63.36 29.48 17.44 2.65 Public Issue/Other Expenses W/O - - - - Bad debts W/O - - - - Total Expenditure 616.53 734.74 288.30 134.55 27.51 Net Profit before Interest, Depreciation, Tax and Extraordinary Items 80.47 88.13 26.65 37.37 17.51 Interest 12.61 11.30 4.36 13.68 - Depreciation 56.33 109.97 111.69 111.23 111.25 Net Profit before Tax and Extraordinary Items 11.53 (33.14) (89.41) (87.55) (93.75) Provision for Taxation Current Tax 2.66 3.00 - - - Fringe benefit tax - 1.53 0.26 0.03 Deferred Tax (1.38) 0.24 - - - Net Profit after Tax and before Extraordinary Items 10.24 (36.38) (90.93) (87.81) (93.78) Extraordinary Items - - - - Net Profit after Extraordinary Items 10.24 (36.38) (90.93) (87.81) (93.78) Balance brought forward (1,708.19) (1,671.81) (1,576.62) (1,488.81) (1,395.03) Profit/(Loss) Carried to Balance Sheet (1,697.95) (1,708.19) (1,667.55) (1,576.62) (1,488.81)

163 COMPARISON BETWEEN FINANCIAL PERFORMANCES FOR ACCOUNTING PERIOD ENDED 31 st March, 2010 AND 31st March, 2009.

TOTAL INCOME

SALES During the year ended 31 st March, 2010, the sales of our company, had increased to Rs.597.25 Lakhs from Rs. 314.96 Lakhs in financial year ended 31 st March, 2009. The Sales was increased by 89.63% during the financial year 2009-10 due to increase in revenues in trading of shares.

Other Income, part of total income - Other income rose as per the increase in sales.

OPERATIONAL EXPENSES The Operational Expenses during the financial year 2009-10 had increased substantially from Rs. 258.82 Lakhs in 31 st March, 2009 (82.18% of sales) to Rs. 556.88 Lakhs in 31 st March, 2010 (93.24% of sales). The Operational Expenses increased by 115.16% during the financial year 2009-10. The increase can be attributed to increase in volume of operations and also increased staff cost.

ADMINISTRATION EXPENSES The Administration Expenses during the financial year 2009-10 had increased from Rs.29.48 Lakhs in 31 st March, 2009 (9.36% of sales) to Rs. 63.36 Lakhs in 31 st March, 2010 (10.61% of sales). The Administrative Expenses had increased by 114.93% of sales during the financial year 2009-10. The increase could be attributed to various factors like substantial expenditure incurred towards filing fees, increased communication costs and travel and conveyance expenditure.

INTEREST EXPENSES Interest Expenses for the year ended 31 st March, 2010 was Rs. 11.30 Lakhs (1.89% of sales) against Rs. 4.36 Lakhs (1.38% of sales) for the year ended 31 st March, 2009. The interest expenses were increased by 159.17% during the financial year 2009-10.

DEPRECIATION Depreciation for the year ended 31 st March 2010 was Rs. 109.97 Lakhs (18.41% of sales) against Rs.111.69 Lakhs (35.46% of sales) for the year ended 31 st March 2009 mainly

PROFIT BEFORE TAX and before exceptional items (PBT) The Profit before tax for the year ended 31 st March, 2010 was Rs. (33.14) Lakhs against Rs. (89.41) Lakhs for the year ended 31 st March, 2009. The Profit before tax was negative due to high operative expenses.

COMPARISON BETWEEN FINANCIAL PERFORMANCES FOR ACCOUNTING PERIOD ENDED 31 st March, 2009 AND 31st March, 2008.

TOTAL INCOME

SALES During the year ended 31 st March, 2009, the sales of our company, had increased to Rs.314.96 Lakhs from Rs. 171.91 Lakhs in financial year ended 31 st March, 2008. The Sales was increased by 83.21% during the financial year 2008-09 due to increase in revenues in trading of shares by 63%, increase of 58% increase in consultancy income and more than doubling of software development income.

Other Income, part of total income - Other income rose as per the increase in sales.

164 OPERATIONAL EXPENSES The Operational Expenses during the financial year 2008-09 had increased substantially from Rs. 117.11 Lakhs in 31 st March, 2008 (68.12% of sales) to Rs. 258.82 Lakhs in 31 st March, 2009 (82.18% of sales). The Operational Expenses increased by 121.01% during the financial year 2008-09. The increase can be attributed to increase in volume of operations and also increased staff cost.

ADMINISTRATION EXPENSES The Administration Expenses during the financial year 2008-09 had increased from Rs.17.44 Lakhs in 31 st March, 2008 (10.14% of sales) to Rs. 29.48 Lakhs in 31 st March, 2009 (9.36% of sales). The Administrative Expenses had increased by 69.05% of sales during the financial year 2008-09. The increase could be attributed to various factors like substantial expenditure incurred towards filing fees, increased communication costs and travel and conveyance expenditure.

INTEREST EXPENSES Interest Expenses for the year ended 31 st March, 2009 was Rs. 4.36 Lakhs (1.39% of sales) against Rs. 13.68 Lakhs (7.96% of sales) for the year ended 31 st March, 2008. The interest expenses were decreased by 213.40% during the financial year 2008-09. As the company has entered into One Time Settlement (OTS) with some of its bankers and is negotiating OTS settlements with other bankers also, the interest payments are determined by these OTS settlements.

DEPRECIATION Depreciation for the year ended 31 st March 2009 was Rs. 111.69 Lakhs (35.46% of sales) against Rs. 111.23 Lakhs (64.70% of sales) for the year ended 31 st March 2008 mainly due to increased amount of depreciation for computers in the current year. In the previous year, depreciation was claimed only for part of the year for the computers which were purchased during that year.

PROFIT BEFORE TAX and before exceptional items (PBT) The Profit before tax for the year ended 31 st March, 2009 was Rs. (89.41) Lakhs against Rs. (87.55) Lakhs for the year ended 31 st March, 2008.

COMPARISON BETWEEN FINANCIAL PERFORMANCE FOR ACCOUNTING PERIOD ENDED 31 ST MARCH, 2008 AND 31ST MARCH 2007.

TOTAL INCOME

SALES During the year ended 31 st March, 2008, the sales of our company, had increased to Rs.171.91 Lakhs from Rs. 45.02 Lakhs in financial year ended 31 st March, 2007. The Sales were increased by 281.88% during the financial year 2007-08 because of the two new additional streams of Income viz. Consultancy and Software Development accounting for a turnover of Rs.23.05 Lakhs and 62.32 Lakhs respectively.

OPERATIONAL EXPENSES The Operational Expenses during the financial year 2007-08 had increased substantially from Rs. 24.86 Lakhs in 31 st March, 2007 (55.22% of sales) to Rs. 117.11 Lakhs in 31 st March, 2008 (68.12% of sales). The Operational Expenses were increased by 371.13% during the financial year 2007-08 because of the increased expenditure in connection with two new streams of activities viz. Consultancy and Software Development.

ADMINISTRATION EXPENSES The Administration Expenses during the financial year 2007-08 had increased from Rs.2.65 Lakhs in 31 st March, 2007 (5.90% of sales) to Rs. 17.44 Lakhs in 31 st March, 2008 (10.14% of sales). The Administrative Expenses had increased by 558.11% of sales during the financial year 2007-08 mainly because of the increased communication costs and costs incurred in connection with the new streams of revenues for the Company during the year.

165 INTEREST EXPENSES Interest Expenses for the year ended 31 st March, 2008 was Rs. 13.68 Lakhs (7.96% of sales). The company has entered into One Time Settlement (OTS) with one of its bankers and is negotiating OTS settlements with other bankers also. Interest payment is determined by these OTS settlements.

DEPRECIATION Depreciation for the year ended 31 st March 2008 was Rs. 111.23 Lakhs (64.70% of sales) against Rs. 111.25 Lakhs (247.11% of sales) for the year ended 31 st March 2007. As WDV method of depreciation is adopted, depreciation for the current year is generally lower than previous year. On some of the new computers, depreciation is claimed only for 2 months and for some others for 5 months (depending on the month of purchase of these computers)

PROFIT BEFORE TAX and before exceptional items (PBT) The Profit before tax for the year ended 31 st March, 2008 was Rs. (87.55) Lakhs against Rs. (93.75) Lakhs for the year ended 31 st March, 2007.

Other Information

1. Unusual or Infrequent Events or Transactions Except as described in this Letter of Offer, there have been no other events or transactions to our knowledge, which may be described as “unusual” or “infrequent”.

2. Significant economic changes that materially affected or are likely to affect income from continuing operations:

In view of cancellation of NBFC registration of RKIL by RBI vide its order No. DNBS (Ch) / 2642/ Che 00053/99-2000 dated November 1, 1999, the company had to stop its retail financing business. During the years 1999 to 2006, the Issuer Company was engaged in recovering its old outstanding receivables. During the years 2007 to 2009, the Issuer Company has ventured into Consultancy Services, Software Development and Trading of Securities. In December 2009, the Company has ventured into entertainment industry by making an acquisition of 100% equity stake of TBO-India Pvt. Ltd. and Pix Aalaya Studios Pvt. Ltd. The Company now proposes to venture into telecasting of TBO Channel owned by its chain Subsidiary i.e. TBO Singapore Pte. Ltd. to other countries having significant Tamil Population and distribution of Overseas rights of Southern Indian Movies in Overseas markets.

3. Known Trends and Uncertainties Except as described in “Risk Factors” and “Managements Discussion and Analysis of Financial condition and results of operations” and elsewhere in this Letter of Offer, to our knowledge there are no known trends or uncertainties that have or had or expected to have material adverse impact on our revenues or income from continuing operations.

4. Future Relationship between Cost and Income Except as described in “Risk Factors”, “Business Overview” and “Managements Discussion and Analysis of Financial Conditions and Results of Operations” to our knowledge there are no known factors that will have a material adverse impact on our operations and finances which can affect cost and income in future.

5. Introduction of New Products We have recently entered into the Southern Indian Entertainment sector and are operating in Television Media segment through telecasting 24 x 7 Tamil Television channel in select territories other than India and production of movie based and current kollywood events based entertainment content focusing and concentrating on regional language i.e. Tamil.

6. Seasonality of Business Our business is not seasonal in nature.

7. Publicly announced New Product or Business Segment As of date, we have not publicly announced any new product or business segment except as disclosed in this Letter of Offer. 166

8. Significant dependence on a single product or few suppliers or customers We are not dependent on any single product, any single customer or few suppliers.

9. Competitive conditions Please refer to page no. 62 under “Industry Overview” of the Letter of Offer.

Note: Statement in the Management Discussion and Analysis Report describing our objectives, outlook, estimates, expectations or predictions may be "Forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to our operations include, among others, economic conditions affecting demand/supply and price conditions in domestic and overseas market in which we operate, changes in government regulations, tax laws and other statutes and incidental factors.

167 VII - LEGAL AND OTHER INFORMATION

(A) Outstanding Litigations and Material Developments

Except as described below, there are no outstanding litigations, suits or civil proceedings, or criminal proceedings, or prosecutions or tax liabilities, irrespective of whether specified in Schedule XIII of the Act, against our Company or the Directors, or the Subsidiaries or the Promoters or group companies. There are no proceedings initiated for economic/ civil/ and other offences (including past cases where penalty may or may not have been awarded) that would result in a material adverse effect on the business. No disciplinary action has been taken by the SEBI/ Stock Exchanges against our Company, Directors of our Company and Promoters. There are no Show Cause Notices (SCNs) received by Issuer Company, Promoter Group Company, Associates and promoters in their individual capacities.

I. Litigation involving Our Company

A. Cases filed against our Company Sr. No. 1 Case No./Date EO C.C. 467 to 469 of 2004 In The Court Of Additional CMM, EO-II, Egmore, Chennai By Reserve Bank of India Particulars Certain depositors of RKIL filed petitions before the Hon’ble Company Law Board seeking repayment of their deposits. CLB directed the company to repay their deposits in certain installments. Since the company could not make payments, they made a complaint to RBI whereupon RBI has initiated prosecution for the offence of not complying with the orders of the Company Law Board. Status Three directors filed Crl.O.P Nos 20279, 20280 & 20281 of 2007 and Crl.O.P.Nos. 12365, 12366 and 12367 of 2009 to quash the said complaints, before the Hon’ble High Court, Madras in which the High Court was pleased to dispense with their presence and also stayed further proceedings in the complaint. Crl.O.P.Nos. 20279, 20280/07 have been allowed. Crl.O.P. No. 20281/07 has been partly allowed. The other OPs. are pending on the Hon’ble High Court, Madras. The Next hearing date for C.C.Nos. 467 to 469 is on 29.10.2010. Background The Company was dealing with finance and had received deposits from various investors. Due to certain new guidelines issued by RBI, the company could function as a NBFC company. Therefore, a group company, KTL, doing business under the same brand name, took over the liabilities of the company with a bonafide intention to save its brand name “Kaashyap, though it did not have any commitment or responsibility towards the liabilities of the company. Pursuant to such takeover, KTL acknowledged the liabilities of the subscribers and depositors of the company and agreed to pay on a certain date. Due to unforeseen circumstances, KTL was not able to honour the commitment stated above on the due dates. Therefore, KTL formulated a scheme of repayment to all the depositors and got appropriate sanction from Hon’ble High Court, Madras, in C.P.No. 204 of 2003, vide order dated 03.11.2004. KTL has since then been making payments in accordance with the approved scheme and the scheme period runs till May 2010. All the depositors are bound by the said scheme. Hence there is no merit in the said complaint. Risk Assessment In the event of the case ending in conviction, RKIL may be saddled with a penalty not exceeding Rs.1 lakh

Sr. No. 2 Case No./Date O.A. 685 of 2000 In The Court Of DRT –1, Chennai By Karnataka Bank Limited Particulars The company had availed a loan of Rs.3,22,14,805.89/- overdraft facility to the tune of Rs.210 lakhs (Rs.150 lakhs for HP and Rs.60 lakhs for leasing facilities) from the Bank for the recovery of which the Bank has filed this O.A. 168 Status Enquiry pending. Next hearing date is 04.11.2010. Background For availing the loan as stated above, RKIL had mortgaged all lease/hire purchase documents covering finance on vehicles, machineries, equipments, etc., and respective assets including those coming into existence by natural increase, accretion, purchased or otherwise to the Bank. However the company has already entered into a compromise arrangement with the Bank whereby the Bank has agreed to receive Rs. 62.5 lakhs in full and final settlement of all its dues. Risk Assessment The company is already making payments in accordance with the compromise.

Sr. No. 3 Case No./Date O.A. 263 of 2000 In The Court Of DRT –1, Chennai By Bank of Baroda Particulars The company had availed a cash credit facility of Rs.200 Lakhs, for the recovery of which along with interest the Bank has filed this OA. Status Orders were pronounced allowing the O.A. without taking note of the Memo regarding compromise filed by the company. Hence the company has now filed a Review Application which is pending adjudication. Background For availing the above said loan, the company had mortgaged Machinery, plant, equipment and other assets of any kind whether new or second hand including vehicles, Air Conditioners, Computer, Office Equipments, T.V. Sets, Home Appliances, and Electronic component together with all their accessories, peripherals, Softwares, components, spares and stores whether manufactured or purchased by or belonging to the First Defendant etc to the Bank. The company has already entered into a compromise with the Bank whereby the Bank has agreed to receive Rs.75 lakhs in full and final settlement of all its dues payable in 6 installments. The company has already paid Rs.22.5 lakhs in three installments. Risk Assessment The company has filed a memo stating the above compromise. The company has only to pay the balance amount in accordance with the compromise.

(B) Cases Filed by our company There are no pending litigation / suits or proceeding except as mentioned below: Sr. No. 1 Case No./Date IN. No. 277 of 2008 In The Court Of DRAT, Chennai Against State Bank of Mysore Particulars The bank filed O.A. No. 338 of 2001 in DRT, Bangalore, For recovery of a sum of Rs.6,21,69,105.56/- and also Rs.1,50,000/- towards costs. The DRT decreed the said OA without even giving an opportunity to the company to let in evidence or defend. This is an appeal against the said order dated 17.12.2007 passed by DRT, Bangalore in O.A.No. 338 of 2001 Status The Bank has served notice on the company. The next hearing date is 04.11.2010. Background The company had availed cash credit facilities from the Bank and for recovery of dues in that regard, the Bank filed O.A.No.338 of 2001. In the said OA the Bank filed its evidence in chief. The company filed an application seeking permission of the Tribunal to cross examine the Bank’s witness. The Tribunal summarily dismissed the said application. The company filed an appeal against such order. The DRAT, Chennai allowed the said appeal. In the mean while, even before the hearing date of the OA, the Tribunal suo moto advanced the hearing and passed the order now appealed against. Risk Assessment In the event of the bank succeeding in its contentions, the company may be saddled with a liability to pay the Bank's claim of Rs.6,21,69,105.56/- and also Rs.1,50,000/- towards costs.

169 C. Litigations against Promoter / Director of our Company:

There are no pending litigation/ proceedings (civil or criminal) by or against the Directors of our company. We do not apprehend any potential litigation against our Directors.

The litigations against the promoter is as follows:

Mr. Arunagiri who was an employee of our company for a short period and he was also a Director in a Company in which Mr. Venkatramani was the Managing Director. Over the personal enmity between Mr. Arunagiri and Mr. Venkatramani, Mr. Arunagiri, being a law graduate, resorted to abuse of process of Court by filing vexatious Litigations before the Civil and Criminal Courts and those cases are as follows:

Civil Suit:

A civil suit in C.S No. 323/2002 is pending on the file of the Hon’ble High Court, Madras and the said suit was filed by Mr. Arunagiri as a Pauper claiming crores of rupees and the said Suit is one for recovery of money. Pending suit at the time of disposal of the interim application, the Hon’ble High Court, has observed that Mr. Arunagiri has not come to court with clean hands.

Criminal Complaint:

Mr. Arunagiri as a shareholder of Company founded and incorporated at the instance of Mr. Venkatramani, filed a criminal complaint for the alleged offence under section 420of IPC and other allied offences in the Court of XI Metropolitan Magistrate Court, Saidapet. The said case was transferred to the file of II Metropolitan Magistrate, Egmore. Chennai and the same is pending in CC No. 13368/2003. For the reasons best known to Mr. Arunagiri he avoided the completion of his side witness and except him as Pwl, the trial has not progressed. Over the protraction of the trial Mr. Venkatramani filed Crl OP No. 12557/2007 for quashing and sought for stay. The Hon'ble High Court was pleased to grant stay of all further proceedings pending on the file of the II M.M., Egmore, Chennai. The quash petition is pending disposal and a vacate stay petition has been filed by Mr. Arunagiri and those petitions are pending for disposal by the Hon’ble High Court.

Mr. Arunagiri has also filed three applications in Crl MP No 1561, 1562 & 156372006 and those petitions were dismissed by the II M.M., Egmore, Chennai and against the order of dismissal Mr. Arunagiri is approaching the revisional court (i.e) Principal Sessions Judge, Chennai.

II. Litigations involving our Group Companies

A. Cases filed against our Group Companies

1. KAASHYAP TECHNOLOGIES LIMITED

Criminal Cases

Sr. No. 1 Case No./Date CC.No.1724/2005 In The Court Of XVIII Metropolitan Magistrate, Chennai By UTI Bank Ltd Particulars Complaint filed under Section 138 of Negotiable Instruments Act for dishonour of the Cheque of Rs.1100 Lacs. Status Pending for hearing. Background The defence taken by the Company is that the subject cheque was issued as a security and not for the discharge of any liability Risk Involved KTL may be imposed with a liability of Rs.1100 Lacs.

Sr. No. 2 170 Case No./Date CC.No.8041/2002 In The Court Of XVIII Metropolitan Magistrate, Chennai By UTI Bank Ltd Particulars Complaint filed under Section 138 of Negotiable Instruments Act for dishonour of the Cheque of Rs. 1950 Lacs. A quash petition Crl OP No. 23215/2006 is pending on the file of Hon’ble High Court, Madras. Status Pending for hearing. Background The defence taken by the Company is that the subject cheque was issued as a security and not for the discharge of any liability. Risk Involved KTL may be imposed with a liability of 1950 Lacs.

Civil Cases

Sr. No. 1 Case No./Date O.A. No.69/2004 In The Court Of Debt Recovery Tribunal-1, Chennai By UTI Bank Particulars Recovery of loan availed for bill discounting facility. Status The next hearing date is 19.11.2010. Background Bank’s case is that the company is in arrears of around Rs.1500 Lacs to the bank for the bill discounting facility availed by it. KTL entered into a compromise with the Bank and the Bank agreed to receive RS. 800 Lacs as full and final settlement pursuant to which KTL paid a sum of Rs. 100 Lacs to the Bank. An application filed by KTL in this OA to record such compromise and to pass a decree in terms of it is pending. Risk Involved In the event of the application being allowed and OA decreed, KTL may have to pay around 700 Lacs to the Applicant/Bank.

Sr. No. 2 Case No./Date O.A. 181 of 2000 In The Court Of Debt Recovery Tribunal -1, Chennai By Indian Overseas Bank, against Tachyon Computing Systems and others. KTL has been impleaded as the 10 th Defendant. Particulars OA is for recovery of Rs.22,08,344.00/- with future interest @19.38% Status KTL has after impleading filed its reply statement. The matter has been posted on 10.12.2010 for counter. Background This application is against Tachyon Computing Systems and others for enforcement of a mortgage loan granted to the company. The bank arrived at a settlement with the Managing Director of the company and agreed to receive Rs.20.25 lakhs as full and final settlement. KTL offered to purchase a software developed by the company and to pay the consideration of Rs. 17.50 lakhs to the Bank in certain instalments towards the settlement amount. KTL has already paid Rs. 10.10 lakhs. The other defendants sought to dissociate themselves from the OA on the ground that the Bank should proceed only against KTL. Though KTL was impleaded, the DRT and the Appellate Tribunal declined to relieve others. Risk Involved KTL may have to pay the balance of Rs.7,40,000/- to the Bank.

171 B. Litigation initiated by the company

Sr. No. 1 Case No./Date C.S. No. 871 of 2009 In The Court Of The Hon’ble High Court of Judicature at Madras Against Nitin Gokal Particulars The suit is for declaring that the Agreement dated 19.12.2007 between the Plaintiffs and the Defendant is null and void and unenforceable. Status Next hearing date is 29.10.2010 Background Nitin Gokul claimed some money from Mr.A.Venkatramani. To settle such dues KTL entered into an agreement dated 19.12.2007 with Nitin Gokul undertaking to pay the amount of 4 Crores in certain installments. In turn Nitin agreed to withdraw the criminal complaint filed by him in Ballard Pier court, Mumbai. The company alleges that the agreement dated 19.12.2007 is null and void and is therefore unenforceable because the consideration for the said agreement is against public policy and that therefore the defendant cannot present the cheques issued thereunder and calls for return of the said cheques. The amount involved is around 4 crores. Risk Involved In the event of the suit being dismissed, KTL may have to pay around 4 crores to the Defendant.

2. SPACE COMPUTER AND SYSTEMS LIMITED

A. Cases filed against the Company

Sr. No. 1 Case No./Date R.C.O.P.No. 1793 of 2009 In The Court Of XII Judge, Small Causes Court, Chennai By Rekha Bhatla and another Particulars Petition under Rent Control Act. Status The company has entered appearance through its counsel. The next hearing date is 03.11.2010. Background The Petitioners are the landlords of the premises in which the company is a tenant. They have filed this petition to evict the company from the premises on the ground of own use and occupation. The company’s defence is that the petitioner’s plea is false since they have making inconsistent pleas to somehow vacate the premises. Risk Assessment There is no real risk involved. If the suit is decreed against the company, the company may have to vacate the premises, if the landlord initiates any legal means of eviction.

B. Litigation initiated by the company

Sr. No. 1 Case No./Date C.S.No. 1071 of 2007 In The Court Of High Court, Madras Against Rekha Bhatla and another Particulars For a permanent injunction restraining the defendants and their agents etc from disturbing with the company’s peaceful possession and enjoyment of the suit property, except under due process of law. Status There is an interim stay order against the defendants until further orders. The suit is pending. Background The defendants are the landlords of the premises in which the company is a tenant. The landlords tried to vacate the company by unlawful means before the expiry of the lease agreement between them. Hence the company was constrained to file the present suit. Risk Assessment There is no real risk involved. If the suit is decreed against the company, the company may have to vacate the premises, if the landlord initiates any legal means of eviction. 172

Sr. No. 2 Case No./Date C.S.No. 886 of 2007 In The Court Of High Court, Madras Against K.J.Ravichandra Raja and another Particulars For a permanent injunction restraining the defendants and their agents etc from disturbing with the company’s peaceful possession and enjoyment of the suit property except under due process of law. Status There is an interim stay order against the defendants until further orders. The suit is pending. Background The defendants are the landlords of the premises in which the company is a tenant. The agreement was that the premises would be used for residential purposes of one of the company’s directors. The landlords tried to vacate the Director’s family, including a senior citizen aged about 80 years, by unlawful means before the expiry of the lease agreement between them. Hence the company was constrained to file the present suit. Risk Assessment There is no real risk involved. If the suit is decreed against the company, the company may have to vacate the premises, if the landlord initiates any legal means of eviction.

3. SPACE HOSPITALS LIMITED

A. Cases filed against the Company

Sr. No. 1 Case No./Date R.C.O.P.No. 1794 of 2009 In The Court Of XII Judge, Small Causes Court, Chennai By Vinod Bhatla and another Particulars Petition under Rent Control Act. Status The company has entered appearance through its counsel. The next hearing date is 28.10.2010. Background The Petitioners are the landlords of the premises in which the company is a tenant. They have filed this petition to evict the company from the premises on the ground that the company had sublet the premises to a third party. The company’s defence is that the petitioner’s plea is false since they have making inconsistent pleas to somehow vacate the company. Risk Assessment There is no real risk involved. If the suit is decreed against the company, the company may have to vacate the premises, if the landlord initiates any legal means of eviction.

Sr. No. 2 Case No./Date C.S.No. 358 of 2009 In The Court Of Addl District Judge, (West) Tiz Hazari Courts, Delhi By Bhavishya Bharat Particulars Suit for recovery of Rs. 11,63,646/- Status The company has entered appearance through its counsel. For reply to be filed by the Company, the case is posted to 12.01.2011. Background The company is in the business of providing telemedicine facilities in various parts. For that purpose, the company entered into a purchase cum service order with Bhavishya Bharat. Bhavishya bharat alleges that the equipments were not installed as agreed and are therefore entitled to refund of the cost of the equipments. The company’s defence is that the equipments were delivered at the premises but could not be installed only because BSNL could not make connectivity feasible, the premises being on a mountainous terrain in Sikkim. Risk Assessment If the suit is decreed against the company, the company may have to pay Rs. 11.64 lakhs to Bhavishya Bharat.

173

B. Litigation initiated by the company

Sr. No. 1 Case No./Date C.S.No. 119 of 2008 In The Court Of High Court, Madras Against Vinod Bhatla and another Particulars For a permanent injunction restraining the defendants and their agents etc from disturbing with the company’s peaceful possession and enjoyment of the suit property, except under due process of law. Status There is an interim injunction order against the defendants. The suit is pending. Background The defendants are the landlords of the premises in which the company is a tenant. The landlords tried to vacate the company by unlawful means before the expiry of the lease agreement between them. Hence the company was constrained to file the present suit. Risk Assessment There is no real risk involved. If the suit is decreed against the company, the company may have to vacate the premises, if the landlord initiates any legal means of eviction.

B. Statutory Liability/ Dues against our Group Company

NIL

III. Amounts Owed to Small Scale Undertakings

There are no sums exceeding Rs. One lakh due to any person selling goods and materials and/or rendering services as claimed to be small-scale undertaking which is outstanding for more than thirty days.

IV. Defaults

There are no defaults outstanding in meeting statutory dues, institutional dues and towards instrument holders like debentures, fixed deposits etc.

V. Material Developments

There have been no material developments, since the date of the last balance sheet otherwise than as disclosed in the section 'Management's Discussion and Analysis of Financial Condition And Results Of Operations' on page 162.

174 (B) Government Approvals or licensing Arrangements

The below mentioned licenses, permits and approvals are granted to the Company by various authorities for conducting its business activities.

Licenses & Approvals

There are no any specific approvals and licensing arrangements required for our business except as stated below:

1. Company Registration No. 18 – 026312 of 1993.

2. Corporate Identification Number - L65991TN1993PLC026312

3. Certificate of Incorporation dated December 3, 1993 issued to the Company by the Registrar of Companies, Tamil Nadu at Chennai;

4. Certificate of Commencement of Business dated December 27, 1993 issued to the Company by the Registrar of Companies, Tamil Nadu at Chennai;

5. PAN card bearing No. AAACR2672L issued by the Income Tax Department;

6. TAN No.: CHER00551F issued by the National Securities Depository Limited.

There are no approvals/ licenses required in respect of the proposed activities of the Issuer Company as on date.

175 SECTION VIII- REGULATORY AND STATUTORY DISCLOSURES

Authority of the Present Issue

The present issue is being made pursuant to the approval accorded by the Board of Directors of the Company at their Meetings held on August 28, 2009 and January 21, 2010. The Letter of Offer has been approved by the Board at its Meeting held on October 26, 2010.

Rights Issue of 3,51,60,000 Equity Shares of face value of Rs.10/- each for cash at par on rights basis to the existing Equity Shareholders of Ram Kaashyap Investment Limited in the ratio of 4 (Four) Equity Shares for every 1 (One) Equity Share held on the Record Date i.e. November 08, 2010.

Prohibition by SEBI

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

None of our directors is associated with the Securities market.

Neither we nor our directors, our promoters, the directors and persons in control of promoters, group companies, other companies promoted by the promoters and companies with which our company’s directors are associated as directors, have been identified as willful defaulters of RBI.

Our company is an existing listed Company. It is eligible to offer this Rights Issue as the eligibility requirements contained in part I of Chapter III of SEBI (ICDR) regulations, 2009, are not applicable for Rights Issue. We are in compliance of the relevant rules and regulations, applicable to the rights issue of the SEBI (ICDR) Regulations, 2009.

Eligibility for the Issue

Ram Kaashyap Investment Limited is an existing Company registered under the Companies Act, whose equity shares are listed on Bombay Stock Exchange and Madras Stock Exchange.

It is eligible to Offer this Rights Issue in terms of SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009.

DISCLAIMER CLAUSE OF SEBI

AS REQUIRED, A COPY OF THE LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THIS LETTER OF OFFER TO SECURITIES AND EXCHANGE BOARD OF INDIA (‘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 THIS LETTER OF OFFER. THE LEAD MANAGER TO THE ISSUE, I.E. VIVRO FINANCIAL SERVICES PRIVATE LIMITED HAS CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 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 THE ISSUER COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF 176 ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE ISSUER COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE LEAD MANAGER, I.E. VIVRO FINANCIAL SERVICES PVT. LTD. HAS FURNISHED TO SEBI A DUE DILIGENCE CERTIFICATE DATED JANUARY 20, 2010 WHICH READS AS FOLLOWS:

1. 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 finalization of the Draft Offer Document pertaining to the said rights issue;

2. On the basis of such examination and discussions with the company, its directors and other officers, other agencies, independent verification of the statements concerning the objects of the issue, price justification and contents of the documents and other papers furnished by the company;

WE CONFIRM THAT:

a. the draft letter of offer filed with the Board is in conformity with the documents, materials and papers relevant to the issue;

b. all the legal requirements relating to the issue as also the regulations guidelines, instructions, etc. framed/issued by the Board, the Central Government and any other competent authority in this behalf have been duly complied with; and

c. the disclosures made in the draft letter of offer 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 Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and other applicable legal requirements.

3. We confirm that besides ourselves, all the intermediaries named in the draft letter of offer are registered with the Board and that till date such registration is valid.

4. 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.

5. 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 sub- section (3) of section 73 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 letter of offer. We further confirm that the agreement entered into between the bankers to the issue and the issuer specifically contains this condition.

6. We certify that a disclosure has been made in the draft letter of offer that the investors shall be given an option to get the shares in demat or physical mode.

7. We certify that all the applicable disclosures mandated in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 have been made in addition to disclosures which, in our view, are fair and adequate to enable the investor to make a well informed decision.

8. We certify that the following disclosures have been made in the draft letter of offer:

177 (a) An undertaking from the issuer that at any given time, there shall be only one denomination for the equity shares of the issuer, 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.

9. We undertake to comply with the regulations pertaining to advertisement in terms of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 while making the issue.

10. We enclose a note explaining how the process of due diligence has been exercised by us in view of the nature of current business background or the issuer, situation at which the proposed business stands, the risk factors, promoters experience ,etc.

11. We enclose a checklist confirming regulation-wise compliance with the applicable provisions of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, containing details such as the regulation number, its text, the status of compliance, page number of the draft letter of offer where the regulation has been complied with and our comments, if any.

The filing of the draft Letter of Offer does not, however, absolve the issuer from any liabilities under section 63 or section 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 Lead Manager any irregularities or lapses in Draft Letter of Offer.

DISCLAIMER STATEMENT FROM THE ISSUER AND LEAD MERCHANT BANKER

The Company and the Lead Manager accept no responsibility for statements made otherwise than in the Letter of Offer or in the advertisement or any other material issued by or at the instance of the issuer and that anyone placing reliance on any other source of information would be doing so at his own risk.

Caution

The Company and Lead Manager accept no responsibility for statements made otherwise than in the Letter of Offer or in the advertisements or any other material issued by or at the instance of the Company and that anyone placing reliance on any other source of information would be doing so at his/her/their own risk. All information shall be made available by the Lead Manager and the Issuer to the shareholders and no selective or additional information would be made available for a section of the shareholders or investors in any manner whatsoever including at presentations, research reports etc.

Investor who invest in the Issuer will be deemed to have been represented by the Issuer and Lead Manager 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 our Company, and are relying on independent advice / evaluation as to their ability and quantum of investment in this Issue.

The Lead Manager and the Company shall make all information available to the Equity Shareholders and no selective or additional information would be available for a section of the Equity Shareholders in any manner whatsoever including at presentations, in research or sales reports etc. after filing of this Letter of Offer with SEBI.

Disclaimer in Respect of Jurisdiction

This Letter of Offer has been prepared under the provisions of Indian Law and the applicable rules and regulations hereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the appropriate court(s) in Chennai, India only. The Draft Letter of Offer was filed with SEBI for its observations on May 17, 2010. SEBI issued its observations on June 10, 2010 and July 22, 2010 and this final Letter of Offer has been filed with the Stock Exchanges as per the provisions of the Companies Act after incorporating SEBI observations. The distribution of the Letter of Offer and the Issue of Equity Shares on a Rights basis to persons in certain jurisdictions outside India may be restricted by the legal 178 requirements prevailing in those jurisdictions. Persons in whose possession this Letter of Offer may come are required to inform them about and observe such restrictions. No action has been or will be taken to permit this Issue in any jurisdiction where action would be required for that purpose, except that this Letter of Offer 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 Letter of Offer may not be distributed in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create any implication that there has been no change in the Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date.

Disclaimer clause of Bombay Stock Exchange Limited (BSE)

BSE has given vide its letter no. DCS/PREF/JA/IP-RT/1636/09-10 dated February 18, 2010, permission to our Company to use its name in this Letter of Offer on which this company’s securities are proposed to be listed. The Disclaimer clause of BSE vides the said letter is reproduced below:

“Bombay Stock Exchange Limited (“the Exchange”) has given vide its letter dated February 18, 2010, permission to this Company to use the Exchange’s name in this Letter of Offer as one of the Stock exchanges on which this company’s securities are proposed to be listed. The Exchange has scrutinized this Letter of Offer for its limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The Exchange does not in any manner:

i. warrant, certify or endorse the correctness or completeness of any of the contents of this Letter of Offer; or

ii. warrant that this Company’s securities will be listed or will continue to be listed on the Exchange; or

iii. take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company;

and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.”

Disclaimer clause of Madras Stock Exchange Limited (MSE) MSE has given vide its letter no. MSE/LD/PSK/738/084/10 dated February 24, 2010, permission to our Company to use its name in this Letter of Offer on which this company’s securities are proposed to be listed. The Disclaimer clause of MSE vides the said letter is reproduced below:

“Madras Stock Exchange” does not in any manner -

a. Warrant, certify or endorse the correctness or completeness of any of the contents of this offer document, or b. Warrant that this Company’s securities will be listed or will continue to be listed on the Madras Stock Exchange, or c. Take any responsibility for the financial or other soundness of this Company, its promoters, its management or any scheme or project of this Company.

It should not for any reason be deemed or construed that this offer document has been cleared or approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the Madras Stock Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever.” 179

Designated Stock Exchange

The Designated Stock Exchange for the purpose of this Issue will be BSE.

FILING

This Letter of Offer has been filed with Securities Exchange Board of India, Southern Regional Office, Division of Issues and Listing, Securities and Exchange Board of India, D’ Monte Building, 3rd Floor, 32, D’ Monte Colony, TTK Road, Alwarpet, Chennai- 600 018, for its observations and also with the Bombay Stock Exchange Limited and the Madras Stock Exchange Limited where the securities to be issued in terms of the Letter of Offer are proposed to be listed.

IMPERSONATION

As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of sub- section (1) of Section 68A of the Companies Act, 1956 (hereinafter referred to as the Act) which is reproduced below:

“Any person who – i. makes in a fictitious name an application to a Company for acquiring or subscribing for any shares therein, or ii. otherwise induces a Company to allot, or register any transfer of, shares therein to him, or any other person in a fictitious name shall be punishable with imprisonment for a term which may extend to five years.”

LISTING

The shares of the company are listed on the Bombay Stock Exchange Limited (the designated stock exchange) and Madras Stock Exchange Limited and in- principle approval for listing of shares has been obtained from the BSE and MSE through their letter dated February 18, 2010 and February 24, 2010 respectively. The company will apply to BSE and MSE for listing of the securities to be issued pursuant to this issue.

If the permission to deal in and for an official quotation of the securities is not granted by any of the Stock Exchanges mentioned here within 42 days from the Issue Closing Date, the Company should forthwith repay, without interest, all monies received from the applicants in pursuance of this Letter of Offer. If such money is not repaid within eight days after the Company becomes liable to repay it, then the Company and every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly and severally liable to repay the money, with interest, as prescribed under Section 73 of the Companies Act 1956.

CONSENT

Consents in writing of the Auditors, Lead Managers, Legal Advisor to the Issue and Registrar to the Issue to act in their respective capacity have been obtained and such consents have not been withdrawn up to the time of delivery of the Letter of Offer for registration with the stock exchanges. We are in the process of obtaining consent from Bankers to the Company and Banker to the Issue. To the best of the knowledge of the company, there are no other consents required for this issue. However, should the need arise, necessary consents shall be obtained by the Company.

EXPERT OPINION

The company has not obtained any expert opinion.

180 EXPENSES OF THE ISSUE & DETAILS OF THE FEES PAYABLE

The expenses of the issue have been listed below:

Sr. Particulars Rs. In Lakhs % of the Issue No. Size 1. Lead Manager, Legal Advisor and Other Fees 40 1.14 2. Statutory Fees payable to SEBI and Stock Exchanges, 5 0.14 Registrar and Depository Charges 3. Advertising, Marketing, Printing, Stationery, Stamp Duty 35 1.00 & Postage expenses (including transportation costs) 4. Misc. Exps. 10 0.28 TOTAL 90 2.56

The percentage of the total issue expenses of Rs. 90 lakhs is 2.56% of the total issue size.

Previous Public or Rights Issue, if any (During the last 5 years)

There are no public or rights issue during the last 5 years.

Previous Issues of Securities otherwise than for cash

ISSUE OF SHARES FOR CONSIDERATION OTHER THAN CASH BY OUR COMPANY

(A) On 22 nd October 2009, Our Company entered into a Share Purchase Agreement with the shareholders of Tamil Box Office (India) Pvt. Ltd. to acquire 100% shareholding of Tamil Box Office Private Limited and has in turn issued 13,00,000 equity shares of our Company on 30th December 2009 at a price of Rs. 15 per share (including premium of Rs. 5 per share) to shareholders of TBO-India on preferential basis for consideration aggregating to Rs 195 lakhs.

(B) On 22 nd October 2009, Our Company entered into a Share Purchase Agreement with the shareholders of Pix Aalaya Studios Private Limited (PSPL) to acquire 100% shareholding of Pix Aalaya Studios Private Limited and has in turn issued 11,00,000 equity shares of our Company on 30 th December 2009 at a price of Rs. 15 per share (including premium of Rs. 5 per share) to shareholders of PSPL on preferential basis for consideration aggregating to Rs. 165 lakhs.

Commission or brokerage on previous issues

There are no out standings against underwriting commission, brokerage and selling commission payable by the Company on account of previous capital issues made by the Company.

Particulars of Listed Group Companies/ subsidiaries /associates which made capital issue during the last three years:

181 Issued 16,25,25,000 Equity shares of Re.1 each at a premium of Rs.3 each upon issue of 4,92,500 GDR @ USD 33.50 per GDR aggregating USD 16.5 Million on December 27, 2007 and listed on the Bombay Stock Exchange Ltd. w.e.f. January 4, 2008 and on Madras Stock Exchange Ltd w.e.f. April 15, 2008.

2. Kaashyap Technologies Limited, has in its Board Meeting on April 9, 2009 discussed the business prospects of Logistics Solutions Inc., USA, the consulting division of USA and decided to acquire 49% stake in Logistics Solutions Inc., USA through issue of Global Depository Receipts (GDRs) in lieu of cash consideration amounting not more than USD 6 Million. The company after taking the decision of the same, taken the valuation report and negotiated the stake value to be USD 4.4 million and decided to issue 2,20,000 GDRs represented by 21,20,80,000 Equity Shares of Rs. 1/- each on October 9, 2009 to the share holders of Logistic Solutions Inc., USA for acquiring 49% stake. The said GDRs were listed on the Luxembourg Stock Exchange on October 9, 2009 and also successfully got the 21,20,80,000 underlying Equity Shares listed on the Bombay Stock Exchange Ltd. w.e.f. October 27, 2009 and on Madras Stock Exchange w.e.f. October 28, 2009.

Performance vis-à-vis Objects

Issuer

In the last 10 years we have not made any capital issues.

Listed Group Companies// subsidiaries/ associates companies

KTL has not provided any projections and hence not applicable.

Outstanding debentures or bonds and redeemable preference shares and other instruments issued by our Company outstanding as on the date of Letter of Offer and terms of the issue.

There are no outstanding debentures or bonds and any other instruments which are outstanding as on the date of offer document.

DEMATERIALIZED DEALING

Our Company has entered into Agreements dated October 17, 2007 with National Securities Depository Limited (NSDL) and with Central Depository Services (India) Limited (CDSL) dated January 23, 2008, and its Equity Shares bear the ISIN No.: INE736I01014.

STOCK MARKET DATA

As our Company’s shares are actively traded on the BSE, our Company’s stock market data have been given for BSE.

The high and low closing prices recorded on the BSE for the preceding three years and the number of Equity Shares traded on the days the high and low prices recorded are stated below:

Prices for the last three years:

Our shares were suspended from BSE with effect from October 1, 2002 and we received the order dated June 9, 2008 from BSE for revocation of the suspension of trading of our securities on Stock Exchange.

High Low Average Month Price Volume Price Volume Price for the Date (Rs.) (Nos) Date (Rs.) (Nos.) Month (Rs.) Jun’08 June 09, 2008 14.96 300 June 27, 2008 13.51 100 14.23 Jul’08 July 01, 2008 12.84 100 July 03, 2008 12.20 100 12.52 Aug’08 NIL NIL NIL NIL NIL NIL NIL Sep’08 September 15, 2008 12.81 200 September 15, 2008 12.81 200 12.81 182 Oct’08 NIL NIL NIL NIL NIL NIL NIL Nov’08 NIL NIL NIL NIL NIL NIL NIL Dec’08 NIL NIL NIL NIL NIL NIL NIL Jan’09 NIL NIL NIL NIL NIL NIL NIL Feb’09 NIL NIL NIL NIL NIL NIL NIL Mar’09 NIL NIL NIL NIL NIL NIL NIL Apr’09 NIL NIL NIL NIL NIL NIL NIL May’09 May 29, 2009 13.45 1000 May 29, 2009 13.45 1000 13.45 Jun ‘09 June 03, 2009 15.40 1,900 June 01, 2009 14.00 200 14.88 Jul ‘09 July 29, 2009 15.40 1,000 July 31, 2009 14.65 100 15.03 Aug ’09 August 31, 2009 17.46 2,64,000 August 13, 2009 9.76 100 12.83 Sep ’09 September 02, 2009 18.60 84,900 September 25, 2009 14.50 1,700 16.29 Oct’09 October 01, 2009 16.20 34,500 October 29, 2009 13.65 600 14.91 Nov’09 November 06, 2009 15.14 100 November 16, 2009 14.39 100 14.69 Dec’09 December 04, 2009 14.06 100 December 31, 2009 8.60 3900 10.72 Jan’10 January 12, 2010 9.18 2,700 January 18, 2010 7.65 3,100 8.37 Feb’10 February 22,2010 15.30 139,100 February 3,2010 8.16 2,900 11.56 Mar’10 March 3, 2010 14.24 13,200 March 31, 2010 11.41 1,000 12.93 Apr’10 April 23, 2010 11.95 1101 April 13, 2010 10.46 1700 11.18 May 10 May 6, 2010 12.05 1 May 17, 2010 8.96 100 10.53 June 10 June 30, 2010 11.20 2304 June 7, 2010 9.70 409 10.10 July 10 July 30, 2010 10.58 4 July 12, 2010 9.50 1,705 9.96 Aug 10 August 19, 2010 10.38 310 August 30, 2010 8.81 194 9.81 Sept 10 September 22, 2010 10.78 606 September 30, 2010 8.78 16,311 9.72 Source : Official Website of Bombay Stock Exchange Ltd. www.bseindia.com

The Board of Directors of the Company approved the Rights Issue at the meeting held on August 28, 2009. The high and low prices of the Company’s shares as quoted on the Bombay Stock Exchange Limited, Mumbai (BSE) on August 31, 2009 , the day on which the trading happened immediately following the date of the Board Meeting is as follows:

Date Volume (Nos.) High (Rs.) Low (Rs.) August 31, 2009 2,64,000 17.46 15.80 Source: Official website of Bombay Stock Exchange Ltd.- www.bseindia.com

Volume of Shares traded in the last six months:

Month Volume (Nos.) March 2010 187,300 April 2010 35,460 May 2010 168,983 June 2010 63,820 July 2010 77,524 August 2010 63,475 September 2010 1,16,096 Source: Official Website of Bombay Stock Exchange Ltd - www.bseindia.com

COMPLIANCE WITH LISTING AGREEMENT

The Company is listed on BSE and MSE and has complied with the requirements under the respective Listing Agreement of the above-mentioned stock exchanges. It has paid the requisite fee of the Stock Exchanges. Also no disciplinary action has been initiated by the stock exchanges or SEBI against our Company or any of our Directors.

183 Investor Grievances and Redressal Mechanism

Redressal Mechanism:

Our Company has adequate arrangements for redressal of investor complaints. Well arranged correspondence system has been developed for letters of routine nature. The company has share transfer committee, which approves the transfer, transmission, split, issue of duplicate share certificates etc. Share transfer forms along with the share certificates complete in all respect are processed, approved and registered within stipulated time.

Letters are filed category wise after having attended to. Redressal norm for response time for all correspondence including shareholders complaints is 15 days.

For details of Shareholder / Investor Grievance committee, please refer to the section titled “Our Management” on page [ ●] of this Letter of Offer.

Status of complaints

Particulars Status No. of investor Complaints received during the three years preceding the filing Offer 11 Document with the Board and the number of complaints disposed off during that period. No. of shareholders’ complaints pending as on , September 30, 2010 Nil Total No. of complaints pending as on March 31, 2010 of Listed Group Company Nil Time normally taken by the Company for disposal of various types of investor 15 days Grievances

Registrar to the Issue will also handle the investors’ grievances related to the Issue in coordination with Compliance Officer of the 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 of the applicant, address, number of Equity Shares applied for, amount paid on application and bank and branch. The Company would monitor the work of the Registrar to ensure that the investors’ grievances are settled expeditiously and satisfactorily.

Type of Investors’ Grievance Time Taken for Reply (No. of Days) Non-receipt of Refund Order 7 Non-receipt of Share Certificates 7 Transfer of Shares 30 Change of Address 15 Correction of Address 7

Changes in Auditors

There has been no change in the Auditors of the company for last three years except during the financial year 2009-10, M/s. R. Ravindran & Associates have been appointed as Statutory Auditors of the Company to fill the casual vacancy caused due to the sudden death of Mr. G. Parthasarathy with effect from October 22, 2009 and M/s. R. Ravindran & Associates hold office till the conclusion of the next Annual General Meeting.

Capitalization of Reserves or Profits during the last 5 years

We have not capitalized any reserves during the past 5 years by way of Bonus Issue or otherwise.

Revaluation of Assets during the last 5 years

None of the Assets of the company have been revalued during the last 5 years.

184 SECTION IX- OFFERING INFORMATION

(A) TERMS OF THE ISSUE

The Equity Shares, now being issued, are subject to the terms and conditions of this Letter of Offer, the enclosed Composite Application Form (“CAF”), the Memorandum and Articles of Association of the Company, the approvals from the GOI, FIPB and RBI, if applicable, the provisions of the Companies Act, 1956, regulations and guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued by Government of India and/ or other statutory authorities and bodies from time to time, terms and conditions as stipulated in the allotment advice or letter of allotment or Security Certificate and rules as may be applicable and introduced from time to time.

Authority for the Issue

Pursuant to the approval accorded by the Board of Directors of the Company, at their Meeting held on August 28, 2009 under Section 81 (1) of the Companies Act, 1956.

Issue Schedule Issue Opening Date November 18, 2010 Last Date for receiving requests for split forms November 25, 2010 Issue Closing Date December 02, 2010

Basis for the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of the Company in respect of Equity Shares held in the physical form at the close of business hours on the Record Date i.e. November 08, 2010 fixed in consultation with the BSE (the Designated Stock Exchange).

Rights of the Equity shareholders

Subject to the 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; • Right of free transferability; and • Such other rights, as may be available to a shareholder of a listed public company under the Companies Act and Articles of Association of our Company and the terms of the listing agreement with the Stock Exchange.

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 the Articles of Association of our Company" beginning on page 211 of this Letter of Offer.

Option available to the Equity Shareholders

If the Equity Shareholder applies for an investment in Equity Shares, then he / she can: • Apply for his entitlement in part. • Apply for his entitlement in part and renounce the other part. • Apply for his entitlement in full. • Apply for his entitlement in full and also apply for additional Equity Shares.

185 Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for additional Equity Shares.

Issue of Duplicate Share Certificates

If any Equity Share certificate(s) is/are mutilated or defaced or the cages for recording transfers of Equity Shares are fully utilized, the Company against the surrender of such certificate(s) may replace the same, provided that the same will be replaced as aforesaid only if the certificate numbers and the distinctive numbers are legible. If any Equity Share certificate(s) is/are destroyed, stolen, lost or misplaced, then upon production of proof thereof to the satisfaction of the Company and upon furnishing such indemnity/surety and/or such other documents as the Company may deem adequate, duplicate Equity Share certificate(s) shall be issued.

Offer to Non-Resident Equity Shareholders/Applicants

Applications received from NRIs and other NR shareholders for allotment of Equity Shares shall be inter alia, subject to the conditions imposed from time to time by the RBI under the Foreign Exchange Management Act, 1999 (FEMA) in the matter of refund of application moneys, allotment of Equity Shares, issue of Letter of Allotment / share certificates, payment of interest, dividends, etc. General permission has been granted to any person resident outside India to apply shares offered on rights basis by an Indian Company in terms of FEMA and the rules and regulations there under Vide Notification No. FEMA20/2000- RBI dated May 3, 2000, The Board of directors may at its absolute discretion, agree to such terms and conditions as may be stipulated by RBI while approving the allotment of equity shares, payment of dividend etc. to NR shareholders. The equity shares purchased on a rights basis by NR shall be subject to the same conditions including restrictions in regard to the repatriability as applicable to the original equity shares against which equity shares are issued on rights basis.

The existing non-resident shareholders may apply for issue of additional Equity Shares and the Company may allot the same subject to the condition that the overall issue of Equity Shares to non-residents in the total paid up capital does not exceed the sectoral cap. In other words, non-residents may subscribe for additional Equity Shares over and above Equity Shares offered on rights basis by the Company and renounce the Equity Shares offered in full or part thereof in favor of a person named by them.

Vide notification dated October 03, 2003, bearing no. FEMA no. 101/2003-RB this facility would not be available to investors who have been allotted such Equity Shares as OCBs. OCBs may however renounce the Equity Shares offered in full or part thereof in favor of a person named by them other than an OCB.

As such, entitlement of rights shares is not automatically available to Overseas Corporate Bodies (OCBs). OCBs have been derecognized as a class of investors with effect from September 16, 2003. Therefore, Companies desiring to issue rights shares to such erstwhile OCBs will have to take specific prior permission from Reserve Bank. However, bonus shares can be issued to erstwhile OCBs.

However, in the present Master Circular RBI permitted Erstwhile OCBs, who have converted themselves into companies incorporated outside India can make fresh investments in India under the FDI Scheme provided they are not under the adverse notice of Reserve Bank / SEBI.

Terms of the Issue

No statement made in this Letter of Offer shall contravene any of the provisions of the Companies Act, 1956.

Ranking of the Equity Shares

The Equity Shares shall be subject to the Memorandum and Articles of Association of the Company and shall rank pari passu in all respects including dividends with the existing Equity Shares of the Company.

186 Mode of payment of dividend

The Company shall pay dividend to shareholders as per the provisions of the Companies Act.

Face value and Issue Price

Each Equity Share shall have the face value of Rs.10/- and is being offered at a price of Rs. 10/- each for cash.

Terms of payment

The entire Issue Price of Rs. 10/- per Share is payable on application only.

Where an applicant has applied for additional equity shares and is allotted lesser number of equity shares than applied for, the excess application money paid shall be refunded. The monies would be refunded within fifteen days from the closure of the Issue, and if there is a delay beyond eight days from the stipulated period, our Company will pay interest on the monies in terms of the section 73 of the Companies Act.

For Equity Shareholders wishing to apply through the newly introduced ASBA process for rights issues, kindly refer section titled “Procedure for Application through the Applications Supported By Blocked Amount (“ASBA”) Process” on page no. [ ●] of this Letter of Offer.

Rights Entitlement Ratio

As your name appears as beneficial owner in respect of the shares held in the electronic form or appears in the register of members as an equity shareholder of our Company as on the Record Date i.e. November 08, 2010. You are entitled to the number of shares in Block I of Part A of the enclosed in the CAF.

The Equity Shares are being offered on a rights basis to the existing Equity Shareholders of the Company in the ratio of 4 (four) Equity Share for every 1 (one) Equity Shares held as on the Record Date i.e. November 08, 2010.

Market lot

The Equity Shares of the Company is tradable only in dematerialized form . The market lot for Equity Shares in dematerialised mode is one.

In case of holding in physical form, the Company would issue to the allottees one certificate for the Equity Shares allotted to one folio ("Consolidated Certificate"). In respect of the Consolidated Certificate, the Company will, upon receipt of a request from the Equity Shareholder, split such Consolidated Certificate into smaller denomination within one month’s time from the request of the Equity Shareholder in accordance with the provisions of the Articles of Association.

Nomination facility

In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant can nominate any person by filling the relevant details in the CAF in the space provided for this purpose. A sole Equity Shareholder or first Equity Shareholder, along with other joint Equity Shareholders being individual(s) may nominate any person(s) who, in the event of the death of the sole holder or all the joint- holders, as the case may be, shall become entitled to the Equity Shares. A Person, being a nominee, becoming entitled to the Equity Shares by reason of the death of the original Equity Shareholder(s), shall be entitled to the same advantages to which he would be entitled if he were the registered holder of the Equity Shares. Where the nominee is a minor, the Equity Shareholder(s) may also make a nomination to appoint, in the prescribed manner, any person to become entitled to the Equity Share(s), in the event of death of the said holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the Equity Share by the person nominating. A transferee will be entitled to make a fresh nomination in the manner prescribed. When the Equity Share is held by two or more persons, the nominee shall become entitled to receive the amount only on the demise of all the holders. Fresh 187 nominations can be made only in the prescribed form available on request at the registered office of the Company or such other person at such addresses as may be notified by the Company. The applicant can make the nomination by filling in the relevant portion of the CAF. Only one nomination would be applicable for one folio. Hence, in case the Shareholder(s) has already registered the nomination with the Company, no further nomination needs to be made for Equity Shares to be allotted in this Issue under the same folio.

In case the allotment of Equity Shares is in dematerialized form, there is no need to make a separate nomination for the Equity Shares to be allotted in this Issue. Nominations registered with respective DP of the applicant would prevail. If the applicant requires to change the nomination, they are requested to inform their respective DP.

Joint Holders

Where two or more persons are registered as the holders of Equity Shares, they shall be deemed (so far as the Company is concerned) to hold the same as joint- holders with benefits of survivorship subject to provisions contained in the AOA.

Minimum Subscription a. If the Company does not receive minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the issue, or if the subscription level falls below 90% after the closure of the issue on account of cheque having being returned unpaid or withdrawal of applications, the company shall forthwith refund the entire subscription amount received. b. If there is a delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. 15 days after the closure of the issue), the company will pay interest for the delayed period, at the rates prescribed in sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

Arrangement for Disposal of Odd Lots

We have not made any arrangements for the disposal of odd lot of equity shares arising out of this Issue. The Company will issue certificates of denomination equal to the number of equity shares being allotted to the Equity Shareholders.

Restrictions on transfer and transmission of shares and on their consolidation/ splitting:

There are no restriction on transfer and transmission of shares to be allotted out of the Rights Issue and also on their consolidation or splitting.

188 (B) ISSUE PROCEDURE

This Offer is being made to the existing Equity Shareholders of the Company (hereinafter referred to as “shareholders”) whose names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity Shares held in the electronic form and on the Register of Members of the Company in respect of equity shares held in the physical form at the close of the business hours on the Record date i.e. November 08, 2010.

Issue of 3,51,60,000 Equity Shares of Rs. 10/- each for cash at par aggregating Rs. 3516 Lakhs to the existing equity shareholders on rights basis in the ratio of 4 (Four) Equity Shares for every 1 (One) Equity Share held on Record Date i.e. November 08, 2010 . The face value of the Equity Share is Rs.10/- per Share and the Issue Price is 1 (One) times the face value.

Terms of payment

Full amount of Issue price Rs. 10/- per Equity Share shall be payable on application. Where an Applicant has applied for additional shares and is allotted lesser number of Equity Shares than applied for, the excess application money paid shall be refunded. The moneys would be refunded within 15 days from the closure of the Issue, and if there is a delay beyond eight days from the stipulated period, the Company will pay interest on the moneys in terms of Section 73 of the Companies Act, 1956.

Quoting of Permanent Account Number in the application forms

Every applicant shall disclose the Permanent Account Number (PAN), allotted under the Income Tax Act, 1961, in the application form, irrespective of the amount for which application is made. Application forms without this information will be considered incomplete and are liable to be rejected.

Option to Receive Rights Equity Shares in Dematerialized Form

Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the securities in dematerialized (electronic) form at the option of the applicant. The Company and Knack Corporate Services Private Limited, the Registrar to the Company, have signed a tripartite agreement with CDSL on January 23, 2008 and with NSDL on October 17, 2007 which enables the investors to hold and trade in securities in a dematerialized form, instead of holding the securities in the form of physical certificates. The ISIN No. allotted to the Company is INE736I01014. In this Rights Issue, the allottees who have opted for Equity Shares in dematerialized form will receive their Equity Shares in the form of an electronic credit to their beneficiary account with a Depository Participant. Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF. Applications, which do not accurately contain this information, will be given the securities in physical form. No separate applications for securities in physical and dematerialized form should be made. If such applications are made, the application for physical securities will be treated as multiple applications and is liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought in demat and balance, if any, will be allotted in physical shares.

Procedure for availing this facility for allotment of Equity Shares in this Issue in the electronic form is as under:

1. Open a Beneficiary Account with any Depository Participant (care should be taken that the Beneficiary Account should carry the name of the holder in the same manner as is exhibited in the records of the Company. In case of joint holding the Beneficiary Account should be opened carrying the names of the holders in the same order as with the Company). In case of Investors having various folios in the Company with different joint holders, the investors will have to open separate accounts for such holdings. Those Equity Shareholders who have already opened such Beneficiary Account (s) need not adhere to this step.

2. For Equity Shareholders already holding Equity Shares of the Company in dematerialized form as on Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts later or those who change their accounts and wish to receive their Rights Equity 189 Shares by way of credit to such account, the necessary details of their beneficiary account should be filled in the space provided in the CAF. It may be noted that the allotment of securities arising out of this Issue may be made in dematerialized form even if the original equity shares of the Company are not dematerialized. Nonetheless, it should be ensured that the Depository Account is in the name(s) of the Equity Shareholders and the names are in the same order as in the records of the Company.

3. Responsibility for correctness of applicant’s age and other details given in the CAF vis-à-vis those with the applicant’s Depository Participant would rest with the applicant. Applicants should ensure that the names of the applicants and the order in which they appear in CAF should be same as registered with the applicant’s Depository Participant.

4. If incomplete / incorrect Beneficiary Account details are given in the CAF the applicant will get Equity Shares in physical form.

5. The Rights Equity Shares allotted to investors opting for dematerialized form, would be directly credited to the Beneficiary Account as given in the CAF after verification. Allotment advice, Refund Order (if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s Depository Participant will provide to him, the confirmation of the credit of the Rights Equity Shares to the applicant’s Depository Account.

6. Renouncees will also have to provide the necessary details about their Beneficiary Account for allotment of securities in this Issue. In case these details are incomplete or incorrect, the application is liable to be rejected.

Dividend or other benefits with respect to the Equity Shares held in dematerialized form would be paid to those shareholders whose names appear in the list of beneficial owners given by the depositories to the Company as on book closure/ record dates.

INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE TRADED ON THE BOMBAY STOCK EXCHANGE IN DEMATERIALIZED AND PHYSICAL FORMS.

How to apply

The prescribed colour of the CAF for various shareholder categories is as follows:

Category Colour of Composite Application Form Residents, NRIs applying on a non-repatriation CAF Printed with Black Ink basis NRIs or FIIs applying on a repatriation basis CAF Printed with Black Ink with separate advise for NRIs/FIIs holder(s)

Resident Equity Shareholders

Application should be made only on the enclosed CAF provided by the Company. The enclosed CAF should be completed in all respects, as explained in the instructions indicated in the CAF. Applications will not be accepted by the Lead Managers or by the Registrar to the Issue or by the Company at any offices except in the case of postal applications as per instructions given in the Letter of Offer.

Non-resident Equity Shareholders on Non Repatriation basis

Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall, inter alia, be subject to the conditions as may be imposed from time to time by the Reserve Bank of India, in the matter of refund of application moneys, allotment of Equity Shares, issue of Letters of Allotment/ certificates/ payment of dividends etc.

190 The CAF consists of four parts:

Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares Part B: Form for renunciation Part C: Form for application for renouncees Part D: Form for request for split application forms

Application by Mutual Funds

In case of a Mutual Fund, a separate application can be made in respect of each scheme of the Mutual Fund registered with SEBI and such Applications in respect of more than one scheme of the Mutual Fund will not be treated as multiple applications provided that the application clearly indicate the scheme concerned for which the application has been made.

Applications made by asset management companies or custodians of a mutual fund shall clearly indicate the name of the concerned scheme for which application is being made.

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 CCPS / Warrants 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.

Applications by Non Resident Indians

1. CAFs have been made available for eligible NRIs at our Registered Office and with the Lead Manager(s).

2. Eligible NRI applicants may please note that only such applications as are accompanied by payment in free foreign exchange shall be considered for Allotment. The Eligible NRIs who intend to make payment through Non-Resident Ordinary (NRO) accounts shall use the form meant for Resident Indians and shall not use the forms meant for reserved category.

Applications by ASBA investors

Acceptance of the Rights Issue

You may accept the Offer and apply for Equity Shares offered, either in full or in part by filling Part “A” of the enclosed CAF and submit the same along with the application money payable to the “Bankers to the Issue” or any of the branches as mentioned on the reverse of the CAF before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board thereof in this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together with the cheque drawn on a local bank at Chennai, Tamil Nadu /demand draft payable at Chennai, Tamil Nadu to the Registrar to the Issue by registered post.

Renunciation

As an Equity Shareholder, you have the right to renounce your entitlement for the Equity Shares in full or in part in favour of one or more person(s). Such renouncees can only be Indian Nationals.

Companies incorporated under and governed by the Act, statutory corporations / institutions, trusts (unless registered under the Indian Trust Act,) minors (through their legal guardians), societies (unless registered under Societies Registration Act, 1860 or any other applicable laws) provided that such trust / 191 society is authorized under its constitution / bye laws to hold equity shares in a company and cannot be a partnership firm, more than four persons including joint-holders, HUF, foreign nationals (unless approved by RBI or other relevant authorities) or to any person situated or having jurisdiction where the offering in terms of the Letter of Offer should be illegal or require compliance with securities law of such jurisdiction or any other person not approved by the Board.

Renunciation in favour of Non – Residents/FIIs

Any Renunciation from Resident Indian Shareholder(s) to Non-Resident Indian(s) or from Non-Resident Indian Shareholder(s) to other Non-Resident Indian(s) is subject to the renouncer(s)/ renouncee(s) obtaining the approval of the FIPB and / or necessary permission of RBI under the Foreign Exchange Management Act, 1999 (FEMA) and other applicable laws and such permission should be attached to the CAF. Applications not accompanied by the aforesaid approval are liable to be rejected.

The right of renunciation is subject to the express condition that the Board shall be entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any reason thereof.

Procedure for Renunciation

To renounce the whole offer in favour of one renouncee

If you wish to renounce the offer indicated in Part A, in whole, please complete Part B of the CAF. In case of joint holding, all joint holders must sign Part B of the CAF. The person in whose favour renunciation has been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must sign this part C of the CAF.

Renoncee(s) shall not be entitled to further renounce the entitlement in favour of any other person.

To renounce in part/or renounce the whole to more than one person(s)

If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour of two or more renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of split forms in the space provided for this purpose in Part D of the CAF and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours on the last date of receiving requests for split forms i.e. November 25, 2010. On receipt of the required number of split forms from the Registrar, the procedure as mentioned in paragraph above shall have to be followed.

In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with the specimen registered with the Company, the application is liable to be rejected.

Renouncee(s)

The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing Date i.e. December 02, 2002 along with the application money.

Change and or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person or persons, not more than four , who is/are not already joint holder with you, it shall amount to renunciation and the procedure as stated above for renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall amount to renunciation and the procedure, as stated above shall have to be followed.

However, this right of renunciation is subject to the express condition that the Board of Directors of the Company shall be entitled in its absolute discretion to reject the request for allotment of equity shares from the renouncee(s) without assigning any reason thereof. 192

Please note that:

a. Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been made. If used, this will render the application invalid. b. Only the person to whom this Letter of Offer has been addressed to and not the renouncee(s) shall be entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again. c. Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.

Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and allotment shall be made in the manner prescribed elsewhere in the Letter of Offer under the section “Basis of Allotment”. The renouncees applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares.

In case of application for additional Equity Shares by non-resident Equity Shareholders, the allotment of additional securities will be subject to the permission of the Reserve Bank of India.

Where the number of additional Equity Shares applied for exceeds the number available for allotment, the allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.

The summary of options available to the Equity Shareholder is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the enclosed CAF:

Option Available and Action Required

S No Option Available Action Required 1 Accept whole or part of your Fill in and sign Part A (All joint holders must sign) entitlement without renouncing the balance 2 Accept your entitlement in full Fill in and sign Part A including Block III relating and apply for additional Equity to the acceptance of entitlement and Block IV relating Shares to additional Equity Shares (All joint holders must sign) 3 Renounce your entitlement Fill in and sign Part B (all joint holders must sign) In full to one person indicating the number of Equity Shares renounced and (Joint renouncees are hand it over to the renouncee. The renouncees must fill in considered as one) and sign Part C (All joint renouncees must sign) 4 Accept a part of your Fill in and sign Part D (all joint holders must sign) entitlement and renounce the requesting for Split Application Forms. Send the CAF to balance to one or more the Registrar to the Issue so as to reach them on or renouncee(s) OR Renounce before the last date for receiving requests for Split your entitlement to all the Forms. Splitting will be permitted only once. On receipt of Equity Shares offered to you to the Split Form take action as indicated below: more than one renounce For the Equity Shares you wish to accept, if any, fill in and sign Part A. For the Equity Shares you wish to renounce, fill in and sign Part B indicating the number of Equity Shares renounced and hand it over to the renouncees. Each of the renounces should fill in and sign Part C for the Equity Shares accepted by them. 5 Introduce a joint holder or Fill in and sign Part B and the renouncees must fill in and change the sequence of joint sign Part C. holders. This will be treated as a renunciation.

193

Applicants residing at places other than designated collection centers

Applicants residing at places other than the cities where the Bank collection centres have been opened and non- resident applicants applying on a non-repatriation basis should send their completed CAF by registered post/speed post to the Registrars to the Issue, Knack Corporate Services Private Limited along with demand draft, net of demand draft and postal charges, payable at Chennai, Tamil Nadu in favour of “RKIL – RIGHTS ISSUE” crossed “A/c Payee only” so that the same are received on or before closure of the Issue i.e. December 02, 2010.

Non-resident investors applying on a repatriation basis should send their completed CAF by registered post/speed post to the Registrar to the Issue, Knack corporate services Private Limited along with demand draft for the full application amount, payable at Chennai, Tamil Nadu in favour of “RKIL – RIGHTS ISSUE-NR”, crossed “ A/c Payee only” so that the same are received on or before closure of the Issue i.e. December 02, 2010.

We will not be liable for any postal delays and applications received through mail after the closure of the Issue, which are liable to be rejected and returned to the applicants. Applications by mail should not be sent in any other manner except as mentioned here.

Availability of duplicate CAF

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and Client ID no. and his / her full name and address to the Registrar to the Issue. Please note that those who are making the application in the duplicate form should not utilize the original CAF for any purpose including renunciation, even if it is received/ found subsequently. If the applicant violates any of these requirements, he/ she shall face the risk of rejection of both the applications as well as forfeiture of amounts remitted along with the applications.

Applications under Power of Attorney

In case of applications made under a power of attorney or by limited companies or bodies corporate or registered societies or mutual funds or trusts, certified true copy of the relevant power of attorney or relevant resolution or authority to make the investment and sign the application, as the case may be, along with a copy of the memorandum and articles of association and/or bye-laws must be lodged with the Registrar giving reference of the serial number of the CAF after submission of the CAF to the Bankers to the Issue or any of their collection centers, failing which the applications are liable to be rejected.

In case the above-referred documents are already registered with the Company, the same need not be furnished again. However, the serial number of registration or reference of the letter, vide which these papers were lodged with the Company/R&T Agents must be mentioned just below the signature(s) on the CAF. In no case should these papers be attached to the application submitted to the Bankers to the Issue or at its collection centers.

Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate CAF may make an application to subscribe to the Rights Issue on plain paper, along with an Account Payee Cheque drawn on a local bank at Chennai, Tamil Nadu/ Demand Draft payable at Chennai, Tamil Nadu which should be drawn in favour of “RKIL – RIGHTS ISSUE” and send the same by registered post directly to the Registrar to the Issue.

The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Date of Closure of the Issue and should contain the following particulars:

• Name of Issuer being Ram Kaashyap Investment Limited 194 • Name and address of the Equity Shareholder including joint holders • Registered Folio Number/ DP and Client ID no. • Number of Equity Shares held as on Record Date i.e. November 08, 2010 • Certificate numbers and Distinctive numbers, if held in Physical form • Number of Rights Equity Shares entitled, Number of Rights Equity Shares applied for out of entitlement • Number of additional Equity Shares applied for, if any • Total number of Equity Shares applied for • Total amount paid @ Rs. 10/ - per Equity Share • Particulars of Cheque/ Draft enclosed • In case of non-resident shareholders, NRE/FCNR/NRO account number, name and address of the bank and branch • If the payment is made by drafts purchased from NRE/FCNR accounts as the case may be, an account debit certificate from the bank issuing the draft confirming that the draft has been issued by debiting the NRE/FCNR account. • If the payment is made by a draft purchased from an NRO account, an account debit certificate from the bank issuing the draft, confirming that the draft has been issued by debiting the NRO account. • Savings/Current Account Number and name and address of the bank where the Equity Shareholder will be depositing the refund order. • PAN number, and • Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company.

Payments in such cases, should be through a cheque/ demand draft payable at Chennai, Tamil Nadu be drawn in favour of the Bankers to the Issue marked “A/c Payee only” and marked “RKIL – RIGHTS ISSUE”.

Please note that those who are making the application otherwise than on original CAF shall not be entitled to renounce their Rights and should not utilize the original CAF for any purpose including renunciation even if it is received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of both the applications as well as forfeiture of amounts remitted along with the applications.

Last date of Application

The last date for submission of CAF is December 02, 2010. The Board/Committee of Directors will have the right to extend the said date for such period as it may determine from time to time but not exceeding thirty days from the date the Issue opens.

If the CAF together with the amount payable is not received by the Bankers to the Issue/ Registrar on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/ Committee of Directors, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under the heading “Basis of Allotment”.

PROCEDURE FOR APPLICATION THROUGH THE APPLICATIONS SUPPORTED BY BLOCKED AMOUNT (“ASBA”) PROCESS

SEBI, by its circular dated August 20, 2009, introduced in rights issue - Application Supported by Blocked Amount (ASBA) wherein the application money remains in the ASBA Account until allotment. Mode of payment through ASBA in Rights Issue became effective on August 20, 2009. In supersession of earlier circulars passed, SEBI, has vide circular No. SEBI/CFD/DIL/ASBA/1/2009/30/12 dated December 30, 2009 made compulsory the applicability of ASBA in Rights Issue also and withdrawn the earlier Circulars passed for the same. Since this is a new mode of payment in Rights Issues, set forth below is the procedure for applying under the ASBA procedure, for the benefit of the shareholders.

195 This section is only to facilitate better understanding of aspects of the procedure which is specific to ASBA Investors. ASBA Investors should nonetheless read this document in entirety. Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and ensure that the number of Equity Shares applied for by such Shareholder do not exceed the applicable limits under laws or regulations.

The Company and the Lead Manager are not liable for any amendments or modifications or changes in applicable laws or regulations, which may occur after the date of this Letter of Offer. Equity Shareholders who are eligible to apply under the ASBA Process are advised to make their independent investigations and ensure that the number of Equity Shares applied for by such Equity Shareholders do not exceed the applicable limits under laws or regulations.

The lists of banks that have been notified by SEBI to act as SCSB for the ASBA Process are provided on http://www.sebi.gov.in/pmd/scsb.pdf . For details on designated branches of SCSBs collecting the CAF, please refer the above mentioned link.

ASBA Process

An ASBA Investor can submit his application through CAF / plain paper, either in physical or electronic mode, to the SCSB with whom the bank account of the ASBA Investor or bank account utilised by the ASBA Investor is maintained. The SCSB shall block an amount equal to the application amount in the ASBA Account specified in the CAF, physical or electronic, on the basis of an authorisation to this effect given by the account holder at the time of submitting the CAF. The application data shall thereafter be uploaded by the SCSB in the web enabled interface of the Stock Exchanges as prescribed under circular issued by SEBI - SEBI/CFD/DIL/ASBA/1/2009/30/12 dated December 30, 2009 or in such manner as may be decided in consultation with the Stock Exchanges. The amount payable on application shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment and consequent transfer of the amount against the allocated Equity Shares to the separate account opened by the Company for Rights Issue or until failure of the Issue or until rejection of the ASBA application, as the case may be. Once the basis of Allotment is finalized, the Registrar to the Issue shall send an appropriate request to the Controlling Branch for unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful ASBA Investors to the separate account opened by the Company for Rights Issue. In case of withdrawal/failure of the Issue, the blocked amount shall be unblocked on receipt of such information from the Registrar to the Issue.

The Lead Manager, our Company, its directors, affiliates, associates and their respective directors and officers and the Registrar to the Issue shall not take any responsibility for acts, mistakes, errors, omissions and commissions etc. in relation to applications accepted by SCSBs, Applications uploaded by SCSBs, applications accepted but not uploaded by SCSBs or applications accepted and uploaded without blocking funds in the ASBA Accounts. It shall be presumed that for applications uploaded by SCSBs, the amount payable on application has been blocked in the relevant ASBA Account.

Equity Shareholders who are eligible to apply under the ASBA Process

The option of applying for Equity Shares in the Issue through the ASBA Process is only available to Shareholders of the Company on the Record Date and who: • Is holding Equity Shares in dematerialised form and has applied for entitlements or additional Securities in the Issue in dematerialised form; • Have not renounced his entitlements in full or in part; • Have not split the CAF; • Is not a renouncee to the issue; • Who applies through a bank account with one of the SCSBs.

CAF

The Registrar will dispatch the CAF to all Equity Shareholders as per their entitlement on the Record Date for the Issue. Equity Shareholders desiring to use the ASBA Process are required to submit their applications by selecting the ASBA Option in Part A of the CAF only. Application in electronic mode will only be 196 available with such SCSB who provides such facility. The Equity Shareholder shall submit the CAF/plain paper application to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. The Equity Shareholder shall submit the CAF to the SCSB for authorizing such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB. Equity Shareholders applying under the ASBA Process are also advised to ensure that the CAF is correctly filled up, stating therein the bank account number maintained with the SCSB in which an amount equivalent to the amount payable on application as stated in the CAF will be blocked by the SCSB.

Application on plain paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain a duplicate CAF and wanting to apply under ASBA process may make an application to subscribe for the Issue on plain paper. The application on plain paper, duly signed by the applicants including joint holders, in the same order as per specimen recorded with the Company, must be submitted at a designated branch of a SCSB on or before the Issue Closing Date and should contain the following particulars:

• Name of the issuer, being Ram Kaashyap Investment Limited; • Name and address of the Equity Shareholder, including any joint holders; • Registered folio number / DP ID number and client ID number; • Number of Equity Shares held as on the Record Date; • Rights Entitlement; • Savings / Current Account Number along with name and address of the SCSB and Branch from which the money will be blocked; • The permanent account number (PAN) of the Equity Shareholder and where relevant, for each joint holder, except in respect of Central and State Government officials and officials appointed by the court (e.g., official liquidators and court receivers) who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transacting in the securities market, subject to submitting sufficient documentary evidence in support of their claim for exemption, provided that such transactions are undertaken on behalf of the Central and State Government and not in their personal capacity; • Signature of the Equity Shareholders to appear in the same sequence and order as they appear in the records of our Company; • Incase of Non Resident Shareholders, NRE / FCNR / NRO A/c no., name and address of the SCSB and Branch • In the application, the ASBA Investor shall, inter alia, give the following confirmations/declarations: A) That he / she is an ASBA Investor as per the SEBI (ICDR) Regulations and B) That he / she has authorized the SCSBs to do all acts as are necessary to make an application in the Issue, upload his / her application data, block or unblock the funds in the ASBA Account and transfer the funds from the ASBA Account to the separate account maintained by the Company for Rights Issue after finalization of the basis of Allotment entitling the ASBA Investor to receive Equity Shares in the Issue etc.

The Equity Shareholder shall submit the plain paper application to the SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said bank account maintained with the same SCSB.

If an applicant makes an application in more than one mode i. e. both in the Composite Application Form and on plain paper, then both the applications may be liable for rejection.

Acceptance of the Issue

You may accept the Issue and apply for the Equity Shares offered, either in full or in part, by filling Part A of the CAF sent by the Registrar, selecting the ASBA process option in Part A of the CAF and submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by the Board of Directors of the Company in this regard.

197 Mode of payment

The Shareholder applying under the ASBA Process agrees to block the entire amount payable on application (including for additional Equity Shares, if any) with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to the amount payable on application, in a bank account maintained with the SCSB. After verifying that sufficient funds are available in the bank account provided in the CAF, the SCSB shall block an amount equivalent to the amount payable on application mentioned in the CAF until it receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall transfer such amount as per Registrar’s instruction allocable to the Shareholders applying under the ASBA Process from bank account with the SCSB mentioned by the Shareholder in the CAF. This amount will be transferred in terms of the SEBI ICDR Regulations into the separate bank account maintained by the Company as per the provisions of section 73(3) of the Companies Act, 1956. The balance amount remaining after the finalisation of the basis of allotment shall be either unblocked by the SCSBs or refunded to the investors by the Registrar on the basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Managers to the respective SCSB.

The Shareholders applying under the ASBA Process would be required to block the entire amount payable on their application at the time of the submission of the CAF.

The SCSB may reject the application at the time of acceptance of CAF if the bank account with the SCSB details of which have been provided by the Shareholder in the CAF does not have sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to the acceptance of the application by the SCSB, the Company would have a right to reject the application only on technical grounds.

Options available to the Shareholder applying under the ASBA Process

The summary of options available to the Shareholders is presented below. You may exercise any of the following options with regard to the Equity Shares offered, using the CAF received from Registrar:

Sr. Option Available Action Required No. 1 Accept whole or part of your entitlement Fill in and sign Part A of the CAF (All joint holders without renouncing the balance. must sign) 2 Accept your entitlement in full and apply Fill in and sign Part A of the CAF including Block III for additional Equity Shares relating to the acceptance of entitlement and Block IV relating to additional Equity Shares (All joint holders must sign)

The Shareholder applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required details as mentioned therein. However, in cases where this option is not selected, but the CAF is tendered to the SCSB with the relevant details required under the ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if the Shareholder has selected to apply through the ASBA process option.

Additional Equity Shares

The equity shareholder is eligible to apply for additional Equity Shares over and above the number of Equity Shares that he is entitled too, provided that he have applied for all the Shares offered without renouncing them in whole or in part in favour of any other person(s). Applications for additional shares shall be considered and allotment shall be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed under “Basis of Allotment” on page [ ●] of this Letter of Offer.

If you desire to apply for additional shares, please indicate your requirement in the place provided for additional Securities in Part A of the CAF.

198 Renunciation under the ASBA Process

Renouncees cannot participate in the ASBA Process.

Last date of Application The last date for submission of the duly filled in CAF is December 02, 2010. The Issue will be kept open for a minimum of 15 (fifteen) days and the Board or any committee thereof will have the right to extend the said date for such period as it may determine from time to time but not exceeding 30 (thirty) days from the Issue Opening Date i.e. November 18, 2010. If the CAF together with the amount payable is not received by the SCSB on or before the close of banking hours on the aforesaid last date or such date as may be extended by the Board of Directors, the offer contained in this Letter of Offer shall be deemed to have been declined and the Board of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as provided under “Basis of Allotment” on page [ ●] of this Letter of Offer.

Option to receive Securities in Dematerialized Form

SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY UNDER THE ASBA PROCESS CAN ONLY BE ALLOTTED IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES ARE BEING HELD ON RECORD DATE.

Issuance of Intimation Letters

Upon approval of the basis of Allotment by the Designated Stock Exchange, the Registrar to the Issue shall send the Controlling Branches, a list of the ASBA Investors who have been allocated Equity Shares in the Issue, along with: • The number of Equity Shares to be allotted against each successful ASBA; • The amount to be transferred from the ASBA Account to the separate account opened by the Company for Rights Issue, for each successful ASBA; • The date by which the funds referred to in para above, shall be transferred to separate account opened by the Company for Rights Issue; and • The details of rejected ASBAs, if any, along with reasons for rejection to enable SCSBs to unblock the respective ASBA Accounts.

General instructions for Shareholders applying under the ASBA Process

(a) Please read the instructions printed on the CAF carefully. (b) Application should be made on the printed CAF / plain paper and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and / or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected. The CAF / plain paper application must be filled in English. (c) The CAF / plain paper application in the ASBA Process should be submitted at a Designated Branch of the SCSB and whose bank account details are provided in the CAF and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting Bank is not a SCSB), to the Company or Registrar or Lead Manager to the Issue. (d) All applicants, and in the case of application in joint names, each of the joint applicants, should mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of the application. CAFs / plain paper application without PAN will be considered incomplete and are liable to be rejected. (e) All payments will be made by blocking the amount in the bank account maintained with the SCSB. Cash payment is not acceptable. In case payment is affected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. (f) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to the Constitution of India. Thumb impression and Signatures other than in English or Hindi must be attested by a Notary Public or a Special Executive Magistrate under his/her official seal. The Equity Shareholders must sign the CAF /plain paper application as per the specimen signature recorded with the Company / Depositories.

199 (g) In case of joint holders, all joint holders must sign the relevant part of the CAF / plain paper application in the same order and as per the specimen signature(s) recorded with the Company. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant. (h) All communication in connection with application for the Securities, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole applicant Shareholder, folio numbers and CAF number. (i) Only the person or persons to whom Securities have been offered and not renouncee(s) shall be eligible to participate under the ASBA process.

Do’s

(a) Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in. In case of non-receipt of the CAF, the application can be made on plain paper with all necessary details as required under the para “Application on plain paper” appearing under the procedure for application under ASBA. (b) Ensure that you submit your application in physical mode only. Electronic mode is only available with certain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to you. (c) Ensure that the details about your Depository Participant and beneficiary account are correct and the beneficiary account is activated as Equity Shares will be allotted in the dematerialized form only. (d) Ensure that the CAF / plain paper application is submitted at the SCSBs whose details of bank account have been provided in the CAF / plain paper application. (e) Ensure that you have mentioned the correct bank account number in the CAF / plain paper application. (f) Ensure that there are sufficient funds (equal to {number of Equity Shares applied for} X {Issue Price per Equity Shares as the case may be}] available in the bank account maintained with the SCSB mentioned in the CAF / plain paper application before submitting the CAF to the respective Designated Branch of the SCSB. (g) Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application mentioned in the CAF / plain paper application, in the bank account maintained with the respective SCSB, of which details are provided in the CAF / plain paper application and have signed the same. (h) Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF / plain paper application in physical form. (i) Each applicant should mention their Permanent Account Number (“PAN”) allotted under the Income Tax Act. (j) Ensure that the name(s) given in the CAF / plain paper application is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the CAF / plain paper application. (k) Ensure that the Demographic Details are updated, true and correct, in all respects.

Don’ts: (a) Do not apply on duplicate CAF after you have submitted a CAF / plain paper application to a Designated Branch of the SCSB. (b) Do not pay the amount payable on application in cash, money order or by postal order. (c) Do not send your physical CAFs / plain paper application to the Lead Manager to Issue / Registrar / Collecting Banks (assuming that such Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the SCSB only. (d) Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground. (e) Do not instruct their respective banks to release the funds blocked under the ASBA Process.

Grounds for Technical Rejection for ASBA Process:

In addition to the grounds listed under “Grounds for Technical Rejection” mentioned on page [ ●] of this Letter of Offer, applications under ASBA Process may be rejected on following additional grounds:

200 (a) Application for entitlements or additional shares in physical form. (b) DP ID and Client ID mentioned in CAF / plain paper application not matching with the DP ID and Client ID records available with the Registrar. (c) Sending CAF / plain paper application to the Lead Manager / Issuer / Registrar / Collecting Bank (assuming that such Collecting Bank is not a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB / Company. (d) Renouncee applying under the ASBA Process. (e) Insufficient funds are available with the SCSB for blocking the amount. (f) Funds in the bank account with the SCSB whose details are mentioned in the CAF / plain paper application having been frozen pursuant to regulatory orders. (g) Account holder not signing the CAF / plain paper application or declaration mentioned therein. (h) Application on split form.

Depository account and bank details for Shareholders applying under the ASBA Process

IT IS MANDATORY FOR ALL THE SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF / PLAIN PAPER APPLICATION. SHAREHOLDERS APPLYING UNDER THE ASBA PROCESS MUST ENSURE THAT THE NAME GIVEN IN THE CAF / PLAIN PAPER APPLICATION IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF / PLAIN PAPER APPLICATION 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 CAF / PLAIN PAPER APPLICATION.

Shareholders applying under the ASBA Process should note that on the basis of name of these Shareholders, Depository Participant’s name and identification number and beneficiary account number provided by them in the CAF / plain paper application, the Registrar to the Issue will obtain from the Depository demographic details of these Shareholders such as address, bank account details for printing on refund orders / advice and occupation (“Demographic Details”). Hence, Shareholders applying under the ASBA Process should carefully fill in their Depository Account details in the CAF / plain paper application.

These Demographic Details would be used for all correspondence with such Shareholders including mailing of the letters intimating unblock of bank account of the respective Shareholder. The Demographic Details given by Shareholders in the CAF / plain paper application would not be used for any other purposes by the Registrar. Hence, Shareholders are advised to update their Demographic Details as provided to their Depository Participants. By signing the CAF / plain paper application, the Shareholders applying under the ASBA Process 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.

Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of the Shareholder applying under the ASBA Process as per the Demographic Details received from the Depositories. Refunds, if any, will be made directly to the bank account in the SCSB and which details are provided in the CAF and not the bank account linked to the DP ID. Shareholders applying under the ASBA Process may note that delivery of letters intimating unblocking of bank account 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 Shareholder in the CAF / plain paper application would be used only to ensure dispatch of letters intimating unblocking of bank account.

Note that any such delay shall be at the sole risk of the Shareholders applying under the ASBA Process and none of the SCSBs, Company or the Lead Manager shall be liable to compensate the Shareholder applying under the ASBA Process for any losses caused to such Shareholder due to any such delay or liable to pay any interest for such delay.

201 In case no corresponding record is available with the Depositories that match three parameters, namely, names of the Shareholders (including the order of names of joint holders), the DP ID and the beneficiary account number, then such applications are liable to be rejected.

Disposal of Investor Grievances

All grievances relating to the ASBA may be addressed to the Registrar to the Issue, with a copy to the SCSB, giving full details such as name, address of the applicant, number of Equity Shares applied for, Amount blocked on application, account number of the ASBA Bank Account and the Designated Branch or the collection centre of the SCSB where the CAF / plain paper application was submitted by the ASBA Investors.

Printing of Bank Particulars on Refund Orders or Refund through Electronic Clearing System

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the applicant’s bank account are mandatory required to be provided for printing on the refund orders or for refunds through Electronic Clearing System. Bank account particulars will be printed on the refund orders, which can then be deposited only in the account, specified. In case where the securities are requested in dematerialized form - the bank account details of the applicant would be taken from the data provided by him to the depository. The Company will in no way be responsible if any loss occurs through these instruments falling into improper hands either through forgery or fraud.

Impersonation

Basis of Allotment

1. Subject to provisions contained in this Letter of Offer, the Articles of Association and approval of the Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of priority: a. Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or in part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in full or in part. b. On applying the rights will not lead to fractional entitlement c. Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as rights and have also applied for additional Equity Shares. The allotment of such additional Equity Shares will be made as far as possible on an equitable basis having due regard to the number of Equity Shares held by them on the Record Date, provided there is an under- subscribed portion after making full allotment in (a) above. The allotment of such Equity Shares will be at the sole discretion of the Board/Committee of Directors in consultation with the Designated Stock Exchange, as a part of the Rights Issue. d. Allotment to the renouncees who having applied for the Equity Shares renounced in their favour have also applied for additional Equity Shares, provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The allotment of such additional Equity Shares will be made on a proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation with the Designated Stock Exchange, as a part of the Rights Issue.

2. The Company shall not retain any over subscription. 202

3. After taking into account the allotments made under 1(a), 1(b) and 1(c) above, if there is still any under subscription, the unsubscribed portion shall be disposed off by the Board or Committee of Directors authorized in this behalf by the Board upon such terms and conditions, through such securities (Equity Shares) and to such person/persons and in such manner as the Board / Committee of Directors may in its absolute discretion deem fit, as part of the rights issue and not preferential allotment.

Procedure and time schedule for allotment and issue of certificates:

The Company will issue and dispatch letters of allotment/ securities certificates and/ or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period of 15 days from the Date of Closure of the Issue. If such money is not repaid within 8 days from the day the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under Section 73 of the Act.

Letters of allotment/ securities certificates/ refund orders above the value of Rs.1,500 will be dispatched by Registered Post/ Speed Post to the sole/ first applicant’s registered address. However, refund orders for value not exceeding Rs.1,500 shall be sent to the applicants under Postal Certificate. Such cheques or pay orders will be payable at par at all the centers where the applications were originally accepted and will be marked “A/c payee” and would be drawn in the name of the sole/ first applicant. Adequate funds would be made available to the Registrar to the Issue for the dispatch of Letters of allotment/ securities certificates and refund orders.

ALLOTMENT ADVICES / REFUND ORDERS

Our Company will issue and dispatch allotment advice / share certificates/ demat credit and/or letters of regret along with refund order or credit the allotted securities to the respective beneficiary accounts, if any, within a period of 15 days from the date of closure of the Issue. If such money is not repaid within eight days from the day the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under section 73 of the Companies Act.

Investors residing in the 68 cities specified by SEBI pursuant to its circular dated February 1, 2008, with amendments, if any, will get refunds through ECS only except where Investors are otherwise disclosed as applicable / eligible to get refunds through direct credit and RTGS provided the MICR details are recorded with the Depositories or the Company.

In case of those Investors who have opted to receive their Rights Entitlement in dematerialized form using electronic credit under the depository system, and advice regarding their credit of the Rights Equity Shares shall be given separately. Investors to whom refunds are made through electronic transfer of funds will be sent a letter through certificate of posting intimating them about the mode of credit of refund within 15 working days of closure of the Issue.

In case of those Investors who have opted to receive their Rights Entitlement in physical form, the Company will issue the corresponding share certificates under Section 113 of the Companies Act or other applicable provisions.

Refund orders exceeding Rs. 1,500 would be sent by registered post / speed post to the sole / first Investors' registered address. Refund orders up to the value of Rs. 1,500 would be sent under certificate of posting. Such refund orders would be payable at par at all places where the applications were originally accepted. The same would be marked ‘Account Payee only’ and whole would be drawn in favour of the sole / first Investor. Adequate funds would be made available to the Registrar to the Issue for this purpose.

Payment of Refund

Mode of making refunds

The payment of refund, if any, would be done through various modes in the following order of preference:

203 1. ECS Payment of refund would be done through ECS for Investors having an account at any centre where such facility has been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for Investors having a bank account at the centers where ECS facility has been made available by the RBI (subject to availability of all information for crediting the refund through ECS), except where the Investor, being eligible, opts to receive refund through NEFT, direct credit or RTGS.

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. Direct Credit Investors having bank accounts with the Bankers to the Issue shall be eligible to receive refunds through direct credit. Charges, if any, levied by the relevant bank(s) for the same would be borne by the Company.

4. RTGS Investors having a bank account at any of the centres where such facility has been made available and whose refund amount exceeds Rs. 1 Lac., have the option to receive refund through RTGS. Such eligible Investors who indicate their preference to receive refund through RTGS are required to provide the IFSC code in the CAF. In the event the same is not provided, refund shall be made through ECS. Charges, if any, levied by the Refund bank for the same would be borne by the Company. Charges if any, levied by the investors’ bank receiving the credit would be borne by the Investor.

5. For all other Investors, including those who have not updated their bank particulars with the MICR code, the refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and through speed post / registered post for refund orders of Rs. 1,500 and above. Such refunds will be made by cheques, pay orders or demand draft drawn in favour of the sole / first Investor and payable at par.

As regards allotment/ refund to Non-Residents, the following further conditions shall apply

In case of Non-Residents, who remit their application monies from funds held in NRE/ FCNR accounts, refunds and/ or payment of interest/ dividend and other disbursement, if any, shall be credited to such accounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of non-residents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/ or payment of dividend/ interest and any other disbursement, shall be credited to such accounts (details of which should be furnished in the CAF) and will be made net of bank charges/ commission in US Dollars, at the rate of exchange prevailing at such time. The Company will not be responsible for any loss on account of exchange fluctuations for converting the Indian Rupee amount into US Dollars. The Equity Share certificate(s) will be sent by registered post at the Indian address of the non- resident applicant.

Letters of Allotment / Share Certificates / Demat Credit

Letter(s) of allotment/ share certificates/ demat credit or letters of regret will be dispatched to the registered address of the first named applicant or respective beneficiary accounts will be credited within 15 days, from the date of closure of the subscription list. In case we issue letters of allotment, the relative share certificates will be dispatched within three months from the date of allotment. Allottees are requested to preserve such letters of allotment (if any) to be exchanged later for share certificates. 204 Export of letters of allotment (if any)/ share certificates/ demat credit to non-resident allottees will be subject to the approval of RBI.

Underwriting and Standby Arrangement

The Present Rights Issue is not underwritten.

Undertaking by the Company

• That the complaints received in respect of the Issue shall be attended to by the issuer company expeditiously and satisfactorily. • That all steps for completion of the necessary formalities for listing and commencement of trading at all stock exchanges where the securities are to be listed shall be taken within seven working days of finalization of the basis of allotment. • That the security certificates or refund orders to the Non-Resident Indians shall be dispatched within specified time. • That the funds required for dispatch of refund orders/allotment letters/certificates by registered post shall be made available to the Registrar to the Issue by the Issuer Company. • That no further issue of securities shall be made till the securities offered through this Draft Letter of Offer are listed or till the application moneys are refunded on account of non-listing, under subscription, etc. • The Company, its promoters, any of the Company’s associates of group companies and other Companies with which directors of the Company are associated as directors or promoters have neither been suspended by SEBI or been prohibited from accessing the capital market nor has any disciplinary action been taken by any order or direction passed by SEBI. • That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within fifteen 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; • That adequate arrangement shall be made to collect all ASBA applications and to consider them similar to non-ASBA applications while finalizing the basis of allotment. • At any given time that there shall be only one denominator of the shares of the Company and the company shall comply with such disclosures and accounting norms specified by SEBI from time to time. • All information shall be made available to the Lead Managers and the issuer 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 shows, presentations, in research of sales reports etc. Utilization of Issue Proceeds

The Board of Directors declares that:- i. The funds received against this Issue will be transferred to a separate bank account other than the bank account referred to sub-section (3) of Section 73 of the Act. ii. Details of all moneys utilized out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the purpose for which such money has been utilized. iii. Details of all such unutilized moneys out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet of the Company indicating the form in which such unutilized moneys have been invested.

General Instructions for Applicants (a) Please read the instructions printed on the enclosed CAF carefully.

(b) Application should be made on the printed CAF, provided by the Company and should be completed in all respects. The CAF found incomplete with regard to any of the particulars required to be given therein, and/ or which are not completed in conformity with the terms of this Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded without interest if refunded within stipulated period. The CAF must be filled in English and the names of all the applicants, details of occupation, address, and father’s / husband’s name must be filled in block letters. 205

(c) The CAF together with cheque/ demand draft should be sent to the Bankers to the Issue/ Collecting Bank or to the Registrar and not to the Company or Lead Managers to the Issue. Applicants residing at places other than cities where the branches of the Bankers to the Issue have been authorised by the Company for collecting applications, will have to make payment by Demand draft payable at Chennai, Tamil Nadu (net of demand draft charges and postal charges) and send their application forms to the Registrar to the Issue by Registered Post. If any portion of the CAF is / are detached or separated, such application is liable to be rejected.

(d) Applicants are advised to provide information as to their savings/ current account number, 9 digit MICR number and the name of bank, branch with whom such account is held in the CAF to enable the Registrar to print the said details in the Refund Orders, if any, after the names of the payees. Application not containing such details is liable to be rejected.

(e) The payment against the application should not be effected in cash if the amount to be paid is Rs.20,000/- or more. In case payment is effected in contravention of this, the application may be deemed invalid and the application money will be refunded and no interest will be paid thereon. Payment against the application if made in cash, subject to conditions as mentioned above, should be made only to the Bankers to the Issue.

(f) Signatures should be either in English or Hindi or in any other language specified in the 8th Schedule of the Constitution of India. Signatures other than in English or Hindi and thumb impression must be attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded with us.

(g) In case of an application under power of attorney or by a body corporate or by a society, a certified true copy of the relevant power of attorney or relevant resolution or authority to make investment and sign the application along with a copy of the memorandum & articles of association and/ or bye laws must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case these papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closure Date, then the application is liable to be rejected.

(h) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as per the specimen signature(s) recorded with us. Further, in case of joint applicants who are renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if any, will be made in the first applicant’s name and all communication will be addressed to the first applicant.

(i) Application(s) received from Non-Residents/ NRIs, or persons of Indian origin residing abroad for allotment of Equity Shares shall, interalia, be subject to conditions, as may be imposed from time to time by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest, export of Equity Share certificates, etc. In case a Non-Resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his shareholding, he should enclose a copy of such approval with the CAF.

(k) All communication in connection with application for the Equity Shares, including any change in address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF number. Please note that any intimation for change of address of Equity Shareholders, after the date of allotment, should be sent to the Registrar and Transfer Agents of the Company or Registrar to Issue (Knack Corporate Services Private Limited) in the case of equity shares held in physical form and to the respective DP, in case of equity shares held in dematerialised form.

(l) Split forms cannot be re-split.

(m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be entitled to obtain split forms. 206

(n) Applicants must write their CAF number at the back of the cheque / demand draft.

(o) Only one mode of payment per application should be used. The payment must be either in cash or by cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the CAF where the application is to be submitted.

(p) A separate cheque /draft must accompany each CAF. Outstation cheques or post-dated cheques and postal /money orders will not be accepted and applications accompanied by such cheques / demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment against application if made in cash. (For payment against application in cash please refer point (f) above)

(q) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/ Registrar will acknowledge receipt of the same by stamping and returning the acknowledgement slip at the bottom of the CAF.

Grounds for Technical Rejections

Investors are advised to note that applications are liable to be rejected on technical grounds, including the following:

• Amount paid does not tally with the amount payable for; • Bank account details (for refund) are not given and the same are not available with the DP (in the case of dematerialized holdings) or the Registrar (in the case of physical holdings); • Age of first Investor not given while completing Part C of the CAFs; • Except for applications on behalf of the Central or State Government and the officials appointed by the courts, PAN number not given for application of any value; • Submit the GIR number instead of the PAN; • In case of application under power of attorney or by limited companies, corporate, trust, etc., relevant documents are not submitted; • If the signature of the existing Eligible Equity Shareholder does not match with the one given on the CAF and for renouncee(s) if the signature does not match with the records available with their depositories; • If the Investor desires to have Rights Equity Shares in electronic form, but the CAF does not have the Investor‘s depository account details; • Application forms are not submitted by the Investors within the time prescribed as per the CAF and the Letter of Offer; • Applications not duly signed by the sole/joint Investors; • Applications by OCBs unless accompanied by specific approval from RBI permitting the OCBs to participate in the Issue; • Applications accompanied by Stockinvest; • In case no corresponding record is available with the Depositories that matches three parameters, namely, names of the Investors (including the order of names of joint holders), the Depository Participant‘s identity (DP ID) and the beneficiary‘s identity; • Applications that do not include the certification set out in the CAF to the effect that the subscriber is not a “U.S. person” (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States and is authorized to acquire the rights and the securities in compliance with all applicable laws and regulations; • Applications which have evidence of being executed in/dispatched from the US; • Applications by ineligible Non-residents (including on account of restriction or prohibition under applicable local laws) and where a registered address in India has not been provided; • Applications where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements; • Multiple Applications; • Duplicate Applications, including cases where an Investor submits CAFs along with a plain paper application. 207 • Where the applicant has selected both the payment methods. • Applications by renouncees who are persons not contempt to contract under the Indian Contract Act, 1872, including minors; and • Please read this Letter of Offer and the instructions contained therein and in the CAF carefully before filling in the CAF. The instructions contained in the CAF are each an integral part of this Letter of Offer and must be carefully followed. An application is liable to be rejected for any non-compliance of the provisions contained in this Letter of Offer or the CAF.

Mode of payment

For Resident applicants • Applicants who are resident in centers with the bank collection centres shall draw cheques /s accompanying the CAF in favour of “RKIL – RIGHTS ISSUE”, crossed account payee only and drawn on any bank (including a co-operative bank) which is situated at and is a member or a sub-member of the bankers’ clearing house located at the centre where the CAF is submitted. A separate cheque/draft must accompany each CAF. Only one mode of payment should be used. Money orders, postal orders and outstation cheques will not be accepted and applications accompanied by any such instruments will be rejected. • Applicants residing at places other than places where the bank collection centres have been opened by the Company for collecting applications, are requested to send their applications together with Demand Draft/Pay Order payable at Chennai, Tamil Nadu in favour of the “RKIL – RIGHTS ISSUE”, crossed account payee only directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date December 02, 2010. The Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Mode of payment for Non-Resident Equity Shareholders/ Applicants

As regards the application by non-resident equity shareholders, the following further conditions shall apply:

Payment by Non-Residents must be made by demand draft / cheque payable at Chennai, Tamil Nadu (net of demand draft charges and postal charges) or funds remitted from abroad in any of the following ways:

Application with repatriation benefits

(A) By Indian Rupees purchased from abroad and payable at Chennai, Tamil Nadu or funds remitted from abroad (submitted along with Foreign Inward Remittance Certificate); or (B) By Cheque / on a Non-Resident External Account (NRE) or FCNR Account maintained in Chennai, Tamil Nadu; or (C) By Rupee purchased by debit to NRE/ FCNR Account maintained elsewhere in India and payable at Chennai, Tamil Nadu. (D) Non-resident investors applying with repatriation benefits should draw cheques/s in favour of “RKIL – RIGHTS ISSUE-NR”, payable at Chennai, Tamil Nadu and must be crossed “A/c Payee Only” for full application amount.

Application without repatriation benefits

As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary) Account maintained in Chennai, Tamil Nadu or Rupee purchased out of NRO Account maintained elsewhere in India but payable at Chennai, Tamil Nadu. In such cases, the allotment of Equity Shares will be on non- repatriation basis.

All cheques/drafts submitted by non-residents should be drawn in favour of “RKIL – RIGHTS ISSUE” payable at Chennai, Tamil Nadu and must be crossed “A/c Payee only” for the full application amount. The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on the Issue 208 Closing Date. A separate cheque or bank must accompany each CAF.

Applicants may note that where payment is made from NRE/ FCNR/ NRO accounts as the case may be, an Account Debit Certificate from the bank issuing the confirming has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise the application shall be considered incomplete and is liable to be rejected.

New demat account shall be opened for holders who have had a change in status from resident Indian to NRI. Note: • In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to Income Tax Act, 1961. • In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity Shares cannot be remitted outside India. • The CAF duly completed together with the amount payable on application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the close of banking hours on the aforesaid Issue Closing Date. A separate cheque or bank must accompany each CAF. • In case application received from Non-Residents, allotment, refunds and other distribution, if any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such allotment, remittance and subject to necessary approvals.

Investment by FIIs

In accordance with the current regulations, the following restrictions are applicable for investment by FIIs: The Issue of Rights Equity Shares under this Issue to a single FII should not exceed 10% of the post-issue paid up capital of our Company. In respect of an FII investing in the Rights Equity Shares on behalf of its sub-accounts the investment on behalf of each sub-account shall not exceed 5% of the total paid up capital of our Company. In accordance with foreign investment limits applicable to our Company, the total FII investment cannot exceed 24% of the total paid-up capital of our Company. With the approval of the board and the shareholders by way of a special resolution, the aggregate FII holding can go up to 100% of our equity share capital.

Investments by NRIs

Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3)(i) of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. NRI Investors should note that applications by ineligible Non-residents (including on account of restriction or prohibition under applicable local laws) and where a registered address in India has not been provided are liable to be rejected.

Payment by Stock invest

In terms of RBI Circular DBOD No. FSC BC 42/24.47/2003-04 dated November 5, 2003; the Stock invest scheme has been withdrawn with immediate effect. Hence, payment through Stock invest would not be accepted in this Issue.

Disposal of application and application money

No acknowledgment will be issued for the application moneys received by the Company. However, the Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and returning the acknowledgment slip at the bottom of each CAF.

In case an application is rejected in full, the whole of the application money received will be refunded. Wherever an application is rejected in part, the balance of application money, if any, after adjusting any money due on Equity Shares allotted, will be refunded to the applicant within 15 days from the close of the Issue. The Board reserves its full, unqualified and absolute right to accept or reject any application in whole or in part and in either case without assigning any reason. 209

Minimum Subscription a. If the Company does not receive minimum subscription of 90% of the issue, the entire subscription shall be refunded to the applicants within 15 days from the date of closure of the issue, or if the subscription level falls below 90% after the closure of the issue on account of cheques having being returned unpaid or withdrawal of applications, the company shall forthwith refund the entire subscription amount received. b. If there is a delay in the refund of subscription by more than 8 days after the company becomes liable to pay the subscription amount (i.e. 15 days after the closure of the issue), the company will pay interest for the delayed period, at the rates prescribed in sub-sections (2) and (2A) of Section 73 of the Companies Act, 1956.

INVESTORS MAY PLEASE NOTE THAT THEY SHALL HAVE AN OPTION EITHER TO RECEIVE THE SECURITY CERTIFICATES OR TO HOLD THE SECURITIES IN DEMATERIALISED FORM WITH A DEPOSITORY.

For further instruction, please read the Composite Application Form carefully.

Please read the Letter of Offer carefully before taking any action. The instructions contained in the accompanying CAF are an integral part of the conditions of the Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.

All inquiries in connection with the Letter of Offer or accompanying CAF and requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and Client ID no., the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and subscribed on the envelope) to the Registrar to the Issue at the following address:

KNACK CORPORATE SERVICES PVT. LTD.

17/9, Thiruvengadam Street, Mandaveli, Chennai – 600 028 Tel.: 91- 44 – 2461 5006/ 4210 0092 Fax: 91- 044 – 2461 1917 Email: [email protected] Contact Person: Mr. R. Chandrasekaran

It is to be specifically noted that this Issue of Equity Shares is subject to Risk Factors appearing on Page no. 10 of this Letter of Offer.

The Issue will be kept open for 15 days unless extended, in which case it will be kept open for a maximum of 30 days.

210 (C) DESCRIPTION OF EQUITY SHARES AND TERMS OF ARTICLES OF ASSOCIATION

Capitalised terms used in this section have the meaning given to such terms in the Articles of the Company.

Pursuant to Schedule II of the Companies Act, 1956 and the SEBI (ICDR) Regulations, the main provisions of the Articles of Association of the Company relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of equity shares and or their consolidation/splitting are required to be stated. Please note that each provision herein below is numbered as per the corresponding article number in the Articles of Association and defined terms herein have the meaning given to them in the Articles of Association.

AUTHORISED SHARE CAPITAL

3A. * The authorized capital of the company is Rs 50,00,00,000/- (Rupees Fifty Crores only) divided into 5,00,00,000 (Five Crores only) Equity shares of Rs. 10/-(Rupees Ten Only) each, with power to divide the shares in the Capital into two classes and to attach thereto respectively such preferential rights, privileges or conditions as may be determined by or in accordance with the Articles of Association of the Company for the time being. The Company has power to increase or reduce the share Capital in accordance with the time provisions of the Companies Act, 1956. .

3B. The Company shall have power to issue shares at a premium or discount, but in doing so, it shall comply with the provisions of Sections 78 and 79 of the Act, option or right to call of shares shall not be given to any person or persons without sanction of the Company in General Meeting.

FURTHER ISSUE AND ALLOTMENT OF SHARES

4. The Company by a special resolution in General Meeting, may determine that any shares (whether forming part of the original capital or of any increased capital of the company) shall be offered to such persons (whether members of the company or not) in such proportions and on such terms and conditions and either at premium or at par (subject to compliance of Section 79 of the Act) at a discount, as such General Meeting shall determine and shall have full power to give any persons (whether members of the company or not) the option to call for or be allotted shares of any class of the company either at a premium or at par (subject to compliance of Section 79 of the Act) at a discount, such option being exercisable at such times and for such consideration as may be directed by such General Meeting or the company in General Meeting may make any other provision whatsoever for the issue, allotment or disposal of any shares.

4A. Debentures/ Bonds, Debenture Stock Bonds or other securities with the right to conversion into or allotment of shares shall be issued with the consent of the company in General Meeting.

4B. Share /Debenture Certificates shall be issued in marketable lots and where share / debenture certificates are issued for either more or less than marketable lots. Subdivision / consolidation into marketable lots shall be done free of charge.

No Fee shall be charged for issue of new Share / Debenture Certificates in replacement of those which are old, decrepit, worn out or where the cages on the reverse for recording transfers have been fully utilized.

CALL ON SHARES

1. (a) (i) The Board may, from time to time, make calls upon the members in respect of any monies unpaid on their shares (whether on account of the nominal value of the share or by way of premium) and not by the conditions of allotment thereof made payable at fixed times. A call may be made payable by installments. All such calls shall be made on a uniform basis on all shares falling under the same clause.

211 (ii) Each member shall, subject to receiving atleast one month’s notice specifying the time or times and place of payment paid to the company at the time or times and place specified, the amount called on its shares.

(iii) A call may be revocated or postponed at the discretion of the Board.

(b) A call shall be deemed to have been made at the time when the resolution of the Board authorizing the call is passed and may be required to be paid by installments.

(d) (i) If a sum called in respect of a share is not paid before or on the day appointed for payment thereof, the person from whom the sum is due shall pay interest thereon from the day appointed for payment thereof to the time of actual payment at 18% per annum or at such lower rate, if any, as the Board may determine.

(ii) The Board shall be at liberty to waive payment of any such interest wholly or in part.

(e) (i) Any sum which by the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium shall for the purposes of these Regulations, be deemed to be a call duly made and payable on the date on which by the terms of issue such sum becomes payable.

(ii) In case of non-payment of such sum all the relevant provisions of these Regulations as to payment of interest and expenses, forfeiture or otherwise shall apply as if such sum had become payable by virtue of a call duly made and notified.

(f)(i) Subject to the provisions of Section 92 of the Act the Board may, if it thinks fit, receive from any member willing to advance the same, all or any part of the moneys uncalled and unpaid upon any shares held by him and

(ii) Upon all or any of the moneys so advanced, the Board may (until the same would but for such advances, become presently payable) pay interest at such rate not exceeding the maximum amount permissible by SEBI unless the company in General Meeting shall otherwise direct, may be agreed upon between the Board and the member paying the sum in advance.

Calls paid in advance may confer right for interest but shall not entitle any person to participate in the profits of the company or any dividend that may be declared.

LIEN

6A. The company shall have first and paramount lien upon all the shares (other than fully paid-up shares) registered in the name of each member (whether solely or jointly with others) and upon the proceeds of sale thereof for all moneys (whether presently payable or not) called or payable at a fixed time in respect of such shares and no equitable interest in any share shall be created except upon the footing and condition that this article will have full effect. Such lien shall extended to all dividends and bonuses 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 Directors at any time declare any shares wholly or in part to exempt from the provisions of this clause

6B. No fee shall be charged for transfer of shares/ debentures of for effecting transmission or for registering any letters of probate, letters of administration and similar other documents.

Provided that the registration of a transfer shall not be refused on the grounds of the transferor being either alone or jointly with any other person(s) indebted to the company on any account whatsoever.

6C. (i) To give effect to any such sale, the Board may authorize some person to transfer the shares sold to the purchaser thereof. 212 (ii) The purchaser shall be registered as the shareholder of the share comprised in any such transfer. (iii) The purchaser shall not be bound to see to the application of the purchase money, nor shall his title to the shares be affected by any irregularity or invalidity in the proceedings in reference to the sale.

6D. (i) The proceeds of the sale shall be received by the company and applied in payment of such part of the amount in respect of which the lien exists as is presently payable. (ii) The residue, if any, shall subject to a like lien for sums not presently payable as existed upon the shares before the sale, be paid to the persons entitled to the shares at the date of the sale.

6E. No member shall exercise any voting rights in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regard To which Company has, and has exercised any right of lien.

ALTERATION OF SHARE CAPITAL

7. The Company shall have power to increase its share capital or after the conditions of its Memorandum subject to section 94 of the Act so that it may:

a) Consolidate and divide all or any of its share capital in to shares of larger amount than its existing shares; b) Convert all or any of its fully paid up shares into Stock and reconvert that stock into fully Paid up shares of any denomination; c) Subdivide its shares or any of them, into shares of smaller amount than is fixed by the Memorandum, so however, that in the subdivision the proportion between the amount Paid and the amount if any unpaid on each reduced share shall be the same as it was in The case of the share from which the reduced share is derived. d) Cancel shares which at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled provided however the cancellation of shares in pursuance of the exercise of this power shall not be deemed to be a reduction of share capital within the meaning of the Act.

7A. Registration of a transfer of shares shall not be refused on the ground of the transferor. Being either alone or jointly with any other person or persons indebted to the company. On any ground whatsoever except a lien on the shares.

SET OFF OF MONEYS DUE TO SHARE HOLDERS

7. Any money due from the company to a share holder may, with out the consent of such Shareholder, be applied by the company in or towards payment of any money due for Him, either alone or jointly with other person, to the company in respect of any call.

BORROWING

14. (1) The Board of Directors may from time to time but with such consent of the Company in general meeting as may be required under section 293 of the Act raise any money or any moneys or sums of money for the purposes of the Company provided that the moneys to be borrowed by the Company apart from temporary loans obtained from the Company’s bankers in the ordinary course of business shall not without the sanction of the Company at a general meeting exceed the aggregate of the paid- up Capital of the company and its free reserves that is to say reserves not set apart for any specific purpose and in particular, but subject to the provisions of Section 292 of the Act, the Board may from time to time at their discretion raise or borrow or secure the payment of any such sum or sums of money for the purpose of the Company, by the issue of debentures perpetual or otherwise including debentures convertible into mortgage, pledge or charge, the whole or any part of the property, assets or revenue of the Company present or future including its uncalled capital by special assignment or otherwise or to transfer or convey the same absolutely or in trust and to give the 213 lenders powers of sale and other powers as may be expedient and to purchase, redeem or pay off any such securities. Provided that every resolution passed by the Company in General Meeting in relation to the exercise of the power to borrow as stated above shall specify the total amount upto which monies may be borrowed by the Board of Directors.

(2) The Directors may be a resolution at a meeting of the Board delegates the above power to borrow money otherwise than on debentures to committee of Directors within the limits prescribed.

25A. “Debenture / Debenture Stock, Loan / Loan Stock, bonds or other securities conferring the right to allotment or conversion into shares or the option or right to call for allotment for shares shall not be issued except with the sanction of the Company in General Meeting”.

15. (1) The Board shall exercise the following powers on behalf of the company and the said power shall be exercised only by a resolution passed at a meeting of the Board.

(a) Power to make calls on shareholders in respect of money unpaid on their shares. (b) Power to issue debentures. (c) Power to borrow moneys otherwise than on debentures. (d) Power to invest the funds of the Company, and (e) Power to make loans

(2) The Board may by a resolution passed at a meeting delegate to any committee of the Board any powers specified in sub clauses (c) (d) and (e) of clause (1) above.

(3) Every resolution delegating the power set out in sub-clause (c) of clause (1) above shall specify the total amount outstanding at any one time upto which the moneys may be borrowed by the said delegatee.

(4) Every resolution delegating the power referred to in sub-clause (d) of clause (1) above shall specify the total amount upto which the fund may be invested and nature of investments which may be made by the delegatee.

(5) Every resolution delegating the power referred to in sub-clause (e) of clause (1) above shall specify the total amount upto which loans may be made by the delegate, the purposes for which the loans may be made and the maximum amount of the loan that may be made for each such purpose in individual cases.

(6) So long as Financial Institution as defined under the Act hold and continue to hold loan/debentures, they shall be entitled to appoint one nominee as Director on the Board of the Company to represent one or more of them and such a Director as appointed shall not be liable to retire by rotation.

DIVIDEND AND RESERVE

16. The Company in general meeting may declare dividends but no dividend shall exceed the amount recommended by the Board provided however, that in declaring the divided a company shall comply with the provisions of Section 205 of the Act.

29A. No unclaimed or unpaid dividend shall be forfeited by the Board and the Company shall comply with all the provisions of Section 205 A of the Act in respect of unclaimed or unpaid dividend.

214 17. The Board may from time to time pay to the member such interim dividend as appear to it to be justified by the profits of the Company.

CAPITALISATION OF PROFITS

32.(a) 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 to or the credit of the Profit and Loss account or otherwise available for distribution, and

(ii) that such sum be accordingly set free for distribution in the manner specified in clause (b) amongst the members who would have been entitled thereto, if distributed by way of dividend and in the same proportion.

(b) The sum aforesaid shall not be paid in cash but shall be applied, subject to the provisions contained in clause (c) either in or towards (i) paying up any amounts for the time being unpaid on any shares held by such members respectively, (ii) paying up in full, unissued shares of the Company to be allotted and distributed, credited as fully paid up, to and amongst such members in the proportions aforesaid, or (iii) partly in the way specified in sub-clause (ii).

(b) 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.

(d) The Board shall give effect to the resolution passed by the company in pursuance of the Regulation.

215 SECTION X –STATUTORY AND OTHER INFORMATION

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 Letter of Offer) which are or may be deemed material have been entered or are to be entered into by our Company. These contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office of our Company situated at Ram Kaashyap Investment Limited, No. 33/8, B. R. Complex, II Floor, C. P. Ramasamy Road, Alwarpet, Chennai – 600 018, Tamilnadu, India, from 10.00 a.m. to 5.00 p.m., from the date of this Letter of Offer until the Issue Closing Date, on working days.

A. Material Contracts 1. Agreement dated January 20, 2010 entered between our Company and Lead Manager i.e. Vivro Financial Services Private Limited 2. Agreement dated August 01, 2008 entered between our Company and Registrar to the Issue and renewal of the agreement dated July 31, 2010 received from the Registrar to the Issue.

B. Documents available for inspection 1. Certificate of Incorporation of the Company dated December 3, 1993. 2. Certificate for Commencement of Business dated December 27, 1993 3. Copy of the Memorandum and Articles of the Company, as amended from time to time. 4. Copy of the Board Resolution dated August 28, 2009 and January 21, 2010 approving this Issue. 5. Consents of the Directors, Lead Manager to the Issue, Legal Counsel, Registrar to the Issue, Statutory Auditors and Compliance Officer of the Company to include their names in the Letter of Offer to act in their respective capacities. 6. Prospectus dated 08-11-1994 for the Initial Public Offering made by the Company. 7. Copy of Letter/ Order No. DNBS (Ch)/2642/Che 00053/99-2000 dated November 1, 1999_issued by Reserve Bank of India cancelling NBFC License of the Company. 8. Board Resolution passed at the Board Meeting held on October 22, 2009 appointing M/s. R. RAVINDRAN ASSOCIATES, Chartered Accountants, as statutory auditors to fill the casual vacancy. 9. Annual Reports of the Company for the last five Financial Years i.e. 2005-06, 2006-07, 2007-08, 2008- 09 & 2009-10 and for the six months ended September 30, 2010. 10. Letter dated October 22, 2010 from the Statutory Auditors of the Company M/s. R. Ravindran & Associates, Chartered Accountants, Chennai confirming Tax Benefits as mentioned in the Letter of Offer. 11. Report of the Statutory Auditors of the Company M/s. R. Ravindran & Associates, Chartered Accountants, Chennai, dated October 22, 2010 on Standalone Financial Statements prepared as per Indian GAAP and mentioned in this Letter of Offer and copies of Summary of Assets and Liabilities and Profit and Loss Accounts as restated of the Company. 12. Report of the Statutory Auditors of the Company M/s. R. Ravindran & Associates, Chartered Accountants, Chennai, dated October 22, 2010 on Consolidated Financial Statements prepared as per Indian GAAP and mentioned in this Letter of Offer and copies of Summary of Assets and Liabilities and Profit and Loss Accounts (as consolidated )and restated of the Company. 13. In-principle listing approval for this Issue dated February 18, 2010 from BSE. 14. In-principle listing approval for this Issue dated February 24, 2010 from MSE. 15. Agreement for Appointment and fixing of remuneration of Whole-time Director Mr. Jude Jeyaprakash dated December 08, 2009. 16. Share Purchase Agreement dated October 22, 2009 with Pix Aalaya Studios Private Limited. 17. Share Purchase Agreement dated October 22, 2009 with Tamil Box Office (India) Private Limited. 18. Due Diligence certificate dated January 20, 2010 issued by the Lead Manger to the Rights Issue. 19. Tripartite agreements dated October 17, 2007 entered into with NSDL, Our Company and the Registrar of the Company. 20. Tripartite agreements dated January 23, 2008 entered into with CDSL, Our Company and the Registrar of the Company. 21. SEBI Observation letter no. SEBI/SRO/DIL/2010 dated June 10, 2010 and final observation letter No. SEBI/SRO/DIL/2010 dated July 22, 2010.

216

DECLARATION

No statement made in this Letter of Offer contravenes any of the provisions of the Companies Act, 1956 and the rules made there under. All the legal requirements connected with the said Issue as also the regulations, guidelines, instructions, etc. issued by SEBI, Government and any other competent authority in this behalf have been duly complied with.

We hereby certify that all disclosures made in this Letter of Offer are true and correct.

Signed by all the Directors of the Company

______Mr. Jude Jeyaprakash Whole-time Director

______Mr. T V Balachandran Independent Director

______Mr. S. Krishna Kumar Independent Director

______Mr. Adapa Srinivas Independent Director

______Mr. K J Chandra Mouli Compliance Officer & Company Secretary

Date: October 26, 2010 Place: Chennai

217