Draft Letter of Offer September 27, 2011 For Equity Shareholders of our Company only FAME INDIA LIMITED Our Company was incorporated in India on October 26, 1999 as Shringar Cinemas Private Limited under the Companies Act, 1956. The name was changed to Shringar Cinemas Limited on December 24, 2004 pursuant to a fresh certificate of incorporation consequent to change of name upon conversion to public company. The name of our Company was then changed to the present name Fame India Limited on January 25, 2008 pursuant to a fresh certificate of incorporation consequent to change of name with Corporate Identification Number L92490MH1999PLC122381. For details of change of name of our Company, please see the chapter “History and Other Corporate Matters” on page 71 of this Draft Letter of Offer. Registered Office: Citi Mall, 2nd Floor, Oshiwara Link Road, Andheri (W), Mumbai – 400 053, Maharashtra, India. Tel: +91 22 6640 3636 Fax: +91 22 6640 3637 Contact Person: Mr. Suratha Satpathy, Company Secretary and Compliance Officer. E-mail: [email protected] Website: www.fame.co.in PROMOTER OF OUR COMPANY: INOX LEISURE LIMITED FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY ISSUE OF [●] EQUITY SHARES WITH A FACE VALUE OF ` 10 EACH AT A PREMIUM OF ` [●] PER EQUITY SHARE (“EQUITY SHARES”) FOR AN AMOUNT NOT EXCEEDING ` 9,000 LACS ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF FAME INDIA LIMITED (THE “COMPANY” OR THE “ISSUER”) IN THE RATIO OF [●] EQUITY SHARE(S) FOR EVERY [●] FULLY PAID-UP EQUITY SHARE(S) HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE, THAT IS ON [●] (THE “ISSUE”). FOR FURTHER DETAILS, PLEASE SEE “TERMS OF THE ISSUE” ON PAGE 295 OF THIS DRAFT LETTER OF OFFER. This Draft Letter of Offer may not be sent to any person or any jurisdiction in which it would not be permissible to deliver the Equity Shares and rights to purchase the Equity Shares, and the Equity Shares and rights to purchase the Equity Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, to any such person or in any such jurisdiction. The Equity Shares and rights to purchase the Equity Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, allotted, taken up, exercised, renounced, pledged, transferred or delivered, directly or indirectly, within the United States (as defined in Regulation S under the Securities Act (“Regulation S”)). GENERAL RISK Investment in equity and equity related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, Investors must rely on their own examination of our Company and the Issue including the risks involved. The securities being offered in the Issue have not been recommended or approved by Securities and Exchange Board of India (the “SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Draft Letter of Offer. Investors are advised to refer to the “Risk Factors” on page IX of this Draft Letter of Offer before making an investment in the Issue. COMPANY’S ABSOLUTE RESPONSIBILITY Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to our Company and the Issue, which is material in the context of the Issue, that the information contained in the Draft 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 make this Draft Letter of Offer as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The existing Equity Shares are listed on the Bombay Stock Exchange Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”). We have received "in-principle" approvals from the BSE and the NSE for listing the Equity Shares arising from the Issue vide their letters dated [●] and [●], respectively. For the purposes of the Issue, the Designated Stock Exchange is [●]. LEAD MANAGER REGISTRAR TO THE ISSUE Enam Securities Private Limited Link Intime India Private Limited 801/802, Dalamal Towers, C- 13, Pannalal Silk Mills Compound, Nariman Point, Mumbai 400 021 LBS Marg, Bhandup (West), Maharashtra, India. Mumbai - 400 078, Tel: +91 22 6638 1800 Maharashtra, India Fax: +91 22 2284 6824 Tel: +91 22 2596 0320 Website: www.enam.com Fax: +91 22 2596 0329 E-mail: [email protected] Website: www.linkintime.co.in Investor Grievance E-mail: [email protected] Email: [email protected] Contact Person: Ms. Simran Gadh Contact Person: Mr. Pravin Kasare SEBI Reg. No: INM000006856 SEBI Registration No: INR000004068 LAST DATE FOR REQUEST FOR ISSUE OPENS ON ISSUE CLOSES ON SPLIT APPLICATION FORMS [●] [●] [●] TABLE OF CONTENTS SECTION I – GENERAL ........................................................................................................................................... I DEFINITIONS AND ABBREVIATIONS................................................................................................................. I NOTICE TO OVERSEAS SHAREHOLDERS ...................................................................................................... VI PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA ............................... VII FORWARD LOOKING STATEMENTS ............................................................................................................ VIII SECTION II - RISK FACTORS .............................................................................................................................. IX PROMINENT NOTES ....................................................................................................................................... XXVIII SECTION III – INTRODUCTION ............................................................................................................................ 1 SUMMARY OF INDUSTRY ..................................................................................................................................... 1 SUMMARY OF BUSINESS ...................................................................................................................................... 4 SUMMARY FINANCIAL INFORMATION .......................................................................................................... 8 THE ISSUE ................................................................................................................................................................ 20 GENERAL INFORMATION .................................................................................................................................. 21 CAPITAL STRUCTURE ......................................................................................................................................... 26 SECTION IV – PARTICULARS OF THE ISSUE ................................................................................................. 40 OBJECTS OF THE ISSUE ...................................................................................................................................... 40 BASIS OF ISSUE PRICE ......................................................................................................................................... 44 STATEMENT OF TAX BENEFITS ....................................................................................................................... 47 SECTION V – ABOUT US ........................................................................................................................................ 57 INDUSTRY OVERVIEW ........................................................................................................................................ 57 BUSINESS OVERVIEW ......................................................................................................................................... 62 KEY INDUSTRY REGULATIONS ....................................................................................................................... 69 HISTORY AND OTHER CORPORATE MATTERS ......................................................................................... 71 MANAGEMENT ...................................................................................................................................................... 77 PROMOTER AND PROMOTER GROUP ........................................................................................................... 89 DIVIDEND POLICY ................................................................................................................................................ 94 SECTION VI – FINANCIAL INFORMATION.................................................................................................... 95 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION .......................................................................................................................................................... 214 MARKET PRICE