ccvf brochure

CINEMA CAPITAL VENTURE FUND 1

CINEMA CAPITAL VENTURE FUND

Y o u r t i c k e t t o b l o c k b u s t e r r e t u r n s

SCHEME 1


CONTENTS

The Indian Media and Entertainment Industry 4

Film Entertainment Industry 7

A Unique Investment Opportunity 7

World’s Fastest Growing Film & Entertainment Industry 9

Explosive Domestic Growth 11

Multiplex Growth 12

Global Market for Bollywood 14

Multiple Revenue Streams 15

Revenue Streams : Then and Now 15

Pre-selling of film rights 15

Risk Minimization 16

Block Buster Returns in the Last 2 Years 17

Film Industry Returns 19

Transparency and Corporatisation 22

Preferred Investment Destination 23

The Film Entertainment Industry Opportunity 25

Investment Strategy 26

Exit Options 27

Fund Summary 28

Why Cinema Capital Venture Fund? 29

Taxation 30

Fund Structure 31

Professional Advisors 32

CCVF Advisory Council 32

Key Management Team 32

Film Entertainment Industry – FAQs 33


"The Indian Media and Entertainment (M&E) industry is poised to enter a golden era. One of the largest markets in the world, the industry is seeing strong growth and has the potential to garner US$ 25 billion by 2012." PricewaterhouseCoopers - FICCI Industry Report


"From a global perspective, India has been ranked as the fastest growing market in the world for spend in M&E over the next five years." Eighth PricewaterhouseCoo-pers Global Entertainment and Media Outlook

The Indian Media and Entertainment Industry

The Indian Media and Entertainment industry is one of the fastest growing in the world having doubled its size in the last 4 years. In 2007 alone it grew by 20% reaching an estimated size of INR 51,000 Crores. Film and television segments constitute almost 70% of the entire industry and are its key drivers.

The Indian government accorded industry status to the film entertainment business in 2001. Film entertainment companies are now listed on Indian and International stock markets and have attracted significant private equity and venture capital from across the world. India’s leading corporate houses like Reliance, Birla and Mahindra have also entered this sector. Reputable banks and financial institutions now provide funding and insurance services to the industry.

This transformation has contributed to the film industry segments rapid growth from approx. Rs 600 crores in 1999 to 9600 crores in 2007, an increase of 15 times in just 9 years.


"India has a relatively conducive and open regulatory environment for the M&E industry, unlike many other developed and emerging countries. This has been a significant factor for global M&E conglomerates to set up shop in India." Farokh Balsara, National Sector Leader, Media & Entertainment, Ernst & Young

CINEMA CAPITAL VENTURE FUND Scheme 1

Launches India’s first SEBI approved Venture Capital Fund focused on the Film • and Entertainment Industry

Captures the immense growth opportunity of investing in the fastest growing • entertainment economy in the world

Offers investors a first time opportunity of ‘ownership’ in film and entertainment • ventures

Enjoys low correlation with other traditional asset classes, thereby providing • investment diversification

Employs a “best of breed” strategy to deliver returns in a highly transparent and • professional manner supported by industry experts in areas of media, film, legal, tax and finance

Seeks to deliver superior investment returns for its investors by building a • diverse portfolio of richly valued companies in this fast growing industry


India is one of the four countries along with Brazil, Russia and China where there is significant opportunity for global media and entertainment companies to make money in the medium and long term. Favourable regulatory environment is one of the reasons that foreign companies find India more attractive than China.

Credit Suisse Report on Global Entertainment 2007


Market Opportunity

The world’s largest and fastest growing film entertainment industry with 1100 films released and 3.5 billion tickets sold

Industry has doubled in size in the last 4 years and is projected to double again by 2012

Multiplex and Digital Screens projected to grow 5 fold from 2350 currently to over 10,000 by 2012, coupled with higher ticket prices will lead to greater revenue growth

India has the most favourable demographics to support a growing entertainment industry with over 60% of the population under 35 years

A growing global market for the industry that is now reaching over 40 countries worldwide

Risk minimization due to growth of multiple revenue streams, pre-selling of film rights delivers profits even before the release of the film

SOuRCES :PRICEwATERhOuSECOOPERS, FICCI REPORT 2008, 2007A.T. KEARnEy REPORT 2007

Did you know? India sells 2.5 times more tickets than the US the second largest ticket sale market in the world

Film Entertainment Industry —A Unique Investment Opportunity


Industry Opportunity

Low correlation with traditional asset classes, thereby providing investor portfolio diversification. Entertainment consumption relatively unaffected during times of recession

Transparency and corporatisation in film entertainment com-panies resulting in attractive valuations

Preferred destination for global and Indian corporates with over uS$ 500 million Foreign Direct Investment in the last 12 months

An opportunity to invest in an industry where almost 70% of the most successful companies in the sector are still privately held

Did you know? Film production companies enjoy the highest valuation in the M & E Sector averaging 35-40 times earnings

Film Main hoon na Om Shanti Om

Director Farah Khan Farah Khan

year 2004 2007

Cast Shahrukh Khan, Sushmita Sen Shahrukh Khan, Deepika Padukone

Production Red Chillies Entertainment Red Chillies Entertainment

Budget 25+ crores 25+ crores

Domestic net Revs. 35.5 crores 86.35 crores

nET BOx OFF ICE REVEnuE gROwTh OF 81%

SOuRCE: IBOSnETwORK.COM, MARKET ESTIMATES


SOuRCE: PwC/FICCI REPORT, 2008

Growth of the Indian Media and Entertainment Industry

World’s Fastest Growing Film & Entertainment Industry

SOuRCE: PwC/FICCI REPORT, 2008

Rate of growth across key markets in the global Film Entertainment Industry

gro

wth

in %

Rs B

illio

n


"Our growth rates are much higher than Hollywood's, but in value terms we are way below [the U.S. movie indus-try], But that will change as ticket prices—which now average less than $1 in India—swiftly catch up with the rac-ing Indian economy" Timmy Kandhari, Head of PWC's media and entertainment practice.

Number of tickets sold (In Billion)

Number of films made

Largest Film Industry


Increase in domestic box-office revenues (Rs Crore)

Top 10 films - Domestic box-office revenues (2004) Top 10 films - Domestic box-office revenues (2007)

Increase of 91% in 3 years for top 10 films

Explosive Domestic Growth

India has the most favourable demographics to support a fast growing entertainment industry with over 60% of the population under 35 years.

RaNK FILM NaME NET REvENUE(Rs. Crore)

1 welcome 72.98

2 Om Shanti Om 69.96

3 Taare Zameen Par 59.71

4 Chak De India 53.73

5 guru (2007) 50.34

6 Partner (2007) 50.16

7 heyy Babyy 42.75

8 Bhool Bhulaiyaa 40.61

9 Tara Rum Pum 34.29

10 namastey London 29.63

504.16

RaNK FILM NaME NET REvENUE(Rs. Crore)

1 Veer Zaara 38.47

2 Main hoon na 33.4

3 Dhoom 29.5

4 Lakshya 27.86

5 Mujhse Shaadi Karogi 27.24

6 Khakee 27.1

7 hum Tum 21.89

8 Masti 21.49

9 hulchul 20.68

10 Swades 16.88

264.51

SOuRCE: IBOSnETwORK.COM


"India's multiplex bandwagon has gone beyond the metros to redefine entertainment in B and C class towns. "While the first phase (of the multiplex story) saw emergence of multiplexes in metros and now this growth is spreading to Tier 2 and 3 cities like Lucknow, Indore, Nasik, aurangabad, Kanpur, amritsar and so on," says ajay Bijli, Managing Director, PvR Cinemas Outlook Business 2008

Growth in the number of screens over the next 5 years

Average ticket price in India (Rs)

Multiplex Growth

Multiplex and digital screens are going to grow five fold in the next 5 years, hugely increasing the domestic boxoffice revenue.


Three thousand six hundred shows per day, 1600 screens, Rs 22 crore gross earnings in the first three days, Rs13 crores net earnings internationally in the first one week. These are some of the numbers that the film, Race, has garnered since its release last week.

DNa India May 2008


Did you know? 7 of the top 10 highest grossing Indian films in the US have come in the last two years

"The Bollywood segment of the UK market goes on growing. It is rare nowadays for the top 20 films each week not to feature at least one Bollywood title" Mark Batey, Chief Executive of the Federation of UK Distributors association

The Industry caters to a worldwide market of nRIs as well as local populations in over 40 countries.

Global Market for Bollywood

SOuRCE: IBOSnETwORK.COM, BOxOFFICEInDIA.COM

Increase of UK box-office revenues (£ sterling)

£ S

terl

ing

Mn

Increase of US box-office revenues (US $ Mn)

US

$ M

n

Only films which grossed more than $ 500,000


Film IPR (Intellectual Property Rights), is an asset that generates multiple revenue streams in perpetuity •

Till the late 1980’s, 85-90% of a film’s entire revenue was dependent on domestic box-office •

Today, a large number of rights are sold before the film release thereby guaranteeing a minimum return before it hits the box-office •

Multiple Revenue Streams

Revenue Streams : Then and Now

Pre-selling of Film Rights

Om Shanti OmCost – 30 crores (Industry Estimates)Eros acquisition – 70 croresEstimated Profit – 133%

Jab We MetCost – 15 crores (Industry Estimates)Studio 18 Acquisition – 24 croresEstimated Profit – 60%

Welcome Cost – 25 croresUTV acquisition – 45 croresEstimated Profit – 80 %

UP TILL EaRLY 90s CURRENT SCENaRIO

Domestic Theatrical Domestic Theatrical

home video Overseas Theatrical

Music home Video (DVD, VCD)

home Video (Overseas)

home Video (Rental)

Music (India and Overseas)

Mobile Rights

Satellite Rights

Overseas Satellite Rights

Terrestrial Rights Doordarshan

IPTV, Internet Rights

Retail and Merchandizing

Brands and Sponsorship rights

SOuRCES: InDuSTRy ESTIMATES, MARKET SOuRCES


Did you know? Films like Om Shanti Om, Welcome, Singh is King and Partner have delivered an estimated 100% plus returns while still under production

Risk Minimization

The risks are getting increasingly minimized due to the emergence of alternative revenue streams. Revenues from DVD sales, mobile, gaming, internet, DTh, Video on Demand are set to increase fivefold by 2012.

Trends in Distribution of Revenue Streams

2006 2011(Projected)

Film Dhoom Dhoom 2Director Sanjay gadhvi Sanjay gadhvi

year 2004 2006

CastAbhishek Bachchan,

John AbrahamAbhishek Bachchan,

hrithik RoshanProduction yashraj Films yashraj Films

Budget 20+ crores 30+ croresDomestic net Revs.

29.5 crores 83.5 crores

Overseas 5+ crores 25+ croresnET BOx OFF ICE gROwTh 214%

SOuRCE: yES BAnK REPORT, AMR'S FILM EnTERTAInMEnT wORLDwIDE

Distribution of revenue streams in a mature market (hollywood)

US Film Industry



Blockbuster Returns in the Last 2 Years

16 out of the top 25 domestic box-office revenue earning films have come in the last 2 years.

Film Munnabhai MBBS Lage raho Munna bhaiDirector Raj Kumar hirani Raj Kumar hirani

year 2003 2006

CastSanjay Dutt, Arshad warsi

Sanjay Dutt, Arshad warsi

Production Vidhu Vinod Chopra Vidhu Vinod ChopraBudget 10+ crores 15+ crores

Domestic net Revs.

25 crores 65.28 Crores

Overseas 5+ crores 15+ croresnET BOx OFF ICE REVEnuE gROwTh OF 167%

RaNK FILM NaME YEaRREvENUE(Rs. Crore)

1 Om Shanti Om 2007 86.50 Cr

2 Dhoom 2 2006 85.48 Cr

3 welcome 2007 76.21 Cr

4 gadar Ek Prem Katha 2001 70.00 Cr

5 Lage Raho Munnabhai 2006 69.89 Cr

6 Krrish 2006 65.53 Cr

7 Chak De India 2007 63.98 Cr

8 Partner 2007 62.14 CR

9 Taare Zameen Par 2007 61.04CR

10 Bhool Bhulaiyaa 2007 53.97 CR

11 Fanaa 2006 53.13 Cr

12 heyy Babyy 2007 51.64 Cr

13 Rang De Basanti 2006 51.07 Cr

14 Don 2006 50.04 Cr

RaNK FILM NaME YEaRREvENUE(Rs. Crore)

15 Kabhi Khushi Ka-bhie gham 2001 49.00 Cr

16 Kabhi Alvida na Kehna 2006 46.40 Cr

17 no Entry 2005 44.84 Cr

18 Koi Mil gaya 2003 44.00 Cr

19 Bhagam Bhag 2006 41.69 Cr

20 guru 2007 41.65 Cr

21 Veer Zaara 2004 41.00 Cr

22 Devdas 2002 36.00 Cr

23 Kal ho na ho 2003 35.00 Cr

24 Kaho naa Pyaar hai 2000 34.00 Cr

25 Mohabbatein 2000 30.00 Cr

Blockbusters in 2006 – 2007

SOuRCE: BOxOFFICEInDIA.COM

SOuRCE: BOxOFFICEInDIA.COM


Box-office grosses rose during five of the last seven

economic downturns in the U.S. — including the

'70s oil crisis and the burst of the dot-com bubble

in the early 2000s. The total number of movies

people see in a year tends to rise in recessionary

periods.

Time Magazine March 2008


Film Industry Returns

Lage Raho MunnabhaiCost – 15 crores

Domestic theatrical – net 64 crores (28 cr shr)Overseas – 10Satellite – 14

home video – 2.5Music 1.0

Total revenue – 55.5 crores net Estimated Profit – 370%

Pyaar ke side effectsCost 3.5 croresTheatrical – 8.5 crores (4 crores)Satellite 2 croreshome video 0.75 croresMusic 0.75 croresTotal 7 croresEstimated Profit - 100%

Rang De BasantiCost – 30 croresNet Revenues – 52 crores (20 crores)Satellite – 16 croresOverseas – 20 croresEstimated Profit – 55%

KrisshCost – 40 crores

Domestic Theatrical – 63 crores (30 crores)

Satellite – 15 croresOverseas – 15.5 crores

Home video and music – 4.5 croresMerchandising – 4

Total revenues – 69 croresEstimated Profit – 72%

Hits - Big Budget Films

Hits - Mid Budget Films

Hits - International Films

Monsoon WeddingCost – 2.5 croresWorldwide Revenues – 150 croresProducer share – 80 croresEstimated Profit – 3100%

Bend It Like BeckhamCost – 22 crores

Worldwide revenues – 300 CroresProducer share – 175+ crores

Estimated Profit – 600%

"a box-office hit movie like Rang De Basanti, which was made with a budget of Rs 30 crore recovered nearly half of its production cost through satellite rights. Similarly, Lago Raho Munnabhai garnered more money than its production costs by selling its satellite rights for Rs 15 crore." Economic Times Dec 2007

SOuRCES: InDuSTRy ESTIMATES, TRADE MAgAZInES, IBOSnETwORK.COM, MARKET SOuRCES


SivajiCost – 60 crores

Total Revenue – 120 croresEstimated Profit – 100%

Pokhiri (2006)Star – Mahesh Babu Director – Puri JagannathanCost – 14 croresGross Business – 50+ croresEstimated Profit – 250%

Bheja FryCost – 1.5 crores

Total revenues – 8 croresEstimated Profit – 433%

FizaCost – 5.5 crores

Total revenue (Industry estimates) – 27 crores

YaadeinCost – 12 croresTotal revenue (Industry estimates) – 44 crores

Khosla Ka GhoslaCost – 2 croresTotal revenues – 10 croresEstimated Profit – 400%

"a film like Khosla Ka Ghosla, which was made on a modest budget of just above Rs 2 crore, spent another two-thirds of that amount on marketing the film raked in as much as Rs 22 crore in collections." Economic Times 2008

Hits - Content Films

Regional Films

SOuRCE: InDuSTRy ESTIMATES, IBOSnETwORK.COM


Hollywood investors are now "reassessing their

previous cool attitude" towards India and major

players like viacom, Universal, Dream Works

and Warner Bros. prefer to invest in the Indian

entertainment industry compared to China, says

Hollywood trade magazine variety

Economic Times March 2008


Transparency and Corporatisation

Shift from traditional sources of finance to institutional sources •

IDBI has not had a single non Performing Asset since it started financing film companies •

Corporatisation across the value chain of production, distribution and exhibition •

More corporate and transparent structures have attracted increased investments and led to higher valuations averaging • 30-35 times earnings

COMPaNY NaME

REvENUE FY07 EBITDa GROWTH MaRKET CaPSHaRE PRICE

aS ON MaYPE

MULTIPLES

(Rs Million) growth % (Rs Million) growth % (Rs Million) (Rs)

Pyramid 1,643 3193% 199 1274% 10,706 378 54

Ashtavinayak 967 142% 167 716% 4,042 403 24

Adlabs Films 3,316 197% 2,018 314% 30,512 662 15

uTV Software 1,524 13% 300 185% 19,875 800 66

PVR 1,986 54% 338 72% 4,326 188 13

Prime Focus 551 38% 370 40% 7,887 620 21

Inox Leisure 1,530 4.30% 455 20% 6,378 104 14

TV 18 1,939 53% 579 2% 37,920 317 65

SOuRCE: www.MOnEyCOnTROL.COM

growth % compared to previous year "India's film industry has long been prolific and chaotic. Now, with modern business leaders, it's coming of age—and taking aim at Hollywood, U.S.a." Newsweek 2008 Cover Story

Did you know? There is almost a complete absence of cash transactions from a star salaries to the lowest light-man on sets


Did you know? 100% FDI allowed in the Film Entertainment Industry

Preferred Investment Destination

The Indian film and enterta • inment sector has become a preferred investment destination for major Indian corporates and global investors. Major Indian corporates like Reliance ADAg, Mahindras, Birlas have entered this sector •george Soros has invested over $100 million in this sector •walt Disney has partnered with yash Raj Films to make animated movies •warner group is funding Ramesh Sippy’s film projects •Viacom has joint-ventured with the TV 18 group to form Viacom-18 •Sony Pictures Entertainment has co-produced Saawariya with SLB Films (Sanjay Leela Bansali FIlms). •ICICI ventures and JP Morgan have invested 120 Crores in PVR Pictures •

INDIaN COMPaNY FOREIGN INvESTOR FDI

(USD million) FDI

(Rs. million)

uTV Software walt Disney Company 200 8050

uTV global Broadcasting walt Disney Company 30 1181

Times global Broadcasting Reuters Singapore Pte Ltd. 21.91 885.64

uTV Software Various entities 7.47 295.05

K Sera Sera Various Mauritius entities 3.40 138.57

Shree Asthavinayak Various entities 3.54 144.56

Cinemeta Entertainment Ratnam Sudesh Iyer, Singapore 0.24 9.90

Reliance Big Entertainment george Soros 100 4100

COMPaNY aMOUNT

(IN Rs Crores)MaRKET CaTEGORY

Eros 220 uK AIM Film Production, Distribution

uTV 300 uK AIM Film Production, Distribution

Indian Film Co. (TV-18) 440 uK AIM Film Production, Distribution

Total 960

SOuRCE: MARKET SOuRCES, gOVERnMEnT OF InDIA; JAn 2007- nOV 2007

Preferred global Investment Destination – A snapshot

Indian film entertainment companies have successfully raised funding overseas


In India, what is it that drives internet portals,

gaming devices, and mobile phones? Intel? Wrong.

Google? Wrong again. Microsoft? You are not even

close. It is Bollywood.

Economic Times 2008 – ‘Bollywood : Lifeblood of various Industries’


An Untapped Investment Opportunity

70% of India’s most successful films in the last 2 years were made by privately held companies

The Film Entertainment Industry Opportunity

Low Correlation To Business Cycles And Traditional Asset Classes

A unique opportunity to invest in a lowly correlated asset class •

In 5 out of 7 economic recessions in the uS, box-office revenues grew •

Films are still the cheapest source of mass entertainment •

Sr No. Name of The film Year % GrowTh

1 Dhoom 2 2006 144

2 Om Shanti Om 2007 140

3 Krrish 2006 130

4 welcome 2007 125

5 Lage Raho Munnabhai 2006 114

6 Jodha Akbar 2008 113

7 Race 2008 104

8 guru (2007) 2007 101

9 Fanna 2006 99

10 Partner (2007) 2007 99

Top Grossers Worldwide - 2006-08

SOuRCE: www.IBOSnETwORK.COM

Films produced by privately held companies

"Box-office grosses rose during five of the last seven economic downturns in the U.S. — including the '70s oil crisis and the burst of the dot-com bubble in the early 2000s. It's not just a ticket price bump that accounts for the extra dough, either — the total number of movies people see in a year tends to rise in recessionary peri-ods." Time Magazine March 2008


To deliver superior investment returns by building a portfolio of richly valued companies in the Indian film and entertainment industry.

To invest in unlisted Film Entertainment Companies that

have a critical role in industry development •Possess an established track record •have moved to corporate governance and transparent structures. •have sound business models •

Film Production Ventures

Established production houses •First generation entrepreneurs •Boutique outfits •niche and regional players •Productions ventures of •

established actors/directors

Film Entertainment Related Segments

Animation and visual effects •Studios – Shooting and Post Production •Television software •Digital content and related technologies •Content distribution platforms and •

technologiesFilm entertainment supported streams •

such as gaming, licensing and merchandising, etc

new media opportunities, especially in • online media and entertainment space

Investment Strategy

Investment mix

"across a slate of 20 or 30 films, just two or three hits will all but ensure a positive return for investors, based on over 30 years of historical performance data from the film industry.” Paul Kent, SvP Citibank, Euromoney,

October 2006

have a strong catalogue of products/IPR held •have a strong pipeline of products/projects signed •Possess key talent and vendor relationships •


Sale to Strategic Buyer

Large business groups seeking to enter the film and entertainment business and expansion by existing players. Examples: Turner-Miditech, Disney-uTV, Kosmic-greycells Entertainment, Reliance Adlabs, Synergy Adlabs, Mahindra group, Reliance Industries, Aditya Birla group.

Sale to Financial Buyer

global PE firms now operating in India such as Blackstone, 3i, Columbia Capital, Carlyle, TPg and Soros Funds Management have significant entertainment assets internationally and are looking at expansion into India. Examples of such transactions are deals of 3i-nimbus and JM Financial-ushodaya., PVR Pictures – J.P. Morgan/ICICI Ventures.

IPO Route (Domestic and International)

CCVF investee companies can successfully launch an IPO in India within 36-48 months. Examples of successful IPO’s in the last three years – Pyramid Samaira, Balaji Telefilms, uTV, Adlabs and Shree Ashtavinayak.

Exit Options for Fund Investments

Film Jhankaar Beats Pyar ke side effects

Director Sujoy ghosh Saket Chaudhary

year 2003 2007

CastRahul BoseJuhi Chawla

Rahul Bose Mallika Shehrawat

Production Pritish nandy Communications Pritish nandy Communications

Budget 2.5+ crores 4+ crores

Domestic net Revs. 2.5 crores 12 crores

nET BOx OFF ICE gROwTh OF 380%

Did you know? Domestic Box-office collections of top tens film total at 264 Crores in 2004 grew to 485 Crores in 2007 registering an increase of 85%

SOuRCE: MARKET SOuRCES


Name of Trust FundCinema Capital Venture Fund Scheme 1

Fund StructureClosed ended – 5 years

Target of Trust FundRs. 500,00,00,000 (Rupees five hundred crores)

Green ShoeRs. 250,00,00,000 (Rupees two hundred and fifty crores)

Minimum InvestmentRs. 10,00,000 (Rupees ten lakhs only)

Initial Capital Contribution 25% of total commitment. Balance in 3 installments at the end of every quarter after the final closing

Management Fee 2% pa of capital commitment

Administrative Expenses As per actuals (upto 2% pa of capital commitment)

Initial Setup Costs 5% (1% to be charged per annum)

Fund Summary

Hurdle Rate15% pa (Post expenses, pre-tax)

Performance Fee 20%

Investment Manager Cinema Capital

Legal AdvisorDSK Legal

Tax AdvisorsErnst & young

Transaction And Valuation Advisory Ernst & young

AuditorsPricewaterhouse

Liquidity Possible income distribution after 36 months as per management discretion.

Target IRR 35% (post expenses, pre tax)

Did you know? Monsoon Wedding delivered an estimated 3100% return to its producers due to the international box office.


Why Cinema Capital Venture Fund?

First SEBI regulated entertainment venture capital fund •

uniquely focused on the Film and Entertainment sector •

First time opportunity for ‘ownership’ in film entertainment ventures •

Independent professionals not aligned with any corporate group •

Experienced management and advisory council •

Team with access to key talent across all industry segments •

Transparency and SEBI guidelines for investor reporting •

‘Best of Breed’ strategy – PricewaterhouseCoopers as auditors, • Ernst & young as taxation and valuation advisors

Entertainment sector investment experts with successful track records •

"In India, what is it that drives internet portals, gaming devices, and mobile phones? Intel? Wrong. Google? Wrong again. Microsoft? You are not even close. It is Bollywood." Economic Times 2008 – ‘Bollywood:

Lifeblood of various Industries’

Film no Entry welcome

Director Anees Bazmi Anees Bazmi

year 2005 2007

CastAnil Kapoor

Salman KhanAnil Kapoor

Akshay Kumar

Production Boney Kapoor Feroz nadiadwala

Budget 10+ crores 10+ crores

Domestic net Revs. 40 crores 73 Crores

Overseas 8+ crores 20+ crores

nET BOx OFF ICE gROwTh OF 87%



Taxation

Cinema Capital Venture Fund is expected to generate the following three streams of income:

Capital gains •Interest and other income •Dividend Income •

DESCRIPTIONHOLDING PERIOD

TaxaTION

Long term capital gain on listed shares/ securities

More than 12 months

nIL

Long term capital gain on non listed shares

More than 12 months

22.66%

Long term capital gain on other assets

More than 36 months

22.66%

Short term capital gain on listed shares/ securities

Less than 12 months 16.99%

Short Term capital gain on non listed shares


Short Term capital gain on other assets


Interest Income 33.99%

Dividend Income nIL

Capital GainsTaxability of the above streams of income is given below:

Interest and Other Income

Dividend Income

Note: The tax rates mentioned above are as per the Financial Act, 2008

Did you know? 6 out of the top 10 Income Tax payers in India are from the film industry

Taxability of the Investor

As the Fund will be taxed at the maximum marginal rate applicable, the distribution made by Cinema Capital Venture Fund at the end of its tenure will be exempt from tax in the hands of the investor.


Fund Structure

INVESTORS ADVISORY COUNCIL

E&Y Transaction / Valuation /

Structure / Taxation

PWCAudit

DSK LegalLegal Advisors

Venture Capital Undertaking 1



CINEMA CAPITAL VENTURE FUND CINEMA CAPITAL

Advisory

Identify Invest-ment Opportunity

Investmentsbased on Business Plan and Investment Type

AdvisorySourcingMonitoring


Samir Gupta Over 12 years in the Entertainment and •

Media industryFilm Producer •Ex CEO, FBC Media group, a European •

media corporation

Sanjay Bhattacharji Over 15 years of management experience in the •

Film and Entertainment industryEx Chief Operating Officer, uTV Motion Pictures •Ex head Of Strategy, InOx group •Ex Consultant Film Strategy, STAR India •

Soumo GangulyOver 10 years of international experience in the •

Media sector in business development and marketing, finance and fund raising, organization building, and general management

Ex CEO, Chivach Media, an Entertainment group •Ex CEO, Moving Picture Company, a listed •

entertainment company Mohit Mehra

Over 14 years of experience across Advertising, • Television and Film Entertainment

Ex Business head, home Production, Adlabs Films •Ex AVP Projects, uTV •Ex AVP Entertainment Media, nimbus •Former Marketing head, Ten Sports, Channel [V] •

Key Management Team

Ketan MehtaDirectornational Award winner

K N MemaniEx Chairman, Ernst & young

Asad Sultan Managing Director, Cantor FitzgeraldInvestment Banker

Anil DharkerFilm CriticColumnist

Sandeep BhammerManaging Director, BAM Investment Advisors (Asia)

Sudhir MishraDirector national Award winner

Kabir BediActorMedia Personality

Komal NahtaTrade AnalystPublisher, Film Information

Madhu MantenaCEO, Saregama Films

Shankar, Ehsaan, LoyIndia’s leading film music directors

Vivek SinghaniaEx CEO, Pantaloon Films

Professional Advisors

Legal Advisors DSK Legal

Tax advisors Ernst & young

Valuation Advisors Ernst & young Transaction Advisory Services

AuditorsPricewaterhouse

Registrars Karvy

CCVF Advisory Council


Film Entertainment Industry – FAQs

Q : What is Film IPR? A : IPR = Intellectual Property Rights are the rights created when you make a film. These rights are like an asset that can be sold for revenue. This asset has perpetual value and is leased to various buyers from time to time to generate revenue for the IPR owner.

Q : How do films make money?A : Films make money from various sources – theatre tickets worldwide, television rights exploitation, sale of rights for dvd, video rental, music, internet, gaming, merchandising, remake rights.

Q : What does it mean when a film is a “HIT”?A : The word hit is often colloquially used to denote a degree of success. when a film recovers more than 2-3 times the money invested, it is termed a “hIT”.

Q : What is the maximum upside that one can see in a film?A : Films have been known to give upto 4-6 times the initial amount invested in them. In the last two years with all around growth, a number of films have delivered such returns.

Q : Is there insurance cover for film producers ?A : yes. Comprehensive insurance cover is available to film production companies today to safeguard against any untoward incidents while a film is in production which includes accidents, fires, equipment loss, theft etc. A producer can also opt for key man insurance for his lead actors, which insures him against any loss if anything were to happen to the actor which caused delays or stoppage of his film project.

Q : What does it mean when a film is a “FLOP”A : The term ‘FLOP’ is usually given to a film which has not performed in the box-office. In the current scenario with fast growing alternative revenue streams like television rights, dvd, dth, online and gaming, most films can limit their downside to 10-15% of the production cost. This usually gets recovered over a medium term due to exploitation and re-sale of IPR rights.

Q : What kind of valuations do companies in the Film Entertainment command ?A : Film entertainment ventures command an average of 30-40 times earnings in the BSE/nSE markets. In the private equity space this can be as high as 25-30 times earnings.

Did you know? Most films are presold and profits booked before release


DISCLAIMER:

This Presentation is intended only for the benefit of

potential investors to whom the presentation is made

or delivered for the purpose of considering a possible

investment in the Cinema Capital Venture Fund Scheme 1

1. The presentation is not and should not be deemed to

constitute an offer to invest or a solicitation of an offer

to invest, to or from the public in general or to or from

any person other than the person to whom the same is

addressed.

2. Any reproduction hereof in whole or in part, or the

disclosure of its contents or the distribution of the

presentation, without the prior written consent of Cinema

Capital, is prohibited.

3. The Contents of the presentation are provisional and

may be subjected to change. The presentation is neither a

prospectus nor an offer or invitation to apply for units of

fund. The information contained herein is not exhaustive

and must be read in conjunction with the information

memorandum and the other documents.

4. While reasonable care has been taken to ensure that

the information included herein is correctly and fairly

represented. Cinema Capital, and other parties involved

in the presentation hereof assume no liability for the

relevance, accuracy or completeness of the contents

herein.

5. In making an investment decision, potential investors

must rely on their own examination of the fund documents

and the term of the offering, including the merits and risks

involved.

6. Before making an investment, each potential investors

should make its independent assessment and inquiries

and consult its own advisors as to legal, business, tax and

related matters concerning an investment in fund.

7. The fund and its portfolio companies are subjected to

several risk factors that may affect the fund performance

which are detailed in the Information Memorandum.


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