letter of offer july 24, 2013 for equity shareholders of

Letter of Offer

July 24, 2013

For Equity Shareholders of the Company only

RELIANCE MEDIAWORKS LIMITED

Our Company was incorporated as Adlabs Films Private Limited on November 30, 1987, as a private limited company in Mumbai under the Companies Act, 1956. Pursuant to conversion into a public company, our Company’s name was changed to Adlabs Films Limited. Subsequently, our Company’s name was further changed to Reliance MediaWorks

Limited. For details of changes in the name and the registered office of our Company, please see the chapter entitled “History and Certain Corporate Matters” at page 169 of this

Letter of Offer.

Registered Office: Film City Complex, Goregaon (East), Mumbai 400 065, Maharashtra

Contact Person: Ashish Agarwal, Company Secretary and Compliance Officer Tel: +91 22 3980 8900 Facsimile: +91 22 3980 8985 Email: [email protected] Website: www.reliancemediaworks.com

FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF RELIANCE MEDIAWORKS LIMITED

THE “COMPANY” OR THE “ISSUER” ONLY

THE PROMOTERS OF OUR COMPANY ARE RELIANCE LAND PRIVATE LIMITED AND RELIANCE CAPITAL LIMITED

ISSUE OF UPTO 14,99,10,052 EQUITY SHARES WITH A FACE VALUE OF `5 EACH (“EQUITY SHARES”) AT A PREMIUM OF `35 PER EQUITY SHARE FOR

AN AMOUNT NOT EXCEEDING `59,964.02 LAKHS ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF OUR COMPANY IN THE

RATIO OF 13 EQUITY SHARES FOR EVERY 4 FULLY PAID-UP EQUITY SHARES HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD

DATE, THAT IS ON WEDNESDAY JULY 24, 2013 (“ISSUE”). THE ISSUE PRICE IS 8 TIMES THE FACE VALUE OF THE EQUITY SHARES. FOR FURTHER

DETAILS, PLEASE SEE THE CHAPTER ENTITLED “TERMS OF THE ISSUE” AT PAGE 319 OF THE 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 the 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 the 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 the Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or adequacy of this Letter of Offer. Investors are advised to refer to the chapter entitled “Risk

Factors” at page 11 of this Letter of Offer before making an investment in this Issue.

ISSUER’S ABSOLUTE RESPONSIBILITY

Our Company, having made all reasonable inquiries, accepts responsibility for and confirms that this 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 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 Letter of Offer as a whole or

any 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 BSE Limited (“BSE”) and the National Stock Exchange of India Limited (“NSE”) (collectively, “Stock Exchanges”). Our Company

received “in-principle” approvals from the BSE and the NSE for listing the Equity Shares to be Allotted in the Issue vide their letters dated April 18, 2013 and April 10, 2013,

respectively. For the purpose of the Issue, the Designated Stock Exchange is BSE.

Lead Manager REGISTRAR TO THE ISSUE

Axis Capital Limited

Axis House, 1st Floor,

C-2 Wadia International Centre, P.B. Marg, Worli, Mumbai – 400 025

Telephone: +91 22 4325 3150

Facsimile: +91 22 4325 3000 Email: [email protected]

Website: www.axiscapital.co.in

Investor Grievance Email: [email protected] Contact Person: Vivek Toshniwal

SEBI Registration Number: INM000012029

Link Intime India Private Limited

C 13, Pannalal Silk Mills Compound

LBS Marg, Bhandup (West)

Mumbai 400 078 Telephone: +91 22 2596 7878

Facsimile: +91 22 2596 0329

E-mail: [email protected] Investor Grievance Email: [email protected]

Website: www.linkintime.co.in Contact Person: Pravin Kasare

SEBI Registration No.: INR 000004058

ISSUE PROGRAMME

ISSUE OPENS ON LAST DATE FOR RECEIVING REQUESTS FOR SPLIT

APPLICATION FORMS ISSUE CLOSES ON

Tuesday, August 6, 2013 Tuesday, August 13, 2013 Tuesday, August 20, 2013

TABLE OF CONTENTS

SECTION I: GENERAL ..................................................................................................................................................................... 1

DEFINITIONS AND ABBREVIATIONS .......................................................................................................................................... 1 NOTICE TO OVERSEAS SHAREHOLDERS ................................................................................................................................... 6 PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA .................................................................. 8 FORWARD LOOKING STATEMENTS .......................................................................................................................................... 10

SECTION II: RISK FACTORS ......................................................................................................................................................... 11

SECTION III: INTRODUCTION ..................................................................................................................................................... 39

SUMMARY OF INDUSTRY ............................................................................................................................................................ 39 SUMMARY OF BUSINESS ............................................................................................................................................................. 41 SUMMARY FINANCIAL INFORMATION .................................................................................................................................... 47 ISSUE ................................................................................................................................................................................................ 63 GENERAL INFORMATION ............................................................................................................................................................ 64 CAPITAL STRUCTURE .................................................................................................................................................................. 69 OBJECTS OF THE ISSUE ................................................................................................................................................................ 81 BASIS FOR ISSUE PRICE ............................................................................................................................................................. 128 STATEMENT OF TAX BENEFITS ............................................................................................................................................... 131

SECTION IV: ABOUT THE COMPANY ...................................................................................................................................... 138

INDUSTRY OVERVIEW ............................................................................................................................................................... 138 BUSINESS ...................................................................................................................................................................................... 149 REGULATIONS AND POLICIES .................................................................................................................................................. 166 HISTORY AND CERTAIN CORPORATE MATTERS ................................................................................................................. 169 OUR SUBSIDIARIES, JOINT VENTURES AND PARTNERSHIP .............................................................................................. 179 OUR MANAGEMENT ................................................................................................................................................................... 190 OUR PROMOTER AND PROMOTER GROUP ............................................................................................................................ 200 OUR GROUP COMPANIES ........................................................................................................................................................... 208 DIVIDEND POLICY ...................................................................................................................................................................... 224

SECTION V: FINANCIAL STATEMENTS ................................................................................................................................... F-1

PRO FORMA FINANCIAL STATEMENT ................................................................................................................................. F-261 STATEMENT OF CAPITALISATION POST ISSUE ................................................................................................................. F-265 FINANCIAL INDEBTEDNESS ..................................................................................................................................................... 225 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ....... 234 MATERIAL DEVELOPMENTS .................................................................................................................................................... 275

SECTION VI: LEGAL AND OTHER INFORMATION ............................................................................................................... 276

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ..................................................................................... 276

GOVERNMENT AND OTHER APPROVALS .............................................................................................................................. 304 OTHER REGULATORY AND STATUTORY DISCLOSURES ................................................................................................... 306

SECTION VII: ISSUE INFORMATION ........................................................................................................................................ 319

TERMS OF THE ISSUE ................................................................................................................................................................. 319

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ................................................................................ 352

SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION ................................................................................ 353

SECTION IX: OTHER INFORMATION ....................................................................................................................................... 380

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ......................................................................................... 380 DECLARATION ............................................................................................................................................................................. 382

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SECTION I: GENERAL

DEFINITIONS AND ABBREVIATIONS

Definitions

Unless the context indicates or implies otherwise, certain definitions and abbreviations used in this Letter of Offer have the meanings as

provided below. Reference to any legislation, act or regulation shall be to such legislation, act or regulation as amended from time to time.

Issuer Related Terms

Term Description

“RMWL”, “our Company”, “the Company”

or “the Issuer” Reliance MediaWorks Limited

“We” or “us” or “our” or “our Group” Reliance MediaWorks Limited and its subsidiaries, joint ventures and associates on a consolidated

basis, unless the context indicates or implies otherwise

ADAV Anil Dhirubhai Ambani Ventures Limited

Articles / Articles of Association Articles of Association of our Company

Auditors B S R & Co., Chartered Accountants and Chaturvedi & Shah, Chartered Accountants

Board/Board of Directors Board of Directors of our Company or a duly constituted committee thereof

DDMG Digital Domain Media Group Inc. and its subsidiaries

Director A director of our Company

ED Directorate of Enforcement

Eligible Equity Shareholders Existing Equity Shareholders on the Record Date i.e. Wednesday, July 24, 2013.

Equity Shares Equity Shares of our Company at face value of ` 5 each

Equity Shareholder / Shareholder A holder of the Equity Shares of our Company

Group Companies

Companies, firms, ventures etc. promoted by our Promoters, irrespective of whether such entities

are covered under section 370(1)(B) of the Companies Act or not and disclosed in the chapter

entitled “Our Group Companies” at page 208 of this Letter of Offer.

iLab Our facility for digital image correction, film restoration and film processing in the UK

Joint Ventures Joint ventures of our Company set out in the chapter entitled “Our Subsidiaries, Joint Ventures

and Partnership” at page 179 of this Letter of Offer.

Lowry Digital Reliance Lowry Digital Imaging Services Inc.

Memorandum / Memorandum of

Association Memorandum of Association of our Company

Promoter Group

Such persons and entities constituting the promoter group of our Company in terms of Regulation

2(1)(zb) of the ICDR Regulations. However, Reliance Capital Limited, being an investing

company, has made investments in excess of 10% in its normal course of business in various

companies, which are neither related to Reliance Capital Limited nor Reliance Capital Limited has

any influence of management control over them. Accordingly, these companies have not been

included within the definition of ‘Promoter Group’.

Promoters The promoters of our Company viz. Reliance Land Private Limited and Reliance Capital Limited

Registered Office The registered office of our Company situated at Film City Complex, Goregaon (East), Mumbai

400 065, Maharashtra

Reliance Group In context of this Letter of Offer, Reliance Group shall mean the group of companies headed /

promoted by Anil D. Ambani

RoC Registrar of Companies, Maharashtra, situated at Everest, 5

th Floor, 100, Marine Drive, Mumbai -

400 002, Maharashtra

Subsidiaries Subsidiaries of our Company set out in the chapter entitled “Our Subsidiaries, Joint Ventures and

Partnership” at page 179 of this Letter of Offer.

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Issue Related Terms

Term Description

Abridged Letter of Offer The abridged letter of offer to be sent to the Equity Shareholders of our Company with respect to the

Issue in accordance with the ICDR Regulations

Allot / Allotted / Allotment The allotment of Equity Shares pursuant to the Issue

Allottees Persons to whom Equity Shares of our Company are Allotted pursuant to the Issue

Application Supported by Blocked

Amount / ASBA

The application (whether physical or electronic) used by an ASBA Investor to make an application

authorizing the SCSB to block the application amount in his / her specified bank account maintained

with the SCSB

ASBA Account An account maintained with an SCSB and specified in the CAF for blocking the amount mentioned in

the CAF

ASBA Investor

Equity Shareholders proposing to subscribe to the Issue through ASBA process and who:

1. are holding the Equity Shares of our Company in dematerialized form as on the Record Date

and have applied for their Rights Entitlements and / or additional Equity Shares in

dematerialized form;

2. have not renounced their Rights Entitlements in full or in part;

3. are not Renouncees; and

4. are applying through blocking of funds in a bank account maintained with the SCSBs

Banker to the Issue Axis Bank Limited

Composite Application Form / CAF The form used by an Investor to make an application for the Allotment of Equity Shares in the Issue

Consolidated Certificate In case of holding of Equity Shares in physical form, the certificate that our Company would issue for

the Equity Shares Allotted to one folio

Controlling Branches of the SCSBs Such branches of the SCSBs which coordinate with the Lead Manager, the Registrar to the Issue and

the Stock Exchanges, a list of which is available at http://www.sebi.gov.in

Designated Branches Such branches of the SCSBs which shall collect application forms used by ASBA Investors and a list

of which is available at http://www.sebi.gov.in

Designated Stock Exchange BSE

Draft Letter of Offer The draft letter of offer dated March 11, 2013 filed with SEBI

Investor(s) The Equity Shareholders of our Company on the Record Date, i.e. Wednesday, July 24, 2013 and the

Renouncees

Issue

Issue of upto 14,99,10,052 Equity Shares each at a premium of ` 35 per Equity Share for an amount

not exceeding `59,964.02 lakhs on a rights basis to the existing Equity Shareholders of our Company

in the ratio of 13 Equity Shares for every 4 fully paid-up Equity Shares held on the Record Date (i.e.

Wednesday, July 24, 2013)

Issue Closing Date Tuesday, August 20, 2013

Issue Opening Date Tuesday, August 6, 2013

Issue Price ` 40

Issue Proceeds The proceeds of the Issue that are available to our Company Issue Size The issue of upto 14,99,10,052 Equity Shares for an amount not exceeding `59,964.02 lakhs

Lead Manager/LM Axis Capital Limited

Letter of Offer The final letter of offer to be filed with the Stock Exchanges after incorporating the observations

received from the SEBI on the Draft Letter of Offer

Listing Agreement The listing agreements entered into between our Company and the Stock Exchanges

Monitoring Agency Axis Bank Limited, the Monitoring Agency appointed in accordance with Regulation 16 of the ICDR

Regulations

Net Proceeds The Issue Proceeds less the Issue related expenses. For further details, please see the chapter entitled

“Objects of the Issue” at page 81 of this Letter of Offer.

Non Institutional Investors All Investors including sub-accounts of FIIs registered with SEBI, which are foreign corporate or

foreign individuals, that are not QIBs or Retail Individual Investors and who have applied for Rights

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Term Description

Issue Equity Shares for a cumulative amount of more than ` 2 lakhs.

QFI

QFI shall mean a person who fulfills the following criteria:

i. Resident in a country that is a member of Financial Action Task Force (“FATF”) or a member of a

group which is a member of FATF; and ii. Resident in a country that is a signatory to International

organization of Securities Commission’s Multilateral Memorandum of Understanding or a signatory

of a bilateral Memorandum of Understanding with SEBI.

Provided that the person is not resident in a country listed in the public statements issued by FATF

from time to time on: (a) jurisidictions having a strategic Anti-Money Laundering / Combating the

Financing of Terrorism (“AML / CFT”) deficiencies to which counter measures apply; (b)

jusrisdictions that have not made sufficient progress in addressing the deficiencies or have not

committed to an action plan developed with the FATF to address the deficiencies;

Provided further, such person is not resident in India;

Provided further that such person is not registered with SEBI as FII or Sub-Account, Foreign Venture

Cpaital Investor.

QIB(s) or Qualified Institutional Buyer Applicants in the Issue who are qualified institutional buyers, as defined under Regulation 2(1)(zd) of

the ICDR Regulations

Record Date Wednesday, July 24, 2013

Registrar to the Issue Link Intime India Private Limited

Renouncee(s) Any person(s) who has/have acquired Rights Entitlements from Equity Shareholders

Rights Entitlements The number of Equity Shares that an Investor is entitled to in proportion to the number of Equity

Shares held by the Investor on the Record Date

SAF(s) Split Application Form(s)

SCSB(s) A Self Certified Syndicate Bank registered with SEBI, which acts as a banker to the Issue, and which

offers the facility of ASBA. A list of all SCSBs is available at http://www.sebi.gov.in

Stock Exchanges The BSE and the NSE where the Equity Shares of our Company are presently listed

Conventional and General Terms or Abbreviations

Term/Abbreviation Description/ Full Form

` or Rupees or INR or Rs. Indian Rupee

AGM Annual General Meeting

AS Accounting Standards in accordance with the Companies (Accounting Standards) Rules, 2006 as amended

BPLR Benchmark Prime Lending Rate

BSE BSE Limited

CDSL Central Depository Services (India) Limited

Central Government The Central Government of India

CIN Corporate Identification Number

Companies Act Companies Act, 1956

CY Calender Year

Depositories Act Depositories Act, 1996

Depository A depository registered with the SEBI under the Securities and Exchange Board of India (Depositories

and Participants) Regulations, 1996

DIN Director Identification Number

DP ID Depository Participant Identity

DP / Depository Participant Depository Participant as defined under the Depositories Act

EBITDA Earnings Before Interest, Tax, Depreciation and Amortisation

4


ECS Electronic Clearing Service

EGM Extra-Ordinary General Meeting

EPS Earnings Per Share

FDI Foreign Direct Investment

FEMA Foreign Exchange Management Act, 1999

FII Foreign Institutional Investor (as defined under the SEBI (Foreign Institutional Investors) Regulations,

1995), registered with the SEBI

Financial Year / Fiscal / FY

12 months ended March 31 of that particular year. In relation to our Company, Fiscal 2008 represents the

nine months ended March 31, 2008, Fiscal 2012 represents eighteen months ended September 30, 2012, Fiscal

2013 represents twelve months ending September 30, 2013

GAAP Generally Accepted Accounting Principles

GDP Gross Domestic Product

GoI Government of India

ICAI Institute of Chartered Accountants of India

ICDR Regulations Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations,

2009, as amended from time to time

IFRS International Financial Reporting Standards

India Republic of India

Indian GAAP Generally accepted accounting principles followed in India

IT Act Income Tax Act, 1961

LLC Limited Liability Company

LIBOR London Inter Bank Offer Rate

MCA Ministry of Corporate Affairs, Government of India

Mutual Fund / MF Mutual fund registered with the SEBI under the SEBI (Mutual Funds) Regulations, 1996

NECS National Electronic Clearing Service

NR Non-Resident

NRE Account Non-Resident External Account

NRI Non-Resident Indian

NRO Account Non-Resident Ordinary Account

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

p.a. Per annum

PAN Permanent Account Number

PAT Profit After Tax

PBT Profit Before Tax

PLR Prime Lending Rate

QIP or Qualified Institutions

Placement

Qualified Institutions Placement in accordance with the provisions of Chapter VIII of the ICDR

Regulations

RBI Reserve Bank of India

Regulation S Regulation S under the Securities Act

SBI PLR Prime lending rate of State Bank of India

SEBI Securities and Exchange Board of India

SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to time

Securities Act U.S. Securities Act, 1933, as amended from time to time

SEZ Special Economic Zone

Sq.ft. square feet

STT Securities Transaction Tax

Takeover Code Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,

2011, as amended from time to time

Tier 1 Cities Fairly well-established market, with potential of higher consumer pattern

5


Tier 2 Cities Growing market, experiencing growing demand and investments

Tier 3 Cities Market yet to be established, where customers are relatively more price sensitive

UK United Kingdom

US / USA / United States United States of America

Technical and Industry Related Terms


2D 2 dimensional

3D 3 dimensional

6D 6 dimensional

ATPs Average ticket prices

C&S Cable and satellite

CGI Computer-generated imagery

DCI Digital Cinema Initiative

DI Digital intermediate

DTS Digital Theatre Surround

E&M Entertainment and media

IMAX Image Maximum

SPH Spend per head on food and beverages

TVC Television commercials

VFX Visual effects services

6

NOTICE TO OVERSEAS SHAREHOLDERS

No action has been or will be taken to permit the Issue in any jurisdiction where action would be required for that purpose, except that the Draft

Letter of Offer has been filed with the SEBI for its observations. Accordingly, the Equity Shares 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 legal requirements applicable in such

jurisdiction. Receipt of this Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make such an offer

and, in those circumstances, this Letter of Offer must be treated as sent for information only and should not be copied or redistributed.

Accordingly, persons receiving a copy of this Letter of Offer should not, in connection with the issue of the Equity Shares or the Rights

Entitlements, distribute or send this Letter of Offer in or into the United States or any other jurisdiction where to do so would or might

contravene local securities laws or regulations. If this Letter of Offer is received by any person in any such territory, or by their agent or

nominee, they must not seek to subscribe to the Equity Shares or the Rights Entitlements referred to in this Letter of Offer.

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 our Company's affairs from the date hereof or that the information contained herein is correct as at any time subsequent to the date of

this Letter of Offer.

NO OFFER IN THE UNITED STATES

The rights and the Equity Shares have not been and will not be registered under the United States Securities Act, 1933, as amended (“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 (“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 securities or rights for sale in the United States or as a solicitation therein of

an offer to buy any of the said securities or rights. Accordingly, this Letter of Offer / Letter of Offer / Abridged Letter of Offer and the enclosed

CAF should not be forwarded to or transmitted in or into the United States at any time.

Neither our Company nor any person acting on behalf of our Company will accept subscriptions or renunciation from any person, or the agent of

any person, who appears to be, or who our Company or any person acting on behalf of our 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 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 this 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. Our Company is making this issue of Equity Shares on a rights basis to

the Equity Shareholders of our Company and this Letter of Offer / Abridged 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.

Our Company reserves the right to treat as invalid any CAF which: (i) does 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 authorised to acquire the rights and the Equity Shares in compliance with all applicable laws and regulations; (ii) appears to our

Company or its agents to have been executed in or dispatched from the United States; (iii) where a registered Indian address is not provided; or

(iv) where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory requirements;

and our Company shall not be bound to allot or issue any Equity Shares or Rights Entitlements in respect of any such CAF. Our Company is

informed that there is no objection to a United States shareholder selling its rights in India. Rights Entitlements may not be transferred or sold to

any U.S. Person.

European Economic Area Restrictions

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, “Relevant Member

State”), an offer of the Equity Shares to the public may not be made in that Relevant Member State prior to the publication of a prospectus in

7

relation to the Rights Entitlements or the Equity Shares which has been approved by the competent authority in that Relevant Member State or,

where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in

accordance with the Prospectus Directive, except that an offer of Equity Shares or Rights Entitlements to the public in that Relevant Member

State from and including the Relevant Implementation Date may be made:

(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose

corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last Fiscal; (2) a total balance sheet of

more than Euro 430.00 lakhs and (3) an annual net turnover of more than Euro 500.00 lakhs, as shown in its last annual or consolidated

accounts; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer of Equity Shares shall result in the requirement for the publication by our Company or the Lead Manager pursuant to

Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any Equity Shares in any Relevant Member State means

the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to

enable an investor to decide to purchase or subscribe the Equity Shares, as the same may be varied in that Member State by any measure

implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/71/EC and

includes any relevant implementing measure in each Relevant Member State. In the case of any Rights Entitlements or Equity Shares being

offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will be deemed to

have represented, acknowledged and agreed that the Rights Entitlements or Equity Shares acquired by them in the Issue have not been acquired

on a nondiscretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may

give rise to an offer of any Rights Entitlements or Equity Shares acquired by them in the Issue to the public other than their offer or resale in a

Relevant Member State to qualified investors as so defined who are not financial intermediaries or in circumstances in which the prior consent

of the Lead Manager has been obtained to each such proposed offer or resale.

United Kingdom Restrictions

This Letter of Offer is only being distributed to, and is only directed at (i) persons who are outside the UK , or (ii) investment professionals

falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (“Order”) or (iii) high net worth

entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons

together being referred to as “relevant persons”). The Equity Shares are only available to, and any invitation, offer or agreement to subscribe,

purchase or otherwise acquire such Equity Shares will be engaged in only with, relevant persons. Any person who is not a relevant person

should not act or rely on this document or any of its contents.

8

PRESENTATION OF FINANCIAL INFORMATION AND USE OF MARKET DATA

Certain Conventions

References in this Letter of Offer to “India” are to the Republic of India. All references to the “US”, or the “U.S.A.” or the “United States” are

to the United States of America and all references to “UK” or the “U.K.” are to the United Kingdom.

Financial data

Unless stated otherwise, the financial data in this Letter of Offer is derived from our Company's audited and restated consolidated and stand

alone financial statements, as applicable. Our Company's Financial Year commences on April 1 and ends on March 31 of the following calendar

year except for:

Fiscal 2008, which commenced on July 1, 2007 and ended on March 31, 2008;

Fiscal 2012, which commenced on April 1, 2011 and ended on September 30, 2012; and

Fiscal 2013, which commenced on October 1, 2012 and will end on September 30, 2013.

Our Company prepares its financial statements in accordance with the generally accepted accounting principles in India, which differ, in certain

respects, from generally accepted accounting principles in other countries. Indian GAAP differs, in certain significant respects, from the

International Financial Reporting Standards. Our Company publishes its financial statements in Indian Rupees. Any reliance by persons not

familiar with Indian accounting practices on the financial disclosures presented in this Letter of Offer should accordingly be limited. We have

not attempted to explain those differences or quantify their impact on the financial data included herein, and we urge you to consult your own

advisors regarding such differences and their impact on our financial data.

In this Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off and, unless

otherwise specified, all financial numbers in parenthesis represent negative figures.

For definitions, please see the chapter entitled “Definitions and Abbreviations” at page 1 of this Letter of Offer.

Market and Industry data

Unless stated otherwise, market, industry and demographic data used in this Letter of Offer has been obtained from market research, publicly

available information, industry publications and government sources. Industry publications generally state that the information that they contain

has been obtained from sources believed to be reliable but that the accuracy and completeness of that information is not guaranteed. Similarly,

internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified and neither our

Company nor the Lead Manager makes any representation as to the accuracy of that information. Accordingly, Investors should not place undue

reliance on this information.

Currency of presentation

All references in this Letter of Offer to “Rupees”, “`”, “Rs.”, “Indian Rupees” and “INR” are to Indian Rupees, the official currency of India.

All references to “U.S. $”, “U.S. Dollar”, ‘USD” or “$” are to United States Dollars, the official currency of the United States of America. All

references to “EUR”, “€” or “Euro” are to Euro, the official currency of the European Union. All references to “MUR” are to Mauritian rupee,

the official currency of Mauritius. All references to “MYR” or “RM” are to Malaysian Ringgit, the official currency of Malaysia. All references

to “NPR” are to Nepalese Rupee, the official currency of Nepal. All references to “GBP” or “£” are to Pound Sterling, the official currency of

the UK.

Please Note:

One lakh is equal to 100,000/100 thousand

One million is equal to 10,00,000/10 lakhs

One billion is equal to 1,000 million/100 crores

One crore is equal to 10 million/100 lakhs

9

Exchange rates

Fluctuations in the exchange rate between the Rupee and the U.S. Dollar will affect the U.S. Dollar equivalent of the Rupee price of the Equity

Shares on the Stock Exchanges. These fluctuations will also affect the conversion into U.S. Dollars of any cash dividends paid in Rupees on the

Equity Shares.

The following table sets forth, for the periods indicated, information with respect to the exchange rate between the Rupee and the U.S. Dollar (in

Rupees per U.S. Dollar) based on the reference rates obtained from www.rbi.org.in. No representation is made that the Rupee amounts actually

represent such amounts in U.S. Dollars or could have been or could be converted into U.S. Dollars at the rates indicated, at any other rates or at

all.

12 months ended March 31 Period End Average* High* Low*

2009 50.95 45.91 52.06 39.89

2010 45.14 47.42 50.53 44.94

2011 44.65 45.58 47.57 44.03

2012 51.16 47.95 54.24 43.95

Eighteen months ended September 30, 2012 52.70 50.25 57.22 43.95

6 months ended March 31, 2013 54.39 54.16 55.70 51.62

Month ended Period End Average* High* Low*

January 2013 53.29 54.32 55.33 53.29

February 2013 53.77 53.77 54.48 52.97

March 2013 54.39 54.40 55.05 54.10

April 2013 54.22 54.38 54.88 53.94

May 2013 56.50 55.01 56.50 53.74

June 2013 59.70 58.40 60.59 56.42

Source: website at www.rbi.org.in

*Note: Average, High and low have been obtained from www.rbi.org.in as the average of all the rates available during the period, the maximum of all the rates

available during the period and the minimum of all the rates available during the period respectively. The reference rate on July 1, 2013 was U.S. $1.00 = `

59.15.

http://www.rbi.org.in/

10

FORWARD LOOKING STATEMENTS

Certain statements in this Letter of Offer are not historical facts but are “forward-looking” in nature. Forward looking statements appear

throughout this Letter of Offer, including, without limitation, under the chapters entitled “Risk Factors”, “Management's Discussion and

Analysis of Financial Condition and Results of Operations”, “Industry” and “Business”. Our Company may, from time to time, make written or

oral forward-looking statements in reports to Equity Shareholders and in other communications. Forward-looking statements include statements

concerning our Company’s plans, objectives, goals, strategies, future events, future revenues or financial performance, capital expenditures,

financing needs, plans or intentions relating to acquisitions, our Company’s competitive strengths and weaknesses, our Company’s business

strategy and the trends our Company anticipates in the industries and the political and legal environment, and geographical locations, in which

our Company operates, and other information that is not historical information.

Words such as “believe”, “anticipate”, “estimate”, “seek”, “expect”, “continue”, “intend”, “predict”, “project”, “should”, “goal”, “future”,

“could”, “may”, “will”, “would”, “targets”, “aims”, “is likely to”, “plan” and similar expressions, or variations of such expressions, are intended

to identify forward-looking statements but are not the exclusive means of identifying such statements.

By their nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that the

predictions, forecasts, projections and other forward-looking statements will not be achieved.

These risks, uncertainties and other factors include, among other things, those particularly listed under the chapter entitled “Risk Factors” at

page 11 of this Letter of Offer, as well as those included elsewhere in this Letter of Offer. Prospective investors should be aware that a number

of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in

such forward-looking statements. These factors include, but are not limited, to:

Our inability to effectively implement our business and growth strategies;

Our ability to effectively respond to competition and changes in technology;

Prevention of piracy;

Reduction in our advertising/sponsorship revenue;

Reduction or termination of our tax incentives;

Success of the films that we exhibit; and

Competition from other entertainment avenues.

For a further discussion of factors that could cause our Company’s actual results to differ, see the chapters entitled “Risk Factors” and

“Business” at pages 11 and 149, respectively. 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 nor the Lead Manager make any representation, warranty or prediction that the results anticipated by such

forward-looking statements will be achieved, and such forward-looking statements represent, in each case, only one of many possible scenarios

and should not be viewed as the most likely or standard scenario. Neither our Company nor the Lead Manager nor any of their respective

affiliates or advisors 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

Exchanges 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 permissions by the Stock Exchanges.

11

SECTION II: RISK FACTORS

An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in this Letter of Offer, including

the risks and uncertainties described below, before making an investment in our Equity Shares. The risks and uncertainties described in this

section are not the only risks that we currently face. Additional risks and uncertainties not known to us or that we currently believe to be

immaterial may also have an adverse effect on our business, results of operations and financial condition. If any of the following risks, or other

risks that are not currently known or are now deemed immaterial, actually occur, our business, results of operations and financial condition

could suffer, the price of our Equity Shares could decline, and you may lose all or part of your investment.

The financial and other related implications of risks concerned, wherever quantifiable, have been disclosed in the risk factors mentioned below.

However, there are risk factors where the effect is not quantifiable and hence the same has not been disclosed in such risk factors.

To obtain a complete understanding, you should read this section in conjunction with the chapters entitled “Business” and “Management's

Discussion and Analysis of Financial Condition and Results of Operations” as well as the other financial and statistical information contained

in this Letter of Offer.

Unless otherwise stated, the financial information of our Company used in this section is derived from our restated consolidated financial

statements.

Internal Risks

1. Our Auditors have qualified their audit report.

Our auditors have qualified their audit report in respect of our consolidated financial statements for six months ended March 31, 2013, Fiscal

2012 and Fiscal 2011.

In the audit report on consolidated financial results for six months ended March 31, 2013, our Auditors have drawn attention to the recognition

of Deferred Revenue Expenditure aggregating ` 1,040.41 lakhs pertaining to start up and stabilization costs of the business of Reliance

MediaWorks Entertainment Services Limited, one of our subsidiaries, since the recognition is not in accordance with the relevant accounting

standard.

If our Company had recognised these losses in the six months ended March 31, 2013, the loss for the said period would have been higher by `

1,040.41 lakhs.

In the audit report on consolidated financial results for Fiscal 2012, our Auditors have drawn attention to the recognition of Deferred Revenue

Expenditure aggregating ` 1,213.80 lakhs pertaining to start up and stabilization costs of the business of Reliance MediaWorks Entertainment

Services Limited, one of our subsidiaries, since the recognition is not in accordance with the relevant accounting standard.

If our Company had recognised these losses in Fiscal 2012, the loss for the said period would have been higher by ` 1,213.80 lakhs.

In the audit report on consolidated financial results for Fiscal 2011, our Auditors have drawn attention to the recognition of Deferred Revenue

Expenditure aggregating ` 1,734.00 lakhs pertaining to start up and stabilization costs of the business of Reliance MediaWorks Entertainment

Services Limited, one of our subsidiaries, since the recognition is not in accordance with the relevant accounting standard.

If our Company had recognised these losses in Fiscal 2011, the loss for the said period would have been higher by ` 1,734.00 lakhs.

Further, our Auditors have in the report on restated standalone financial information drawn attention to the fact that the networth of our

Company has fully eroded on account of loss of ₹91,016.62 lakhs (as restated) for Fiscal 2012 on a consolidated basis and ₹70,356.34 lakhs

on a standalone basis. In addition, our Auditors have in the report on restated consolidated financial information drawn attention to the fact that

the networth of our Company has fully eroded on account of loss of ₹34,044.77 lakhs (as restated) for the six months ended March 31, 2013 on

a consolidated basis and ₹27,593.15 lakhs on a standalone basis.

The erosion of networth, in view of the auditors, indicates an uncertainty that may cast a doubt about our Company’s ability to continue as a

going concern. We cannot assure you that our net worth will not decrease further.

12

For further details, please see the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.

2. We are making operating losses for the last 5 years since 2009 onwards and continue to incur losses. The company has incurred net

losses of `91,016.62 lakhs during the 18 month period ending on September 30, 2012. At present, we have a negative net worth.

As per our audited restated financial statements, we incurred net losses of `32,796.95 lakhs in Fiscal 2011, on a consolidated basis and

`24,348.00 lakhs on a standalone basis. Further, for Fiscal 2012 and for the six months ended March 31, 2013, we incurred a net loss of `

91,016.62 lakhs and ` 34,044.77 lakhs, respectively on a consolidated basis and ` 70,356.34 lakhs and ` 27,593.15 lakhs, respectively on a

standalone basis as per our audited restated financial statements. The net losses are on account of charges paid towards loans taken, depreciation

and write-off for properties where we have decided to exit.

Further, our net worth as at March 31, 2013, reduced to ` (92,707.78) lakhs on a consolidated basis and ` (47,014.66) lakhs on a standalone

basis, as per our audited restated financial statements. For further details, please see the chapter entitled “Financial Statements” at page F-1 of


In addition, we incurred losses (as per our audited restated financial statements), for the previous five (5) financial periods as set out below.

Sl.

No.

Fiscal Net operating loss

#(in ` lakhs)

(Consolidated)

Net loss (in ` lakhs)

(Consolidated)

Net operating loss

#(in ` lakhs)

(Standalone)

Net loss (in ` lakhs)

Standalone

1. 2009 (6,942.17) (7,787.97) (4,920.31) (4,937.01)

2. 2010 (13,281.09) (12,803.24) (8,797.00) (8,797.00)

3. 2011 (32,427.06) (32,796.95) (24,348.00) (24,348.00)

4. 2012 (90,007.31) (91,016.62) (70,356.34) (70,356.34)

5. Six months ended March 31,

2013

(33,578.17) (34,044.77) (27,593.15) (27,593.15)

# Net operating loss is calculated as net loss for the year, excluding provision for tax and share of loss allocated to minority and impacts of scheme.

Further, during Fiscal 2009, pursuant to a Court sanctioned scheme of amalgamation with our wholly owned subsidiaries Adlabs Multiplex and

Theatres Limited, Adlabs Multiplex Limited, Rave Entertainment Private Limited and Mahimna Entertainment Private Limited we had recorded

an adjustment for diminution in value of assets (production and distribution rights, fixed assets, investments, debtors and loans and advances)

aggregating `15,669.70 lakhs by debiting the same to the capital reserve instead of the profit and loss account. If we debited the profit and loss

account instead, the loss before tax for Fiscal 2009 would have been higher by the said amount.

Our ability to pay dividends will depend upon a number of factors, including, amongst others, our profitability, our results of operations,

earnings, capital requirements and surplus, general financial conditions, contractual restrictions and applicable Indian and foreign legal

restrictions. Our financial position may accordingly be perceived adversely by external parties such as customers and bankers, which may affect

our reputation and business operations.

3. The proposed issue proceeds of `59,964.02 lakhs will mainly go towards payment of promoter’s debt and may not help in substantially

reviving the company.

We have over the years availed of debt funding from Reliance Capital, one of our Promoters, primarily in the form of inter-corporate debt

(“ICD”). As on May 31, 2013 loans aggregating ` 1,14,783.43 lakhs are outstanding from Reliance Capital. We intend to repay ₹45,000 lakhs

out of the Issue Proceeds to Reliance Capital since we believe that this will assist in reducing our total debt component and to enable us to better

leverage our equity. There can be no assurance, however, that repaying the said debt will help substantially in reviving our Company.

4. There are certain criminal cases pending against us, our Directors, our Promoters, our Group Companies and our Joint Ventures.

There are 127 criminal proceedings pending against us, our Directors, our Promoters, our Group Companies and our Joint Ventures before

various fora and are at various stages of adjudication. The impact of these litigations cannot be quantified. For details of all the pending criminal

13

actions and cases against us, our Directors, our Promoters and our Group Companies please see the chapter entitled “Outstanding Litigations

and other Material Developments” at page 276 of this Letter of Offer.

In addition to the above, there are various litigations outstanding involving our Company, our Subsidiaries, our Joint Ventures, our Directors,

one of our Promoters and our Group Companies. These legal proceedings are pending at different levels of adjudication before various fora. The

amounts claimed in these proceedings have been disclosed to the extent ascertainable and quantifiable and include amounts claimed jointly and

severally from our Company and other parties. Should any new developments arise, such as any change in applicable Indian law or any rulings

against our Company by appellate courts or tribunals, our Company may need to make provisions in its financial statements that could increase

expenses and current liabilities. Any adverse decision may have an adverse effect on our Company’s business, results of operations and financial

condition. The brief details of such outstanding litigation as of the date of this Letter of Offer are as follows:

Litigation against our Company

Sr. No. Nature of litigation Number of outstanding cases Aggregate approximate amount involved

(in ` lakhs)*

1. Criminal 1 NA

2. Civil 32 481.52

3. Winding up cases 2 324.24

4. Arbitration 2 7,859.97

5. Tax 35 6,923.80

6. Labour 6 14.53

7. Consumer 19 15.05

8. Enforcement Directorate

investigation

1 NA

Litigation against our Subsidiaries and Joint Ventures

Sr. No. Name of Subsidiary/Joint

Venture

Nature of litigation Number of outstanding

cases

Aggregate approximate

amount involved

(in ` lakhs)*

1. Reliance MediaWorks

Entertainment Services

Limited

Tax 2 536.88

2. Reliance MediaWorks

Theatres Limited

Civil 2 1.50

3. Swanston Multiplex Cinemas

Private Limited

Criminal 3 NA


Private Limited

Civil 1 32.95


Private Limited

Labour 1 NA


Private Limited

Tax cases 3 157.81

*Litigation that is not quantifiable is represented as NA

Litigation against our Directors

Sr. No. Name of Director Nature of litigation Number of outstanding

cases


amount involved (in ` lakhs)*

1. Gautam Doshi Criminal 1 NA

2. Sujal Shah Civil 2 ` 2,800.00 *Litigation that is not quantifiable is represented as NA

Note: With respect to the proceedings before the ED in relation to the issue of FCCBs by our Company in 2006, as disclosed in risk factor no. 16, the summons

14

have also been issued to Anil Sekhri, one of our non-executive Directors.

Litigation against our Promoter

Sr. No. Name of Promoter Nature of litigation Number of outstanding

cases


amount involved

(` in lakhs)*

1. Reliance Capital Limited Criminal 44 NA

2. Reliance Capital Limited Civil 3 921.50

3. Reliance Capital Limited Investor Related Disputes

(monetary)

242 9.42

4. Reliance Capital Limited Consumer 279 1,55.44 *Litigation that is not quantifiable is represented as NA

Litigation against our Group Companies

Sr. No. Name of Group Company Nature of litigation Number of outstanding

cases


amount involved

(` in lakhs)*

1. Reliance Broadcast Network

Limited

Civil 13 205.97


Limited

Tax 2 70.57


Limited

Labour 5 31.29


Limited

Stamp Duty 1 8.19


Limited

Notices 5 1,421

6. Reliance Capital Asset

Management Limited

Civil 18 48.47

7. Reliance Capital Asset

Management Limited

Consumer 23 185.00

8. Reliance General Insurance

Company Limited

Civil 1 14.33


Company Limited

Consumer 6,659 5,546.42


Company Limited

Insurance claims 26,411 29,835.17


Company Limited

Arbitration 1 100

12. Reliance Securities Limited Civil 5 1,924.42

13. Reliance Securities Limited Arbitration 4 41.92

14. Reliance Securities Limited Consumer 7 45.43

15. Reliance Securities Limited Labour 1 NA

16. Reliance Money Express

Limited

Civil 1 1.03

17. Reliance Life Insurance

Company Limited

Criminal 102 NA


Company Limited

Civil 116 655.94

19. Reliance Life Insurance Arbitration 1 2,109.42

15

Sr. No. Name of Group Company Nature of litigation Number of outstanding

cases


amount involved

(` in lakhs)*

Company Limited


Company Limited

Tax 14 7,955.58


Company Limited

Labour 10 NA


Company Limited

Consumer 733 2,588.17


Company Limited

Insurance claims 7,426 NA


Company Limited

Notices 1,148 NA

25. Reliance Home Finance

Limited

Consumer 10 0.94

26. Indian Commodity Exchange

Limited

Civil 2 NA

27. Reliance Exchangenext Limited Civil 1 NA

28. Quant Capital Private Limited Civil 2 NA

29. Quant Broking Private Limited Civil 1 NA

30. Quant Securities Private

Limited

Civil 1 NA

31. Quant Commodities Private

Limited

Civil 1 NA

32. Quant Capital Advisors Private

Limited

Civil 1 NA

33. Quant Capital Finance and

Investments Private Limited

Civil 1 NA

34. Quant Investment Service

Private Limited

Civil 1 NA

35. QCAP Trade Private Limited Civil 1 NA

36. Reliance Asset Reconstruction

Company Limited

Civil 1 NA

*Litigation that is not quantifiable is represented as NA

Action taken by SEBI against Promoter Group / Group Companies in the past:

Sl. No. Name of Promoter Group / Group company Action taken by SEBI

1. Reliance Securities Limited Two show cause notices were issued by SEBI to Reliance Securities

Limited (RSL) on August 9, 2010 and August 31, 2010, alleging

violation of the provisions of the SEBI (Stock Brokers and Sub-

brokers) Regulations, 1992 in respect of certain irregularities in

operations. RSL, subsequently, approached SEBI under the SEBI

guidelines for Consent Orders without admitting to, or denying,

guilt. The terms of consent were accepted by SEBI. The accepted

terms of consent were issued in the form of a Consent Order on June

9, 2011. According to the terms of the Consent Order, amongst other

things, RSL was directed to pay `25,00,000 as settlement charges

for settlement of the matter. Pursuant to the said Consent Order,

Reliance Securities Limited paid `25,00,000 and the said

proceedings stand disposed off.

16


2. Reliance Equities International Private Limited(1)

SEBI conducted an inspection of books and records of Reliance

Equities International Private Limited (“REIPL”) for the period

April 1, 2008 to March 31, 2009. REIPL had submitted its responses

on various findings / comments of SEBI. Subsequently, SEBI by its

letter date August 31, 2010 directed REIPL to rectify certain defects

which it had failed to rectify. REIPL submitted its response to SEBI

on September 24, 2010 confirming the corrective steps taken.

3. Reliance Share & Stock Brokers Private Limited SEBI, vide order dated December 11, 2006 had suspended Reliance

Share & Stock Brokers Private Limited’s (RSSBPL) registration as

stock broker for a period of 4 (four) months. Thereafter, RSSBPL

filed an appeal No. 151 of 2006 with Securities Appellate Tribunal

(SAT) challenging SEBI’s order. Meanwhile, SEBI through its letter

dated November 30, 2007 has agreed to the consent terms proposed

by RSSBPL of settling the matter, among other things, by payment

of `50,00,000. However, the payment under the abovementioned

letter from SEBI was subject to approval of consent terms by SAT.

SEBI vide order no. EFD / DRAIII / VRP / SS / 109671 / 2007

dated November 30, 2007 has accepted RSSBPL consent application

for a consent order towards settlement of the dispute with them. The

dispute was settled without admitting or denying the guilt under the

consent terms proposed by RSSBPL and as approved by the

independent high power advisory committee (HPAC) of SEBI.

4. Reliance Capital Limited SEBI had issued a letter (no. MIRSD-4/DP/INSP/OW/10677/2010)

dated July 1, 2010 to Reliance Capital in respect of certain

irregularities / deficiencies in its depository operations.

Reliance Capital has submitted the detailed reply vide letter dated

July 20, 2010 confirming the corrective steps taken.

5. Reliance Capital Asset Management Limited 1. SEBI on June 3, 2009 directed Reliance Capital Asset

Management Limited to withdraw one particular advertisement

pertaining to the NFO of Reliance Infrastructure Fund of

Reliance Mutual Fund for non compliance with regulation

30(1) of Securities and Exchange Board of India (Mutual

Funds) Regulations, 1996.

SEBI vide order dated January 12, 2010 disposed off the

proceedings and directed Reliance Capital Asset Management

Limited to abide by the aforesaid regulations.

2. SEBI had imposed a fine of `6,00,000 on Reliance Mutual Fund

in March 2003 for breach of investment restrictions which was

duly paid.

17

IRDA Penalties

Sl. No. Name of Promoter Group /

Group company

Details Paid on Penalty imposed


Company Limited

Co-insurer – Breach by lender May 29, 2006 1,000

Co-insurer – Breach by lender August 28, 2006 1,000

Co-insurer- Breach by lender August 28, 2006 1,000

Predatory Pricing December 5, 2006 50,00,000

Breach of File & Use Guidelines

(Health wise policy)

July 28, 2009 20,00,000

2. Reliance Life Insurance Company

Limited

Payment of excess referral fees

than envisaged in the referral

guidelines and deviation in the

File & Use procedure particularly

in group products in violation of

circular IRDA/Cir. No.

01/IRDA/ACTL/MC/2006-07

dated 12/7/2006

August 12, 2010 10,00,000

5. Gautam Doshi, one of our non-executive Directors, is currently being investigated by the Central Bureau of Investigation.

The Central Bureau of Investigation (CBI) has registered a first information report (FIR) dated October 21, 2009 pertaining to allegations of

criminal conspiracy and criminal misconduct, in respect of telecommunications licences and spectrum allotted by the Government of India inter

alia to SwanTelecom Limited in 2008. Pursuant to the FIR, the CBI filed a charge sheet dated April 2, 2011 in the Court of Special Judge (CBI),

New Delhi, against various persons, including one of our non-executive Directors, Gautam Doshi. The Special Judge (CBI) has framed charges

against all the persons specified in the charge sheet.

Proceedings in the matter, including a writ petition that Gautam Doshi has preferred to the High Court at Delhi, are ongoing. For further details,

please see the chapter entitled “Outstanding Litigation and Material Developments” at page 285 of this Letter of Offer.

6. Our net worth has decreased substantially over the last three years which restricts our ability to invest in our overseas subsidiaries and

joint ventures and may hamper our growth plans.

As per our audited restated financial statements, our Company’s net worth on a standalone basis has decreased from `66,641.08 lakhs as on

March 31, 2008 to `(47,014.66) lakhs as on March 31, 2013 and on a consolidated basis has decreased from `67,783.05 lakhs as on March 31,

2008 to `(92,707.78) lakhs as on March 31, 2013. In terms of the applicable FEMA regulations, we may not invest in our joint ventures or

wholly owned subsidiaries situated outside India in excess of 400% of our Company’s net worth as on the last audited balance sheet. This limit

includes contribution to the capital of, loans granted to, and guarantees issued to or on behalf of, the overseas joint ventures or wholly owned

subsidiaries. As on March 31, 2013 we have invested ` 67,249.29 lakhs in our overseas subsidiaries and joint ventures. Accordingly, we will not

be able invest in our overseas joint ventures or wholly owned subsidiaries till our net worth increases significantly, which may have an adverse

impact on our future growth plan.

7. If we are unable to effectively implement our business and growth strategies, our results of operations may be adversely affected.

Our success will depend, in large part, on our ability to effectively implement our business and growth strategies. We cannot assure you that we

will be able to execute our strategies in a timely manner or within budget estimates or that we will meet the expectations of targeted customers.

We believe that our business and growth strategies will place significant demands on our management and other resources and will require us to

develop and improve operational, financial and other internal controls. Our business and growth strategies may require us to incur further

indebtedness. Any inability to manage our business and growth strategies could adversely affect our business, financial condition and results of

operations.

As part of our growth strategy, we propose to increase the number of cinema theatres we operate in India and other countries with Indian

diaspora. When establishing new cinema theatres, we may encounter cost overruns or delays in implementation due to, among other causes,

18

delays in construction, receipt of government approvals or delivery of equipment by suppliers. For instance, the Image Maximum (IMAX)

Dome theatre scheduled to be established in Mumbai in December 2000 was not established until March 2001. In addition, the four screen

multiplex project scheduled to be established in Mumbai in September 2001 was not fully established until November 2001. In the future, if any

cinema theatres are not established in a timely manner, or at all, our business and results of operations may be adversely affected. Further, we

were scheduled to complete construction of all three stages of our studio by December 2011. However, while we completed one stage by

January 2011, we are yet to complete construction of the other stages.

New cinema theatres we establish may not achieve anticipated levels of patronage and as a result may not perform as expected. The occurrence

of any of these risks could adversely affect our business, financial condition, and results of operations.

8. Conditions and restrictions imposed on us by the agreements governing our indebtedness could adversely affect our ability to operate

our businesses.

Certain of our financing agreements include conditions and restrictive covenants that require us to obtain consents from the respective lenders

prior to carrying out certain activities and entering into certain transactions. Our lenders have certain rights to determine how we operate our

businesses, which, among other things, restrict our ability to raise additional equity, pay dividends, make investments, effect a change in

ownership, amend our Memorandum and Articles of Association, undertake a merger, amalgamation or reconstruction, make changes in our

management, incur additional long-term indebtedness, sell assets or acquire other businesses. We cannot assure you that we will be able to

obtain approvals to undertake any of the activities restricted under these financial covenants as and when required in respect of such restrictions

or comply with such covenants or other covenants in the future.

Further, these debt obligations are typically secured by a combination of security interests over our assets and hypothecation of movables and

future receivables. The security allows our lenders to sell the relevant assets in the event of our default, convert outstanding debt into equity,

nominate directors to our Board or exercise other such related rights.

Under such financing agreements, we are also required to comply with certain financial covenants, such as the maintenance of certain specified

financial ratios, including a ratio of gross borrowings to tangible net worth, which may limit our ability to obtain additional funds. We currently

are not in compliance with some of these financial ratios; however the relevant lenders have not yet recalled any of these loans. If we are unable

to maintain these ratios, the lenders are entitled to declare the loans due immediately. In addition, certain of the loan agreements contain cross-

default provisions, whereby a default of any of the covenants under any one of financing agreements may result in an event of default under

other financing agreements or respective concession or licence agreements. If we do not repay the outstanding loan amounts in a timely manner

or at all, our business, reputation and financial condition may be adversely affected. Further, our Company has used short term borrowings for

long term investments during Fiscals 2012, 2011 and 2010. For further details, please see the chapter entitled “Financial Statements” at page F-

1 of this Letter of Offer.

If we incur more debt or there is an increase in the applicable interest rates for our existing debt, our interest payment obligations will increase

and we may become subject to additional conditions from lenders, including additional restrictions on the operation of our businesses. The

financing agreements that we are party to or which we may enter into in the future may be unilaterally terminated by our lenders or the lenders

could decline to lend to us under such agreements. Further, we cannot assure you that we will be able to raise additional financing on favourable

terms, or at all. Any failure in the future to obtain sufficient financing could result in a lack of cash flow to meet our operating requirements and,

therefore, could have an adverse effect on our business, financial condition and results of operations.

9. Contingent liabilities that have not been provided for could adversely affect our financial condition.

As of March 31, 2013 we had certain contingent liabilities as per our audited restated financial statements, that had not been provided for, as

disclosed in our restated consolidated financial statements. The details of such contingent liabilities are as follows: (` in lakhs)

Particulars As of March 31, 2013

Consolidated Standalone

Central excise 2,555.90 2,555.90

Service tax 204.90 204.90

Income tax 2,418.30 2,418.30

Entertainment tax 14,112.40 14,112.40

19

Particulars As of March 31, 2013

Value Added Tax 522.80* 522.80*

Claims against our Company not acknowledged

as debts 8,152.10

8,152.10

Guarantees given on behalf of Subsidiary

Companies -

16,443.90

Contingent liabilities of Subsidiary Companies 536.90 -

Share of contingent liabilities in the Joint

Ventures 99.30

-

* The Maharashtra Value Added Tax Act, 2002 lists the scheduled entry, inter alia, “Copy right” w.e.f. 1 April 2005. Pursuant to this enactment / scheduled

entry, the entertainment industry has made a written representation to the Finance Minister, Maharashtra for deletion of the scheduled entry from the Act.

Similar representation was made by the industry in some other states, as a result of which the Maharashtra Value Added Tax Act, 2002 was modified to delete

this scheduled entry. Our Company is awaiting a positive response from the Ministry of Finance in respect of the assurance given. Accordingly, no provision

(amount not currently ascertainable) has been made in the books of accounts.

With effect from the May 1, 2011 the Maharashtra Value Added Tax Act, 2002 was amended to exempt tax on “Copyrights” for distribution and exhibition of

cinematographic films in theatres and cinema halls.

If any of these liabilities materialises, our financial condition could be adversely affected. For further details, please see the chapter entitled

“Financial Statements” at page F-1 of this Letter of Offer.

10. The objects of the Issue include the utilization of the proceeds of the Issue to repay existing loans from one of our Company’s Promoter.

Our Company intends to use a portion of the Net Proceeds to discharge some of the existing loans availed by our Company from Reliance

Capital Limited, one of our Company’s Promoter. We propose to repay ` 45,000 lakhs to one of our Promoter, Reliance Capital Limited, which

constitutes 75% of the issue size. To the extent that portion of the existing loans are adjusted as share application money, our Company will not

receive fresh funds. As at May 31, 2013 we had availed of loans aggregating ` 114,783.43 lakhs from Reliance Capital Limited constituting

50.67% of our aggregate loan amount. For further details, please see the chapter entitled “Capital Structure” at page 69 of this Letter of Offer.

Additionally, if the Company’s other Equity Shareholders do not subscribe to the Issue the proportionate share of equity held by the Company’s

Promoters will increase. This will dilute the relative interest of the Company’s other Equity Shareholders. For further details, please see the

chapter entitled “Objects of the Issue” at page 81 of this Letter of Offer.

11. Our Company’s high debt-equity ratio may hamper our ability to avail of future debt

As per our audited restated financial statements, as of March 31, 2013, our Company’s total outstanding borrowing was `2,27,834.90 lakhs on a

consolidated basis and `2,22,401.50 lakhs on a standalone basis against our Company’s net worth of ` (92,707.78) lakhs as of March 31, 2013

on a consolidated basis and ` (47,014.66) lakhs on a standalone basis. As per our audited restated financial statements, our EBITDA on a

consolidated basis was of ` (5,923.00) lakhs and ` (20,738.91) lakhs before exceptional items for six months ended March 31, 2013 and Fiscal

2012, respectively. Further, for the six month ended March 31, 2013 and Fiscal 2012, our EBITDA on stand alone basis before exceptional

items was ` (4,137.17) lakhs and ` (13,278.54) lakhs, respectively. Further, as per our audited restated financial statements, our Company’s total

outstanding borrowing increased to ` 226,518.80 lakhs as on May 31, 2013. Our Company’s high debt leverage may make it difficult for us to

raise finance, on terms favourable to us or at all. While one of the objects of this Issue is to pre-pay / repay some of our Company’s existing

borrowings, there can be no assurance that the improvement in the debt-equity ratio, upon repayment of such existing borrowings, will facilitate

raising additional debt on favourable terms. If our Company’s highly levereaged debt profile continues, or worsens, it will have a significant

impact on our business, results of operations and financials.

12. Our Company has delayed the repayment of certain loans.

As per our audited restated financial statements, during Fiscal 2012, our Company has delayed the repayment of the following loans:

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Nature of loan Principal amount (` in

lakhs)

Due date Date of payment

Unsecured term loan 12,500.00 March 28, 2012 May 14, 2012

Secured term loan 13,333.33 March 31, 2012 May 11, 2012

Secured term loan 1,250.00 December 16, 2011 December 30, 2011

Secured term loan 1,000.00 May 3, 2012 May 6, 2012

Delay in repayment of loans may not only constitute a default under the respective loan agreements but may also affect our ability to raise

further debt. Consequently, our inability to raise further debt may adversely affect our business, financial condition and results of operations.

While none of the loans has been recalled by any lender so far, there can be no assurance that they may not be recalled in future.

13. If we cannot respond effectively to competition, our financial condition and results of operations may be adversely affected.

We face competition in the various segments of the entertainment and media industry in which we operate. As per our audited restated financial

statements, during six months ended March 31, 2013, Fiscal 2012, Fiscal 2011 and Fiscal 2010, our theatrical exhibition business constituted

69.42%, 69.99%, 65.39% and 64.37%, respectively of our total consolidated revenues. We cannot assure you that this business segment will

continue to contribute to our consolidated revenue at similar levels. Increased competition resulting from the growth of other theatrical

exhibitors’ operations may reduce attendance in our cinema theatres, which could adversely affect our financial condition and results of

operations.

In addition, our theatrical exhibition business competes with alternative film delivery methods, including cable television, Internet, digital video

disc, satellite and pay-per-view services. Film distributors, while licensing a film to the domestic theatrical exhibition industry, have

traditionally refrained from making the same film available through other film delivery methods for a certain period of time, a practice

commonly referred to as the “theatrical release window”. If film distributors significantly reduce the duration of the theatrical release window,

the appeal of viewing films in cinema theaters may be reduced, which may adversely affect our business, financial condition and results of

operations.

We are also engaged in the business of television content production, an area which has witnessed increasing levels of competition.

Our costs related to marketing and human resources may increase due to such increased competition. Further, our competitors may expand their

financial and other resources in an attempt to increase their market share. If we are unable to adequately address such competitive pressures, our

business and financial condition may be adversely affected.

14. Piracy may reduce attendance at our cinema theatres, which may adversely affect our business and financial condition.

Piracy, i.e., making available unauthorised copies of media content, software or other digital content at highly reduced prices or without charge,

is prevalent throughout the world, including India. Anti-piracy laws may not be adequate or may be inadequately enforced in the jurisdictions in

which we operate. The availability of pirated copies of films may cause some of our potential customers to be less inclined or completely

disinclined to visit cinema theatres, which may adversely affect our business and results of operations.

Our business is highly dependent on the maintenance of intellectual property rights in the entertainment products and services we create and

exhibit. Piracy of media products, including digital and Internet piracy and the sale of counterfeit consumer products, may decrease revenues

received from the exploitation of our products. The move to digital formats has facilitated high-quality piracy, particularly through the Internet

and cable television. We may face difficulties in monitoring infringement of our intellectual property rights. The Indian film industry

experiences significant amounts of losses due to piracy. Existing copyright and trademark laws in India afford only limited practical protection

and the lack of Internet-specific legislation relating to trademark and copyright protection creates a further challenge for us to protect our content

delivered through such media. Notwithstanding the anti-piracy measures we take, we cannot assure you that we will be able to prevent piracy of

our products.

15. We have no prior experience in establishing or operating studios.

We are in the process of establishing an approximately 200,000 square feet studio in Film City, Mumbai, comprising of three studio buildings

with eight sound stages with appropriate noise control and other features. A part of this studio was completed in January 2011 and we expect to

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complete the remaining portion of the studio by December, 2013. While we have been operating one studio building with three sound stages

since January, 2011, we have not in the past established or operated studios. As per our audited restated financial statements, during Fiscal 2012

and six months ended March 31, 2013, we generated ` 1,436.75 lakhs and ₹ 344.58 lakhs, respectively, from the studio, constituting less than

2% of our total revenues. Our studios may be subject to various operational risks, such as unexpected maintenance or technical problems,

accidents, power interruptions or equipment failures. Due to our lack of experience in operating studios, we may be unable to prevent or address

such risks appropriately. Further, any studio that we establish and operate may not perform as expected. Any failure to successfully operate

studios may adversely affect our business, financial condition and results of operations.

16. Our Company is subject to certain proceedings before the Directorate of Enforcement in relation to the issue of FCCBs by our Company

in 2006 and summons have been issued in relation thereto. Any adverse outcome in relation to the proceedings may have a detrimental

impact on our reputation and financial condition.

On July 15, 2013, Anil Sekhri, a non-Executive Director of the Company appeared personally before the ED pursuant to summons issued on

July 3, 2013 with respect to the issue of FCCBs by the Company in 2006. Similar summons were issued to Anil Sekhri, to Manmohan Shetty,

our ex-Chairman and Managing Director, and to one of our key management personnel, in the past. The correspondence in this regard required

the persons to provide information and documents inter alia in respect of the issue of FCCB’s. Our Company has provided the information

sought by the ED through its replies dated September 4, 2012 and April 18, 2013.

Further to Anil Sekhri’s appearance in response to the summons, the ED has issued fresh summons to one of our key management personnel

directing him to appear before it on the July 22, 2013. The hearing was adjourned.

Any adverse outcome may adversely affect our reputation and financial condition. For further details, please see chapter entitled ‘Outstanding

Litigation and Material Developments’ on page 279 of this Letter of Offer.

17. Our pro forma financial statements have not been audited or reviewed by our Auditors.

Our Company is proposing to undertake internal restructuring of its business by transferring its whole or part of theatrical exhibition business

and film and media services to certain of its wholly owned subsidiaries which it is yet to identify and our shareholders have approved the same

proposal on February 21, 2012 through postal ballot. Accordingly, our Company has prepared pro forma financial statements which assume the

transfer of our Company’s film and media services and theatrical exhibition business division to our subsidiaries at book values. For the purpose

of the transfer, it is assumed that all assets which form part of business division assets and business division liabilities are transferred to the

subsidiaries of the Company and the amount receivable as consideration on transfer is shown as a short term loan and advance recoverable from

these subsidiaries.

The pro forma financial information has been prepared by our management and has not been audited or reviewed by our Auditors. It may not

necessarily be indicative of the net results of operations that might have been achieved by the Company for period or dates indicated, nor is it

necessarily indicative of the future results of the Company after such proposed internal restructuring.

For further details, please see the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.

18. We have not received consents for transferring our film and media services and theatrical exhibition business to our subsidiaries from

some of our lenders.

We are in the process of transferring our film and media services and theatrical exhibition business to certain of our wholly owned subsidiaries

which we will identify in due course. The shareholders of our Company have approved the transfer through a resolution dated February 21,

2012.

In terms of the financing agreements with our lenders we are required to obtain their prior consent for, amongst other, transferring our business.

While we have received consents from certain lenders, we have not received consent from all. Further, the consents received are also subject to

certain conditions including:

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that there should be no material change to the security offered to the lenders and the assets transferred should continue to secure the

exposure;

the relevant subsidiaries or our Company, as the case may be, should ensure sufficient cash flows to meet the repayment obligations;

that our Company has received necessary approval from all lenders; and

that we would continue to comply with the terms and conditions of the financing documents.

Non-receipt of the requisite consents in time or at all from the lenders may either hamper the process of transferring our film and media

services and theatrical exhibition business to certain of our wholly owned subsidiaries or we may be forced to repay the debt due to them.

19. Changes in technology may render our current technologies obsolete or require us to undertake substantial capital investments, which

could adversely affect our results of operations.

Technologies currently under development or that may be developed in the future, if employed by our existing competitors or new entrants, may

adversely affect our competitiveness. The development and application of new technologies involve time, substantial cost and risk. Our

competitors may be able to deploy new technologies before us and we cannot predict how emerging and future technological changes will affect

our operations or the competitiveness of our services. If we fail to successfully implement new technologies in a timely manner or at all, our

business, financial condition and results of operations may be adversely affected.

We are engaged in the business of film and media services and currently have a production laboratory in Mumbai and a post-production services

facility in Burbank, USA and London, UK. As per our audited restated financial statements, our film and media services business generated `

6,353.40 lakhs, ` 27,802.90 lakhs, `23,265.50 lakhs and `15,764.30 lakhs for six months ended March 31, 2013, Fiscal 2012, Fiscals 2011 and

2010, respectively, which constituted 18.07%, 22.55%, 27.82% and 21.72%, respectively, of our total consolidated revenues for the said

periods. However, new technologies may replace traditional film production methods which may adversely affect our business and results of

operations.

In relation to our theatrical exhibition business, digital projection technology may replace traditional analogue film projection technology in

cinema theatres. Digital projection technology is more expensive to implement and operate than analogue film projection technology. While 355

of our screens were equipped with digital projection technology as of May 31, 2013, to remain competitive in the future, we may be required to

implement and operate digital projection technology in more of our cinema theatres, which would require significant investments of time,

financial resources and personnel attention that may adversely affect our financial condition. Further, if we are unable to implement digital

projection technology in our cinema theatres in a timely manner, or at all, we may lose patronage which could adversely affect our business and

financial condition, specifically in the US.

20. If the exhibition of films through megaplexes becomes more popular in India, our business and results of operations may be adversely

affected.

Changes in technology and the availability of real estate have significantly altered the global theatrical exhibition industry. Multiplexes, a

cinema theatre format that typically comprises four to five screens may, in the future, be substantially replaced by megaplexes, a cinema theatre

format that typically comprises 14 to 15 screens. The megaplex format has achieved popularity in many developed markets, including the

United States. In these markets, the industry-wide strategy of aggressively building megaplexes has generated significant competition and has

rendered many multiplexes obsolete. If the exhibition of films through megaplexes becomes more popular in India, we may be required to make

significant investments to shift our theatrical exhibition business towards the establishment and operation of megaplexes, which could adversely

affect our business, financial condition and results of operations.

21. Reduction in our advertisement/ sponsorship revenues could have an adverse effect on our results of operations.

As per our audited restated financial statements, during six months ended March 31, 2013, Fiscal 2012, Fiscals 2011 and 2010, we had `

1,928.60 lakhs, ` 3,498.40 lakhs, `3,684.20 lakhs and `4,651.70 lakhs of advertisement/sponsorship revenue, respectively. This constituted

5.26%%, 2.79%, 4.33% and 6.22%, respectively, of our total consolidated revenue for the same periods. We generally utilise our existing

cinema infrastructure to display advertisements for our advertising customers. Our gross margin on advertisement revenue is high as we do not

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incur significant additional cost for each additional amount of advertisement revenue we earn. Consequently, changes in our advertisement

revenue will have a larger percentage impact on our profit before tax than changes in some of our other sources of revenue.

22. The cost of exhibition of a film varies across films and cinemas and if we are unable to obtain films on competitive terms, our results of

operations may be adversely affected.

We rely on distributors to obtain films for exhibition. In order to obtain a film for exhibition, we enter into agreements in which the distributor’s

share is typically calculated as a percentage of ticket receipts (net of entertainment taxes and other applicable taxes). The applicable percentage

is negotiated on a film-to-film basis in respect of films produced in India and periodically for film releases by international studios. Distributors

work on a non-exclusive basis and there is competition between exhibitors to acquire films. Competitive pressures may result in increasing the

cost at which we acquire the rights to exhibit films. If we are unable to recover such increased costs through higher box office collections or

other forms of revenue generation, our results of operations would be adversely affected.

23. In the event of any reduction or termination of any of our tax incentives or, specifically, if a state Government refuses to grant,

withdraws or reduces its entertainment tax incentive, our business and results of operations may be adversely affected.

We benefit from certain tax regulations and incentives. Specifically, we are subject to entertainment taxes in various states in India in which we

operate our cinema theatres. The applicable entertainment tax is determined by the relevant state as a percentage of our gross box office

collections in that state. The rates vary substantially from state to state. We are eligible for entertainment tax exemption for certain of our cinema

theatres, which is typically staggered over a period of time. In addition, we also enjoy full entertainment tax exemption in respect of certain of

our cinema theatres in Punjab and Rajasthan. When deciding whether to open a new cinema theatre, we consider the availability of

entertainment tax holidays and incentives given by various state Governments. Typically, the developer, from whom we propose to acquire a

new property, files an application for the grant of an entertainment tax exemption with respect to the relevant property. If a state Government

refuses to grant, withdraws, or reduces its entertainment tax incentive, our business, financial condition and results of operations may be

adversely affected.

Further, in certain instances, we are required to operate a cinema theatre for a certain period of time in order to avail of certain tax incentives. If

we fail to operate a cinema theatre for the required period of time, we will not be eligible for the tax incentive and will have to pay taxes in

arrears, which may adversely affect our financial condition and results of operations.

24. Certain equipment for the construction of our studio and some of our cinema theatres may not be received in a timely manner, or at all,

which could adversely affect our business and results of operations.

We are currently in the process of constructing a studio in Film City, Mumbai. As part of the construction process, we have placed orders for

certain equipment. However, based on our estimates, we are yet to place orders for large number of equipment. Similarly, we are yet to place

orders for certain equipment for new cinema theatres that we are constructing. If we do not receive any such equipment in a timely manner, on

favourable terms, or at all, the construction of our studio and cinema theatres may be delayed or prevented, which could adversely affect our

business, financial condition and results of operations.

25. Our business and growth strategies involve the pursuit of strategic acquisitions, and any difficulties encountered in identifying or

integrating other entities may adversely affect our financial condition and results of operations.

Our growth strategy involves the acquisition of new businesses. For example, we have acquired Rave Entertainment Private Limited, Synergy

Communications Private Limited (now, “Big Synergy Media Limited”), iLab and Reliance Lowry Digital Imaging Services Inc. (“Lowry

Digital”) between the financial years 2007 and 2010 and the assets and brand “Digital Domain” belonging to DDMG, through Galloping Horse-

Reliance LLC, an associate entity, in financial year 2012. Although as of the date of this Letter of Offer, we have not entered into any letters of

intent, memoranda of understanding or agreements regarding contemplated acquisitions, we intend to continue to evaluate options for

acquisitions that may improve our businesses and service offerings. We may be unable to complete future acquisitions on terms acceptable to us,

in a timely manner, or at all. Our acquisitions may require that our management develop new expertise, manage new business relationships,

attract new customers and operate in new geographic markets. Furthermore, acquisitions require the devotion of significant attention and

resources from our management, and the diversion of our management, attention and resources could adversely affect our ability to manage our

business.

24

In addition, we cannot assure you that the integration of any future acquisitions will be successful or that the expected strategic benefits or

synergies of any future acquisitions will be realised. We may experience difficulties in integrating acquisitions into our existing business and

operations. Future acquisitions may expose us to potential risks including risks associated with the integration of new operations, services or

personnel, unforeseen or unaccounted liabilities, the diversion of resources from our existing businesses and technologies, our inability to

generate sufficient revenue to offset the costs of acquisitions, and potential loss of, or harm to, relationships with employees or customers, any

of which could significantly disrupt our ability to manage our business and in turn adversely affect our business, financial condition and results

of operations.

26. If we are unable to obtain or renew approvals in a timely manner, or at all, our business and results of operations may be adversely

affected.

As of May 31, 2013 we operated 119 cinema theatres with 439 screens across India and the United States. In order to operate each of these

cinema theatres, we must obtain certain approvals, many of which we must renew from time to time. In addition, as we expand our business and

open new cinema theatres, we will require additional approvals for these new locations. If we fail to obtain or renew any applicable licences,

registration or permits in a timely manner, or at all, our ability to operate our cinema theatres may be adversely affected, which could in turn

adversely affect our business, financial condition and results of operations.

The approvals and licences obtained by us may contain conditions, some of which could be onerous. We cannot assure you that the approvals,

licences, registrations or permits issued to us would not be suspended or revoked in the event of non-compliance or alleged non-compliance with

any terms or conditions thereof, or pursuant to any regulatory action. Any suspension or revocation of any of the approvals, licences,

registrations or permits that have been or may be issued to us may adversely affect our business and results of operations.

27. Failure to complete contracts, which have a fixed-time frame, as scheduled may negatively affect our profitability and may result in

increased expenses due to repetition of work.

We derive a significant portion of our earnings from our post-production services on a fixed-time frame basis. In respect of such fixed-time post-

production services, we bear the risk of penalty provisions, cost overruns, completion delays and wage inflation in connection with these

projects. Our failure to estimate the resources and time required for a project, including as a result of uncertainties due to creativity issues, may

adversely affect our reputation, business, financial condition and results of operations. In addition, our post-production agreements require that

we redo the production of content that is rejected by clients on grounds of such content not complying with specifications. Such agreements also

provide for penalty clauses where we are liable to pay penalties for any delay in the completion and handover of the material being produced

under the agreement. We cannot assure you that we will always complete the production of material under our post-production arrangements on

time or that such material will be accepted by our clients. Any inability to complete these post-productions in a timely manner or in accordance

with client specifications could adversely affect our business, financial condition and results of operations.

28. Procurement of new contracts for our post-production business is subject to negotiations, financial closure and initial quality tests. Our

inability to procure new contracts could affect our future results of operations and cash flows.

The growth of our business depends on our ability to win new contracts. Generally, it is difficult to predict whether and when we will be

awarded a new contract since many potential contracts involve negotiations with our clients and also financial closure prior to signing definitive

agreements. The process also involves initial quality tests which are normally done by way of pilot productions and subject to approval by the

clients. As the growth of our business will be derived primarily from these contracts, our future results of operations and cash flows can

fluctuate materially from period to period depending on the timing of contract awards.

29. If the number of unsuccessful films in the film industry increases, our business, financial condition and results of operations may be

adversely affected.

Our business relies heavily on the success of the films we exhibit. Our potential cinema theatre patrons may be inclined to visit our theatres in

significant part based on the appeal of the films we exhibit, irrespective of the services, technologies and amenities we offer. Typically, we are

also able to raise the profile of our film and media services business through association with successful films. A film’s success cannot be

predicted through the use of any definite formula or study of prior successful films. Consequently, the success of a new film may be difficult to

predict. We cannot assure you that box office collections of films with well-known casts or previously successful content will be successful. If

25

the number of unsuccessful films in the film industry increases, our business, financial condition and results of operations may be adversely

affected.

30. We operate most of our cinema theatres through agreements with the owners and / or developers of the relevant properties, which entail

certain risks.

As of May 31, 2013 we operated 119 cinema theatres with 439 screens across India and the United States. We operate a vast majority of our

cinema theatres through a lease on the relevant property, a business conducting agreement or a management agreement to operate the relevant

property as a cinema theatre. We cannot assure you that we will be able to enter into or renew business conducting agreements for our cinema

theatres that are of the same duration as the relevant property leases on favourable terms, or at all. In the event that a business conducting

agreement or lease is not renewed, we will be required to expend time and financial resources to relocate the cinema theatre, which may

adversely affect our financial condition. We cannot assure you that we will be able to relocate a cinema theatre to an appropriate location in a

timely manner, or at all. There can be no assurance that a relocated cinema theatre will generate revenues at levels equal to those generated at

the previous location. Further, if any lease or business conducting agreement is terminated, revoked subsequent to the lock-in period and prior to

tenure, not renewed or if we are required to cease business operations at a property for any reason whatsoever, our business, financial condition

and results of operations may be adversely affected. After such termination, if the relevant property is leased or sold to another theatrical

exhibition company, we may face increased competition in that geographic area. We operate some of our cinema theatres inside shopping malls

and if the operator of a shopping mall has not obtained certain approvals, our ability to operate such cinema theatres may be adversely affected.

While we pay stamp duty on our business conducting agreements, these agreements may be treated as lease under relevant stamp legislation. In

such event, we would be required to pay a higher stamp duty and might also be required to pay penalties in accordance with the relevant stamp

duty legislation. If any of our business conducting agreements is treated under relevant stamp duty legislation as a lease, our business and

financial condition may be adversely affected.

31. We are dependent on the services of key management personnel and our ability to recruit and retain skilled and experienced employees.

In order to successfully manage and expand our business, we are dependent on the services of key management personnel and our ability to

attract, train, motivate and retain skilled employees, including artists, technicians and other professionals. If we are unable to hire additional

personnel or retain existing qualified personnel, our ability to expand our business may be impaired and our revenues may decline. We may be

unable to hire and retain enough skilled and experienced employees to replace those who leave or may not be able to re-deploy. In addition, we

do not maintain key man insurance. We also may be unable to retain the proper mix of employees to follow industry trends and changing

customer preferences. Any failure to hire or retain key management personnel and skilled and experienced employees could adversely affect our

business and results of operations.

32. Our Company, Subsidiaries, Promoters, Group Companies and associate companies of our Company have availed of unsecured loans

that may be recalled by lenders at any time.

Our Company, Subsidiaries, Promoters, Group Companies and associate companies of our Company have availed of unsecured loans which

may be recalled by the lenders at any time. Any accelerated repayment of such loans may adversely affect the cash flow and results of

operations of such entities. We may also require alternative sources of financing, which may not be available on commercially reasonable terms

or at all. Separately, certain loans availed by our Company from the Promoters are overdue. While none of the loans have been recalled by the

Promoters so far, there can be no assurance that they may not be recalled in future. For further details in relation to the unsecured loans obtained

by our Company, please see the chapter entitled “Financial Indebtedness” at page 225 of this Letter of Offer.

33. If we are unable to recover certain amounts outstanding in relation to our film and media services business, our financial condition

and results of operations may be adversely affected.

Certain risks are involved in relation to the film and media services industry practice of extending credit for long periods of time and the

uncertainty regarding the receipt of certain outstanding amounts due. Due to these industry conditions, we have and will continue to have high

levels of outstanding receivables. As per our audited restated financial statements, as of March 31, 2013, we had ` 7,885.57 lakhs of trade

receivables in relation to our film and media services business. Given the nature of the film and media services industry and our clients, billings

are generally subject to negotiation at the time of settlement. This often results in high levels of rebates, discounts and write-offs. Any increase

26

in the levels of rebates, discounts or write-offs given could increase our working capital requirements and could adversely affect our business,

financial condition and results of operations.

34. If a third party files an intellectual property infringement case against us, our business, reputation and financial condition may be

adversely affected.

A significant portion of our business involves intellectual property. The films exhibited at our cinema theatres and television content we produce

involve intellectual property rights of various entities. While we attempt to ensure that necessary consents are obtained from third parties to

acquire intellectual property rights for the distribution and exhibition of films and the production of television content, third parties may file

infringement cases against us or may make us party to claims filed against third parties, such as producers. Such cases may not be decided in our

favour, which may result in the payment of damages and/or injunctive action. Further, the defense of any infringement claim may consume

significant time and financial resources. If a third party files an intellectual property infringement action against us, our business, reputation and

financial condition may be adversely affected.

35. If the strength of the “Reliance Group” brand name is diluted, our business and financial condition may be adversely affected.

We believe that the “Reliance Group” brand name commands strong brand recall and interest among the Indian population due to its long

presence in the Indian market and the diversified businesses in which the Reliance Group operates. Our success depends in part on our ability to

leverage the strength of the “Reliance Group” brand name. Any adverse change in the strength of the “Reliance Group” brand name, due to,

among other reasons, an adverse change among customers with regard to the perceived service quality of other companies in the Reliance

Group, could tarnish the “Reliance Group” brand and cause consumers be less interested in our products and services. If the strength of the

“Reliance Group” brand name is diluted for any reason, our business and financial condition may be adversely affected.

36. We do not own several trademarks and a logo related to our business and if we are unable to enter into or renew licence agreements for

the use of these trademarks and logo, our business and financial condition may be adversely affected.

We do not own the trademarks “Reliance MediaWorks” and “BIG Cinemas”. Reliance Big Entertainment Private Limited has entered into an

agreement for the use of the “BIG Cinemas” trademark.

We also do not own the “Reliance” trademark, the logo or the logo. We have entered into a brand licence agreement with

Anil Dhirubhai Ambani Ventures Limited for the use of the “Reliance” trademark and the logo. Under the terms of the brand licence agreement,

Anil Dhirubhai Ambani Ventures Limited may terminate the agreement on various grounds, including, among others, our failure to pay our debt

upon maturity, our undergoing change of control or any attempt by us to claim any right of ownership in relation to the “Reliance” trademark or

the logo.

Brand recognition is critical to the successful operation and growth of our business. If we are unable to use the trademarks or logo related to our

business, we may be required to change our name and/or logo. Any such change may lead to additional costs or dilute or eliminate the strength

of our brand, which would have an adverse effect on our business, financial condition and results of operations. For details, please see the

chapter entitled “Business” at page 149 of this Letter of Offer.

37. We may acquire new businesses, enter into strategic partnerships or undertake internal restructuring. If such undertakings / activities

do not yield the expected results, it may adversely affect our business, results of operations and financial condition.

We may acquire or partner with companies that we believe will enhance our business, revenues and profitability, in India or overseas, where

suitable opportunities arise. We may also evaluate restructuring some of our business divisions and subsidiaries including by transferring certain

of our business divisions to our subsidiaries. We may also evaluate various options to raise further capital, including through investments in our

subsidiaries which may have an impact on our shareholding in such subsidiaries. These activities, in general, involve numerous risks, including:

diversion of our management’s attention and diversion of resources from our existing business;

inability to control or loss of control over the business divisions or subsidiaries as a result of restructuring;

inability to coordinate product, development, sales and marketing functions of the acquired business;

27

inability to control the activities of the entities with whom we partner, including preventing such partner from entering into similar

arrangements with our competitors;

transition of operations, users and advertisers of the acquired business onto our existing platforms;

inability to retain the management, key personnel and other employees of the acquired business and integrate them into our core

workforce successfully and smoothly;

inability to assimilate the operations, administrative systems, product, technologies and information systems of the acquired business

with our core businesses; and

increase in investment of capital, which may increase our funding requirements as a result of acquisition or restructuring.

In the event that any of the above risks materialises, we may not be able to manage such risks successfully or in a timely manner or at all, which

could have, our business, results of operations and financial condition may be adversely affected. Further, acquired assets or business may not

generate the financial results that we expect and we may not be able to achieve the objective of any internal restricting that we may undertake.

These activities involved incurring substantial expenditure and employing significant time and other resources. In the event that these activities

fail to provide the expected results, our business, results of operations and financial condition may be adversely affected.

38. Our Company does not own the premises where our Company’s Registered Office is situated and its operations may be interrupted in

case of inability to renew the lease agreement.

Our Company does not own the premises where our Company’s Registered Office is situated. In terms of the lease agreement with the

Maharashtra Film Stage & Cultural Development Corporation Limited, our Company pays an annual rent for the premises on which our

registered office is situated. The rent is subject to an escalation every five years. Additionally, our Company is liable to pay a consideration

linked to the activities carried out by our Company from the said premises. The lease has been granted for a term of 33 years (“Initial Term”)

from October 21, 1996. The term of the lease shall be renewed for a further period of 33 years on an application made by our Company, six

months prior to the expiration of the Initial Term, on the same terms and conditions. In event our Company fails to renew the lease agreement or

if our Company is required to vacate the premises for any reason whatsoever, our Company will have to search for alternative office space.

There can be no assurance that our Company will be able to obtain the same on similar terms or at all.

39. The financial statements of our Company for the previous years may not be comparable to each other.

The financial statements of our Company for Fiscal 2012 are for eighteen months ended September 30, 2012 and the financial statements of our

Company for the Fiscal 2008 are for nine months ended March 31, 2008. The financial statements of our Company for the Fiscals 2009, 2010 and

2011 are for Fiscal 2009, 2010 and 2011, respectively. Consequently, our financial statements for these financial years are not comparable due to

different accounting periods and also because of the various schemes of arrangements and acquisitions undertaken by our Company. For further

details, please see the chapter entitled “History and Certain Corporate Matters” at page 169 of this Letter of Offer.

Further, our financial statements for Fiscals 2008 and 2009 reflect the accounting treatments prescribed in the schemes of arrangements given effect to

by our Company as approved by the respective High Courts. For further details of the accounting treatments pursuant to the schemes of

arrangements, please see the chapters entitled “History and Certain Corporate Matters – Scheme of Arrangements” and “Financial Statements”

at pages 173 and F-1, respectively.

40. We are subject to the risk of theft and fraud / embezzlement by our employees, contractors and customers.

We are exposed to the risk of theft and embezzlement by employees, contractors and customers. While we carefully recruit all of our employees

and develop and revise appropriate procedures for the handling and transportation of cash, equipment and intellectual property materials, we

cannot assure you that our employees and customers will not commit any acts of theft or embezzlement against us. The occurrence of any such

acts could adversely affect our reputation, business and financial condition.

28

Further, in the recent past, one of our contractors Laurent & Benton from whom we sourced human resources committed a fraud on the contract

labour employees aggregating approximately `294.20 lakhs. We have issued a legal notice to the said contractor but we have not received a

response from it. Should the contractor not be traced we may be required to compensate Laurent & Benton’s employees, which we may not be

able to recover from Laurent & Benton.

41. If our information technology systems are disrupted, our business and financial condition may be adversely affected.

The day-to-day operations of our cinema theatres involve the use of information technology systems, including the processing of advance

bookings, ticket sales and billing processes. We also rely on our information technology systems for carrying out routine corporate activities,

such as processing of financial information and management of our accounts. Any disruption of our information technology systems may

adversely affect our business, financial condition and results of operations.

42. If there is a dispute or a strike within the Hindi or United States film industry, our business may be adversely affected.

In India, the Hindi film industry was significantly affected by a dispute between multiplex operators and film distributors that led to a strike by

multiplex operators between April 2009 and June 2009. The said strike adversely impacted our ability to exhibit any Hindi films in our

multiplexes. Although the strike was eventually resolved, our domestic theatrical exhibition revenues suffered. Our theatrical exhibition

revenue, on a standalone basis, was significantly lower during the quarter ended June 2009 as compared to the corresponding period in year

2008. We cannot assure you that a strike will not occur in the future or that it will be resolved on terms favourable to us. If such a strike occurs,

our business, financial condition and results of operations could be adversely affected.

In the United States, the film industry was significantly affected by a strike conducted by the United States’ two major writers’ guilds between

November 2007 and February 2008 as a result of the guilds’ dispute with the Alliance of Motion Picture and Television Producers. During and

after this period, the production of certain films was significantly disrupted or completely halted. As a result, the release dates of certain films

were delayed, the production of certain films and their final content were adversely affected and the financing arrangements regarding certain

films were disrupted or terminated. Such a strike could adversely affect the operations of our subsidiary located in the United States, Lowry

Digital, which provides various film and media services to American film productions. We cannot assure you that a strike related to the

American film industry will not occur in the future or that such a strike will be resolved in a manner that does not adversely affect the operations

of Lowry Digital. If such a strike occurs, our business, financial condition and results of operations could be adversely affected.

43. If film distributors delay in providing us films or do not enter into agreements with us for the distribution of their films, our business

and results of operations could be adversely affected.

We rely on film distributors to supply the films that we exhibit at our cinema theatres. We cannot assure you that we will be able to enter into

agreements with all film distributors from whom we wish to source films or that film distributors will supply us films under our agreements in a

timely manner. As a result, we may be unable to exhibit films in our cinema theatres as desired or expected. If film distributors delay in

providing us their films or do not enter into agreements with us for the distribution of their films, our business and results of operations could be

adversely affected.

44. We operate our theatrical exhibition and film and media services businesses in India and overseas, which entails certain risks.

We operate our theatrical exhibition and film and media services businesses in several foreign jurisdictions in addition to India. As of May 31,

2013, we operated our theatrical exhibition business in India and the United States, with 254 screens in India and an additional 185 screens

overseas. In addition, we operate our film post production services through production laboratory in Mumbai and our creative services through

facilities in Burbank, London and Navi Mumbai. As we operate in various jurisdictions around the world, we are subject to laws, rules and

regulations in the jurisdictions in which we operate our theatrical exhibition and film and media services businesses. The laws, rules and

regulations applicable in these jurisdictions generally vary from each other and we may be required to obtain additional certifications or

approval in certain jurisdictions. We may also be required to make changes to the manner in which we conduct our operations to comply with

the applicable laws in these jurisdictions. In the event that we are unable to comply with the requirements under the applicable laws, rules or

regulations of the jurisdictions in which we operate, we may face actions and claims against us. This may have adverse effect our business,

29

results of operations and financial conditions. Further, any failure to manage our overseas business operations effectively or balance our

management’s attention and resources between our Indian and overseas business operations may adversely affect our business, financial

condition and results of operations.

45. We face certain risks related to our handling of inflammable materials, including film rolls.

We work with certain inflammable materials in the course of our business, including film rolls. Despite compliance with requisite industry

safety standards, our operations are subject to hazards associated with the handling of these inflammable materials. If improperly handled or

subjected to unsuitable conditions, these materials could be destroyed and may also cause damage to our properties. The loss of such materials

due to fire could cause us to fail to deliver certain film materials in a timely manner, or at all, which could adversely affect our business,


46. Some viewers or civil society organisations may find the film or television content we exhibit or produce to be objectionable.

It is possible that some viewers in India or overseas may object to certain film or television content exhibited or produced by us based on

religious, political, ideological or any other positions held by such viewers. This is particularly possible with regard to content that is graphic in

nature, including violent or romantic scenes and films that are politically oriented or targeted at a particular segment of the public. Viewers or

civil society organisations, including interest groups, political parties, religious or other organisations may assert legal claims, seek to ban the

exhibition of film at our cinema theatres or television content, protest against us or films in our cinema theatres or television programs, damage

our facilities, disrupt our operations or object in a variety of other ways. The occurrence of any of these risks could damage our reputation and

have an adverse effect on our business, prospects, financial condition and results of operations. The films exhibited by us and television content

that we produce could result in claims being asserted, prosecuted or threatened against us based on a variety of grounds, including, among

others, defamation, hurting religious sentiments, invasion of privacy, negligence, obscenity or facilitating illegal activities, any of which could

have an adverse effect on our business, financial condition and results of operations.

47. Our liabilities may not be fully covered by insurance policies, which may expose us to substantial costs that could adversely affect our


We maintain insurance for each of our properties which we believe is typical in our industry and in amounts which we believe are commercially

appropriate for a variety of risks, including for losses incurred due to terrorism, fire, flood, earthquake allied perils and burglary and loss of

profit due to fire in our cinema theatres. Additionally, we maintain insurance related to commercial general liability, cash and equipment in

transit as well as coverage for various items of equipment. However, such insurance may not be adequate to cover all losses or liabilities that

may arise from our operations, particularly when the loss suffered is not easily quantifiable. Even if we have availed of adequate insurance

cover, we may not be able to successfully assert our claims for any liability or loss under the relevant insurance policies. Additionally, there may

be various other risks or losses for which we are not insured either because such risks are uninsurable or not insurable on commercially

acceptable terms. For example, we do not carry insurance for certain types of losses, such as those due to war. We also do not maintain a key

man insurance policy. Should an uninsured loss occur, we could incur substantial losses. In addition, even if any such loss is insured, we may be

required to pay a significant deductible on any claim for recovery of such a loss prior to our insurer being obligated to reimburse us for the loss,

or the amount of the loss may exceed the limit of our coverage. Further, if an accident resulting in personal injury to a patron or other third party

at one of our cinema theatres occurs, even if we hold sufficient insurance cover for the liability, our reputation may be adversely affected. If an

uninsured loss or a loss in excess of an insured limit occurs, our business, financial condition and results of operations may be adversely

affected. Furthermore, we cannot assure you that in the future we will be able to maintain insurance of the types or at levels which we deem

necessary or adequate.

48. Restrictions on ticket prices imposed in certain states of India may adversely affect our results of operations.

Cinema theatres in Delhi, Punjab, Haryana Tamil Nadu and Andhra Pradesh are subject to regulations under which the ticket prices are required

to be approved by the licensing authority, and such prices may be increased only with the prior sanction of the licensing authority. In Tamil

Nadu and Andhra Pradesh, the minimum and maximum ticket prices are determined based on facilities in the respective cinema theatres.

Further, in Tamil Nadu, we are required to reserve 10.00% of the total approved seating capacity of the cinema theatres for the lowest class

depending on the location of the cinema theatres. For the Fiscal 2011, Fiscal 2012 and for the six months ended March 31, 2013, cinema theatres

in Delhi, Punjab, Haryana, Tamil Nadu and Andhra Pradesh accounted for 23%, 22% and 22%, respectively, of our total theatrical exhibition

revenues. As of May 31, 2013, 26 of the 96 cinema theatres operated by us in India are located in these states, representing 60 out of a total of

30

254 screens in India (including food courts). In the event these restrictions prevent us from increasing the ticket prices as may be required by us,

it may affect the results of our operations.

49. We face competition from other forms of media and entertainment.

We compete for the public's leisure time and disposable income with other forms of entertainment, including, among others, sporting events,

concerts, live theatre and restaurants. The theatrical exhibition industry also faces competition from other forms of out-of-home entertainment,

such as concerts, amusement parks and from other forms of in-home entertainment. We also face competition from other forms of media such as

radio, cable television, newspapers, and magazines. These alternate forms of entertainment compete with the theatrical exhibition of films to

capture the discretionary spending of the patrons and advertisement revenues.

50. We have not entered into definitive agreements to use the Net Proceeds of the Issue.

We intend to use the Net Proceeds of the Issue for (i) prepayment/ repayment of our loans availed from our various entities including our

Promoters and (ii) general corporate purposes, as described in the chapter entitled “Objects of the Issue” at page 81 of this Letter of Offer.

Pending utilization of the Issue Proceeds as described in this Letter of Offer, we intend to temporarily invest the funds in high quality interest

bearing liquid instruments, including deposits with banks and investments in money market mutual funds and other financial products and

investment grade interest bearing securities. Such investments would be in accordance with the investment policies or investment limits

approved by our Board of Directors from time to time. Our management will have the discretion to revise our business plan from time to time

and consequently our funding requirement and deployment of funds may also change.

51. Some of our Group Companies have incurred losses.

As set forth below, some of our Group Companies have incurred losses (as per their unconsolidated financial statements). (` in lakhs)

Sr. No. Name of the Group Company Profit /

Loss after

tax for the

financial

year 2011

Profit /

Loss after

tax for the

financial

year 2012

Profit / Loss

after tax for

the

financial

year 2013

1. Adhar Project Management & Consultancy Private Limited 10.84 (0.54) (0.31)

2. Indian Commodity Exchange Limited (3,122.00) (2,556.00) (1,026.03)

3. Reliance Alternative Investments Services Private Limited 4.19 (2.84) (0.03)

4. Reliance Asset Management (Malaysia) Sdn. Bhd. a* (912.81) (1,038.90) (947.40)

5. Reliance Asset Management (Singapore) Pte Limitedb* (732.10) (1,519.09) (1,188.30)

6. Reliance Capital (Singapore) Pte. Limitedd (5.68) (9.17) (2.56)

7. Reliance Capital Asset Management (UK) Plc.c* (623.16) (603.75) (636.22)

8. Reliance Composite Insurance Broking Limited 605.79 (226.36) (933.14)

9. Reliance Exchangenext Limited (108.58) (146.94) (2548.54)

31

Sr. No. Name of the Group Company Profit /

Loss after

tax for the

financial

year 2011

Profit /

Loss after

tax for the

financial

year 2012

Profit / Loss

after tax for

the

financial

year 2013

10. Reliance General Insurance Company Limited (31,160.17) (34,319.93) (9276.92)

11. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private

Limited)

(0.16) (0.16) (809.07)

12. Reliance Share & Stock Brokers Private Limited (133.13) (121.05) (3251.73)

13. Reliance Spot Exchange Infrastructure Limited (648.47) (550.98) (128.45)

14. Reliance Venture Asset Management Private Limited (215.23) (106.46) (0.32)

15. Reliance Wealth Management Limited (93.78) (286.60) (308.90)

16. Viscount Management Services Limited (7,144.15) (7,996.66) (16959.00)

17. Indian Agri Services Private Limited NA (6.60) (0.04)

18. Reliance CWT India Limited (0.39) (0.58) (0.21)

a Losses in RM. The average exchange rate for the year ended March 31, 2010, March 31, 2011, March 31, 2012 & March 31, 2013 used for

conversion are RM1=` 13.69, 14.47, 15.62 and 17.54 respectively. b Losses in SGD. The average exchange rate for the year ended March 31, 2010, March 31, 2011 , March 31, 2012 & March 31, 2013 used for

conversion is SG$ 1 = ` 33.25, 34.21, 38.15 & 42.38 respectively. c Losses in Pound. The average exchange rate for the year ended March 31, 2010, March 31, 2011 , March 31, 2012 & March 31, 2013 used for

conversion is £1= ` 75.72, 70.87 ,76.44& 85.84 , respectively. d. Losses in USD. The average exchange rate for the year ended March 31, 2010, March 31, 2011 , March 31, 2012 & March 31, 2013, used for

conversion is $1= ` 54.17, 45.98,45.27& 55.69 respectively.

*Differences due to conversion of IFRS financial to Indian GAAP

Further, our listed Group Company has also suffered losses (as per their unconsolidated financial statements): (` in lakhs)

Name of the Group Company Loss After Tax

for the financial

year 2010(1)

Loss After Tax

for six months ended

September 30, 2010(1)

Loss After Tax

for six months

ended March 31,

2011(2)

Loss After Tax

for 12 months

ended March 31,

2012

Loss After Tax

for six months

ended September

30, 2012(3)

Reliance Broadcast Network Limited (7,612.67) (2,491.73) (1,149.68) (1,952.53) (2,670.15)

(1) Pursuant to the board resolution dated October 21, 2010, Reliance Broadcast Network Limited closed its books of accounts as of September 30, 2010 and accordingly

the financial year was of six months ending September 30, 2010.

(2) Pursuant to the board resolution dated May 5, 2011, Reliance Broadcast Network Limited closed its books of accounts as of March 31, 2011 and accordingly the

financial year was of six months ending March 31, 2011.

(3) Based on unaudited financials subject to limited review

For details, please see the chapter entitled “Our Group Companies” at page 208 of this Letter of Offer.

32

52. We have experienced negative cash flows during previous fiscals and any negative cash flows in the future could adversely affect our

financial condition and the trading price of our Equity Shares.

As per our audited restated financial statements, we have negative cash flow from operations of ` 7,320.59 lakhs on a consolidated basis and `

470.30 lakhs on a standalone basis. The negative cash flows from operations are primarily on account of losses incurred by our Company. The

negative cash flows in the previous periods, as per our audited restated financial statements, are as set forth in the tables below:

Standalone: (` in lakhs)

Six months ended

March 31, 2013

Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009

Net cash generated

from/(used in) Operating

Activities

(470.30) (510.48) NA NA (13,864.35)

Net cash generated from /

(used in) investing activities

(8,216.10) (15,611.58) (7,987.20) (51,893.66) (2,062.80)

Net cash flow (used in) /

generated from financing

activities

NA NA NA NA NA

Only negative cash flows have been disclosed. Positive cash flow during any fiscal has been indicated as “NA”.

Consolidated: (` in lakhs)

Six months ended

March 31, 2013


Net cash generated

from/(used in)

Operating Activities

(7,320.59) (8,288.22) (5,216.62) NA NA

Net cash generated

from / (used in)

investing activities

(1,307.14) (3,161.67) NA (46,562.73) (23,791.91)

Net cash flow (used in) /

generated from

financing activities

NA NA NA NA NA

Only negative cash flows have been disclosed. Positive cash flow during any fiscal has been indicated as “NA”.

Any negative cash flows in the future could adversely affect our financial condition and the trading price of the Equity Shares.

53. We have entered into, and may, in future, enter into, related party transactions.

We have entered into, and may in the future enter into, certain transactions with our Promoters and Group Companies, including companies

engaged in our line of business or in related areas. These transactions were primarily made in the ordinary course of business at arm’s length. It

is likely that we will continue to enter into further related party transactions in the future. For details of the related party transactions, please see

the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.

54. We may raise additional equity capital which may dilute your existing shareholding.

Our growth and business strategies may require us to raise additional capital. We may raise such additional capital through a further issue of

securities. Our Company’s shareholders have at the annual general meeting held on December 24, 2012 approved a qualified institutions

placement (“QIP”) of equity shares or instruments that are convertible into or exchangeable with equity shares, in one or more tranches, upto an

aggregate amount not exceeding `50,000 lakhs, which as per Regulation 89 of the SEBI (ICDR) Regulations, can happen only once our

networth becomes substantially positive, as the aggregate amount of the QIP cannot exceed five times of our networth as per the audited balance

33

sheet of the previous financial year. Any issuance of Equity Shares to persons other than the Equity Shareholders will dilute your existing equity

shareholding. Further, we may obtain a funding from our Promoters through an equity infusion. This will also dilute your shareholding.

External Risk Factors

55. The Indian film exhibition sector is highly regulated and changes in regulations may have an adverse effect on our business.

The Indian film exhibition sector is highly regulated by both the central and the state governments. These regulations and policies are exhaustive

and apply to all aspects of building and safety requirements, specify preconditions to be met for licensing requirements, show tax and

entertainment tax registrations and the pre-conditions for grant of exemptions from the payment of entertainment tax. These regulations and

policies have an impact on our ability to operate cinemas and the viability of our cinemas in different states. Changes in these regulations may

have an adverse effect on our business and may render our business unviable by increasing compliance requirements and compliance costs.

56. The transition to IFRS converged Indian Accounting Standards in India is still unclear and we may be negatively impacted by such

transition.

The Ministry of Corporate Affairs, Government of India, has recently notified that the IFRS converged Indian Accounting Standards (“IND

AS”) will be implemented in a phased manner. It was also mentioned that the date of implementation of IND AS will be notified by the MCA at

a later date and such date is yet to be notified. Additionally, IND AS has fundamental differences with IFRS and hence financial statements

prepared under IND AS may be substantially different from financial statements prepared under IFRS. There can be no assurance that the

financial condition, results of operations, cash flow or changes in shareholder’s equity of our Company will not appear materially worse under

IND AS than under Indian GAAP. As our Company adopts IND AS reporting, it may encounter difficulties in the ongoing process of

implementing and enhancing its management information systems. Moreover, there is increasing competition for the small number of IFRS

experienced accounting personnel available once Indian companies begin to prepare IND AS financial statements. There can be no assurance

that the adoption of IND AS by our Company will not adversely affect its reported results of operations or financial condition and any failure to

successfully adopt IND AS in accordance with the prescribed timelines could have a material adverse effect on our financial position and results

of operations.

57. Fluctuation of the Rupee against foreign currencies may have an adverse effect on our results of operations.

While we report our financial results in Indian rupees, portions of our total income, expenses and investments are denominated, generated or

incurred in currencies other than Indian rupees. Such foreign currencies include the USD, GBP, MYR and EUR. To the extent that our income,

expenditures and investments are not denominated in Indian rupees, exchange rate fluctuations may have an adverse effect on our results of

operations and financial condition.

Further, our future capital expenditures and investments may be denominated in currencies other than Indian rupees. Therefore, a decline in the

value of the Indian rupee against such other currencies could increase the Indian rupee cost of incurred on such expenditures and investments.

The exchange rate between the Indian rupee and various foreign currencies has varied substantially in recent years and may continue to fluctuate

significantly in the future. The consolidation of our overseas subsidiaries will also expose us to translation risks which may significantly impact

our results of operations and financial condition.

Risks Relating to India

58. Political instability or changes in the Government of India could adversely affect economic conditions in India and consequently our

business.

We are incorporated in India, derive a significant portion of our revenues from India and a significant portion of our assets are located in India.

Consequently, our performance and the market price and liquidity of the Equity Shares may be affected by changes in exchange rates and

controls, interest rates, Government policies, taxation, social and ethnic instability and other political and economic developments affecting

India. The Government has traditionally exercised and continues to exercise significant influence over many aspects of the economy. Our

business and the market price and liquidity of the Equity Shares may be affected by interest rates, changes in Government policy, taxation,

social and civil unrest and political, economic or other developments in or affecting India. Since 1991, successive governments have pursued

policies of economic and financial sector liberalisation and deregulation and encouraged infrastructure projects. The Government in recent years

34

has announced policies and taken initiatives that support the economic liberalisation programme pursued by previous governments. The

Government may change policies regarding the rate of economic liberalisation, banks and financial institutions and the film industry, foreign

investment and other matters affecting investment in the Equity Shares. A significant change in the Government's policies in the future, in

particular, those relating to the film industry in India, could affect business and economic conditions in India, and could also adversely affect our


59. If communal disturbances, riots or terrorist attacks occur in India, or if regional hostilities increase, our business, financial condition

and results of operations may be adversely affected.

India has experienced communal disturbances, riots and terrorist attacks in recent years. If such events recur, our operational and marketing

activities may be adversely affected, resulting in a decline in our income. The Asian region has, from time to time, experienced instances of civil

unrest and hostilities among neighbouring countries. Hostilities and tensions may occur in the future and on a wider scale. Military activity or

terrorist attacks in India, such as the attacks in Mumbai in November 2008, as well as other acts of violence or war could influence the Indian

economy by creating a perception that investments in India involve higher degrees of risk. Events of this nature in the future, as well as social

and civil unrest within other countries in Asia, could influence the Indian economy and could have an adverse effect on the market for securities

of Indian companies, including the Equity Shares.

60. A slowdown in the economic growth in India could adversely affect our business.

We derive most of our revenues from operations in India and consequently, our performance and growth is dependent in large part on the state

of the Indian economy. Any slowdown in the Indian economy, and in particular in the discretionary spending habits of our customers, could

adversely affect our business.

61. A downgrade of India’s sovereign debt rating may adversely affect our ability to raise additional debt financing.

India's sovereign debt rating could be downgraded due to various factors, including changes in tax or fiscal policy, which are outside our control.

Such downgrading could cause a change in interest rates or other commercial terms and could adversely affect our ability to raise additional

financing as well as our capital expenditure plans, business and financial performance. A decline in this reserve could affect the valuation of the

Indian Rupee and could result in reduced liquidity and higher interest rates, which could adversely affect the availability of financing to us.

62. Natural disasters that could severely disrupt the normal operation of our business.

Some of the countries in which we operate have, in the past, experienced natural disasters, such as tsunamis and earthquakes. If any of our

facilities were to be damaged by a natural disaster, our business operations could be interrupted or delayed, which could adversely affect our


63. An outbreak of an infectious disease or any other serious public health concerns in Asia or elsewhere could adversely affect our

business.

The outbreak of an infectious disease in Asia or elsewhere or any other serious public health concern, such as swine influenza, could have a

negative impact on the global economy, financial markets and business activities worldwide, which could adversely affect our business. While

we have not been adversely affected by such outbreaks in the past, we cannot assure you that a future outbreak of an infectious disease among

humans or animals or any other serious public health concerns will not have an adverse effect on our business.

64. Our ability to raise foreign capital may be constrained by Indian law.

As an Indian company, we are subject to exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our

financing sources for our operations and could constrain our ability to obtain financing on favourable terms and refinance existing indebtedness.

In addition, we cannot assure you that required approvals will be granted to us without onerous conditions, or at all. Limitations on foreign debt

may have an adverse effect on our business, financial condition and results of operations.

35

65. Our business and activities are regulated by the Competition Act, 2002.

The Parliament has enacted the Competition Act, 2002, as amended, (“Competition Act”) for the purpose of preventing practices having an

adverse effect on competition in the relevant market in India under the auspices of the Competition Commission of India (“CCI”). Under the

Competition Act, any arrangement, understanding or action whether or not formal or informal which causes or is likely to cause an appreciable

adverse effect on competition is void and attracts substantial penalties. Any agreement among competitors which directly or indirectly involves

determination of purchase or sale prices, limits or controls production, or shares the market by way of geographical area or number of customers

in the relevant market is presumed to have an appreciable adverse effect on competition in the relevant market in India and shall be void.

Further, the Competition Act prohibits abuse of dominant position by any enterprise. If it is proved that the contravention committed by a

company took place with the consent or connivance or is attributable to any neglect on the part of, any director, manager, secretary or other

officer of such company, that person shall be guilty of the contravention and liable to be punished.

On March 4, 2011 the Government of India notified and brought into force the combination regulation (merger control) provisions under the

Competition Act with effect from June 1, 2011. The combination regulation provisions require that acquisition of shares, voting rights, assets or

control or mergers or amalgamations which cross the prescribed asset and turnover based thresholds shall be mandatorily notified to and pre-

approved by the CCI. In addition, on May 11, 2011, the CCI issued the final Competition Commission of India (Procedure in regard to the

transaction of business relating to combinations) Regulations, 2011 which sets out the mechanism for implementation of the combination

regulation provisions under the Competition Act. It is unclear as to how the Competition Act and the CCI will affect the business environment in

India.

If we are adversely impacted, directly or indirectly, by any provision of the Competition Act, or its application or interpretation, generally or

specifically in relation to any merger, amalgamation or acquisition proposed by us, or any enforcement proceedings initiated by the CCI, either

suo moto or pursuant to any complaint, for alleged violation of any provisions of the Competition Act it may have a material adverse effect on

our business, financial condition and results of operations.

Risks Relating to the Investment in the Equity Shares

66. Our ability to pay dividends in the future will depend upon our future earnings, financial condition, cash flows, working capital

requirements, capital expenditures and other factors.

The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital

requirements, capital expenditures and other factors. There can be no assurance that we will have distributable funds in future periods or that we

will pay dividend even if we have distributable profits.

67. The price of our Equity Shares may be volatile.

The trading price of our Equity Shares may fluctuate after this Issue due to a variety of factors, including our results of operations and the

performance of our business, competitive conditions, general economic, political and social factors, the performance of the Indian and global

economy and significant developments in India’s fiscal regime, volatility in the Indian and global securities market, performance of our

competitors, the Indian film industry and the perception in the market about investments in the film industry, changes in the estimates of our

performance or recommendations by financial analysts and announcements by us or others regarding contracts, acquisitions, strategic

partnerships, joint ventures, or capital commitments. In addition, if the stock markets experience a loss of investor confidence, the trading price

of our Equity Shares could decline for reasons unrelated to our business, financial condition or operating results. The trading price of our Equity

Shares might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. Each of

these factors, among others, could adversely affect the price of our Equity Shares.

68. Any future issuance of Equity Shares by us or sales of the Equity Shares by any of our significant shareholders may adversely affect the

trading price of the Equity Shares.

Any future issuance of Equity Shares by us, such as a primary offering or pursuant to a preferential allotment, may dilute your shareholding in

us, adversely affect the trading price of our Equity Shares and could affect our ability to raise capital through an issuance of our securities. In

addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares.

36

Additionally, the disposal of Equity Shares by any of our significant shareholders or our promoters, any future issuance of Equity Shares by us

or the perception that such issuances or sales may occur may significantly affect the trading price of the Equity Shares. We cannot assure you

that we will not issue Equity Shares or that such shareholders will not dispose of, pledge or encumber their Equity Shares in the future.

69. The movements in the price of the Equity Shares may be subject to restrictions from time to time, which may adversely affect a

shareholder’s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.

We are subject to a daily circuit breaker imposed on listed companies by all stock exchanges in India which does not allow transactions beyond

certain volatility in the price of the Equity Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers

generally imposed by SEBI on Indian stock exchanges. The percentage limit on our circuit breaker is set by the stock exchanges based on the

historical volatility in the price and trading volume of the Equity Shares. The stock exchanges are not required to inform us of the percentage

limit of the circuit breaker from time to time, and may change it without our knowledge. This circuit breaker would effectively limit the upward

and downward movements in the price of the Equity Shares. As a result of this circuit breaker, the ability of shareholders to sell the Equity

Shares or the price at which shareholders may be able to sell their Equity Shares may be adversely affected.

70. There is no guarantee that the Equity Shares will be listed on the Stock Exchanges in a timely manner or at all, and any trading

closures at the Stock Exchanges may adversely affect the trading price of our Equity Shares.

In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued pursuant to the Issue will not be

granted until after the Equity Shares have been issued and allotted. Approval for listing and trading will require all relevant documents

authorising the issuing of Equity Shares to be submitted. There could be a failure or delay in listing the Equity Shares on the Stock Exchanges.

Any failure or delay in obtaining the approval would restrict your ability to dispose of your Equity Shares.

71. You may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares.

Capital gains arising from the sale of the Equity Shares are generally taxable in India. Currently, any gain realised on the sale of our shares on a

stock exchange held for more than 12 months will not be subject to capital gains tax in India if the securities transaction tax (“STT”) has been

paid on the transaction. The STT will be levied on and collected by an Indian stock exchange on which our shares are sold. Any gain realised on

the sale of our shares held for more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange and as a

result of which no STT has been paid, will be subject to capital gains tax in India. Further, any gain realised on the sale of our shares held for a

period of 12 months or less will be subject to capital gains tax in India. Capital gains arising from the sale of our shares will be exempt from

taxation in India in cases where an exemption is provided under a treaty between India and the country of which the seller is a resident.

Generally, Indian tax treaties do not limit India’s ability to impose tax on capital gains. For more information, please see the chapter entitled

“Statement of Tax Benefits” at page 131 of this Letter of Offer. However, capital gains on the sale of our Equity Shares purchased in the Issue by

residents of certain countries may not be taxable in India by virtue of the provisions contained in the taxation treaties between India and such

countries. As a result, residents of other countries may be liable for tax in India as well as in their own jurisdictions on gains arising from a sale

of Equity Shares.

72. You will not be able to sell immediately on the Stock Exchanges any of the Equity Shares you purchase in the Issue.

The Equity Shares will be listed on the Stock Exchanges. Pursuant to Indian regulations, certain actions must be completed before the Equity

Shares can be listed and trading may commence. Investors’ book entry, or “demat”, accounts with depository participants in India are expected

to be credited within two working days of the date on which the basis of allotment is approved by the Stock Exchanges. Thereafter, upon receipt

of final approval from the Stock Exchanges, trading in the Equity Shares is expected to commence within seven working days of the date on

which the basis of allotment is approved by the Designated Stock Exchange. We cannot assure that the Equity Shares will be credited to

investors’ demat accounts, or that trading in the Equity Shares will commence, within the time periods specified above.

73. Our Company’s scrip has been moved to the trade-to-trade segment of the BSE and NSE. BSE and NSE have moved our Company’s scrip from the normal trading segment of the exchanges to the restricted trading segment, i.e., ‘trade-

to-trade’ segment, with effect from July 19, 2013. Consequently, selling / buying of shares in the scrip results into giving / taking delivery of

shares at the gross level and no intraday netting off / square-off facility is permitted. Further, a circuit filter of 5% or less will be applicable. This

could have an impact on the volume of shares traded which would impact liquidity and, potentially, the price of our Equity Shares.

37

Prominent notes

1. Issue of upto 14,99,10,052 Equity Shares at a premium of ` 35 per Equity Share for an amount not exceeding `59,964.02 lakhs on a

rights basis to the existing Equity Shareholders of our Company in the ratio of 13 Equity Share(s) for every 4 fully paid-up Equity

Share(s) held by the existing Equity Shareholders on the record date, that is on Wednesday, July 24, 2013. The Issue Price is 8 times

the face value of the Equity Shares.

2. As per our audited restated financial statements, our net worth as at March 31, 2013 was ` (92,707.78) lakhs on a consolidated basis

and `(47,014.66) on a stand alone basis, as per our restated financial statements prepared under Indian GAAP.

3. There has been no financing arrangement whereby our Promoter Group, directors of our Promoters, our Directors and their relatives

have financed the purchase by any other person of securities of our Company other than in normal course of the business of the

financing entity during the period of six months immediately preceding the date of filing of this Letter of Offer.

4. Our Company has been in compliance the provisions of the Equity Listing Agreement, including Clauses 35, 40A, 41 and 49; the

provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and SEBI (Prohibition of Insider Trading

Regulations), 1992 during the financial year immediately preceding the date of filing this Letter of Offer.

5. As per our audited restated financial statements, set out below are the related party transactions entered into by us.

(` in lakhs)

Sr.

No.

Particulars Transaction

Amount

Transaction

Amount

Transaction

Amount

Transaction

Amount

Transaction

Amount

Transaction

Amount

Six months

ended March

31, 2013

Fiscal 2012 Fiscal 2011 Fiscal 2010 Fiscal 2009 Fiscal 2008

1. Holding

Companies

-

- - - - 546.38

2. Significant

Shareholders, key

managerial

personnel and

their relatives 11.80 35.80 10.80 17.80 7.80 179.70

3. Enterprises over

which Company

has significant

influence /

associates 8,198.31 (23.30) 15.80 262.90 414.37 753.51

For further details about our related party transactions, please see the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.

6. Details of the transaction between our Company and our Group Companies and between our Company and our Subsidiaries during

Fiscal 2012 and the six months ended March 31, 2013, along with the nature of transactions and the cumulative value of such

transactions are set out below:

38

Sr.

No.

Name of the Party

Fiscal 2012

Amount (` in lakhs) Nature of transaction

1. Reliance General Insurance Company Limited 201.02 Insurance

2. Reliance Equity Advisors Limited 0.31 Theatrical exhibition business revenue

3. Reliance Life Insurance Company Limited 89.77 Theatrical exhibition business revenue

4. Reliance Broadcast Network Limited 198.95 Theatrical exhibition business revenue

Total 490.05

Sr.

No.

Name of the Party

Six months ended March

31, 2013

Amount (` in lakhs) Nature of transaction

1. Reliance General Insurance Company Limited 1.28 Theatrical exhibition business revenue

2. Reliance Broadcast Network Limited 6.92 Theatrical exhibition business revenue

3. Reliance Capital Asset Management Limited 27.62 Theatrical exhibition business revenue

4. Reliance Capital Limited 0.75 Theatrical exhibition business revenue

5. Reliance General Insurance Company Limited 1.19 Insurance

Total 37.76

7. Investors may contact the Lead Manager for complaints, information or clarifications pertaining to the Issue.

39

SECTION III: INTRODUCTION

SUMMARY OF INDUSTRY

The following is a summary of the industry overview. This summary should be read in conjunction with, and is qualified in its entirety by, more

detailed information in the chapter entitled “Industry Overview” at page 138 of this Letter of Offer.

We have relied on websites and publicly available documents from various sources. The data may have been re-classified by us for the purpose

of presentation. Neither we nor any other person connected with the Offer has independently verified the information provided in this chapter.

Industry sources and publications, referred to in this section, generally state that the information contained therein has been obtained from

sources generally believed to be reliable but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability

cannot be assured, and, accordingly, investment decisions should not be based on such information.

Overview of the Indian Economy

India is one of the fastest growing economies in the world with a rapidly expanding entertainment and media (“E&M”) industry.

According to the Ministry of Statistics and Programme Implementation’s revised estimates, India’s GDP at factor cost (at constant 2004-2005

prices) registered a lower growth of 4.96% during Financial Year 2013, as compared with 6.21% in Financial Year 2012, largely attributable to

dismal performance of agriculture sector 1.79% during the Financial Year 2013 as compared to 3.65% in Financial Year 2012 and service sector

6.59% in Financial Year 2013 as compared to 8.20% in Financial Year 2012. However of the larger countries of the world only China and

Indonesia has grown faster than India in the Financial Year 2013. (Source http://indiabudget.nic.in “Budget Speech of FM for Financial Year

13-14”)

The following table illustrates India's real GDP growth between financial years 2009 and 2012 (at factor cost at constant 2004-05 prices):

Financial Year 2009 Financial Year 2010 Financial Year 2011 Financial Year 2012 Financial Year 2013

6.7% 8.6% 9.3% 6.2% 5.0%

Source: http://mospi.nic.in “Summary of macroeconomic aggregates at constant (2004-05) prices, 1950-51 to 2012-13”

Overview of the Indian Entertainment and Media Industry

The Indian E&M industry (primarily comprised, among others, of film, television, print media, animation and visual effects VFX, radio and

music) has witnessed steady growth in recent years and is estimated to have reached `72,80,000 lakhs in 2011. The Indian E&M industry is

projected to grow at a compound annual growth rate (“CAGR”) of 14.90% from the year 2011 to the year 2016 to reach `1,45,70,000 lakhs.

The Indian E&M industry has grown at a CAGR of 9.09% between 2007 and 2011. (Source: Federation of Indian Chambers of Commerce and

Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)

The following factors are expected to contribute to further growth of the Indian E&M industry:

the continued growth and development of the Indian economy;

favourable demographic characteristics and trends in India;

the cultural diversity of the Indian population;

the internationalisation of the Indian E&M industry;

the availability of popular content; and

digitisation of content.

The following table provides the expected sizes and growth rates of the various segments of the Indian E&M industry for the years 2011 through

2016:

http://mospi.nic.in/Mospi_New/upload/item11-St50-51-constant.xls

40

(` lakhs)

E&M Industry

Segment 2011 2012P 2013P 2014P 2015P 2016P

CAGR (2011

to 2016)

T.V. 32,90,000 38,00,000 43,50,000 51,40,000 61,80,000 73,50,000 17.00%

Print 20,88,000 22,60,000 24,68,000 27,00,000 29,49,000 32,34,000 9.00%

Film 9,29,000 10,00,000 10,97,000 12,11,000 13,45,000 15,03,000 10.00%

Radio 1,15,000 1,30,000 1,60,000 2,00,000 2,40,000 2,95,000 21.00%

Music 90,000 1,00,000 1,13,000 1,31,000 1,54,000 1,82,000 15.00%

O.O.H. 1,78,000 1,95,000 2,15,000 2,36,000 2,60,000 2,90,000 10.00%

Animation 3,10,000 3,63,000 4,30,000 5,11,000 6,10,000 6,90,000 17.00%

Gaming 1,30,000 1,80,000 2,30,000 2,90,000 3,70,000 4,60,000 29.00%

Digital Advertising 1,54,000 1,99,000 2,58,000 3,35,000 4,37,000 5,70,000 30.00%

Total 72,84,000 82,27,000 93,21,000 1,07,54,000 1,25,45,000 1,45,74,000 14.90% *P=Projected

(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)

41

SUMMARY OF BUSINESS

The information in this section is qualified in its entirety by, and should be read together with, the more detailed financial and other information

included in this Letter of Offer, including the information contained in the sections “Industry Overview”, “Risk Factors”, “Business” and

“Management’s Discussion and Analysis on Results of Operations and Financial Conditions” on pages 138, 11, 149 and 234, respectively.

The following is a summary of our business. This summary should be read in conjunction with, and is qualified in its entirety by, more detailed

information in the chapter entitled “Business” at page 149 of this Letter of Offer.

Overview

We are one of India’s leading entertainment and media (“E&M”) companies with a presence across several businesses such as theatrical

exhibition of films, film and media services and television content production and distribution. Our headquarters are located in Mumbai and we

have operations across 78 cities and towns in India and internationally, in, the UK and the United States.

Our theatrical exhibition business is our largest source of revenue. We operate one of India’s largest cinema chains, under the brand ‘BIG

Cinemas’, with 254 screens in India (including 16 screens which are only managed by our Company) and an additional 185 screens in the

United States (including 116 screens which are only managed by our Company) as of May 31, 2013. During Fiscal 2012, BIG Cinemas

(excluding customers of screens which are only managed by our Company) catered to approximately 502 lakhs and 74 lakhs consumers in India

and overseas, respectively and approximately 144 lakhs consumers in India for the six months ended March 31, 2013 March 31, 2013 and 15

lakhs consumers overseas for the six months ended March 31, 2013.

Our film and media services business comprising production services, post-production services and media and creative services for films and

television is our second largest source of revenue, which comprises:

Production services: We lease sound stages, shooting floors, standard and high definition multi-camera equipment and other related

equipment to television and film production companies.

Post-production services: We process and trade film negatives at our laboratory located in Film City, Mumbai. Our 4K DI laboratory

located in Film City, Mumbai undertakes quality enhancement of film and television content through digital techniques.

Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content to 3D and CGI services through

our wholly owned subsidiary, Reliance MediaWorks Entertainment Services Limited. In addition, our wholly owned subsidiaries

located in United States and UK, Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks (UK) Limited, respectively,

are engaged in the business of digital image correction, film restoration and film processing.

We operate our film post production services through our production laboratory in Mumbai and our creative services through facilities in

Burbank (United States), London (UK) and Navi Mumbai (India). Films processed at our laboratory in Mumbai have won, among others, 15

national awards for cinematography and our Company’s film processing facilities have been certified by Kodak Imagecare, an internationally

recognised quality certification program, for each of the years beginning 2007. We were among four companies to receive the “Judges Award

for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in 2010. In August 2011, our Company received a

patent for an innovation – “System and method for removing semi-transparent artifacts from digital images caused by contaminants in the

camera’s optical path”. We won the Scientific and Technical Award, 2012 at the Academy of Motion Picture, Arts and Sciences in 2012, for

the development of a unique and efficient system for the reduction of noise and other artefacts, thereby providing high quality images required

by the film making process.

As a part of our long term growth strategy of asset creation, during the previous five years, we have established:

a business process outsourcing (BPO) facility at Navi Mumbai;

post-production facilities for television commercials and broadcast; and

a DI Lab.

42

Further, we have purchased broadcast and film cameras. We have also increased the number of screens we operate. This has been achieved

organically and has enhanced our reach in terms of exhibition business and also enabled us to strengthen our capabilities in post-production

services and creative services divisions.

are also in the process of establishing approximately 2,00,000 square feet studio located in Film City, Mumbai with facilities for shooting

films, television shows and television commercials, which we believe meets international standards. This studio aims to provide a one-stop

solution for all production needs for domestic and international clients. When completed, the studio is expected to have three studio

buildings with eight sound stages with appropriate noise control and other features. A part of the studio constituting one studio building

with three sound stages is in operation since January 2011. We expect to complete the remaining portion of the studio by December 2013.

We are also engaged in the business of television content production through our subsidiary, Big Synergy Media Limited, under the brand

“BIG Synergy”, which primarily produces non-fiction programmes in addition to adapting international programme formats for Indian

viewers. We have produced shows such as Kaun Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum, India’s Got

Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. We also selectively distribute films.

For the six months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, our restated consolidated net loss after tax was ` 34,044.77 lakhs, `

91,016.62 lakhs and ` 32,796.95 lakhs, respectively and our standalone net loss after tax was ` 27,593.15 lakhs, ` 70,356.34 lakhs and `

24,348.00 lakhs, respectively. For the six months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, our consolidated total income was `

36,637.80 lakhs, ` 125,486.90 lakhs and ` 85,026.20 lakhs, respectively and our standalone total income was ` 24,026.10 lakhs, `

80,454.80 lakhs and ` 54,287.40 lakhs respectively.

Our Competitive Strengths

We believe the following are our key competitive strengths:

Strong reputation and brand in the E&M sector

We believe that we have established a strong reputation and brand in the E&M sector. We have rebranded our theatrical exhibition and our

television content production businesses as “BIG Cinemas” and “BIG Synergy”, respectively. This rebranding was undertaken in order to create

a single E&M brand, “BIG”.

We have received various awards for our theatrical exhibition business, including “Multiplex of the Year” for the year 2012 at Star Retail

Awards, “Best Cinema Chain” for the year 2012 ZEE ETC Business Awards, “Most Admired Innovative Concept of the Year” at the Images

Retail Awards 2010 for our Ciné Diner theatre exhibition concept, “Most Admired Retailer of the Year: Entertainment” award at the India

Retail Awards in 2009, the “Exhibitor of the Year” award at the CineAsia 2008 awards and the “Retailer of the Year” in the ‘Entertainment &

Fun’ category at the India Retail Summit in 2007. The Silent National Anthem campaign launched by Big Cinemas has secured a silver lion in

the PR Lions category and two bronze lions for Best Use of Broadcast in a Promotional Campaign and Corporate Image & Information, Films

categories in 2011.

BIG Synergy, under which we produce television content, has produced television shows such as Kaun Banega Crorepati, Kya Aap Paanchvi

Paas Se Tez Hain, Dus Ka Dum, India’s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. Many of these shows have

received high viewer ratings and received awards in various categories.

Our Academy Award winner wholly owned subsidiary Lowry Digital, we believe is one of the leading digital image correction and restoration

facilities in the world. Lowry Digital’s clients include industry leaders such as Walt Disney Pictures and Television and Warner Bros.

Entertainment Inc. Lowry Digital’s facility has provided image enhancement and restoration services to approximately 621 films as of May 31,

2013 and has worked on classics such as Casablanca, Singin’ in the Rain, Sunset Boulevard and a number of Walt Disney Pictures & Television

classics such as Cinderella, Bambi, George of the Jungle, Snow White, Fantasia, Tron, Tangled, Winnie the Pooh, Beauty and the Beast and 101

Dalmatians.

We invested 30% in capital of Galloping Horse America LLC. Consequently, Galloping Horse America LLC has been renamed Galloping

Horse-Reliance LLC. Galloping Horse-Reliance LLC has acquired certain assets of Digital Domain Media Group Inc (DDMG), an Academy

43

Award-winning digital production studio in Hollywood. We believe that this association strengthens our position substantially as a major service

provider for Hollywood studios as also demonstrates our quality and efficient workflow processes as well as strong brand repute.

We believe that our longstanding presence in the film processing business has made us one of the important operators in the Hindi film category

in addition to being a key operator in certain regional language films. Films processed at our laboratory located in Mumbai have won, among

others, 15 national awards for cinematography and our film processing facilities have been certified by Kodak Imagecare, an internationally

recognised quality certification program, for each of the years beginning 2007.

We believe we have established a strong reputation and brand through the quality of our products and services which have obtained industry

recognition and customer satisfaction. We believe that our strong reputation and brand differentiates us from our competitors.

Demonstrated ability to expand our operations both organically and inorganically

We have created a global E&M company that is capable of operating across the entire E&M business value chain. Since the Reliance Group

acquired control of our Company in the financial year 2006, we have grown and diversified our business. Our revenues have grown from

`36,296.74 lakhs in Fiscal 2008 to `1,25,486.90 lakhs in Fiscal 2012. Currently, we have diversified service offering across several businesses,

such as theatrical exhibition of films, film and media services and television and content production and distribution.

Our theatrical exhibition business has expanded from 32 screens across five cities as of March 31, 2006 to 439 screens across more than 99

towns and cities in India and the United States as of May 31, 2013. Of the 439 screens 355 screens are equipped with digital projectors. The

number of customers our Big Cinemas brand (excluding customers of screens which are only managed by our Company) catered to in India

increased from 126 lakhs in Fiscal 2008 to 576 lakhs across India and overseas in Fiscal 2012. Big Cinemas (excluding customers of screens

which are only managed by our Company) had approximately 144 lakhs customers in India for the six months ended March 31, 2013 and 15

lakhs customers overseas for the six months ended March 31, 2013.

We have also demonstrated our ability to acquire companies located in India and overseas in order to consolidate our position as a company that

is capable of operating across the entire E&M business value chain. For example, we acquired Rave Entertainment Private Limited (“Rave”),

Synergy Communications Private Limited (now, Big Synergy Media Limited), iLab and Lowry Digital between the financial years 2007 and

2010 and the assets and brand “Digital Domain” belonging to DDMG, through Galloping Horse-Reliance LLC, an associate entity, in financial

year 2012. The acquisition of Rave helped us in establishing our footprint in the North Indian cinema territories, while Synergy

Communications Private Limited has facilitated our entry into the business of television content production and Lowry, “Digital Domain” and

iLab have helped us establish significant presence in the North American and European markets, offering us new business opportunities in

image processing and restoration, 2D to 3D conversion and VFX.

Presence across various E&M businesses and geographies

We believe we are a one-stop solution provider for film and television producers and distributors in India. We provide the entire range of film

services, including studio rental, equipment rental, DI post-production laboratory services, VFX, stereoscopic conversion, film processing,

digital cinema mastering and operating cinema theatres in India and US. Our presence across various businesses in the E&M sector allows allow

us to develop long-term relationships as we are able to cross-sell our various services and offer solutions for the varying requirements of our

customers.

Our strategy is to create a single global E&M company that is capable of operating in geographically diverse markets and catering to a variety of

consumers. We have expanded our operations by acquiring theatrical exhibition assets in US. We have also established a presence in the film

post-production services business in the United States and the UK through the acquisition of Lowry Digital and iLab, respectively. We believe

that our multinational presence makes us an attractive proposition for our customers.

Our technological capabilities

We have attempted to develop or acquire the latest technological capabilities across our business lines to ensure that we remain competitive. In

our film and media services business, we utilise various sophisticated technologies, including digital camera technology capable of recording

high-definition video, sync-sound enabled studio stages and fibre optic cables for the distribution of films.

44

We utilise proprietary image processing technology to deliver superior picture elements and have developed a unique technology, the “Lowry

Process”, which is used to create high image quality for all outputs, including film, broadcast television, advertisements, digital cinema, Blu-Ray

Disc and internet video. Lowry Digital’s services include film restoration, emergency image repair, digital blow-ups and DI enhancements.

Lowry Digital also offers image enhancement tools which are used for the restoration and upgrade of damaged analogue film prints. We were

among four companies to receive “Judges Award for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in

November 2010. In August 2011, our Company received a patent for the following innovation – “System and method for removing semi-

transparent artifacts from digital images caused by contaminants in the camera’s optical path”. Our Company was the first Indian company to

be recognized in the category of science and technology for the development of a unique and efficient system for the reduction of noise and

other artefacts which provide a high quality image required for the film making process at the Academy of Motion Pictures, Arts & Science

Awards 2012.

Our film processing laboratory, through its telecine scanners, enables us to capture the fine details of a filmed image. We are capable of grading

the film in an uncompressed 4K resolution, the highest available resolution for film production.

We introduced the IMAX digital projection system in India in 2001, which has enabled us to take advantage of the increasing number of IMAX

and IMAX 3D releases.

The Reliance Group’s brand, experience and position in India and overseas

The Reliance Group is a diversified business group with a strong brand, level of experience and position in India and overseas. The Reliance

Group is headed by Anil D. Ambani, one of India’s leading entrepreneurs, who has won several awards and was voted as the “Person of Year –

2008” by Light Readings for outstanding achievements in the telecommunications industry and “Businessman of the Year” in a poll conducted

by The Times of India in 2006. Reliance Communications Limited, one of India’s leading wireless carriers, in terms of coverage and capacity,

and Reliance Capital Limited, one of the India’s leading private sector financial services companies are part of the Reliance Group. The

Reliance Group also includes Reliance Power Limited, one of India’s leading power development companies. The Reliance Group has a large

presence in the entertainment, communications and infrastructure sectors and we derive significant benefits from our association with the group.

For example, we are able to derive benefits of synergy in approaching advertisers through our relationship with Reliance Broadcast Network

Limited, a group company which owns 92.7 Big FM, one of India's leading radio networks, and BIG Street, an out-of-home media business. We

believe that we will continue to benefit from the depth of experience of the Reliance Group and our association with the Reliance Group

significantly enhances our brand value.

Our Business Strategy

Our business strategy is to build upon our competitive strengths and business opportunities to continue to be a leading E&M company. Our

business strategy consists of the following principal elements:

Create lean front-end centers in overseas markets and substantial back-end delivery centres in India for film and media services

Hollywood produces maximum number of high budget films with high expenditure on VFX and 3D conversions. However, the cost of

production in US is almost four times as compared to that in India (Source: Federation of Indian Chambers of Commerce and Industry and KPMG,

“Indian Media & Entertainment Industry Report 2009”). We have identified this opportunity and mapped the demand with supply. We have created

strategic front-ends in the markets of US (Burbank) and UK (London), complimented by back-end delivery centres in India, one of which is

located in a SEZ. The front-end centers in US and UK focus on business development and hence are lean on assets. We intend to continue to

focus on further enhancement of strategic front-end tie-ups as also further strengthen the force-to-market (sales) teams backed by increasing

back-end asset creation in India, where our main delivery centres are located.

Continue to focus on increasing our revenue from film and media services through complementary services

We intend to expand our service offerings in line with technological developments and market demand. For instance, we have extended our

BPO offerings from restoration and content processing to VFX, 2D to 3D conversion and CGI keeping in line with the emerging market trends.

We commenced production services business with equipment rental and have extended our service bouquet by building a state-of-the-art studio

in Film City, Mumbai, comprising of three studio buildings with eight sound stages, which we believe will significantly strengthen our ability to

provide film and media services. While a part of the studio constituting one studio building with three sound stages is operational, we expect to

complete the remaining portion of the studio by December 2013.

45

Opportunistically expand our theatrical exhibition business

The key elements of our growth strategy for our domestic theatrical exhibition business include the following:

Focussing on select metro and tier 1 cities which we believe could potentially have a higher consumption pattern; and

Expanding in certain select locations to establish a footprint or to strengthen our presence in identified film territories.

A retail centric approach, to enhance the profitability of our theatrical exhibition business

Our key focus in improving the profitability of our theatres is through increasing patronage and improving the overall customer experience,

which we believe will lead to greater spending by customers, allow us to command greater premiums in our ticket prices and increase

advertising revenues. We seek to achieve this through the following:

Enhancing our understanding of our customer to enable us to customise our programme selection. Further, we propose to introduce movie

and time specific pricing to increase admits and, consequently, box office collections;

Offering the customer a wider F&B choice and providing the customer greater access to F&B option in-theatre i.e. within the precincts of

the auditorium;

Augmenting our advertising sales by better utilising the available on-screen and off-screen space;

Delivering consistent customer experience, in line with our proposition of delivering an affordable luxury experience to larger pool of

customers, whilst keeping a tight control on costs; and

Exploring avenues for rent rationalisation, in the context of the changing market environment.

Grow our business through internal restructuring

We would continue to evaluate various opportunities for the growth of our business. In order to garner further investments with an aim to raise

fresh capital for the growth of our business, we are considering restructuring certain of our business divisions i.e. film and media services

business and exhibition business, including by transferring them to our subsidiaries. We may also consider options for entering into technical

and financial collaboration with strategic partners either directly or through our subsidiaries. For further details, please see the chapter entitled

“History and Certain Corporate Matters” at page 169 of this Letter of Offer.

Continue to pursue strategic acquisitions and alliances

We have expanded our operations by identifying and carrying out strategic acquisitions / alliances. The goals that we hope to achieve through

such strategic acquisitions/alliances include:

the expansion and enhancement of our businesses with minimum cost – both capital & operational;

the benefit of technical and operational synergies; and

expansion of our geographical reach.

We intend to continue to evaluate such options even in the future.

Competition

Our theatrical exhibition business comprises 254 screens across 96 cinemas and 78 cities in India as of May 31, 2013 and is a combination of

single or twin-screen cinemas and multiplexes. We face significant competition from some organised multiplex chains in large cities. We face

competition in the standalone cinema theatre segment from local cinema theatres in Tier 2 Cities and Tier 3 Cities where customers are price

sensitive.

46

In our film processing business, we face competition from certain other laboratories.

We have set up our 4K DI laboratory and face competition from existing companies. However, the client base that we have established through

our processing laboratory has helped us establish ourselves as a key player in this segment.

In our television content production business, we primarily create non-fiction content. This is an emerging segment and the competition is

restricted to a few players.

We also face intense competition in our US operations from various cinema theatre operators. Further, our restoration business also faces

competition in the United States.

47

SUMMARY FINANCIAL INFORMATION

Following is a summary of the financial information. This summary should be read in conjunction with, and is qualified in its entirety by, more

detailed information in the section entitled “Financial Statements” at page F-1.

Consolidated Financial Information

Summary statement of assets and liabilities of the Group, as restated

(` in lakhs)

As at

Particulars

March 31,

2013

September 30,

2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

Assets

A Non-current assets

I Fixed assets

(i) Tangible assets 81,929.44 89,148.54 111,782.74 104,933.32 80,215.84 40,666.60

(ii) Intangible assets 7,925.80 8,895.80 8,804.20 6,034.60 3,249.60 18,251.60

(iii) Capital work-in-

progress 8,880.60 12,010.90 15,029.90 24,538.92 21,203.60 21,331.01

(iv) Intangible assets

under development - 285.90 - 132.51 - -

II Goodwill on

consolidation 5,149.02 5,145.32 8,819.42 8,728.62 4,202.56 2,746.76

III Non-current

investments 8,836.30 553.34 1,092.99 1,272.41 1,161.72 6,991.37

IV Deferred tax assets

(net) 26.11 14.31 2.60 2.20 18.70 64.40

V Long-term loans and

advances 22,803.90 23,687.28 29,369.76 27,166.38 24,816.84 29,293.35

VI Other non-current

assets 583.90 62.00 389.30 277.42 59.41 43.75

136,135.07 139,803.39 175,290.91 173,086.38 134,928.27 119,388.84

B Current assets

I Current investments - - 10.44 7,902.30 - 13,556.71

II Inventories 1,151.00 1,417.70 1,325.30 907.20 690.50 761.30

III

Trade receivables 18,546.30

18,673.04 21,600.60 23,230.60 21,031.70 12,141.50

IV Cash and bank

balances 9,395.50 11,198.70 11,772.99 8,270.97 7,881.99 12,376.49

V Short-term loans and

advances 5,659.00 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61

VI Other current assets 1,465.80 2,041.40 5,570.80 2,789.90 4,401.30 4,027.96

36,217.60 46,293.94 53,482.14 79,667.62 68,885.16 67,888.57

48


(` in lakhs)

As at

Particulars

March 31,

2013

September 30,

2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

Liabilities

C Non-current

liabilities

I Long-term

borrowings 37,443.20 75,668.37 44,430.11 40,405.00 57,360.46 53,099.90

II Deferred tax

liabilities (net) - - 516.39 63.39 66.59 192.03

III Other long-term

liabilities 4,062.40 3,639.00 2,909.05 1,468.90 871.85 342.98

IV Long-term provisions 545.10 621.10 774.71 383.20 3,434.40 3,038.99

42,050.70 79,928.47 48,630.26 42,320.49 61,733.30 56,673.90

D Minority interest 1,216.98 1,074.08 1,347.88 1,736.58 3,006.58 1,621.78

E Current liabilities

I Short-term

borrowings 145,385.80 106,771.10 103,178.16 117,402.75 72,109.67 41,319.22

II Trade payables 15,054.57 18,967.70 12,935.97 11,088.28 8,287.62 9,003.83

III Other current

liabilities 61,080.90 37,260.10 59,759.57 44,224.02 9,204.87 9,049.62

IV Short-term provisions 271.50 200.90 215.99 165.91 230.40 1,826.01

221,792.77 163,199.80 176,089.69 172,880.96 89,832.56 61,198.68

F Net Worth (A+B-C-

D-E) (92,707.78) (58,105.02) 2,705.22 35,815.97 49,240.99 67,783.05

G Represented by

i) Share capital 2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31

ii) Reserves and surplus

(net) (95,161.59) (60,558.83) 398.91 33,509.66 46,934.68 65,476.74

H Net worth (i + ii) (92,707.78) (58,105.02) 2,705.22 35,815.97 49,240.99 67,783.05

49

Summary statement of profit and loss of the Group, as restated

(` in lakhs)

Particulars

Period March

2013 Period 2012 Period 2011 Period 2010 Period 2009 Period 2008

Revenue from operations 35,139.80 123,441.40 79,207.40 71,507.20 65,935.34 30,768.94

Other income 1,498.00 2,045.50 5,818.80 3,256.70 7,184.90 5,527.80

Total revenue 36,637.80 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74

Direct operational expenses 14,321.70 49,304.20 31,059.80 28,102.00 23,868.30 9,792.00

Employee benefits expense 8,975.90 31,712.30 20,979.80 13,179.30 10,147.60 2,605.10

Finance costs (including loss on

derivative contracts) (net) 13,930.70 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24

Depreciation, amortisation and

impairment expense 7,723.40 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62

Other expenses 19,263.20 65,209.31 34,672.96 25,317.05 20,056.90 7,914.65

Total expenses 64,214.90 207,312.71 117,453.26 88,044.99 80,062.41 33,370.61

(Loss) / profit before exceptional

items, tax and minority interest (27,577.10) (81,825.81) (32,427.06) (13,281.09) (6,942.17) 2,926.13

Exceptional items (6,001.07) (8,181.50) - - - -

(Loss) / profit before tax and

minority interest (33,578.17) (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13

Less - Provision for taxes

- Current tax 232.90 769.50 113.90 39.77 416.36 228.29

- Deferred tax (credit) / charge (11.80) (492.59) 452.69 13.25 (69.44) 551.72

- Fringe benefit tax - - - - 171.70 78.00

Net (loss) / profit after tax before

minority interest (33,799.27) (90,284.22) (32,993.65) (13,334.11) (7,460.79) 2,068.12

Less: (Loss) / profit transferred to

Minority interest 245.50 732.40 (196.70) (530.87) (322.12) 53.80

Net (loss) / profit after tax before

adjustment pursuant to Schemes (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,138.67) 2,014.32

50


(` in lakhs)

Particulars

Period March


Add: Adjustment pursuant to

Modified Composite Scheme of

Amalgamation and Arrangement - - - - - 84.20

Less: Adjustment pursuant to

Scheme of Amalgamation of

Katch 22 - - - - - (100.00)

Less: Adjustment pursuant to

Scheme of Arrangement for

demerger of Radio business/

Scheme of Amalgamation - - - - (649.30) -

Net (loss) / profit after tax (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,787.97) 1,998.52

Period March 2013 – Six months ended March 31, 2013

Period 2012 - Eighteen months ended September 30, 2012

Period 2011 - Year ended March 31, 2011



Period 2008 - Nine months ended March 31, 2008

51

Summary statement cash flow of the Group, as restated

(` in lakhs)

Period March


A

Cash flow from operating

activities

Net (loss) / profit before

tax, as restated (33,578.17) (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13

Adjustment for

Depreciation, amortisation

and impairment expense 9,608.00 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62

Bad debts / Advances

written off 155.53 1,010.40 201.20 152.10 348.40 391.00

Sundry balances written-

off 16.50 981.50 - - - -

Provisions written back - - - (241.70) - -

Capital work in progress

written off 2,902.70 4,424.60 - - - -

Provision for doubtful

debts and advances 590.00 4,767.92 1,666.30 121.90 - 3.20

Dividend income - (0.40) - - (132.60) (127.40)

Interest income (226.50) (1,255.70) (868.40) (538.60) (967.10) (967.70)

Profit on derivative

contract - - - - - (977.40)

Loss / (profit) on sale /

discarding of fixed assets

(net) 2.10 669.80 (2,694.80) 70.60 6.80 57.20

Loss on disposal of

subsidiaries - 2,722.92 - - - -

Gain on sale of current

investments (57.50) (39.50) (423.60) (274.40) (269.20) (32.40)

Gain on sale of

investments - - - - (1,700.00) (2,660.30)

Unrealised foreign

exchange (gain) / loss (1,250.80) (2,304.85) (129.80) (474.39) (1,136.60) 16.70

Finance costs (including

loss on derivative

contracts) (net) 13,930.70 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24

Operating profit before

working capital changes

and before net results of

Radio Business (7,907.44) (17,943.72) (3,935.46) 6,981.06 15,197.14 11,687.89

52


(` in lakhs)

Period March


Adjustment for cash loss

pertaining to transaction

relating to Radio business

till March 31, 2008,

pursuant to the Modified

Composite Scheme of

Amalgamation and

Arrangement - - - - - (8,377.00)

(7,907.44) (17,943.72) (3,935.46) 6,981.06 15,197.14 3,310.89

Operating profit before

working capital changes

Adjustment for :

(Increase) / decrease in

trade receivables (258.90) (2,083.40) (393.30) (2,513.90) (17,371.80) (7,658.94)

Decrease / (increase) in

loans and advances and

other assets 5,800.60 2,806.20 (5,004.24) (1,670.40) 7,719.20 (1,370.40)

(Increase) / Decrease / in

Inventories 270.30 (178.50) (417.00) (231.50) 80.10 (551.40)

Increase / (decrease) in

trade and other payable

(2,861.75) 7,912.90 3,345.12 4,196.26 (2,084.43) 10,404.08

Adjustment for Katch 22

merger due to Scheme of

Amalgamation - - - - - 23.30

Cash (used in) /

generated from operating

activities (4,957.19) (9,486.52) (6,404.88) 6,761.52 3,540.21 4,157.53

Taxes paid (net of refunds) (2,363.40) 1,198.30 1,188.26 (1,467.09) (1,974.50) (1,628.70)

Net cash (used in) /

generated from operating

activities (A) (7,320.59) (8,288.22) (5,216.62) 5,294.43 1,565.71 2,528.83

B

Cash flow from investing

activities

Purchase of fixed assets (1,184.67) (8,721.73) (22,335.80) (40,917.60) (35,911.00) (49,772.50)

Proceeds from sale of fixed

assets 463.30 1,914.10 13,999.70 23.10 1,097.50 14.10

Purchase of investment-

long term- in shares of

subsidiaries companies/

joint venture/ associates

- (90.80) (3,001.00) (7,861.20) (2,653.60)

(1,147.81)

Profit from / investment in

mutual funds (net) (27.00) 39.50 423.60 274.40 269.20 32.40

Redemption of /

investment in mutual

funds - - 7,983.98 (7,982.03) 13,556.69 (13,623.83)

Purchase of investment-

long term- other - - - (9.90) (4.30) (0.30)

53


(` in lakhs)

Period March


Proceeds on sale of non-

current investments / rights

therein 338.30 9,092.50 23.10 4,066.80 3,127.30 -

(Investment in) /

withdrawals’ from

Partnership firm (0.16) 33.26 (15.80) 371.80 278.30 -

Dividend income - - - - 132.60 127.40

Dividend income - 0.40 - - - -

Advance towards share

application - (6,811.20) - - - -

Interest income 260.10 1,368.30 784.50 647.30 1,626.10 288.20

Cash (used)/ generated in

investing activities (1,297.94) (3,084.87) 772.48 (46,527.13) (23,688.81) (65,588.13)

Taxed paid (net of refunds) (9.20) (76.80) (25.80) (35.60) (103.10) (194.40)

Net Cash (used)/

generated in investing

activities (B) (1,307.14) (3,161.67) 746.68 (46,562.73) (23,791.91) (65,782.53)

C

Cash flow from financing

activities

Proceeds from fresh issue

of share capital (including

share premium) /

preference shares

29,500.00 - - - -

-

Payment to Minority (53.57) (994.10) (228.60) (598.60) (212.90) -

Dividend tax paid on

distribution by Subsidiaries

and joint ventures - - (9.10) - (12.80) -

Introduction of capital by

minority partners in a

Subsidiary - - - 62.99 - -

Profit/ (loss) on option

contract - - - - - 977.40

Proceeds from long-term

borrowings - 68,308.50 39,775.90 5,489.00 7,826.10 40,000.00

Repayment of Foreign

currency convertible bonds - - (15,814.50) - - -

(Repayment) / proceeds

from short term borrowings

(net) 38,985.80 3,029.50 (1,003.80) 52,962.60 31,271.20 28,812.30

Repayment of long term

borrowings (18,248.00) (62,160.50) (17,083.30) - - -

Interest recoverable from

Reliance Broadcast

Network Limited - - (1,448.60) (2,507.90) (2,584.90) -

Recovered from Reliance 9,961.40 20,000.00 - - -

54


(` in lakhs)

Period March


Broadcast Network

Limited pursuant to

demerger of Radio

business 63.80

Dividend (including

dividend tax) paid - (7.90) - - (1,349.20) (1,164.10)


loss on derivative

contracts) (net) (10,425.70) (35,314.00) (18,773.50) (13,414.80) (11,287.10) (4,949.20)

Net cash generated from

(used in) financing

activities ( C ) 10,119.13 12,322.90 5,414.50 41,993.29 23,650.40 63,676.40

Net increase / (decrease)

in cash and cash

equivalent (A+B+C) 1,491.40 873.01 944.56 724.99 1,424.20 422.70

Cash and cash equivalents

as at beginning of the

period 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40 5,101.00


taken over on acquisition

of subsidiaries - (794.96) - 292.10 611.90 -

Exchange gain / loss on

translation 36.80 99.20 20.10 (119.50) - -


disposed on sale of subs/

JV's - - - - - -

Adjustment from

Composite Scheme of

Amalgamation and

Arrangement / Modified

Composite Scheme of

Amalgamation and

Arrangement / Scheme of

Arrangement / Scheme of

Amalgamation - - - - (4,207.00) 306.70

Cash and cash

equivalents as at end of

the period 7,227.20 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40

1,491.40 873.01 944.56 724.99 1,424.20 422.70

The above statement should be read together with significant accounting policies and notes to summary statement of cash flows, as restated, of

the Group (Annexure IV)

55

Note:

1. The above cash flow statement has been prepared under the “Indirect” Method as set out in Accounting Standard 3 – ‘Cash Flow

Statements’.







56

Standalone Financial Information

Summary statement of assets and liabilities of the Company, as restated

(` in lakhs)

Particulars

As at

March 31,

2013

September 30,

2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

Assets

A

Non-current assets

I Fixed assets

(i) Tangible assets 70,032.73 75,331.83 85,631.03 84,424.23 66,359.33 34,799.90

(ii) Intangible assets 645.30 722.20 418.10 184.60 219.00 18,206.10

(iii) Capital work-in-

progress 8,865.10 11,966.60 13,812.70 16,132.50 16,863.20 21,331.01

(iv) Intangible assets

under development - - - - - -

II Non-current

investments 18,040.94 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45

III Deferred tax assets

(net) - - - - - -

IV Long-term loans and

advances 21,737.30 22,599.00 27,325.70 25,648.86 23,869.54 28,957.13

V Other non-current

assets 583.90 62.00 290.30 277.42 59.41 43.75

119,905.27 128,722.57 134,746.13 132,017.01 109,704.98 114,257.34

B Current assets

I Current investments - - - 7,902.40 - 13,500.30

II Inventories 762.80 658.50 724.50 596.80 518.30 191.80

III Trade receivables 16,116.40 16,179.40 18,741.90 22,119.10 20,202.40 11,640.10

IV Cash and bank

balances 5,351.90 6,802.00 8,761.80 4,515.17 4,057.93 7,143.29

V Short-term loans and

advances 63,743.50 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68

VI Other current assets 424.20 717.60 4,265.20 2,765.47 4,281.48 3,911.16

86,398.80 79,766.60 94,307.00 108,369.43 79,887.31 67,886.33

Liabilities

C Non-current

liabilities

I Long-term borrowings 35,137.50 71,412.50 39,870.80 36,416.70 54,230.00 53,099.90

II Deferred tax liabilities

(net) - - - - - -

III Other long-term

liabilities 3,963.50 3,636.70 2,934.69 1,822.66 839.10 342.98

57


(` in lakhs)

Particulars

As at

March 31,

2013

September 30,

2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

IV Long-term provisions 494.00 501.10 695.90 344.50 3,427.40 3,038.34

39,595.00 75,550.30 43,501.39 38,583.86 58,496.50 56,481.22

D Current liabilities

I Short-term borrowings 144,714.00 106,424.50 102,371.40 114,773.20 70,233.50 41,028.60


III Other current liabilities 57,466.20 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46

IV Short-term provisions 84.60 94.00 125.40 31.80 29.30 1,800.65

213,723.73 153,390.40 168,745.58 160,332.22 79,986.13 59,021.37

E Net Worth (A+B-C-

D) (47,014.66) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08

F Represented by

i) Share capital 2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31

ii) Reserves and surplus

(net) (49,468.47) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77

G Net Worth (i+ ii) (47,014.66) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08

Note :

58

Summary statement of profit and loss of the Company, as restated

(` in lakhs)

Particulars

Period March



Other income 384.90 4,325.50 5,618.20 3,073.20 6,647.90 5,385.30

Total revenue 24,026.10 80,454.80 54,287.40 48,625.19 54,882.24 32,280.01

Direct operational expenses 9,547.77 30,064.14 20,449.70 15,631.90 15,752.90 7,585.30

Employee benefits expense 3,644.00 13,856.10 9,882.50 5,969.20 5,645.80 2,272.80

Finance costs (including loss on

derivative contracts) (net) 13,694.80 39,061.20 16,973.30 11,306.60 12,363.70 2,751.34

Depreciation and amortisation

expense 4,078.60

10,789.40 6,735.10 6,087.40 12,296.61 9,971.04

Other expenses 14,971.50 49,813.10 24,594.80 18,427.09 13,743.54 7,150.27

Total expenses 45,936.67 143,583.94 78,635.40 57,422.19 59,802.55 29,730.75

(Loss) / profit before tax and

exceptional items (21,910.57) (63,129.14) (24,348.00) (8,797.00) (4,920.31) 2,549.26

Exceptional items (5,682.58) (7,227.20) - - - -

(Loss) / profit before tax (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26


- Deferred tax charge / (credit) - - - - (134.80) 621.40


Net (loss) / profit after tax (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37







59

Summary statement of cash flow of the Company, as restated

(` in lakhs)

Particulars

Period March


A Cash Flow from

operating activities

Net (loss) / profit before

tax, as restated (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26

Adjustment for

Depreciation and

amortisation expense 5,963.20 10,789.40 6,735.10 6,087.40 12,296.61 9,971.04

Bad debts / advances

written-off 27.32 103.60 107.30 50.50 263.00 385.10

Provision for doubtful

debts and advances 590.00 8,977.20 1,658.20 121.90 - -

Provision for diminution

in value of non-current

investments - 825.10 - - - -

Sundry balances written-

off 16.50 981.50 - - - -

Capital work-in-progress

written-off 2,902.70 4,424.60

Dividend income - (200.40) - (85.30) (205.40) (148.80)

Interest income (145.40) (1,080.10) (773.20) (406.40) (716.70) (831.50)


contract - - - - - (977.40)

Loss / (profit) on sale /

discarding of fixed assets

(net) 7.90 674.20 (2,701.10) 40.80 4.40 56.50

Gain on sale of non-

current investments - (766.50) - - - -


investments (57.50) (39.50) (423.60) (274.40) (269.20) (9.10)

Gain on sale of non-

current investments - - - - (1,700.00) (2,660.30)

Provisions written back - - - (241.70) - -

Unrealised foreign

exchange (gain) / loss (13.00) (2,588.50) (305.30) 2,000.20 (807.20) (18.10)

60


(` in lakhs)

Particulars

Period March



loss on derivative

contracts) (net)

39,061.20 16,973.30

11,306.60

12,363.70

2,751.34 13,694.80

Operating (loss) / profit

before working

capital changes and

before net results of

Radio business

(9,194.54) (3,077.30) 9,802.60 16,308.90 11,068.04

(4,606.63)

Adjustment for cash loss

pertaining to transaction

relating to Radio business

up to March 31, 2008

pursuant to Modified

Composite Scheme of

Amalgamation and

Arrangement - - - - - (8,377.00)

Operating (loss) / profit

before working capital

changes (4,606.73) (9,194.54) (3,077.30) 9,802.60 16,308.90 2,691.04

Adjustment for :

Decrease / (Increase) / in

trade receivables (413.22) 515.90 2,749.20 (2,008.60) (17,317.60) (7,582.14)


loans and advances and

other assets 4,817.10 3,918.50 (5,484.91) (1,978.10) (6,541.45) (5,773.14)


inventories (104.30) 66.00 (127.70) (78.50) (325.40) (30.30)

Increase / (decrease) in

trade and other payables 51.65 2,393.56 4,988.71 4,863.50 (4,444.30) 9,061.70

Cash generated from /

(used in) from operating

activities (255.40) (2,300.58) (952.00) 10,600.90 (12,319.85) (1,632.84)

Taxes paid (net of

refunds) (214.90) 1,790.10 1,693.00 (1,122.00) (1,544.50) (1,346.80)

Net cash generated from

/ (used in) operating

activities (A) (470.30) (510.48) 741.00 9,478.90 (13,864.35) (2,979.64)

B

Cash flow from


Purchase of fixed assets (767.50)

(5,183.50)

(15,372.10)

(24,733.56)

(21,363.60)

(46,194.40)

Proceeds from sale of

fixed assets 46.40 762.40 13,986.70 10.80 1,087.60 12.10

Proceeds on sale of non-

current investments 60.00 1,233.62 1.00 4,066.80 3,127.30 -

Loan to subsidiaries and

joint ventures (net) (7,776.30) (1,721.70) (13,597.70) (21,195.70) - -

61


(` in lakhs)

Particulars

Period March


Purchase of non-current

investment - in shares of

subsidiaries companies /

joint venture/ associates - (12,127.00) (2,000.00) (3,005.00) (201.80) (2,720.80)

Advance for application

money towards

subscription of shares in a

joint venture - - - (125.00) - -

Repayment of capital by

Partnership firm - - - 241.70 - -

Purchase of non-current

investments – other - - - (9.90) (4.50) (0.40)

Profit from / investment

in mutual funds (net) 57.50 39.50 423.60 274.40 269.20 9.10

Redemption of /

(investment in) mutual

funds - - 7,902.40 (7,902.40) 13,500.30 (13,480.50)

Dividend income - 200.40 - 85.30 205.40 148.80

Interest income 164.40 1,232.00 685.90 425.60 1,395.40 238.40

Cash generated (used

in) / from investing

activities (8,215.50) (15,564.28) (7,970.20) (51,866.96) (1,984.70) (61,987.69)

Taxed paid (net of

refunds) (0.06) (47.30) (17.00) (26.70) (78.10) (194.40)

Net Cash generated

(used in) / from

investing activities (B) (8,216.10) (15,611.58) (7,987.20) (51,893.66) (2,062.80) (62,182.09)

C Cash flow from


Proceeds from long-term

borrowings - 66,900.00 37,500.00 3,500.00 - 40,000.00

Proceeds from short-term

borrowings (net) 38,289.40 4,053.20 2,598.10 54,539.70 31,250.80 28,845.30

Proceeds from issue of

Preference Shares - 29,500.00 - - - -

Repayment of Foreign

currency convertible

bonds - (15,814.50) - - -

Repayment of long-term

borrowings (17,108.30) (61,020.80) (17,083.30) - - -


contract - - - - - 977.40

Interest recoverable from

Reliance Broadcast

Network Limited - - (1,448.60) (2,507.89) (2,584.90) -

62


(` in lakhs)

Particulars

Period March


Recovered from Reliance

Broadcast Network

Limited pursuant to

Scheme of Arrangement 63.80 9,961.40 20,000.00 - - -

Dividend (including

dividend distribution tax)

paid - - - - (1,349.20) (1,164.10)


loss on derivative

contracts) (net) (10,175.60) (34,561.34) (16,757.90) (13,034.60) (11,201.60) (4,795.30)

Net cash flow generated

from / (used in)

financing activities ( C ) 11,069.30 14,832.46 8,993.80 42,497.21 16,115.10 63,863.30

Net increase in cash and

cash equivalent

(A+B+C) 2,382.90 (1,289.60) 1,747.60 82.45 187.95 (1,298.43)


as at beginning of the

period 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10 1,987.53


adjusted pursuant to

Composite Scheme of

Amalgamation and

Arrangement - - - - 37.70 1,300.00


adjusted pursuant to

Modified Composite

Scheme of Amalgamation

and Arrangement - - - - (843.70) -

Cash and cash

equivalents as at end of

the period 4,294.40 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10

2,382.90 (1,289.60) 1,747.60 82.45 187.95 (1,298.43)

Note :

1. The above cash flow statement has been prepared under the "Indirect Method" as set out in Accounting Standard 3 - Cash Flow

Statement

Period March 2013 – Six month ended March 31, 2013






63

ISSUE

The following is a summary of the Issue. This summary should be read in conjunction with, and is qualified in its entirety by, more detailed

information in the chapter entitled “Terms of the Issue” at page 319 of this Letter of Offer.

Equity Shares to be issued 14,99,10,052 Equity Shares

Rights Entitlements 13 Equity Share(s) for every 4 fully paid-up Equity Share(s) held on the Record Date.

Record Date Wednesday, July 24, 2013

Face Value per Equity Share ` 5

Issue Price per Equity Share `40

Equity Shares outstanding prior to the Issue 4,61,26,170 Equity Shares(1)

Equity Shares outstanding after the Issue (assuming full

subscription for and Allotment of the Rights

Entitlements)

19,60,36,222 Equity Shares

Terms of the Issue For more information, please see the section entitled “Terms of the Issue” at page 319.

Use of Issue Proceeds For further information, please see the section entitled “Objects of the Issue” at page

81.

(1)

The Equity Shareholders of our Company have, at the Annual General meeting held on December 24, 2012 approved a qualified institutions placement (QIP)

of Equity Shares or instruments that are convertible into or exchangeable into Equity Shares, in one or more tranches, upto an aggregate amount not exceeding

` 50,000 lakhs. Accordingly, our Company may undertake the QIP in accordance with the ICDR Regulations.

64

GENERAL INFORMATION

Pursuant to the resolution passed by our Board of Directors at its meeting held on July 25, 2012 it has been decided to make the following offer

to the Equity Shareholders, with a right to renounce:

ISSUE OF UPTO 14,99,10,052 EQUITY SHARES AT A PREMIUM OF `35 PER EQUITY SHARE FOR AN AMOUNT NOT

EXCEEDING ` 59,964.02 LAKHS ON A RIGHTS BASIS TO THE EXISTING EQUITY SHAREHOLDERS OF OUR COMPANY IN

THE RATIO OF 13 EQUITY SHARES FOR EVERY 4 FULLY PAID-UP EQUITY SHARES HELD ON THE RECORD DATE,

THAT IS ON WEDNESDAY, JULY 24, 2013. THE ISSUE PRICE IS 8 TIMES THE FACE VALUE OF THE EQUITY SHARES.

Issue Programme

The subscription will open upon the commencement of the banking hours and will close upon the close of banking hours on the dates mentioned

below:

ISSUE OPENS ON LAST DATE FOR RECEIVING

REQUESTS FOR SPLIT APPLICATION

FORMS

ISSUE CLOSES ON

Tuesday, August 6, 2013 Tuesday, August 13, 2013 Tuesday, August 20, 2013

Registered Office of our Company

Reliance MediaWorks Limited

Film City Complex

Goregaon (East)

Mumbai 400 065

Maharashtra

Telephone: +91 22 3980 8900

Facsimile: +91 22 3980 8985

Website: www.reliancemediaworks.com

CIN: L29299MH1987PLC045446

Address of the RoC

Our Company is registered with the RoC, which is situated at the following address:

Registrar of Companies

Everest, 5th

Floor,

100, Marine Drive

Mumbai 400 002

Maharashtra

Board of Directors of our Company

Our Board of Directors consists of:

Name and Designation DIN Address

Gautam Doshi

Non-Executive Non-Independent Director

00004612 402, Hamilton Court, Tagore Road, Santa Cruz (West),

Mumbai 400 054

Amit Khanna

Non-Executive Non-Independent Director

00005430 301, Sea Star, 3rd Floor, Balraj Sahani Marg Juhu, Mumbai

400 049

Sujal Shah

Non-Executive Independent Director

00058019 9, Ganesh Bhuvan, Natwar Nagar, Road no.2, Jogeshwari

(East), Mumbai 400 060

65

Name and Designation DIN Address

Anil Sekhri


00506790 23-A, Krishna Kunj, Opp. Millat Nagar, Off. New Link

Road, Andheri (West), Mumbai 400 053

Prasoon Joshi


01260545 201-202, B Wing, Quantum Park Building Union Park,

Khar (West), Mumbai 400 052

For further details of our Directors, please see the chapter entitled “Our Management” at page 190 of this Letter of Offer.

Company Secretary and Compliance Officer

Ashish Agarwal is the Company Secretary and Compliance Officer of our Company. His details are as follows:

Ashish Agarwal


Film City Complex

Goregaon (East)

Mumbai 400 065

Maharashtra

India

Tel: +91 22 3980 8900

Facsimile: +91 22 3980 8985

Email: [email protected]

Investors may contact the Registrar to the Issue or our Company Secretary and Compliance Officer for any pre-Issue / post-Issue related matter.

All grievances relating to the ASBA process 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, ASBA Account number and the designated branch of the

SCSB where the CAF was submitted by the ASBA Investors.

Lead Manager

Axis Capital Limited

Axis House, 1st Floor,

C-2 Wadia International Centre,

P.B. Marg, Worli, Mumbai – 400 025

Telephone: +91 22 4325 3150

Facsimile: +91 22 4325 3000


Website: www.axiscapital.co.in

Investor Grievance Email: [email protected]

Contact Person: Vivek Toshniwal

SEBI Registration Number: INM000012029

Legal Advisors to the Issue

Bharucha & Partners

2nd

Floor, Hague Building,

9, S. S. Ram Gulam Marg,

Ballard Estate,

Mumbai 400 001

Telephone: +91 22 6132 3900

Facsimile: +91 22 6633 3900


66

Auditors to our Company

B S R & Co., Chartered Accountants

KPMG Lodha Excelus

1st Floor, Apollo Mills Compound

N.M. Joshi Marg

Mahalakshmi

Mumbai 400 011

Telephone: +91 22 3989 6000

Facsimile: +91 22 3983 5010


Chaturvedi & Shah, Chartered Accountants

714-715 Tulsiani Chambers

212, Nariman Point

Mumbai 400 021

Telephone: +91 22 30218500

Facsimile: +91 22 302185 95


Registrar to the Issue




Mumbai 400 078

Telephone: +91 22 2596 7878

Facsimile: +91 22 2596 0329

E-mail: [email protected]


Website: www.linkintime.co.in

Contact Person: Pravin Kasare

SEBI Registration No.: INR000004058

Bankers to the Issue

Axis Bank Limited

Axis House, 6th

Floor,

Bombay Dyeing Mill Compound,

P. B. Marg, Worli,

Mumbai 400 029

Telephone: +91 22 2425 3654

Facsimile: +91 22 2424 1700

Contact Person: Sandeep Singh


Bankers to our Company

Yes Bank Limited

Indiabulls Finance Centre,

Tower II, 25th

Floor,

S.B. Marg,

Elphinstone (West),

Mumbai 400 013

Telephone: +91 22 3347 9158

Email : [email protected]

Syndicate Bank

Nariman Point Branch

227, Nariman Bhavan, Ground Floor,

Nariman Point,

Mumbai 400 021

Telephone : +91 22 22029881 / 2284 2865

Facsimile: +91 22 2202 4812


Axis Bank Limited

Axis House, 7th

Floor,

Bombay Dyeing Mill Compound,

P. B. Marg, Worli,

Union Bank of India

Industrial Finance Branch

Union Bank Bhavan,

239, Vidhan Bhavan Marg,

67

Mumbai 400 029

Telephone: +91 22 2425 3734

Facsimile: +91 22 2424 1700


Nariman Point,

Mumbai 400 021

Telephone: +91 22 2289 2150

Facsimile: +91 22 2285 5037 / 2204 0023


Bank of Baroda

Chakala Branch

Apple Heritage,

Andheri (East),

Mumbai 400 093

Telephone: +91 22 26877314 / 26879832

Facsimile No. : +91 22 2687 8307


Self Certified Syndicate Banks

The list of banks that have been notified by SEBI to act as SCSB for the ASBA process is provided on http://www.sebi.gov.in.

Expert Opinion

Except for:

the report of our Auditors with respect to the audit report dated July 3, 2013 in the form and context it appears in this Letter of Offer; and

the report on the statement of tax benefits dated June 29, 2013 received from Jitendra Sanghavi & Co., Chartered Accountants, in the form

and context in which it appears in this Letter of Offer,

we have not obtained any other expert opinion in relation to this issue.

Monitoring Agency

Since the Issue size is in excess of `50,000 lakhs, in accordance with Regulation 16 of the ICDR Regulations, our Company is required to

appoint a Monitoring Agency. Accordingly, pursuant to an agreement dated July 1, 2013 we have appointed Axis Bank Limited as the

monitoring agency.

Statement of responsibility of the Lead Manager

Axis Capital Limited is the sole Lead Manager to the Issue and all the responsibilities relating to coordination and other activities in relation to the

Issue shall be performed by it. The various activities have been set forth below:

Sr. No. Activities

1. Structuring of the Issue in conformity with the ICDR Regulations, undertaking liaison with the Stock Exchanges, as may be required

under the prevailing framework of regulations/rules/guidelines issued by the SEBI and the Stock Exchanges.

2. Assisting our Company and its legal advisors in drafting the Letter of Offer, the Abridged Letter of Offer and the CAF; conduct due

diligence as may be required on our Company and assist in compliance with regulatory requirements of the SEBI and the Stock

Exchanges. The Lead Manager shall ensure compliance with the ICDR Regulations and other stipulated requirements and completion

of prescribed formalities with the Stock Exchanges and the SEBI.

3. Assisting in the listing of the Equity Shares issued pursuant to the Issue on the Stock Exchanges.

4. Assist in the selection of various agencies connected with the Issue, including printers, advertising agencies, legal advisors, bankers to

the Issue (selecting collection centers) and Registrar to the Issue.

68

Sr. No. Activities

5.

The post issue activities will involve essential follow up steps which must include finalization of basis of allotment, listing of

instruments and dispatch of certificates and refunds, if any, with the various agencies connected with the activities such as Registrars

to the Issue, Bankers to the Issue. Whilst, many of the post issue activities will be handled by other intermediaries, the Lead Manager

shall be responsible for ensuring that these agencies fulfill their functions and enable them to discharge this responsibility through

suitable agreements with the Issuer Company.

Credit Rating

As this is an issue of Equity Shares on rights basis, credit rating is not required for this Issue.

Trustees

As the Issue is of Equity Shares, the appointment of trustees is not required.

Appraisal Reports

None of the purposes for which the Net Proceeds are proposed to be utilised have been appraised by any bank or financial institution.

Book Building Process

As the Issue is a rights issue, the Issue will not be made through the book building process.

Underwriting

The Issue is not underwritten.

69

CAPITAL STRUCTURE

The share capital of our Company as on the date of this Letter of Offer is set forth below:

(In `, except share data)

Aggregate value at face value Aggregate value at Issue

Price

A AUTHORISED SHARE CAPITAL

48,00,00,000 Equity Shares of `5/- each 240,00,00,000

2,00,00,000 Preference Shares of `5/- each. 10,00,00,000

Total 250,00,00,000

B ISSUED, SUBSCRIBED AND PAID-UP CAPITAL BEFORE

THE ISSUE

4,61,26,170 fully paid up Equity Shares of `5/- each 23,06,30,850

10%, 29,50,000 Redeemable Non Convertible Preference Shares of

`5/- each 1,47,50,000

Total 24,53,80,850

C

PRESENT ISSUE BEING OFFERED TO THE EXISTING

EQUITY SHAREHOLDERS THROUGH THIS LETTER OF

OFFER

14,99,10,052 Equity Shares at an Issue Price of ` 40 per Equity Share 74,95,50,260 599,64,02,080

D ISSUED, SUBSCRIBED AND PAID UP CAPITAL AFTER THE

ISSUE

19,60,36,222 Equity Shares of `5/- each fully paid-up# 98,01,81,110

10%, 29,50,000 Redeemable Non Convertible Preference Shares of

`5/- each 1,47,50,000

E SECURITIES PREMIUM ACCOUNT

Before the Issue 761,69,98,808

After the Issue 1286,38,50,628 #

Assuming full subscription of the Issue

The Issue of Equity Shares has been authorised by our Board of Directors pursuant to its resolution dated July 25, 2012.

Changes in the Authorised Capital of our Company

1. The initial authorised share capital of `25,00,000 divided into 25,000 equity shares of `100/- each was sub-divided into 2,50,000 equity

shares of `10/- each pursuant to a resolution of our shareholders passed on November 1, 1999.

2. The authorised share capital of `25,00,000 divided into 2,50,000 equity shares of `10/- each was increased to `12,00,00,000 divided

into 1,20,00,000 equity shares of `10/- each pursuant to a resolution of the shareholders passed on November 1, 1999.

3. The authorised share capital of `12,00,00,000 divided into 1,20,00,000 equity shares of `10/- each was sub-divided into 2,40,00,000

Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on August 1, 2000.

4. The authorised share capital of `12,00,00,000 divided into 2,40,00,000 Equity Shares of `5/- each was increased to `15,00,00,000

divided into 3,00,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on May 14, 2005.

70


divided into 5,00,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on July 26, 2005.


divided into 6,00,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on January 12, 2006.


divided into 9,20,58,000 Equity Shares of `5/- each on May 29, 2009 pursuant to the scheme of amalgamation amongst Adlabs

Multiplexes and Theatres Limited, Adlabs Multiplex Limited, Mahimna Entertainment Private Limited, Rave Entertainment Private

Limited and our Company. For further details, please see the chapter entitled “History and Certain Corporate Matters – Scheme of

Arrangements” at page 176 of this Letter of Offer.


divided into 10,00,00,000 Equity Shares of `5/- each pursuant to a resolution of the shareholders passed on September 30, 2009.

9. The authorised share capital was reclassified from `50,00,00,000 divided into 10,00,00,000 Equity Shares of `5/- each, to

`50,00,00,000 divided into 8,00,00,000 Equity Shares of `5/- each and 2,00,00,000 (Two Crore) Preference Shares of `5/- each

pursuant to a resolution of the shareholders passed on March 30, 2012.

10. The authorised share capital of `50,00,00,000 divided into 8,00,00,000 Equity Shares of `5/- each and 2,00,00,000 Preference Shares

of `5/- each was increased to `250,00,00,000 divided into 48,00,00,000 Equity Shares of `5/- each and 2,00,00,000 preference shares

of ` 5/- each pursuant to a resolution of the shareholders passed on July 13, 2012.

Notes to the Capital Structure

1. Share Capital History of our Company

a. The history of the equity share capital and securities premium account of our Company is detailed in the following table:

Date of allotment No. of equity

shares allotted

Face

Value

per

equity

share (`)

Issue Price

per equity

share (`)

Nature of

consideration

Cumulative

number of

equity shares

Cumulative equity

share capital (`)

Cumulative equity

securities premium

(`)(5)

At incorporation 200 100/- 100/- Cash 200 20,000 -

February 8, 1990 4,800 100/- 100/- Cash 5,000 5,00,000 -

November 1, 1999 85,00,000 10/-(1) - Bonus in the ratio

of 170:1 fully

paid up equity

shares out of the

general reserve

85,50,000 8,55,00,000 -

December 2, 1999 300 10/- 10/- Cash 85,50,300 8,55,03,000 -

December 29, 2000 44,00,150 5/-(2) 120/- Cash(3) 2,15,00,750 10,75,03,750 50,60,17,250

May 24, 2005 35,00,000 5/- 150/- Cash 2,50,00,750 12,50,03,750 1,01,35,17,250

August 8, 2005 1,10,00,000 5/- 175.20/- Cash 3,60,00,750 18,00,03,750 2,88,57,17,250

March 31, 2006 38,00,000 5/- 175.20/- Cash 3,98,00,750 19,90,03,750 3,53,24,77,250

November 13, 2007 4,92,754 5/- 543.42/- Cash(4) 4,02,93,504 20,14,67,520 3,79,77,85,858.68

November 22, 2007 7,48,866 5/- 543.42/- Cash(4) 4,10,42,370 20,52,11,850 4,20,09,90,290.40

November 30, 2007 3,99,396 5/- 543.42/- Cash(4) 4,14,41,766 20,72,08,830 4,41,60,33,084.72

December 11, 2007 9,48,565 5/- 543.42/- Cash(4) 4,23,90,331 21,19,51,655 4,92,67,59,452.02

December 19, 2007 7,03,933 5/- 543.42/- Cash(4) 4,30,94,264 21,54,71,320 5,30,57,71,057.88

January 2, 2008 16,22,544 5/- 543.42/- Cash(4) 4,47,16,808 22,35,84,040 6,17,93,81,198.36

71

Date of allotment No. of equity

shares allotted

Face

Value

per

equity

share (`)

Issue Price

per equity

share (`)

Nature of

consideration

Cumulative

number of

equity shares

Cumulative equity

share capital (`)

Cumulative equity

securities premium

(`)(5)

January 22, 2008 11,64,734 5/- 543.42/- Cash(4) 4,58,81,542 22,94,07,710 6,80,64,97,278.64

February 5, 2008 1,19,818 5/- 543.42/- Cash(4) 4,60,01,360 23,00,06,800 6,87,10,09,686.20

February 25, 2008 74,886 5/- 543.42/- Cash(4) 4,60,76,246 23,03,81,230 6,91,13,29,806.32

March 17, 2008 49,924 5/- 543.42/- Cash(4) 4,61,26,170 23,06,30,850 6,93,82,09,886.40 (1) On November 1, 1999, face value of the equity shares was sub-divided from `100/- each to `10/- each. (2) On August 1, 2000, face value of the equity shares was sub-divided from `10/- each to `5/- each. (3) Issuance of 44,00,150 Equity Shares pursuant to an initial public offer undertaken by our Company for an aggregate amount of `5,280.0

lakhs. (4) Equity Shares allotted by our Company pursuant to conversion of foreign currency convertible bonds. (5) Adjustments to the securities premium account: The amount standing to the credit of the securities premium account was adjusted towards

FCCB redemption premium and related issue expenses during the Fiscals 2006 to 2011. Further, it was adjusted pursuant to the various schemes

of arrangements undertaken by our Company, as approved by the respective High Courts, during Fiscal 2008 and Fiscal 2009. For details,

please see chapter entitled “Financial Statements”at page F-1 of this Letter of Offer.

b. The details of the equity shares allotted for consideration other than cash are provided in the following table:

Date of

allotment

Name of the allottee(s) No. of equity

shares allotted

Face value per

equity share (`)

Issue Price per

equity share (`)

Reasons for the allotment

November 1,

1999

Existing equity

shareholders of our

Company

85,00,000 10/- - Bonus in the ratio of 170:1 fully

paid up equity shares out of the

general reserve

c. The details of the preference shares allotted are provided in the following table:

Date of

allotment

Name of the

allottee(s)

No. of preference

shares allotted

Face value per

preference share

(`)

Issue Price

per equity

share (`)

Reasons for the allotment

March 31,

2012

Reliance Utility

Engineers Private

Limited

17,50,000 5/- 1,000/- For the purpose of networth rebuilding

and strengthening the long term

resource base of our Company

including meeting working capital

requirements March 31,

2012

Reliance Infocomm

Engineering Private

Limited

12,00,000 5/- 1,000/-

2. History of the equity share capital held by our Promoters

a. Details of the build-up of our Promoters’ shareholding in our Company:

Date of

allotment/

Transfer

Nature of transaction No. of Equity

Shares

Nature of

consideration

Face value

per Equity

Share (`)

Issue Price

/Average

Acquisition Price

per Equity Share

(`)

Percentage of

the pre- Issue

capital

(%)

Percentage of

the post- Issue

capital (%)#

Reliance Land Private Limited

June 30, 2005 Acquisition of Equity

Shares(1) 58,00,000 Cash 5/- 169.00/- 12.57 2.96

August 8, 2005 Preferential Allotment 1,10,00,000 Cash 5/- 175.20/- 23.85 5.61

March 31,

2006 Conversion of warrants 38,00,000 Cash 5/- 175.20/- 8.24 1.94

72

Date of

allotment/

Transfer


Shares

Nature of

consideration

Face value

per Equity

Share (`)

Issue Price

/Average

Acquisition Price

per Equity Share

(`)

Percentage of

the pre- Issue

capital

(%)

Percentage of

the post- Issue

capital (%)#

Total 2,06,00,000

44.66 10.51

Reliance Capital Limited

October 1,

2005

Purchase from

secondary market 12,55,000 Cash 5/- 99.19/- 2.72 0.64

January 6,

2009

Purchase from


January 6,

2009

Purchase from


January 7,

2009

Purchase from

secondary market 12,500 Cash 5/- 230.00/- 0.03 0.01

January 7,

2009

Purchase from


January 9,

2009

Purchase from


January 9,

2009

Purchase from


January 12,

2009

Purchase from


January 12,

2009

Purchase from


January 14,

2009

Purchase from


January 14,

2009

Purchase from


February 3,

2009

Purchase from


February 3,

2009

Purchase from


February 10,

2009

Purchase from


February 10,

2009

Purchase from


February 13,

2009

Purchase from


February 13,

2009

Purchase from


February 18,

2009

Purchase from


February 18,

2009

Purchase from


February 25,

2009

Purchase from


February 25,

2009

Purchase from


February 26,

2009

Purchase from


February 26,

2009

Purchase from


February 27,

2009

Purchase from


February 27, Purchase from 60,000 Cash 5/- 165.45/- 0.13 0.03

73

Date of

allotment/

Transfer


Shares

Nature of

consideration

Face value

per Equity

Share (`)

Issue Price

/Average

Acquisition Price

per Equity Share

(`)

Percentage of

the pre- Issue

capital

(%)

Percentage of

the post- Issue

capital (%)#

2009 secondary market

October 14,

2009 Acquisition of shares(2) 24,00,000 Cash 5/- 355.62/- 5.20 1.22

October 14,

2009 Acquisition of shares(2) 24,00,000 Cash 5/- 355.62/- 5.20 1.22

November 3,

2009

Purchase from


November 3,

2009

Purchase from


November 4,

2009

Purchase from


November 4,

2009

Purchase from


November 5,

2009

Purchase from


November 5,

2009

Purchase from


November 13,

2009

Purchase from


November 13,

2009

Purchase from


November 20,

2009

Purchase from


November 20,

2009

Purchase from


November 16,

2011

Purchase from

secondary market 1,00,352 Cash 5/- 83.24/- 0.22

0.05

November 17,

2011

Purchase from

secondary market 62,588 Cash 5/- 82.95/- 0.14

0.03

November 18,

2011

Purchase from


0.04

November 22,

2011

Purchase from


0.02

November 24,

2011

Purchase from


November 29,

2011

Purchase from


Total 85,29,366 18.49 4.35 # Assuming full subscription of the Issue

(1) On June 30, 2005, Reliance Land Private Limited entered into two separate share purchase agreements with Vasanji Asaria Mamania and

Rubaiyat Arun Patel, being erstwhile shareholders of our Company, for acquiring 44,00,000 Equity Shares and 14,00,000 Equity Shares,

respectively, i.e. aggregating to 58,00,000 Equity Shares.

(2) On October 14, 2009, there was an intergroup transfer from AAA Entertainment Private Limited to Reliance Capital Limited.

b. The Issue is exempted from the requirements of minimum promoters’ contribution in accordance with Regulation 34(c) of the ICDR

Regulations.

c. Our Promoters have, through the letters dated July 26, 2012 and July 1, 2013 (“Subscription Letters”), jointly and / or severally,

undertaken to (i) apply for Equity Shares being offered to them pursuant to the Issue to the extent of their Rights Entitlements; (ii)

apply directly or through our Company’s Promoter Group for any Equity Shares renounced in their favour; and (iii) apply directly or

through the Company’s Promoter Group for any additional Equity Shares in the Rights Issue only to the extent of any unsubscribed

74

portion of the Rights Issue, subject to applicable law, to ensure that at least 90% of the Rights Issue is subscribed (together the

“Promoter Subscription”).

As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in accordance with the paragraph

above, either / both Promoters may acquire Equity Shares over and above their Rights Entitlements which may result in an increase in

their shareholding, individually and / or collectively, above their current shareholding. Any such subscription and acquisition of Equity

Shares by either / both Promoters in the Rights Issue will not result in change of control of the management of the Company in

accordance with Regulation 3 (2) of the Takeover Code and shall be exempt in terms of Regulation 10 (4) (b) of the Takeover Code.

Further, such subscription to additional Equity Shares by either / both Promoters beyond their Rights Entitlements will be in accordance

with the provisions of Regulation 10(4) (b) of the Takeover Code. As such, other than meeting the requirements indicated in the chapter

entitled “Objects of the Issue” at page 81 of this Letter of Offer, there is no other intention / purpose for the Issue, including any

intention to delist our Equity Shares, even if, as a result of any Allotment in the Issue to either / both Promoter(s) and / or the members

of our Promoter Group, the shareholding of our Promoters and/or Promoter Group in our Company exceeds their current shareholding.

However, such participation will not result in breach of minimum public shareholding requirement stipulated in the equity Listing

Agreement entered into between us and the Stock Exchanges.

d. Our Company had availed of unsecured loans aggregating `1,18,834.50 lakhs (“RCL Loan”) from Reliance Capital Limited, which is

one of our Promoters. As at May 31, 2013, the total amount outstanding for the RCL Loan was `1,14,783.43 lakhs. For further

details, please see the chapter entitled “Financial Indebtedness” at page 225 of this Letter of Offer. Reliance Capital Limited through

its letter dated March 8, 2013 and July 1, 2013 has consented to adjust the RCL Loan towards share application money against

Promoter Subscription. Consequently, no fresh Issue proceeds would be received by our Company to such an extent. For further

details, please see the chapter entitled“Objects of the Issue” at page 81 of this Letter of Offer.

3. Shareholding Pattern of our Company

The table below presents the shareholding pattern of Equity Shares for the quarter ended June 30, 2013 is as follows:

75

Category

code

Category of

Shareholder

Number of

Shareholders

Total number

of shares

Number of shares

held in

dematerialized

form

Total shareholding as a percentage

of total number of shares

Shares Pledged or otherwise

encumbered

As a percentage of

(A+B)

As a

percentage of

(A+B+C)

Number

of shares

As a percentage

(I) (II) (III) (IV) (V) (VI) (VII) (VIII) (IX)=(VIII) /

(IV)*100

(A) Shareholding of Promoter and

Promoter Group

NA NA

1 Indian

(a) Individuals/ Hindu Undivided Family

(b) Central Government/ State

Government(s)

(c) Bodies Corporate 2 2,91,29,366 2,91,29,366 63.15 63.15

(d) Financial Institutions/ Banks

(e) Any Other(Specify)

Sub Total(A)(1) 2 2,91,29,366 2,91,29,366 63.15 63.15

2 Foreign

A Individuals (Non-Resident

Individuals/Foreign Individuals)

B Bodies Corporate

C Institutions

D Qualified Foreign Investors

E Any Other (specify)

Sub Total(A)(2) 0 0 0 0.00 0.00

Total Shareholding of Promoter

and Promoter Group (A)=

(A)(1)+(A)(2) 2 2,91,29,366 2,91,29,366 63.15 63.15

76

Category

code

Category of

Shareholder

Number of

Shareholders

Total number

of shares

Number of shares

held in

dematerialized

form




encumbered

As a percentage of

(A+B)

As a

percentage of

(A+B+C)

Number

of shares

As a percentage

(B) Public shareholding N.A. N.A.

1 Institutions N.A. N.A.

(a) Mutual Funds/ UTI 0 0 0 0.00 0.00

(b) Financial Institutions /Banks 3 60,005 60,005 0.13 0.13

(c) Central Government/ State

Government(s)

(d) Venture Capital Funds

(e) Insurance Companies

(f) Foreign Institutional Investors 1 1 1 0.00 0.00

(g) Foreign Venture Capital Investors

(h) Qualified Foreign Investors

(i) Any Other (specify)

1. Trust 0 0 0 0.00 0.00

Sub-Total (B)(1) 4 60,006 60,006 0.13 0.13

2 Non-institutions

(a) Bodies Corporate 1,085 35,36,123 35,36,123 7.67 7.67

(b) Individuals-

i. Individual shareholders holding

nominal share capital up to `1

lakh 93,142 1,12,36,983 1,12,08,265 24.36 24.36 ii. Individual shareholders

holding nominal share capital in

excess of `1 lakh. 26 14,27,032 14,27,032 3.09 3.09

77

Category

code

Category of

Shareholder

Number of

Shareholders

Total number

of shares

Number of shares

held in

dematerialized

form




encumbered

As a percentage of

(A+B)

As a

percentage of

(A+B+C)

Number

of shares

As a percentage

(c) Qualified Foreign Investors

(d) Any Other (specify)

1. Clearing Member 286 4,58,159 4,58,159 0.99 0.99

2. NRI (Repartriate)

566

2,50,317

2,50,267

0.54

0.54

3. NRI (Non-Repartriate) 147

27,280

27,280 0.06 0.06

4. HUF 1 900 0 0.00 0.00

5. Trust 1 4 4 0.00 0.00

Sub-Total (B)(2)

95,254

1,69,36,798

1,69,07,130

36.72 36.72

Total Public Shareholding

(B)= (B)(1)+(B)(2)

95,258

1,69,96,804

1.69.67.136

36.85

36.85

TOTAL (A)+(B)

95,260 4,61,26,170

4,60,96,502

100.00 100.00

(C) Shares held by Custodians and

against which Depository

Receipts have been issued

N.A. 1 Promoter and Promoter Group

2 Public

GRAND TOTAL (A)+(B)+(C)

95,260 4,61,26,170

4,60,96,502

100.00 100.00

78

4. The list of top 10 shareholders of our Company and the number of Equity Shares held by them is as under:

a. As of July 21, 2013:

Sr. No. Name of the Shareholder Number of Equity Shares

held

Percentage of

shareholding

1. Reliance Land Private Limited 2,06,00,000 44.66

2. Reliance Capital Limited 85,29,366 18.49

3. Thalia Infratech Private Limited 2,04,000 0.44

4. Atul Goel 2,00,000 0.43

5. Vimgi Investments Pvt Ltd 1,70,000 0.37

6. Veena Gupta 1,60,000 0.35

7 Adonis Niryat Private Limited 1,60,000 0.35

8. Gulshan Investment Company Limited 1,46,000 0.32

9. Elara India Opportunities Fund Limited 1,41,380 0.31

10. Manmohan Shetty 1,22,484 0.27

b. As of July 14, 2013:

Sr. No. Name of the Shareholder Number of Equity

Shares held

Percentage of

shareholding

2. Reliance Land Private Limited 2,06,00,000 44.66



4. Atul Goel 2,00,000 0.43

5. Vimgi Investments Pvt Ltd 1,70,000 0.37

6. Veena Gupta 1,60,000 0.35

7 Adonis Niryat Private Limited 1,60,000 0.35

8. Gulshan Investment Company Limited 1,46,000 0.32

9. Religare Finvest Ltd 1,36,495 0.30

10. Bonanza Portfolio Limited 1,28,261 0.28

c. As of July 22, 2011:

Sr. No. Name of the shareholder Number of Equity Shares

held

Percentage of

shareholding 1. Reliance Land Private Limited 2,06,00,000 44.66


3. Manmohan Shetty 17,91,234 3.88

4. Deutsche Securities Mauritius Limited 4,08,116 0.88

5. BNP Paribas Arbitrage 3,88,400 0.84


7. Macquarie Bank Limited 1,96,000 0.42

8. Globe Capital Market Limited 1,77,755 0.39

9. JM Financial Services Private Limited 1,62,000 0.35

10. DLF Commercial Developers Limited 1,15,943 0.25

5. Our Company, our Directors and the Lead Manager have not entered into any buy-back arrangement and / or safety net facility

for purchase of Equity Shares from any person.

6. Our Company has not issued Equity Shares during a period of one year preceding the date of this Letter of Offer.

7. Except Reliance Securities Limited, which has sold one share in April 2013, none of our Promoters, directors of our Promoters,

Promoter Group, our Directors and their immediate relatives have purchased or sold any Equity Shares during a period of six

months preceding the date on which this Letter of Offer with SEBI.

8. Except as stated in the chapter entitled “Our Management” at page 198 of this Letter of Offer, none of our Directors and their

immediate relatives or key management personnel hold any Equity Shares. None of our Promoter Group or directors of our

79

Promoters hold any Equity Shares in our Company.

9. Preferential allotments made by our Company after being a listed company have been made in compliance with the relevant

provisions of applicable law.

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

11. Our Company has 94,615 members as of July 21, 2013.

12. Our Company has not issued any Equity Shares pursuant to any scheme approved under the Sections 391-394 of the

Companies Act.

13. Neither the Lead Manager nor any associates of the Lead Manager hold any Equity Shares in our Company.

14. All Equity Shares will be fully paid up at the time of Allotment failing which such Equity Shares may be forfeited for non-

payment of calls within 12 months from the date of Allotment.

15. There are no outstanding warrants, options or rights to convert debentures, loans or other instruments convertible into the

Equity Shares.

16. There have been no financial arrangements whereby our Promoter Group, our Directors and their relatives have financed the

purchase by any other person of securities of our Company, other than in the normal course of the business of the financing

entity during a period of six months preceding the date of filing of this Letter of Offer.

17. Our Company’s shareholders have at the AGM held on December 24, 2012 approved a qualified institutions placement

(“QIP”) of Equity Shares or instruments that are convertible into or exchangeable with Equity Shares, in one or more tranches,

upto an aggregate amount not exceeding `50,000 lakhs. Our Company may undertake the QIP in accordance with the ICDR

Regulations, which may not be possible if our company has a negative networth as per the audited balance sheet of the

previous financial year. Except as stated above, there will be no further issue of Equity Shares, whether by way of issue of

bonus shares, preferential allotment, rights issue, or in any other manner during the period commencing from submission of

this Letter of Offer with SEBI until the Equity Shares have been listed.

18. Except the QIP as set out above, our Company presently does not intend or propose to alter the capital structure for a period of

six months from the Issue Opening Date, by way of split or consolidation of the denomination of Equity Shares or further issue

of Equity Shares (including issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares)

whether on a preferential basis or issue of bonus or rights or further public issue of specified securities or otherwise. However,

if our Company enters into acquisitions, joint ventures or other arrangements, our Company may, subject to necessary

approvals, consider raising additional capital to fund such activity or use Equity Shares as currency for acquisitions or

participation in such joint ventures.

19. Further, the shareholders of our Company pursuant to a resolution passed at the AGM held on August 31, 2010 have in terms

of section 81(1A) of the Companies Act and the SEBI (Employee Stock Option Scheme and Employee Stock Purchase

Scheme) Guidelines, 1999, accorded their consent to our Board of Directors to introduce and implement the Reliance

MediaWorks Employee Stock Option Scheme (“ESOS Scheme”). In terms of the resolution, our Board of Directors is also

authorised to issue and allot Equity Shares of our Company and/or options giving rights to purchase or subscribe such number

of Equity Shares/equity linked instruments including depository receipts (“ESOS Securities”) which could give rise to the

issue of Equity Shares of our Company, to the permanent employees of our Company, our Subsidiaries and our Directors on

such terms as may be decided by our Board of Directors.

Additionally, the number of ESOS Securities issued to any single employee, including any non executive or independent

director, during any one year shall be less than 1% of the issued and paid up Equity Shares of our Company i.e. upto 4,61,261

Equity Shares. However, the aggregate number of securities issued shall not exceed 10% of the paid up share capital of our

Company as on August 2, 2010 i.e. 46,12,617 Equity Shares.

As on the date of this Letter of Offer, our Company has not granted any ESOS Securities under the aforesaid scheme.

20. 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.

80

21. The Equity Shares are fully paid up and there are no partly paid up Equity Shares as on the date of filing this Letter of Offer.

22. The Issue will remain open for a minimum of 15 days. The Board of Directors or duly authorised committee thereof shall have

the right to extend the Issue period as it may determine from time to time, provided that the issue will not be kept open in

excess of 30 days from the Issue Opening Date.

23. An over-subscription to the extent of 10% of the Issue may be retained for the purpose of rounding off to the nearer multiple of

minimum allotment lot.

81

OBJECTS OF THE ISSUE

The objects of the Issue are:

1. Repayment / prepayment of debt; and

2. General corporate purposes.

The main objects set out in our Memorandum of Association enable us to undertake our existing activities and the activities for which

funds are being raised by us through the Issue.

Requirement of Funds

The details of the Net Proceeds are set forth in the following table:

Sr. No. Description Amount (In ` lakhs)

1. Gross proceeds of the Issue 59,964.02

2. Issue expenses 350.00

3. Net Proceeds 59,614.02

Means of Finance

The following table details the objects of the Issue and the amount proposed to be financed from the Net Proceeds of the Issue:

Sr. No. Objects of the Issue Amount proposed to be

financed from Net Proceeds of

the Issue (In ` lakhs)

Percentage amount proposed to be

financed from Net Proceeds of the

Issue (%)

1. Repayment/ prepayment of debt to Reliance

Capital Limited, viz one of our Promoters

45,000 75.05

2. Repayment/ prepayment of debt to other

lenders

14,200 23.68

3. General corporate purposes 414.02 0.69

Total 59,614.02 100.00

Utilization of Net Proceeds

The details of utilisation of net proceeds of the Issue will be in accordance with the table set forth below:

Sr. No. Particulars Amount to be utilised (In ` lakhs)

Upto September 2014

1. Repayment/ prepayment of debt to Reliance Capital Limited, viz one

of our Promoters

45,000

2. Repayment/ prepayment of debt to certain lenders 14,200

3. General corporate purposes 414.02

Total 59,614.02

Details of the Objects of the Issue

The stated objects of the Issue are proposed to be financed entirely out of the Net Proceeds. Accordingly, we confirm that there is no

requirement for us to make firm arrangements of finance through verifiable means towards 75% of the stated means of finance,

excluding the amount to be raised through the Issue. The Net Proceeds, after deduction of all issue expenses, are estimated to be

approximately ` 59,614.02 lakhs. The details in relation to Objects of the Issue are set forth herein below.

82

The fund requirement described below is based on the management estimates and is not appraised by any bank or financial institution. In

case of any shortfall or any variation in the actual utilization of funds earmarked for the objects mentioned above, such shortfall or

increased fund deployment for a particular activity will be financed through internal accruals and additional borrowings. If there is any

surplus from the Net Proceeds after meeting all the above mentioned objects, such surplus proceeds will be used for general corporate

purposes. Further, since the Net Proceeds of the Issue are not intended to be utilized for any project, there is no schedule of

implementation or any deployment of funds.

Our Company has availed of certain long-term and other short-term loan facilities from various banks, financial institutions, other

lenders and one of our Promoters. These loan facilities aggregated `2,53,334.50 lakhs as at May 31, 2013 and the amount outstanding

under these facilities as at May 31, 2013 was ` 226,518.80 lakhs. For further details of the long-term and short-term loan facilities

availed by our Company, please see the chapter entitled “Financial Indebtedness” at page 225 of this Letter of Offer. Our Company

intends to utilise ` 59,200 lakhs towards repayment and/or pre-payment of a portion of such outstanding debt.

1. Repayment of debt to Reliance Capital Limited

The following table provides the details of the unsecured loans availed by our Company from Reliance Capital Limited which are

proposed to be repaid and/or prepaid out of the Net Proceeds (“Identified Loans”) as certified by Sandeep S. Shah, Chartered

Accountants vide their certificate dated July 1, 2013:

Sr.

no.

Name of

the lenders

Nature of

borrowing

Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding as

at May 31, 2013

(In `lakhs)

Interest

Tenure

Repayment

1. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

March 7, 2012

25,187.50 21,136.43(1)

13.00%

p.a.

One year from the

date of

disbursement

On Demand

2. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

March 30, 2012

1,900.00 1,900.00(1)

13.00%

p.a.

One year from the

date of

disbursement

On Demand

3. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

April 3, 2012

18,850.00 18,850.00(1)

13.00%

p.a.

One year from the

date of

disbursement

On Demand

4. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

May 7, 2012

39,840.00 39,840.00(1)

13.00%

p.a.

One year from the

date of

disbursement

On Demand

5. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

June 7, 2012

3,863.50 3,863.50(1)

13.00%

p.a.

One year from the

date of

disbursement

On Demand

6. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated July

3, 2012

7,690.00 7,690.00(1)

13.00%

p.a.

One year from the

date of

disbursement

On Demand

7. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

September 10, 2012

4,565.50 4,565.50 13.00%

p.a.

One year from the

date of

disbursement

On Demand

8. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

3,238.00 3,238.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand

83

Sr.

no.

Name of

the lenders

Nature of

borrowing

Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding as

at May 31, 2013

(In `lakhs)

Interest

Tenure

Repayment

October 25, 2012

9. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

November 23, 2012

2,400.00 2,400.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand

10. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

December 6, 2012

3,500.00 3,500.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand

11. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

January 8, 2013

4,200.00 4,200.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand

12. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

February 5, 2013

2,000.00 2,000.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand

13. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

May 15, 2013

1,600.00 1,600.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand

Total 118,834.50 114,783.43

(1) These loans were due within one year from the date of respective disbursements and are currently overdue.

Each of our Promoters have undertaken by their letters dated July 1, 2013, jointly and / or severally to: (a) to apply for Equity Shares

being offered to us pursuant to the Rights Issue to the extent of our Rights Entitlements; (b) to apply directly or through the Company’s

Promoter Group for any Equity Shares renounced in their favour; and (c) to apply directly or through the Company’s Promoter Group for

any additional Equity Shares in the Rights Issue only to the extent of any unsubscribed portion of the Rights Issue, subject to applicable

law, to ensure that at least 90% of the Rights Issue is subscribed.

Reliance Capital Limited through its letters dated March 8, 2013 and July 1, 2013 has consented to adjust the RCL Loan towards share

application money against Promoter Subscription. Consequently no fresh Issue proceeds would be received by our Company to such an

extent.

None of the identified loans provide for any penalty in the event of pre-payment of the outstanding amounts under such loans.

2. Repayment / pre-payment of loans from other lenders

A. Loans from banks

In addition to the above, we may also repay/pre-pay loan facilities availed from various financial institutions, including banks, in part or

full. Details of our outstanding loan facilities as certified by Sandeep S. Shah, Chartered Accountants vide their certificate dated July 1,

2013, are set out below.

Sr.

No.

Name of the

lender

Nature and date of the loan

agreement/sanction letter

Purpose of

utilisation

Amount

sanctioned as

at May 31,

2013 (in ₹

lakhs)

Amount

outstanding as

at May 31,

2013 (in ₹

lakhs)

Interest

(% per annum)

1. Union Bank of

India

Term loan agreement dated

January 29, 2010 and review

For financing

our Company’s

8,000.00 4,000.00(1) Base Rate +

3.50% p.a.

84

Sr.

No.

Name of the

lender

Nature and date of the loan

agreement/sanction letter

Purpose of

utilisation

Amount

sanctioned as

at May 31,

2013 (in ₹

lakhs)

Amount

outstanding as

at May 31,

2013 (in ₹

lakhs)

Interest

(% per annum)

letter dated January 18, 2010

as modified by the sanction

letter dated February 9, 2010.

This was further modified by

the sanction letter dated July

27, 2011. Our Company

accepted this revision effective

from June 6, 2012 vide

agreement dated June 7, 2012

Studio project

in Mumbai

2. Syndicate Bank General Agreement dated June

11, 2010 and the sanction letter

dated May 31, 2010 as

supplemented by letter dated

July 18, 2011

For augmenting

long term

working capital

requirement

15,000.00 8,437.50(2) Base Rate +

2.50% p.a.

3. Syndicate Bank General agreement dated June

10, 2011 and sanction letter

dated June 6, 2011 and

modified vide letter dated

October 10, 2011

Long term

working capital

10,000.00 10,000.00 Base rate + 1%

p.a.

4. Barclays Bank PLC 12.50% unsecured redeemable

Non –

Convertible Debentures

Adjustment of

amounts

payable under

an interest rate

swap

4,400.00 2,750.00(3) 12.50% p.a.,

compounded

monthly,

payable

quarterly in

arrears

Total 37,400.00 25,187.50 (1) On June 28, 2013 our Company repaid an installment of ` 400 lakhs. Accordingly, repayment of the said loan, if any, from the Net Proceeds will be

only to the extent of ` 3,600 lakhs. (2) On June 13, 2013 our Company repaid an installment of ` 937.50 lakhs. Accordingly, repayment of the said loan, if any, from the Net Proceeds will

be only to the extent of ` 7,500.00 lakhs. (3) On June 10, 2013 our Company repaid Series D of ` 550 lakhs. Accordingly, repayment of the said loan, if any, from the Net Proceeds will be only to

the extent of ` 2,200 lakhs.]

B. Loans from other lenders

Loans from other lenders as certified by Sandeep S. Shah, Chartered Accountants vide their certificate dated July 1, 2013, are set out

below:

Sr.

No.

Name of the

lender

Nature and date of the

loan agreement/sanction

letter

Amount sanctioned as at

May 31, 2013 (in ₹ lakhs)

Amount outstanding as at

May 31, 2013 (in ₹ lakhs)

Interest

(% per annum)

1. Magma Fin Corp

Limited

Inter corporate deposit

facility agreement dated

March 26, 2012, renewal

letter dated September 8,

2012 and March 20, 2013

2,200.00 2,200.00 12.00% p.a.

2. Magma Fin Corp

Limited

Inter corporate deposit

facility agreement dated

April 30, 2012, renewal

letter dated October 9,

2012 and April 6, 2013

1,300.00 1,300.00 12.00% p.a.

Total 3,500.00 3,500.00

85

Our Company intends to utilise the Net Proceeds to pre-pay / repay, in part or full, some of our outstanding loans availed of from various

financial institutions including banks. The rationale for pre-paying / repaying these facilities, inter alia, is to reduce our prevailing high

interest costs and to increase our administrative and operating flexibility.

We will identify the facilities to be repaid based, amongst others, on the factors set out below.

a. Sanction limits granted;

b. Existence of other facilities from the same lender;

c. Prevailing rate of interest; and

d. Operational flexibility.

86

The details of outstanding loan facilities availed from one of our Promoter, various financial institutions, banks and others along with end utilization of the same, as certified by Sandeep S. Shah,

Chartered Accountants vide their certificate dated July 1, 2013, are as follows:

Table A: Unsecured inter-corporate deposits taken from Promoters – Reliance Capital Limited

Sr.

no.

Name of the

lenders

Nature of

borrowing

Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure

Repayment First level

utilization of loans

Subsequent traces Subsequent traces - 1 Subsequent traces –

2

1. Reliance

Capital Limited

Inter corporate

deposit facility agreement

dated March 7,

2012

25,187.50 21,136.43(1) 13.00%

p.a.

One year from the

date of disbursement

On Demand Towards repaying

commercial paper (CP) aggregating

`10,500 lakhs on

March 31, 2012. The CP was issued

on November 23, 2011 to Yes Bank.

Towards to

repaying a part of

CP’s aggregating `

12,500 lakhs on

November 25, 2011. The CP was

issued to Yes Bank on February 25,

2011 (Net proceeds

from issue# – ` 11,490.20 lakhs)

Towards repaying a loan

of ` 10,000 lakhs availed from Bank of India. The

loan was availed of on

May 28, 2010 and was repaid on February 28,

2011 ,

Towards repaying CP

aggregating ` 2,500 lakhs issued to IFCI

Limited on March 4,

2010 and balance ` 7,500 lakhs was used

to repay a part of a Syndicate Bank loan

of ` 10,000 lakhs

raised on December 24, 2009.

Refer note no. 4

below for details of utilization of CP

issued to IFCI

Limited

The loan from

Syndicate Bank was used towards

repaying a loan of

` 10,000 lakhs availed from

Allahabad Bank on January 9, 2009.

The loan was

repaid on January 8, 2010.

Refer note no 6 for

details of Allahabad Bank

loan utilization

Funding subsidiaries towards their capital

expenditure and working

capital requirements – `

267.71 lakhs (End Use)

Working capital

requirements of the

Company – ` 1,222.49

lakhs (End Use)

87

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

Towards repaying an installment of a

loan aggregating to

` 10,000 lakhs availed of from

Syndicate Bank – ` 1,250 lakhs

The loan was drawn in various tranches

aggregating `

10,000 lakhs. The first drawdown

of ` 2,500 lakhs was on September

18, 2009.

` 1,080 lakhs towards capital

expenditure for the

Company’s theatrical exhibition

business. (End Use)

` 689.50 lakhs - Funding

subsidiaries towards their capital

expenditure and

working capital requirements (End

Use)

` 730.50 lakhs towards the

Company’s working capital requirements

(End Use)

Second drawdown

of ` 3,500 lakhs was on September

29, 2009.

` 763.50 lakhs - Funding

subsidiaries towards

their capital expenditure and

working capital

requirements (End

Use)

` 760 lakhs towards capital expenditure

for the Company’s

theatrical exhibition

business (End Use)


for the Company’s

film production services business

88

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

(End Use).

` 1,239.50 lakhs

towards the


(End Use)

Third drawdown of ` 2,000 lakhs was

October 29, 2009.

` 190 lakhs – Funding


expenditure and


Use)

` 481.31 lakhs towards capital

expenditure for the

Company’s


business(End Use)


expenditure for the Company’s film

production services

business (End Use)

` 646.30 lakhs

towards the Company’s working

capital requirements

(End Use)

Fourth drawdown

of ` 2,000 lakhs –

December 29, 2009

` 1,500 lakhs -

funding subsidiaries

towards their capital expenditure and

working capital

requirements (End

89

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

Use)–

` 357.68 lakhs

towards capital

expenditure for the Company’s film

production services

business (End Use).

` 142.32 lakhs



(End Use)

Towards repaying a

sum of ` 937.50

lakhs, an installment of a

loan aggregating ` 15,000 lakhs

availed of from

Syndicate Bank –

Loan of ` 15,000

lakhs availed from

Syndicate Bank on June 14, 2010

Towards repaying loan

of ` 10,000 lakhs

availed from Union Bank of India and drawn

down on December 15,

2009 and December 30,

2009. The loan was

repaid on June 15, 2010.

Towards repaying a

secured loan of `

10,000 lakhs availed from Syndicate Bank

on December

31,2008. The loan

was repaid on

December 30, 2009.

Refer note no 2

below

` 1,733 lakhs - Funding


expenditure and


Use)


for the Company’s

theatrical exhibition business (End Use).

` 1,066.90 lakhs towards capital

expenditure for the

Company’s film

90

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

production services business. (End Use)

` 1,991.10 lakhs



(End Use)

Towards repaying

CPs worth `12,500

lakhs on March 9, 2012. The CP was

issued on October

10, 2011 to Yes Bank. (Net

proceeds from

issue# – ` 11,920.55)

Used to repay CPs

of ` 10,000 raised

from Franklin

Templeton on

February 3, 2011.

The CP was repaid

on October 12,

2011. (Net

proceeds from

issue# – ` 9,252.39)

Used to repay CPs of ` 7,500 lakhs raised from

LIC Income Plus MF on May 19, 2010. The CPs

were repaid on February

4, 2011 (Net proceeds

from issue# – `

7,191.46)

Used to repay

CPs of ` 2,500

lakhs and `

1,500 lakhs

raised on November 25,

2009 and

November 30, 2009,

respectively,

from JM Mutual Fund.

The CPs were

repaid on May 25, 2010.

` 713 lakhs towards capital

expenditure of


business (End

Use).

` 203.11 lakhs

towards capital expenditure of

film production

services business (End

Use).

Refer note no 5

91

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

Working capital

requirements

of the

Company – `

2,275.35 lakhs (End Use)

` 310 lakhs towards

capital expenditure for the Company’s

film production

services business. (End Use)


expenditure for the

Company’s theatrical exhibition

business. (End Use)

` 933.87 lakhs

towards the


(End Use)

92

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

` 1,920.15 lakhs

towards the

Company’s

working capital

requirements part

(End Use)

2. Reliance

Capital Limited

Inter corporate


dated March

30, 2012

1,900.00 1,900.00(1) 13.00%

p.a.

One year from the


On Demand ` 1,900 lakhs

towards the Company’s

working capital

requirements (End

Use)

3. Reliance Capital

Limited

Inter corporate deposit facility

agreement

dated April 3, 2012

18,850.00 18,850.00(1) 13.00% p.a.

One year from the date of

disbursement

On Demand Repayment of loan

from DBS Bank – `

15,000 lakhs

The loan from DBS

Bank of ` 15,000

lakhs was used to

repay / redeem outstanding foreign

currency

convertible bonds aggregating Euro

20.65 million i.e. ` 15,488.66 lakhs.

The FCCB proceeds of Euro 84 million (` 45,719.94 lakhs) was utilized to inter alia for:

Establishing / acquiring new theatrical

exhibition complexes - ` 7,258.75 lakhs;

Film distribution - ` 1,394 lakhs;

Film production - ` 15,271.11 lakhs; and

Radio business - ` 16,630.82 lakhs.

(End Use)

Repayment of a

Yes Bank loan of ` 2,000 lakhs.

` 2,000 lakhs


working capital

requirements. (End

Use)

` 1,850 lakhs


working capital

requirements (End

Use)

93

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

4. Reliance Capital

Limited


agreement

dated May 7, 2012

39,840.00 39,840.00(1) 13.00% p.a.


disbursement

On Demand Repayment of a

Yes Bank loan of `

1,000 lakhs.

` 1,000 lakhs towards the

Company’s


Use)

Repayment of a syndicated bank

loan of – `

13,333.33 lakhs

The syndicated loan

of ` 40,000 lakhs

was utilized

towards

Repaying CPs

aggregating ` 25,500 lakhs;

capital expenditure of

theatrical

exhibition

business – `

14,500 lakhs

Refer note no. 1 regarding details of bank loan facilities availed by the Company

Repayment of a Canara Bank loan

of ` 12,500 lakhs raised on

September 28,

2010.

Repayment of CPs issued to IFCI

Limited of

` 2,500 lakhs on October 14, 2010

and July 16, 2010 (Net proceeds from

issue# – ` 2,451.05)


for the Company’s film production

services business.

(End Use)

` 94 lakhs towards



business. (End Use)

` 1,943.05 lakhs

towards the


(End Use)

94

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

Towards repaying a

loan of ` 10,000

lakhs availed from

Union Bank on June 18, 2010. The

loan was repaid on

October 18, 2010.

Towards repaying a loan

of ` 10,000 availed from

Syndicate Bank on

December 24, 2009. The loan was repaid on June

24, 2010.

Towards repaying a

loan of ` 10,000

lakhs availed from Allahabad Bank on

January 9, 2009. The

loan was repaid on January 8, 2010.

Refer note no 6

Repayment of a

Canara Bank loan

of ` 7,500 lakhs

raised on November 15, 2010

Towards repaying a

CP of ` 4,000 lakhs –November 26,

2010 (LIC Mutual Fund issued on

August 30, 2010)

(Net proceeds from

issue# – ` 3,926.17

lakhs)

` 168 lakhs – Funding


their capital expenditure and

working capital

requirements (End

Use)


for the Company’s

film production services business.

(End Use)

` 3,703.17 lakhs towards the


(End Use)

Towards repaying a

short term loan on December 2, 2010

– ` 1,500 lakhs –

HDFC Bank Short

term loan , drawn

on September 3, 2010)

` 1,500 lakhs – Funding subsidiaries towards

their capital expenditure

and working capital

requirements (End Use)

95

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

Towards repaying a

part of CPs on

December 3, 2010

– Used for part

payment of CPs

aggregating `

20,000 lakhs

(LIC Mutual Fund

` 10,000 lakhs and

LIC Mutual Fund –

` 10,000 lakhs

issued on January

29, 2010) (Net

proceeds from

issue# - ` 18,998.04

lakhs)

Towards repaying CPs

of ` 2,500 lakhs –

Religare Mutual Fund

taken on January 6, 2010

and repaid on February

26, 2010

Towards partly repaying a loan of

Allahabad Bank of `

10,000 lakhs drawn on January 9, 2009

Refer note no 6

Towards repaying CPs

of ` 5,000 lakhs issued to JM Mutual Fund on

January 6, 2010 and

repaid on February 26, 2010

Towards party repaying

CPs of ` 17,500 lakhs

partly issued to LIC Mutual Fund:

` 12,500 lakhs on December 8, 2009 ;

and

` 5,000 lakhs on

December 14, 2009.

The CPs was repaid on March 8, 2010.

Towards repaying the

following CPs

` 3,000 lakhs -

Religare Mutual Fund –

issued on

September 9, 2009

` 7,000 lakhs –

JM Mutual Fund – issued

on September 9, 2009

` 2,500 lakhs –

Andhra Bank – issued on

September 9,

2009

towards partly

repaying CPs

CP’s of Religare Mutual Fund, JM

Mutual Fund and

Andhra Bank were partly used for

funding of a CP

Yes Bank Limited

– ` 15,000 lakhs

issued on April 29, 2009 and repaid on

September 9, 2009

(Net proceeds

from issue# - `

14,562.24 lakhs) Refer note no 7

For details of utilization of IDFC

Limited refer note

no 8

96

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

issued to IDFC

Limited of `

15,000 lakhs –

raised on September 14,

2009 and due

on December 14, 2009

Repayment of loan

of Yes Bank – ` 3,000 lakhs

500 lakhs –

Funding subsidiaries

towards their capital

expenditure

and working capital

requirements

(End Use)

2,500 lakhs

towards the

Company’s working capital

requirements

(End Use)

Repayment of loan

of Yes Bank – `

1,500 lakhs

` 1,500 lakhs

towards the


requirements (End

Use)

– ` 1,006.67 lakhs

towards the


requirements (End

Use)

97

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

5. Reliance Capital

Limited


agreement

dated June 7, 2012

3,863.50 3,863.50(1) 13.00% p.a.


disbursement

On Demand Repayment of loan of Syndicate Bank

– ` 937.50 lakhs

Refer utilization given in Sr. No. 1

of Table A given

for Syndicate Bank

repayment of `

937.50 lakhs

Repayment of loan of Syndicate Bank

– ` 1,250 lakhs

Refer utilization given in Sr. No. 1

of Table A given

for Syndicate Bank

repayment of `

1,250 lakhs

Repayment of an installment of loan

from Union Bank

of India – ` 400 lakhs

` 400 lakhs was expended towards

capital expenditure

for the studio at Film City, Mumbai.

(End Use)

Funding subsidiaries

towards their

capital expenditure and working capital

requirements – `

570.49 lakhs (End

Use)

` 705.51 lakhs towards the

Company’s


Use)

6. Reliance

Capital Limited

Inter corporate


dated July 3,

2012

7,690.00 7,690.00(1) 13.00%

p.a.

One year from the


On Demand Funding

subsidiaries towards their

capital expenditure

and working capital

98

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

requirements – ` 4,401.45 lakhs

(End Use)


Company’s


Use)

7. Reliance Capital

Limited


agreement

dated September 10,

2012

4,565.50 4,565.50 13.00% p.a.


disbursement

On Demand Funding subsidiaries

towards their


requirements – `

937.11 lakhs (End

Use)

Repayment of an

installment of loan from Union Bank

of India – ` 400

lakhs

` 400 lakhs was

expended towards capital expenditure

for the studio at

Film City, Mumbai. (End Use)

Repayment of a

series of non-

convertible

debentures issue to

Barclays Bank PLC

– `550 lakhs

Adjustment of

amounts payable

under an interest

rate swap held by

the Company

converted into

Unsecured

Redeemable Non -

Convertible

Debentures (End

Use)

99

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

` 1,740.89 lakhs

towards the

Company’s

working capital

requirements (End

Use)

Towards repaying a

sum of ` 937.50 lakhs, an

installment of a


availed of from Syndicate Bank –

Loan of ` 15,000

lakhs availed from Syndicate Bank on

June 14, 2010


of ` 10,000 lakhs availed from Union

Bank of India and drawn

down on December 15, 2009 and December 30,

2009. The loan was


` 1,733 lakhs -

Funding


their capital

expenditure and working capital

requirements (End

Use)

` 209 lakhs towards



business (End Use).

` 1,066.90 lakhs

towards capital

expenditure for the

Company’s film

production services business. (End Use)

` 1,991.10 lakhs

towards the

Towards repaying a

secured loan of ` 10,000 lakhs availed

from Syndicate Bank

on December 31, 2008. The loan was

repaid on December

30, 2009.

Refer note no 2

below

100

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2


(End Use)

8. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement

dated October

25, 2012

3,238.00 3,238.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand Funding

subsidiaries

towards their

capital expenditure

and working capital

requirements – `

329.17 lakhs (End

Use)

` 2,908.83 lakhs


working capital

requirements (End

Use)

9. Reliance

Capital

Limited

Inter corporate

deposit facility

agreement dated

November 23, 2012

2,400.00 2,400.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand Funding

subsidiaries

towards their capital expenditure

and working capital

requirements – `

331.77 lakhs (End

Use)

` 2,068.23 lakhs

towards the


requirements (End

Use)

10. Reliance

Capital

Limited

Inter

corporate

deposit

facility

3,500.00 3,500.00 13.00%

p.a.

One year from the

date of

disbursement

On Demand Funding

subsidiaries

towards their capital expenditure

and working capital

requirements – `

101

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

agreement

dated

December

6, 2012

531.50 lakhs (End

Use)

Repayment of an

installment of loan

from Union Bank

of India – ` 400

lakhs

` 400 lakhs was

expended towards capital expenditure

for the studio at

Film City, Mumbai. (End Use)

Repayment of a

series of non-

convertible

debentures issue to

Barclays Bank PLC

– `550 lakhs

Adjustment of

amounts payable

under an interest

rate swap held by

the Company

converted into

Unsecured

Redeemable Non -

Convertible

Debentures (End

Use)

Towards repaying a

sum of ` 937.50

lakhs, an installment of a


availed of from

Syndicate Bank –

Loan of ` 15,000

lakhs availed from

Syndicate Bank on June 14, 2010


of ` 10,000 lakhs

availed from Union Bank of India and drawn

down on December 15,

2009 and December 30, 2009. The loan was


` 1,733 lakhs - Funding


expenditure and


Use)

Towards repaying a

secured loan of `

10,000 lakhs availed from Syndicate Bank

on December 31,

2008. The loan was repaid on December

30, 2009.

Refer note 2 below

102

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2


for the Company’s

theatrical exhibition business (End Use).

` 1,066.90 lakhs towards capital

expenditure for the

Company’s film production services

business. (End Use)



(End Use)

` 1,081 lakhs towards the

Company’s


Use)

11. Reliance Capital

Limited

Inter

corporate

deposit

facility

agreement

dated

January 8,

2013

4,200.00 4, 200.00 13.00% p.a.


disbursement

On Demand Funding subsidiaries

towards their


requirements – `

2,118.20 lakhs (End Use)

` 2,081.80

lakhs towards

the Company’s

working capital

requirements

(End Use)

103

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

12. Reliance

Capital

Limited

Inter

corporate

deposit

facility

agreement

dated

February 5,

2013

2,000.00 2,000.00 13.00%

p.a.

One year from

the date of

disbursement

On

Demand

Funding

subsidiaries

towards their

capital

expenditure and

working capital

requirements –

` 253.47 lakhs

(End Use)

` 1,746.53

lakhs towards

the Company’s

working capital

requirements

(End Use)

13. Reliance

Capital

Limited

Inter

corporate

deposit

facility

agreement

dated May

15, 2013

1,600.00 1,600.00 13.00%

p.a.

One year from

the date of

disbursement

On

Demand

Funding

subsidiaries

towards their

capital

expenditure and

working capital

requirements –

` 713.17 lakhs

(End Use)

Repayment of a

series of non-

convertible

debentures

issue to

Adjustment of

amounts

payable under

an interest rate

swap held by

104

Sr.

no. Name of the

lenders Nature of

borrowing Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May 31,

2013

(In ` lakhs)

Interest

Tenure




2

Barclays Bank

PLC – ` 550

lakhs

the Company

converted into

Unsecured

Redeemable

Non -

Convertible

Debentures

(End Use)

` 336.83 lakhs

towards the

Company’s

working capital

requirements

(End Use)

(1) These loans were due within one year from the date of respective disbursements and are currently overdue.

Table B: Loan facilities availed from various financial institutions, including banks and others

Sr.

No.

Name of

the lender


loan

agreement/sanction

letter

Purpose of

utilisation

Amount

sanctioned

as at May

31, 2013 (in

` lakhs)

Amount

outstanding

as at May 31,

2013 (in `

lakhs)

Interest

(% per

annum)

First level utilization of

loans

Subsequent traces Subsequent traces – 1 Subsequent

traces – 2

1. Union Bank

of India

Term loan agreement

dated January 29, 2010 and review letter dated

January 18, 2010 as

For financing

the Company’s

Studio 8,000.00 4,000.00

Base Rate +

3.50% p.a.

Capital expenditure

towards studio at Film City, Mumbai (End

Use).

105

Sr.

No.

Name of

the lender


loan

agreement/sanction

letter

Purpose of

utilisation

Amount

sanctioned

as at May

31, 2013 (in

` lakhs)

Amount

outstanding

as at May 31,

2013 (in `

lakhs)

Interest

(% per

annum)


loans


traces – 2

modified by the

sanction letter dated February 9, 2010

project in

Mumbai

2. Syndicate

Bank

General Agreement

dated June 11, 2010 and

the sanction letter dated

May 31, 2010 as

supplemented by letter

dated July 18, 2011

For

augmenting

long term

working

capital

requirement

15,000.00 8,437.50

Base Rate +

2.50% p.a. Loan of ` 15,000 lakhs

was drawn on 1June 4, 2010

` 10,000 lakhs used to repay loan

of ` 10,000 lakhs availed from Union Bank of India on

December 15, 2009 and

December 30, 2009. The loan was repaid on June 15, 2010

Repayment of a secured loan of ` 10,000 lakhs

availed from Syndicate Bank repaid on December 30, 2009. The loan was availed on

December 31, 2008.

Refer note 2

below

` 1,733 lakhs – Funding subsidiaries towards their

capital expenditure and

working capital requirements (End Use)

` 209 lakhs towards capital

expenditure for the Company’s theatrical

exhibition business. (End

Use)

` 1,066.90 towards capital

expenditure for the Company’s film production

services business. (End

Use)



requirements (End Use)

3. Syndicate

Bank

General agreement

dated June 10, 2011 and sanction letter dated

June 6, 2011

Long term

working capital

10,000.00 10,000.00

Base rate +

1% p.a.

Loan was drawn on 13

June 2011 and used for part repayment of CPs

issued to Franklin

Templeton aggregating

CP of Franklin Templeton raised

on December 28, 2010 was used

for repayment of a CP of `

20,000 lakhs raised from LIC

Mutual Fund issued on March 9,

CP of LIC Mutual Fund was used for the

repayment of CPs of ` 17,500 lakhs issued from LIC Mutual Fund on December 14, 2009

and repaid on March 26, 2010

Refer note 3

below

106

Sr.

No.

Name of

the lender


loan

agreement/sanction

letter

Purpose of

utilisation

Amount

sanctioned

as at May

31, 2013 (in

` lakhs)

Amount

outstanding

as at May 31,

2013 (in `

lakhs)

Interest

(% per

annum)


loans


traces – 2

`22,500 lakhs, drawn on

December 28, 2010 and repaid on June 15, 2011.

(Net proceeds from

issue# – ` 21,339.07 lakhs)

2010 – ` 5,000 lakhs and March

15, 2010 – ` 15,000 lakhs. The CP was repaid on December 29,

2010 (Net proceeds from issue#

– ` 18,908.92 lakhs)

Funding subsidiaries towards their capital

expenditure and working capital requirements –

` 1,408.92 lakhs (End Use)



requirements (End Use).

4. Barclays

Bank PLC

Unsecured Redeemable

Non - Convertible

Debentures

4,400.00 2,750.00

12.50% p.a.,

compounded

monthly, payable

quarterly in

arrears

Series A – September

18, 2012

Series B – December 10, 2012

Series C – March 10,

2013 Series D – June 10, 2013

Series E – September

10, 2013

Series F – December 10,

2013

Series G – March 10, 2014

Series H – June 10, 2014

Series A – September 18, 2012 –

` 550.00

Series B – December 10, 2012 -

` 550.00

Series C – March 10, 2013 - ` 550.00

Series D – June 10, 2013 - ` 550.00

Series E – September 10, 2013 -

` 550.00

Series F – December 10, 2013 - `

550.00

Series G – March 10, 2014 - `

550.00

Series H – June 10, 2014 - ` 550.00

Adjustment of amounts payable under an

interest rate swap held by the Company

converted into Unsecured Redeemable Non - Convertible Debentures (End Use)

107

Table C: Unsecured inter-corporate deposits - Others

Sr. no. Name of

the

lenders

Nature of

borrowing

Amount

sanctioned

(In ` lakhs)

Principal

amount

outstanding

as at May

31, 2013

(In ` lakhs)

Interest

Tenure

Repayment First level utilization

of loans

Subsequent traces Subsequent traces - 1 Subsequent traces – 2

1. Magma

Fin Corp

Limited

Inter

corporate

deposit facility

agreement

dated March 26, 2012

2,200.00 2,200.00 12.00%

p.a.

6 months from

date of drawl

On Demand Repayment of an

installment of loan

from Union Bank of

India – ` 400 lakhs

` 400 lakhs was

expended towards

capital expenditure

for the studio at Film

City, Mumbai (End

Use).

` 383 lakhs - Funding subsidiaries towards

their capital

expenditure and working capital

requirements (End

Use)

` 1,417 lakhs. towards the Company’s


Use)

2. Magma

Fin Corp Limited

Inter

corporate deposit

facility

agreement dated April

30, 2012

1,300.00 1,300.00 12.00%

p.a.

6 months from

date of drawl

On Demand ` 1,300 lakhs towards the Company’s

working capital

requirements (End

Use)

# - The CP’s have been issued at a discount to face value

108

Note no. 1: Syndicated loan from 6 Banks

Sr.

No.

Name of the

lender



letter

Purpose of

utilisation

Amount

Sanction

Amount

availed

Interest

(% per

annum)

First level

utilization of

loans

Subsequent

traces

Subsequent

traces - 1

Subsequent

traces – 2

1 Allahabad

Bank

June 27, 2012 Repayment of

existing

commercial

paper and

incurring fresh

capital

expenditure

5,000.00 5,000.00

13.25% -

(SBPLR –

1.50%) p.a.

Syndicated loan

of ₹40,000

lakhs was used

towards

repaying

commercial

papers

aggregating `

25,500 lakhs

and towards

capital

expenditure for

the Company’s

theatrical

exhibition

business – `

14,500 lakhs

(End Use).

Used for repayment of Commercial Papers (CP’s)

aggregating ₹25,500 lakhs in the matter set out below

CP issued to UTI Mutual Fund - ₹5,000 lakhs issued on

December 28, 2007 and repaid on March 26, 2008 (Net

proceeds from issue# – ₹ 4,898.48 lakhs)

Subsequent traces

CP issued to Tata Mutual Fund – ₹ 5,000 lakhs issued

on October 4, 2007 and repaid on December 28, 2007

(Net proceeds from issue# – ₹ 4,907.65 lakhs)

Subsequent traces

CP issued to ABN AMRO Mutual Fund – ₹ 5,000 lakhs

issued on July 6, 2007 and repaid on October 4, 2007

(Net proceeds from issue# – ₹ 4,903.87 lakhs)

Subsequent traces

₹ 4,903.87 lakhs was used to fund expansion of Radio

business, which was demerged from the Company

effective April 1, 2008 pursuant to scheme of demerger

approved by the High Court of Judicature at Mumbai

(End Use)

2 Export Import

Bank

June 27, 2012

7,000.00 7,000.00

3 Jammu &

Kashmir Bank

June 27, 2012

7,000.00 7,000.00

4 Syndicate

Bank

June 27, 2012

7,000.00 7,000.00

5 Union Bank of

India

June 27, 2012

6,000.00 6,000.00

6 Vijaya Bank June 27, 2012

8,000.00 8,000.00

109

Sr.

No.

Name of the

lender



letter

Purpose of

utilisation

Amount

Sanction

Amount

availed

Interest

(% per

annum)

First level

utilization of

loans

Subsequent

traces

Subsequent

traces - 1

Subsequent

traces – 2

Used for repayment of CP’s

CP issued to UTI Mutual Fund – ₹ 5,000 lakhs issued on



Subsequent traces

CP issued to Kotak Mahindra Mutual Fund – ₹ 3,000

lakhs issued on October 3, 2007 and repaid on December

28, 2007 (Net proceeds from issue# – ₹ 2,943.82 lakhs)

&

CP issued to Principal Mutual Fund – ₹ 2,000 lakhs

issued on October 5, 2007 and repaid on December 28,

2007 (Net proceeds from issue# – ₹ 1,964.07 lakhs)

Subsequent traces


July 5, 2007 and repaid on October 3, 2007 (Net

proceeds from issue# – ₹ 2,941.97 lakhs) &

CP issued to HSBC Mutual Fund – ₹ 2,000 lakhs issued

on July 6, 2007 and repaid on October 5, 2007 (Net


Subsequent traces





(End Use)

110

Sr.

No.

Name of the

lender



letter

Purpose of

utilisation

Amount

Sanction

Amount

availed

Interest

(% per

annum)

First level

utilization of

loans

Subsequent

traces

Subsequent

traces - 1

Subsequent

traces – 2


CP issued to Sundaram BNP Paribas Mutual Fund – ₹

3,000 lakhs issued on December 26, 2007 and repaid on

March 26, 2008 (Net proceeds from issue# – ₹ 2,937.74

lakhs)

Subsequent traces

CP repaid to Sundaram BNP Paribas Mutual Fund - ₹

3,000 lakhs issued on September 28, 2007 and repaid on

December 26, 2007 (Net proceeds from issue# – ₹

2,941.90 lakhs)

Subsequent traces

CP repaid to Sundaram BNP Paribas Mutual Fund – ₹

3,000 lakhs issued on July 10, 2007 and repaid on

September 28, 2007 (Net proceeds from issue# – ₹

2,954.67 lakhs)

Subsequent traces

₹ 2,000 lakhs was used to fund expansion of Radio




(End Use)&

₹ 954.67 lakhs towards capital expenditure for the

Company’s theatrical exhibition business (End Use).

111

Sr.

No.

Name of the

lender



letter

Purpose of

utilisation

Amount

Sanction

Amount

availed

Interest

(% per

annum)

First level

utilization of

loans

Subsequent

traces

Subsequent

traces - 1

Subsequent

traces – 2





Subsequent traces





(End Use)


CP issued to Principal Mutual Fund – ₹ 7,500 lakhs

issued on December 27, 2007 and repaid on March 26,

2008 (Net proceeds from issue# – ₹ 7,342.85 lakhs)

Subsequent traces





(End Use)

₹ 4,680.17 lakhs towards capital expenditure for the

Company’s theatrical exhibition business (End Use).

112

Note no. 2

Syndicate Bank loan availed on December 31, 2008 and repaid on December 30, 2009, used for repayment of

a. Non-convertible debentures issued to Canara Robecco Mutual Fund – ₹ 5,000 lakhs – issued on November 21, 2008 and repaid on January 9,

2009

Subsequent traces

Repayment of CP of JM Financial Mutual Fund of ₹5,000 lakhs issued on November 6, 2008 and repaid on November 21, 2008 (Net proceeds from

issue# - ₹4,969.37 lakhs)

Subsequent traces

Part repayment of a CP of JM Financial Mutual Fund - ₹10,000 lakhs issued on September 19, 2008 and repaid on November 6, 2008 (Net proceeds

from issue# - ₹9,844.64 lakhs)

Subsequent traces

Used for repayment of 3 CP’s

Issuer Amount (₹ in lakhs) Date of issue Date of repayment Net proceeds from issue#

(₹ in lakhs)

Birla Sunlife Trustee

Company Limited 5,000.00 August 20, 2008 September 19, 2008 4,956.01

ABN AMRO Mutual Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00

Canara Robecco Mutual

Fund 2,500.00 August 20, 2008 September 19, 2008 2,478.00

Subsequent traces



(₹ in lakhs)

Principal Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66


HDFC Standard Life

Insurance Company 2,500.00 May 20, 2008 August 20, 2008 2,446.66

ABN AMRO Mutual Fund 2,500.00 May 20, 2008 August 20, 2008 2,446.66

Subsequent traces

Used for repayment of 3CP’s


(₹ in lakhs)

LIC Mutual Fund 2,000.00 February 20, 2008 May 20, 2008 1,950.70

ABN AMRO Mutual Fund 5,000.00 February 20, 2008 May 20, 2008 4,876.75

Lotus India Mutual Fund 2,000.00 February 20, 2008 May 20, 2008 1,950.70

And

₹ 786.64 lakhs towards the Company’s working capital requirements (End Use)

113

Subsequent traces

Used for part repayment of 2 CP’s


(₹ in lakhs)

Principal Mutual Fund 5,000.00 November 20, 2007 February 20, 2008 4,892.11


Company Limited 4,500.00 November 20, 2007 February 20, 2008 4,402.89

Subsequent traces

Part repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on August 22, 2007 and repaid on November 20, 2007 (Net proceeds from

issue# - ₹ 11,764.45 lakhs)

Subsequent traces

Repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on May 24, 2007 and repaid on August 22, 2007 (Net proceeds from issue# - ₹

11,715.46 lakhs)

Subsequent traces

₹ 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of

demerger approved by the High Court of Judicature at Mumbai (End Use)

And

₹ 2,550 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)

And

₹ 1,094.16 lakhs towards capital expenditure for the Company’s production and distribution business. (End Use)

b. Part repayment of a CP of Yes Bank Limited – ₹ 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net proceeds

from issue# - ₹ 22,011.53 lakhs)

Subsequent traces

Repayment of a CP of ABN AMRO Mutual Fund – ₹ 22,500 lakhs issued on October 24, 2008 and repaid on December 5, 2008 (Net proceeds from

issue# - ₹ 22,105.73 lakhs)

Subsequent traces



(₹ in lakhs)

ABN AMRO Mutual Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53


Fund 2,500.00 September 26, 2008 October 24, 2008 2,473.53

Kotak Mahindra Mutual




IDFC Limited 2,500.00 September 26, 2008 October 24, 2008 2,473.53

114

Subsequent traces



(₹ in lakhs)

ABN AMRO Mutual Fund 17,500.00 September 1, 2008 September 26, 2008 17,373.06


Fund 5,000.00 September 1, 2008 September 26, 2008 4,964.30

Subsequent traces



(₹ in lakhs)

ABN AMRO Mutual Fund 8.500.00 June 4, 2008 September 1, 2008 8,315.88

ABN AMRO Mutual Fund 2,500.00 June 4, 2008 September 1, 2008 2,445.85


Mirae Asset Management 2,500.00 June 4, 2008 September 1, 2008 2,445.85

Allahabad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68

Birla Sunlife Mutual Fund 4,500.00

June 4, 2008 September 1, 2008 4,402.53

Subsequent traces



(₹ in lakhs)

Allahabad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87

Birla Sunlife Mutual Fund 4,500.00 March 4, 2008 June 4, 2008 4,387.21

United Bank of India 3,500.00 March 4, 2008 June 4, 2008 3,412.27

UTI Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.34

Saraswat Cooperative Bank

Limited 1,000.00 March 4, 2008 June 4, 2008 975.55

SBI Life Insurance Company

Limited 2,500.00 March 4, 2008 June 4, 2008 2,438.87

Tata Mutual Fund 4,000.00 March 4, 2008 June 4, 2008 3,900.14

ABN AMRO Mutual Fund 2,500.00 March 4, 2008 June 4, 2008 2,437.59

Subsequent traces



(₹ in lakhs)

Tata Mutual Fund 10,000.00 October 12, 2007 March 7, 2008 9,706.80

Principal Mutual Fund 8,500.00 November 5, 2007 March 4, 2008 8,282.17


Fund 1,500.00 November 5, 2007 March 4, 2008 1,461.56

And

₹ 1,938.84 lakhs towards the Company’s working capital requirements

115

Subsequent traces

₹ 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of


And

₹ 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)

And

₹ 11,353.84 lakhs towards capital expenditure for the Company’s theatrical exhibition business. (End Use)

Note no. 3

LIC Mutual Fund (through 2 CP’s) - ₹ 17,500 lakhs raised on December 14, 2009 and repaid on March 26, 2010 (Net proceeds from issue# - ₹

17,323.30 lakhs)

Subsequent traces

Part repayment of 2 CP’s


(₹ in lakhs)

IDFC Limited 15,000.00 September 14, 2009 December 14, 2009 14,706.67

Yes Bank Limited 7,500.00 September 14, 2009 December 14, 2009 7.359.63

Subsequent traces



(₹ in lakhs)

LIC Mutual Fund 5,000.00 March 17, 2009 September 14, 2009 4,746.95





Subsequent traces



(₹ in lakhs)

Indian Overseas Bank 1,000.00 December 17, 2008 March 17, 2009 966.63

Federal Bank 2,500.00 December 17, 2008 March 17, 2009 2,416.58

LIC Mutual Fund 5,000.00 December 19, 2008 March 17, 2009 4,848.05




And

₹ 234.75 lakhs towards the Company’s working capital requirements

116

Subsequent traces



(₹ in lakhs)

ABN AMRO Mutual Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98


Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98



JP Morgan Mutual Fund 3,000.00 December 5, 2008 December 30, 2008 2,969.49

And

Repayment of a non-convertible debenture issued to Canara Robecco Mutual Fund – ₹ 5,000 lakhs issued on November 21, 2008 and repaid on

December 30, 2008

And


And

₹ 2,058.88 lakhs towards the Company’s working capital requirements (End Use)

Subsequent traces



(₹ in lakhs)


STCI Primary Dealer

Limited 2,500.00 August 20, 2008 September 19, 2008 2,478.00










And

Repayment of a CP of JP Morgan Mutual Fund – ₹ 3,000 lakhs issued on November 6, 2008 and repaid on December 5, 2008 (Net proceeds from

issue# - ₹ 2,964.67 lakhs)

Subsequent traces

Repayment of a CP of JP Morgan Mutual Fund – ₹ 3,000 lakhs issued on September 19, 2008 and repaid on November 6, 2008 (Net proceeds from

issue# - ₹ 2,953.39 lakhs)

(This CP was repaid along with the 7 CP’s included above)

117

Subsequent traces



(₹ in lakhs)



HDFC Standard Life

Insurance Co. Ltd. 2,500.00 May 20, 2008 August 20, 2008 2,446.66

Sundaram BNP Paribas

Mutual Fund 1,000.00 May 20, 2008 August 20, 2008 978.66


Birla Sunlife Insurance

Company Limited 1,000.00 May 20, 2008 August 20, 2008 978.66

And



(₹ in lakhs)


Company Limited 5,500.00 February 20, 2008 August 20, 2008 5,238.78


Fund 2,500.00 February 20, 2008 August 20, 2008 2,381.26

Subsequent traces

CP’s of ₹12,000 lakhs


And


CP’s of ₹8,000 lakhs

Repayment of a CP of Lotus India Mutual Fund – ₹ 2,500 lakhs issued on November 20, 2007 and repaid on February 20, 2008 (Net proceeds from

issue# - ₹ 2,446.05 lakhs)

And


And

CP of ₹ 2,500 lakhs was used for part repayment of a CP of UTI Bank Limited – ₹ 12,000 lakhs – issued on August 22, 2007 and repaid on

November 20, 2007 (Net proceeds from issue# - ₹ 11,764.45 lakhs)

Subsequent traces

Part repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on August 22, 2007 and repaid on November 20, 2007 (Net proceeds from

issue# - ₹ 11,764.45 lakhs)

Subsequent traces


11,715.46 lakhs)

118

Subsequent traces

₹ 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of


And


And


Note no. 4

CP raised from IFCI Limited - ₹ 2,500 lakhs issued on March 4, 2010 and repaid on June 4, 2010 (Net proceeds from issue# - ₹ 2,452.10 lakhs)

Subsequent traces

Repayment of a CP of LIC Mutual Fund – ₹ 2,500 lakhs issued on December 8, 2009 and repaid on March 7, 2010 (Net proceeds from issue# - ₹

2,477.70 lakhs)

Subsequent traces

Repayment of a CP of Andhra Bank – ₹ 2,500 lakhs issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds from issue# - `

2,457.58 lakhs)

Subsequent traces

Part repayment of a CP of Yes Bank Limited – ₹ 15,000 lakhs issued on April 29, 2009 and repaid on September 9, 2009 (Net proceeds from issue# -

₹ 14,562.24 lakhs)

Subsequent traces

Repayment of a CP of Yes Bank Limited – ₹ 15,000 lakhs issued on February 3, 2009 and repaid on April 30, 2009 (Net proceeds from issue# - ₹

14,663.15 lakhs)

Subsequent traces

Part repayment of a CP of Yes Bank Limited – ` 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net proceeds from issue# -

₹ 22,011.53 lakhs)

Subsequent traces

Repayment of a CP of ABN AMRO Mutual Fund – ₹₹ 22,500 lakhs issued on October 24, 2008 and repaid on December 5, 2008 (Net proceeds from

issue# - ₹ 22,105.73 lakhs)

Subsequent traces



(₹ in lakhs)









119

Subsequent traces


Issuer Amount (` in lakhs) Date of issue Date of repayment Net proceeds from issue#

(₹ in lakhs)




Subsequent traces



(₹ in lakhs)





Allahabad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68


June 4, 2008 September 1, 2008 4,402.53

Subsequent traces



(₹ in lakhs)

Allahabad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87










Subsequent traces



(₹ in lakhs)





And


120

Subsequent traces



And


And


Note no. 5

CPs of ₹ 2,500 lakhs and ₹ 1,500 lakhs raised on November 25, 2009 and November 30, 2009, respectively, from JM Mutual Fund. The CPs were

repaid on May 25, 2010 (Net proceeds from issue # ₹ 2,424.26 lakhs and ₹ 1,455.78 lakhs respectively)

Subsequent traces

₹ 2,380.04 lakhs towards capital expenditure for the Company’s film production services business. (End Use)

And

Repayment of a CP of JM Mutual Fund – ₹ 1,500 lakhs issued on September 1, 2009 and repaid on November 30, 2009 (Net proceeds from issue# - ₹

1,474.55 lakhs)

Subsequent traces

₹ 1,474.55 lakhs towards capital expenditure for the Company’s film production services business. (End Use)

Note no. 6

Towards repaying a loan of ₹ 10,000 lakhs availed from Allahabad Bank on January 9, 2009. The loan was repaid on January 8, 2010

Subsequent traces

Part repayment of a CP of ₹ 22,500 lakhs of Yes Bank Limited – ₹ 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net

proceeds from issue# - ₹ 22,011.52 lakhs)

Subsequent traces

Part repayment of a CP of Yes Bank Limited – ₹ 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net proceeds from issue#

- ` 22,011.53 lakhs)

Subsequent traces


issue# - ₹ 22,105.73 lakhs)

Subsequent traces



(₹ in lakhs)









121

Subsequent traces



(₹ in lakhs)




Subsequent traces



(₹ in lakhs)





Allahbad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68


June 4, 2008 September 1, 2008 4,402.53

Subsequent traces



(₹ in lakhs)

Allahbad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87










Subsequent traces



(₹ in lakhs)





And


122

Subsequent traces



And


And


Note no. 7

CP’s of Religare Mutual Fund, JM Mutual Fund and Andhra Bank were partly used for funding of a CP Yes Bank Limited – ₹ 15,000 lakhs issued on

April 29, 2009 and repaid on September 9, 2009 (Net proceeds from issue# - ` 14,562.24 lakhs)

CP of Religare Mutual Fund – ₹ 3,000 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds from issue# - ₹

2,949.10 lakhs)

And

CP of JM Mutual Fund - ₹ 7,000 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds from issue# - ₹ 6,881.23

lakhs)

And

CP of Andhra Bank - ₹ 2,500 lakhs was issued on September 9, 2009 and repaid on December 8, 2009 (Net proceeds from issue# - ` 2,457.58 lakhs)

Subsequent traces

Part repayment of a CP of Yes Bank Limited – ₹ 15,000 lakhs issued on April 29, 2009 and repaid on September 9, 2009 (Net proceeds from issue# -

₹ 14,562.24 lakhs)

Subsequent traces

Repayment of a CP of Yes Bank Limited – ₹ 15,000 lakhs issued on February 3, 2009 and repaid on 30 April 2009 (Net proceeds from issue# - ₹

14,663.15 lakhs)

Subsequent traces

Part repayment of a CP of Yes Bank Limited – ₹ 22,500 lakhs issued on December 5, 2008 and repaid on February 3, 2009 (Net proceeds from issue# -

₹ 22,011.53 lakhs)

Subsequent traces


issue# - ₹₹ 22,105.73 lakhs)

Subsequent traces



(₹ in lakhs)









123

Subsequent traces



(₹ in lakhs)




Subsequent traces



(` in lakhs)

ABN AMRO Mutual Fund 8.500.00 June 4, 2008 September 1, 2008 8,315.88




Allahbad Bank 2,000.00 June 4, 2008 September 1, 2008 1,956.68


June 4, 2008 September 1, 2008 4,402.53

Subsequent traces



(₹ in lakhs)

Allahbad Bank 2,000.00 March 4, 2008 June 4, 2008 1,949.87










Subsequent traces



(₹ in lakhs)






124

Subsequent traces

` 5,000 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of


And

₹₹ 3,096.69 lakhs – Funding subsidiaries towards their capital expenditure and working capital requirements (End Use)

And


Note no. 8

CP of IDFC Limited - ` 15,000 lakhs issued on September 14, 2009 and repaid on December 14, 2009 (Net proceeds from issue# - ₹ 14,706.67 lakhs)

Subsequent traces



(₹ in lakhs)






Subsequent traces



(₹ in lakhs)

Indian Overseas Bank 1,000.00 December 17, 2008 March 17, 2009 966.63

Federal Bank 2,500.00 December 17, 2008 March 17, 2009 2,416.58





And

₹ 234.75 lakhs towards the Company’s working capital requirements

Subsequent traces



(₹ in lakhs)

ABN AMRO Mutual Fund 2,500.00 September 19, 2008 December 19, 2008 2,422.98





JP Morgan Mutual Fund 3,000.00 December 5, 2008 December 30, 2008 2,969.49

125

And

Repayment of a non-convertible debenture issued to Canara Robecco Mutual Fund – ` 5,000 lakhs issued on November 21, 2008 and repaid on

December 30, 2008


And


Subsequent traces



(₹ in lakhs)


STCI Primary Dealer

Limited 2,500.00 August 20, 2008 September 19, 2008 2,478.00










And

Repayment of a CP of JP Morgan Mutual Fund – ₹ 3,000 lakhs issued on November 6, 2008 and repaid on December 5, 2008 (Net proceeds from

issue# - ₹ 2,964.67 lakhs)

Subsequent traces

Repayment of a CP of JP Morgan Mutual Fund – ` 3,000 lakhs issued on September 19, 2008 and repaid on November 6, 2008 (Net proceeds from

issue# - ₹ 2,953.39 lakhs)

(This CP was repaid along with the 7 CP’s included above)

Subsequent traces



(₹ in lakhs)



HDFC Standard Life

Insurance Co. Ltd. 2,500.00 May 20, 2008 August 20, 2008 2,446.66

Sundaram BNP Paribas

Mutual Fund 1,000.00 May 20, 2008 August 20, 2008 978.66



Company Limited 1,000.00 May 20, 2008 August 20, 2008 978.66

126

And



(₹₹ in lakhs)


Company Limited 5,500.00 February 20, 2008 August 20, 2008 5,238.78


Fund 2,500.00 February 20, 2008 August 20, 2008 2,381.26

Subsequent traces

CP’s of ` 12,000 lakhs


And


CP’s of ₹ 8,000 lakhs

Repayment of a CP of Lotus India Mutual Fund – ₹ 2,500 lakhs issued on 20 November 2007 and repaid on February 20, 2008 (Net proceeds from

issue# - ₹ 2,446.05 lakhs)

And


CP of ₹ 2,500 lakhs was used for part repayment of a CP of UTI Bank Limited – ₹ 12,000 lakhs – issued on August 22, 2007 and repaid on 20

November 2007 (Net proceeds from issue# - ₹ 11,764.45 lakhs)

Subsequent traces

Part repayment of a CP from UTI Bank Limited – ₹ 12,000 lakhs raised on August 22, 2007 and repaid on 20 November 2007 (Net proceeds from

issue# - ₹ 11,764.45 lakhs)

Subsequent traces


11,715.46 lakhs)

Subsequent traces

` 8,071.30 lakhs was used to fund expansion of Radio business, which was demerged from the Company effective April 1, 2008 pursuant to scheme of


And


And


For further details regarding our indebtedness, please see the chapter entitled “Financial Indebtedness” beginning at page 225 of this Letter of Offer.

127

3. General Corporate Purposes

Our Company intends to deploy the balance Net Proceeds aggregating ` 414.02 lakhs for general corporate purposes, including but

not restricted to, future growth requirements, strategic initiatives, partnerships, joint ventures and acquisitions, meeting exigencies

which our Company in ordinary course of business may face, or any other purposes as may be approved by the Board of Directors.

4. Issue related expenses

The Issue related expenses include, among others, fees to various advisors, printing and distribution expenses, advertisement

expenses, and registrar’s fees. The estimated Issue related expenses are as follows:

Activity Expense

(₹ in lakhs)

Expense (% of total

expenses)

Expense (% of Issue

Size)

Fee to the Lead Manager 75.00 21.43 0.13

Fee to the Registrar to the Issue 3.06 0.87 0.01

Fee to the Monitoring Agency and Legal Advisors 17.00 4.86 0.03

Others (SEBI Fees, Stock Exchange Fees, Printing, Stationery

and Postage, Advertisement, etc)

254.94 72.84 0.43

Total estimated Issue expenses 350.00 100.00 0.58 Note: Our Company will recoup the expenses already incurred and paid, from the issue expenses set out above.

Interim use of proceeds

The management of our Company, in accordance with the policies formulated by it from time to time, will have flexibility in deploying

the Net Proceeds received from the Issue. Pending utilization of the Issue Proceeds for the purposes described above, our Company

intends to temporarily invest the funds in interest bearing liquid instruments including investments in mutual funds and other financial

products, such as principal protected funds, derivative linked debt instruments, other fixed and variable return instruments, listed debt

instruments, rated debentures or deposits with banks as may be approved by our Board of Directors. Such investments would be in

accordance with the investment policies approved by our Board of Directors from time to time.

Bridge Financing Facilities

Our Company has not raised any bridge loans from any bank or financial institution as on the date of this Letter of Offer, which are

proposed to be repaid from the Net Proceeds.

Monitoring of Utilisation of Funds

In terms of Regulation 16 of the ICDR Regulations we are required to appoint a monitoring agency since the Issue size is in excess of

₹50,000 lakhs. The Monitoring Agency will monitor the utilisation of Issue Proceeds.

Pursuant to clause 49 of the Listing Agreement, our Company shall on a quarterly basis disclose to the Audit Committee the uses and

applications of the Issue Proceeds. The Audit Committee shall review the report submitted by the Monitoring Agency and make

recommendations to our Board of Directors for further action, if appropriate. Our Company shall, on an annual basis, prepare a statement

of funds utilised for purposes other than those stated in this Letter of Offer and place it before the Audit Committee. Such disclosure

shall be made only until such time that all the Issue Proceeds have been utilised in full. The statement shall be certified by the statutory

auditors of our Company.

Further, in accordance with clause 43A of the Listing Agreement, our Company will furnish a statement to the Stock Exchanges on a

quarterly basis a statement on indicating material deviations, if any, in the utilisation of the Net Proceeds of the Issue. This information

will also be published in newspapers simultaneously / along with the interim or annual financial results, after placing the same before the

Audit Committee. Further, our Company will also inform the Stock Exchanges of deviations, if any, in the utilisation of Net Proceeds of

the Issue, pointed out by the Monitoring Agency, after review by our Audit Committee and also publish the same in the newspapers.

Our Company proposes to utilise the Net Proceeds to repay certain loans availed by our Company from our Promoter and related entities,

as mentioned in this chapter entitled “Objects of the Issue”. Other than as mentioned in this section, no part of the Issue Proceeds will be

paid by our Company as consideration to our Promoters, our Board of Directors, our Company’s key management personnel or

companies promoted by our Promoters, except in the usual course of business.

128

BASIS FOR ISSUE PRICE

You should read the following summary with the chapter entitled “Risk Factors” at page 11 and the more detailed information about us

and the restated financial statements included in this Letter of Offer at page F-1.

The face value of each Equity Share is ₹5/- and the Issue Price is 8 times the face value of each Equity Share.

Qualitative Factors

We believe we have the following competitive strengths:

1. Strong reputation and brand in the E&M sector;

2. Demonstrated ability to expand our operations both organically and inorganically;

3. Presence across various E&M businesses and geographies;

4. Our technological capabilities; and

5. The Reliance Group’s brand, experience and position in India and overseas.

For further details regarding some of the qualitative factors which form the basis for computing the Issue Price please see the chapters

entitled “Business” and “Risk Factors” at pages 149 and 11, respectively.

Quantitative Factors

Information presented in this section is derived from our standalone and consolidated restated financial statements prepared in

accordance with Indian GAAP, Companies Act and the ICDR Regulations. Some of the quantitative factors which form the basis for

computing Issue Price are as follows:

1. Basic Earnings Per Share (EPS) and Diluted Earnings Per Share (EPS)

Particulars Basic EPS (in ₹)

# Diluted EPS (in ₹)

#

Weight Standalone Consolidated Standalone Consolidated

Fiscal 2010 (19.07) (27.89) (19.07) (27.89) 1

Fiscal 2011 (52.79) (71.22) (52.79) (71.22) 2

Fiscal 2012 (152.53) (197.43) (152.53) (197.43) 3

Weighted Average (97.04) (127.10) (97.04) (127.10)

Six month period ended March 31,

2013 (59.82) (73.81) (59.82) (73.81)

# As per our audited restated financial statements

Note:

(1) The face value of Equity Share is ₹5/-; and

(2) Earnings per share calculations are done in accordance with AS 20 ‘Earnings per Share’ issued by the ICAI.

2. Price/Earning (P/E) ratio in relation to Issue Price of ₹ 40 per Equity Share

Sr. No. Particulars Standalone Consolidated

a. P/E ratio based on Basic EPS for Fiscal 2010 at the

Issue Price

Cannot be computed as EPS

for Fiscal 2010 is negative

Cannot be computed as EPS for

Fiscal 2010 is negative

b. P/E ratio based on Diluted EPS for Fiscal 2010 at the

Issue Price





c. P/E ratio based on Basic EPS for Fiscal 2011 at the

Issue Price





129

Sr. No. Particulars Standalone Consolidated

d. P/E ratio based on Diluted EPS for Fiscal 2011 at the

Issue Price





e. P/E ratio based on Basic EPS for Fiscal 2012 at the

Issue Price





f. P/E ratio based on Diluted EPS for Fiscal 2012 at the

Issue Price





g. P/E ratio based on Basic EPS for the six months ended

March 31, 2013 at the Issue Price


for the six months ended

March 31, 2013 is negative


the six months ended March

31, 2013 is negative

h. P/E ratio based on Diluted EPS for the six months ended

March 31, 2013 at the Issue Price


for the six months ended

March 31, 2013 is negative


the six months ended March

31, 2013 is negative

Peer Group P/ E*

Particulars P/ E Ratio

Highest Inox Leisure Limited - 33.83

Lowest PVR Limited - 16.47

Average 25.15#

* Computed based on closing market price as on March 28, 2013 on BSE Limited divided by respective EPS for the twelve month period ended March

31, 2013.

# Average of both the peer group companies, viz., Inox Leisure Limited and PVR Limited

3. Return on Net worth (“RoNW”)

Particulars RoNW (%) Weight

Standalone# Consolidated

#

Fiscal 2010 (21.21)% (35.92)% 1

Fiscal 2011 (144.88)% (1,214.37)% 2

Fiscal 2012(1)

NA NA 3

Weighted Average (103.66)% (821.55)%

Six month ended March 31,

2013(1)

NA NA

# As per our audited restated financial statements

Note: Net worth as appearing in the restated audited standalone and consolidated summary statement of assets and liabilities for the respective period

has been considered for RoNW. (1) RoNW for Fiscal 2012 and six months ended March 31, 2013 cannot be computed as our net worth as per the consolidated and standalone restated

financial statements is negative.

4. Minimum Return on Increased Net Worth Required to Maintain pre-Issue EPS as of March 31, 2013:

(a) Based on Basic EPS

Based on standalone restated financial statements: Cannot be computed as EPS is negative; and

Based on consolidated restated financial statements: Cannot be computed as EPS is negative.

(b) Based on Diluted EPS:

Based on standalone restated financial statements: Cannot be computed as EPS is negative; and

Based on consolidated restated financial statements: Cannot be computed as EPS is negative.

130

5. Net Asset Value per share

NAV (`)

Standalone# Consolidated

#

NAV per Equity Share as at March 31, 2013 (102.25) (201.31)

NAV per Equity Share after the Issue 6.53 (16.78)

Issue Price 40.00 40.00 # As per our audited restated financial statements

NAV per Equity Share = Net worth, as restated, at the end of the period/year (excluding preference share capital and premium)/ Number

of equity shares outstanding at the end of the period.

6. Comparison with Industry Peers:

Name of the

Company

Standalone/

Consolidated Period ended

Face Value

(`)

Basic EPS

(`) P/E

(1) RONW (%) NAV

Reliance

MediaWorks

Limited

Stand-alone Fiscal 2012(2)

5/- (152.53)# NA

(3) # NA

(4) # (44.66)

#

Stand-alone Six months ended

March 31, 2013

5/- (59.82) # NA

(3) # NA

(4) # (102.25)

#

Peer Group*

Inox Leisure

Limited Stand-alone

Year ended March

31, 2013

10/- 1.92 33.83 3.63% 82.08

PVR Limited Stand-alone Year ended March

31, 2013

10/- 18.42 16.47 8.53% 162.36

*Source: As per audited standalone financial statement filed with the Stock Exchanges # As per our audited restated financial statements

(1) Computed based on closing market price as on March 28, 2013 on BSE Limited divided by respective EPS for the twelve month period ended March

31, 2013. (2) Fiscal 2012 represents eighteen months ended September 30, 2012. (3) Cannot be computed as EPS is negative. (4) Cannot be computed as net worth is negative. (5) Computed by dividing the net profit for the period with the net worth. (6) Computed by dividing the net worth (excluding preference share capital and premium) with the total outstanding equity shares as at the end of the

period.

On the basis of the above qualitative and quantitative parameters and the current market price of the equity shares of the Company, our

Company, in consultation with the Lead Manager, is of the opinion that the Issue Price of ` 40 per Equity Share is justified. For further

details, please see the chapter entitled “Risk Factors” at page 11 and our financials including important profitability and return ratios, as

set out in the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.

131

To,

The Board of Directors,


Filmcity Complex,

Goregaon (East)

Mumbai - 400065

STATEMENT OF TAX BENEFITS

We hereby report that the enclosed statement, prepared by Reliance MediaWorks Limited (formerly known as Adlabs Films Limited)

(hereinafter referred to as the “Issuer”), states the possible tax benefits available to the Issuer and its members under the provisions of the

Income Tax Act, 1961, Wealth Tax Act, 1957 and Gift Tax Act, 1958 presently in force in India. The benefits as stated 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.

The benefits discussed in the enclosed annexure 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 advice. In view of the individual nature of the tax

consequences and 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.

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

i) the Issuer or its members will continue to obtain these benefits in future; or

ii) the conditions prescribed for availing the benefits, where applicable have been / would be met

The contents of the enclosed statement are based on the information, explanations and representations obtained from the Issuer and on

the basis of the understanding of the business activities and operations of the Issuer and the interpretation of the current tax laws in force

in India.

For JITENDRA SANGHAVI & CO.

CHARTERED ACCOUNTANTS.

PLACE: MUMBAI (J.B. SANGHAVI)

Date: 29.6.2013 PARTNER

Membership No.30127

Firm Reg.No.104299W

132

TAX BENEFITS TO THE COMPANY AND ITS SHAREHOLDERS

The tax benefits listed below are the possible benefits available under the Income Tax Act, 1961 and the Wealth Tax Act, 1957, presently

in force in India. Several of these benefits are dependent on the Issuer or its members fulfilling the conditions prescribed under the

relevant provisions of the respective tax laws. Hence, the ability of the Issuer or its members to derive the tax benefits is dependent upon

fulfilling such conditions, which based on the business imperatives, the Issuer may or may not choose to fulfill.

The benefits discussed below 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. In view of the individual nature of the tax consequences and

the changing tax laws, each investor is advised to consider in his / her own case the tax implications of an investment in the shares.

Further 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.

I. Tax Benefits available to the Issuer - under the Income Tax Act, 1961 (the Act)

A. Special Tax Benefits

The Issuer does not enjoy any special tax benefits

B. General Tax Benefits

1. Depreciation Benefits

Under section 32 of the Act, the Issuer is entitled to claim depreciation at the prescribed rates on specified tangible and

intangible assets used by the Issuer for the purposes of its business and subject to other conditions listed in the Act.

Unabsorbed depreciation, if any, for an assessment year can be carried forward & set off against income from any other source

in the subsequent assessment years as per section 32 subject to the provisions of section 72(2) and section 73(3) of the Act.

2. Minimum Alternate Tax (MAT) and Credit for the same

The Issuer would be required to pay tax on its book profits under the provisions of section 115JB in case where tax on its “total

income” (the term defined under section 2(45) of the Act) is less than 18.50%(plus applicable education cess & also a surcharge

in case book profit exceeds Rs.100 lakhs) of its “book profits” (the term defined under section 115JB of the Act). Such tax is

referred to as Minimum Alternate Tax (MAT).

The difference between the MAT paid for any assessment year commencing on or after April 1, 2006 and the tax on its total

income payable for that assessment year shall be allowed to be carried forward as “MAT credit”. The MAT credit shall be

utilised to be set off against taxes payable on the total income in the subsequent assessment years. However, it can be carried

forward only upto 10 assessment years succeeding the assessment year in which such MAT was paid.

3. Exemption from Dividends and Income from units of Specified Mutual Funds

Section 10(34) of the Act provides an exemption in respect of any income by way of dividends referred to in section 115-O

(whether interim or final). Dividends referred to in section 115-O would cover dividends declared, distributed or paid by the

domestic companies in respect of which the distributing company is liable to pay dividend distribution tax. Similarly the income

received from units of a Mutual Fund specified under section 10(23D) is exempt from tax. Such income distributed by the

Mutual Fund or the Administrator of the specified undertaking would also be subject to applicable dividend distribution tax,

except when the distribution is made by an open ended “equity oriented fund”. It may be pertinent to note that section 14A of

the Act restricts claim for deduction of expenses incurred in relation to exempt income.

4. Dividend Distribution tax

Dividends declared/distributed/paid by the Issuer is subject to dividend distribution tax @ 15% (plus applicable surcharge and

education cess). As per Section 115O(1A), for the purpose of calculating dividend distribution tax, the aforesaid amount of

dividend shall be reduced by the amount received by the Issuer from its subsidiaries by way of dividend during the financial

year provided the subsidiaries have paid dividend distribution tax.

133

5. Concessional rate of tax on Dividend from Foreign subsidiaries.

Dividend received by an Indian holding company from its foreign subsidiaries will be taxed at concessional rate of Tax @ 15%

under Section 115BBD.

6. Capital Gains

(a) Under section 112 of the Act, long term capital gains are subject to tax at the rate of 20% (plus applicable surcharge

and education cess). Such long term capital gains are to be computed by deducting from the sale consideration (i)

expenditure incurred in connection with such transfer; and (ii) except in case of certain bonds and debentures the

indexed cost of acquisition of the capital asset. In computing the long term capital gains chargeable to tax, no

deduction under Chapter VI-A would be allowed under section 112 of the Act.

In case of long term capital gains arising from the transfer of unlisted securities, the maximum tax payable on long

term capital gains is restricted to 10% of the capital gains calculated without indexation of the cost of acquisition.

However, in respect of long term capital gains arising from transfer of listed securities, units or zero coupon bonds, the

maximum tax payable on long term capital gains is restricted to 10% of the capital gains calculated without indexation

of the cost of acquisition.

Further, in terms of section 10(38) of the Act, any long term capital gain arising to the Issuer on or after October 1,

2004, from the transfer of a long term capital asset being an equity share in a company or a unit of an equity oriented

fund, where such transaction is chargeable to securities transaction tax (STT), is exempt from tax in the hands of the

Issuer. However, long term capital gains earned by the Issuer shall be taken into account in computing the book profits

for the purposes of computation of MAT.

(b) In terms of section 111A of the Act any short term capital gains arising to the Issuer from the transfer of a short term

capital asset being an equity share in a company or unit of an equity oriented fund, where such transaction is

chargeable to STT, would be subject to tax only at a rate of 15% (plus applicable surcharge and education cess). In

other cases, the short term capital gains would be chargeable to tax @ 30% (plus applicable surcharge and education

cess). Further deduction under Chapter VI-A would not be allowed from such short term capital gains subject to tax

under section 111A of the Act.

(c) As per the provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains

arising to the Issuer {other than those exempt under section 10(38)} shall not be chargeable to tax to the extent such

capital gains are invested in certain notified bonds within six months from the date of transfer. If only part of the

capital gain is so reinvested, the exemption shall be proportionately reduced.

However, if the assessee transfers or converts the notified bonds into money within a period of three years from the

date of their acquisition, the amount of capital gains exempted earlier would become chargeable to tax as long term

capital gains in the year in which such bonds are transferred or otherwise converted into money. The maximum

investment permissible for the purposes of claiming the exemption in the above bonds by any person in a financial year

is Rs. 50 lakhs.

II. Tax Benefits available to the Members of the Company under the Act

I. Special Tax Benefits

There are no special tax benefits available to the members of the Company.

II. General Tax Benefits

2.1 Resident Members

a) Under section 10(32) of the Act, any income of minor children clubbed in the total income of the parent under section

64(1A) of the Act, will be exempt from tax to the extent of Rs. 0.015 lakh per minor child, whose income is so

included.

134

b) The characterization of gains / losses, arising from sale of shares, as capital gains or business income would depend on

the nature of holding in the hands of the member and various other factors.

c) Section 10(34) of the Act provides an exemption in respect of any income by way of dividends referred to in section

115O (whether interim or final). Dividends referred to in section 115-O would cover dividends declared, distributed or

paid by the domestic companies in respect of which the distributing company is liable to pay dividend distribution tax.

However, it may be pertinent to note that section 14A of the Act restricts claim for deduction of expenses incurred in

relation to exempt income

d) Under section 111A of the Act, capital gains arising from transfer of short term capital assets, inter alia being an equity

share in a company, which is subject to STT will be taxable @15% (plus applicable surcharge and educational cess). In

other cases, the short term capital gains would be chargeable as part of the total income and the tax rates would depend

on the income slab. Further no deduction under Chapter VI-A would be allowed in computing such short term capital

gains subject to tax under section 111A of the Act.

e) Under section 112 of the Act, long term capital gains are subject to tax at the rate of 20% (plus applicable surcharge

and education cess). Such long term capital gains are to be computed by deducting from the sale consideration (i)

expenditure incurred in connection with such transfer; and (ii) except in case of certain bonds and debentures the

indexed cost of acquisition of the capital asset. In computing the long term capital gains chargeable to tax, no

deduction under Chapter VI-A would be allowed under section 112 of the Act.

However, in respect of long term capital gains arising from transfer of listed securities, units or zero coupon bonds, the

maximum tax payable on long term capital gains is restricted to 10% of the capital gains calculated without indexation

of the cost of acquisition.

Further, in terms of section 10(38) of the Act, any long term capital gain arising to the Issuer on or after October 1,

2004, from the transfer of a long term capital asset being an equity share in a company, where such transaction is

chargeable to securities transaction tax (STT), is exempt from tax in the hands of the Issuer. However, in case of

companies, long term capital gains earned by the Issuer shall be taken into account in computing the book profits for

the purposes of computation of MAT.

f) As per the provisions of section 54EC of the Act and subject to the conditions specified therein, long term capital gains

arising to the members {other than those exempt under section 10(38)} shall not be chargeable to tax to the extent such







is Rs. 50 lakhs.

g) Under section 54F of the Act, where in the case of an individual or HUF capital gain arise from transfer of long term

assets {other than a residential house and those exempt under section 10(38) of the Act} then such capital gain, subject

to the conditions and to the extent specified therein, will be exempt if the net sales consideration from such transfer is

utilised, for purchase of residential house property within a period of one year before or two year from the date of

transfer, or for construction of residential house property within a period of three years after the date of transfer. If only

a part of the net consideration is so reinvested, the exemption shall be proportionately reduced.

h) In terms of section 36(xv) of the Act, the STT paid by the member in respect of the transactions entered into in the

course of the business would be deductible while computing income chargeable under the head “Profits and Gains

under Business or Profession” arising from taxable securities transactions.

i) As per the provisions of section 10(23D) of the Act, all mutual funds set up by public sector banks, public financial

institutions or mutual funds registered under the Securities and Exchange Board of India (SEBI) or authorized by the

Reserve Bank of India are eligible for exemption from income-tax, subject to the conditions specified therein, on their

entire income including income from investment in the shares of the company.

135

2.2 Non Resident Members other than Foreign Institutional Investors

a) Under section 10(32) of the Act, any income of minor children clubbed in the total income of the parent under section

64(1A) of the Act, will be exempt from tax to the extent of Rs.0.015 lakh per minor child, whose income is so

included.

b) The characterization of gains / losses, arising from sale of shares, as capital gains or business income would depend on

the nature of holding in the hands of the member and various other factors.

c) Section 10(34) of the Act provides an exemption in respect of any income by way of dividends referred to in section

115O (whether interim or final). Dividends referred to in section 115-O would cover dividends declared, distributed or


However, it may be pertinent to note that section 14A of the Act restricts claim for deduction of expenses incurred in

relation to exempt income.

d) Under section 111A of the Act, capital gains arising from transfer of short term capital assets, inter alia being an equity


other cases, the short term capital gains would be chargeable as part of the total income and the tax rates would depend

on the income slab. Further no deduction under Chapter VI-A would be allowed in computing such short term capital

gains subject to tax under section 111A of the Act.

e) Under section 112 of the Act, long term capital gains would be subject to tax at the rate of 20% (plus applicable

surcharge and education cess). Such long term capital gains are to be computed by deducting from the sale

consideration (i) expenditure incurred in connection with such transfer; and (ii) the cost of acquisition of the capital

asset from the sale consideration. However, there exists a special provision for non residents providing for adjustments

to the cost of acquisition, in respect of exchange rate fluctuations, in computing the capital gains. Further, in computing

the long term capital gains chargeable to tax, no deduction under Chapter VI-A would be allowed under section 112 of

the Act

Further, in terms of section 10(38) of the Act, any long term capital gain arising on or after October 1, 2004, from the

transfer of a long term capital asset inter alia being an equity share in a company, where such transaction is chargeable

to STT, is exempt from tax in the hands of the member. However, in the case of companies, long term capital gains so

earned shall be taken into account in computing the book profits for the purposes of computation of MAT.


arising to the members {other than those exempt under section 10(38)} shall not be chargeable to tax to the extent such







is Rs. 50 lakhs.

g) Under section 54F of the Act, where in the case of an individual or HUF capital gain arise from transfer of long term

assets {other than a residential house and those exempt under section 10(38) of the Act} then such capital gain, subject

to the conditions and to the extent specified therein, will be exempt if the net sales consideration from such transfer is

utilised, for purchase of residential house property within a period of one year before or two year from the date of

transfer, or for construction of residential house property within a period of three years after the date of transfer. If only

a part of the net consideration is so reinvested, the exemption shall be proportionately reduced.

h) In terms of section 36(xv) of the Act, the STT paid by the member in respect of the transactions entered into in the

course of the business would be deductible while computing income chargeable under the head “Profits and Gains

under Business or Profession” arising from taxable securities transactions.

i) As per section 90 of the Act, the provisions of the Act or the provisions of the applicable Double Tax Avoidance

Agreement, whichever is more beneficial to the taxpayer / assessee, would apply. In order to avail the benefit under

136

Double Tax Avoidance Agreement (DTAA), every person not being a resident in India has to provide a certificate of

him being a resident (i.e. Tax Residency Certificate) in any country outside India or specified territory outside India,

obtained by him from the Government of that country or specified territory.

2.3 Special optional provisions available to Non Resident Indians under the Act

a) A Non Resident Indian (NRI), i.e. an individual being a citizen of India or person of Indian origin has an option to be

governed by the special provisions contained in Chapter XII-A of the Act, i.e. “Special Provisions relating to certain

incomes of Non-Residents”.

b) Under section 115E of the Act, where the NRI has subscribed the shares of the company in convertible foreign

exchange, long term capital gains arising to the non resident on transfer of such shares {in cases not covered under

section 10(38) of the Act} be chargeable to tax at concessional flat rate of 10% (plus applicable surcharge and

educational cess). In computing the capital gains for non residents, arising from transfer of shares or debentures of an

Indian company, no indexation benefit is allowed. However, in such cases all the non residents have been provided

with a protection against foreign exchange fluctuation under the first proviso to section 48 of the Act.

c) Under provisions of section 115F of the Act, long term capital gains {not covered under section 10(38) of the Act}

arising to the NRI from the transfer of such shares shall be exempt from income tax if the net consideration is

reinvested in specified assets 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 otherwise converted into money within three years from the date

of their acquisition.

d) Under provisions of section 115G of the Act, it shall not be necessary for the NRI to furnish his return of income if his

only source of income is 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.

e) Under section 115-I of the Act, the NRI may elect not to be governed by the provisions of Chapter XII-A of the Act for

any assessment year by furnishing his return of income under section 139 of the Act declaring therein that the

provisions of the Chapter shall not apply to him for that assessment year and if he does so the provisions of this

Chapter shall not apply to him. In such a case the tax on investment income and long term capital gains would be

computed as per normal provisions of the Act, in which case the above stated provisions from point (c) to (h) in Para

2.2 would be applicable.

2.4 Foreign Institutional Investors (FIIs)

a) Section 10(34) of the Act provides an exemption in respect of any income by way of dividends referred to in section

115-O (whether interim or final). Dividends referred to in section 115-O would cover dividends declared, distributed or


b) The characterization of gains / losses arising from sale of shares as capital gains or business income would generally

depend on the nature of holding in the hands of the member and various other factors.

c) Under section 111A of the Act, capital gains arising from transfer of short term capital assets, inter alia being an equity


other cases, the short term capital gains would be chargeable to tax @30% (plus applicable surcharge and education

cess).

d) Under section 10(38) of the Act, any long term capital gain arising on or after October 1, 2004, from the transfer of a

long term capital asset inter alia being an equity share in a company, where such transaction is chargeable to STT, is

exempt from tax in the hands of the member. However, in the case of companies, long term capital gains so earned

may be taken into account in computing the book profits for the purposes of computation of MAT.

e) Section 115AD provides special provisions for taxability of various types of income of FIIs. Under section 115AD

long term capital gains arising from transfer of shares in a company {other than those mentioned in point (d) above},

are taxed at the rate of 10% (plus applicable surcharge and education cess). Such capital gains would be computed

without giving effect to the first and second proviso to section 48 of the Act. In other words, the benefit of indexation

137

or the adjustment in respect of foreign exchange fluctuation, as mentioned under the two proviso would not be allowed

while computing the capital gains. Under Section 196D of the Act, no deduction shall be made from any income by

way of capital gains, in respect of transfer of shares referred to in Section 115AD.


arising to the investors / members {other than those exempt under section 10(38)} shall not be chargeable to tax to the

extent such capital gains are invested in certain notified bonds within six months from the date of transfer. If only part

of the capital gain is so reinvested, the exemption shall be proportionately reduced.





is Rs. 50 lakhs.

g) As per section 90 of the Act, the provisions of the Act or the provisions of the applicable Double Tax Avoidance

Agreement, whichever is more beneficial to the taxpayer / assessee, would apply. In order to avail the benefit under

Double Tax Avoidance Agreement (DTAA), every person not being a resident in India has to provide a certificate of

him being a resident (i.e. Tax Residency Certificate) in any country outside India or specified territory outside India,

obtained by him from the Government of that country or specified territory.

III. Tax Benefits under the Wealth Tax Act, 1957

Shares in a company held by a member will not be treated as an asset within the meaning of section 2(ea) of Wealth-tax Act,

1957. Hence, wealth tax is not leviable on shares held in a company.

IV. The Gift Tax Act, 1958

Since the provisions of The Gift Tax Act, 1958 have ceased to apply with effect from October 1, 1998 , gift of shares made on

or after October 1, 1998 will not be liable to Gift Tax under the Gift Tax Act, 1958. However, pursuant to the Finance Act,

2009, Section 56 of the Act has been amended to provide that the value of any property, including shares and securities ,

received without consideration or for inadequate consideration (from persons or in situations other than those exempted under

section 56 (vii) of the Act ) will be included in the computation of total income of the recipient and be subject to tax.

V. Direct Tax Code

The above statement does not provide the tax benefits under the Direct Tax Code. The year of implementation of the Direct Tax

Code is not certain at present. The tax benefits under the said code are not furnished as the same is under formative stage.

138

SECTION IV: ABOUT THE COMPANY

INDUSTRY OVERVIEW

We have relied on websites and publicly available documents from various sources. The data may have been re-classified by us for the

purpose of presentation. Neither we nor any other person connected with the Offer has independently verified the information provided

in this chapter. Industry sources and publications, referred to in this section, generally state that the information contained therein has

been obtained from sources generally believed to be reliable but their accuracy, completeness and underlying assumptions are not

guaranteed and their reliability cannot be assured, and, accordingly, investment decisions should not be based on such information.

Overview of the Indian Economy

India is one of the fastest growing economies in the world with a rapidly expanding entertainment and media (“E&M”) industry.

According to the Ministry of Statistics and Programme Implementation’s (MOSPI) revised estimates, India’s GDP at factor cost (at

constant 2004-2005 prices) registered a lower growth of 4.96% during Financial Year 2013, as compared with 6.21% in Financial Year,

largely attributable to dismal performance of agriculture sector 1.79% during Financial Year 2013 as compared to 3.65% in Financial

Year 2012 and service sector 6.59% in Financial Year 2013 as compared to 8.20% in Financial Year 2012. However of the larger

countries of the world only China and Indonesia has grown faster than India in Financial Year 2013. (Source http://indiabudget.nic.in

“Budget Speech of FM for Financial Year 13-14”).

The following table illustrates India's real GDP growth between financial years 2009 and 2013 (at factor cost at constant 2004-05 prices):

Financial Year 2009 Financial Year 2010 Financial Year 2011 Financial Year 2012 Financial Year 2013

6.7% 8.6% 9.3% 6.2% 5.0%

Source: http://mospi.nic.in “Summary of macroeconomic aggregates at constant (2004-05) prices, 1950-51 to 2012-13”

Overview of the Indian Entertainment and Media Industry

The Indian E&M industry (primarily comprised, among others, of film, television, print media, animation and visual effects VFX, radio

and music) has witnessed steady growth in recent years and is estimated to have reached `72,80,000 lakhs in 2011. The Indian E&M

industry is projected to grow at a compound annual growth rate (“CAGR”) of 14.90% from the year 2011 to the year 2016 to reach

`1,45,70,000 lakhs. The Indian E&M industry has grown at a CAGR of 9.09% between 2007 and 2011. (Source: Federation of Indian

Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)

The following factors are expected to contribute to further growth of the Indian E&M industry:

the continued growth and development of the Indian economy;

favourable demographic characteristics and trends in India;

the cultural diversity of the Indian population;

the internationalisation of the Indian E&M industry;

the availability of popular content; and

digitisation of content.

The following table provides the expected sizes and growth rates of the various segments of the Indian E&M industry for the years 2011

through 2016:

(` lakhs)

E&M Industry

Segment 2011 2012P 2013P 2014P 2015P 2016P

CAGR (2011

to 2016)

T.V.

32,90,000

38,00,000

43,50,000

51,40,000

61,80,000

73,50,000 17.00%

Print

20,88,000

22,60,000

24,68,000

27,00,000

29,49,000

32,34,000 9.00%

Film

9,29,000

10,00,000

10,97,000

12,11,000

13,45,000

15,03,000 10.00%

Radio

1,15,000

1,30,000

1,60,000

2,00,000

2,40,000

2,95,000 21.00%

139

(` lakhs)

E&M Industry

Segment 2011 2012P 2013P 2014P 2015P 2016P

CAGR (2011

to 2016)

Music

90,000

1,00,000

1,13,000

1,31,000

1,54,000

1,82,000 15.00%

O.O.H.

1,78,000

1,95,000

2,15,000

2,36,000

2,60,000

2,90,000 10.00%

Animation

3,10,000

3,63,000

4,30,000

5,11,000

6,10,000

6,90,000 17.00%

Gaming

1,30,000

1,80,000

2,30,000

2,90,000

3,70,000

4,60,000 29.00%

Digital

Advertising

1,54,000

1,99,000

2,58,000

3,35,000

4,37,000

5,70,000 30.00%

Total

72,84,000

82,27,000

93,21,000

1,07,54,000

1,25,45,000

1,45,74,000 14.90% *P=Projected


Favourable Demographic Characteristics and Trends in India

The growth of the Indian economy has led to increased income levels and has resulted in the availability of greater amounts of disposable

income. It is estimated that the number of households with an income of less than ` 0.90 lakhs per year will decrease from approximately

1,011 lakhs households in 2005 to 499 lakhs households in 2025. (Source: Federation of Indian Chambers of Commerce and Industry and

KPMG, “Indian Media & Entertainment Industry Report 2009”)

The following chart illustrates certain expected changes in the distribution of income groups in India:

E=Estimated


Approximately 70.0% of India’s population was below 35 years of age in 2001. More than 50.0% percent of India’s population is

expected to be under the age of 30 in 2015. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media &

Entertainment Industry Report 2009”)

The following chart illustrates the population distribution in India across various age groups:

140


Cultural Diversity of the Indian Population

India is a country with significant geographic, linguistic and cultural diversity. Although catering to India’s diversity is challenging for

the E&M industry, such diversity broadens the scope of services offered and reduces the concentration of business risk. Regional content

has emerged as one of the most significant aspects of content customisation and has become a significant growth driver for the E&M

industry in India.

The following charts illustrate the linguistic composition of the Indian film market, by shares of the number of films released:


Certain E&M trends with regard to diversity include the growth in popularity of regional channels and the expansion of regional channel

portfolios by regional and national media companies. Content preferences have shifted more towards socially relevant and localised /

regionalised programs, such as Phulwa (Chambal forest in MP), Diya Aur Baati Hum (Pushkar, Rajasthan), Agle Janam (Uttar Pradesh

and Bihar), Pavitra Rishta (Maharashtra), Balika Vadhu (Rajasthan) and Laado (Haryana). Large broadcasters have looked at increasing

their presence in regional market by new channel launch and M&A activity for example, launch of Discovery Tamil, ETV’s takeover by

Network 18 etc. Dainik Bhaskar entered Marathi by launching editions in Aurangabad, Nasik, Jalgaon and Ahmednagar and

strengthened its position on Rajasthan and Jharkhand by launching more editions. (Source: Federation of Indian Chambers of Commerce and


141

Internationalisation of the Indian E&M Industry

Indian E&M companies have begun targeting international markets. International demand for Indian content has grown and a number of

Indian television channels are currently broadcast across the world. For example, NDTV has launched NDTV Arabia and NDTV

Malaysia. Regional language channels such as Asianet have also been broadcasting overseas. “Colors” was recently launched in the

United States and the UK as “Aapka Colors”. Content produced in India is targeted largely at the Indian diaspora in key markets,

primarily the United States, the UK, United Arab Emirates and South Africa. (Source: Federation of Indian Chambers of Commerce and

Industry and KPMG, “Indian Media & Entertainment Industry Report 2009” & “Indian Media & Entertainment Industry Report 2010”)

Further, in recent years, some large budget and popular Hindi films have generated a significant share of their box office earnings

overseas. Overseas theatrical revenues alone have accounted for approximately 7.4% of Indian film industry revenues in CY 2011, which

is complemented by overseas home viewing revenue streams such as DVD and satellite broadcasts. Due to the presence of a significant

non-resident Indian population in countries around the world, E&M companies expect to increase their revenues from such international

markets and are now attempting to target non-resident Indians with their productions. (Source: Federation of Indian Chambers of Commerce

and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)

The Availability of Popular Content

Over the years, the availability and variety of Indian film content has increased. Five films have breached the level of `10,000 lakhs in

2011, more than double the count of films as compared to last year. Further, it was not just the A-list star cast films that did well, niche /

focussed content from independent film-makers also gained widespread acceptance. “Ragini MMS”, “Murder 2” and “Tanu weds Manu”

performed well at the box office in 2011. Themes that were women oriented such as “No One Killed Jessica” and “The Dirty Picture”,

horror based “Haunted”, urbane life based “Zindagi Na Milegi Dobara”, “Delhi Belly” and romance based “Ladies v/s Ricky Bahl” were

all box-office hits. The Indian film industry has also witnessed the increasing use of special effects and film viewing technologies. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)

Digitisation of Content

Digitisation is changing the Indian E&M industry. The introduction of the Conditional Access System has led to the increasing

popularity of digital cable. Further, the advent of direct-to-home service providers such as Dish TV, Tata Sky, Sun, Big TV and Airtel

Digital TV and the commercial launch of Internet protocol television has increased the digitisation of E&M content. Digitisation has

reached every aspect of the film-making process in India, from production and post-production to distribution and projection. Further,

recently, the Central Government has made digitization of cable television mandatory by October 31, 2012, in Mumbai, Delhi, Chennai

and Kolkata.

Segments of the Indian E&M industry

The Indian E&M industry is primarily comprised, among others, of film, television, and animation and VFX segments.

Film

The film segment is one of the largest segments of the E&M industry and is primarily comprised of films distributed through theatrical

exhibition, home video, C&S television. The film segment has grown by 11.50% from `833,000.00 lakhs in 2010 to `929,000.00 lakhs

in 2011. In 2012, the film segment contributed approximately 12.80% of India’s total E&M industry revenue. The Indian film industry is

projected to grow at a CAGR of 10.10% from 2011 to 2016 to reach approximately `1,503,000 lakhs in 2016. (Source: Federation of Indian


142

Recent Trends in the Indian Film Industry

In the recent past, the following trends have emerged in the Indian film industry:

Changing trend in film production & distribution

Film budgets have increased sharply over the years.

Movies with familiar starcast and strong recall are believed to perform better on box office. 2012 has seen sequels like Dabangg 2, Race

2, Housefull -2, Jism 2, Murder 3, Raaz 3, Kya super cool hai hum. Sequels have historically made more money than the original film at

the box office. Dhoom 2 did business of INR 15,000 lakhs compared to INR 7,000 lakhs for Dhoom.

Movies are also releasing on a wider scale. The number of domestic and international screens for big budget films has more than doubled

in the last year. Medium budget films have also observed a steady growth in domestic screens. The average print size for top 3 films has

increased from 1080 in CY 2008 to 3000 in CY 2011.

Demand for quality infrastructure in increasing rapidly. Integrated and well-equipped studios such as Reliance and Yash Raj are

providing quality infrastructure to film makers. On a daily basis, there is a demand-supply gap of 100 studio floors in Mumbai alone

which is home for bollywood and Hindi GECs. There is a clear potential for absorbing additional floor space. (Source: Federation of Indian


Pan-India Release of Films

In recent years, there has been a growing trend among Indian producers and distributors to release the films across larger networks via

analogue or digital media. Pan-India releases enable producers to take advantage of the publicity and attention which the film receives at

the time of release. Further, it also helps to curb down the incidence of piracy.

Exploitation of the Overseas Market by the Indian Film Industry

The growing popularity of Indian film content overseas has opened new avenues for the Indian film industry. While the US region, UK

and Middle East continue to account for the bulk of overseas revenues; markets in South Korea, Western Europe, Taiwan and Africa are

gearing up for Hindi films. Studios continue to seed new markets for Indian films. For example, Vijay’s Tamil film was screened in

Denmark and ‘Kites’ was screened in Latin America. In 2011, ‘Ra-One’ and ‘Bodyguard’ were released with over 900 prints in the

overseas market. The industry believes that it is a question of influencing consumption patterns and cultivating relationships with the

local partners. The contribution of overseas revenue in the total film’s revenue can go up from its current levels of 10-15 percent to

upwards of 40 percent. While most benefits from these markets would accrue to the big budget films, there trickledown effect to quality

content in medium and low budget films is expected. Along with identification of new markets, Industry believes that growth would also

be driven by enhanced overseas marketing campaign and increased penetration in existing areas. As a result of these and other factors,

overseas theatrical revenues are expected to increase from approximately `69,000.00 lakhs in 2011 to approximately `1,15,000.00 lakhs

in 2016 and are expected to constitute approximately 10.50% of Indian films’ total revenues in 2016. (Source: Federation of Indian


Growing Popularity of Hollywood and other Western Films Among the Indian Population

Along with changing lifestyles, the film preference of the Indian population is shifting towards Hollywood and other Western films. The

success of Hollywood films in India can be attributed to a number of factors such as an ever rising English speaking population, the

growth of multiplexes, increased international exposure through internet, television and tourism, Hindi and local language dubbing and

simultaneous global releases. Given the rising importance of the Indian market for Hollywood producers, a large number of films are

being released in India prior to the US release to play on the prestige factor of watching films before the rest of the world. In 2011, ten

Hollywood films were released in India prior to their release in their home market. (Source: Federation of Indian Chambers of Commerce and


Revenue Streams of the Indian Film Industry

Domestic theatrical exhibition is the largest contributor of revenue for the Indian film industry. The second largest contributor is overseas

theatrical. However, contributions from cable and satellite rights are growing at a faster pace and are likely to emerge as the second

largest contributor in the near future.

143

The following chart illustrates the components of the Indian film industry revenue streams for the years 2007 through 2016:

P=Projected


Domestic Theatrical

In 2011, theatrical revenue (including overseas collections) constituted approximately 81.5% of total Indian film industry revenue. The

revenue from domestic theatrical exhibition has increased from `620,000.00 lakhs in 2010 to `688,000.00 lakhs in 2011, increase of

10.97%. This segment is expected to grow to `1,080,000.00 lakhs in 2016. (Source: Federation of Indian Chambers of Commerce and Industry

and KPMG, “Indian Media & Entertainment Industry Report 2012”)

The growth in domestic theatrical exhibition revenue is demonstrated by the following tables which provide the net box office revenues

for the top 10 grossing films in India in CY 2011 and 2012:

Top 10 Films – Domestic Box Office Revenue (Calendar Year 2011)* Top 10 Films – Domestic Box Office Revenue (Calendar Year 2012)*

Rank Film Net Revenue (` in

lakhs)

Rank Film Net Revenue (in

lakhs)

1 Bodyguard 14,095.00 1 Ek Tha Tiger 18,654.64

2 Ready 12,086.00 2 Dabangg 2 13,681.00

3 Ra.One 11,475.00 3 Rowdy Rathore 13,166.00

4 Singham 9,776.00 4 Agneepath 11,996.00

5 Zindagi Na Milegi Dobara 8,988.00 5 Housefull 2 11,267.00

6 The Dirty Picture (Hindi) 7,518.00 6 Barfi ! 10,555.46

7 Don 2 7,091.00 7 Jab Tak Hai Jaan 10,151.32

8 Rockstar 6,762.00 8 Bol Bachchan 9,991.78

9 Mere Brother Ki Dulhan 5,781.00 9 Talaash 9,025.92

10 Delhi Belly 5,521.00 10 Son Of Sardaar 8,834.00

Total: 89,093.00 Total: 117,323.12

(Source: www.boxofficeindia.co.in) *Top 10 films calculated on the basis of net collections received during the year indicated, regardless of release date.

http://www.boxofficeindia.co.in/

144

The following table provides details of the size and growth of the Indian film industry for the years 2009 through 2016:

(` in lakhs)

2009 2010 2011 2012P 2013P 2014P 2015P 2016P CAGR 2011-

2016

Total industry size 893,000 833,000 929,000 1,000,000 1,097,000 1,211,000 1,345,000 1,503,000

Growth (%) -6.72% 11.52% 7.64% 9.70% 10.39% 11.07% 11.75% 10.10%

Domestic theatrical 685,000 620,000 688,000 735,000 802,000 880,000 972,000 1,080,000

Growth (%) -9.49% 10.97% 6.83% 9.12% 9.73% 10.45% 11.11% 9.40%

*P=Projected


A recent change in the domestic theatrical exhibition segment is the emergence and growth of multiplexes. Multiplex contribution has

increased to approximately 25.00% of the total domestic theatrical revenues for the overall Indian film industry in 2009 and as much as

60.00% for Hindi films. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry

Report 2010”)

Further, many single-screen and stand-alone cinema theatres are being converted into multi-screen cinema theatres and multiplexes. A

number of single screen and stand-alone cinema theatres have been acquired on lease for refurbishment or renovation or conversion to

multiplexes. Such refurbishment or renovation and conversion to a multiplex has resulted in higher occupancy rates and consequently,

higher box office collections.

In addition to the increase in admits in Indian multiplexes, the ATPs and food and beverage spending per admit in India are likely to

increase in line with the trends prevailing in the developed markets, which will be beneficial to Indian multiplexes.

The growth of multiplexes in India is being driven by a variety of factors. We believe that cinema theatre patrons often prefer

multiplexes over single-screen cinema theatres as multiplexes function as comprehensive entertainment platforms with cinema theatres,

gaming parlours and food courts, thus catering to a wider range of leisure time requirements. Further, we believe that the growing

popularity of Hollywood films among Indian viewers is also driving the growth of multiplexes in India as cinema theaters patrons

typically prefer to watch Hollywood films in multiplexes or refurbished cinema theatres. Film producers often prefer large multiplex

chains as channel partners as multiplex chains enable them to release a film on a pan-India basis. Multiplexes are also instrumental in

developing a separate class of audiences in large Indian cities for niche and off-beat films.

Another important trend in the theatrical segment in India is the emergence of digital technology as a preferred medium for the exhibition

of films over analogue technology. The rising number of cinema theatres and multiplexes in India equipped with digital projection

technology provides the film industry with a larger number of release centres for the distribution of their films. While prior to the

increased penetration of digital projection technology, a film was typically released in approximately 250 centres, films are now typically

released in 700 to 800 centres due to lower costs and improved logistics. The number of screens equipped with digital projection

technology is expected to increase significantly as producers and distributors utilise more screens equipped with digital projection

technology to ensure a wider release of their films, reduce print costs and combat piracy. Digital projection technology also provides

theatrical exhibitors with the opportunity to receive additional revenues through alternative content offerings such as sporting events and

award shows. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report

2010”)

In India, multiplex penetration (admits as a percentage of population) is quite low compared to the penetration in more developed

countries as shown in the following table. However, multiplex penetration and SPH are expected to grow in line with overseas trends and

the gap is expected to decrease as the propensity to spend increases across the Indian populace as a result of increasing disposable

incomes.

145

30

43 45 4652 53

61

77

117

12

0

20

40

60

80

100

120

140

UK

Belg

ium

Germ

an

y

Sp

ain

Ita

ly

Irela

nd

Den

ma

rk

Fra

nce

US

Ind

ia

(Source: KPMG and CII, “Indian entertainment industry Focus 2010: Dreams to reality”)

Overseas Theatrical

The demand for Indian films among the Indian population in the United States, UK and the Far East region is growing. This is

demonstrated by the contribution of overseas theatrical revenues in the total revenue of the Indian film industry. The revenue from

overseas theatrical exhibition is expected to grow from `69,000.00 lakhs in 2011 to `115,000.00 lakhs in 2016. (Source: Federation of

Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”)

The growing popularity of Indian films in overseas market has opened new opportunities for Indian exhibitors. Typically, cinema chains

in the United States show very few foreign films, including Indian films. This has created an opportunity for Indian exhibitors to

establish cinema theatres in the United States for exhibiting Indian films to the local Indian population. In addition, Indian film

distributors may access a unique distribution opportunity in exhibiting their films through Indian cinema chains instead of United States

cinema chains, as United States cinema chains often exhibit Indian films in smaller cinema theatres, which causes poor customer

experience that results in lower box office collections. Further, smaller cinema theatres in the United States that exhibit Indian films

typically deal with Indian film distributors by giving a minimum guarantee and a percentage share of the overflow, which results in

substantial under-reporting of revenues.

Television

Television has played a dominant role in the Indian E&M industry, with a size of `3,290,000.00 lakhs and believed to be approximately

1,460 lakhs television households in 2011. Household penetration of cable and satellite television has increased to approximately 80.0%

in the year. The number of television channels in India has increased from 120 in 2003 to more than 623 in 2011. While general

entertainment channels (“GECs”) in Hindi and regional languages still garner a greater share of TV viewership, channels which cater to

niche audiences are also popular. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment

Industry Report 2012”)

146

The following chart illustrates the growth in number of cable and satellite (“C&S”) households in India in 2010 to 2016:

(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2012”).

The following charts illustrate the programming composition of India’s GECs in 2004 and 2008:


Fictional television programmes remained the dominant genre in the Indian television industry, with films ranking as the second most

popular programme type. These fictional offerings have retained their prominence despite the growing popularity of “reality TV”

content. In 2008 and 2009, serialised “soaps” occupied the most programming time and received the most viewership. However, viewer

preferences have shifted from the popular ‘saas bahu’ programmes in favour of socially relevant and localised or regionalised content.

The number of big format programmes has also increased substantially over the last five years. (Source: Federation of Indian Chambers of

Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report 2010”)

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The following chart illustrates the size of the Indian television industry for the years 2006 through 2016:

P = Projected


The strength of the Indian economy and the increasing popularity of new distribution platforms such as digital distribution are expected

to propel the growth of the Indian television industry.

Animation and VFX

India’s animation and VFX industry was approximately `310,000.00 lakhs in 2011 and is expected to grow at a CAGR of 17.0 % to

reach approximately `690,000.00 lakhs in 2016. The Indian animation and VFX industry is driven by the increased consumption of

animated content, creation of global intellectual property formats, acceptance of 3D graphics and the spread of the industry to

international markets. The use of VFX in live-action films has grown significantly in recent years. Many live action films in India now

include special effects sequences and the duration of these sequences is estimated to have grown by nearly 40.0% percent over 2008. The

growing demand and capability of Indian studios to produce high quality VFX content has helped Indian studios establish their presence

in overseas markets. Overseas presence enables Indian studios to create integrated production systems and generate robust pipelines of

projects through their global networks. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media &

Entertainment Industry Report 2012”)

The following table illustrates the size of the animation and VFX industry in India for the years 2008 through 2011:

Segment (INR Lakhs) 2008 2009 2010 2011

CAGR (2008-

11)

Animation Services 48000 55200 62100 71000 14%

Animation Production 36000 36700 38600 42000 5%

VFX 23000 31500 44700 62000 39%

Post Production 68000 77600 90800 135000 26%

Total 175000 201000 236200 310000 21%

(Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report

2012”)

The VFX industry in India is in an early stage of development and has the potential to grow into a significantly larger industry. The use

of VFX has been an integral part of many Hollywood films, with 8 out of the 10 top grossing Hollywood films in 2011 featuring

significant VFX sequences. The Indian film industry is increasingly producing storylines and films oriented around the use of VFX. With

due increases in the capabilities of Indian VFX studios and competitive pricing, VFX is expected to become one of the top outsourcing

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sectors in India. (Source: Federation of Indian Chambers of Commerce and Industry and KPMG, “Indian Media & Entertainment Industry Report

2012”)

Unlike in India, the VFX industry in overseas markets has matured. However, the Indian VFX industry is undergoing a series of changes

in order to provide better quality service to viewers such as offering services on alternative platforms such as television, Internet and

mobile applications and offering high-definition content, image up-scaling, conversion from 2D to 3D and CGI.

The following table provides the estimated cost of production of 30 minutes of animated content in India, Korea/Philippines and North

America:


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BUSINESS

The information in this section is qualified in its entirety by, and should be read together with, the more detailed financial and other

information included in this Letter of Offer, including the information contained in the sections “Industry Overview”, “Risk Factors”,

“Our Business” and “Management’s Discussion and Analysis on Results of Operations and Financial Conditions” on pages 138, 11,

149 and 234, respectively. In this section, descriptions of contracts and agreements are not, nor do they purport to be, complete

summaries of all terms or terms customarily found in such contracts and agreements.

Overview

We are one of India’s leading entertainment and media (“E&M”) companies with a presence across several businesses such as theatrical

exhibition of films, film and media services and television content production and distribution. Our headquarters are located in Mumbai

and we have operations across 78 cities and towns in India and internationally, in, the UK and the United States.

Our theatrical exhibition business is our largest source of revenue. We operate one of India’s largest cinema chains, under the brand ‘BIG

Cinemas’, with 254 screens in India (including 16 screens which are only managed by our Company) and an additional 185 screens in

the United States (including 116 screens which are only managed by our Company) as of May 31, 2013. During Fiscal 2012, BIG

Cinemas (excluding customers of screens which are only managed by our Company) catered to approximately 502 lakhs and 74 lakhs

consumers in India and overseas, respectively and approximately 144 lakhs consumers in India for the six months ended March 31, 2013

March 31, 2013 and 15 lakhs consumers overseas for the six months ended March 31, 2013.

Our film and media services business comprising production services, post-production services and media and creative services for films

and television is our second largest source of revenue, which comprises:

Production services: We lease sound stages, shooting floors, standard and high definition multi-camera equipment and other

related equipment to television and film production companies.

Post-production services: We process and trade film negatives at our laboratory located in Film City, Mumbai. Our 4K DI

laboratory located in Film City, Mumbai undertakes quality enhancement of film and television content through digital

techniques.

Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content to 3D and CGI services

through our wholly owned subsidiary, Reliance MediaWorks Entertainment Services Limited. In addition, our wholly owned

subsidiaries located in United States and UK, Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks (UK)

Limited, respectively, are engaged in the business of digital image correction, film restoration and film processing.

We operate our film post production services through our production laboratory in Mumbai and our creative services through facilities in

Burbank (United States), London (UK) and Navi Mumbai (India). Films processed at our laboratory in Mumbai have won, among others,

15 national awards for cinematography and our Company’s film processing facilities have been certified by Kodak Imagecare, an

internationally recognised quality certification program, for each of the years beginning 2007. We were among four companies to receive

the “Judges Award for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in 2010. In August 2011, our

Company received a patent for an innovation – “System and method for removing semi-transparent artifacts from digital images caused

by contaminants in the camera’s optical path”. We won the Scientific and Technical Award, 2012 at the Academy of Motion Picture,

Arts and Sciences in 2012, for the development of a unique and efficient system for the reduction of noise and other artefacts, thereby

providing high quality images required by the film making process.




a DI Lab.

Further, we have purchased broadcast and film cameras. We have also increased the number of screens we operate. This has been

achieved organically and has enhanced our reach in terms of exhibition business and also enabled us to strengthen our capabilities

in post-production services and creative services divisions.

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We are also in the process of establishing approximately 2,00,000 square feet studio located in Film City, Mumbai with facilities for

shooting films, television shows and television commercials, which we believe meets international standards. This studio aims to

provide a one-stop solution for all production needs for domestic and international clients. When completed, the studio is expected

to have three studio buildings with eight sound stages with appropriate noise control and other features. A part of the studio

constituting one studio building with three sound stages is in operation since January 2011. We expect to complete the remaining

portion of the studio by December 2013.

We are also engaged in the business of television content production through our subsidiary, Big Synergy Media Limited, under the

brand “BIG Synergy”, which primarily produces non-fiction programmes in addition to adapting international programme formats

for Indian viewers. We have produced shows such as Kaun Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum,

India’s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. We also selectively distribute films.

For the six months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, as per our audited restated financial statements, our restated

consolidated net loss after tax was ` 34,044.77 lakhs, ` 91,016.62 lakhs and ` 32,796.95 lakhs, respectively and our standalone net

loss after tax was ` 27,593.15 lakhs, ` 70,356.34 lakhs and ` 24,348.00 lakhs, respectively. For the six months ended March 31,

2013, Fiscal 2012 and Fiscal 2011, our consolidated total income was ` 36,637.80 lakhs, ` 125,486.90 lakhs and ` 85,026.20 lakhs,

respectively and our standalone total income was ` 24,026.10 lakhs, ` 80,454.80 lakhs and ` 54,287.40 lakhs respectively, as per

our audited restated financial statements..

Our Competitive Strengths

We believe the following are our key competitive strengths:

Strong reputation and brand in the E&M sector

We believe that we have established a strong reputation and brand in the E&M sector. We have rebranded our theatrical exhibition and

our television content production businesses as “BIG Cinemas” and “BIG Synergy”, respectively. This rebranding was undertaken in

order to create a single E&M brand, “BIG”.

We have received various awards for our theatrical exhibition business, including “Multiplex of the Year” for the year 2012 at Star Retail

Awards, “Best Cinema Chain” for the year 2012 ZEE ETC Business Awards, “Most Admired Innovative Concept of the Year” at the

Images Retail Awards 2010 for our Ciné Diner theatre exhibition concept, “Most Admired Retailer of the Year: Entertainment” award at

the India Retail Awards in 2009, the “Exhibitor of the Year” award at the CineAsia 2008 awards and the “Retailer of the Year” in the

‘Entertainment & Fun’ category at the India Retail Summit in 2007. The Silent National Anthem campaign launched by Big Cinemas has

secured a silver lion in the PR Lions category and two bronze lions for Best Use of Broadcast in a Promotional Campaign and Corporate

Image & Information, Films categories in 2011.

BIG Synergy, under which we produce television content, has produced television shows such as Kaun Banega Crorepati, Kya Aap

Paanchvi Paas Se Tez Hain, Dus Ka Dum, India’s Got Talent, Aap Ki Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. Many of

these shows have received high viewer ratings and received awards in various categories.

Our Academy Award winner wholly owned subsidiary Lowry Digital, we believe is one of the leading digital image correction and

restoration facilities in the world. Lowry Digital’s clients include industry leaders such as Walt Disney Pictures and Television and

Warner Bros. Entertainment Inc. Lowry Digital’s facility has provided image enhancement and restoration services to approximately 621

films as of May 31, 2013 and has worked on classics such as Casablanca, Singin’ in the Rain, Sunset Boulevard and a number of Walt

Disney Pictures & Television classics such as Cinderella, Bambi, George of the Jungle, Snow White, Fantasia, Tron, Tangled, Winnie

the Pooh, Beauty and the Beast and 101 Dalmatians.

We invested 30% in capital of Galloping Horse America LLC. Consequently, Galloping Horse America LLC has been renamed

Galloping Horse-Reliance LLC. Galloping Horse-Reliance LLC has acquired certain assets of Digital Domain Media Group Inc

(DDMG), an Academy Award-winning digital production studio in Hollywood. We believe that this association strengthens our position

substantially as a major service provider for Hollywood studios as also demonstrates our quality and efficient workflow processes as well

as strong brand repute.

We believe that our longstanding presence in the film processing business has made us one of the important operators in the Hindi film

category in addition to being a key operator in certain regional language films. Films processed at our laboratory located in Mumbai have

won, among others, 15 national awards for cinematography and our film processing facilities have been certified by Kodak Imagecare,

an internationally recognised quality certification program, for each of the years beginning 2007.

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We believe we have established a strong reputation and brand through the quality of our products and services which have obtained

industry recognition and customer satisfaction. We believe that our strong reputation and brand differentiates us from our competitors.

Demonstrated ability to expand our operations both organically and inorganically

We have created a global E&M company that is capable of operating across the entire E&M business value chain. Since the Reliance

Group acquired control of our Company in the financial year 2006, we have grown and diversified our business. Our revenues have

grown from `36,296.74 lakhs in Fiscal 2008 to `1,25,486.90 lakhs in Fiscal 2012 and `36,637.80 lakhs for the six months ended March

31, 2013 on a consolidated basis and have grown from `32,280.01 lakhs in Fiscal 2008 to `80,454.80 lakhs in Fiscal 2012 and

`24,026.10 lakhs for the six months ended March 31, 2013 on a stand alone basis. Currently, we have diversified service offering across

several businesses, such as theatrical exhibition of films, film and media services and television and content production and distribution.

Our theatrical exhibition business has expanded from 32 screens across five cities as of March 31, 2006 to 439 screens across more than

99 towns and cities in India and the United States as of May 31, 2013. Of the 439 screens 355 screens are equipped with digital

projectors. The number of customers our Big Cinemas brand (excluding customers of screens which are only managed by our Company)

catered to in India increased from 126 lakhs in Fiscal 2008 to 576 lakhs across India and overseas in Fiscal 2012. Big Cinemas

(excluding customers of screens which are only managed by our Company) had approximately 144 lakhs customers in India for the six

months ended March 31, 2013 and 15 lakhs customers overseas for the six months ended March 31, 2013.

We have also demonstrated our ability to acquire companies located in India and overseas in order to consolidate our position as a

company that is capable of operating across the entire E&M business value chain. For example, we acquired Rave Entertainment Private

Limited (“Rave”), Synergy Communications Private Limited (now, Big Synergy Media Limited), iLab and Lowry Digital between the

financial years 2007 and 2010 and the assets and brand “Digital Domain” belonging to DDMG, through Galloping Horse-Reliance LLC,

an associate entity, in financial year 2012. The acquisition of Rave helped us in establishing our footprint in the North Indian cinema

territories, while Synergy Communications Private Limited has facilitated our entry into the business of television content production

and Lowry, “Digital Domain” and iLab have helped us establish significant presence in the North American and European markets,

offering us new business opportunities in image processing and restoration, 2D to 3D conversion and VFX.

Presence across various E&M businesses and geographies

We believe we are a one-stop solution provider for film and television producers and distributors in India. We provide the entire range of

film services, including studio rental, equipment rental, DI post-production laboratory services, VFX, stereoscopic conversion, film

processing, digital cinema mastering and operating cinema theatres in India and US. Our presence across various businesses in the E&M

sector allows allow us to develop long-term relationships as we are able to cross-sell our various services and offer solutions for the

varying requirements of our customers.

Our strategy is to create a single global E&M company that is capable of operating in geographically diverse markets and catering to a

variety of consumers. We have expanded our operations by acquiring theatrical exhibition assets in US. We have also established a

presence in the film post-production services business in the United States and the UK through the acquisition of Lowry Digital and

iLab, respectively. We believe that our multinational presence makes us an attractive proposition for our customers.

Our technological capabilities

We have attempted to develop or acquire the latest technological capabilities across our business lines to ensure that we remain

competitive. In our film and media services business, we utilise various sophisticated technologies, including digital camera technology

capable of recording high-definition video, sync-sound enabled studio stages and fibre optic cables for the distribution of films.

We utilise proprietary image processing technology to deliver superior picture elements and have developed a unique technology, the

“Lowry Process”, which is used to create high image quality for all outputs, including film, broadcast television, advertisements, digital

cinema, Blu-Ray Disc and internet video. Lowry Digital’s services include film restoration, emergency image repair, digital blow-ups

and DI enhancements. Lowry Digital also offers image enhancement tools which are used for the restoration and upgrade of damaged

analogue film prints. We were among four companies to receive “Judges Award for Creativity & Innovation” in post-production at the

Hollywood Post Alliance Awards in November 2010. In August 2011, our Company received a patent for the following innovation –

“System and method for removing semi-transparent artifacts from digital images caused by contaminants in the camera’s optical path”.

Our Company was the first Indian company to be recognized in the category of science and technology for the development of a unique

and efficient system for the reduction of noise and other artefacts which provide a high quality image required for the film making

process at the Academy of Motion Pictures, Arts & Science Awards 2012.

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Our film processing laboratory, through its telecine scanners, enables us to capture the fine details of a filmed image. We are capable of

grading the film in an uncompressed 4K resolution, the highest available resolution for film production.

We introduced the IMAX digital projection system in India in 2001, which has enabled us to take advantage of the increasing number of

IMAX and IMAX 3D releases.

The Reliance Group’s brand, experience and position in India and overseas

The Reliance Group is a diversified business group with a strong brand, level of experience and position in India and overseas. The

Reliance Group is headed by Anil D. Ambani, one of India’s leading entrepreneurs, who has won several awards and was voted as the

“Person of Year – 2008” by Light Readings for outstanding achievements in the telecommunications industry and “Businessman of the

Year” in a poll conducted by The Times of India in 2006. Reliance Communications Limited, one of India’s leading wireless carriers, in

terms of coverage and capacity, and Reliance Capital Limited, one of the India’s leading private sector financial services companies are

part of the Reliance Group. The Reliance Group also includes Reliance Power Limited, one of India’s leading power development

companies. The Reliance Group has a large presence in the entertainment, communications and infrastructure sectors and we derive

significant benefits from our association with the group. For example, we are able to derive benefits of synergy in approaching

advertisers through our relationship with Reliance Broadcast Network Limited, a group company which owns 92.7 Big FM, one of

India's leading radio networks, and BIG Street, an out-of-home media business. We believe that we will continue to benefit from the

depth of experience of the Reliance Group and our association with the Reliance Group significantly enhances our brand value.

Our Business Strategy

Our business strategy is to build upon our competitive strengths and business opportunities to continue to be a leading E&M company.

Our business strategy consists of the following principal elements:

Create lean front-end centers in overseas markets and substantial back-end delivery centres in India for film and media services

Hollywood produces maximum number of high budget films with high expenditure on VFX and 3D conversions. However, the cost of

production in US is almost four times as compared to that in India (Source: Federation of Indian Chambers of Commerce and Industry and

KPMG, “Indian Media & Entertainment Industry Report 2009”). We have identified this opportunity and mapped the demand with supply. We

have created strategic front-ends in the markets of US (Burbank) and UK (London), complimented by back-end delivery centres in India,

one of which is located in a SEZ. The front-end centers in US and UK focus on business development and hence are lean on assets. We

intend to continue to focus on further enhancement of strategic front-end tie-ups as also further strengthen the force-to-market (sales)

teams backed by increasing back-end asset creation in India, where our main delivery centres are located.

Continue to focus on increasing our revenue from film and media services through complementary services

We intend to expand our service offerings in line with technological developments and market demand. For instance, we have extended

our BPO offerings from restoration and content processing to VFX, 2D to 3D conversion and CGI keeping in line with the emerging

market trends. We commenced production services business with equipment rental and have extended our service bouquet by building a

state-of-the-art studio in Film City, Mumbai, comprising of three studio buildings with eight sound stages, which we believe will

significantly strengthen our ability to provide film and media services. While a part of the studio constituting one studio building with

three sound stages is operational, we expect to complete the remaining portion of the studio by December 2013.

Opportunistically expand our theatrical exhibition business

The key elements of our growth strategy for our domestic theatrical exhibition business include the following:

Focussing on select metro and tier 1 cities which we believe could potentially have a higher consumption pattern; and

Expanding in certain select locations to establish a footprint or to strengthen our presence in identified film territories.

A retail centric approach, to enhance the profitability of our theatrical exhibition business

Our key focus in improving the profitability of our theatres is through increasing patronage and improving the overall customer

experience, which we believe will lead to greater spending by customers, allow us to command greater premiums in our ticket prices and

increase advertising revenues. We seek to achieve this through the following:

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Enhancing our understanding of our customer to enable us to customise our programme selection. Further, we propose to introduce

movie and time specific pricing to increase admits and, consequently, box office collections;

Offering the customer a wider F&B choice and providing the customer greater access to F&B option in-theatre i.e. within the

precincts of the auditorium;

Augmenting our advertising sales by better utilising the available on-screen and off-screen space;

Delivering consistent customer experience, in line with our proposition of delivering an affordable luxury experience to larger pool

of customers, whilst keeping a tight control on costs; and

Exploring avenues for rent rationalisation, in the context of the changing market environment.

Grow our business through internal restructuring

We would continue to evaluate various opportunities for the growth of our business. In order to garner further investments with an aim to

raise fresh capital for the growth of our business, we are considering restructuring certain of our business divisions i.e. film and media

services business and exhibition business, including by transferring them to our subsidiaries. We may also consider options for entering

into technical and financial collaboration with strategic partners either directly or through our subsidiaries. For further details, please see

the chapter entitled “History and Certain Corporate Matters” at page 169 of this Letter of Offer.

Continue to pursue strategic acquisitions and alliances

We have expanded our operations by identifying and carrying out strategic acquisitions / alliances. The goals that we hope to achieve

through such strategic acquisitions/alliances include:

the expansion and enhancement of our businesses with minimum cost – both capital & operational;

the benefit of technical and operational synergies; and

expansion of our geographical reach.

We intend to continue to evaluate such options even in the future.

Recent measures to stimulate our business operations

The business of the Company is broadly segmented in 3 lines of businesses, i.e.

i. Theatrical Exhibition;

ii. Film and Media Services; and

iii. Television / Film production and distribution.

While we reported a loss of ` 34,044.77 lakhs on a restated consolidated basis for the six months ended March 31, 2013 and ` 27,593.15

lakhs on a restated standalone basis and ` 91,016.62 lakhs, as restated in Fiscal 2012 on a consolidated basis and ` 70,356.34 lakhs on a

stand alone basis we believe that our performance must be viewed against the backdrop of certain legacy problems that we have faced

and continue to face. Further, we have initiated remedial measures which we believe have benefitted us and will be reflected in the

coming financial years. Set out below is a brief segment wise description of our operations since 2006, as were then were, was acquired

by the Reliance Group.

i. Theatrical Exhibition

The theatrical exhibition business has been our largest source of revenue since 2008. At the time of the Acquisition we operated

5 multiplexes and 20 screens across Mumbai, Nashik and Pune. The strategy behind the acquisition was to emerge as a leader in

the theatrical exhibition business with a pan-India presence of about 500 screens across Tier I, Tier II & Tier III cities/ towns.

To implement this strategy we built a projects team comprising engineers, architects and supply chain professionals. The scale

of recruitment was in line with the overall strategy.

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In conformity with the strategy envisaged we acquired a number of properties and were operating 543 screens as at March 31,

2011, resulting in significant capital expenditure and, consequently, high levels of debt. In addition to rapid expansion in India,

we have entered into overseas markets through acquisitions.

However, due to changed economic scenario, we had to abate the envisaged growth plan. We continued to retain the services of

the projects team expecting to complete the targeted scale upon recovery in the economic environment. These increased

overheads along with the higher rentals locked in during the expansion phase led to adverse impact in the financial results.

Accordingly, to fund growth and to reduce the debt component and thereby the debt servicing costs, we proposed a rights issue

in 2009. Unfortunately, though, given the macro-economic scenario in and global financial crises post 2008, the rights issue

could not be completed resulting in us bearing a significant debt servicing cost. This Issue is expected to provide much required

funds which will enable us to reduce our debt servicing cost and shore up our resources.

In the interim, we have undertaken the following measures to enhance our operating efficiencies and chart a path to profitability

–

a) We have closed loss making properties

b) We have undertaken a manpower rationalization exercise to right size the project team to match the changed role of

focusing on maintenance rather than rapid expansion; and

c) We have identified properties with high rentals (as a percentage of revenues) and re-negotiated the contracts to lower

rentals; This is clearly visible as the rent expense as a percentage of Exhibition Revenues has come down from 43.28% for

the twelve month period, April 2011 to March 2012 to 35.28% for the twelve month period, April 2012 to March 2013.

Further to our recent endeavours to rationalize our screen count, reduced from 543 screens as on March 31, 2011 to 439 screens

as of May 31, 2013.

In addition, the above measures for Indian operations have resulted in improvement of standalone financials for the theatrical

exhibition segment. Standalone revenues for the segment have increased from ` 37,567.40 lakhs for the twelve month period,

April 2011 to March 2012 to ` 40,890.74 lakhs for the twelve month period, April 2012 to March 2013, an 8.84% growth in

spite of shutting down of loss making properties. Standalone segment result (earnings before interest and tax) for the segment

showed marked improvement, reducing from loss of ` 15,987.59 lakhs for the twelve month period, April 2011 to March 2012

to loss of ` 9,947.62 lakhs for twelve month period, April 2012 to March 2013.

In the above context, we have decided to focus our energies on the cash flow generation from India operations of the theatrical

exhibition segment. In line with this thought process, we have truncated our overseas business, by selling our Malaysian and

Nepal theatre exhibition chain while continuing our operations in the USA.

While exiting / closing loss making properties resulted in a write-off of approximately ` 5,289.69 lakhs for Fiscal 2012 and `

5,753.70 lakhs for the six month ended March 31, 2013, we believe that this loss which will enable us to re-focus our priorities.

We believe that these measures are bearing fruition which coupled with the recent surge in the industry has enabled us to

recover and generate profits at the EBITDA level. Further, we also believe that these measures will generate sufficient cash for

future growth.

ii. Film and Media Services (FMS)

FMS is categorized into i) Post production services, ii) production services & iii) media & creative services. Production and

post-production services have always been and continue to be profitable business segments.

We realized that the trend of digitization was emerging across various industries including telecom, retail, healthcare and

manufacturing. Replacing the existing analog technology with digital technology resulting in instant access to a full range of

multi-media entertainment is expected to have far reaching implications. This rapid shift towards new technology is expected to

restructure the entire industry and we believe will have significant impact on each business within the industry.

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Keeping abreast with this new evolving trend, in Fiscal 2009, we decided to venture into media & creative services including

restoration, content processing, VFX and stereoscopic conversion and set up a BPO in a SEZ at Airoli, Navi Mumbai of about

90,000 sq. ft.

In July 2011, we signed a three (3) year binding ‘Guaranteed Compensation’ contract with Digital Domain Production Inc., a

subsidiary of DDMG, with an overall value in excess of ` 10,000 lakhs annually to cater to their VFX & conversion projects.

We hired and trained VFX & conversion artists to deliver projects received from Digital Domain Production Inc. Since

September, 2011 we have serviced this contract, however, in September 2012, DDMG filed for bankruptcy along with its

subsidiaries and we had to write off ` 2,774.82 lakhs receivable from Digital Domain Production Inc.

We had also signed a three (3) year contract with National Film Archives for India (NFAI) for restoration of 1,000 films and

hired restoration artists to restore these films. However, due to its internal constraints, NFAI awarded around 600 films to us

over a period of 3 years.

Both these cases resulted in excessive capacity, leading to significant impact on our profits.

Subsequently, we have adopted the following measures to curb losses:

a) Employee strength has been pared in line with the revenue visibility, resulting in a significant reduction on the overall

salary cost;

b) Relocation of facilities have resulted in rent reduction; and

c) Strict monitoring and control over collection of receivables.

d) Reinforce sale team in US to attract outsourcing work to India

e) Joint acquisition of VFX business of DDMG along with Beijing Galloping Horse Media Co. Ltd.

We have expended significant energy in rationalizing the cost and paring our staff strength. Similarly, we believe we have made

substantial progress towards augmenting our delivery process by way of technological integration, improved pricing

mechanisms, building operational efficiencies and expanding senior management bandwidth wherever critical, across

geographies.

We are now, therefore, focusing on business development and revenue enhancement and are in discussions with large corporate

houses / studios across USA, UK and Asia.

We believe these efforts would pay off in the coming years, and result in a positive impact on the cash flows from this business

segment.

iii. Television / Film production and distribution

TV content production under the brand “BIG Synergy” has been a profitable venture from inception and is expected to grow

and deliver premium content.

Rights Issue

As per our audited restated financial statements, during six month ended March 31, 2013 and Fiscal 2012, our total income was

` 36,637.80 lakhs and `125,486.90 lakhs on a consolidated basis and ` 24,026.10 lakhs and ` 80,454.80 lakhs on a standalone

basis respectively and total expenses was ` 64,214.90 lakhs and ` 207,312.71 lakhs on a consolidated basis and ` 45,936.67

lakhs ` 143,583.94 lakhs on a standalone basis respectively. As per our audited restated financial statements, the total expenses

comprised finance costs (net) for the six months ended March 31, 2013 and Fiscal 2012 was `13,930.70 lakhs and ` 39,751.40

lakhs on a consolidated basis and ` 13,694.80 lakhs and ` 39,061.20lakhs on a standalone basis respectively, constituting

38.02% and 31.68% on a consolidated basis and 57.00% and 48.55% on a standalone basis respectively of our total income. In

Fiscals 2011 and 2010, our finance cost (net) comprised only 20.60% and 15.67% on a consolidated basis and 31.27% and

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23.25% on a standalone basis, respectively, of our total income as per our audited restated financial statements. The significant

and continuous increase in our finance cost is crucial and hampers our ability to grow.

As set out in the section entitled ‘Object of the Issue’ at page 81 of this Letter of Offer the objects of this Issue are to repay/pre-

pay some of our outstanding debts. Reducing our outstanding debt will, we believe, significantly help in reducing our finance

cost over time. This will enable us to attract finance on more favourable terms.

We expect that the measures mentioned above coupled with this Issue will send out a clear signal that we are headed in the right

direction and are on the path to recovery. We believe that this Issue is in the best interests of our Company and, consequently,

our shareholders.

Our Business Operations

Theatrical Exhibition Business

We operate one of India’s largest cinema chains under the brand “BIG Cinemas”, with 254 screens in India and 185 screens in the United

States as of May 31, 2013. Of the 439 screens operated by our Company, 132 screens are operated through management agreements. We

introduced the IMAX digital projection system in India and created properties such as BIG Cinemas R City, IMAX Big Cinemas and

Metro BIG Cinemas in Mumbai and Odeon BIG Cinemas in New Delhi.

The different types of agreements through which we operate our cinema theatres are set forth below:

Business conducting agreements: Typically, business conducting agreements are entered into between our Company, the

owners of the cinema theatre premises and persons/entities who hold licenses to operate cinema theatres (“License Holders”).

Under business conducting agreements, our Company operates and manages the cinema theatres on a conducting basis

exclusively, in consideration of which, our Company pays certain conducting charges to the License Holders. The licenses and

approvals required to operate the cinema theatres are acquired and maintained by the License Holders. The term of business

conducting agreements ranges from three years to twenty years.

Lease agreements: Lease agreements are entered into between our Company and the owners of the cinema theatre premises.

Under lease agreements, our Company obtains a right to occupy, possess and operate various cinema theatres /multiplexes on

exclusive basis, in consideration of which, our Company pays rent along with certain additional charges. The licenses and

approvals required to operate the cinema theatres are acquired and maintained by our Company. Typically, the term of these

lease agreements ranges from ten years to twenty years.

Management agreements: Management agreements are entered into between our Company and the owners of the cinema theatre

premises. Under management agreements, our Company manages operations for the cinema theatres, in consideration of which,

our Company receives a monthly management fee. Typically, the term of these management agreements ranges from three years

to ten years.

We operate most of our cinema theatres through lease arrangements, business conducting agreements or through management

agreements, except the multiplex situated at Mulund, Mumbai which is owned by us, the multiplex situated at Wadala, Mumbai which is

owned by us through a perpetual lease, the multiplex at Kalyani Nagar, Pune which is owned by a partnership firm, wherein we are one

of the partners and the multiplex at Trimurti Chowk, Nashik, which is owned by our Joint Venture company through a lease of 90 years.

Our cinema theatres are equipped with various types of sound systems such as Dolby Digital (5.1, EX and 7.1) and DTS, comfortable

seating and other customer-friendly amenities such as Mobile Box Office, mobile phone ticket purchasing application, ticketing through

“Print@Home” at select locations and “Easyticket”, a virtual pre-paid card that may be used to purchase tickets.

The number of our cinema theatres and screens are as follows:

As of March 31 Number of Cinema Theatres Number of Screens in Our

Cinema Theatres

2006 8 32

2007 15 57

2008 54 147

2009 115 429

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As of March 31 Number of Cinema Theatres Number of Screens in Our

Cinema Theatres

2010 140 508

2011 146 543

As of September 30, 2012 122 463

We operate 119 cinema theatres with 439 screens across India and the United States as of May 31, 2013.

India

In India, BIG Cinemas is located in 15 states and union territories with 96 properties and 254 screens as of May 31, 2013.

The number of our cinema theatres and screens in the states and union territories of India as of May 31, 2013 were as follows:

State / Union Territory Number of Cinema Theatres Number of Screens

Andhra Pradesh 7 15

Chattisgarh 2 3

Delhi 1 2

Gujarat 12 32

Haryana 2 5

Karnataka 2 6

Madhya Pradesh 3 8

Maharashtra 28 89

Pondicherry 1 2

Punjab 6 20

Rajasthan 6 9

Tamil Nadu 10 18

Uttaranchal 1 3

Uttar Pradesh 14 39

West Bengal 1 3

Total 96 254

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The following map illustrates our theatrical exhibition presence across 78 cities in India as on May 31, 2013:

The following table provides certain details of admits, ATP and SPH that illustrate the growth our theatrical business in India over the

last two Fiscals:

Particulars* Fiscal Tier 1 Cities Tier 2 Cities Tier 3 Cities

Admits (lakhs) 2011 107 55 86

2012 187 117 198

ATP (`) 2011 150 94 64

2012 168 78 52

SPH (`) 2011 41 27 19

2012 43 28 20

* excluding admits to theatres which are only managed by our Company

The United States

We have 185 screens located across the United States as of May 31, 2013. We have 23 cinema theatres located in the states of New

Jersey, New York, Virginia, California, Florida, Illinois, Georgia, Maryland, Tennessee, Kansas, Nevada, Ohio, North Carolina,

Pensylvania and South Carolina. In addition to exhibiting films in the Hindi, Tamil and Telugu languages, we also exhibit English-

language Hollywood films. We operate the leased cinema theatres under the brand name “Big Cinemas”.

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The following map illustrates our presence across the United States as of May 31, 2013:

Our Theatrical Exhibition Business Model

Our revenues are primarily generated from the following:

patronage and patron spending, which entails revenues generated from ticket sales, food and beverage sales, gaming and

parking;

advertising revenue;

business conducting fees; and

management fees.

The yearly details of our patron admissions for our cinema theatres globally are as follows:

Period Patron Admissions (in lakhs)*

Fiscal 2008 126

Fiscal 2009 258

Fiscal 2010 331

Fiscal 2011 359

Fiscal 2012 576

* Excluding patrons in theatres which are only managed by our Company

Our patron admissions for our cinemas theatres (excluding patrons in theatres which are only managed by our Company) are 502 lakhs

across India and 74 lakhs across the United States for Fiscal 2012 and approximately 144 lakhs across India and 15 lakhs across the

United States for six months ended March 31, 2013.

We have adopted a price differentiation model which we believe has increased our appeal to consumers by offering our patrons an

enhanced cinema-going experience at each price point. Our ATPs for our single / twin screen cinema theatres as compared to our

multiplexes may vary.

We provide our patrons with a wide variety of food and beverage options which we believe enhances their cinema-going experience. The

food and beverage offerings are primarily in the nature of fast food.

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The exhibition of films in our cinema theatres offers advertisers an opportunity to command the attention of a large, captive audience and

our pan-India presence is an attractive feature for such advertisers. Advertising opportunities in a cinema theatre include space selling,

on-screen and off-screen promotions and event sponsorship. We have entered into advertising agreements with several reputed

companies, including HDFC Limited, ITC Limited and Reliance Communications Limited.

Film and Media Services

The film and media services business is our second largest source of revenue and has been operational for approximately two decades.

We have expanded our portfolio of film and media services to provide post-production and grading with our 4K DI laboratory and our

digital cinema mastering facility.

Our film production services and post-production services operations in India are located in Mumbai. In Mumbai, we provide a wide

range of services.

We are engaged in media & creative services such as restoration, content processing, VFX, conversion of 2D content to 3D and CGI

business through our subsidiary, Reliance MediaWorks Entertainment Services Limited.

In addition, our subsidiaries located in United States and UK, Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks

(UK) Limited, respectively, are engaged in the business of digital image correction and film restoration.

The following chart illustrates our presence across the E&M industry value chain:

Film Processing Business

Our film processing business serviced approximately 245 clients and 58 clients during Fiscal 2012 and the six months ended March 31,

2013, respectively. For the said period, we provided film processing services for 230 films and developed approximately 28,316

analogue prints and 39 films and developed approximately 4,150 prints in Fiscal 2012 and the six months ended March 31, 2013,

respectively. We have established facilities that offer a variety of film negative services, including, film negatives processing, colour

correction, editing and the production of final prints for distribution. We also supply film negatives to film producers.

We have received national Indian awards for best cinematography for 15 films including, Salim Langde Pe Mat Ro in 1990, Suchitra

Mitra in 1993, Tarana in 1996, Hum Dil De Chuke Sanam in 2000, Rasikpriya in 2001, Girni and Swades in 2005, Parsi wada Tarapore

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– Present Day & Yatra in 2006, Kramasha in 2007, Three Of Us in 2008 and Kutty Srank and Gaarud in 2009, Anhe Ghorey Da Daan in

2011, Kaatal in 2012. In addition, our processing laboratory in Chennai received the South Indian Cinematographers’ Association award

for ‘Best Colour Laboratory’ in 2007.

The customer base for our film processing business includes the following film companies:

Filmmakers Film

Yash Raj Films Private Limited Rocket Singh, Badmaash Company, Lafangey Parindey, Mere Brother Ki

Dulhan, Ladies V/S Ricky Bahl, Ishqzaade, Ek Tha Tiger, Jab Tak Hai Jaan

Red Chillies Entertainment Private Limited Om Shanti Om, Main Hoo Na, Billu, Ra. One

Studio 18 OMG! Oh My God, Department, Shaitan, Son of Sardar, Aiyaa!, Chashme

Baddoor

UTV Software Communications Limited Rowdy Rathore , Barfi!, Dev D, Fashion, Welcome To Sajjanpur, Mumbai Meri

Jaan, Race, Taare Zameen Par, The Blue Umbrella, The Namesake, Aamir,

Chup Chup Ke, Khosla Ka Ghosla, The Happening, Chance Pe Dance, Udaan,

Raajneeti, Thank You, Kai po Che

Vinod Chopra Films Private Limited Ferrari Ki Sawaari ,Munnabhai M.B.B.S., Parineeta, Eklavya, Lage Raho

Munna Bhai, 3 Idiots

Rakeysh Omprakash Mehra Productions Delhi-6, Teen Thay Bhai

Rajshri Productions Private Limited Vivah, Dulhan Wahi Jo Piya Man Bhaye, Tarana, Ek Vivaah . . . Aisa Bhi, Love

U Mr. Kalakaar

Arbaaz Khan Productions Dabangg

Shree Ashtavinayak Cine Vision Limited Bol Bachchan ,Maharathi, Jab We Met, Superstar, Bhagam Bhag, Golmaal,

Golmaal Returns, Kidnap, Khatta Meetha, Rockstar,

Mukta Arts Limited 36 China Town, Apna Sapna Money Money, Black & White, Good Boy Bad Boy,

Sanai Choughade, Bombay to Bangkok, Khanna & Iyer, Shaadi Se Pehle, Valu-

The Bull, Yuvvraj, Hello Darling

Tips Industries Limited Kismat Konnection, Naqaab, Race, Dil Apna Punjabi, Prince, Tere Naal Love

Ho Gaya

Nadiadwala Grandson Entertainment Private Limited Jaan-E-Mann, Heyy Babyy, Housefull, House Full -2

B.R.Films Private Limited Bhootnath, Videsh, Water, Baabul

Dharma Productions Student Of The Year, I Hate Luv Storys, We Are Family, Agneepath, Ek Main

Aur Ekk Tu,

Balaji Motion Pictures Limited Once Upon a Time in Mumbai , Ragini MMS, The Dirty Picture, Kya Super Cool

Hai Hum, Ek thi Daayan

Reliance Big Entertainment Private Limited Kites, Raavan, Singham, Real Steel, Cowboys & Aliens Don 2, Dredd, Makkhi,

David

Eros Entertainment Aladin, Anjana Anjani, Veer, Shirin Farhad ki Nikal Padi, Khiladi 786

Function of a Film Processing Laboratory

A film processing laboratory is an integral component of the film production to exhibition value chain. Raw film is created during the

production of a film and cannot be exhibited in such form until it undergoes a number of processes to render it fit for viewing, which are

provided by a film processing laboratory. The laboratory aligns the film, performs sound correction and edits the film, which results in

the creation of a final print. The final print is then previewed in a preview theatre as a quality check. Distributors, the last link in the

value chain, market and distribute a film after acquiring distribution rights from the film producers of the film and ordering prints from

the film processing lab.

Film Processing Business

The primary services of our film processing business are colour negatives processing, colour positives processing, film printing, photo

guard coating and ultrasonic film cleaning. The processes involved for performing these services are detailed as follows:

Stage I

The exposed set of film negatives received from a studio or film shoot location is processed at our laboratory in accordance with the

picture negatives reports or camera logs prepared by the camera assistant for the camera operator or director. After the film is developed,

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it is inspected in accordance with the camera log and divided into sections according to the scenes and takes filmed. These sections are

then joined together into rolls, which are examined by the grading operator along with instructions received from the director to

determine how they will be printed. When the characteristics have been decided and recorded, a positive print is made from the

assembled rolls and processed through the developing machine. These prints are known as the “daily rush prints”.

Stage II

The negatives then undergo post-production processes, such as editing and sound synchronisation, in order to produce the first film print.

The laboratory then assembles the final picture and tracks the negatives to match the editor’s work print so that the newly created print

may be sent for approval to the film production company.

Stage III

A potential release print is ready for release when printing characteristics for both picture and sound have been standardised such that the

required number of copies of may be produced in consistency with the approved print.

We utilise a preview theatre featuring Dolby Digital Surround EX and DTS sound systems to carry out a final inspection of the films

processed at the laboratory, in addition to analysing films with densitometers and film analysers. We utilise two diesel generators with a

total capacity of 510 kVA as a backup power supply for our critical chemical processing activities.

DI Laboratory Business

We have set up a 4K DI laboratory that converts traditional analogue films to digital formats and features real-time grading capabilities.

Its integrated client services include telecine, digital optics, promotional packaging, conversion, scanning, high definition recording and

subtitling. Films serviced by our DI laboratory include, among others, Barfi!, Student Of The Year, Jab Tak Hai Jaan, Khiladi 786, Son

of Sardar, OMG! Oh My God, Chakravyuh, Rowdy Rathore, Ishqzaade, Bol Bachchan, Rockstar, Singam, RA- One, Zindagi Na Milegi

Dobara, Robot, 3 Idiots.

Digital Cinema Services Business

Our DCI grade digital cinema services business includes:

digital content mastering;

global fibre optic distribution; and

digital cinema theatre equipment installation and maintenace

Our secure digital cinema services facility located in Film City, Mumbai is connected to our digital processing labs on the same premises

and offers film producers and distributors the ability to have their finished film delivered in both 35 mm and digital formats. We have

introduced fibre optic distribution of films from India to the United States. We have successfully transmitted several films over our fibre

optic network to the United States. The fibre optic network entails robust security features as well as flexibility, timing and pricing

advantages.

Film and Broadcast Equipment Rental Business

Our film and broadcast equipment rental business rents standard and high definition cameras with assorted lenses and related equipment

as well as providing solutions and expertise through our technical advisory team. We have been associated with 33 programmes on

general entertainment channels in India and 77 televised events during Fiscal 2012. During the said period, we have also rented out film

equipment for 70 films and 519 advertising films. Further, we were associated with 12 programmes on general entertainment channels in

India and 27 televised events during the six months ended March 31, 2013. During the said period, we have also rented out film

equipment for 37 films and 250 advertising films. The following table lists some of the television programmes, event and films

associated with our equipment rental business:

Television Programmes Events Films

Kaun Banega Crorepati Filmfare Awards Dabangg (Arbaaz Khan Productions) and Aurangazeb (Yash

Raj Films)

Bigg Boss Femina Miss India Rajneeti (Prakash Jha Productions)

Jhalak Dikhla Ja Mirchi Awards Heroine (Bhandarkar entertainment)

Nach Baliye Star Parivaar Awards Barfi! ( Eshana Films)

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Television Programmes Events Films

India's Got Talent Star Screen Awards Bol Bachchan ( Shree ashtavinayak Films)

Pati Patni Aur Woh Standard Chartered Mumbai Marathon Rowdy Rathore ( SLB Films)

Rakhi Ka Swayamvar Airtel Delhi Marathon Ra – One (Red Chillies Entertainment)

Rahul Dulhaniya Le Jayega Sunfeast Bangalore Marathon Body Guard (The Reel Life Productions Pvt Ltd)

Dus Ka Dum Economic Times Awards Tees Maar Khan (Three's Company Productions)

Sacch Ka Samna Brand Equity Awards The Dirty Picture (Vertex Motion Pictures Pvt. Ltd.)

Creative Services

We offer a wide range of creative solutions to filmmakers through pre-production, production and post-production stages, including the

following:

VFX

We offer various VFX Solutions, with specialisation in highly complex visual effects, such as concept design, pre-visualisation, “look

development”, on-set supervision, 3D animation and CGI, matte painting, compositing and finishing for 2D and 3D stereoscopic feature

films and television projects. Our VFX team is supported by a network that connects our VFX studios in Burbank (USA), London (UK),

Navi Mumbai and Film City, Mumbai, (India). Galloping Horse - Reliance LLC, in which we have 30% stake, which owns Academy-

award winning brand “Digital Domain”, facilitates outsourcing of VFX and conversion work to India and UK and also demonstrates our

superior quality and efficient workflow processes as well as strong brand repute.

2D to 3D Conversion

We operate a 2D to 3D conversion facility that combines the technological and artistic abilities present in Hollywood with the skills and

large scale image processing capabilities in India. Through this facility, we cater to the demand for converting new films shot in standard

2D and older legacy titles proposed to be released in cinemas in stereoscopic 3D.

Our facility is based in Navi Mumbai (India) and houses a team of approximately 260 artists who have been trained to develop 3D

content. We have made our foray in the domestic markets with ‘Don 2’.

Film Restoration

We provide comprehensive solutions for the transfer of analogue content to digital formats. We address the needs of a variety of content

owners, such as international film and television studios, television networks, library owners and content distribution companies. We

offer services including restoration, encoding, transcoding, compression authoring, format and standards conversion, duplication and

dubs, meta tagging, repurposing, editing, versioning, quality control and archiving. We have serviced an order for the digitisation and

digital restoration of 600 films preserved by the National Films Archive of India.

Lowry Digital

Lowry Digital, our subsidiary based in Burbank, United States, operates digital restoration facilities. Lowry Digital utilises proprietary

image processing technology to deliver superior picture elements and has developed a unique technology, the “Lowry Process”, which is

used to create high image quality for all outputs, including film, broadcast television, advertisements, digital cinema, Blu-ray Disc and

Internet video. Lowry Digital’s services include film restoration, emergency image repair, digital blow-ups and DI enhancements. Lowry

Digital also offers image enhancement tools which are used for restoration and upgrade of damaged analogue film prints.

Lowry Digital’s clients include industry leaders such as Walt Disney Pictures & Television and Warner Bros. Entertainment Inc. Lowry

Digital’s facility has provided image enhancement and restoration services to approximately 621 films as of May 31, 2013 and has

worked on film classics such as Casablanca, Singin’ in the Rain, Sunset Boulevard and a number of Walt Disney Pictures & Television

classics such as Cinderella, Bambi, George of the Jungle, Snow White, Fantasia, Tron, Tangled, Winnie the Pooh, Beauty and the Beast

and 101 Dalmatians.

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iLab

iLab is a dedicated film and media services facility located in Soho, London, which offers front-end, processing, restoration and post-

production services to broadcasters and studios. iLab has produced rushes for many high-end films and original drama series for the

British Broadcasting Corporation and offers bespoke, specialist rush service for the advertising, feature film and broadcast markets.

3D Solutions

We offer integrated stereo services for various 3D alignment issues, image and detail enhancements, grain and noise management and

on-set consulting, in addition to our other services for stereoscopic 3D conversion, DI grading for 3D, creation and handling of 3D

pictures and 3D camera services. We have performed image and detail enhancements, addressed vertical and horizontal alignments

issues and ‘911 emergency services’ for 3D versions of leading titles such as Journey to the Center of the Earth, X Games 3D: The

Movie and Step Up.

Television Content Production and Film Distribution

Our television and film content production and distribution operations comprise of the production of television content which is

produced by us and includes related services of financing for the production of films. Film distribution operations comprise of our share

of revenue from exploitation and distribution rights acquired by us, which may include as a package, theatrical rights and video and

television rights.

We established BIG Synergy, our brand for television content production, through the acquisition of a majority interest in Synergy

Communications Private Limited (now known as Big Synergy Media Limited) in 2007. Big Synergy is one of the key companies in non-

fiction programming in India and has enjoyed success in adapting international formats for Indian viewers.

In 2011, Big Synergy’s KBC was awarded ‘CNN - IBN Indian of the Year 2011 Team KBC & Amitabh Bachchan’ in Entertainment

Category, Big Star most Entertaining Series (TV Non-Fiction) 2011 & Big Star TV Show of the Decade 2001-2010 at Big Star

Entertainment Awards, Best Anchor Game/Quiz Show at Indian Television Academy Awards 2011. Amongst various other awards, Big

Synergy was awarded ‘Best Production House of the Year’ at the Ninth Indian Telly Awards 2009.

Big Synergy has produced shows such as Kya Aap Paanchvi Paas Se Tez Hain, India’s Got Talent, Sach Ka Saamna and Aap Ki

Kachehri, Dus Ka Dum, Jhalak Dikhhla Jaa, Eureka, A Question of Answers, Mum Tum Aur Hum, as well as the adaptation of

international formats such as Mastermind India, University Challenge, Kamzor Kadi Kaun, India’s Child Genius, Bluffmaster, Heart

Beat- Dil Tham Ke Khelo and Kaun Banega Crorepati (Including its regional version), which have been broadcasted on major television

channels, including Colors, Star, Sony and Zee.

We also selectively undertake film distribution.

Competition

Our theatrical exhibition business comprises 254 screens across 96 cinemas and 78 cities in India as of May 31, 2013 and is a

combination of single or twin-screen cinemas and multiplexes. We face significant competition from some organised multiplex chains in

large cities. We face competition in the standalone cinema theatre segment from local cinema theatres in Tier 2 Cities and Tier 3 Cities

where customers are price sensitive.

In our film processing business, we face competition from certain other laboratories.

We have set up our 4K DI laboratory and face competition from existing companies. However, the client base that we have established

through our processing laboratory has helped us establish ourselves as a key player in this segment.

In our television content production business, we primarily create non-fiction content. This is an emerging segment and the competition

is restricted to a few players.

We also face intense competition in our US operations from various cinema theatre operators. Further, our restoration business also faces

competition in the United States.

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Employees

As of May 31, 2013, we had 1,951 full-time employees and 1,829 workers on contract labour basis.

Insurance

We maintain a general all-risk insurance cover for all of our cinema theatres and premises including cover for riots, terrorism, fire,

burglary and housebreaking, flood and earthquake. We also maintain group medical insurance covering all employees. In addition, we

have also purchased a public liability non-industrial risk policy, which has been extended to cover terrorism.

Intellectual Property

We do not own the trademarks “Reliance MediaWorks” and “BIG Cinemas”.

We have entered into a brand licensing agreement (“Brand Licensing Agreement”) with ADAV on December 7, 2009 for the use of the

trademarks “Reliance” and the logo on non-exclusive and royalty-free basis for a period of 10 years. In terms of the Brand License

Agreement, ADAV may terminate the agreement on various grounds, including (i) our failure to repay debt in the ordinary course of

business or when such debt becomes due, (ii) change of control of our Company, (iii) or if we attempt to claim any right of ownership in

relation to the aforementioned brand. In consideration of the licensing rights, we shall incur expenditure from time to time in accordance

with the directives and guidance of the authorised representatives of ADAV for an amount up to `5,000 lakhs.

We have entered into a brand license agreement (“Big BLA”) with Reliance Big Entertainment Private Limited (“RBEPL”) on

December 1, 2009 for the trademark “Big Cinemas” and the logo on a non-exclusive and royalty-free basis for a period of 10 years.

RBEPL may terminate the agreement on various grounds, including (i) our failure to repay debt in ordinary course of business or when

such debt becomes due or files for insolvency, (ii) change of control of our Company, (iii) or if we attempt to claim any right of

ownership in relation to the aforementioned brand. In consideration of the licensing rights, we shall incur expenditure from time to time

in accordance with the directives and guidance of the authorised representatives of RBL for an amount up to `5,000 lakhs.

Lowry Digital, one of our subsidiaries has obtained US Patent # 7,973,977 B2 issued on July 5, 2011 for ‘System and Method for

Removing Semi-Transparent Artifacts from Digital Images caused by Contaminants in the Camera's Optical Path’.

In addition, Lowry Digital has also filed an application with the US Patents and Trademarks Office for a patent for ‘System and Method

of Static Pattern Removal from Movies Captured using a Digital CCD Camera’.

Our Properties

Our registered office is located at Film City Complex, Goregaon (East), Mumbai 400 065, Maharashtra. We have taken our registered

office on lease from the Maharashtra Film Stage Cultural Development Corporation Limited pursuant to the lease agreement dated

October 21, 1996 for a period of 33 years for a rent payable annually and which is subject to an escalation every five years. Additionally,

our Company is liable to pay a consideration linked to the activities carried out by our Company from the said premises. The lease has

been granted for a term of 33 years (“Initial Term”) from October 21, 1996. The term of the lease shall be renewed for a further period of

33 years on an application made by our Company, six months prior to the expiration of the Initial Term, on the same terms and

conditions.

We own the multiplex situated at Mulund, Mumbai and the multiplex situated at Wadala, Mumbai is owned by us through a perpetual

lease. Further, the multiplex at Kalyani Nagar, Pune is owned by a partnership firm, wherein we are one of the partners and the multiplex

at Trimurti Chowk, Nashik, is owned by our joint venture company through a lease of 90 years. We have entered into various lease

agreements and conducting agreements for our cinema theatres located in India and overseas and the period of such leases varies across

our properties.

Further, we have also entered into separate agreements dated August 14, 2007 on build, operate and transfer basis for our studios located

at Film City, Mumbai for a period of 20 years for a rent payable annually and which is subject to an escalation every year. Our

production laboratory in Mumbai and a post-production services facility in Burbank, United States have been obtained on lease or leave

and license basis. Additionally, in respect of our production laboratory in Mumbai our Company is liable to pay a consideration linked to

the activities carried out by our Company from the said premises. This lease has been granted for a term of 33 years (“Initial Term”)

from October 21, 1996. The term of the lease shall be renewed for a further period of 33 years on an application made by our Company,

six months prior to the expiration of the Initial Term, on the same terms and conditions.

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REGULATIONS AND POLICIES

The following description is a summary of certain sector specific laws and regulations in India, which are applicable to our Company.

The information detailed in this section has been obtained from publications available in the public domain. The regulations set out

below may not be exhaustive, and are only intended to provide general information to the investors and are neither designed nor

intended to substitute for professional legal advice.

The Cinematograph Act, 1952

The Cinematograph Act, 1952 (“Cinematograph Act”) was enacted to regulate and certify cinematograph films prior to the exhibition

of such films. The Cinematograph Act authorizes the Central Government to constitute a Board of Film Certification in accordance with

the Cinematograph (Certification) Rules, 1983 (“Certification Board”) for the purpose of sanctioning films for public exhibition in

India.

The Cinematograph Film Rules, 1948

The Cinematograph Film Rules, 1948 (“Cinematograph Rules”) require that a license must be obtained prior to storing of any film

unless specifically exempted. Any person transporting, storing or handling films must ensure compliance with the provisions of the

Cinematograph Rules. The Cinematograph Rules inter alia pertain to precautions against fire, restriction of access to films by

unauthorised personnel, supervision of operations, storage of any loose films, minimum specifications for aisle space and exits in storage

rooms and electrical installations in the storage rooms. The Cinematograph Rules also specify the form and the procedure for applying

for licenses, renewal of licenses, transfer of licenses, refusal to license and cancellation of licenses.

The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981

The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Act, 1981 (“Employment Act”) was enacted with the

object of regulating the conditions of employment of workers employed in cinemas and theatres. A producer of a feature film is

mandated to enter into an agreement with the workers prior to employing them. Further, the Employment Act enjoins them to register

such an agreement with the relevant authority. The Employment Act specifically makes the Employees’ Provident Funds and

Miscellaneous Provisions Act, 1952, the Payment of Gratuity Act, 1972 applicable to all cinema theatres employing five or more

workers. The Employment Act also provides a dispute resolution mechanism in order to address grievances of the workers employed in

such theatres or under producers of feature films.

The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Rules, 1984

The Cine-Workers and Cinema Theatre Workers (Regulation of Employment) Rules, 1984 provides the form of the agreement between a

cine-worker and a producer of a feature film. The rules also provide the procedure for reference of disputes and conduct of proceedings

before a Conciliation Officer of a Tribunal.

The Cine-Workers Welfare Fund Act, 1981

The Cine-Workers Welfare Fund Act, 1981 (“Welfare Fund Act”) was enacted with the object of setting up a welfare fund catering to

needs of the cine-workers and to promote activities for their welfare. The Welfare Fund Act provides that the Central Government will

create a Cine-Workers’ Welfare Fund wherein contributions would be made by way of grants of the Central Government and voluntary

contributions, etc. The Welfare Fund Act also provides that the Central Government should apply such funds for the purpose of meeting

expenses incurred in carrying out activities for the general welfare of the cine-workers, including providing grants and loans to such

workers and to devise schemes for their benefit. The Central Government is also authorised to require producers to furnish statistical data

about workers employed under them from time to time.

The Cine- Workers Welfare Cess Act, 1981

The Cine- Workers Welfare Cess Act, 1981 (“Cess Act”) provides for the levy and collection of cess on feature films for the purposes of

the Cine-workers Welfare Fund under the Welfare Fund Act. The Cine-Workers Welfare Cess Rules, 1984 lays down the manner of

collection of the duty prescribed in the Cess Act.

The Copyright Act, 1957

The Copyright Act, 1957 (“Copyright Act”) covers registration of copyrights of original literary, dramatic, musical and artistic works,

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cinematographic films and sound recordings. A copyright board has been established under the Copyright Act (“Copyright Board”),

which ordinarily hears all proceedings instituted before it. The Copyright Board is deemed to be a civil court and all proceedings before

the Copyright Board are deemed to be judicial proceedings as understood under the Code of Criminal Procedure, 1887 and the Indian

Penal Code, 1887 respectively. The Copyright Act also envisages that a copyright office shall be established under the immediate control

of the registrar of copyrights.

In accordance with the Copyright Act, copyright shall subsist during the period of the lifetime of the author and until sixty years

thereafter. Licensing and assignment of copyright is permitted in accordance with the provisions of the Copyright Act. Further, copyright

societies have been set up for issuing and granting licenses. Infringement of copyright is a civil or criminal offence under the Copyright

Act depending on the circumstances. Further, certain police officers above the rank of sub inspector may seize, without warrant, all

materials used for infringement. No court inferior to that of a Metropolitan Magistrate or a Judicial Magistrate of the First Class is

empowered to try an offence under the Copyright Act. The Copyright Rules, 1958 which sets out the procedure for the enforcement of

the Copyright Act was also introduced with the Copyright Act.

The Prevention of Food Adulteration Act, 1954

The Prevention of Food Adulteration Act, 1954 (“PF Act”) was enacted to make provisions for prevention of food adulteration. The PF

Act restricts a person from selling or distributing any food which is adulterated or misbranded or being sold in contravention of the

conditions of the license under which it is to be distributed or sold or any article which has been prohibited from being sold by the Food

Health Authority or any other adulterant and enjoins all persons to ensure that the standards as laid down by the Central Committee on

food standards from time to time is met. The PF Act empowers the Central and the State Governments to appoint public analysts and

food inspectors for the purpose of taking samples of food from outlets selling them and for examining such food. A purchaser or a

recognized consumer association may also get any article of food analysed in the manner prescribed. The PF Act also provides that a

vendor of food items may be required to disclose the name and other details of any person from whom such food has been purchased.

The PF Act outlines the procedure and penalties to be levied in cases of contravention of any of the terms of the PF Act.

The Standards of Weights and Measures (Packaged Commodities) Rules, 1977

The Standards of Weights & Measures (Packaged Commodities) Rules, 1977 (“Packaging Rules”) issued under the Standards of

Weights and Measures Act, 1976 set out the rules applicable to packaged commodities. ‘Pre-packed commodity’ means a commodity

which, without the purchasers being present, is placed in a package of whatever nature, whether sealed or opened,, so that the quantity of

the product containing therein has a pre-determined value and such value cannot be altered without the package or its lid or cap, as the

case may be, being opened or undergoing a perceptible modification. The expression ‘Package’ is to be construed as a package

containing a pre-packed commodity. Every company selling such packaged product must ensure that the package being sold bears a label

containing the name and address of the manufacturer and the packer, a common description of the commodity/commodities packaged,

the net quantity of the commodity, the month and year of manufacture and the maximum retail price of the product. A consumer buying

such product must ensure that these declarations are mentioned prominently on the label of the product. The Weights & Measures

Organization, Controller of Legal Metrology at the state level, Assistant Controller of Legal Metrology at the divisional level and

Inspector, Weights & Measures at circle level are the appropriate authorities for redressal of any disputes under the Packaging Rules.

Environmental Regulations

Our Company is subject to Indian laws and regulations concerning environmental protection. The principal environmental regulations

applicable to industries in India are the Water (Prevention and Control of Pollution) Act, 1974, the Water Access Act, 1977, the Air

(Prevention and Control of Pollution) Act, 1981, the Environment Protection Act, 1986 and the Hazardous Wastes (Management and

Handling) Rules, 1989. Further, environmental regulations require a company to file an Environmental Impact Assessment (“EIA”) with

the State Pollution Control Board (“PCB”) and the Ministry of Environment and Forests (“MEF”) before undertaking a project entailing

the construction, development or modification of any plant, system or structure. If the PCB approves the project, the matter is referred to

the MEF for its final determination. The estimated impact that a particular project might have on the environment is carefully evaluated

before granting clearances. When granting clearance, conditions may be imposed and the approving authorities may direct variations to

the proposed project.

Kyoto Protocol and Carbon Credits

The Kyoto Protocol is a protocol to the International Framework Convention on Climate Change with the objective of reducing

greenhouse gases (“GHG”) that cause climate change. The Kyoto Protocol was agreed on December 11, 1997 at the third conference of

the parties to the treaty when they met in Kyoto, and entered into force on February

16, 2005. India ratified the Kyoto Protocol on August 22, 2006.

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The Hazardous Waste (Management, Handling and Transboundary Movement) Rules, 2008

The Hazardous Wastes (Management, Handling and Transboundary Movement) Rules, 2008, as amended (“Hazardous Wastes Rules”),

which superseded the Hazardous Wastes (Management and Handling) Rules, 1989, state that the occupier will be responsible for safe

and environmentally sound handling of hazardous wastes generated in his establishment. The hazardous wastes generated in the

establishment of the occupier should be sent or sold to a recycler or re-processor or re-user registered or authorised under the Hazardous

Wastes Rules or should be disposed off in an authorised disposal facility. The Ministry of Environment and Forests has been empowered

to deal with the trans-boundary movement of hazardous wastes and to grant permission for transit of hazardous wastes through any part

of India. No import of hazardous waste is permitted in India. The State Government, occupier, operator of a facility or any association of

the occupier will be individually or jointly or severally responsible for, and identify sites for, establishing the facility for treatment,

storage and disposal of hazardous wastes for the State.

Foreign Investment Regulation

The industrial policy was formulated in 1991 to implement the Government’s liberalisation programme and consequently industrial

policy reforms relaxed industrial licensing requirements and restrictions on foreign investment. FDI is allowed under the automatic route

for 100% in respect of sector in which our Company carries out its business.

Labour Laws

The workers are regulated by various labour laws, rules and regulations including the Workmen Compensation Act, 1923, the Payment

of Wages Act, 1936, the Employees’ State Insurance Act, 1948, the Factories Act, 1948, the Minimum Wages Act, 1948, the Employees’

Provident Funds and Miscellaneous Provisions Act, 1952, the Payment of Bonus Act, 1965, the Contract Labour (Regulation and

Abolition) Act, 1970 and the Payment of Gratuity Act, 1972, where applicable.

Intellectual Property Laws

In India, trademarks enjoy protection under both statutory and common law. The Trade Marks Act, 1999 protects a distinct ‘mark’. The

Trade Marks Act also makes special provision for application of marks as ‘collective marks’. The Registrar of Trademarks is the

authority responsible for registration of the trademarks, settling opposition proceedings and rectification of the register of trademarks.

The Indian Patent Act, 1970 protects any new invention / inventive step allowing the inventor the opportunity to reap the benefits of his

effort. The patent may be for a process or a product. An application for patent can be filed at any of the four patent offices in India.

Shops and Establishments legislations in various states

The provisions of various Shops and Establishments legislations, as applicable, regulate the conditions of work and employment in shops

and commercial establishments and generally prescribe obligations in respect of inter alia registration, opening and closing hours, daily

and weekly working hours, holidays, leave, health and safety measures and wages for overtime work.

Property Laws

The Transfer of Property Act, 1882 (“TP Act”) lays down general principles for the transfer of immovable property in India. It specifies

the categories of property that can be transferred, the persons competent to transfer property, the legitimacy of restrictions and conditions

imposed on the transfer and the creation of contingent and vested interest in the property. The TP Act recognizes, among others, sale,

mortgage, charge and lease as forms in which an interest in an immovable property may be transferred.

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HISTORY AND CERTAIN CORPORATE MATTERS

Our Company was incorporated as Adlabs Films Private Limited on November 30, 1987, as a private limited company under the

Companies Act. Our Company was originally promoted by Manmohan Ramanna Shetty and Vasanji Asaria Mamania. In 1989, our

Company entered into the business of motion picture processing by setting up a film processing laboratory at Andheri, Mumbai.

On June 19, 2000, pursuant to the conversion of our Company into a public company, the name of our Company was changed to Adlabs

Films Limited. Subsequently, in December 2000, our Company made an initial public offering of 44,00,150 Equity Shares.

On June 30, 2005, one of our Promoters i.e. Reliance Land Private Limited entered into share purchase agreements with Vasanji Asaria

Mamania and Rubaiyat Arun Patel, erstwhile shareholders of our Company, for acquiring an aggregate of 23.20% of our Company’s

shareholding. Further, our Board of Directors, pursuant to their resolution dated August 8, 2005, approved issuance of 1,10,00,000

Equity Shares on preferential basis to Reliance Land Private Limited along with 38,00,000 warrants, convertible into one Equity Share

for each warrant held of our Company. Pursuant to the above, Reliance Capital Limited and Reliance Land Private Limited made an open

offer for acquiring a further shareholding of 20.00% of our Company in compliance with the Securities and Exchange Board of India

(Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

On September 14, 2007, the High Court of Judicature at Mumbai approved the scheme of amalgamation pursuant to which Katch 22

Entertainment Private Limited was amalgamated with our Company with effect from April 1, 2006. For further detail, please see the part

entitled “Scheme of Arrangements- The scheme of amalgamation amongst Katch 22 Entertainment Private Limited, our Company and

their respective shareholders and creditors” in this chapter at page 173.

On March 7, 2008, the High Court of Judicature at Mumbai approved the scheme of arrangement pursuant to which Entertainment One

Limited was merged into our Company and the digital cinema business of Adlabs Multiplex and Theatres Limited (formerly Mukta

Adlabs Digital Exhibition Private Limited) was demerged to our Company with effect from April 1, 2005. For further detail, see

“Scheme of Arrangements- The composite and modified schemes of amalgamation and arrangement amongst Entertainment One

Limited, Adlabs Multiplex and Theatres Limited (previously known as Mukta Adlabs Digital Exhibition Private Limited), our Company

and their respective shareholders and creditors” in this chapter at page 174.

On April 4, 2009, the High Court of Judicature at Mumbai approved the scheme of arrangement pursuant to which the radio business of

our Company was demerged to Reliance Broadcast Network Limited (previously known as Reliance Unicom Limited– subsequently it

was also known as Reliance Media World Limited) with effect from April 1, 2008. For further details, please see the part entitled

“Scheme of Arrangements - The scheme of arrangement amongst Reliance Broadcast Network Limited (previously known as Reliance

Unicom Limited– subsequently it was also known as Reliance Media World Limited) our Company and their respective shareholders and

creditors” in this section at page 175.

On May 8, 2009, the High Court of Judicature at Mumbai approved the scheme of arrangement pursuant to which Adlabs Multiplexes

and Theatres Limited, Adlabs Multiplex Limited, Mahimna Entertainment Private Limited, Rave Entertainment Private Limited were

merged into our Company with effect from April 1, 2008. For further detail, see “Scheme of Arrangements - The scheme of

amalgamation amongst Adlabs Multiplexes and Theatres Limited, Adlabs Multiplex Limited, Mahimna Entertainment Private Limited,

Rave Entertainment Private Limited, our Company and their respective shareholders and creditors” in this chapter at page 176.

Our Company’s name was further changed to Reliance MediaWorks Limited pursuant to which a fresh certificate of incorporation dated

October 5, 2009 was issued by the RoC.

Changes in Registered Office

The details of change in the registered office are set forth below:

Date of Change of

Registered Office

Details of the address of Registered Office Reasons for

change

July 17, 2000 Change of registered office address from 35/38 Suren Road, Andheri (East), Mumbai 400

093 to Film City Complex, Goregaon (East), Mumbai 400 065

Not known.

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The Main Objects of Company

The main objects, inter alia, contained in the Memorandum of Association of our Company are as follows:

1. To carry on the business of manufacturers, producers, exporters, importers, hirers, dealers, distributors and exhibitors of raw

films, chemicals, photographic and optical goods, cinematographic films, video cassettes, apparatus, recorders, machinery and

equipments pertaining to or required for the film developing, printing, processing, editing, sound recording, re-recording,

transferring, dubbing of sound, video taping, transferring film to video, duplicating video cassettes, discs or any format and to

edit various formats.

2. To arrange to produce, secure, procedure, acquire, retain, purchase, publish, dispose off and distribute advertisement films, TV

serials, feature films, and programmes of educational, cultural, devotional, industrial, health, entertainment, family welfare,

tourism, Governmental and of other subjects of interest.

The main objects as contained in the Memorandum of Association enable our Company to carry on the business presently carried out as

well as business proposed to be carried out and the activities proposed to be undertaken pursuant to the Objects of the Issue.

Amendments to the Memorandum of Association

Our Memorandum of Association was amended from time to time pursuant to the change in the authorised share capital of our Company.

For details of change in the authorised capital of our Company since its incorporation, please see the chapter entitled “Capital Structure”

at page 69 of this Letter of Offer. The details along with the amendment of our Memorandum of Association due to changes other than

the changes to authorised share capital are set out below:

Date of

shareholders’

resolution

Nature of Amendment

December 2, 1999 The name of our Company was changed from Adlabs Films Private Limited to Adlabs Films Limited

January 12, 2006 Additions were made to other objects of our Company by inserting clauses 86 to 91 to the clause III(C) of the

Memorandum of Association, as follows:

“86.To carry on the business of running a TV Station, Radio Station, recording studio, shooting studio, sound

mixing studio, dubbing studio, editing unit, preview theatre, hiring out the film shooting equipment,

studios for production of serials for the Indian Market and export thereof.

87. To carry on the business of production of Television serials and radio programmes, to play, relay, uplink,

downlink, broadcast, telecast live or otherwise all kinds of programme including but not restricted to

entertainment, news, and current affairs, health, game shows, songs, features films, educational, sports and

artistic shows or any other entertainment content.

88. To carry on the business of development of music software including series of sound or music recorded on

magnetic tapes, cassette, compact disk and digital media, digital system for pre-production, post

production and software for commercial broadcasting which can be played and reproduced on any

appropriate apparatus for the Indian market and for transfer and export by any means out of India.

89. To carry on business of financing any person or partnership firm, joint venture company, body corporate

or any other entity, whether incorporated or not and whether in India or abroad related to film production,

TV serial , TV channels, radio programmes, running and maintenance of multiplex and all or any objects

in relation thereto.

90. To carry on the business of designers, manufacturers, processors, assemblers, dealers, traders, distributors,

importers, exporters, agents, consultants, designers and contractors, for erection and commissioning turn-

key or transporting and converting, repairing, installing, training, servicing maintenance of all kinds of

telephone instruments, intercoms, accessories, telecommunication, radio communication equipment

further for the Indian market and for transfer and export by any means out of India.

91. To carry on business of construction, development and maintenance, of residential complex, commercial

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Date of

shareholders’

resolution

Nature of Amendment

complex, entertainment centres, convention centres, exhibition centres, guest house, restaurants, parlours,

including all value added services such as recreational and other facilities such as movie theatre, hotels,

fast food centre, exhibitions of paintings, telecommunication centre, fitness centre, children’s theme park,

amusement park.”

September 30, 2009 The name of our Company was changed from Adlabs Films Limited to

Reliance MediaWorks Limited.

Promoters

The Promoters of our Company are Reliance Land Private Limited and Reliance Capital Limited. For details, please see the chapter

entitled “Our Promoters and Promoter Group” at page 200 of this Letter of Offer.

Capital raising activities through equity or debt

As on July 21, 2013, our Company had 94,615 members. For further details regarding our debt capital raising, please see the chapter

entitled “Financial Indebtedness” and regarding our equity capital raising, please see the chapter entitled “Capital Structure” at pages

225 and 69, respectively, of this Letter of Offer.

Our Company’s Shareholders

For details regarding our Comapny’s shareholders, please see the chapter entitled “Capital Structure” at page 69 of this Letter of Offer.

Major events of our Company

The table below sets forth some of the key events in our history:

Year Event

1989 Entered the business of motion picture processing by setting up a film processing laboratory at Andheri, Mumbai

December 2000 Our Company made an initial public offering of 44,00,150 Equity Shares

November 2001 Our first multiplex IMAX, Wadala, Mumbai was made fully operational

September 2005 The Reliance group acquired majority stake in our Company

January 2006 Commenced the film distribution business

January 2006 Issued and allotted 84,000 zero coupon foreign currency convertible bonds of face value of € 1,000 each

aggregating € 84 million (FCCBs)

May 2006 Incorporated wholly owned subsidiaries Adlabs Films (USA) Inc. (now known as Reliance MediaWorks (USA)

Inc) and Adlabs Films (UK) Limited (now known as Reliance MediaWorks (UK) Limited) in the United States

and UK, respectively.

January 2007 Acquired a 51% stake in Synergy Communications Private Limited (Big Synergy Media Limited) which is

involved in the business of operating in television content production

April 2007 Acquired 100% stake in Rave Entertainment Private Limited in order to establish our Company’s presence in the

theatrical exhibition business in the North

September 2008 Film processing, digital cinema and post-production facilities was certified by the Federation Against Copyright

Theft, UK

February 2008 Incorporated a wholly owned subsidiary namely Adlabs Films Netherland B.V. (now known as Reliance

MediaWorks (Netherlands) B.V.) in the Netherlands for distribution of films

April 2008 Commenced exhibition business in the United States through our Subsidiaries

September 2008 Acquired 90% of the paid-up capital of Lowry Digital, which enabled us to enter film restoration business in USA

October 2008 Our theatrical exhibition business was re-branded as “BIG Cinemas”

November 2008 Acquired 70% of the paid-up capital of Big Cinemas Lotus Five Star Sdn. Bhd., Malaysia, through one of our

Subsidiaries, which enabled us to enter the exhibition business in Malaysia

May 2009 Entered into the business of digital restoration and content processing facilities by acquiring AAA Digital Imaging

Private Limited (now known as Reliance MediaWorks Entertainment Services Limited)

June 2009 Transfer and vesting of our radio business in Reliance Unicom Limited (now known as Reliance Broadcast

Network Limited) with effect from April 1, 2008

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Year Event

January 2010 Acquired iLab, a dedicated film and media services facility located in Soho, London

January 2011 Commencement of operations of Stage 1 of our Studio

January 2011 Redeemed all outstanding FCCBs on the due date

May 2011 Sold 89.68% stake in Sri Ramakrishna Theatre Limited held by our Company. It is no longer a subsidiary of our

Company.

June 2011 Sold 50% stake in Cineplex Private Limited held by our Company. It is no longer a joint venture of our Company.

April 2012 Sold 100% stake in Rave Entertainment and Food Nepal Private Limited held by the Company

June 2012 Acquired the remaining 30% of the paid-up capital of Big Cinemas Lotus Five Star Sdn. Bhd., Malaysia, making it

a wholly owned subsidiary of Reliance MediaWorks (Malaysia) Sdn Bhd., one of our indirect subsidiaries.

September 2012 Invested 30% stake in capital of Galloping Horse America LLC and jointly bid for certain assets and brand

“Digital Domain” of DDMG. This gave us access to visual effects, Mothership Media and certain other businesses

and assets of DDMG and its subsidiaries.

September 2012 Sold 100% stake in BIG Cinemas’ exhibition circuit in Malaysia held by our Company.

December 2012 In line with an MoU signed between Reliance Group and Wanda Group, China, to set up a joint venture for

strategic long term relationship between the two groups, we have agreed to explore possible co-operation in the

multiplexes business in India and the US.

Our Business

For details in relation to our business, please see the chapter entitled “Business” at page 149 of this Letter of Offer.

Injunction or restraining order

Our Company is under no injunction or restraining order.

Technology and market competence

For details on the technology and market competence of our Company, please see the chapter entitled “Business” at page 149 of this

Letter of Offer.

Competition

For details on the competition faced by our Company, please see the chapter entitled “Business” at page 149 of this Letter of Offer.

Our Subsidiaries and Joint Ventures

Our Company has 26 Subsidiaries, 2 (two) Joint Ventures, 1 associate and is a partner in 1 partnership firm. For details, please see the

chapter entitled “Our Subsidiaries, Joint Ventures and Partnership” at page 179 of this Letter of Offer.

Proposed Internal Restructuring

On February 21, 2012, our Company’s shareholders approved the proposed transfer of our exhibition and film and media services

divisions to certain of our wholly owned subsidiaries that we are yet to identify. Accordingly, we are in process of transferring these

business divisions.

We believe that such a transfer will enable us to garner fresh investment into these businesses and harness the growth potential. Towards

this end, we may also consider entering into technical and financial collaboration with strategic and private equity partners either directly

or through our subsidiaries. Further, should an appropriate opportunity arise, we may acquire or partner with companies that we believe

will enhance our business, revenues and profitability. The impact, if any, on our financial statements cannot be quantified, at present. The

above process will not impact our equity share capital. Accordingly, our Company has prepared pro forma financial statements which

assume the transfer of our Company’s film production services and theatrical exhibition business division to our Subsidiaries at book

values. For the purpose of the transfer, it is assumed that all assets which form part of business division assets and business division

liabilities are transferred to the Subsidiaries of the Company and the amount receivable as consideration on transfer is shown as a short

term loan and advance recoverable from these Subsidiaries.

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The pro forma financial information has been prepared by our management and has not been audited or reviewed by our Auditors. It may

not necessarily be indicative of the net results of operations that might have been achieved by the Company for period or dates indicated,

nor is it necessarily indicative of the future results of the Company after such proposed internal restructuring. For further details, please

see the chapter entitled “Financial Statements - Pro Forma Financial Statements” at page F-261 of this Letter of Offer.

Further, our Company has, on July 17, 2012, executed an indicative non-binding term sheet with a private equity fund to acquire a

substantial minority stake through an investment of `60,500 lakhs in our Company’s film and media services division. The investment is

proposed to be made into the subsidiary of our Company, into which our film and media services division will be transferred. No

definitive agreement has been executed in respect of the proposed transaction. This term sheet has been extended and is now valid till

August 12, 2013.

While our Company is not sure of any definitve timeframe within which the proposed internal restructuring will occur, we believe that it

will not be completed prior to the closure of this Issue.

Scheme of Arrangements

a. The scheme of amalgamation (“Katch 22 Scheme”) amongst Katch 22 Entertainment Private Limited (“Katch”), our

Company and their respective shareholders and creditors.

The Katch 22 Scheme was approved by the High Court of Judicature at Mumbai on September 14, 2007, thereby granting its

approval for amalgamation of Katch with our Company. The purpose of the merger was to achieve business synergies and

operational consolidation as well as convenience. The Katch 22 Scheme was approved with effect from April 1, 2006

(“Appointed Date”).

The Katch 22 Scheme provided for transfer and vesting of the “undertaking” (as described below) in our Company.

“Undertaking” means the entire business of Katch along with all assets, properties, debts, liabilities and obligations pertaining to

the same.

Set forth below are the key features of the Katch 22 Scheme:

Share Capital as on March 31, 2006:

i. The authorised capital of Katch was `1,00,000 and the issued, subscribed and paid up share capital on the

same date was `1,00,000. After March 31, 2006, Katch issued and allotted 13,00,000, 9% non-cumulative

redeemable preference shares of `1 each for cash at a premium of `99 each.

ii. The authorised capital of our Company was `30,00,00,000 and the issued, subscribed and paid up share

capital on the same date was `19,90,03,750.

Date of operation of Katch 22 Scheme: The Katch 22 Scheme shall be effective from Appointed Date but shall be

operative from the date on which the certified copy of the High Court order is filed with the RoC i.e. October 9, 2007

(“Effective Date”).

Transfer and vesting of Undertaking: With effect from the Appointed Date the undertaking of Katch was transferred to

and vested in our Company.

Cancellation of existing share capital: Upon the Katch 22 Scheme being effective, no shares of our Company shall be

allotted in lieu or exchange of its holding in Katch and the share capital of Katch stood cancelled.

Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other instruments to which Katch was a

party to and which were subsisting before the arrangement to be in full force and effect against and in favour of our

Company.

Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against Katch arising at the Appointed

Date, as and from the Effective Date were continued and enforced by or against our Company.

Staff, employees and workmen: On the Katch 22 Scheme becoming operative, all the employees, staff and workmen of

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Katch in service on the Effective Date were transferred to our Company on terms and conditions not less favorable

than subsisting with Katch on the Effective Date.

Accounting Treatment: Our Company recorded all the assets and liabilities of Katch transferred to and vested in our

Company at their fair values. The investment in Katch, appearing in books of our Company stood cancelled. The

difference, being the excess or shortfall of the net assets of Katch transferred to our Company against the book value of

the investment in the shares of Katch recorded by our Company, along with a diminution in the value of assets and

liabilities of our Company, pursuant to the order of the High Court of Judicature at Mumbai, was adjusted against

general reserves.

Dissolution: Upon the Katch 22 Scheme becoming effective, Katch stood dissolved without being wound up.

b. The composite and modified scheme of amalgamation and arrangement (“EM Scheme”) between Entertainment One Limited

(“EOIL”), Adlabs Multiplex and Theatres Limited (previously, Mukta Adlabs Digital Exhibition Private Limited) (“MADEL”),

our Company and their respective shareholders and creditors.

The High Court of Judicature at Mumbai pursuant to its order dated September 15, 2006 sanctioned the Composite Scheme

which, interalia, provided for the amalgamation of EOIL and demerger of the digital cinema business of MADEL to our

Company with effect from April 1, 2005 along with demerger of the radio business of our Company to RUL effective from

March 31, 2006. Subsequently, an application was filed with the Ministry of Information and Broadcasting by our Company for

the vesting of radio licenses held by it in the name of RUL. Pending receipt of the above-mentioned approval and completion of

licensing and other procedural formalities, the Composite Scheme was eventually not filed with the RoC as required under the

applicable provisions of the Companies Act. Thereafter, our Company filed a modified scheme of arrangement which was

between our Company, EOIL, MADEL and their respective shareholders and creditors (“EM Scheme”).

The EM Scheme was approved by the High Court of Judicature at Mumbai on March 7, 2008, thereby granting its approval to

merge EOIL into our Company and demerge the digital cinema business of MADEL to our Company. The purpose of the

merger was to streamline the film production and exhibition businesses of our Company. The EM Scheme was approved with

effect from April 1, 2005 (“Appointed Date”).

The EM Scheme provided for transfer and vesting of (i) “EOIL undertaking”; and (ii) “MADEL undertaking” in our Company.

“EOIL undertaking” means the entire business and, all assets, properties, debts, liabilities and obligations of EOIL as on the

Appointed Date. “MADEL undertaking” means the digital cinema business and, all related assets, properties, debts, liabilities

and obligations pertaining to the digital cinema business of MADEL as on the Appointed Date.

Set forth below are the key features of the EM Scheme:


i. The authorised capital of EOIL was `25,00,000.00 and the issued, subscribed and paid up share capital on the

same date was `5,00,000.00.

ii. The authorised capital of MADEL was `10,00,00,000.00 and the issued, subscribed and paid up share capital

on the same date was `1,00,000.00.

iii. The authorised capital of our Company was `30,00,00,000.00 and the issued, subscribed and paid up share


Date of operation of EM Scheme: The EM Scheme shall be effective from Appointed Date but shall be operative from

the date on which the certified copy of the High Court order is filed with the RoC i.e. March 31, 2008 (“Effective

Date”).

Transfer and vesting of Undertaking:

i. With effect from the Appointment Date and upon the EM Scheme becoming effective, the EOIL undertaking

was transferred and vested in our Company.

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ii. With effect from the Appointed Date, the MADEL undertaking was transferred and vested in our Company as

a going concern. With effect from the Appointment Date and upon the EM Scheme becoming effective, all

statutory licenses and permits required by MADEL for carrying on the business of digital cinema business

were vested in our Company in accordance with the terms of the EM Scheme. However, the transfer and

vesting of the MADEL undertaking is subject to the securities, charges, mortgages and other encumbrances

that were subsisting in respect to MADEL undertaking or any part thereof.

Cancellation of existing share capital: Upon the EM Scheme being effective, no share of our Company shall be allotted

in lieu or exchange of its holding in EOIL and the share capital of EOIL stood cancelled.

Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other instruments to which EOIL and

MADEL (pertaining to its digital cinema business) were party to and which were subsisting on the Effective Date

continued to be in full force and effect in the name of our Company.

Legal Proceedings: All suits, appeal and other legal proceedings, pending on or after the Appointed Date by or against

EOIL and MADEL (pertaining to its digital cinema business) were continued and enforced by or against our Company.

Staff, employees and workmen: With effect from the Appointment Date and upon the EM Scheme becoming effective,

all the employees, staff and workmen of EOIL and MADEL (pertaining to its digital cinema business) were transferred

to our Company on terms and conditions not less favorable than subsisting with EOIL and MADEL on the Effective

Date.

Accounting Treatment: Upon the EM Scheme becoming effective, investments in the equity share capital of EOIL as

appearing in our Company’s books of accounts was cancelled. Also, all assets and liabilities recorded in the books of

accounts of EOIL was transferred to and vested in our Company and the same was recorded at their fair values as on

the Appointed Date. The inter company balances was cancelled. The excess of the fair value of the assets recorded over

and above the value of our Company’s liabilities, less the book value of the equity shares of EOIL as appearing in our

Company’s books, if positive, was to be created to the general reserve account of our Company and if negative be

debited to the securities premium account. All credits were included in our general reserves, while all debits were

adjusted against the securities premium account. Our Company recorded the asset and liabilities pertaining to digital

cinema business of MADEL at the respective book values in the books of our Company as on the Appointed Date.

MADEL reduced the book value of asset and liabilities pertaining to the digital cinema business of MADEL. Excess of

book value of assets over book value of liabilities of the digital media business of MADEL to be adjusted; credits

against general reserve and debits were to be adjusted against the securities premium. Further, the financial statements

of our Company prepared after the Effective Date was not to record the results of the transaction related to radio

business from March 31, 2006 upto the Effective Date in its profit and loss accounts and, instead, the net effect of all

such transactions was to be debited / credited to the general reserve account of our Company.

Dissolution: Upon the EM Scheme becoming effective, EOIL shall be dissolved without being wound up.

Remaining Business of MADEL: The remaining business of MADEL and assets, liabilities and obligations pertaining

thereto shall continue to belong to and be vested in and be managed by MADEL.

c. The scheme of arrangement (“RUL Scheme”) amongst Reliance Broadcast Network Limited (previously known as Reliance

Unicom Limited) (“RUL”), our Company and their respective shareholders and creditors.

The RUL Scheme was approved by the High Court of Judicature at Mumbai on April 4, 2009, thereby granting its approval to

demerge the radio business of our Company to RUL. The purpose of the demerger was to explore the potential of radio business

of our Company to the fullest, provide focused leadership and management attention and enhance shareholder value. The RUL

Scheme was approved with effect from April 1, 2008 (“Appointed Date”).

The RUL Scheme provided for transfer and vesting of the “radio business undertaking” (as described below) in RUL as a going

concern. “Radio business undertaking” means the radio business of our Company along with all related assets, properties, debts,

liabilities and obligations pertaining to the same and as mutually agreed between our Board of Directors and the board of

directors of RUL. Pursuant to the RUL Scheme, all the shareholders of our Company were issued one RUL equity share for

every equity share of our Company held by them.

176

Set forth below are the key features of the RUL Scheme:


i. The authorised capital of RUL was `1,05,50,000 and the issued, subscribed and paid up share capital on the

same date was `1,05,50,000.

ii. The authorised capital of our Company was `30,00,00,000 and the issued, subscribed and paid up share


Date of operation of RUL Scheme: The RUL Scheme shall be effective from Appointed Date but shall be operative

from the date on which the certified copy of the High Court order is filed with the RoC i.e. June 30, 2009 (“Effective

Date”).

Transfer and vesting of Undertaking: With effect from the Appointed Date the radio business undertaking of our

Company was transferred to and vested in RUL as a going concern. Also, all licenses, permissions, approvals and

consents held by our Company that are required for carrying out the operations of the radio business were also

transferred and vested in RUL and mutated by the statutory authorities concerned in favour of RUL. The demerger was

subject to the securities, charges and mortgages and other encumbrances created to secure the liabilities forming part of

the radio business.

Cancellation of existing share capital: Pursuant to the demerger, RUL shall in respect of every equity share of `5/- each

of our Company issue one equity share of `5/- each in RUL. The capital of RUL shall increase to that extent. The

shares held by our Company in RUL stood cancelled.

Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other instruments to which our

Company (pertaining to its radio business) was a party to and which were subsisting on the Effective Date continued to

be in full force and effect in the name of RUL.

Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against our Company (pertaining to its

radio business) were continued and enforced by or against RUL.

Staff, employees and workmen: On the RUL Scheme being operative, all the employees, staff and workmen of our

Company (pertaining to its radio business) in service on the Effective Date were transferred to RUL on terms and

conditions not less favorable than subsisting with our Company on the Effective Date.

Accounting Treatment: In terms of the RUL Scheme, the book value of the assets and liabilities pertaining to our radio

business undertaking were reduced by our Company at our book values. The difference that is in excess of the book

value of the assets pertaining to radio business undertaking over liabilities after adjusting the investments made by our

Company in RUL was to be, in the event of a credit balance be credited to our Company’s capital reserve account, and

in the event of a debit, was to be adjusted against our Company’s securities premium account. RUL shall record all

assets and liabilities pertaining to the radio business at the respective book values on the Appointed Date. There will be

a credit in share capital, to the extent of the shares issued.

Further, in relation to RUL, the liabilities in excess of assets recorded by RUL over and above the amount credited as

share capital after adjusting the cancellation of then existing share capital of RUL held by our Company shall be

deemed to comprise and be credited to the extent of `10,000 lakhs was credited to the securities premium account, and

the balance, if any, was to be treated as capital reserve arising on acquisition of business pursuant to the demerger. In

event of shortfall, the same was to be debited and carried forward as goodwill.

Remaining Business of our Company: The remaining business of our Company and assets, liabilities and obligations

pertaining thereto shall continue to belong to and be vested in and be managed by our Company.

d. The scheme of amalgamation (“AAMR Scheme”) amongst Adlabs Multiplexes and Theatres Limited (“AMTL”), Adlabs

Multiplex Limited (“AML”), Mahimna Entertainment Private Limited (“MEPL”), Rave Entertainment Private Limited

(“Rave”) (collectively, “Transferor Companies”), our Company and their respective shareholders and creditors.

177

The AAMR Scheme was approved by the High Court of Judicature at Mumbai on May 8, 2009, thereby granting its approval

for merging AMTL, AML, MEPL and Rave with our Company. The purpose of the merger was for administrative convenience

and economical and operational synergy. The AAMR Scheme was approved with effect from April 1, 2008 (“Appointed

Date”).

The AAMR Scheme provided for transfer and vesting of the “undertakings” (as described below) in our Company.

“Undertaking” means the entire business of the Transferor Companies along with all assets, properties, debts, liabilities and

obligations pertaining to the same.

Set forth below are the key features of the AAMR Scheme:


i. The authorised capital of AMTL was `10,00,00,000 and the issued, subscribed and paid up share capital on

the same date was `5,00,000.

ii. The authorised capital of AML was `1,00,00,000 and the issued, subscribed and paid up share capital on the

same date was `98,10,000.

iii. The authorised capital of MEPL was `1,00,000 and the issued, subscribed and paid up share capital on the

same date was `1,00,000. After March 31, 2008, the authorised share capital was changed to `2,90,000 and

the issued, subscribed and paid up share capital was `2,90,000.

iv. The authorised capital of Rave was `5,00,00,000 and the issued, subscribed and paid up share capital on the

same date was `3,00,00,000. After March 31, 2008, the authorised share capital was changed to `5,00,00,000

and the issued, subscribed and paid up share capital was `5,00,00,000.

v. The authorised capital of our Company was `30,00,00,000 and the issued, subscribed and paid up share


Upon the sanction of the AAMR Scheme, the authorised share capital of our Company was increased by the authorised

share capital of the Transferor Companies.

Date of operation of AAMR Scheme: The AAMR Scheme shall be effective from Appointed Date but shall be

operative from the date on which the certified copy of the High Court order is filed with the RoC i.e. May 29, 2009

(“Effective Date”).

Transfer and vesting of Undertaking: With effect from the Appointed Date the undertakings of the Transferor

Companies were transferred to and vested in our Company. Also, all licenses, permissions, approvals and consents held

by the Transferor Companies were also transferred and vested in our Company. The merger was subject to the

securities, charges and mortgages and other encumbrances created or subsisting in respect of the assets of the

Transferor Companies with respect to the financial agreement and arrangements entered into by the Transferor

Companies.

Cancellation of existing share capital: Upon the AAMR Scheme being effective, no shares of our Company shall be

allotted in lieu or exchange of its holding in the Transferor Companies and the share capital of Transferor Companies

stood cancelled.

Contracts, deeds, bonds and other instruments: All contracts, deeds, bonds and other instruments to which the

Transferor Companies were a party to and which were subsisting on the AAMR Scheme coming into effect continued

to be in full force and effect against our in favour of our Company.

Legal Proceedings: All suits, appeal and other legal proceedings, pending by or against the Transferor Companies were

continued and enforced by or against our Companies.

Staff, employees and workmen: On the AAMR Scheme becoming operative, all the employees, staff and workmen of

the Transferor Companies in service on the Effective Date were transferred to our Company on terms and conditions

178

not less favorable than subsisting with the Transferor Companies on the Effective Date.

Accounting Treatment: On the AAMR Scheme becoming operative, all our investment in the share capital of the

Transferor Companies stood cancelled. Further, all assets and liabilities of the Transferor Companies were recorded by

our Company at their respective fair values as on March 31, 2009. The inter company balance and transactions stood

cancelled. The difference between the amount of assets and liabilities taken over and recorded by our Company after

making all required adjustments along with any appreciation/diminution in the value of our assets whether fixed or

current investments, if any, were to be adjusted into the capital reserve account.

Dissolution: Upon the AAMR Scheme becoming effective, the Transferor Companies stood dissolved without being

wound up.

Financial and Strategic Partners

Our Company does not have any financial or strategic partners. Further, our Promoters have not entered into a sharholder’s agreement in

respect of the Company.

179

OUR SUBSIDIARIES, JOINT VENTURES AND PARTNERSHIP

Our Company has the following 26 Subsidiaries, two Joint Ventures, one associate and is a partner in one partnership firm. None of our

Subsidiaries or Joint Ventures is listed on any stock exchange or has made any public or rights issue in the last three years or has become

a sick company under the meaning of the Sick Industrial Companies Act, 1985 or is under winding up as of the date of this Letter of

Offer.

Unless otherwise specified, all information in this section is as on the date of this Letter of Offer.

Following are the Subsidiaries of our Company:

1. Big Cinemas Entertainment (DE) LLC;

2. Big Cinemas Entertainment LLC;

3. Big Cinemas Exhibitions LLC;

4. Big Cinemas Falls Church LLC;

5. Big Cinemas Galaxy LLC;

6. Big Cinemas IMC LLC;

7. Big Cinemas Laurel LLC;

8. Big Cinemas Norwalk LLC;

9. Big Cinemas Phoenix LLC;

10. Big Cinemas Sahil LLC;

11. Big Cinemas SAR LLC;

12. Big Pictures USA, Inc.;

13. Big Synergy Media Limited;

14. Phoenix Big Cinemas Management LLC;

15. Reliance Lowry Digital Imaging Services Inc.;

16. Reliance Media Consultant Private Limited;

17. Reliance Media & Marketing Communications LLC;

18. Reliance MediaVentures Private Limited;

19. Reliance MediaWorks Creative Services Limited;

20. Reliance MediaWorks Entertainment Services Limited;

21. Reliance MediaWorks Theatres Limited;

22. Reliance Media Works VFX Inc.;

23. Reliance MediaWorks (Mauritius) Limited;

24. Reliance MediaWorks (UK) Limited;

25. Reliance MediaWorks (USA) Inc.; and

26. Reliance MediaWorks (Netherlands) B.V.

Following are the joint ventures / associates set up by our Company:

1. Divya Shakti Marketing Private Limited;

2. Swanston Multiplex Cinemas Private Limited; and

3. Galloping Horse – Reliance, LLC.

Following is a partnership firm set up by our Company:

1. HPE / Adlabs LP

Subsidiaries

1. Big Cinemas Entertainment (DE) LLC

Corporate Information

Big Cinemas Entertainment (DE) LLC was incorporated in Delaware, USA, under applicable US law on January 24, 2008 as

Adlabs Entertainment (DE) LLC. Big Cinemas Entertainment (DE) LLC is primarily engaged in the business of exhibition of

180

films.

Capital Structure

Big Cinemas Entertainment (DE) LLC does not have any share capital.

Shareholding

Big Cinemas Entertainment (DE) LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a

wholly owned subsidiary of our Company.

2. Big Cinemas Entertainment LLC


Big Cinemas Entertainment LLC was incorporated in New Jersey, USA, under applicable US law on December 19, 2007 as

Adlabs Entertainment LLC. Big Cinemas Entertainment LLC is primarily engaged in the business of exhibition of films.

Capital Structure

Big Cinemas Entertainment LLC does not have any share capital.

Shareholding

Big Cinemas Entertainment LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly

owned subsidiary of our Company.

3. Big Cinemas Exhibitions LLC


Big Cinemas Exhibitions LLC was incorporated in Delaware, USA, under applicable US law on March 6, 2008 as Adlabs

Exhibition LLC. Big Cinemas Exhibitions LLC is primarily engaged in the business of exhibition of films.

Capital Structure

Big Cinemas Exhibitions LLC does not have any share capital.

Shareholding

Big Cinemas Exhibitions LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly


4. Big Cinemas Falls Church LLC


Big Cinemas Falls Church LLC was incorporated in Virginia, USA, under applicable US law on November 8, 2007 as Adlabs

Falls Church LLC. Big Cinemas Falls Church LLC is primarily engaged in the business of exhibition of films.

Capital Structure

Big Cinemas Falls Church LLC does not have any share capital.

Shareholding

Big Cinemas Falls Church LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly

181


5. Big Cinemas Galaxy LLC


Big Cinemas Galaxy LLC was incorporated in Georgia, USA, under applicable US law on December 21, 2007 as Adlabs

Galaxy LLC. Big Cinemas Galaxy LLC is primarily engaged in the business of exhibition of films.

Capital Structure

Big Cinemas Galaxy LLC does not have any share capital.

Shareholding

Big Cinemas Galaxy LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned

subsidiary of our Company.

6. Big Cinemas IMC LLC


Big Cinemas IMC LLC was incorporated in California, USA, under applicable US law on January 10, 2008 as Adlabs IMC

LLC, and it was accepted by the concerned regulatory authority on January 19, 2008. Big Cinemas IMC LLC is primarily

engaged in the business of exhibition of films.

Capital Structure

Big Cinemas IMC LLC does not have any share capital.

Shareholding

Big Cinemas IMC LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned


7. Big Cinemas Laurel LLC


Big Cinemas Laurel LLC was incorporated in Maryland, USA, under applicable US law on November 28, 2007 as Adlabs

Laurel LLC. Big Cinemas Laurel LLC was earlier engaged in the business of exhibition of films. However, the cinema theatre

operated by the company, i.e. Big Cinemas Laurel, was closed on May 9, 2010 due to expiry of its lease agreement. The

company is currently not engaged in any business.

Capital Structure

Big Cinemas Laurel LLC does not have any share capital.

Shareholding

Big Cinemas Laurel LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned


8. Big Cinemas Norwalk LLC


182

Big Cinemas Norwalk LLC was incorporated in California, USA, under applicable US law on March 7, 2008 as Adlabs

Norwalk LLC. Big Cinema Norwalk was closed on January 31, 2012 due to expiry of lease of the premises. The company is at

present not engaged in any business.

Capital Structure

Big Cinemas Norwalk LLC does not have any share capital.

Shareholding

Big Cinemas Norwalk LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned


9. Big Cinemas Phoenix LLC


Big Cinemas Phoenix LLC was incorporated in Delaware, USA, under applicable US law on February 22, 2008 as Adlabs

Phoenix LLC. Big Cinemas Phoenix LLC is primarily engaged in the business of exhibition of films.

Capital Structure

Big Cinemas Phoenix LLC does not have any share capital.

Shareholding

Reliance MediaWorks (USA) Inc. is a 51% member of Big Cinemas Phoenix LLC, which in turn is a wholly owned subsidiary

of our Company.

10. Big Cinemas Sahil LLC


Big Cinemas Sahil LLC was incorporated in Illinois, USA, under applicable US law on November 7, 2008 and it was accepted

by the concerned regulatory authority on November 13, 2008 as Adlabs Sahil LLC. Big Cinemas Sahil LLC is primarily

engaged in the business of exhibition of films.

Capital Structure

Big Cinemas Sahil LLC does not have any share capital.

Shareholding

Reliance MediaWorks (USA) Inc. is a 97% member of Big Cinemas Sahil LLC, which in turn is a wholly owned subsidiary of

our Company.

11. Big Cinemas SAR LLC


Big Cinemas SAR LLC was incorporated in Michigan, USA, under applicable US law on November 7, 2007 and it was

accepted by the concerned regulatory authority on November 8, 2007 as Adlabs SAR LLC. Big Cinemas SAR LLC was earlier

engaged in the business of exhibition of films. However, the cinema theatre which was operated by the company, i.e. Big

Cinemas Novi 8, was closed on September 30, 2010 due to expiry of its lease agreement. The company is currently not engaged

in any business.

Capital Structure

183

Big Cinemas SAR LLC does not have any share capital.

Shareholding

Reliance MediaWorks (USA) Inc. is a 51% member of Big Cinemas SAR LLC, which in turn is a wholly owned subsidiary of

our Company.

12. Big Pictures USA, Inc.


Big Pictures USA, Inc. was incorporated in New Jersey, USA, under applicable US law on March 30, 2009. Big Pictures USA,

Inc. has not commenced operations. Big Pictures USA, Inc. proposes to engage in the business of exhibition and distribution of

films.

Capital Structure

No. of equity shares Authorised capital 2,500 equity shares of no par value

Issued, subscribed and paid-up capital Nil

Shareholding

Big Pictures USA, Inc. is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly owned


13. Big Synergy Media Limited


Big Synergy Media Limited was incorporated in India on February 24, 1988 under the Companies Act as Synergy

Communications Private Limited. Big Synergy Media Limited is engaged in the business of television contents production.

Capital Structure

No. of shares Authorised capital 20,000 equity shares of `100/- each and 12,00,000 preference shares of

`100/- each

Issued, subscribed and paid-up capital 10,000 equity shares of `100/- each

Shareholding

Our Company holds 5,100 equity shares of Big Synergy Media Limited, which constitutes 51% of interest in Big Synergy

Media Limited.

14. Phoenix Big Cinemas Management LLC


Phoenix Big Cinemas Management LLC was incorporated in the State of Tennessee, USA, under the applicable US law on

February 22, 2008 as Phoenix Adlabs Theatre Management LLC, and it was accepted by the concerned regulatory authority on

February 25, 2008. Phoenix Big Cinemas Management LLC is engaged in the business of managing theatres.

Capital Structure

184

Phoenix Big Cinemas Management LLC does not have any share capital.

Shareholding

Reliance MediaWorks (USA) Inc. is a 51% member of Phoenix Big Cinemas Management LLC, which in turn is a wholly


15. Reliance Lowry Digital Imaging Services Inc.


Reliance Lowry Digital Imaging Services Inc. was incorporated in California, USA, under the applicable US law on April 3,

2008. Reliance Lowry Digital Imaging Services Inc. is engaged in the business of digital processing of movie content.

Capital Structure

No. of ordinary shares Authorised capital 1,000 ordinary shares of $1/- each

Issued, subscribed and paid-up capital 1,000 ordinary shares of $1/- each

Shareholding

Reliance MediaWorks (USA) Inc., a wholly owned subsidiary of our Company, and our Company hold 90.00% and 10.00%

interest, respectively, in Reliance Lowry Digital Imaging Services Inc.

16. Reliance Media Consultant Private Limited

Reliance Media Consultant Private Limited was incorporated in India on February 16, 2012 under the Companies Act. Reliance

Media Consultant Private Limited is engaged in the business of offering consultancy and advisory services in all areas of film

and media services.

Capital Structure

No. of equity shares Authorised Share Capital 10,000 equity shares of `10/- each


Shareholding

Reliance Media Consultant Private Limited is a wholly owned subsidiary of our Company.

17. Reliance Media & Marketing Communications LLC


Reliance Media & Marketing Communications LLC was incorporated in Delaware, USA, under the applicable US law on May

13, 2009 as Adlabs Media LLC. Reliance Media & Marketing Communications LLC is engaged in the business of advertising

and marketing services.

Capital Structure

Reliance Media & Marketing Communications LLC does not have any share capital.

Shareholding

Reliance Media & Marketing Communications LLC is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which

in turn is a wholly owned subsidiary of our Company.

185

18. Reliance MediaVentures Private Limited


Reliance MediaVentures Private Limited was incorporated under the Companies Act on June 19, 2012. Reliance MediaVentures

Private Limited is yet to commence business operations.

Capital Structure

No. of equity shares Authorised capital 10,000 equity shares of `10/- each


Shareholding

Reliance MediaVentures Private Limited is a wholly owned subsidiary of our Company.

19. Reliance MediaWorks Creative Services Limited


Reliance MediaWorks Creative Services Limited was incorporated in India under the Companies Act on June 20, 2013.

Reliance MediaWorks Creative Services Limited is yet to commence business operations.

Capital Structure

No. of shares Authorised capital 80,000 equity shares of `10/- each

2,00,000 Preference Shares of `1/- each


Shareholding

Reliance MediaWorks Creative Services Limited is a wholly owned subsidiary of Reliance MediaWorks Entertainment Services

Limited, which in turn is a wholly owned subsidiary of our Company.

20. Reliance MediaWorks Entertainment Services Limited


Reliance MediaWorks Entertainment Services Limited was incorporated in India under the Companies Act on March 27, 2006

as AAA Infrastructure Investment Private Limited. Reliance MediaWorks Entertainment Services Limited is engaged in the

business of conversion of 2D movies into 3D movies, film restoration, image processing and content format processing.

Capital Structure

No. of shares Authorised capital 15,00,000 equity shares of `10/- each

50,00,000 preference shares of `1/- each

Issued, subscribed and paid-up capital 8,50,000 equity shares of `10/- each

12,00,000 preference shares of `1/- each

Shareholding

Reliance MediaWorks Entertainment Services Limited is a wholly owned subsidiary of our Company.

186

21. Reliance MediaWorks Theatres Limited


Reliance MediaWorks Theatres Limited was incorporated in India under the Companies Act on May 19, 2003 as Gemini

Exhibitors Limited. It is a partner in a partnership firm Gold Adlabs which operates a multiplex in Pune.

Capital Structure

No. of equity shares Authorised capital 5,00,000 equity shares of `10/- each


Shareholding

Reliance MediaWorks Theatres Limited is a wholly owned subsidiary of our Company.

22. Reliance Media Works VFX Inc.


Reliance Media Works VFX Inc. was incorporated in California, USA, under the applicable USA law on January 25, 2010.

Reliance Media Works VFX Inc. is engaged in the business of providing visual effects and animation services.

Capital Structure

No. of equity shares Authorised capital 200 equity shares of no par value

Issued, subscribed and paid-up capital 100 equity shares of no par value

Shareholding

Reliance Media Works VFX Inc. is a wholly owned subsidiary of Reliance MediaWorks (USA) Inc., which in turn is a wholly


23. Reliance MediaWorks (Mauritius) Limited


Reliance MediaWorks (Mauritius) Limited was incorporated in Mauritius, under the applicable Mauritius law on March 20,

2008 as Adlabs (Mauritius) Limited. Reliance MediaWorks (Mauritius) Limited is engaged in the business of exhibition of

films.

Capital Structure

No. of ordinary shares Authorised capital 1,000 ordinary shares of no par value

Issued, subscribed and paid-up capital 1,000 ordinary shares of no par value

Shareholding

Reliance MediaWorks (Mauritius) Limited is a wholly owned subsidiary of our Company.

187

24. Reliance MediaWorks (UK) Limited


Reliance MediaWorks (UK) Limited was incorporated in the UK, under the applicable UK law on May 19, 2006 as Adlabs

Films (UK) Limited. Reliance MediaWorks (UK) Limited is engaged in the business of film distribution and in providing

dedicated film and media services facility in London through iLab.

Capital Structure

No. of ordinary shares Authorised capital 10,000 ordinary shares of £1/- each

Issued, subscribed and paid-up capital 10,000 ordinary shares of £1/- each

Shareholding

Reliance MediaWorks (UK) Limited is a wholly owned subsidiary of our Company.

25. Reliance MediaWorks (USA) Inc.


Reliance MediaWorks (USA) Inc. was incorporated in New Jersey, United States, under the applicable United States law on

May 17, 2006 as Adlabs Films USA Inc. Reliance MediaWorks (USA) Inc. is engaged in the business of exhibition, film

distribution and post production services through its subsidiaries. It is also engaged in the business of providing services such as

film restoration, emergency image repair, digital blow-ups and DI enhancements and also operates digital restoration facilities

through its subsidiaries Reliance Lowry Digital Imaging Services Inc. and Reliance Media Works VFX Inc.

Capital Structure

No. of ordinary stock Authorised capital 200 ordinary stock of no par value

Issued, subscribed and paid-up capital 200 ordinary stock of no par value, issued for $ 20,000

Shareholding

Reliance MediaWorks (USA) Inc. is a wholly owned subsidiary of our Company.

26. Reliance MediaWorks (Netherlands) B.V.


Reliance MediaWorks (Netherlands) B.V. was incorporated in Netherlands, under the applicable Netherlands law on February

8, 2008 as Adlabs Films Netherlands B.V. Reliance MediaWorks (Netherlands) B.V. is engaged in the business of film

distribution.

Capital Structure

No. of equity shares Authorised capital 900 equity shares of Euro 100/- each

Issued, subscribed and paid-up capital 180 equity shares of Euro 100/- each

Shareholding

Reliance MediaWorks (Netherlands) B.V. is a wholly owned subsidiary of our Company.

188

Joint Ventures

1. Divya Shakti Marketing Private Limited


Divya Shakti Marketing Private Limited was incorporated in India under the Companies Act on October 21, 1994. Divya Shakti

Marketing Private Limited is engaged in the business of exhibition of films.

Capital Structure

No. of equity shares Authorised capital 2,10,000 equity shares of `10/- each

Issued, subscribed and paid-up capital 2,00,000 equity shares of `10/- each

Shareholding

Our Company holds 1,00,000 equity shares of Divya Shakti Marketing Private Limited, which constitutes 50% of interest in

Divya Shakti Marketing Private Limited.

2. Swanston Multiplex Cinemas Private Limited


Swanston Multiplex Cinemas Private Limited was incorporated in India under the Companies Act on October 11, 2001.

Swanston Multiplex Cinemas Private Limited is engaged in the business of exhibition of films.

Capital Structure

No. of equity shares Authorised capital 30,00,000 equity shares of ` 10/- each

Issued, subscribed and paid-up capital 20,30,000 equity shares of ` 10/- each

Shareholding

Our Company holds 10,15,000 equity shares of Swanston Multiplex Cinemas Private Limited, which constitutes 50% of interest

in Swanston Multiplex Cinemas Private Limited.

Associates

Galloping Horse-Reliance LLC


Galloping Horse-Reliance LLC was incorporated in Delaware, USA under applicable law on September 17, 2012. It is engaged

in the business of visual effects through its wholly owned subsidiaries.

Capital Structure

Galloping Horse-Reliance LLC does not have share capital.

Shareholding

Reliance MediaWorks (USA) Inc., our wholly owned subsidiary is 30% member of Galloping Horse-Reliance LLC.

189

Partnership Firm

HPE / Adlabs LP


HPE /Adlabs LP was incorporated in California, United States of America under applicable law on June 9, 2006. It is engaged

in the business of production of movies.

Capital Structure

HPE/ Adlabs LP does not have any share capital.

Shareholding

Our Company is a limited partner in HPE / Adlabs LP.

Interest of our Subsidiaries, Partnership Firm and Joint Ventures in our Company

None of our Subsidiaries, Partnership Firm and Joint Ventures holds any Equity Shares in our Company. We have entered into

certain transactions with our Subsidiaries and Joint Ventures. For details, please see the chapter entitled “Financial Statements”

at page F-1 of this Letter of Offer.

190

OUR MANAGEMENT

Board of Directors

According to our Articles of Association, our Company is required to have not less than three Directors and not more than 12 Directors.

Our Company currently has five Directors.

The following table sets forth details regarding the Board of Directors of our Company as of the date of filing this Letter of Offer:

Name, Father’s Name, Designation, Term,

DIN, Occupation, Nationality and Address

Age

(in years)

Other Directorships/Partnerships/Trusts in which our

Director is a trustee

Gautam Doshi

Father’s name: Bhailal Doshi

Designation: Non-Executive Non-Independent

Director

Term: Liable to retire by rotation

DIN: 00004612

Occupation: Service

Nationality: Indian

Address:

402, Hamilton Court

Tagore Road, Santa Cruz (West)

Mumbai 400 054.

60 Other directorships

1. Connect Infotain Private Limited;

2. Digital Bridge Foundation;

3. Piramal Life Sciences Limited;

4. Reliance Anil Dhirubhai Ambani Group Limited;

5. Reliance Big TV Limited;

6. Reliance Broadcast Network Limited;

7. Reliance Communications Infrastructure Limited;

8. Reliance Home Finance Limited;

9. Reliance Telecom Limited;

10. REL Utility Engineers Limited (formerly known as

Sonata Investments Limited);

11. Sterlite Industries (India) Limited; and

12. Telecom Infrastructure Finance Private Limited.

Proprietorships

1. Gautam Doshi & Co.

Amit Khanna

Father’s name: Jawaharlal Khanna

Designation: Non-Executive Non-Independent

Director


DIN: 00005430

Occupation: Media Professional

Nationality: Indian

Address:

301, Sea Star, 3rd

Floor

Balraj Sahani Marg, Juhu

Mumbai 400 049.


1. Earth Communications Office - India Association;

2. Reliance BIG TV Limited; and

3. Reliance Entertainment Private Limited.

4.

Proprietorships

1. Film Unit; and

2. Media Corp

Trusts

1. Mumbai Academy of Moving Images

Sujal Shah

Father’s name: Anil Shah

Designation: Non-Executive Independent

Director


1. Amal Limited;

2. Gitanjali Gems Limited;

3. Hindoostan Mills Limited;

4. Hindoostan Technical Fabrics Limited;

5. i-Process Services (India) Private Limited;

191

Name, Father’s Name, Designation, Term,

DIN, Occupation, Nationality and Address

Age

(in years)

Other Directorships/Partnerships/Trusts in which our

Director is a trustee


DIN: 00058019

Occupation: Professional

Nationality: Indian

Address:

9, Ganesh Bhuvan, Natwar Nagar,

Road no.2, Jogeshwari (East),

Mumbai 400 060.

6. Keynote Corporate Services Limited;

7. Pramerica Trustees Private Limited;

8. Reliance Asset Reconstruction Company Limited;

9. Rudolf Atul Chemicals Limited;

10. Sabero Organics Gujarat Limited;

11. SSPA Consultants Private Limited;

12. Bhishma Realty Limited; and

13. Capricon Realty Limited

Partnerships

1. SSPA & Associates; and

2. SSPA & Co.

Anil Sekhri

Father’s name: Avtarkrishan Sekhri


Director


DIN: 00506790

Occupation: Professional

Nationality: Indian

Address:

23-A, Krishna Kunj, Opp. Millat Nagar, Off

New Link Road, Andheri (West), Mumbai 400

053.


1. ND S Art World Private Limited;


3. Sprint Tours & Travels Private Limited;

4. Reliance MediaWorks Entertainment Services

Limited;

5. Reliance MediaWorks Theatres Limited; and


Proprietorships

1. Anil Sekhri & Co.

HUF

1. Avtar HUF

Prasoon Joshi

Father’s name: Devendra Kumar Joshi


Director


DIN: 01260545

Occupation: Service

Nationality: Indian

Address:

201-202, B Wing, Quantum Park Building,

Union Park, Khar (West) Mumbai 400 052.


1. McCann Erickson India Private Limited;

2. Result Services Private Limited;

3. Associated Corporate Consultants India Private

Limited;

4. Reliance Broadcast Network Limited; and

5. End to end Marketing Solutions Private Limited.

Relationship with Other Directors

192

None of our Directors are related to one another.

Brief Biographies

Gautam Doshi, aged 60 years, has been a Director since October 7, 2005. He holds a master’s degree in commerce from the University

of Mumbai, Mumbai. He is also a fellow member of the Institute of Chartered Accountants of India. He has 36 years of experience in

areas such as mergers and acquisitions, income-tax, international taxation, accounting, auditing, finance, banking, legal and general

management. He was a senior partner in RSM & Co. and was a founder director of Ambit Corporate Finance Private Limited. He is

currently the group managing director of the Reliance Group.

Amit Khanna, aged 62 years, has been a Director since April 26, 2007. He holds a bachelor’s degree in arts from St. Stephen’s College,

New Delhi. He has nearly 40 years of experience in areas such as film production, script writing, lyrics writing, direction, theatre, radio,

films, journalism and television programming. He has held the position of the president, All India Film Producers Council, president,

Film and Television Producers Guild of India Limited and vice-president, Association of Motion Picture and TV Program Producers. He

has also been on the governing council of the film institutes situated in Pune and Kolkata. He was the first Indian to serve on the jury of

International Emmy. He has also been on the jury of various film festivals and awards in India and abroad. Besides serving on various

international, government and trade organizations and institutions, he has also won several awards.

Sujal Shah, aged 44 years, has been a Director since April 26, 2007. He holds a bachelor’s degree in commerce from University of

Mumbai, Mumbai. He is also a chartered accountant by qualification and is a member of the Institute of Chartered Accountants of India.

He has approximately 20 years experience in the field of accounting and corporate consultancy practice including mergers and

acquisitions, restructuring of companies, valuation of business/shares, due diligence review. He was the president of the Chamber of Tax

Consultants for the year 2010-2011 and is a founder partner of SSPA & Co., Chartered Accountants.

Anil Sekhri, aged 54 years, has been a Director since September 13, 2007. He holds a bachelor’s degree in commerce from Punjab

University, Chandigarh. He is also a fellow member of the Institute of Chartered Accountants of India. He has over 26 years of

experience in the areas such as accounting, taxation and legal matters with focus on media and entertainment sector. He is the founder of

Anil Sekhri & Co., Chartered Accountants.

Prasoon Joshi, aged 46 years, has been a Director since September 3, 2009. He holds a bachelor’s degree in science from University of

Meerut, Meerut a master’s degree in science (physics) from Meerut University, Meerut and a master’s degree in business administration

in marketing from the Institute of Management Technology, Ghaziabad. He has over 18 years of experience in areas such as advertising,

song writing, poetry and communication. He has received approximately 400 national and international awards and honors. He is

currently the executive chairman of McCann Worldgroup, India.

None of our Directors is or was a director of any listed company during the last five years preceding the date of filing of this Letter of

Offer, whose shares have been or were suspended from being traded on the BSE or the NSE, during the term of their directorship in such

company.

Except as set out below, none of our Directors is or was a director of any listed company which has been or was delisted from any

recognised stock exchange in India during the term of their directorship in such company.

Director Name of the

Company

Listed on Date of

delisting

Compulsory or

Voluntary

Reasons

for

delisting

Whether

relisted

Tenure

Mr. Sujal

Shah

Amrit

Banaspati

Company

Limited

BSE (May 20,

1996)

BSE - March

7, 2013.

Voluntary Please see

note 1

below.

No Appointed on

October 30,

2010.

Resigned with

effect from July

17, 2013.

Mr. Sujal

Shah

Amrit

Banaspati

Company

Limited

Delhi Stock

Exchange (DSE)

(May 21, 1996)

DSE – April 8,

2013.

Voluntary Please see

note 1

below.

No Appointed on

October 30,

2010.

Resigned with

effect from July

17, 2013.

193

Note 1:

The company has sold/transferred its edible oils business along with its manufacturing undertaking located at Rajpura (Punjab) on a

slump sale basis and as a going concern to M/s Bunge India Private Limited. Pursuant to the said sale/transfer of the edible oils business,

the company is engaged in trading of various commodities and treasury operations pertaining to cash consideration received from the

said sale/transfer of edible oils business. Further, the management of the company is exploring various new business opportunities, other

than the edible oils business, in which the company may engage in future. Since, the company is no longer engaged in the edible oils

business, which was its core business at the time of listing with BSE and DSE, it has been delisted.

Remuneration of our Directors

The remuneration paid to our Directors during Fiscal 2012 is as follows:

1. Executive Directors

Our Company does not have any executive Director. Ashish Agarwal, though, is the Manager of our Company in terms of the

Companies Act.

2. Non-Executive Directors

The following table sets forth the details of sitting fees and commission paid to the non-executive Directors during Fiscal 2012:

(in `)

Name Fiscal 2012

Sitting fees Commission and others

Gautam Doshi 50,000 Nil

Amit Khanna 1,80,000 Nil

Sujal Shah 2,05,000 Nil

Anil Sekhri 2,05,000 Nil

Prasoon Joshi 1,20,000 Nil

Ajay Prasad * 30,000 Nil *Ajay Prasad has resigned w.e.f April 10, 2012.

Except as stated in this section and the sitting fees paid in Fiscal 2012, no amount or benefit has been paid within the two preceding years

or is intended to be paid or given to any of our Company’s officers including our Directors and key management personnel.

None of the beneficiaries of loans, advances and sundry debtors are related to our Directors. Further, except statutory benefits and

contractual payments like gratuity and leave encashments, upon termination of their employment in our Company or retirement, no

officer of our Company, including our Directors and our key management personnel, are entitled to any benefits upon termination of

employment.

No loans have been availed by our Directors from our Company. Except Krishnanand Shetty, none of the key managerial personnel has

availed any loan from our Company.

Service Contracts with our Directors

We have not entered into any service contracts with our Directors entitling them to any benefits on termination of employment or

otherwise.

Service Agreement with the Manager

Pursuant to Board resolution dated July 1, 2011, Ashish Agarwal was appointed as a Manager of our Company with effect from July 1,

2011.

A service agreement has been entered into by our Company with Ashish Agarwal on July 1, 2011 (Service Agreement) in relation to his

appointment as the Manager with effect from July 1, 2011 for a period of five years, i.e. upto June 30, 2016 with a remuneration of `24

lakhs per annum.

The Service Agreement shall expire on June 30, 2016. Either party may terminate the Service Agreement with one month prior notice.

194

His DIN is 01598849.

Shareholding of Directors

None of our Directors hold any Equity Shares in our Company.

Borrowing Powers of our Board of Directors

Pursuant to a resolution passed by the shareholders of our Company on October 25, 2007, and in accordance with the provisions of the

Companies Act, the Board is authorised to borrow from time to time, any sum or sums of money, upon such terms and conditions and

with or without security, in Indian/foreign currency, as our Board may in its discretion think fit, notwithstanding that the money or

monies to be so borrowed by us (excluding the temporary loans obtained or to be obtained from our Company’s bankers in the ordinary

course of business) together with the sums already borrowed, may exceed the aggregate of our paid-up capital and free reserves,

provided the sums so borrowed shall not, at any time, exceed `5,00,000 lakhs.

Corporate Governance

Our Company is in compliance with the applicable corporate governance requirements, including under the Equity Listing Agreements,

the Companies Act and other applicable laws and regulations. The corporate governance framework is based on an effective independent

Board, separation of the Board’s supervisory role from the executive management team and constitution of committees of the Board, as

required under law.

Committees of the Board of Directors

The Board has constituted committees of Directors, each of which functions in accordance with the relevant provisions of the Companies

Act and the Equity Listing Agreements. These include, (i) Audit Committee, (ii) Shareholders’ and Investors’ Grievance Committee, (iii)

Remuneration Committee, and (iv) Committee of Directors. The details of these committees are as follows:

A. Audit committee

The members of the Audit Committee are:

1. Sujal Shah;

2. Amit Khanna;

3. Anil Sekhri;

4. Gautam Doshi; and

5. Prasoon Joshi.

The Audit Committee was re-constituted by a resolution passed by the Board of Directors in its meeting held on May 15, 2012. The

terms of reference of the Audit Committee are as provided in Clause 49 of the Equity Listing Agreements, as well as Section 292A of the

Companies Act, including overview of the accounting systems, correctness of the financial reporting and internal controls of our

Company.

B. Shareholders’ and Investors’ Grievance Committee

The members of the Shareholders’ and Investors’ Grievance Committee are:

1. Gautam Doshi;

2. Amit Khanna; and

3. Prasoon Joshi.

The Shareholders’ and Investors’ Grievance Committee was re-constituted by a meeting of our Board held on October 22, 2009. The

terms of reference of the Shareholders’ and Investors’ Grievance Committee include investigation into any matter relating to redressing

shareholders’ and/or investors’ complaints pertaining to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividend,

duplicate share certificates and dematerialization or rematerialization of shares.

195

C. Nomination / Remuneration Committee

The members of the Nomination / Remuneration Committee are:

1. Anil Sekhri;

2. Gautam Doshi;

3. Amit Khanna; and

4. Sujal Shah.

The name of Remunation Committee was changed to Nomination/ Remuneration Committee in the meeting of Board of Directors held

on November 03, 2012. The Nomination/ Remuneration Committee was re-constituted by a circular resolution passed by the Board of

Directors on June 9, 2010. The powers, duties and terms of reference of the Remuneration Committee include reviewing the overall

compensation policy and structure, service agreements and other employment conditions for the members of the board.

D. Committee of Directors

The members of the Committee of Directors are:

1. Amit Khanna;

2. Sujal Shah; and

3. Anil Sekhri.

The above Committee of Directors was constituted by a meeting of our Board held on July 25, 2012. The powers, duties and terms of

reference of the Committee of Directors include, inter alia, fixing a record date for the purpose of the issue, finalizing the size of issue

and issue price, deciding the opening and closing dates for the rights issue, approving and adopting the draft letter of offer, letter of offer,

application form and such other as documents as may be required, issuing and allotting the shares in one or more tranches and to do all

such acts and deeds necessary or desirable in connection with or incidental to the issue of the shares and dispose of the balance

unsubscribed portion of the right issue, if any, to our Promoters and/or any person(s) or institution(s) as it thinks most beneficial to our

Company, subject to such regulations, if any, as may be applicable.

Interests of our Directors

All of our Directors, including our independent Directors, may be deemed to be interested to the extent of fees, if any, payable to them

for attending meetings of the Board or a committee thereof, as well as to the extent of other remuneration and reimbursement of

expenses, if any, payable to them under our Articles of Association. All our non-executive Directors are entitled to sitting fees of as set

out at 193 above. Our Directors, including independent Directors, may also be regarded as interested in the Equity Shares held by the

companies, firms and trust, in which they are interested as directors, members, partners or trustees.

Our Directors, including independent Directors, may also be regarded as interested to the extent Equity Shares are allotted to entities in

which they are interested as directors, members, partners or trustees. Further, Mrs. Geeta Sekhri, wife of Anil Sekhri, one of our

Directors holds 1 (one) Equity Share. Anil Sekhri can be considered interested in our Company to extent of Equity Shares held by Mrs.

Geeta Sekhri.

All Directors may be deemed to be interested in the contracts, agreements / arrangements entered into or to be entered into by our

Company with any company in which they hold directorships or any partnership firm in which they are partners as declared in their

respective declarations.

Except as stated above, none of our Directors are interested in the promotion of our Company nor have any of them acquired any

property in 2 years preceding the date of this Letter of Offer.

Except as otherwise stated in the chapter entitled “Financial Statements” beginning at page F-1 of this Letter of Offer, our Company has

not entered into any contract, agreements or arrangements during the two years preceding the date of this Letter of Offer, in which our

Directors are interested directly or indirectly and no payments have been made to them in respect of such contracts, agreements or

arrangements.

Bonus or profit sharing plan for our Directors

Our Company does not have any bonus or profit sharing plan for its Directors.

196

Changes in our Board of Directors during the last three years:

Name Date of Appointment/ Change/ Cessation Reason

Pradeep Shah September 3, 2009 Resignation

Prasoon Joshi September 3, 2009 Appointment as additional director, regularized on

September 30, 2009

Ajay Prasad February 15, 2010 Appointment as additional director, regularized on August

31, 2010

Darius Kakalia June 9, 2010 Resignation

Ajay Prasad April 10, 2012 Resignation

197

Management Organisation Structure

Key Managerial Personnel of our Company

Venkatesh Roddam, Chief Executive Officer, aged 49 years, joined our Company in January 2012 to head the Film and Media Services

Business. He was re-designated as the CEO of the Company with effect from May 1, 2013. He holds a Masters degree in Business

Administration. Concurrently, he also holds directorship positions at VenSat Tech Services Pvt Ltd and Annapurna Studios Pvt Ltd.

Having spent a majority of his career in banking, he started his career with ANZ Grindlays Bank in 1987 and went on to work with

Emirates Bank International Ltd, HDFC Bank Ltd and Deutsche Bank AG. Thereafter, he held a leadership position as the CEO with

Mahindra Satyam BPO, before moving on to set up VenSat Tech Services Pvt Ltd in 2010 and has approximately 25 years of experience.

During Fiscal 2012, he was paid a gross compensation of ₹112.50 lakhs.

Mohan Umrotkar, Chief Financial Officer, aged 39 years, joined our Company in May 2008 and has been redesignated as the Chief

Financial Officer with effect from May 1, 2013. He is a chartered accountant by qualification. Prior to joining our Company, he was with

C.C Choksi & Company, a member firm of Deloitte. He has approximately 17 years of experience. He heads our finance function.

During Fiscal 2012, he was paid a gross compensation of `97.50 lakhs.

Shiana Makhija, Chief Human Resources Officer, aged 47 years, joined our Company in January 2011. She holds a bachelor's degree in

arts from University of Mumbai, Mumbai. She also holds masters’ degree in arts (social work) from Tata Institute of Social Sciences.

She has previously worked with companies such as Blue Star Limited, Johnson Controls India Private Limited, MIRC Electronics

Limited and Reliance Capital Limited and has held the position of Senior Vice President – Human Resources at Reliance Capital Ltd.

She has approximately 20 years of experience in the field of human resources. During Fiscal 2012 she was paid a gross compensation of

`105.00 lakhs.

Krishnanand Shetty, President – Processing & DI Lab, aged 60 years, joined our Company in April 1999. He holds a bachelor's degree

in science from University of Mumbai, Mumbai. He has approximately 36 years of experience in the media and entertainment industry.

During Fiscal 2012, he was paid a gross compensation of `150.00 lakhs. Although Krishnanand Shetty was supposed to retire on

February 20, 2012, by a letter dated February 1, 2012, his services were extended for a further period of two years.

Venkatesh Roddam

Chief Executive Officer

International

Business

Board of Directors

Ashish Agarwal

Company Secretary &

Manager

Film & Media Services

India

Business

Krishnanand Shetty

President - Processing &

DI Lab

Ashish Chakravorty

President - Production

Service &Broadcast Solution

Naresh Jhangiani

President – Operations

Media & Creative Services

& Corporate Services

Naresh Malik

President – Media &

Creative Services & Global

Sales - USA

Mohan Umrotkar

Chief Financial

Officer

Shiana Makhija

Chief Human

Resources Officer

USA India

Exhibition Operations

Ashish Saksena

Chief Operating Officer

Big Synergy

Siddhartha B – Chairman & MD

ns Media & Creative Services &

Corporate Services

President – Operations Media &

Creative Services & Corporate

Services

President – Operations Media &

Creative Services & Corporate

Services

v&MD

198

Ashish Chakravorty, President - Production Services & Broadcast Solutions, aged 48 years, joined our Company in January 2008. He

holds a bachelor's degree in economics from University of Mumbai, Mumbai. Prior to joining our Company he has worked with Zee

Entertainment Enterprises Limited and Universal Music. He has approximately 24 years of experience in various fields such as

marketing, advertising and music. During Fiscal 2012, he was paid a gross compensation of `49.50 lakhs.

Naresh Jhangiani, President – Operation Media & Creative Services & Corporate Services, aged 48 years, joined our Company in

January 2012. He holds a degree in Masters of Business administration in Human Resources. Prior to joining our Company, he has

worked with VenSat Tech Services Pvt Ltd, Mahindra Satyam BPO & Gati Limited. He has approximately 23 years of experience in

various fields such as human resources, marketing, business development, business affairs and talent management. During Fiscal 2012,

he was paid a gross compensation of `49.50 lakhs.

Naresh Malik, President – Media & Creative Services & Global Services (an employee of Reliance Lowry Digital Imaging Services

Inc.), aged 46 years, joined our Company in January 2010. He holds a bachelor’s degree in engineering (electronics and communication)

from Institution of Engineers, Chennai. Prior to joining our Company he has worked with, inter alia, Century Communication Limited -

Pixion, Ideal System Asia Pacific and Grass Valley Group and has held the position of Chief Executive Officer in Prime Focus World.

He has approximately 21 years of experience in the management and post production business. During Fiscal 2012, he was paid a gross

compensation of `145.33 lakhs.

Ashish Saksena, Chief Operating Officer - Exhibition, aged 46 years, joined our Company in September 2009. He holds a bachelor's

degree in Technology (Mechanical) from University of Calicut and post graduate diploma in management from IGNOU. Prior to joining

our Company, he held the position of CEO with PVR Pictures Limited and has also worked with Inox Leisure. He has approximately 25

years of experience. During Fiscal 2012, he was paid a gross compensation of ` 132.50 lakhs.

Ashish Agarwal, Company Secretary and Manager, aged 39 years, joined our Company in July 2011. He holds a bachelor's degree in

commerce and has obtained a degree in law from Maharshi Dayanand Saraswati University, Ajmer, Rajasthan. He is also a member of

the Institute of Company Secretaries of India. Prior to our Company he has worked with Aditya Birla Nuvo Limited. He has

approximately 14 years of experience in the legal and secretarial area. During Fiscal 2012, he was paid a gross compensation of `30

lakhs.

Except for the Service Agreement with Ashish Agarwal in relation to his appointment as the Manager with effect from July 1, 2011 for a

period of five years, the key management personnel are permanently employed with our Company as of the date of this Letter of Offer.

None of the key management personnel are related to each other.

Brief details of the general employment contract of key management personnel of our Company

Our Company has entered into general employment contracts with our key management personnel. A summary of the terms of these

general employment contracts is set out below:

The key management personnel are subject to an initial probation period of six months. Either party may terminate the contract during

this period, after giving a notice for a period of 15 days, without assigning any reason. The appointment and continuation of the key

management personnel is subject to them being found medically fit to be employed. The age of retirement is 58 years.

The key management personnel is prohibited from disclosing any secret, processes, methods, designs and any intellectual property of our

Company along with any other information relating to our Company gathered during the course of their employment. Any inventions,

discoveries, intellectual property designed or developed would become our Company’s exclusive property.

After completion of probation period, normally either party may terminate the contract after giving a notice of one month. Our Company

may terminate the contract, without a notice, if the particulars provided by the applicant in the application are incomplete or incorrect.

Also, if there is any misconduct or fraudulent activity on part of the employee, the services can be terminated.

Shareholding of key managerial personnel

Except Krishnanand Shetty and Ashish Chakravorty, who hold 150 Equity Shares and 100 Equity Shares, respectively, in our Company,

none of our key managerial personnel hold Equity Shares of our Company.

199

Interest of Key Managerial Personnel

Except to the extent of their shareholding in our Company, and remuneration or benefits to which they are entitled as per the terms of

their appointment and reimbursement of expenses incurred by them in the ordinary course of business, our Company’s key managerial

personnel do not have any other interest in our Company.

Bonus or profit sharing plan of the key management personnel

None of the key management personnel are entitled to any profit sharing plan.

Changes in the key management personnel

The changes in the key management personnel in the last three years are as follows:

Name Designation Date of change Reason for

change

Shiana Makhija Chief Human Resources Officer January 3, 2011 Appointment

Ashok Ganapathy Chief Executive Officer – Exhibition May 5, 2011 Appointment

Kirti Desai Company Secretary and Manager May 15, 2011 Resignation

Madhulika Singh Manager May 28, 2011 Appointment

Madhulika Singh Manager July 1, 2011 Resignation

Ashish Agarwal Company Secretary and Manager July 1, 2011 Appointment

Venkat Devarajan Chief Financial Officer December 16,

2011

Resignation

Tushar Dhingra Chief Operating Officer – Exhibition (North, East & Central) December 31,

2011

Resignation

Shankar Dutta President – Motion Pictures & Allied Services December 31,

2011

Resignation

Venkatesh

Roddam

Chief Executive Officer – Film & Media Services January 2, 2012 Appointment

Anil Arjun Chief Executive Officer September 30,2012 Resignation

Anantha Krishnan Vice President – Technology February 28, 2013 Resignation

Ashok Ganapathy Chief Executive Officer – Exhibition May 30, 2013 Resignation

Naresh Jhangiani President – Operation Media & Creative Services & Corporate

Services

May 23, 2013 Re-designation

Employees

Employee Stock Option Scheme

The shareholders of our Company pursuant to a resolution passed at the AGM held on August 31, 2010 have in terms of section 81(1A)

of the Companies Act and the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999,

accorded their consent to our Board of Directors to introduce and implement the Reliance MediaWorks Employee Stock Option Scheme

(“ESOS Scheme”). As on the date of this Letter of Offer, our Company has not granted any ESOS Securities under the aforesaid

scheme.

Payment or Benefit to Officers of our Company (non salary related)

Except as stated above, no amount or benefit (non salary related) has been paid within the two preceding years or is intended to be paid

or given to any of our Company’s officers including our Directors and key management personnel, including benefits in kind for all

capacities and contingent or deferred compensation. Further, except statutory benefits upon termination of their employment in our

Company or retirement, no officer of our Company, including our Directors and our key management personnel, are entitled to any

benefits upon termination of employment.

200

OUR PROMOTER AND PROMOTER GROUP

Promoters

Reliance Land Private Limited and Reliance Capital Limited are the Promoters of our Company.

1. Reliance Land Private Limited

Reliance Land Private Limited was incorporated as Reliance Homes Limited, a public limited company, under the Companies Act on

December 23, 1993. The company received a certificate of commencement of business on January 3, 1994. Subsequently, the name of

the company was changed to Reliance Land Limited pursuant to which a fresh certificate of incorporation dated May 25, 1995 was

issued by the Registrar of Companies. Pursuant to the conversion of the company into a private limited company, the name was changed

to Reliance Land Private Limited on September 7, 2001.

Reliance Land Private Limited is involved in the business of real estate.

The registered office of Reliance Land Private Limited is situated at H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi

Mumbai 400 710, India.

Board of directors

The board of directors of Reliance Land Private Limited comprises of:

1. Achuthan Kothandath; and

2. Vinod Kumar Tripathi.

Shareholding pattern

Shareholding pattern of Reliance Land Private Limited as of June 30, 2013 is as follows:

Name of Shareholder No. of Equity Shares Held % of shareholding

Reliance Capital Limited 50,00,000 50.00

Reliance Share & Stock Brokers Private

Limited

50,00,000 50.00

Total 1,00,00,000 100.00

Unconsolidated Financial performance

(In ` lakhs, except share data)

Particulars As at and for the

nine month period

ended March 31,

2010(1)

As at and for the

year ended March

31, 2011

As at and for the

year ended March

31, 2012

As at and for the

year ended March

31, 2013

Sales & Other Income 31.34 41.47 17.10 161.18

PAT (185.09) 115.29 (157.20) (1,485.26)

Equity Capital 1,000.00 1,000.00 1,000.00 1,000.00

Reserves 33,887.54 30,852.83 37,195.62 29,772.87

Basic and Diluted EPS (in `)(1)

(2.45) 1.15 (1.57) (14.85)

Net asset value per share (in `)(2)

348.88 318.53 381.96 307.73 (1)

Excluding preference dividend (2)

Excluding reserves earmarked for preference share redemption

201

Promoters of Reliance Land Private Limited

Reliance Capital Limited is the promoter of Reliance Land Private Limited. The directors of Reliance Capital Limited are as follows:

1. Anil D. Ambani;

2. Amitabh Jhunjhunwala;

3. Rajendra Prabhakar Chitale;

4. Dr. Bidhubhusan Samal; and

5. Vijayendra Nath Kaul.

There has been no change in the control or the management of Reliance Land Private Limited in the three years preceding the date of this

Letter of Offer.

Our Company confirms that the permanent account number, bank account number, company registration number and the address of the

Registrar of Companies where Reliance Land Private Limited is registered shall be submitted to the Stock Exchanges at the time of filing


2. Reliance Capital Limited

Reliance Capital Limited was incorporated as Reliance Capital & Finance Trust Limited under the Companies Act on March 5, 1986.

The company received a certificate of commencement of business on March 27, 1986. Subsequently, the name of the company was

changed to Reliance Capital Limited, pursuant to which a fresh certificate of incorporation dated January 6, 1995 was issued by the

Registrar of Companies.

Reliance Capital Limited is a non-banking financial company registered with the Reserve Bank of India under section 45-IA of the RBI

Act, 1934. Reliance Capital Limited has interests in asset management, mutual funds, portfolio management services, pension funds, life

and general insurance, private equity and proprietary investments, stock broking and depository services, investment banking, wealth

management, home and commercial finance, financial products distribution, venture capital, exchanges, asset reconstruction and other

activities in financial services.

The registered office of Reliance Capital Limited is situated at H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai

400 710, India.

Board of directors

The board of directors of Reliance Capital Limited comprises of:

1. Anil D. Ambani;

2. Amitabh Jhunjhunwala;

3. Rajendra Prabhakar Chitale;

4. Dr. Bidhubhusan Samal; and

5. Vijayendra Nath Kaul

202

Shareholding Pattern

The shareholding pattern of Reliance Capital Limited as of June 30, 2013 is as follows:

Categor

y Code

( I )

Category of

Shareholder

( II )

No of

Shareh

olders

( III )

Total No of

Shares

( IV )

Number of

shares held

in

dematerilised

Form

( V )

Total Shareholding as percentage


Shares Pledged

or otherwise

encumbered

As a

percentage of

(A+B) ( VI )

As a percentage

of (A+B+C) (

VII )

No of

Shares

(VIII)

As a

percent

age of

(A+B+

C)

(IX=VI

II/IV*1

00)

(A)

Shareholding of

Promoter and

Promoter Group

(1) Indian

(a) Individuals/Hindu

Undivided Family 9 11,65 ,983 11,65 ,983 0.48

0.47

0

0.00

(b)

Central

Government/State

Governments

- - - -

-

(c) Bodies Corporate 9 13,02,16,289 13,02,16,289 53.15 53.01 0 0.00

(d) Financial

Institutions/Banks

- - - -

-

(e) Any Other

(Specify) 1 16,00,000 16,00,000 0.65

0.65

0.00 0.00

Sub -Total (A)(1) 19 13,29,82,272 13,29,82,272 54.28

54.14

0

0.00

(2) Foreign

(a)

Individuals(Non-

Resident

Individuals/Foreign

Individuals)

- - - -

-

(b) Bodies Corporate

- - - -

-

(c) Institutions

- - - -

-

(d) Qualified Foreign

Investor

- - - -

-

(e) Any Other

(Specify)

- - - -

-

Sub -Total (A)(2)

- - - -

-

Total

shareholding of

Promoter and

Promoter Group

(A)=(A)(1)+(A)(2)

19 13,29,82,272 13,29,82,272 54.28

54.14

0

0

(B) Public

Shareholding

(1) Institutions

(a) Mutual Funds /UTI 187 18,03,022 17,38,725 0.74 0.73 - -

(b) Financial

Institutions/Banks 284 4,61,694 4,46,963 0.19

0.19

- -

(c)

Central

Government/State

Governments

78 76, 584 32,896 0.03

0.03

- -

203

Categor

y Code

( I )

Category of

Shareholder

( II )

No of

Shareh

olders

( III )

Total No of

Shares

( IV )

Number of

shares held

in

dematerilised

Form

( V )

Total Shareholding as percentage


Shares Pledged

or otherwise

encumbered

As a

percentage of

(A+B) ( VI )

As a percentage

of (A+B+C) (

VII )

No of

Shares

(VIII)

As a

percent

age of

(A+B+

C)

(IX=VI

II/IV*1

00)

(d) Venture Capital

Funds

- - - -

-

- -

(e) Insurance

Companies 18 1,08,57,082 1,08,56,927 4.43

4.42

- -

(f)

Foreign

Institutional

Investors

514 4,79,82,718 4,79,76,899 19.59

19.53

- -

(g) Foreign Venture

Capital Investors

- - - -

-

- -

(h) Qualified Foreign

Investor

- - - -

-

- -

(I) Any Other

(Specify)

- - - -

-

- -

Sub -Total (B)(1) 1,081 6,11,81,100 6,10,52,410 24.97 24.91 0 0.00

(2) Non-Institutions

(a) Bodies Corporate 5,859 75,67,622 74,93,705 3.09 3.08 - -

(b)

i. Individual

shareholders

holding nominal

share capital up to

`1 Lakh.

11,45,0

10 3,80,97,561 3,31,23,638 15.55

15.51

- -

ii. Individual

shareholders

holding nominal

share capital in

excess of `1Lakh.

62 38,28,319 38,05,819 1.56

1.56

- -

(c) Qualified Foreign

Investor - - - -

-

- -

(d) Any Other

(Specify)

1 NRIs/OCBs 13,158 13,20,537 11,25,769 0.54 0.54 - 0.00

Sub -Total (B)(2) 11,64,0

89 5,08,14,039 4,55,48,931 20.74

20.69

0 0.00

Total Public

Shareholding

B=(B)(1)+(B)(2)

11,65,1

70 11,19,95,139 10,66,01,341 45.72

45.59

0 0.00

TOTAL (A) +(B) 11,65,1

89 24,49,77,411 23,95,83,613 100.00

99.73

0 0.00

(C)

Shares held by

Custodians and

against which

Depository

Receipts have

been issued

1 Promoter and

Promoter Group 0 0 0 0.00

0.00

0 0.00

2 Public 1 6,55,389 6,55,389 0.00 0.27 0 0.00

Sub - Total (C ) 1 6,55,389 6,55,389 0.00 0.27 0 0.00

GRAND TOTAL

(A)+(B)+(C)

11,65,1

90 24,56,32,800 24,02,39,002 100.00

100.00

0

0.00

204

Unconsolidated Financial Performance

The brief financial details of Reliance Capital Limited derived from its audited financial statements, prepared on a standalone basis, are

set forth below:

(In ` lakhs, except share data)

Particulars As at and for the year

ended March 31, 2011

As at and for the

year ended March

31, 2012

As at and for the

year ended March

31, 2013

Sales & Other Income 1,97,126.43 3,31,733.53 3,86,793.33

PAT 22,927.00 51,924.58 66,186.26

Equity Capital 24,616.00 24,616.00 24,616.00

Reserves (excluding revaluation reserves)* 6,71,208.89 10,66,374.01 11,34,623.81

Basic & Diluted EPS (in `) 9.33 21.14 26.95

Book value per share (in `) 283.28 444.15 461.92

* Reserves are net of miscellaneous expenditure to the extent not written off.

There has been no change in the control or the management of Reliance Capital Limited in the three years preceding the filing of this

Letter of Offer.

Our Company confirms that the permanent account number, bank account number, company registration number and the address of the

Registrar of Companies where Reliance Capital Limited is registered shall be submitted to the Stock Exchanges at the time of filing this

Letter of Offer.

Promoters of Reliance Capital Limited

The promoters of Reliance Capital Limited are as follows:

Individual promoters:

1. Kokila D. Ambani;

2. Anil D. Ambani;

3. Tina A. Ambani;

4. Jaianmol A. Ambani; and

5. Jaianshul A. Ambani (through father and natural guardian Anil D. Ambani).

Corporate promoters:

1. AAA Enterprises Private Limited;

2. AAA Infrastructure Consulting and Engineers Private Limited;

3. REL Utility Engineers Limited (formerly known as Sonata Investments Limited);

4. Reliance ADA Group Trustees Private Limited - Trustees of RCAP ESOS Trust; and

5. Reliance Innoventures Private Limited.

Natural person in control of the corporate promoters:

The natural person in control of the corporate promoters of Reliance Capital Limited is Anil D. Ambani.

Interests of Promoters

Our Promoters are interested in our Company to the extent of their shareholding, dividend received and interest received on the loans

given to us. For details on the shareholding of our Promoters in our Company, please see the chapter entitled “Capital Structure” at page

69 of this Letter of Offer. For details of loans given by Reliance Capital Limited, please see the chapter entitled “Financial Indebtedness”

at page 225 of this Letter of Offer.

Our Promoters do not have any interest in the property acquired by our Company within two years preceding the date of this Letter of

Offer or proposed to be acquired by our Company.

205

Reliance Capital Limited has provided a corporate guarantee in favour of Axis Trustee Services Limited for an amount of `35,000 lakhs

for the Non Convertible Debentures issued by our Company to Yes Bank for an aggregate amount of `35,000.00 lakhs. For further

details in relation to Non Convertible Debentures issued by our Company, please see the chapter entitled “Financial Indebtedness” at

page 225 of this Letter of Offer.

Payment of benefits to our Promoters or Promoter Group

Except as stated in the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer, there has been no payment of benefits

to our Promoters or Promoter Group during the two years preceding the filing of this Letter of Offer.

Confirmations

None of our Promoters have been declared as a willful defaulter by the RBI or any other government authority and there are no

violations of securities laws committed by our Promoters in the past and no proceedings for violation of securities laws are pending

against them.

Further, none of our Promoters or our Promoter Group or our Directors has been restrained from accessing the capital markets for any

reasons by SEBI or any other entity.

Companies with which our Promoters have disassociated in the last three years

Except as disclosed below, our Promoters have not disassociated from any company during the preceding three years from the date of

this Letter of Offer:

Reliance Capital Limited has disassociated from Medybiz Private Limited, Net Logistics Private Limited, Reliance Capital Services

Private Limited and Reliance Infrastructure Finance Private Limited as a result of sale of shares held by Reliance Capital Limited in

these companies. Reliance Commercial Finance Private Limited, Viscount Management Services (Alpha) Limited, Emerging Money

Mall Limited and Reliance Equities International Private Limited have been amalgamated with Reliance Capital Limited.

Change in the management and control of our Company

Other than as disclosed in this Letter of Offer, there has been no change in the management and control of our Company.

Promoter Group

In addition to our Promoters, the following persons form part of our Promoter Group i.e. part of the Reliance Group:

1. AAA Enterprises Private Limited;

2. AAA Infrastructure Consulting & Engineers Private Limited;

3. Adhar Project Management & Consultancy Private Limited;

4. Ammolite Holdings Limited;

5. Indian Agri Services Private Limited;

6. Indian Commodity Exchange Limited;

7. Payone Enterprise Private Limited (formerly known as Ashadeep Properties Private Limited);

8. QOPPA Trading Private Limited;

9. Quant Alternative Asset Management Private Limited;

10. Quant Broking Private Limited;

11. Quant Capital Advisors Private Limited;

12. Quant Capital Finance and Investments Private Limited;

13. Quant Capital Private Limited;

14. Quant Commodities Private Limited;

15. Quant Commodity Broking Private Limited;

16. Quant Investment Services Private Limited;

17. Quant Securities Private Limited;

18. QCAP Trade Private Limited (formerly Valankulam Investments and Trading Private Limited)

19. Reliance Alternative Investments Services Private Limited;

20. Reliance Asset Management (Malaysia ) SDN. BHD.;

206

21. Reliance Asset Management (Mauritius) Ltd.;

22. Reliance Asset Management (Singapore) Pte Limited;

23. Reliance Asset Reconstruction Company Limited;


25. Reliance Capital (Singapore) Pte. Limited;

26. Reliance Capital Asset Management (UK) Plc.;

27. Reliance Capital Asset Management Limited;

28. Reliance Capital Pension Fund Limited;

29. Reliance Capital Trustee Co. Limited;

30. Reliance Commodities Limited;

31. Reliance Composite Insurance Broking Limited

32. Reliance Consultants (Mauritius) Ltd;

33. Reliance Equity Advisors (India) Limited;

34. Reliance Exchangenext Limited;

35. Reliance Financial Limited;

36. Reliance General Insurance Company Limited;

37. Reliance Gilts Limited;

38. Reliance Home Finance Limited (formerly Reliance Home Finance Private Limited);

39. Reliance Innoventures Private Limited;

40. Reliance Financial Advisory Services Limited (formerly Reliance Investment Banking Services Limited);

41. Reliance Life Insurance Company Limited;

42. Reliance Money Express Limited;

43. Reliance Money Precious Metals Private Limited;

44. Reliance Net Limited;

45. Reliance AIF Management Company Private Limited (formerly Reliance Realty Private Limited);

46. Reliance Securities Limited;

47. Reliance Share & Stock Brokers Private Limited;

48. Reliance Spot Exchange Infrastructure Limited;

49. Reliance Venture Asset Management Private Limited;

50. Reliance Wealth Management Limited;

51. Viscount Management Services Limited;

52. Reliance Capital AIF Trustee Company Private Limited; and

53. Reliance CWT India Limited

The following entities have not been considered as being part of the Promoter Group for making disclosures in the Letter of Offer:

Names of the Companies Promoter(s)

Unilizer Media Limited

Unilazer Holdings Limited

TV Today Network Limited

Living Media India Limited

Aroon Purie

Ventura Textiles Limited

Ventura Texports Private Limited

Penny Securities & Investments Limited

Grover Vineyard Limited

Hindustan Export & Import Corporation Private Limited

Vallee De Vin Private Limited

Neeraj Deorah

Ravinder Kumar Jain

Deepak Roy

Menon & Menon Limited

Vijay Menon

Padmini Menon

Satish Menon

Preethi V Menon

K. Parameswaran

207

Vinod Sridharan

Divya V. Menon

Shreya V. Menon

Reverse Logistics Company Private

Limited

Hitendra Chaturvedi

Savita Chaturvedi

Rationale for not considering the above companies to be part of the Promoter Group:

Reliance Capital Limited (RCL), one of the Promoters of the Issuer, is a registered NBFC with the Reserve Bank of India. RCL is

classified as an “Investment Company” and is engaged in the business of acquisition and sale of securities. As part of its business RCL

invests in various companies from time to time and, on occasions, holds shares in excess of 10% of such companies. Accordingly, some

of these companies come within the ambit of the definition of Promoter Group in terms of SEBI ICDR Regulations.

RCL’s shareholding in these companies, though, is only in the nature of investment and these entities are neither related to RCL nor does

RCL have any significant influence or management control over them. These are purely financial investments with an intention to sell in

near future.

We further confirm that none of the promoters as mentioned above are related to Reliance Group.

Natural person in control of the Promoters

Anil D. Ambani is the promoter of our Promoters.

Anil D. Ambani, age 54 years, is the promoter of our Promoters. He holds a Bachelor’s

Degree in Science from the University of Bombay and a Master’s Degree in Business

Administration from the Wharton School, University of Pennsylvania, USA. Anil D.

Ambani is also the Chairman of Reliance Communications Limited, Reliance Capital

Limited, Reliance Infrastructure Limited and Reliance Power Limited. He is also on

the Board of Reliance Infratel Limited and Reliance Anil Dhirubhai Ambani Group

Limited. He is a member of the Wharton Board of Overseers, the Wharton School,

USA and Executive Board, Indian School of Business (ISB), Hyderabad. Anil D.

Ambani is also the Chairman of the Board of Governors of Dhirubhai Ambani Institute

of Information and Communication Technology, Gandhinagar, Gujarat.

Awards and Achievements

As one of the India’s youngest business leaders, Anil D. Ambani has received national and international acclaim for his vision and

leadership. Certain awards and recognitions include:

1. Ranked 4th

amongst India’s Top 100 CEOs by The Economic Times, India in 2010 and in 2009;

2. Included in its selection of 50 notable business leaders from emerging markets in 2010 by the UK-based Financial Times;

3. Ranked as the third most powerful and influential person of India in its list of 50 such luminaries by India Today magazine in

2009;

4. Also included in a similar list by the US-based Business Week magazine in 2009;

5. Awarded by Light Readings as the Person of the Year – 2008 for outstanding achievements in the communication industry;

6. Voted ‘The Businessman of the Year’ in a poll conducted by The Times of India – TNS, December, 2006;

7. Voted the ‘Best role model’ among business leaders in the biannual Mood of the Nation poll conducted by India Today

magazine, August 2006;

8. Conferred with ‘the CEO of the Year 2004’ award at the Platts Global Energy Awards.

208

OUR GROUP COMPANIES

Unless otherwise stated, none of the companies forming part of Group Companies is a sick company under the meaning of SICA and

none of them are under winding up. Further, except Reliance Broadcast Network Limited, all our Group Companies are unlisted

companies and they have not made any public issue of securities in the preceding three years.

None of our Group Companies, for which an application was made to the Registrar of Companies for striking off the name of the

company during the five years preceding the date of filing this Letter of Offer, have remained defunct.

The Group Companies of our Company are as follows:

Sr. No. Name of the company

1. Adhar Project Management & Consultancy Private Limited

2. Ammolite Holdings Limited

3. Indian Agri Services Private Limited

4. Indian Commodity Exchange Limited

5. QOPPA Trading Private Limited

6. Quant Alternative Asset Management Private Limited

7. Quant Broking Private Limited

8. Quant Capital Advisors Private Limited

9. Quant Capital Finance and Investments Private Limited

10. Quant Capital Private Limited

11. Quant Commodities Private Limited

12. Quant Commodity Broking Private Limited

13. Quant Investment Services Private Limited

14. Quant Securities Private Limited


16. Reliance Alternative Investments Services Private Limited

17. Reliance Asset Management (Malaysia ) SDN. BHD.;

18. Reliance Asset Management (Mauritius) Limited

19. Reliance Asset Management (Singapore) Pte Limited

20. Reliance Asset Reconstruction Company Limited

21. Reliance Broadcast Network Limited

22. Reliance Capital (Singapore) Pte. Limited

23. Reliance Capital Asset Management (UK) Plc.

24. Reliance Capital Asset Management Limited

25. Reliance Capital Partners

26. Reliance Capital Pension Fund Limited

27. Reliance Capital Trustee Co. Limited

28. Reliance Commodities Limited


30. Reliance Consultants (Mauritius) Ltd.

31. Reliance Equity Advisors (India) Limited

32. Reliance Exchangenext Limited

33. Reliance Financial Limited

34. Reliance General Insurance Company Limited

35. Reliance Gilts Limited

36. Reliance Home Finance Limited (formerly Reliance Home Finance Private Limited)

37. Reliance Investment Banking Services Limited

38. Reliance Life Insurance Company Limited

39. Reliance Money Express Limited

40. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private Limited)

41. Reliance Securities Limited

42. Reliance Share & Stock Brokers Private Limited

43. Reliance Spot Exchange Infrastructure Limited

44. Reliance Venture Asset Management Private Limited

45. Reliance Wealth Management Limited

46. Viscount Management Services Limited

209

Sr. No. Name of the company

47. Reliance Capital AIF Trustee Company Private Limited


Top five Group Companies (details as at May 31, 2013)

The details of one listed Group Company and the top four Group Companies on basis of turnover are set forth below:



Reliance Broadcast Network Limited (CIN L64200MH2005PLC158355) was incorporated in India, under the Companies Act on

December 27, 2005 as Reliance Unicom Limited obtained the certificate of commencement of business on February 13, 2006. The name

was changed to Big Radio Limited vide a fresh certificate of incorporation consequent upon change of name dated October 6, 2006

issued by the Registrar of Companies. The name of the company was subsequently changed to Reliance Unicom Limited vide a fresh

certificate of incorporation consequent upon change of name dated September 18, 2007 issued by the Registrar of Companies. The name

of the company was again changed to Reliance Media World Limited vide the fresh certificate of incorporation consequent upon change

of name dated July 22, 2009 issued by the registrar. Subsequently the company’s name was changed to Reliance Broadcast Network

Limited vide the fresh certificate of incorporation consequent upon change of name dated June 17, 2010 issued by the registrar of the

companies. Reliance Broadcast Network Limited is a media entertainment conglomerate with play across radio, television, intellectual

properties andtelevision production. It is part of the Reliance Group and specializes in creating and executing integrated media solutions

for brands.

Interest of our Promoter

Reliance Capital Limited and Reliance Land Private Limited hold 19.80% and 48.94% interest, respectively, in Reliance Broadcast

Network Limited as on May 31, 2013.

Financial Information

The brief financial details of Reliance Broadcast Network Limited derived from its audited standalone financial statements for financial

year September 30, 2010 (i.e. April 1, 2010 to September 30, 2010), March 31, 2011 (i.e. October 1, 2010 to March 31, 2011) and

March 31, 2012 (i.e. April 1, 2011 to March 31, 2012) are set forth below:

(` in lakhs, except share data)

Particulars Six month period

ended September 30,

2010(1)

Six month period

ended March 31,

2011(2)

As at and for the

year ended March

31, 2012

As at and for the

year ended March

31, 2013

Equity Capital 3,972.56 3,972.56 3,972.56 3,972.56

Reserves (excluding revaluation

reserves)

20,660.89 19,511.22 17,558.65 13,143.23

Sales & other income 11,050.78 14,082.96 31,475.37 22,737.94

Profit After Tax (2,941.73) (1,149.68) (1,952.57) (2,351.35)

Basic and Diluted EPS (in `) (6.35)* (1.45)* (2.46) (2.96)

Book value (in `) 31.00 29.56 27.10 21.54 (1)

Pursuant to the board resolution dated October 21, 2010, Reliance Broadcast Network Limited closed its books of accounts as of September 30, 2010 and

accordingly the financial year was of six months ending September 30, 2010. (2)

Pursuant to the board resolution dated May 5, 2011, Reliance Broadcast Network Limited closed its books of accounts as of March 31, 2011 and accordingly the

financial year was of six months ending March 31, 2011. * Not annualized. .

Share Price Information

Equity Shares of Reliance Broadcast Network Limited are listed on BSE and NSE.

The monthly high and low of the closing market price of the equity shares of Reliance Broadcast Network Limited having a face value of

`5/- each for the last six months in NSE and BSE is as follows:

210

BSE

Month Monthly High price in ` Monthly Low price in `

January 2013 45.95 37.15

February 2013 40.45 27.80

March 2013 28.90 23.30

April 2013 31.10 24.10

May 2013 32.90 27.70

June 2013 36.35 26.25

The market capitalisation of Reliance Broadcast Network Limited based on the closing price of `36.35/- per equity share on the BSE as

on June 28, 2013 was`28,880.50 lakhs.

NSE

Month Monthly High price in ` Monthly Low price in `

January 2013 46 37.25

February 2013 39.75 27.85

March 2013 29.40 24.00

April 2013 31.05 24.15

May 2013 32.60 27.70

June 2013 36.15 26.40

The market capitalisation of Reliance Broadcast Network Limited based on the closing price of `36.15/- per equity share on the NSE as

on June 28, 2013 was `28,721.60 lakhs.

Changes in capital structure

The Authorised Share Capital of the Company has been altered from `125,00,00,000 (Rupees one hundred twenty five crore) comprising

of 15,00,00,000 (fifteen crore) Equity Shares of `5 (Rupees five) each, and 10,00,00,000 (ten crore) Preference Shares of `5 (Rupees

five) each to `150,00,00,000 (Rupees one hundred fifty crore) comprising of 20,00,00,000 (twenty crore) Equity Shares of `5 (Rupees

five) each, and 10,00,00,000 (ten crore) Preference Shares of `5 (Rupees five) each by way of ordinary resolution passed by the

shareholders at their 8th

AGM held on September 27, 2012.

There have been no changes in the subscribed and issued capital structure of Reliance Broadcast Network Limited during the preceding

six months.

Reliance Broadcast Network Limited has made no other public or rights issue in the last three years.

2. Reliance Life Insurance Company Limited


Reliance Life Insurance Company Limited was incorporated in India, under the Companies Act on May 14, 2001. Reliance Life

Insurance Company Limited has been granted a license by Insurance Regulatory and Development Authority on January 03, 2002 for

carrying life insurance, health insurance and annuity business.


Reliance Capital Limited holds 47.78% interest in Reliance Life Insurance Company Limited.


The brief financial details of Reliance Life Insurance Company Limited derived from its audited standalone financial statements for

211

financial years 2011, 2012 and 2013 are set forth below:


Particulars

As at and for the financial

year 2011


year 2012


year 2013

Equity Capital 1,16,584.49 1,19,632.35 1,19,632.35

Reserves (excluding revaluation reserves) (87,285.30) (29,044.23) 3,512.46

Sales & Other Income 6,57,114,64 5,49,761.92 4,04,539.33

Profit After Tax (12,929.10) 37,257.13 38,041.72

EPS (in `) (1.11) 3.16 3.18

Diluted EPS (in `) (1.11) 3.14 3.17

Net asset value per share (in `) 2.51 7.57 10.29



Reliance Capital Asset Management Limited was incorporated in India, under the Companies Act on February 24, 1995. Reliance

Capital Asset Management Limited is engaged in the business of providing investment management and advisory services to mutual

funds. Reliance Capital Asset Management Limited is the asset management company for Reliance Mutual Fund.

Reliance Capital Asset Management Limited is also engaged in the business of providing portfolio management services.


Reliance Capital Limited holds 65.23% interest in Reliance Capital Asset Management Limited.


The brief financial details of Reliance Capital Asset Management Limited derived from its audited standalone financial statements for



Particulars


year 2011


year 2012


year 2013

Equity Capital 1,051.00 1,051.00 1,127.00

Reserves (excluding revaluation reserves) 1,10,159.08 119,025.39 1,20,907.02

Sales & Other Income 69,925.10 64,229.00 71,267.41

Profit After Tax 26,127.34 27,610.90 19,753.82

Basic EPS/ (in `) 248.59 262.71 177.93

Diluted EPS (in `) 248.04 260.23 177.00

Net asset value per share (in `) 1,058.14 1,142.50 1,099.24



Reliance General Insurance Company Limited was incorporated in India, under the Companies Act on August 17, 2000. Reliance

General Insurance Company Limited is engaged in the business of providing general insurance services.


Reliance Capital Limited holds 96.50% interest in Reliance General Insurance Company Limited.

212


The brief financial details of Reliance General Insurance Company Limited derived from its audited unconsolidated financial statements

for financial years 2011, 2012 and 2013 are set forth below:


Particulars


year 2011


year 2012


year 2013

Equity Capital 11,667.30 12,119.33 12,277.50

Reserves (excluding revaluation reserves) 50,489.61 60,017.64 66,082.55

Sales & Other Income 1,46,046.49 2,19,178.68 2,41,636.76

Profit After Tax (31,160.17) (34,319.93) (9,276.92)

Basic and Diluted EPS (in `) (26.80) (29.24) (7.61)

Net asset value per share (in `) 53.27 59.52 63.82



Reliance Securities Limited was incorporated in India, under the Companies Act on June 17, 2005. Reliance Securities Limited is

engaged in the business of securities brokering and is a depository participant of CDSL.


Reliance Capital Limited holds 99.60% interest in Reliance Securities Limited.


The brief financial details of Reliance Securities Limited derived from its audited unconsolidated financial statements for financial years

2011, 2012 and 2013 are set forth below:


Particulars


year 2011


year 2012


year 2013

Equity Capital 2,500.00 2,500.00 2,500.00

Reserves (excluding revaluation reserves) 2,774.82 3,374.76 2,639.50


Profit After Tax 710.21 599.94 (735.26)

Basic and Diluted EPS (in `)* (4.18) (3.41) (8.75)

Net asset value per share (in `) 21.10 23.50 20.56 * After providing for dividend on cumulative redeemable preference shares

Group Company with negative net worth

The details of the Group Company with negative net worth as at March 31, 2013 are as follows:



Indian Commodity Exchange Limited was incorporated on August 18, 2008 in India, under the Companies Act. Indian Commodity

Exchange Limited is engaged in the business of commodity spot exchange.


Reliance Capital Limited holds 26.00% interest in Indian Commodity Exchange Limited.

213


The brief financial details of Indian Commodity Exchange Limited derived from its audited standalone financial statements for financial

years 2010, 2011 and 2012 are set forth below:


2. Reliance Equity Advisors (India) Limited


Reliance Equity Advisors (India) Limited was incorporated in India, under the Companies Act on May 4, 2005. Reliance Equity

Advisors (India) Limited is engaged in the business of providing investment advisory services.


Reliance Capital Limited holds 100.00% interest in Reliance Equity Advisors (India) Limited.

Financial Information The brief financial details of Reliance Equity Advisors (India) Limited derived from its audited standalone financial statements for



Particulars


year 2011


year 2012


year 2013

Equity Capital 5.00 5.00 5.00

Reserves (excluding revaluation reserves) (1,526.55) (1,446.96) (1,318.98)


Profit After Tax 226.44 79.58 127.97

Basic and Diluted EPS (in `) 452.88 159.16 255.95

Net asset value per share (in `) (3,043.10) (2,883.92) (2,627.98)

3. Reliance Spot Exchange Infrastructure Limited


Reliance Spot Exchange Infrastructure Limited was incorporated in India, under the Companies Act on January 12, 2009. Reliance Spot

Exchange Infrastructure Limited is engaged in the business of commodity spot exchange.


Reliance Capital Limited holds 100.00% interest in Reliance Spot Exchange Infrastructure Limited.

Particulars As at and for the financial

year 2010


year 2011

As at and for the financial year

2012

Equity Capital 10,000 10,000 10,000

Reserves & Surplus (excluding

revaluation reserves)

(671) (3,793) (6,349)

Sales & Other Income 1,121 1,396 1,066

Profit After Tax (554) (3,122) (2,556)

Basic and Diluted EPS (0.37) (1.56) (1.28)

Net asset value per share 4.66 3.10 1.83

214


The brief financial details of Reliance Spot Exchange Infrastructure Limited derived from its audited standalone financial statements for



Particulars


year 2011


year 2012


year 2013

Equity Capital 1,765.00 1,765.00 1,765.00

Reserves (excluding revaluation reserves) (1,524.72) (2,073.35) (2,201.80)

Sales & Other Income 19.91 56.25 54.27

Profit After Tax (648.48) (550.98) (128.45)

Basic and Diluted EPS (in `) (42.98) (3.12) (0.73)

Net asset value per share (in `) 1.36 (1.75) (2.48)

4. Viscount Management Services Limited


Viscount Management Services Limited was incorporated in India, under the Companies Act on May 8, 1995. It is engaged in the

business of providing consultancy services various fields including, management, finance and commerce to any person or corporation.

Interest of the Promoter

Reliance Capital Limited holds 17.74% and Reliance Land Private Limited holds 46.27% interest in Viscount Management Services

Limited.


The brief financial details of Viscount Management Services Limited derived from its audited standalone financial statements for



Particulars


year 2010


year 2011


year 2012

Equity Capital 6.00 6.00 23.00

Reserves (excluding revaluation reserves) 15,507.67 12,904.1 (2,493.96)

Sales & Other Income 0.00 1.15 0.00

Profit After Tax (7,400.29) (7,144.15) (7,996.66)

Basic and Diluted EPS (in `) (12,333.81) (11,906.91) (5,024.07)

Net asset value per share (in `) 25,856.12 21,516.83 (1,074.33)

5. Indian Agri Services Private Limited


Indian Agri Services Private Limited was incorporated in India, under the Companies Act on April 29, 2011. Indian Agri Services

Private Limited is engaged in the business and services of handling, delivering commodities / things / produce from gate level to

consumers.


Reliance Capital Limited holds 100% interest in Indian Agri Services Private Limited.

215


The brief financial details of Indian Agri Services Private Limited derived from its audited standalone financial statements for financial

years 2011, 2012 and 2013 are set forth below:


Particulars


year 2011


year 2012


year 2013

Equity Capital NA 3.00 12.00

Reserves (excluding revaluation reserves) NA (6.60) (6.64)

Sales & Other Income NA 288.08 3.17

Profit After Tax NA (6.60) (0.04)

EPS/ Diluted EPS (in `) NA (21.99) (0.04)

Net asset value per share (in `) NA (12.00) 4.46

Other Group Companies

Details of other Group Companies are as follows:

1. Adhar Project Management & Consultancy Private Limited


Adhar Project Management & Consultancy Private Limited was incorporated in India, under the Companies Act on June 11, 2008. Adhar

Project Management & Consultancy Private Limited is engaged in the business of providing management consultancy services.


Reliance Land Private Limited holds 100.00% interest in Adhar Project Management & Consultancy Private Limited.

2. Ammolite Holdings Limited


Ammolite Holdings Limited was incorporated in Jersey, UK, under the relevant applicable laws on August 26, 2005. Ammolite Holdings

Limited is engaged in the business of managerial, technical, chartering, and agency services.


Reliance Capital Limited and Reliance Land Private Limited each holds 50.00% interest in Ammolite Holdings Limited.

3. QOPPA Trading Private Limited


QOPPA Trading Private Limited was incorporated in India, under the Companies Act on February 28, 2011. QOPPA Trading Private

Limited is engaged in the business of investment and trading activities.


Reliance Capital Limited holds 74.00% interest in QOPPA Trading Private Limited.



Quant Broking Private Limited was incorporated in India, under the Companies Act on December 4, 2007. Quant Broking Private

216

Limited is engaged in the business of broking.


Reliance Capital Limited holds 74.00% interest in Quant Broking Private Limited.



Quant Capital Advisors Private Limited was incorporated in India, under the Companies Act on March 9, 2009. Quant Capital Advisors

Private Limited is engaged in the business of providing mutual fund advisory services.


Reliance Capital Limited holds 74.00% interest in Quant Capital Advisors Private Limited.



Quant Capital Finance and Investments Private Limited was incorporated in India, under the Companies Act on December 31, 1981.

Quant Capital Finance and Investments Private Limited is a non banking financial institution.


Reliance Capital Limited holds 74.00% interest in Quant Capital Finance and Investments Private Limited.



Quant Capital Private Limited was incorporated in India, under the Companies Act on December 4, 2007. Quant Capital Private Limited

is engaged in the business of providing investment and financial services.


Reliance Capital Limited holds 74.00% interest in Quant Capital Private Limited.



Quant Commodities Private Limited was incorporated in India, under the Companies Act on March 9, 2009. Quant Commodities Private

Limited is engaged in the business of commodity exchange.


Reliance Capital Limited holds 74.00% interest in Quant Commodities Private Limited.

9. Quant Commodity Broking Private Limited


Quant Commodity Broking Private Limited was incorporated in India, under the Companies Act on March 9, 2009. Quant Commodity

Broking Private Limited is engaged in the business of commodity broking.

217


Reliance Capital Limited holds 74.00% interest in Quant Commodity Broking Private Limited.

10. Quant Investment Services Private Limited


Quant Investment Services Private Limited was incorporated in India, under the Companies Act on March 18, 2011. Quant Investment

Services Private Limited is engaged in the business of providing advisory services.


Reliance Capital Limited holds 74.00% interest in Quant Investment Services Private Limited.



Quant Securities Private Limited was incorporated in India, under the Companies Act on December 4, 2007. Quant Securities Private

Limited is engaged in the business of stock broking.


Reliance Capital Limited holds 74.00% interest in Quant Securities Private Limited.



QCAP Trade Private Limited was incorporated in India, under the Companies Act on March 1, 2011. QCAP Trade Private Limited is

engaged in the business of investment and trading activities.


Reliance Capital Limited holds 74.00% interest in QCAP Trade Private Limited.

13. Quant Alternative Asset Management Private Limited


Quant Alternative Asset Management Private Limited was incorporated in India, under the Companies Act on October 12, 2012. Quant

Alternative Asset Management Private Limited is engaged in the business of Investment and Asset Management activities


Reliance Capital Limited holds 74.00% interest in Quant Alternative Asset Management Private Limited.

14. Reliance Alternative Investments Services Private Limited


Reliance Alternative Investments Services Private Limited was incorporated in India, under the Companies Act on September 26, 2008.

Reliance Alternative Investments Services Private Limited is engaged in the business of providing services of a trustee.

218


Reliance Capital Limited holds 100% interest in Reliance Alternative Investments Services Private Limited.

15. Reliance Asset Management (Malaysia) SDN. BHD.


Reliance Asset Management (Malaysia) SDN. BHD. was incorporated in Malaysia, under the applicable Malaysian law on February 20,

2009. Reliance Asset Management (Malaysia) SDN. BHD. is engaged in the business of Islamic fund management.


Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Malaysia) SDN. BHD.

16. Reliance Asset Management (Mauritius) Limited


Reliance Asset Management (Mauritius) Limited was incorporated in Mauritius, under the applicable Mauritius law on December 27,

2004. Reliance Asset Management (Mauritius) Limited is engaged in the business of providing investment management and advisory

services to collective investment schemes.


Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Mauritius) Limited.

17. Reliance Asset Management (Singapore) Pte Limited


Reliance Asset Management (Singapore) Pte Limited was incorporated in Singapore, under the applicable Singapore law on August 22,

2005. Reliance Asset Management (Singapore) Pte Limited is engaged in the business of providing fund management services.


Reliance Capital Limited holds 65.23% interest in Reliance Asset Management (Singapore) Pte Limited.



Reliance Asset Reconstruction Company Limited was incorporated in India, under the Companies Act on April 17, 2006. Reliance Asset

Reconstruction Company Limited is engaged in the business of asset reconstruction and securitization.


Reliance Capital Limited holds 49% interest in Reliance Asset Reconstruction Company Limited.

19. Reliance Capital (Singapore) Pte. Limited


Reliance Capital (Singapore) Pte. Limited is a private company with limited liability, incorporated in Singapore, on 7 August 2008.

Reliance Capital (Singapore) Pte. Limited is registered with the Accounting and Corporate Regulatory Authority with registration

number 200815527C. Reliance Capital (Singapore) Pte. Limited’s objective is to carry on or undertake any business or activity

(including but not limited to investment holding company).

219


Reliance Capital Limited holds 100.00% interest in Reliance Capital (Singapore) Pte. Limited.

20. Reliance Capital Asset Management (UK) Plc.


Reliance Capital Asset Management (UK) Plc. was incorporated in UK, under the applicable UK law on May 23, 2007. Reliance Capital

Asset Management (UK) Plc. is engaged in the business of providing financial advisory services.


Reliance Capital Limited holds 65.23% interest in Reliance Capital Asset Management (UK) Plc.

21. Reliance Capital Partners


Reliance Capital Partners is a partnership firm constituted in India, under the Indian Partnership Act, 1932 on April 19, 2006. Reliance

Capital Partners is engaged in the business of trading in various commodities and articles other than securities.


Reliance Capital Partners is a partnership firm. Reliance Capital Limited and Reliance Land Private Limited are its partners.

22. Reliance Capital Pension Fund Limited


Reliance Capital Pension Fund Limited was incorporated in India, under the Companies Act on March 31, 2009. Reliance Capital

Pension Fund Limited is engaged in the business of managing pension funds and undertaking related activities.


Reliance Capital Limited holds 70.45% interest in Reliance Capital Pension Fund Limited.

23. Reliance Capital Trustee Co. Limited


Reliance Capital Trustee Co. Limited was incorporated in India, under the Companies Act on March 1, 1995. Reliance Capital Trustee

Co. Limited is engaged in the business of providing trusteeship services and act as administrator of mutual funds. Reliance Capital

Trustee Co. Limited is the trustee for Reliance Mutual Fund.


Reliance Capital Limited holds 100.00% interest in Reliance Capital Trustee Co. Limited.



Reliance Commodities Limited was incorporated in India, under the Companies Act on July 8, 2005. Reliance Commodities Limited is

engaged in the business of Commodities Broking.

220


Reliance Capital Limited holds 100.00% interest in Reliance Commodities Limited.



Reliance Composite Insurance Broking Limited was incorporated in India, under the Companies Act on October 24, 1994. Reliance

Composite Insurance Broking Limited is engaged in the business of insurance broking.


Reliance Capital Limited holds 99.60% in Reliance Securities Limited.

Reliance Securities Limited holds 51.79% interest in Reliance Composite Insurance Broking Limited.

26. Reliance Consultants (Mauritius) Ltd.


Reliance Consultants (Mauritius) Ltd. was incorporated in Mauritius, under the applicable Mauritius law on March 10, 2008. Reliance

Consultants (Mauritius) Ltd. is engaged in the business of providing investment advisory services.


Reliance Capital Limited holds 100.00% interest in Reliance Consultants (Mauritius) Ltd.



Reliance Exchangenext Limited was incorporated in India, under the Companies Act on July 7, 2000. Reliance Exchangenext Limited is

engaged in the business of forming and promoting stock exchanges.


Reliance Capital Limited holds 100.00% interest in Reliance Exchangenext Limited.

28. Reliance Financial Limited


Reliance Financial Limited was incorporated in India, under the Companies Act on August 26, 2005. Reliance Financial Limited is

registered with RBI as a Non Banking Financial Company. Reliance Financial Limited is engaged in the business of providing financial

services.


Reliance Capital Limited holds 100.00% interest in Reliance Financial Limited.

29. Reliance Gilts Limited


Reliance Gilts Limited was incorporated in India, under the Companies Act on August 17, 2000. Reliance Gilts Limited is engaged in the

business of dealing in government securities.

221


Reliance Capital Limited holds 100.00% interest in Reliance Gilts Limited.

30. Reliance Home Finance Limited


Reliance Home Finance Limited was incorporated in India, under the Companies Act on June 5, 2008. Reliance Home Finance Limited

is engaged in the business of providing home finance and other allied services.


Reliance Capital Limited holds 100.00% interest in Reliance Home Finance Limited.

31. Reliance Financial Advisory Services Limited (formerly Reliance Investment Banking Services Limited)


Reliance Financial Advisory Services Limited was incorporated in India as Reliance Investment Banking Services Limited, under the

Companies Act on May 22, 2008. Reliance Investment Banking Services Limited is engaged in the business of providing investment /

merchant banking services.


Reliance Capital Limited holds 100.00% interest in Reliance Financial Advisory Services Limited.

32. Reliance Money Express Limited


Reliance Money Express Limited was incorporated in India, under the Companies Act on November 28, 2002. Reliance Money Express

Limited is registered with RBI for providing services as a full –fledged money changer (FFMC) and money transfer services.


Reliance Capital Limited holds 100.00% interest in Reliance Money Express Limited.

33. Reliance Money Precious Metals Private Limited (formerly Reliance Capital Research Private Limited)


Reliance Money Precious Metals Private Limited was incorporated in India, under the Companies Act on October 5, 2006.

Reliance Money Precious Metals Private Limited is engaged in the business of offering Gold Accumulation Plans to retail investors.


Reliance Capital Limited holds 100.00% interest in Reliance Money Precious Metals Private Limited.

34. Reliance Share & Stock Brokers Private Limited


Reliance Share & Stock Brokers Private Limited was incorporated in India, under the Companies Act on November 26, 1993. Reliance

Share & Stock Brokers Private Limited is engaged in the business of share and stock broking services.

222


Reliance Capital Limited and Reliance Land Private Limited each hold 50.00% interest in Reliance Share & Stock Brokers Private

Limited.

35. Reliance Venture Asset Management Private Limited


Reliance Venture Asset Management Private Limited was incorporated in India, under the Companies Act on October 6, 2006. Reliance

Venture Asset Management Private Limited is engaged in the business of providing venture capital services.


Reliance Capital Limited holds 100.00% interest in Reliance Venture Asset Management Private Limited.

36. Reliance Wealth Management Limited


Reliance Wealth Management Limited was incorporated in India, under the Companies Act on January 1, 2009. Reliance Wealth

Management Limited is engaged in the business of providing portfolio / wealth management services.


Reliance Capital Limited holds 100.00% interest in Reliance Wealth Management Limited.

37. Reliance Capital AIF Trustee Private Limited


Reliance Capital AIF Trustee Private Limited was incorporated in India, under the Companies Act on September 21, 2006. Reliance

Capital AIF Trustee Private Limited is engaged in the business to act as trustee, settlor, administrator, representative or nominee of or for

any investment funds, alternative investment funds.


Reliance Capital Limited holds 100.00% interest in Reliance Capital AIF Trustee Private Limited.



Reliance CWT India Limited was incorporated on January 12, 2009, in India, under the Companies Act. Reliance CWT India Limited is

engaged in the business of managing commodity exchange deliveries for spot and derivatives trading.


Reliance Capital Limited holds 18% interest in Reliance CWT India Limited

Common Pursuits amongst our Group Companies with our Company

There are no common pursuits amongst any of our Group Companies and our Company.

Related Business Transactions within our Group Companies and Significance on the Financial Performance of our Company

For details, please see the chapter entitled “Financial Statements” at page F-1 of this Letter of Offer.

223

Sale/ Purchase between Group Companies

Our Company does not have any sales/purchase arising out of any transaction with any group company exceeding aggregate 10% of total

sales or purchase of our Company during the financial years 2012, 2011, 2010, 2009 and 2008.

COMPANIES WITH WHICH OUR PROMOTERS HAVE DISASSOCIATED IN THE LAST THREE YEARS

Except as disclosed below, our Promoters have not disassociated from any company during the preceding three years from the date of

this Letter of Offer:

Reliance Capital Limited has disassociated from Medybiz Private Limited, Net Logistics Private Limited, Reliance Capital Services

Private Limited And Reliance Infrastructure Finance Private Limited as a result of sale of shares held by it in these companies. Reliance

Commercial Finance Private Limited, Viscount Management Services (Alpha) Limited , Emerging Money Mall Limited and Reliance

Equities International Private Limited have been amalgamated with Reliance Capital Limited. Further, Reliance Capital Infrastructure

Partners has been dissolved. Accordingly Reliance Capital Limited has ceased to be a partner.

224

DIVIDEND POLICY

The declaration and payment of dividends will be recommended by our Board of Directors and approved by the shareholders of our

Company, at their discretion, subject to the provisions of the Articles of Association and the Companies Act. The dividend, if any, will

depend on a number of factors, including but not limited to the future expansion plans and capital requirements, profit earned during the

financial year, liquidity and applicable taxes including dividend distribution tax payable by our Company.

Our company has not paid any dividend on the Equity Shares for financial years 2010, 2011 and 2012.

F-1

SECTION V: FINANCIAL STATEMENTS

Sr. No. Particulars Pg No.

1. Audited restated consolidated financial statements as of and for the six months period

ended March 31, 2013, as of and for the eighteen months period ended September 30,

2012, as of and for the year ended March 31, 2011, as of and for the year ended March

31, 2010, as of and for the year ended March 31, 2009, as of and for the nine months

period ended March 31, 2008.

F-2 – F-146

2. Audited restated standalone financial statements as of and for the six months period

ended March 31, 2013, as of and for the eighteen months period ended September 30,

2012, as of and for the year ended March 31, 2011, as of and for the year ended March

31, 2010, as of and for the year ended March 31, 2009, as of and for the nine months

period ended March 31, 2008.

F-146 – F-260

3. Pro Forma Financials F-261 – F-264

4. Statement of capitalisation post issue F-265 – F-267

F-2

The Board of Directors


Film City Complex

Goregaon (East)

MUMBAI 400 065

July 3, 2013

Dear Sirs,

1. We have examined the attached restated summary consolidated financial information of

Reliance MediaWorks Limited („RMWL‟ or „the Company‟ or „the Parent Company‟) and

its subsidiaries, joint ventures and associate / s (together referred to as „the Group‟), as

approved by the Board of Directors of the Company, prepared in terms of the requirements

of Paragraph B, Part II of Schedule II to the Companies Act, 1956 ('the Act'), the Securities

and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations

2009, as amended to date, to the extent applicable („SEBI Regulations‟), the Guidance note

on „Reports in Company Prospectus (Revised)‟ issued by the Institute of Chartered

Accountants of India („ICAI‟), to the extent applicable („Guidance Note‟), and in terms of

our engagement agreed upon with you in accordance with our engagement letter dated

July 3, 2013 in connection with the proposed Issue of Equity Shares of the Company on a

rights basis.

2. We have examined the attached Summary Statement of Assets and Liabilities, as restated,

of the Group as at March 31, 2013, September 30, 2012, March 31, 2011, March 31, 2010,

March 31, 2009 and March 31, 2008, the attached Summary Statement of Profit and Loss,

as restated, of the Group for the six months ended March 31, 2013, eighteen months period

ended September 30, 2012, year ended March 31, 2011, year ended March 31, 2010, year

ended March 31, 2009 and nine months ended March 31, 2008 and the attached Summary

Statement of Cash Flow, as restated, of the Group for the six months ended

March 31, 2013, eighteen months period ended September 30, 2012, year ended

March 31, 2011, year ended March 31, 2010, year ended March 31, 2009 and nine months

ended March 31, 2008, as set out in Annexure I, Annexure II and Annexure III

respectively, together referred to hereinafter as the „Restated Summary Statements of the

Group‟. These Restated Summary Statements of the Group have been prepared by the

management of the Company from the audited condensed consolidated financial

statements for the six months ended March 31, 2013 which have been approved by the

Board of Directors and from the audited consolidated financial statements for the eighteen

months period ended September 30, 2012 for the year ended March 31, 2011, year ended

March 31, 2010, year ended March 31, 2009 and nine months ended March 31, 2008,

being the last five financial years / periods for which the consolidated accounts of the

Group have been made up, and have been approved by the Board of Directors of the

Company for the respective years and approved by the members of the Company. The

consolidated financial statements of the Company as at and for the year ended

March 31, 2009 and nine months ended March 31, 2008 have been audited by one of the

joint auditors, B S R & Co., Chartered Accountants. The condensed consolidated financial

statement as at and for the six month ended March 31, 2013, consolidated financial

statements for the eighteen months ended September 30, 2012 and the financial statements

as at and for the year ended March 31, 2011 and as at and for the year ended March

31, 2010 have been audited by us.

F - 3

a. In the consolidated financial statements for the nine months ended March 31, 2008, the

joint auditors, B S R & Co., Chartered Accountants, have relied on reports of other

auditors for subsidiaries, associate and certain joint ventures not audited by them, whose

financial statements reflect the Group‟s share of total assets of ` 4,200.20 lakhs as at

March 31, 2008 and the Group‟s share of total revenues of ` 3,490.00 lakhs and net cash

inflows of ` 3,256.30 lakhs for the nine months ended March 31, 2008.

b. In the consolidated financial statements for the year ended March 31, 2009, the joint

auditors, B S R & Co., Chartered Accountants, have relied on reports of other auditors for

subsidiaries, associate and certain joint ventures not audited by them, whose financial

statements reflect the Group‟s share of total assets of ` 40,048.70 lakhs as at March

31, 2009 and the Group‟s share of total revenues of ` 20,003.80 lakhs and net cash inflows

of ` 1,323.60 lakhs for the year ended March 31, 2009.

c. In the consolidated financial statements for the year ended March 31, 2010:

i) the financial statements of Swanston Multiplex Cinemas Private Limited, a joint

venture has been audited by one of the joint auditors, B S R & Co., Chartered

Accountants, whose financial statements reflect Group‟s share of total assets of

` 937.60 lakhs as at March 31, 2010, Group‟s share of total revenues of ` 542.10 lakhs

and Group‟s share of net cash inflows aggregating ` 3.20 lakhs for the year ended on

that date;

ii) the financial statements of Adlabs Distributors and Exhibitors Limited, a subsidiary

has been audited by one of the joint auditors, Chaturvedi & Shah Chartered



and Group‟s share of net cash inflows aggregating ` 43.80 lakhs for the year ended on

that date;

iii) we have relied on reports of other auditors for certain subsidiaries, associate and

certain joint ventures not audited by us, whose financial statements reflect the

Group‟s share of total assets of ` 63,844.80 lakhs as at March 31, 2010 and the

Group‟s share of total revenues of ` 25,476.10 lakhs and Group‟s share of net cash

outflows aggregating ` 35.60 lakhs for the year ended on that date.

d. In the consolidated financial statements for the year ended March 31, 2011:

i) the financial statements of Swanston Multiplex Cinemas Private Limited a joint

venture has been audited by one of the joint auditors, B S R & Co., Chartered



and net cash outflows aggregating ` 46.70 lakhs for the year ended on that date;

ii) we have relied on reports of other auditors for certain subsidiaries and certain joint

ventures not audited by us, whose financial statements reflect the Group‟s share of

total assets of ` 70,293.40 lakhs as at March 31, 2011 and the Group‟s share of total

revenues of ` 32,236.50 lakhs and Group‟s share of net cash outflows aggregating

` 796.19 lakhs for the year ended on that date.

e. In the consolidated financial statements for the eighteen months ended

September 30, 2012, we have relied on reports of other auditors for certain subsidiaries

and certain joint ventures not audited by us, whose financial statements reflect the

Group‟s share of total assets of ` 58,143.20 lakhs as at September 30, 2012 and the

Group‟s share of total revenues of ` 45,324.60 lakhs and Group‟s share of net cash

inflows aggregating ` 1,494.80 lakhs for the eighteen months ended on that date.

F - 4

f. In the consolidated financial statements for the six months ended March 31, 2013, we

have relied on reports of other auditors for certain subsidiaries and certain joint ventures

not audited by us, whose financial statements reflect the Group‟s share of total assets of ` 54,710.28 lakhs as at March 31, 2013 and the Group‟s share of total revenues of ` 12,661.40 lakhs and Group‟s share of net cash outflows aggregating ` 854.70 lakhs for the

six months ended on that date.

3. Without qualifying our report, we draw attention to the following:

a) As set out in paragraph (a) (i) of Note D of Annexure IV to this report, the Group‟s net

worth is fully eroded and has a negative net worth of ` 92,707.78 Lakh (as restated), the

Group has incurred a loss of ` 34,044.77 lakh (as restated) for the period October 1, 2012

to March 31, 2013, indicating the existence of uncertainty that may cast doubt about the

Group‟s ability to continue as a going concern. Considering the matters set out in the said

note, this Restated Summary Statement, of the Group is prepared on a going concern

basis.

b) As set out in paragraph (b) (i) of Note D of Annexure IV to this report, the Group‟s net

worth is fully eroded and has a negative net worth of ` 58,105.02 Lakh (as restated), the

Group has incurred a loss of ` 91,016.62 lakh (as restated) for the period April 1, 2011 to

September 30, 2012, indicating the existence of uncertainty that may cast doubt about the

Group‟s ability to continue as a going concern. Considering the matters set out in the said

note, this Restated Summary Statement, of the Group is prepared on a going concern

basis.

c) As set out in paragraph (e)(i) of Note D of Annexure IV, during the period ended March

31, 2008, the Hon‟ble High Court of Judicature at Bombay vide its order dated March

7, 2008 sanctioned the Modified Composite Scheme of Amalgamation and Arrangement

(„Modified Scheme‟) for modification of the Composite Scheme. The Modified Scheme

was filed with the ROC on March 31, 2008. The Modified Scheme inter-alia provides

that the net results of the transactions related to the radio business of the Company for the

period from March 31, 2006 to the Effective Date (i.e. the date of filing the Modified

Scheme with the ROC, March 31, 2008) be adjusted in the General reserve account of the

Company. The Composite Scheme was given effect to in accordance with the accounting

treatment prescribed by the said Scheme in the consolidated financial statements for the

fifteen months ended June 30, 2007 and, only the modifications to the original scheme

were have been given effect to in the consolidated financial statements for the nine

months ended March 31, 2008.

d) As set out in paragraph (d)(ii) of Note D and point 2 of paragraph IV of Note E of

Annexure IV, during the year ended March 31, 2009, the Hon‟ble High Court of

Judicature at Mumbai vide its order dated May 8, 2009 sanctioned the Scheme of

Amalgamation of the Company with its wholly owned subsidiaries Adlabs Multiplex and

Theatres Limited, Adlabs Multiplex Limited, Rave Entertainment Private Limited and

Mahimna Entertainment Private Limited („Amalgamation Scheme‟), under sections 391

to 394 of the Act. Pursuant to the said Amalgamation Scheme, the Company has

recorded an increase in value of its assets aggregating ` 17,890.10 lakhs by crediting the

Capital reserve. Further, the Company has recorded an adjustment for diminution in

value of its assets (production and distribution rights, fixed assets, investments, debtors

and loans and advances) aggregating ` 15,669.70 lakhs by debiting the same to Capital

reserve instead of the profit and loss account, had the Company debited the profit and loss

account, the loss before tax for the year would be higher by the said amount.

F - 5

4. Effective April 1, 2011, revised Schedule VI notified vide Notification No. S.O. 447(E), dated

February 28, 2011 (as amended by Notification No. 2/6/2008-CL-V, dated 30-3-2011) and

General Circular No. 62/2011 F No. 17/244/2011-CL-V, dated September 5, 2011 under the

Act has become applicable to the Group for preparation and presentation of these Summary

financial statements, as restated of the Group. Accordingly, the Group has prepared these

Restated Summary Statements as per revised Schedule VI. The adoption of revised Schedule

VI does not impact recognition and measurement principles followed for preparation of

annual financial statements, however it introduces additional new disclosures, including

compulsory classification of all assets and liabilities into current and non-current.

Further, we draw attention to the fact that for the purposes of these Restated Summary

Statements, due to practical difficulties, restatement/ reclassification of the summary financial

information as per revised Schedule VI, pertaining to certain subsidiaries, associate/s and

certain joint ventures, the said restatement/ reclassification for the year / period ended March

31, 2010, March 31, 2009 and nine months ended March 31, 2008 has not been audited by the

respective auditor. Such financial information, as approved by the Board of Directors of the

Company and certified by a Proprietor / firm of chartered accountant have been furnished to

us by the management of the Company and our report in so far as it relates to the amounts

included in respect of such subsidiaries, associate/s and joint venture is based solely on such

certified summary financial information.

5. In accordance with the requirements of Paragraph B, Part II of Schedule II of the Act, the

SEBI Regulations, the Guidance Note and in accordance with the terms of our engagement

agreed with you, and read with paragraphs 2 and 4 above and with regards to adjustments for

matters of emphasis in the Auditors‟ report as stated in paragraph 3 above, we confirm/

further report that the Restated Consolidated Summary Statements examined by us and as set

out in Annexure I, Annexure II and Annexure III to this report are prepared after making

adjustments and regrouping as in our opinion were appropriate and as are more fully

described in the significant accounting policies and notes to the Restated Summary

Statements of the Group enclosed as Annexure IV to this report.

6. Based on the above, read with the matters stated in paragraph 2 and 4 above and with regards

to adjustments for matters of emphasis in the Auditors‟ report as stated in paragraph 3 above,

we are of the opinion that the Restated Summary Statements of the Group have been made

after incorporating:

i. Adjustments for the changes in accounting policies adopted by the Company

retrospectively in respective financial years / periods to reflect the same accounting

treatment as per changed accounting policy for all the reporting periods;

ii. Adjustments for material amounts in the respective financial years/ periods to which they

relate;

iii. Adjustments for qualifications, as applicable in the Auditors‟ reports in the respective

years/ periods to which they relate; and

iv. There are no extraordinary items that need to be disclosed separately in the Restated

Summary Statements of the Group.

7. We have also examined the following other restated financial information set out in the

Annexures prepared by the management and approved by the Board of Directors, relating to

the Restated Summary Statements of the Group and annexed to this report.

a) Statement of share capital of the Group, enclosed as Annexure V

b) Summary statement of reserves and surplus of the Group, enclosed as Annexure VI

F - 6

c) Statement of non-current investment, deferred tax assets, long-term loans and advances

and other non-current assets, of the Group, enclosed as Annexure VII

d) Statement of current assets of the Group, enclosed as Annexure VIII

e) Statement of non-current liabilities of the Group, enclosed as Annexure IX

f) Statement of current liabilities of the Group, enclosed as Annexure X

g) Statement of revenue of the Group, enclosed as Annexure XI

h) Statement of other income of the Group, enclosed as Annexure XII

i) Statement of contingent liabilities and commitments of the Group, enclosed as Annexure

XIII

j) Statement of accounting ratios of the Group, enclosed as Annexure XIV

k) Statement of principal terms and conditions of long-term borrowings and short-term

borrowings of the Group, enclosed as Annexure XV

l) Statement of capitalization of the Group, as at March 31, 2013, enclosed as Annexure

XVI

m) Statement of dividend paid/ proposed of the Group, enclosed as Annexure XVII

n) Statement of related party disclosures of the Group, enclosed as Annexure XVIII

o) Statement of Segment Information of the Group, enclosed in Annexure XIX.

8. In our opinion, the Restated Summary Statements, as restated of the Group contained in Annexure

I, Annexure II and Annexure III to this report, read with the significant accounting policies and

notes disclosed in Annexure IV and other financial information contained in Annexure V to

Annexure XIX of this report and read with paragraphs 2, 3 and 4 above and note 2 and 3 disclosed

in Annexure VII and Annexure VIII respectively, have been prepared in accordance with

Paragraph B, Part II of Schedule II of the Act and the SEBI Regulations.

9. The report should not in any way be construed as a reissuance or redating of any of the previous

audit reports issued by us or by the other firm of Chartered Accountants, nor should this report be

construed as a new opinion on any consolidated financial statements referred to herein.

10. We have no responsibility to update our report for events and circumstances occurring after the

date of the report.

11. This report is intended solely for use of the management and for inclusion in the Offer Document

in connection with the proposed issue of equity shares of the Company on a rights basis, and is not

to be used, referred to or distributed for any other purpose without our prior written consent.

For B S R & Co.

Chartered Accountants

Firm‟s Registration No: 101248W

For Chaturvedi & Shah



Bhavesh Dhupelia

Partner

Membership No: 042070

Mumbai

Parag D. Mehta

Partner


Mumbai

F - 7

Annexure I



(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

Assets

A Non-current

assets

I Fixed assets

(i) Tangible

assets 81,929.44 89,148.54 111,782.74 104,933.32 80,215.84 40,666.60

(ii) Intangible

assets 7,925.80 8,895.80 8,804.20 6,034.60 3,249.60 18,251.60

(iii) Capital

work-in-

progress 8,880.60 12,010.90 15,029.90 24,538.92 21,203.60 21,331.01

(iv) Intangible

assets under

development - 285.90 - 132.51 - -

II Goodwill on

consolidation 5,149.02 5,145.32 8,819.42 8,728.62 4,202.56 2,746.76

III Non-current

investments 8,836.30 553.34 1,092.99 1,272.41 1,161.72 6,991.37

IV Deferred tax

assets (net) 26.11 14.31 2.60 2.20 18.70 64.40

V Long-term loans

and advances 22,803.90 23,687.28 29,369.76 27,166.38 24,816.84 29,293.35

VI Other non-

current assets 583.90 62.00 389.30 277.42 59.41 43.75

136,135.07 139,803.39 175,290.91 173,086.38 134,928.27 119,388.84

B Current assets

I Current

investments - - 10.44 7,902.30 - 13,556.71

II Inventories 1,151.00 1,417.70 1,325.30 907.20 690.50 761.30

III Trade

receivables 18,546.30

18,673.04 21,600.60 23,230.60 21,031.70 12,141.50

IV Cash and bank

balances 9,395.50 11,198.70 11,772.99 8,270.97 7,881.99 12,376.49

V Short-term

loans and

advances 5,659.00 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61

VI Other current

assets 1,465.80 2,041.40 5,570.80 2,789.90 4,401.30 4,027.96

36,217.60 46,293.94 53,482.14 79,667.62 68,885.16 67,888.57

F - 8

Annexure I



(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

Liabilities

C Non-current

liabilities

I Long-term

borrowings 37,443.20 75,668.37 44,430.11 40,405.00 57,360.46 53,099.90

II Deferred tax

liabilities (net) - - 516.39 63.39 66.59 192.03

III Other long-term

liabilities 4,062.40 3,639.00 2,909.05 1,468.90 871.85 342.98

IV Long-term

provisions 545.10 621.10 774.71 383.20 3,434.40 3,038.99

42,050.70 79,928.47 48,630.26 42,320.49 61,733.30 56,673.90

D Minority

interest 1,216.98 1,074.08 1,347.88 1,736.58 3,006.58 1,621.78

E Current

liabilities

I Short-term

borrowings 145,385.80 106,771.10 103,178.16 117,402.75 72,109.67 41,319.22


III Other current

liabilities 61,080.90 37,260.10 59,759.57 44,224.02 9,204.87 9,049.62

IV Short-term

provisions 271.50 200.90 215.99 165.91 230.40 1,826.01

221,792.77 163,199.80 176,089.69 172,880.96 89,832.56 61,198.68

F Net Worth

(A+B-C-D-E) (92,707.78) (58,105.02) 2,705.22 35,815.97 49,240.99 67,783.05

G Represented by

i) Share capital 2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31

ii) Reserves and

surplus (net) (95,161.59) (60,558.83) 398.91 33,509.66 46,934.68 65,476.74

H Net worth (i +

ii) (92,707.78) (58,105.02) 2,705.22 35,815.97 49,240.99 67,783.05

The above statement should be read together with significant accounting policies and notes to

summary statement of assets and liabilities, as restated, of the Group (Annexure IV)

F - 9

Annexure II



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008


Other income 1,498.00 2,045.50 5,818.80 3,256.70 7,184.90 5,527.80

Total revenue 36,637.80 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74

Direct operational

expenses 14,321.70 49,304.20 31,059.80 28,102.00 23,868.30 9,792.00

Employee benefits

expense 8,975.90 31,712.30 20,979.80 13,179.30 10,147.60 2,605.10


loss on derivative

contracts) (net) 13,930.70 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24

Depreciation, amortisation

and impairment expense 7,723.40 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62

Other expenses 19,263.20 65,209.31 34,672.96 25,317.05 20,056.90 7,914.65

Total expenses 64,214.90 207,312.71 117,453.26 88,044.99 80,062.41 33,370.61

(Loss) / profit before

exceptional items, tax

and minority interest (27,577.10) (81,825.81) (32,427.06) (13,281.09) (6,942.17) 2,926.13

Exceptional items (Refer

note 8 of I of E of

Annexure IV and 12 of II

of E of Annexure IV) (6,001.07) (8,181.50) - - - -

(Loss) / profit before tax

and minority interest (33,578.17) (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13


- Current tax 232.90 769.50 113.90 39.77 416.36 228.29

- Deferred tax (credit) /

charge (11.80) (492.59) 452.69 13.25 (69.44) 551.72


Net (loss) / profit after tax

before minority interest (33,799.27) (90,284.22) (32,993.65) (13,334.11) (7,460.79) 2,068.12

Less: (Loss) / profit

transferred to Minority

interest 245.50 732.40 (196.70) (530.87) (322.12) 53.80

F - 10

Annexure II



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008


before adjustment

pursuant to Schemes (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,138.67) 2,014.32

Add: Adjustment pursuant

to Modified Composite

Scheme of Amalgamation

and Arrangement - - - - - 84.20

Less: Adjustment

pursuant to Scheme of

Amalgamation of Katch

22 - - - - - (100.00)

Less: Adjustment

pursuant to Scheme of

Arrangement for

demerger of Radio

business/ Scheme of

Amalgamation - - - - (649.30) -


(Balance carried to

Annexure VI) (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,787.97) 1,998.52

The above statement should be read together with significant accounting policies and notes to summary

statement of profit and loss, as restated, of the Group (Annexure IV)







F - 11

Annexure III



(` in lakhs)

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

A

Cash flow from


Net (loss) / profit

before tax, as

restated (33,578.17) (90,007.31) (32,427.06) (13,281.09) (6,942.17) 2,926.13

Adjustment for

Depreciation,

amortisation and

impairment expense 9,608.00 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62

Bad debts /

Advances written off 155.53 1,010.40 201.20 152.10 348.40 391.00

Sundry balances

written-off 16.50 981.50 - - - -

Provisions written

back - - - (241.70) - -

Capital work in

progress written off 2,902.70 4,424.60 - - - -

Provision for

doubtful debts and

advances 590.00 4,767.92 1,666.30 121.90 - 3.20

Dividend income - (0.40) - - (132.60) (127.40)

Interest income (226.50) (1,255.70) (868.40) (538.60) (967.10) (967.70)


contract - - - - - (977.40)

Loss / (profit) on

sale / discarding of

fixed assets (net) 2.10 669.80 (2,694.80) 70.60 6.80 57.20

Loss on disposal of

subsidiaries - 2,722.92 - - - -

Gain on sale of

current investments (57.50) (39.50) (423.60) (274.40) (269.20) (32.40)

Gain on sale of

investments - - - - (1,700.00) (2,660.30)

Unrealised foreign

exchange (gain) /

loss (1,250.80) (2,304.85) (129.80) (474.39) (1,136.60) 16.70

Finance costs

(including loss on

derivative contracts)

(net) 13,930.70 39,751.40 17,514.20 11,717.20 12,447.20 2,905.24

Operating profit

before working

capital changes and

before net results

of Radio Business (7,907.44) (17,943.72) (3,935.46) 6,981.06 15,197.14 11,687.89

F - 12

Annexure III



(` in lakhs)

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Adjustment for cash

loss pertaining to

transaction relating

to Radio business till

March 31, 2008,

pursuant to the

Modified Composite

Scheme of

Amalgamation and

Arrangement - - - - - (8,377.00)

(7,907.44) (17,943.72) (3,935.46) 6,981.06 15,197.14 3,310.89

Operating profit

before working

capital changes

Adjustment for :

(Increase) /

decrease in trade

receivables (258.90) (2,083.40) (393.30) (2,513.90) (17,371.80) (7,658.94)

Decrease / (increase)

in loans and

advances and other

assets 5,800.60 2,806.20 (5,004.24) (1,670.40) 7,719.20 (1,370.40)

(Increase) / Decrease

/ in

Inventories 270.30 (178.50) (417.00) (231.50) 80.10 (551.40)

Increase / (decrease)

in trade and other

payable

(2,861.75) 7,912.90 3,345.12 4,196.26 (2,084.43) 10,404.08

Adjustment for

Katch 22 merger due

to Scheme of

Amalgamation

(Refer note 3 of VI

of E of Annexure

IV) - - - - - 23.30

Cash (used in) /

generated from

operating activities (4,957.19) (9,486.52) (6,404.88) 6,761.52 3,540.21 4,157.53

Taxes paid (net of

refunds) (2,363.40) 1,198.30 1,188.26 (1,467.09) (1,974.50) (1,628.70)

Net cash (used in) /

generated from


(A) (7,320.59) (8,288.22) (5,216.62) 5,294.43 1,565.71 2,528.83

F - 13

Annexure III



(` in lakhs)

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

B

Cash flow from


Purchase of fixed

assets (1,184.67) (8,721.73) (22,335.80) (40,917.60) (35,911.00) (49,772.50)

Proceeds from sale

of fixed assets 463.30 1,914.10 13,999.70 23.10 1,097.50 14.10

Purchase of

investment- long

term- in shares of

subsidiaries

companies/

joint venture/

associates

- (90.80) (3,001.00) (7,861.20) (2,653.60)

(1,147.81)

Profit from /

investment in mutual

funds (net) (27.00) 39.50 423.60 274.40 269.20 32.40

Redemption of /

investment in

mutual funds - - 7,983.98 (7,982.03) 13,556.69 (13,623.83)

Purchase of

investment- long

term- other - - - (9.90) (4.30) (0.30)

Proceeds on sale of

non-current

investments / rights

therein 338.30 9,092.50 23.10 4,066.80 3,127.30 -

(Investment in) /

withdrawals‟ from

Partnership firm (0.16) 33.26 (15.80) 371.80 278.30 -

Dividend income - - - - 132.60 127.40

Dividend income - 0.40 - - - -

Advance towards

share application - (6,811.20) - - - -

Interest income 260.10 1,368.30 784.50 647.30 1,626.10 288.20

Cash (used)/

generated in

investing activities (1,297.94) (3,084.87) 772.48 (46,527.13) (23,688.81) (65,588.13)

Taxed paid (net of

refunds) (9.20) (76.80) (25.80) (35.60) (103.10) (194.40)

Net Cash (used)/

generated in


(B) (1,307.14) (3,161.67) 746.68 (46,562.73) (23,791.91) (65,782.53)

F - 14

Annexure III



(` in lakhs)

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

C

Cash flow from


Proceeds from fresh

issue of share capital

(including share

premium) /

preference shares

(Refer note 2)

29,500.00 - - - -

-

Payment to Minority (53.57) (994.10) (228.60) (598.60) (212.90) -

Dividend tax paid on

distribution by

Subsidiaries and

joint ventures - - (9.10) - (12.80) -

Introduction of

capital by minority

partners in a

Subsidiary - - - 62.99 - -

Profit/ (loss) on

option contract - - - - - 977.40

Proceeds from long-

term borrowings - 68,308.50 39,775.90 5,489.00 7,826.10 40,000.00

Repayment of

Foreign currency

convertible bonds - - (15,814.50) - - -

(Repayment) /

proceeds from short

term borrowings

(net) 38,985.80 3,029.50 (1,003.80) 52,962.60 31,271.20 28,812.30

Repayment of long

term borrowings (18,248.00) (62,160.50) (17,083.30) - - -

Interest recoverable

from Reliance

Broadcast Network

Limited - - (1,448.60) (2,507.90) (2,584.90) -

Recovered from

Reliance Broadcast

Network

Limited pursuant to

demerger of Radio

business

9,961.40 20,000.00 - - -

63.80

Dividend (including

dividend tax) paid - (7.90) - - (1,349.20) (1,164.10)

Finance costs

(including loss on

derivative contracts)

(net) (10,425.70) (35,314.00) (18,773.50) (13,414.80) (11,287.10) (4,949.20)

Net cash generated

from (used in)


( C ) 10,119.13 12,322.90 5,414.50 41,993.29 23,650.40 63,676.40

F - 15

Annexure III



(` in lakhs)

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Net increase /

(decrease) in cash

and cash

equivalent

(A+B+C) 1,491.40 873.01 944.56 724.99 1,424.20 422.70

Cash and cash

equivalents as at

beginning of the

period 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40 5,101.00

Cash and cash

equivalents taken

over on acquisition

of subsidiaries - (794.96) - 292.10 611.90 -

Exchange gain / loss

on translation 36.80 99.20 20.10 (119.50) - -

Cash and cash

equivalents disposed

on sale of subs/ JV's - - - - - -

Adjustment from

Composite Scheme

of Amalgamation

and Arrangement /

Modified Composite

Scheme of

Amalgamation and

Arrangement /

Scheme of

Arrangement /

Scheme of

Amalgamation - - - - (4,207.00) 306.70

Cash and cash

equivalents as at

end of the period

(refer note (I) and

(II) D of Annexure

VIII) 7,227.20 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40

1,491.40 873.01 944.56 724.99 1,424.20 422.70


statement of cash flows, as restated, of the Group (Annexure IV)

Note:

2. The above cash flow statement has been prepared under the “Indirect” Method as set out in Accounting

Standard 3 – „Cash Flow Statements‟.

3. During Period 2012, the Company has apportioned the loans received on a short term basis into

preference shares amounting to ` 29,500 lakhs

F - 16







F - 17

Annexure IV


Significant accounting policies and notes to the restated summary statements of the Group

The figures for Period March 2013 represent six months ended March 31, 2013, Period 2012 represent eighteen

months ended September 30, 2012, Period 2011 represent the year ended March 31, 2011, Period 2010 represents the

year ended March 31, 2010, Period 2009 represents the year ended March 31, 2009 and Period 2008 represents the

nine months ended March 31, 2008. Summary statements are not strictly comparable on account of accounting

pursuant to Court approved Schemes in Period 2008 and Period 2009. Also, the summary statements are not

comparable on account of varying accounting periods forming part of them.

The restated summary statements of the Group have been prepared to comply in all material respects with the

requirements of Schedule II to the Companies Act, 1956 (“the Act”) read with the Securities and Exchange Board of

India (Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by SEBI on

August 26, 2009, as amended, to the extent applicable.

A. Summary of significant accounting policies

1. Basis of preparation

These summary statements of the Group relate to Reliance MediaWorks Limited („the Company or Parent

Company‟), its subsidiary companies, associates and joint ventures. The Company along with its

subsidiaries, associates and joint ventures constitute „the Group‟.

The summary statements of the subsidiaries, joint venture and associates companies used in the

consolidation are for the same reporting period as the Company. These financial statements are audited by

the auditors of the respective entities.

These summary statements of the Group are prepared and presented under the historical cost convention on

the accrual basis of accounting except for revaluation of certain fixed assets and in accordance with the

Accounting Standards („AS‟) notified in the Companies (Accounting Standards) Rules, 2006 and the

relevant provisions of the Companies Act, 1956 („the Act‟), to the extent applicable. The summary

statements are presented in Indian Rupees in lakhs except per share data and where mentioned otherwise.

Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011 (as

amended by notification no. F. No/2/6/2008-CL-V dated March 30, 2011), read with General Circular no.

62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised Schedule VI

notified under the Act has become applicable to the Company for the purpose of preparation and

presentation of its summary statements. The adoption of revised Schedule VI does not impact the

recognition and measurement principles followed for preparation of summary statements. All assets and

liabilities have been classified as current or non-current as per the Company‟s normal operating cycle and

other criteria set out in the revised Schedule VI.

Due to practical difficulties, restatement / reclassification of the summary financial information as per

revised Schedule VI, pertaining to certain subsidiaries, associate and joint ventures, the said restatement /

reclassification for the Period March 2013, 2012, 2011, 2010, 2009 and 2008 has not been audited by the

respective auditor. Such financial information, as approved by the Board of Directors of the Company and

certified by a firm of Chartered Accountant / Chartered Accountant have been furnished to us by the

management of the Company and our report in so far as it relates to the amounts included in respect of such

subsidiaries, associate and joint venture is based solely on such certified summary financial information.

F - 18

The restated summary statements of Group have been prepared to comply in all material respects with the

requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of

India (Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by

SEBI on August 26, 2009, as amended, to the extent applicable.

2. Principles of Consolidation

The Summary statements of the Group are prepared in accordance with AS 21 – „Consolidated Financial

Statements‟, AS 23 - „Accounting for Investments in Associates in Consolidated Financial Statements‟ and

AS 27 – „Financial Reporting of Interest in Joint ventures‟. Summary statements of the Group are prepared

using uniform accounting policies for transactions and other events in similar circumstances except where it

is not practicable to do so. The Summary statements of the Group are presented, to the extent possible, in

the same format as that adopted by the Parent Company for its independent Summary Statements. The

Summary statements of the Group have been consolidated on the following basis:

Subsidiaries

The excess of cost to the Group of its investment in subsidiaries over its portion of equity in the subsidiaries

at the respective dates on which investments in such subsidiaries was made is recognised in the financial

statements as goodwill and any excess of assets over the investment of the Group in a subsidiary is

transferred to Capital reserve. The Group‟s portion of equity in the subsidiaries is determined on the basis

of the book value of assets and liabilities as per the financial statements of the subsidiaries as on the date of

the investment.

The financial statements of the Parent Company and its subsidiaries have been combined on a line-by-line

basis by adding together the book values of like items of assets, liabilities, income and expenses, after

eliminating intra-group balances / transactions and resulting unrealised profits in full. The amounts shown

in respect of reserves / accumulated losses comprise the reserve / accumulated losses as per the balance

sheet of the Parent Company and its share in the post-acquisition increase / decrease in the relevant reserve /

accumulated losses of the subsidiaries.

F - 19

The amount of goodwill and capital reserve are presented on a net basis for each Subsidiary.

Minority interest‟s share of profits or losses is adjusted against the income to arrive at the net income attributable to the shareholders. Minority interests‟ share of net

assets is disclosed separately in the Summary statements of the Group.

Joint venture entities

Interests in jointly controlled entities are accounted for using proportionate consolidation method.

The group consists of

Name of the entity Date of

gaining

control

Country of

Incorporation

Ownership

interest

Period March

2013

Ownership

interest

Period 2012

Ownership

interest

Period 2011

Ownership

interest

Period 2010

Ownership

interest

Period 2009

Ownership

interest

Period 2008

Subsidiaries / Step down

Subsidiaries / Joint ventures /

Associates

Reliance MediaWorks

Entertainment Services Limited

May 4, 2009 India 100% 100% 100% 100% - -

Reliance Media Consultant

Private Limited

February 16,

2012

India 100% 100% - - - -

Reliance MediaVentures Private

Limited

June 19, 2012 India 100% 100% - - - -

Reliance MediaWorks Theatres

Limited

May 19, 2003 India 100% 100% 100% 100% 100% 100%

Big Synergy Media Limited January 12,

2007

India 51% 51% 51% 51% 51% 51%

Sri Ramakrishna Theatres

Limited (Refer Note 10 below)

January 11,

2008

India - - 89.68% 89.68% 89.68% 89.16%

F - 20


gaining

control

Country of

Incorporation

Ownership

interest

Period March

2013

Ownership

interest

Period 2012

Ownership

interest

Period 2011

Ownership

interest

Period 2010

Ownership

interest

Period 2009

Ownership

interest

Period 2008



Associates

Reliance MediaWorks (UK)

Limited

May 19, 2006 United

Kingdom

100% 100% 100% 100% 100% 100%

Reliance MediaWorks (USA)

Inc.

May 17, 2006 United States

of America

100% 100% 100% 100% 100% 100%

Reliance MediaWorks

(Netherlands) B.V.

February 8,

2008

The

Netherlands

100% 100% 100% 100% 100% 100%

Reliance MediaWorks

(Mauritius) Limited

March 20,

2008

Mauritius 100% 100% 100% 100% 100% 100%

Rave Entertainment and Food

Nepal Private Limited (Refer

note 12)

August 24,

2008

Nepal - - 100% 100% 100% -

Big Cinemas Entertainment LLC December 19,

2007

United States

of America

100% 100% 100% 100% 100% 100%

Big Cinemas Entertainment (DE)

LLC

January 24,

2008

United States

of America

100% 100% 100% 100% 100% 100%

Adlabs Forum LLC (Refer note 7

below)

March 6,

2008

United States

of America

- - - - 100% 100%

Big Cinemas Laurel LLC November

28, 2007

United States

of America

100% 100% 100% 100% 100% 100%

F - 21


gaining

control

Country of

Incorporation

Ownership

interest

Period March

2013

Ownership

interest

Period 2012

Ownership

interest

Period 2011

Ownership

interest

Period 2010

Ownership

interest

Period 2009

Ownership

interest

Period 2008



Associates

Big Cinemas Falls Church LLC November 8,

2007

United States

of America

100% 100% 100% 100% 100% 100%

Adlabs Heritage LLC (Refer note

7 below)

March 7,

2008

United States

of America

- - - 100% 100% 100%

Big Cinemas Norwalk LLC March 14,

2008

United States

of America

100% 100% 100% 100% 100% 100%

Big Cinemas Galaxy LLC (Refer

note 8 below)

December 21,

2007

United States

of America

100% 100% 100% 51% 51% 51%

Big Cinemas Sahil LLC November

13, 2007

United States

of America

97% 97% 97% 97% 100% 100%

Big Cinemas SAR LLC November 8,

2007

United States

of America

51% 51% 51% 51% 51% 51%

Phoenix Big Cinemas

Management LLC

February 25,

2008

United States

of America

51% 51% 51% 51% 51% 51%

Big Cinemas Union LLC (Refer

note 7 below)

February 8,

2008

United States

of America

- - - - 100% 100%

Big Cinemas Phoenix LLC February 22,

2008

United States

of America

51% 51% 51% 51% 51% 51%

F - 22


gaining

control

Country of

Incorporation

Ownership

interest

Period March

2013

Ownership

interest

Period 2012

Ownership

interest

Period 2011

Ownership

interest

Period 2010

Ownership

interest

Period 2009

Ownership

interest

Period 2008



Associates

Big Cinemas Exhibitions LLC March 6,

2008

United States

of America

100% 100% 100% 100% 100% 100%

Big Cinemas IMC LLC January 19,

2008

United States

of America

100% 100% 100% 100% 100% 100%

Reliance Lowry Digital Imaging

Services Inc. (Refer note 9

below)

September 1,

2008

United States

of America

100% 100% 100% 100% 90% -

Big Pictures USA Inc March 30,

2009

United States

of America

100% 100% 100% 100% 100% -

Adlabs Digital Media LLC (Refer

note 7 below)

March 27,

2009

United States

of America

- - - 100% 100% -

Reliance Media and Marketing

Communications LLC

May 13, 2009 United States

of America

100% 100% 100% 100% - -

Adlabs GlobalStar LLC (Refer

note 7 below)

September

23, 2009

United States

of America

- - - - - -

Reliance Media Works VFX Inc. January 25,

2010

United States

of America

100% 100% 100% 100% - -

Reliance MediaWorks (Malaysia)

Sdn. Bhd. (Refer note 13)

April 18,

2008

Malaysia - - 100% 100% 100% -

F - 23


gaining

control

Country of

Incorporation

Ownership

interest

Period March

2013

Ownership

interest

Period 2012

Ownership

interest

Period 2011

Ownership

interest

Period 2010

Ownership

interest

Period 2009

Ownership

interest

Period 2008



Associates

Reliance MediaWorks Big

Cinemas Sdn. Bhd. (Refer note

13)

November 1,

2008

Malaysia - - 70% 70% 70% -

Adlabs Multiplex Limited (Refer

note 1 below)

December 20,

2007

India - - - - - 100%

Rave Entertainment Private


May 31, 2007 India - - - - - 100%

Adlabs Multiplexes and Theatres


April 1, 2006 India - - - - - 100%

Katch 22 Entertainment Private


April 23,

2007

India - - - - - -

Reliance Broadcast Network


March 27,

2006

India - - - - - 100%

Joint ventures

Adlabs Multiplex Limited (Refer

Note 1 below)

NA India - - - - - -

Swanston Multiplex Cinemas NA India 50% 50% 50% 50% 50% 50%

F - 24


gaining

control

Country of

Incorporation

Ownership

interest

Period March

2013

Ownership

interest

Period 2012

Ownership

interest

Period 2011

Ownership

interest

Period 2010

Ownership

interest

Period 2009

Ownership

interest

Period 2008



Associates

Private Limited

Divya Shakti Marketing Private

Limited

NA India 50% 50% 50% 50% 50% 50%

Cineplex Private Limited (Refer

Note 11 below)

NA India - - 50% 50% 50% 50%

Associates

Sultan Production Private


NA India - - - NA 49% 49%

GH – Reliance LLC NA United States

of America

30% - - - - -

F - 25

Notes:

Note 1 – Adlabs Multiplex Limited („AML‟) was accounted as a Joint venture till the fifteen month period

ended June 30, 2007 and part of Period 2008. During Period 2008, the balance outstanding shares of AML were

acquired by the Parent Company and AML became a 100% subsidiary of the Parent Company. During Period

2009, effective from April 1, 2008, AML was amalgamated with the Parent Company as per Scheme of

Amalgamation for merger of wholly owned subsidiaries.

(Refer note 2 of V of E of Annexure IV for details of Scheme of Amalgamation of AML with the Parent

Company)

Note 2 – Rave Entertainment Private Limited („REPL‟) was amalgamated with the Parent Company during

Period 2009, effective April 1, 2008 as per Scheme of Amalgamation for merger of wholly owned subsidiaries.

(Refer note 2 of VI of E of Annexure IV for details of acquisition of shares of REPL by the Group and note 2 of

V of E of Annexure IV for details of Scheme of Amalgamation of REPL with the Parent Company)

Note 3 - Adlabs Multiplexes and Theatres Limited („AMTL‟) was a joint venture of the Parent Company up to

April 1, 2006 with the Parent Company holding 50% interest in the Joint venture. Subsequently, the Parent

Company acquired the balance shares of AMTL and AMTL became a wholly owned subsidiary of the Parent

Company effective April 1, 2006. During Period 2009, effective from April 1, 2008, AMTL was amalgamated

with the Parent Company as per Scheme of Amalgamation for merger of wholly owned subsidiaries. (Refer note

2 of V of E of Annexure IV for details of Scheme of Amalgamation of AMTL with the Parent Company).

Note 4 – Katch 22 Entertainment Private Limited („Katch 22) was merged with the Parent Company during

period 2008 with effect from April 1, 2006 as per Scheme of Amalgamation of Katch 22 with the Parent

Company. (Refer note 3 of VI of E of Annexure IV for details of Scheme of Amalgamation). The shares of

Katch-22 were acquired effective April 23, 2007 and transactions of Katch 22 were not considered as part of

consolidated financial statements of fifteen month period ended June 30, 2007. However, no restatement

adjustments have been made pertaining to consideration of balances of Katch 22 in financial statements of

fifteen month period ended June 30, 2007.

Note 5 – Reliance Broadcast Network Limited („RBNL‟) was considered as a subsidiary of the Parent Company

till March 31, 2006. During the fifteen month period June 30, 2007, as per Composite Scheme of Amalgamation

and Arrangement, the Radio Business of the Parent Company was to be demerged to Reliance Broadcast

Network Limited and the investment of the Group in RBNL was to be cancelled. The Composite Scheme of

Amalgamation and Arrangement was given effect to in the financial statements for the fifteen month period

ended June 30, 2007, on an in-principle basis and RBNL was not consolidated as a subsidiary for those financial

statements. Subsequently, the Company modified the Composite Scheme of Amalgamation and Arrangement,

vide Modified Composite Scheme of Amalgamation and Arrangement which was given effect to in the financial

statements for Period 2008 and accordingly RBNL was considered a subsidiary of the Parent Company and

consolidated in the results for Period 2008. During Period 2009, the Radio Business of the Company was

demerged to RBNL as per Scheme of Arrangement and the investment of the Parent Company in the shares of

RBNL was deemed to be cancelled. Accordingly RBNL was not considered as a subsidiary for the financials of

Period 2009. (Refer note 1 of V of E of Annexure IV for details of Scheme of demerger of Radio business

pursuant to Scheme of Arrangement)

Note 6 – The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of

20%. This investment was made by the Company with the intention of investment in the movie "Sultan: The

warrior". However, during the Period 2010, the Company has issued a letter of termination and demanded

refund for the moneys paid by the Company towards production of the movie in the Joint venture and sale of

shares held by the Company to Orcher Studios Private Limited, as per a shareholders agreement signed by the

Company, which has been agreed to Orcher Studios Private Limited. Since, the Company has the intention of

F - 26

selling the shares, the Company has decided not to consider Sultan as an associate under AS-18 Related Party

Disclosures and AS-23 'Accounting for Associates in consolidated financial statements.

During Period 2011, the shares in Sultan Production Private Limited have been sold by the Group

Note 7 – These Companies have been dissolved during the Period 2010 / Period 2011.

Note 8 – During Period 2011, as part of settlement with the minority holders, the Group has acquired the

balance 49% stake in Big Cinemas Galaxy LLC.

Note 9 – During Period 2010, the Parent Company, acquired the balance 10% of the shares of Reliance Lowry

Digital Imaging Services Inc. from the external shareholders. The balance 90% of the shares are held by

Reliance MediaWorks (USA) Inc., a wholly owned subsidiary of the Parent Company.

Note 10 – During Period 2012 on May 27, 2011, the Parent Company, sold its shareholding in Sri Ramakrishna

Theaters Limited („SRTL‟) comprising of 89.68% of the issued equity share capital of SRTL, whereupon SRTL

has ceased to be subsidiary of the Company.

Note 11 – During Period 2012 on June 3, 2011, the Parent Company, sold its shareholding in Cineplex Private

Limited („CPL‟) comprising of 50% of the issued equity share capital of CPL, whereupon CPL has ceased to be

joint venture of the Company.

Note 12 – During Period 2012 on April 30, 2012, the Parent Company, sold its shareholding in Rave

Entertainment and Food Nepal Private Limited. The transfer of consideration for the same was subject to

approval of regulatory authorities and has been completed post the date of financial statements.

Note 13 – During Period 2012, on September 21, 2012, Reliance MediaWorks (Mauritius) Limited, a wholly

owned subsidiary of the Parent Company, has sold its entire holding in Reliance MediaWorks (Malaysia) Sdn.

Bhd.. Consequently, Reliance Works (Malaysia) Sdn. Bhd. and its wholly owned subsidiary Reliance

MediaWorks Big Cinemas Sdn. Bhd. have ceased to be subsidiaries of the Company.

3. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles

(„GAAP‟) in India requires management to make estimates and assumptions that affect the reported

amounts of assets and liabilities, the disclosure of contingent liabilities on the date of the financial

statements and the reported amount of income and expenses during the reported period. The estimates and

assumptions used in the accompanying summary statements are based upon managements‟ evaluation of

relevant facts and circumstances as at the date of the summary statements, which in its opinion are prudent

and reasonable. Actual results could differ from those estimates. Any revision to accounting estimates is

recognised prospectively in current and future periods.

4. Goodwill on consolidation

The excess of cost to the Parent Company of its investments over its portion of equity in the subsidiaries /

associates / joint ventures, as at the date on which the investment was made, is recognised as goodwill in

the summary statements of the Group. The Group‟s portion of equity in the subsidiaries / associates / joint

ventures‟ is determined on the basis of the book value of assets and liabilities as per the financial statements

of the subsidiaries as on the date of investment.

F - 27

Goodwill is reviewed for a decline other than temporary in its carrying value, whenever events or changes

in circumstances indicate that the carrying amount may not be recoverable. The Group assesses the

recoverability of goodwill by reference to the valuation methodology adopted by it on the acquisition date,

which included strategic and synergic factors that were expected to enhance the enterprise value.

Accordingly, the Group would consider that there exists a decline other than temporary in the carrying

value of goodwill when, in conjunction with its valuation methodology, its expectations with respect to the

underlying acquisitions it has made deteriorates with adverse market conditions.

5. Fixed assets and depreciation / amortisation

a. Tangible assets

Tangible fixed assets are stated at cost and / or revalued amount in accordance with Scheme of

Amalgamation less accumulated depreciation and any provision for impairment. Cost includes freight,

duties, taxes (other than those recoverable from tax authorities) and other expenses related directly /

indirectly to the acquisition / construction and installation of the fixed assets and for bringing the asset to its

working condition for its intended use.

Depreciation on fixed assets is provided on the straight line method, at the rates prescribed in Schedule XIV

to the Act, which, in management‟s opinion, reflects the estimated useful lives of those fixed assets, except

assets of subsidiaries and a Joint Venture, namely Reliance MediaWorks (USA) Inc. (including its

subsidiaries), Reliance MediaWorks Big Cinemas Sdn. Bhd., Reliance MediaWorks (UK) Limited and

Swanston Multiplex Cinemas Private Limited and theatrical exhibition segment in India wherein

depreciation is provided at following rates:

Leasehold improvements / buildings are depreciated over the lower of the useful life of the asset and the

lease term, on a straight line basis.

Individual assets costing up to ` 0.05 lakhs are depreciated fully in the period of acquisition.

b. Intangible assets

Intangible assets, all of which have been acquired / created and are controlled through custody or legal

rights, are capitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are

regarded as having a limited useful economic life and the cost is amortised over the lower of useful life and

ten years.

Application software purchased, which is not an integral part of the related hardware, is shown as an

intangible asset and amortised on a straight line basis over its useful life, not exceeding five / ten years, as

determined by management.

Film rights comprise negative rights and distribution rights in films and are for a contractually specified

mode of exploitation, period and territory and are stated at cost less accumulated amortisation. Cost of film

Particulars of fixed assets

Rate of depreciation

Plant and machinery 7.07% to 20%

Furniture and fixture 10% to 25%

Office equipments 10%

Computers 20%

Vehicles 10%

F - 28

rights comprises original purchase price / minimum guarantee. Cost is ascertained on specific identification

basis where possible.

In case multiple films / rights are acquired for a consolidated amount, cost is allocated to each film / right

based on management‟s best estimates.

The individual film forecast method is used to amortise the cost of film rights acquired. Under this method,

costs are amortised in the proportion that gross revenues realised bear to management‟s estimate of the

total gross revenues expected to be received. If estimates of the total revenues and other events or changes

in circumstances indicate that the realisable value of a right is less than its unamortised cost, a loss is

recognised for the excess of unamortised cost over the film right‟s realisable value.

In respect of unreleased films, payments towards film rights are classified under capital advances as the

amounts are refundable in the event of non-release of the film.

Internally generated software is capitalised by the Group and amortised over its estimated useful life of

five / ten years.

Purchased goodwill is recognised by the Group on the basis of excess of purchase consideration paid over

the fair value of assets acquired at the time of acquisition of business and is amortised over, its estimated

useful life not exceeding ten years.

6. Impairment

In accordance with AS 28 – „Impairment of Assets‟, where there is an indication of impairment of the

Group‟s asset, the carrying amounts of the Group‟s assets are reviewed at each Balance sheet date to

determine whether there is any impairment. The recoverable amount of the asset (or where applicable, that

of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and

its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash

generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and

loss.

If at the Balance sheet date there is an indicator that a previously assessed impairment loss no longer exists,

the recoverable amount is re-assessed and the asset is reflected at the recoverable amount subject to a

maximum depreciated historical amount.

Value in use is the present value of estimated future cash flows expected to arise from the continuing use of

the asset and from its disposal at the end of its useful life.

7. Investments

Long-term investments are carried at cost. A provision for diminution is made to recognise a decline, other

than temporary, in the value of long-term investments and is determined separately for each individual

investment.

Current investments are carried at lower of cost and fair value.

8. Inventories

Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon lamps and stores

and spares related to theatrical exhibition / film production services business etc.) are stated at the lower of

cost and net realisable value. Cost is determined on the first-in first-out (FIFO) basis except in the case of

Reliance MediaWorks (USA), Inc. (and its subsidiaries), and Reliance MediaWorks Big Cinemas Sdn. Bhd.

wherein the Group uses the weighted average method.

F - 29

Inventory of DVD‟s is stated at lower of cost or net realisable value, wherein cost is determined using

weighted average method.

Inventory of content cost not aired is stated at lower of cost and net realisable value.

9. Employee benefits

Short term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short

term employee benefits. The undiscounted amount of short term employee benefits expected to be paid in

exchange for the services rendered by employees are recognised as an expense during the period.

Long term employee benefits:

Provident fund and other schemes

The Group‟s state governed provident fund scheme, employee state insurance scheme and labour welfare

fund are defined contribution plans. The contribution paid / payable under the schemes is recognised during

the Period in which the employee renders the related service.

Gratuity Plan

The Group‟s gratuity benefit scheme is a defined benefit plan. The Group‟s net obligation in respect of the

gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned

in return for their service in the current and prior periods; that benefit is discounted to determine its present

value and the fair value of any plan assets is deducted.

The present value of the obligation under such defined benefit plan is determined based on actuarial

valuation using the Projected unit credit method.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used

for determining the present value of the obligation under defined benefit plan, are based on the market

yields on Government securities as at the Balance sheet date.

Actuarial gains and losses are recognised immediately in the statement of profit and loss.

Other Long term employment benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in

which the employee renders the related services are recognised as a liability at the present value of the

defined benefit obligation at the Balance sheet date, determined based on actuarial valuation using

Projected unit credit method. The discount rates used for determining the present value of the obligation

under defined benefit plan, are based on the market yields on Government securities as at the Balance sheet

date.

10. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and

the revenue can be reliably measured. The amount recognised as revenue is exclusive of value added tax,

service tax and net of trade discounts.

F - 30

Amount of entertainment tax is shown as a reduction from revenue.

Film production services

Revenue from processing / printing of cinematographic films is recognised upon completion of the related

processing / printing.

Revenue from processing of digital content is recognised using the proportionate completion method. Use

of the proportionate completion method requires the Group to estimate the efforts expended to date as a

proportion of the total efforts to be expended. Efforts expended have been used to measure progress

towards completion, as there is a direct relationship between efforts expended and contracted output.

Sale of traded goods is recognised when the risks and rewards of ownership are passed on to the customer,

which generally coincides with the dispatch of goods.

Income from equipment / facility rental is recognised over the period of the relevant agreement /

arrangement.

Theatrical exhibition and related income

Sale of tickets

Revenue from theatrical exhibition is recognised on the date of the exhibition of the films and comprises

proceeds from sale of tickets, gross of entertainment tax. As the Group is the primary obligor with respect

to exhibition activities, the share of distributors in these proceeds is separately disclosed as Distributors‟

share.

Amount of entertainment tax is shown as a reduction from revenue where applicable.

Revenue from gift cards is recognised on the basis of availing the facility by the customer. At the time of

sale, the amounts received are recognised as deferred revenue.

Share of profit in partnership firm is recognised on the basis of audited financial statement of the

Partnership firm.

Sale of food and beverages

Revenue from sale of food and beverages is recognised upon sale and delivery at the counter.

Advertisement / sponsorship revenue

Revenue from advertisements, sponsorship and events is recognised on the date of the exhibition of the

advertisement / event or over the period of the contract or on completion of the Group‟s obligation, as

applicable.

Management fee is recognised as revenue on a time proportion basis as per the relevant agreement.

Television / film production, distribution and related income

Television / Film content production and related income

Revenue from sale of content / motion picture is accounted for on the date of agreement to assign / sell the

rights in the concerned motion picture / content or on the date of release of the content / motion picture,

whichever is later. Program sales are accounted on the delivery of tape to the channel.

Income from film distribution activity

F - 31

In case of distribution rights of motion picture / content, revenue is recognised on the date of release /

exhibition.

Revenue from other rights such as satellite rights, overseas rights, music rights, video rights, etc. is

recognised on the date when the rights are made available to the assignee for exploitation.

Revenue from sale of VCDs / DVDs, etc is recognised when the risks and rewards of ownership are passed

on to the customer, which generally coincides with the dispatch of the products.

Interest income / income from film financing

Interest income, including from film / content related production financing, is recognised on a time

proportion basis at the rate implicit in the transaction.

Dividend income

Dividend income is recognised when the right to receive dividend is unconditional at the balance sheet date.

Marketing Rights / Rights to profit

Amounts received in lieu of future marketing rights sale, right to future profit from business of the Group

and other rights are recognised as income in the period of entering into the contract.

11. Foreign currency transactions

Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of

the transactions. Exchange differences arising on foreign exchange transactions settled during the period are

recognised in the statement of profit and loss of the period.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated

at the closing exchange rates on that date; the resultant exchange differences are recognised in the statement

of profit and loss except in case of exchange differences arising on translation of monetary items which

form part of Group‟s net investment in a non-integral foreign operation which is accumulated in a „Foreign

currency translation reserve‟ until its disposal.

Non-monetary items which are carried at historical cost denominated in a foreign currency are reported

using the exchange rate at the date of the transaction.

Forward contracts are entered into to hedge the foreign currency risk of the underlying transaction. The

premium or discount on all such contracts arising at the inception of each contract is amortised as income or

expense over the life of the contract. Exchange difference on forward contracts is recognised as income or

expense in the statement of profit and loss of the period. Any profit or loss arising on the cancellation and

renewal of forward contract is recognised as income or expense for the period.

12. Foreign currency translation

The consolidated financial statements are reported in Indian rupees in accordance with AS-11 – „The

Effects of Changes in Foreign Exchange Rates‟ which specifies translation of foreign subsidiaries on the

basis of their classification as integral / non-integral to the operations of the Parent Company.

Local currency financials of each integral foreign subsidiary within the Group into Indian Rupees is

performed in respect of assets and liabilities other than fixed assets, using the exchange rate in effect at the

balance sheet date and for revenue and expense items other than the depreciation costs, using average

exchange rate during the reporting period. Net exchange difference resulting from the above translation of

F - 32

the financial statements of integral foreign subsidiaries is recognised in the consolidated statement of profit

and loss. Fixed assets are translated at exchange rates on the date of the transaction and depreciation on

fixed assets is translated at exchange rates used for translation of the underlying fixed assets.

Translation of local currency balances of each non-integral foreign subsidiary within the Group into Indian

Rupees is performed in respect of assets and liabilities at the exchange rate in effect at the Balance sheet

date and for revenue and expense items at the average exchange rate during the reporting period. Net

exchange differences resulting from the above translation of the financial statements is accumulated in a

„Foreign currency translation reserve‟, disclosed as Reserves and surplus. The amount accumulated will be

held in this account till the time of disposal of the net investment in the subsidiary.

13. Earnings per share

In determining earning per share, the Group considers the net result after tax and includes the post tax effect

of any extraordinary / exceptional item. The number of shares used in computing basic earnings per share is

the weighted average number of shares outstanding during the period. The number of shares used in

computing diluted earning per share comprises the weighted average number of shares considered for

deriving basic earnings per share and also the weighted average number of shares that could have been

issued on the conversion of all dilutive potential equity shares unless the results would be anti-dilutive.

Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a

later date.

14. Taxation

Income-tax expense comprises current tax expense and fringe benefit tax computed in accordance with the

relevant provisions of the Income tax Act, 1961 / local Income tax regulations of the respective countries of

operation of the Group and deferred tax charge or credit.

Current tax provision is made based on the tax liability computed after considering tax allowances and

exemptions, in accordance with the Income tax Act, 1961 / local Income tax regulations of the respective

countries of operation of the Group. Deferred tax charge or credit and the corresponding deferred tax

liability or asset is recognised for timing differences between the profits / losses offered for income tax and

profits / losses as per the financial statements. Deferred tax assets and liabilities are measured using the tax

rates and tax laws that have been enacted or substantively enacted at the Balance sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be

realised in future. However, where there is unabsorbed depreciation or carried forward loss under taxation

laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.

Deferred tax assets are reviewed as at each Balance sheet date and written down / up to reflect the amount

that is reasonably / virtually certain (as the case may be) to be realised.

Provision for fringe benefit tax is made on the basis of applicable rates on the taxable value of eligible

expenses of the Group as prescribed under the Income Tax Act, 1961 till Period 2009 on the basis of

applicability.

15. Share issue / Foreign Currency Convertible Bonds (FCCB) issue expenses and premium on

redemption

Share / FCCB issue expenses incurred and premium payable on FCCB are adjusted in the period of issue

against the Securities premium reserve.

16. Provisions and contingencies

F - 33

Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Group

recognises it has a present obligation as a result of past events, it is more likely than not that an outflow of

resources will be required to settle the obligation and the amount can be reasonably estimated.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation

that may, but probably will not require an outflow of resources. When there is a possible obligation or a

present obligation in respect of which the likelihood of outflow of resources is remote, no provision or

disclosure is made.

Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is

probable that a liability has been incurred and the amount can be reasonably estimated.

17. Leases

Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases are recorded

on a straight line basis over the lease term.

18. Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are

capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial

period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

19. Commercial papers

Commercial papers issued are recognised as a liability, at the amount of cash received at the time of

issuance i.e. discounted value. The discount is amortised as interest cost over the period of the commercial

paper, at the rate implicit in the transaction.

F - 34

B. Significant changes in accounting policies and other adjustments (debited) / credited to the restated financial statements:

(` in lakhs)

Particulars Refer

Note

Below

Period

March 2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Adjustment to

opening balance in

the statement of

profit and loss as at

July 1, 2007

(Loss) / profit after tax as per audited financial

statements

(34,173.39) (91,047.40) (32,886.10) (14,320.80) (5,787.10) 4,731.50

Balances as per audited financial statements 9,786.53

Adjusted for

Change in depreciation method (a) - - - (130.28) (853.29) 371.29 464.15

Change in estimated useful life (b) - - - - - - (218.77)

Restatement of FCCB‟s (c) - - 1,272.40 1,718.10 (1,130.10) (1,860.40) -

Prior period adjustment (net) (d) - - - - - (0.40) 0.40

Effect of qualification – deferred revenue

expenditure

(e)

173.40 520.19 (1,734.00) - - - -

Miscellaneous expenditure not written off,

adjusted in opening balance

(f)

- - 2.50 2.56 0.74 9.45 (15.25)

Prior period – tax

Excess / (short) provision for tax (g) (44.78) 46.40 12.44 (72.82) (11.76) (10.61) 81.13

Excess / (short) provision for Minimum alternative

tax

(g) - - - - (1,242.60) 1,242.60

Net impact of all adjustments 128.62 566.59 (446.66) 1,517.56 (1,994.41) (2,733.27) 1,554.26

F - 35

Particulars Refer

Note

Below

Period

March 2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Adjustment to

opening balance in

the statement of

profit and loss as at

July 1, 2007

Current tax impact of adjustments

Deferred tax impact of adjustments (g) - (535.81) 535.81 - (6.46) 0.29 0.08

(Loss) / Profit after tax as per restatement (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,787.77) 1,998.52

Balances as per restatement as on July 1,

2007

11,340.87

F - 36

a) Change in accounting policy for depreciation

During Period 2009, the Group has charged depreciation as per the written down value method in

the film production services, production and distribution business and for unallocated assets at the

rates specified in Schedule XIV of the Companies Act, 1956 till March 31, 2008. Starting April 1,

2008, the Group has changed its policy to charge depreciation as per the straight line method at the

rates specified in Schedule XIV of the Companies Act, 1956. Accordingly, depreciation charge for

the previous period‟s has been restated based on the new method and the impact of change in

depreciation method for the period prior to July 1, 2007 has been adjusted to opening balance of the

surplus in statement of profit and loss, as restated as on July 1, 2007.

b) Change in estimated useful life of assets

The Group had revised the estimated useful lives of certain fixed assets pertaining to the theatrical

exhibition business from July 1, 2007, since in the opinion of the management, the revised useful

life reflect the estimated period of economic benefit to be derived from the use of such assets. For

the purpose of these summary statements, depreciation has been recomputed based on revised useful

life of the assets from the date of capitalisation of these assets. Accordingly depreciation for the

periods prior to July 1, 2007 has been restated and depreciation for these periods has been adjusted

to opening balance of the surplus in statement of profit and loss, as restated as on July 1, 2007.

c) Accounting for Foreign Currency Convertible Bonds („FCCB‟)

During Period 2008, the liability for FCCB‟s had been reclassified as a non-monetary liability inter-

alia on the basis of the trend of earnings, movement of the Parent Company‟s share prices and

conversion option exercised by the FCCB holders (bondholders holding 75.42% of the FCCB had

exercised conversion option as of March 31, 2008). However, during Period 2011, the balance

FCCB‟s were redeemed at a premium, as per the terms of the issue document.

The Company had reversed foreign exchange fluctuation loss aggregating to ` 438.06 lakhs in

Period 2008 based on the consideration of FCCB‟s as a non-monetary liability. This position was

carried forward till Period 2010 and was a matter of emphasis referred to in the auditors report for

Period 2008, 2009 and 2010.

Hence, the Company has reversed the reversal made during Period 2008 and recognised the loss /

gain on the non-converted portion of FCCB‟s, considering them as a monetary item in Period 2008,

2009 and 2010 and reversed this loss in Period 2011, wherein the Company has recognised the

entire loss on redemption in its audited financial statements.

d) Prior period adjustments (net)

Prior period adjustments pertain to under accrual of expenses by Subsidiaries and Joint ventures.

The amount pertains to period‟s prior to July 1, 2007 and hence the same has been adjusted against

the opening balance of the surplus in statement of profit and loss, as restated as of June 30, 2007.

e) Deferred revenue expenditure

Reliance MediaWorks Entertainment Services Limited, a subsidiary of the Group had recognised

deferred revenue expenditure for start up and stabilisation costs during Period 2011, which was a

subject matter of qualification by the auditors of the Subsidiary in Period 2011. The Group has

F - 37

reversed the accounting treatment followed by the Subsidiary regarding recognition of deferred

revenue expenditure and has appropriately charged off the expenditure in the Statement of profit

and loss, as restated.

The deferred revenue expenditure was amortised over a period of 5 years starting Period 2012,

which has been appropriately reversed in the Statement of profit and loss, as restated of Period 2012

and Period March 2013.

f) Miscellaneous expenditure not written-off

The Group has written off the balances of miscellaneous expenditure as of July 1, 2007 to the

opening balance of surplus of statement of profit and loss, as restated as on April 1, 2006 and has

consequently reversed the charge made for write off made in Period 2008, 2009, 2010 and 2011.

g) Tax impact on restatement

The statement of profit and loss, as restated of some periods include amounts paid / provided for or

refunded / written back, in respect of shortfall / excess income tax (including fringe benefit tax)

arising out of assessments, appeals etc. which has now been adjusted in the respective period‟s tax

liability. Also, income tax (current tax and deferred tax) has been computed on adjustments made

and has been adjusted accordingly in the statement of profit and loss, as restated for the respective

periods.

h) Consequent to the notification of the Companies (Accounting Standards) Rules, 2006, with effect

from July 1, 2007, the Group adopted Accounting Standard (AS 15) - Employee Benefits. However,

there was no significant impact on adoption of the Standard which is required to be adjusted to the

opening balance of reserves and surplus.

i) Adjustments have been made in the Restated Summary Statements, wherever required, by a

reclassification of the corresponding items of income, expenses, assets and liabilities, in order to

bring them in line with the groupings as per the audited financials of the Group for Period March

2013 as prepared under Government Notification no. S.O. 447 (E) dated February 28, 2011 (as

amended by notification no. F.No/2/6/2008-CL-V dated March 30, 2011), read with General

Circular no. 62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs.

j) The Company in Period 2009 has classified its operations in US and in Period 2010 its operations in

Nepal as non-integral to the operations of the Parent Company in India. The impact of this change is

not material on the results of respective periods and hence, no restatement has been made for the

same.

k) De-merger of Radio Business

During the year ended March 31, 2006 the Company commenced operations of the Radio business.

The Company was granted 45 FM Radio operation licenses in various parts of India including all

metros.

During the fifteen month period ended June 30, 2007, the Board of Directors and members of the

Company and the Hon‟ble High Court of Judicature at Bombay approved the Composite Scheme of

Amalgamation and Arrangement („Composite Scheme‟) which among other things provided for

demerger of the Radio business of the Company to Reliance Broadcast Network Limited with effect

from April 1, 2006. The Company had given the in-principle effect of the Composite Scheme

including the demerger of the Radio business of the Company to Reliance Broadcast Network

F - 38

Limited in the accounts for the fifteen month period ended June 30, 2007 pending filing of the

Scheme with the Registrar of Companies. Subsequently, due to non-receipt of approval from the

Ministry of Information and Broadcasting, the Company filed the Modified Composite Scheme of

Amalgamation and Arrangement (the „Modified Composite Scheme‟) which provided for reversal

of the effect of demerger, of the Radio business that was given effect to in the accounts for the

fifteen month period ended June 30, 2007 and provided for adjusting the net result of the

transactions related to Radio business for the period March 31, 2006 till the effective date of the

Modified Composite Scheme i.e. March 31, 2008 in the General reserve account of the Company.

During Period 2009, the Board of Directors and members of the Company and the Hon‟ble High

Court of Judicature at Bombay approved a Scheme of Arrangement which provides for demerger of

the Radio business of the Company effective April 1, 2008 to Reliance Broadcast Network Limited.

Accordingly, transaction related to Radio business does not form part of the statement of profit and

loss, for Period 2008. However, the assets and liability were included in the summary statement of

assets and liability in Period 2008. The assets and liabilities of the Radio business for Period 2008

which are included in the statement of assets and liability of the Group are:

Particulars Period 2008

(` in lakhs)

Fixed assets

Gross block 32,728.23

Less: Accumulated depreciation 3,845.38

Net block 28,882.85

Capital work in progress 2,309.17

Current assets

Inventories 17.67

Sundry debtors 6,679.51

Cash and bank balances 843.71

Loans and advances 6,387.06

13,927.95

Current liabilities and provisions

Current liabilities 4,348.71

Provisions 626.94

4,975.65

Net working capital 8,952.30

Less: Loans 2,046.28

Net Capital employed 38,098.04

(Refer note 1 of VI of E of Annexure IV for details of the Modified Composite Scheme of

Amalgamation and Arrangement giving effect to in the accounts of the Company for Period 2008

and note Refer note 1 of V of E of Annexure IV for details of the Scheme of arrangement given

effect to in the accounts of the Group for Period 2009)

C. Auditors‟ qualification

F - 39

a. Period March 2013

i. As reproduced below, auditors have qualified their audit report for Period March 2013 for

recognition of deferred revenue expenditure

We draw attention to Note 42 to the consolidated financial statements regarding recognition of

Deferred Revenue Expenditure aggregating to ` 1,040.41 lakhs pertaining to start-up and

stabilization costs of the business, by Reliance MediaWorks Entertainment Services Limited, a

subsidiary of the Company. As opined by the auditor of the subsidiary, such recognition is not

in accordance with Accounting Standard 26 – „Intangible Assets.

Had the Group recognised the above loss and such costs, the loss before tax and deficit in

Statement of profit and loss as at period ended March 31, 2013 for the Group would be higher by

` 1,040.41 lakhs.

(Refer note (e) of B of Annexure IV for effect of restatement of the qualification)

b. Period 2012

i. As reproduced below, auditors have qualified their audit report for Period 2012 for

recognition of deferred revenue expenditure

We draw attention to Note 49 to the consolidated financial statements regarding recognition of

Deferred Revenue Expenditure aggregating to ` 1,213.80 lakhs pertaining to start-up and

stabilization costs of the business, by Reliance MediaWorks Entertainment Services Limited, a

subsidiary of the Company. As opined by the auditor of the subsidiary, such recognition is not

in accordance with Accounting Standard 26 – „Intangible Assets.

Had the Group recognised the above loss and such costs, the loss before tax and deficit in

Statement of profit and loss as at period ended September 30, 2012 for the Group would be

higher by ` 1,213.80 lakhs.


c. Period 2011

i. As reproduced below auditors have qualified their audit report for Period 2011 for

recognition of deferred revenue expenditure. The qualification is re-produced as follows:

As more fully explained in note 15 of Schedule 23 to the consolidated financial statements, the

financial statements of Reliance MediaWorks Entertainment Services Limited, a subsidiary, has

been qualified on account of treatment of start up and stabilisation costs of the film production

services segment aggregating to ` 1,734.00 lakhs as deferred revenue expenditure, which is not in

accordance with Accounting Standard 26 – „Intangible Assets‟, prescribed in the Companies

(Accounting Standards) Rules, 2006. Had the Subsidiary not followed the said accounting

treatment, the loss for the current year would have been higher by ` 1,734.00 lakhs and

F - 40

consequentially the Debit balance in Profit and Loss Account would have been higher by `

1,734.00 lakhs.

The management has adjusted the effect of the qualification in the restated statements of the

Group.


D. Extract of other matters / matter of emphasis referred by auditors in their reports as

reproduced below:

a. Period March 2013

i) We draw attention to note 37 to the consolidated financial statements; the Group‟s net

worth is fully eroded and has a negative net worth of ` 91,294.20 lakhs, the Group has

incurred a loss of ` 34,173.39 lakhs for the six month period October 1, 2012 to March 31,

2013, indicating the existence of uncertainty that may cast doubt about the Group‟s ability

to continue as a going concern. Considering the matters set out in the said note, this

consolidated financial statement is prepared on a going concern basis.

Our opinion is not qualified in respect of these matters.

(Refer note 5 of I of E of Annexure IV)

b. Period 2012

i) Without qualifying our report, we draw attention to note 37 to the consolidated financial

statements; the Group‟s net worth is fully eroded and has a negative net worth of `

56,562.80 lakhs, the Group has incurred a loss of ` 91,047.40 lakhs for the eighteen month

period April 1, 2011 to September 30, 2012, indicating the existence of uncertainty that

may cast doubt about the Group‟s ability to continue as a going concern. Considering the

matters set out in the said note, this consolidated financial statement is prepared on a going

concern basis.

(Refer note 5 of II of E of Annexure IV)

c. Period 2010

i) Without qualifying our report, we draw attention to note 8 of schedule 22 to the financial

statements regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟).

During the financial period ended March 31, 2008, the Company re-classified the liability

towards FCCB as non–monetary liability inter-alia on the basis of the trend of earnings,

movement of the Company‟s share prices and conversion option exercised by the FCCB

holders. The Company continues to classify the liability towards FCCB as non–monetary

liability as in its view the current fall in the market price of the Company‟s share price and

non-conversion by bond holders is a temporary aberration, consequently, the foreign

exchange fluctuation gain for the year aggregating ` 1,718.10 lakhs has not been recognised

and the said liability has not been restated at the year-end exchange rate.

An alternate view exists that the liability towards FCCB is a monetary liability and should

be restated at the year-end exchange rate in accordance with Accounting Standard 11 -

„The Effects of Changes in Foreign Exchange Rates‟ prescribed in the Companies

(Accounting Standards) Rules, 2006. There is no specific guidance of The Institute of

F - 41

Chartered Accountants of India on accounting for foreign currency bonds convertible into

equity shares at the option of the holder. Had the said liability been considered as a

monetary liability as before, the loss before tax for the current year would be lower by `

1,718.10 lakhs and the reserves and surplus would be lower by ` 1,272.30 lakhs.

(Refer note 5 of IV of E of Annexure IV for note 17 of Schedule 22 which has been

referred to above)

(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary

item)

d. Period 2009

i) Without qualifying our report, we draw attention to Note 10 of Schedule 22 to the

consolidated financial statements regarding accounting of the Foreign Currency

Convertible Bonds („FCCB‟). During the previous financial period ended March 31, 2008,

the Company reclassified the liability towards FCCB as non–monetary liability inter-alia

on the basis of the trend of earnings, movement of the Company‟s share prices and

conversion option exercised by the FCCB holders. The Company continues to classify the

liability towards FCCB as non– monetary liability as in its view the current fall in the

market price of the Company‟s share price and non conversion by bond holders during the

year is a temporary aberration, consequently, the foreign exchange fluctuation (net loss) for

the year aggregating ` 1,130.10 lakhs has not been recognised and the said liability has not

been restated at the period-end exchange rate.


be restated at the period-end exchange rate in accordance with Accounting Standard 11 -

„The Effects of Changes in Foreign Exchange Rates‟ prescribed in the Companies

(Accounting Standards) Rules, 2006 issued by the Central government in consultation with

the National Advisory Committee on Accounting Standards. There is no specific guidance

of The Institute of Chartered Accountants of India on accounting for foreign currency

bonds convertible into equity shares at the option of the holder. Had the said liability been

considered as a monetary liability, the loss before tax for the current year would be higher

by ` 1,130.10 lakhs and the reserves and surplus would be lower by ` 2,990.40 lakhs.

(Refer note 7 of V of E of Annexure IV for note 10 of Schedule 22 which has been referred

to above)


item)

ii) Without qualifying our opinion, we draw attention to Note 2 of Schedule 22 to the

financial statements. As more fully explained in the said Note, during the year, the Hon‟ble

High Court of Judicature at Mumbai vide its order dated May 8, 2009 sanctioned the

Scheme of Amalgamation of the Company with its wholly owned subsidiaries Adlabs

Multiplexes and Theatres Limited, Adlabs Multiplex Limited, Rave Entertainment Private

Limited and Mahimna Entertainment Private Limited, under sections 391 to 394 of the Act.

Pursuant to the said Scheme the Company has the made an adjustment for diminution in

value of its assets (production and distribution rights, fixed assets, investments, debtors and

loans and advances) aggregating ` 15,669.70 lakhs by debiting the same to capital reserve

F - 42

instead of the statement of profit and loss. Had the Company debited the statement of profit

and loss the loss before tax for the year would be higher by the said amount.

(Refer note 2 of V of E of Annexure IV for note 2 of Schedule 22 which has been referred

to above)

e. Period 2008

i) Without qualifying our report, we draw attention to Note 1 of Schedule 22 to the financial

statements. As more fully explained in the said Note, during the period, the Hon'ble High

Court of Judicature at Bombay vide its order dated March 7, 2008 sanctioned the Modified

Composite Scheme of amalgamation and arrangement ('the Modified Scheme') between the

Company, Entertainment One India Limited ('E-ONE') and Mukta Adlabs Digital

Exhibition Private Limited ('MADEL')#. The Scheme was filed with the Registrar of

Companies ('ROC') on March 31, 2008. Pending completion of licensing and other

procedural formalities, the original Composite Scheme of amalgamation and arrangement

between the Company, E-ONE, MADEL#, Reliance Unicom Limited ('RUL')## and their

respective shareholders and creditors sanctioned by the Hon'ble High Court of Judicature at

Bombay vide its order dated September 15, 2006 was not filed with the Registrar of

Companies ('ROC') as required under Section 391(3) of the Companies Act, 1956 ('the

Act'). However, the said original Scheme was given effect to by the Company's

management in the previous period's financial statements for the fifteen months ended June

30, 2007, so as to give effect to the substance of the Scheme as approved by the Hon'ble

High Court of Judicature at Bombay. The Modified Scheme inter-alia provides that the net

results of the transactions related to the radio business of the Company for the period from

March 31, 2006 to the Effective date (i.e. the date of filing the Modified Scheme with the

ROC) be adjusted in the General reserve account of the Company (the original scheme

provided for the demerger of the radio business of the Company to RUL## effective March

31, 2006). As the original scheme was given effect to in the previous period's financial

statements for the fifteen months ended June 30, 2007, only the modifications to the

original scheme have been given effect to in the current period's financial statements

(including reversal of demerger of radio business to RUL##).

# - The name of the Company was subsequently changed to Adlabs Multiplex and Theatres

Limited

## - The name of the Company was subsequently changed to Reliance Broadcast Network

Limited

(Refer note 1 of VI of E of Annexure IV for note 1 of Schedule 22 which has been referred

to above)

ii) Without qualifying our report, we draw attention to Note 16 of Schedule 22 to the financial

statements regarding accounting of the Foreign Currency Convertible Bonds ('FCCB').

During the current period, the Company reclassified the liability towards FCCB as non-

monetary liability inter-alia on the basis of the trend of earnings and movement of the

Company's share prices. Accordingly, the foreign exchange fluctuation (net loss)

aggregating to ` 438.10 lakhs accounted in previous period has been reversed and the

foreign exchange fluctuation loss for the current period aggregating to ` 3,621.80 lakhs has

not been recognised by management and the said liability has not been revalued at the

period-end exchange rate.

F - 43


be revalued at the period-end exchange rate in accordance with Accounting Standard 11 -

'The Effects of Changes in Foreign Exchange Rates' prescribed in the Companies

(Accounting Standard) Rules, 2006 issued by the Central Government in consultation with

the National Advisory Committee on Accounting Standard. There is no specific guidance

of The Institute of Chartered Accountants of India on accounting for foreign currency

bonds convertible into equity shares at the option of the holder. Had the said liability been

considered as a monetary liability as before, the profit after tax would be lower by `

4,118.90 lakhs.

(Refer note 7 of VI of E of Annexure IV for note 21 of Schedule 22 which has been

referred to above)


item)

E. Extract of significant notes from audited financial statements

I. Period March 2013

1. Lease disclosure under AS 19 – „Leases‟

The Group is obligated under non-cancellable leases primarily for theatre and office premises and

equipments which are renewable thereafter as per the term of the respective agreements.

The future minimum lease payments in respect of non-cancellable operating lease are as follows:

Amount payable within lock-in-period is ` 51,547.10 lakhs

Amount debited to statement of profit and loss for lease rental is ` 9,692.50 lakhs.

2. Interest in Joint ventures

The Company‟s interests in jointly controlled entities (incorporated Joint Ventures) are:

Name of the Company Country of

Incorporation

% of ownership

interest as at

March 31, 2013

Particulars Minimum

lease

payments (` in

lakhs)

For the Parent Company / Subsidiaries companies

Amounts due within one year from the Balance sheet date 14,363.40

Amounts due in the period between one year and five years 42,408.80

Amount due after five years 58,034.40

114,806.60

F - 44

Swanston Multiplex Cinemas Private Limited India 50%

Divya Shakti Marketing Private Limited India 50%

Details of Joint Venture

Particulars Period March 2013

Balance Sheet

EQUITY AND LIABILITIES

Shareholders' funds

(a) Share capital 111.50

(b) Reserves and surplus (140.30)

LIABILITIES

Non-current liabilities

(a) Long term borrowing 211.70

(b) Long-term provisions 0.60

Current liabilities

(a) Trade payable 88.00

(b) Other current liabilities 69.40

Total 340.90

ASSETS

Non-current assets

(a) Fixed assets

Tangible assets 200.90

(b) Long-term loans and advances 71.90

Current assets

(a) Inventories 3.80

(b) Trade Receivables 17.30

(c) Cash and cash equivalents 31.00

(d) Short-term loans and advances 0.60

(e) Other current assets 15.40

Total 340.90

Statement of Profit and loss

Revenue

(a) Revenue from operations 96.60

(b) Other income 0.20

Total Revenue 96.80

Expenses

Direct operation expenses 49.80

F - 45


Employee benefit expense 4.20

Finance cost -

Depreciation / amortisation expense 10.70

Other expenses 82.50

Total Expenses 147.20

(Loss) before tax (50.40)

Tax Expenses

(1) Current tax -

(2) Deferred tax (credit)/ charge -

(Loss) for the period (50.40)

OTHER MATTERS

1. Contingent Liabilities 99.30

2. Capital Commitments -

Movement of the aggregate Shareholders‟ funds of the Joint

ventures:

Shareholders‟ funds as at beginning of the period 21.60

Add: Share of (loss) / profits for the period (50.40)

Shareholders‟ funds as at the end of the period (28.80)

3. Foreign currency exposures (other than investments and fixed assets) not covered by forward

contracts

Currency As at March 31, 2013

Amount – foreign

currency (lakhs) Amount – (` in

lakhs)

Trade and other receivables USD 40.30 2,202.60

GBP 9.50 789.70

Trade and other payables USD 68.90 3,765.70

GBP 9.00 748.10

EURO 0.60 42.00

MUR 0.60 1.10

Loans / Buyers credit USD 85.70 4,683.90

Cash and bank balances USD 27.30 1492.10

GBP 4.00 332.50

EURO 0.10 7.00

F - 46

4. Movement of Goodwill


(` in lakhs)

Opening balance of Goodwill 5,145.32

Impact of exchange differences 3.70

5,149.02

5. Considering the continuing substantial losses incurred by the Group / Parent Company, its net worth

has been eroded. However, having regard to improved operational performance on account of

stabilization of new businesses in films and media services, financial support from its promoters,

further restructuring exercise being implemented etc, the financial statements of the Company have

been prepared on the basis of going concern and no adjustments are required to the carrying value of

assets and liabilities.

6. The Parent Company executed an indicative non-binding term sheet with a private equity fund to

acquire a substantial minority stake through an investment of ` 6,050 in the Group‟s film and media

services division. The investment is proposed to be made into the subsidiary of the Parent Company,

into which our film and media services division will be transferred. No definitive agreement has

been executed in respect of the proposed transaction. The exclusivity period as per non-binding term

sheet has been expired on October 15, 2012, however the Parent Company and the fund have

extended the exclusivity period upto August 12, 2013.

7. The shareholders of the Parent Company have approved on February 21, 2012 through postal ballot

the resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings

pertaining to the Film & Media Services and Exhibition business on a going concern basis to its

wholly owned subsidiaries at consideration not less than tax written down values as the board may

decide and on such terms and conditions and in such manner as may be decided by the board and

the wholly owned subsidiaries. Since necessary approval from lenders and other appropriate

authorities are still awaited, the Company has not executed relevant agreements with its

subsidiaries. The appropriate accounting treatment / disclosures will be given once the requisite

approvals are obtained.

8. Exceptional items includes:

a. The Parent Company has undertaken an initiative for rationalization / improvement of

overall Exhibition business, under which the Parent Company is re-negotiating rentals.

As part of this initiative, rentals for several properties have been reduced, however in

some cases the Parent Company has decided to exit the property. In these cases, `

5,682.58 lakhs pertaining to these properties have been written off / provided to the

statement of profit and loss, thereby reducing subsequent cash losses suffered by the

Parent Company.

b. A subsidiary of the Parent Company in Mauritius has provided certain advances and

deposits – ` 318.49 lakhs.

9. For Period March 2013, subsidiaries in USA have been considered as non-integral and subsidiaries

in UK, Mauritius and Netherlands have been considered as integral to the operations of the Parent

Company in India.

II. Period 2012


F - 47





Amount debited to statement of profit and loss for lease rental is ` 30,455.10 lakhs (excluding

amount capitalised ` 268.30 lakhs).



Name of the Company

Country of

Incorporation

% of ownership

interest as at

September 30,

2012 Swanston Multiplex Cinemas Private Limited India 50%

Cineplex Private Limited (up to June 3, 2011) India Nil

Divyashakti Marketing Private Limited India 50%



Balance Sheet


Shareholders' funds



LIABILITIES



(b) Other long-term liabilities 0.50

(c) Long-term provisions 0.30

Current liabilities

Particulars Minimum

lease

payments (` in

lakhs)

For the Parent Company / Subsidiaries companies

Amounts due within one year from the Balance sheet date 15,846.90



133,380.90

F - 48




Total 361.40

ASSETS

Non-current assets

(a) Fixed assets



Current assets


(b ) Trade Receivables 23.40




Total 361.40


Revenue

(a) Revenue from operations 1,109.80


Total Revenue 1,118.50

Expenses


Employee benefit expense 57.20

Finance cost 1.10



Total Expenses 1,329.20


Tax Expenses

(1) Current tax 17.50

(2) Deferred tax (credit)/ charge 0.10


OTHER MATTERS

F - 49



2. Capital Commitments Nil

Movement of the aggregate Shareholders‟ funds of the Joint

ventures:


Add: Issue of shares by joint venture 125.00


Effect of disposal of joint ventures (299.00)

Shareholders‟ funds as at the end of the period 21.60

Note:

Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex

cinema. The lease of the multiplex cinema has been terminated by the landlord. Considering the

termination of the lease, the Company has decided to provide for diminution in the value of

investments in the Joint Venture amounting to ` 825.06 lakhs.

3. Foreign currency exposures (other than investments and fixed assets) not covered by forward

contracts

Currency As at September 30, 2012

Amount – foreign

currency (lakhs) Amount – (` in

lakhs)


GBP 24.80 2,117.30

MYR 15.10 262.60

MUR 174.30 312.50


GBP 7.00 597.60

EURO 0.40 27.20

MYR 0.10 1.70

MUR 34.50 61.90


Cash and bank balances USD 39.30 2,075.00

GBP 6.80 580.50

EURO 0.10 6.80



(` in lakhs)

F - 50


(` in lakhs)

Opening balance of Goodwill 8,819.42

Impact for Subsidiaries sold during the period / year (3,196.30)

Impact of exchange differences 14.80

Impact of impairment for a Joint venture (492.60)

5,145.32

5. Considering the continuing substantial losses incurred by the Group / Parent Company, its net worth

has been eroded. However, having regard to improved operational performance on account of

stabilisation of new businesses in films and media services, financial support from its promoters,

further restructuring exercise being implemented etc, the financial statements of the Company have

been prepared on the basis of going concern and no adjustments are required to the carrying value of

assets and liabilities.

6. The Company executed an indicative non-binding term sheet with a private equity fund to acquire a

substantial minority stake through an investment of ` 60,500 lakhs in the Company‟s film and media

services division. The investment is proposed to be made into the subsidiary of the Company, into

which our film and media services division will be transferred. No definitive agreement has been

executed in respect of the proposed transaction. Though exclusivity period as per non-binding term

sheet has been expired on October 15, 2012, the Company and the fund are in process of extending

exclusivity period.

7. The shareholders of the Parent Company have approved on February 21, 2012 through postal ballot

the resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings

pertaining to the Film & Media Services and Exhibition business on a going concern basis to its

wholly owned subsidiaries at consideration not less than tax written down values as the board may

decide and on such terms and conditions and in such manner as may be decided by the board and

the wholly owned subsidiaries. Since necessary approval from lenders and other appropriate

authorities are still awaited, the Company has not executed relevant agreements with its

subsidiaries. The appropriate accounting treatment / disclosures will be given once the requisite

approvals are obtained.

8. During Period 2012, the Company has dropped several properties under development / completed

properties and hence has written off the carrying value of capital work-in-progress of ` 4,424.60

lakhs and deposits of ` 981.50 lakhs pertaining to these properties.

9. Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex


termination of the lease, the Group has decided to write down the value of its goodwill amounting to

` 492.60 lakhs.

10. Reliance MediaWorks (USA) Inc., a Subsidiary acquired the assets of Digital Domain Media Group

Inc.‟s („DDMG‟) VFX and commercial business jointly through an auction process with Beijing

Galloping Horse Media Co., Ltd („Galloping Horse‟) and has agreed to hold 30% units of Galloping

Horse America, LLC, a special purpose entity incorporated by Galloping Horse for the purpose of

acquisition of these assets of DDMG. The Subsidiary is in the process of entering in an agreement

with Galloping Horse. Hence, the amounts advanced by the Subsidiary to the special purpose

vehicle has been treated as advances given towards share application.

11. During Period 2012, the Company has sold its shareholding in

a) A joint venture - Cineplex Private Limited effective June 3, 2011

F - 51

b) Subsidiaries – Sri Ramakrishna Theatres Limited effective May 28, 2011, Rave

Entertainment and Food Nepal Private Limited effective April 30, 2012, Reliance

MediaWorks (Malaysia) Sdn. Bhd. effective September 21, 2012 and Reliance

MediaWorks Big Cinemas Sdn. Bhd. effective September 21, 2012


a) Loss on sale of investment in subsidiaries in Malaysia, which operated in the theatrical

exhibition business aggregating to ` 2,722.90 lakhs

b) Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a

subsidiary of Digital Domain Media Group Inc. ('DDMG') for various services rendered.

On September 11, 2011, DDMG along with all its subsidiaries filed for bankruptcy

proceedings in the United States of America. The amount provided for outstanding

balances is ` 2,774.80 lakhs

c) Loss on Litigation settlement by US subsidiary of ` 2,683.90 lakhs. The subsidiary was a

defendant in a law suit regarding termination of a lease. During the previous year, the said

subsidiary received an adverse order for claim of damages by the landlord to the tune of

USD 4.9 million. The US Supreme Court has denied an appeal filed by the subsidiary

Company. Accordingly, the Subsidiary has made a provision of ` 2,683.90 lakhs for such

claim along with other charges payable as per the order. Considering its nature same has

been disclosed as an exceptional item.

13. For Period 2012, subsidiaries in USA and Nepal have been considered as non-integral and

subsidiaries in UK, Malaysia, Mauritius and Netherlands have been considered as integral to the

operations of the Parent Company in India.

14. Interest and finance charges (net) include loss on derivative transactions (net) of ` 5,966.80 lakhs.

III. Period 2011

1. Lease disclosure under AS 19 - „Leases‟


equipments which are renewable thereafter as per the terms of the respective agreements.

The future minimum lease payments in respect of non-cancellable operating leases are as follows:

Particulars Minimum

lease

payments (` in

lakhs)

For the Parent Company / Subsidiary Companies

Amounts due within one year from the balance sheet date 14,312.10



160,750.80

For Joint ventures (Group's share)

Amounts due within one year from the balance sheet date 193.00

Amounts due in the period between one year and five years 176.90

F - 52

369.90

Amount payable within lock-in-period is ` 102,125.80 lakhs.

Amount debited to statement of profit and loss for lease rental is ` 17,114.60 lakhs excluding

amount capitalised ` 906.20 lakhs.

2. Mark to Market (MTM) losses on derivative contracts

The Group has assigned the derivative contract pertaining to Interest rate swap for long term

loans to a Company (Assignee), who has advised the Group regarding entering into these

contracts. The Assignee had advised the Group with regards to entering into these derivative

contracts and has indemnified the Company with regards to any mark to market losses that the

Group will have to incur on termination of these contracts. Consequently, the total mark to

market loss of ` 1,921.40 lakhs has not been recognised by the Group in its statement of profit

and loss. For the same reason, the Group has also not recognised a liability for these MTM losses and

amounts receivable from the Assignee Company.


The Company‟s interests in jointly controlled entities (incorporated Joint ventures) are:

Name of the Company

Country of

Incorporatio

n

% of ownership

interest as at

March 31, 2011


Cineplex Private Limited India 50%


Details of Joint ventures


(` in lakhs)


Shareholders' funds


(b) Reserves and surplus 349.90

Share application money, pending allotment 125.00

LIABILITIES


(a) Long-term borrowings 383.00

(b) Deferred tax liabilities (net) 38.40

(c) Other long-term liabilities 4.30

(d) Long-term provisions 1.00

F - 53


(` in lakhs)

Current liabilities

(a) Trade payables 103.70


(c) Short-term provisions 80.30

Total 1,207.90

ASSETS

Non-current assets

(a) Fixed assets

(i) Tangible assets (including capital work-in-progress) 761.90


Current assets

(a) Current investments 10.40

(b) Inventories 11.80

(c ) Trade receivables 84.60

(d) Cash and bank balances 33.90

(e) Short-term loans and advances 101.10

(f) Other current assets 36.20

Total 1,207.90

Statement of profit and loss



Total revenue 1,102.30

Expenses

Direct operational expenses 540.10

Employee benefits expense 54.40

Finance costs (net) 14.30



Total expenses 1,140.40

Loss before tax (38.10)

Tax expenses


(2) Deferred tax (credit) (1.00)

Loss for the period (67.40)

OTHER MATTERS

1. Contingent liabilities 116.20*

2. Capital commitments Nil

*amount is not quantifiable in case of joint venture

Movement of the aggregate reserves of the joint ventures:

F - 54


(` in lakhs)

Reserves as at beginning of the period 491.30

Add: Share of loss for the period (67.40)

Reserves as at the end of the period 423.90

4. Foreign currency exposures (other than investments and fixed assets) not covered by

forward contracts

Particulars Currency As at March 31, 2011

Amount – foreign

currency (lakhs)

Amount

(` in lakhs)


GBP 9.50 691.60

EURO 0.70 44.80

NPR 375.80 242.60

MYR 34.60 519.70

SGD 0.40 14.40

MUR 174.30 288.80


GBP 7.60 553.20

EURO 0.40 25.60

MYR 99.30 1,491.30

NPR 72.30 46.70

MUR 1.10 1.80


MYR 53.20 799.00


MYR 22.00 330.40

NPR 157.20 101.50

GBP 4.10 298.40

EURO 0.30 19.20

MUR 0.40 0.70

5. Foreign Currency Convertible Bonds („FCCB‟)

On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency

Convertible Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840

lakhs which were convertible at any time on or after March 7, 2006 and up to the close of the

business on January 19, 2011 by the holders of the Bonds („the Bondholders‟) into newly issued

equity shares of the Company with full voting rights with par value of ` 5 each („Shares‟) at an

initial conversion price (as defined in Terms and Conditions of the Bonds) of ` 543.42 per share

with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. The Bonds were listed on the

F - 55

Singapore Exchange Securities Trading Limited („SGX ST‟). Of the above, bondholders holding

bonds of value Euro 633.50 lakhs opted for conversion in period ended March 31, 2008. During the

year ended March 31, 2009, the Company demerged its radio division to Reliance Broadcast

Network Limited. As per the terms of FCCB‟s issued, the conversion price of the bonds is subject

to adjustment and the Company was awaiting a confirmation from the bondholders till the date of

redemption. Unless previously redeemed, converted or purchased and cancelled, the bonds will

mature on January 26, 2011 at 121.679 per cent of the principal amount.

During the financial period ended March 31, 2008, the Company classified the liability towards

FCCB‟s as non–monetary liability inter-alia on the basis of the trend of earnings, movement of the

Company's share prices and conversion option exercised by the FCCB holders. On January 25,

2011, the entire FCCB‟S outstanding as at March 31, 2010, aggregating to Euro 206.50 lakhs have

been redeemed at ` 15,814.20 lakhs (including premium ` 3,085.40 lakhs). Consequently on

redemption, foreign exchange loss aggregating to ` 1,489.60 lakhs has been accounted.

6. Movement of goodwill


(` in lakhs)

Opening balance of goodwill 8,728.62

Goodwill for Subsidiaries acquired in the current year -

Goodwill for additional shares in Subsidiaries acquired in the current year (net) 90.80

8,819.42

7. The Parent Company's stake in share capital of Sultan Production Private Limited ('Sultan') is

in excess of 20%. This investment was made by the Parent Company with the intention of

investment in the movie "Sultan: The warrior". However, during Period 2009, the Company has

issued a letter of termination demanded refund for the moneys paid by the Company and filed a

recovery suit against Orcher Studios, as per a shareholders‟ agreement signed by the Company

which has been agreed to by Orcher Studios. Since, the Company has intention of selling the

shares; the Company has decided not to consider Sultan as an associate under AS-18 Related

Party Disclosures and AS-23 'Accounting for Associates in Consolidated Financial Statements.

The outstanding balance of Sultan Production Private Limited was ` 1,158.80 lakhs as at March

31, 2010, of which the Company has considered ` 120.00 lakhs as doubtful in Period 2010 and

provided for the same.

During Period 2011 Company have received all the money receivable as per the shareholders

agreement and sold the shares

8. During Period 2011, the Company has sold assets of ` 10,417.30 lakhs for `13,997.20 lakhs

pertaining to the theatrical exhibition segment and leased them back subsequently. The profit

on sale of these assets has been disclosed under the Annexure of other income.


subsidiaries in UK, Malaysia, Mauritius and Netherlands have been considered as integral to

the operations of the Parent Company in India.

10. Interest and finance (net) charge includes loss on derivative contract (net) ` 2,166.90 lakhs.

F - 56

IV. Period 2010





Particulars Minimum

lease

payments (` in

lakhs)

For the Parent Company




112,956.40

For Subsidiaries



Amounts due after five years 10,170.30

19,791.70

For Joint ventures (Group's share)



562.90


Amount debited to profit and loss account for lease rental is ` 12,366.10 lakhs excluding amounts

capitalised ` 1,344.20 lakhs.


The Group has assigned the derivative contracts pertaining to Options for FCCB and interest

rate swap for long term loans to a Company (Assignee), who has advised the Group regarding

entering into these contracts. The Assignee had advised the Group with regards to entering into

these derivative contracts and has indemnified the Group with regards to any mark to market

losses that the Group will have to incur on termination of these contracts. Consequently, the

total mark to market loss of ` 2,750.40 lakhs has not been recognised by the Group in its profit

and loss account. For the same reason, the Group has also not recognised a liability for these

MTM losses and amounts receivable from the Assignee Company.



F - 57

Name of the Company

Country of

Incorporation

% of ownership

interest as at

March 31, 2010





Particulars

Period 2010

(` in lakhs)

I Assets

1. Fixed assets net block (including Capital work-in-progress) 871.00

2. Investments

-

3. Current assets, loans and advances

a) Inventories

11.40

b) Sundry debtors

70.50

c) Cash and bank balances

77.80

d) Interest accrued but not due

1.00

e) Loans and advances

277.80

II Liabilities

1. Shareholders' fund

491.30

2. Advance towards share application money 125.00

3. Unsecured loans

456.80

4. Deferred tax liability (net) 39.50

5. Current liabilities and provisions

a) Liabilities

153.90

b) Provisions

43.00

III Income

1. Income from theatrical exhibition (net of duties and taxes) 1,027.30

2. Other income

36.00

IV Expenses

1. Direct operational expenses

539.70

2. Personnel costs 53.60

3. Other operating and general administrative expenses

348.60

4. Depreciation

111.80

5. Interest

44.40

Loss before tax

(34.80)

Provision for tax (including deferred tax)

(47.50)

Profit after tax

12.70

V. Other matters

1. Contingent liabilities

948.20

2. Capital commitments

Nil

F - 58

Particulars

Period 2010

(` in lakhs)

Movement of the aggregate shareholders funds of the joint ventures:

At the beginning of the period

478.60

Add: Share of profits for the period

12.70

At the end of the period

491.30


forward contracts


Amount – foreign

currency (lakhs)

Amount

(` in lakhs)

Sundry debtors USD 29.00 1,305.90

GBP 1.60 108.60

EURO 0.40 24.20

NPR 0.20 0.10

Sundry creditors USD 59.60 2,683.80

GBP 16.70 1,133.40

EURO 1.60 96.90

MYR 107.60 1,484.30

NPR 113.60 72.20

MUR 1.20 1.80

Loans and advances USD 14.20 639.40

GBP 6.20 420.80

EURO 0.10 6.10

MYR 31.40 433.20

NPR 296.60 188.40

MUR 174.30 265.00

Loans taken USD 101.90 4,588.60

MYR 53.20 733.90

NPR 443.30 281.60

Advance from

customer

USD 3.30 148.60

GBP 0.50 33.90

Cash and bank

balances

USD 54.70 2,463.10

MYR 28.00 386.20

NPR 1.50 1.00

GBP 1.10 74.70

F - 59


Amount – foreign

currency (lakhs)

Amount

(` in lakhs)

EURO 0.10 6.10

MUR

Buyers credit USD 46.10 2,075.90

GBP 1.20 78.00

EURO 8.20 496.70

Foreign currency

convertible bonds

(FCCB) (refer note

(c) of B of Annexure

IV)

EURO 206.50 12,511.90

Provision for premium

on redemption on

FCCB

EURO 44.80 2,712.40


On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency

Convertible Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840

lakhs. The Bonds are convertible at any time on or after March 7, 2006 and up to the close of

the business on January 19, 2011 by the holders of the Bonds („the Bondholders‟) into newly

issued equity shares of the Company with full voting rights with par value of ` 5 each („Shares‟)

at an initial conversion price (as defined in Terms and Conditions of the Bonds) of ` 543.42 per

share with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. Of the above

bondholders holding bonds of value Euro 633.50 lakhs opted for conversion in Period 2008.

The balance bond values aggregating to EURO 206.50 lakhs are outstanding as on the balance

sheet date. During Period 2009, the Company demerged its radio division to Reliance

Broadcast Network Limited (refer note 1 of V of E of Annexure IV). As per the terms of bond

issue, the conversion price of the bonds is subject to adjustment, after agreement with the

bondholders. Pending finalisation of agreement, the revised conversion price is not yet decided.

Consequently the equity shares issuable on conversion of FCCB 2,061,884 have been computed

based on initial conversion price. The Bonds are listed on the Singapore Exchange Securities

Trading Limited („SGX ST‟).

The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on

or after January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain

conditions. Unless previously redeemed, converted or purchased and cancelled, the bonds will


The balance in premium account as at March 31, 2010 is as follows:

F - 60

Period 2010

(` in lakhs)

Opening balance

3,084.79

Adj: foreign exchange fluctuation

(372.50)

Closing balance

2,712.29

During Period 2008, the Company classified the liability towards FCCB as non–monetary

liability inter-alia on the basis of the trend of earnings, movement of the Company's share

prices and conversion option exercised by the FCCB holders. The Company continues to

classify the liability towards FCCB as a non–monetary liability as in its view the current fall in

the market price of the Company‟s share price and non-conversion by bond holders is a

temporary aberration. Further, pursuant to scheme of demerger of the radio division, the

conversion price is subject to adjustment, after agreement with bond holders. The Company

estimates that there will be significant adjustments to conversion price considering the value of

Radio division which has demerged. Consequently, the foreign exchange fluctuation (gain) /

loss for the year ended March 31, 2010 aggregating to ` (1,718.10) lakhs has not been

recognised by management. Cumulative loss not recognised due to classification of FCCB as a

non-monetary liability is ` 1,272.20 lakhs in respect of outstanding FCCB's. Unrecognised

losses on FCCB's which were converted into equity shares in earlier periods is ` 2,199.50 lakhs.

(Refer note (c) of B of Annexure IV)

6. The Parent Company's stake in share capital of Sultan Production Private Limited ('Sultan') is

in excess of 20%. This investment was made by the Company with the intention of investment

in the movie "Sultan: The warrior". However, during Period 2010, the Company has issued a

letter of termination demanded refund for the moneys paid by the Parent Company and filed a

recovery suit against Orcher Studios, as per a shareholders agreement signed by the Company

which has been agreed to by Orcher Studios.

Since, the Parent Company has intention of selling the shares, the Company has decided not to

consider Sultan as an associate under AS-18 Related Party Disclosures and AS-23 'Accounting

for Associates in Consolidated Financials Statements.

The outstanding balance of Sultan Production Private Limited is ` 1,158.80 lakhs of which the

Company has considered ` 120.00 lakhs as doubtful in Period 2010 and provided for the same.

7. Movement of goodwill


(` in lakhs)


Goodwill for Subsidiaries acquired in the period 1,944.36

Goodwill for additional shares in Subsidiaries acquired in the period (net) 2,581.70

Total 8,728.62


subsidiaries in UK, Malaysia, Mauritius and Netherlands have been considered as integral to

the operations of the Parent Company in India.

F - 61

9. Interest and finance charges (net) include loss on derivative transactions (net) of ` 3,539.20

lakhs.

V. Period 2009

1. Demerger of the Radio Business of the Company to Reliance Broadcast Network Limited

The Board of the Company in their meeting held on October 25, 2008 approved a Scheme of

Arrangement („the Radio Scheme‟) between Reliance Broadcast Network Limited („RBNL‟), a

wholly owned subsidiary and the Company for the de-merger of the Radio business of the Company

into RBNL.

The shareholders of the Company accorded their approval in a court convened meeting of members

of the Company held on January 22, 2009. The Radio Scheme was approved by the Hon‟ble High

Court of Judicature at Bombay vide its order dated April 4, 2009 and filed with the Registrar of

Companies („ROC‟) on June 30, 2009, as required under Section 391(3) of the Act after obtaining

approval from the Ministry of Information and Broadcasting („MIB‟) for vesting of radio licenses

held by the Company in the name of RBNL.

As per the Radio Scheme, the Radio business of the Company stands transferred to RBNL with

effect from April 1, 2008, the Appointed Date and has been given effect to on June 30, 2009, being

the Effective Date and the accounting treatment prescribed by the Radio Scheme has been given

effect to in the financial statements for the year ended March 31, 2009.

All the assets of and liabilities, directly allocable and as mutually determined by the Board of

Directors of RBNL and the Company, of the Radio business as at April 1, 2008 have been

transferred at their respective book values. Further, general borrowings of the Company as on April

1, 2008 have been allocated between the Company and RBNL on the basis of ratio of total assets of

the Company immediately before giving effect of the Radio Scheme. In consideration of the

demerger, RBNL will allot equity shares of ` 5 each in the ratio of 1:1 and upon issue of shares as

above the Company‟s investment in shares of RBNL will stand cancelled.

As per the provisions of the Radio Scheme, excess balances of assets transferred over liabilities and

the cost of Investments in RBNL cancelled has been debited to Securities premium account as

follows:

Amount

(` in lakhs)

Assets of Radio Business as of April 1, 2008 transferred as per the provisions of the

Radio Scheme 44,929.50

Liabilities of Radio Business as of April 1, 2008 transferred as per the provisions of the

Radio Scheme (6,831.50)

General borrowings of the Company as of April 1, 2008 allocated between RBNL (Radio

Business) and the Company as per the provisions of the Radio Scheme (22,400.00)

Excess of net assets transferred to RBNL (Radio Business) 15,698.00

Cancellation of investment in RBNL 1,010.00

Total amount debited to Securities premium account as per the Provisions of the


The radio business has been held / carried on in trust for the period April 1, 2008 till the Effective

Date by the Company. Accordingly, the Company has charged interest, at an agreed rate on the

amount receivable as at the appointed date and subsequent funding till the effective date. The total

F - 62

receivable ` 26,095.00 lakhs (includes interest ` 2,584.90 lakhs) has been disclosed as a recoverable

from RBNL.

However, for Period 2009 financial statements, pending allotment of shares by RBNL, the

investment has been cancelled to give effect to the substance of the Radio Scheme as approved by

the Hon‟ble High Court of Judicature at Bombay and RBNL ceases to be a subsidiary for Period

2009 financial statements.

2. Scheme for merger of wholly owned subsidiaries with the Company

The Board of the Company in their meeting held on January 30, 2009 approved the Scheme of

Amalgamation („Amalgamation Scheme‟) of the Company („Transferee‟) with its wholly owned

subsidiaries Adlabs Multiplexes and Theatres Limited („AMTL‟), Adlabs Multiplex Limited

(„AML‟), Mahimna Entertainment Private Limited („MEPL‟) and Rave Entertainment Private

Limited („REPL‟) (collectively referred to as the Transferor Companies). The Amalgamation

Scheme was approved by the Hon‟ble High Court of Judicature at Bombay vide its order dated May

8, 2009 and filed with the Registrar of Companies („ROC‟) on May 29, 2009, as required under

Section 391(3) of the Act.

AMTL, AML and REPL are engaged in the exhibition business and has been included in the

exhibition segment. MEPL has been included in the unallocated corporate segment.

As per the Amalgamation Scheme, AMTL, AML, MEPL and REPL amalgamated with the

Company with effect from April 1, 2008, the Appointed Date and has been given effect to on May

29, 2009, being the Effective Date and the accounting treatment prescribed by the Amalgamation

Scheme has been given effect to in the financial statements for the Period 2009.

In accordance with the requirements of the Amalgamation Scheme, the credit aggregating ` 5,826.20

lakhs to Capital reserve has been arrived at as follows:

All assets and liabilities of the transferor companies as at April 1, 2008 which have been

identified by the Board of Directors have been recorded at their respective fair values (as

determined based on valuation reports from government approved valuer / management

estimates) as on March 31, 2009. Investments in the equity shares of the transferor companies

as appearing in the books of the Transferee Company as at March 31, 2009 have been

cancelled. The excess of net assets of the transferor companies taken over at fair value (as

determined on March 31, 2009) over the cost of investment in these companies, aggregating `

3,605.80 lakhs has been credited to Capital reserve.

The Company has recorded an increase in the value of its assets based on revaluation of certain

assets of the Company pertaining to the Exhibition and Film Services business. The total

increase in value of assets of the Company is ` 17,890.10 lakhs, based on revaluation reports

obtained from government approved external valuers. The Company has also reduced the value

of its assets by ` 15,669.70 lakhs (Fixed assets and intangible rights ` 3,989.50 lakhs, Debtors `

2,050.70 lakhs, Loans and advances including capital advances ` 6,188.50 lakhs and

Investments ` 3,441.00 lakhs). The net increase in the value of assets of the Company ` 2,220.40

lakhs has been credited to Capital reserve pursuant to the provisions of the Scheme.

F - 63

The authorised share capital of the transferor Companies was considered as authorised share

capital of the transferee Company. Hence, the authorised share capital of the Company has been

increased by ` 1,602.90 lakhs divided into 32,058,000 shares of ` 5 each.

The above mentioned accounting treatment is in accordance with the Amalgamation Scheme, had

the Company followed accounting treatment prescribed by AS – 14 “Accounting for

Amalgamations” / Indian GAAP:

The excess of investments over net assets acquired for the Company amounting to ` 1,939.10

lakhs would have been transferred to Goodwill and would have been amortised over 5 years.

The appreciation in the value of the Company‟s assets aggregating ` 17,890.10 lakhs would

have been credited to the Revaluation reserve instead of being credited to the capital reserve.

The diminution in the value of the Company‟s assets aggregating ` 15,669.70 lakhs would have

been debited to the profit and loss account instead of capital reserve. Accordingly, had the

Amalgamation Schemes as referred above been accounted for as per the requirements of AS –

14 “Accounting for Amalgamations” / Indian GAAP, the loss for the year would be higher by `

16,057.60 lakhs, capital reserve would have been lower ` 281.20 lakhs, revaluation reserve

would have been higher by ` 17,890.10 lakhs and balance of Goodwill would have been `

1,551.30 lakhs.





Particulars Minimum lease

payments (` in lakhs)





Total 106,087.40

For Subsidiaries




Total 19,727.20

For Joint venture (Group‟s share)


Total 2,046.70

F - 64


Amount debited to profit and loss account for lease rental is ` 9,672.10 lakhs excluding amount



The Company has assigned the derivative contracts pertaining to Options for FCCB and Interest rate

swap for long term loans to a Company(„Assignee‟), who has advised the Company regarding

entering into these contracts. The Assignee had advised the Company with regards to entering into

these derivative contracts and has indemnified the Company with regards to any mark to market

losses that the Company will have to incur on termination of these contracts. Consequently, the total

mark to market loss of `14,037.00 lakhs have not been recognised by the Company in its profit and

loss account.

For the same reason, the Company has also not recognised a liability for these MTM losses and


5. Interest in joint ventures



Incorporation

% of ownership

interest as at

March 31, 2009





Period 2009

(` in lakhs)

I Assets

1. Fixed assets (including Capital work-in-progress) 964.20


a) Inventories 11.20

b) Sundry debtors 53.70

c) Cash and bank balances 82.00

d) Interest accrued but not due 0.60

e) Loans and advances 115.00

II Liabilities

1. Shareholders' fund 478.60

2. Unsecured loans 506.80



F - 65

Period 2009

(` in lakhs)

a) Liabilities 159.30

b) Provisions 26.30

III Income

1. Sales (net of duties and taxes) 1,186.70

2. Other income 92.00

IV Expenses

1. Operating expenses 956.80

2. Depreciation 109.70

3. Interest -

Profit before tax 212.20

Provision for tax (including deferred tax) 51.50

Profit after tax 160.70

V. Other matters

1. Contingent liabilities 1,016.10


Movement of the aggregate shareholders‟ funds of the joint ventures:

At the beginning of the period 404.90

Add: Share of profits for the period 160.70

Less: Dividend declared during the period (87.00)

At the end of the period 478.60


forward contracts

Particulars


Foreign Currency

Amount (lakhs) Amount (` in lakhs)

Sundry debtors USD 34.60 1,805.20

GBP 0.50 37.10

EURO 0.20 13.80


GBP 2.30 170.60

EURO 0.10 6.90

MUR 133.60 216.80

MYR 0.60 8.60

NPR 2.80 1.80

Loans and advances USD 37.80 1,972.20

GBP 0.50 37.10

EURO 0.60 41.30

MYR 19.70 282.00

NPR 41.30 26.60

MUR 282.80 458.90

F - 66

Particulars


Foreign Currency

Amount (lakhs) Amount (` in lakhs)


MYR 68.70 983.30

NPR 54.70 35.30

GBP 1.10 81.60

EURO 0.40 27.60

Buyers credit USD 5.30 276.60

GBP 1.20 85.30

EURO 8.20 564.90

Unsecured loans USD 156.40 8160.10

Foreign Currency Convertible bonds

(„FCCB‟)

EURO 206.50 14,230.00

Provision for premium on redemption

of FCCB

EURO 44.80 3,084.80


On January 25, 2006 the Company („Issuer‟) issued Zero Coupon Foreign Currency Convertible

Bonds („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds are convertible at any time

on or after March 7, 2006 and up to the close of the business on January 19, 2011 by the holders of

the Bonds („the Bondholders‟) into newly issued equity shares of the Company with full voting

rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in Terms and

Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion of `

54.26 = EUR 1.00. Of the above bondholders holding bonds of value Euro 633.50 lakhs opted for

conversion in the Period 2008. The balance bondholders holding bonds value aggregating to Euro

206.50 lakhs have not opted for conversion and outstanding as on the balance sheet date. The

conversion price is subject to adjustment in certain circumstances, such as demerger of divisions,

based on the agreement with bondholders and the Company. Pending finalisation of agreement, the

revised conversion price is not yet decided. Consequently the equity shares issuable on conversion

of FCCB have been computed based on initial conversion price. The Bonds are listed on the

Singapore Exchange Securities Trading Limited („SGX-ST‟).

The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or

after January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain





(` in lakhs)

Opening balance 2,839.89

Add: foreign exchange fluctuation 244.90

Closing balance 3,084.79

During Period 2008, the Company re-classified the liability towards Foreign Currency Convertible

Bonds ('FCCB') as non–monetary liability inter-alia on the basis of the trend of earnings, movement

F - 67

of the Company's share prices and conversion option exercised by the FCCB holders. The Company

continues to classify the liability towards FCCB as a non–monetary liability as in its view the

current fall in the market price of the Company‟s share price and non-conversion by bond holders is

a temporary aberration. Consequently, the foreign exchange fluctuation loss for the Period 2009

aggregating to ` 1,130.10 lakhs has not been recognised by the management. Cumulative loss not

recognised due to classification of FCCB as a non-monetary liability is ` 2,990.40 lakhs in respect of

outstanding FCCB's. Unrecognised losses on FCCB's which were converted into equity shares in

earlier periods is ` 2,199.50 lakhs.


8. Impairment Disclosure

During Period 2009, the Company has impaired certain fixed assets pertaining to the:- Exhibition

Division on the basis of determination of value in use of each property, which the Company

considers as the relevant Cash Generating Unit („CGU‟) for the purpose of impairment testing. The

Company has considered a discount rate of 11.68%. The amount of impairment loss of ` 551.70

lakhs has been debited to the Capital reserve pursuant to Scheme of Amalgamation.

(Refer note 2 of V of E of Annexure IV)



(` in lakhs)


Goodwill, reversed on Subsidiaries which have been amalgamated in the Period 2009 (1,605.50)

Goodwill for Malaysia Subsidiary acquired in the Period 2009 3,060.70

Goodwill for additional shares in Subsidiaries acquired in the Period 2009 0.60

Total 4,202.56

10. For Period 2009, subsidiaries in USA have been considered as non-integral and subsidiaries in

UK, Malaysia, Mauritius, Nepal and Netherlands have been considered as integral to the

operations of the Parent Company in India.


VI. Period 2008

1. Modified Composite Scheme of amalgamation and arrangement

The Board of the Company at their meeting held April 23, 2006 approved the Composite Scheme of

amalgamation and arrangement between the Company, Entertainment One India Limited („E-

ONE‟), Adlabs Multiplex and Theatres Limited („AMTL‟) and Reliance Broadcast Network

Limited („RBNL‟). The shareholders of the Company accorded their approval to the Composite

Scheme at the Annual General Meeting on July 29, 2006. The Composite Scheme was approved by

F - 68

the Hon'ble High Court of Judicature at Bombay vide its order dated September 15, 2006. The

Composite Scheme inter-alia provided for the following:

the amalgamation of E-ONE with the Company effective April 1, 2005;

the merger of the digital business of AMTL with the Company effective April 1, 2005; and

the demerger of the radio business of the Company to RBNL effective March 31, 2006.

The Company had made an application to the Ministry of Information and Broadcasting for vesting

of radio licenses held by it in the name of RBNL. Pending the said approval, the Composite Scheme

was not filed with the Registrar of Companies ('ROC') as required under Section 391(3) of the

Companies Act, 1956 ('the Act'). However, for the purpose of the fifteen month period ended June

30, 2007 financial statements, pending completion of licensing and other procedural formalities, the

Composite Scheme was given effect to in view of the Court approval and to give effect to the

substance of the Composite Scheme as approved by the Hon'ble High Court of Judicature at

Bombay

In accordance with the requirements of the Composite Scheme, the merger of E-ONE as well as the

digital business of AMTL and the demerger of the radio business of the Company was accounted

for as follows:

All assets and liabilities of E-ONE as at April 1, 2005 were recorded by the Company at

their fair values. Since E-ONE was a wholly owned subsidiary of the Company, the

investment by the Company in the shares of E-ONE was cancelled against the assets and

liabilities acquired on amalgamation. The excess of net assets taken (at fair value) over the

cost of investment in EONE amounting to ` 272.58 lakhs was credited to 'Amounts pending

transfer to the Securities premium account and / or General reserve account as per the

Composite Scheme of amalgamation and arrangement'.

All assets and liabilities of the digital business of AMTL as at April 1, 2005 were recorded

by the Company at their book values. Since AMTL was a wholly owned subsidiary of the

Company, no consideration was paid against the assets and liabilities acquired. The excess

of liabilities over the assets taken over (at book value) amounting to ` 44.69 lakhs was

debited to 'Amounts pending transfer to the Securities premium account and / or General

reserve account as per the Composite Scheme of amalgamation and arrangement'.

All assets and liabilities of the radio business of the Company as at March 31, 2006 were

transferred at their respective book values. The aggregate value of net assets transferred

pursuant to the Composite Scheme in excess of ` 10,000.00 lakhs (which was recorded as

receivable from RBNL) was recorded in 'Amounts pending transfer to the Securities

premium account and/or General reserve account as per the Composite Scheme of

amalgamation and arrangement'

Subsequently during the current period, the Board modified the aforesaid Composite Scheme vide

circular mode pursuant to Section 289 of the Companies Act, 1956 on February 13, 2008. The

Modified Composite Scheme of amalgamation and arrangement (the Modified Scheme) between the

Company, E-ONE and AMTL was approved by the Hon'ble High Court of Judicature at Bombay

vide its order dated March 7, 2008 and was filed with the ROC as required under Section 391(3) of

the Companies Act, 1956 ('the Act') on March 31, 2008.The Modified Scheme inter-alia provides

for the following:

F - 69



adjusting the net results of the transactions related to radio business from March 31, 2006

till the effective date in the General reserve account of the Company.

As the Composite Scheme was primarily modified in relation to the radio business, in respect of

amalgamation of E-ONE and merger of digital business of AMTL, these were already given effect

to in the financial statements of the fifteen month period ended June 30, 2007. Accordingly, no

further adjustments are made in the current period's financial statements, except that the amounts

which were not credited / debited to 'Securities premium' / 'General reserve' pending filing the

Composite Scheme with ROC have now been debited / credited to Securities premium / General

reserve as applicable on the filing of the Modified Scheme with the ROC.

During the Period upto March 31, 2008, E-ONE and AMTL carried on their existing business in

trust for and on behalf of the Company. All vouchers, deeds, licenses, agreements, loan documents,

etc are in the name of E-ONE and AMTL. The tile deeds, licenses, agreements, loan documents, etc

are being transferred in the name of the Company.

As regards the Radio business, the provision relating to demerger of the radio business of the

Company to RBNL effective March 31, 2006 as provided in the Composite Scheme and given

effect to in the fifteen month period ended June 30, 2007 financial statements has been deleted in

the Modified Scheme. Accordingly, all the adjustments effected in the fifteen month ended June 30,

2007 financial statements in this regard have been reversed during the current period. Further, in

accordance with the Modified Scheme, the net results of the transactions related to radio business

for the period from March 31, 2006 till the effective date i.e. March 31, 2008 have been debited to

General reserve account of the Company.

The net results of the transactions related to radio business for the period from March 31, 2006 up to

March 31, 2008 are summarised hereunder:


(` in lakhs)

Fifteen

month period

ended June

30, 2007

(` in lakhs)

Income 11,160.90 3,320.30

Expenditure

Direct costs 5,062.10 2,024.60

Personnel costs 3,477.60 2,528.10

Other operating and general administrative expenses * 5,584.10 4,547.60

Interest 1,346.30 2,119.90

Depreciation / amortisation 2,396.60 1,474.80

Loss before taxation (6,705.80) (9,374.70)

Tax Expenses - fringe benefit tax 114.90 75.50

Loss after tax (A) (6,820.70) (B) (9,450.20)

Total (A + B) (16,270.90)

Tax effect of the above 1,907.60

Balance transferred to General reserve account 14,363.30

F - 70

* includes ` 785.80 lakhs (Fifteen month ended June 30, 2007: ` 2,086.70 lakhs, since reversed)

being interest etc. allocated / charged in the fifteen month ended June 30, 2007 by Company to the

Radio Business on net funds utilised in carrying on the radio business.

For deviation to the accounting treatment recommended in the standard refer note 3 of VI of E of

Annexure IV.

2. Acquisition of Rave Entertainment Private Limited ('REPL')

On May 31, 2007, the Company entered into a Share Purchase Agreement ('SPA') with the

shareholders of Rave Entertainment Private Limited ('REPL'), a company engaged inter-alia in the

business of owning and operating multiplexes, for acquisition of 100% stake in that company. One

of the conditions precedent to the SPA was the approval by the Hon'ble High Court of Judicature at

Allahabad of the Scheme of demerger filed by REPL for demerger of Kanpur properties. Pending

approval of the Scheme of demerger by the said Court, the shares of REPL were held in Escrow and

the consideration of ` 500 lakhs was disclosed under loans and advances in the last period's

financial statements. On December 12, 2007, the Hon'ble High Court of Judicature at Allahabad

approved the said Scheme of demerger. Consequently, REPL is now a wholly owned subsidiary of

the Company and the amounts placed in Escrow and those disclosed under loans and advances have

been adjusted as per the terms of the SPA.

3. Acquisition of Katch 22 Entertainment Private Limited ('Katch 22')

On April 23, 2007, the Company acquired 100% stake in Katch 22, a company engaged in the

production and distribution of films. Subsequently, pursuant to the Board of Directors' approval

vide resolution dated April 26, 2007, the Company had filed the Scheme of amalgamation of Katch

22 ('the Katch 22 Scheme') with the Hon'ble High Court of Judicature at Bombay for the merger of

Katch 22 with the Company effective April 1, 2006. The Katch 22 Scheme was approved by the

Hon'ble High Court of Judicature at Bombay vide its order dated September 14, 2007 and filed with

the ROC on October 9, 2007. The Katch 22 Scheme inter-alia provides for the amalgamation of

Katch 22 Entertainment Private Limited with the Company effective April 1, 2006.

In accordance with the requirements of the said Katch 22 Scheme, the merger of Katch 22 with the

Company has been accounted for as follows:

As per the Katch 22 Scheme, Katch 22 amalgamates with the Company retrospectively

from April 1, 2006, the Appointed Date. All assets and liabilities of Katch 22 as at April 1,

2006 have been recorded by the Company at their fair values. Since Katch 22 was a wholly

owned subsidiary of the Company, the investment by the Company in the shares of Katch

22 has been cancelled against the assets and liabilities acquired on amalgamation. The

excess of net assets taken over at fair value (as determined on the effective date i.e.

October 9, 2007) over the cost of investment in Katch 22 amounting to ` 201.80 lakhs has

been credited to General reserve account.

The Company has also recorded the reduction of ` 2,000 lakhs in the value of its assets

(debtors, unamortised rights and loans and advances) by debit to 'General reeserve account'

as per the provisions of the Katch 22 Scheme.

F - 71

The net results of the transactions relating to Katch from April 1, 2006 upto the Effective Date are

as follows:

Particulars For the period

from July 1, 2007

to October 8, 2007

(` in lakhs)

Fifteen month

period ended

June 30, 2007

(` in lakhs)

Sales and Service (net) - 701.90

Other Income 23.30 -

Total Revenue 23.30 701.90

Direct costs - 1,691.30

Other operating and general administrative expenses 0.20 0.10

Interest - 131.60

Profit Before taxation 23.10 (1,121.10)

Tax expenses - -

Profit after tax 23.10 (1,121.10)

Impact of Schemes referred to in notes 1 of VI of E of Annexure IV and 3 of VI of E of

Annexure IV:

Had the Company followed the accounting treatment prescribed by AS-14 / generally accepted

accounting principles in India:

` 201.80 lakhs arising from the merger of Katch 22 with the Company and credited to the

General reserve account would have been credited to Capital reserve account;

Reduction of ` 2,000.00 lakhs in value of the Company's assets would have been debited to

the Profit and loss account instead of General reserve account;

` 2,086.70 lakhs being interest on monies advances by the Company to the Radio Business

would have been reversed in the profit and loss account as against the reversal in the

General reserve; and

the net results (loss) of the transactions related to Radio Business from March 31, 2006

upto the Effective date i.e. March 31, 2008 aggregating to ` 14,363.30 lakhs (net of tax

benefits) arising from modification in the Scheme of demerger of Radio Business and

debited to the General reserve account would have been debited to profit and loss account.

Accordingly, had the Modified Scheme been accounted for in compliance with the requirements of

AS 14 / generally accepted accounting principles in India, the profit for the period before tax would

have been lower by ` 18,450.00 lakhs, General reserve account would have been higher by `

18,248.20 lakhs and Capital reserve account would have been stated at ` 201.80 lakhs.





F - 72


(` in lakhs)





Total 77,050.40

For Subsidiaries



Total 2,401.80

For Joint venture (Group‟s share)



Total 218.50


Amount debited to profit and loss account for lease rental is ` 3,287.20 lakhs.

5. Interests in Joint Venture

The Group's interests in jointly controlled entities (incorporated Joint ventures) are:


incorporation % of ownership

interest as at March 31, 2008

Swanston Multiplex Cinemas Private Limited India 50.00% Adlabs Multiplex Limited (Became wholly owned subsidiary with effect from December 20, 2007)

India -

Cineplex Private Limited India 50.00% Divyashakti Marketing Private Limited India 50.00%


Particulars Period 2008 (` in lakhs)

I. Assets 1. Fixed assets (including Capital work-in-progress) 1,063.80 2. Investments 56.40 3. Current assets, loans and advances a) Inventories 8.50 b) Sundry debtors 88.40 c) Cash and bank balances 69.30 d) Interest accrued but not due 0.50 e) Loans and advances 73.50 II. Liabilities


F - 73

Particulars Period 2008 (` in lakhs)

2 Unsecured loans 634.60 3. Deferred tax liability (net) 54.10 4. Current liabilities and provisions a) Liabilities 179.60 b) Provisions 13.20 III. Income

1. Sales (net of duties and taxes) 1024.10 2. Other income 102.80 IV. Expenses

1. Operating expenses 911.30 2. Depreciation 102.10 3. Interest 0.60 4. Profit before tax 112.90 5. Prior period adjustments (0.40) 6. Provision for tax (including deferred tax) 30.00 7. Profit after tax 83.30 V. Other matters

1. Contingent liabilities 2,032.20 2. Capital commitments - Movement of the aggregate shareholders‟ funds of the joint ventures:

At the beginning of the period 497.10 Add: Share of loss for the period (18.20) At the end of the period 478.90


forward contracts

Particulars Currency

Period 2008 Foreign Currency

Amount (lakhs) Amount

(` in lakhs)

Sundry debtors USD 6.00 239.80 EURO 0.10 6.50

GBP 3.70 290.80 Sundry creditors USD 43.80 1,958.00 EURO 0.30 15.40 GBP 8.30 524.40 MUR 0.70 1.10 Unsecured loans USD 35.80 1,433.80 EURO 13.20 839.30 GBP 0.10 9.00 Zero Coupon Foreign Currency Convertible Bonds („FCCB‟) (Refer note (c) of B of Annexure IV)

EURO 206.50 13,099.90

Provision for premium on redemption of FCCB

EURO 44.80 2,899.90


F - 74

On 25 January 2006 the Company ('Issuer') issued Zero Coupon Foreign Currency Convertible

Bonds ('Bonds' or 'FCCB') aggregating Euro 840 lakhs. The Bonds are convertible at any time on or

after 7 March 2006 and upto the close of the business on January 19, 2011 by the holders of the

Bonds ('the Bondholders') into newly issued equity shares of the Company with full voting rights

with par value of ` 5 each ('Shares') at an initial conversion price (as defined in Terms and

Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion of `

54.26=EUR 1.00. The conversion price is subject to adjustment in certain circumstances. The Bonds

are listed on the Singapore Exchange Securities Trading Limited ('SGX-ST').

The Bonds may be redeemed, in whole but not in part, at the option of the Issuer at any time on or

after January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain



During the Period 2008, bond holders holding bonds aggregating Euro 633.50 lakhs have opted to

convert the bonds to equity shares. Accordingly shares aggregating to 6,325,420 have been issued to

them at a price of ` 543.42 per share (including securities premium of ` 538.42 per share).

Period 2008

(` in lakhs)


Add: Reversal of provision for premium on conversion of FCCB (7,858.20)



* Premium payable on redemption of FCCB ` 9,880.90 lakhs has been fully provided for and has

been charged to securities premium account. During the period, Bond holders holding bonds

aggregating Euro 633.50 lakhs have opted to convert their bonds into equity shares.

During the Period 2008, FCCBs have been reclassified as non-monetary liabilities pursuant to inter-

alia the current trend of earnings and market price of the Company's equity share exceeding the

conversion price stipulated in the offer document (bondholders holding 75.42% of the FCCB have

exercised conversion option to this date). Consequently, the foreign exchange fluctuation loss

aggregating to ` 438.10 lakhs accounted in the fifteen month period ended June 30, 2007 and year

ended 31 March 2006 has been reversed during the period in the Profit and Loss account and

foreign exchange fluctuation loss of ` 3,621.80 lakhs for the financial period has not been

recognised in the profit and loss account.


8. For Period 2008, subsidiaries in USA, UK, Mauritius, and Netherlands have been considered as

integral to the operations of the Parent Company in India.

F - 75

Annexure V


10

Statement of share capital

(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012 March 31,

2011

March

31,

2010

March

31, 2009

March 31,

2008

Authorised

Equity shares of

` 5/-each 24,000.00 24,000.00 5,000.00

5,000.0

0 4,602.90 3,000.00

Preference

shares of `5/-

each 1,000.00 1,000.00 - - - -

25,000.00 25,000.00 5,000.00

5,000.0

0 4,602.90 3,000.00

Issued,

subscribed and

paid-up capital

Equity shares of

` 5/- each, fully

paid-up 2,306.31 2,306.31 2,306.31

2,306.3

1 2,306.31 2,306.31

10 %

redeemable non

convertible non

cumulative

preference

shares

(Preference

shares) of ` 5/-

each, fully paid-

up 147.50 147.50 - - - -

2,453.81 2,453.81 2,306.31

2,306.3

1 2,306.31 2,306.31

(refer notes (a) to (i) below)

(a) Reconciliation of the shares outstanding at the commencement and at the end of the period

Equity shares

No of

Shares No of Shares No of Shares

No of

Shares

No of

Shares No of Shares

(In

lakhs) (In lakhs) (In lakhs)

(In

lakhs)

(In

lakhs) (In lakhs)

At the

commencement

of the period 461.26 461.26 461.26 461.26 461.26 398.00

Share issued

during the

period - - - - - 63.26

F - 76

Annexure V


10


(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012 March 31,

2011

March

31,

2010

March

31, 2009

March 31,

2008

At end of the

period 461.26 461.26 461.26 461.26 461.26 461.26

Preference shares

No of


No of

Shares

No of

Shares No of Shares

(In


(In

lakhs)

(In

lakhs) (In lakhs)

At the

commencement

of the period 29.50 - - - - -

Share issued

during the

period - 29.50 - - - -

At end of the

period 29.50 29.50 - - - -

(b) Rights, preferences and restriction attached to equity shares

The Company has only one class of equity shares having par value of ` 5 per share. Each equity holder

is entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees.

The dividend proposed, if any by the Board of the Directors is subject to the approval of the

shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive

remaining assets of the Company, after distribution of all preferential amounts. The distribution will

be in proportion to the number of equity shares held by the shareholders.

(c) Rights, preferences and restriction attached to Preference share

Preference shares shall be redeemed at the end of 20 years from the date of allotment i.e. each

Preference shares shall be redeemed at a premium calculated in a manner that gives the holder an

yield of 10% p.a. (till date of redemption ) on issue price of ` 1,000 (including premium of ` 995) after

deduction of dividend, if any declared during the tenure. However, the premium on redemption will

be paid only to the original subscribers or to the transferees if the transfers have been previously

approved by the Company.

Further early redemption at the option of holder of Preference shares can be done, at issue price plus

yield as mentioned above, at any time after the date of allotment by giving not less than two months

advance notice to the Company. Early redemption at the option of Company at the applicable

redemption price can be done, any time after the date of allotment by giving not less than 30 days

notice to the Preference share holder.

(d) Names of shareholders holding more than 5% of equity share in the Company

No of


No of

Shares

No of

Shares No of Shares

(In


(In

lakhs)

(In

lakhs) (In lakhs)

Reliance Land 206.00 206.00 206.00 206.00 206.00 206.00

F - 77

Annexure V


10


(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012 March 31,

2011

March

31,

2010

March

31, 2009

March 31,

2008

Private Limited

Reliance Capital

Limited 85.29 85.29 81.05 81.05 29.55 -

AAA

Entertainment

Private Limited - - - - 48.00 48.00

%

holding

in the

class

% holding

in the class

% holding

in the class

%

holding

in the

class

%

holding

in the

class

% holding

in the class

Reliance Land

Private Limited 44.66% 44.66% 44.66% 44.66% 44.66% 44.66%

Reliance Capital

Limited 18.49% 18.49% 17.57% 17.57% 6.41% -

AAA

Entertainment

Private Limited - - - - 10.40% 10.40%

(e)

Names of

shareholders

holding more

than 5% of

Preference

share in the

Company

No of


No of

Shares

No of

Shares No of Shares

(In


(In

lakhs)

(In

lakhs) (In lakhs)

Reliance

Infocomm

Engineering

Private Limited 12.00 12.00 - - - -

Reliance Utility

Engineers


%

holding

in the

class

% holding

in the class

% holding

in the class

%

holding

in the

class

%

holding

in the

class

% holding

in the class

Reliance

Infocomm

Engineering

Private Limited 40.68% 40.68% N.A. N.A. N.A. N.A.

F - 78

Annexure V


10


(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012 March 31,

2011

March

31,

2010

March

31, 2009

March 31,

2008

Reliance Utility

Engineers


(f) Pursuant to shareholder approval dated March 30, 2012, the authorised share capital of the Company

was reclassified from 1,000 lakh equity shares of ` 5 each to 800 lakh equity shares of ` 5 each and 200

lakh preference shares of ` 5 each.

(g) Pursuant to shareholder approval dated July 13, 2012, the authorised share capital of the Company

was increased from ` 5,000 lakhs to ` 25,000 lakhs divided into 4,800 lakh equity shares of ` 5 each

and 200 lakh preference shares of ` 5 each.

(h) During Period 2009, the authorised share capital of the Company has been increased as per the

provisions of Scheme of Amalgamation by ` 1,602.90 divided into 32,058,000 shares of ` 5 each.

(refer note 1 of VI of E of Annexure IV)

(i) During the Period 2008, bond holders holding bonds aggregating EURO 633.50 lakhs have opted to

convert their bonds to equity shares. Accordingly, equity shares aggregating to 63.26 lakhs have been

issued to them at a price of ` 543.42 per share (including securities premium of ` 538.42).

F - 79

Annexure VI


Summary statement of reserves and surplus, of the Group, as restated

(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

a) Securities

premium

reserve

At the

commencement

of the period 76,214.64 46,862.14 47,235.25 46,862.75 63,815.65 25,824.54

Less : Provision

for premium on

redemption of

Zero Coupon

Foreign

Currency

Convertible

Bonds ('FCCB')

(Also refer note

(c ) of B of

Annexure IV) - - (373.11) 372.50 (244.90) (691.50)

Add : On

issuance of

equity shares

pursuant to

conversion of

FCCB‟s - - - - - 34,161.66

Add : Premium

on issuance of

preference

shares - 29,352.50 - - - -

Less:

Adjustment

pursuant to

Katch 22

Scheme (Refer

note 3 of VI of

E of Annexure

IV) - - - - - (1,287.00)

Add : Reversal

of provision for

premium on

FCCB converted

during the

period (Also

refer note (c ) of

B of Annexure

IV)

- - - - 7,858.20

-

F - 80

Annexure VI



(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

Less :

Adjustment

pursuant to

Modified

Composite

Scheme of

Amalgamation

and

Arrangement

(Refer note 1 of

VI of E of

Annexure IV)

- - - - (2,050.25)

Less:

Adjustment

pursuant to

Scheme of

Arrangement for

demerger of

Radio business

(refer note 1 of

V of E of

Annexure IV) - - - - (16,708.00) -

76,214.64 76,214.64 46,862.14 47,235.25 46,862.75 63,815.65

b) General

reserve

At the

commencement

of the period 911.95 790.62 888.42 1,210.22 1,324.82 5,633.54

Add : Transfer

from Statement

of profit and

loss - 151.03 - - - 11,580.20

Add : Transfer

on account of

Scheme of

Amalgamation

of Katch 22

(Refer note 3

of VI of E of

Annexure IV)

- - - - 201.80

-

F - 81

Annexure VI



(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

Less : Reduction

in value of

Companies

assets pursuant

to Scheme of

Amalgamation

of Katch 22

(Refer note 3 of

VI of E

Annexure IV) - - - - - (2,000.00)

Less : Net result

of the

transactions

relating to Radio

business

adjusted

pursuant to

Modified

Composite

Scheme of

Amalgamation

and

Arrangement

(Refer note 1 of

VI of E of

Annexure IV) - - - - - (14,363.30)

Less:

Transferred to

Capital

Redemption

reserve - (29.70) (97.80) (321.80) (114.60) -

Add :

Adjustment

pursuant to

Modified

Scheme of

Amalgamation

and

Arrangement

(Refer note1of

VI of E of

Annexure IV)

- - - - 272.58

-

911.95 911.95 790.62 888.42 1,210.22 1,324.82

c) Capital reserve

on

consolidation - - - 240.70 -

F - 82

Annexure VI



(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

d) Capital reserve

–I At the

commencement

and end of the

period 33.88 33.88 33.88 33.88 33.88 33.88

e) Capital reserve

- II

At the

commencement

of the period 5,826.20 5,826.20 5,826.20 5,826.20 - -

Amounts

transferred to

Capital reserve

as per provisions

of the Scheme

of

Amalgamation

(Refer note 2 of

V of E of

Annexure IV) - - - - 5,826.20 -

5,826.20 5,826.20 5,826.20 5,826.20 5,826.20 -

f) Capital

redemption

reserve

At the

commencement

of the period

1,200.00 534.20 436.40 114.60 - -

Add:

Transferred

from profit and

loss - 636.10 - - - -

Add:

Transferred

from general

reserve - 29.70 97.80 321.80 114.60 -

1,200.00 1,200.00 534.20 436.40 114.60 -

g) Foreign

Currency

Translation

Reserve

At the

commencement

of the period 654.44 (315.04) (428.85) 262.12 - -

F - 83

Annexure VI



(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

Add: Foreign

currency

translation gain /

(loss) on non-

integral

operations (net) (452.59) 969.48 113.81 (690.98) 262.12 -

201.85 654.44 (315.04) (428.85) 262.01 -

h) Amount

pending

transfer to the

Securities

premium

reserve and / or

the General

reserve as per

the Composite

Scheme of

Amalgamation

and

Arrangement

(Refer note 1 of

VI of E of

Annexure IV)

i) Pending

transfer to

Securities

premium

reserve

At the

commencement

of the period - - - - - (10,015.64)

Reversal due to

the Modified

Scheme of

Amalgamation

and

Arrangement - - - - - 7,965.39

Transfer to

Securities

premium reserve - - - - - 2,050.25

- - - - - -

ii) Pending

transfer to

General

reserve

F - 84

Annexure VI



(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

At the

commencement

of the period - - - - - 272.58

On merger of E-

ONE transfer to

General Reserve - - - - - (272.58)

Transfer to

General reserve - - - - - -

I) (Deficit) /

Surplus in

Statement of

profit and loss

At the

commencement

of the period (145,399.94) (53,333.09) (20,481.64) (7,615.79) 302.39 11,340.87

(Loss) / Profit

for the period, as

per Statement of

profit and loss (34,044.77) (91,016.62) (32,796.95) (12,803.24) (7,787.97) 1,998.52

Reduction of

Reserves on sale

of subsidiaries

and joint

ventures - (148.43) - - - -

Appropriations

Transfer to

general reserve - (151.00) - - - (11,580.20)

Capital

redemption

reserve - (636.10) - - - -

Proposed

dividend on

preference

shares of a

subsidiary - (43.90) (46.60) (53.50) (76.00) (84.00)

Proposed

dividend on

equity shares of

a subsidiary - - - - - (1,153.15)

Dividend tax on

proposed

dividend on

preference

shares of a

subsidiary

- (7.10) (7.90 (9.11) (12.91) (14.28)

F - 85

Annexure VI



(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

Dividend tax on

proposed

dividend on

equity shares (105.40) (63.70) - - (41.30) (205.37)

(179,550.11) (145,400.94) (53,333.09) (20,481.64) (7,615.79) 302.39

(95,161.59) (60,558.83) 398.91 33,509.66 46,934.68 65,476.74


statements of the Group (Annexure IV)

F - 86

Annexure VII


Statement of non-current investment, deferred tax assets, long-term loans and advances and other non-current

assets, of the Group, as restated

(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

A Non-current

investments

I Investment in

Equity

Instruments

(Unquoted)

Others (non-trade,

unquoted and at

cost)

a Sultan Production

Private Limited

(refer note 7 of III

of E Annexure IV) - - - 1.00 1.00 1.00

b Manipal Industries

Limited - - 0.01 0.01 0.01 0.01

C Efficient

Management

Services Private

Limited - - 0.02 0.02 0.02 0.02

- - 0.03 1.03 1.03 1.03

II Investment in

Associates

A GH – Reliance LLC 8,198.30 - - - - -

III Investment in

Partnership Firm

(Unquoted and at

cost)

a Gold Adlabs 507.20 507.04 540.30 524.50 503.40 529.60

b HPE / Adlabs LP 1,999.30 1,999.30 1,999.30 1,999.30 2,241.00 4,607.75

(2009 and 2010 `

2,366.80 lakhs

towards recovery of

principal pursuant

to a contract and

2010; ` 241.70 lakhs

has been repaid by

the partnership firm

as principal)

F - 87

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

Less : -Provision for

diminution in value

of the long term

investments (1,999.30) (1,999.30) (1,999.30) (1,999.30) (2,241.00) -

507.20 507.04 540.30 524.50 503.40 5,137.35

IV Investment in

preference shares

(non-trade,

unquoted and at

cost)

Tree of Knowledge

DOT Com Private

Limited # - - - - 1,200.00 1,200.00

Less : -Provision for

diminution in value

of the long term

investments - - - - (1,200.00) -

- - - - - 1,200.00

V Investment in

Government

securities (trade,

unquoted and at

cost)

Government

securities

a National savings

certificates 30.30 30.30 34.30 114.40 104.50 100.20

(Pledged with State

government

authorities)

B Rural Electrification

Corporation Bond - - - 22.00 22.00 22.00

30.30 30.30 34.30 136.40 126.50 122.20

VI Investment in

mutual fund (non-

trade, unquoted

and at lower of

cost and fair value) 100.50 16.00 518.36 610.48 530.79 530.79

Total 8,836.30 553.34 1,092.99 1,272.41 1,161.72 6,991.37

Aggregate value of

unquoted 10,835.60 2,552.64 3,092.29 3,271.71 4,602.72 6,991.37

F - 88

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

investments

Aggregate provision

for diminution in

value of

investments 1,999.30 1,999.30 1,999.30 1,999.30 3,441.00 -

B Deferred tax asset

Arising on account

of timing difference

in:

Provision for leave

encashment and

gratuity 192.05 254.80 274.60 130.50 137.10 207.30

Others* 5,345.13 3,258.81 39.20 79.30 584.10 186.10

Unabsorbed

depreciation

allowance and

carried forward

business loss * 1,593.18 1,895.10 4,101.77 2,215.30 1,093.90 1,899.30

7,130.36 5,408.71 4,415.57 2,425.10 1,815.10 2,292.70

Deferred tax

liability

Arising on account


in:

Depreciation/

amortisation (net) 6,782.77 5,019.30 4,929.36 2,485.89 1,862.99 2,420.33

Others 321.48 375.10 - 0.40 - -

7,104.25 5,394.40 4,929.36 2,486.29 1,862.99 2,420.33

Net deferred tax

assets / (liabilities) 26.11 14.31 (513.79) (61.19) (47.89) (127.63)

* Restricted to the

extent of deferred

tax liability due to

absence of virtual

certainty

The net asset /

(liability) has been

shown as the Group

does not have the

option to set off the

balances of

individual

Companies.

Deferred tax asset 26.11 14.31 2.60 2.20 18.70 64.40

F - 89

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

Deferred tax

liability

-

- 516.39 63.39 66.59 192.03

Net deferred tax

asset / (liability) 26.11 14.31 (513.79) (61.19) (47.89) (127.63)

C Long-term loans

and advances

- Unsecured,

considered good

I Capital advances 652.90 905.20 1,712.91 2,868.32 1,931.27 9,613.49

II Security deposits 13,378.10 13,878.10 17,788.75 17,484.12 16,926.55 14,799.22

III Loans to others 96.90 271.90 206.20 266.11 320.00 385.30

IV Advance tax, tax

deducted at source,

advance fringe

benefit tax (net of

provision for tax

Period March 2013

- ` 1,291.70 lakhs,

Period 2012 - ` 1,

292.40 lakhs,

Period 2011 - `

638.30 lakhs,

Period 2010 – `

1,144.90 lakhs,

Period 2009 - `

4,006.26 lakhs,

Period 2008 - `

4,818.37 lakhs) 2,608.70 2,116.78 3,726.90 5,416.88 4,154.02 3,450.82

V Advance towards

investment (Refer

Annexure XIII) 5,000.00 5,000.00 5,000.00 - - -

VI Others * 1,067.30 1,515.30 935.00 1,130.95 1,485.00 1,044.52

22,803.90 23,687.28 29,369.76 27,166.38 24,816.84 29,293.35

*Prepaid expenses

and entertainment

tax paid under

protest etc.

-Unsecured

considered

F - 90

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

doubtful

Security deposits 384.80 240.50 - - - -

Others 173.30 - - - - -

Provision for

doubtful advances,

deposits and others (558.10) (240.50) - - - -

- - - - - -

22,803.90 23,687.28 29,369.76 27,166.38 24,816.84 29,293.35

D Other non-current

assets

I Interest accrued but

not due 31.70 22.20 49.00 52.50 49.10 33.44

II Fixed Deposits with

bank - 8.40 99.00 - - -

III Gratuity - - 9.80 - - -

IV Balance with bank -

Margin money

deposit* 552.20 31.40 231.50 224.92 10.31 10.31

*Margin money

deposits are under

bank lien for

guarantees given by

the Company

583.90 62.00 389.30 277.42 59.41 43.75

# These shares have been forfeited during Period 2010

The above statement should be read with significant accounting policies and notes to summary

statements, as restated (Annexure IV)

Notes:

1. Amounts due from parties related to the issuer Company, has been disclosed in Annexure

XVIII as part of related party disclosures.

2. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall

disclose in the offer document whether any of the receivable are related to directors or promoters

or the issuer in any way. In absence of clarification on “related to the directors or promoters”,

Company has disclosed amounts due from relatives of directors as defined in Schedule IA of the

Companies Act, 1956 and in case of promoters, amount due from “Promoter Group” and “Group

Companies” as defined in SEBI ICDR Regulation. The List of persons / entities classified as

“Promoter Group” and “Group Companies” has been determined by the Group and relied upon

by the Auditors.

3. Refer note 2 of V of E of Annexure IV, note 1 of VI of E of Annexure IV and note 3 of VI of

E of Annexure IV for advances written off pursuant to Schemes.

F - 91

Annexure VIII


Statement of current assets, of the Group, as restated

(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

A Current

investments

I Investment in

mutual fund (non-

trade, unquoted

and at lower of

cost and fair

value)

Investment in

mutual funds - - 10.44 7,902.30 - 13,556.71

- - 10.44 7,902.30 - 13,556.71

Market value of

current

investment - 10.44 7,906.70 - 13,556.71

B Inventories

(valued at lower

cost and net

realisable value)

(refer note 8 of A

of Annexure IV)

I Stores and spares 517.30 425.80 482.40 356.50 388.00 57.80

II Chemical stock 18.80 36.50 20.70 16.50 33.50 17.20

III Food and beverages 373.50 346.10 433.00 371.70 154.80 67.60

IV Negative film rolls 30.10 45.50 52.40 54.10 54.60 58.80

V Content not aired 211.30 563.80 334.90 60.70 - 515.80

VI Stocks of DVD's - - 1.90 47.70 59.60 44.10

1,151.00 1,417.70 1,325.30 907.20 690.50 761.30

C Trade receivables

Unsecured,

considered good;

I Debts outstanding

for a period

exceeding six

months from the

date they are due

for payments 13,204.00 13,162.72 16,175.70 13,145.50 14,184.30 1,518.70

Other debts 5,342.30 5,510.32 5,424.90 10,085.10 6,847.40 10,622.80

18,546.30 18,673.04 21,600.60 23,230.60 21,031.70 12,141.50

F - 92

Annexure VIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

Unsecured,

considered

doubtful;

II Debts outstanding

for a period

exceeding six

months from the

date they are due

for payments 5,354.70 2,421.99 724.60 49.60 - 224.10

Other debts - 2,386.70 - - 40.60 93.80

5,354.70 4,808.69 724.60 49.60 40.60 317.90

Less: Provision for

doubtful debts 5,354.70 4,808.69 724.60 49.60 40.60 317.90

- - - - - -

18,546.30 18,673.04 21,600.60 23,230.60 21,031.70 12,141.50

D Cash and bank

balances

Cash and cash

equivalents

I Balances with

banks

- in current

accounts 5,340.10 4,755.40 5,003.80 2,809.80 3,235.00 2,364.80

- in fixed deposit

account with

original maturity

less than three

months 1,469.20 360.30 283.55 1,489.59 228.50 3,372.30

II Cash on hand 417.90 583.30 234.40 257.70 196.00 91.60

- Foreign

Currency

denominated

preloaded cards - - - - - 1.70

7,227.20 5,699.00 5,521.75 4,557.09 3,659.50 5,830.40

III Other bank

balances

- in dividend

account 10.50 10.50 12.20 13.80 14.60 8.20

- in escrow

account - - - - - -

- in fixed deposit

account maturing 1,801.80 610.80 697.11 648.49 1,535.61 1,391.90

with in a year

- in margin

money deposit

maturing with in a 356.00 4,878.40 5,541.93 3,051.59 2,672.28 5,145.99

F - 93

Annexure VIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

year*

2,168.30 5,499.70 6,251.24 3,713.88 4,222.49 6,546.09

9,395.50 11,198.70 11,772.99 8,270.97 7,881.99 12,376.49

*Margin money

deposits are under

bank lien for

guarantees given by

the Company

E Short-term loans

and advances

- Unsecured,

considered good

I Amount due from

Reliance Broadcast

Network Limited

pursuant to

demerger of Radio

business - - 6,095.00 26,095.00 26,095.00 -

II Loans to others 1,161.70 879.60 1,507.90 1,136.69 2,745.40 14,071.10

III Deposits 211.60 185.50 1.85 35.48 0.05 0.08

IV Advance tax, tax

deducted at source,

advance fringe

benefit tax (net of

provision for tax of

Period March 2013:

` Nil, Period 2012 :

` 37.40 lakhs, 2011

: ` 112.10 lakhs,

2010: ` 419.00

lakhs 2009: `

530.96 lakhs and

2008: ` 295.76

lakhs) 342.50 327.00 688.97 275.08 66.99 27.65

V Advance towards

share application

(Refer note 10 of II

of E of Annexure

IV) - 6,811.20 - - - -

VI Others * 3,943.20 4,759.80 4,908.29 9,024.40 5,972.23 10,925.78

5,659.00 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61

- Unsecured,

considered

Doubtful

F - 94

Annexure VIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

Loans to others 393.50 393.50 - - - -

Others* 1,081.50 1,081.50 979.50 120.60 0.60 66.50

Less: Provision for

doubtful advances 1,475.00 1,475.00 979.50 120.60 0.60 66.50

- - - - - -

5,659.00 12,963.10 13,202.01 36,566.65 34,879.67 25,024.61

*includes service

tax credit input,

value added tax

input credit,

prepaid expenses,

employee advance,

advances to

vendors etc.

F Other current

assets

I Unbilled revenue 1,401.00 1,531.40 1,461.90 217.00 125.10 -

II Interest accrued and

due from Reliance

Broadcast Network

Limited - 63.80 3,930.20 2,481.60 - -

III Interest accrued but

not due 49.80 92.90 178.70 91.30 209.40 900.66

IV Assets held for sale 15.00 15.00 - - - -

IV Other receivables

for sale of

investment / Right

to investment

- 338.30 - - 4,066.80 3,127.30

1,465.80 2,041.40 5,570.80 2,789.90 4,401.30 4,027.96



Notes:

1. The list of parties related to directors / promoters (as per SEBI ICDR Regulations, 2009)

are as follows:

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

Trade receivables

Reliance Capital

Limited 26.46 24.98 37.40 43.42 1.63 -

Reliance Capital

Asset Management

Limited 36.01 28.80 32.29 4.38 0.26 -

Gini & Jony

Apparel Private - - 1.23 0.03 0.56 -

F - 95

Annexure VIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

Limited

TV Today Network

Limited - - 0.09 - - -

Reliance Equity

Advisors (India)

Limited - 0.31 - - - -

Reliance Broadcast

Network Limited 1,476.06 1,513.41 1,376.70 1,337.90 - -

Reliance Life

Insurance Company

Limited - 1.10 0.92 - - -

Loans, advances

and other

receivables

Reliance Broadcast

Network Limited - 63.82 10,025.20 28,749.80 26,095.00 -

Reliance Securities

Limited - - - - - 3,126.90

Reliance General

Insurance Company

Limited - 0.31 - - - -

Reliance Life

Insurance Company

Limited 9.00 9.00 9.00 9.00 20.00 -

Total 1,547.53 1,641.73 11,482.83 30,144.53 26,117.45 3,126.90

2. Above data excludes amounts due from parties related to the issuer Company, which has been disclosed

in Annexure XVIII as part of related party disclosures.

3. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose in

the offer document whether any of the receivable are related to directors or promoters or the issuer in

any way. In absence of clarification on “related to the directors or promoters”, Company has disclosed

amounts due from relatives of directors as defined in Schedule IA of the Companies Act, 1956 and in

case of promoters, amount due from “Promoter Group” and “Group Companies” as defined in SEBI

ICDR Regulation. The List of persons / entities classified as “Promoter Group” and “Group Companies”

has been determined by the Group and relied upon by the Auditors.

4. Refer note 2 of V of E of Annexure IV, note 1 of VI of E of Annexure IV and note 3 of VI of E of

Annexure IV for receivables and advances written off pursuant to Schemes.

F - 96

Annexure IX


Statement of non-current liabilities of the Group, as restated

(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March 31,

2011

March

31, 2010

March

31, 2009

March

31, 2008

A Long term

borrowing

I Non convertible

debentures (secured) 25,000.00 35,000.00 - - - -

II Non convertible

debentures

(unsecured) 550.00 1,650.00 - - - -

III Term loans

- From banks

(secured) 11,653.50 20,171.30 36,131.60 39,671.57

40,000.0

0 37,500.00

- From banks

(unsecured) - 961.17 7,500.00 - 3,130.46 -

- Others (secured) - 17,500.00 - - - 2,500.00

III Zero Coupon Foreign

Currency Convertible

Bonds ('FCCB') - - -

14,230.0

0 13,099.90

IV Other loans and

advances

From other parties

(Secured) 239.70 366.80 - - - -

From other parties

(Unsecured) - 19.10 798.51 733.43 - -

37,443.20 75,668.37 44,430.11 40,405.00 57,360.46 53,099.90

B Other long-term

liabilities

I Lease rent liability as

per AS 19 - "Leases" 3,917.70 3,502.20 2,784.55 1,419.60 820.05

342.98

II Dues for capital

expenditure - - 1.36 - - -

III Security deposit 144.70 136.80 123.14 49.30 51.80 -

4,062.40 3,639.00 2,909.05 1,468.90 871.85 342.98

C Long-term provision

I Leave encashment 407.20 517.00 728.03 362.00 343.16 162.76

II Gratuity 137.90 104.10 46.68 21.20 6.45 36.34

F - 97

Annexure IX


Statement of non-current liabilities of the Group, as restated

(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March 31,

2011

March

31, 2010

March

31, 2009

March

31, 2008

III Premium on

redemption of FCCB - - - - 3,084.79 2,839.89

545.10 621.10

774.71

383.20

3,434.40

3,038.99

The above statement should be read with significant accounting policies and notes

to summary statements, as restated (Annexure IV)

Note:

1. Also refer Annexure XV for principal terms and conditions for borrowings

F - 98

Annexure X


Statement of current liabilities, of the Group as restated

(` in lakhs)

As at

Particulars

March 31,

2013

Septembe

r 30, 2012

March 31,

2011

March

31, 2010

March

31, 2009

March

31, 2008

A Short term

borrowing

I Term loans

- From banks

(secured) - - - -

10,000.0

0 -

- Term loan

(unsecured) - - 23,500.00 40,000.00

10,000.0

0 -

II Loans repayable

on demand

(secured)

From banks

- Cash credit 1,972.70 1,451.20 3,264.00 985.20 37.16 293.30

III Other loans and

advances

a From banks

- Buyers credit

(unsecured) - - 318.00 1,392.60 926.80 -

- Buyers credit

(secured) 2,509.70 3,974.50 2,965.87 - - -

- Others

(unsecured) - - 1,885.19 1,897.32 -

b Commercial

Papers

(unsecured) - - 57,842.40 72,683.00

49,024.5

0 38,688.70

c Inter-corporate

deposit

(unsecured)

140,903.4

0

101,345.4

0 15,000.00 - - 2,046.30

d From other

parties (Secured) - - 100.40 - - -

e From other

parties

(Unsecured) - - 187.49 456.76 223.89 290.92

145,385.80 106,771.10 103,178.16 117,402.75 72,109.67 41,319.22

F - 99

Annexure X



(` in lakhs)

As at

Particulars

March 31,

2013

Septembe

r 30, 2012

March 31,

2011

March

31, 2010

March

31, 2009

March

31, 2008

Above includes

Borrowings from

Promoters (as per

SEBI ICDR 113,183.43 97,845.50 15,000.00 - - 2,046.30

Regulations,

2009) / Group

companies /

Subsidiaries /

Material

Associate

companies

B Other current

liabilities

I Current maturities

of long-term

debts 45,005.90 24,824.90 50,633.53 35,421.68 3,130.46 0.40

II Interest accrued

and due on

borrowings 7,646.30 2,272.40 28.80 - - -

III Interest accrued

but not due on

borrowings 388.60 2,257.50 63.68 50.53 30.00 -

IV Unclaimed

dividend 10.50 10.50 12.20 13.80 14.60 8.20

V Advance received

from customers 2,036.00 2,187.90 2,453.30 1,759.40 924.60 5,395.10

VII Dues for capital

expenditure 1,805.40 2,195.20 3,334.60 4,315.04 2,147.50 716.17

Temporary book

overdraft 460.70 924.90 - - - -

Deposits received 18.50 - - - - -

VIII Others * 3,709.00 2,586.80 3,233.46 2,663.57 2,957.71 2,929.75

61,080.90 37,260.10 59,759.57 44,224.02 9,204.87 9,049.62

*including

payable related to

employee,

expense payable,

lease rent and

statutory dues etc.

C Short-term

provision

I Proposed - - - - - 1,153.15

F - 100

Annexure X



(` in lakhs)

As at

Particulars

March 31,

2013

Septembe

r 30, 2012

March 31,

2011

March

31, 2010

March

31, 2009

March

31, 2008

dividend

II Tax on proposed

dividend 105.40 - 7.90 9.11 41.30 210.35

III Gratuity 0.70 1.80 0.92 - 24.95 112.86

IV Leave

encashment 165.40 199.10 207.17 156.80 164.15 349.65

271.50 200.90 215.99 165.91 230.40 1,826.01



Note: Disclosure as per SEBI ICDR Regulations, 2009 are as follows

Particulars of

Lenders

Principal

Amount

(` in lakhs)

Period when

amount is

outstanding

Interest Rate Repayment

Schedule

Reliance Capital

Limited

2,046.30

Period 2008 12.00% Repayable on

demand

Reliance Capital

Limited

15,000.00


demand

Reliance Capital

Limited

97,845.50 Period 2012 13.00% Repayable on

demand

Reliance Capital

Limited

113,183.43 Period March

2013

13.00% Repayable on

demand


statements (Annexure IV).

Note:


F - 101

Annexure XI


Statement of revenue of the Group, as restated

(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Theatrical exhibition

Sale of tickets 18,267.70 68,030.50 39,009.50 34,706.70 25,864.40 10,034.40

less: Entertainment tax 3,068.00 10,885.50 5,098.90 3,958.20 2,288.70 1,288.00

15,199.70 57,145.00 33,910.60 30,748.50 23,575.70 8,746.40

Advertisements /

sponsorship revenue 1,928.60 3,498.40 3,684.20 4,651.70 1,465.20 1,437.80

Facilities provided at

multiplex 844.60 2,345.20 1,054.70 737.30 647.30 329.10

Food and beverages 5,026.00 19,396.40 10,716.70 8,722.30 6,470.34 1,725.34

Others 1,388.60 3,879.70 2,011.70 1,850.20 1,012.60 -

24,387.50 86,264.70 51,377.90 46,710.00 33,171.14 12,238.64


Processing/ printing of

films 4,842.60 22,905.30 18,794.00 11,486.40 9,299.80 3,595.70

Equipment / facility rental

income 1,346.50 3,665.30 2,084.60 1,566.50 612.40 265.30

Trading income 121.60 1,304.30 1,926.30 2,229.30 3,077.40 2,410.20

Others 42.70 150.90 44.30 72.30 67.40 -

6,353.40 28,025.80 22,849.20 15,354.50 13,057.00 6,271.20

Film / content production,

distribution and related

services 4,398.90 9,150.90 4,980.30 9,442.70 19,707.20 12,259.10

Total 35,139.80 123,441.40 79,207.40 71,507.20 65,935.34 30,768.94

The above statement should be read with significant accounting policies and notes to summary statements, as

restated (Annexure IV)

F - 102

Annexure XII


Statement of other income of the Group, as restated

(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009 Period 2008

Recurring

Dividend income from :

- Other non-current

investments - - - - - 10.10

- Current investments - 0.40 0.80 - 132.60 117.30

- 0.40 0.80 - 132.60 127.40

Interest income from:

- Bank 149.10 733.40 364.90 326.80 496.70 737.30

- Loans, advance and

other deposits 77.40 522.30 503.50 211.80 470.40 230.40

226.50 1,255.70 868.40 538.60 967.10 967.70


investments 57.50 39.50 423.60 274.40 269.20 32.40

Bad debts recovered/

provision written back 19.50 85.60 1,405.50 1,080.90 - -

Sundry balances written

back (net) - - 306.30 - - -

Foreign exchange gain

advances, trade

receivables and trade

payables (net) 1,125.90 - - 80.10 1,070.70 -

Miscellaneous income 68.60 101.00 119.40 69.70 648.41 762.60

Non Recurring

Gain on derivative

contracts (net) - - - - - 977.40

Gain on sale of

investments / rights

therein (long term) - 563.30 - - 1,700.00 2,660.30

Consultation fees - - - - 2,130.45 -

Proceeds from keyman

insurance policy - - - - 266.44 -

Share of advertisement

income - - - 1,213.00 - -

Profit on sale of assets /

discarding of assets (net) - - 2,694.80 - - -

1,498.00 2,045.50 5,818.80 3,256.70 7,184.90 5,527.80



Note

1. The classification of other income by the management into recurring and non-recurring is based

on the current operations and business activities of the Company.

F - 103

2. Other income is related / incidental to the business activities of the Company.

3. In accordance with the accounting treatment followed by the Company, exchange fluctuation

gain / loss and profit / loss on sale of assets is disclosed net. Gross amounts in respect thereof are

not readily determinable. Hence, net gain where applicable has been considered for the purpose

of above disclosure.

F - 104

Annexure XIII


Statement of contingent liabilities and commitments of the Group

(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

Contingent Liabilities

of Parent Company

A Central excise

Disputed central excise

demand pending with the

Central Excise and

Service Tax Appellate

Tribunal 2,555.90 2,555.90 1,918.40 1,715.30 1,308.60 1,110.90

B Value added tax

Disputed value added tax

demand pending for

various states 522.80 38.40 - - - -

C Service tax

Disputed service tax

demand pending with the

Central Excise and


Tribunal 204.90 204.90 - - - -

C Income tax

i) Disputed liability in

respect tax deduction at

source, matter is pending

with Commissioner of

Income tax (Appeals) 1,017.10 1,017.10 1,017.10 - - -

ii) Disputed tax liability in

respect of AY 2008-09 for

Rave Entertainment

Private Limited („REPL‟),

REPL was wholly owned

subsidiary of the

Company and merged

with it with effect from

April 1, 2008.

Department‟s appeal

against order of

Commissioner of Income

Tax (Appeals) is pending

with Income Tax

Appellant 1,401.20 1,401.20 1,401.20 - - -

F - 105

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

Tribunal (ITAT). In

Period 2011 the same was

pending with

Commissioner of Income

Tax (Appeals).

Further Company has

received demand in

respect of REPL matter

for assessment year 2009-

10, appeal is pending


Income tax (Appeals)

- 1,787.20 - - - -

D Entertainment tax

i) In respect of a Multiplex,

the Company has received

a demand for

entertainment tax

pertaining to the period

wherein the said multiplex

was availing an exemption

from entertainment tax.

The Company has filed an

appeal against the said

demand. 71.50 - - - - -

ii) In respect of certain

multiplexes, the Company

has made an application

for availing exemption

under the relevant Act

retrospectively from the

date of commencement of

the operations of the said

multiplex and the

application is pending

approval

- 300.70 219.40 340.00 391.29 357.40

iii) In respect of certain

multiplexes, the Company

is in dispute with the

entertainment tax

authorities regarding

eligibility for availing

exemption under the

relevant Act. 570.60 509.60 558.80 451.70 293.45 219.40

F - 106

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

iii) In respect of demand

orders received for

payments of entertainment

tax collected and not paid

to the authorities, the

Company has made an

appeal against said

demand orders as it

believes that the same is

not payable, being

exemption from payment

available to it - 113.20 107.50 62.94 56.89

iv) The Company shall be

liable to pay the

entertainment tax in the

event that the multiplexes

do not continue operations

for a period of 10 years

from the respective dates

from which they

commenced their

operations 13,470.30 12,845.00 11,125.20 10,614.90 5,747.47 4,404.40

E Claim against Company

not acknowledged as

debts

8,152.10 7,859.80 198.60 74.00 74.00 74.00

The Company has

engaged the services of a

Contractor for the purpose

of deploying personnel at

its cinemas. During the

tenure of the contract, the

Company has paid the

Contractor, amounts

payable towards

employers

The Company has

engaged the services of a

Contractor for the purpose

of deploying personnel at

its cinemas. During the

tenure of the contract, the

Company has paid the

Contractor, amounts

F - 107

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

payable towards

employers contribution to

provident fund (PF)

amounting to ` 294.20

lakhs on a regular basis.

The Company has learnt

that the Contractor has

failed to deposit

appropriate amounts for

employee and employer

contributions amounting

to approximately ` 588.40

lakhs with the PF

authorities and the

Company apprehends that

some portion of the

aforesaid amount which

was supposed to be

deposited in the individual

accounts of the Personnel

by the Contractor may

have actually been mis-

appropriated by the

Contractor. The Company

has filed a criminal

complaint against the

Contractor and the matter

is currently under

investigation. The

Company has not received

any claims in this regard.

F Value Added Tax:

The Maharashtra Value

Added Tax Act, 2002 lists

the Scheduled entry,

interalia, “Copy right”

w.e.f. April 1, 2005. to

delete this scheduled

entry. The Company is

F - 108

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

awaiting a positive

response from the

Ministry of Finance in

respect of the assurance

given. Accordingly, no

provision (amount not

currently ascertainable)

has been made in the

books of accounts.

Pursuant to this

enactment/ scheduled

entry, the entertainment

industry has made a

written representation to

the Finance Minister,

Maharashtra for deletion

of the scheduled entry

from the Act. Similar

representation was made

by the industry in some

other states, as a result of

which the Act was

modified

With effect from May 1,

2011 the Maharashtra

Value Added Tax Act,

2002 was amended to

exempt the on Copyrights

for distributon and

exhibition of

cinematographic films in

theatres and cinema halls

G

Guarantees given to bank

and others for loans/credit

facilities given to others - 183.00 - - - -

H Capital Commitment

i) Estimated amount of

contract remaining to be

executed on capital

account and not provided

for net of advances (for

fixed 4,653.50 4,803.00 5,269.90

12,248.7

0 6,386.90 13,599.60

assets)

F - 109

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

ii) Estimated amount of

contract remaining to be

executed on capital

account and not provided

for net of advances (for

investments) 1,200.00 1,200.00 1,200.00 - - -

iii) Amount of uncalled on

1,500,000 partly paid

preference shares of Tree

of Knowledge DOT COM

Private Limited - - - - 300.00 300.00

I Contingent liabilities of

Subsidiary Companies

i) Disputed Income tax

liability, wherein the

Subsidiary has filed an

appeal before the first

appellate authority - - 7.50 7.50 - -

Octroi / Cess Tax

ii) Disputed Cess Tax

Demand pending with

Deputy Commissioner,

Navi Mumbai Municipal

Corporation-Cess

Department. The

Company believes, being

an SEZ unit it is fully

exempt from payment of

Octroi/Cess Tax as per

Maharashtra IT-ITEs

policy, 2009. The amount

of ` 96.56 lakhs deposited,

as Tax demand, for the

purpose of admission of

Appeal is reflected as

Short Term Loans and

Advances. 536.90 536.90 - - - -

iii) Claims against a - - 112.00 64.20 - -

F - 110

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

subsidiary not

acknowledged as debts

iv) A subsidiary of the

Company has received an

adverse judgement with

regard to a cancelled

lease.

During the current

provided, the Company

has provided for the

judgement - - 2,211.00 - - -

J Share of Contingent

liabilities in the Joint

Ventures („JV‟)

A Joint Venture had

received demand orders

for payment of

entertainment tax

collected and not paid to

the authorities aggregating

to ` 198.10 lakhs. The

Bombay High Court

passed an order dated

October 21, 2008 in

favour of the JV,

upholding the exemption

of payment from

entertainment tax

available to the JV and

has also directed the State

Government to refund the

amount of ` 20 lakhs

deposited by the JV. The

State Government had

preferred a special leave

petition („SLP‟) before the

Supreme Court of India

challenging the said Order

and the judgment passed

by the Bombay High

Court. Based on a legal

opinion obtained by the

JV, the JV had made a

provision aggregating to `

18.30 lakhs in the books

of accounts - - - - 89.90 89.90

F - 111

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

Septembe

r 30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

However, the Supreme

Court vide its Order dated

July 27, 2009, directed

the Chief Minister of

Maharashtra to realise the

amount to the extent the

JV has unjustly enriched

itself and pay the same to

a voluntary or a charitable

organisation. The

management of the JV has

subsequently

paid the entire amount of

entertainment tax

demanded aggregating to `

187.30 lakhs

A Joint Venture shall be

liable to pay entertainment

tax in the event that the

Multiplex does not

continue operations for

the period of ten years

from the date of

commercial operations 96.90 96.90* 96.90* 929.40 926.20 926.20

As per amendment made

by Finance Act 2010,

renting of immovable

property is defined as a

taxable service with

retrospective effect from

June 1, 2007. Based on a

legal opinion obtained by

the management joint

venture has reversed the

unpaid service tax

liability. - - 16.40 15.90 - -

Disputed VAT liability of

a Joint Venture - - 1.80 1.80 - -

Claims against a Joint

Venture not

acknowledged as debts 2.40 1.10 1.10 1.10 - -

* Amount is not currently quantifiable in case of a joint venture

F - 112

Note:

a) The Group is a party to various legal proceedings in the normal course of business and does not expect

the outcome of these proceedings to have any adverse effect on its financial conditions, results of

operations or cash flows.

b) The amounts are excluding penalty and interest if any that would be levied at the time of final

conclusion.

Other Commitment :-

a) In view of the loss during the period, the Company has not created Debenture Redemption Reserve in

terms of Section 117 (C) of the Companies Act, 1956. The Company shall create such reserve out of

profit, if any in future years.

b) Preference shares shall be redeemed at the end of 20 years from the date of allotment. Each Preference

shares shall be redeemed at a premium calculated in a manner that gives the holder an yield of 10% p.a.

(till date of redemption) on issue price of ` 1,000 (including premium of ` 995) after deduction of

dividend, if declared during the tenure. However, the premium on redemption will be paid only to the

original subscribers or to the transferees if the transfers have been previously approved by the Company.

Yield on preference shares of ` 1,471.00 lakhs (cumulative till date ` 2,958.10 lakhs) for the current

period will be paid as premium at the time of redemption.


statements, as restated, of the Group (Annexure IV).

F - 113

Annexure XIV


Statement of accounting ratios based on adjusted profits related to earnings per share, net asset value and

return on net worth of the Group

(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

1 Net (loss) / profit

after tax, as

restated (after

dividend on

preference shares (34,044.77) (91,067.62) (32,851.45) (12,865.85) (7,876.88) 1,900.24

2 Weighted average

number of Equity

Share outstanding

during the period

for basic earning

per share 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170 42,103,935

3 Add - equity share

issuable on

conversion of

FCCB (Refer note

(c) of B of

Annexure IV) - - 1,694,699 2,061,884 2,061,884 6,084,140

4 Weighted average

number of equity

share outstanding

during the Period

for dilutive

earnings per share

(Refer note (c) of

B of Annexure IV) 46,126,170 46,126,170 47,820,869 48,188,054 48,188,054 48,188,075

5 Number of equity

shares outstanding

at the end of the

period 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170

6 Paid up value of

each equity share 5.00 5.00 5.00 5.00 5.00 5.00

7 Total paid capital

– equity 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31

F - 114

Annexure XIV


Statement of accounting ratios based on adjusted profits related to earnings per share, net asset value and

return on net worth of the Group

(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

8 Reserves and

surplus (net of

deficit in statement

of profit and loss)

(excluding

revaluation

reserve) (95,161.59) (60,558.83) 398.91 33,509.66 46,934.68 65,476.74

9 Net worth

attributable to

equity

shareholders (7+8) (92,855.28) (58,252.52) 2,705.22 35,815.97 49,240.99 67,783.05

Accounting

Ratios

a) Earning per share

Basic earning per

share (73.81) (197.43) (71.22) (27.89) (17.08) 4.51

Diluted earning

per share (73.81) (197.43) (71.22) (27.89) (17.08) 3.94

b) Return of net

worth (refer note 7

below) NA NA (1,214.37%) (35.92)% (16.00)% 2.80%

c) Net assets value

per share

(126.29) 106.75 146.95 (201.31) 5.86 77.65

Note

1 The ratios have been

computed as under :-

Basic and diluted earning

per share

Net profit / (loss) after tax, as restated, excluding

extraordinary items attributable to equity shareholders

Weighted average number of equity share outstanding during the

period

Return on Net worth %



Net worth, as restated, excluding revaluation reserve at the end

of the period

F - 115

Net assets value per share

(`)

Net worth, as restated, excluding revaluation reserve at the

end of the period

Number of equity share outstanding at the end of the year/

period

2 Restated net profit as appearing in the restated statement of profit and loss and net worth as appearing in

summary statement of assets and liabilities, as restated, has been considered for the purpose of computing

the above ratios.

3 Calculation of ratios post issue has not been considered.

4 Earnings per share calculations are done in accordance with Accounting Standard 20 "Earning Per Share",

notified in the Companies (Accounting Standards) Rules, 2006.

5 The above statement should be read together with significant accounting policies and notes to summary


6 Dilutive EPS has not been presented in Period 2009, Period 2010 and Period 2011, since it is anti

dilutive.

7 Return on net worth for the Period March 2013 and Period 2012 cannot be computed as net worth as

on March 31, 2013 and September 30, 2012 is negative.

8 Dividend on preference capital is non-cumulative and will be paid as premium at the time of

redemption and shall be adjusted against securities premium reserve. Accordingly, the same is not

adjusted for the purpose of calculating the above ratios. Yield is ` 1,471.00 lakhs for Period March

2013 and ` 1,487.10 lakhs for Period 2012.

F - 116

Annexure XV

Reliance MediaWorks Limited Statement of principal terms and conditions of long-term borrowings and short-term borrowings of the Group

(` in lakhs)

S.

No

Particulars As at

March 31,

2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

1. Commercial Papers / Short Term Loans from Banks (unsecured)

A Templeton Mutual

Fund (Refer note 9 of

Annexure XV) - -

21,984.7

9 - - -

B ICICI Prudential

(Refer note 9 of

Annexure XV) - - 9,943.51 - - -

C Templeton Mutual

Fund (Refer note 9 of

Annexure XV) - - 9,422.16 - - -

D Yes Bank Limited

(Refer note 9 of

Annexure XV) - -

11,619.6

3 - - -

E BNP Paribas (Refer

note 9 of Annexure

XV) - - 4,872.31 - - -

F LIC MF Savings Plus

Fund - - - 7,450.18 - -

G LIC MF Income Plus - - - 9,832.06 - -

H LIC MF Floating Rate - - - 983.21 - -

I LIC MF Savings Plus

Fund - - - 9,808.90 - -

J J M Financial Mutual

Fund - - - 2,477.40 - -

K J M Financial Mutual

Fund - - - 1,486.43 - -

L LIC MF Income Plus - - - 9,599.87 - -

M LIC MF Savings Plus

Fund - - - 9,599.87 - -

N IFCI Limited - - - 2,466.68 - -

O LIC MF Floating Rate - - - 4,744.82 - -

P LIC MF Savings Plus

Fund

- - - 4,744.53 - -

Q LIC MF Income Plus - - - 9,489.05 - -

R Yes Bank Limited - - - - 14,886.41 -

S IDBI Limited - - - - 2,457.18 -

F - 117

S.

No

Particulars As at

March 31,

2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

T SIDBI - - - - 491.44 -

U Canara Bank - - - - 2,456.18 -

V IFCI Limited - - - - 4,893.69 -

W LIC MF Floating Rate

Fund - - - - 4,767.92 -

X LIC MF Income Plus

Fund - - - - 4,767.92 -

Y LIC MF Liquid Fund - - - - 4,767.92 -

Z LIC MF Savings Plus

Fund - - - - 4,767.92 -

AA LIC MF Special Unit

Scheme - - - - 4,767.92 -

AB UTI Mutual Funds -

liquid cash plan - - - - - 1,973.16

AC ABN Amro Money

Plus Fund - - - - - 4,932.89

AD Lotus India Liquid

Fund - - - - - 1,973.16

AE Birla Sun Life Interval

Income Fund Quarterly

Plan Series II

- - - - - 5,297.62

AF Kotak Quarterly

Interval Plan - Series 6

- - - - - 2,408.01

AG Allahabad Bank - - - - - 1,965.13

AH Birla Cash Plus - - - - - 4,421.54

AI United Bank Of India - - - - - 3,438.97

AJ UTI Spread Fund - - - - - 2,456.41

AK Saraswat Co-op Bank

Ltd.

- - - - - 982.42

AL SBI Life Insurance Co.

Ltd.

- - - - - 2,456.04

AM Tata MF - Tata Fixed

Horizon Fund

- - - - - 3,928.19

AN ABN Amro Flexi Short

Term Plan - Series B - - - - - 2,455.16

AO Allahabad Bank Loan - - - 10,000.0

0 10,000.00 -

AP Revolving line of

credit from ICICI

Bank, New York

Branch - - - 1,885.19

1,897.28 -

AQ Syndicate Bank Loan - - 10,000.0

0

10,000.0

0

- -

AR Union Bank of India

Loan

- - 10,000.0

0

10,000.0

0

- -

AS Bank of Baroda Loan - - - 10,000.0

0

- -

AT Yes Bank Limited - - 3,500.00 - - -

Sub Total -

15,000.00

-

15,000.00

81,342.40 114,568.1

9

60,921.78 38,688.70

2. Unsecured Long Term Loan from Bank (including amounts due within the next 1 year)

A Canara Bank Loan

- -

20,000.0

0 - - -

F - 118

B DBS Bank Limited

(Refer note 9 of

Annexure XV) - - 15,000.00 - - -

C ICICI Bank Loan, New

York Branch - - - 2,701.81 6,260.92 -

D Non-convertible

debentures 2,750.00

3,850.00 - - - -

2,750.00 3,850.00 35,000.00 2,701.81 6,260.92 -

3. Secured Short Term Loan From Bank / Other Loans form Bank (including amounts due

within the next 1 year)

A Syndicate Bank (Refer

note 6 of Annexure XV) - - - - 10,000.00 -

B Bank Asiana – Working

Capital Lines (Refer note

12 of Annexure XV) 994.94 961.17 - - - -

Sub Total 994.94 961.17 - - 10,000.00 -

4. Secured Long Term Loan From Bank / Other Long Term Loan (including amounts due

within the next 1 year)

A Allahabad Bank (Refer

note 1 of Annexure XV)* - 1,666.67 3,333.33 5,000.00 5,000.00 -

B Exim Bank (Refer note 1

of Annexure XV)* - 2,333.34 4,666.68 7,000.00 7,000.00 -

C Jammu & Kashmir Bank

(Refer note 1 of

Annexure XV)* - 2,333.34 4,666.68 7,000.00 7,000.00 -

D Syndicate Bank (Refer

note 1 of Annexure XV)* - 2,333.34 4,666.68 7,000.00 7,000.00 -

E Union Bank of India

(Refer note 1 of

Annexure XV)* - 2,000.00 4,000.00 6,000.00 6,000.00 -

F Vijaya Bank (Refer note

1 of Annexure XV)* - 2,666.67 5,333.33 8,000.00 8,000.00 -

G Rank Investments Private

Limited (Refer note 1 of

Annexure XV) - - - - - 2,500.00

H Barclays Bank Plc (Refer

note 1 of Annexure XV)

- - - - - 37,500.00

I Syndicate Bank (Refer


- - 6,250.00 10,000.00 - -

J Syndicate Bank (Refer

note 1 of Annexure XV

8,437.50 10,312.50 15,000.00 - - -

K Union Bank of India

(Refer note 1 of

Annexure XV)

4,000.00 4,800.00 6,000.00 3,500.00 - -

L Syndicate Bank (Refer


10,000.00

10,000.00

- - - -

M Non Convertible

Debentures (Refer note

(Refer note 9 &10 of

35,000.00 35,000.00 - - - -

F - 119

S.

No

Particulars As at

March 31,

2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

Annexure XV)

N Indiabulls Financial

Service Limited (Refer


17,500.00 17,500.00 - - - -

O Axis Bank – Term loan

(Refer note 11 of

Annexure XV)

3,366.04 4,208.79 5,348.40 3,484.42 - -

Sub Total 78,303.54 95,154.65 59,265.15 56,984.42 40,000.00 40,000.00

* - As per agreement dated June 28, 2008 for long term loan obtained from banks, the Company has to

comply with covenants with regards to financial parameters, as specified in the agreement. Based on Period

2009, 2010, 2011 and 2012 financials, the Company is not in compliance with the debt covenants.

5. Overdraft facilities / Working Capital Demand Loans from Banks / Car Loan

A Cash credit-Bank of

Baroda (Refer note 2,

4,6 and 15 of Annexure

XV)

530.61 554.60 540.53 352.63 37.20 293.60

B Cash Credit – Axis Bank

(Refer note 2, 4, 5, 6 and

15 of Annexure XV)

645.33 - 1,959.47 - - -

C Cash Credit – Axis Bank

(Refer note 11 of

Annexure XV)

796.82 896.60 764.00 533.62 - -

D Cash Credit - - 99.25 - -

E Others (Car loan) (Refer


- - - - 0.40

F Buyers credit (Refer note

2, 4,6, 7 and 15 of

Annexure XV)

2,509.75

3,974.50 2,965.90 - - -

Sub Total 4,482.51 5,425.70 6,229.90 985.50 37.20 294.00

6. Others (Unsecured)

A Zero Coupon FCCB

(Refer note 8 of

Annexure XV)

- - - 15,224.30 14,230.00 13,099.90

B Inter Corporate Deposits 140,903.43 101,345.40 15,000.00 - - 2,046.30

C Buyers Credit - - 318.00 1,392.68 926.80 -

D Others - - 187.49 456.80 223.89 290.62

E Others (long-term) - 19.10 798.51 733.40 - -

F NIC Bank – Term loan - - - 182.33 - -

Subtotal 140,903.4

3

101,364.5

0

16,304.00 17,989.51 15,380.69 15,436.82

7. Others (Secured) (including amounts due within the next 1 year)

A Equipment loan (refer


43.46 60.88 100.40 - - -

B Finance lease obligations

to HP Financial Services

357.14 447.47 - - - -

F - 120

S.

No

Particulars As at

March 31,

2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

Subtotal 400.60 508.35 100.40 - - -

Grand Total 227,834.9

0

207,264.3

7

198,241.80 193,229.43 132,600.59 94,419.52

Period March 2013

Particulars of lenders and instrument Amount

outstanding

(` in lakhs)

Interest rate Repayment schedule

Union Bank of India

4,000.00

14.00% per annum ` 400 .00 - 20 equal

quarterly instalment

starting from March

31, 2012

Syndicate Bank

8,437.50

13.00% per annum ` 937.50 - 16 equal


starting from

September 14, 2011

Syndicate Bank

10,000.00

11.50% per annum ` 2,500.00 - 4 equal


starting from

September 14, 2013

Non Convertible Debentures

35,000.00

11.00% per annum

Coupon Series 1 - ` 10,000

lakhs – March 1, 2014

Series 2 - ` 12,500


Series 3 - ` 12,500


Non Convertible debentures

2,750.00

12.50% per annum All series of ` 550

lakhs

Series D – June 10,

2013


10, 2013

Series F – December

10, 2013

Series G – March 10,

2014

Series H – June 10,

2014

Buyers Credit

2,509.75

Libor Linked –

Various

Various Dates

Inter Corporate Deposit - Magma Fincorp

Limited 2,200.00

12.00% per annum September 26, 2013


Limited 1,300.00

12.00% per annum April 29, 2013

Inter-corporate deposit – Reliance Capital 113,183.43 13.00% per annum Various Dates

F - 121


outstanding

(` in lakhs)


Limited

Inter-corporate deposit - Chlorosulf

Private Limited 24,220.00

13.00% per annum Various Dates

Indiabulls Financial Services Limited

17,500.00

12.79% per annum 6 equal monthly

instalments starting

the 13th

month from

the date of

disbursement

Bank of Baroda (cash credit) 530.61 13.50% per annum Repayable on demand

Axis Bank Limited (cash credit) 645.33 13.25% per annum Repayable on demand

Axis Bank – Term loan – RMESL

3,366.04

13.75% per annum

18 unequal quarterly

instalment starting

from December 31,

2010

Equipment loan – Lowry

43.46

11.00% per annum repayable in 40

prorated monthly

instalments

Axis Bank (Cash credit – RMESL) 796.82 13.75% per annum Repayable on demand

Bank Asiana – Working Capital Lines

994.94

6.25% per annum May 17, 2012

HPFS – RMESL – Equipment Loan 357.15 12.95% per annum Various Dates

Total 227,834.91

Period 2012


outstanding

(` in lakhs)


Allahabad Bank *

1,666.67

13.25% per annum ` 1,666.67 due on

March 31, 2013

Exim Bank *

2,333.34

13.25% per annum ` 2,333.34 due on

March 31, 2013

Jammu & Kashmir Bank *

2,333.34

13.25% per annum ` 2,333.34 due on

March 31, 2013

Syndicate Bank *

2,333.34

13.25% per annum `2,333.34 due on

March 31, 2013

Union Bank of India *

2,000.00

13.25% per annum ` 2,000.00 due on

March 31, 2013

Vijaya Bank *

2,666.67

13.25% per annum ` 2,666.67 due on

March 31, 2013

Union Bank of India 4,800.00

14.00% per annum ` 400 .00 - 20 equal


F - 122


outstanding

(` in lakhs)


starting from March

31, 2012

Syndicate Bank

10,312.50

13.00% per annum ` 937.50 - 16 equal


starting from

September 14, 2011

Syndicate Bank

10,000.00

11.75% per annum ` 2,500.00 - 4 equal


starting from

September 14, 2013

Buyers Credit

3,974.50

Libor Linked –

Various

Various Dates


Limited 2,200.00

12.00% per annum March 26, 2013


Limited 1,300.00


Inter-corporate deposit – Reliance Capital

Limited 97,845.40



3,850.00


lakhs

Series B – December

10, 2012


2013


2013


10, 2013


10, 2013


2014


2014


17,500.00


instalments starting

the 13th

month from

the date of

disbursement


Axis Bank (cash credit – RMESL) 896.60 13.75% per annum Repayable on demand


35,000.00

11.00% per annum Series 1 - ` 10,000


Series 2 - ` 12,500


Series 3 - ` 12,500


Axis Bank – Term loan – RMESL

4,208.79

13.75% per annum 18 unequal quarterly

instalment starting

from December 31,

F - 123


outstanding

(` in lakhs)


2010

Equipment loan – Lowry

60.88

11.00% per annum repayable in 40

prorated monthly

instalments

Bank Asiana – Working Capital Lines

961.17

6.25% per annum May 17, 2012

HPFS – RMESL – Equipment Loan 447.47 12.95% per annum Various Dates

Inter Corporate Deposit - Divya Shakti

Marketing Pvt. Ltd. 19.10

Interest free

Total 207,264.37

* - Details of delayed repayment of loans:

Nature of loan Principal amount (`

in lakhs)






Period 2011

Particulars of Lenders and Instrument Amount

outstanding


Schedule

Templeton Mutual Fund 21,984.79 11.75% per

annum

June 15, 2011

ICICI Prudential Fund 9,943.51 11.15% per annum April 20, 2011

Templeton Mutual Fund 9,422.16 11.75% per

annum

October 12, 2011

Yes Bank Limited 11,619.63 11.75% per

annum

November 25,

2011 BNP Paribas Mutual Fund

4,872.31 12.00% per

annum

June 20, 2011

Allahabad Bank 3,333.33 10.25% per annum ` 1,666.67 due on

March 31, 2012.

` 1,666.67 due on

March 31, 2013 Exim Bank 4,666.68 10.25% per annum ` 2,333.34 due on

March 31, 2012.

` 2,333.34 due on

March 31, 2013 Jammu & Kashmir Bank 4,666.68 10.25% per annum ` 2,333.34 due on

March 31, 2012.

` 2,333.34 due on

March 31, 2013

F - 124


outstanding


Schedule

Syndicate Bank 4,666.68 10.25% per annum ` 2,333.34 due on

March 31, 2012.

` 2,333.34 due on

March 31, 2013 Union Bank of India 4,000.00 10.25% per annum ` 2,000.00 due on

March 31, 2012.

` 2,000.00 due on

March 31, 2013 Vijaya Bank 5,333.33 10.25% per annum ` 2,666.67 Due on

March 31, 2012.

` 2,666.67 Due on

March 31, 2013 Syndicate Bank 6,250.00

12.00% per annum ` 1,250.00 - 8

equal quarterly

instalment started

from September

17, 2010


13.00% per annum ` 400.00 - 20

equal quarterly

instalment starting

from March 31,

2012 Syndicate Bank 15,000.00

12.00% per annum ` 937.50 - 16

equal quarterly

instalment starting

from September

14, 2013

Canara Bank 12,500.00 11.50% per annum March 28, 2012

7,500.00 11.50% per annum May 15, 2012

Syndicate Bank 10,000.00 9.00% per annum May 27, 2011

Union Bank of India 10,000.00 10.50% per annum May 23, 2011

Yes Bank Limited 3,500.00 12.50% per annum May 27, 2011

DBS Bank Limited 15,000.00 11.40% per annum January 24, 2012

Buyers credit 3283.90 Libor Linked –

Various

Various Dates

Bank of Baroda (cash credit) 540.53 11.00% per annum Repayable on

demand Axis Bank (cash credit) 1,959.47 12.75% per annum Repayable on

demand Axis Bank – Term loan 5,348.40 13.75% per annum 18 unequal

quarterly

instalment starting

from December

31, 2010

Equipment loan – Others 100.40 11.00% per annum repayable in 40

prorated monthly

instalments

F - 125


outstanding


Schedule

Cash Credit – Axis Bank 764.00 12.50% per annum Repayable on

demand

Reliance Capital Limited 15,000.00 12.00% per annum Various dates

Others 986.00 Interest free Various dates

Total 198,241.80

Period 2010


outstanding


Schedule

LIC MF Savings Plus 7,450.18 6.60% per annum May 10, 2010

LIC MF Income Plus 9,832.06 5.50% per annum July 26, 2010

LIC MF Floating Rate 983.21 5.50% per annum July 26, 2010

LIC MF Savings Plus Fund 9,808.90 5.50% per annum August 11, 2010

JM Financial Mutual Fund 2,477.40 6.30% per annum May 25, 2010

JM Financial Mutual Fund 1,486.43 6.30% per annum May 25, 2010

LIC MF Income Plus 9,599.87 6.25% per annum December 3, 2010

LIC MF Savings Plus 9,599.87 6.25% per annum December 3, 2010

IFCI Ltd. 2,466.68 7.75% per annum June 4, 2010

LIC MF Floating Rate 4,744.82 7.25% per annum December 29,

2010 LIC MF Savings Plus 4,744.53 7.25% per annum December 29,

2010 LIC MF Income Plus 9,489.05 7.25% per annum December 29,

2010 Allahabad Bank 5,000.00 10.75% per annum ` 1,666.67 due on

March 31, 2011.

` 1,666.67 due on

March 31, 2012

` 1,666.67 due on

March 31, 2013

Exim Bank 7,000.00 10.75% per annum ` 2,333.34 due on

March 31, 2011.

` 2,333.34 due on

March 31, 2012

` 2,333.34 due on

March 31, 2013

Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 due on

March 31, 2011.

` 2,333.34 due on

March 31, 2012

` 2,333.34 due on

March 31, 2013

F - 126


outstanding


Schedule

Syndicate Bank 7,000.00

10.75% per annum ` 2,333.34 due on

March 31, 2011.

` 2,333.34 due on

March 31, 2012

` 2,333.34 due on

March 31, 2013

Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 due on

March 31, 2011.

` 2,000.00 due on

March 31, 2012

` 2,000.00 due on

March 31, 2013

Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 due on

March 31, 2011.

` 2,666.67 due on

March 31, 2012

` 2,666.67 due on

March 31, 2013


10.00% per annum ` 1250.00 - 8

equal quarterly

instalment starting

from September

17, 2010


11.00% per annum ` 400 - 20 equal

quarterly

instalment starting

from March 31,

2012

Allahabad Bank 10,000.00 7.75% per annum September 24,

2010

Syndicate Bank 10,000.00 7.50% per annum June 22, 2010

Union Bank of India 10,000.00 7.00% per annum June 11, 2010

Bank of Baroda 10,000.00 7.75% per annum July 10, 2010

Buyers Credit 1,392.68 Libor Linked –

Various

Various Dates

Zero Coupon FCCB (Refer note 8 of Annexure

XV)

15,224.30 - January 25, 2011


demand

Axis Bank – Term loan 3,484.42 10.75% 18 unequal

quarterly

instalment starting

from December

31, 2010

F - 127


outstanding


Schedule

NIC Bank – Term loan 182.33 12% 16 un-equal

quarterly

instalments

Cash Credit – Axis Bank 533.62 10.75% Repayable on

demand

Cash Credit – NIC Bank 99.25 12.50% Repayable on

demand

ICICI Bank 1,885.19 Benchmark +

0.25% per annum

Within 30 months

from date of

disbursement


3.20% per annum

Within 30 months

from date of

disbursement

Others 1,190.20 Interest free Various dates

Total 193,229.43

Period 2009


outstanding


Schedule

Yes Bank Limited 14,886.41 9.75% per annum April 30, 2009

IDBI Limited 2,457.18 10.00 % per

annum

June 4, 2009

SIDBI 491.44 10.00 % per

annum

June 4, 2009

Canara Bank 2,456.18 10.25 % per

annum

June 4, 2009

IFCI 4,893.69 10.20 % per

annum

June 18, 2009

LIC MF Floating Rate Fund 4,767.92 10.75 % per

annum

September 14,

2009

LIC MF Income Plus Fund 4,767.92 10.75 % per

annum

September 14,

2009

LIC MF Liquid Fund 4,767.92 10.75 % per

annum

September 14,

2009

LIC MF Savings Plus Fund 4,767.92 10.75% per annum September 14,

2009

LIC MF Special Unit Scheme 4,767.92 10.75% per annum September 14,

2009 Allahabad Bank 5,000.00 10.75% per annum ` 1,666.67 due on

March 31, 2011.

` 1,666.67 due on

March 31, 2012

` 1,666.67 due on

March 31, 2013

F - 128


outstanding


Schedule

Exim Bank 7,000.00 10.75% per annum ` 2,333.34 due on

March 31, 2011.

` 2,333.34 due on

March 31, 2012

` 2,333.34 due on

March 31, 2013

Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 due on

March 31, 2011.

` 2,333.34 due on

March 31, 2012

` 2,333.34 due on

March 31, 2013


10.75% per annum ` 2,333.34 due on

March 31, 2011.

` 2,333.34 due on

March 31, 2012

` 2,333.34 due on

March 31, 2013

Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 due on

March 31, 2011.

` 2,000.00 due on

March 31, 2012

` 2,000.00 due on

March 31, 2013

Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 due on

March 31, 2011.

` 2,666.67 due on

March 31, 2012

` 2,666.67 due on

March 31, 2013

Allahabad Bank 10,000.00 13.50% per annum January 8, 2010

Syndicate Bank 10,000.00 13.50% per annum December 31,

2009

Buyers Credit 926.80 Libor Linked –

Various

Various Dates


XV)

14,230.00 - January 25, 2011


3.20% per annum

Within 30 months

from date of

disbursement


0.25% per annum

Within 30 months

from date of

disbursement


demand

Others 223.89 Interest free Various dates

F - 129


outstanding


Schedule

Total 132,600.59

Period 2008


outstanding


Schedule

UTI Mutual Funds - liquid cash plan 1,973.16 10.25% per

annum

May 20, 2008

ABN Amro Money Plus Fund 4,932.89 10.25% per

annum

May 20, 2008

Lotus India Liquid Fund 1,973.16 10.25% per

annum

May 20, 2008

Birla Sunlife Interval Income Fund 5,297.62 10% per annum August 20, 2008

Kotak Quarterly Interval Plan - Series 6 2,408.01 10% per annum August 20, 2008

Allahabad Bank 1,965.13 10.20 % per

annum

June 4, 2008

Birla Cash Plus 4,421.54 10.20 % per

annum

June 4, 2008

United Bank Of India 3,438.97 10.20 % per

annum

June 4, 2008

UTI Spread Fund 2,456.41 10.20% per

annum

June 4, 2008

Saraswat Co-op Bank Ltd. 982.42 10.28% per

annum

June 4, 2008

SBI Life Insurance Co. Ltd. 2,456.04 10.28% per

annum

June 4, 2008

Tata MF - Tata Fixed Horizon Fund 3,928.19 10.50% per

annum

June 4, 2008

ABN Amro Flexible Short Term Plan - Series B 2,455.16

10.50% per

annum

June 4, 2008

Rank Investments Private Limited 2,500.00 10.75% per

annum ` 833.34 due on

March 31, 2011.

` 833.34 due on

March 31, 2012

` 833.32 due on

March 31, 2013

Barclays Bank PLC 37,500.00 10.75% per

annum ` 12,500.00 due on

March 31, 2011.

` 12,500.00 due on

March 31, 2012

` 12,500.00 due on

March 31, 2013

ICICI (car loan) 0.40 Various rates As per schedule

F - 130


outstanding


Schedule


XV)

13,099.90 - January 25, 2011

Inter-corporate deposit – Reliance Capital limited 2,046.30 12.00% per

annum

Repayable on

demand

Bank of Baroda (cash credit) 293.60 11.25% per

annum

Repayable on

demand Others 290.62 Interest free Various dates

Total 94,419.52

Commercial Paper:

Details of Terms of Discount rate and repayment schedule of Commercial papers are set out below:

Period 2011


outstanding

Discount Rate Repayment

Schedule

Templeton MF (4,500 commercial paper of face

value ` 500,000 each dated December 28, 2010

aggregating to ` 22,500 lakhs)

21,984.79 Issued at `

21,339.08 lakhs,

discount rate

11.75 % per

annum

June 15, 2011

ICICI Prudential Mutual Fund (2,000 commercial

paper of face value ` 500,000 each dated January 20,

2011 aggregating to ` 10,000 lakhs)

9,943.51 Issued at `

9,732.42 lakhs,

discount rate

11.15 % per

annum

April 20, 2011

Templeton MF (2,000 commercial paper of face

value ` 500,000 each dated February 3, 2011



9,252.39 lakhs,

discount rate

11.75 % per

annum

October 12, 2011

Yes Bank Ltd (2500 commercial paper of face value

` 500,000 each dated February 25, 2011 aggregating

to ` 12,500 lakhs)

11,619.63 Issued at `

11,490.20 lakhs,

discount rate

11.75 % per

annum

November 25,

2011

BNP Paribas Mutual Fund (1,000 commercial paper

of face value ` 500,000 each dated March 21, 2011



4,854.75 lakhs,

discount rate

12.00 % per

annum

June 20, 2011

Total 57,842.40

Period 2010


outstanding


Schedule

F - 131


outstanding


Schedule

LIC MF Savings Plus (1,500 commercial paper of face

value ` 500,000 each dated June 3, 2009 aggregating to

` 7,500 lakhs)


7,064.41 lakhs,

discount rate

6.60 % per

annum

May 10,

2010

LIC MF Income Plus (2,000 commercial paper of face

value ` 500,000 each dated October 28, 2009



9607.67 lakhs,

discount rate

5.50 % per

annum

July 26, 2010

LIC MF Floating Rate (200 commercial paper of face

value ` 500,000 each dated October 28, 2009


983.21 Issued at `

960.77 lakhs,

discount rate

5.50 % per

annum

July 26, 2010


value ` 500,000 each dated November 13, 2009



9607.67 lakhs,

discount rate

5.50 % per

annum

August 11,

2010

J M Financial Mutual Fund (500 commercial paper of

face value ` 500,000 each dated November 25, 2009



2424.26 lakhs,

discount rate

6.30 % per

annum

May 25,

2010





1455.78 lakhs,

discount rate

6.30 % per

annum

May 25,

2010


value ` 500,000 each dated January 29, 2010



9499.02 lakhs,

discount rate

6.25 % per

annum

December 3,

2010


value ` 500,000 each dated January 29, 2010



9499.02 lakhs,

discount rate

6.25 % per

annum

December 3,

2010

IFCI Ltd. (2,000 commercial paper of face value `

500,000 each dated January 29, 2010 aggregating to `

10,000 lakhs)


2452.10 lakhs,

discount rate

7.75 % per

annum

June 4, 2010


value ` 500,000 each dated March 9, 2010 aggregating

to ` 5,000 lakhs)


4,723.24 lakhs,

discount rate

7.25 % per

annum

December

29, 2010

LIC MF Savings Plus (1000 commercial paper of face


to ` 5,000 lakhs)


4,728.56 lakhs,

discount rate

7.25 % per

annum

December

29, 2010

F - 132


outstanding


Schedule

LIC MF Income Plus (2000 commercial paper of face


to ` 10,000 lakhs)


9,457.12 lakhs,

discount rate

7.25 % per

annum

December

29, 2010

Total 72,683.00

Period 2009


outstanding


Schedule

Yes Bank Limited (3,000 commercial paper of

face value ` 500,000 each dated February 3, 2009


14,886.41 Issued at `

14,663.14 lakhs,

discount rate 9.75

% per annum

April 30, 2009

IDBI Limited (500 commercial paper of face

value ` 500,000 each dated March 9, 2009

aggregating to ` 2500 lakhs)


2,441.80 lakhs,

discount rate

10.00 % per

annum

June 4, 2009

SIDBI (100 commercial paper of face value `

500,000 each dated March 9, 2009 aggregating to

` 500 lakhs)

491.44 Issued at ` 488.36

lakhs, discount

rate 10.00 % per

annum

June 4, 2009

Canara Bank (500 commercial paper of face value

` 500,000 each dated March 6, 2009 aggregating

to ` 2,500 lakhs)


2,438.37 lakhs,

discount rate

10.25% per

annum

June 4, 2009

IFCI (1,000 commercial paper of face value `

500,000 each dated March 20, 2009 aggregating

to ` 5,000 lakhs)


4,877.33 lakhs,

discount rate

10.20% per

annum

June 18, 2009

LIC MF Floating Rate Fund (1,000 commercial

paper of face value ` 500,000 each dated March

17, 2009 aggregating to ` 5,000 lakhs)

4,767.92 Issued at ` 4746.95

lakhs, discount

rate 10.75% per

annum

September 14,

2009

LIC MF Income Plus Fund (1,000 commercial



4,767.92 Issued at ` 4746.95

lakhs, discount

rate 10.75% per

annum

September 14,

2009

LIC MF Liquid Fund (1,000 commercial paper of

face value ` 500,000 each dated March 17, 2009



4,746.95 lakhs,

discount rate

10.75% per

annum

September 14,

2009

F - 133


outstanding


Schedule

LIC MF Savings Plus Fund (1,000 commercial




4,746.95 lakhs,

discount rate

10.75% per

annum

September 14,

2009

LIC MF Special Unit Scheme (1,000 commercial




4,746.95 lakhs,

discount rate

10.75% per

annum

September 14,

2009

Total 49,024.50

Period 2008


outstanding


Schedule

UTI Mutual Funds - liquid cash plan (400

commercial paper of face value ` 500,000 each

dated February 20, 2008 aggregating to ` 2,000

lakhs)


1,950.70 lakhs,

discount rate

10.25% per

annum

May 20, 2008

ABN Amro Money Plus Fund (1,000 commercial

paper of face value ` 500,000 each dated February



4,876.74 lakhs,

discount rate

10.25 % per

annum

May 20, 2008

Religare Mutual Fund* (400 commercial paper of

face value ` 500,000 each dated February 20, 2008



1,950.70 lakhs,

discount rate

10.25 % per

annum

May 20, 2008

Birla Sunlife Interval Income Fund Quarterly Plan

Series II (1,100 commercial paper of face value `

500,000 each dated February 20, 2008 aggregating

to ` 5,500 lakhs)


5,238.78 lakhs,

discount rate

10.00% per

annum

August 20, 2008

Kotak Quarterly Interval Plan - Series 6 (500


dated February 20, 2008 aggregating to ` 2,500

lakhs)


2,381.26 lakhs,

discount rate

9.20% per annum

August 20, 2008

Allahabad Bank (400 commercial paper of face




1,949.87 lakhs,

discount rate

10.20% per

annum

June 4, 2008

Birla Cash Plus (900 commercial paper of face




4,387.21 lakhs,

discount rate

10.20% per

annum

June 4, 2008

F - 134


outstanding


Schedule

United Bank Of India (700 commercial paper of




3,412.27 lakhs,

discount rate

10.20% per

annum

June 4, 2008

UTI Spread Fund (500 commercial paper of face




2,437.34 lakhs,

discount rate

10.20% per

annum

June 4, 2008

Saraswat Co-op Bank Ltd. (200 commercial paper



982.42 Issued at ` 975.55

lakhs, discount

rate 10.28% per

annum

June 4, 2008

SBI Life Insurance Co. Ltd. (500 commercial paper




2,438.87 lakhs,

discount rate

10.28% per

annum

June 4, 2008

Tata MF - Tata Fixed Horizon Fund (800


dated March 7, 2008 aggregating to ` 4,000 lakhs)


3,900.14 lakhs,

discount rate

10.50% per

annum

June 4, 2008

ABN Amro Flexible Short Term Plan - Series B

(500 commercial paper of face value ` 500,000

each dated March 7, 2008 aggregating to ` 2,500

lakhs)


2,437.59 lakhs,

discount rate

10.50% per

annum

June 4, 2008

Total 38,688.70

* Religare Mutual Fund is Formerly known as Lotus India Mutual Fund

Notes:

Note 1: Secured by first pari passu charge on all fixed assets of the Parent Company.

Note 2: Cash credit is secured by deferred payment note, hypothecation of book-debts, moveable fixed assets

and stocks of chemicals.

Note 3: Secured against the motor cars acquired on Equitable Monthly Instalment (EMI) System.

Note 4: Secured by pari passu first charge on the inventories, book debts and other current assets of the

Company.

F - 135

Note 5: Secured by pari passu second charge of all the movable fixed assets and pari passu first charge on

current assets of the Company.

Note 6: Secured by pari passu first charge on goods, stocks, raw material finished goods, unfinished goods,

book debts and loans and advances i.e. current assets of the Company

Note 7: Secured by pari passu second charge on current assets and the moveable fixed assets of the

Company.

Note 8: As per the terms of the issue document, the bonds were redeemable, in whole but not in part at the

option of the Company at any time on or after January 25, 2009 and on or prior to January 26, 2011 subject

to certain conditions at 121.679 per cent of the principal amount. During the current year the balance

outstanding bonds were redeemed.

Note 9: These loans have been guaranteed by Reliance Capital Limited.

Note 10: Secured by first pari passu charge on the all assets of the Parent Company and its Wholly owned

Indian subsidiaries.

Note 11: Secured by pari passu first charge of all the fixed assets, inventories, book debts and loans of

advances of subsidiary and Corporate guarantee of the Parent Company.

Note 12 : Secured by Standby Letter of credit issued by Parent Company for availing facility by subsidiary

company in foreign.

Note 13: Secured by the hypothecation of fixed assets purchased.

Note 14: Secured by second charge on current assets and fixed assets (including moveable and immovable)

of the Parent Company.

Note 15: Secured by first pari passu charge on the current assets and moveable fixed assets of the Company.

F - 136

Annexure XVI


Statement of capitalisation of the Group

Pre-issue Post-issue

As at

Particulars March 31, 2013 As Adjusted for Issue

Borrowings:

Short term borrowings 145,385.80

Long term borrowings (including ` 45,005.90 current

maturities) 82,449.10

Total borrowings 227,834.90 -

Shareholder's fund:

Share capital 2,453.81

Reserves and surplus (net) (excluding revaluation reserves) (95,161.58)

Less: Miscellaneous expenditures not written off -

Total shareholder's fund (92,707.77) -

Long term debt / Shareholder‟s fund NA

Notes : -

a) Short term borrowing represents amount repayable within one year from March 31, 2013

b) The figures disclosed above are based on the summary statement of assets and liabilities, as restated, of

the Company as at March 31, 2013

c) The corresponding post issue figures are not determinable at this stage pending the completion of the

Rights issue process and hence have not been furnished.

F - 137

Annexure XVII


Statement of the dividend paid / proposed

(` in lakhs)

Class of shares

Face

Value of

share in `

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Equity shares

Equity shares capital as at

year end / period end 5

2,306.31

2,306.31

2,306.31

2,306.31 2,306.31 2,306.31

Total 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31

Final dividend

Rate of the final dividend

(excluding dividend

distribution tax) - - - - - 50.00%

Aggregating amount of

final dividend - - - - - 1,153.20

F - 138

Annexure XVIII


Statement of related party disclosures of the Group

(` in lakhs)

Parties where control exists

Holding Company

Reliance Capital Limited (up to November 30, 2007)

Reliance Land Private Limited (up to November 30, 2007)

Other related parties with whom transactions have taken place during the period

(a) Significant shareholders, key managerial personnel and their relatives

Manmohan Shetty (up to November 30, 2007)

Pooja Shetty (up to November 30, 2007)

Kirti Desai – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from January

30, 2008 till May 15, 2011)

Madhulika Singh – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from May

28, 2011 upto June 30, 2011)

Ashish Agarwal – Manager appointed u/s 269 of the Companies Act, 1956 (with effect from July

1, 2011)

Reliance Land Private Limited (upto November 30, 2007)

(b) Enterprises over which company / key managerial personnel has significant influence /

Associates

HPE / Adlabs LP.

Sultan Production Private Limited (up to March 31, 2009)

GH – Reliance LLC (with effect from October 1, 2012)

Gold Adlabs

Dharma Production Private Limited (up to November 30, 2007)

Idream Productions Private Limited (up to November 30, 2007)

Whistling Woods International Private Limited (up to November 30, 2007)

Reliance Communication Infrastructure Limited (up to November 30, 2007)

Reliance Capital Assets Management Limited (up to November 30, 2007)

Reliance Web Stores Limited (up to November 30, 2007)

Reliance General Insurance Company Limited (up to November 30, 2007)

M/s. Shringar Films (upto November 30, 2007)

South Yarra Holding (upto November 30, 2007)

Shringar Films Limited (upto November 30, 2007)

Adlabs Shringar Multiplex Cinemas Private Limited (upto November 30, 2007)

(c) Joint ventures

F - 139

Cineplex Private Limited (upto June 3, 2011)

Swanston Multiplex Cinemas Private Limited

Divyashakti Marketing Private Limited

Adlabs Multiplex Limited (upto December 19, 2007)

Nature of

Transactions

Name of Related

Party

Holding Company

Period

March

2013

Period

2012

Period

2011 Period

2010

Period

2009

Period

2008

Dividend Paid

Reliance Land

Private Limited

-

- - - - 515.00

Reliance Capital

Limited

-

- - - - 31.38

Nature of

Transactions

Name of Related

Party

Significant Shareholders, key managerial personnel and their

relatives

Period

March

2013

Period

2012

Period

2011 Period

2010

Period

2009

Period

2008

Dividend Paid Manmohan Shetty - - - - 57.30

Managerial

Remuneration

Kirti Desai - 5.60 10.80 7.80 7.80 1.40

Madhulika Singh - 0.80 - - - -

Ashish R. Agarwal 11.80 29.40 - - - -

Manmohan Shetty - - - - - 116.10

Pooja Shetty - - - - - 4.90

Loans given Kirti Desai - - - 5.00 - -

Loans

received back Kirti Desai

-

- - 5.00 - -

Nature of

Transaction

s

Name of Related

Party

Enterprises over which Company has significant influence /

associates

Period

March

2013

Period

2012

Period

2011 Period

2010

Period

2009

Period

2008

Reimburseme

nt of

expenses

Sultan Production

Private Limited - - - - (107.70) -

Income from

theatre

operation Gold Adlabs 16.80 166.60 121.60 151.30 252.08 292.22

(Withdrawal)

/ additional

contribution Gold Adlabs (16.79) (189.90)

(105.80

) (130.l0) (278.31) (301.61)

Interest

Income HPE / Adlabs LP -

-

- - - 43.70

Repayment

of

Principal by

Limited

liability

Partnership HPE / Adlabs LP - - - 241.70 - -

Investment in GH – Reliance 8,198.30 - - - - -

F - 140

Nature of

Transaction

s

Name of Related

Party


associates

Period

March

2013

Period

2012

Period

2011 Period

2010

Period

2009

Period

2008

Associate LLC

Loan Given

Sultan Production

Private Limited

-

- - - 548.30 719.20

Outstanding

Balances as

at period end

Sultan Production

Private Limited

-

- - - 1,159.70 719.20

F - 141

Annexure XIX


Segment information of the Group

Particulars Film production services

Period

March

2013

Period

2012

Period 2011 Period 2010 Period 2009 Period 2008

Revenue

Operating revenue 6,861.50 28,638.40 24,726.90 16,060.40 13,498.00 6,647.70

Other income - - 416.30 409.80 - 49.70

Net revenue 6,861.50 28,638.40 25,143.20 16,470.20 13,498.00 6,697.40

Internal segment

sales (508.10) (835.50) (1,877.70) (705.90) (441.00) (376.50)

Total segment

revenue 6,353.40 27,802.90 23,265.50 15,764.30 13,057.00 6,320.90

Result ((loss) /

profit before

interest and

corporate expenses)

Segment result (7,443.51) (13,312.94) (477.60) 3,067.42 3,538.96 2,306.70

Other Information

Segment assets 76,436.29 71,199.49 75,073.22 58,167.72 29,764.20 15,425.76

Segment liabilities 5,959.70 5,484.30 5,268.80 4,656.80 1,577.50 3,186.70

Net capital

employed 70,476.59

65,715.19

69,804.42 53,510.92 28,186.70 12,239.06

Capital expenditure 1,119.86 3,786.50 16,464.20 23,533.80 4,810.90 7,514.61

Depreciation,

amortisation and

impairment 3,755.00 9,346.80 4,870.00 2,189.28 1,049.84 330.50

Particulars Theatrical exhibition

Period

March

2013

Period

2012


Revenue


Other income 19.50 41.51 3,300.40 14.80 - 330.30

Net revenue 24,407.00 86,316.51 54,725.00 47,635.60 34,169.84 12,568.94

Internal segment

sales

-

(9.00) (46.70) (910.80) (998.70) -

F - 142

Particulars Theatrical exhibition

Period

March

2013

Period

2012


Total segment

revenue 24,407.00 86,307.51 54,678.30 46,724.80 33,171.14 12,568.94

Result ((loss) /

profit before

interest and

corporate

expenses)

Segment result (13,366.09) (30,380.83) (10,398.60) (4,953.70) (4,545.60) 684.90

Other

Information

Segment assets 66,818.13 84,119.03 108,259.33 121,947.33 108,036.63 55,514.41

Segment

liabilities

18,174.90 21,310.70

15,772.40 13,197.00 10,908.40 5,575.30

Net capital

employed

48,643.23 62,808.33

92,486.93 108,750.33 97,128.23 49,939.11

Capital

expenditure

436.79 2,488.60

5,860.10 18,905.70 36,854.70 16,980.33

Depreciation and

amortisation and

impairment 3,901.30

11,732.00 8,241.80 7,140.70 3,509.60 1,152.00

Particulars Television / Film Production and Distribution

Period

March

2013

Period

2012


Revenue


Other income - 44.14 690.20 656.30 - 332.10

Net revenue 4,398.90 9,195.04 6,024.20 11,067.30 21,164.80 14,240.00

Internal segment

sales

- -

(353.70) (968.30) (1,457.60) (1,648.80)

Total segment

revenue

4,398.90 9,195.04

5,670.50 10,099.00 19,707.20 12,591.20

Result ((loss) /

profit before

interest and

corporate expenses)

Segment result 638.51 1,965.80 1,150.00 4,011.00 3,187.33 (148.32)

F - 143

Particulars Television / Film Production and Distribution

Period

March

2013

Period

2012


Other Information

Segment assets 13,775.16 13,687.66 10,528.86 16,325.56 16,882.06 41,849.73

Segment liabilities 3,358.10 3,072.30 2,417.70 2,178.20 1,420.70 7,974.30

Net capital

employed

10,417.06 10.615.36

8,111.16 14,147.36 15,461.36 33,875.43

Capital expenditure 4.44 23.10 19.20 483.20 - 7,512.90

Depreciation and

amortisation and

impairment 29.00 38.60 49.00 280.00 8,915.87 8,647.50

Particulars Radio

Period

March

2013

Period

2012


Other Information

Segment assets - - - - - 45,061.80

Segment liabilities - - - - - 7,021.90

Net capital

employed

-

- - - - 38,039.90

Capital expenditure - - - - - 19,195.02

Particulars Total

Period

March 2013

Period 2012


Revenue

Operating

revenue

35,647.90

124,064.30 81,485.50 74,092.20 68,832.64 32,794.24

Other income 19.50 85.64 4,406.90 1,080.90 - 712.10

Net revenue 35,667.40 124,149.94 85,892.40 75,173.10 68,832.64 33,506.34

Internal

segment sales

(508.10)

(844.50) (2,278.10) (2,585.00) (2,897.30) (2,025.30)

Total segment

revenue

35,159.30

123,305.44 83,614.30 72,588.10 65,935.34 31,481.04

Unallocated

revenue

1,478.50

2,181.46 1,411.90 2,175.80 7,184.90 4,815.70

Total Revenue 36,637.80 125,486.90 85,026.20 74,763.90 73,120.24 36,296.74

F - 144

Particulars Total

Period

March 2013

Period 2012


Result ((loss) /

profit before

interest and

corporate

expenses)

Segment result (20,171.08) (41,727.97) (9,726.20) 2,124.72 2,180.69 2,843.28

Unallocated

corporate

income 1,478.50 2,181.46 1,411.90 2,175.80 7,184.90 4,815.70

Unallocated

corporate

expenses (954.89) (10,709.42) (6,598.56) (5,864.41) (3,860.56) (1,827.61)

(Loss) / profit

before interest

and tax (19,647.47) (50,255.91) (14,912.86) (1,563.89) 5,505.03 5,831.37

Income tax

(including

deferred tax and

fringe benefit

tax) (221.10) (276.91) (586.63) (53.02) (543.36) (858.01)

Minority

interest (245.50) (732.40) 196.70 530.87 322.12 (53.80)

(Loss) / profit

for the period (34,044.77) (91,016.62) (32,816.99) (12,803.24) (7,812.71) 1,998.52

Other

Information

Segment assets 157,029.58 169,006.18 193,861.41 196,440.61 154,682.89 157,851.70

Unallocated

corporate assets 15,323.09 17,046.37 34,913.25 56,315.00 49,131.99 29,425.71

Total assets 172,352.67 186,052.55 228,774.66 252,755.61 203,814.88 187,277.41

Segment

liabilities 27,492.70 29,867.30 23,458.90 20,032.00 13,906.60 23,758.20

Unallocated

corporate

liabilities 237,567.75 214,335.05 202,608.93 196,906.03 140,665.84 95,736.46

Total liabilities 265,060.45 244,202.35 226,067.83 216,938.03 154,572.44 119,494.66

Net capital

employed

(unallocated) (222,472.57) (197,288.68) (167,695.68) (140,591.03) (91,533.85) (66,310.75)

Capital

expenditure 1,561.09 6,298.20 22,343.50 42,922.70 41,665.60 51,202.86

Unallocated

corporate

capital

expenditure - 51.90 58.70 168.60 186.30 74.28

Total capital

expenditure 1,561.09 6,350.10 22,402.20 43,091.30 41,851.90 51,277.14

F - 145

Particulars Total

Period

March 2013

Period 2012


Depreciation

and

amortisation

and impairment 7,685.30 21,117.40 13,160.80 9,609.98 13,475.31 10,130.00

Unallocated

depreciation

and

amortisation

and impairment 38.00 218.10 65.70 119.46 67.10 23.62

Total

depreciation

and

amortisation

and impairment 7,723.30 21,335.50 13,226.50 9,729.44 13,542.41 10,153.62

India

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Segment Revenue 28,333.10 89,526.60 60,277.90 50,012.80 52,324.04 31,292.64

Segment Assets 149,223.17 160,714.52 200,866.76 227,050.71 178,966.78 186,167.11

Capital Expenditure 859.42 4,485.79 18,941.70 34,344.70 22,584.80 51,276.64

United States of America

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Segment Revenue 6,544.00 20,636.40 16,234.10 15,679.80 11,540.00 120.00

Segment Assets 19,178.10 19,239.10 14,093.80 13,294.80 12,385.10 654.40

Capital Expenditure 674.95 720.40 2,325.60 5,269.80 9,101.00 0.50

Malaysia

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Segment Revenue - 9,427.20 5,615.70 4,970.80 1,491.10

Segment Assets - - 10,323.60 10,892.10 12,197.90

Capital Expenditure - 405.90

617.50

1,702.50

10,081.00

Others

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Segment Revenue 282.20 3,715.20 1,486.60 1,924.70 580.20 68.40

Segment Assets 3,951.40 6,098.90 3,490.50 1,518.00 265.10 455.90

Capital Expenditure 26.73 737.90 517.40 1,774.30 85.10 -

F - 146

Total

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Segment Revenue 35,159.30 81,644.46 83,614.30 72,588.10 65,935.34 31,481.04

Segment Assets 172,352.67 186,052.55 228,774.66 252,755.61 203,814.88 187,277.41

Capital Expenditure 1,561.09 6,350.10 22,402.20 43,091.30 41,851.90 51,277.14

The Group has disclosed Business Segment as the primary segment.

The business of the Group is divided into three segments - Film production services, Theatrical exhibition

and Television / Film production and distribution. Segments have been identified taking into account the

nature of the business, the differing risks and returns, the organisation structure and internal reporting

system. Film production services operation primarily comprise of processing of raw exposed films, colour

correction, editing, digital processing, equipment / facility rental, copying and printing of positive exhibitions

prints and trading in raw film rolls. Theatrical exhibition operations comprise of single screen, multiplex /

Imax cinema exhibition, range of activities / services offered at cinema centres including catering food and

beverages. Television / film production and distribution comprises of production of television / film content

which is produced / coproduced by the Group and includes related services of financing for production of

films. Film distribution operation comprises of the Group‟s share of revenue from exploitation of distribution

rights acquired by the Group, which may include as a package, theatrical rights and video and television

rights.

Segment revenue, segment results, segment assets and segment liabilities include the respective amounts

identifiable to each segment as also the amounts allocable on a reasonable basis. Income and expenses which

are not directly attributable to any business segment are shown as unallocated corporate income / expenses.

Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocated

corporate assets and liabilities respectively.

Further, the Group has considered the overseas operations as a separately identifiable geographic segment

due to substantial operations in the United States of America and Malaysia. Hence, the Group has identified

secondary segments based on geographic locations and has reported India, Americas, Malaysia and Rest of

world as geographic segments.

Pursuant to the business restructuring exercise of Film production services, with effect from October 1, 2011,

animation business is no longer considered to be a part of this segment.

F - 147



Film City Complex

Goregaon (East)

MUMBAI 400 065

July 3, 2013

Dear Sirs

1. We have examined the attached restated summary financial information of Reliance

MediaWorks Limited („RMWL‟ or „the Company‟), as approved by the Board of Directors of

the Company, prepared in terms of the requirements of Paragraph B, Part II of Schedule II to

the Companies Act, 1956 ('the Act'), the Securities and Exchange Board of India (Issue of

Capital and Disclosure Requirements) Regulations 2009, as amended to date, to the extent

applicable („SEBI Regulations‟), the Guidance note on „Reports in Company Prospectus

(Revised)‟ issued by the Institute of Chartered Accountants of India („ICAI‟), to the extent

applicable („Guidance Note‟), and in terms of our engagement agreed upon with you in

accordance with our engagement letter dated July 3, 2013 in connection with the proposed

Issue of Equity Shares of the Company on a rights basis.

2. We have examined the attached Summary Statement of Assets and Liabilities, as restated, of

the Company as at March 31, 2013, September 30, 2012, March 31, 2011, March 31, 2010,

March 31, 2009 and March 31, 2008, the attached Summary Statement of Profit and Loss, as

restated, for the six months ended March 31, 2013, eighteen months ended September 30,

2012, year ended March 31, 2011, year ended March 31 2010, year ended March 31, 2009 and

nine months ended March 31, 2008, and the attached Summary Statement of Cash Flow, as

restated, for the six months ended March 31, 2013, eighteen months ended September 30,

2012, for the year ended March 31, 2011, year ended March 31, 2010, year ended March 31,

2009 and nine months ended March 31, 2008, as set out in Annexure I, Annexure II and

Annexure III respectively, together referred to hereinafter as the „Restated Summary

Statements‟. These restated summary statements of RMWL have been prepared by the

management from the audited condensed financial statements for the six months ended March

31, 2013 which have been approved by the Board of Directors and from the audited financial

statements for the eighteen months ended September 30, 2012, for the year ended March 31,

2011, year ended March 31, 2010, year ended March 31, 2009 and nine months ended

March 31, 2008, being the last five financial years / periods for which the accounts of the

Company have been made up, and have been approved by the Board of Directors for the

respective years / periods and adopted by the Members of the Company. The financial

statements of the Company as at and for the year ended March 31, 2009 and nine months ended

March 31, 2008 have been audited by one of the joint auditors, B S R & Co., Chartered

Accountants. The condensed financial statement as at and for the six month ended March 31,

2013, financial statements as at and for the eighteen months ended September 30, 2012 and the

financial statements as at and for the year ended March 31, 2011 and as at and for the year

ended March 31, 2010 have been audited by us. The restated summary statements have been

prepared in line with General Circular No. 62/2011 F No. 17/244/2011-CL-V, dated September

5, 2011 issued by Ministry of Corporate Affairs, Government of India.

F-148

3. Without qualifying our report, we draw attention to the following

a) As set out in paragraph (a) of Note C of Annexure IV to this report, the Company‟s net worth

is fully eroded (restated) and has a negative net worth of ` 47,014.66 lakhs, and the Company

has incurred a loss of ` 27,593.15 lakh (as restated) for the six months period October 1, 2012

to March 31, 2013, indicating the existence of uncertainty that may cast doubt about the

Company‟s ability to continue as a going concern. Considering the matters set out in the said

note, this Restated Summary Statement is prepared on a going concern basis.

b) As set out in paragraph (b) of Note C of Annexure IV to this report, the Company‟s net worth

is fully eroded (restated) and has a negative net worth of ` 20,451.53 lakhs, and the Company

has incurred a loss of ` 70,356.34 lakh (as restated) for the eighteen months period April 1,

2011 to September 30, 2012, indicating the existence of uncertainty that may cast doubt about

the Company‟s ability to continue as a going concern. Considering the matters set out in the

said note, this Restated Summary Statement is prepared on a going concern basis.

c) As set out in paragraph (f)(i) of Note C of Annexure IV, during the nine months period ended

March 31, 2008, the Hon‟ble High Court of Judicature at Bombay vide its order dated March

7, 2008 sanctioned the Modified Composite Scheme of Amalgamation and Arrangement

(„Modified Scheme‟) for modification of the Composite Scheme. The Modified Scheme was

filed with the ROC on March 31, 2008. The Modified Scheme inter-alia provides that the net

results of the transactions related to the radio business of the Company for the period from

March 31, 2006 to the Effective Date (i.e. the date of filing the Modified Scheme with the

ROC, March 31, 2008) be adjusted in the General reserve account of the Company. The

Composite Scheme was given effect to in accordance with the accounting treatment

prescribed by the said Scheme in the financial statements for the fifteen months ended June

30, 2007 and, only the modifications to the original scheme were given effect to in the

financial statements for the nine months ended March 31, 2008.

d) As set out in paragraph (e)(ii) of Note C and point 2 of paragraph IV of Note D of Annexure

IV, during the year ended March 31, 2009, the Hon‟ble High Court of Judicature at Mumbai

vide its order dated May 8, 2009 sanctioned the Scheme of Amalgamation of the Company

with its wholly owned subsidiaries Adlabs Multiplex and Theatres Limited, Adlabs Multiplex

Limited, Rave Entertainment Private Limited and Mahimna Entertainment Private Limited

(„Amalgamation Scheme‟), under sections 391 to 394 of the Act. Pursuant to the said

Amalgamation Scheme, the Company has recorded an increase in value of assets aggregating

` 17,890.10 lakhs by crediting the Capital reserve. Further, the Company has recorded an

adjustment for diminution in value of its assets (production and distribution rights, fixed

assets, investments, debtors and loans and advances) aggregating ` 15,669.70 lakhs by

debiting the same to Capital reserve instead of the profit and loss account, had the Company

debited the profit and loss account, the loss before tax for the year would be higher by the said

amount

4. In accordance with the requirements of Paragraph B, Part II of Schedule II of the Act, the SEBI

Regulations, the Guidance Note and in accordance with the terms of our engagement agreed with

you, and read with paragraphs 2 above and with regards to adjustments for matters of emphasis in

the Auditors‟ report as stated in paragraph 3 above, we confirm / further report that the Restated

Summary Statements examined by us and as set out in Annexure I, Annexure II and Annexure III

to this report are prepared after making adjustments and regrouping as in our opinion were

appropriate and as are more fully described in significant accounting policies and notes to the

Restated Summary Statements enclosed as Annexure IV to this report.

F-149

5. Based on the above, read with the matters stated in paragraphs 2 above and with regards to

adjustments for matters of emphasis in the Auditors‟ report as stated in paragraph 3 above, we are

of the opinion that the restated financial information have been made after incorporating:

i. Adjustments for the changes in accounting policies adopted by the Company retrospectively

in respective financial years/ periods to reflect the same accounting treatment as per changed

accounting policy for all the reporting periods;

ii. Adjustments for material amounts in the respective financial years / periods to which they

relate;

iii. Adjustments for qualifications, as applicable in the Auditors‟ reports in the respective years/

periods to which they relate; and

iv. There are no extraordinary items that need to be disclosed separately in the Restated

Summary Statements.

6. We have also examined the following other restated financial information set out in the

Annexures prepared by the management and approved by the Board of Directors, relating to the

Restated Summary Statements and annexed to this report:

a) Statement of share capital, enclosed as Annexure V

b) Summary statement of reserves and surplus, enclosed as Annexure VI

c) Statement of non-current investment, deferred tax assets (net), long-term loans and

advances and other non-current assets, enclosed as Annexure VII

d) Statement of current assets, enclosed as Annexure VIII

e) Statement of non-current liabilities, enclosed as Annexure IX

f) Statement of current liabilities, enclosed as Annexure X

g) Statement of revenue, enclosed as Annexure XI

h) Statement of other income, enclosed as Annexure XII

i) Statement of contingent liabilities and commitments, enclosed as Annexure XIII

j) Statement of accounting ratios, enclosed as Annexure XIV

k) Statement of principal terms and conditions of long-term borrowings and short-term

borrowings, enclosed as Annexure XV

l) Statement of capitalization as at March 31, 2013, enclosed as Annexure XVI

m) Statement of dividend paid/ proposed, enclosed as Annexure XVII

n) Statement of related party disclosures, enclosed as Annexure XVIII

o) Statement of tax shelter, enclosed as Annexure XIX

7. In our opinion, the Restated Summary Statements contained in Annexure I, Annexure II and

Annexure III to this report, read with the significant accounting policies and notes disclosed in

Annexure IV, and other restated financial information contained in Annexure V to Annexure XIX

to this report, and read with paragraphs 2 and 3 above and note 2 and 3 disclosed in Annexure VII

and Annexure VIII respectively, have been prepared in accordance with Paragraph B, Part II of

Schedule II of the Act and the SEBI Regulations.

8. The report should not in any way be construed as a reissuance or redating of any of the previous

audit reports issued by us or by the other firm of Chartered Accountants, nor should this report be

construed as a new opinion on any financial statements referred to herein.

F-150

9. We have no responsibility to update our report for events and circumstances occurring after the

date of this report.

10. This report is intended solely for use of the management and for inclusion in the Offer Document

in connection with the proposed issue of equity shares of the Company on a rights basis, and is

not to be used, referred to or distributed for any other purpose without our prior written consent.

For B S R & Co.






Bhavesh Dhupelia

Partner


Mumbai

Parag D. Mehta

Partner


Mumbai

F-151

Annexure I



(` in lakhs)

Particulars

As at

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

Assets

A Non-current

assets

I Fixed assets

(i) Tangible

assets 70,032.73 75,331.83 85,631.03 84,424.23 66,359.33 34,799.90

(ii) Intangible

assets 645.30 722.20 418.10 184.60 219.00 18,206.10

(iii) Capital

work-in-progress 8,865.10 11,966.60 13,812.70 16,132.50 16,863.20 21,331.01

(iv) Intangible

assets under

development - - - - - -

II Non-current

investments 18,040.94 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45

III Deferred tax

assets (net) - - - - - -

IV Long-term loans

and advances 21,737.30 22,599.00 27,325.70 25,648.86 23,869.54 28,957.13

V Other non-

current assets 583.90 62.00 290.30 277.42 59.41 43.75

119,905.27 128,722.57 134,746.13 132,017.01 109,704.98 114,257.34

B Current assets

I Current

investments - - - 7,902.40 - 13,500.30

II Inventories 762.80 658.50 724.50 596.80 518.30 191.80

III Trade receivables 16,116.40 16,179.40 18,741.90 22,119.10 20,202.40 11,640.10

IV Cash and bank

balances 5,351.90 6,802.00 8,761.80 4,515.17 4,057.93 7,143.29

V Short-term loans

and advances 63,743.50 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68

VI Other current

assets 424.20 717.60 4,265.20 2,765.47 4,281.48 3,911.16

86,398.80 79,766.60 94,307.00 108,369.43 79,887.31 67,886.33

Liabilities

C Non-current

liabilities

I Long-term

borrowings 35,137.50 71,412.50 39,870.80 36,416.70 54,230.00 53,099.90

II Deferred tax

liabilities (net) - - - - - -

F-152

Annexure I



(` in lakhs)

Particulars

As at

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

III Other long-term

liabilities 3,963.50 3,636.70 2,934.69 1,822.66 839.10 342.98

IV Long-term

provisions 494.00 501.10 695.90 344.50 3,427.40 3,038.34

39,595.00 75,550.30 43,501.39 38,583.86 58,496.50 56,481.22

D Current

liabilities

I Short-term

borrowings 144,714.00 106,424.50 102,371.40 114,773.20 70,233.50 41,028.60


III Other current

liabilities 57,466.20 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46

IV Short-term

provisions 84.60 94.00 125.40 31.80 29.30 1,800.65

213,723.73 153,390.40 168,745.58 160,332.22 79,986.13 59,021.37

E Net Worth

(A+B-C-D) (47,014.66) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08

F Represented by

i) Share capital 2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31

ii) Reserves and

surplus (net) (49,468.47) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77

G Net Worth (i+

ii) (47,014.66) (20,451.53) 16,806.16 41,470.36 51,109.66 66,641.08

Note :

The above statement should be read with significant accounting policies and notes to summary statement of

assets and liabilities of the Company, as restated (Annexure IV)

F-153

Annexure II


Summary statement of profit and loss of the Company, as restated

(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Revenue from operations 23,641.20 76,129.30 48,669.20

45,551.99 48,234.34 26,894.71

Other income 384.90 4,325.50 5,618.20 3,073.20 6,647.90 5,385.30

Total revenue

24,026.10

80,454.80 54,287.40

48,625.19 54,882.24 32,280.01

Direct operational

expenses 9,547.77 30,064.14 20,449.70

15,631.90 15,752.90 7,585.30

Employee benefits

expense 3,644.00 13,856.10 9,882.50 5,969.20 5,645.80 2,272.80


loss on derivative

contracts) (net) 13,694.80 39,061.20 16,973.30

11,306.60 12,363.70 2,751.34

Depreciation and

amortisation expense 4,078.60

10,789.40 6,735.10 6,087.40 12,296.61 9,971.04

Other expenses 14,971.50 49,813.10 24,594.80

18,427.09 13,743.54 7,150.27

Total expenses 45,936.67 143,583.94 78,635.40 57,422.19 59,802.55 29,730.75


and exceptional items (21,910.57) (63,129.14) (24,348.00) (8,797.00) (4,920.31) 2,549.26

Exceptional items (Refer

note 4 of I of D of

Annexure IV and 7 of II

of D of Annexure IV) (5,682.58) (7,227.20) - - - -

(Loss) / profit before tax (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26


- Deferred tax charge /

(credit) - - - - (134.80) 621.40


Net (loss) / profit after

tax (Balance carried to

Annexure VI) (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37


profit and loss of the Company, as restated (Annexure IV)

F-154

Annexure II








F-155

Annexure III



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

A Cash Flow from

operating

activities

Net (loss) / profit

before tax, as

restated (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26

Adjustment for

Depreciation and

amortisation

expense 5,963.20 10,789.40 6,735.10 6,087.40 12,296.61 9,971.04

Bad debts /

advances written-

off 27.32 103.60 107.30 50.50 263.00 385.10

Provision for

doubtful debts and

advances 590.00 8,977.20 1,658.20 121.90 - -

Provision for

diminution in value

of non-current

investments - 825.10 - - - -

Sundry balances

written-off 16.50 981.50 - - - -

Capital work-in-

progress written-off 2,902.70 4,424.60

Dividend income - (200.40) - (85.30) (205.40) (148.80)

Interest income (145.40) (1,080.10) (773.20) (406.40) (716.70) (831.50)


contract - - - - - (977.40)

Loss / (profit) on

sale / discarding of

fixed assets (net) 7.90 674.20 (2,701.10) 40.80 4.40 56.50

Gain on sale of

non-current

investments - (766.50) - - - -

Gain on sale of

current investments (57.50) (39.50) (423.60) (274.40) (269.20) (9.10)

Gain on sale of

non-current

investments - - - - (1,700.00) (2,660.30)

Provisions written

back - - - (241.70) - -

Unrealised foreign

exchange (gain) /

loss (13.00) (2,588.50) (305.30) 2,000.20 (807.20) (18.10)

F-156

Annexure III



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Finance costs

(including loss on

derivative

contracts) (net)

39,061.20 16,973.30

11,306.60

12,363.70

2,751.34

13,694.80

Operating (loss) /

profit before

working

capital changes

and before net

results of Radio

business

(9,194.54) (3,077.30) 9,802.60 16,308.90 11,068.04

(4,606.63)

Adjustment for

cash loss pertaining

to transaction

relating to Radio

business up to

March 31, 2008

pursuant to

Modified

Composite Scheme

of Amalgamation

and Arrangement - - - - - (8,377.00)

Operating (loss) /

profit before

working capital

changes (4,606.73) (9,194.54) (3,077.30) 9,802.60 16,308.90 2,691.04

Adjustment for :

Decrease /

(Increase) / in trade

receivables (413.22) 515.90 2,749.20 (2,008.60) (17,317.60) (7,582.14)

Decrease /

(increase) in loans

and advances and

other assets 4,817.10 3,918.50 (5,484.91) (1,978.10) (6,541.45) (5,773.14)

Decrease /

(increase) in

inventories (104.30) 66.00 (127.70) (78.50) (325.40) (30.30)

Increase /

(decrease) in trade

and other payables 51.65 2,393.56 4,988.71 4,863.50 (4,444.30) 9,061.70

Cash generated

from / (used in)

from operating

activities (255.40) (2,300.58) (952.00) 10,600.90 (12,319.85) (1,632.84)

Taxes paid (net of

refunds) (214.90) 1,790.10 1,693.00 (1,122.00) (1,544.50) (1,346.80)

F-157

Annexure III



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Net cash

generated from /

(used in)

operating

activities (A) (470.30) (510.48) 741.00 9,478.90 (13,864.35) (2,979.64)

B

Cash flow from


Purchase of fixed

assets (767.50)

(5,183.50)

(15,372.10)

(24,733.56)

(21,363.60)

(46,194.40)

Proceeds from sale

of fixed assets 46.40 762.40 13,986.70 10.80 1,087.60 12.10

Proceeds on sale of

non-current

investments 60.00 1,233.62 1.00 4,066.80 3,127.30 -

Loan to

subsidiaries and

joint ventures (net) (7,776.30) (1,721.70) (13,597.70) (21,195.70) - -

Purchase of non-

current investment

- in shares of

subsidiaries

companies / joint

venture/ associates

(Refer Note 2) - (12,127.00) (2,000.00) (3,005.00) (201.80) (2,720.80)

Advance for

application money

towards

subscription of

shares in a joint

venture - - - (125.00) - -

Repayment of

capital by

Partnership firm - - - 241.70 - -

Purchase of non-

current investments

– other - - - (9.90) (4.50) (0.40)

Profit from /

investment in

mutual funds (net) 57.50 39.50 423.60 274.40 269.20 9.10

Redemption of /

(investment in)

mutual funds - - 7,902.40 (7,902.40) 13,500.30

(13,480.50)

Dividend income - 200.40 - 85.30 205.40 148.80

Interest income 164.40 1,232.00 685.90 425.60 1,395.40 238.40

F-158

Annexure III



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Cash generated

(used in) / from

investing activities (8,215.50) (15,564.28) (7,970.20) (51,866.96) (1,984.70) (61,987.69)

Taxed paid (net of

refunds) (0.06) (47.30) (17.00) (26.70) (78.10) (194.40)

Net Cash

generated (used

in) / from


(B) (8,216.10) (15,611.58) (7,987.20) (51,893.66) (2,062.80) (62,182.09)

C Cash flow from

financing

activities

Proceeds from

long-term

borrowings - 66,900.00 37,500.00 3,500.00 - 40,000.00

Proceeds from

short-term

borrowings (net)

(Refer note 3

below) 38,289.40 4,053.20 2,598.10 54,539.70 31,250.80 28,845.30

Proceeds from

issue of Preference

Shares (Refer note

3 below) - 29,500.00 - - - -

Repayment of

Foreign currency

convertible bonds - (15,814.50) - - -

Repayment of

long-term

borrowings (17,108.30) (61,020.80) (17,083.30) - - -


contract - - - - - 977.40

Interest recoverable

from Reliance

Broadcast Network

Limited - - (1,448.60) (2,507.89) (2,584.90) -

Recovered from

Reliance Broadcast

Network Limited

pursuant to Scheme

of Arrangement 63.80 9,961.40 20,000.00 - - -

Dividend

(including dividend

distribution tax)

paid - - - - (1,349.20) (1,164.10)

F-159

Annexure III



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Finance costs

(including loss on

derivative

contracts) (net) (10,175.60) (34,561.34) (16,757.90) (13,034.60) (11,201.60) (4,795.30)

Net cash flow

generated from /

(used in) financing

activities ( C ) 11,069.30 14,832.46 8,993.80 42,497.21 16,115.10 63,863.30

Net increase in

cash and cash

equivalent

(A+B+C) 2,382.90 (1,289.60) 1,747.60 82.45 187.95 (1,298.43)

Cash and cash

equivalents as at

beginning of the

period 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10 1,987.53

Cash and cash

equivalents

adjusted pursuant

to Composite

Scheme of

Amalgamation and

Arrangement - - - - 37.70 1,300.00

Cash and cash

equivalents

adjusted pursuant

to Modified

Composite Scheme

of Amalgamation

and Arrangement - - - - (843.70) -

Cash and cash

equivalents as at

end of the period

(refer note (I) and

(II) of D of

Annexure VIII) 4,294.40 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10

2,382.90 (1,289.60) 1,747.60 82.45 187.95 (1,298.43)

Note :

2. The above cash flow statement has been prepared under the "Indirect Method" as set out in

Accounting Standard 3 - Cash Flow Statement

3. During Period 2012, the Company has apportioned loan given to a subsidiary into preference

shares amounting to ` 12,000 lakhs

4. During Period 2012, the Company has apportioned the loans received on a short term basis into

preference shares amounting to ` 29,500 lakhs


cash flow of the Company, as restated (Annexure IV)

F-160

Annexure III



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Period March 2013 – Six month ended March 31, 2013






F-161

Annexure IV


Significant accounting policies and notes to the restated summary statements

The figures for Period March 2013 represent the six month period ended March 31, 2013, Period 2012 represents the

eighteen month period ended September 30, 2012, Period 2011 represents the year ended March 31, 2011, Period

2010 represents the year ended March 31, 2010, Period 2009 represents the year ended March 31, 2009 and Period

2008 represents the nine month period ended March 31, 2008. Summary statements are not strictly comparable on

account of accounting pursuant to Court approved Schemes in Period 2008 and Period 2009. Also, the summary

statements are not comparable on account of varying accounting periods forming part of them.

The restated summary statements have been prepared to comply in all material respects with the requirements of

Schedule II to the Companies Act, 1956 (“the Act”) read with the Securities and Exchange Board of India (Issue of

Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by SEBI on August 26,

2009, as amended, to the extent applicable.

A. Summary of significant accounting policies

1. Basis of preparation

These summary statements are prepared and presented under the historical cost convention on the accrual

basis of accounting except for revaluation of certain fixed assets and in accordance with the Accounting

Standards („AS‟) notified in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions

of the Companies Act, 1956 („the Act‟), to the extent applicable. The summary statements are presented in

Indian Rupees in lakhs except per share data and where mentioned otherwise.

Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011 (as

amended by notification no. F.No/2/6/2008-CL-V dated March 30, 2011), read with General Circular no.

62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised Schedule VI

notified under the Act has become applicable to the Company for the purpose of preparation and

presentation of its summary statements. The adoption of revised Schedule VI does not impact the

recognition and measurement principles followed for preparation of summary statements. All assets and

liabilities have been classified as current or non-current as per the Company‟s normal operating cycle and

other criteria set out in the revised Schedule VI.

The restated summary statements of Company have been prepared to comply in all material respects with the

requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of

India (Issue of Capital and Disclosure Requirements) Regulations 2009 (“the SEBI Regulations”) notified by

SEBI on August 26, 2009, as amended, to the extent applicable.

2. Use of estimates

The preparation of summary statements of the Company in conformity with generally accepted accounting

principles („GAAP‟) in India requires management to make estimates and assumptions that affect the

reported amounts of assets and liabilities, the disclosures of contingent liabilities on the date of the

summary statements and the reported amount of income and expenses during the reported period. The

estimates and assumptions used in the accompanying financial statements are based upon management‟s

evaluation of relevant facts and circumstances as at the date of the financial statements, which in its opinion

are prudent and reasonable. Actual results could differ from those estimates. Any revision to accounting

estimates is recognised prospectively in current and future periods.

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3. Fixed assets and depreciation / amortisation

a. Tangible assets

Tangible fixed assets are stated at cost and / or revalued amount in accordance with scheme of

amalgamation less accumulated depreciation and any provision for impairment. Cost includes freight,

duties, taxes (other than those recoverable from tax authorities) and other expenses related directly /

indirectly to the acquisition / construction and installation of the fixed assets for bringing the asset to its

working condition for its intended use.

Depreciation on fixed assets is provided on the straight line method, at the rates prescribed in Schedule XIV

to the Act, which, in management‟s opinion, reflects the estimated useful lives of those fixed assets, except

in case of following assets of theatrical exhibition segment wherein depreciation is provided at following

rates:

Leasehold improvements / buildings are depreciated over the lower of the useful life of the asset and the

lease term, on a straight line basis.

Individual assets costing up to ` 0.05 lakhs are depreciated fully in the year of acquisition.

b. Intangible assets

Intangible assets, all of which have been acquired / created and are controlled through custody or legal

rights, are capitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are

regarded as having a limited useful economic life and the cost is amortised over the lower of useful life and

ten years.

Application software purchased, which is not an integral part of the related hardware, is shown as

intangible assets and amortised on a straight line basis over its useful life, not exceeding five / ten years, as

determined by management.

Film rights comprise negative rights and distribution rights in films and are for a contractually specified

mode of exploitation, period and territory and are stated at cost less accumulated amortisation. Cost of film

rights comprises original purchase price / minimum guarantee. Cost is ascertained on specific identification

basis where possible. In case multiple films / rights are acquired for a consolidated amount, cost is

allocated to each film / right based on management‟s best estimates.

The individual film forecast method is used to amortise the cost of film rights acquired. Under this method,

costs are amortised in the proportion that gross revenues realised bear to management‟s estimate of the

total gross revenues expected to be received. If estimates of the total revenues and other events or changes

in circumstances indicate that the realisable value of a right is less than its unamortised cost, a loss is

recognised for the excess of unamortised cost over the film right‟s realisable value.

Particulars of fixed assets

Rate of depreciation

Plant and machinery 10%

Office equipment 10%

Furniture and fixture 10%

Computers 20%

Vehicles 10%

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In respect of unreleased films, payments towards film rights are classified under capital advances as the

amounts are refundable in the event of non‑release of the film.

Purchased goodwill is recognised by the Company on the basis of excess of purchase consideration paid

over the value of the assets acquired at the time of acquisition and is amortised over its estimated useful

life not exceeding ten years.

4. Impairment

In accordance with AS 28 – „Impairment of Assets‟, where there is an indication of impairment of the

Company‟s asset, the carrying amounts of the Company‟s assets are reviewed at each balance sheet date to

determine whether there is any impairment. The recoverable amount of the asset (or where applicable, that

of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and

its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash

generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and

loss.

If at the balance sheet date there is an indicator that a previously assessed impairment loss no longer exists,

the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a

maximum of the depreciated historical cost.

Value in use is the present value of estimated future cash flows expected to arise from the continuing use of

the asset and from its disposal at the end of its useful life.

5. Investments

Long-term investments are carried at cost. A provision for diminution is made to recognise a decline, other

than temporary, in the value of long-term investments and is determined separately for each individual

investment.

Current investments are carried at lower of cost and fair value.

6. Inventories

Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon lamps and stores

and spares related to theatrical exhibition / film production services business etc.) are stated at the lower of

cost and net realisable value. Cost is determined on the first-in first out (FIFO) basis.

7. Employee benefits

Short term employee benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short

term employee benefits. The undiscounted amount of short term employee benefits expected to be paid in

exchange for the services rendered by employees are recognised as an expense during the period.

Long term employee benefits:

Provident fund and other schemes

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The Company‟s state governed provident fund scheme, employee state insurance scheme and labour

welfare fund are defined contribution plans. The contribution paid / payable under the schemes is

recognised during the period in which the employee renders the related service.

Gratuity Plan

The Company‟s gratuity benefit scheme is a defined benefit plan. The Company‟s net obligation in respect

of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have

earned in return for their service in the current and prior period; that benefit is discounted to determine its

present value and the fair value of any plan assets is deducted.

The present value of the obligation under such defined benefit plan is determined based on actuarial

valuation using the Projected Unit Credit Method.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used

for determining the present value of the obligation under defined benefit plan, are based on the market

yields on Government securities as at the balance sheet date.

Actuarial gains and losses are recognised immediately in the statement of profit and loss.

Other Long term employment benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in

which the employee renders the related services are recognised as a liability at the present value of the

defined benefit obligation at the balance sheet date, determined based on actuarial valuation using Projected

Unit Credit Method. The discount rates used for determining the present value of the obligation under

defined benefit plan, are based on the market yields on Government securities as at the balance sheet date.

8. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company

and the revenue can be reliably measured. The amount recognised as revenue is exclusive of value added

tax, service tax and net of trade discounts.



Revenue from processing / printing of cinematographic films is recognised upon completion of the related

processing / printing.

Revenue from processing of digital content is recognised using the proportionate completion method. Use

of the proportionate completion method requires the Company to estimate the efforts expended to date as a

proportion of the total efforts to be expended. Efforts expended have been used to measure progress

towards completion, as there is a direct relationship between efforts expended and contracted output.

Sale of traded goods is recognised when the risks and rewards of ownership are passed on to the customer,

which generally coincides with the dispatch of goods.

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Income from equipment / facility rental is recognised over the period of the relevant agreement /

arrangement.

Theatrical exhibition and related income

Sale of tickets

Revenue from theatrical exhibition is recognised on the date of the exhibition of the films and comprises

proceeds from sale of tickets, gross of entertainment taxes. As the Company is the primary obligor with

respect to exhibition activities, the share of distributors in these proceeds is separately disclosed as

distributors‟ share.


Sale of food and beverages

Revenue from sale of food and beverages is recognised upon sale and delivery at the counter.

Advertisement / sponsorship revenue

Revenue from advertisements, sponsorship and events is recognised on the date of the exhibition of the

advertisement / event, over the period of the contract or on completion of the Company‟s obligations, as

applicable.

Film production, distribution and related income

Film production and related income

Revenue from sale of content / motion pictures is accounted for on the date of agreement to assign / sell the

rights in the concerned motion picture / content or on the date of release of the content / motion picture,

whichever is later.

Income from film distribution activity

In case of distribution rights of motion pictures / content, revenue is recognised on the date of release /

exhibition.

Revenue from other rights such as satellite rights, overseas rights, music rights, video rights, etc. is

recognised on the date when the rights are made available to the assignee for exploitation.

Revenue from sale of VCDs / DVDs, etc is recognised when the risks and rewards of ownership are passed

on to the customer, which generally coincides with the dispatch of the products.

Interest income / income from film financing

Interest income, including from film / content related production financing, is recognised on a time

proportion basis at the rate implicit in the transaction.

Dividend income

Dividend income is recognised when the right to receive dividend is unconditional at the balance sheet date.

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Marketing rights / Rights to profit

Amounts received in lieu of future marketing rights sale, right to future profit from business of the

Company and other rights are recognised as income in the period of entering into the contract.

9. Foreign currency transactions

Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of

the transactions. Exchange differences arising on foreign exchange transactions settled during the period are

recognised in the statement of profit and loss of the period.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated

at the closing exchange rates on that date; the resultant exchange differences are recognised in the statement

of profit and loss except in case of exchange differences arising on translation of monetary items which

form part of Company‟s net investment in a non-integral foreign operation which is accumulated in a

„Foreign currency translation reserve‟ until its disposal.

Non-monetary items which are carried at historical cost denominated in a foreign currency are reported

using the exchange rate at the date of the transaction.

Forward contracts are entered into to hedge the foreign currency risk of the underlying transaction. The

premium or discount on all such contracts arising at the inception of each contract is amortised as income or

expense over the life of the contract. Exchange differences on forward contracts are recognised as income

or expense in the statement of profit and loss of the period. Any profit or loss arising on the cancellation

and renewal of forward contract are recognised as income or expense for the period.

10. Earnings per share

In determining earning per share, the Company considers the net result after tax and includes the post tax

effect of any extraordinary / exceptional item. The number of shares used in computing basic earnings per

share is the weighted average number of shares outstanding during the period. The number of shares used in

computing diluted earnings per share comprises the weighted average number of shares considered for

deriving basic earnings per share and also the weighted average number of shares that could have been

issued on the conversion of all dilutive potential equity shares unless the results would be anti - dilutive.

Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a

later date.

11. Taxation

Income-tax expense comprises current tax expense and fringe benefit tax computed in accordance with the

relevant provisions of the Income tax Act, 1961 and deferred tax charge or credit.

Current tax provision is made based on the tax liability computed after considering tax allowances and

exemptions, in accordance with the Income tax Act, 1961. Deferred tax charge or credit and the

corresponding deferred tax liability or asset is recognised for timing differences between the profits / losses

offered for income tax and profits / losses as per the summary statements. Deferred tax assets and liabilities

are measured using the tax rates and tax laws that have been enacted or substantively enacted at the Balance

sheet date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be

realised in future. However, where there is unabsorbed depreciation or carried forward loss under taxation

laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of such assets.

Deferred tax assets are reviewed as at each Balance sheet date and written down / up to reflect the amount

that is reasonably / virtually certain (as the case may be) to be realised.

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Provision for fringe benefit tax was made on the basis of applicable rates on the taxable value of eligible

expenses of the Company as prescribed under the Income Tax Act, 1961 till Period 2009 on the basis of

applicability.

12. Share issue / Foreign Currency Convertible Bonds (FCCB) issue expenses and premium on

redemption.

Share / FCCB issue expenses incurred and premium payable on FCCB are adjusted in the period of issue

against the Securities premium reserve.

13. Provisions and contingencies

Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Company

recognises that it has a present obligation as a result of past events, it is more likely than not that an outflow

of resources will be required to settle the obligation and the amount can be reasonably estimated.

A disclosure for a contingent liability is made when there is a possible obligation or a present obligation

that may, but probably will not require an outflow of resources. When there is a possible obligation or a

present obligation in respect of which the likelihood of outflow of resources is remote, no provision or

disclosure is made.

Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is

probable that a liability has been incurred and the amount can be reasonably estimated.

14. Leases

Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases are recorded

on a straight line basis over the lease term.

15. Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are

capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial

period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

16. Commercial papers

Commercial papers are recognised as a liability at the amount of cash received at the time of issuance i.e.

discounted value. The discount is amortised as interest cost over the period of the commercial paper at the

rate implicit in the transaction.

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B. Significant changes in accounting policies and other adjustments credited / (debited) to the restated summary statements:

(` in lakhs)

Particulars Refer

Note

Below

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Adjustment to balance

at the beginning in the

statement of profit and

loss as at July 1, 2007

(Loss) / profit after tax as per audited

financial statements (27,593.15) (70,356.34) (25,621.00) (10,437.00) (2,972.60) 4,590.50

Balances as per audited financial

statements

8,794.79

Adjusted for

Change in depreciation method (a) - - - - (834.31) 370.57 463.74

Change in estimated useful life (b) - - - - -

- (218.77)

Restatement of FCCB‟s (c) - - 1,272.40 1,718.10 (1,130.10) (1,860.40) -

Excess / (short) provision for tax (d) - - 0.60 (78.10) -

(1.70) 79.20

Excess / (short) Minimum alternative tax (d) - - - - -

(1,242.60) 1,242.60

Net impact of all adjustments

- - 1,273.00 1,640.00 (1,964.41) (2,734.13) 1,566.77

Loss / (profit) after tax as restated

(27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37

Balance of statement of profit and loss as

on July 1, 2007, as restated 10,361.56

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a) Change in accounting policy for depreciation

During Period 2009, the Company has charged depreciation as per the written down value method in

the film production services, production and distribution business and for unallocated assets at the rates

specified in Schedule XIV of the Companies Act, 1956 till March 31, 2008. Starting April 1, 2008, the

Company has changed its policy to charge depreciation as per the straight line method at the rates

specified in Schedule XIV of the Companies Act, 1956. Accordingly, depreciation charge for the

previous period‟s has been restated based on the new method and the impact of change in depreciation

method for the period prior to July 1, 2007 has been adjusted to opening balance of the surplus in

statement of profit and loss, as restated as on July 1, 2007.

b) Change in estimated useful life of assets

The Company had revised the estimated useful lives of certain fixed assets pertaining to the theatrical

exhibition business from July 1, 2007, since in the opinion of the management, the revised useful life

reflect the estimated period of economic benefit to be derived from the use of such assets. For the

purpose of these summary statements, depreciation has been recomputed based on revised useful life of

the assets from the date of capitalisation of these assets. Accordingly depreciation for the periods prior

to July 1, 2007 has been restated and depreciation for these periods has been adjusted to opening

balance of the surplus in statement of profit and loss, as restated as on July 1, 2007.

c) Accounting for Foreign Currency Convertible Bonds („FCCB‟)

During Period 2008, the liability for FCCB‟s had been reclassified as a non-monetary liability inter-alia

on the basis of the trend of earnings, movement of the Company‟s share prices and conversion option

exercised by the FCCB holders (bondholders holding 75.42% of the FCCB had exercised conversion

option as of March 31, 2008). However, during Period 2011, the balance FCCB‟s were redeemed at a

premium, as per the terms of the issue document.

The Company had reversed foreign exchange fluctuation loss aggregating to ` 438.06 lakhs in Period

2008 based on the consideration of FCCB‟s as a non-monetary liability. This position was carried

forward till Period 2010 and was a matter of emphasis referred to in the auditor‟s report for Period

2008, 2009 and 2010.

Hence, the Company has reversed the reversal made during Period 2008 and recognised the loss / gain

on the non-converted portion of FCCB‟s, considering them as a monetary item in Period 2008, 2009

and 2010 and reversed this loss in Period 2011, wherein the Company had recognised the entire loss on

redemption in its audited financial statements.

d) Tax impact on restatement

The statement of profit and loss of some period‟s include amounts paid / provided for or refunded /

written back, in respect of shortfall / excess income tax (including fringe benefit tax, wealth tax and

MAT credit entitlement) arising out of assessments, appeals etc. which has now been adjusted in the

respective Period‟s tax liability. Also, income tax (current tax and deferred tax) has been computed on

adjustments made and has been adjusted accordingly in the statement of profit and loss, as restated for

the respective periods.

e) Consequent to the notification of the Companies (Accounting Standards) Rules, 2006, with effect from

July 1, 2007, the Company adopted Accounting Standard (AS 15) - Employee Benefits. However,

there was no significant impact on adoption of the Standard which is required to be adjusted to the

opening balance of reserves and surplus.

f) Adjustments have been made in the Restated Summary Statements, wherever required, by a

reclassification of the corresponding items of income, expenses, assets and liabilities, in order to bring

them in line with the groupings as per the audited financials of the Company for Period March 2013 as

prepared under Government Notification no. S.O. 447 (E) dated February 28, 2011 (as amended by

notification no. F.No/2/6/2008-CL-V dated March 30, 2011), read with General Circular no. 62/2011

dated September 5, 2011, issued by the Ministry of Company Affairs.

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g) The Company in Period 2009 has classified its operations in US and in Period 2010 its operations in

Nepal as non-integral to the operations of the Parent Company in India. The impact of this change is

not material on the results of respective periods and hence, no restatement has been made for the same.

h) De-merger of Radio business

During the year ended March 31, 2006, the Company commenced operation of the Radio business. The

Company was granted 45 FM Radio operation licenses in various parts of India including all metros.

During the fifteen month period ended June 20, 2007, the Board of Directors of the Company,

members of the Company and the Hon‟ble High Court of Judicature at Bombay approved the

Composite Scheme of Amalgamation and Arrangement („Composite Scheme‟) which among other

things provided for demerger of the Radio business of the Company to Reliance Broadcast Network

Limited with effect from April 1, 2006. The Company had given the in-principle effect of the

Composite Scheme including the demerger of the Radio business of the Company to Reliance

Broadcast Network Limited in the accounts for the fifteen month period ended June 30, 2007, pending

filing of the Composite Scheme with the Registrar of Companies. Subsequently, due to non-receipt of

approval from the Ministry of Information and Broadcasting, the Company filed the Modified

Composite Scheme of Amalgamation and Arrangement (the „Modified Composite Scheme‟) which

provided for reversal of the effect of demerger, of the Radio business that was given effect to in the

accounts for the fifteen month period ended June 30, 2007 and provided for adjusting the net result of

the transactions related to Radio business for the period March 31, 2006 till the effective date of the

Modified Composite Scheme i.e. March 31, 2008 in the General reserve of the Company.

During Period 2009, the Board of Directors of the Company, members of the Company and the

Hon‟ble High Court of Judicature at Bombay approved a Scheme of Arrangement („the Radio Scheme')

which provided for demerger of the Radio business of the Company effective April 1, 2008 to Reliance

Broadcast Network Limited.

Accordingly, transactions related to Radio business do not form part of the statement of profit and loss

for the Period 2008. However, the assets and liability were included in the summary statement of assets

and liability in Period 2008. The assets and liabilities of the Radio business for Period 2008 which are

included in the statement of assets and liability of the Company are:


(` in lakhs)

Fixed assets Gross block 32,728.23

Less: Accumulated depreciation 3,845.38

Net block 28,882.85

Capital work in progress 2,309.17

Current assets Inventories 17.67

Sundry debtors 6,679.51

Cash and bank balances 843.71

Loans and advances 6,387.06

13,927.95

Current liabilities and provisions Current liabilities 4,348.71

Provisions 626.94

4,975.65

Net working capital 8,952.30

Less: Loans 2,046.28

Net capital employed 38,098.04

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(Refer note 1 of VI of D of Annexure IV for details of the Modified Composite Scheme of Amalgamation and

Arrangement given effect to in the accounts of the Company for Period 2008 and note 1 of V of D of Annexure

IV for details of the Scheme of Arrangement given effect to in the accounts of the Company for Period 2009)

C. Extract of other matters / matter of emphasis referred by auditors in their reports as reproduced

below:

a) Period March 2013

i) We draw attention to note 41 to the condensed financial statements; the Company‟s net worth is fully

eroded and has a negative net worth of ` 46,796.00 lakhs, the Company has incurred a loss of `

27,593.15 lakhs for the six months period October 1, 2012 to March, 31, 2013, indicating the existence

of uncertainty that may cast doubt about the Company‟s ability to continue as a going concern.

Considering the matters set out in the said note, this financial statement is prepared on a going concern

basis.

Our opinion is not qualified in respect of these matters.

(Refer note 5 of I of D of Annexure IV for note 41 which has been referred to above)

b) Period 2012

i) Without qualifying our report, we draw attention to note 45 to the financial statements; the Company‟s

net worth is fully eroded and has a negative net worth of ` 20,232.70 lakhs, the Company has incurred a

loss of ` 70,356.34 lakhs for the eighteen month period April 1, 2011 to September 30, 2012, indicating

the existence of uncertainty that may cast doubt about the Company‟s ability to continue as a going

concern. Considering the matters set out in the said note, this financial statement is prepared on a

going concern basis.

(Refer note 4 of II of D of Annexure IV for note 45 which has been referred to above)

ii) Under clause (x) of CARO –

The accumulated losses of the Company are more than 50% of its net worth and it has incurred cash

losses in the current financial period and in the immediately preceding financial year.

iii) Under clause (xi) of CARO –

In our opinion and according to the information and explanations given to us, the Company has not

defaulted in repayment of its dues to bankers or financial institutions or bondholders, however there

have been instances of delays in payment of principal amount which are subsequently paid.

Nature of default Principal amount (`

in lakhs)


Principal loan

amount 12,500.00 March 28, 2012 May 14, 2012

13,333.33 March 31, 2012 May 11, 2012

1,250.00 December 16, 2011 December 30, 2011

1,000.00 May 3, 2012 May 6, 2012

iv) Under clause (xvii) of CARO –

According to the information and explanations given to us and on an overall examination of the

Balance sheet of the Company, we report that the Company has used funds raised on short term basis

for long term investments. The Company has used short term borrowings aggregating ` 54,320.00

lakhs to fund long term purposes.

v) Under clause (xxi) of CARO –

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According to the information and explanations given to us, no fraud by the Company has been noticed

or reported during the period. Further, Company has reported a possible misappropriation of provident

fund by the contractor engaged by the Company amounting to approximately ` 588.40 lakhs. The

Company has filed a criminal complaint against the Contractor and the matter is currently under

investigation

c) Period 2011

i) Under clause (x) of CARO –

The accumulated losses of the Company are more than 50% of its net worth and it has incurred cash

losses in the current financial year and in the immediately preceding financial year.

ii) Under clause (xvii) of CARO –



for long term investments. The Company has used short term borrowings aggregating ` 67,740.00

lakhs to long term purpose.

d) Period 2010

i) Without qualifying our report, we draw attention to note 17 of schedule 22 to the financial statements

regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟). During the financial

period ended March 31, 2008, the Company re-classified the liability towards FCCB as non–monetary

liability inter-alia on the basis of the trend of earnings, movement of the Company‟s share prices and

conversion option exercised by the FCCB holders. The Company continues to classify the liability

towards FCCB as non–monetary liability as in its view the current fall in the market price of the

Company‟s share price and non-conversion by bond holders is a temporary aberration, consequently,

the foreign exchange fluctuation gain for the year aggregating ` 1,718.10 lakhs has not been recognised

and the said liability has not been restated at the year-end exchange rate.

An alternate view exists that the liability towards FCCB is a monetary liability and should be restated

at the year-end exchange rate in accordance with Accounting Standard 11 - „The Effects of Changes in

Foreign Exchange Rates‟ prescribed in the Companies (Accounting Standards) Rules, 2006. There is

no specific guidance of The Institute of Chartered Accountants of India on accounting for foreign

currency bonds convertible into equity shares at the option of the holder. Had the said liability been

considered as a monetary liability as before, the loss before tax for the current year would be lower by `

1,718.10 lakhs and the reserves and surplus would be lower by ` 1,272.30 lakhs.

(Refer note 5 of IV of D of Annexure IV for note 17 of Schedule 22 which has been referred to above)

(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s as a monetary item)

ii) Under clause (xvii) of CARO –



for long term investments. The Company has used short term borrowings aggregating ` 26,560 lakhs to

fund fixed assets, investments and long term loans to subsidiaries.

e) Period 2009

i) Without qualifying our report, we draw attention to Note 19 of Schedule 22 to the financial statements

regarding accounting of the Foreign Currency Convertible Bonds („FCCB‟). During the previous

financial period ended March 31, 2008, the Company reclassified the liability towards FCCB as non–

monetary liability inter-alia on the basis of the trend of earnings, movement of the Company‟s share

prices and conversion option exercised by the FCCB holders. The Company continues to classify the

liability towards FCCB as non– monetary liability as in its view the current fall in the market price of

the Company‟s share price and non conversion by bond holders during the year is a temporary

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aberration, consequently, the foreign exchange fluctuation (net loss) for the year aggregating ` 1,130.10

lakhs has not been recognised and the said liability has not been restated at the period-end exchange

rate.

An alternate view exists that the liability towards FCCB is a monetary liability and should be restated

at the period-end exchange rate in accordance with Accounting Standard 11 - „The Effects of Changes

in Foreign Exchange Rates‟ prescribed in the Companies (Accounting Standards) Rules, 2006 issued

by the Central government in consultation with the National Advisory Committee on Accounting

Standards. There is no specific guidance of The Institute of Chartered Accountants of India on

accounting for foreign currency bonds convertible into equity shares at the option of the holder. Had

the said liability been considered as a monetary liability, the loss before tax for the current year would

be higher by ` 1,130.07 lakhs and the reserves and surplus would be lower by ` 2,990.40 lakhs.

(Refer note 7 of V of D of Annexure IV for note 19 of Schedule 22 which has been referred to above)


ii) Without qualifying our opinion, we draw attention to Note 2 of Schedule 22 to the financial statements.

As more fully explained in the said Note, during the year, the Hon‟ble High Court of Judicature at

Mumbai vide its order dated May 8, 2009 sanctioned the Scheme of Amalgamation of the Company

with its wholly owned subsidiaries Adlabs Multiplexes and Theatres Limited, Adlabs Multiplex

Limited, Rave Entertainment Private Limited and Mahimna Entertainment Private Limited, under

sections 391 to 394 of the Act. Pursuant to the said Scheme the Company has made an adjustment for

diminution in value of its assets (production and distribution rights, fixed assets, investments, debtors

and loans and advances) aggregating ` 15,669.70 lakhs by debiting the same to capital reserve instead

of the statement of profit and loss. Had the Company debited the statement of profit and loss the loss

before tax for the year would be higher by the said amount.

(Refer note 2 of V of D of Annexure IV for note 2 of Schedule 22 which has been referred to above)

iii) Under clause (ix) (a) of CARO –

According to the information and explanations given to us and on the basis of our examination of the

records of the Company, amounts deducted / accrued in the books of account in respect of undisputed

statutory dues including Provident Fund, Employees‟ State Insurance, Income tax, Sales-tax / VAT,

Customs duty, Entertainment tax, Investor Education and Protection Fund, Cess and other material

statutory dues have been generally regularly deposited during the year by the Company with the

appropriate authorities. In respect of service tax, management is in the process of reconciling the

amounts accrued as per the books of account on a monthly basis as compared to the payment records

maintained. Based on the payment records examined by us, the Company has been generally regular in

depositing the said amounts with the appropriate authorities. As informed to us, the Company did not

have any dues on account of Wealth tax. There were no dues on account of cess under Section 441A of

the Act since the date from which the aforesaid section comes into force has not yet been notified by

the Central Government. According to the information and explanations given to us and except for the

outcome of the reconciliation referred to above, no undisputed amounts payable in respect of Provident

fund, Employees‟ State Insurance, Income tax, Sales-tax / VAT, Service tax, Customs duty,

Entertainment tax, Investor Education and Protection Fund and other material statutory dues were in

arrears as at March 31, 2009 for a period of more than six months from the date they became payable

except for ` 391.30 lakhs being entertainment tax pertaining to multiplexes / single screens where the

Company has made an application for availing exemption under the relevant Act retrospectively from

the date of commencement of operations of the said multiplex. Also, as more fully explained in note 3

of Schedule 22 to the financial statements, no amount has been accrued in respect of Maharashtra

Value Added Tax.

(Note 3 of Schedule 22 refers to disclosure of contingent liabilities in Period 2009, refer Annexure XIII

for details of contingent liabilities)

f) Period 2008

F-174

i) Without qualifying our report, we draw attention to Note 1 of Schedule 22 to the financial statements.

As more fully explained in the said Note, during the period, the Hon'ble High Court of Judicature at

Bombay vide its order dated March 7, 2008 sanctioned the Modified Scheme of Amalgamation and

Arrangement ('the Modified Scheme') between the Company, Entertainment One India Limited ('E-

ONE') and Mukta Adlabs Digital Exhibition Private Limited ('MADEL')#. The Scheme was filed with

the Registrar of Companies ('ROC') on March 31, 2008. Pending completion of licensing and other

procedural formalities, the original composite Scheme of amalgamation and arrangement between the

Company, E-ONE, MADEL, Reliance Unicom Limited ('RUL') ## and their respective shareholders

and creditors sanctioned by the Hon'ble High Court of Judicature at Bombay vide its order dated

September 15, 2006 was not filed with the Registrar of Companies ('ROC') as required under Section

391(3) of the Companies Act, 1956 ('the Act'). However, the said original Scheme was given effect to

by the Company's management in the previous period's financial statements for the fifteen months

ended June 30, 2007, so as to give effect to the substance of the Scheme as approved by the Hon'ble

High Court of Judicature at Bombay. The Modified Scheme inter-alia provides that the net results of

the transactions related to the radio business of the Company for the period from March 31, 2006 to the

Effective date (i.e. the date of filing the Modified Scheme with the ROC) be adjusted in the General

reserve of the Company (the original scheme provided for the demerger of the radio business of the

Company to RUL## effective March 31, 2006). As the original scheme was given effect to in the

previous period's financial statements for the fifteen months ended June 30, 2007, only the

modifications to the original scheme have been given effect to in the current period's financial

statements (including reversal of demerger of radio business to RUL##).

# - The name of the Company was subsequently changed to Adlabs Multiplex and Theatres Limited

## - The name of the Company was subsequently changed to Reliance Broadcast Network Limited

(Refer note 1 of VI of D of Annexure IV for note 1 of Schedule 22 which has been referred to above)

ii) Without qualifying our report, we draw attention to Note 21 of Schedule 22 to the financial statements

regarding accounting of the Foreign Currency Convertible Bonds ('FCCB'). During the current period,

the Company reclassified the liability towards FCCB as non-monetary liability inter-alia on the basis of

the trend of earnings and movement of the Company's share prices. Accordingly, the foreign exchange

fluctuation (net loss) aggregating to ` 438.10 lakhs accounted in previous period has been reversed and

the foreign exchange fluctuation loss for the current period aggregating to ` 3,621.80 lakhs has not been

recognised by management and the said liability has not been revalued at the period-end exchange rate.

An alternate view exists that the liability towards FCCB is a monetary liability and should be revalued

at the period-end exchange rate in accordance with Accounting Standard 11 - 'The Effects of Changes

in Foreign Exchange Rates' prescribed in the Companies (Accounting Standards) Rules, 2006 issued by

the Central government in consultation with the National Advisory Committee on Accounting

Standard. There is no specific guidance of The Institute of Chartered Accountants of India on

accounting for foreign currency bonds convertible into equity shares at the option of the holder. Had

the said liability been considered as a monetary liability as before, the profit after tax would be lower

by ` 4,118.90 lakhs.

(Refer note 7 of VI of D of Annexure IV for note 21 of Schedule 22 which has been referred to above)


iii) Under clause (ix) (a) of CARO –

According to the information and explanations given to us and on the basis of our examination of the

records of the Company, amounts deducted / accrued in the books of account in respect of undisputed

statutory dues including Provident Fund, Employees' State Insurance, Income tax, Customs duty,

Entertainment tax and other material statutory dues have been generally regularly deposited during the

period by the Company with the appropriate authorities. In respect of service tax and sales tax / VAT,

management is in the process of reconciling the amounts accrued as per the books of account on a

monthly basis as compared to the payment records maintained. Based on the payment records

F-175

examined by us, the Company has been generally regular in depositing the said amounts with the

appropriate authorities. As informed to us, the Company did not have any dues on account of Wealth

tax and Investor Education and Protection Fund. There were no dues on account of cess under Section

441A of the Act since the date from which the aforesaid section comes into force has not yet been

notified by the Central Government.

According to the information and explanations given to us and except for the outcome of the

reconciliation referred to above, no undisputed amounts payable in respect of Provident fund,

Employees' State Insurance, Income tax, Sales tax / VAT, Service tax, Customs duty, Entertainment tax

and other material statutory dues were in arrears as at March 31, 2008 for a period of more than six

months from the date they became payable except for ` 280.30 lakhs being entertainment tax pertaining

to a multiplex where the Company has made an application for availing exemption under the relevant

Act retrospectively from the date of commencement of operations of the said multiplex. Also, as more

fully explained in note 4 of Schedule 22 to the financial statements, no amount has been accrued in

respect of Maharashtra Value Added Tax.

(Note 4 of Schedule 22 refers to disclosure of contingent liabilities in Period 2008, refer Annexure XIII

for details of contingent liabilities)

D. Extract of significant notes from audited financial statements

I. For Period March 2013


The Company is obligated under non-cancellable leases primarily for theatres, office premises and




payments (` in

lakhs)




Total 106,212.80


Amount debited to statement of profit and loss for lease rental is ` 7,981.30 lakhs

2. Foreign currency exposures (other than investments) not covered by forward contracts


Amount – foreign

currency (lakhs) Amount – (` in lakhs)

Trade and other

receivables

USD

888.80 48,335.70

GBP 120.80 10,044.90

EURO 2.30 164.10

Trade and other

payables

USD

0.90 49.80

GBP 0.10 6.60

EURO 0.30 17.70

F-176


Amount – foreign


Borrowings USD 45.90 2,509.70



Name of the Company

Country of

Incorporation

% of ownership

interest as at

March 31, 2013





Balance Sheet


Shareholders' funds



LIABILITIES


(a) Long term borrowings 211.70

(b) Long-term provisions 0.60

Current liabilities



Total 340.90

ASSETS

Non-current assets

(a) Fixed assets



Current assets






Total 340.90


Revenue

(a) Revenue from operations 96.60


Total Revenue 96.80

F-177


Expenses



Finance cost -



Total Expenses 147.20


Tax Expenses

(1) Current tax -

(2) Deferred tax (credit)/ charge -


OTHER MATTERS


2. Capital Commitments -

Movement of the aggregate Shareholders‟ funds of the Joint ventures:



Shareholders‟ funds as at the end of the period (28.80)

4. The Company has undertaken an initiative for rationalisation / improvement of overall Exhibition

business, under which the Company is re-negotiating rentals. As part of this initiative, rentals for

several properties have been reduced, however in some cases the Company has decided to exit the

property. In these cases, the amounts pertaining to these properties have been written off / provided to

the statement of profit and loss, thereby reducing subsequent cash losses suffered by the Company.

This has been disclosed an exceptional item in the financial statements of the Company.

5. Considering the continuing substantial losses incurred by the Company, its net worth has been eroded.

However, having regard to improved operational performance on account of stabilisation of new

businesses in films and media services, financial support from its promoters, further restructuring

exercise being implemented etc, the financial statements of the Company have been prepared on the

basis of going concern and no adjustments are required to the carrying value of assets and liabilities.





executed in respect of the proposed transaction. The exclusivity period as per non-binding term sheet

has been expired on October 15, 2012, however the Company and the fund have extended the

exclusivity period in the current quarter upto August 12, 2013.

7. The shareholders of the Company have approved on February 21, 2012 through postal ballot the

resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings pertaining to the

Film & Media Services and Exhibition business on a going concern basis to its wholly owned

subsidiaries at consideration not less than tax written down values as the board may decide and on such

terms and conditions and in such manner as may be decided by the board and the wholly owned

subsidiaries. Since necessary approval from lenders and other appropriate authorities are still awaited,

the Company has not executed relevant agreements with its subsidiaries. The appropriate accounting

treatment / disclosures will be given once the requisite approvals are obtained.

II. For Period 2012

F-178


The Company is obligated under non-cancellable leases primarily for theatres, office premises and




payments (` in

lakhs)




Total 123,476.00


Amount debited to statement of profit and loss for lease rental is ` 23,708.60 lakhs

(excluding amount capitalised ` 268.30 lakhs)


Particulars Currency As at September 30, 2012

Amount – foreign


Trade and other

receivables

USD

821.70 43,383.70

GBP 108.90 9,301.40

EURO 2.30 159.00

Trade and other

payables

USD

1.70 88.60

GBP 0.10 4.50

EURO 0.20 11.00

MYR 0.10 0.90

Borrowings USD 75.30 3,974.50



Name of the Company

Country of

Incorporation

% of ownership

interest as at

September 30,

2012 Swanston Multiplex Cinemas Private Limited India 50%

Cineplex Private Limited (up to June 3, 2011) India Nil




Balance Sheet


Shareholders' funds


F-179



LIABILITIES



(b) Other long-term liabilities 0.50

(c) Long-term provisions 0.30

Current liabilities



Total 361.40

ASSETS

Non-current assets

(a) Fixed assets



Current assets






Total 361.40


Revenue



Total Revenue 1,118.50

Expenses



Finance cost 1.10



Total Expenses 1,329.20


Tax Expenses


(2) Deferred tax (credit)/ charge 0.10


OTHER MATTERS

F-180



2. Capital Commitments Nil

Movement of the aggregate Shareholders‟ funds of the Joint ventures:


Add: Issue of shares by joint venture 125.00


Effect of disposal of joint ventures (299.00)

Shareholders‟ funds as at the end of the period 21.60

Note:

Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a multiplex


termination of the lease, the Company has decided to provide for diminution in the value of

investments in the Joint Venture amounting to ` 825.06 lakhs.

4. Considering the continuing substantial losses incurred by the Company, its net worth has been eroded.

However, having regard to improved operational performance on account of stabilisation of new

businesses in films and media services, financial support from its promoters, further restructuring

exercise being implemented etc, the financial statements of the Company have been prepared on the

basis of going concern and no adjustments are required to the carrying value of assets and liabilities.

5. The shareholders of the Company have approved on February 21, 2012 through postal ballot the

resolution to sell or otherwise dispose of the Company‟s whole or part of undertakings pertaining to the

Film and Media Services and Exhibition business on a going concern basis to its wholly owned

subsidiaries at consideration not less than tax written down values as the board may decide and on such

terms and conditions and in such manner as may be decided by the board and the wholly owned

subsidiaries. Since necessary approval from lenders and other appropriate authorities are still awaited,

the Company has not executed relevant agreements with its subsidiaries. The appropriate accounting

treatment / disclosures will be given once the requisite approvals are obtained.





executed in respect of the proposed transaction. Though exclusivity period as per non-binding term

sheet has been expired on October 15, 2012, the Company and the fund are in process of extending

exclusivity period.


a. Provision of ` 6,921.90 lakhs made for advances given to a wholly owned subsidiary –

Reliance MediaWorks (Mauritius) Limited, which suffered a loss on sale of its investments

held in Exhibition operations in Malaysia.

b. Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a subsidiary

of Digital Domain Media Group Inc. ('DDMG') for various services rendered. On September

11, 2011, DDMG along with all its subsidiaries filed for bankruptcy proceedings in the United

States of America. The amount provided for outstanding balances is ` 305.30 lakhs.

8. During Period 2012, the Company has dropped several properties under development / completed

properties and hence has written off the carrying value of capital work-in-progress of ` 4,424.60 lakhs

and deposits of ` 981.50 lakhs pertaining to these properties.

9. During Period 2012, the Company has sold its shareholding in

a. A joint venture - Cineplex Private Limited effective June 3, 2011

b. Subsidiaries – Sri Ramakrishna Theatres Limited effective May 28, 2011, Rave Entertainment

and Food Nepal Private Limited effective April 30, 2012, Reliance MediaWorks (Malaysia)

Sdn. Bhd. effective September 21, 2012 and Reliance MediaWorks Big Cinemas Sdn. Bhd.

(formerly known as Big Cinemas Lotus Five Star Sdn. Bhd.) effective September 21, 2012

F-181


III. For Period 2011


The Company is obligated under non-cancellable leases primarily for theatre and office premises and



Particulars Minimum

lease

payments (` in

lakhs)




Total 137,879.30


Amount debited to statement of profit and loss for lease rental is ` 12,527.10 lakhs excluding amount

capitalised ` 906.20 lakhs.


The Company has assigned the derivative contract pertaining to Interest rate swap for long term loans

to a Company (Assignee), who has advised the Company regarding entering into these contracts. The

Assignee had advised the Company with regards to entering into these derivative contracts and has

indemnified the Company with regards to any mark to market losses that the Company will have to

incur on termination of these contracts. Consequently, the total mark to market loss of ` 1,921.40 lakhs

has not been recognised by the Company in its statement of profit and loss.





Name of the Company

Country of

Incorporatio

n

% of ownership

interest as at

March 31, 2011






(` in lakhs)


Shareholders' funds


F-182


(` in lakhs)

(b) Reserves and surplus 349.90

Share application money, pending allotment 125.00

LIABILITIES


(a) Long-term borrowings 383.00

(b) Deferred tax liabilities (net) 38.40

(c) Other long-term liabilities 4.30

(d) Long-term provisions 1.00

Current liabilities



(c) Short-term provisions 80.30

Total 1,207.90

ASSETS

Non-current assets

(a) Fixed assets

(i) Tangible assets (including capital work-in-progress) 761.90


Current assets

(a) Current investments 10.40

(b) Inventories 11.80

(c ) Trade receivables 84.60

(d) Cash and bank balances 33.90

(e) Short-term loans and advances 101.10

(f) Other current assets 36.20

Total 1,207.90

Statement of profit and loss




Expenses

Direct operational expenses 540.10


Finance costs (net) 14.30



F-183


(` in lakhs)


Loss before tax (38.10)

Tax expenses


(2) Deferred tax (credit) (1.00)

Loss for the period (67.40)

OTHER MATTERS

1. Contingent liabilities 116.20*


*amount is not quantifiable in case of joint venture

Movement of the aggregate shareholders funds of the joint

ventures:

Shareholder‟s funds as at beginning of the period 491.30

Add: Share of loss for the period (67.40)

Shareholder‟s funds as at the end of the period 423.90



Amount – foreign

currency (lakhs)

Amount

(` in lakhs)


GBP 51.90 3,778.20

EURO 2.30 149.90

Trade and other payables USD 5.80 262.80

GBP 0.20 11.50

EURO 0.10 4.20

Buyers credit USD 72.30 3,283.90


On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency Convertible

Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs which were

convertible at any time on or after March 7, 2006 and up to the close of the business on January 19,

2011 by the holders of the Bonds („the Bondholders‟) into newly issued equity shares of the Company

with full voting rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in

Terms and Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion

of ` 54.26=EUR 1.00. The Bonds were listed on the Singapore Exchange Securities Trading Limited

(„SGX ST‟). Of the above, bondholders holding bonds of value Euro 633.50 lakhs opted for

conversion in Period 2008. During Period 2009, the Company demerged its radio division to Reliance

Broadcast Network Limited. As per the terms of FCCB‟s issued, the conversion price of the bonds is

subject to adjustment and the Company was awaiting a confirmation from the bondholders till the date

of redemption. Unless previously redeemed, converted or purchased and cancelled, the bonds will


F-184

During Period 2008, the Company classified the liability towards FCCB‟s as non–monetary liability

inter-alia on the basis of the trend of earnings, movement of the Company's share prices and conversion

option exercised by the FCCB holders. On January 25, 2011, the entire FCCB‟S outstanding as at

March 31, 2010, aggregating to Euro 206.50 lakhs have been redeemed at ` 15,814.20 lakhs (including

premium ` 3,085.40 lakhs). Consequently on redemption, foreign exchange loss aggregating to `

1,489.60 lakhs has been accounted.


6. The Company's stake in share capital of Sultan Production Private Limited ('Sultan') is in excess of

20%. During Period 2011, the Company has received all the money receivable as per the shareholders

agreement and sold the shares. This investment was made by the Company with the intention of

investment in the movie "Sultan: The warrior". However, during Period 2010, the Company had issued

a letter of termination demanding refund for the moneys paid by the Company and filed a recovery suit

against Orcher Studios, as per a shareholders‟ agreement signed by the Company which has been

agreed to by Orcher Studios. Since, the Company has intention of selling the shares; the Company has

decided not to consider Sultan as an associate under AS-18 Related Party Disclosures and AS-23

'Accounting for Associates in Consolidated Financial Statements. The outstanding balance of Sultan

Production Private Limited was ` 1,158.80 lakhs as at March 31, 2010, of which the Company had

considered ` 120.00 lakhs as doubtful in the previous year and provided for the same.

7. During Period 2011, the Company has sold assets of ` 10,417.30 lakhs for ` 13,997.20 lakhs pertaining

to the theatrical exhibition segment and leased them back subsequently. The profit on sale of these

assets has been disclosed under the Statement of other income.


IV. For Period 2010





Particulars

Minimum lease

payments (` in

lakhs)




Total 112,956.40





F-185

The Company has assigned the derivative contracts pertaining to Options for FCCB and interest rate

swap for long term loans to a Company (Assignee), who has advised the Company regarding entering

into these contracts. The Assignee had advised the Company with regards to entering into these

derivative contracts and has indemnified the Company with regards to any mark to market losses that

the Company will have to incur on termination of these contracts. Consequently, the total mark to

market loss of ` 2,750.40 lakhs has not been recognised by the Company in its statement of profit and

loss. For the same reason, the Company has also not recognised a liability for these MTM losses and




Name of the Company

Country of

Incorporation

% of ownership

interest as at

March 31, 2010





Particulars

Period 2010

(` in lakhs)

I Assets

1. Fixed assets net block(including Capital work-in-progress) 871.00


a) Inventories

11.40

b) Sundry debtors

70.50

c) Cash and bank balances

77.80

d) Interest accrued but not due

1.00

e) Loans and advances

277.80

II Liabilities


491.30

2. Advance towards share application money 125.00

3. Unsecured loans

456.80



a) Liabilities

153.90

b) Provisions

43.00

III Income

1. Income from theatrical exhibition (net of duties and taxes) 1,027.30

2. Other Income

36.00

IV Expenses

1. Direct operational expenses

539.70

2. Personnel costs 53.60

3. Other operating and general administrative expenses

348.60

4. Depreciation

111.80

5. Interest

44.40

Loss before tax

(34.80)

Provision for tax (including deferred tax)

(47.50)

Profit after tax

12.70

V. OTHER MATTERS

1. Contingent liabilities

948.20

2. Capital commitments

Nil


At the beginning of the period

478.60

Add: Share of profits for the period

12.70

At the end of the period

491.30


F-186


Amount – foreign


Sundry debtors USD 2.60 117.60

GBP 0.10 10.80

Advance from

customers

USD 0.10 2.20

Sundry creditors USD 1.60 71.40

EURO 0.10 8.00


GBP 35.70 2,422.90

EURO 1.60 96.50


GBP 1.20 78.00

EURO 8.20 496.70

Foreign currency

convertible bonds

(FCCB) (Refer note (c)

of B of Annexure IV)

EURO 206.50 12,511.90

Provision for premium

on redemption on

FCCB

EURO 44.80 2,712.40


On January 25, 2006 the Company („Issuer‟) issued 84,000 Zero Coupon Foreign Currency Convertible

Bonds of face value of Euro 1,000 each („Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds

are convertible at any time on or after 7 March 2006 and up to the close of the business on January 19,

2011 by the holders of the Bonds („the Bondholders‟) into newly issued equity shares of the Company

with full voting rights with par value of ` 5 each („Shares‟) at an initial conversion price (as defined in

Terms and Conditions of the Bonds) of ` 543.42 per share with a fixed rate of exchange on conversion

of ` 54.26=EUR 1.00. Of the above bondholders holding bonds of value Euro 633.50 lakhs opted for

conversion in Period 2008. The balance bond values aggregating to EURO 206.50 lakhs are

outstanding as on March 31, 2010. During Period 2009, the Company demerged its radio division to

Reliance Broadcast Network Limited (refer note 1 of V of D of Annexure IV). As per the terms of bond

issue, the conversion price of the bonds is subject to adjustment, after agreement with the bondholders.

Pending finalisation of agreement, the revised conversion price is not yet decided. Consequently the

equity shares issuable on conversion of FCCB - 2,061,884 have been computed based on initial

conversion price. The Bonds are listed on the Singapore Exchange Securities Trading Limited („SGX

ST‟).

The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or after

January 25, 2009 and on or prior to January 26, 2011 subject to satisfaction of certain conditions.

Unless previously redeemed, converted or purchased and cancelled, the bonds will mature on January

26, 2011 at 121.679 per cent of the principal amount.


F-187

Period 2010

(` in lakhs)

Opening balance

3,084.79

Adj: foreign exchange fluctuation

(372.50)

Closing balance

2,712.29

During Period 2008, the Company classified the liability towards FCCB as non–monetary liability

inter-alia on the basis of the trend of earnings, movement of the Company's share prices and

conversion option exercised by the FCCB holders. The Company continues to classify the liability

towards FCCB as a non–monetary liability as in its view the current fall in the market price of the

Company‟s share price and non-conversion by bond holders is a temporary aberration. Further,

pursuant to Scheme of Arrangement for demerger of the Radio business, the conversion price is

subject to adjustment, after agreement with bond holders. The Company estimates that there will

be significant adjustments to conversion price considering the value of Radio business which has

demerged. Consequently, the foreign exchange fluctuation (gain) / loss for Period 2010

aggregating to ` (1,718.10) lakhs has not been recognised by management. Cumulative loss not

recognised due to classification of FCCB as a non-monetary liability is ` 1,272.20 lakhs in respect

of outstanding FCCB's. Unrecognised losses on FCCB's which were converted into equity shares

in earlier periods is ` 2,199.50 lakhs.



20%. This investment was made by the Company with the intention of investment in the movie

"Sultan: The warrior". However, during Period 2010, the Company has issued a letter of termination

demanding refund for the moneys paid by the Company and filed a recovery suit against Orcher

Studios, as per a shareholders‟ agreement signed by the Company which has been agreed to by Orcher

Studios.

Since, the Company has intention of selling the shares; the Company has decided not to consider Sultan

as an associate under AS-18 „Related Party Disclosures‟ and AS-23 'Accounting for Associates in

Consolidated Financials Statements‟.

The outstanding balance of Sultan Production Private Limited is ` 1,158.80 lakhs of which the

Company has considered ` 120.00 lakhs as doubtful in the current year and provided for the same.


V. For Period 2009

1. Demerger of the Radio business of the Company to Reliance Broadcast Network Limited

The Board of the Company in their meeting held on October 25, 2008 approved a Scheme of

Arrangement („the Radio Scheme‟) between Reliance Broadcast Network Limited („RBNL‟), a wholly

owned subsidiary and the Company for the de-merger of the Radio business (constituting the Radio

segment) of the Company into RBNL.

The shareholders of the Company accorded their approval in a court convened meeting of members of

the Company held on January 22, 2009. The Radio Scheme was approved by the Hon‟ble High Court

of Judicature at Bombay vide its order dated April 4, 2009 and filed with the Registrar of Companies

(„ROC‟) on June 30, 2009, as required under Section 391(3) of the Act after obtaining approval from

the Ministry of Information and Broadcasting („MIB‟) for vesting of radio licenses held by the

Company in the name of RBNL.

As per the Radio Scheme, the Radio business of the Company stands transferred to RBNL with effect

from April 1, 2008, the Appointed Date and has been given effect to on June 30, 2009, being the

Effective Date and the accounting treatment prescribed by the Radio Scheme has been given effect to

in the financial statements for Period 2009.

F-188

All the assets and liabilities, directly allocable and as mutually determined by the Board of Directors of

RBNL and the Company, of the Radio business as at April 1, 2008 have been transferred at their

respective book values. Further, general borrowings of the Company as on April 1, 2008 have been

allocated between the Company and RBNL on the basis of ratio of total assets of the Company

immediately before giving effect of the Radio Scheme. In consideration of the demerger, RBNL will

allot equity shares of ` 5 each in the ratio of 1:1 and upon issue of shares as above the Company‟s

investment in shares of RBNL will stand cancelled.

As per the provisions of the Radio Scheme, excess balances of assets transferred over liabilities and the

cost of investments in RBNL cancelled has been debited to Securities premium reserve as follows:

Particulars Amount

(` in lakhs)

Assets of Radio business as of April 1, 2008 transferred as per the provisions of the


Liabilities of Radio business as of April 1, 2008 transferred as per the provisions of

the Radio Scheme (6,831.50)

General borrowings of the Company as of April 1, 2008 allocated between RBNL

(Radio Business) and the Company as per the provisions of the Radio Scheme (22,400.00)

Excess of net assets transferred to RBNL (Radio business) 15,698.00

Cancellation of investment in RBNL 1,010.00

Total amount debited to Securities premium reserve as per the provisions of

the Radio Scheme 16,708.00

The Radio business has been held / carried on in trust for the period April 1, 2008 till the Effective

Date by the Company. Accordingly, the Company has charged interest, at an agreed rate on the amount

receivable as at the appointed date and subsequent funding till the Effective Date. The total receivable `

26,095.00 lakhs (includes interest ` 2,584.90 lakhs) has been disclosed as a recoverable from RBNL.

However, for Period 2009 financial statements, pending allotment of shares by RBNL, the investment

has been cancelled to give effect to the substance of the Radio Scheme as approved by the Hon‟ble

High Court of Judicature at Bombay and RBNL ceases to be a subsidiary for Period 2009 financial

statements.

2. Scheme for merger of wholly owned subsidiaries with the Company

The Board of the Company in their meeting held on January 30, 2009 approved the Scheme of

Amalgamation („Amalgamation Scheme‟) of the Company („Transferee‟) with its wholly owned

subsidiaries Adlabs Multiplexes and Theatres Limited („AMTL‟), Adlabs Multiplex Limited („AML‟),

Mahimna Entertainment Private Limited („MEPL‟) and Rave Entertainment Private Limited („REPL‟)

(collectively referred to as the Transferor Companies). The Amalgamation Scheme was approved by

the Hon‟ble High Court of Judicature at Bombay vide its order dated May 8, 2009 and filed with the

Registrar of Companies („ROC‟) on May 29, 2009, as required under Section 391(3) of the Act.

AMTL, AML, and REPL are engaged in the exhibition business and have been included in the

theatrical exhibition segment. MEPL has been included in the unallocated corporate segment.

As per the Amalgamation Scheme, AMTL, AML, MEPL and REPL amalgamated with the Company

with effect from April 1, 2008, the Appointed Date and has been given effect to on May 29, 2009,

being the Effective Date and the accounting treatment prescribed by the Amalgamation Scheme has

been given effect to in the financial statements for Period 2009.

In accordance with the requirements of the Amalgamation Scheme, the credit aggregating ` 5,826.20

lakhs to Capital reserve has been arrived at as follows:

F-189

All assets and liabilities of the Transferor companies as at April 1, 2008 which have been

identified by the Board of Directors have been recorded at their respective fair values (as

determined based on valuation reports from Government approved valuer / management estimates)

as on March 31, 2009. Investments in the equity shares of the Transferor companies as appearing

in the books of the Transferee Company as at March 31, 2009 have been cancelled. The excess of

net assets of the transferor companies taken over at fair value (as determined on March 31, 2009)

over the cost of investment in these companies, aggregating ` 3,605.80 lakhs has been credited to

Capital reserve.

The Company has recorded an increase in the value of its assets based on revaluation of certain

assets of the Company pertaining to the theatrical exhibition and film production services business.

The total increase in value of assets of the Company is ` 17,890.10 lakhs, based on revaluation

reports obtained from Government approved external valuers. The Company has also reduced the

value of its assets by ` 15,669.70 lakhs (Fixed assets and intangible rights ` 3,989.50 lakhs, Debtors

` 2,050.70 lakhs, Loans and advances including capital advances ` 6,188.50 lakhs and Investments `

3,441.00 lakhs). The net increase in the value of assets of the Company ` 2,220.40 lakhs has been

credited to Capital reserve pursuant to the provisions of the Amalgamation Scheme.

The authorised share capital of the Transferor Companies was considered as authorised share

capital of the Transferee Company. Hence, the authorised share capital of the Company has been

increased by ` 1,602.90 lakhs divided into 32,058,000 shares of ` 5 each.

The above mentioned accounting treatment is in accordance with the Amalgamation Scheme, had

the Company followed accounting treatment prescribed by AS – 14 “Accounting for

Amalgamations” / Indian GAAP:

The excess of investments over net assets acquired by the Company amounting to ` 1,939.10 lakhs

would have been transferred to Goodwill and would have been amortised over 5 years.

The appreciation in the value of the Company‟s assets aggregating ` 17,890.10 lakhs would have

been credited to the Revaluation reserve instead of being credited to the Capital reserve.

The diminution in the value of the Company‟s assets aggregating ` 15,669.70 lakhs would have

been debited to the statement of profit and loss instead of Capital reserve. Accordingly, had the

Amalgamation Scheme as referred above been accounted for as per the requirements of AS – 14

“Accounting for Amalgamations” / Indian GAAP, the loss for the year would be higher by `

16,057.60 lakhs, capital reserve would have been lower ` 281.20 lakhs, revaluation reserve would

have been higher by ` 17,890.10 and balance of Goodwill would have been ` 1,551.30 lakhs.






payments (` in

lakhs)




Total 106,087.40


F-190




The Company has assigned the derivative contracts pertaining to Options for FCCB and Interest rate

swap for long term loans to a Company („Assignee‟), who has advised the Company regarding entering

into these contracts. The Assignee had advised the Company with regards to entering into these

derivative contracts and has indemnified the Company with regards to any mark to market losses that

the Company will have to incur on termination of these contracts. Consequently, the total mark to

market loss of `14,037.00 lakhs have not been recognised by the Company in its statement of profit and

loss.






Incorporation

% of ownership

interest as at

March 31, 2009





Period 2009

(` in lakhs)

I Assets

1. Fixed assets (including Capital work-in-progress) 964.20


a) Inventories 11.20





II Liabilities



3. Deferred tax (net) 55.70



b) Provisions 26.30

III Income



IV Expenses



F-191

Period 2009

(` in lakhs) 3. Interest -

Profit before tax 212.20

Provision for tax (including deferred tax) 51.50

Profit after tax 160.70

V. Other matters





Add: Share of profits for the period 160.70

Less: Dividend declared during the period (87.00)



Particulars Currency

As at March 31, 2009

Amount – Foreign

currency (lakhs)

Amount

(` in lakhs)


GBP 1.70 124.40

EURO 0.20 10.60

Sundry creditors USD 3.80 200.40

GBP 0.10 4.00

EURO 0.10 3.50


GBP 4.40 327.40

EURO 0.60 40.80


GBP 1.20 85.30

EURO 8.20 564.90

Foreign Currency Convertible Bonds

(„FCCB‟) (Refer note (c) of B of Annexure

IV)

EURO 206.50 14,230.00

Provision for premium on redemption of

FCCB

EURO 44.80 3,084.80


On January 25, 2006 the Company („Issuer‟) issued Zero Coupon Foreign Currency Convertible Bonds

(„Bonds‟ or „FCCB‟) aggregating Euro 840 lakhs. The Bonds are convertible at any time on or after 7

March 2006 and up to the close of the business on January 19, 2011 by the holders of the Bonds („the

Bondholders‟) into newly issued equity shares of the Company with full voting rights with par value of

` 5 each („Shares‟) at an initial conversion price (as defined in Terms and Conditions of the Bonds) of `

543.42 per share with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. Of the above

bondholders holding bonds of value Euro 633.50 lakhs opted for conversion in the Period 2008. The

F-192

balance bondholders holding bonds of value aggregating to Euro 206.50 lakhs have not opted for

conversion and are outstanding as on March 31, 2009. During Period 2009, pursuant to the Scheme of

Arrangement for demerger of Radio business, the conversion price is subject to adjusted after

agreement with the bondholders and the Company. Pending finalisation of agreement, the revised

conversion price is not yet decided. Consequently the equity shares issuable on conversion of FCCB

have been computed based on initial conversion price. The Bonds are listed on the Singapore Exchange

Securities Trading Limited („SGX-ST‟).

The Bonds may be redeemed, in whole but not in part, at the option of the issuer at any time on or after





Period 2009

(` in lakhs)




During Period 2008, the Company re-classified the liability towards Foreign Currency Convertible

Bonds ('FCCB') as non–monetary liability inter-alia on the basis of the trend of earnings, movement of

the Company's share prices and conversion option exercised by the FCCB holders. The Company

continues to classify the liability towards FCCB as a non–monetary liability as in its view the current

fall in the market price of the Company‟s share price and non-conversion by bond holders is a

temporary aberration. Consequently, the foreign exchange fluctuation loss for the Period 2009

aggregating to ` 1,130.10 lakhs has not been recognised by the management. Cumulative loss not

recognised due to classification of FCCB as a non-monetary liability is ` 2,990.40 lakhs in respect of

outstanding FCCB's. Unrecognised losses on FCCB's which were converted into equity shares in

earlier periods is ` 2,199.50 lakhs.

(Refer note (c) of B of Annexure IV for subsequent recognition of FCCB‟s a monetary liability)

8. Impairment Disclosure

During the Period 2009, the Company has impaired certain fixed assets pertaining to the theatrical

exhibition segment on the basis of determination of value in use of each property, which the Company

considers as the relevant Cash Generating Unit („CGU‟) for the purpose of impairment testing. The

Company has considered a discount rate of 11.68%. The amount of impairment loss of ` 551.70 lakhs

has been debited to the Capital reserve pursuant to Scheme of Amalgamation.

(Refer note 2 of V of D of Annexure IV)


VI. For Period 2008

1. Modified Composite Scheme of Amalgamation and Arrangement

The Board of the Company at their meeting held April 23, 2006 approved the Composite Scheme of

Amalgamation and Arrangement (the „Composite Scheme‟) between the Company, Entertainment One

India Limited („E-ONE‟), Adlabs Multiplexes and Theatres Limited („AMTL‟) and Reliance Broadcast

Network Limited („RBNL‟). The shareholders of the Company accorded their approval to the Scheme

at the Annual General Meeting on July 29, 2006. The Composite Scheme was approved by the Hon'ble

F-193

High Court of Judicature at Bombay vide its order dated September 15, 2006. The Composite Scheme

inter-alia provided for the following:



the demerger of the radio business of the Company to RBNL effective March 31, 2006.

The Company had made an application to the Ministry of Information and Broadcasting for vesting of

Radio licenses held by it in the name of RBNL. Pending the said approval, the Composite Scheme was

not filed with the Registrar of Companies ('ROC') as required under Section 391(3) of the Companies

Act, 1956 ('the Act'). However, for the purpose of the fifteen months ended June 30, 2007 financial

statements, pending completion of licensing and other procedural formalities, the Composite Scheme

was given effect to in view of the Court approval and to give effect to the substance of the Composite

Scheme as approved by the Hon'ble High Court of Judicature at Bombay.

In accordance with the requirements of the Composite Scheme, the merger of E-ONE as well as the

digital business of AMTL and the demerger of the Radio business of the Company was accounted for

as follows:

All assets and liabilities of E-ONE as at April 1, 2005 were recorded by the Company at their

fair values. Since E-ONE was a wholly owned subsidiary of the Company, the investment by

the Company in the shares of E-ONE was cancelled against the assets and liabilities acquired

on amalgamation. The excess of net assets taken (at fair value) over the cost of investment in

E-ONE amounting to ` 272.58 lakhs was credited to 'Amounts pending transfer to the

Securities premium account and / or General reserve account as per the Composite Scheme of

Amalgamation and Arrangement'.

All assets and liabilities of the digital business of AMTL as at April 1, 2005 were recorded by

the Company at their book values. Since AMTL was a wholly owned subsidiary of the

Company, no consideration was paid against the assets and liabilities acquired. The excess of

liabilities over the assets taken over (at book value) amounting to ` 44.69 lakhs was debited to

'Amounts pending transfer to the Securities premium account and / or General reserve account

as per the Composite Scheme of Amalgamation and Arrangement'.

All assets and liabilities of the Radio business of the Company as at March 31, 2006 were

transferred at their respective book values. The aggregate value of net assets transferred

pursuant to the Composite Scheme in excess of ` 10,000 lakhs (which was recorded as

receivable from RBNL) was recorded in 'Amounts pending transfer to the Securities premium

account and / or General reserve account as per the Composite Scheme of Amalgamation and

Arrangement'

Subsequently during the current period, the Board modified the aforesaid Composite Scheme vide

circular mode pursuant to Section 289 of the Companies Act, 1956 on February 13, 2008. The

Modified Composite Scheme of amalgamation and arrangement (the „Modified Scheme‟) between the

Company, E-ONE and AMTL was approved by the Hon'ble High Court of Judicature at Bombay vide

its order dated March 7, 2008 and was filed with the ROC as required under Section 391(3) of the

Companies Act, 1956 ('the Act') on March 31, 2008.The Modified Scheme inter-alia provides for the

following:



adjusting the net results of the transactions related to Radio business from March 31, 2006 till

the Effective Date in the General reserve account of the Company.

As the Composite Scheme was primarily modified in relation to the Radio business, in respect of

amalgamation of E-ONE and merger of digital business of AMTL, these were already given effect to in

the financial statements of the fifteen month period June 30, 2007. Accordingly, no further adjustments

are made in the Period 2008 financial statements, except that the amounts which were not credited /

debited to 'Securities premium' / 'General reserve account ' pending filing the Composite Scheme with

ROC have now been debited / credited to Securities premium / General reserve account as applicable

on the filing of the Modified Scheme with the ROC.

F-194

During the Period upto March 31, 2008, E-ONE and AMTL carried on their existing business in trust

for and on behalf of the Company. All vouchers, deeds, licenses, agreements, loan documents, etc are

in the name of E-ONE and AMTL. The tile deeds, licenses, agreements, loan documents, etc are being

transferred in the name of the Company.

As regards the Radio business, the provision relating to demerger of the Radio business of the

Company to RBNL effective March 31, 2006 as provided in the Composite Scheme and given effect to

in the fitten month period ended June 30, 2007 financial statements have been deleted in the Modified

Scheme. Accordingly, all the adjustments effected in the fifteen month period ended June 30, 2007

financial statements in this regard have been reversed during the Period 2008. Further, in accordance

with the Modified Scheme, the net results of the transactions related to Radio business for the period

from March 31, 2006 till the Effective Date (i.e. March 31, 2008) have been debited to General reserve

account of the Company.

The net results of the transactions related to Radio business for the period from March 31, 2006 up to

March 31, 2008 are summarised hereunder:


(` in lakhs)

Fifteen month

period ended June

30, 2007

(` in lakhs)

Income 11,160.90 3,320.30

Expenditure

Direct costs 5,062.10 2,024.60

Personnel costs 3,477.60 2,528.10

Other operating and general administrative

expenses *

5,584.10 4,547.60

Interest 1,346.30 2,119.90

Depreciation / amortisation 2,396.60 1,474.80

Loss before tax (6,705.80) (9,374.70)

Tax expenses - fringe benefit tax 114.90 75.50

Loss after tax (A) (6,820.70) (B) (9,450.20)

Total (A + B) (16,270.90)

Tax effect of the above 1,907.60

Balance transferred to General reserve

account

14,363.30

* includes ` 785.80 lakhs (Fifteen month period ended June 30, 2007: ` 2,086.70 lakhs, since reversed)

being interest etc. allocated / charged in the fifteen month period ended June 30, 2007 by Company to

the radio business on net funds utilised in carrying on the Radio business.

For deviation to the accounting treatment recommended in the standard refer note 3 of VI of D of

Annexure IV.

2. Acquisition of Rave Entertainment Private Limited ('REPL')

On May 31, 2007, the Company entered into a Share Purchase Agreement ('SPA') with the

shareholders of Rave Entertainment Private Limited ('REPL'), a company engaged inter-alia in the

business of owning and operating multiplexes, for acquisition of 100% stake in that company. One of

the conditions precedents to the SPA was the approval by the Hon'ble High Court of Judicature at

Allahabad of the Scheme of demerger filed by REPL for demerger of Kanpur properties. Pending

approval of the Scheme of demerger by the said Court, the shares of REPL were held in Escrow and the

consideration of ` 500 lakhs was disclosed under loans and advances in the fifteen month period ended

June 30, 2007 financial statements. On December 12, 2007, the Hon'ble High Court of Judicature at

Allahabad approved the said Scheme of demerger. Consequently, REPL is now a wholly owned

subsidiary of the Company and the amounts placed in Escrow and those disclosed under loans and

advances have been adjusted as per the terms of the SPA.

3. Acquisition of Katch 22 Entertainment Private Limited ('Katch 22')

F-195

On April 23, 2007, the Company acquired 100% stake in Katch 22, a company engaged in the

production and distribution of films. Subsequently, pursuant to the Board of Directors' approval vide

resolution dated April 26, 2007; the Company had filed the Scheme of Amalgamation of Katch 22 ('the

Katch 22 Scheme') with the Hon'ble High Court of Judicature at Bombay for the merger of Katch 22

with the Company effective April 1, 2006. The Katch 22 Scheme was approved by the Hon'ble High

Court of Judicature at Bombay vide its order dated September 14, 2007 and filed with the ROC on

October 9, 2007. The Katch 22 Scheme inter-alia provides for the amalgamation of Katch 22

Entertainment Private Limited with the Company effective April 1, 2006.

In accordance with the requirements of the Katch 22 Scheme, the merger of Katch 22 with the

Company has been accounted for as follows:

As per the Katch 22 Scheme, Katch 22 amalgamates with the Company retrospectively from

April 1, 2006, the Appointed Date. All assets and liabilities of Katch 22 as at April 1, 2006

have been recorded by the Company at their fair values. Since Katch 22 was a wholly owned

subsidiary of the Company, the investment by the Company in the shares of Katch 22 has

been cancelled against the assets and liabilities acquired on amalgamation. The excess of net

assets taken over at fair value (as determined on the Effective Date i.e. October 9, 2007) over

the cost of investment in Katch 22 amounting to ` 201.80 lakhs has been credited to General

reserve account.

The Company has also recorded the reduction of ` 2,000.00 lakhs in the value of its assets

(debtors, unamortised rights and loans and advances) by debit to 'General reserve account' as

per the provisions of the Katch 22 Scheme.

The net results of the transactions relating to Katch from April 1, 2006 up to the Effective Date are as

follows:

Particulars For the period from

July 1, 2007 to October

8, 2007 (` in lakhs)

Fifteen month

period ended

June 30, 2007

(` in lakhs)

Sales and service (net) - 701.90

Other income 23.30 -

Total revenue 23.30 701.90

Direct costs - 1,691.30

Other operating and general administrative expenses 0.20 0.10

Interest - 131.60

Profit before tax 23.10 (1,121.10)

Tax expenses - -

Profit after tax 23.10 (1,121.10)

Impact of Schemes referred to in notes 1 of VI of D of Annexure IV and 3 of VI of D of Annexure

IV:

Had the Company followed the accounting treatment prescribed by AS-14 / generally accepted

accounting principles in India:

` 201.80 lakhs arising from the merger of Katch 22 with the Company and credited to the

General reserve account would have been credited to Capital reserve account;

Reduction of ` 2,000 lakhs in value of the Company's assets would have been debited to the

statement of profit and loss instead of General reserve account;

` 2,086.70 lakhs being interest on monies advances by the Company to the Radio business

would have been reversed in the statement of profit and loss as against the reversal in the

General reserve account, and

The net results / (loss) of the transactions related to Radio business from March 31, 2006 up to

the Effective Date i.e. March 31, 2008 aggregating to ` 14,363.30 lakhs (net of tax benefits)

F-196

arising from modification in the Scheme of demerger of Radio business and debited to the

General reserve account would have been debited to statement of profit and loss.

Accordingly, had the Modified Scheme been accounted for in compliance with the requirements of AS

14 / generally accepted accounting principles in India, the profit for the period before tax would have

been lower by ` 18,450 lakhs, General reserve account would have been higher by ` 18,248.20 lakhs

and Capital reserve account would have been stated at ` 201.80 lakhs.





Particulars

Minimum lease

payments (` in

lakhs) Amounts due within one year from the balance sheet date 4,607.80



Total 77,050.40


Amount debited to statement of profit and loss for lease rental is ` 2,593.50 lakhs.



incorporation % of ownership

interest as at March 31, 2008

Swanston Multiplex Cinemas Private Limited India 50.00% Adlabs Multiplex Limited (Became subsidiary with effect from December 20, 2007)

India -

Cineplex Private Limited India 50.00% Divya Shakti Marketing Private Limited India 50.00%



(` in lakhs)

I. Assets

1. Fixed assets (including Capital work-in-progress) 1,063.80

2. Investments

56.40


a) Inventories 8.50





II. Liabilities


478.90


3. Deferred tax (net) 54.10


F-197


(` in lakhs)


b) Provisions 13.20

III. Income



IV. Expenses



3. Interest 0.60

4. Profit before tax 112.90

5. Prior period adjustments (0.40)

6. Provision for tax 30.00

7. Profit after tax 83.30

V. Other Matters


2. Capital commitments -



Add: Share of losses for the period (18.20)



Particulars Currency Period 2008

Amount – Foreign

currency (lakhs)

Amount

(` in lakhs)


GBP 3.10 246.30

Euro 0.10 6.50


GBP 1.60 129.90

Euro 8.20 520.20

Loans and advances USD 21.60 865.80

Euro 7.00 444.20

Foreign Currency Convertible Bonds („FCCB‟) (Refer note (c) of B Annexure IV)

Euro 206.50 13,099.90

Provision for premium on redemption of FCCB Euro 44.80 2,899.90


On January 25, 2006 the Company ('Issuer') issued Zero Coupon Foreign Currency Convertible Bonds

('Bonds' or 'FCCB') aggregating Euro 840 lakhs. The Bonds are convertible at any time on or after

March 7, 2006 and up to the close of the business on January 19, 2011 by the holders of the Bonds ('the

Bondholders') into newly issued equity shares of the Company with full voting rights with par value of

` 5 each ('Shares') at an initial conversion price (as defined in Terms and Conditions of the Bonds) of `

F-198

543.42 per share with a fixed rate of exchange on conversion of ` 54.26=EUR 1.00. The conversion

price is subject to adjustment in certain circumstances. The Bonds are listed on the Singapore Exchange

Securities Trading Limited ('SGX-ST').

The Bonds may be redeemed, in whole but not in part, at the option of the Issuer at any time on or after




During Period 2008, bond holders holding bonds aggregating Euro 633.50 lakhs have opted to convert

the bonds to equity shares. Accordingly shares aggregating to 6,325,420 have been issued to them at a

price of ` 543.42 per share (including securities premium of ` 538.42 per share).


Period 2008

(` in lakhs)

Opening balance

10,006.59

Add: Reversal of provision for premium on conversion of FCCB

(7,858.20)

Add: foreign exchange fluctuation

691.50

Closing balance

2,839.89

* Premium payable on redemption of FCCB ` 9,880.90 lakhs has been fully provided for and has been

charged to securities premium reserve. During Period 2008, Bond holders holding bonds aggregating

Euro 633.50 lakhs have opted to convert their bonds into equity shares.

During Period 2008, FCCBs have been reclassified as non-monetary liabilities pursuant to inter-alia the

current trend of earnings and market price of the Company's equity share exceeding the conversion

price stipulated in the offer document (bondholders holding 75.42% of the FCCB have exercised

conversion option up to March 31, 2008). Consequently, the foreign exchange fluctuation loss

aggregating to ` 438.10 lakhs accounted in the fifteen month period ended June 30, 2007 and year

ended March 31, 2006 has been reversed during the period in the statement of profit and loss and

foreign exchange fluctuation loss of ` 3,621.80 lakhs for the financial period has not been recognised in

the statement of profit and loss.

(Refer (c) of B of Annexure IV for subsequent consideration of FCCB as a monetary liability)

F-199

Annexure V


10

Statement of share capital of the Company

(` in lakhs)

Particulars

As at

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

Authorised

Equity shares of ` 5/-each 24,000.00 24,000.00 5,000.00 5,000.00 4,602.90 3,000.00

Preference shares of ` 5/-

each 1,000.00 1,000.00 - - - -

25,000.00 25,000.00 5,000.00 5,000.00 4,602.90 3,000.00

Issued, subscribed and

paid-up capital

Equity shares of ` 5/- each,

fully paid-up 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31

10 % redeemable non

convertible non cumulative

preference shares

(Preference shares) of `

5/- each, fully paid-up 147.50 147.50 - - - -

2,453.81 2,453.81 2,306.31 2,306.31 2,306.31 2,306.31

(refer notes (a) to (i) below)

(a) Reconciliation of the shares outstanding at the commencement and at the end of the period

Equity shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares

(In lakhs) (In lakhs)

(In


(In

lakhs)

At the commencement of the

period 461.26 461.26 461.26 461.26 461.26 398.00

Share issued during the

period - - - - - 63.26

At end of the period 461.26 461.26 461.26 461.26 461.26 461.26

Preference shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares

(In

lakhs) (In lakhs)

(In


(In

lakhs)

At the commencement of the

period 29.50 - - - - -

Share issued during the

period

-

29.50 - - - -

At end of the period 29.50 29.50 - - - -

(b) Rights, preferences and restriction attached to equity shares

The Company has only one class of equity shares having par value of ` 5 per share. Each equity holder is

entitled to one vote per share. The Company declares and pays dividends, if any, in Indian Rupees. The

dividend proposed, if any by the Board of the Directors is subject to the approval of the shareholders in the

ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive

remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in

proportion to the number of equity shares held by the shareholders.

F-200

Annexure V


10


(` in lakhs)

Particulars

As at

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

(c) Rights, preferences and restriction attached to Preference share

Preference shares shall be redeemed at the end of 20 years from the date of allotment i.e. each Preference


(till date of redemption) on issue price of ` 1,000 (including premium of ` 995) after deduction of dividend,

if any declared during the tenure. However, the premium on redemption will be paid only to the original

subscribers or to the transferees if the transfers have been previously approved by the Company.

Further early redemption at the option of holder of Preference shares can be done, at issue price plus yield

as mentioned above, at any time after the date of allotment by giving not less than two months advance

notice to

the Company. Early redemption at the option of Company at the applicable redemption price can be done,

any time after the date of allotment by giving not less than 30 days notice to the Preference share holder.

(d) Names of shareholders holding more than 5% of equity share in the Company

No of

Shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares


(In


(In

lakhs)

Reliance Land Private

Limited 206.00 206.00 206.00 206.00 206.00 206.00

Reliance Capital Limited 85.29 85.29 81.05 81.05 29.55 -

AAA Entertainment Private

Limited - - - - 48.00 48.00

%

holding in

the class

% holding

in the class

%

holding

in the

class

%

holding

in the

class

%

holding

in the

class

%

holding

in the

class

Reliance Land Private

Limited 44.66% 44.66% 44.66% 44.66% 44.66% 44.66%

Reliance Capital Limited 18.49% 18.49% 17.57% 17.57% 6.41% -

AAA Entertainment Private

Limited - - - - 10.40% 10.40%

(e)

Names of shareholders

holding more than 5% of

Preference share in the

Company

No of

Shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares

No of

Shares


(In


(In

lakhs)

Reliance Infocomm

Engineering Private Limited 12.00 12.00 - - - -

Reliance Utility Engineers


%

holding in

the class

% holding

in the class

%

holding

in the

class

%

holding

in the

class

%

holding

in the

class

%

holding

in the

class

Reliance Infocomm

Engineering Private Limited 40.68% 40.68% N.A. N.A. N.A. N.A.

Reliance Utility Engineers


F-201

Annexure V


10


(` in lakhs)

Particulars

As at

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March

31, 2008

(f) Pursuant to shareholder approval dated March 30, 2012, the authorised share capital of the Company was

reclassified from 1,000 lakh equity shares of ` 5 each to 800 lakh equity shares of ` 5 each and 200 lakh

preference shares of ` 5 each.

(g) Pursuant to shareholder approval dated July 13, 2012, the authorised share capital of the Company was

increased from ` 5,000 lakhs to ` 25,000 lakhs divided into 4,800 lakh equity shares of ` 5 each and 200

lakh preference shares of ` 5 each.

(h) During Period 2009, the authorised share capital of the Company has been increased as per the provisions

of Scheme of Amalgamation by ` 1,602.90 lakhs divided into 32,058,000 shares of ` 5 each. (refer note 2of

V of D of Annexure IV)

(i) During the Period 2008, bond holders holding bonds aggregating EURO 633.50 lakhs have opted to

convert their bonds to equity shares. Accordingly, equity shares aggregating to 63.26 lakhs have been

issued to them at a price of ` 543.42 per share (including securities premium of ` 538.42).

F-202

Annexure VI


10

Summary statement of reserves and surplus of the Company

(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

a)

Securities

premium

reserve

At the

commencement

of the period 76,169.95 46,817.45 47,190.56 46,818.06 63,770.96 24,537.54

Less : Provision

for premium on

redemption of

Zero Coupon

Foreign

Currency

Convertible

Bonds ('FCCB')

(Also refer note

(c) of B of

Annexure IV) - - (373.11) 372.50 (244.90) (691.50)

Add : On

issuance of

equity shares

pursuant to

conversion of

FCCB‟s - - - - - 34,161.66

Add : Premium

on issuance of

preference

shares - 29,352.50 - - - -

Add : Reversal

of provision for

premium on

FCCB

converted

during the

period (Also

refer note (c) of

B of Annexure

IV) - - - - - 7,858.20

Less :

Adjustment

pursuant to

Modified

Composite

Scheme of

Amalgamation

and

Arrangement

(Refer note 1 of

VI of D of

Annexure IV) - - - - - (2,094.94)

F-203

Annexure VI


10


(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

Less:

Adjustment

pursuant to

Scheme of

Arrangement

for demerger of

Radio business

(refer note 1 of

V of D of

Annexure IV) - - - - (16,708.00) -

76,169.95 76,169.95 46,817.45 47,190.56 46,818.06 63,770.96

b)

General

reserve

At the

commencement

of the period 1,195.08 1,195.08 1,195.08 1,195.08 1,195.08 5,584.00

Add : Transfer

from Statement

of profit and

loss - - - - - 11,500.00

Add : Transfer

on account of

Scheme of

Amalgamation

of Katch 22

(Refer note 3 of

VI of D of

Annexure IV) - - - - - 201.80

Less :

Reduction in

value of

Companies

assets pursuant

to Scheme of

Amalgamation

of Katch 22

Refer note 3 of

VI of D of

Annexure IV) - - - - - (2,000.00)

Less : Net result

of the

transactions

relating to

Radio business

adjusted

pursuant to

Modified

Composite

Scheme of

Amalgamation

and

Arrangement

(Refer note 1 of

VI of D of

Annexure IV) - - - - - (14,363.30)

F-204

Annexure VI


10


(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

Add :

Adjustment

pursuant to

Modified

Scheme of

Amalgamation

and

Arrangement

(Refer note 1 of

VI of D of

Annexure IV) - - - - - 272.58

1,195.08 1,195.08 1,195.08 1,195.08 1,195.08 1,195.08

c) Capital reserve

At the

commencement

of the period 5,826.20 5,826.20 5,826.20 5,826.20 - -

Amounts

transferred to

Capital reserve

as per

provisions of

the Scheme of

Amalgamation

(Refer note 2 of

V of D of

Annexure IV) - - - 5,826.20 -

5,826.20 5,826.20 5,826.20 5,826.20 5,826.20 -

d)

Foreign

currency

translation

reserve

At the

commencement

of the period 2,973.05 (625.60) (682.51) 532.29 - -

Add: Foreign

currency

translation gain

/ (loss) on non-

integral

operations (net) 1,030.02 3,598.65 56.91 (1,214.80) 532.29 -

4,003.07 2,973.05 (625.60) (682.51) 532.29 -

e) Amount

pending

transfer to the

Securities

premium

reserve and /

or the General

reserve as per

the Composite

Scheme of

Amalgamation

and

Arrangement

(Refer note 1

of VI of D of

Annexure IV)

F-205

Annexure VI


10


(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March 31,

2009

March 31,

2008

i) Pending

transfer to

Securities

premium

reserve

At the

commencement

of the period - - - - - (10,060.33)

Reversal due to

the Modified

Scheme of

Amalgamation

and

Arrangement - - - - - 7,965.39

Transfer to

Securities

premium

reserve - - - - 2,094.94

- - - - - -

ii) Pending

transfer to

General

reserve

At the

commencement

of the period - - - - - 272.58

On merger of E-

ONE transfer to

General

Reserve - - - - - (272.58)

Transfer to

General reserve - - - - - -

f) (Deficit) /

Surplus in

Statement of

profit and loss

At the

commencement

of the period (109,069.62) (38,713.28) (14,365.28) (5,568.28) (631.27) 10,361.56

(Loss) / Profit

for the period,

as per Statement

of profit and

loss (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,937.01) 1,856.37

Appropriations

Transfer to

general reserve - - - - - (11,500.00)

Proposed

dividend - - - - - (1,153.15)

Dividend tax - - - - - (196.05)

(136,662.77) (109,069.62) (38,713.28) (14,365.28) (5,568.28) (631.27)

Total (49,468.47) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77

The above statement should be read with significant accounting policies and notes to summary statements of the

Company, as restated (Annexure IV)65502.1

F-206

Annexure VII


Statement of non-current investment, deferred tax assets (net), long-term loans and advances and other non-

current assets of the Company

(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

A

Non-current

investments

I Investment in

equity instruments

Subsidiary

companies (non-

trade, unquoted

and at cost)

A Reliance

MediaWorks

Theatres Limited 5.00 5.00 5.00 5.00 5.00 5.00

B Reliance

MediaWorks Films

(UK) Limited 8.47 8.47 8.47 8.47 8.47 8.47

C Reliance

MediaWorks (USA)

Inc. 9.21 9.21 9.21 9.21 9.21 9.21

D Reliance

MediaWorks

(Netherlands) B.V. 10.40 10.40 10.40 10.40 10.40 10.40

E Reliance

MediaWorks

(Mauritius) Limited 0.01 0.01 0.01 0.01 0.01 0.01

F Big Synergy Media

Limited 641.55 641.55 641.55 641.55 641.55 641.55

G Rave Entertainment

and Food (Nepal)

Private Limited - - 60.00 60.00 60.00 -

H Sri Ramakrishna

Theatres Limited

(refer note 9 of II of

D of Annexure IV) - - 442.10 442.10 442.10 -

I Reliance

MediaWorks

Entertainment

Services Limited 2,005.00 2,005.00 2,005.00 5.00 - -

J Reliance Lowry

Digital Imaging

Services Inc. (This

investment constitute

10% of the

outstanding shares

and balance 90% of

the

outstanding shares

are held by Reliance

MediaWorks (USA),

Inc., a wholly owned

subsidiary of the

Company) 3,000.00 3,000.00 3,000.00 3,000.00 - -

F-207

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

K Reliance Media

Consultant Private

Limited 1.00 1.00 - - - -

L Rave Entertainment

Private Limited

(refer note 2 of V of

D of Annexure IV

for merger of the

subsidiary with the

Company) - - - - - 515.30

M Reliance Broadcast

Networks Limited

(refer note1 of V of

D of Annexure IV

for Scheme of

Arrangement for

demerger of Radio

business) - - - - - 1,010.00

N Adlabs Multiplex

Limited (refer note 2

of V of D of

Annexure IV for

merger of the

subsidiary with the

Company) - - - - - 1,753.50

O Adlabs Multiplex

and Theatres


of V of D of

Annexure IV for

merger of the

subsidiary with the

Company) - - - - - 5.00

P Reliance

MediaVentures


Joint Ventures

(non-trade,

unquoted at cost)

A Cineplex Private


of II of D of

Annexure IV) - - 25.00 25.00 25.00 25.00

B Divya Shakti

Marketing Private

Limited 329.00 329.00 329.00 329.00 329.00 329.00

C Swanston Multiplex

Cinemas Private


of II of D of

Annexure IV) 825.06 825.06 700.06 700.06 700.06 700.06

Less: Provision for

diminution in value

of long-term

investments (825.06) (825.06) - - - -

F-208

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

Others (non-trade,

unquoted at cost)

A Sultan Production

Private Limited

(refer note 6 of III

of D of Annexure

IV) - - - 1.00 1.00 1.00

6,010.64 6,010.64 7,235.80 5,236.80 2,231.80 5,013.50

II Investment in

partnership firm

(non-trade,

unquoted at cost)

A HPE / Adlabs LP

(Investment in

limited

partnership) (2009

and 2010 : `

2,366.80 lakhs

towards recovery of

principal pursuant to

a contract and 2010:

` 241.70 lakhs has

been repaid by the

Partnership firm as

principal) 1,999.30 1,999.30 1,999.30 1,999.30 2,241.00 4,607.75

Less: Provision for

diminution in value

of long term

investments (refer

note 2 of V of D of

Annexure IV) (1,999.30) (1,999.30) (1,999.30) (1,999.30) (2,241.00) -

- - - - - 4,607.75

III Investment in

preference shares

(non-trade,

unquoted at cost)

A Tree of Knowledge

DOT Com Private

Limited.# - - - - 1,200.00 1,200.00

Less: Provision for

diminution in value

of long term

investments (refer

note 2 of V of D of

Annexure IV) - - - - (1,200.00) -

Reliance

MediaWorks

Entertainment

Services Limited 12,000.00 12,000.00 - - - -

# These shares have

been forfeited during

Period 2010 12,000.00 12,000.00 - - - 1,200.00

F-209

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

IV

Investment in

Government

securities (trade,

unquoted and at

cost)

Government

securities

National savings

certificates 30.30 30.30 32.50 112.60 102.70 98.20

(pledged with State

government

authorities) 30.30 30.30 32.50 112.60 102.70 98.20

Total 18,040.94 18,040.94 7,268.30 5,349.40 2,334.50 10,919.45

Aggregate value of

unquoted

investments

20,865.30

20,865.30

9,267.60

7,348.70

5,775.50

10,919.45

Aggregate provision

for diminution in

value of investments 2,824.36 2,824.36 1,999.30 1,999.30 3,441.00 -

B Deferred tax asset

Arising on account


in:

Provision for leave

encashment and

gratuity 187.70 193.10 272.80 127.90 126.40 207.30

Others* 5,266.00 3,246.90 547.50 79.30 583.30 186.10

Unabsorbed

depreciation

allowance and

carried forward

business loss * - - 3,108.90 2,215.00 1,093.90 1,894.30

5,453.70 3,440.00 3,929.20 2,422.20 1,803.60 2,287.70

Deferred tax

liability

Arising on account


in:

Depreciation/

amortisation 5,453.70 3,440.00 3,929.20 2,422.20 1,803.60 2,287.70

5,453.70 3,440.00 3,929.20 2,422.20 1,803.60 2,287.70

Net deferred tax

assets / liabilities - - - - - -

* Restricted to the

extent of deferred

tax liability due to

absence of virtual

certainty

C Long-term loans

and advances

- Unsecured,

considered good

F-210

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

I Capital advances 601.50 641.10 1,483.80 2,577.50 1,776.90 9,613.49

II Security deposits 12,810.90 13,169.10 16,053.70 16,354.50 16,116.50 14,559.40

III

Capital advance to

related party 98.60 98.60 - - - -

IV Loans to others 96.90 271.90 206.20 266.11 320.00 385.30

V Advance tax, tax

deducted at source,

advance fringe

benefit tax (net of

provision for tax

Period March 2013 -

` 594.50, Period

2012 - ` 594.50,

Period 2011 - `

594.50, Period 2010

– ` 594.10, Period

2009 4,392.76,

Period 2008 - `

4,097.08) 2,119.70 1,904.20 3,647.00 5,319.80 4,171.14 3,354.42

VI Advance towards

investment (Refer

Annexure XIII) 5,000.00 5,000.00 5,000.00 - - -

VII Others* 1,009.70 1,514.10 935.00 1,130.95 1,485.00 1,044.52

21,737.30 22,599.00 27,325.70 25,648.86 23,869.54 28,957.13

*Prepaid expenses

and entertainment

tax paid under

protest

D Other non-current

assets

I

Interest accrued but

not due 31.70 22.20 49.00 52.50 49.10 33.44

II Gratuity - - 9.80 - - -

III

Balance with bank -

Fixed deposit

accounts with

maturity greater than

twelve months - 8.40 - - - -

IV

Balance with bank -

Margin money

deposit* 552.20 31.40 231.50 224.92 10.31 10.31

583.90 62.00 290.30 277.42 59.41 43.75

* Margin money

deposits are under

bank lien for

guarantees given by

the Company


Company, as restated (Annexure IV)

Notes:

F-211

Annexure VII




(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

1. Amounts due from parties related to the issuer Company, has been disclosed in Annexure XVIII as part of

related party disclosures.

2. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose in the

offer document whether any of the receivable are related to directors or promoters or the issuer in any way. In

absence of clarification on “related to the directors or promoters”, Company has disclosed amounts due from

relatives of directors as defined in Schedule IA of the Companies Act, 1956 and in case of promoters, amount

due from “Promoter Group” and “Group Companies” as defined in SEBI ICDR Regulation. The List of persons

/ entities classified as “Promoter Group” and “Group Companies” has been determined by the Group and relied

upon by the Auditors.

3. Refer note 2 of V of D of Annexure IV, note 1 of VI of D of Annexure IV and note 3 of VI of D of Annexure

IV for advances written off pursuant to Schemes.

F-212

1

0

Annexure VIII


Statement of current assets of the Company

(` in lakhs)

As at

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

Current investments

I Investment in

mutual fund (non-

trade, unquoted and

at lower of cost and

fair value)

Investment in mutual

funds - - - 7,902.40 - 13,500.30

- - - 7,902.40 - 13,500.30

Market value of

current investment - - - 7,906.70 - 13,500.30

Inventories

(valued at lower cost

and net realisable

value) (refer note 6 of

A of Annexure IV)

I Stores and spares 403.50 312.70 357.30 293.90 283.30 44.80

II Chemical stock 18.80 36.50 20.70 16.50 33.50 17.20

III Food and beverages 310.30 279.10 303.50 238.60 146.90 53.30

IV Raw films 30.20 30.20 43.00 47.80 54.60 58.80

V Content not aired - - - - - 17.70

762.80 658.50 724.50 596.80 518.30 191.80

Trade receivables

Unsecured,

considered good;

I Debts outstanding for

a period exceeding

six months from the

date they are due for

payments 12,528.70 12,916.10

14,758.90

13,159.70

15,216.30 1,756.20

Other debts 3,587.70 3,263.30 3,983.00 8,959.40 4,986.10 9,883.90

16,116.40 16,179.40

18,741.90

22,119.10

20,202.40

11,640.10

Unsecured,

considered

doubtful;

II Debts outstanding for

a period exceeding

six months from the

date they are due for

payments 2,830.40 2,240.40 681.20 1.90 - 206.60

Other debts - - - - - 93.80

2,830.40 2,240.40 681.20 1.90 - 300.40

Less: Provision for

doubtful debts 2,830.40 2,240.40 681.20 1.90 - 300.40

- - - - - -

16,116.40 16,179.40 20,202.40

F-213

1

0

Annexure VIII



(` in lakhs)

As at

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

18,741.90 22,119.10 11,640.10

D Cash and bank

balances

Cash and cash

equivalents

I Balances with banks

- in current

accounts 2,876.30 1,364.40 3,034.50 1,368.30 1,129.00 1,911.60

- in fixed deposit

account with original

maturity less than

three months 1,050.00 - - - 186.25 -

II Cash on hand 368.10 547.10 166.60 85.20 55.80 77.50

4,294.40 1,911.50 3,201.10 1,453.50 1,371.05 1,989.10

III Other bank

balances

- in dividend

accounts 10.50 10.50 12.20 13.80 14.60 8.20

- in fixed deposit

account maturing

with in a year 691.00 1.60 10.70 - - -

- in margin money

deposit maturing

with in a year* 356.00 4,878.40 5,537.80 3,047.87 2,672.28 5,145.99

1,057.50 4,890.50 5,560.70 3,061.67 2,686.88 5,154.19

5,351.90 6,802.00 8,761.80 4,515.17 4,057.93 7,143.29

*Margin money

deposits are under

bank lien for

guarantees given by

the Company

E Short-term loans

and advances

- Unsecured,

considered good

I Amount due from

Reliance Broadcast

Networks Limited

pursuant to demerger

of Radio business - - 6,095.00 26,095.00 26,095.00 -

II Loans and advances

to related parties

- subsidiaries 59,923.60 51,155.40 49,844.90 35,877.00 17,729.80 7,622.80

- joint ventures 192.60 192.60 391.10 399.20 565.70 706.20

- Advance towards

share application

money in a Joint

venture - Swanston

Multiplex Cinemas

Private Limited - - 125.00 125.00 - -

F-214

1

0

Annexure VIII



(` in lakhs)

As at

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

III Loans to others 756.00 698.90 1,285.80 1,136.69 528.40 13,566.90 IV Deposits 77.20 29.40 - - - -

V

Others * 2,794.10 3,332.80 4,071.80 6,837.60 5,908.30

9,603.78

63,743.50 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68

- Unsecured,

considered doubtful

I Loans and advances

to related parties -

Subsidiaries 6,921.90 6,921.90 - - - -

Loans to others 393.50 393.50 - - - -

II Others* 1,081.50 1,081.50 978.90 120.00 - 65.80

Less: Provision for

doubtful advances 8,396.90 8,396.90 978.90 120.00 - 65.80

- - - - - -

63,743.50 55,409.10 61,813.60 70,470.49 50,827.20 31,499.68

*includes service tax

input credit, value

added tax input

credit, prepaid

expenses, employee

advance, advances to

vendors etc.

F Other current assets

I Unbilled revenue 420.00 561.10

177.30

217.00

125.10 -

II Interest accrued and

due from Reliance

Broadcast Network

Limited - 63.80

3,930.20

2,481.60 - -

III Interest accrued but

not due 4.20 32.70

157.70 66.87 89.58

783.86

IV Other receivables for

sale of investment /

Right to investment - 60.00 - -

4,066.80

3,127.30

424.20 717.60 4,265.20 2,765.47 4,281.48 3,911.16



Notes:

1. The list of parties related to directors / promoters (as per SEBI ICDR Regulations, 2009) are as follows:

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

Trade receivables

Reliance Capital Limited 26.46 24.98 37.40 43.42 1.63 -

Reliance Capital Asset

Management Limited

36.01

28.80 32.29 4.38 0.26 -

Gini & Jony Apparel Private

Limited

-

- 1.23 0.03 0.56 -

F-215

1

0

Annexure VIII



(` in lakhs)

As at

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March 31,

2009

March

31, 2008

TV Today Network Limited - - 0.09 - - -

Reliance Equity Advisors

(India) Limited

-

0.31 - - - -


Limited

1,476.06

1,513.41 1,376.70 1,337.90 - -

Reliance Life Insurance

Company Limited

-

1.10 0.92 - - -

Loans, advances and other

receivables


Limited

-

63.82 10,025.20 28,749.80 26,095.00 -

Reliance Securities Limited

-

- - - -

3,126.90

Reliance General Insurance

Company Limited

-

0.31 - - - -

Reliance Life Insurance

Company Limited

9.00

9.00 9.00 9.00 20.00

-

Total 1,547.53 1,641.73 11,482.83 30,144.53 26,117.45 3,126.90

2. Above data excludes amounts due from parties related to the issuer Company, which has been disclosed in

Annexure XVIII as part of related party disclosures.

3. As per para (21) (B)(IX) Part A Schedule VIII of SEBI ICDR Regulations, Company shall disclose in the

offer document whether any of the receivable are related to directors or promoters or the issuer in any way. In

absence of clarification on “related to the directors or promoters”, Company has disclosed amounts due from

relatives of directors as defined in Schedule IA of the Companies Act, 1956 and in case of promoters, amount

due from “Promoter Group” and “Group Companies” as defined in SEBI ICDR Regulation. The List of persons

/ entities classified as “Promoter Group” and “Group Companies” has been determined by the Group and relied

upon by the Auditors.

4. Refer note 2 of V of D of Annexure IV, note 1 of VI of D of Annexure IV and note 3 of VI of D of Annexure

IV for receivables and advances written off pursuant to Schemes.

F-216

Annexure IX


10

Statement of non-current liabilities of the Company

(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March 31,

2010

March 31,

2009

March 31,

2008

A Long-term

borrowings

I Non convertible

debentures

(secured) 25,000.00 35,000.00 - - - -

II Non Convertible

Debentures

(Unsecured) 550.00 1,650.00 - - - -

III Term loans

- From banks

(secured) 9,587.50 17,262.50

32,370.80 36,416.70 40,000.00 37,500.00

- From banks

(unsecured) - - 7,500.00 - - -

- Others

(secured) - 17,500.00 - - - 2,500.00

IV Zero Coupon

Foreign Currency

Convertible

Bonds ('FCCB') - - - - 14,230.00 13,099.90

35,137.50 71,412.50

39,870.80 36,416.70 54,230.00 53,099.90

B Other long-term

liabilities

I Lease rent

liability as per

AS 19 - "Leases" 3,770.50 3,379.60 2,449.05 1,265.86 787.30 342.98

II Security deposit 144.70 136.30 123.14 49.30 51.80 -

III Advance from

related party 48.30 120.80 362.50 507.50 - -

3,963.50 3,636.70 2,934.69 1,822.66 839.10 342.98

C Long-term

provisions

I Leave

encashment

373.20

472.80 695.90 344.50 342.50 162.56

II Gratuity 120.80 28.30 - - - 35.89

III Premium on

redemption of

FCCB - - - - 3,084.90 2,839.89

494.00 501.10 695.90 344.50 3,427.40 3,038.34


Company, as restated (Annexure IV)

Note:


F-217

Annexure X


Statement of current liabilities of the Company

(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

A Short-term

borrowings

I Term loans

From banks

(secured) - - - - 10,000.00 -

From banks

(unsecured) - - 23,500.00 40,000.00 10,000.00 -

II Loans

repayable on

demand

(secured)

From banks

- Cash credit 1,175.90 554.60 2,500.00 352.60 37.20 293.60

III Loans and

advance from

related parties

(unsecured) 125.00 550.00 245.00 345.00 245.00 -

IV Other loans

and advances

a From banks

- Buyers credit

(unsecured) - - 318.00 1,392.60 926.80 -

- Buyers credit

(secured) 2,509.70 3,974.50 2,966.00 - - -

b Commercial

papers

(unsecured) - - 57,842.40 72,683.00 49,024.50 38,688.70

d Inter-corporate

deposit

(unsecured) 140,903.40 101,345.40 15,000.00 - - 2,046.30

144,714.00 106,424.50 102,371.40 114,773.20 70,233.50 41,028.60

Above

includes

Borrowings

from

Promoters

113,308.43 98,395.50 15,245.00 345.00 245.00 2,046.30

(as per SEBI

ICDR

Regulations,

2009) / Group

companies /

Subsidiaries /

Material

Associate

companies

F-218

Annexure X


Statement of current liabilities of the Company

(` in lakhs)

As at

Particulars

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010

March

31, 2009

March 31,

2008

B Other current

liabilities

I Current

maturities of

long-term

debts 42,550.00 23,383.40 49,045.80 32,307.60 - 0.40

II Interest

accrued and

due on

borrowings 7,715.00 2,324.30 28.80 - - -

III Interest

accrued but not

due on

borrowings 351.10 2,222.60 18.30 20.10 30.00 -

IV Unclaimed

dividend 10.50 10.50 12.20 13.80 14.60 8.20

V Advance

received from

customers 1,472.90 1,258.70 1,527.00 1,130.90 731.80 4,936.40

VI Dues for

capital

expenditure 1,769.40 2,133.80 3,252.00 3,154.00 2,136.50 399.43

VII Temporary

book overdraft

460.70 924.90 - - - -

VIII Others * 3,136.60 1,967.20 1,875.48 1,592.02 1,648.33 2,602.03

*including

payable related

to employee,

lease rent,

expense

payable and

statutory dues. 57,466.20 34,225.40 55,759.58 38,218.42 4,561.23 7,946.46

C Short-term

provisions

I Proposed

dividend - - - - - 1,153.15

II Tax on

proposed

dividend - - - - - 196.05

III Gratuity - - - - - 104.24

IV Leave

encashment 84.60 94.00 125.40 31.80 29.30 347.21

84.60 94.00 125.40 31.80 29.30 1,800.65


statements of the Company, as restated (Annexure IV)

Note: Disclosure as per SEBI ICDR Regulations, 2009 are as follows

Particulars of

Lenders

Principal

Amount

(` in lakhs)

Period when

amount is

outstanding


Schedule

Reliance

MediaWorks Theatres

245.00

Period 2011 and

2009

7.00% Repayable on

demand

F-219

Particulars of

Lenders

Principal

Amount

(` in lakhs)

Period when

amount is

outstanding


Schedule

Limited

Reliance

MediaWorks Theatres

Limited

345.00


demand

Reliance

MediaWorks Theatres

Limited

550.00 Period 2012 9.50% to 10.25% Repayable on

demand

Reliance

MediaWorks Theatres

Limited

125.00 Period March

2013

9.50% to 10.25% Repayable on

demand

Reliance Capital

Limited

2,046.30


demand

Reliance Capital

Limited

15,000.00

Period 2011 12.00% One year from

date of the loan

Reliance Capital

Limited

97,845.50 Period 2012 13.00% One year from

date of the loan

Reliance Capital

Limited

113,183.43 Period March

2013

13.00% One year from

date of the loan

Note:


F-220

Annexure XI


Statement of revenue of the Company

(` in lakhs)

For the Period

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Theatrical exhibition

Sale of tickets 15,149.60 47,893.80 26,272.30 22,401.80 18,147.00 8,378.20

Less: Entertainment tax 3,068.00 8,965.80 3,919.10 2,890.80 1,925.80 1,023.50

12,081.60 38,928.00 22,353.20 19,511.00 16,221.20 7,354.70

Advertisements /

sponsorship revenue 1,698.80 2,980.10 2,117.00 3,819.30 1,245.00 1,281.00

Facilities provided at

multiplex 795.60 2,203.40 754.70 578.40 525.60 303.30

Food and beverages 4,102.40 13,222.70 7,122.80 5,139.89 3,867.94 1,434.91

Others 589.90 1,710.50 1,032.50 1,590.40 328.40 -

19,268.30 59,044.70 33,380.20 30,638.99 22,188.14 10,373.91


Processing / printing of

films 2,574.80 11,355.30 10,606.10 7,106.40 6,999.60 3,666.20

Equipment / facility rental

income 1,346.50 3,948.80 2,066.60 1,839.40 612.40 265.30

Trading income 121.60 1,304.30 1,926.30 2,229.30 3,077.40 2,410.20

Others 42.70 150.90 13.60 45.90 67.40 -

4,085.60 16,759.30 14,612.60 11,221.00 10,756.80 6,341.70

Film / content

production, distribution

and related services 287.30 325.30 676.40 3,692.00 15,289.40 10,179.10

Total 23,641.20 76,129.30 48,669.20 45,551.99 48,234.34 26,894.71



F-221

Annexure XII


Statement of other income of the Company

(` in lakhs)

For the period

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Recurring

Dividend income from :

- Joint ventures - - - - 75.00 55.00

- Subsidiaries - 200.40 - 85.30 - -

- Other non-current

investments - - - - - 7.20

- Current investments - - - - 130.40 86.60

- 200.40 - 85.30 205.40 148.80

Interest income from:

- Bank 86.20 613.00 303.60 253.50 344.60 470.70

- Loans, advance and other

deposits 36.40 467.10 469.60 152.90 372.10 360.80

122.60 1,080.10 773.20 406.40 716.70 831.50


investments 57.50 39.50 423.60 274.40 269.20 9.10

Bad debts recovered /

provisions written back 19.50 79.50 814.00 1,080.90 - -

Sundry balances written

back (net) - - 306.30 - - -

Foreign exchange gain (net) 124.70 2,081.90 349.10 - 1,203.50 -

Miscellaneous income 60.60 77.60 250.90 13.20 156.20 758.20

Non recurring

Gain on derivative contracts

(net) - - - - - 977.40

Gain on sale of non-current

investment / rights therein - 766.50 - - 1,700.00 2,660.30

Consultation fees - - - - 2,130.50 -

Proceeds from key man

insurance policy - - - - 266.40 -

Share of advertisement

income - - - 1,213.00 - -

Profit on sale of assets /

discarding of assets (net) - - 2,701.10 - - -

384.90 4,325.50 5,618.20 3,073.20 6,647.90 5,385.30


statements, as restated (Annexure IV).

Note

4. The classification of other income by the management into recurring and non-recurring is based on the

current operations and business activities of the Company.

5. Other income is related / incidental to the business activities of the Company.

6. In accordance with the accounting treatment followed by the Company, exchange fluctuation gain /

loss and profit / loss on sale of assets is disclosed net. Gross amounts in respect thereof are not readily

determinable. Hence, net gain where applicable has been considered for the purpose of above

disclosure.

F-222

Annexure XIII


Statement of contingent liabilities and commitments of the Company

(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

A Central excise

Disputed central excise

demand pending with

the Central Excise and


Tribunal 2,555.90 2,555.90 1,918.40 1,715.30 1,308.80 1,110.90

B Value added tax

Disputed value added

tax demand pending for

various states 522.80 38.40 - - - -

C Service tax

Disputed Service Tax

demand pending with

the Central Excise and


Tribunal 204.90 204.90 - - - -

D Income tax

i) Disputed liability in

respect tax deduction at

source, matter is

pending with

Commissioner of

Income tax (Appeals) 1,017.10 1,017.10 1,017.10 - - -

ii) Disputed tax liability in

respect of AY 2008-09

for Rave Entertainment

Private Limited

(„REPL‟), REPL was

wholly owned

subsidiary of the

Company and merged

with it with effect from

April 1, 2008. 1,401.20 1,401.20 1,401.20 - - -

Department‟s appeal

against order of

Commissioner of

Income Tax (Appeals)

is pending with Income

Tax Appellant Tribunal

(ITAT). In Period 2011

the same was pending


Income Tax (Appeals).

F-223

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

Further Company has

received demand in

respect of REPL matter

for assessment year

2009-10, appeal is

pending with

Commissioner of

Income tax (Appeals)

- - - - - 1,787.20

E Entertainment tax

i) In respect of a

Multiplex, the

Company has received

a demand for

entertainment tax

pertaining to the period

wherein the said

multiplex was availing

an exemption from

entertainment tax. The

Company has filed an

appeal against the said

demand. 71.50 - - - - -

ii) In respect of certain

multiplexes, the

Company has made an

application for availing

exemption under the

relevant Act

retrospectively from the

date of commencement

of the operations of the

said multiplex and the

application is pending

approval

- 300.70 219.40 340.00 391.30 280.30

iii) In respect of certain

multiplexes, the

Company is in dispute

with the entertainment

tax authorities

regarding eligibility for

availing exemption

under the relevant Act. 570.60 509.60 558.80 451.70 293.40 219.40

iv) In respect of demand

orders received for

payments of

entertainment tax

collected and not paid

to the authorities, the

Company has made an

appeal against said

demand orders as it

believes that the same is

not payable, being

exemption from - - 113.20 107.50 62.90 56.90

F-224

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

payment available to it

v) The Company shall be

liable to pay the

entertainment tax in the

event that the

multiplexes do not

continue operations for

a period of 10 years

from the respective

dates from which they

commenced their

operations 13,470.30 12,845.00 11,125.20 10,614.90 5,747.50 4,404.40

F The Company has

engaged the services of

a Contractor for the

purpose of deploying

personnel at its

cinemas. During the

tenure of the contract,

the Company has paid

the Contractor, amounts

payable towards

employers contribution

to provident fund (PF)

amounting to ` 294.20

lakhs on a regular basis.

The Company has

learnt that the

Contractor has failed to

deposit appropriate

amounts for employee

and employer

contributions

amounting to

approximately ` 588.40

lakhs with the PF

authorities and the

Company apprehends

that some portion of the

aforesaid amount which

was supposed to be

deposited in the

individual accounts of

the Personnel by the

Contractor may have

actually been mis-

appropriated by the

Contractor. The

Company has filed a

criminal complaint

against the Contractor

and the matter is

F-225

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

currently under

investigation. The

Company has not

received any claims in

this regard.

G Claims against

Company not

acknowledged as debts 8,152.10 7,859.80 198.60 74.00 74.00 74.00

H Guarantees

Guarantee given to

Ministry of information

broadcasting of Radio

license - - - - 2,302.00 -

Guarantees given to

bank and others for

loans / credit facilities

given to Subsidiary

Companies 11,325.90 14,489.80 10,518.00 17,689.60 11,258.40 -

Guarantees given to

bank for loans / credit

facilities given to

Others - 183.00 - - - -

Guarantee given to a

Service providers in

respect of Subsidiary

Companies 5,118.00 4,944.40 4,254.00 4,218.10 33.70 -

I Value added tax:

Value added tax: The

Maharashtra Value

Added Tax Act, 2002

lists the Scheduled

entry, interalia, “Copy

right” w.e.f. 1 April

2005. Pursuant to this

enactment / scheduled

entry, the entertainment

industry has made a

written representation

to the Finance Minister,

Maharashtra for

deletion of the

scheduled entry from

the Act. Similar

representation was

made by the industry in

some other states, as a

result of which the Act

was modified to delete

this scheduled entry.

The Company is

awaiting a positive

response from the

Ministry of Finance in

F-226

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

respect of the assurance

given. Accordingly, no

provision (amount not

currently ascertainable)

has been made in the

books of accounts.

With effect from the

May 1, 2011 the

Maharashtra Value

Added Tax Act, 2002

was amended to exempt

tax on Copyrights for

distribution and

exhibition of

cinematographic films

in theatres and cinema

halls.

J Capital Commitment

i) Estimated amount of

contract remaining to

be executed on capital

account and not

provided for net of

advances (for fixed

assets) 4,389.40 4,512.20 4,646.74 11,858.30 5,661.80 13,409.70

ii) Estimated amount of

contract remaining to

be executed on capital

account and not

provided for net of

advances (for

investments) 1,200.00 1,200.00 1,200.00 - - -

iii) Amount of uncalled on

150,000 partly paid

preference shares of

Tree of Knowledge

DOT COM Private

Limited - - - 300.00 300.00



Note :-

a) The Company is a party to various legal proceedings in the normal course of business and does not expect

the outcome of these proceedings to have any adverse effect on its financial conditions, results of operations

or cash flows.

b) The amounts are excluding penalty and interest if any that would be levied at the time of final conclusion.

Other Commitment :-

a) Company has issued letter of financial support to some of its wholly owned foreign subsidiaries.

b) In view of the loss during the period, the Company has not created Debenture Redemption Reserve in

terms of Section 117 (C) of the Companies Act, 1956. The Company shall create such reserve out of profit,

if any in future years.

c) Preference shares shall be redeemed at the end of 20 years from the date of allotment. Each Preference


(till date of redemption) on issue price of ` 1,000 (including premium of ` 995) after deduction of dividend,

F-227

Annexure XIII



(` in lakhs)

As at

Particulars

March

31, 2013

September

30, 2012

March

31, 2011

March

31, 2010

March

31, 2009

March 31,

2008

if declared during the tenure. However, the premium on redemption will be paid only to the original

subscribers or to the transferees if the transfers have been previously approved by the Company. Yield on

preference shares of ` 1,471.00 lakhs (cumulative till date ` 2,958.10 lakhs) for the current period will be

paid as premium at the time of redemption.

Annexure XIV


Summary of accounting ratios of the Company

(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

1 Net (loss) / profit

after tax, as

restated (27,593.15) (70,356.34)

(24,348.00) (8,797.00) (4,937.01) 1,856.37

2 Weighted average

number of equity

shares

outstanding

during the Period

for basic earnings

per share 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170 42,103,935

3 Add - equity share

issuable on

conversion of

FCCB (Refer note

(c) of B of

Annexure IV) - - 1,694,699 2,061,884 2,061,884 6,084,140

4 Weighted average

number of equity

share outstanding

during the Period

for dilutive

earnings per share

(Refer (c) of B of

of Annexure IV) 46,126,170 46,126,170 47,820,869 48,188,054 48,188,054 48,188,075

5 Number of equity

shares

outstanding at the

end of the Period 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170 46,126,170

6 Paid up value of

each equity share 5.00 5.00 5.00 5.00 5.00 5.00

7 Total paid capital 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31

F-228

Annexure XIV



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

– equity

8 Reserves and

surplus (net of

deficit in

statement of profit

and loss)

(excluding

revaluation

reserve) (49,468.47) (22,905.34) 14,499.85 39,164.05 48,803.35 64,334.77

9 Net worth

attributable to

equity

shareholders

(7+8) (47,162.16) (20,599.03) 16,806.16 41,470.36 51,109.66 66,641.08

Accounting

ratios

a) Earnings per

share

Basic earnings per

share (59.82) (152.53) (52.79) (19.07) (10.70) 4.41

Diluted earnings

per share (59.82) (152.53) (52.79) (19.07) (10.70) 3.85

b) Return of net

worth NA NA (144.88)% (21.21)% (9.66)% 2.79%

c) Net assets value

per share (102.25) (44.66) 36.44 89.91 110.80 144.48

Note

1 The ratios have been

computed as under :-

Basic and diluted

earning per share



Weighted average number of equity share outstanding

during the period

Return on Net worth %



Net worth, as restated, excluding revaluation reserve at

the end of the period

Net assets value per

share (`)

Net worth, as restated, excluding revaluation reserve at

the end of the period

Number of equity share outstanding at the end of the

period

F-229

Annexure XIV



(` in lakhs)

Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

2 Restated net profit as appearing in the restated statement of profit and loss and net worth as

appearing in summary statement of assets and liabilities, as restated, has been considered for the

purpose of computing the above ratios.

3 Calculation of ratios post issue has not been considered.

4 Earnings per share calculations are done in accordance with Accounting Standard 20 "Earning

Per Share", notified in the Companies (Accounting Standards) Rules, 2006.

5 The above statement should be read together with significant accounting policies and notes to

summary statements, as restated (Annexure IV)

6 Dilutive EPS has not been presented in Period 2009, Period 2010 and Period 2011, since it is

anti dilutive.

7 Return on net worth for the Period March 2013 and Period 2012 cannot be computed as net

worth as on March 31, 2013 and September 30, 2012 is negative.

8 Dividend on preference capital is non-cumulative and will be paid as premium at the time of

redemption and shall be adjusted against securities premium reserve. Accordingly, the same is

not adjusted for the purpose of calculating the above ratios. Yield is ` 1,471.00 lakhs for

Period March 2013 and ` 1,487.10 lakhs for Period 2012.

F-230

Annexure XV


Statement of principal terms and conditions of long-term borrowings and short-term borrowings

(` in lakhs)

S.

N

o

Particulars As at

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010 March

31, 2009

March

31, 2008

1. Commercial Papers / Short Term Loans from Banks (unsecured)

A Templeton

Mutual Fund

(Refer note 9 of

Annexure XV) - - 21,984.79 - - -

B ICICI Prudential

Fund (Refer note

9 of Annexure

XV)

- - 9,943.51 - - -

C Templeton

Mutual Fund

(Refer note 9 of

Annexure XV) - - 9,422.16 - - -

D Yes Bank

Limited (Refer

note 9 of

Annexure XV) - - 11,619.63 - - -

E BNP Paribas

(Refer note 9 of

Annexure XV) - - 4,872.31 - - -

F LIC MF Savings

Plus Fund - - - 7,450.18 - -

G LIC MF Income

Plus - - - 9,832.06 - -

H LIC MF Floating

Rate - - - 983.21 - -

I LIC MF Savings

Plus Fund

- - - 9,808.90 - -

J J M Financial

Mutual Fund

- - - 2,477.40 - -

K J M Financial

Mutual Fund - - - 1,486.43 - -

L LIC MF Income

Plus - - - 9,599.87 - -

M LIC MF Savings

Plus Fund - - - 9,599.87 - -

N IFCI Limited - - - 2,466.68 - -

O LIC MF Floating

Rate - - - 4,744.82 - -

P LIC MF Savings

Plus Fund - - - 4,744.53 - -

Q LIC MF Income

Plus - - - 9,489.05 - -

R Yes Bank

Limited - - - - 14,886.41 -

S IDBI Limited - - - - 2,457.18 -

F-231

Annexure XV



(` in lakhs)

S.

N

o

Particulars As at

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010 March

31, 2009

March

31, 2008

T SIDBI - - - - 491.44 -

U Canara Bank - - - - 2,456.18 -

V IFCI Limited - - - - 4,893.69 -

W LIC MF Floating

Rate Fund - - - - 4,767.92 -

X LIC MF Income

Plus Fund - - - - 4,767.92 -

Y LIC MF Liquid

Fund - - - - 4,767.92 -

Z LIC MF Savings

Plus Fund

- - - - 4,767.92 -

AA LIC MF Special

unit scheme

Special Unit

Scheme

- - - - 4,767.92 -

AB UTI Mutual

Funds - liquid

cash plan - - - - - 1,973.16

AC ABN Amro

Money Plus Fund - - - - - 4,932.89

AD Lotus India

Liquid Fund - - - - - 1,973.16

AE Birla Sun Life

Interval Income

Fund Quarterly

Plan Series II - - - - -

5,297.62

AF Kotak Quarterly

Interval Plan -

Series 66 - - - - - 2,408.01

AG Allahabad Bank - - - - - 1,965.13

AH Birla Cash Plus - - - - - 4,421.54

AI United Bank Of

India - - - - - 3,438.97

AJ UTI Spread Fund - - - - - 2,456.41

AK Saraswat Co-op

Bank Ltd. - - - - - 982.42

AL SBI Life

Insurance Co.

Ltd. - - - - - 2,456.04

AM Tata MF - Tata

Fixed Horizon

Fund - - - - - 3,928.19

AN ABN Amro Flexi

Short Term Plan -

Series B - - - - - 2,455.16

F-232

Annexure XV



(` in lakhs)

S.

N

o

Particulars As at

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010 March

31, 2009

March

31, 2008

AO Kotak Mahindra

Flexi Debt

Scheme - - - - - -

AP Birla Cash Plus - - - - - -

AQ Allahabad Bank - - - 10,000.00 10,000.00 -

AR Syndicate Bank - - 10,000.00 10,000.00 - -

AS Union Bank of

India -

-

10,000.00 10,000.00

- -

AT Bank of Baroda - - - 10,000.00 - -

AU Yes Bank

Limited - - 3,500.00 -

- -

Sub total - - 81,342.40 112,683.00 59,024.50 38,688.70

2. Unsecured Long Term Loan from Bank / others (including amounts due within the next 1 year)

A Canara Bank - - 20,000.00 - - -

- B DBS Bank Limited

(Refer note 9 of

Annexure XV) - - 15,000.00 - - -

C Non-convertible

debentures 2,750.00 3,850.00 - - - -

Sub total 2,750.00 3,850.00 35,000.00 - - -

3. Secured Short Term Loan From Bank

A Syndicate Bank

(Refer note 6 of

Annexure XV) - - - - 10,000.00 -

Sub total - - - - 10,000.00 -

4. Secured Long Term Loan From Bank / Other Long Term Loan (including amounts due within

the next 1 year)

A Allahabad Bank

(Refer note 1 of

Annexure XV)*

* - 1,666.67 3,333.33 5,000.00 5,000.00 -

B Exim Bank (Refer

note 1 of Annexure

XV) * - 2,333.34 4,666.68 7,000.00 7,000.00 -

C Jammu & Kashmir

Bank (Refer note 1

of Annexure XV) * - 2,333.34 4,666.68 7,000.00 7,000.00 -

D Syndicate Bank

(Refer note 1 of

Annexure XV) * - 2,333.34 4,666.68 7,000.00 7,000.00 -

E Union Bank of

India (Refer note 1

of Annexure XV) * - 2,000.00 4,000.00 6,000.00 6,000.00 -

F Vijaya Bank (Refer

note 1 of Annexure - 2,666.67 5,333.33 8,000.00 8,000.00 -

F-233

Annexure XV



(` in lakhs)

S.

N

o

Particulars As at

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010 March

31, 2009

March

31, 2008

XV) *

G Rank Investments

Private Limited

(Refer note 1 of

Annexure XV) - - - - - 2,500.00

H Barclays Bank Plc

(Refer note 1 of

Annexure XV) - - - - - 37,500.00

I Syndicate Bank

(Refer note 6 of

Annexure XV)

- - 6,250.00 10,000.00 - -

J Syndicate Bank

(Refer note 1 of

Annexure XV)

8,437.50 10,312.50

15,000.00 - - -

K Union Bank of

India (Refer note 1

of Annexure XV) 4,000.00 4,800.00 6,000.00 3,500.00 - -

L Syndicate Bank

(Refer note 1 of

Annexure XV)

10,000.00

10,000.00 - - - -

M Non Convertible

Debentures (Refer

note 10 of

Annexure XV)

35,000.00 35,000.00 - - - -

N Indiabulls Financial

Service Limited

(Refer note 11 of

Annexure XV) 17,500.00 17,500.00 - - - -

Sub total 74,937.50 90,945.86 53,916.70 53,500.00 40,000.00 40,000.00

* - As per agreement dated June 28, 2008 for long term loan obtained from banks, the Company has to comply

with covenants with regards to financial parameters, as specified in the agreement. Based on Period 2009, 2010,

2011 and 2012 financials, the Company is not in compliance with the debt covenants.

5. Overdraft facilities / Car loan

A Cash credit - Bank

of Baroda (Refer

note 2, 4,6 and 12 of

Annexure XV) 530.61 554.63 540.53 352.60 37.20 293.60

B Cash credit – Axis

Bank (Refer note 5

and 12 of Annexure

XV) 645.33 - 1,959.47 - - -

C Car loan (Refer

note 3 of Annexure

XV) -

-

- - - 0.40

D Buyers credit (Refer

note 7 and 12 of

Annexure XV) 2,509.75

3,974.48

2,965.90 - - -

Sub Total 3,685.69 4,529.11 5,465.90 352.60 37.20 294.00

6. Others (Unsecured) (including amounts due within the next 1 year)

F-234

Annexure XV



(` in lakhs)

S.

N

o

Particulars As at

March 31,

2013

September

30, 2012

March 31,

2011

March 31,

2010 March

31, 2009

March

31, 2008

A Zero Coupon

Foreign Currency

Convertible Bonds

(Refer note 8 of

Annexure XV)

-

-

- 15,224.30 14,230.00 13,099.90

B Inter corporate

deposits

141,028.43 101,895.43 15,245.00 345.00 245.00 2,046.30

C Buyers credit - - 318.00 1,392.60 926.80 -

Subtotal 141,028.43 101,895.43 15,563.00 16,961.90 15,401.80 15,146.20

Grand total 222,401.62 201,220.40 191,288.00 183,497.50 124,463.50 94,128.90

Period March 2013


outstanding (`

in lakhs)


Union Bank of India

4,000.00

14.00% per annum ` 400 .00 - 20 equal


starting from March

31, 2012

Syndicate Bank

8,437.50

13.00% per annum ` 937.50 - 16 equal


starting from

September 14, 2011

Syndicate Bank

10,000.00

11.50% per annum ` 2,500.00 - 4 equal


starting from

September 14, 2013


35,000.00

11.00% per annum



Series 2 - ` 12,500


Series 3 - ` 12,500



2,750.00


lakhs


2013


10, 2013


10, 2013


2014


2014

Buyers Credit 2,509.75 Libor Linked – Various Dates

F-235


outstanding (`

in lakhs)


Various


Limited 2,200.00

12.00% per annum September 26, 2013


Limited 1,300.00


Inter-corporate deposit – Reliance

MediaWorks Theatres Limited 125.00

9.50% - 10.25% per

annum

Repayable on demand


Limited 113,183.43


Inter-corporate deposit - Chlorosulf Private

Limited 24,220.00



17,500.00


instalments starting the

13th

month from the



Axis Bank Limited (cash credit) 645.33 13.25% per annum Repayable on demand

Total 222,401.62

Period 2012


outstanding (`

in lakhs)


Allahabad Bank *

1,666.67

13.25% per annum ` 1,666.67 Due on

March 31, 2013

Exim Bank *

2,333.34

13.25% per annum ` 2,333.34 Due on

March 31, 2013

Jammu & Kashmir Bank *

2,333.34

13.25% per annum ` 2,333.34 Due on

March 31, 2013

Syndicate Bank *

2,333.34

13.25% per annum ` 2,333.34 Due on

March 31, 2013

Union Bank of India *

2,000.00

13.25% per annum ` 2,000.00 Due on

March 31, 2013

Vijaya Bank *

2,666.67

13.25% per annum ` 2,666.67 Due on

March 31, 2013

Union Bank of India

4,800.00

14.00% per annum ` 400 .00 - 20 equal


starting from March

31, 2012

Syndicate Bank

10,312.50

13.00% per annum ` 937.50 - 16 equal


starting from

September 14, 2011

Syndicate Bank

10,000.00

11.75% per annum ` 2,500.00 - 4 equal


starting from

September 14, 2013

F-236


outstanding (`

in lakhs)



35,000.00

11.00% per annum



Series 2 - ` 12,500


Series 3 - ` 12,500



3,850.00


lakhs

Series B – December

10, 2012


2013


2013


10, 2013


10, 2013


2014


2014

Buyers Credit

3,974.48

Libor Linked –

Various

Various Dates


Limited 2,200.00



Limited 1,300.00




9.50% - 10.25% per

annum

Repayable on demand


Limited 97,845.40



17,500.00


instalments starting the

13th

month from the



Total 201,220.40

* - Details of delayed repayment of loans:

Nature of loan Principal amount (` in

lakhs)






Period 2011

F-237


outstanding (`

in lakhs)


Templeton Mutual Fund 21,984.79 11.75% per annum June 15, 2011

ICICI Prudential Fund 9,943.51 11.15% per annum April 20, 2011

Templeton Mutual Fund 9,422.16 11.75% per annum October 12, 2011

Yes Bank Limited 11,619.63 11.75% per annum November 25, 2011

BNP Paribas Mutual Fund

4,872.31 12.00% per annum June 20, 2011

Allahabad Bank

3,333.33

10.25% per annum ` 1,666.67 Due on

March 31, 2012. `

1,666.67 Due on

March 31, 2013 Exim Bank

4,666.68

10.25% per annum ` 2,333.34 Due on

March 31, 2012. `

2,333.34 Due on

March 31, 2013 Jammu & Kashmir Bank

4,666.68

10.25% per annum ` 2,333.34 Due on

March 31, 2012. `

2,333.34 Due on

March 31, 2013 Syndicate Bank

4,666.68

10.25% per annum ` 2,333.34 Due on

March 31, 2012. `

2,333.34 Due on

March 31, 2013 Union Bank of India

4,000.00

10.25% per annum ` 2,000.00 Due on

March 31, 2012. `

2,000.00 Due on

March 31, 2013 Vijaya Bank

5,333.33

10.25% per annum ` 2,666.67 Due on

March 31, 2012. `

2,666.67 Due on

March 31, 2013 Syndicate Bank

6,250.00

12.00% per annum ` 1,250.00 - 8 equal


started from September

17, 2010 Union Bank of India

6,000.00

13.00% per annum ` 400.00 - 20 equal


starting from March

31, 2012 Syndicate Bank

15,000.00

12.00% per annum ` 937.50 - 16 equal


starting from

September 14, 2011 Canara Bank 12,500.00 11.50% per annum March 28, 2012

7,500.00 11.50% per annum May 15, 2012

Syndicate Bank 10,000.00 9.00% per annum May 27, 2011

Union Bank of India 10,000.00 10.50% per annum May 23, 2011

Yes Bank Limited 3,500.00 12.50% per annum May 27, 2011

DBS Bank Limited 15,000.00 11.40% per annum January 24, 2012

Buyers Credit 3,283.90

Libor Linked –

Various

Various Dates



7.00% per annum Repayable on demand

F-238


outstanding (`

in lakhs)



Limited 15,000.00



Axis Bank (cash credit) 1,959.47 12.75% per annum Repayable on demand

Total 191,288.00

Period 2010


outstanding

(` in lakhs)


LIC MF Savings Plus fund 7,450.18 6.60% per annum May 10, 2010

LIC MF Income Plus 9,832.06 5.50% per annum July 26, 2010

LIC MF Floating Rate 983.21 5.50% per annum July 26, 2010

LIC MF Savings Plus Fund 9,808.90 5.50% per annum August 11, 2010

J M Financial Mutual Fund 2,477.40 6.30% per annum May 25, 2010

J M Financial Mutual Fund 1,486.43 6.30% per annum May 25, 2010


LIC MF Savings Plus Fund 9,599.87 6.25% per annum December 3, 2010

IFCI Limited 2,466.68 7.75% per annum June 4, 2010

LIC MF Floating Rate 4,744.82 7.25% per annum December 29, 2010

LIC MF Savings Plus 4,744.53 7.25% per annum December 29, 2010


Allahabad Bank

5,000.00

10.75% per annum ` 1,666.67 Due on

March 31, 2011. `

1,666.67 Due on

March 31, 2012 `

1,666.67 Due on

March 31, 2013

Exim Bank

7,000.00

10.75% per annum ` 2,333.34 Due on

March 31, 2011. `

2,333.34 Due on

March 31, 2012 `

2,333.34 Due on

March 31, 2013

Jammu & Kashmir Bank

7,000.00

10.75% per annum ` 2,333.34 Due on

March 31, 2011. `

2,333.34 Due on

March 31, 2012 `

2,333.34 Due on

March 31, 2013

Syndicate Bank

7,000.00

10.75% per annum ` 2,333.34 Due on

March 31, 2011. `

2,333.34 Due on

March 31, 2012 `

2,333.34 Due on

March 31, 2013

Union Bank of India

6,000.00

10.75% per annum ` 2,000.00 Due on

March 31, 2011. `

2,000.00 Due on

March 31, 2012 `

2,000.00 Due on

March 31, 2013

F-239


outstanding

(` in lakhs)


Vijaya Bank

8,000.00

10.75% per annum ` 2,666.67 Due on

March 31, 2011. `

2,666.67 Due on

March 31, 2012 `

2,666.67 Due on

March 31, 2013

Syndicate Bank

10,000.00

10.00% per annum ` 1250.00 - 8 equal


starting from

September 17, 2010 Union Bank of India

3,500.00

11.00% per annum ` 400 - 20 equal


starting from March

31, 2012 Allahabad Bank 10,000.00 7.75% per annum September 24, 2010

Syndicate Bank 10,000.00 7.50% per annum June 22, 2010

Union Bank of India 10,000.00 7.00% per annum June 11, 2010

Bank of Baroda 10,000.00 7.75% per annum July 10, 2010

Buyers Credit 1,392.60

Libor Linked –

Various

Various Dates

Zero Coupon FCCB (Refer note 8 of

Annexure XV) 15,224.30 - January 25, 2011



7% per annum Repayable on demand


Total 183,497.50

Period 2009


outstanding

(` in lakhs)


Yes Bank Limited 14,886.41 9.75% per annum April 30, 2009

IDBI Limited 2,457.18 10.00 % per annum June 4, 2009

SIDBI 491.44 10.00 % per annum June 4, 2009

Canara Bank 2,456.18 10.25 % per annum June 4, 2009

IFCI 4,893.69 10.20 % per annum June 18, 2009

LIC MF Floating Rate Fund 4,767.92 10.75 % per annum September 14, 2009

LIC MF Income Plus Fund 4,767.92 10.75 % per annum September 14, 2009

LIC MF Liquid Fund 4,767.92 10.75 % per annum September 14, 2009

LIC MF Savings Plus Fund 4,767.92 10.75% per annum September 14, 2009

LIC MF Special Unit Scheme 4,767.92 10.75% per annum September 14, 2009

Allahabad Bank – Secured loan 5,000.00 10.75% per annum ` 1,666.67 Due on

March 31, 2011. `

1,666.67 Due on

March 31, 2012 `

1,666.67 Due on

March 31, 2013

F-240


outstanding

(` in lakhs)


Exim Bank 7,000.00 10.75% per annum ` 2,333.34 Due on

March 31, 2011. `

2,333.34 Due on

March 31, 2012 `

2,333.34 Due on

March 31, 2013

Jammu & Kashmir Bank 7,000.00 10.75% per annum ` 2,333.34 Due on

March 31, 2011. `

2,333.34 Due on

March 31, 2012 `

2,333.34 Due on

March 31, 2013

Syndicate Bank – Secured loan 7,000.00

10.75% per annum ` 2,333.34 Due on

March 31, 2011. `

2,333.34 Due on

March 31, 2012 `

2,333.34 Due on

March 31, 2013

Union Bank of India 6,000.00 10.75% per annum ` 2,000.00 Due on

March 31, 2011. `

2,000.00 Due on

March 31, 2012 `

2,000.00 Due on

March 31, 2013

Vijaya Bank 8,000.00 10.75% per annum ` 2,666.67 Due on

March 31, 2011. `

2,666.67 Due on

March 31, 2012 `

2,666.67 Due on

March 31, 2013

Syndicate Bank – Unsecured loan 10,000.00 13.50% per annum December 31, 2009

Allahabad Bank – Unsecured loan 10,000.00 13.50% per annum January 8, 2010

Buyers Credit 926.80 Libor Linked –

Various

Various Dates


Annexure XV)

14,230.00 - January 25, 2011

Inter-corporate deposit - Reliance

MediaWorks Theatres Limited

245.00 7.00% per annum Repayable on demand


Total 124,463.50

Period 2008


outstanding

(` in lakhs)


UTI Mutual Funds - liquid cash plan 1,973.16 10.25% per annum May 20, 2008

F-241


outstanding

(` in lakhs)


ABN Amro Money Plus Fund 4,932.89 10.25% per annum May 20, 2008

Lotus India Liquid Fund# 1,973.16 10.25% per annum May 20, 2008

Birla Sunlife Interval Income Fund 5,297.62 10% per annum August 20, 2008

Kotak Quarterly Interval Plan - Series 6 2,408.01 10% per annum August 20, 2008

Allahabad Bank 1,965.13 10.20 % per annum June 4, 2008

Birla Cash Plus 4,421.54 10.20 % per annum June 4, 2008

United Bank Of India 3,438.97 10.20 % per annum June 4, 2008

UTI Spread Fund 2,456.41 10.20% per annum June 4, 2008

Saraswat Co-op Bank Ltd. 982.42 10.28% per annum June 4, 2008

SBI Life Insurance Co. Ltd. 2,456.04 10.28% per annum June 4, 2008

Tata MF - Tata Fixed Horizon Fund 3,928.19 10.50% per annum June 4, 2008

ABN Amro Flexible Short Term Plan - Series

B

2,455.16

10.50% per annum June 4, 2008

Rank Investments Private Limited 2,500.00 10.75% per annum ` 833.34 Due on March

31, 2011. `

833.34 Due on March

31, 2012 `

833.32 Due on March

31, 2013

Barclays Bank Plc 37,500.00 10.75% per annum ` 12,500.00 Due on

March 31, 2011. `

12,500.00 Due on

March 31, 2012 `

12,500.00 Due on

March 31, 2013

ICICI (car loan) 0.40 Various rates As per schedule


Annexure XV)

13,099.90 - January 25, 2011

Inter Corporate Deposit – Reliance Capital

Limited

2,046.30 12.00% per annum Repayable on demand


Total 94,128.90

Commercial Paper:

Details of Terms of Discount rate and repayment schedule of Commercial papers are set out below:

Period 2011


outstanding


Schedule

F-242


outstanding


Schedule

Templeton MF (4,500 commercial paper of face value `

500,000 each dated December 28, 2010 aggregating to `

22,500 lakhs)

21,984.79 Issued at `

21,339.08 lakhs,

discount rate

11.75 % per

annum

June 15,

2011

ICICI Prudential Mutual Fund (2,000 commercial paper

of face value ` 500,000 each dated January 20, 2011



9,732.42 lakhs,

discount rate

11.15 % per

annum

April 20,

2011

Templeton MF (2,000 commercial paper of face value `

500,000 each dated February 3, 2011 aggregating to `

10,000 lakhs)


9,252.39 lakhs,

discount rate

11.75 % per

annum

October 12,

2011

Yes Bank Ltd (2500 commercial paper of face value `


12,500 lakhs)

11,619.63 Issued at `

11,490.20 lakhs,

discount rate

11.75 % per

annum

November

25, 2011

BNP Paribas Mutual Fund (1000 commercial paper of




4,854.75 lakhs,

discount rate

12.00 % per

annum

June 20,

2011

Total 57,842.40

Period 2010


outstanding


Schedule


value ` 500,000 each dated June 3, 2009 aggregating to `

7,500 lakhs)


7,064.41 lakhs,

discount rate 6.60

% per annum

May 10, 2010


value ` 500,000 each dated October 28, 2009 aggregating

to ` 10,000 lakhs)


9607.67 lakhs,

discount rate 5.50

% per annum

July 26, 2010


value ` 500,000 each dated October 28, 2009 aggregating

to ` 1,000 lakhs)

983.21 Issued at ` 960.77

lakhs, discount

rate 5.50 % per

annum

July 26, 2010


value ` 500,000 each dated November 13, 2009



9607.67 lakhs,

discount rate 5.50

% per annum

August 11,

2010





2424.26 lakhs,

discount rate 6.30

% per annum

May 25, 2010





1455.78 lakhs,

discount rate 6.30

% per annum

May 25, 2010

F-243


outstanding


Schedule


value ` 500,000 each dated January 29, 2010 aggregating

to ` 10,000 lakhs)


9499.02 lakhs,

discount rate 6.25

% per annum

December 3,

2010


value ` 500,000 each dated January 29, 2010 aggregating

to ` 10,000 lakhs)


9499.02 lakhs,

discount rate 6.25

% per annum

December 3,

2010

IFCI Ltd. (2,000 commercial paper of face value `

500,000 each dated January 29, 2010 aggregating to `

10,000 lakhs)


2452.10 lakhs,

discount rate 7.75

% per annum

June 4, 2010


value ` 500,000 each dated March 9, 2010 aggregating to

` 5,000 lakhs)


4723.24 lakhs,

discount rate 7.25

% per annum

December 29,

2010

LIC MF Savings Plus (1000 commercial paper of face


to ` 5,000 lakhs)


4728.56 lakhs,

discount rate 7.25

% per annum

December 29,

2010

LIC MF Income Plus (2000 commercial paper of face


to ` 10,000 lakhs)


9457.12 lakhs,

discount rate 7.25

% per annum

December 29,

2010

Total 72,683.00

Period 2009


outstanding


Schedule

Yes Bank Limited (3,000 commercial paper of face



14,886.41 Issued at ` 14,663.14

lakhs, discount rate

9.75 % per annum

April 30,

2009

IDBI Limited (500 commercial paper of face value `

500,000 each dated March 9, 2009 aggregating to `

2500 lakhs)

2,457.18 Issued at ` 2,441.80


10.00 % per annum

June 4, 2009

SIDBI (100 commercial paper of face value ` 500,000

each dated March 9, 2009 aggregating to ` 500 lakhs)

491.44 Issued at ` 488.36


10.00 % per annum

June 4, 2009

Canara Bank ( 500 commercial paper of face value `


2,500 lakhs)

2,456.18 Issued at ` 2,438.37


10.25% per annum

June 4, 2009

F-244


outstanding


Schedule

IFCI (1,000 commercial paper of face value ` 500,000

each dated March 20, 2009 aggregating to ` 5,000

lakhs)

4,893.69 Issued at ` 4,877.33


10.20% per annum

June 18,

2009

LIC MF Floating Rate Fund (1,000 commercial paper



4,767.92 Issued at ` 4746.95


10.75% per annum

September

14, 2009

LIC MF Income Plus Fund (1,000 commercial paper



4,767.92 Issued at ` 4746.95


10.75% per annum

September

14, 2009

LIC MF Liquid Fund (1,000 commercial paper of face



4,767.92 Issued at ` 4,746.95


10.75% per annum

September

14, 2009

LIC MF Savings Plus Fund (1,000 commercial paper



4,767.92 Issued at ` 4,746.95


10.75% per annum

September

14, 2009

LIC MF Special Unit Scheme (1,000 commercial

paper of face value ` 500,000 each dated March 17,


4,767.92 Issued at ` 4,746.95


10.75% per annum

September

14, 2009

Total 49,024.50

Period 2008


outstanding


Schedule

UTI Mutual Funds - liquid cash plan (400 commercial

paper of face value ` 500,000 each dated February 20,


1,973.16 Issued at ` 1,950.70


10.25% per annum

May 20,

2008

ABN Amro Money Plus Fund (1,000 commercial

paper of face value ` 500,000 each dated February 20,


4,932.89 Issued at ` 4,876.74


10.25 % per annum

May 20,

2008

Religare Mutual Fund* (400 commercial paper of face



1,973.16 Issued at ` 1,950.70


10.25 % per annum

May 20,

2008

Birla Sunlife Interval Income Fund Quarterly Plan

Series II (1,100 commercial paper of face value `


5,500 lakhs)

5,297.62 Issued at ` 5,238.78


10.00% per annum

August 20,

2008

Kotak Quarterly Interval Plan - Series 6 (500

commercial paper of face value ` 500,000 each dated

February 20, 2008 aggregating to ` 2,500 lakhs)

2,408.01 Issued at ` 2,381.26


9.20% per annum

August 20,

2008

F-245


outstanding


Schedule

Allahabad Bank (400 commercial paper of face value `


2,000 lakhs)

1,965.13 Issued at ` 1,949.87


10.20% per annum

June 4,

2008

Birla Cash Plus (900 commercial paper of face value `


4,500 lakhs)

4,421.54 Issued at ` 4,387.21


10.20% per annum

June 4,

2008

United Bank Of India (700 commercial paper of face


to ` 3,500 lakhs)

3,438.97 Issued at ` 3,412.27


10.20% per annum

June 4,

2008

UTI Spread Fund (500 commercial paper of face value

` 500,000 each dated March 4, 2008 aggregating to `

2,500 lakhs)

2,456.41 Issued at ` 2,437.34


10.20% per annum

June 4,

2008

Saraswat Co-op Bank Ltd. (200 commercial paper of



982.42 Issued at ` 975.55


10.28% per annum

June 4,

2008

SBI Life Insurance Co. Ltd. (500 commercial paper of



2,456.04 Issued at ` 2,438.87


10.28% per annum

June 4,

2008

Tata MF - Tata Fixed Horizon Fund (800 commercial

paper of face value ` 500,000 each dated March 7,


3,928.19 Issued at ` 3,900.14


10.50% per annum

June 4,

2008

ABN Amro Flexible Short Term Plan - Series B (500

commercial paper of face value ` 500,000 each dated

March 7, 2008 aggregating to ` 2,500 lakhs)

2,455.16 Issued at ` 2,437.59


10.50% per annum

June 4,

2008

Total 38,688.70

* Religare Mutual Fund is formerly known as Lotus India Mutual Fund

Notes:

Note 1: Secured by first pari passu charge on all fixed assets of the company.

Note 2: Cash credit is secured by deferred payment note, hypothecation of book-debts, moveable fixed assets

and stocks of chemicals.

Note 3: Secured against the motor cars acquired on Equitable Monthly Instalment (EMI) System.

Note 4: Secured by pari passu first charge on the inventories and book debts of the Company.

Note 5: Secured by pari passu Second charge of all the movable fixed assets and pari passu First charge on

current assets of the Company.

F-246

Note 6: Secured by pari passu first charge on current assets of the Company including inventories, book debts

and loans and advances.

Note 7: Secured by pari passu second charge on current assets and the moveable fixed assets of the Company.

Note 8: As per the terms of the issue document, the bonds were redeemable, in whole but not in part at the

option of the Company at any time on or after January 25, 2009 and on or prior to January 26, 2011 subject to

certain conditions at 121.679 per cent of the principal amount. During Period 2011 the balance outstanding

bonds were redeemed.

Note 9: These loans have been guaranteed by Reliance Capital Limited.

Note 10: Secured by first pari passu charge on the all assets of the Company and its wholly owned Indian

subsidiaries, along with corporate guarantee by Reliance Capital Limited.

Note 11: Secured by second charge on current assets and fixed assets (including moveable and immovable) of

the Company.

Note 12: Secured by first pari passu charge on the current assets and moveable fixed assets of the Company.

F-247

Annexure XVI


Statement of capitalisation as at March 31, 2013

Pre-issue Post-issue

As at

Particulars March 31, 2013 As Adjusted for Issue

Borrowings:

Short term borrowings 144,714.00


maturities) 77,687.50

Total borrowings 222,401.50

Shareholder's Fund:

Share capital (including Preference Shares) 2,453.81

Reserves and surplus (net) (excluding revaluation reserves) (49,468.47)

Less: Miscellaneous expenditures not written /off -

Total shareholder's fund (47,014.66) -

Long term debt / Shareholder‟s fund NA

Notes : -

a) Short term borrowing represents amount repayable within one year from March 31, 2013

b) The figures disclosed above are based on the summary statement of assets and liabilities, as restated, of the

Company as at March 31, 2013

c) The corresponding post issue figures are not determinable at this stage pending the completion of the Rights

issue process and hence have not been furnished.

F-248

Annexure XVII


Statement of the dividend paid / proposed

(` in lakhs)

Class of shares

Face

value of

share in `

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

Equity shares

Equity share capital as

at period end 5

2,306.31

2,306.31

2,306.31

2,306.31 2,306.31 2,306.31

Total 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31 2,306.31

Final dividend

Rate of the final

dividend (excluding

dividend distribution

tax) - - - - - 50.00%

Aggregating amount of

final dividend - - - - - 1,153.15

F-249

Annexure XVIII


Statement of related party disclosures, as restated

Parties where control exists

Holding company

Reliance Capital Limited (up to November 30, 2007)


Subsidiary companies

Reliance MediaWorks (UK) Limited (from May 19, 2006)

Reliance MediaWorks (USA) Inc. (from May 17, 2006)

Reliance MediaWorks (Netherlands) B.V. (from February 8, 2008)

Reliance MediaWorks (Mauritius) Limited (from March 20, 2008)

Adlabs Multiplexes and Theatres Limited (merged with the Company with effect from April 1, 2008)

Reliance MediaWorks Theatres Limited

Big Synergy Media Limited (from January 12, 2007)

Adlabs Multiplex Limited (from December 20, 2007 and merged with the Company with effect from

April 1, 2008)

Rave Entertainment Private Limited (from May 31, 2007 and merged with the Company with effect

from April 1, 2008)

Reliance Broadcast Network Limited (ceased to be a subsidiary with effect from April 1, 2008 pursuant

to demerger of Radio business)

Sri Ramakrishna Theatre Limited (from January 11, 2008 upto May 27, 2011)

Rave Entertainment and Food Nepal Private Limited (from August 24, 2008 upto April 30, 2012)

Reliance MediaWorks Entertainment Services Limited (from May 4, 2009)

Katch 22 Entertainment Private Limited (from April 23, 2007 and merged with the Company with

effect from April 1, 2006 during Period 2008)

Reliance Media Consultant Private Limited (from February 16, 2012)

Reliance MediaVentures Private Limited (from June 19, 2012)

Step down subsidiary companies

Big Cinemas Entertainment LLC (from December 19, 2007)

Big Cinemas Entertainment (DE) LLC (from January 24, 2008)

Big Cinemas Laurel LLC (from November 28, 2007)

Big Cinemas Falls Church LLC (from November 8, 2007)

Big Cinemas Norwalk LLC (from March 14, 2008)

Big Cinemas Galaxy LLC (from December 21, 2007)

Big Cinemas Sahil LLC (from November 13, 2007)

Big Cinemas SAR LLC (from November 8, 2007)

Phoenix Big Cinemas Management LLC (from February 25, 2008)

Big Cinemas Phoenix LLC (from February 22, 2008)

Big Cinemas Exhibitions LLC (from March 6, 2008)

Big Cinemas IMC LLC (from January 19, 2008)

Reliance Lowry Digital Imaging Services Inc. (from September 1, 2008)

Reliance Media Works VFX Inc. (from January 25, 2010)

Big Pictures USA Inc. (from March 30, 2009)

Reliance Media and Marketing Communications LLC (from May 13, 2009)

Adlabs Digital Media LLC (from March 27, 2009 till April 15, 2010, the date of dissolution)

Adlabs Forum LLC (from March 6, 2008 till February 8, 2010, the date of dissolution)

Adlabs Heritage LLC (from March 7, 200 till May 14, 2010, the date of dissolution)

Adlabs GlobalStar LLC (from September 23, 2009 till February 9, 2010, the date of dissolution)

F-250

Big Cinemas Union LLC (from February 8, 2008 till February 19, 2010, the date of dissolution)

Reliance MediaWorks (Malaysia) Sdn. Bhd. (from April 18, 2008 till September 21, 2012)

Reliance MediaWorks Big Cinemas Sdn. Bhd. (from November 1, 2008 till September 21, 2012)

Other related parties with whom transactions have taken place during the period

(a) Significant shareholders, Key managerial personnel and their relatives

Manmohan Shetty (up to November 30, 2007)

Pooja Shetty (up to November 30, 2007)

Kirti Desai – Manager appointed u/s 269 of the Companies Act, 1956 (from January 30, 2008 till May

15, 2011)

Madhulika Singh – Manager appointed u/s 269 of the Companies Act, 1956 (from May 28, 2011 till

June 30, 2011)

Ashish Agarwal – Manager appointed u/s 269 of the Companies Act, 1956 (from July 1, 2011)


(b) Enterprises over which company has significant influence / associates

HPE / Adlabs LP.

Sultan Production Private Limited (upto March 31, 2009)

(c) Joint ventures

Cineplex Private Limited (upto June 3, 2011)

Swanston Multiplex Cinemas Private Limited

Divya Shakti Marketing Private Limited

Adlabs Multiplexes and Theatres Limited (upto December 19, 2007)

(d) Enterprises over which Key managerial personnel have significant influence

Dharma Production Private Limited (up to November 30, 2007)

Idream Productions Private Limited (up to November 30, 2007)

Whistling Woods International Private Limited (up to November 30, 2007)

Reliance Communication Infrastructure Limited (up to November 30, 2007)

Reliance Capital Asset Management Limited (up to November 30, 2007)

Reliance Web Stores Limited (up to November 30, 2007)

Reliance General Insurance Company Limited (up to November 30, 2007)

HPE / Adlabs LP. (up to November 30, 2007)

Nature of

transactions

Name of related

party

Holding Company

Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Reliance Land

Private Limited - - - - - 515.00

Dividend

Paid

Reliance Capital

Limited - - - - - 31.38

Nature of

transactions

Name of related

party


Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Receiving of

Services

Reliance

MediaWorks

Theatres Limited - - - 0.60 0.60 -

Adlabs Multiplex

Limited - - - - - 10.90

Reliance

MediaWorks

Entertainment

Service Limited 5.60 30.20 1,763.30 3.00 - -

F-251

Nature of

transactions

Name of related

party


Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Rave

Entertainment


Reimburseme

nt of

expenses

Reliance

MediaWorks (UK)

Limited - - - (0.90) (70.20) 242.00

Reliance

MediaWorks

(USA) Inc. - (88.80) (215.70) (0.80) (66.10) -

Reliance

MediaWorks

Entertainment

Services Limited - 4.70 0.30 38.90 - -

Sri Ramakrishna

Theatre Limited - - 1.70 - - -

Reliance

MediaWorks

(Mauritius)

Limited - 0.01 - - - -

Big Synergy Media

Limited - - - 58.50 86.70 81.80

Rendering of

services

Reliance

MediaWorks

Theatres Limited 3.40 10.00 6.60 6.00 6.00 -

Reliance

MediaWorks (UK)

Limited - - 0.50 3.80 425.80 36.40

Reliance

MediaWorks

(USA) Inc. - - - 4.00 740.30 89.20

Adlabs Multiplex

Limited - - - - - 3.80

Reliance

MediaWorks

Entertainment

Services Limited 3.10 85.50 6.30 0.60 - -

Reliance Lowry

Digital Imaging

Services Inc. 17.30 - - - - -

Reliance

MediaWorks

(Netherlands) B.V - - - 1.80 - -

Big Synergy Media

Limited 84.20 298.00 304.10 312.10 76.00 70.50

Interest

Income

Reliance Broadcast

Network Limited - - - - - 130.30

Interest

expenses

Reliance

MediaWorks

Theatres Limited 18.70 52.30 18.40 14.40 9.00 -

Dividend

income

Big Synergy Media

Limited - - - 85.30 - -

Investment /

Purchase of

shares

Reliance

MediaWorks

(Mauritius)

Limited - - - - - 0.10

Reliance

MediaWorks

(Netherlands) B.

V. - - - - - 10.40

Rave

Entertainment


F-252

Nature of

transactions

Name of related

party


Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Reliance Broadcast

Network Limited - - - - - 1,005.00

Adlabs Multiplex

Limited - - - - - 1,704.50

Reliance

MediaWorks

Entertainment

Services Limited - - - 4.00 - -

Reliance Media

Consultant Private

Limited - 1.00 - - - -

Reliance

MediaVentures

Private Limited - 1.00 - - - -

Conversion

of loan to

equity shares

Reliance

MediaWorks

Entertainment

Services Limited - - 2,000.00 - - -

Subscription

of preference

shares

Reliance

MediaWorks

Entertainment

Services Limited - 12,000.00 - - - -

Loan given

Reliance

MediaWorks

(Mauritius)

Limited - - 326.40 1,094.30 11,527.50 -

Reliance

MediaWorks (UK)

Limited 992.20 4,806.60 898.40 2,375.90 318.40 -

Reliance

MediaWorks

(USA) Inc. 3,890.70 2,918.80 7.090.00 11,564.60 9,381.70 865.80

Reliance

MediaWorks

(Netherlands) B.

V. - - 44.90 67.00 - 444.20

Adlabs Multiplexes

and Theatres

Limited - - - - - 436.50

Rave

Entertainment

Private Limited - - - - - 3,246.40

Reliance Broadcast


Adlabs Multiplex

Limited - - - - - 24.80

Reliance

MediaWorks

Entertainment

Services Limited 2,841.30 6,901.30 6,814.30 6,277.50 - -

Rave

Entertainment and

Food Nepal Private

Limited - - 432.00 - - -

Reliance Media

Consultant Private

Limited 0.50

Reliance

MediaVentures

Private Limited 0.50

Big Synergy Media

Limited - - - - - 155.00

F-253

Nature of

transactions

Name of related

party


Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Loan

received back

Reliance

MediaWorks

Theatres Limited - - - - - 310.90

Reliance

MediaWorks

Entertainment

Services Limited

$$ - 12,000.00 - - - -

Reliance

MediaWorks

(Mauritius)

Limited - 149.80 - - - -

Reliance

MediaWorks

(USA) Inc. - - - - 5,757.60 -

Reliance

MediaWorks

(Netherlands) B.

V. - - - - 406.70 -

Reliance Broadcast


Adlabs Multiplex

Limited - - - - - 42.20

Big Synergy Media

Limited - - - - - 155.00

Rave

Entertainment and

Food Nepal Private

Limited - 432.00 - - - -

Loans taken

Reliance

MediaWorks

Theatres Limited - 505.00 -

300.00 245.00

-

Loans repaid

Reliance

MediaWorks

Theatres Limited

425.00 200.00 100.00 200.00

- -

Fixed assets

purchased

Reliance

MediaWorks

Entertainment

Services Limited

- 3.80 103.20

- - -

Fixed assets

sold

Reliance

MediaWorks

Entertainment

Services Limited - - 9.70 - - -

Guarantees

given

Reliance

MediaWorks

(USA) Inc.

- 1,056.00 2,832.10 810.50 11,258.40

-

Reliance

MediaWorks

(Netherlands) B.V. - - - -

33.70

-

Reliance

MediaWorks

Entertainment

Services Limited - 2,640.00 -

7,500.00

- -

Rave

Entertainment and

Food Nepal Private

Limited - - -

283.00

- -

Guarantees

cancelled

Rave

Entertainment and - - 100.00 - - -

F-254

Nature of

transactions

Name of related

party


Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Food Nepal Private

Limited

Reliance

MediaWorks

(USA) Inc. 3,293.80 - 9,906.60 - - -

Guarantees

outstanding

Reliance

MediaWorks

(USA) Inc. 6,176.00 9,260.20 7,054.00 14,094.50 11,258.4 -

Reliance

MediaWorks

(Netherlands) B.V.

35.00 34.00 32.00 30.30 33.70 -

Reliance

MediaWorks

Entertainment


Rave

Entertainment and

Food Nepal Private

Limited

- - 185.90 283.00 - -

Net

outstanding

balances as at

period end

Reliance

MediaWorks

(Mauritius)

Limited @ 14,186.50 13,939.90 12,135.50 11,708.20 12,008.90 -

Reliance

MediaWorks

Theatres Limited (143.90) (555.40) (238.60) (333.10) (235.10) 47.90

Reliance

MediaWorks (UK)

Limited 10,047.50 9,300.60 3,745.30 2,427.60 406.10 238.10

Reliance

MediaWorks

(USA) Inc. 34,358.30 29,431.80 22,814.70 15,451.60 5,572.30 865.80

Reliance

MediaWorks

(Netherlands) B.

V. 164.10 159.00 149.90 96.50 39.90 444.20

Adlabs Multiplexes

and Theatres

Limited - - - - 436.50

Rave

Entertainment

Private Limited - - - - 3,246.40

Reliance Broadcast

Network Limited - - - - 2,349.00

Adlabs Multiplex

Limited - - - - 72.80

Reliance Media

Consultant Private

Limited 0.50

Reliance

MediaVentures

Private Limited 0.50

Big Synergy Media

Limited 171.10 (74.20) (303.50) (477.20) 288.60 207.30

Reliance

MediaWorks

Entertainment


Reliance Lowry 17.30 - - - - -

F-255

Nature of

transactions

Name of related

party


Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Digital Imaging

Services Inc.

Sri Ramakrishna

Theatre Limited - - 1.70 - - -

Rave

Entertainment and

Food Nepal Private

Limited - - 432.00 - - -

@ - Amount provided for loans given to subsidiary - ` 6,921.90 lakhs

$$ - Amounts have been apportioned from loans towards subscription of preference shares of the

Subsidiary

Nature of

transactions

Name of related

party

Significant shareholders, key management personnel and their

relatives

Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Dividend

paid Manmohan Shetty -

-

- - - 57.30

Managerial

remuneration

Ashish Agarwal 11.80 29.40

Madhulika Singh - 0.80

Kirti Desai - 5.60 10.80 7.80 7.80 1.40

Manmohan Shetty - - - - - 116.10

Pooja Shetty - - - - - 4.90

Loans given Kirti Desai - - - 5.00 - -

Loans repaid Kirti Desai - - - 5.00 - -

Nature of

transactions

Name of related

party


associates

Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Reimbursement

of expenses

Sultan Production

Private Limited - - - - (107.70) -

Interest Income HPE / Adlabs LP - - - - - 43.70

Repayment of

principal by

Limited

Liability

Partnership HPE / Adlabs LP - - - 241.70 - -

Loan given

Sultan Production

Private Limited - - - - 548.30 719.20

Outstanding

Balances as at

year / period

end

Sultan Production

Private Limited - - - - 1,159.70 719.20

Nature of

transactions

Name of related

party

Joint ventures

Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Receiving of

Services

Cineplex Private

Limited - - - 9.70 17.60 17.00

Divya Shakti

Marketing Private 13.70 - - 8.40 14.60 18.00

F-256

Nature of

transactions

Name of related

party

Joint ventures

Period

March

2013

Period

2012

Period

2011

Period

2010 Period

2009

Period

2008

Limited

Swanston Multiplex

Cinemas Private

Limited - - - 1.40 - -

Adlabs Multiplex

Limited - - - - - 23.50

Reimbursement

of expenses

Cineplex Private

Limited - 2.90 0.50 1.50 -

Swanston Multiplex

Cinemas Private

Limited (2.80) 7.00 - - - -

Divya Shakti

Marketing Private

Limited

2.40

- - 0.50 1.30 -

Rendering of

services

Cineplex Private

Limited - 2.80 16.50 16.50 16.90 12.60

Adlabs Multiplex

Limited - - - - - 6.50

Interest income

Divya Shakti

Marketing Private

Limited 22.90 20.20 13.50 17.10 29.03 -

Cineplex Private

Limited - - 16.50 50.70 13.34 -

Dividend Paid

Swanston Multiplex

Cinemas Private

Limited - - - - (75.00) (55.00)

Investment /

Purchase of

shares

Swanston Multiplex

Cinemas Private

Limited - 125.00 - - - -

Loan given

Advance

towards share

application

money

Swanston Multiplex

Private Limited - - - 125.00 -

-

Sale of fixed

assets

Divya Shakti

Marketing Private

Limited 6.60 - - - - -

Loan Received

back

Cineplex Private

Limited - 133.40 101.50 104.30 128.10 30.00

Outstanding

balances as at

year end

Cineplex Private

Limited

- - 133.40

256.90 342.20 489.20

Divya Shakti

Marketing Private

Limited

246.50 241.70 201.30

194.50 223.60 222.40

Swanston Multiplex

Cinemas Private

Limited 0.80 0.80 125.80 125.80 - -

* - Amount written off – Period March 2013 - ` 22.90 lakhs, Period 2012 - ` 20.20 lakhs, Period 2011 - ` 13.50

lakhs and Period 2010: ` 30.40 lakhs.

Note:


20%. This investment was made by the Company with the intention of investment in the movie

"Sultan: The warrior". However, during Period 2010, the Company had issued a letter of

termination demanding refund for the moneys paid by the Company and filed a recovery suit

against Orcher Studios, as per a shareholders‟ agreement signed by the Company which has been

agreed to by Orcher Studios. Since, the Company has intention of selling the shares; the Company

F-257

has decided not to consider Sultan as an associate under AS-18 Related Party Disclosures and AS-

23 'Accounting for Associates in Consolidated Financial Statements. The outstanding balance of

Sultan Production Private Limited was ` 1,158.80 lakhs as at March 31, 2010, of which the

Company had considered ` 120.00 lakhs as doubtful in the previous year and provided for the

same.

During Period 2011, the Company has received all the money receivable as per the shareholders

agreement and sold the shares.

2. The Company has issued 11% 3,500 Secured Redeemable Non Convertible Debentures

(Debentures) amounting ` 35,000 lakhs as of September 30, 2012 having face value of ` 10 lakhs

each on a private placement basis. The Debentures are secured by first pari passu charge on all

assets of the company and its Indian subsidiaries.

3. Swanston Multiplex Cinemas Private Limited, a Joint Venture of the Company operated a

multiplex cinema. The lease of the multiplex cinema has been terminated by the landlord.

Considering the termination of the lease, the Company has decided to provide for diminution in the

value of investments amounting to ` 825.10 lakhs.

F-258

Annexure XIX


Statement of tax shelter

(` in lakhs)

Sr.

No. Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

1 (Loss) / profit

before tax, as

restated (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) 2,549.26

Adjustments for:

Modified Scheme

of Amalgamation

and Arrangement - - - - - (6,705.80)

Amalgamation of

Katch 22 - - - - - (2,000.00)

2 Adjusted (Loss) /

profit before tax, as

restated (27,593.15) (70,356.34) (24,348.00) (8,797.00) (4,920.31) (6,156.54)

3a Income tax rates

including surcharge

and education cess 32.45% 32.45% 33.22% 33.99% 33.99% 33.99%

3b Minimum alternate

tax rate 20.01% 20.01% 19.93% 17.00% 11.33% 11.33%

4 Tax at income tax

rates (1X3a) - - - - - -

5 Adjustments:

A Permanent

differences

i Exempt income net

of expenses 352.76 (1,611.92) (1,752.58) (2,318.83) 10.29 (3,737.17)

ii Expenditure

disallowed under

Income Tax Act,

1961 2,902.73 4,426.92 (3,076.56) 4.05 23.68 20.77

iii Adjustments for:

Composite Scheme

of Amalgamation

and Arrangement

- - - - -

Iv Scheme of

Amalgamation -

- - (7,756.55) -

5a Total permanent

differences 3,255.49 2,815.00 (4,829.14) (2,314.78) (7,722.58) (3,716.40)

B Timing differences

i Difference between

book and tax

depreciation 2,632.90 737.62 (612.45) (2,061.06) (2,115.06) (5,038.38)

ii Unrealised notional

(gain) / loss on

foreign exchange - - - (2,037.19) 416.22 1,680.78

F-259

Annexure XIX



(` in lakhs)

Sr.

No. Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

iii Arising out of

differences in

treatment of

expenses as per

Income Tax Act,

1961 and as per

books of account: -

iv (Loss) / profit on

sale of fixed assets 7.90 674.20 (2,701.14) 40.79 4.40 56.50

v Notional rent as per

Accounting

Standard 19 on

"leases" 1,149.38 4,119.80 1,229.51 506.99 250.59 301.11

vi Provision of bad

debts / advance 590.00 9,802.30 1,658.21 121.88 - -

vii Others (16.50) 194.63 366.80 (174.17) 222.84 63.39

5b Total timing

differences 4,363.68 15,528.55 (59.07) (3,602.76) (1,221.01) (2,936.60)

c Other differences

i Profit on sale of

Investments (57.50) (806.09) (423.57) (274.41) (269.17) (9.10)

ii Dividend stripping

u/s.94

- - - 11.58

5c Total other

differences (57.50) (806.09) (423.57) (274.41) (269.17) 2.48

6 Total adjustments

(5a+5b+5c) 7,561.67 17,537.46 (5,311.78) (6,191.95) (9,212.76) (6,650.52)

7 Tax savings

thereon (6X3a) 2,453.76 5,690.91 (1,764.57) (2,104.64) (3,131.42) (2,260.51)

8 Taxable (loss) /

profit as per

Income Tax Act

(2+6)

(20,031.48) (52,188.88) (29,659.78)

(14,988.95

)

(14,133.07

)

(12,807.06

)

9 Income tax thereon

(8X3a) - - - - - -

10 Short term capital

gains tax - - - - - -

11 Total income tax

- - - -

12 Taxable income as

per section 115JB

of the Income Tax

Act, 1961 (27,003.15) (60,554.04) (23,961.52) (8,882.27) (5,125.70) (8,965.66)

13 MAT thereon

(12X3b) - - - - - -

14 Total tax as per

income tax return

(higher - - - - -

F-260

Annexure XIX



(` in lakhs)

Sr.

No. Particulars

Period

March

2013

Period

2012

Period

2011

Period

2010

Period

2009

Period

2008

of 9 and 13) -

14 Deferred tax charge

/ (credit) - - - - (134.80) 621.40

15 Fringe benefit tax - - - - 151.50 71.49

16 Total tax as per

summary statement

of profit and loss,

as restated - - - - 16.70 692.89

Notes

1. The statement of tax shelter has been prepared based on adjusted profit/loss as per the summary

statement of profit and losses, as restated (Refer Annexure II.)

2. The above statement should be read together with Summary of significant accounting policies and

notes to summary statement, as restated (Annexure IV).

3. The figures for the six months ended March 31, 2013 are based on the provisional computation of total

income prepared by the Company for the year ended March 31, 2013 and are subject to any changes

that may be considered at the time of final filing of the return of income for the year ended March 31,

2013.

4. The figures for the eighteen month period ended September 30, 2012 are based on the tax return for the

year ended March 31, 2012 and the provisional computation of total income prepared by the Company

for the year ended March 31, 2013 and are subject to any changes that may be considered at the time of

final filing of the return of income for the year ended March 31, 2013.

5. Where the adjusted restated results before taxes are a loss, tax expense at applicable rate is taken as

Nil.

F-261

PRO FORMA FINANCIAL STATEMENT


Summary statement of assets and liabilities of the Company on a pro forma basis as at March 31, 2013.

(` in lakhs)

Particulars As at Adjustments As at

March 31,

2013

(Restated)

Transfer of

Film

Production

Services

business

Transfer

of

Theatrical

Exhibition

business

March 31,

2013

(Restated)after

adjustments

Assets

A Non-current assets

I Fixed assets

(i) Tangible assets 70,032.73 29,928.75 39,827.69 276.29

(ii) Intangible assets 645.30 421.02 158.24 66.04

(iii) Capital work-in-progress 8,865.10 5,495.81 3,369.29 -

II Non-current investments 18,040.94 - 359.32 17,681.62

III Deferred tax assets (net) - - - -

IV Long-term loans and advances 21,737.30 3,395.85 14,056.49 4,284.96

V Other non-current assets 583.90 - - 583.90

119,905.27 39,241.43 57,771.03 22,892.81

B Current assets

I Inventories 762.80 80.84 681.96 -

II Trade receivables 16,116.40 3,829.38 2,493.88 9,793.14

III Cash and bank balances 5,351.90 - - 5,351.90

IV Short-term loans and advances 63,743.50 1,225.43 665.02 148,255.79

V Other current assets 424.20 - - 424.20

86,398.80 5,135.65 3,840.86 163,825.03

Liabilities

C Non-current liabilities

I Long-term borrowings 35,137.50 - - 35,137.50

II Deferred tax liabilities (net) - - - -

III Other long-term liabilities 3,963.50 72.18 3,436.10 455.22

IV Long-term provisions 494.00 366.82 - 127.18

39,595.00 439.00 3,436.10 35,719.90

D Current liabilities

I Short-term borrowings 144,714.00 - - 144,714.00

II Trade payables 11,458.93 1,664.01 8,576.89 1,218.03

III Other current liabilities 57,466.20 1,582.52 3,887.71 51,995.97

IV Short-term provisions 84.60 - - 84.60

213,723.73 3,246.53 12,464.60 198,012.60

E Net Worth (A+B-C-D) (47,014.66)

(47,014.66)

F Represented by

i) Share capital 2,453.81

2,453.81

F-262


Summary statement of assets and liabilities of the Company on a pro forma basis as at March 31, 2013.

(` in lakhs)

Particulars As at Adjustments As at

March 31,

2013

(Restated)

Transfer of

Film

Production

Services

business

Transfer

of

Theatrical

Exhibition

business

March 31,

2013

(Restated)after

adjustments

ii) Reserves and surplus (net) (49,468.47)

(49,468.47)

G Net Worth (i+ ii) (47,014.66)

(47,014.66)

The above statement should be read together with notes to pro forma financial statements

F-263


Summary statement of profit and loss of the Company on a proforma basis for the six month period ended

March 31, 2013.

(` in lakhs)

Particulars

Period

March

2013

(Restated)

Adjustments Period

March

2013

(Restated)

after

adjustment

s

Transfer

of Film

Production

Services

business

Transfer

of

Theatrical

Exhibition

business

Revenue from operations 23,641.20 4,111.26 19,268.45 261.49

Other income 384.90 83.37 55.78 507.24

Total revenue 24,026.10 4,194.63 19,324.23 507.24

Direct operational expenses 9,547.77 937.78 8,436.41 173.58

Employee benefits expense 3,644.00 1,842.51 1,488.40 313.09

Finance costs (including loss on derivative

contracts) (net) 13,694.80 - - 13,694.80

Depreciation and impairment expense 4,078.60 1,354.59 2,664.99 59.02

Other expenses 14,971.50 1,923.58 12,676.89 371.03

Total expenses 45,936.67 6,058.46 25,266.69 14,611.52

(Loss) before tax and exceptional items

(21,910.57

) (1,863.83) (5,942.46) (14,104.28)

Exceptional items (5,682.58) - (5,682.58) -


(27,593.15

) (1,863.83) (11,625.04) (14,104.28)

Less - Provision for taxes - - - -

Net (loss) after tax

(27,593.15

) (1,863.83) (11,625.04) (14,104.28)

Period March 2013 - Six months ended March 31, 2013

The above statement should be read together with notes to pro forma financial statements

F-264

Reliance MediaWorks Limited Notes to the pro forma unaudited financial statements

for the six month period ended March 31, 2013

(Currency: Indian Rupees in Lakhs)

Background

Reliance MediaWorks Limited (‘Reliance MediaWorks’ or ‘the Company’) was incorporated in 1987 as a

Private Limited Company and is currently a Public Listed Company. The equity shares of the Company are

listed on BSE Limited and National Stock Exchange of India Limited. Reliance MediaWorks is primarily

engaged in theatrical exhibition, film production services and television / film production and distribution and

related services.

The Company’s last financial year ended on March 31, 2013 and was for a period of six months ended on that

date. The pro forma balance sheet is prepared as of March 31, 2013 and the pro forma statement of profit and

loss is for a period of six months ended on March 31, 2013.

Basis of presentation

The shareholders of the Company have approved on February 21, 2012 through postal ballot the resolution to

sell or otherwise dispose of the Company’s whole or part of undertakings pertaining to the Film & Media

Services and Exhibition business on a going concern basis to its wholly owned subsidiaries at consideration not

less than tax written down values as the board may decide and on such terms and conditions and in such manner

as may be decided by the board and the wholly owned subsidiaries.

Further, the Company executed an indicative non-binding term sheet with a private equity fund to acquire a

substantial minority stake through an investment of ` 60,500 lakhs in our Company’s film and media services

division. The investment is proposed to be made into the subsidiary of our Company, into which our film and

media services division will be transferred. No definitive agreement has been executed in respect of the

proposed transaction. The term sheet signed by the parties is valid till August 12, 2013.

The pro forma financial information of the Company assume the transfer of the film production services and

theatrical exhibition business segments of the Company to the subsidiaries of the Company at book values. For

the purpose of the transfer, it is assumed that all assets which form part of segment assets and segment liabilities

are transferred to the subsidiaries of the Company and the amount receivable as consideration on transfer is

shown as a short term loan and advance recoverable from these subsidiaries.

The pro forma financial statements assume transfer of all assets and liabilities of these businesses as on the last

day of the financial year, for the purpose of preparation of the balance sheet and the first day of the financial

year for the purpose of statement of profit and loss.

This pro forma financial information is prepared solely for information purpose and is not necessarily indicative

of the net results of operations that might have been achieved for period or dates indicated, nor is it necessarily

indicative of the future results of the Company after subsidiarisation.

F-265

STATEMENT OF CAPITALISATION POST ISSUE


Reliance MediaWorks Limited (“the Company”)

Film City Complex

Goregaon (East)

MUMBAI 400 065

July 19, 2013

Certificate for Proposed Rights Issue of Equity Shares (the ‘Issue’) of Reliance MediaWorks

Limited (the ‘Company’)

We statutory auditors of Reliance MediaWorks Limited (‘the Company’), have been informed by the

management of the Company that it requires a confirmation from the statutory auditors in respect of

Statement of capitalisation of Company and Group respectively as adjusted for issue, for disclosure in

the offer document of the proposed issue of equity shares of the Company on a rights basis (the

“Rights Issue”), which is to be filed with the Securities and Exchange Board of India (”SEBI”) and

the Stock Exchanges.

The Statement of capitalisation of the Company and Group adjusted for issue is based on the

summary statement of assets and liabilities, as computed and certified by the Company’s

management, is as detailed below:

Statement of capitalisation of the Company as adjusted for issue

(` in lakhs)

Pre-Issue Post-issue

Particulars

As at March 31,

2013

As Adjusted for

Issue

Borrowings:

Short term borrowings 144,714.00 144,714.00


maturities) 77,687.50 77,687.50

Total borrowings 222,401.50 222,401.50

Shareholder's Fund:

Share capital (including Preference Shares) 2,453.81 9,949.31

Reserves and surplus (net) (excluding revaluation reserves) (49,468.47) 3,000.05

Less: Miscellaneous expenditures not written /off - -

Total shareholder's fund (47,014.66) 12,949.36

Long term debt / Shareholder’s fund NA 6.00

F-266

Statement of capitalisation of the Group as adjusted for issue

(` in lakhs)

Pre-Issue Post-issue

As at March 31,

2013

Particulars As Adjusted for Issue

Borrowings:

Short term borrowings 145,385.80 145,385.80


maturities) 82,449.10 82,449.10

Total borrowings 227,834.90 227,834.90

Shareholder's fund:

Share capital 2,453.81 9,949.31

Reserves and surplus (net) (excluding revaluation reserves) (95,161.58) (42,693.06)

Less: Miscellaneous expenditures not written off - -

Total shareholder's fund (92,707.77) (32,743.75)

Long term debt / Shareholder’s fund NA NA

Notes

The Statement of capitalization of Company and Group as adjusted for the issue are prepared by the

Company’s management and have considered the following principles for the purpose of calculation:

a) Short term borrowing represents amount repayable within one year from March 31, 2013.

b) Pre issue figures are based on the summary statement of assets and liabilities, as restated, of the

Company and Group as at March 31, 2013.

c) The corresponding post issue figures are based on the rights issue entitlement ratio of 13:4 (13

shares for every 4 shares held) and based on the issue price of ` 40 per share as decided by the Rights

Issue Committee in its meeting dated July 13, 2013.

d) The Capitalisation Statement, adjusted for Rights Issue is prepared on the assumption that the

proposed rights issue of 149,910,052 Equity Shares at ` 40 per equity share will be subscribed fully.

Based on the information and explanations given to us and representations received from the

Company’s management, we confirm the accuracy and correctness of the Statement of capitalisation

of the Company and Group adjusted for Rights Issue as mentioned above.

This letter is intended solely for use of the management and for inclusion in the offer document in

connection with the Rights Issue and is not to be used, referred to or distributed for any other purpose

without our prior written consent. This letter is not a valuation report or a certification of the future

financial viability of the Company.

For B S R & Co.


Firm’s Registration No: 101248W



Firm’s Registration No: 101720W

Bhavesh Dhupelia

Partner


Mumbai

Parag D. Mehta

Partner


Mumbai

225

FINANCIAL INDEBTEDNESS

The details of indebtedness of our Company on a standalone basis, as at May 31, 2013, are as provided below, together with a brief description of certain material covenants of the relevant financing

agreements:

Secured Loans

I. Loans

Sr. no. Name of the lenders Nature of

borrowing

Amount

sanctioned

(except

otherwise

stated, in `

lakhs)

Principal amount

outstanding as at

May 31, 2013

(In `lakhs)

Purpose Utilization Interest/

Commission

Tenure

Repayment Security

1. Syndicate Bank General

Agreement dated

June 11, 2010 and the sanction letter

dated May 31,

2010 as

supplemented by

letter dated July

18, 2011

15,000.00 8,437.50 For augmenting long term

working capital requirement

For augmenting long term

working capital requirement

Base Rate + 2.50%

p.a.

Five years 16 equal quarterly

installments after

one year initial moratorium from

the date of

drawdown

For details of

security see

note 1 below

2. Union Bank of India Term loan agreement dated

January 29, 2010

and review letter dated January 18,

2010 as modified by the sanction

letter dated

February 9, 2010. This was further

modified by the

sanction letter dated July 27,

2011. Our

Company accepted this

revision effective

from June 6, 2012 vide agreement

dated June 7, 2012

8,000.00 4,000.00 For financing our Company’s studios situated at Film City,

Mumbai

For financing our Company’s studios situated at Film City,

Mumbai

Base Rate + 3.50% p.a.

Six years 11 months 20 equal quarterly installment of

`400 lakhs commencing from

March 31, 2012

For details of security see

note 1 below

226


borrowing

Amount

sanctioned

(except

otherwise

stated, in `

lakhs)

Principal amount

outstanding as at

May 31, 2013

(In `lakhs)


Commission

Tenure

Repayment Security

3. Bank of Baroda Sanction letter

January 5, 2010 as amended by letter

dated June 20,

2010 and November 1, 2010

and reviewed on

June 25, 2012 and Deed of

Declaration and

confirmation dated September

24, 2012 further

reviewed on March 22, 2013

and Deed of

Declaration and confirmation

dated March 26,

2013

Aggregate:

6,100.00

Aggregate:

5,074.22

Working capital Working capital

For details of

security see note 2 below

Fund based:

600.00

Fund based: 3.54 Cash credit: 2.75%

above Base Rate (floating) p.a.

Cash credit: 12

months

Cash credit: On

demand

Non fund

based: 5,500.00

Non fund based:

(i) letter of credit:

1,127.09 (USD 20 lakhs); (ii) bank

guarantee:

3,943.59

(i) Bank guarantee:

commission of 50%

of applicable charges for Old BGs and

1.05% p.a. for

New/fresh BG’s; and (ii) Inland/import

letter of credit/letter

of undertaking/ letter of credit to avail

buyer’s credit: (a)

40% of applicable charges for

import/inland letter

of credits upto `100 lakhs; (b) charges as

applicable for import/inland letter

of credits of above

`100 lakhs; and (c) letter of undertaking

/ letter of credit in

foreign currency as per schedule of

charges

(i) Bank guarantee:

five years. Above

five years, the same shall will be dealt on

case to case basis;

and (ii) Inland/import letter

of credit/ letter of

undertaking / letter of credit to avail

buyer’s credit: (a)

365 days for raw material; and (b)

upto three years for

capital goods

Bank guarantee on

expiry and

Inland/import letter of credit/

letter of

undertaking / letter of credit to

avail buyer’s

credit: on maturity

227


borrowing

Amount

sanctioned

(except

otherwise

stated, in `

lakhs)

Principal amount

outstanding as at

May 31, 2013

(In `lakhs)


Commission

Tenure

Repayment Security

4. Axis Bank Limited Letter of

arrangement:

overdraft credit advances dated

January 29, 2010

and sanction letter December 8, 2009

as amended by the

letter dated August 13, 2010

and the letter

dated July 21, 2011 and first

supplemental

indenture of

mortgage dated

February 6, 2013

and the letter dated April 1,

2013

Aggregate:

5,500.00 Aggregate:

1,822.70

For details of

security see

note 3 below Fund based:

1,500.00 Fund based: 1.06 Over draft: to meet

temporary mismatch of funds

Over draft: To meet temporary mismatch of funds

Over draft: Base Rate + 4.00% p.a.

One year Over draft: On demand

Non fund

based: 4,000.00

Non fund based:

(i) letter of credit:Nil; (ii)

letter of credit for

purchase/import of capital goods:

Nil; (iii) buyers

credit: 1,668.27; (iv) bank

guarantee: 153.37;

and (v) standby letter of credit: Nil

(i) letter of credit: (a) for

procurement of raw materials, consumables

stores, spares and tools,

packing materials etc. (b) any other purpose approved by

the bank; (ii) letter of credit

for purchase / import of capital goods: (a) for

procurement of capital

goods; and (b) any other purpose approved by the

bank; (iii) buyers credit and

standby letter of credit: (a) for procurement of raw

materials, consumables

stores, spares and tools, packing materials etc. (b) any

other purpose approved by

the bank, (c) for procurement of capital goods; (iv) bank

guarantee: towards bids,

bond, security deposit, contract

performance/performance

guarantee, advance payment and retention money purpose

etc.

(i) buyers credit: (a) for

procurement of raw materials, consumables

stores, spares and tools,

packing materials etc. (b) any other purpose approved by

the bank, (c) for procurement

of capital goods; (ii) bank guarantee: towards bids,

bond, security deposit,

contract performance / performance guarantee,

advance payment and

retention money purpose etc.

Commission: (i)

letter of credit and letter of credit for

purchase/import of

capital goods: 0.60% p.a. + services tax;

(ii) buyers credit:

0.75% p.a. + applicable tax; (iii)

bank guarantee and

standby letter of credit: 0.75% p.a. +

applicable service

tax

(i) letter of credit and

letter of credit for purchase / import of

capital goods: (a)

inland letter of credit: maximum

usance upto 180

days; and (b) foreign letter of credit:

maximum usance of

365 days; (ii) buyers credit: (a) import of

raw material: upto

one year; and (b) import of capital

equipment: upto

three years; (iv) bank guarantee: maximum

upto 5.5 years; and

(v) standby letter of credit: three years

On maturity

228


borrowing

Amount

sanctioned

(except

otherwise

stated, in `

lakhs)

Principal amount

outstanding as at

May 31, 2013

(In `lakhs)


Commission

Tenure

Repayment Security

5. Syndicate Bank General

agreement dated June 10, 2011 and

sanction letter

dated June 6, 2011 and modified vide

letter dated

October 10, 2011

10,000.00 10,000.00 Long term working capital Long term working capital Base rate + 1% p.a. Three years Four equal

quarterly installments from

the date of

drawdown after a moratorium

period of two

years

For details of


6. HDFC Bank Limited Loan agreement cum guarantee

dated October 26,

2006

Non fund based:

10,000.00

(credit facility)

Non fund based: 469.64 (Bank

Guarantee)

Working capital requirement Working capital requirement Commission: at a mutually agreed rate

On maturity On expiry For details of security see

note 4 below

7. 11% Secured Redeemable Non-

Convertible Debentures

issued to Yes Bank

Limited ***

11% Secured Redeemable Non -

Convertible

Debenture

35,000.00 35,000.00 Refinancing of existing debt and capital expenditure of the

Company

Repayment of Existing Debts 11.00% p.a. Coupon Rate

Series 1 – March 1, 2014

Series 2 – March 1,

2015

Series 3 –

March 1, 2016

Series 1 – March 1, 2014

Series 2 – March

1, 2015

Series 3 –

March 1, 2016

For details of security see

note 5 below

8. Indiabulls Housing

Finance Limited

(formerly

Indiabulls

Financial Services

Limited)

Loan

Agreement,

Deed of

Hypothecation

dated August

30,

2012,Sanction

Letter dated

August 30,

2012

17,500.00 17,500.00 General Corporate Purpose Repayment of Existing

Debts, Working Capital requirement and cash flow

mismatch

12.79% - IBFSL

PLR – 921bps

18 months 6 monthly equal

installment of Rs. 29,16,66,667/-

after completion

of moratorium period of 12

months

For details of


*** Reliance Capital Limited has provided a corporate guarantee dated March 5, 2012 in favour of Axis Trustee Services Limited for an amount of `35,000 lakhs for the said Non convertible Debentures.

Note 1:

229

First pari-passu charge on the fixed assets of our Company.

Note 2:

Cash credit & Inland/import letter of credit / letter of undertaking / letter of credit

First pari-passu charge on the entire current asset & movable fixed assets of our Company.

Bank guarantee

(i) Counter indemnity signed by our Company; and

(i) First pari-passu charge on the current asset of our Company; and

(ii) First pari-passu charge on the movable fixed assets of our Company.

Note 3:

(i) First pari-passu charge on the current asset of our Company; and

(ii) First pari-passu charge on the movable fixed assets of our Company.

In addition to the above, for bank guarantee and standby letter of credit a counter guarantee of our Company to be furnished.

Note 4:

Lien over fixed deposit to the extent of 100% value of the loan.

Note 5:

Secured by pari passu first charge on Fixed Assets (including Immovable and Movable Fixed Assets) and Current Assets of the Company and Indian wholly owned subsidiaries namely Reliance

MediaWorks Entertainment Services Limited and Reliance MediaWorks Theatres Limited.

Note 6:

Secured by Second charge on all Fixed Assets and Current Assets, including receivables/ book debts to the extent of minimum of 125% of the loan amount.

Unsecured Loans

II. Loans

230

Sr.

no.

Name of the

lenders

Nature of borrowing Amount sanctioned

(In ` lakhs)

Principal amount

outstanding as at

May 31, 2013

(In ` lakhs)

Interest/Commission

Tenure

Repayment

1. 12.50%

unsecured

redeemable

Non –

Convertible

Debentures

issued to

Barclays Bank

PLC

12.50% unsecured

redeemable Non –

Convertible

Debentures

4,400.00 2,750.00 12.50% p.a., compounded

monthly, payable quarterly in

arrears


2013


10, 2013


10, 2013


2014


2014

Series D – June 10, 2013 - Rs. 550.00

Series E – September 10, 2013 - Rs.

550.00

Series F – December 10, 2013 - Rs.

550.00

Series G – March 10, 2014 - Rs. 550.00

Series H – June 10, 2014 - Rs. 550.00

III. Inter Corporate Deposits

Sr.

no.

Name of the lenders Nature of borrowing Amount sanctioned

(In ` lakhs)

Principal amount

outstanding as at May

31, 2013

(In ` lakhs)

Interest

Tenure

Repayment

1. Reliance Capital

Limited


agreement dated March 7, 2012

25,187.50 21,136.43(1)

13.00% p.a. One year from date of

disbursement

On Demand

2. Magma Fin Corp Ltd Inter corporate deposit facility


and renewal letter dated March 20,

2013

2,200.00 2,200.00 12.00% p.a. 6 months from date of

drawl/rollover

On Demand

3. Reliance Capital

Limited



1,900.00 1,900.00(1)


disbursement

On Demand

4. Reliance Capital

Limited


agreement dated April 3, 2012

18,850.00 18,850.00(1)


disbursement

On Demand

231

Sr.

no.


(In ` lakhs)

Principal amount


31, 2013

(In ` lakhs)

Interest

Tenure

Repayment

5. Magma Fin Corp Ltd Inter corporate deposit facility

agreement dated April 30, 2012 and

renewal letter dated April 6, 2013

1,300.00 1,300.00 12.00% p.a. 6 months from date of

drawl/rollover

On Demand

6. Reliance Capital

Limited


agreement dated May 7, 2012

39,840.00 39,840.00(1)


disbursement

On Demand

7. Reliance Capital

Limited


agreement dated June 7, 2012

3,863.50 3,863.50(1)


disbursement

On Demand

8. Reliance Capital

Limited


agreement dated July 3, 2012

7,690.00 7,690.00(1)


disbursement

On Demand

9. Reliance Capital

Limited


agreement dated September 10,

2012

4,565.50 4565.50 13.00% p.a. One year from date of

disbursement

On Demand


Limited


agreement dated October 25, 2012

3,238.00 3,238.00 13.00% p.a. One year from date of

disbursement

On Demand


Limited


agreement dated November 23,

2012


disbursement

On Demand


Limited


agreement dated December 6, 2012


disbursement

On Demand


Limited


agreement dated January 8, 2013


disbursement

On Demand


Limited


agreement dated February 5, 2013


disbursement

On Demand

16. Chlorosulf Private Ltd. Inter corporate deposit facility



disbursement

On Demand

232

Sr.

no.


(In ` lakhs)

Principal amount


31, 2013

(In ` lakhs)

Interest

Tenure

Repayment

17. Chlorosulf Private Ltd. Inter corporate deposit facility

agreement dated April 1, 2013


disbursement

On Demand


Limited


agreement dated May 15, 2013


disbursement

On Demand

Total 1,50,834.50 1,46,783.43

(1) These loans were due within one year from the date of respective disbursements and are currently overdue

Others

Further, as of May 31, 2013, our Company has availed an unsecured loan of `375 lakhs by way of promissory note dated March 19, 2010 from Reliance MediaWorks Theatres Limited. This loan is

repayable on demand and the interest payable on the same is 7.00% - 10.50% per annum.

Restrictive Covenants with Respect to our Borrowing

Certain corporate actions for which our Company requires the prior written consent of the lenders include:

1. Make any change in the management set-up;

2. Transfer the Equity Shares held by our Promoters below the prescribed per cent;

3. Issue any guarantee except as required under the transaction documents;

4. Enter into any transaction of merger, consolidation, amalgamation or re-organisation;

5. Convey, sell, lease, let or otherwise dispose of (or agree to do any of the foregoing at any future time) all or any part of its property or assets, except for any permitted disposal;

6. Alter Memorandum of Association and / or Articles of Association;

7. Agree to, create, incur, assume or suffer to exist any security interest upon or with respect to any property, revenues, or assets (real, personal or mixed, tangible or intangible) of our Company,

whether now owned or hereafter acquired;

8. Change in our Company’s capital structure which is adverse to the interest of the lenders;

233

9. To declare or pay dividends for any year except out of profits relating to that year after the meeting of all financial commitments to the bank and making of due and necessary provisions;

10. To utilize the loans for purposes other than provided for;

11. Make any corporate investment or investment by way of contribution to share capital or debentures or advance funds to or place deposits with any concern; and

12. Any incremental indebtedness over and above outstanding as on February 15, 2012 – excluding promoter loans/group ICDs will be with the prior approval of Majority Debenture holders at that

point of time.

13. Future losses to be funded through Equity or Promoter’s loan / Group ICD’s

14. All future Promoter loans/Group ICDs will be subordinated & subservient in all terms and conditions to the Debentures.

15. Company to infuse equity to the satisfaction of lender within a period of 6 months from the borrowing done in August 2012

16. Further, under the terms of the loan agreements, our Company is required to maintain certain limits on financial ratios like, inter alia, ratio of gross borrowings to tangible net worth, ratio of

gross borrowings to EBITDA, ratio of secured debt to secured fixed assets and ratio of EBITDA to schedule debt payment.

234

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATION

You should read the following discussion of our financial condition and results of operations in conjunction

with the audited and restated consolidated financial statements including the schedules and notes thereto and

the examination reports thereon, which appear at page F-1.

This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may

differ materially from those anticipated in these forward-looking statements as a result of certain factors, such

as the risks set forth in the chapters entitled “Risk Factors” and “Forward Looking Statements” at pages 11

and 10, respectively.

The following discussion and analysis of our financial condition and results of operations is based upon and

should be read in conjunction with our audited consolidated financial statements, as restated, Six month period

ended March 31, 2013, Fiscal 2012 and Fiscal 2011, Fiscal 2010 and Fiscal 2009, including the schedules,

annexures and notes thereto and the reports thereon. Our audited consolidated and standalone financial

statements, as restated, are prepared in accordance with Indian GAAP, the accounting standards prescribed

under the Accounting Standard Rules, 2006, the relevant provisions of the Companies Act and the SEBI

Regulations.

Overview

We are one of India’s leading entertainment and media (“E&M”) companies with a presence across several

businesses such as theatrical exhibition of films, film and media services and television content production and

distribution. Our headquarters are located in Mumbai and we have operations across 78 cities and towns in India

and internationally, in, the UK and the United States.

Our theatrical exhibition business is our largest source of revenue. We operate one of India’s largest cinema

chains, under the brand ‘BIG Cinemas’, with 254 screens in India (including 16 screens which are only managed

by our Company) and an additional 185 screens in the United States (including 116 screens which are only

managed by our Company) as of May 31, 2013. During Fiscal 2012, BIG Cinemas (excluding customers of

screens which are only managed by our Company) catered to approximately 502 lakhs and 74 lakhs consumers

in India and overseas, respectively and approximately 144 lakhs consumers in India for the six months ended

March 31, 2013 March 31, 2013 and 15 lakhs consumers overseas for the six months ended March 31, 2013.

Our film and media services business comprising production services, post-production services and media and

creative services for films and television is our second largest source of revenue, which comprises:

Production services: We lease sound stages, shooting floors, standard and high definition multi-camera

equipment and other related equipment to television and film production companies.

Post-production services: We process and trade film negatives at our laboratory located in Film City,

Mumbai. Our 4K DI laboratory located in Film City, Mumbai undertakes quality enhancement of film

and television content through digital techniques.

Media & Creative Services: We are engaged in the film restoration, VFX, conversion of 2D content to

3D and CGI services through our wholly owned subsidiary, Reliance MediaWorks Entertainment

Services Limited. In addition, our wholly owned subsidiaries located in United States and UK,

Reliance Lowry Digital Imaging Services, Inc and Reliance MediaWorks (UK) Limited, respectively,

are engaged in the business of digital image correction, film restoration and film processing.

We operate our film post production services through our production laboratory in Mumbai and our creative

services through facilities in Burbank (United States), London (UK) and Navi Mumbai (India). Films processed

at our laboratory in Mumbai have won, among others, 15 national awards for cinematography and our

Company’s film processing facilities have been certified by Kodak Imagecare, an internationally recognised

quality certification program, for each of the years beginning 2007. We were among four companies to receive

the “Judges Award for Creativity & Innovation” in post-production at the Hollywood Post Alliance Awards in

2010. In August 2011, our Company received a patent for an innovation – “System and method for removing

235

semi-transparent artifacts from digital images caused by contaminants in the camera’s optical path”. We won

the Scientific and Technical Award, 2012 at the Academy of Motion Picture, Arts and Sciences in 2012, for the

development of a unique and efficient system for the reduction of noise and other artefacts, thereby providing

high quality images required by the film making process.




a DI Lab.

Further, we have purchased broadcast and film cameras. We have also increased the number of screens we

operate. This has been achieved organically and has enhanced our reach in terms of exhibition business and

also enabled us to strengthen our capabilities in post-production services and creative services divisions.

We are also in the process of establishing approximately 2,00,000 square feet studio located in Film City,

Mumbai with facilities for shooting films, television shows and television commercials, which we believe

meets international standards. This studio aims to provide a one-stop solution for all production needs for

domestic and international clients. When completed, the studio is expected to have three studio buildings

with eight sound stages with appropriate noise control and other features. A part of the studio constituting

one studio building with three sound stages is in operation since January 2011. We expect to complete the

remaining portion of the studio by December 2013.

We are also engaged in the business of television content production through our subsidiary, Big Synergy

Media Limited, under the brand “BIG Synergy”, which primarily produces non-fiction programmes in

addition to adapting international programme formats for Indian viewers. We have produced shows such as

Kaun Banega Crorepati, Kya Aap Paanchvi Paas Se Tez Hain, Dus Ka Dum, India’s Got Talent, Aap Ki

Kachehri - Kiran Bedi Ke Sath and Sach Ka Saamna. We also selectively distribute films.

For the six months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, our restated consolidated net loss

after tax was ` 34,044.77 lakhs, ` 91,016.62 lakhs and ` 32,796.95 lakhs, respectively and our standalone

net loss after tax was ` 27,593.15 lakhs, ` 70,356.34 lakhs and ` 24,348.00 lakhs, respectively. For the six

months ended March 31, 2013, Fiscal 2012 and Fiscal 2011, our consolidated total income was ` 36,637.80

lakhs, ` 125,486.90 lakhs and ` 85,026.20 lakhs, respectively and our standalone total income was `

24,026.10 lakhs, ` 80,454.80 lakhs and ` 54,287.40 lakhs respectively.

Factors Affecting Our Results of Operations

The key factors affecting our results of operations are set out below:

Our Ability to Predict and Control Key Revenue and Cost Drivers

The key components of our costs include:

Distributors’ Share for Exhibition of Films: Our ability to retain a sufficient share of our box office

collections for the films we exhibit is one of the key drivers of our revenues. In India, in order to obtain the

right to exhibit a film in our single-screen cinema theatres, we pay the distributor of the film a certain fixed

percentage of the relevant film’s gross or net box office collections, while for the exhibition of a film in our

multiplexes, we pay the distributor of the film a percentage of our revenue based on the overall performance

of the film at multiplexes in India. In overseas, we enter into agreements with distributors in which a

distributor’s share could typically ranges between 40% to 70% of the box office collections, depending on

the location of the cinema theatre and the film. In the future, if distributors are able to demand a higher

share of films’ revenues, we will be able to retain a smaller share of our box office collections, which would

adversely affect our operations.

Film Studio Establishment and Operation: We are also in the process of establishing an approximately

200,000 square feet studio located in Film City, Mumbai with facilities for shooting films, television shows

and television commercials, which we believe is on par with international standards. We believe that our

236

future performance will be significantly dependent on our ability to complete the project in a timely manner

and within expected costs. A part of this studio was completed in January 2011. We expect to incur

significant additional costs to complete the remaining parts of the studio and to operate the studio to provide

film and television production services. Certain factors that may affect the cost of establishing the studio

include our ability to receive necessary equipment in a timely and cost efficient manner. As part of the

construction process, we have placed orders for certain items of equipment. However, we are yet to place

orders for large number of equipment. If we do not receive any such equipment in a timely manner, on

favourable terms or at all, the construction of our studio may be delayed or prevented, which could

adversely affect our results of operations.

Employee benefits Expenses: In order to successfully manage and expand our business, we are dependent on

the services of key management personnel and our ability to attract, train, motivate and retain skilled

employees, including artists, technicians and other professionals, which requires significant investments of

time and financial resources. Consequently, employee benefits expenses constitute a significant portion of

our total costs. As we add more products and services to our business and establish more cinema theatres,

our employee benefits expenses will increase as a result. In addition, if any of our employees unionise or

engage in work disruptions or stoppages, our employee benefits expenses may also increase. Changes in

labour regulations in India and in the overseas jurisdictions in which we operate may also affect the costs of

maintaining an adequate workforce.

Rent Expenses: Our ability to lease the properties at which we operate our cinema theatres at competitive

rates is a key driver of our costs. We operate all but four of our cinema theatres through lease arrangements,

business conducting agreements and management agreement for terms ranging from 3 to 30 years. . In the

event that a lease or a business conducting agreement or management agreement is not renewed, we will be

required to expend time and financial resources to relocate the cinema theatre which may adversely affect

our financial condition. Any adverse changes in our ability to lease properties at competitive rates may

adversely affect our results of operations.

Competitive Environment

In our theatrical exhibition business, we face competition from other cinema theatre chains and standalone

cinema theatre operators. We also face competition from alternative film delivery methods, including cable

television, the Internet, digital video disc, satellite and pay-per-view services. In addition, technologies currently

under development or that may be developed in the future, if employed by our existing theatrical exhibition

business competitors or new entrants, may adversely affect our competitiveness. Our competitors may be able to

deploy new technologies before us or we may be unable to adapt to new technologies, and we cannot predict

how emerging and future technological changes will affect our operations or the competitiveness of our

services. Changes in any of these factors may adversely affect the competitiveness of our theatrical exhibition

business and consequently, our results of operations.

We also face significant competition in our film production services business, including from local laboratories

in southern India, where certain competitors are also the producers and distributors of regional films, which

provides them with certain competitive advantages in relation to costs and business relationships. In digital film

processing industry, we face competition from existing entities. Some of these entities have longer operating

histories and greater financial resources than us. Our ability to compete in the film production services business

depends in significant part on our ability to adapt to technological trends and offer competitive rates for our

services. Any reduction in our ability to compete in the film production services business may adversely affect

our results of operations.

In our television production and distribution business, we primarily create non-fiction content, which is an

emerging business in India dominated by a few key entities. Our success in this line of business would depend

on our and our competitors’ ability to predict and cater to viewer preferences.

Success of Films

The success of the films we exhibit affects the revenue we generate in our theatrical exhibition business. Our

potential cinema theatre patrons may be inclined to visit our theatres in significant part based on the appeal of

the films we exhibit, irrespective of the services, technologies and amenities we offer. The availability of more

successful films in our cinema theatres results in higher patronage and longer running films, and as a result,

237

increased revenues from ticket sales, food and beverage sales and other revenue streams related to our cinema

theatres. Our theatrical exhibition business revenues are driven in significant part on the availability of popular

films that are well accepted by broad audiences.

Ability to Borrow at Favourable Rates

Our business requires significant amounts of capital expenditure and working capital. We have generally

resorted to borrowings to meet our capital expenditure requirements. As an Indian company, we are subject to

exchange controls that regulate borrowing in foreign currencies. Such regulatory restrictions limit our financing

sources for our operations and could constrain our ability to obtain financing on favourable terms and refinance

existing indebtedness. In addition, certain of our financing agreements include conditions and restrictive

covenants that require us to obtain consents from the respective lenders prior to carrying out certain activities

and entering into certain transactions. Any future changes in regulatory restrictions or in the terms typically

found in our indebtedness agreements may adversely affect our ability to borrow at favourable rates, which may

in turn adversely affect our results of operations.

Changes in Interest and Foreign Exchange Rates

The entirety of our investments in our foreign operations and revenues generated from our foreign operations

are denominated in foreign currencies. Change in the relevant foreign exchange rates could occur for a variety

of reasons and may adversely affect the returns from these investments and the revenues generated. For

instance, such changes in exchange rates could result from a decline in India’s foreign exchange reserves. In the

future, adverse changes in interest and foreign exchange rates may adversely affect our results of operations.

Changes in Economic Conditions

Our results of operations are highly dependent on the overall economic conditions in India and in the foreign

jurisdictions in which we operate. Our theatrical film exhibition business is our largest source of revenue.

Cinema theatre attendance is a discretionary expense for our potential customers and thus may be particularly

reduced in times of negative economic conditions. Any slowdown in the Indian economy or in the economies of

the overseas jurisdictions in which we operate, due to, among other things, changes in interest rates, government

policies, taxation, social and civil unrest and political, economic or other developments, could adversely affect

our business and results of operations.

Restrictions on ability to fund our foreign subsidiaries

Our ability to fund our foreign subsidiaries is connected to our networth. Our stand-alone and consolidated

networth, as restated as on March 31, 2013, was ` (47,014.66) lakhs and ` (92,707.78) lakhs, respectively. Our

networth has eroded which has impaired our ability to fund our foreign subsidiaries, consequently, our growth

and results of operations may be adversely impacted.

Changes in Government Policies and Regulations

We are affected by changes in a variety of government policies and regulations that affect the operations of our

businesses in India. For instance, we are affected by changes in government policies regarding investment in

overseas subsidiaries. These policies are governed by the relevant authority for foreign investment in those

countries. In addition, we are eligible for exemptions from the payment of entertainment taxes in respect of 5 of

our cinema theatres on the basis of policies of certain State governments, such as Maharashtra, Madhya Pradesh,

Uttar Pradesh and Punjab. We are eligible for exemptions from the payment of a specified percentage of the

entertainment taxes for a period of up to five years on a staggered basis from the date of commencement of

operations in respect of 5 theatres in Maharashtra, Madhya Pradesh, and Uttar Pradesh, subject to the fulfilment

of certain conditions required by the regulation. In addition, we are eligible for an exemption from payment of

entire entertainment tax payable in respect of six theatres in Punjab and six theatres in Rajasthan throughout the

life of such theatres. In the future, if we are unable to avail of such exemptions, our results of operations could

be adversely affected. Cinema theatres in the states of Delhi, Punjab and Haryana are governed by the

provisions of the Punjab Cinemas (Regulation) Act, 1952, as amended, under which the licensee must comply

with ticket prices approved by the licensing authority. The said prices may be changed only with the prior

intimation of the licensing authority and in Delhi, the prices may not be changes more than six times in a year..

238

In the event these restrictions prevent us from increasing the ticket prices as may be required by us, it may affect

the results of our operations.

Our Significant Accounting Policies

Preparation of Consolidated Financial Statements

Our consolidated financial statements have been prepared in accordance with AS 21 – ‘Consolidated Financial

Statements’, AS 23 – ‘Accounting for Investments in Associates in Consolidated Financial Statements’ and AS

27 – ‘Financial Reporting of Interest in Joint Ventures’. Our consolidated financial statements are prepared

using uniform accounting policies for transactions and other events in similar circumstances, except where it is

not practicable to do so. Our consolidated financial statements are presented to the extent possible, in the same

format as that adopted by our Company for our independent financial statements. Our consolidated financial

statements have been consolidated on the following basis:

Subsidiaries: The excess of our cost of our investment in subsidiaries over our portion of equity in the

subsidiaries at the respective dates on which investment in such subsidiaries was made is recognised in

our financial statements as goodwill and any excess of assets over our investment in a subsidiary is

transferred to the capital reserve. Our portion of equity in our subsidiaries is determined on the basis of

the book value of assets and liabilities in accordance with the financial statements of our subsidiaries as

of the date of the investment.

The financial statements of our Company and our subsidiaries have been combined on a line-by-line

basis by adding together the book values of like items of assets, liabilities, income and expenses, after

eliminating intra-group balances and transactions and resulting unrealised profits in full. The amounts

shown in respect of reserves and accumulated losses comprise the reserve or accumulated losses in

accordance with the balance sheet of our Company and our share in the post-acquisition increase or

decrease in the relevant reserves or accumulated losses of our subsidiaries.

The amount of goodwill and capital reserve are presented on a net basis for each subsidiary.

The minority interest’s share of profits or losses is adjusted against the income to arrive at the net

income attributable to the shareholders. The minority interest’s share of net assets is disclosed

separately in the balance sheet.

During Fiscal 2012:

o We sold our entire shareholding in Sri Ramakrishna Theatres Limited, Rave Entertainment

and Food Nepal Private Limited, Reliance MediaWorks (Malaysia) Sdn. Bhd. and Reliance

MediaWorks Big Cinemas Sdn. Bhd. our subsidiaries in May 2011, April 2012 and September

2012 respectively.

o We sold our entire shareholding shares in a joint venture viz., Cineplex Private Limited in

June 2011.

o We incorporated new subsidiaries Reliance Media Consultant Private Limited and Reliance

MediaVentures Private Limited with effect from February 16, 2012 and June 19, 2012.

During Fiscal 2011:

o We sold our entire shareholding in Sultan Production Private Limited

o We dissolved three LLCs in the United States viz., Adlabs Heritage LLC, Adlabs Digital

Media LLC and Adlabs GlobalStar LLC.

o As part of a settlement with its minority holders, we acquired the balance 49% stake in Big

Cinemas Galaxy LLC.

Joint Venture Entities: Interest in jointly controlled entities are accounted for using the proportionate

consolidation method.

239

The list of subsidiaries considered in our consolidated financial statements with percentage

shareholding for six month period ended March 31, 2013 is summarised below:

Name of Subsidiary Country of Incorporation Ownership Interest as of

March 31, 2013 (%)

Reliance MediaWorks Theatres

Limited

India 100%

Reliance MediaWorks (UK)

Limited

United Kingdom 100%

Reliance MediaWorks (USA) Inc. United States 100%

Reliance MediaWorks

(Netherlands) B.V.

The Netherlands 100%

Reliance MediaWorks (Mauritius)

Limited

Mauritius 100%

Big Synergy Media Limited India 51%

Rave Entertainment and Food

Nepal Private Limited (4)

Nepal Nil

Reliance MediaWorks

Entertainment Services Limited

India 100%

Reliance Media Consultant Private

Limited

India 100%

Reliance MediaVentures Private

Limited

India 100%

Adlabs Multiplex Limited (1)

India N.A.

Rave Entertainment Private Limited (1)

India N.A.

Adlabs Multiplex and Theatres

Limited (1)

India N.A.

Katch 22 Entertainment Private

Limited (2)

India N.A.


Limited (3)

India N.A.

Sri Ramakrishna Theatres Limited (4)

India N.A.

(1) It was amalgamated with our Company in Fiscal 2009. (2) It was amalgamated with our Company in Fiscal 2008. (3) It ceased to be our subsidiary from Fiscal 2009 pursuant to a scheme of demerger. (4) It ceased to be a subsidiary pursuant to sale of shares in Fiscal 2012.

The list of step-down subsidiaries considered in our consolidated financial statements with percentage

shareholding as of March 31, 2013 is summarised below:

Name of Subsidiary Country of

Incorporation

Name of Parent

Company

Ownership Interest

as of March 31, 2013

(%)

BIG Cinemas

Entertainment LLC

United States Reliance MediaWorks

(USA) Inc.

100%

BIG Cinemas

Entertainment (DE) LLC


(USA) Inc.

100%

Adlabs Forum LLC (1)


(USA) Inc.

N.A.

BIG Cinemas Laurel LLC


(USA) Inc.

100%

BIG Cinemas Falls Church

LLC


(USA) Inc.

100%

Adlabs Heritage LLC (2)

United States Reliance MediaWorks N.A.

240

Name of Subsidiary Country of

Incorporation

Name of Parent

Company

Ownership Interest

as of March 31, 2013

(%)

(USA) Inc.

BIG Cinemas Norwalk

LLC


(USA) Inc.

100%

BIG Cinemas Galaxy LLC


(USA) Inc.

100%

BIG Cinemas Sahil LLC


(USA) Inc.

97%

BIG Cinemas SAR LLC


(USA) Inc.

51%

Phoenix BIG Cinemas

Management LLC


(USA) Inc.

51%

Big Cinemas Union LLC (1)


(USA) Inc.

N.A.

BIG Cinemas Phoenix

LLC


(USA) Inc.

51%

BIG Cinemas Exhibition

LLC


(USA) Inc.

100%

BIG Cinemas IMC LLC


(USA) Inc.

100%

Big Pictures USA Inc.


(USA) Inc.

100%

Adlabs Digital Media LLC (2)


(USA) Inc.

N.A.

Reliance Media and

Marketing

Communications LLC


(USA) Inc.

100%

Reliance Lowry Digital

Imaging Services Inc.


(USA) Inc. – 90%

Our Company – 10%

100%

Reliance Media Works

VFX Inc.


(USA) Inc.

100%

Reliance MediaWorks

(Malaysia) Sdn. Bhd. (3)

Malaysia Reliance MediaWorks

(Mauritius) Limited

Nil

Reliance MediaWorks Big

Cinemas Sdn. Bhd. (3)

Malaysia Reliance MediaWorks

(Malaysia) Sdn. Bhd.

Nil

(1) Dissolved in Fiscal 2010 (2) Dissolved in Fiscal 2011 (3) Ceased to be subsidiary pursuant to sale of shares in Fiscal 2012

The list of joint venture entities considered in our consolidated financial statements with percentage

shareholding is summarised below:

Name of Joint Venture Country of

Incorporation

Ownership Interest as of

March 31, 2013 (%)

Swanston Multiplex Cinemas Private

Limited

India 50%

Divyashakti Marketing Private Limited

India 50%

Cineplex Private Limited (1)

India Nil (1) Ceased to be a Joint Venture pursuant to sale of shares in Fiscal 2012

241

Associates – GH – Reliance LLC is an Associate of the Company with effect from October 1, 2012

with Reliance MediaWorks (USA) Inc. holding 30%.

Key accounting policies that are relevant and specific to our business and operations are as follows:

Basis of Preparation: The summary statements of the subsidiaries, joint ventures and associate

companies used in the consolidation are for the same reporting period as our Company. These financial

statements are audited by the auditors of the respective entities.

Our financial statements have been prepared to comply in all material respects with the requirements of

the Schedule II of the Companies Act, 1956 (the “Act”) and the Securities and Exchange Board of

India (Issue of Capital and Disclosure Requirements) Regulations, 2009, to the extent applicable.

Effective April 1, 2011, as per the Government Notification no. S.O. 447 (E) dated February 28, 2011

(as amended by notification no. F. No/2/6/2008-CL-V dated March 30, 2011), read with General

Circular no. 62/2011 dated September 5, 2011, issued by the Ministry of Company Affairs, the revised

Schedule VI notified under the Act has become applicable to the Company for the purpose of

preparation and presentation of its summary statements. The adoption of revised Schedule VI does not

impact the recognition and measurement principles followed for preparation of summary statements.

All assets and liabilities have been classified as current or non-current as per the Company’s normal

operating cycle and other criteria set out in the revised Schedule VI.

Use of Estimates: The preparation of financial statements in conformity with GAAP in India requires

us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the

disclosures of contingent liabilities on the date of the financial statements and the reported amount of

income and expenses during the reported period. We believe that the estimates made in the preparation

of financial statements are reasonable. Actual results could differ from those estimates. Any revision to

accounting estimates is recognised prospectively in current and future periods.

Goodwill on consolidation: The excess of cost to the parent company of its investments over its

portion of equity in the subsidiaries / associates / joint ventures, as at the date on which the investment

was made, is recognised as goodwill in the financial statements. Our portion of equity in the

subsidiaries / associates / joint ventures’ is determined on the basis of the book value of assets and

liabilities as per the financial statements of the subsidiaries as on the date of investment.

Goodwill is reviewed for a decline other than temporary in its carrying value, whenever events or

changes in circumstances indicate that the carrying amount may not be recoverable. We assess the

recoverability of goodwill by reference to the valuation methodology adopted by us on the acquisition

date, which included strategic and synergic factors that were expected to enhance the enterprise value.

Accordingly, we would consider that there exists a decline other than temporary in the carrying value

of goodwill when, in conjunction with its valuation methodology, its expectations with respect to the

underlying acquisitions we have made deteriorates with adverse market conditions.

Fixed Assets and Depreciation / Amortisation:

o Tangible Assets: Tangible fixed assets are stated at cost or revalued amount in accordance

with the scheme of amalgamation less accumulated depreciation and any provision for

impairment. Cost includes freight, duties, taxes (other than those recoverable from tax

authorities) and other expenses related directly or indirectly to the acquisition or construction

and installation of the fixed assets and for bringing the asset to its working condition for its

intended use. Depreciation on fixed assets is provided on the straight line method, at the rates

prescribed in Schedule XIV to the Act, which, in our opinion, reflects the estimated useful

lives of those fixed assets, except assets of subsidiaries, namely Reliance MediaWorks (USA)

Inc. (including its subsidiaries), Reliance MediaWorks (UK) Limited and Swanston Multiplex

Cinemas Private Limited and our theatrical exhibition segment in India wherein depreciation

is provided at following rates:

242

Plant and machinery: 7.07% to 20%

Furniture and fixtures: 10% to 25%

Computers: 20%

Motor cars: 10%

Office equipment: 10%

Leasehold improvements / buildings are depreciated over the lower of useful life of the asset

and lease term, on a straight line basis. Individual assets costing up to ` 0.05 lakhs are

depreciated fully in the year of acquisition.

o Intangible Assets: Intangible assets, all of which have been acquired or created and are

controlled through custody or legal rights, are capitalised at cost, where they can be reliably

measured. Where capitalised, intangible assets are regarded as having a limited useful

economic life and the cost is amortised over the lower of useful life or ten years.

Application software purchased, which is not an integral part of the related hardware, is shown

as intangible assets and amortised on a straight line basis over its useful life, not exceeding

five or ten years, as determined by us.

Film rights comprise negative rights and distribution rights in films and are for a contractually

specified mode of exploitation, period and territory and are stated at cost less accumulated

amortisation. Cost of film rights comprises original purchase price or minimum guarantee.

Cost is ascertained on a specific identification basis where possible. In case multiple films or

rights are acquired for a consolidated amount, cost is allocated to each film / right based on

management’s best estimates.

The individual film forecast method is used to amortise the cost of film rights acquired. Under

this method, costs are amortised in the proportion that gross revenues realised bear to our

estimate of the total gross revenues expected to be received. If estimates of the total revenues

and other events or changes in circumstances indicate that the realisable value of a right is less

than its unamortised cost, a loss is recognised for the excess of unamortised cost over the film

right’s realisable value.

In respect of unreleased films, payments towards film rights are classified under capital

advances as the amounts are refundable in the event of non-release of the film.

Internally generated software is capitalised by the Company and amortised over its estimated

useful life of five / ten years.

Purchased goodwill is recognised by us on the basis of excess of purchase consideration paid

over the value of the assets acquired at the time of acquisition and is amortised over its

estimated useful life not exceeding ten years.

Impairment: In accordance with Accounting Standards 28 – ‘Impairment of Assets’, where there is an

indication of impairment of our asset, the carrying amounts of our assets are reviewed at each balance

sheet date to determine whether there is any impairment. The recoverable amount of the asset (or where

applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its

net selling price and its value in use. An impairment loss is recognised whenever the carrying amount

of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in

the statement of profit and loss.

If at the Balance sheet date there is an indicator that a previously assessed impairment loss no longer

exists, the recoverable amount is re-assessed and the asset is reflected at the recoverable amount subject

to a maximum depreciated historical amount.

243

Value in use is the present value of estimated future cash flows expected to arise from the continuing

use of the asset and from its disposal at the end of its useful life.

Investments: Long-term investments are carried at cost. A provision for diminution is made to

recognise a decline, other than temporary, in the value of long-term investments and is determined

separately for each individual investment. Current investments are carried at lower of cost and fair

value.

Inventories: Inventories (comprising of food and beverage items, chemicals, negative film rolls, xenon

lamps and stores and spares related to theatrical exhibition / film production services business etc.) are

stated at the lower of cost and net realisable value. Cost is determined on the first-in first out basis,

except in the case of Reliance MediaWorks (USA) Inc. (and its subsidiaries) and Reliance MediaWorks

Big Cinemas Sdn. Bhd., wherein we use the weighted average method. Inventory of DVDs is stated at

lower of cost and net realisable value.

Employee benefits:

o Short Term Employee Benefits: All employee benefits payable wholly within 12 months of

rendering the service are classified as short term employee benefits. The undiscounted amount

of short term employee benefits expected to be paid in exchange for the services rendered by

employees are recognised as an expense during the period.

o Long Term Employee Benefits:

Provident Fund and Other Schemes: Our state governed provident fund scheme,

employee state insurance scheme and labour welfare fund are defined contribution

plans. The contribution paid or payable under the schemes is recognised during the

year in which the employee renders the related service.

Gratuity Plan: Our gratuity benefit scheme is a defined benefit plan. Our net

obligation in respect of the gratuity benefit scheme is calculated by estimating the

amount of future benefit that employees have earned in return for their service in the

current and prior year; that benefit is discounted to determine its present value and

the fair value of any plan assets is deducted. The present value of the obligation

under such defined benefit plan is determined based on actuarial valuation using the

Projected Unit Credit Method. The obligation is measured at the present value of the

estimated future cash flows. The discount rates used for determining the present

value of the obligation under defined benefit plan, are based on the market yields on

Government Securities as at the Balance Sheet date. Actuarial gains and losses are

recognised immediately in the statement of Profit and Loss.

Other Long Term Employment Benefits: Compensated absences which are not

expected to occur within twelve months after the end of the period in which the

employee renders the related services are recognised as a liability at the present value

of the defined benefit obligation at the Balance Sheet date, determined based on

actuarial valuation using Projected Unit Credit Method. The discount rates used for

determining the present value of the obligation under defined benefit plan, are based

on the market yields on Government Securities as at the Balance Sheet date.

Revenue Recognition: Revenue is recognised to the extent that it is probable that the economic

benefits will flow to us and the revenue can be reliably measured. The amount recognised as sales is

exclusive of value added tax and service tax and net of trade discounts. Amount of entertainment tax is

shown as a reduction from revenue.

o Film Production Services Income: Revenue from processing or printing of cinematographic

films is recognised upon completion of the related processing / printing. Revenue from

processing of digital content is recognised using the proportionate completion method. Use of

the proportionate completion method requires us to estimate the efforts expended to date as a

proportion of the total efforts to be expended. Efforts expended have been used to measure

244

progress towards completion, as there is a direct relationship between efforts expended and

contracted output. Sale of traded goods is recognised when the risks and rewards of ownership

are passed on to the customer, which generally coincides with the dispatch of goods. Income

from equipment or facility rental is recognised over the period of the relevant agreement or

arrangement.

o Theatrical Exhibition and Related Income:

Sale of tickets: Revenue from theatrical exhibition is recognised on the date of the

exhibition of the films and comprises proceeds from sale of tickets, gross of

entertainment tax. As we are the primary obligor with respect to exhibition activities,

the share of distributors in these proceeds is separately disclosed as distributors’

share. Amount of entertainment tax is shown as a reduction from revenue

Revenue from gift cards is recognised on the basis of availing the facility by the

customer. At the time of sale, the amounts received are recognised as deferred

revenue.

Share of profit in partnership firm is recognised on the basis of audited financial

statement of the Partnership firm.

Sale of food and beverages: Revenue from sale of food and beverages is recognised

upon sale and delivery at the counter.

Advertisement / sponsorship revenue: Revenue from advertisements, sponsorship and

events is recognised on the date of the exhibition of the advertisement or event, over

the period of the contract or on completion of our obligations, as applicable.

Management fee is recognised as revenue on a time proportion basis as per the

relevant agreement.

o Television/ Film Production and Related Income: Revenue from sale of content or motion

pictures is accounted for on the date of agreement to assign or sell the rights in the concerned

content or motion picture or on the date of release of the content or motion picture, whichever

is later. Program sales are accounted on the delivery of tape to the channel.

o Income from Film Distribution Activity: In case of distribution rights of motion pictures or

content, revenue is recognised on the date of release or exhibition. Revenue from other rights

such as satellite rights, overseas rights, music rights or video rights is recognised on the date

when the rights are made available to the assignee for exploitation. Revenue from sale of

VCDs/ DVDs is recognised when the risks and rewards of ownership are passed on to the

customer, which generally coincides with the dispatch of the products.

o Interest Income or Income from Film Financing: Interest income, including from film or

content related production financing, is recognised on a time proportion basis at the rate

implicit in the transaction.

o Dividend Income: Dividend income is recognised when the right to receive dividend is

unconditional at the balance sheet date.

o Marketing Rights or Rights to Profit: Amounts received in lieu of future marketing rights sale,

right to future profit from our business and other rights are recognised as income in the period

of entering into the contract.

Foreign Currency Transactions: Transactions denominated in foreign currency are recorded at the

exchange rate prevailing on the date of the transactions. Exchange differences arising on foreign

exchange transactions settled during the year are recognised in the statement of profit and loss of the

period. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date

are translated at the closing exchange rates on that date; the resultant exchange differences are

245

recognised in the statement of profit and loss except in case of exchange differences arising on

translation of monetary items which form part of our net investment in a non-integral foreign operation

which is accumulated in a ‘foreign currency translation reserve’ until its disposal. Non-monetary items

which are carried at historical cost denominated in a foreign currency are reported using the exchange

rate at the date of the transaction. Forward contracts are entered into to hedge the foreign currency risk

of the underlying transaction. The premium or discount on all such contracts arising at the inception of

each contract is amortised as income or expense over the life of the contract. Exchange difference on

forward contracts are recognised as income or expense in the statement of profit and loss of the period.

Any profit or loss arising on the cancellation and renewal of forward contract is recognised as income

or expense for the period.

Foreign Currency Translation: The consolidated financial statements are reported in Indian rupees in

accordance with AS-11 – ‘The Effects of Changes in Foreign Exchange Rates’ which specifies

translation of foreign subsidiaries on the basis of their classification as integral / non-integral to the

operations of the parent company.

Local currency financials of each integral foreign subsidiary into Indian Rupees is performed in respect

of assets and liabilities other than fixed assets, using the exchange rate in effect at the balance sheet

date and for revenue and expense items other than the depreciation costs, using average exchange rate

during the reporting period. Net exchange difference resulting from the above translation of the

financial statements of integral foreign subsidiaries is recognised in the consolidated statement of profit

and loss. Fixed assets are translated at exchange rates on the date of the transaction and depreciation on

fixed assets is translated at exchange rates used for translation of the underlying fixed assets.

Translation of local currency balances of each non-integral foreign subsidiary into Indian Rupees is

performed in respect of assets and liabilities at the exchange rate in effect at the balance sheet date and

for revenue and expense items at the average exchange rate during the reporting period. Net exchange

differences resulting from the above translation of the financial statements is accumulated in a ‘Foreign

currency translation reserve’, disclosed as reserves and surplus. The amount accumulated will be held

in this account till the time of disposal of the net investment in the subsidiary.

Leases: Rental expenses in non-cancellable arrangements / agreements with scheduled rent increases

are recorded on a straight line basis over the lease term.

Borrowing costs: Borrowing costs that are attributable to the acquisition, construction or production of

qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that

necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs

are charged to revenue.

Recent Changes in Accounting Policies

1. Change in Accounting Policy for Depreciation, amortisation and impairment expense

During Fiscal 2009, we have charged depreciation as per the written down value method in the film

production services, production and distribution business and for unallocated assets at the rates

specified in Schedule XIV of the Companies Act till March 31, 2008. Commencing from April 1, 2008,

we changed our policy to charge depreciation as per the straight line method at the rates specified in

Schedule XIV of the Companies Act. For further details, please see the chapter entitled “Financial

Statements – Significant accounting policies and notes to the restated summary statements of the Group

– Significant changes in accounting policies and other adjustments (debited) / credited to the restated

financial statements on page F-1

Our Business Segments

Our business is divided into three segments on the basis of the nature of the businesses, the differing risks and

returns, the organisation structure and our internal reporting systems:

246

(a) Theatrical Exhibition: Theatrical exhibition operations comprise of single screen, multiplex, IMAX

cinema exhibition and a range of activities and services offered at our cinema theatres including

catering food and beverages.

(b) Film Production Services: Film production services primarily comprise of processing of raw exposed

films, colour correction, editing, digital processing, visual effects, equipment rental, copying and

printing of positive exhibition prints and trading in raw film rolls.

(c) Television, Film Production, Distribution and related services: Television and film production and

distribution operations comprise of the production of television or film content which is produced or

co-produced by us and includes relates services of financing for production of films. Film distribution

operations comprise of our share of revenue from exploitation and distribution rights acquired by us,

which may include as a package, theatrical rights and video and television rights.

247

The following table summarises our consolidated income and operating profit from our three business segments, for the six month ended March 31, 2013, Fiscals

2012, 2011, 2010 and 2009: (in ` lakhs except percentage amounts)

Business

Segment

Six month ended March 31,

2013


Incom

e

% of

Total

Income

of

Three

Segme

nts

Operati

ng

Profit/

(Loss)

Income % of

Total

Income

of

Three

Segme

nts

Operati

ng

Profit/

(Loss)

Incom

e

% of

Total

Income

of

Three

Segme

nts

Operati

ng

Profit/

(Loss)

Incom

e

% of

Total

Income

of

Three

Segme

nts

Operati

ng

Profit/

(Loss)

Incom

e

% of

Total

Income

of

Three

Segme

nts

Operati

ng

Profit/

(Loss)

Theatrical

Exhibitio

n#

24,407.

00 69.42%

(13,366.

09)

86,307.5

0 69.99%

(30,380.

83)

54,678.

30 65.39%

(10,398.

60)

46,724.

80 64.37%

(4,953.7

0)

33,171.

14 50.31%

(4,545.6

0)

Film

Productio

n

Services#

6,353.4

0 18.07%

(7,443.5

1)

27,802.9

0 22.55%

(13,312.

94)

23,265.

50 27.83% (477.60)

15,764.

30 21.72%

3,067.4

2

13,057.

00 19.80%

3,538.9

6

Film

Productio

n and

Distributi

on#

4,389.9

0 12.51% 638.51 9,195.00 7.46% 1,965.80

5,670.5

0 6.78% 1,150.00

10,099.

00 13.91%

4,011.0

0

19,707.

20 29.89%

3,187.3

3

Total

35,159.

30

100.00

%

(20,171.

09

)

123,305.

40

100.00

%

(41,727.

97)

83,614.

30

100.00

%

(9,726.2

0)

72,588.

10

100.00

%

2,124.7

2

65,935.

34

100.00

%

2,180.6

9

248

# This includes part of Other Income allocated to each of our business segments and does not include unallocated revenue.

Additionally, we have considered our overseas operations as separately identifiable geographic segments due to substantial operations in the US and Malaysia.

The following table summarises our consolidated income from our four geographic segments, for the six month ended March 31, 2013, Fiscals 2012, 2011, 2010

and 2009:

(in ` lakhs except percentage amounts)

Geographic Segments Six month ended March 31, 2013 * Fiscal 2012* Fiscal 2011* Fiscal 2010* Fiscal 2009*

Income % of Total

Income of Three

Segments

Income % of

Total

Income

of Three

Segments

Income % of

Total

Income

of Three

Segments

Income % of

Total

Income

of Three

Segments

Income % of

Total

Income

of Three

Segments

India 28,333.10 80.58% 89,526.60 72.61% 60,277.90 72.09% 50,012.80 68.90% 52,324.04 79.36 %

United States of America 6,544.00 18.61% 20,636.40 16.74% 16,234.10 19.41% 15,679.80 21.60% 11,540.00 17.50%

Malaysia 0.00 0.00% 9,427.20 7.65% 5,615.70 6.72% 4,970.80 6.85% 1,491.10 2.26%

Others 282.20 0.81% 3,715.20 3.01% 1,486.60 1.78% 1,924.70 2.65% 580.20 0.88%

Total 35,159.30 100.00% 123,305.40 100.00% 83,614.30 100.00% 72,588.10 100.00% 65,935.34 100.00%

249

* This includes part of Other Income allocated to each of our business segments and does not include unallocated revenue.

Consolidated Results of Operations

The following table provides certain information with respect to our consolidated results of operations for six month ended March 31, 2013, Fiscals 2012, 2011,

2010 and 2009, as set forth in our audited restated consolidated financial statements. (in ` lakhs except percentage amounts)

Particulars Six month ended

March 31, 2013


Amount

(` in

lakhs)

% of

Total

Income

Amount

(` in

lakhs)

% of

Total

Income

Amount

(` in

lakhs)

% of

Total

Income

Amount

(` in

lakhs)

% of

Total

Income

Amount

(` in

lakhs)

% of

Total

Income

Revenue from operations 35,139.80 95.91%

123,441.4

0 98.37% 79,207.40 93.16% 71,507.20 95.64% 65,935.34 90.17%

Other income 1,498.00

4.09% 2,045.50 1.63% 5,818.80 6.84% 3,256.70 4.36% 7,184.90 9.83%


100.00

%

125,486.9

0

100.00

% 85,026.20

100.00

% 74,763.90

100.00

% 73,120.24

100.00

%

Expenditure

Direct operational expenses 14,321.70 39.09% 49,304.20 39.29% 31,059.80 36.53% 28,102.00 37.59% 23,868.30 32.64%

Employee benefits expense 8,975.90 24.50% 31,712.30 25.27% 20,979.80 24.67% 13,179.30 17.63% 10,147.60 13.88%

Other expenses 19,263.20 52.58% 65,209.31 51.97% 34,672.96 40.78% 25,317.05 33.86% 20,056.90 27.43%

Finance costs (net) 13,930.70 38.02% 39,751.40 31.68% 17,514.20 20.60% 11,717.20 15.67% 12,447.20 17.02%

Depreciation, amortization and impairment expense 7,723.40 21.08% 21,335.50 17.00% 13,226.50 15.56% 9,729.44 13.01% 13,542.41 18.52%


175.27

%

207,312.7

1

165.21

% 117,453.26

138.14

% 88,044.99

117.76

% 80,062.41

109.49

%

Loss before exceptional items, tax, minority

interest and share in associates

(27,577.1

0)

(75.27

%)

(81,825.8

1)

(65.21

%)

(32,427.06)

(38.14)

%

(13,281.09)

(17.76)

%

(6,942.17)

(9.49)

%

Exceptional items

(6,001.07

)

(16.38

%)

(8,181.50

) (6.52%)

Loss before tax, minority interest and share in

associates

(33,578.1

7)

(91.65

%)

(90,007.3

1)

(71,73

%)

(32,427.06)

(38.14)

%

(13,281.09)

(17.76)

%

(6,942.17)

(9.49)

%

Less: Provision for tax

250

Particulars Six month ended

March 31, 2013


Amount

(` in

lakhs)

% of

Total

Income

Amount

(` in

lakhs)

% of

Total

Income

Amount

(` in

lakhs)

% of

Total

Income

Amount

(` in

lakhs)

% of

Total

Income

Amount

(` in

lakhs)

% of

Total

Income

- Current tax 232.90 0.64% 769.50 0.61%

113.90 0.13%

39.77 0.05% 416.36 0.57%

- Deferred tax credit / (charge) (11.80) (0.03%) (492.59) (0.39%)

452.69 0.53%

13.25 0.02%

(69.44) (0.09)%

- Fringe benefit tax - - - - - 0.00% - 0.00%

171.70 0.23%

Loss after tax and before minority interest

(33,799.2

7)

(92.25

%)

(90,284.2

2)

(71.95

%)

(32,993.65)

(38.80)

%

(13,334.11)

(17.83)

%

(7,460.79)

(10.20)

%

Add: Share in profit of associate

Less: (Loss) / profit transferred to Minority interest

245.50 0.67%

732.40 0.58%

(196.70) (0.23)%

(530.87) (0.71)%

(322.12) (0.44)%

Net loss after tax before adjustment pursuant to

Schemes

(34,044.7

7)

(92.92

%)

(91,016.6

2)

(72.53

%)

(32,796.95)

(38.57)

%

(12,803.24)

(17.12)

%

(7,138.67)

(9.76)

%

Less: Adjustment pursuant to Radio Scheme of

Arrangement / Scheme of Amalgamation

- - - - (649.30) (0.89)%

Net loss as restated

(34,044.7

7)

(92.92

%)

(91,016.6

2)

(72.53

%)

(32,796.95)

(38.57)

%

(12,803.24)

(17.12)

%

(7,787.97)

(10.65)

%

251

INCOME

Our income comprises income from our operations and other income, each of which is described below.

Income from operations

Our income from operations is primarily comprised of income from our various businesses: theatrical exhibition, film production services and

television and film content production and distribution.

Theatrical Exhibition

The theatrical exhibition of films is our primary business and largest source of revenue, which is generated from the sale of admission tickets,

food and beverage sales, the sale of advertisement space and the utilisation of other facilities in our cinema theatres.

Film Production Services

Our film production services business is our second largest source of revenue, which is generated from the operation of services related to film

processing, film negatives trading, equipment rental, post-production and film restoration.

Television and Film Production and Distribution

We acquire various rights including the right to theatrical exhibition in India and overseas territories and home viewing format rights for films

for distribution on a commission basis or on an overflow basis for our distribution business. We typically acquire the rights to films that are

under production or are at a conceptual stage. We also engage in the co-production of films. Where we have co-produced films we realise our

revenue from these films including through the sale of rights for theatrical releases and satellite broadcast. BIG Synergy Media Limited, one of

our subsidiaries is engaged in the production of television content.

Interest Income

Interest income is primarily generated from certain fixed deposits that we maintain. We also generate interest income from loans given to our

employees and interest on inter-corporate deposits.

Other Income

Our other income primarily includes both recurring and non-recurring income. The recurring components of our

other income include dividend income, interest income, profit on sale of current investments, bad debts recovered, provisions and sundry

balances written back and foreign exchange gains. The non-recurring components of our other income include profits on option contracts, sale

and discarding of assets and sale of investments, profits from insurance and share of advertisement income.

Expenditure

Our expenditure consists generally of operating expenses, employee benefits expenses, administrative expenses, finance costs (net) and

depreciation / amortisation.

Direct operational expenses

Our operating expenses primarily comprise the following:

the production and processing of film negatives for our film services business;

distributors’ share in our theatrical exhibition business;

food and beverage costs;

overflow to producers; and

content production costs in the relation to our television and film content production and distribution business.

252

Cost of Negative Films

The production and processing of film negatives is a significant cost in relation to our film production services business. It primarily consists of

the cost of negatives purchased by us for trading and utilisation during processing.

Distributors’ Share in Our Theatrical Exhibition Business

In order to obtain the right to exhibit a film in our single-screen cinema theatres, we pay the distributor of the film a certain fixed percentage of

the relevant film’s gross or net box office collections. In order to obtain the right to exhibit a film in our multiplexes, we pay the distributor of

the film a percentage of our revenue based on the overall performance of the film at multiplexes in India, in accordance with the settlement

agreement reached in May 2009 between the Multiplex Association of India and the Film & Television Producers’ Guild of India. Pursuant to

the settlement agreement, we have entered into distribution agreements with major distributors in India which provide for a sliding scale of

payment of a distributor’s share based on a film’s performance. For the exhibition of films in the United States, we enter into agreements with

distributors in which a distributor’s share typically ranges from approximately 40.0% to 70.0% of box office collections, depending on the

location of the cinema theatre and the film.

Food and Beverage Costs

We purchase branded and unbranded food and beverage items from various vendors for preparation and sale in our theatres and multiplexes.

The cost of our food and beverage sales is determined by the type and quantity of items purchased, the controls we institute to reduce wastage

and the structure of the menu used in our theatres and multiplexes.

Overflow to Producers

When we acquire film distribution rights, we typically are required to pay a minimum guarantee to the producer of the content. Revenue

received in excess of such minimum guarantee is shared between us and the producer, according to terms of the relevant distribution agreement.

Content Production Costs

Content production costs relate to our television and film content production and distribution business and consist of costs such as equipment

rental, location rental, artist costs, other technical and profession personnel hiring and other incidental expenses at film and television content

production locations.

Electricity, power and water charges

Electricity, power and water charges are mainly pertaining to our theatrical exhibition business, wherein we incur cost of utilities for operation

of our theatres and also include cost of diesel for operation of generators for backup power at our cinemas and facilities.

Employee Benefits Expense

Employee benefits expenses consist primarily of expenses incurred towards payment of salaries, allowances and bonuses, contributions to the

employees’ provident fund and other welfare funds, gratuity and leave encashment and other staff welfare expenses. Our employee benefits

expenses have grown and are expected to continue to grow, primarily due to the increase in the number of cinema theatres we operate and the

expansion of our new businesses.

Other Expenses

Other expenses primarily include rent, legal and professional expenses, expenses for advertising and business promotion, travelling and

conveyance expenses, communication expenses, electricity charges, office, printing and stationary expenses.

253

Rent

Lease rent for theatrical exhibition is a major component of our cost.

Finance Costs

Our finance costs include interest and charges payable on borrowings and loss on derivative contracts. Interest primarily includes interest on

borrowings paid to banks and financial institutions and interest paid to corporate lenders on inter-corporate deposits. We borrow primarily to

meet our capital expenditure requirements and meet working capital shortfalls. Finance costs also include bank guarantee commissions paid to

banks towards guarantees given to our Subsidiaries, regulatory authorities and other officials in various states.

Depreciation and Amortisation Expense

We incur capital expenditure on lease improvements, plant and machinery, air conditioning equipment, theatrical equipment, data processing

equipment and office equipment. In our theatrical exhibition business, our plant and machinery include, among others, our projectors, sound

system equipment and equipment used for our concession counters in our cinema theatres. In our film production services business, our plant

and machinery include, among others, laboratory equipment used for processing of film negatives, scanners for the processing of exposed film,

subtitling equipment and cameras for our equipment rental business.

Immoveable assets at our leased premises, which include civil works and electrical items, are capitalised as leasehold assets and are amortised

over the primary period of lease.

Depreciation is provided on the basis of “Straight Line Method”, at the rates specified in Schedule XIV of the Companies Act or the rates based

on useful lives of the assets as estimated by the management, whichever is higher.

Individual assets costing less than ` 0.05 lakhs are fully depreciated in the year of acquisition. The depreciation is provided on pro rata basis on

the assets acquired, sold or disposed of during the relevant year. The annual depreciation rates are as provided below:

Asset Rate of Depreciation (%)

Plant and machinery 7.07% to 20%

Office equipment 10%

Furniture and fixtures 10% to 25%

Computers 20%

Vehicles 10%

Taxation

We are subject to income tax liability in India under the IT Act and overseas based on the relevant local laws of the particular jurisdiction. In

India, pursuant to the provisions of the IT Act we may also be liable to pay Minimum Alternate Tax based on book profit. We make provision

for current tax as well as for deferred tax liability based on our anticipated utilisation of tax charges carried forward. We have made necessary

provisions for fringe benefit tax as well.

Provision for Taxation

Current Tax: Current tax is the provision made for income tax liability on the profits for the applicable financial period in accordance with

applicable tax laws.

Deferred Tax: Deferred tax arises from timing differences between book profits (accounting) and taxable profits that originate in one period and

are capable of reversal in one or more subsequent periods. Deferred tax is measured using tax rates and laws that have been enacted or

substantially enacted as of the date of our balance sheet.

Fringe Benefit Tax: In accordance with existing laws, we have provided for the necessary fringe benefit tax up to and including Fiscal 2009.

254

Six month ended March 31, 2013

Our results for six month period ended March 31, 2013 were primarily driven by the following key factors:

i) Closure of several loss making properties during the current period to reduce the operational losses suffered by the Exhibition business.

Income

Our total income was ` 36,637.80 lakhs for the six month period ended March 31, 2013.

Income from Operations

Our income from our operations was ` 35,139.80 lakhs for the six months ended March 31, 2013. (` in lakhs)

Particulars Six months ended March 31, 2013

Amount % of Total Income

Theatrical exhibition business:

Sale of tickets 18,267.70 49.86%

Entertainment tax (3,068.00) (8.37%)

Food and Beverage Sales 5,026.00 13.72%

Advertisements / Sponsorship revenue 1,928.60 5.26%

Others 2,233.20 6.09%

Total (a) 24,387.50 66.56%

Film Production Services Business:

Processing / printing of films 4,842.60 13.22%

Equipment / facility rental income 1,346.50 3.68%

Trading income 121.60 0.33%

Others 42.70 0.12%

Total (b) 6,353.40 17.34%

Income from television / films distribution and production

and related services (c) 4,398.90 12.01%

Total Income from Operations (a + b + c) 35,139.80 95.91%

Income from Theatrical Exhibition Business

Income from theatrical exhibition business was ` 24,387.50 lakhs for the six months ended March 31, 2013.

Our sale of tickets income was ` 18,267.70 lakhs for the six months ended March 31, 2013.

Food and beverage sales income for the six months ended March 31, 2013 was Rs. 5,026.00 lakhs, which was 27.51% of our gross box office

collections.

Advertisement / sponsorship income was ` 1,928.60 lakhs for the six months ended March 31, 2013.

Other revenue from exhibition business was ` 2,233.20 lakhs for the six months ended March 31, 2013.

Income from Film Production Services Business

Our income from film production services business was ` 6,353.40 lakhs for the six months ended March 31, 2013.

255

Income from processing and printing of films was ` 4,842.60 lakhs.

Income from equipment / facility rental income was ` 1,346.50 lakhs for the six months ended March 31, 2013.

Our income from film negatives trading was ` 121.60 lakhs.

Other film production services income increased was ` 42.70 lakhs.

Income from Television / Film Content Production and Distribution business

Our total income from our television / film content production and distribution business was ` 4,398.90 lakhs for the six months ended March

31, 2013.

Other Income

Our other income for the six months ended March 31, 2013 was ` 1,498.00 lakhs.

Expenditure (` in lakhs)


Amount % of Total Income

Direct operational expenses 14,321.70 39.09%

Employee benefits expense 8,975.90 24.50%

Other expenses 19,263.20 52.58%

Finance costs (net) 13,930.70 38.02%

Depreciation, amortisation and impairment expense 7,723.40 21.08%

Total Expenditure 64,214.90 175.27%

Our expenditure was ` 64,214.90 lakhs for the six month ended March 31, 2013.

Direct Operating Expenses

Direct operating expenses were ` 14,321.70 lakhs for the six months ended March 31, 2013:

(` in lakhs)


Amount

(` in lakhs)

% of Total Income

Distributors share 7,071.90 19.30%

Print, publicity expenses and Producers overflow 214.30 0.58%

Cost of production for television content 2,207.52 6.03%

Electricity, power and water charges 2,632.70 7.19%

Cost of food and beverage sold 1,499.70 4.09%

Cost of raw films sold 113.80 0.31%

Processing charges 140.70 0.38%

Other direct operational expenses 441.08 1.20%

Total 14,321.70 39.09%

Our revenue for television production was ` 4,111.62 lakhs and our cost of production of television content was ` 2,207.52 lakhs for the six

month period ended March 31, 2013 with a margin of 46.31%

Our cost of food and beverages as remained constant at about 29.84 % of our sale of food and beverages.

256

Employee benefits expense

Our employee benefits expenses were ` 8,975.90 lakhs for the six month period ended March 31, 2013.

Other Expenses

Our other expenses were ` 19,263.20 lakhs for the six month period ended March 31, 2013.

Finance Costs

Our finance cost was ` 13,930.70 lakhs for the six month period ended March 31, 2013.

Depreciation, amortisation and impairment expense

Depreciation, amortisation and impairment expense was ` 7,723.40 lakhs for the six months ended March 31, 2013.

Exceptional items

During six months ended March 31, 2013, the Company has recognised exceptional items of expenditure which consisted of:

i) The Company has undertaken an initiative for rationalization / improvement of overall Exhibition business, under which the Company is re-

negotiating rentals. As part of this initiative, rentals for several properties have been reduced, however in some cases the Company has

decided to exit the property. In these cases, ` 5,682.58 lakhs pertaining to these properties have been written off / provided to the statement

of profit and loss, thereby reducing subsequent cash losses suffered by the Company.

ii) A subsidiary of the Parent Company in Mauritius has provided certain advances and deposits – ` 318.49 lakhs.

Tax

Tax expenses were ` 221.10 lakhs for the six months ended March 31, 2013.

Minority Interest

Minority’s share of profit was ` 245.50 lakhs for the six months ended March 31, 2013.

(Loss)/Profit After Minority Interest After Adjustments pursuant to Schemes

Loss after minority interest after adjustments pursuant to Schemes was ` 34,044.77 lakhs for the six months ended March 31, 2013.

Fiscal 2012 compared to Fiscal 2011

Our results of operations for Fiscal 2012 were primarily driven by the following key factors:

i) We started delivery for the Digital Domain Production Inc. contract from our centres in Mumbai, India and London, United Kingdom.

ii) Subsequent bankruptcy of DDMG and acquisition of 30% controlling interest in Galloping Horse-Reliance LLC all through a court

approved process.

iii) Sale of our investments in Nepal and Malaysia in the exhibition business.

257

Further, during Fiscal 2012:

i) We sold our entire shareholding in our subsidiaries Sri Ramakrishna Theatres Limited, Rave Entertainment and Food Nepal Private

Limited, Reliance MediaWorks (Malaysia) Sdn. Bhd. and Reliance MediaWorks Big Cinemas Sdn. Bhd. and our Joint Venture Cineplex

Private Limited.

ii) We incorporated a new subsidiaries Reliance Media Consultant Private Limited and Reliance MediaVentures Private Limited with effect

from February 16, 2012 and June 19, 2012.

Income

Our total income was ` 85,026.20 lakhs in Fiscal 2011 to ` 125,486.90 lakhs in Fiscal 2012, for the reasons mentioned below.


Our income from our operations was ` 79,207.40 lakhs for Fiscal 2011 and ` 123,441.40 lakhs for Fiscal 2012.

(` in lakhs)

Particulars Fiscal 2012 Fiscal 2011

Amount % of Total Income Amount % of Total Income


Sale of tickets 68,030.50 54.21% 39,009.50 45.88%

Entertainment tax (10,885.50) (8.67)% (5,098.90) (6.00)%

Food and Beverage Sales 19,396.40 15.46% 10,716.70 12.60%

Advertisements / Sponsorship revenue 3,498.40 2.79% 3,684.20 4.33%

Others 6,224.90 4.96% 3,066.40 3.61%

Total (a) 86,264.70 68.74% 51,377.90 60.43%


Processing / printing of films 22,905.30 18.25% 18,794.00 22.10%

Equipment / facility rental income 3,665.30 2.92% 2,084.60 2.45%

Trading income 1,304.30 1.04% 1,926.30 2.27%

Others 150.90 0.12% 44.30 0.05%

Total (b) 28,025.80 22.33% 22,849.20 26.87%

Income from television / films

distribution and production and

related services (c) 9,150.90 7.29% 4,980.30 5.86%

Total Income from Operations (a +

b + c) 123,441.40 98.37% 79,207.40 93.16%


Income from theatrical exhibition business was ` 51,377.90 lakhs in Fiscal 2011 and ` 86,264.70 lakhs in Fiscal 2012.

Our sale of tickets income was ` 39,009.50 lakhs in Fiscal 2011 and ` 68,030.50 lakhs in Fiscal 2012.

Food and beverage sales income for Fiscal 2012 was ` 19,396.40 lakhs vis-à-vis sales of ` 10,716.70 lakhs for Fiscal 2011. Food and beverage

sales income as a percentage of gross box office collections is 27.47% for Fiscal 2011 and 28.51% for Fiscal 2012 reflecting our increased focus

on food and beverage sales, our enhanced menu offerings at our cinemas.

258

Advertisement / sponsorship income was ` 3,498.40 lakhs for Fiscal 2012 vis-à-vis ` 3,684.20 lakhs for Fiscal 2011.

Other revenue from exhibition business was ` 6,224.90 lakhs for Fiscal 2012 vis-à-vis ` 3,066.40 lakhs for Fiscal 2011.


Our income from film production services business was ` 28,025.80 lakhs for Fiscal 2012 vis-à-vis ` 22,849.20 lakhs for Fiscal 2011.

Income from processing and printing of films was ` 22,905.30 lakhs for Fiscal 2012 vis-à-vis ` 18,794.00 lakhs for Fiscal 2011. The year

witnessed reduction in the share of analogue revenue due to increased trend of digitisation of movies.

Income from equipment / facility rental income was ` 3,665.30 lakhs for Fiscal 2012 vis-à-vis ` 2,084.60 lakhs for Fiscal 2011.

Our income from film negatives trading was ` 1,304.30 lakhs for Fiscal 2012 vis-à-vis ` 1,926.30 lakhs for Fiscal 2011.

Other film production services income increased was ` 150.90 lakhs for Fiscal 2012 vis-a-vis ` 44.30 lakhs for Fiscal 2011.

Income from Television / Film Content Production and Distribution business

Our total income from our television / film content production and distribution business was ` 9,150.90 lakhs for Fiscal 2012 vis-à-vis `

4,980.30 lakhs for Fiscal 2011.

Other Income

Our other income for Fiscal 2012 was ` 2,045.50 lakhs vis-à-vis ` 5,818.80 lakhs for Fiscal 2011. During Fiscal 2011, we had profit on sale of

fixed assets of ` 2,694.80 lakhs.




Direct operational expenses 49,304.20 39.29% 31,059.80 36.53%

Employee benefits expense 31,712.30 25.27% 20,979.80 24.67%

Other expenses 65,209.31 51.97% 34,672.96 40.78%

Finance costs (net) 39,751.40 31.68% 17,514.20 20.60%

Depreciation, amortisation and

impairment expense 21,335.50 17.00% 13,226.50 15.56%

Total Expenditure 207,312.71 165.21% 117,453.26 138.14%

Our expenditure was ` 207,312.71 lakhs for Fiscal 2012 vis-à-vis ` 117,453.26 lakhs for Fiscal 2011.

Direct Operating Expenses

Direct operating expenses were ` 49,304.20 lakhs for Fiscal 2012 and ` 31,059.80 lakhs for Fiscal 2011. A breakup of our direct operating

expenses is as mentioned below:


Amount

(` in lakhs)

% of Total Income Amount

(` in lakhs)

% of Total Income

Distributors share 26,625.90 21.22% 16,027.20 18.85%

Print, publicity expenses and Producers overflow 163.70 0.13% 253.30 0.30%

Cost of production for television content 4,995.50 3.98% 3,185.20 3.75%

Electricity, power and water charges 8,847.40 7.05% 5,140.90 6.05%

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Amount

(` in lakhs)


(` in lakhs)

% of Total Income

Cost of food and beverage sold 6,110.10 4.87% 3,382.40 3.98%

Cost of raw films sold 1,133.60 0.90% 1,667.10 1.96%

Processing charges 409.20 0.33% 332.10 0.39%

Other direct operational expenses 1,018.80 0.81% 1,071.60 1.26%

Total 49,304.20 39.29% 31,059.80 36.53%

Our revenue for television production was ` 4,334.55 lakhs in Fiscal 2011 and ` 8,825.23 lakhs in Fiscal 2012 and our cost of production of

television content was ` 3,185.20 lakhs for Fiscal 2011 and ` 4,995.50 lakhs. Our revenue for television production less cost of production of

television content in proportion to our revenue for television production leads to a margin of 26.52% in Fiscal 2011 and 43.40% in Fiscal 2012.

Our cost of food and beverages as remained constant at about 31.50% of our sale of food and beverages.


Our employee benefits expenses were ` 31,712.30 lakhs for Fiscal 2012 vis-à-vis ` 20,979.80 lakhs for Fiscal 2011. As of September 30, 2012

we had 3,256 employees.

Other Expenses

Our other expenses were ` 65,209.31 lakhs for Fiscal 2012 vis-à-vis ` 34,672.96 lakhs for Fiscal 2011. The increase is primarily on account of

increased in our rent expenses.

Finance Costs

Our finance cost was ` 39,751.40 lakhs for Fiscal 2012 vis-à-vis ` 17,514.20 lakhs for Fiscal 2011, which included the loss on derivative

contracts of ` 5,966.80 lakhs in Fiscal 2012 and ` 2,166.90 lakhs in Fiscal 2011.

Our borrowings as of September 30, 2012 were ` 207,264.37 lakhs and ` 198,241.80 lakhs as of March 31, 2011.

We had borrowed a sum of ` 29,500 lakhs from Reliance Utility Engineers Private Limited and Reliance Infocomm Engineering Private Limited

in Fiscal 2012 towards repaying some of our outstanding obligations. These loans were subsequently converted to preference shares on March

31, 2012, thereby augmenting our net-worth and reducing our outstanding borrowings.


Depreciation, amortisation and impairment expense was ` 21,335.50 lakhs for Fiscal 2012 vis-à-vis ` 13,226.50 lakhs for Fiscal 2011.

Exceptional items

During Fiscal 2012, the Company has recognised exceptional items of expenditure which consisted of:

i) Loss on sale of investment in subsidiaries in Malaysia, which operated in the theatrical exhibition business aggregating to ` 2,722.90 lakhs.

ii) Provision for amount recoverable from Digital Domain Productions Inc. (DDPI), a subsidiary of Digital Domain Media Group Inc.

('DDMG') for various services rendered. On September 11, 2011, DDMG along with all its subsidiaries filed for bankruptcy proceedings in

the United States of America. The amount provided for outstanding balances is ` 2,774.80 lakhs.

iii) Loss on Litigation settlement by US subsidiary of ` 2,683.80 lakhs. The subsidiary was a defendant in a law suit regarding termination of a

lease. During the previous year, the said subsidiary received an adverse order for claim of damages by the landlord to the tune of USD 4.9

million. The US Supreme Court has denied an appeal filed by the subsidiary Company. Accordingly, the Subsidiary has made a provision of

260

` 2,683.80 for such claim along with other charges payable as per the order. Considering its nature same has been disclosed as an

exceptional item.

Tax

Tax expenses changed from ` 566.59 lakhs in Fiscal 2011 to ` 276.91 lakhs in the Fiscal 2012 due to reversal of deferred tax recognised by us in

earlier periods.

Minority Interest

Minority’s share of profit was ` 732.40 lakhs in Fiscal 2012 as compared to minority’s share of loss ` 196.70 lakhs in Fiscal 2011.

(Loss)/Profit After Minority Interest After Adjustments pursuant to Schemes

Loss after minority interest after adjustments pursuant to Schemes changed from ` 32,796.95 lakhs in Fiscal 2011 to ` 91,016.62 lakhs in the

Fiscal 2012.

Fiscal 2011 Compared to Fiscal 2010


i) Increase in the number of screens to 543 as of March 31, 2011 from 508 as of March 31, 2010; and

ii) Commencement, in Fiscal 2011, of commercial operation of our subsidiary Reliance MediaWorks Entertainment Services Limited, which is

engaged in the business of film restoration and conversion. This contributed to the improvement in our revenues from film production

services during Fiscal 2011.

Additionally, during the year our subsidiaries Adlabs Heritage LLC and Adlabs Digital Media LLC were dissolved and we acquired additional

49% stake in our subsidiary Big Cinemas Galaxy LLC, whereupon it became our wholly owned subsidiary. Consequently, to this extent, the

restated consolidated financial statements for Fiscal 2011 may not be directly comparable with the financial statements for Fiscal 2010.

Income

Our total income increased by 13.73% to ` 85,026.20 lakhs for Fiscal 2011 from ` 74,763.90 lakhs for Fiscal 2010, primarily as a result of

increase in revenue from theatrical exhibition and film production services.


Our income from our operations increased by 10.77% to ` 79,207.40 lakhs for Fiscal 2011 from ` 71,507.20 lakhs for Fiscal 2010, primarily as

a result of increase in revenue from theatrical exhibition and film production services, which was partially offset by a decrease in income from

television and film content production and distribution. The following table provides details of our income from operations for Fiscals 2011 and

2010: (` in lakhs)


Amount % of Total

Income

Amount % of Total

Income


Sales of tickets 39,009.50 45.88% 34,706.70 46.42%

Entertainment Tax (5,098.90) (6.00%) (3,958.20) (5.29%)


Advertisements 3,684.20 4.33% 4,651.70 6.22%

Others 3,066.40 3.61% 2,587.50 3.46%

Total Theatrical Exhibition Business Income 51,377.90 60.43% 46,710.00 62.48%

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Amount % of Total

Income

Amount % of Total

Income


Processing and Printing of Film 18,794.00 22.10% 11,486.40 15.36%

Equipment and facilities rental income 2,084.60 2.45% 1,566.50 2.10%

Film Negatives Trading 1,926.30 2.27% 2,229.30 2.98%

Others 44.30 0.05% 72.30 0.10%

Total Film Production Services Business Income 22,849.20 26.87% 15,354.50 20.54%

Total Television and Film Content Production and Distribution

Income

4,980.30 5.86% 9,442.70 12.63%

Total Income from Operations 79,207.40 93.16% 71,507.20 95.64%


Our total income from our theatrical exhibition business increased by 9.99% to ` 51,377.90 lakhs for Fiscal 2011 from ` 46,710.00 lakhs for

Fiscal 2010, primarily as a result of increase in the number of screens under operation and the average realisations from theatres. The number of

our properties increased to 146 as of March 31, 2011 from 140 as of March 31, 2010. Due to the increase in our properties, our screens under

operation increased to 543 screens as of March 31, 2011 from 508 screens as of March 31, 2010. In addition to the increase in the number of

properties, we also derived realisations for full 12 months of Fiscal 2011 from 20 properties which had commenced operations during Fiscal

2010.

Our sale of tickets collections income increased by 12.40% to ` 39,009.50 lakhs for Fiscal 2011 from ` 34,706.70 lakhs for Fiscal 2010,

primarily as a result of increase in the number of screens under operation and average realisation from theatres due to an increase in the number

of multiplexes and an improvement in the business environment.

Food and beverage sales income increased by 22.87% to ` 10,716.70 lakhs for Fiscal 2011 from ` 8,722.30 lakhs for Fiscal 2010, primarily due

to the launch of new food products and combinations of food and beverages made available through a new menu at our cinema theatres.

Advertisement sponsorship income decreased by 20.80% to ` 3,684.20 lakhs for Fiscal 2011 from ` 4,651.70 lakhs for Fiscal 2010, mainly due

to the decrease in advertising expenditure incurred by our clients in view of adverse business and economic conditions.

Income from our other theatrical exhibition business increased by 18.51% from to ` 3,066.40 lakhs in Fiscal 2011 from ` 2,587.50 lakhs in

Fiscal 2010. Our other theatrical exhibition business mainly comprises of income from parking and kiosk rentals. The increase in our income

from other theatrical exhibition business was primarily on account of increase in footfalls and the number of our screens under operation.


Our total income from our film production services business increased by 48.81% to ` 22,849.20 lakhs for Fiscal 2011 from ` 15,354.50 lakhs

for Fiscal 2010, primarily as a result of growth in business related to digital conversion, movie restoration and equipment renting. Additionally,

our subsidiary, Reliance MediaWorks Entertainment Services Limited commenced operations in Fiscal 2011 and generated an income of `

4,293.37 lakhs.

Our income from processing and printing of films increased by 63.62% to ` 18,794.00 lakhs for Fiscal 2011 from ` 11,486.40 lakhs for Fiscal

2010 due to an improvement in our analogue film processing. During Fiscal 2011 we processed 372,484,000 feet of films as compared to

358,387,000 feet in Fiscal 2010. Consequently our income from processing of films increased to ` 5,978.75 lakhs in Fiscal 2011 from `

5,680.03 lakhs in Fiscal 2010.

Our income from equipment and facility rental increased by 33.07% to ` 2,084.60 lakhs for Fiscal 2011 from ` 1,566.50 lakhs for Fiscal 2010,

primarily as a result of completion of phase I of our new studio facility in January 2011 and consequent commencement of its renting.

262

Our income from film negatives trading decreased by 13.59% to ` 1,926.30 lakhs for Fiscal 2011 from ` 2,229.30 lakhs for Fiscal 2010,

primarily as a result of decrease in the number of cans of negative sold from 18,41,000 cans in Fiscal 2010 to 13,75,800 cans in Fiscal 2011.

Our other film services income decreased by 38.73% to ` 44.30 lakhs in Fiscal 2011 from ` 72.30 lakhs in Fiscal 2010.

Income from Television and Film Content Production and Distribution Business

Our total income from our television and film content production and distribution business decreased by 47.26% to ` 4,980.30 lakhs for Fiscal

2011 from ` 9,422.70 lakhs for Fiscal 2010, primarily as a result of reduction in the number of movies distributed by us in Fiscal 2011.

Other Income

Our other income increased by 78.67% to ` 5,818.80 lakhs for Fiscal 2011 from ` 3,256.70 lakhs for Fiscal 2010, primarily as a result of the

profit realised on sale of fixed assets amounting to ` 2,694.80 lakhs, which were leased back subsequently, and recovery of bad debts or

provision written back amounting to ` 1,405.50 lakhs in Fiscal 2011.




Direct Operational Expenses 31,059.80 36.53% 28,102.00 37.59%


Other expenses 34,672.96 40.78% 25,317.05 33.86%


Depreciation, amortisation and impairment

expense

13,226.50 15.56% 9,729.44 13.01%


Our expenditure increased by 33.40% to ` 117,453.26 lakhs for Fiscal 2011 from ` 88,044.99 lakhs for Fiscal 2010, primarily as a result of

increases in direct operational expenses, employee benefits expenses and administrative and other expenses, and finance costs (net).

Direct Operational Expenses

The key components of our direct operational expenses are detailed in the following table: (` in lakhs)



Distributors’ share 16,027.20 18.85% 15,782.50 21.11%

Print, publicity expenses and producers overflow 253.30 0.30% 333.80 0.45%





Processing charges 332.10 0.39% 509.00 0.68%

Other Direct Expenses 1,071.60 1.26% 761.90 1.02%

Total 31,059.80 36.53% 28,102.00 37.59%

Direct operational expenses increased by 10.53% to ` 31,059.80 lakhs for Fiscal 2011 from ` 28,102.00 lakhs for Fiscal 2010. This increased

primarily as a result of increases in Fiscal 2011 in (i) the cost of production for television content caused by an increase in the content

production and distribution undertaken by us during this Fiscal, (ii) utilities charges due to increased cost of fuel and other inputs and an

263

increase in the number of screens operated by us, (iii) and an increase in cost of food and beverages sold resulting from the increase in the

number of screens operated by us customer footfalls.


Our employee benefits expenses increased by 59.19% to ` 20,979.80 lakhs for Fiscal 2011 from ` 13,179.30 lakhs for Fiscal 2010, primarily as

a result of an increase in the number of employees to 6,644 as of March 31, 2011 as compared to 5,634 as of March 31, 2010 due to the

commencement of our production and post-production services for television commercials, VFX services, studio located at the Film City,

Mumbai, and digital conversion and restoration services.

Other Expenses

Our administrative and other expenses increased by 36.95% to ` 34,672.96 lakhs for Fiscal 2011 from ` 25,317.05 lakhs for Fiscal 2010,

primarily as a result of increases in costs due to rent and miscellaneous costs.

Finance Charges

Our finance costs (net) increased by 49.47% to ` 17,514.20 lakhs for Fiscal 2011 from ` 11,717.20 lakhs for Fiscal 2010, primarily as a result of

utilisation of borrowed funds for capital expenditure. Additionally, during Fiscal 2011, the interest rate on our borrowing increased, we incurred

expenditure on the interest rate swap for hedging the interest rates on our long term syndicated bank loan and we incurred foreign exchange loss

due to redemption of FCCBs.


Depreciation, amortisation and impairment expense increased by 35.94% to ` 13,226.50 lakhs for Fiscal 2011 from ` 9,729.44 lakhs for Fiscal

2010, primarily as a result of increase in our assets due to the capital expenditure incurred and full year utilisation of certain assets during Fiscal

2011.

Tax

Tax increased by 968.63% to ` 566.59 lakhs for Fiscal 2011 from ` 53.02 lakhs for Fiscal 2010, primarily as a result of deferred tax, which

increased to ` 452.69 lakhs for Fiscal 2011 as from ` 13.25 lakhs for Fiscal 2010.

Minority Interest

Share of the minority interest in our losses was ` 196.70 lakhs for Fiscal 2011 as compared to ` 530.87 lakhs for Fiscal 2010.

(Loss)/Profit After Minority Interest After Adjustments Pursuant to Schemes

Loss after minority interest after adjustments increased to ` 32,796.95 lakhs for Fiscal 2011 from ` 12,803.24 lakhs for Fiscal 2010, primarily as

a result of increases in employee benefits expenses, administrative and other expenses, finance costs (net) and depreciation, amortisation and

impairment expense.

Fiscal 2010 Compared to Fiscal 2009


i) the expansion of our theatrical exhibition business;

ii) the acquisition of assets related to processing laboratory acquired by us from Vectrox Limited; and

iii) the expansion of our equipment rental business.

Additionally, during the year our subsidiaries BIG Cinemas Union LLC and Adlabs Forum LLC were dissolved, we acquired 100% stake in

Reliance MediaWorks Entertainment Services Limited, whereupon it became our wholly owned subsidiary, we registered three new subsidiaries

being Reliance Media Works VFX Inc., Adlabs Globalstar LLC and Reliance Media and Marketing Communications LLC, we purchased the

264

balance 10% of the outstanding shares of Reliance Lowry Digital Imaging Services Inc., pursuant to which it became our wholly owned

subsidiary and we diluted our shareholding in BIG Cinemas Sahil LLC by 3%. Consequently, to this extent, the restated consolidated financial

statements for Fiscal 2010 may not be directly comparable with the financial statements for Fiscal 2009.

Income

Our total income increased by 2.25% to ` 74,763.90 lakhs for Fiscal 2010 from ` 73,120.24 lakhs for Fiscal 2009, primarily as a result of an

increase in our total theatrical exhibition business income by 40.82% to ` 46,710.00 lakhs for Fiscal 2010 from ` 33,171.14 lakhs for Fiscal

2009, an increase in film production services income by 17.60% to ` 15,354.50 lakhs for Fiscal 2010 from ` 13,057.00 lakhs for Fiscal 2009,

which was partially offset by a decrease in our total television and film content production and distribution income by 52.09% to ` 9,442.70

lakhs for Fiscal 2010 from ` 19,707.20 lakhs for Fiscal 2009.


Our income from our operations increased by 8.45% to ` 71,507.20 lakhs for Fiscal 2010 from ` 65,935.34 lakhs for Fiscal 2009, primarily as a

result of increases in our total theatrical exhibition business income and film production services income, which, was partially offset by a

decrease in our total television and film content production and distribution income. The following table provides details of our income from

operations for Fiscals 2010 and 2009:

(` in lakhs)


Amount % of Total

Income

Amount % of Total

Income


Sale of tickets 34,706.70 46.42% 25,864.40 35.37%

Entertainment Tax (3,958.20) (5.29)% (2,288.70) (3.13)%


Advertisements / Sponsorship 4,651.70 6.22% 1,465.20 2.00%

Others 2,587.50 3.46% 1,659.90 2.27%

Total Theatrical Exhibition Business Income 46,710.00 62.48% 33,171.14 45.37


Processing and Printing of Film 11,486.40 15.36% 9,299.80 12.72%

Equipment/ Facility Rental 1,566.50 2.10% 612.40 0.84%

Film Negatives Trading 2,229.30 2.98% 3,077.40 4.21%

Others 72.30 0.10% 67.40 0.09%

Total Film Production Services Business Income 15,354.50 20.54% 13,057.00 17.86%

Total Television and Film Content Production and

Distribution Income

9,442.70 12.63% 19,707.20 26.95%

Total Income from Operations 71,507.20 95.64% 65,935.34 90.17%


Our total income from our theatrical exhibition business increased by 40.82% to ` 46,710.00 lakhs for Fiscal 2010 from ` 33,171.14 lakhs for

Fiscal 2009, primarily as a result of an increase in the scale of our operations in India and the effect of accruing a full year of revenue for our

theatrical exhibition business operations in Malaysia. Our number of properties increased to 140 properties as of March 31, 2010 from 115

properties as of March 31, 2009. Our number of screens increased to 508 screens as of March 31, 2010 from 429 screens as of March 31, 2009.

Our sale of tickets collections income increased by 34.19% to ` 34,706.70 lakhs for Fiscal 2010 from ` 25,864.40 lakhs for Fiscal 2009,

primarily as a result of an increase in the number of our cinema theatres in India and the effect of accruing a full year of revenue for our

theatrical exhibition business operations in Malaysia.

265

Food and beverage sales income increased by 34.80% to ` 8,722.30 lakhs for Fiscal 2010 from ` 6,470.34 lakhs for Fiscal 2009, primarily as a

result of an increase in the number of our cinema theatres and an improved menu.

Advertisement sponsorship income increased by 217.48% to ` 4,651.70 lakhs for Fiscal 2010 from ` 1,465.20 lakhs for Fiscal 2009, primarily

as a result of increased monetisation of available space in the Indian and overseas markets and the launch of several initiatives for co-branding

and promotion of our products.


Our total income from our film production services business increased by 17.60% to ` 15,354.50 lakhs for Fiscal 2010 from ` 13,057.00 lakhs

for Fiscal 2009, primarily as a result of our expansion into new business areas such as equipment rental.

Our income from the processing and printing of film increased by 23.51% to ` 11,486.40 lakhs for Fiscal 2010 from ` 9,299.80 lakhs for Fiscal

2009, primarily as a result of the full year effect of the acquisition of our Subsidiary, Lowry Digital.

Our income from equipment rental increased by 155.80% to ` 1,566.50 lakhs for Fiscal 2010 from ` 612.40 lakhs for Fiscal 2009, primarily as a

result of an increase in the number of cameras we rented and the rental of specialised equipment.

Our income from film negatives trading decreased 27.56% to ` 2,229.30 lakhs for Fiscal 2010 from ` 3,077.40 lakhs for Fiscal 2009, primarily

as a result of reduction in sales volume.

Income from Television and Film Content Production and Distribution Business

Our total income from our television and film content production and distribution business decreased by 52.09% to ` 9,442.70 lakhs for Fiscal

2010 from ` 19,707.20 lakhs for Fiscal 2009, primarily as a result of the non-availability of popular, large-budget content.

Other Income

Our other income decreased by 54.67% to ` 3,256.70 lakhs for Fiscal 2010 from ` 7,184.90 lakhs for Fiscal 2009, primarily as a result of

reduced income from, among other sources, dividends, the sale of long term investments and consultation fees.

Expenditure

(` in lakhs)


Amount % of Total

Income

Amount % of Total

Income

Direct Operational Expenses 28,102.00 37.59% 23,868.30 32.64%


Other Expenses 25,317.05 33.86% 20,056.90 27.43%


Depreciation, amortisation and impairment expense 9,729.44 13.01% 13,542.41 18.52%


Our expenditure increased by 9.97% to ` 88,044.99 lakhs for Fiscal 2010 from ` 80,062.41 lakhs for Fiscal 2009, primarily as a result of

increases in direct operational expenses, employee benefits expenses and administrative and other expenses, partially offset by a decrease in

depreciation, amortisation and impairment expense.

266

Direct Operational Expenses

The key components of our direct operational expenses are detailed in the following table:


Amount

(` in lakhs)


(` in lakhs)

% of Total Income

Distributors’ share 15,782.50 21.11% 8,758.10 11.98%

Print, publicity expenses and Producers overflow 333.80 0.45% 2,029.20 2.78%





Processing charges 509.00 0.68% 1,331.40 1.82%

Other Direct Expenses 761.90 1.02% 569.40 0.78%

Total 28,102.00 37.59% 23,868.30 32.64%

Direct operational expenses increased by 17.74% to ` 28,102.00 lakhs for Fiscal 2010 from ` 23,868.30 lakhs for Fiscal 2009, primarily as a

result of an increase in amounts paid for distributors’ share caused by the addition of new cinema theatres.


Our employee benefits expenses increased by 29.88% to ` 13,179.30 lakhs for Fiscal 2010 from ` 10,147.60 lakhs for Fiscal 2009, primarily as

a result of an increase in the number of employees to 5,634 as of March 31, 2010 as compared to 2,382 as of March 31, 2009 to operate

additional cinema theatres and the new businesses initiated by us during this Fiscal.

Other Expenses

Our administrative and other expenses increased by 26.23% to ` 25,317.05 lakhs for Fiscal 2010 from ` 20,056.90 lakhs for Fiscal 2009,

primarily as a result of increases in costs due to rent, legal and professional fees, facility maintenance charges, labour charges, advertisement,

repairs and miscellaneous costs.

Finance Charges

Our finance costs (net) decreased by 5.86% to ` 11,717.20 lakhs for Fiscal 2010 from ` 12,447.20 lakhs for Fiscal 2009, primarily as a result of

lower expenditure on hedging of loans and interest and foreign exchange gain due to redemption of FCCBs, which was partially offset by an

increase in the utilisation of borrowed funds for capital expenditure.


Depreciation, amortisation and impairment expense decreased by 28.16% to ` 9,729.44 lakhs for Fiscal 2010 from ` 13,542.21 lakhs for Fiscal

2009, primarily as a result of a reduction in our amortisation cost of films due to a reduction in the number of films released during this Fiscal.

Tax

Tax decreased by 89.78% to ` 53.02 lakhs for Fiscal 2010 from ` 518.62 lakhs for Fiscal 2009, primarily as a result of withdrawal of the fringe

benefit tax during this Fiscal 2010 as compared to charge of ` 171.70 lakhs for Fiscal 2009, deferred tax (net) was ` 13.25 lakhs for Fiscal 2010

as compared to a credit of ` 69.44 lakhs for Fiscal 2009 and lower profit, in accordance with the IT Act, in Big Synergy Media Limited.

Minority Interest

Share of the minority interest in our losses was ` 530.87 lakhs for Fiscal 2010 as compared to ` 322.12 lakhs for Fiscal 2009.

267

(Loss)/Profit After Minority Interest After Adjustments and Pursuant to Schemes

Loss after minority interest after adjustments increased to a loss of ` 12,803.24 lakhs for Fiscal 2010 from a loss of ` 7,787.97 lakhs for Fiscal

2009, primarily as a result increased interest costs, including losses from derivative contracts, depreciation, amortisation and impairment

expense.

Liquidity and Capital Resources

We operate in a capital intensive industry. Our primary liquidity needs have been to finance our operations, working capital needs, acquisitions

and expansions, dividend payments and debt servicing. We have historically funded such capital expenditures through a combination of internal

cash flows and borrowings. The following table sets forth a summary of our cash flows for the six months ended March 31, 2013, Fiscals 2012,

2011, 2010 and 2009:

(In ` lakhs)

Six months

ended March

31, 2013

Fiscal 2012 Fiscal 2011

Fiscal 2010 Fiscal 2009

Net cash (used in) / generated from operating

activities (7,320.59) (8,288.22) (5,216.62) 5,294.43 1,565.71

Net cash generated from /(used in) investing

activities (1,307.14) (3,161.67) 746.68 (46,562.73) (23,791.91)

Net cash generated/(used in) financing activities 10,119.13 12,322.90 5,414.50 41,993.29 23,650.40

Net increase/(decrease) in cash and cash equivalents 1,491.40 873.01 944.56 724.99 1,424.20

Cash in the form of bank deposits, current account balances and cash on hand represents our cash and cash equivalents.

Net cash generated from Operating Activities

Net cash used in operations in the six months ended March 31, 2013 was ` 7,320.59 lakhs primarily due to higher losses incurred by the

Company in the Fiscal 2012.

Net cash used in operations in the Fiscal 2012 was ` 8,288.22 lakhs primarily due to higher losses incurred by the Company in the Fiscal 2012.

Net cash used in operations in Fiscal 2011 was ` 5,216.62 lakhs, primarily as a result of higher losses incurred during Fiscal 2011.

In Fiscal 2010 we generated ` 5,294.43 lakhs as net cash from operating activities, primarily as a result of a smaller increase in sundry debtors

and greater finance costs (net), partially offset by a larger net loss before tax and an increase in loans and advances.

Net cash used in operations in Fiscal 2009 was ` 1,565.71 lakhs primarily due to increase in sundry debtors, trade payments and loss during the

year.

Net cash generated from Investing Activities

Net cash used in investing activities was ` 1,307.14 lakhs in the six months ended March 31, 2013 primarily due to our investment in GH –

Reliance LLC.

Net cash used in investing activities was ` 3,161.67 lakhs in Fiscal 2012 primarily due to our investment in purchase of fixed assets and

advances given towards share application partially offset by sale of our investment in subsidiaries.

Net cash generated from investing activities was ` 746.68 lakhs in Fiscal 2011. Key investments during Fiscal 2011 included, purchase of fixed

assets of ` 22,335.80 lakhs and redemption of mutual fund units aggregating ` 7,983.98 lakhs.

Net cash used in investing activities was ` 46,562.73 lakhs in Fiscal 2010. Key investments during Fiscal 2010 comprised of purchase of fixed

assets of ` 40,917.60 lakhs and investments in mutual fund units aggregating ` 7,982.03 lakhs.

268

Net cash used in investing activities was `(23,791.91) lakhs in Fiscal 2009, which primarily consisted of the purchase of fixed assets

aggregating ` 35,911.00 lakhs and amounts paid for acquisition of companies which are, presently, our subsidiaries aggregating ` 7,861.20

lakhs, partially offset by proceeds on the sale of long term investments/rights therein of ` 3,127.30 lakhs and redemption of mutual fund units

aggregating ` 13,556.69 lakhs .

Net cash generated from Financing Activities

Net cash from financing activities was ` 10,119.13 lakhs for the six months ended March 31, 2013 due to raising of funds on short term basis

through inter-corporate deposits.

Net cash from financing activities was ` 12,322.90 lakhs during Fiscal 2012 due to repayment of debts during the period of ` 24,565.12 lakhs,

which was offset by funds raised through issue of 10%, 29,50,000 Redeemable Non Convertible Preference Shares of `5 each at a price of `

1,000 aggregating ` 29,500 lakhs.

Net cash generated from financing activities in Fiscal 2011 was ` 5,414.50 lakhs. During Fiscal 2011, we raised ` 39,775.90 lakhs from long

term borrowings and repaid ` 17,083.30 lakhs and ` 1,003.80 lakhs towards long term loans and short term loans (net), respectively.

Net cash generated from financing activities was ` 41,993.29 lakhs in Fiscal 2010, which primarily consisted of proceeds from short term

borrowings (net) of ` 52,962.60 lakhs and proceeds from long term borrowings of ` 5,489.00 lakhs, partially offset by interest expense and

finance charges (net) of ` 13,414.80 lakhs.

Net cash generated from financing activities was ` 23,650.40 lakhs in Fiscal 2009, which primarily consisted of proceeds from short term

borrowings (net) of ` 31,271.20 lakhs and proceeds from long term borrowings of ` 7,826.10 lakhs, partially offset by interest expense and

finance charges (net) of ` 11,287.10 lakhs, and payment of dividend of `1,574.90 lakhs.

Contingent Liabilities

For details in relation to our contingent liabilities, please see the chapter entitled “Financial Statements” on page F-1 of this Letter of Offer.

Indebtedness

For details in relation to the Company’s indebtedness, please see the chapter entitled “Financial Indebtedness” on page 225 of this Letter of

Offer.

Capital Commitments and Lease Obligations

For details in relation to our Capital Commitments and Lease Obligations, please see the chapter entitled “Financial Statements” at page F-1 of


Off-Balance Sheet Arrangements

Derivative Instruments

Details of indemnification contract entered into by the Company

In March 2008, the Company entered into had two outstanding derivative contracts – interest rate swap for its long term loans and foreign

currency option for outstanding FCCB’s, details of which are as follows:

a. Interest rate swap – Our Company had availed a term loan from a bank with fixed rate of interest based on either the government of India

bond rates or State Bank of India prime lending rate. The interest rate swap allowed our Company to swap its fixed rupee interest liability

either USD LIBOR or YEN LIBOR at the option of the lender.

269

b. An EURO call option contract with knockouts for quarterly validity with strike price being fixed at each fixing date and a pre-determined

knock out range of fixing price + 0.0700. Further, our Company as part of the option deal, has also sold a EUR / USD put option in the

event a knock in happens at a barrier rate (fixing rate - 0.0400) then Bank has the option to buy EUR from the Company at the fixing rate.

The Company has entered into these derivative contracts based on the advice it has received from a party (Assignee). As per the consultancy and

indemnity agreements entered into with the Assignee, the Assignee has to indemnify the Company of mark to market losses suffered by it on

derivative contracts except for losses suffered on pre-mature termination of the contract. These agreements specify that the Company shall pay

the Assignee a certain fixed fee of, and a variable fee based on, performance of the derivative contracts.

Based on such advice, the Company has not considered the mark to market losses as of the balance sheet date in its profit and loss account.

Capital Expenditure

Historical Capital Expenditure

The following table sets forth our historical capital expenditure by segment for the six months ended March 31, 2013, Fiscals 2012, 2011, 2010

and 2009:

(` in lakhs)

Particular

s

Six months ended

March 31, 2013


Amoun

t

% of Total

Capital

Expenditur

e

Amoun

t

% of Total

Capital

Expenditu

re

Amount % of Total

Capital

Expenditu

re

Amount % of Total

Capital

Expenditur

e

Amount % of Total

Capital

Expenditur

e

Theatrical

Exhibition 436.79 27.98

2,488.6

0 39.19 5,860.10 26.16

18,905.7

0 43.87

36,854.7

0 88.05

Film

Production

Services

1,119.8

6 71.74

3,786.5

0 59.63

16,464.2

0 73.49

23,533.8

0 54.61 4,810.90 11.50

Television

and Film

Content

Production

and

Distributio

n 4.44 0.28 23.10 0.36 19.20

0.09

483.20 1.12 - -

Unallocate

d - - 51.90 0.82 58.70

0.26

168.60 0.40 186.30 0.45

Total 1,561.0

9 100.00

6,350.1

0 100.00

22,402.2

0

100.00 43,091.3

0 100.00 41,851.9

0 100.00

Related Party Transactions

For details of the related party transactions, please see the chapter entitled “Financial Statements - Statement of Related Party Transactions” at

page F-1 of this Letter of Offer.

Quantitative and Qualitative Disclosure about Market Risk

Market risk is the risk of loss related to adverse changes in market prices, including interest rate and foreign exchange rates of financial

instruments. We are exposed to various types of market risks, in the normal course of our business. The following discussion and analysis,

which constitute “forward-looking statements” that involve risk and uncertainties, summarise our exposure to different market risks.

270

1. Unusual or Infrequent Events or Transactions

Except as described in the section entitled ‘Risk Factors’ at page 11 and ‘Financial Statements’ on page F-1of this Letter of Offer, there

have been no other events or transactions that, to the knowledge of the management of our Company, may be described as “unusual” or

“infrequent”.

2. Significant Economic Changes

Other than as mentioned under the part “Factors Affecting Results of Performance” in this chapter, to the knowledge of the

management of our Company, there are no other significant economic changes that materially affect or are likely to affect income from

continuing operations.

3. Known Trends or Uncertainties

Our business has been affected and we expect will continue to be affected by the trends identified above in the part entitled “Factors

Affecting our Results of Operations and Financial Condition” and the uncertainties described in the chapter entitled “Risk Factors” at

page 11 of this Letter of Offer. To our knowledge, except as described or anticipated in this Letter of Offer as mentioned above, there

are no known factors which we expect will have a material adverse impact on our revenues or income from continuing operations.

4. Future Relationship Between Costs and Income

Other than as described in this Letter of Offer, particularly in this chapter, to the knowledge of the management of our Company, there

are no known factors that might affect the future relationship between costs and revenues.

5. Material Increases in Net Sales or Revenue due to Increased Sales Volume, Introduction of New Products or Services, or

Increased Sales Prices

Changes in revenues during the last three years are as explained in the part “Fiscal 2011 compared to Fiscal 2010” and “Fiscal 2010

compared to Fiscal 2009” in this chapter.

6. Total Turnover of Each Major Industry Segment in Which the Issuer Company Operated

We operate in the media and entertainment industry. We currently operate in three business segments; namely theatrical exhibition,

film production services facility and television / film production and distribution. Relevant published data, as available, has been

included in the chapter entitled ‘Industry Overview’ at page 138 of this Letter of Offer.

7. Status of Any Publicly Announced New Products or Business Segment

Except as described in this chapter and the chapters entitled ‘Our Business’ and ‘Risk Factors’ at pages 149 and 11, respectively, of this

Letter of Offer, there are currently no publicly announced new products or business segments.

8. Seasonality of Business

Our business is not seasonal. Our business is largely dependent on the state of economy and overall economic conditions prevailing

both locally and globally. The level of our operations, income and profitability may be affected by these factors. For further details in

this regard, please see the chapter entitled ‘Risk Factors’ at page 11 of this Letter of Offer.

9. Supplier or Customer Concentration

Our business is not significantly dependent on any of our suppliers or customers.

271

10. Competitive Conditions

We have many competitors who are present in the exhibition, film processing, TV content production, equipment rental, digital

intermediate lab, digital cinema mastering and restoration business. In the future we may also face competition from global

entertainment companies who may establish operations in India. Besides, our exhibition business is subject to varying degrees of

competition in the geographic areas in which we operate. These competitors may be national players, regional players or smaller

independent exhibitors. For further details in this regard, please see the chapter entitled ‘Risk Factors’ at page 11 of this Letter of Offer.

272

STOCK MARKET DATA

The Equity Shares of our Company have been listed on the BSE and the NSE since January 8, 2001 and January 10, 2001, respectively. The

tables below set forth, for the periods indicated the high, low and average closing prices and the trading volumes on the BSE and the NSE for

our Company’s Equity Shares.

As on the date of this Letter of Offer, 4,61,26,170 Equity Shares have been issued and are fully paid up.

The following tables set forth the reported high, low and average market prices of the Equity Shares of our Company on the BSE and the NSE

for the calendar years 2010, 2011 and 2012.

BSE

Calendar Year High (`) Date of High Volume on

date of High Low (`) Date of Low Volume on

date of Low Average Price

(`)

2010 309.00 October 6, 2010 42,63,296 160.40 May 26, 2010 37,480 222.81

2011 236.20 January 3, 2011 6,78,081 66.10 December 20,

2011

49,806 125.39

2012 103.80 December 3, 2012 17,12,026 49.00 May 31, 2012 90,111 72.41

(Source: www.bseindia.com)

NSE

Calendar Year High (`) Date of High Volume on


date of Low Average Price

(`)

2010 309.00 October 6, 2010 1,46,82,789 161.65 May 27, 2010 2,94,145 222.92

2011 236.00 January 3, 2011 15,67,560 66.10 December 20,

2011

1,38,119 125.44

2012 103.75 December 3, 2012 40,59,242 49.00 June 4, 2012 1,26,079 72.44

(Source: www.nseindia.com)

Notes

High and Low for the period are based on intra day prices and Average Price is based on average of closing price. In case of two days with the same closing price, the date with higher volume has been considered.

The following tables set forth the reported high, low and average market prices of the Equity Shares of our Company on the BSE and the NSE

during the last six months.

273

BSE

Month High (`) Date of High Volume on

date of High

Low (`) Date of Low Volume on

date of Low

Average Price (`)

January 2013 88.90 January 2,

2013

34,227 72.05 January 25,

2013

16,788 79.74

February 2013 74.95 February 1,

2013

14,771 59.60 February 28,

2013

19,353 67.75

March 2013 61.95 March 7,

2013

36,923 44.65 March 28,

2013

48,676 54.31

April 2013 54.90 April 29,

2013

2,97,324 45.85 April 1, 2013 68,166 49.69

May 2013 61.50 May 11, 2013 1,14,835 46.75 May 31, 2013 95,305 54.49

June 2013 50.00 June 6, 2013 36,004 41.80 June 25, 2013 46,741 45.73

(Source: www.bseindia.com)

NSE

Month High (`) Date of High Volume on


date of Low Average Price (`)

January 2013 88 January 2,

2013

73,668 70.6 January 25,

2013

28,606 79.68

February 2013 74.95 February 4,

2013

25,797 59.1 February 28,

2013

54,028 67.64

March 2013 61.50 March 11,

2013

73,647 44.20 March 28,

2013

98,227 54.32

April 2013 55.70 April 29,

2013

5,85,103 45.80 April 1, 2013 1,32,628 49.76

May 2013 61.40 May 11,

2013

2,81,318 46.85 May 31,

2013

1,84,786 54.48

June 2013 49.90 June 7, 2013 87,874 41.65 June 25,

2013

76,439 45.80

(Source: www.nseindia.com)

274

Notes

High and Low for the period are based on intra day prices and Average Price is based on average of closing price. In case of two days with the same closing price, the date with higher volume has been considered.

The closing prices of our Equity Shares on the BSE and the NSE on July 26, 2012, the trading day immediately following the day on which the

resolution of the Board to approve the Issue was passed, were `57.50 and `57.60 per Equity Share, respectively.

275

MATERIAL DEVELOPMENTS

Recent Developments

The information required to be disclosed for the period between the last date of the financial statements provided to the shareholders and the

date preceding one month from the date of this Letter of Offer is provided below:

1. Working results of our Company on a stand-alone basis for the period from April 1, 2013 to May 31, 2013:

Particulars Amount (In ` lakhs)

Total sales / turnover 7,627.73

Other operating income 1,088.59

Total income 8,716.31

EBITDA (1,339.58)

Interest/ finance charges (net) 4,910.95

Provision for depreciation 1,159.80

Provision for tax -

Profit after tax (6,321.75)

2. Material changes and commitments, if any, affecting the financial position of our Company:

There are no material changes and commitments, other than as disclosed in this Letter of Offer, which are likely to affect the financial

position of our Company since March 31, 2013 (i.e. last date up to which audited information is incorporated in this Letter of Offer).

3. Reliance Group executed a MoU with the Wanda Group, China, to set up a joint venture for strategic long term relationship between

the two groups. Pursaunt to this MoU, we have agreed to explore possible co-operation in the multiplexes business in India and the US.

4. Reliance Lowry Digital Imaging Services Inc., our Subsidiary entered into an MOU with Eugene Mattos on June 13, 2013 for

providing complete CGI services for the production of the animation project “THE LITTLEST WARRIOR” for USD 83 lakhs.

5. Reliance Lowry Digital Imaging Services Inc. our Subsidiary entered into an MOU with Random Cow Pictures on February 7, 2013 for

providing complete CGI services for production of the animation project “IT’S A DOG’S WORLD” for USD 65 lakhs.

6. Reliance Lowry Digital Imaging Services Inc. our Subsidiary entered into an MOU with Ethreya Films, LLC on April 18, 2013 for

various shot production as well as some animation elements in reference of the animation project “ETHREYA CODE OF THE

BRETHREN” for USD 90 lakhs.

7. During the previous year, the Company executed an indicative non-binding term sheet with a private equity fund to acquire a

substantial minority stake through an investment of ` 60,500 lakhs in our Company’s film and media services division. The investment

is proposed to be made into the subsidiary of our Company, into which our film and media services division will be transferred. No

definitive agreement has been executed in respect of the proposed transaction. The validity of the term sheet has been extended till

August 12, 2013.

8. The current financial year of the Company has been extended till September 30, 2013.

276

SECTION VI: LEGAL AND OTHER INFORMATION

OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS

Except as stated below there are no outstanding litigation, suits, criminal or civil prosecutions, proceedings or tax liabilities against

our Company, its Subsidiaries, its Joint Ventures, associates, its Promoters, Directors and the Group Companies and there are no

defaults, non-payment of statutory dues, over-dues to banks/financial institutions, defaults against banks/financial institutions,

defaults in dues payable to holders of any debenture, bonds and fixed deposits and arrears of preference shares issued by our

Company, defaults in creation of full security as per terms of issue/other liabilities, proceedings initiated for economic/civil/any other

offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified

under paragraph (I) of Part 1 of Schedule XIII of the Companies Act) other than unclaimed liabilities of our Company and no

disciplinary action has been taken by SEBI or any stock exchanges against our Company, its Subsidiaries, its Joint Ventures, its

associate, its Promoters, Directors or our Group Companies.

Except litigation with respect to our Company which has been disclosed as of the date of this Letter of Offer, and except as disclosed

otherwise on page 290 below, all litigation with respect to our Directors, our Subsidiaries, Joint Ventures, associates, Promoters, and

the Group Companies has been disclosed as ofJuly 10, 2013.

For details of the contingent liabilities of our Company, see the section entitled “Financial Statements” at page F-1.

Cases involving our Company

Cases filed against our Company

Criminal Cases

Kishor. K. Dave, managing trustee representing Shree Jagrut Nagrik, consumer protection organization registered under Public

Charity Trust Act, 1950 and Society Registration Act, 1860, has filed a letter with the Collector of Deesa. The Collector in turn

intimated the local police who took cognizance of the offence and filed a criminal complaint before the Additional Sessions Judge at

Deesa, Palanpur, against three employees of our Company at Rajmandir BIG Cinemas Deesa Theatre in their official capacity

alleging, inter alia, that food items were being sold in the above-mentioned theatre at a high price and for non-adherence to rules and

regulations under the Standard and Weights Measures Act, 1976 and the rules made there under. Bail has been granted to the three

employees and the matter is currently pending.

Civil Cases

1. IndusInd Media & Communications Limited (“Plaintiff”) has filed a summary suit (no. 1666 of 2006) before the High Court of

Judicature at Mumbai against Amit Bokadia, K.C. Bokadia and our Company for recovery of money due and payable by Amit

Bokadia and K.C. Bokadia to the Plaintiff in relation to two films titled “Ek Haseena Ek Deewana” and “Sazaa”. Our Company

was a party to the suit as our Company is in possession of the negatives of the above-mentioned films. Our Company has in the

reply, inter alia, stated that since our Company was entrusted with the task of converting the negatives of the film into positives

for public exhibition, our Company had the first lien and primary charge over the film negatives until the amount of `123.90

lakhs due and payable is paid to our Company. The matter is currently pending.

2. IDBI bank has filed an Original Application No. 34 of 2013 in the Debt Recovery Tribunal at Mumbai against Infinity India

Advisors Private Limited and Others claiming certain monies from Infinity Advisors India Private Limited. Our Company has

been made a party to the suit to restrain us from handing over the negatives of the film ‘Mrutyunjay- Legends of love’ that is in

our possession. Notice of the proceedings was served upon us on April 10, 2013. The matter is currently pending.

3. Krutika Jaggi has filed a suit No. 1902 of 2013 in the Bombay City Civil Court at Dindoshi, Goregaon against Sunrise Pictures

Private Limited and Others claiming certain monies from Sunrise Pictures Private Limited. Our Company has been made a party

277

to the suit to restrain us from handing over the negatives of the film ‘HORN OK PLEASE’ that is in our possession. The matter is

currently pending.

4. One Mahendra Dhariwal had obtained advances in the form of loans from Samdarshi Jaiswal (“Plaintiff”) for making three films

i.e. “Maa Tujhe Salaam”, “Nehle Pe Dehla” and “Jail”. Samdarshi Jaiswal has filed a summary suit (no. 285 of 2007) before the

Court of Civil Judge (Senior Division), Chandigarh, against amongst others Mahendra Dhariwal and our Company alleging non-

payment of an amount due and payable by Mahendra Dhariwal and breach of undertaking by our Company by handing over the

prints of the movie “Nehle Pe Dehla” to Mahendra Dhariwal while the loan amount was outstanding. The Plaintiff has also

claimed a sum of `300.00 lakhs. The matter is currently pending.

5. Samdarshi Jaiswal has filed a civil contempt application (no. 144 of 2008) before the Civil Judge (Junior Division), Chandigarh

against our Company alleging violation of interim order dated February 21, 2007 in summary suit (no. 285 of 2007) discussed in

2 above which restrained the release of the prints of the movie. The matter is currently pending.

6. There are 23 matters pending against our Company, and others, before various courts and fora including Collector of Stamps, in

relation to, inter alia, infringement of intellectual property rights, recovery of amounts due and payable, ticket pricing,

restraining orders against the release of films. The aggregate amount involved in these cases is `181.52 lakhs. The matters are

currently pending.

7. A Writ Petition no. 7789 of 2012 has been filed before the High Court of Judicature at Mumbai by the Maharashtra State

Electricity Distribution Company Limited for setting aside an order dated March 26, 2012 passed by the Consumer Grievance

Redressal Forum, MSEDC Bhandup in favour of our Company wherein the utility was directed to revert the status of our

Company to an Industrial unit and accordingly be charged with Industrial tariff as against commercial tariff which we have paid

thus far. The matter is currently pending.

8. Our Company had filed a complaint before the Competition Commission of India, New Delhi, against Karnataka Film Chamber

and Commerce (“KFCC”) seeking a direction from the forum restraining KFCC for pressurizing all the local distributors and

producers in the State of Karnataka not to supply any language film prints to Big Cinema outlets. An interim order date

September 9, 2010 has been passed, which was further extended by an order dated September 21, 2010, restraining KFCC from

directly or indirectly imposing restriction on the distributors or producers to supply the film prints to Big Cinema Theatres. A

Final Order dated February 16, 2012 was passed against the KFCC. Against this Order, an appeal was preferred by KFCC before

the Competition Appellate Tribunal and by an order dated August 8, 2012 the interim reliefs prayed for by KFCC has been

rejected by Competition Appellate Tribunal. Against this Order of rejection, KFCC preferred a Writ Petition in the Karnataka

High Court and the same is currently pending and there is no monetary claim against our Company.

9. Sunil Prem Lalla has filed a Public Interest Litigation (L) 50 of 2013 in the High Court of Judicature at Mumbai against the State

of Maharashtra, Revenue & Forest Dept. and 15 Ors including our Company challenging the charging of internet handling

charges / convenience charges / service fee by online booking agencies and cinema exhibition chains despite issuance of an order

dated April 4, 2013 issued by the Govt. of Maharashtra. The matter is currently pending.

10. Radhakrishna Roadways Private Limited has filed a suit (L) 257 of 2012 in the High Court of Judicature at Mumbai against

Morpheus Media Ventures Private Limited and Others claiming certain monies from Morpheus Media Ventures Private Limited.

Our Company has been made a party to the suit to restrain us from handing over the negatives of the film ‘Chemistry’ that is in

our possession. Notice of these proceedings was served upon us on April 2, 2013. The matter is currently pending.

Winding up Cases

1. RDB Two Thousand Plus Limited has filed a winding up petition No. 294 of 2013 against our Company in the High Court of

Judicature at Mumbai alleging outstanding rentals and interest thereon, aggregating `315.37 lakhs for the duration our Company

was operating the multiplex theatre in RDB mall, Kolkata. While the matter is yet to be listed our Company has vide its letter

dated April 16, 2013 claimed a sum of `850.9 lakhs against RBD Two Thousand Plus Limited.

2. Cleave Fernandes, proprietor of Transcase Flight Cases has filed a winding up petition against our Company in the High Court

of Judicature at Mumbai being petition No. 315 of 2013 claiming the outstanding amounts and additionally, interest,

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aggregating a sum of `8.87 lakhs towards goods sold and delivered to our Company. The amounts due to Cleave Fernandes have

already been paid as of July 1, 2013. The matter, however, is yet to be withdrawn.

Arbitration Proceedings

1. Pursuant to a memorandum of understanding dated February 1, 2008 between Nishant Constructions Private Limited, the

developer of Regency Centre at Prahladnagar, Ahmedabad and our Company, the developer has initiated arbitration proceedings

against our Company in December 2011. The developer has claimed that it was ready to handover the possession of the

multiplex shell and our Company reneged from its obligations under the memorandum of association and terminated the

memorandum of association. The aggregate amount involved in this case is `6,006.93 lakhs. The matter is pending.

2. G.S.G. Builders and Infrastructure Limited, the developer of Gold Spot Mall, Hyderabad has initiated arbitration proceedings

against our Company in January 2012. The developer has alleged that our Company has on various occasions defaulted in the

payment of charges payable under a lease deed dated July 27, 2004 between the developer and our Company and has sought to

terminate the lease deed. Our Company has opposed the termination on various grounds and the matter is pending. The

aggregate amount involved in the matter is `1853.04.

Tax Cases

1. A show cause notice dated August 30, 1999 (“Show Cause Notice”) was issued by the Office of the Commissioner of Central

Excise, Mumbai, alleging that a chemical preparation employed for use in the processing of cinematograph films in our

Company’s laboratories amounted to a ‘manufacturing activity’ and hence attracts appropriate tariffs. It was further alleged that

the waste generated from the chemical preparations during such processing activity known as ‘Hypo Solution Waste’ fell within

the category of “Ash and residues – other than from the manufacture of iron and steel, containing metal or metal compounds”

and was chargeable to excise duty. The Commissioner of Central Excise pursuant to his order dated June 26, 2000 confirmed the

demands mentioned in the Show Cause Notice and levied penalties on our Company and Vasanji Mamania, our director then.

Several other periodical notices were issued by the Commissioner of Central Excise, Mumbai and the demand made pursuant to

these show cause notices were confirmed by their respective adjudicating officers. An appeal was preferred to the Customs

Excise and Service Tax Appellate Tribunal (“CESTAT”) by our Company challenging the orders of the above-mentioned

adjudicating officers. The CESTAT by its order dated July 11, 2008 remanded the matter back to the adjudicating authority for a

fresh hearing. The Commissioner of Central Excise preferred an appeal to the High Court of Judicature at Mumbai challenging

the order dated of July 11, 2008. The High Court, by its order dated June 24, 2009, directed all parties to appear before the

Commissioner of Central Excise and with this the appeal was disposed off. The adjudicating officer upon hearing the parties

further confirmed the demand made by all the show cause notice by his order dated August 27, 2009. Hence our Company has

preferred an appeal to the CESTAT challenging the order dated August 27, 2009. Thereafter, the Joint Commissioner of Central

Excise, Mumbai issued another show cause notice which was further confirmed by the Joint Commissioner of Central Excise,

Mumbai by his order dated July 15, 2010. A writ petition was filed before the High Court of Judicature at Mumbai against the

order dated July 15, 2010. Show cause notices were issued from time to time and multiple proceedings in the matter are currently

pending. An Order dated August 16, 2012 was passed against the Company by the Commissioner of Central Excise Mumbai-V.

In an appeal preferred by the Company against this order before the CESTAT by an order dated November 5, 2012, the

CESTAT stayed the said proceedings. A Show Cause Notice dated September 3, 2012 was issued by Commissioner of Central

Excise, Mumbai-V seeking the Company to show cause why a penalty and interest should not be charged on the Company for

non inclusion of duty of `120.00 lakhs. Personal hearing was held on January 7, 2013. We filed our reply to show cause notice

on the said date. By an Order dated January 29, 2013 Commissioner of Central Excise Mumbai-V confirmed the penalty of

`120.00 lakhs. CESTAT by an order dated February 4, 2013 passed an unconditional stay on this order and directed Assistant

Commissioner CE –V not to take any recovery action till final disposal of Appeal and Stay Application. A further Show Cause

Notice dated April 22, 2013 was issued by Commissioner of Central Excise, Mumbai-V seeking the Company to show cause

why a penalty and interest should not be charged on the Company for non inclusion of duty of `103.86 lakhs. The Company is in

the process of filing its reply to the show cause notice. The overall amount involved in these matters is `2,659.80 lakhs.

2. Pursuant to order dated January 22, 2013 by the Indore Bench of the High Court of Judicature at Madhya Pradesh, our Company

has been asked to file a fresh application against the claim of Assistant Commissioner, Commercial Tax, Indore of Entertainment

Tax from the Company in respect of its property, Mangal Cinema, Indore. The Company has filed its written submissions before

the Asst. Commissioner. By an order dated April 18, 2013 the Asst. Commissioner has confirmed the demand of `489.86 lakhs

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against our Company. Our Company has filed a Writ Petition No. 6687 of 2013 before the Indore Bench of the High Court of

Judicature at Madhya Pradesh against the order dated April 18, 2013. The Indore Bench of the High Court of Judicature at

Madhya Pradesh, by an order dated July 9, 2013 granted a stay in favour of the Company till further orders. The matter is

currently pending.

3. 2 (Two) matters, Order no. 102/BR-102/ST II/Yh-I/2012 and Order no. 60/ST II/WLH/2012 dated March 29, 2012 and May 28,

2012, respectively, involving our Company are pending before the CESTAT against orders of the Commissioner of Service Tax

in relation to service tax liabilities on various transactions. The aggregate amount involved in this matter is `272.63 lakhs.

4. 12 (Twelve) matters involving our Company are pending before various state authorities in relation to value added tax liabilities.

The aggregate amount involved in these matters is `522.80 lakhs.

5. Our Company has received 13 demand notices from the TDS department for financial year 2006-2007 to financial year 2009-

2010 with respect to short deduction of TDS, tax deducted but not paid and interest for delayed payment of TDS. The amount

involved in these matters is `1,017.10 lakhs. Our company has preferred appeals and applications for rectification of mistakes

apparent with respect to some of these notices. No replies have been received in this regard.

6. There are 2 (two) disputes pending with regard to Rave Entertainment Private Limited, a wholly owned subsidiary of our

Company which merged with our Company with effect from April 1, 2008. The IT Department issued two notices of demand for

`1,387.31 lakhs on November 20, 2010 with respect to addition of `3,344 lakhs undisclosed income in the assessment for the

assessment year 2008- 2009 and for ` 1,787.26 lakhs on Dec 19, 2011 with respect to addition of `3,286 lakhs undisclosed

income in the assessment for assessment year 2009- 2010. Appeals were preferred to the CIT (Appeal). The CIT (Appeal) by

orders dated November 30, 2011 and October 10, 2012 respectively have deleted the addition and allowed the appeal. The IT

department preferred appeals to the Income Tax Tribunal against the orders passed by the CIT (Appeal). The Income Tax

Tribunal has dismissed the case in respect of assessment year 2009 – 2010. The matter in respect of assessment year 2008 – 2009

is currently pending.

7. The owners of certain multiplexes that we manage in Gujarat, in their capacity as license holders, initiated proceedings before

the High Court of Judicature at Gujarat against the Entertainment tax authorities for availing exemption from payment of tax

under the applicable law. The High Court decided the matter against the owners who preferred an appeal to the Supreme Court

of India. In accordance with directions of the Supreme Court, our Company has deposited the amount payable for the disputed

period with the concerned authority since our Company is responsible for collection of entertainment tax. The amount involved

in this matter is `509.57 lakhs. The matter is currently pending. In respect of our multiplex at Chinchwad, Pune, the Additional

Collector at Pune has issued a notice dated September 15, 2012 claiming amount of `64.71 lakhs + `0.02 lakhs towards penalty

for the property. The claim of the Addl. Collector is based on the point that during the 100% ET exemption period, the ET

amount was collected from the Patrons by our Company but not deposited with the ET authorities. The claim is for period prior

to 2008. The final hearing was held on November 19, 2012. By an order dated March 30, 2013 the Addl. Collector has

confirmed the aforesaid claimed amount against the multiplex property. The Company has preferred an appeal against the

aforesaid order and the same is currently pending before the Div. Commissioner, Pune.

Labour Cases

6 (six) matters involving our Company are pending, among others, before various courts and forums such as Labour Court, City Civil

Court, Office of the Collector (Labour) in relation to, inter alia, payment of minimum wages, illegal termination and retrenchment.

The aggregate amount involved in these matters is `14.53 lakhs.

Consumer Cases

1. 4 (four) matters involving our Company are pending before Jaipur District Consumer Forum in relation to amounts collected by

sale of mineral water bottles in our theatres. The aggregate amount involved in these cases is `3.00 lakhs.

2. 15 (fifteen) matters involving our Company have been filed before Khandwa District Consumer Forum in relation to non

payment of Provident Fund to the Complainants. The aggregate amount involved in these cases is `12.05 lakhs. The Khandwa

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District Consumer Forum has issued orders against our Company in 14 (fourteen) of these matters aggregating `11.24 lakhs. The

matter in respect of the balance amount of `0.81 lakhs is currently pending.

Enforcement Directorate investigation

On July 15, 2013, Anil Sekhri, a non-Executive Director of the Company appeared personally before the Directorate of Enforcement

(ED) pursuant to summons issued on July 3, 2013 with respect to the investigation on the issue of FCCBs by the Company in 2006.

Similar summons were issued to Anil Sekhri on May 3, 2013 wherein he had sought additional time for appearance.

Similar summons were also issued to Manmohan Shetty, ex-Chairman and former Managing Director in the past on January 29, 2013

and one of our key management personnel appeared pursuant to the summons issued on February 15, 2013. Previously, through its

letter dated August 13, 2012 the ED sought information inter alia on the issue of FCCBs by our Company. Our Company has provided

the information through letters dated September 4, 2012 and April 18, 2013.

Further to Anil Sekhri’s appearance in response to the summons, the ED has issued fresh summons to one of our key management

personnel directing him to appear before it on the July 22, 2013. The hearing was adjourned. The matter is currently pending.

Cases filed by our Company

Criminal Complaints

Our Company had engaged the services of a contractor, Laurent & Benton Management Consultants Limited (“Contractor”), for

engaging the services of and deploying the personnel of the contractor at its various exhibition properties. Pursuant to an agreement

with the Contractor, our Company paid to the Contractor a sum of `294.20 lakhs towards its Provident Fund contribution payable to

the personnel deployed at the properties of our Company. Our Company, on learning that the amount as aforesaid which was

supposed to be deposited in the individual accounts of the personnel by the Contractor had actually been misappropriated by the

Contractor, lodged an FIR with the police authorities in New Delhi and filed a criminal complaint in the Court of Metropolitan

Magistrate, Patiala House, New Delhi. The Metropolitan Magistrate has by an order dated June 30, 2012 directed the Station House

Officer, Barakhamba and the Deputy Commissioner of Police (EOW) to look into the matter and submit their reports. Subsequently

one of the directors of the Contractor was arrested by the EOW. Two bail applications filed by the arrested director before the CMM

Patiala House Courts, New Delhi were rejected / dismissed and the director was remanded initially to police custody and later to

judicial custody. A further bail application filed by the director before the Addl. Sessions Judge, Patiala House Courts was rejected

however on a subsequent bail application by an order dated April 29, 2013 the Accused Director was granted conditional bail. The

matter is currently pending.

Criminal Cases

Our Company has filed 3 (three) separate complaints before various Metropolitan Magistrates and Sessions Courts in relation to

misappropriation of funds, cheating and misrepresentation of facts, violation of Private Security Guards (Regulation of Employment

and Welfare) Scheme, 2002 and Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981. The

matters are currently pending.

Civil Cases

1. Our Company has filed 4 (four) separate suits before the High Court of Judicature at Mumbai for recovery of dues. The

aggregate amount involved in these cases is `603.98 lakhs. The matters are currently pending.

2. Our Company has filed a suit 2537 of 2010 before the High Court of Judicature at Mumbai against Headstart Films Private

Limited and four others for recovery of dues amounting to `857.64 lakhs towards assistance given for the film “London

Dreams”. A notice of motion seeking interim reliefs was moved by our Company and the same was rejected by the High Court

of Judicature at Mumbai pursuant to its order dated September 21, 2010. The matter is currently pending.

3. Our Company has filed a writ petition 13305 of 2011 before the High Court of Judicature at Hyderabad against the Lokayukta,

the Government of Andhra Pradesh, Commissioner of Police, G. L. Narasimha Rao and others challenging order dated April 1,

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2011 passed by the Lokayukta, Government of Andhra Pradesh and seeking directions from the Court quash

ing the proceeding

initiated pursuant to a complaint filed by G. L. Narasimha Rao before the Court of the IX Additional Chief Metropolitan

Magistrate, Nampally alleging that online sale of movie tickets through online agencies by various theatres and multiplexes

including our Company is unlawful. By an order dated July 20, 2011 the High Court of Judicature at Hyderabad has granted

interim directions restraining the respondents from interfering with the sale of tickets through on-line ticket bookings by our

Company. The matter is currently pending.

4. A Section 9 Application (under the provisions of the Arbitration and Conciliation Act, 1996) Arb O. P. No. 24 of 2013 for

interim reliefs has been filed before the City Civil Court at Hyderabad and a Section 11 Arbitration Application no. 3 of 2013

has been filed before the Hon’ble High Court of Andhra Pradesh against Gayatri Hotels & Theatres Pvt. Ltd. in respect of

Maheshwari Parmeshwari Multiplex for recovery of our dues amounting to `630 lakhs. The High Court of Judicature at Andhra

Pradesh appointed a sole arbitrator pursuant to the Section 11 application by an order dated April 29, 2013. The matters are

currently pending.

Arbitration proceedings

1. Our Company has initiated 3 (three) separate arbitration proceedings in relation to termination of conducting agreements, entered

into between our Company with owners of properties at Indore (Big B and Satyam) and Guna (Jyoti and Sriram Smriti) on

grounds such as failure to obtain requisite approvals, structural deficiencies of the theatre, etc. The aggregate amount claimed by

our Company is `1,525.08 lakhs.

2. Our Company has initiated an arbitration proceeding against B. R. Films in relation to termination of an agreement dated March

14, 2008 pertaining to a film titled “Banda Yeh Bindaas Hai”. Pursuant to this agreement our Company had paid an amount of

`925.00 lakhs for distribution, exploitation, exhibition and marketing of the above-mentioned film. B. R. Films had agreed to

hand over the film to our Company on its completion. It is the claim of our Company that the B. R. Films failed to comply with

its obligation. The amount involved in the matter is approximately `1,321.50 lakhs. An award against was passed against our

Company and subsequently, our Company has filed an application in the High Court of Judicature at Mumbai for setting aside

the said award. The matter is currently pending.

Section 138 of the Negotiable Instruments Act, 1881

10 (ten) cases have been filed by our Company against its customers under Sections 138 and 142 of Negotiable Instruments Act, 1881

for recovery of dues and dishonour of cheques. The aggregate amount involved in these cases is approximately `294.59 lakhs. These

matters are pending.

Notices

Our Company has served a notice dated April 14, 2009 to Jagdish Vasudev Agarwal, proprietor of Rajmandir Cinema, Jalna for

termination of the conducting agreement entered into between the parties on July 31, 2007. Pursuant to this agreement it was agreed

between the parties that the premises of Rajmandir Cinema would be handed over to our Company on or before September 1, 2007

with all the necessary licenses, permissions, certifications and requirements for the purposes of refurbishing and operating the same.

Our Company has stated in its statement that Jagdish Vasudev Agarwal failed to carry out his obligations. The title of the property

was disputed by Marathwada Wakf Board. Our Company has claimed an amount of `42.50 lakhs from Jagdish Vasudev Agarwal.

Miscellaneous Matters

Our Company has filed 2 (two) separate complaints before the Joint Assessor & Collector, Mumbai Municipal Corporation and the

Brihan Mumbai Municipal Corporation. Our Company has sought adoption of the profit basis method for assessment of its property at

IMAX Big Cinemas, Wadala and Big Cinemas R Mulund, respectively, rather than the currently followed gross method. Both the

complaints are currently pending.

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Small Scale Industries

Except as disclosed below, our Company does not owe any small scale industries any amounts exceeding ` 1.00 lakh which is

outstanding for more than 30 days. There are no disputes with such entities in relation to payments to be made to them. (in ` lakhs)

Sr. No. Name Amount outstanding

as on June 30, 2013

Amount outstanding more than

30 days as on June 30, 2013

1. Linear Electronics Private Limited 1.06 1.06

2. R & S (I) Electronics Private Limited 3.57 3.57

Cases involving our Subsidiaries, Joint Ventures, associate and Partnership

Subsidiaries


Cases filed by Big Synergy Media Limited

Criminal Cases

Big Synergy Media Limited has filed a criminal complaint dated January 5, 2011with the police station located at Amboli,

Maharashtra against Prashant Jhadav alleging criminal breach of trust. Monies were advanced to Prashant Jhadav in various tranches

for the production and delivery of a TV series. The program did not materialise and the monies were repayable to Big Synergy Media

Limited. Prashant Jhadav was acting as Creative Producer through Shree Om Comtech Private Limited. The company claims that

Prashant Jhadav has misappropriated the money advanced to him by Big Synergy Media Limited. This matter has been transferred to

the police station located at Veera Desai. The amount involved in the matter is `79.20 lakhs and till date, an amount of `44.00 lakhs

has been recovered from him. Subsequently, post April 30, 2013, Prashant Jhadav has signed an undertaking to pay the balance

amount by the end of the financial year 2013 – 2014.The matter is currently pending.


Big Synergy Media Limited has filed a cheque dishonour case in Andheri Metropolitan Magistrate Court in December 2011 having

case no. 2921 of 2011 and 2894 of 2011 against Mahuaa Media Private Limited (“Mahuaa”). Mahuaa has approached the Sessions

Court for squashing of the summons issued by Andheri Metropolitan Magistrate Court. The amount involved in the matter is ` 524.88

lakhs.. The Respondent on April 6, 2013 filed an application for permanent exemption. The matter has been adjourned to August 1,

2013. The matter is currently pending.

Winding up cases

Big Synergy Media Limited has filed a winding up petition dated February 01, 2012 having petition no. 58 of 2012 before the High

Court of Judicature at Delhi against Mahuaa Media Private Limited (“Mahuaa”) for recovery of money in relation to a television

show produced by Big Synergy Media Limited for Mahuaa. The amount involved is `524.88 lakhs. On November 27, 2012 the

Honourable Delhi High Court passed an order directing Mahuaa to pay to Big Synergy `50 Lakhs on or before February 15, 2013 and

also submit an affidavit which shall mention a detailed payment schedule for the balance monies. The petition has been disposed off

with the observation that in case of default by Mahuaa in payment of the abovementioned sum to Big Synergy, the petition may be

revived by Big Synergy. A copy of the order is yet to be received.

2. Reliance MediaWorks Entertainment Services Limited

Cases filed against Reliance MediaWorks Entertainment Services Limited

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Tax Cases

Reliance MediaWorks Entertainment Services Limited received a demand notice dated December 30, 2011 from Navi Mumbai

Municipal Corporation for payment of Octroi / Cess Tax as per details provided below.

Financial Year Tax (` in Lakhs) Interest / Penalty (` in

Lakhs)

Total

(` in Lakhs)

2008-09 12.08 57.64 69.72

2009-10 84.48 382.69 467.16

Reliance MediaWorks Entertainment Services Limited has preferred an appeal claiming that the company is a SEZ unit and, is

therefore, exempt from payment of Octroi/entry tax under the Maharashtra IT ITEs Policy 2009. The Directorate of Industries,

Government of Maharashtra, issued a letter on January 4, 2012 stating exemption of the company from Octroi/entry tax. The matter is

currently pending. The next date of hearing is on July 18, 2013.

3. Reliance MediaWorks Theatres Limited

Cases filed against Reliance MediaWorks Theatres Limited

Civil Cases

Two separate show cause notices dated August 17, 2010 and September 21, 2010 (the “Show Cause Notice”) were issued by the

Collector, Pune and the Assistant Commissioner of Police (Administration), Pune, respectively, to Gold Big Cinemas, alleging

exhibition of lesser number of Marathi movies than the number required as per the Maharashtra State Government resolution dated

January 4, 2003 read with the provisions of the Bombay Entertainments Duty Act, 1923. The Collector, Pune has claimed `1.50 lakhs

from Reliance MediaWorks Theatres Limited pursuant to the above-mentioned show cause notice dated August 17, 2010. Reliance

MediaWorks Theatres Limited has filed its written submissions. The matters are currently pending.

4. Reliance MediaWorks (USA) Inc.

Cases filed by Reliance MediaWorks (USA) Inc.

Civil Cases

Reliance MediaWorks (USA) Inc. filed a legal malpractice complaint against its former counsel Giarmarco, Mullins & Horton, P.C in

the above mentioned civil case (NewBurgh / Six Mile Limited Partnership v. Adlabs Films USA, Inc.). The matter was dismissed by

the United States District Court, Eastern District of Michigan. Reliance MediaWorks (USA) Inc. has preferred an appeal with the

Sixth Circuit Court of Appeals. The matter is currently pending.

Joint Ventures

1. Swanston Multiplex Cinemas Private Limited

Cases filed against Swanston Multiplex Cinemas Private Limited

Criminal Cases

1. The Brihan Mumbai Municipal Corporation (“BMC”) has filed 2 (two) cases before the Metropolitan Magistrate, Ville Parle,

Mumbai having case nos. 5787 and 5788/SS/2008 dated April 25, 2008 against Shravan Shroff, director of Swanston Multiplex

Cinemas Private Limited alleging unauthorized construction of an overhead tank and cooling towers for Fame Big Cinemas

theatre. Ld. Metropolitan Magistrate passed an order dated October 17, 2012 of acquittal. A copy of the order is yet to be

received.

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2. BMC has filed a complaint before the Court of Metropolitan, Mumbai Magistrate having case no. 10019/SS of 2008 against

Shravan Shroff and Swanston Multiplex Cinemas Private Limited for keeping celluloid base film at the theatre in violation of the

general conditions of the license issued by the Municipal Corporation of Greater Mumbai. The matter is currently pending.

Civil Cases

Swanston Multiplex Cinemas executed a Leave and License Agreement dated March 2, 2010 with Adlabs Shringar Multiplex Cinemas Pvt.

Ltd. through which Swanston Multiplex Cinemas was granted a right / license to use and occupy the Theatre Premises in a Building known

as Citi Mall in Andheri, Mumbai for the purpose of running the business of exhibiting movies for a period of 36 months at a prescribed

licence fee. Adlabs Shringar Multiplex Cinemas Pvt. Ltd. filed Arbitration Petition (L) No. 782 of 2012 in the Hon’ble High Court of

Judicature at Mumbai against Swanston Multiplex Cinemas for non-payment of the license fee by the Company on and from February 12,

2012. The Petition was disposed of by the Hon’ble Court on July 17, 2012 by passing an order recording the Consent Terms.

Subsequently, Adlabs Shringar Multiplex Cinemas Pvt. Ltd., vide their letter dated March 26, 2013 called upon Swanston Multiplex

Cinemas Pvt. Ltd. to make the payment of Service Tax of `32.95 lakhs for the period beginning April 2008 to February 2010, which

Swanston Multiplex Cinemas Pvt. Ltd. disputed and made a contention that the same is not payable in view of Consent Terms. Adlabs

Shringar Multiplex Cinemas Pvt. Ltd. on June 17, 2013 filed a Contempt Petition No. 44 of 2013 before the High Court of Judicature at

Mumbai for violation of Consent Terms. The matter is currently pending.

Labour Cases

The workers of Fame (India) Limited and Swanston Multiplex Cinemas Private Limited (through their union) (“Complainants”) have

filed a case no. 424/2010 dated October 13, 2010 before the Industrial Court, Bandra, Mumbai against Fame (India) Limited and

Swanston Multiplex Cinemas Private Limited (“Defendants”) alleging unfair labour practices. The Defendants have filed their reply

to the complaint. The matter is currently pending.

Tax

1. Swanston Multiplex Cinemas Private Limited received a notice for the assessment year 2005 – 2006 reopening the assessment

and giving show cause for disallowance under the Income Tax Act for alleged non deduction of TDS on film rental amounting to

`30.95 lakhs paid to non-resident film distributor. Swanston Multiplex Cinemas Private Limited submitted its response to the

notice dated March 30, 2012. Thereafter, the A.O. issued a notice under section 148 reopening the issue and subsequently an

order on March 4, 2013 demanding `11.20 lakhs. Swanston Multiplex Cinemas Private Limited filed an appeal with the CIT 3

on April 4, 2013 disputing the demand and subsequently filed a letter of stay against the demand with the Commissioner of

Income Tax on April 12, 2013. The matter is currently pending.

2. Swanston Multiplex Cinemas Private Limited was issued a show cause notice raising demand of `17.45 lakhs and interest and

penalty of `40.13 lakhs for financial year 2008-09 by the Assistant Commissioner of Sales Tax, Mumbai. Swanston Multiplex

Cinemas Private Limited replied to the said notice partially accepting claims raised by Assistant Commissioner of Sales Tax,

Mumbai. Thereafter, the Assistant Commissioner of Sales Tax issued an assessment order dated February 28, 2013 under the

Maharashtra VAT Act, 2002 demanding `61.49 lakhs. The order was received by Swanston Multiplex Cinemas Private Limited

on March 26, 2013. Swanston Multiplex Cinemas Private Limited has filed an appeal before the Deputy Commissioner, Sales

Tax (Appeal) on May 9, 2013. The matter is currently pending.

3. Swanston Multiplex Cinemas Private Limited received an assessment order dated January 29, 2013 under the Maharashtra VAT

Act, 2002 from the Assistant Commissioner of Sales tax for the assessment year 2005-06 demanding payment of ` 85.12 lakhs.

Swanston Multiplex Cinemas Private Limited filed an appeal on March 13, 2013 with the Deputy Commissioner of Sales Tax –

Appeals. The matter is currently pending.

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Cases filed by Swanston Multiplex Cinemas Private Limited

Civil Cases

Swanston Multiplex Cinemas Private Limited filed a writ petition before the High Court of Judicature at Mumbai against the State of

Maharashtra and other parties in relation to notices issued by the Tahilsdar on December 5, 2005, December 30, 2005 and January 21,

2006 for alleged non-payment of entertainment dues amounting to `198.10 lakhs. The High Court of Judicature at Mumbai granted

relief exonerating Swanston Multiplex Cinemas Private Limited from payment of the dues. However, this judgment was reversed by

the Supreme Court of India upon an appeal by the State of Maharashtra. Further the State of Maharashtra was directed to realize the

amount claimed and donate the same to a charitable organization. Swanston Multiplex Cinemas Private Limited has deposited an

amount of `187.00 lakhs with the Tehsildar, representing the State of Maharashtra. A review petition has now been filed by Swanston

Multiplex Cinemas Private Limited in the Supreme Court for a review of the judgment of the Supreme Court of India and the same

was dismissed on January 14, 2010.

Swanston Multiplex Cinemas Private Limited has also filed a notice of motion before the High Court of Judicature at Mumbai for

recovery of `20.00 lakhs from the Government of Maharashtra which was deposited upon the directions of the High Court at the time

of filing the writ petition. The notice of motion is currently pending.

Cases involving our Directors

1. Gautam Doshi

Cases filed against Gautam Doshi

Criminal Cases

The Central Bureau of Investigation (CBI) has registered a first information report dated October 21, 2009 pertaining to allegations of

criminal conspiracy and criminal misconduct, in respect of telecommunications licences and spectrum allotted by the Government of

India inter alia to SwanTelecom Limited in 2008. Pursuant to the FIR, the CBI filed a charge sheet dated April 2, 2011 in the Court of

Special Judge (CBI), New Delhi, against various persons, including one of our non-executive Directors, Gautam Doshi.

The Special Judge (CBI) has framed charges against all the persons specified in the charge sheet. Proceedings, in the matter, including

a writ petition that Gautam Doshi has preferred to the High Court of Judicature at Delhi are ongoing.

2. Sujal Shah

Cases filed against Sujal Shah

Civil Cases

Yogendra Naranji Thakkar filed suit No. 2505 of 2012 registered on November 9, 2012 in the High Court of Judicature at Mumbai

against Sujal Shah and three others for exemplary, substantial and punitive damages for defamation. An aggregate amount of

`2,800.00 lakhs plus interest at 18% from the date of the suit till the date of the payment and / realisation is claimed jointly and

severally from the Defendants. Yogendra Naranji Thakkar on April 20, 2013 also filed a writ petition 743 of 2013 with the High Court

of Judicature at Mumbai seeking the court to issue directions for the Institute of Chartered Accountants of India and the Disciplinary

Directorate to hear the complaint filed by him and to suspend the certificate of practice of Sujal Shah. The matter is currently pending.

3. Anil Sekhri

With respect to the proceedings before the Directorate of Enforcement (ED) in relation to the issue of FCCBs by our Company in

2006, the summons has also been issued to Anil Sekhri, one of our non-executive Directors. For further details, please see the

disclosure under the sub-head ‘Enforcement Directorate investigation’ under the head ‘Cases filed against our Company’ set out in

this chapter above at page 280.

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Cases filed by Anil Sekhri


Anil Sekhri, one of our directors had filed summary suit no. 3772 of 1998) for recovery of `12.00 lakhs from one J. B. Singh before

the High Court of Judicature at Mumbai. The recovery suit was in relation to a cheque issued by J. B. Singh which was dishonoured.

The High Court of Judicature at Mumbai on December 2, 2002 issued a decree against J. B. Singh in the sum of `24.54 lakhs. J. B.

Singh has preferred an appeal no. 382 of 2003 to the High Court of Judicature at Mumbai on June 15, 2008 and the matter is currently

pending.

Cases involving our Promoters

1. Reliance Capital Limited

Cases filed against Reliance Capital Limited

Criminal Cases

There are 44 criminal cases filed against Reliance Capital Limited by its customers in various courts in respect of disbursement of

loan amounts. These cases are pending at various stages of adjudication. Majority of these cases are the appeals / revisions in respect

of cases filed against the borrowers’ u/s 138 of the Negotiable Instruments Act. 1881. These matters are currently pending.

Civil Cases

1. Bharatiben and others (as legal heirs and representatives of late Manubhai Maneklal) (“Plaintiffs”) have filed a suit no. 1708 of

1997 dated March 25, 1997 before the High Court of Judicature at Mumbai against Reliance Capital Limited for recovery of

equity shares delivered by Manubhai Maneklal and others to Reliance Capital Limited as a custodian in relation to transactions

undertaken by Reliance Enterprises Limited. The aggregate amount involved in this matter is `757.00 lakhs. The matter is

currently pending.

2. Harinarayan Bajaj and others (“Plaintiffs”) have filed a suit no. 2205 of 1997 dated July 1, 1997 before the High Court of

Judicature at Mumbai against Reliance Capital Limited alleging improper enforcement of security by Reliance Capital Limited

in relation to loans amounting to `1,000.00 lakhs granted by Reliance Capital Limited to the Plaintiffs. The Plaintiffs are

claiming refund of the shares pledged as security along with accrued benefits thereon or a payment of an amount of `164.50

lakhs with interest at 24%. The matter is currently pending.

3. Adil Patrawala has filed a case CP No. 27 of 2013, before the Company Law Board, Mumbai against Quant Capital Private

Limited and Reliance Capital Limited under section 397 – 398 of the Companies Act claiming mismanagement in the affairs of

Quant Capital Private Limited and oppression of the minority shareholder. Reliance Capital Limited has been made a party to the

suit as it is a majority shareholder having 74% stake in Quant Capital Private Limited. The petition is currently pending. The

Company Law Board granted an ad-interim relief claimed Adil Patrawala that his shareholding in Quant Capital Private Limited

cannot be diluted.

Investor Related Disputes

1. There are 51 investor related disputes in respect of shares and 11 cases are in relation to monetary claims involving an aggregate

amount of `9.42 lakhs. Further, there are 62 investor related disputes in which Reliance Capital Limited has been made a party,

but there would be no financial impact on Reliance Capital Limited. Out of these, 32 cases are in relation to settlement involving

brokers or third parties and 30 cases where settlement is pending for completion of procedural formalities. Further, there are 52

cases which involve the complainant making payment to Reliance Capital Limited or providing suitable indemnities and 25

cases where copies of relevant court documents / complaints are not available.

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2. There are 41 investor related disputes filed after the demerger of Reliance Capital Ventures Limited from Reliance Industries

Limited and its subsequent merger with Reliance Capital Limited, where parties claim to have lost shares pursuant to the said

demerger and merger. These cases relate to 1,536 shares in total. Reliance Capital Limited has not been made a party in all these

cases. These cases relate to ownership of shares and shares to be allotted subsequent to the said demerger and merger.

Consumer Cases

There are 279 consumer cases filed against Reliance Capital Limited by its customers in various courts in respect of disbursement of

loan amounts. Such cases include civil, insolvency, arbitration appeals and matters filed before the various courts. The aggregate

amount involved in these matters is `1,55.44 lakhs and are at various stages of adjudication.

Cases filed by Reliance Capital Limited

Criminal Cases

There are 14,661 cases filed by Reliance Capital Limited in various Metropolitan Magistrate courts in respect of dishonour of cheques

given towards repayment of loan. The cases involve an aggregate amount of `2369.77 lakhs and are at various stages of adjudication.


1. There are 23 cases filed by Reliance Capital Limited before the sole arbitrator for recovery of dues in respect of loan facilities

granted by it to its various customers. The cases involve an aggregate amount of `4,335.70 lakhs and are at various stages of

adjudication.

2. There are 4 cases filed under section 9 of the Arbitration and Conciliation Act, 1996 for interim reliefs against the borrowers

before the Honourable High Court of Bombay against the borrower.

Cases involving our Group Companies

Except for the litigation in which our Company is also a party, none of the litigation against the Group Companies is likely to have

any adverse effect on the financial performance of our Company.

Cases filed against our Group Companies


Cases filed against Reliance Broadcast Network Limited

Civil Cases

1. Subhiksha Trading Services Limited (“Plaintiff”) has filed a suit before the Additional City Civil Court, Chennai against Hash

10 Telecom Private Limited, Reliance Broadcast Network Limited and others for restraining the airing of certain advertisement

alleged to be defamatory. Reliance Broadcast Network Limited has filed its written statement. The matter is currently pending.

2. Leading Edge has taken out 5 (five) Chamber Summons for changing the name from Reliance Media World Limited to Reliance

Broadcast Network Limited in connection with recovery of an amount of approximately `64.00 lakhs. The application has been

allowed. The matter is currently pending.

3. Narendra Kumar Gupta, proprietor of Jai Durga Tent & Light Decorators has filed a suit before the District Court, New Delhi,

against Reliance Broadcast Network Limited for non – payment of dues for services rendered by him aggregating to `6.85 lakhs.

The matter is currently pending.

4. Rajender Mathur and two others have filed a suit before the District Court, Hisar, against Reliance Broadcast Network Limited

for recovery of damages caused to premises licensed to Reliance Broadcast Network Limited aggregating to `6.82 lakhs. The

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District court has dismissed the case on May 2, 2013. However, an appeal has been filed by Rajendra Mathur for the same. The


5. De Kulture Music Pvt. Ltd. has filed a suit before the District Sessions Judge, Jaipur, against Reliance Broadcast Network

Limited for obtaining injunction against broadcasting of certain sound recordings. The matter is currently pending.

6. Sunrise Advertising Pvt. Ltd. has filed a petition before the District Court, New Delhi against Reliance Broadcast Network

Limited for injunction against the airing of certain radio spots aired by Reliance Broadcast Network Limited, alleging them to be

defamatory in nature and also claiming the amount payable for the suit instituted. The matter is currently pending.

7. Regency Ceramics Limited has filed a petition before the City Civil Court, Hyderabad, against Reliance Broadcast Network

Limited for injunction against the airing of certain radio spots aired by Reliance Broadcast Network Limited, alleging them to be

defamatory in nature and also claiming an amount of `125 lakhs towards damages. The matter is currently pending.

8. Simran Kohli has filed a petition before the Saket District Court at New Delhi against Reliance Broadcast Network Limited for

injunction against the airing of certain radio spots aired by Reliance Broadcast Network Limited, alleging them to be defamatory

in nature and also claiming the costs of the suit. The matter is currently pending.

9. Amarjot Singh Bath has filed a petition before the Civil Court in Chandigarh against Reliance Broadcast Network Limited for

recovery of monies allegedly payable to him for the services rendered by him. The amount involved in the matter is `3.30 lakhs.


10. Basant Kumar Birla and others filed a suit against Prakash Jha and others dated October 8, 2012 for the use of the word ‘Birla’ in

the song ‘Mehengai’ from the movie ‘Chakravyuh’. Reliance Broadcast Network Limited has been made a party to the suit for

broadcasting the song. The matter is currently pending.

11. Jegson Publicity has filed a petition before the Tiz Hazari Court at New Delhi against Reliance Broadcast Network Limited dated

May 4, 2013 for injunction against the airing of certain radio spots aired by Reliance Broadcast Network Limited, alleging them

to be defamatory in nature and also claiming the amount payable for the suit instituted. The matter is currently pending.

12. U Foam Private Limited has filed a petition before the City Civil Court at Hyderabad against Reliance Broadcast Network

Limited dated May 21, 2013 for injunction against the airing of certain radio spots aired by Reliance Broadcast Network

Limited, alleging them to be defamatory in nature. The matter is currently pending.

13. ODM Media Services India Private Limited has filed an application dated April 12, 2013 under Order 39, Rule 1 and 2 of the

Civil Procedure Code before the Additional City Civil and Sessions Judge at Bangalore seeking temporary injunction against the

airing of radio spots against them for the dues to be paid by ODM Media Services India Private Limited to Reliance Broadcast

Network Limited. Notice of the application was served on Reliance Broadcast Network Limited on July 1, 2013. The matter is

currently pending.

Tax Cases

A notice was issued by the Excise & Taxation Officer, Punjab (“ETO”) against Reliance Broadcast Network Limited for improper

documentation of goods under transport. Thereafter, an order dated July 28, 2007 was passed by the ETO against Reliance Broadcast

Network Limited for detention of the goods. Reliance Broadcast Network Limited obtained release of the goods and preferred an appeal to

the Deputy Excise and Taxation Commissioner cum Joint Director of Enforcement, Patiala (“Excise Commissioner”). The Excise

Commissioner disposed the appeal and remanded the matter back to the ETO. The ETO passed a similar order dated March 7, 2009 against

which Reliance Broadcast Network Limited has filed a fresh appeal to the Deputy Excise and Taxation Commissioner-Cum-Joint Director

Enforcement, Patiala Division, Patiala. The aggregate amount involved in this matter is `2.57 lakhs. The matter is currently pending.

A Writ Petition has been filed by the Sales Tax Department before the High Court of Jammu & Kashmir against the order passed by the

State Tax Appellate Tribunal in favour of Reliance Broadcast Network Limited claiming an amount of `68 lakhs. The High Court passed an

order on July 2, 2013 on a limited issue of maintainability of the writ petition and has admitted the petition filed by the department. The

matter is currently pending

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Labour Cases

1. Priti Suiru (“Claimant”) has filed a claim before the Industrial Tribunal, Panaji against Reliance Broadcast Network Limited

alleging wrongful termination of employment and claiming reinstatement and payment of outstanding wages. The amount

involved in the matter is `3.00 lakhs. The order has been passed in favour of the Claimant. Reliance Broadcast Network Limited

has filed a writ petition before the Bombay High Court at Goa against the said order.

2. Mahamaya Jena has filed a complaint before the Labour Court, Bhubaneswar against Reliance Broadcast Network Limited

claiming an amount of `2.28 lakhs towards performance incentive. The matter is currently pending.

3. Munish Ohja has filed a claim before the Labour Court, Chandigarh against Reliance Broadcast Network Limited claiming

amounts aggregating to `0.30 lakhs towards leave encashment. The matter is currently pending.

4. Meenakshi Bhojwani has filed an application before the High Court of Judicature at Delhi against Reliance Broadcast Network

Limited challenging the arbitral award dated December 30, 2009 passed by B. L. Garg, sole arbitrator in favour of Reliance

Broadcast Network Limited. The arbitral award dated December 30, 2009 was in relation to an employment contract and

employment bond, entered into between Reliance Broadcast Network Limited and Meenakshi Bhojwani, former employee. The

amount involved in the matter is `21.87 lakhs. The matter is currently pending.

5. Quadir Ashraf has filed a claim before the Labour Court, Jammu, against Reliance Broadcast Network Limited claiming

amounts aggregating to `3.84 lakhs towards leave encashment and performance bonus. The matter is currently pending.

Stamp Duty Cases

A notice dated April 30, 2007 was issued by the Court of Additional Commissioner (Stamps), Aligarh (“Stamps Commissioner”) against

Reliance Broadcast Network Limited alleging evasion of stamp duty payable on lease renewals. The aggregate amount involved in this

matter is `8.19 lakhs. The Stamps Commissioner passed an order dated October 22, 2009 against Reliance Broadcast Network Limited.

Thereafter, Reliance Broadcast Network Limited has filed a writ petition before the High Court of Judicature at Allahabad for quashing of

the said order. The High Court of Judicature quashed the orders of the lower court and the matter has been remanded to the Assistant

Commissioner (Stamp) for determination of stamp duty payable. Reliance Broadcast Network Limited received a favourable order from the

court and the Stamp Office has been instructed to refund the excess amount of stamp duty paid by Reliance Broadcast Network Limited.

Notices

5 (Five) separate show cause cum demand notices were issued by the Commissioner Service Tax, Mumbai against Reliance Broadcast

Network Limited for an amount aggregating to `1,421 lakhs. Reliance Broadcast Network Limited has filed its replies against these show

cause cum demand notices and the matter is currently pending.

Cases filed by Reliance Broadcast Network Limited

Civil Cases

1. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at Mumbai against the Maharashtra

State Road Development Corporation Limited for recovery of amounts paid by Reliance Broadcast Network Limited under an

agreement dated May 17, 2009 as security deposit and advance license fees along with interest. The amount involved in this

matter is `540.00 lakhs. The matter is currently pending.

2. Reliance Broadcast Network Limited has filed a recovery suit against Sunrise Advertising Private Limited for recovery of

monies due from them. The amount involved in the matter is `18.80 lakhs. The matter has been admitted and a notice has been

served on the other side on April 30, 2013. The matter is currently pending.

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3. Reliance Broadcast Network Limited has filed a summary suit before the City Civil Court at Ahmedabad for recovery of

amounts due. Reliance Broadcast Network Limited are seeking refund of Security deposit amount of `105 lakhs along with

interest from Ahmedabad Municipal Corporation. The matter is currently pending.


1. Reliance Broadcast Network Limited has initiated an arbitration proceeding before a sole arbitrator against Access Atlantech

Entertainment Limited in relation to payment for certain services rendered by Reliance Broadcast Network Limited. An

interim order dated March 1, 2011 has been passed in favour of Reliance Broadcast Network Limited in relation to the

admissibility of the arbitration proceeding. The aggregate amount involved in this matter is `34.30 lakhs. The matter is

currently pending.

2. Reliance Broadcast Network Limited has initiated an arbitration proceeding in relation to breach of employment contract and

employment bond entered into between Reliance Broadcast Network Limited and Meenakshi Bhojwani, former employee.

Reliance Broadcast Network Limited obtained award dated December 30, 2009 in its favour and the same has been challenged

before the High Court of Judicature at Delhi by Meenakshi Bhojwani. An execution petition has also been filed before the

District Judge, Chandigarh by Reliance Broadcast Network Limited for executing the arbitral award dated December 30, 2009.

The aggregate amount involved in the matter is `21.87 lakhs. The matter is currently pending.

3. Reliance Broadcast Network Limited had initiated an arbitration petition in Hyderabad in connection with the dispute with M/s

Stanpower in which Reliance Broadcast Network Limited is claiming an amount of `415.17 lakhs on account of breach by

Stanpower of the terms and conditions of an agreement executed with Reliance Broadcast Network Limited. The matter is

currently pending.

4. Reliance Broadcast Network Limited has a pending dispute with Broadcast Engineering Consultant India Ltd. (“BECIL”) for

an amount of ` 3,896.87 lakhs. 2 (two) separate applications have been filed by Reliance Broadcast Network Limited before

the High Court of Judicature at Delhi, under Sections 9 and 11 of the Arbitration & Conciliation Act, 1996, for the

appointment of an arbitrator to resolve the dispute with BECIL. The matter is currently pending.

5. Reliance Broadcast Network Limited filed two applications under section 11 of the Arbitration and Conciliation Act, 1996

before the High Court of Judicature at Mumbai for the appointment of an arbitrator to resolve the dispute with Mahuaa Media

Private Limited. The total amount involved in this matter was `56.28 lakhs. The parties entered into a settlement agreement

and Mahuaa Media Private Limited has paid approximately `42 lakhs through post dated cheques on February 22, 2013. The

matter is kept in abeyance till the last post dated cheque is encashed.

6. Reliance Broadcast Network Limited has filed an application under Section 11 of the Arbitration and Conciliation Act, 1996,

before the High Court of Bombay for the appointment of an arbitrator to resolve the dispute with Moon Up Info Tech Private

Limited and Mangla Add Creation. The court has appointed Mr. Gautam Mehta as the sole Arbitrator. The total amount

involved in the matter is `42.24 lakhs. The matter is currently pending.

7. Reliance Broadcast Network Limited had filed 6 separate Section 11 applications under the Arbitration and conciliation Act,

1996, before the Delhi High Court challenging the appointment of the arbitrator appointed by Delhi Metro Rail Corporation in

the ongoing dispute with Delhi Metro Rail Corporation. The High Court dismissed the applications. Reliance Broadcast

Network Limited has filed 6 separate SLPs before the Supreme Court challenging the order of the High Court out of which 4

SLPs have been filed on July 5, 2013 and 2 SLPs have been filed on July 15, 2013.


45 cases have been filed by Reliance Broadcast Network Limited under sections 138 and 142 of the Negotiable Instruments Act, 1881 for

recovery of dues and dishonour of cheques. The aggregate amount involved in these cases is approximately `207.59 lakhs. These matters

are pending.

291

Intellectual Property cases

1. Reliance Broadcast Network Limited has filed 16 compulsory licensing application in accordance with Section 31 (1) (b) of the

Copyright Act, 1957, before the Indian Copyright Board against various music labels to allow Reliance Broadcast Network

Limited to broadcast the work from repertoire of the respective music labels on payment of certain percentage of the net

advertising earnings of each of its radio station. The matter is currently pending.

2. Reliance Broadcast Network Limited has filed a complaint under Section 19A(2) read with Section 30A of the Indian Copyright

Act, 1957, before the Indian Copyright Board against Indian Performing Rights Society and Super Cassettes Industries Limited

to refund the royalty paid by Reliance Broadcast Network Limited as performance royalty. The matter is currently pending.

3. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at Mumbai for declaration, permanent

and mandatory injunction & recovery against Indian Performing Rights Society. The matter is currently pending.

4. Reliance Broadcast Network Limited has filed a suit before the High Court of Judicature at Delhi for declaration, permanent and

mandatory injunction & recovery against Super Cassettes Industries Limited. The matter is currently pending.

Winding up cases

1. Reliance Broadcast Network Limited has filed a winding up petition before the High Court of Judicature at Chennai against

Subhiksha Trading Services Limited for non-payment of liabilities amounting to approximately `43.49 lakhs. The winding up

has been ordered by the court.

2. Reliance Broadcast Network Limited has filed a winding up petition before the High Court of Judicature at Mumbai against Raj

Oil Mills Limited for non-payment of liabilities amounting to approximately `178.12 lakhs. The matter is pending.


Cases filed against Reliance Capital Asset Management Limited

Civil Cases

1. Siddharth Deepak Chury has filed a suit before the High Court of Judicature at Mumbai against Prabhakar Deepak Chury and

Reliance Capital Asset Management Limited for obtaining possession of a flat owned by Siddharth Deepak Chury which was

being occupied by Reliance Capital Asset Management Limited on leave and license basis. Reliance Capital Asset Management

Limited has retained possession of the flat since the security deposit paid by Reliance Capital Asset Management Limited was

not refunded upon expiry of the license. The aggregate amount involved in this matter is `10.00 lakhs. The matter is currently

pending.

2. Pramila Lodha (“Plaintiff”) has filed a suit before the High Court of Judicature at Mumbai against Edelweiss Securities Limited

and Reliance Capital Asset Management Limited. The Plaintiff had provided a power of attorney in favour of Edelweiss

Securities Limited and directed Reliance Capital Asset Management Limited to mark a lien on her folio in favour of Edelweiss

Securities Limited. In the present dispute, the Plaintiff has moved to the High Court for issuing directions to Reliance Capital

Asset Management Limited not to act on instructions of the Edelweiss Securities Limited. The aggregate amount involved in this

matter is `12.73 lakhs. The matter is currently pending.

3. Kanti Gupta and Tanushree Varshney (through Kanti Gupta) (“Plaintiffs”) have filed a suit before the Civil Judge (Senior

Division), Kanpur Nagar against Shweta Varshney, Reliance Capital Asset Management Limited and 22 others (“Defendants”)

seeking a permanent injunction against Shweta Varshney from making payments to Defendant Nos. 2 to 23 in relation to

investments held in the name of Vivek Varshney, deceased son of Kanti Gupta, and for a decree of declaration of the Plaintiffs’

share in Vivek Varshney’s property. The matter is currently pending.

4. Dr. Murad A. Rahman (“Plaintiff”) has filed a suit before the High Court of Judicature at Delhi against Ayesha Swathy Rehman,

Reliance Capital Asset Management Limited and others for declaration, partition and a permanent and mandatory injunction.

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The High Court of Judicature at Delhi has directed Reliance Capital Asset Management Limited to freeze the mutual fund

investments of the Plaintiff’s father, late M.A. Rahman, until the matter is disposed off. The amount involved in the matter is

`8.63 lakhs. The matter is currently pending.

5. V. Sundar has filed a petition before the District Judge, Coimbatore in relation to the transmission of mutual fund units on the

basis of the nomination made by D K P Varadarajan, the deceased investor. The units of mutual fund held in the folio of D K P

Varadarajan have been frozen pending the disposal of the suit by the competent court. The amount involved in the matter is

`1.35 lakhs. The matter is currently pending.

6. Siddharth Shukla (“Plaintiffs”) has filed a suit before the Additional District Judge, Jabalpur M.P., in relation to recovery of

`1.35 lakhs towards non receipt of units in Reliance Diversified Power Sector Fund.

7. Indian Dairy (“Plaintiffs”) has filed a suit before Senior Civil Judge, Rohini, Delhi in relation to recovery of `1.50 lakhs towards

non allotment of units in Reliance Liquid Plus Fund.

8. Minor Gitanshu Agarwal & Minor Taejaal Agarwal (represented by their natural father, Sanjoy Kumar Agarwal) (“Plaintiffs”)

have filed a suit before the Civil Judge (Jr. Div.) Howrah against RMF & others for declaration to the effect that the redemption

amount which was paid by Defendant No. 1 (RMF) to Defendant No. 2, being the grandfather of Minor Gitanshu Agarwal &

Minor Taejaal Agarwal belongs to the Plaintiff.

9. Piyush Chandra (“Plaintiff”) has filed a suit at High Court of Judicature at Delhi, against Reliance Mutual Fund and others for

obtaining a decree for permanent injunction. The matter is currently pending.

10. Manoj Kumar Sharma (“Plaintiff”) has filed a case in the Court of Magistrate of First Class, Family Court, Bareily against

Neetu Singh & Ors. including Reliance Capital Asset Management Limited as a party for transfer of units invested in the name

of Neetu Singh to his name.

11. MGD Electronics & Rajesh Rathi (“Plaintiffs”) have filed a suit before the Honourable Civil Judge, Gandhinagar against YES

Bank Ltd, Ms. Shruti Panchal, RMF and others for recovery of a total amount of `33.67 lakhs in respect of losses incurred as a

result of an alleged fraud conducted on the Plaintiffs. The amount involved is `2.13 lakhs and interest thereon. The matter is

currently pending.

12. Smt Rajam Srinivasan filed a suit against Reliance Capital Asset Management Limited alleging wrongful allotment of units of

mutual funds to Sujatha against cheque submitted by her for an amount of `3.00 lakhs. An order was passed by the High Court

of Judicature at Chennai directing Reliance Capital Asset Management Limited to deposit a sum of `5.16 lakhs with the

Registrar of the Court. Reliance Capital Asset Management Limited preferred an appeal. The matter is currently pending.

13. T Shobhana & Velayudha Nair filed a suit for injunction before the Civil Court, Thiruvananthapuram against Ms. Deepa, HSBC,

Axis Bank, Reliance India Limited and others. The Court has directed Reliance Capital Asset Management Limited to freeze the

mutual fund investments of the Anoop Vrindavan, until the matter is disposed off. The amount involved in the matter is `1.55

lakhs. The matter is currently pending.

14. Siddharth Shukla has filed a writ petition before the High Court of Madhya Pradesh, Principal Seat at Jabalpur, for recovery of

`1.35 lakhs in relation to non receipt of units in Reliance Diversified Power Sector Fund. The applicant has prayed for dismissal

of the application filed by Reliance Mutual Fund for making the broker/agent a necessary party to the case. The application has

been allowed by Additional District Judge, Jabalpur M.P. The matter is currently pending.

15. Mrs. Girija Gunaseelan, an investor of Reliance Mutual Fund and others filed a suit before the Court of Principal Subordinate

Judge of Coimbatore against ICICI Bank Ltd, Reliance Capital Asset Management Limited and others for succession to the

properties of S. Gunaseelan. The amount involved is `1.97 lakhs. The matter is currently pending.

16. M Sudhakar has filed a suit in the Court of Subordinate Judge at Vellore, against S. Charumathi & Ors. including Reliance

Mutual Fund for transfer of the investments made in the name of S. Charumathi to his name and to restrain the payment of such

investments to S. Charumathi. The matter is currently pending.

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17. Sanjay Upadhyay has filed a suit in the Court of Civil Judge, Senior Division at Agra, against Smt. Indra Rani Upadhyay,

Rashmi Singh & Ors. including Reliance Mutual Fund to restrain the payment of investments held in the name of late Pramod

Kumar Upadhyay to Rashmi Singh, being the nominee registered under such investments and thereby claiming a one-third share

in such investments held in the name of late Pramod Kumar Upadhyay. The matter is currently pending.

18. Mahabir Prasad Gupta filed and application on May 21, 2013 in the Permanent Lok Adalat for Public Utility Services, Goregaon,

Haryana against Reliance Mutual Fund and Karvy Computershare Private for recovery for redemption proceeds. The amount

involved is `0.75 lakhs. The matter is currently pending.

Consumer Cases

There are 23 consumer related complaints filed against Reliance Capital Asset Management Limited before various District and State

Consumer Disputes Redressal Forums. In certain cases the branch managers, regional managers and chief executive officer/ managing

director of Reliance Capital Asset Management Limited have also been added as parties. These matters involve allegations relating to

inter alia deficiency in service, fraud committed by third parties, rejection of application for allotment of units, refusal for redemption

of units and non-receipt of dividend. The approximate amount involved in these matters is approximately `185.00 lakhs. The matters

are currently pending.

Cases filed by Reliance Capital Asset Management Limited

Civil Cases

Reliance Capital Asset Management Limited has filed an application before the High Court of Judicature at Mumbai for permission to

act as an agent of the receiver appointed by the High Court in the suit (no. 1937 and 1938 of 2000) filed by Siddharth Deepak Chury

against Prabhakar Deepak Chury and others for a flat owned by Siddharth Deepak Chury which was being occupied by Reliance

Capital Asset Management Limited on leave and license basis. Reliance Capital Asset Management Limited has retained possession

of the flat since the security deposit paid by Reliance Capital Asset Management Limited was not refunded upon expiry of the license.

The aggregate amount involved in this matter is `10.00 lakhs. The matter is currently pending.

Consumer Cases

Reliance Capital Asset Management Limited has preferred an appeal to the State Consumer Disputes Redressal Commission,

Maharashtra (Aurangabad Bench) against an order of the District Consumer Disputes Redressal Forum. The aggregate amount

involved in this matter is approximately `0.10 lakhs. The matter is currently pending.


Cases filed against Reliance General Insurance Company Limited

Civil cases

Rajeev Kumar Garg, the land lord of Muzafarnagar premises filed case against Reliance General Insurance Company Limited for the

recovery of `14.33 lakhs for the renovations which was done by him. A written statement has been filed along with an application for

rejection of plaint and the matter is currently pending.

Consumer cases

There are 6,659 Consumer Cases involving an aggregate amount of `5,546.42 lakhs. The matters are pending before various

Consumer Forums.

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Insurance Claims

There are 26,411 claims pending before the Motor Accidents’ Claims Tribunal and various courts against Reliance General Insurance

Company Limited involving an aggregate amount of `29,835.17 lakhs. The matters are currently pending before various tribunals.

Arbitration proceedings

Arbitration proceedings have been initiated against Reliance General Insurance Company Limited by National Rayon Corporation

Ltd., for a claim of `100 lakhs. The matter is currently pending and next date of hearing is on July 24, 2013.

Cases filed by Reliance General Insurance Company Limited

Civil Cases

1. A civil suit has been filed against ICICI Bank in the High Court of Judicature at Mumbai under Original Ordinary Civil

Jurisdiction claiming wrongful debit of a sum of `24.54 lakhs and seeking recovery of the same. The matter is posted for

evidence and the next date of hearing is on July 17, 2013.

2. A civil suit has been filed against CLICO (a foreign firm) and KM Dastur in the High Court of Judicature at Mumbai for not

paying the reinsurance monies of `3,721.92 lakhs.


Reliance General Insurance Company Limited has filed two arbitration applications at Delhi against Mac Overseas and Allied

Enterprises (“Defendants”) for refund of the security deposit paid to the Defendants by Reliance General Insurance Company Limited

in relation to the premises, furniture and fixtures taken by Reliance General Insurance Company Limited on leave and license basis.

The aggregate amount involved in the matter is `18.60 lakhs. The matter is currently pending.


Cases filed against Reliance Securities Limited

Civil Cases

1. Amit Bhargava (“Appellant”) has preferred an appeal to the High Court of Judicature at Delhi against Reliance Securities

Limited challenging the arbitration award dated December 24, 2009 in favour of Reliance Securities Limited. The Appellant had

filed an arbitration application before a panel of arbitrators at NSE, New Delhi against Reliance Securities Limited claiming

reversal of the contract executed on NSE among other claims towards damages and compensation. The amount involved in the

matter is `1,900 lakhs. The matter is currently pending.

2. A writ petition has been filed by a group of 59 clients before the High Court at Guwahati. The matters relate to unauthorised sale

of Oil India shares in the months of September 2009 by a local sub-broker in Tinsukia, Assam. The complainants have prayed

for issuance of directions to SEBI to conduct an enquiry and investigation. The matter is currently pending.

3. Jayshree Gupta, an ex-employee of Reliance Securities Limited, has filed a suit before the district court in Delhi alleging illegal,

unlawful, arbitrary termination of services. The complainant has sought for an aggregate amount of `9.42 lakhs. The matter is

currently pending.

4. Two (2) petitions were filed before the High Court of Judicature, Delhi against Reliance Securities Limited for reimbursement of

service tax and claim of the balance rent under lease agreements for 2 (two) office premises rented by Reliance Securities

Limited in Delhi. The High Court order in both matters was given against Reliance Securities Limited. Subsequently, Reliance

Securities Limited has preferred an appeal against both the orders before the Supreme Court of India. The aggregate amount

involved in these matters is `15.00 lakhs. The matters are currently pending.

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1. Arbitration proceedings have been initiated against Reliance Securities Limited by a client, Premshankar Mishra before NSE,

Kolkata. The Complainant has alleged unauthorised transactions in his account and has claimed an amount of `1.79 lakhs. An

award for payment of `0.94 lakhs together with 10% p.a interest from July 25, 2012 till the date of payment has been passed

against Reliance Securities Limited. Reliance Securities Limited is in the process of filing an appeal against the award.

2. Mrs. Poonam Garg, a client of Reliance Securitied Limited, has initiated arbitration proceedings against Reliance Securities

Limited before NSE, Ahmedabad. The complainant has alleged unauthorised transactions in her account and has claimed an

amount of `32.42 lakhs. The matter is currently pending hearing.

3. Smt. Deepshika Singpuri, a client of Reliance Securities Limited, initiated arbitration proceedings aginst Reliance Securities

Limited before the NSE, Kolkata on April 24, 2013. Notice of the proceedings was received by Reliance Securities Limited on

June 12. 2013. The complainant has alleged unauthorised transactions in her account and has claimed an amount of `3.36 lakhs.


4. Shree Abani Bhushan Prasad, a client of Reliance Securities Limited has initiated arbitration proceedings before the BSE,

Kolkata on June 17, 2013. Notice of the proceedings was received by Reliance Securities Limited on July 3, 2013. The

complainiant has alleged unauthorised transactions in his account and has claimed an amount of `5.20 lakhs with interest at 18%

p.a. from the date of sale, January 16. 2013 till the dateof receipt of compensation. The matter is currently pending.

Consumer Cases

1. There are 6 (six) consumer complaints filed against Reliance Securities Limited before consumer disputes redressal fora in

various states and districts. The aggregate amount involved in these matters is `41.12 lakhs. The matters are currently pending.

2. Laxmi Tomar, Bhopal and Sanjay Mehta, Gujarat (“Appellant”) have preferred appeals to the respective State Consumer

Dispute Redressal Commission, against the orders given by the District forum in favour of Reliance Securities Limited in respect

of certain trades executed in illiquid scrip and unauthorised trades in their accounts by the company. The amount involved in

these matters is `4.31 lakhs. The matters are currently pending.

Labour cases

Mehul Dubey has filed a complaint against Reliance Securities Limited before the Industrial Tribunal / Labour Court Jammu /

Srinagar. The matter related to illegal termination of services without following due process of law. The complainant has prayed for

reinstatement and back wages. The matter is currently pending.

Cases filed by Reliance Securities Limited

Consumer Cases

Reliance Securities Limited has filed an appeal before the State Commission, Mumbai for setting aside impugned order passed by the

district forum at Sindhudurg. The amount involved in the matter is ` 4.03 lakhs. The matter is currently pending.


1. Reliance Securities Limited has initiated arbitration proceedings against one of its clients, Mrs. Ruchi Vipin Agarwal before

NSE, Mumbai for recovery of debit balance in her trading account. The amount involved in the matter is `8.04 lakhs. The matter

is currently pending.

2. Reliance Securities Limited has preferred an appeal to the High Court of Judicature at Mumbai against the Arbitration award

dated August 18, 2010 in the matter of arbitration before NSE, Mumbai in the case filed by Badrinath Bodhai against Reliance

Securities Limited. The amount involved in the matter is `4.13 lakhs. The matter is currently pending.

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3. Reliance Securities Limited has filed 12 arbitration petitions against its clients before various stock exchanges for recovery of the

outstanding ledger balance in the clients’ accounts. The amount involved in these matters is approximately `32.62 lakhs. In

eleven of these matters, the Arbitrator has passed orders in favour of Reliance Securities Limited. In one of these cases, the

Arbitrator has passed orders against Reliance Securities Limited. These orders are pending execution.


Reliance Securities Limited has filed criminal complaints under section 138 of the Negotiable Instruments Act, 1881, against 2 (two)

clients for dishonour of cheques amounting to `9.84 lakhs. The amount has been recovered from Franchisee Deposit on June 18,

2013. The matters are currently pending.


Cases filed by Reliance Commodities Limited

Criminal cases

Reliance Commodities Limited has filed an application before the High Court of Judicature, at Ahmedabad for quashing of the

criminal complaint pending before the local police at Ahmedabad in respect of the complaint filed by one of the commodity client

alleging unauthorized transactions in his account along with his family member’s accounts. A settlement agreement was entered into

between the parties and the same was communicated to FMC and MCX. The matter is currently pending.


Reliance Commodities Limited has filed complaints under section 138 of the Negotiable Instruments Act, 1881, against 3 (three)

customers for dishonour of cheques amounting to `13.7 lakhs. The Court has issued bailable warrants in all three complaints. The

matters are pending.

6. Reliance Money Express Limited (RMEX)

Cases filed against Reliance Money Express Limited

Civil Cases

Pritpal Kaur has filed a suit before Civil Judge (Senior Division), Chandigarh against RMEX and others for recovery of arrears on

lease rent pertaining to the Branch office occupied by Reliance Money Express Limited during the period 2008 to 2010. The amount

involved is `1.03 lakhs. The matter is currently pending.

Cases filed by Reliance Money Express Limited

Civil Cases

RMEX has filed a suit before the Subordinate Court at Kottayam against Cee & Cee Gold & Forex Pvt. Ltd & others for recovery of

money advanced to them for conversion to foreign currency. The amount involved in the matter is `235 lakhs. The matter is pending.


RMEX has filed complaints under Section 138 of the Negotiable Instruments Act, 1881, against a defaulting client, M/s Globe

Explorer for dishonour of cheques amounting to `3.00 lakhs. The matter is pending.

7. Reliance Life Insurance Company Limited (RLIC)

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Cases Filed against RLIC

Criminal Cases

102 complaint/ first information reports have been filed against certain employees, ex employees, advisors, agents and distributors of

Reliance Life Insurance Company Limited under various sections of the IPC in various police stations across India. The Complaint /

FIRs have been filed in relation to allegations of inter alia forgery, cheating, criminal breach of trust, issuance of fake receipts, theft at

office premises, spurious calling, wrong surrender of policies, wrong encashment of surrender cheques, insurance, dead persons, etc.

The matters are currently under police investigation.

Civil Cases

1. Dhruv Kumar (“Petitioner”) has filed a writ petition in the nature of public interest litigation before the Lucknow bench of High

Court of Judicature at Allahabad against the Union of India, Insurance Regulatory and Development Authority, SEBI, Reliance

Life Insurance Company Limited and 13 other insurance companies. The Petitioner is challenging the validity and sale of Unit

Linked Insurance Products. The matter is currently pending.

2. Rajiv Lohia (“Plaintiff”) has filed a suit before the High Court of Judicature at Calcutta against Reliance Life Insurance Company

Limited alleging non-payment of certain sums owed by Reliance Life Insurance Company Limited to the Plaintiff. The amount

involved in the matter is `10.52 lakhs along with interest at a rate of 18% p.a. The matter is currently pending.

3. Bal Natrajan (“Petitioner”) has filed a writ petition before the High Court of Judicature at Kerala challenging the order dated

August 31, 2007 of the Insurance Ombudsman, Cochin. The Petitioner is challenging the cancellation of an insurance policy by

Reliance Life Insurance Company Limited. The amount involved in the matter is `0.50 lakhs. The matter is currently pending.

4. 82 civil cases have been filed before various civil courts against Reliance Life Insurance Company Limited for disputes in relation

to inter alia repudiation of claims, recovery of commission, commercial disputes, injunction for termination of services and

termination of lease deeds. The amount involved in the matters is approximately `354.62 lakhs. The matters are currently pending.

5. 28 cases have been filed before Lok Adalats at various locations against Reliance Life Insurance Company Limited involving

disputes relating to repudiation of claims, wrongful termination and deficiency in service. The amount involved in these matters is

approximately `90.44 lakhs. The matters are currently pending.

6. Hartford Academy of Insurance and Education Private Limited have filed a suit before the High Court of Judicature at Chennai

against Reliance Life Insurance Company Limited for recovering an amount of `94.72 lakhs towards the alleged unpaid bills. The


7. SLC Assurance has filed a winding up petition before the High Court of Judicature at Mumbai on June 8, 2013 against Reliance

Life Insurance Company Limited for recovery of an amount of `17.80 lakhs being balance consideration on the commission due

from Reliance Life Insurance Company Limited. The matter is currently pending.

8. SLC Vision has filed a winding up petition before the High Court of Judicature at Mumbai on June 8, 2013 against Reliance Life

Insurance Company Limited for recovery of an amount of `87.34 lakhs being balance consideration on the commission due from

Reliance Life Insurance Company Limited. The matter is currently pending.

Arbitration Cases

Syntel Global Private Limited (“Claimant”) has commenced arbitration proceedings before Rohit Kapadia, Arbitrator, Mumbai

against Reliance Life Insurance Company Limited alleging non-provision of services required to be rendered under letters of intent

dated March 1, 2008 and April 1, 2008 issued by Reliance Life Insurance Company Limited and a master services agreement dated

September 19, 2008 entered into with Reliance Life Insurance Company Limited. The Claimant seeks payment of `1,120.25 lakhs

with interest at a rate of 18% p.a. along with the arbitration costs or a sum of `989.17 lakhs for expenditure incurred towards setting

up office infrastructure along with the arbitration costs. The matter is currently pending.

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Tax Cases

1. Reliance Life Insurance Company Limited has preferred an appeal to the Commissioner of Income Tax (Appeals), Chennai

against an order passed by the Assistant Director of Income Tax, International Taxation, Chennai, in relation to classification of

royalty payment made to the AMP Group, Australia. The amount involved in the matter is `5.23 lakhs. The matter is currently

pending.

2. Reliance Life Insurance Company Limited has preferred an appeal to the Small Causes Court of Bombay against an order dated

August 8, 2008 passed by the Municipal Corporation of Greater Mumbai (“MCGM”) directing Reliance Life Insurance Company

Limited to pay property tax in accordance with the enhanced value of a leasehold property of Reliance Life Insurance Company

Limited in Ghatkopar, Mumbai. The MCGM has filed the details of computation of the property tax, claiming arrears of `93.00

lakhs from Reliance Life Insurance Company Limited before the Court and Reliance Life Insurance Company Limited has replied

to the same. The matter is currently pending.

3. Reliance Life Insurance Company Limited has preferred an appeal to the Commissioner (Appeals) in Customs Excise and Service

Tax Appellate Tribunal (“CESTAT”), South Zonal Bench, Chennai against an order of the Commissioner (Appeal), Chennai in

relation to disallowance of ineligible credit of service tax. The amount involved in the matter is `33.80 lakhs. The matter is

currently pending.

4. Reliance Life Insurance Company Limited has preferred 9 appeals to the Commissioner of Income Tax (Appeal), Mumbai against

orders of the TDS Officer, Mumbai in relation to short deduction of tax. The amount involved in the matter is `1,449.41 lakhs.

The matters are currently pending.

5. Reliance Life Insurance Company Limited has preferred an appeal on May 24, 2013 bearing no. ST/87198/13-MUM to Customs

Excise and Service Tax Appellate Tribunal (“CESTAT”), West Zonal Bench, Mumbai against the order of Commissioner of

Service Tax, Mumbai in relation to exempted services of the “Traditional Golden Year Plan”. The amount involved in the matter

is `788.64 lakhs. The matter is currently pending.

6. Reliance Life Insurance Company Limited has preferred an appeal on June 20, 2013 to the Commissioner of Income Tax

(Appeal), Mumbai against orders of the Assessing Officer in relation to disallowance of 14A under Income Tax Act, 1961 for

assessment year 2011-12. The amount involved in the matter is `5,585.50 lakhs. The matter is currently pending.

Labour Cases

10 complaints have been filed before different labour conciliation officers against Reliance Life Insurance Company Limited

involving allegations of inter alia illegal termination and non-payment of wages. Reliance Life Insurance Company Limited has filed

its replies before the respective labour authorities.

Consumer Cases

1. 30 appeals have been preferred to the respective State Consumer Disputes Redressal Commissions challenging the orders of the

various District Consumer Disputes Redressal Forums passed in favour of Reliance Life Insurance Company Limited. The amount

involved in the matters is approximately `353.47 lakhs. The matters are currently pending.

2. 632 consumer complaints have been filed before consumer disputes redressal fora in various districts and states of India against

Reliance Life Insurance Company Limited. These matters involve allegations relating to inter alia claims repudiation, non-receipt

of policy documents and deficiency of service. The amount involved in the matters is approximately `1,928.17 lakhs. The matters

are currently pending.

3. Reliance Life Insurance Company Limited has preferred 68 appeals to various State Consumer Disputes Redressal Forums against

orders of the respective District Consumer Disputes Redressal Commissions. The amount involved in the matters is approximately

`270.83 lakhs. The matters are currently pending.

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4. 2 Appeals have been preferred to the respective National Consumer Disputes Redressal Commissions challenging the order of

State Consumer Disputes Redressal Commission passed in favour of Reliance Life Insurance Company Limited. The amount

involved in the matters is approximately `30.90 lakhs. The matters are currently pending.

5. Reliance Life Insurance Company Limited has preferred 1 Appeal to National Consumer Disputes Redressal Commissions against

order of the respective District Consumer Disputes Redressal Forum and State Consumer Dispute Redressal Commission. The

amount involved in the matters is approximately `4.8 lakhs. The matters are currently pending.

Insurance Cases

1. 433 complaints have been filed before the Insurance Ombudsman at various locations against Reliance Life Insurance Company

Limited involving disputes relating to inter alia refusal to refund the premium, cancellation of policy, unilaterally change in terms

of the policy. The amount involved in these matters is not ascertainable. Reliance Life Insurance Company Limited has replied to

281 complaints and is in the process of replying to the remaining complaints.

2. 6,993 complaints have been filed by policy holders received and have been received by Reliance Life Insurance Company Limited

from Insurance Regulatory and Development Authority and Life Council involving disputes relating to inter alia miss-selling,

non-processing claims, repudiation of claims, rejection of claims, refusal to refund premium amounts, non-issue of premium

receipts, unilaterally changing the terms of the policy, non receipt of the policy documents, recovery of money, fraud committed

by employees of Reliance Life Insurance Company Limited and deficiency of services. The amount involved in these cases is not

ascertainable.

Notices

1. 233 inspection notices were issued by various labour enforcement officers against different branches of Reliance Life Insurance

Company Limited in relation to compliances under labour laws. Reliance Life Insurance Company Limited has replied to 232 of

these notices and is in the process of replying to the 1 remaining notices.

2. 915 legal notices were issued against Reliance Life Insurance Company Limited in relation to various issues pertaining to policy

matters having claim and non-claim disputes, notices from statutory / regulatory authorities, non-payment of the lease rentals,

commercial disputes, unilateral termination or breach of lease / leave and license agreements. Reliance Life Insurance Company

Limited has replied to all the notices.

Cases Filed by RLIC

Civil Cases

1. Reliance Life Insurance Company Limited has filed four separate civil suits before the High Court at Bombay against Dawnay

Day, Sanjay Jadhav, Rajiv Lohia and Naizi Mohammad (“Defendants”) for recovery of amounts due to Reliance Life Insurance

Company Limited from the Defendants. The matters involve disputes relating to inter alia unsatisfactory services rendered by the

service provider, breach of contract and excess payment of remuneration. The amount involved in the matters is approximately

`765.52 lakhs. The matters are currently pending.

2. Reliance Life Insurance Company Limited has filed two civil suits before the City Civil Court, Mumbai against four former

employees namely Abhinav Chahad, and Santosh Mestry (“Defendants”) for recovery of amounts due for the alleged breach of

the respective employment contracts of the Defendants. The amount involved in the matters is `0.93 lakhs. The matters are

currently pending.

3. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Allahabad against

Insurance Ombudsman, U.P. and Uttrakhand and Vijay Kumar Gupta challenging an award of the Insurance Ombudsman,

Lucknow pertaining to computation of the premium amount. The matter is currently pending.

4. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Hyderabad against

Insurance Ombudsman, (A.P., Karnataka and Yanam) and M. Subhash challenging an award dated February 7, 2010 of the

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Insurance Ombudsman, Hyderabad pertaining to payment of sum assured to the nominee after the death of life assured. The

amount involved in the matter is `1.00 lakhs. The matter is currently pending.

5. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Chandigarh against

permanent Lok Adalat, Gurgaon and Surendra Kumar challenging an award dated March 21, 2011 of the permanent Lok Adalat,

Gurgaon pertaining to payment of claim arising out of health insurance. The amount involved in the matter is `2.10 lakhs. The


6. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Lucknow against

Insurance Ombudsman, U.P and Uttarakhand and Sudhir Srivastava challenging the award of the Insurance Ombudsman,

Lucknow pertaining to claim related to Total Permanent Disability rider in the concerned policy. The matter is currently pending.

7. Reliance Life Insurance Company Limited has filed a writ petition before the High Court of Judicature at Guwahati against

Insurance Ombudsman, Assam, Meghalaya, Mizoram, Arunachal Pradesh, Nagaland & Tripura and Ajijul Haque challenging the

award of the Insurance Ombudsman, Assam, Meghalaya, Mizoram, Arunachal Pradesh, Nagaland & Tripura pertaining to claim

related to repudiation of claim based on suppression of material facts. The matter is currently pending.


Reliance Life Insurance Company Limited has commenced arbitration proceedings before arbitrator M.P.S. Rao against Azilon

Software Solutions Limited (“Azilon”) in relation to the non-provision of services by Azilon pursuant to a master services agreement

dated July 26, 2007 entered into by Azilon with Reliance Life Insurance Company Limited. Reliance Life Insurance Company

Limited had released 30% of the agreed services fees i.e. `9.36 lakhs under the agreement which has already been realized by Azilon.

The Bombay High Court pursuant to its order dated January 21, 2011 appointed M. P. S. Rao as a sole arbitrator to adjudicate the

matter. The amount involved in the matter is `9.36 lakhs along with `100.00 lakhs towards damages. The matter is currently pending.

8. Reliance Home Finance Limited

Cases filed against Reliance Home Finance Limited

Consumer Cases

There are 10 consumer cases filed against Reliance Home Finance Limited in respect of disbursement of loan amounts. These cases

involve an amount of `0.94 lakhs and are at various stages of adjudication.


Cases filed against Indian Commodity Exchange Limited

Civil Cases

1. MMTC has filed a case against Indiabulls Financial Services Limited, Reliance Exchangenext Limited and Indian Commodity

Exchange Limited. MMTC alleged that the transfer of 26% shareholding to Reliance Exchangenext Limited by Indiabulls

Financial Services Limited is in breach of lock-in requirements under a share sale and purchase agreement dated October 13,

2010 between the MMTC and Indiabulls Financial Services Limited. MMTC has sought for declaration of transfer of shares to

be void. The matter is pending before the Company Law Board.

2. Narayane Behera & Others has filed a petition in Orissa High Court against the Union of India represented through Secretary,

Ministry of Consumer Affairs, Forward Market Commission, Magnum Finance Services Ltd and Indian Commodity Exchange

Limited in month of Feb 2013. The Petitioners are Clients of Magnum Finance Services Ltd and pray for action against this

company for violation of contract concerning amount invested with them. The matter is awaiting listing for hearing by the

honourable High Court.

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Cases filed against Reliance Exchangenext Limited

Civil Cases

MMTC has filed a case against Indiabulls Financial Services Limited, Reliance Exchangenext Limited and Indian Commodity

Exchange Limited. MMTC alleged that the transfer of 26% shareholding to Reliance Exchangenext Limited by Indiabills Financial

Services Limited is in breach of lock-in requirements under a share sale and purchase agreement dated October 13, 2010 between the

MMTC and Indiabulls Financial Services Limited. MMTC has sought for declaration of transfer of shares to be void. The matter is

pending before the Company Law Board.


Cases filed against Quant Capital Private Limited

Civil Cases

1. Quant Transactional Services Private Limited has filed a Suit No. 225 of 2013 against Quant Capital Finance and Investment

Private Limited and others under section 6 of the Specific Relief Act before the High Court of Judicature at Mumbai for recovery

of possession of immovable property. Quant Transactional Services Private Limited has alleged that Quant Capital Private

Limited and others have forcefully dispossessed them from the premises at Goregaon. An interim relief was filed in Notice of

Motion No. (1) 624 of 2013 for repossession of the premises and for taking inventory of the Fixed Assets. The matter is currently

pending.

2. Adil Patrawala has filed a case CP No. 27 of 2013 before the Company Law Board, Mumbai against Quant Capital Private

Limited and Reliance Capital Limited under section 397 – 398 of the Companies Act claiming mismanagement in the affairs of

Quant Capital Private Limited and oppression of the minority shareholder. The petition is currently pending. The Company Law

Board granted an ad-interim relief claimed Adil Patrawala that his shareholding in Quant Capital Private Limited cannot be

diluted.

Cases filed by Quant Capital Private Limited

Civil Cases

Quant Capital Private Limited has filed a summary suit No. 118 of 2013 against Quant Transactional Services Private Limited for

recovery of outstanding dues of `902.97 lakhs. A notice of motion (1) 461 of 2013 claiming interim relief praying lien over the assets

of Quant Transactional Services Private Limited was filed, which the High Court subsequently denied. The matter is currently

pending.


Cases filed against Quant Broking Private Limited

Civil Cases

Quant Transactional Services Private Limited has filed against Quant Broking Private Limited and others under section 6 of the

Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant

Transactional Services Private Limited has alleged that Quant Broking Private Limited and others have forcefully dispossessed them

from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for repossession of the premises

and for taking inventory of the Fixed Assets. The matter is currently pending.

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Cases filed against Quant Securities Private Limited

Civil Cases

Quant Transactional Services Private Limited has filed against Quant Securities Private Limited and others under section 6 of the


Transactional Services Private Limited has alleged that Quant Services Private Limited and others have forcefully dispossessed them

from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for repossession of the premises

and for taking inventory of the Fixed Assets. The matter is currently pending.


Cases filed against Quant Commodities Private Limited

Civil Cases

Quant Transactional Services Private Limited has filed against Quant Commodities Private Limited and others under section 6 of the


Transactional Services Private Limited has alleged that Quant Commodities Private Limited and others have forcefully dispossessed

them from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for repossession of the

premises and for taking inventory of the Fixed Assets. The matter is currently pending.


Cases filed against Quant Capital Advisors Private Limited

Civil Cases

Quant Transactional Services Private Limited has filed against Quant Capital Advisors Private Limited and others under section 6 of

the Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant

Transactional Services Private Limited has alleged that Quant Capital Advisors Private Limited and others have forcefully

dispossessed them from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for

repossession of the premises and for taking inventory of the Fixed Assets. The matter is currently pending.


Cases filed against Quant Capital Finance and Investments Private Limited

Civil Cases

Quant Transactional Services Private Limited has filed against Quant Capital Finance and Investments Private Limited and others

under section 6 of the Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable

property. Quant Transactional Services Private Limited has alleged that Quant Capital Finance and Investments Private Limited and

others have forcefully dispossessed them from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624

of 2013 for repossession of the premises and for taking inventory of the Fixed Assets. The matter is currently pending.

17. Quant Investment Service Private Limited

Cases filed against Quant Investment Service Private Limited

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Civil Cases

Quant Transactional Services Private Limited has filed against Quant Investment Service Private Limited and others under section 6

of the Specific Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant

Transactional Services Private Limited has alleged that Quant Investment Service Private Limited and others have forcefully

dispossessed them from the premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for

repossession of the premises and for taking inventory of the Fixed Assets. The matter is currently pending.

18. QCAP Trade Private Limited

Cases filed against QCAP Trade Private Limited

Civil Cases

Quant Transactional Services Private Limited has filed against QCAP Trade Private Limited and others under section 6 of the Specific

Relief Act before the High Court of Judicature at Mumbai for recovery of possession of immovable property. Quant Transactional

Services Private Limited has alleged that QCAP Trade Private Limited and others have forcefully dispossessed them from the

premises at Goregaon. An interim relief was filed in Notice of Motion No. (1) 624 of 2013 for repossession of the premises and for

taking inventory of the Fixed Assets. The matter is currently pending.


Cases filed against Reliance Asset Reconstruction Company Limited

Civil Cases

Hotel Punja International Limited has filed a writ petition No. 2843 of 2011 against Vijaya Bank and Reliance Asset Reconstruction

Company Limited before the Karnataka High Court seeking directions for Reliance Asset Reconstruction Company Limited to accept

OTS proposal. Reliance Asset Reconstruction Company Limited vide letter dated May 17, 2013 accepted Hotel Punja International

Limited’s OTS proposal and advised them to make the payment on or before June 30, 2013, failing which the recovery certificate will

be executed. The matter is currently pending.

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GOVERNMENT AND OTHER APPROVALS

On the basis of the approvals listed below, our Company can undertake this Issue and our current business activities and other than disclosed

below no further material approvals from any governmental or regulatory authority or any other entity are required to undertake the Issue or

continue our business activities. Unless otherwise stated, these approvals are all valid as of the date of this Letter of Offer.

I. Tax related and other approvals

1. Permanent Account Number AAACA4252H.

2. Tax Deduction Account Number MUMA20296D under the Income Tax Act, 1961.

3. Permits to pay the entertainment tax and additional tax on basis of return granted by the Commercial Tax Department of

relevant State Government.

4. Registration under the Central Sales Tax (Registration and Turnover) Rules, 1957 granted by the Commercial Tax Department

of relevant State Government.

5. Registration under the relevant state value added tax rules granted by the Commercial Tax Department of relevant State

Government.

II. Approvals in relation to human resources

1. Provident Fund Number MH / BAN / 45577.

2. Employee State Insurance Corporation Number 31 - 43575 – 122.

3. We have obtained the following Professional Tax Registration under the relevant state laws:

(i) State of Maharashtra (all locations): 27960001845P;

(ii) State of Gujarat (Vapi): PE2507001542;

(iii) State of Madhya Pradesh (all locations): 78271103303;

(iv) State of Andhra Pradesh (all locations, except Vizianagaram): 28405770417;

(v) State of Tamil Nadu (all locations): 08-117-PE-0034; and

(vi) West Bengal (all locations): RCE0037281.

III. Approvals in relation to the Business

Our Company is required to obtain various approvals in relation to our business. The registrations and approvals required to be obtained

by our Company usually in respect of our business in India include the following:

Cinema Licenses

1. License for cinema issued by the Commissioner of Police of the cities where the theaters of our Company are located.

2. License to sell tickets for admission to a cinema issued by the Commissioner of Police / Deputy Commissioner of the cities

where the theaters of our Company are located.

3. License for exhibition of cinematograph shows in theatres issued by the District Magistrate / Deputy Commissioner of the

cities where the theaters of our Company are located.

Municipality Laws

1. Licenses for storage of cinematograph films issued by license department of the relevant local municipalities.

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2. Licenses for establishment of cafeteria in theatres managed and operated by our Company issued by license department of the

relevant local municipalities.

3. Certificate for sanitary convenience issued by health department of the relevant local municipalities.

4. No objection certificates for disposal of treated sewage/effluents issued by the relevant local municipalities.

Environmental Regulations

Consents from the State Pollution Control Board to operate under the provisions of the Water (Prevention and Control of Pollution)

Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981.

Labour Laws

Registration Certificate of contract labours under the Contract Labour (Registration and Abolition) Act, 1970 issued by the relevant

state authorities.

Prevention of Food Adulteration Laws

License under the Prevention of Food Adulteration Act, 1954 and the Prevention of Food Adulteration Rules, 1955 issued by the

relevant state authorities.

Shops and Establishments Legislations

Registration Certificate of Establishment under the Shops and Establishment Act, 1948 as issued by the Corporation of the cities where

the theaters of our Company are located.

Fire and Emergency Service Laws

Fire license issued by the Directorate of Fire and Emergency Services under the Fire Force Act, applicable in the states where the

theatres of our Company are situated.

Certain approvals may have elapsed in their normal course and our Company has applications to the relevant authorities for renewal of such

licenses and / or approvals or is in the process of making such applications. We undertake to obtain all approvals, licenses, registrations and

permissions required to operate our business.

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OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

The Issue has been authorised by a resolution of our Board of Directors passed at their meeting held on July 25, 2012, pursuant to Section 81 (1)

of the Companies Act. This Letter of Offer has been approved by our Board of Directors on July 24, 2013.

Our Company received in-principle approvals from the BSE and the NSE for the listing of the Equity Shares pursuant to letters dated April 18,

2013 and April 10, 2013, respectively.

Prohibition by SEBI or Other Governmental Authorities

Our Company, Promoters, natural persons behind the Promoters, Directors, Promoter Group and Group Companies, have not been prohibited

from accessing or operating in capital markets under any order or direction passed by SEBI or any other regulatory or governmental authority.

The companies, with which our Promoters, Directors or persons in control of our Company are associated as promoter, directors or persons in

control have not been prohibited from accessing in capital markets under any order or direction passed by SEBI or any other regulatory or

governmental authority.

Except as provided in the table below, there has been no action taken by SEBI against any entity belonging to the Promoter Group or forming

part of Group Companies.


1. Reliance Securities Limited Two show cause notices were issued by SEBI to Reliance Securities

Limited (RSL) on August 9, 2010 and August 31, 2010, alleging

violation of the provisions of the SEBI (Stock Brokers and Sub-

brokers) Regulations, 1992 in respect of certain irregularities in

operations. RSL, subsequently, approached SEBI under the SEBI

guidelines for Consent Orders without admitting to, or denying,

guilt. The terms of consent were accepted by SEBI. The accepted

terms of consent were issued in the form of a Consent Order on June

9, 2011. According to the terms of the Consent Order, amongst other

things, RSL was directed to pay `25,00,000 as settlement charges

for settlement of the matter. Pursuant to the said Consent Order,

Reliance Securities Limited paid `25,00,000 and the said

proceedings stand disposed off.

2. Reliance Equities International Private Limited(1)

SEBI conducted an inspection of books and records of Reliance

Equities International Private Limited (“REIPL”) for the period

April 1, 2008 to March 31, 2009. REIPL had submitted its responses

on various findings / comments of SEBI. Subsequently, SEBI by its

letter date August 31, 2010 directed REIPL to rectify certain defects

which it had failed to rectify. REIPL submitted its response to SEBI

on September 24, 2010 confirming the corrective steps taken.

3. Reliance Share & Stock Brokers Private Limited SEBI, vide order dated December 11, 2006 had suspended Reliance

Share & Stock Brokers Private Limited’s (RSSBPL) registration as

stock broker for a period of 4 (four) months. Thereafter, RSSBPL

filed an appeal No. 151 of 2006 with Securities Appellate Tribunal

(SAT) challenging SEBI’s order. Meanwhile, SEBI through its letter

dated November 30, 2007 has agreed to the consent terms proposed

by RSSBPL of settling the matter, among other things, by payment

of `50,00,000. However, the payment under the abovementioned

letter from SEBI was subject to approval of consent terms by SAT.

SEBI vide order no. EFD / DRAIII / VRP / SS / 109671 / 2007

307

dated November 30, 2007 has accepted RSSBPL consent

application for a consent order towards settlement of the dispute

with them. The dispute was settled without admitting or denying the

guilt under the consent terms proposed by RSSBPL and as approved

by the independent high power advisory committee (HPAC) of

SEBI.

4. Reliance Capital Limited SEBI had issued a letter (no. MIRSD-4/DP/INSP/OW/10677/2010)

dated July 1, 2010 to Reliance Capital in respect of certain

irregularities / deficiencies in its depository operations.

Reliance Capital has submitted the detailed reply vide letter dated

July 20, 2010 confirming the corrective steps taken.

5. Reliance Capital Asset Management Limited 1. SEBI on June 3, 2009 directed

Reliance Capital Asset Management Limited to withdraw one

particular advertisement pertaining to the NFO of Reliance

Infrastructure Fund of Reliance Mutual Fund for non

compliance with regulation 30(1) of Securities and Exchange

Board of India (Mutual Funds) Regulations, 1996.

SEBI vide order dated January 12, 2010 disposed off the

proceedings and directed Reliance Capital Asset Management

Limited to abide by the aforesaid regulations.

2. SEBI had imposed a fine of

`6,00,000 on Reliance Mutual Fund in March 2003 for breach

of investment restrictions which was duly paid.

(1)This company has been amalgamated with Reliance Capital Limited

There has been no action taken by SEBI against our Directors or any entity our Directors are involved in as promoters or directors.

Details of the entities that our Directors are associated with, which are engaged in securities market related business and are registered with

SEBI for the same are as follows:

Name of the Director Sujal Shah

Name of the entity Keynote Corporate Services Limited

SEBI Registration Number of the entity INM 0000 03606

If registration has elapsed, reason for non-renewal Permanent Registration

Details of any inquiry/investigation conducted by SEBI at any

time

Details as given below

Penalty imposed by SEBI (penalty includes deficiency/warning

letter, adjudication proceedings,

suspension/cancellation/prohibitory order

(i) Keynote Corporate Services Limited’s (Keynote) certificate of

registration was suspended for a period of two months pursuant

to a SEBI order dated September 26, 2003 in relation to the

matter of public issue of Maha Chemicals Limited which

opened for subscription in April 1994. Keynote was one of the

lead managers to the said issue. The Presiding Officer,

Securities Appellate Tribunal pursuant to his order dated

October 21, 2003 stayed the order dated September 26, 2003.

Further, pursuant to a subsequent order of April 21, 2004, SAT

directed Keynote not to negotiate, accept or act upon any new

assignments for two months. The matter has been settled.

(ii) A show cause notice was issued by SEBI to Keynote in

relation to a public cum rights issue of Majestic Industries

308

Limited during the year 1996. In June 2009, Keynote filed

consent terms with SEBI which was further revised pursuant to

a letter dated August 7, 2009. SEBI by its order dated February

15, 2010 approved the consent terms. The matter has been

settled.

(iii) SEBI issued a show cause notice dated January 30, 2004 to

Keynote in relation to the public issue of Consortex Karl

Doelitzsch (India) Limited (formerly known as Andhra

Pradesh Power Tools Limited). A personal hearing was

conducted on September 16, 2005. Subsequently, a further

show cause notice dated June 7, 2011 was issued by SEBI

enclosing the report of the Enquiry Officer. The Enquiry

Officer in his report had recommended to SEBI to terminate

the proceedings against Keynote as no charges were

established. Keynote has filed its reply dated June 24, 2011

with SEBI. A personal hearing was scheduled on September 2,

2011 and subsequently, Keynote has on April 13, 2012, filed

its consent terms.

(iv) SEBI has issued a show cause notice dated September 9, 2008

to Keynote in relation to the public issue of Nissan Copper

Limited. Consent terms dated December 8, 2008 were filed by

Keynote Corporate Services Limited with SEBI. SEBI by its

order dated April 9, 2009 approved the consent terms. The

matter has been settled.

(v) A show cause notice dated May 20, 2011 was issued by SEBI

to Keynote Corporate Services Limited in relation to a public

issue of Emmbi Polyarns Limited dealt with during the year

2010. Keynote has filed its reply dated July 12, 2011.

Subsequently, on October 10, 2011 a personal hearing was

granted. The matter is currently pending.

(vi) SEBI has passed an order dated January 31, 2012 against

Keynote imposing a penalty of ` 10 lakhs in relation to the

public issue of Edserve Softsystems Limited. Keynote has filed

an appeal to the SAT on March 13, 2012. The matter is

pending.

Outstanding fee payable to SEBI by the entity, if any Nil

IRDA Penalties

Except as provided in the table below, there has been no penalty imposed by the IRDA against any entity belonging to the Promoter Group or

forming part of Group Companies.


Group company



Company Limited

Co-insurer – Breach by lender May 29, 2006 1,000

Co-insurer – Breach by lender August 28, 2006 1,000

Co-insurer- Breach by lender August 28, 2006 1,000

Predatory Pricing December 5, 2006 50,00,000

Breach of File & Use July 28, 2009 20,00,000

309


Group company


Guidelines (Health wise

policy)

2. Reliance Life Insurance Company

Limited

Payment of excess referral fees

than envisaged in the referral

guidelines and deviation in the

File & Use procedure

particularly in group products

in violation of circular

IRDA/Cir. No.

01/IRDA/ACTL/MC/2006-07

dated 12/7/2006

August 12, 2010 10,00,000

Prohibition by RBI

Neither our Company nor its Promoters, Directors, Group Companies or relatives (as per the Companies Act) of our Promoters are identified as

willful defaulters by the RBI or any other governmental authority. There are no violations of securities laws committed by them in the past or

are pending against them.

Eligibility for the Issue

Our Company is a listed company and has been incorporated under the Companies Act. Our Equity Shares are presently listed on the Stock

Exchanges. It is eligible to offer this issue in terms of Chapter IV of the ICDR Regulations. It is eligible to offer the Issue in terms of Chapter IV

of the ICDR Regulations.

Please note that our Company has undergone a change of control consequent to an acquisition of its majority stake by the Reliance Group in

June 2005 in accordance with Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and

is making a rights issue of its securities for the first time subsequent to such change of control in accordance with clause (3)(a) of Part E of

Schedule VIII of ICDR Regulation. Therefore, the disclosures in the Letter of Offer have been made in accordance with Part A of Schedule VIII

of the ICDR Regulations, except for disclosures as specified in clause (4) of Part E of Schedule VIII of the ICDR Regulations.

DISCLAIMER CLAUSE OF SEBI

AS REQUIRED, A COPY OF THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY

UNDERSTOOD THAT THE SUBMISSION OF THE DRAFT LETTER OF OFFER TO SEBI SHOULD NOT, IN ANY WAY BE

DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY

RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE

ISSUE IS PROPOSED TO BE MADE, OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS

EXPRESSED IN THE DRAFT LETTER OF OFFER. THE LEAD MANAGER, AXIS CAPITALLIMITED HAS CERTIFIED THAT

THE DISCLOSURES MADE IN THE DRAFT 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 ALL RELEVANT INFORMATION IN THE DRAFT LETTER

OF OFFER, THE LEAD MANAGER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY

DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE THE LEAD

MANAGER, AXIS CAPITAL LIMITED WILL FURNISH TO SEBI A DUE DILIGENCE CERTIFICATE WHICH WILL READ AS

FOLLOWS:

(1) WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE

COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER

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MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT LETTER OF OFFER PERTAINING TO

THE ISSUE;

(2) ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE COMPANY, OUR DIRECTORS AND

OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT VERIFICATION OF THE STATEMENTS

CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE 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 HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR

UNDERWRITING COMMITMENTS – NOT APPLICABLE

(5) WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR

SPECIFIED SECURITIES AS PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE

SPECIFIED SECURITIES PROPOSED TO FORM PART OF PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN

SHALL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTERS DURING THE PERIOD STARTING

FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS/DRAFT PROSPECTUS WITH THE BOARD

TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING

PROSPECTUS/DRAFT PROSPECTUS – NOT APPLICABLE

(6) WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF

CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED

SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED

WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN

MADE IN THE DRAFT RED HERRING PROSPECTUS/DRAFT PROSPECTUS – NOT APPLICABLE

(7) WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-

REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF

CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM

THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE

RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’

CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT

ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN

ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER

ALONG WITH THE PROCEEDS Of THE PUBLIC ISSUE – NOT APPLICABLE

(8) WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE COMPANY FOR WHICH THE FUNDS ARE BEING

RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE

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MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE COMPANY AND THAT THE ACTIVITIES

WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS

MEMORANDUM OF ASSOCIATION.

(9) 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 -

NOTED FOR COMPLIANCE

(10) 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.

(11) 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.

(12) WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT LETTER OF OFFER:

(a) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE

DENOMINATION FOR THE EQUITY SHARES OF THE COMPANY AND

(b) AN UNDERTAKING FROM THE COMPANY THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND

ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

(13) 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.

(14) 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.

(15) 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.

(16) WE ENCLOSE STATEMENT ON ‘PRICE INFORMATION OF PAST ISSUES HANDLED BY MERCHANT BANKERS

(WHO ARE RESPONSIBLE FOR PRICING THIS ISSUE)’, AS PER FORMAT SPECIFIED BY THE BOARD THROUGH

CIRCULAR - NOT APPLICABLE

(17) WE CERTIFY THAT PROFITS FROM RELATED PARTY TRANSACTIONS HAVE ARISEN FROM LEGITIMATE

BUSINESS TRANSACTIONS.

THE FILING OF THIS LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY FROM ANY LIABILITIES UNDER

SECTION 63 OR SECTION 68 OF THE COMPANIES ACT OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR

OTHER CLEARANCE 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 THIS

LETTER OF OFFER.

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Caution

Disclaimer clauses from our Company and the Lead Manager

Our Company and the Lead Manager accept no responsibility for statements made otherwise than in this Letter of Offer or in any advertisement

or other material issued by our Company or by any other persons at the instance of our Company and anyone placing reliance on any other

source of information would be doing so at his own risk.

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 at presentations, in research or sales reports etc.

after filing of this Letter of Offer with SEBI.

No dealer, salesperson or other person is authorised to give any information or to represent anything not contained in this document. You must

not rely on any unauthorised information or representations. This Letter of Offer is an offer to sell only the Equity Shares and rights to purchase

the Equity Shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this

Letter of Offer is current only as of its date.

Investors who invest in the Issue will be deemed to have represented to our Company 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, and are relying on independent advice / evaluation as to their ability and quantum of investment in the Issue.

Disclaimer with respect to jurisdiction

This Letter of Offer has been prepared under the provisions of Indian laws and the applicable rules and regulations thereunder. Any disputes

arising out of the Issue will be subject to the jurisdiction of the appropriate court(s) in Mumbai, India only.

Designated Stock Exchange

The Designated Stock Exchange for the purpose of the Issue will be BSE.

Disclaimer Clause of the BSE

As required, a copy of the Draft Letter of Offer has been submitted to the BSE.

BSE Limited (“the Exchange”) has given vide its letter dated April 18, 2013, permission to this Company to use the Exchange’s name in this

Letter of Offer as one of the stock exchanges on which the 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.

313

Disclaimer Clause of the NSE

As required, a copy of this letter of offer has been submitted to National Stock Exchange of India (hereinafter referred to as NSE). NSE has

given vide its letter Ref No. NSE/LIST/200766-Q dated April 10, 2013 permission to the Issuer to use its name in this letter of offer as one of

the stock exchanges on which this Issuer’s securities are proposed to be listed. NSE has scrutinized this Letter of Offer for its limited internal

purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to be distinctly understood that the aforesaid

permission given by NSE should not in any way be deemed or construed that the Letter of Offer has been cleared or approved by NSE; nor does

it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this letter of offer; nor does it warrant that

this Issuer’s securities will be listed or will continue to be listed on the exchange; nor does it take any responsibility for the financial or other

soundness of this Issuer, its Promoters, its management or any scheme or project of this Issuer.

Every person who desires to apply for or otherwise acquires any securities of this Issuer 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.

Selling Restrictions

The distribution of this Letter of Offer and the issue of Equity Shares on a rights basis to persons in certain jurisdictions outside India may be

restricted by legal requirements prevailing in those jurisdictions. Persons into whose possession this Letter of Offer may come are required to

inform themselves about and observe such restrictions. Our Company is making the Issue of Equity Shares on a rights basis to the Equity

Shareholders of our Company and will dispatch the Letter of Offer and CAFs only to Equity Shareholders who have provided an Indian address.

No action has been or will be taken to permit the a public offering of the Equity Shares or Rights Entitlements to occur in any jurisdiction, or the

possession, circulation, or distribution of this Letter of Offer or any other material relating to our Company, the Equity Shares or Rights

Entitlements in any jurisdiction, where action would be required for that purpose, except that this Letter of Offer has been filed with SEBI.

Accordingly, the Equity Shares and Rights Entitlements may not be offered or sold, directly or indirectly, and none of this Letter of Offer or any

offering materials or advertisements in connection with the Equity Shares or Rights Entitlements may be distributed or published in any

jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of this Letter of Offer will not constitute an

offer in those jurisdictions in which it would be illegal to make such an offer.

This Letter of Offer and its accompanying documents are being supplied to you solely for your information and may not be reproduced,

redistributed or passed on, directly or indirectly, to any other person or published, in whole or in part, for any purpose.

If this Letter of Offer is received by any person in any jurisdiction where to do so would or might contravene local securities laws or regulation,

or by their agent or nominee, they must not seek to subscribe to the Equity Shares or the Rights Entitlements referred to in this Letter of Offer.

Investors are advised to consult their legal counsel prior to accepting any provisional allotment of Equity Shares, applying for excess Equity

Shares or Rights Entitlements or making any offer, sale, resale, pledge or other transfer of the Equity Shares or Rights Entitlements.

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 our Company’s affairs from the date hereof or that the information contained herein is correct as of any time subsequent to this date.

Each person who exercises Rights Entitlements and subscribes for Equity Shares or excess Equity Shares, or who purchases Rights Entitlements

or Equity Shares shall do so in accordance with the restrictions set out below.

United States Restrictions

The Rights Entitlements and the Equity Shares have not been, and will not be, registered under 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). The Issue 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 Entitlements for sale in the United

States or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlements. Accordingly, this Letter of Offer and

314

the CAF should not be forwarded to or transmitted in or into the United States at any time. Any person who acquires Rights Entitlements or

Equity Shares will be deemed to have declared, warranted and agreed, by accepting the delivery of this Letter of Offer, 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 and is not a U.S. person (as defined

in Regulation S).

The Rights Entitlements and the Equity Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any

state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or

endorsed the merits of the offering of the Rights Entitlements, the Equity Shares or the accuracy or adequacy of this Letter of Offer. Any

representation to the contrary is a criminal offence in the United States.

Neither our Company nor any person acting on behalf of our Company will accept a subscription or renunciation from any person, or the agent

of any person, who appears to be, or who our Company or any person acting on behalf of our Company has reason to believe is, in the United

States. Any envelope containing a CAF and postmarked from the United States will not be accepted. Similarly, any CAF in which the exercising

holder or subscribing applicant requests Equity Shares to be issued in registered form or credited to a securities account and gives an address in

the United States will not be accepted. Our Company reserves the right to treat as invalid any CAF which: (i) appears to our Company or its

agents to have been executed in or dispatched from the United States; (ii) does not include the relevant certifications; or (iii) where our

Company believes acceptance of such CAF may infringe applicable legal or regulatory requirements; and our Company shall not be bound to

allot or issue any Equity Shares or Rights Entitlements in respect of any such CAF. Any payment made in respect of any CAF that does not meet

the foregoing criteria will be returned without interest. Any person in the United States who obtains a copy of this Letter of Offer or its

accompanying documents is required to disregard it.

Until the expiration of the 40 day period beginning on the date on which our Company will allot and issue the Equity Shares, an offer to sell or a

sale of, or subscription for, the Rights Entitlements or the Equity Shares within the United States by a broker / dealer (whether or not it is

participating in the Issue) may violate the registration requirements of the Securities Act.

Each purchaser of the Rights Entitlements and / or the Equity Shares will be deemed to have represented and agreed as follows (terms defined in

Regulation S have the same meanings when used herein):

(a) the purchaser (i) is, and the person, if any, for whose account it is acquiring such Rights Entitlements and/or the Equity Shares is,

outside the United States, and (ii) is acquiring the Rights Entitlements and/or the Equity Shares in an offshore transaction meeting the

requirements of Regulation S;

(b) the purchaser is aware that the Rights Entitlements and the Equity Shares have not been and will not be registered under the Securities

Act and are being distributed and offered outside the United States in reliance on Regulation S; and

(c) the purchaser acknowledges that our Company, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of

the foregoing representations and agreements.

European Economic Area Restrictions

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, “Relevant Member

State”), an offer of the Equity Shares to the public may not be made in that Relevant Member State prior to the publication of a prospectus in

relation to the Rights Entitlements or the Equity Shares which has been approved by the competent authority in that Relevant Member State or,

where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in

accordance with the Prospectus Directive, except that an offer of Equity Shares or Rights Entitlements to the public in that Relevant Member

State from and including the Relevant Implementation Date may be made:

(a) to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose

corporate purpose is solely to invest in securities;

(b) to any legal entity which has two or more of (1) an average of at least 250 employees during the last Financial Year; (2) a total balance

sheet of more than Euro 43,000,000 and (3) an annual net turnover of more than Euro 50,000,000, as shown in its last annual or

consolidated accounts; or

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(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive;

provided that no such offer of Equity Shares shall result in the requirement for the publication by our Company or the Lead Manager pursuant to

Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any Equity Shares in any Relevant Member State means

the communication in any form and by any means of sufficient information on the terms of the offer and the Equity Shares to be offered so as to

enable an investor to decide to purchase or subscribe the Equity Shares, as the same may be varied in that Member State by any measure

implementing the Prospectus Directive in that Member State and the expression “Prospectus Directive” means Directive 2003/7 1/EC and

includes any relevant implementing measure in each Relevant Member State.

In the case of any Rights Entitlements or Equity Shares being offered to a financial intermediary as that term is used in Article 3(2) of the

Prospectus Directive, such financial intermediary will be deemed to have represented, acknowledged and agreed that the Rights Entitlements or

Equity Shares acquired by them in the Issue have not been acquired on a non-discretionary basis on behalf of, nor have they been acquired with

a view to their offer or resale to, persons in circumstances which may give rise to an offer of any Rights Entitlements or Equity Shares acquired

by them in the Issue to the public other than their offer or resale in a Relevant Member State to qualified investors as so defined who are not

financial intermediaries or in circumstances in which the prior consent of the Lead Manager has been obtained to each such proposed offer or

resale.

United Kingdom Restrictions

This Letter of Offer is only being distributed to and is only directed at (i) persons who are outside the UK, or (ii) in circumstances where Section

21(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 does not apply.

Filing

The Draft Letter of Offer has been filed with the Corporation Finance Department of the SEBI, located at SEBI Bhavan, C-4-A, G Block,

Bandra-Kurla Complex, Bandra (East), Mumbai 400 051, India for its observations.

A copy of this Letter of Offer will be filed with the Designated Stock Exchange in accordance the provisions of the Companies Act.

Listing

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 Equity Shares to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money

is not repaid within eight days from the day our Company becomes liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the

refusal by the Stock Exchange(s), whichever is earlier) our Company and every Director of our Company who is an officer in default shall, on

and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed under Section 73 of the Companies

Act.

Consents

Consents in writing of our Directors, the Auditors, the Lead Manager, the Legal Counsel, the Registrar to the Issue, lenders and experts to act in

their respective capacities have been obtained and such consents have not been withdrawn up to the date of this Letter of Offer. B S R & Co. and

Chaturvedi & Shah, Chartered Accountants, the Auditors of our Company, have given their written consent for the inclusion of their report in

the form and content in which it appears in this Letter of Offer and such consent and report have not been withdrawn up to the date of this Letter

of Offer. Jitendra Sanghavi & Co., Chartered Accountants have given their written consent for the inclusion of the statement of tax benefits

dated June 29, 2013 in the form and content in which it appears in this Letter of Offer. Furthermore, Sandeep S. Shah and Associates, Chartered

Accountants have given their written consent for the inclusion of their name and the certificate dated July 1, 2013 in respect of unsecured loans

availed by our Company from Reliance Capital Limited which are proposed to be repaid and/or prepaid out of the Net Proceeds, in the form and

content in which it appears in this Letter of Offer.

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Expert Opinion

Except for:

the report of our Auditors dated July 3, 2013 in the form and context it appears in this Letter of Offer; and

the report on the statement of tax benefits dated June 29, 2013 received from Jitendra Sanghavi & Co., Chartered Accountants, in the form

and context in which it appears in this Letter of Offer,

we have not obtained any other expert opinion in relation to this issue.

Issue related expenses

The Issue related expenses include, among others, fees to various advisors, printing and distribution expenses, advertisement expenses, and

registrar. The estimated Issue related expenses are as follows:

Activity Expense

(` in lakhs)

Expense (% of total

expenses)

Expense (% of Issue

Size)

Fee to the Lead Manager 75.00 21.43 0.13

Fee to the Registrar to the Issue 3.06 0.87 0.01

Fee to the Monitoring Agency and Legal Advisors 17.00 4.86 0.03

Others (SEBI Fees, Stock Exchange Fees, Printing, Stationery and

Postage, Advertisement, etc.)

254.94 72.84 0.43

Total estimated Issue expenses 350.00 100.00 0.58 Note: Our Company will recoup the expenses already incurred and paid, from the issue expenses set out above.

Previous Issues by our Company

Our Company has not undertaken any public or rights issue during the last five years.

Previous issues of Equity Shares otherwise than for cash

Except as disclosed in the chapter entitled “Capital Structure” at page 69 of this Letter of Offer, our Company has not issued any Equity Shares

for consideration otherwise than for cash.

Commission and Brokerage paid on previous issues of the Equity Shares

Our Company had undertaken an initial public offer in Fiscal 2001. The commission and brokerage paid in relation to the initial public offer was

`191.09 lakhs.

Previous capital issue during the previous three years by listed Subsidiaries, Group Companies and associates of our Company

Except as disclosed at page 209 of this Letter of Offer, none of our Subsidiaries, Group Companies and associates of our Company are listed on

any stock exchange.

Reliance Broadcast Network Limited, a listed Group Company, has not made any public or rights issue in the last three years.

Performance vis-à-vis objects – Public / Rights Issue of our Company and/or listed Subsidiaries, Group Companies and associates of

our Company

Our Company has not undertaken any public or rights issue during the last 10 years immediately preceding the date of this Letter of Offer.

Except as disclosed at page 209 of this Letter of Offer, none of our Group Companies, our Subsidiaries and associates of our Company are listed

on any stock exchange.

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Reliance Broadcast Network Limited has not made any public or rights issue in the last ten years.

Outstanding Debentures/Bonds and Preference Shares

Our Company has issued:

3,500 11.00% secured redeemable non-convertible debentures of `10,00,000 each which are currently outstanding;

440 12.50% unsecured redeemable non-convertible debentures of `10,00,000 each of which 330 are currently outstanding; and

29,50,000 10.00% redeemable non-convertible preference shares of `5 each which are currently outstanding.

Option to Subscribe

Other than as disclosed in the chapter entitled “Capital Structure” at page 69 of this Letter of Offer, our Company has not given any person any

option to subscribe for the Equity Shares.

Investor Grievances and Redressal System

Our Company has adequate arrangements for the redressal of investor complaints in compliance with the corporate governance requirements

under the Listing Agreements. The Shareholders and Investors’ Grievance Committee currently comprises Gautam Doshi, Amit Khanna and

Prasoon Joshi and its broad terms of reference include investigation into any matter relating to redressing shareholders’ and/or investors’

complaints pertaining to transfer of shares, non-receipt of balance sheet, non-receipt of declared dividend, duplicate share certificates and

dematerialization or rematerialization of shares.

Status of Complaints

(a) Total number of complaints received during Fiscal 2010: 19

(b) Total number of complaints received during Fiscal 2011: 37

(c) Total number of complaints received during Fiscal 2012 : 27

(d) Time normally taken for disposal of various types of investor complaints: Not more than five days.

Status of outstanding investor complaints in relation to our Company

As of date of this Letter of Offer, there were no outstanding investor complaints.

Status of outstanding investor complaints in relation to the listed Group Companies

In relation to the Reliance Broadcast Network Limited, there were no outstanding investor complaints as on March 31, 2013.

Investor Grievances arising out of the Issue

Our Company’s investor grievances arising out of the Issue will be handled by Link Intime India Private Limited, who is the Registrar to the

Issue. The Registrar will have a separate team of personnel handling only post-Issue correspondence.

The agreement between our Company and the Registrar will provide for retention of records with the Registrar for a period of at least one year

from the last date of dispatch of Allotment Advice/ share certificate / demat credit / refund order to enable the Registrar to redress grievances of

Investors.

All grievances relating to the Issue may be addressed to the Registrar to the Issue or the SCSB in case of ASBA applicants giving full details

such as folio no., name and address, contact telephone / cell numbers, email i.d. of the first applicant, number and type of shares applied for,

Application Form serial number, amount paid on application and the name of the bank and the branch where the application was deposited,

along with a photocopy of the acknowledgement slip. In case of renunciation, the same details of the Renouncee should be furnished.

The average time taken by the Registrar for attending to routine grievances will be 7-10 days from the date of receipt of complaints. In case of

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non-routine grievances where verification at other agencies is involved, it would be the endeavour of the Registrar to attend to them as

expeditiously as possible. Our Company undertakes to resolve the Investor grievances in a time bound manner.

Registrar to the Issue




Mumbai 400 078

Telephone: +91 22 2596 7878

Facsimile: +91 22 2596 0329






Investors may contact the Compliance Officer in case of any pre-Issue / post -Issue related problems such as non-receipt of Allotment

advice/share certificates/ demat credit / refund orders etc. The contact details of the Compliance Officer are as follows:

Ashish Agarwal


Film City Complex

Goregaon (East)

Mumbai 400 065

Maharashtra, India

Tel: +91 22 3980 8900

Facsimile: +91 22 3980 8985


Changes in Auditors during the last three years

Chaturvedi & Shah, Chartered Accountants were appointed as one of joint auditors on September 30, 2009.

Capitalization of Reserves or Profits

Other than as disclosed in the chapter entitled “Capital Structure” at page 69 of this Letter of Offer of this Letter of Offer, our Company has not

capitalized any of its reserves or profits in the last five years.

Revaluation of Fixed Assets

Except as stated in the chapter entitiled “Financial Statements” at page F-1, there has been no revaluation of our Company’s fixed assets in the

last five years.

Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Issue, or the subscription level falls below 90%, after the Issue

Closing Date on account of cheques being returned unpaid or withdrawal of applications, our Company shall refund the entire subscription

amount received within 15 days from the Issue Closing Date. If there is delay in the refund of the subscription amount by more than eight days

after our Company becomes liable to pay the subscription amount (i.e., 15 days after the Issue Closing Date), our Company and every Director

of our Company who is an officer in default shall be jointly and severally liable to pay interest for the delayed period, as prescribed under sub-

sections (2) and (2A) of Section 73 of the Companies Act.

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SECTION VII: ISSUE INFORMATION

TERMS OF THE ISSUE

The Equity Shares proposed to be issued on a rights basis, are subject to the terms and conditions contained in this Letter of Offer, the enclosed

CAF, the Memorandum of Association and Articles of Association of our Company, and the provisions of the Companies Act, FEMA, the

guidelines and regulations issued by SEBI, approvals, if any, received from the RBI and other governmental authorities, the guidelines,

notifications and regulations for the issue of capital and for listing of securities issued by GoI and other statutory and regulatory authorities

from time to time, terms and conditions as stipulated in the allotment advice or security certificate.

Please note that QIB and Non Institutional applicants and other applicants whose application amount exceeds `2,00,000 can participate in the

Issue only through the ASBA process. Equity Shareholders of our Company who are not QIBs and Non Institutional applicants and whose

application amount is not more than `2,00,000 can participate in the Issue through the ASBA process as well as the non ASBA process. ASBA

Investors should note that the ASBA process involves application procedures that may be different from the procedure applicable to non ASBA

process. ASBA Investors should carefully read the provisions applicable to such applications before making their application through the ASBA

process. For details, please see parts entitled “Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”)

Process” in this chapter.

Basis for the issue

The Equity Shares are being offered for subscription to the 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 statutory register of members of our

Company in respect of the Equity Shares held in physical form at the close of business hours on the Record Date, being Wednesday, July 24,

2013 as intimated to the Designated Stock Exchange.

Rights Entitlements

Eligible Equity Shareholder whose name appears as a beneficial owner in respect of the Equity 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., Wednesday, July 24, 2013, you are entitled to the

number of Equity Shares as set out in Part A of the enclosed CAF.

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 LEGAL REQUIREMENTS PREVAILING IN

THOSE JURISDICTIONS. OUR COMPANY IS MAKING THE ISSUE OF EQUITY SHARES ON A RIGHTS BASIS TO THE

EQUITY SHAREHOLDERS AND THE LETTER OF OFFER, ABRIDGED LETTER OF OFFER AND THE CAFS WILL BE

DISPATCHED ONLY TO THOSE EQUITY SHAREHOLDERS WHO HAVE A REGISTERED ADDRESS IN INDIA. ANY

PERSON WHO ACQUIRES RIGHTS ENTITLEMENTS OR EQUITY SHARES WILL BE DEEMED TO HAVE DECLARED,

WARRANTED AND AGREED, BY ACCEPTING THE DELIVERY OF THE LETTER OF OFFER, 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. PERSONS WHO MAY ACQUIRE RIGHTS ENTITLEMENTS OR COME INTO POSSESSION OF THIS

LETTER OF OFFER OR CAF ARE ADVISED TO CONSULT WITH THEIR OWN LEGAL ADVISORS AS TO WHAT

RESTRICTIONS MAY BE APPLICABLE TO THEM AND TO OBSERVE SUCH RESTRICTIONS. THIS LETTER OF OFFER

MAY NOT BE USED FOR THE PURPOSE OF AN OFFER OR INVITATION IN ANY CIRCUMSTANCES TO SUBSCRIBE TO

EQUITY SHARES IN WHICH SUCH ODDER OR INVITATION IS NOT AUTHORIZED. NO ACTION HAS BEEN TAKEN OR

WILL BE TAKEN THAT WOULD PERMIT THE OFFERING OF THE EQUITY SHARES PURSUANT TO THE ISSUE TO

OCCUR IN ANY JURISDICTION OTHER THAN INDIA, OR THE POSSESSION, CIRCULATION OR DISTRIBUTION OF THIS

LETTER OF OFFER RELATING TO THE COMPANY OR THE EQUITY SHARES IN ANY JURISDICTION WHERE ACTION

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FOR SUCH PURPOSE IS REQUIRED. ACCORDINGLY, THE EQUITY SHARES MAY NOT BE OFFERED OR SOLD,

DIRECTLY OR INDIRECTLY, AND THIS LETTER OF OFFER MAY NOT BE DISTRIBUTED OR PUBLISHED IN OR FROM

ANY COUNTRY OR JURISDICTION EXCEPT UNDER CIRCUMSTANCES THAT WILL RESULT IN COMPLIANCE WITH

ANY APPLICABLE RULES AND REGUMALATIONS OF ANY SUCH COUNTRY OR JURISDICTION.

PRINCIPAL TERMS OF THE EQUITY SHARES

Face Value

Each Equity Share will have the face value of `5/-.

Issue Price

Each Equity Share shall be offered at an Issue Price of `40 at a premium of `35 per Equity Share. The Issue Price has been arrived at after

consultation between our Company and the Lead Manager.

Rights Entitlements Ratio

The Equity Shares are being offered on a rights basis to the Eligible Equity Shareholders in the ratio of 13 Equity Shares for every 4 Equity

Shares held on the Record Date.

Terms of Payment

The full amount of `40 per Equity Share is payable on application.

Reliance Capital Limited through its letters dated March 8, 2013 and July 1, 2013 has consented to adjust the RCL Loan towards share

application money against Promoter Subscription. Consequently no fresh Issue proceeds would be received by our Company to such an extent.

A separate cheque/demand draft pay order must accompany each Application form.

Pursuant to RBI Circular number DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the Stockinvest scheme has been

withdrawn and accordingly, payment through Stockinvest will not be accepted in the Issue.

Fractional Entitlements

For Equity Shares being offered on a rights basis under this Issue, if the shareholding of any of the Eligible Equity Shareholders is less than 4

Equity Shares or not in the multiple of 4, the fractional entitlement of such Eligible Equity Shareholders shall be ignored. Eligible Equity

Shareholders whose fractional Rights Entitlements are being ignored would be given preferential consideration for the Allotment of one

additional Equity Share each if they apply for additional Equity Shares over and above their Rights Entitlements, if any.

Number of Equity Shares held Rights Entitlement

1 3

2 6

3 9

4 13

5 16

6 19

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7 22

8 26

Ranking

The Equity Shares being issued shall be subject to the provisions of our Memorandum of Association and Articles of Association. The Equity

Shares allotted in the Issue shall rank pari passu with our existing Equity Shares in all respects, including in respect of right to receive dividend.

Listing and trading of Equity Shares proposed to be issued

Our Company’s existing Equity Shares are currently listed and traded on the Stock Exchanges under the ISIN INE540B01015. The fully paid up

Equity Shares proposed to be issued on a rights basis shall be listed and admitted for trading on the Stock Exchanges under the existing ISIN for

fully paid up Equity Shares of our Company.

The listing and trading of the Equity Shares shall be based on the current regulatory framework applicable thereto. Accordingly, any change in

the regulatory regime would affect the listing and trading schedule.

The Equity Shares allotted pursuant to this Issue will be listed as soon as practicable and all steps for completion of the necessary formalities for

listing and commencement of trading shall be taken within seven Working Days of finalisation of the basis of allotment. Our Company has

made an application for “in-principle” approval for listing of the Equity Shares to the BSE and the NSE through letters dated April 18, 2013 and

April 10, 2013, respectively and has received such approval from the BSE pursuant to the letter no. DCS/PREF/LP-RT/042/13-14 dated April

18, 2013 and from the NSE pursuant to letter no. NSE/LIST/200766-Q dated April 10, 2013.

Rights of the Eligible Equity Shareholder

Subject to applicable laws, the Eligible Equity Shareholders of our Company 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 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 to free transferability of Equity Shares; and

Such other rights as may be available to a shareholder of a listed public company under the Companies Act and Memorandum of

Association and Articles of Association.

General Terms of the Issue

Market Lot

The Equity Shares of our Company are tradable only in dematerialized form. The market lot for Equity Shares in dematerialised mode is one. In

case an Eligible Equity Shareholder holds Equity Shares in physical form, our Company would issue to the allottees one certificate for the

Equity Shares allotted to each folio (“Consolidated Certificate”).

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Joint Holders

Where two or more persons are registered as the holders of any Equity Shares, they shall be deemed to hold the same as joint tenants with the

benefit of survivorship subject to the provisions contained in the Articles of Association.

Nomination

Nomination facility is available in respect of the Equity Shares in accordance with the provisions of the Section 109A of the Companies Act. An

Eligible Equity Shareholder can nominate any person by filling the relevant details in the CAF in the space provided for this purpose.

In case of Eligible Equity Shareholders who are individuals, a sole Eligible Equity Shareholder or first Eligible Equity Shareholder, along with

other joint Eligible 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 Eligible 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 Eligible 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 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 Investor(s) has already registered the nomination with our Company,

no further nomination needs to be made for Equity Shares that may be allotted in this Issue under the same folio.

In case the allotment of Equity Shares is in dematerialised form, there is no need to make a separate nomination for the Equity Shares

to be allotted in this Issue. Nominations registered with respective Depositary Participant (“DP”) of the Investor would prevail. Any

Investor desirous of changing the existing nomination is requested to inform its respective DP.

Notices

All notices to the Equity Shareholder(s) required to be given by our Company shall be published in one English language national daily

newspaper, one Hindi language national daily newspaper and one regional language daily newspaper with wide circulation in Maharashtra and /

or, will be sent by post to the registered address of the Equity Shareholders in India or the Indian address provided by the Equity Shareholders

from time to time.

Additional Subscription by our Promoters and members of our Promoter Gorup

Our Promoters have, through the Subscription Letters, jointly and / or severally, undertaken to (i) apply for Equity Shares being offered to them

pursuant to the Issue to the extent of their Rights Entitlements; (ii) apply directly or through our Company’s Promoter Group for any Equity

Shares renounced in their favour; and (iii) apply directly or through the Company’s Promoter Group for any additional Equity Shares in the

Rights Issue only to the extent of any unsubscribed portion of the Rights Issue, subject to applicable law, to ensure that at least 90% of the

Rights Issue is subscribed (together the “Promoter Subscription”).

As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in accordance with the paragraph above,

either / both Promoters may acquire Equity Shares over and above their Rights Entitlements which may result in an increase in their

shareholding, individually and / or collectively, above their current shareholding. Any such subscription and acquisition of Equity Shares by

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either / both Promoters in the Rights Issue will not result in change of control of the management of the Company in accordance with Regulation

3 (2) and Regulation 3(3) of the Takeover Code and shall be exempt in terms of Regulation 10 (4) (a) and (b) of the Takeover Code. Further,

such subscription to additional Equity Shares by either / both Promoters beyond their Rights Entitlements will be in accordance with the

provisions of Regulation 10(4) (b) of the Takeover Code. As such, other than meeting the requirements indicated in the chapter entitled “Objects

of the Issue” at page 81 of this Letter of Offer, there is no other intention / purpose for the Issue, including any intention to delist our Equity

Shares, even if, as a result of any Allotment in the Issue to either / both Promoter(s) and / or the members of our Promoter Group, the

shareholding of our Promoters and/or Promoter Group in our Company exceeds their current shareholding.

However, such participation will not result in breach of minimum public shareholding requirement stipulated under Clause 40A of the equity

Listing Agreement entered into between us and the Stock Exchanges.

For details, please see the part entitled “Basis of Allotment” at page 340.

Procedure for Application

The CAF for Equity Shares would be printed in black ink for all the Eligible Equity Shareholders. In case the original CAFs are not received by

the Eligible Equity Shareholder or is misplaced by the Eligible Equity Shareholder, the Eligible Equity Shareholder may request the Registrar to

the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID, Client ID and their full name and address. In case the

signature of the Investor(s) does not match with the specimen registered with our Company, the application is liable to be rejected.

Please note that neither our Company nor the Registrar to the Issue shall be responsible for delay in the receipt of the CAF/duplicate CAF

attributable to postal delays or if the CAF/duplicate CAF are misplaced in the transit. The request for a duplicate CAF should reach the Registrar

to the Issue within seven days from the Issue Opening Date. Investors should note that those who are making the Application in such duplicate

CAF should not utilize the original CAF for any purpose, including renunciation, even if the original CAF is received or found subsequently. If

any Investor violates any of these requirements, they shall face the risk of rejection of both Applications.

Please note that QIB and Non Institutional applicants and other applicants whose application amount exceeds `2,00,000 can participate in the

Issue only through the ASBA process. Eligible Equity Shareholders of our Company who are not QIBs and Non Institutional applicants and

whose application amount is not more than `2,00,000 can participate in the Issue through the ASBA process as well as the non-ASBA process.

Acceptance of the Issue

You may accept the offer to participate and apply for the Equity Shares offered, either in full or in part, by filling Part A of the enclosed CAFs

and submit the same along with the application money payable to the Bankers to the Issue or any of the collection branches as mentioned on the

reverse of the CAFs before the close of the banking hours on or before the Issue Closing Date or such extended time as may be specified by our

Board of Directors in this regard. Investors at centres not covered by the branches of collecting banks can send their CAFs together with the

cheque drawn at par on a local bank at Mumbai/demand draft payable at Mumbai to the Registrar to the Issue by registered post. Such

applications sent to anyone other than the Registrar to the Issue are liable to be rejected. For further details on the mode of payment, please see

the parts entitled “Mode of Payment for Resident Eligible Equity Shareholders/Investors” and “Mode of Payment for Non-Resident Eligible

Equity Shareholders/Investors” at pages 329 and 330, respectively. Investors may also choose to accept the offer to participate in the Issue by

plain-paper Applications.

CAF

The Registrar to the Issue will dispatch the CAF to Eligible Equity Shareholders as per their Rights Entitlements on the Record Date. The CAF

will clearly indicate the number of Equity Shares that the Eligible Equity Shareholder is entitled to. Applicants may also choose to accept the

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offer to participate in the Issue by making plain paper Applications. For more information, see the section entitled “Application on Plain Paper”

at page 327.

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; and

Part D: Form for request for Split Application Forms.

Option available to the Eligible Equity Shareholders

The CAFs will clearly indicate the number of Equity Shares that the Eligible Equity Shareholder is entitled to.

If the Eligible Equity Shareholder applies for an investment in Equity Shares, then he can:

Apply for his Rights Entitlements of Equity Shares in full;

Apply for his Rights Entitlements of Equity Shares in part (without renouncing the other part);

Apply for his Rights Entitlements of Equity Shares in part and renounce the other part of the Equity Shares;

Apply for his Rights Entitlements in full and apply for additional Equity Shares;

Renounce his Rights Entitlements in full.

Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above your Rights Entitlements, provided that you are eligible to apply under

applicable law and 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 at the sole discretion of the Board, subject to sectoral

caps and in consultation if necessary with the Designated Stock Exchange and in the manner prescribed under the part entitled “Basis of

Allotment” at page 340.

If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional Equity Shares in Part A

of the CAF. The Renouncee applying for all the Equity Shares renounced in their favour may also apply for additional Equity Shares.

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.

Renouncees who have subscribed for all the Equity Shares renounced in their favor may also apply for additional Equity Shares.

Renunciation

This Issue includes a right exercisable by you to renounce the Equity Shares offered to you either in full or in part in favour of any other person

or persons. Your attention is drawn to the fact that our Company shall not Allot and/or register Equity Shares in favour of more than three

persons (including joint holders), partnership firm(s) or their nominee(s), minors, any trust or society (unless the same is registered under the

Societies Registration Act, 1860 or the Indian Trust Act, 1882 or any other applicable law relating to societies or trusts and is authorised under

its constitution or bye-laws to hold Equity Shares, as the case may be). Applications by HUFs will be treated as on par with applications by

natural persons. Additionally, existing Eligible Equity Shareholders shall not renounce in favor of persons or entities in the United States or who

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would otherwise be prohibited from being offered or subscribing for Equity Shares or Rights Entitlements under applicable securities laws.

Renouncees cannot participate in the ASBA Process.

Any renunciation (i) from resident Indian equity shareholder(s) to non-resident(s), or (ii) from non-resident equity shareholder(s) to resident

Indian(s), or (iii) from a non-resident equity shareholder(s) to other non-resident(s), is subject to the renouncer(s)/ renouncee(s) obtaining the

necessary regulatory approvals. The renouncer(s)/renouncee(s) is/ are required to obtain any such approval and attach the same to the CAF,

along with any other approval that may be required by such renouncer(s)/renouncee(s). All such renunciations shall be subject to any conditions

that may be specified in such regulatory approval. Applications not complying with conditions of the approval/not accompanied by such

approvals are liable to be rejected.

By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate Bodies (“OCBs”) have been derecognized as

an eligible class of investors and the RBI has subsequently issued the Foreign Exchange Management (Withdrawal of General Permission to

Overseas Corporate Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders of our Company who do not wish to

subscribe to the Equity Shares being offered but wish to renounce the same in favour of Renouncee shall not renounce the same (whether for

consideration or otherwise) in favour of OCB(s).

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. Submission of the enclosed CAF to the Banker to the Issue at its collecting branches specified on the reverse of the CAF

with the form of renunciation (Part ‘B’ of the CAF) duly filled in shall be conclusive evidence for our Company of the person(s) applying for

Equity Shares in Part ‘C’ of the CAF to receive Allotment of such Equity Shares. The Renouncees applying for all the Equity Shares renounced

in their favour may also apply for additional Equity Shares. Part ‘A’ of the CAF must not be used by the Renouncee(s) as this will render the

application invalid. Renouncee(s) will have no further right to renounce any Equity Shares in favour of any other person.

Procedure for renunciation

To renounce all the Equity Shares offered to an Eligible Equity Shareholder 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 of the CAF.

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 under this Issue in favour of two or more

Renouncees, the CAF must be first split into requisite number of forms. Please indicate your requirement of SAFs 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 SAFs. On receipt of the required number of SAFs from the Registrar, the procedure as mentioned in

paragraph above shall have to be followed.

In case the signature of the Eligible Equity Shareholder(s), who has renounced the Equity Shares, does not match with the specimen registered

with our 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 CAF and submit the entire CAF to the

Bankers to the Issue on or before the Issue Closing Date along with the application money in full.

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Change and/or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person(s), not more than three, who is/are not already a 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 our Board of Directors of our Company shall be entitled in its

absolute discretion to reject the request for Allotment from the Renouncee(s) without assigning any reason therefore.

Instructions for Options

The summary of options available to the Eligible 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 Action Required

1. Accept whole or part of your Rights Entitlements

without renouncing the balance

Fill in and sign Part A (All joint holders must sign)

2. Accept your Rights Entitlements in full and apply for

additional Equity Shares

Fill in and sign Part A including Block III relating to the acceptance of

entitlement and Block IV relating to additional Equity Shares (All joint

holders must sign)

3. Accept a part of your Rights Entitlements and renounce

the balance to one or more Renouncee(s)

OR

Renounce your Rights Entitlements to all the Equity Shares

offered to you to more than one Renouncee

Fill in and sign Part D (all joint holders must sign) requesting for SAFs. Send

the CAF to the Registrar to the Issue so as to reach them on or before the last

date for receiving requests for SAFs. Splitting will be permitted only once

On receipt of the SAF take action as indicated below

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 Renouncee.

Each of the Renouncee should fill in and sign Part C for the Equity Shares

accepted by them

4. Renounce your Rights Entitlements in full to one

person (Joint Renouncees are considered as one)

Fill in and sign Part B (all joint holders must sign) indicating the number of

Equity Shares renounced and hand it over to the Renouncee. The Renouncee

must fill in and sign Part C (All joint Renouncees must sign)

5. Introduce a joint holder or change the sequence of joint

holders

This will be treated as a renunciation. Fill in and sign Part B and the

Renouncee must fill in and sign Part C

In case of Equity Shares held in physical form, applicants must provide information in the CAF as to their respective bank account

numbers and name of the bank to enable the Registrar to print the said details on the refund order. Failure to comply with this may

lead to rejection of application. In case of Equity Shares held in demat form, bank account details furnished by the Depositorties will be

printed on the refund order.

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Please note that:

Part ‘A’ of the CAF must not be used by any person(s) other than the Eligible Equity Shareholder to whom this Letter of Offer has

been addressed. If used, this will render the application invalid.

Request for SAFs should be made for a minimum of one Equity Share or, in either case, in multiples thereof and one SAF for the

balance Equity Shares, if any.

Request by the Investor for the SAFs should reach the Registrar on or before Tuesday, August 13, 2013.

Only the Eligible Equity Shareholder to whom this Letter of Offer has been addressed shall be entitled to renounce and to apply

for SAFs. Forms once split cannot be split further.

SAFs will be sent to the Investor(s) by post at the applicant’s risk.

Eligible Equity Shareholders shall not renounce in favour of persons or entities in the United States or who would otherwise be

prohibited from being offered or subscribing for Equity Shares or Rights Entitlements under applicable securities laws.

While applying for or renouncing their Rights Entitlements, joint Eligible Equity Shareholders must sign the Application Form or

SAF in the same order and as per specimen signatures recorded with the Company/ Depositories.

Application(s) received from Non-Resident/NRIs, or persons of Indian origin residing abroad shall 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, interest, export of share certifications, etc. In case a Non-Resident or NRI Eligible Equity Shareholder has specific

approval from the RBI, in connection with his shareholder, he should enclose a copy of such approval with the CAF.

Availability of duplicate CAF

In case the original CAF is not received, or is misplaced by the Investor, the Registrar to the Issue will issue a duplicate CAF on the request of

the Investor who should furnish the registered folio number/ DP and Client ID and his/ her full name and address to the Registrar to the Issue.

Please note that the request for duplicate CAF should reach the Registrar to the Issue within 8 days from the Issue Opening Date. 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 Investor violates such requirements, he / she shall face the risk of rejection of either original CAF or

both the applications.

Neither the Company or the Registrar or Lead Manager to the Issue will be responsible for postal delays or loss of duplicate CAF in transit, if

any.

Please also note that shareholder has an option to print the duplicate CAF from the website of the Registrar to the Issue (Web site:

www.linkintime.co.in) by providing his / her folio. no. / DP ID / Client ID to enable the shareholder to apply for the Issue.

Application on Plain Paper

An Investor 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 Issue on plain paper, along with a/c payee cheque drawn at par / Demand Draft, net of bank and postal charges payable at Mumbai and the

Investor should send the same by registered post directly to the Registrar to the Issue. Applications on plain paper will not be accepted from any

address outside India. For more information on the mode of payment, see the section entitled “Modes of Payment” at page 329.

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The envelope should be super scribed “Reliance MediaWorks Limited – Rights Issue - R” in case of resident shareholders/applicants or

shareholders/applicants applying on non repatriable basis or “Reliance MediaWorks Limited - Rights Issue – NR” in case of non resident

shareholders/applicants applying on repatriable basis and should be postmarked in India. The application on plain paper, duly signed by the

Investors including joint holders, in the same order as per specimen recorded with our Company / Depository, must reach the office of the

Registrar to the Issue before the Issue Closing Date and should contain the following particulars:

Name of Issuer, being Reliance MediaWorks Limited;

Name and address of the Investor including joint holders;

Registered Folio Number/ DP and Client ID;

Number of Equity Shares held as on Record Date;

Share certificate numbers and distinctive numbers of Equity Shares, if held in physical form;

Allotment option preferred – physical or demat form, if held in physical form;

Number of Equity Shares entitled to;

Number of Equity Shares applied for;

Number of additional Equity Shares applied for, if any;

Total number of Equity Shares applied for;

Total application amount paid at the rate of `40 per Equity Share;

Particulars of cheque/ demand draft;

Savings/Current Account Number and name and address of the bank where the Investor will be depositing the refund order;

Except for applications on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the

courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity

Shares applied for pursuant to the Issue.

Signatures of Eligible Equity Shareholders to appear in the same sequence and order as they appear in the records of the Company

or depository records; and

If the payment is made by a draft purchased from NRE/FCNR/NRO account, as the case may be, an account debit certificate from

the bank issuing the demand draft confirming that the demand draft has been issued by debiting the NRE/FCNR/NRO account.

Additionally, all applicants shall include the following:

“I/We understand that neither the Rights Entitlements nor the Equity Shares have been, and will be, registered under the United States

Securities Act of 1933, as amended (“US Securities Act”) or any United States state securities laws, and may not be offered, sold, resold or

otherwise transferred within the United States or to the territories or possessions thereof (“United States”). I/we understand the Equity Shares

referred to in this application are being offered in India but not in the United States. I/we understand the offering to which this application


States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlements in the United States. Accordingly, I/we

understand this application should not be forwarded to or transmitted in or to the United States at any time. I/we understand that none of the

Company, the Registrar, the Lead Manager or any other person acting on behalf of the Company will accept subscriptions from any person, or

the agent of any person, who appears to be, or who the Company, the Registrar, the Lead Manager or any other person acting on behalf of the

Company has reason to believe is, a resident of the United States.

I/We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any jurisdiction or under any

circumstances in which such offer or sale is not authorised or to any person to whom it is unlawful to make such offer, sale or invitation except

under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are

acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our

residence.

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I/We understand and agree that the Rights Entitlements and Equity Shares may not be reoffered, resold, pledged or otherwise transferred except

in an offshore transaction in compliance with Regulation S, or otherwise pursuant to an exemption from, or in a transaction not subject to, the

registration requirements of the US Securities Act.

I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlements and/or the Equity Shares is/are,

outside the United States, and (ii) is/are acquiring the Rights Entitlements and/or the Equity Shares in an offshore transaction meeting the

requirements of Regulation S.

I/We acknowledge that the Company, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of the foregoing

representations and agreements.”

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 Investor violates such requirements,

he/she shall face the risk of rejection of both the applications. Our Company shall refund such application amount to the Investor without any

interest thereon.

Last date for Application

The last date for submission of the duly filled in CAF is Tuesday, August 20, 2013. The Board may extend the said date for such period as it

may determine from time to time, subject to the Issue Period not exceeding 30 days.

If the CAF together with the amount payable is not received by the Banker to the Issue/ Registrar to the Issue 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 invitation to offer contained in the

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 part entitled “Basis of Allotment” at page 340.

Modes of Payment

Mode of Payment for Resident Eligible Equity Shareholders/ Investors

All cheques / demand drafts accompanying the CAF should be drawn in favour of “Reliance MediaWorks Limited – Rights

Issue - R”, crossed ‘A/c Payee only’ and should be submitted along with the CAF to the Bankers to the Issue/Collecting Bank or

to the Registrar to the Issue, as the case may be;

Investors residing at places other than places where the bank collection centres have been opened by our Company for collecting

applications, are requested to send their CAFs together with Demand Draft for the full application amount, net of bank and postal

charges drawn in favour of “Reliance MediaWorks Limited – Rights Issue – R”, crossed ‘A/c Payee only’payable at Mumbai

directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. Our Company or

the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Investors applying under the ASBA Process agree to authorize the SCSB to block an amount equivalent to the Application Money in the

relevant ASBA Account at the time of submission of the CAF. After verifying that sufficient funds are available in the ASBA Account details of

which are provided in the CAF, the SCSB shall block an amount equivalent to the Application Money mentioned in the CAF until it receives

instructions from the Registrar to the Issue. Upon receipt of intimation from the Registrar to the Issue, the SCSBs shall transfer such amount as

per the Registrar to the Issue’s instruction from the ASBA Account. 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. The balance amount

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remaining in the ASBA Accounts after the finalisation of the basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions

issued in this regard by the Registrar to the Issue and the Lead Managers to the respective SCSB. An Investor applying under the ASBA Process

would be required to give instruction to block the entire Application Money at the time of the submission of the CAF. The SCSB may reject the

Application at the time of acceptance of CAF if the ASBA Account details of which have been provided by the Eligible Equity Shareholder in

the CAF does not have sufficient funds equivalent to the Application Money 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.

In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure that for making applications on own

account using ASBA facility, they should have a separate account in their own name with any other SEBI registered SCSB. Such

account shall be used solely for the purpose of making application in public issues and clear demarcated funds should be available in

such account for ASBA applications.

Mode of Payment for Non-Resident Eligible Equity Shareholders/ Investors

As regards the application by non-resident Investor, the following conditions shall apply:

Individual non-resident applicants who are permitted to subscribe for Equity Shares by applicable local securities laws can obtain

application forms from the following address:




Mumbai 400 078

Tel: +91 22 2596 7878

Facsimile: +91 22 2596 0329






Applications will not be accepted from non-resident Indian in the United States or its territories and possessions, or any other

jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be restricted by applicable securities laws.

All non-resident investors should draw the cheques/demand drafts in favour of “Reliance MediaWorks Limited – Rights Issue –

NR”, crossed “A/c Payee only” for the full application amount, net of bank and postal charges and which should be submitted

along with the CAF to the Bankers to the Issue/Collecting Bank or to the Registrar to the Issue.

Non-resident investors applying from places other than places where the bank collection centres have been opened by our

Company for collecting applications, are requested to send their CAFs together with Demand Draft for the full application amount,

net of bank and postal charges drawn in favour of “Reliance MediaWorks Limited – Rights Issue – NR”, crossed ‘A/c Payee

only’ payable at Mumbai directly to the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing

Date. Our Company or the Registrar to the Issue will not be responsible for postal delays or loss of applications in transit, if any.

Payment by non-residents must be made by demand draft payable or drawn at Mumbai / cheque payable or drawn on a bank

account maintained at Mumbai or funds remitted from abroad in any of the following ways:

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Application with repatriation benefits

By the ASBA Process, from the ASBA Account maintained with an SCSB;

By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad (submitted along with

Foreign Inward Remittance Certificate); or

By cheque / draft drawn on a NRE or FCNR Account maintained in Mumbai; or

By Rupee draft purchased by debit to NRE / FCNR Account maintained elsewhere in India and payable in Mumbai; or

FIIs registered with SEBI must remit funds from special non-resident rupee account.

If the payment is made by a draft purchased from NRE/FCNR account, 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. FIIs registered with SEBI must utilise funds

from special non-resident rupee account. NR Investors applying with repatriation benefits should draw cheques/drafts in favor of “Reliance

MediaWorks Limited – Rights Issue-NR” and must be crossed as “Account Payee Only” for the full Application Money, net of bank and

postal charges.

Application without repatriation benefits

By the ASBA Process, from the ASBA Account maintained with an SCSB;

As far as non-residents holding Equity Shares on non-repatriation basis are 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 Mumbai or Rupee Draft

purchased out of NRO Account maintained elsewhere in India but payable at Mumbai. In such cases, the Allotment of Equity

Shares will be on non-repatriation basis.

Applicants should note that where payment is made through drafts purchased from NRE / FCNR / NRO 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/ NRO account should be enclosed with the CAF. In the absence of such an account debit

certificate, the application shall be considered incomplete and is liable to be rejected.

All cheques / demand drafts submitted by NRs applying on a non-repatriation basis should be drawn in favor of “Reliance

MediaWorks Limited – Rights Issue - R” and must be crossed as “Account Payee Only” for the full Application Money, net of

bank and postal charges. The Application Forms duly completed together with the Application Money must be deposited before

the close of banking hours on or before the Issue Closing Date. If Application is made through CAF, the Collecting Bank shall be

indicated on the reverse of the CAFs. A separate cheque or bank draft must accompany each CAF.

An eligible Shareholder whose status has changed from resident to non-resident should open a new demat account reflecting the

changes status. Any application from a demat account which does not reflect the accurate status of the Applicant are liable to be

rejected at the sole discretion of our Company and the Lead Managers.

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Notes:

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 the IT Act.

In case Equity Shares are allotted on a 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 CAFs before the close of banking hours on or before the Issue Closing Date. A separate cheque or bank draft

must accompany each CAF.

In case of an application received from non-residents, Allotment, refunds and other distribution, if any, will be made in accordance

with the guidelines/ rules prescribed by RBI / Government of India as applicable at the time of making such Allotment, remittance

and subject to necessary approvals.

Applications received from NRs/NRIs, or persons of Indian origin residing abroad for Allotment of Equity Shares shall, inter alia,

be subject to conditions, as may be imposed from time to time by the RBI under the FEMA, in respect of matters including Refund

of Application Money, Allotment of Equity Shares, subsequent issue and allotment of Equity Shares, interest and export of share

certificates.

Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”) Process

This section is for the information of the ASBA Investors proposing to subscribe to the Issue through the ASBA Process. Our 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 the Letter of Offer. Investors who are eligible to apply under the ASBA Process are advised to make their

independent investigations and to ensure that the CAF is correctly filled up.

The list of banks that have been notified by SEBI to act as SCSBs for the ASBA Process is provided on http://www.sebi.gov.in. For details on

Designated Branches of SCSBs collecting the CAF, please refer the above mentioned SEBI link.

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 the Investors of our Company on the

Record Date and who:

hold the Equity Shares in dematerialised form as on the Record Date and have applied towards his/her Rights Entitlements or

additional Equity Shares in the Issue in dematerialised form;

have not renounced his/her Rights Entitlements in full or in part;

are not in the United States and are eligible under applicable securities laws to subscribe for the Rights Entitlements and

Equity Shares in the Issue;

are not a Renouncee; and

are applying through a bank account maintained with SCSBs.

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CAF

The Registrar will despatch the CAF to all Eligible Equity Shareholders as per their Rights Entitlements on the Record Date for the Issue. Those

Investors who wish to apply through the ASBA payment mechanism will have to select for this mechanism in Part A of the CAF and provide

necessary details.

Investors 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 available with such SCSBs who provide such facility. The Investor shall submit the CAF to the

SCSB for authorising such SCSB to block an amount equivalent to the amount payable on the application in the said ASBA Account.

Mor than one Investor may apply using the same ASBA Account provided that the SCSB will not accept a total of more than five CAFs with

respect to any single ASBA Account.

Acceptance of the Issue

You may accept the Issue and apply for the Equity Shares either in full or in part, by filling Part A of the respective CAFs 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 our Board of Directors of our Company in this regard.

Mode of payment

The Investor applying under the ASBA Process agrees to block the entire amount payable on application 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 details of which are 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 the Registrar’s instruction from the bank account with the SCSB

mentioned by the Investor in the CAF. This amount will be transferred in terms of the ICDR Regulations, into the separate bank account

maintained by our Company as per the provisions of section 73(3) of the Companies Act. The balance amount remaining after the finalisation of

the basis of Allotment shall be unblocked by the SCSBs on the basis of the instructions issued in this regard by the Registrar to the Issue and the

Lead Manager to the respective SCSB.

The Investor 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 Investor 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, our Company would have a right to reject the application only on technical grounds.

Options available to the Equity Shareholders applying under the ASBA Process

The summary of options available to the Investors is presented below. You may exercise any of the following options with regard to the Equity

Shares, using the respective CAFs received from Registrar:

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Option Available Action Required

1. Accept whole or part of your Rights Entitlements without

renouncing the balance.

Fill in and sign Part A of the CAF (All joint holders must sign)

2. Accept your Rights Entitlements in full and apply for additional

Equity Shares

Fill in and sign Part A of the CAF including Block III relating to

the acceptance of entitlement and Block IV relating to additional

Equity Shares (All joint holders must sign)

The Investors applying under the ASBA Process will need to select the ASBA option process in the CAF and provide required necessary

details. However, in cases where this option is not selected, but the CAF is tendered to the SCSBs with the relevant details required

under the ASBA process option and the SCSBs block the requisite amount, then that CAFs would be treated as if the Investor have

selected to apply through the ASBA process option.

Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011

dated April 29, 2011, all applicants who are QIBs and Non Institutional applications or are applying in this Issue for Equity Shares for

an amount exceeding `2,00,000 shall mandatorily make use of ASBA facility.

Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares that you are entitled to, provided that you are

eligible to apply for Equity Shares under applicable law and you have applied for all the Equity Shares (as the case may be) 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 at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner prescribed

under “Basis of Allotment” in this chapter at page 340.

If you desire to apply for additional Equity Shares, please indicate your requirement in the place provided for additional Equity Shares in Part A

of the CAF.

Renunciation under the ASBA Process

Renouncees cannot participate in the Issue through ASBA Process.

Application on Plain Paper under ASBA process

An Investor who has neither received the original CAF nor is in a position to obtain the duplicate CAF and who is applying under the ASBA

Process may make an application to subscribe to the Issue on plain paper, along with Demand Draft, net of bank and postal charges payable at

Mumbai which should be drawn in favour of the “Reliance MediaWorks Limited – Rights Issue - R” in case of resident shareholders/applicants

or shareholders/applicants applying on non repatriable basis or “Reliance MediaWorks Limited - Rights Issue -NR” in case of non resident

shareholders/applicants applying on repatriable basis and the Investors should send the same by registered post directly to the SCSB.

Applications on plain paper will not be accepted from any address outside India.

The envelope should be super scribed “Reliance MediaWorks Limited – Rights Issue - R” in case of resident shareholders/applicants or

shareholders/applicants applying on non repatriable basis or “Reliance MediaWorks Limited - Rights Issue -NR” in case of non resident

shareholders/applicants applying on repatriable basis and should be postmarked in India. The application on plain paper, duly signed by the

Investors including joint holders, in the same order as per the specimen recorded with our Company / Depositories, must reach the office of the

SCSB before the Issue Closing Date and should contain the following particulars:

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Name of Issuer, being Reliance MediaWorks Limited;

Name and address of the Investor including joint holders;

Registered Folio Number/ DP and Client ID.;

Number of Equity Shares held as on Record Date;

Number of Equity Shares entitled to;

Number of Equity Shares applied for;

Number of additional Equity Shares applied for, if any;

Total number of Equity Shares applied for;

Total amount paid at the rate of `40 per Equity Share;

Details of the ASBA Account such as the account number, name, address and branch of the relevant SCSB;

In case of NR Eligible Equity Shareholders, details of the NRE/FCNR/NRO account such as the account number, name, address and

branch of the SCSB with which the account is maintained;

Except for applications on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the

courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of the total value of the Equity

Shares applied for pursuant to the Issue;

In case of joint holders, signatures of Eligible Equity Shareholders to appear in the same sequence and order as they appear in the

records of the Company and also the depository records; and

Additionally, all applicants shall include the following:

“I/We understand that neither the Rights Entitlements nor the Equity Shares have been, and will be, registered under the United States

Securities Act of 1933, as amended (“US Securities Act”) or any United States state securities laws, and may not be offered, sold, resold or

otherwise transferred within the United States or to the territories or possessions thereof (“United States”). I/we understand the Equity Shares

referred to in this application are being offered in India but not in the United States. I/we understand the offering to which this application


States, or as a solicitation therein of an offer to buy any of the said Equity Shares or Rights Entitlements in the United States. Accordingly, I/we

understand this application should not be forwarded to or transmitted in or to the United States at any time. I/we understand that none of the

Company, the Registrar, the Lead Manager or any other person acting on behalf of the Company will accept subscriptions from any person, or

the agent of any person, who appears to be, or who the Company, the Registrar, the Lead Manager or any other person acting on behalf of the

Company has reason to believe is, a resident of the United States.

I/We will not offer, sell or otherwise transfer any of the Equity Shares which may be acquired by us in any jurisdiction or under any

circumstances in which such offer or sale is not authorised or to any person to whom it is unlawful to make such offer, sale or invitation except

under circumstances that will result in compliance with any applicable laws or regulations. We satisfy, and each account for which we are

acting satisfies, all suitability standards for investors in investments of the type subscribed for herein imposed by the jurisdiction of our

residence.

I/We understand and agree that the Rights Entitlements and Equity Shares may not be reoffered, resold, pledged or otherwise transferred except

in an offshore transaction in compliance with Regulation S, or otherwise pursuant to an exemption from, or in a transaction not subject to, the

registration requirements of the US Securities Act.

I/We (i) am/are, and the person, if any, for whose account I/we am/are acquiring such Rights Entitlements and/or the Equity Shares is/are,

outside the United States, and (ii) is/are acquiring the Rights Entitlements and/or the Equity Shares in an offshore transaction meeting the

requirements of Regulation S.

I/We acknowledge that the Company, the Lead Manager, their affiliates and others will rely upon the truth and accuracy of the foregoing

representations and agreements.”

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Option to receive Equity Shares in Dematerialized Form

INVESTORS UNDER THE ASBA PROCESS MAY NOTE THAT THE EQUITY SHARES UNDER THE ASBA PROCESS CAN BE

ALLOTTED ONLY IN DEMATERIALIZED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY

SAHRES ARE HELD BY SUCH ASBA APPLICANT ON THE RECORD DATE.

General instructions for Investors applying under the ASBA Process

(a) Please read the instructions printed on the respective CAF carefully.

(b) Application should be made on the printed CAF only 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 must be filled in English. In case of non-receipt of CAF, Application can be made

on plain paper mentioning all necessary details as mentioned under the section entitled “Application on Plain Paper” at page 327.

(c) The CAF 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

our Company or Registrar or Lead Manager to the Issue. Plain-paper Applications are to be submitted with the Registrar 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. Except for applications on behalf of the

Central or State Government, the residents of Sikkim and the officials appointed by the courts, CAFs without PAN will be

considered incomplete and are liable to be rejected. With effect from 16 August 2010, the demat accounts for Investors for which

PAN details have not been verified shall be “suspended credit” and no allotment and credit of Equity Shares pursuant to the Issue

shall be made into the accounts of such Investors.

(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.

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 Investors must sign the CAF as per the specimen signature recorded with our Company/or

Depositories.

(g) 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 our 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 Equity Shares, including any change in address of the Investors 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

Investor, folio numbers and CAF number.

(i) Only the person or persons to whom the Equity Shares have been offered and not renouncee(s) shall be eligible to participate under

the ASBA process.

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(j) Only persons outside the United States and who are eligible to subscribe for Rights Entitlements and Equity Shares under applicable

securities laws are eligible to participate.

(k) Only the Eligible Equity Shareholders holding shares in dematerialized form are eligible to participate through ASBA process.

(l) In case of non-receipt of CAF, application can be made on plain paper mentioning all necessary details as mentioned as mentioned

under the heading “Application on Plain Paper” at page 327.

(m) In terms of SEBI circulars dated September 13, 2012 and January 2, 2013, SCSBs should ensure that for making

applications on own account using ASBA facility, they should have a separate account in own name with any other SEBI

registered SCSBs. Such account shall be used solely for the purpose of making application in public issues and clear

demarcated funds should be available in such account for ASBA applications.

Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number CIR/CFD/DIL/1/2011 dated April

29, 2011, all applicants who are QIBs and Non Institutional applicants or are applying in this Issue for Equity Shares for an amount exceeding

`2,00,000 /- shall mandatorily make use of ASBA facility.

Do’s:

a. Ensure that the ASBA Process option is selected in part A of the CAF and necessary details are filled in.

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 CAFs are submitted at the SCSBs and details of the correct bank account have been provided in the CAF.

e. Ensure that there are sufficient funds (equal to {number of Equity Shares as the case may be applied for} X {Issue Price of Equity

Shares, as the case may be}) available in the bank account maintained with the SCSB mentioned in the CAF before submitting the

CAF to the respective Designated Branch of the SCSB.

f. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable on application mentioned in the

CAF, in the bank account maintained with the respective SCSB, of which details are provided in the CAF and have signed the same.

g. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in physical form.

h. Except for CAFs submitted on behalf of the Central or State Government and the residents of Sikkim and the officials appointed by

the courts, each applicant should mention their PAN allotted under the I. T. Act.

i. Ensure that the name(s) given in the CAF 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.

j. Ensure that the Demographic Details are updated, true and correct, in all respects.

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k. Ensure that the account holder in whose bank account the funds are to be blocked has signed authorizing such funds to be blocked.

l. Do not apply through non ASBA process if you are a QIB or Non Institutional investors or if you are and Applicant whose

Application Money exceeds ` 2,00,000

Don’ts:

a. Do not apply if you are in the United States or are not eligible to participate in the Issue under the securities laws applicable to your

jurisdiction.

b. Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the SCSB.

c. Do not apply through a CAF, as well as a plain-paper Application for additional Equity Shares, renunciation or any other purpose.

d. Do not pay the amount payable on application in cash, by money order or by postal order.

e. Do not send your physical CAFs 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.

f. Do not submit more than five CAFs per ASBA Account.

g. Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this ground.

h. Do not instruct your respective banks to release the funds blocked under the ASBA Process.

Grounds for Technical Rejection under the ASBA Process

In addition to the grounds listed under the part entitled “Grounds for Technical Rejection” in this chapter at page 346, applications under the

ABSA Process are liable to be rejected on the following grounds:

a) Application on a SAF (unless all the SAFs are used by the original shareholder).

b) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records available with the Registrar.

c) Sending CAF to a Lead Manager / 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 having been frozen pursuant to regulatory orders.

g) Account holder not signing the CAF or declaration mentioned therein.

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h) CAFs that do not include the certification set out in the CAF to the effect that the subscriber does not have a registered address (and is

not otherwise located) in the United States and is authorised to acquire the rights and the securities in compliance with all applicable

laws and regulations.

i) CAFs which have evidence of being executed in/dispatched from the United States.

j) Application by Applicants, that are QIBs, or Applicants whose Application money exceeds ` 200,000 who are eligible to apply

through ASBA Process, made through non-ASBA process.

k) Application by persons not competent to contract under the Indian Contract Act, 1872, as amended, except applications by minors

having valid demat accounts as per the demographic details provided by the Depositories.

l) The Application by an Eligible Equity Shareholder whose cumulative value of Equity Shares applied for is more than ` 200,000, but

has applied separately through split CAFs of less than ` 200,000 each has not done so through the ASBA process.

m) Submitting the GIR instead of the PAN.

n) Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application.

o) Submission of more than five CAFs per ASBA Account.

p) Application for Rights Entitlements or additional Equity Shares in physical form.

q) ASBA bids by SCSB on own account, other than through an ASBA Account in its own name with any other SCSB.

Depository account and bank details for Investors applying under the ASBA Process

IT IS MANDATORY FOR ALL THE INVESTORS APPLYING UNDER THE ASBA PROCESS TO RECEIVE THEIR EQUITY

SHARES IN DEMATERIALISED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE EQUITY SHARES

ARE HELD BY THE INVESTOR AS ON THE RECORD DATE. ALL INVESTORS APPLYING UNDER THE ASBA PROCESS

SHOULD MENTION THEIR DEPOSITORY PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION

NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE CAF. INVESTORS APPLYING UNDER THE ASBA PROCESS

MUST ENSURE THAT THE NAME GIVEN IN THE CAF IS EXACTLY THE SAME AS THE NAME IN WHICH THE

DEPOSITORY ACCOUNT IS HELD. IN CASE THE CAF 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.

Investors applying under the ASBA Process should note that on the basis of name of these Investors, Depository Participant’s name and

identification number and beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain from the

Depository demographic details of these Investors such as address, bank account details for printing on refund orders and occupation

(“Demographic Details”). Hence, Investors applying under the ASBA Process should carefully fill in their Depository Account details in

the CAF.

These Demographic Details would be used for all correspondence with such Investors including mailing of the letters intimating unblock of

bank account of the respective Investor. The Demographic Details given by the Investors in the CAF would not be used for any other purposes

by the Registrar. Hence, Investors are advised to update their Demographic Details as provided to their Depository Participants.

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By signing the CAFs, the Investors 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 Investor 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 linked to the DP ID. Investors 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 Investor in the CAF 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 Investors applying under the ASBA Process and none of our Company, the

SCSBs or the Lead Manager shall be liable to compensate the Investor applying under the ASBA Process for any losses caused due to

any such delay or liable to pay any interest for such delay.

In case no corresponding record is available with the Depositories that matches three parameters, (a) names of the Investors (including the order

of names of joint holders), (b) the DP ID and (c) the beneficiary account number, then such applications are liable to be rejected.

Underwriting

The Issue is not underwritten.

Issue Schedule

Issue Opening Date: Tuesday, August 6, 2013

Last date for receiving requests for SAFs: Tuesday, August 13, 2013

Issue Closing Date: Tuesday, August 20, 2013

The Board may however decide to extend the Issue period as it may determine from time to time but not exceeding 30 days from the Issue

Opening Date.

Basis of Allotment

Subject to the provisions contained in the Letter of Offer, the Articles of Association of our Company and the 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 Investors who have applied for their Rights Entitlements 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) Allotment pertaining to fractional entitlements in case of any shareholding other than in multiples of 4.

(c) Investors whose fractional entitlements are being ignored would be given preference in allotment of one additional Equity Share each if

they apply for additional Equity Share. Allotment under this head shall be considered if there are any unsubscribed Equity Shares after

allotment under (a) above. If number of Equity Shares required for allotment under this head are more than number of Equity Shares

available after allotment under (a) above, the Allotment would be made on a fair and equitable basis in consultation with the

Designated Stock Exchange.

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(d) Allotment to the Investors who having applied for all the Equity Shares offered to them as part of the Issue 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) and (b) 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 Issue and will not be a preferential Allotment.

(e) Allotment to Renouncees who having applied for all the Equity Shares renounced in their favour, have applied for additional Equity

Shares provided there is surplus available after making full Allotment under (a), (b) and (c) 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 Issue and not preferential Allotment.

(f) Our Promoters have, through the Subscription Letters, jointly and severally, undertaken to (i) apply for Equity Shares being offered to

them pursuant to the Issue to the extent of their Rights Entitlements; (ii) apply directly or through our Company’s Promoter Group for

any Equity Shares renounced in their favour; and (iii) apply directly or through the Company’s Promoter Group for any additional

Equity Shares in the Rights Issue only to the extent of any unsubscribed portion of the Rights Issue, subject to applicable law, to ensure

that at least 90% of the Rights Issue is subscribed (together the “Promoter Subscription”).

As a result of the subscription to any unsubscribed portion and consequent allotment of Equity Shares in accordance with the paragraph above,

either / both Promoters may acquire Equity Shares over and above their Rights Entitlements which may result in an increase in their

shareholding, individually and / or collectively, above their current shareholding. Any such subscription and acquisition of Equity Shares by

either / both Promoters in the Rights Issue will not result in change of control of the management of the Company in accordance with Regulation

3 (2) of the Takeover Code and shall be exempt in terms of Regulation 10 (4) (b) of the Takeover Code. Further, such subscription to additional

Equity Shares by either / both Promoters beyond their Rights Entitlements will be in accordance with the provisions of Regulation 10(4) (b) of

the Takeover Code. As such, other than meeting the requirements indicated in the chapter entitled “Objects of the Issue” at page 81 of this Letter

of Offer, there is no other intention / purpose for the Issue, including any intention to delist our Equity Shares, even if, as a result of any

Allotment in the Issue to either / both Promoter(s) and / or the members of our Promoter Group, the shareholding of our Promoters and/or

Promoter Group in our Company exceeds their current shareholding.

However, such participation will not result in breach of minimum public shareholding requirement stipulated in the equity Listing Agreement

entered into between us and the Stock Exchanges.

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 Equity Shares to the respective beneficiary accounts, if any, within a period of 15 days from the Issue Closing Date. If such money is

not repaid within eight days from the day our Company becomes liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the

refusal by the Stock Exchange(s), whichever is earlier) our Company and every Director of our Company who is an officer in default shall, on

and from expiry of eight days, be jointly and severally liable to pay the money with interest as prescribed under Section 73 of the Companies

Act.

Investors residing at centers where clearing houses are managed by the RBI will get refunds through National Electronic Clearing Service

(“NECS”) except where Investors have not provided the details required to send electronic refunds or where the Investors are otherwise

disclosed as applicable or eligible to get refunds through direct credit and real-time gross settlement (“RTGS”).

In case of those Investors who have opted to receive their Rights Entitlements in dematerialized form using electronic credit under the

depository system, advice regarding their credit of the Equity Shares shall be given separately. Investors to whom refunds are made through

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electronic transfer of funds will be sent a letter through ordinary post intimating them about the mode of credit of refund within 15 days of the

Issue Closing Date.

In case of those Investors who have opted to receive their Rights Entitlements in physical form and our Company issues letter of allotment, the

corresponding share certificates will be kept ready within one month from the date of Allotment thereof or such extended time as may be

approved by our Company Law Board under Section 113 of the Companies Act or other applicable provisions, if any. Investors are requested to

preserve such letters of allotment, which would be exchanged later for the share certificates.

The letter of allotment / refund order would be sent by registered post / speed post to the sole / first Investors registered address. 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 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.

The letter of allotment / Intimations would be sent by ordinary post.

Payment of Refund

Mode of making refunds

The payment of refund, if any, would be done through any of the following modes:

1. NECS – Payment of refund would be done through NECS for Investors having an account at any of the centres 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 records of the Registrar. The payment of refunds is mandatory for

Investors having a bank account at any centre where NECS facility has been made available (subject to availability of all information

for crediting the refund through NECS).

2. NEFT – Payment of refund shall be undertaken through NEFT wherever the Investors’ bank has been assigned the Indian Financial

System Code (IFSC), which can be linked to a MICR, allotted 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

Investors have registered their nine digit MICR number and their bank account number with the registrar to our Company or with the

depository participant 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 Investors 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 our Company.

4. RTGS – If the refund amount exceeds `2 lakhs, the investors 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 or any other eligible mode. Charges, if any, levied by the refund bank(s) for the

same would be borne by our Company. Charges, if any, levied by the Investor’s bank receiving the credit would be borne by the

Investor.

5. For all other Investors the refund orders will be despatched through Speed Post/ Registered Post. Such refunds will be made by

cheques, pay orders or demand drafts drawn in favour of the sole/first Investor and payable at par.

6. Credit of refunds to Investors in any other electronic manner permissible under the banking laws which is in force, and is permitted by

the SEBI from time to time.

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Printing of Bank Particulars on Refund Orders

As a matter of precaution against possible fraudulent encashment of refund orders due to loss or misplacement, the particulars of the Investor’s

bank account are mandatorily required to be given for printing on the refund orders. Bank account particulars, where available, will be printed

on the refund orders/refund warrants which can then be deposited only in the account specified. Our Company will in no way be responsible if

any loss occurs through these instruments falling into improper hands either through forgery or fraud.

Allotment advice / Share Certificates/ Demat Credit

Allotment advice/ demat credit or letters of regret will be dispatched to the registered address of the first named Investor or respective

beneficiary accounts within 15 days, from the Issue Closing Date. In case our Company issues Allotment advice, the relative share certificates

will be dispatched within one month from the date of the Allotment. Allottees are requested to preserve such allotment advice (if any) to be

exchanged later for share certificates.

Option to receive Equity Shares in Dematerialized Form

Investors shall be allotted the Equity Shares in dematerialized (electronic) form at the option of the Investor. Our Company has signed a

tripartite agreement with NSDL on October 31, 2000 which enables the Investors to hold and trade in Equity Shares in a dematerialized form,

instead of holding the Equity Shares in the form of physical certificates. Our Company has also signed a tripartite agreement with CDSL on

September 14, 2000 which enables the Investors to hold and trade in Equity Shares in a dematerialized form, instead of holding the Equity

Shares in the form of physical certificates.

In this 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 as given in the CAF, after verification with a depository participant. Investor will have to give the relevant

particulars for this purpose in the appropriate place in the CAF. Allotment advice, refund order (if any) would be sent directly to the Investor by

the Registrar to the Issue but the Investor’s depository participant will provide to him the confirmation of the credit of such Equity Shares to the

Investor’s depository account. CAFs, which do not accurately contain this information, will be given the Equity Shares in physical form. No

separate CAFs for Equity Shares in physical and /or dematerialized form should be made. If such CAFs are made, the CAFs for physical Equity

Shares will be treated as multiple CAFs and is liable to be rejected. In case of partial Allotment, Allotment will be done in demat option for the

Equity Shares sought in demat and balance, if any, will be allotted in physical Equity Shares. Eligible Equity Shareholders of the Company

holding Equity Shares in physical form may opt to receive Equity Shares in the Issue in dematerialized form.

INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF OUR COMPANY CAN BE TRADED ON THE STOCK

EXCHANGES ONLY IN DEMATERIALIZED FORM.

The procedure for availing the facility for Allotment of Equity Shares in this Issue in the electronic form is as under:

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 registered in the records of our Company. In the case of joint holding, the beneficiary account

should be opened carrying the names of the holders in the same order as registered in the records of our Company). In case of

Investors having various folios in our Company with different joint holders, the Investors will have to open separate accounts for

such holdings. Those Investors who have already opened such beneficiary account(s) need not adhere to this step.

For Eligible Equity Shareholders already holding Equity Shares of our Company in dematerialized form as on the 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 Equity Shares pursuant to this Issue 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 Equity Shares arising out of this

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Issue may be made in dematerialized form even if the original Equity Shares of our Company are not dematerialized. Nonetheless, it

should be ensured that the depository account is in the name(s) of the Investors and the names are in the same order as in the records

of our Company/Depositories.

The responsibility for correctness of information (including Investor’s age and other details) filled in the CAF vis-à-vis such information with

the Investor’s depository participant, would rest with the Investor. Investors should ensure that the names of the Investors and the order in which

they appear in CAF should be the same as registered with the Investor’s depository participant.

If incomplete / incorrect beneficiary account details are given in the CAF, the Investor will get Equity Shares in physical form.

The Equity Shares allotted to applicants opting for issue in 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 such Equity Shares to the applicant’s depository account.

Renouncees will also have to provide the necessary details about their beneficiary account for Allotment of Equity Shares in this Issue. In case

these details are incomplete or incorrect, the application is liable to be rejected.

General instructions for Investors

(a) Please read the instructions printed on the enclosed CAF carefully.

(b) Application should be made on the printed CAF, provided by our Company except as mentioned under the head “Application

on Plain Paper” in this section at page 327 of this Letter of Offer 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 the Letter of Offer are liable to be rejected and the money paid, if any, in respect thereof will be refunded

without interest and after deduction of bank commission and other charges, if any. The CAF must be filled in English and the

names of all the Investors, details of occupation, address, father’s / husband’s name must be filled in block letters.

The CAF together with the cheque / demand draft should be sent to the Bankers to the Issue/Collecting Bank or to the Registrar to the Issue and

not to our Company or Lead Manager to the Issue. Investors residing at places other than cities where the branches of the Bankers to the Issue

have been authorised by our Company for collecting applications, will have to make payment by Demand Draft payable at Mumbai of an

amount net of bank and postal charges and send their CAFs 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.

Applications where separate cheques/demand drafts are not attached for amounts to be paid for Equity Shares are liable to be rejected.

(a) Except for applications on behalf of the Central and State Government, the residents of Sikkim and the officials appointed by

the courts, all Investors, and in the case of application in joint names, each of the joint Investors, should mention his / her

PAN number allotted under the I.T. Act, 1961, irrespective of the amount of the application. CAFs without PAN will be

considered incomplete and are liable to be rejected.

(b) Eligible Equity Shareholders, holding Equity Shares in physical form and Renouncees who are not Eligible Equity

Shareholders holding Equity Shares in demat form. Investors are advised that it is mandatory to provide information as to

their savings / current account number and the name of the bank with whom such account is held in the CAF to enable the

Registrar to the Issue 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.

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(c) All payment should be made by cheque/demand draft only. Application through the ASBA process as mentioned above is

acceptable. Cash payment is not acceptable. 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.

(d) Signatures should be either in English or Hindi or in any other language specified in the Eighth Schedule to 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 Investors must sign the CAF as per the specimen signature recorded

with our Company and the Depositories.

(e) 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 the signatory to make the relevant investment under this Issue and to

sign the application and a copy of the Memorandum and Articles of Association and / or bye laws of such body corporate or

society must be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case the above

referred documents are already registered with our Company, the same need not be a furnished again. In case these papers are

sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closing Date, then the application is liable

to be rejected. In no case should these papers be attached to the application submitted to the Bankers to the Issue.

(f) 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 our Company. Further, in case of joint Investors who are Renouncees, the number of Investors

should not exceed three. In case of joint Investors, reference, if any, will be made in the first Investor’s name and all

communication will be addressed to the first Investor.

(g) Application(s) received from NRs/NRIs, or persons of Indian origin residing abroad for Allotment of Equity Shares shall,

inter alia, 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 share

certificates, etc. In case a NR or NRI Investor has specific approval from the RBI, in connection with his shareholding, he

should enclose a copy of such approval with the CAF. Additionally, applications will not be accepted from NRs/NRIs in the

United States or its territories and possessions, or any other jurisdiction where the offer or sale of the Rights Entitlements and

Equity Shares may be restricted by applicable securities laws.

(h) All communication in connection with application for the Equity Shares, including any change in address of the Investors

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

Investor, folio numbers and CAF number. Please note that any intimation for change of address of Investors, after the date of

Allotment, should be sent to the Registrar and Transfer Agents of our Company, in the case of Equity Shares held in physical

form and to the respective depository participant, in case of Equity Shares held in dematerialized form.

(i) SAFs cannot be re-split.

(j) Only the person or persons to whom Equity Shares have been offered and not Renouncee(s) shall be entitled to obtain SAFs.

(k) Investors must write their CAF number at the back of the cheque / demand draft.

(l) Only one mode of payment per application should be used. The payment must be 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.

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(m) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts 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 (e) above).

(n) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank / Registrar, as the case

may be, will acknowledge receipt of the same by stamping and returning the acknowledgment slip at the bottom of the CAF.

(o) The distribution of this Letter of Offer and issue of Equity Shares and Rights Entitlements to persons in certain jurisdictions

outside India may be restricted by legal requirements in those jurisdictions. Persons in the United States and such other

jurisdictions are instructed to disregard this Letter of Offer and not to attempt to subscribe for Equity Shares.

(p) Investors shall be given an option to get the Equity Shares in demat or physical mode.

(q) Investors are requested to ensure that the number of Equity Shares applied for by them do not exceed the prescribed limits

under prescribed laws

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;

Bank account details (for refund) are not provided or available with the depositories or Registrar to the Issue, as the case may be;

Age of Investor(s) not given (in case of renouncees);

Except for CAFs on behalf of the Central or State Government, the residents of Sikkim and the officials appointed by the courts,

PAN number not given for application of any value;

In case of CAF under power of attorney or by limited companies, corporate, trust, relevant documents are not submitted;

If the signature of the Investor does not match with the one given on the CAF and for renounce(s) if the signature does not match

with the records available with their depositories;

CAFs are not submitted by the Investors within the time prescribed as per the CAF and the Letter of Offer;

CAFs not duly signed by the sole / joint Investors;

CAFs by OCBs;

CAFs accompanied by Stockinvest;

In case no corresponding record is available with the Depositories that matches three parameters, (a) names of the Investors

(including the order of names of joint holders), (b) the DP ID and (c) the beneficiary account number, then such applications are

liable to be rejected.

CAFs that do not include the certifications set out in the CAF to the effect that, among other thing, the subscriber is not located in

the United States and is authorised to acquire the Rights Entitlements and Equity Shares in compliance with all applicable laws

and regulations;

CAFs which have evidence of being executed in/dispatched from the United States or any other jurisdiction where the offer or sale

of the Rights Entitlements and Equity Shares may be restricted by applicable securities laws;

CAFs 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;

CAFs where our Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or regulatory

requirements;

In case the GIR number is submitted instead of the PAN;

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Application by persons not competent to contract under the Indian Contract Act, 1872, as amended, except applications by minors

having valid demat accounts as per the demographic details provided by the Depositories;

Multiple CAFs, including cases where an Investor submits CAFs along with a plain paper application.

Applications from QIBs and Non Institutional applicants or from Investors applying in this Issue for Equity Shares for an amount

exceeding `2,00,000, which are not in ASBA.

The application by an Eligible Equity Shareholder whose cumulative value of Equity Shares applied for is more than ` 2,00,000

but has applied separately through split CAFs of less than ` 2,00,000 and has not done so through the ASBA process; and

Please read the 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 an integral part of the Letter of Offer and must be carefully followed. The CAF is liable to be rejected for any non-

compliance of the provisions contained in the Letter of Offer or the CAF.

Investment by FIIs

In accordance with the current regulations, the following restrictions are applicable for investment by FIIs:

The Issue of 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 Equity Shares on behalf of its sub-accounts the investment on behalf of each sub-account shall not exceed 10% of the

total paid up capital of our Company.

Applications will not be accepted from FIIs in the United States or its territories and possessions, or any other jurisdiction where the offer or sale

of the Rights Entitlements and Equity Shares may be restricted by applicable securities laws.



`2,00,000 shall mandatorily make use of ASBA facility.

Investment 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. Applications will not be accepted from NRIs in the United

States or its territories and possessions, or any other jurisdiction where the offer or sale of the Rights Entitlements and Equity Shares may be

restricted by applicable securities laws. Investors that are NRIs should note that Applications where a registered address is not provided in india

is liable to be rejected.

NRI Applicants may please note that only such Applications as are accompanied by payment in free foreign exchange shall be considered for

Allotment under the reserved category. The NRI Applicants who intend to make payment through NRO accounts shall use the Application Form

meant for resident Indians and shall not use the Application Forms meant for reserved category.

Please note that pursuant to the applicability of the directions issued by SEBI vide its circular bearing number

CIR/CFD/DIL/1/2011 dated April 29, 2011, all applicants who are QIBs and Non Instutitional applicants or are applying in this Issue for Equity

Shares for an amount exceeding `2,00,000 shall mandatorily make use of ASBA facility.

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Procedure for Applications by Mutual Funds

A separate application can be made in respect of each scheme of an Indian mutual fund registered with the SEBI and such applications shall not

be treated as multiple applications. The applications made by asset management companies or custodians of a mutual fund should clearly

indicate the name of the concerned scheme for which the application is being made.



`2,00,000 shall mandatorily make use of ASBA facility.

No Mutual Fund scheme may invest more than 10% of its net asset value in equity shares or equity related instruments of any company,

provided that the limit of 10% will not apply to investments in index funds or sector or industry specific funds. No Mutual Fund under all its

schemes may own over 10% of any company’s paid-up share capital carrying voting rights.

Investment by QFIs

In terms of circulars dated January 13, 2012, SEBI has permitted investment by QFIs in Indian equity issues, including in rights issues. A QFI

can invest in the Issue through its DP with whom it has opened a demat account. No single QFI can hold more than 5% of paid up equity capital

of the company at any point of time.

Further, aggregate shareholding of all QFIs shall not exceed 10% of the paid up equity capital of the Company at any point of time.

Applications will not be accepted from QFIs in restricted jurisdictions.

QFI applicants which are QIBs or whose Application Money exceeds ` 2,00,000 can participate in the Issue only through the ASBA process.

Impersonation

As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions of sub-section (1) of section 68A of the

Companies Act which is reproduced below:

“Any person who makes in a fictitious name an application to a Company for acquiring, or subscribing for, any shares therein, or 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”.

Dematerialized dealing

Our Company has entered into agreements dated October 31, 2000 and September 14, 2000 with NSDL and CDSL, respectively, and its Equity

Shares bear the ISIN INE540B01015.

Payment by Stockinvest

In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003- 04 dated 5 November 2003, the Stockinvest Scheme has been withdrawn.

Hence, payment through Stockinvest would not be accepted in this Issue.

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Disposal of application and application money

No acknowledgment will be issued for the application moneys received by our 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.

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 thereto.

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 Investor within a

period of 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our Company becomes liable to repay

it, our Company and every Director of our 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.

For further instructions, please read the CAF carefully.

Utilisation of Issue Proceeds

Our Board of Directors declares that:

(i) All monies received out of this Issue shall be transferred to a separate bank account other than the bank account referred to sub-

section (3) of Section 73 of the Companies Act;

(ii) Details of all monies utilized out of the Issue shall be disclosed under an appropriate separate head in the balance sheet of our

Company indicating the purpose for which such monies have been utilised;

(iii) Details of all unutilized monies out of the Issue, if any, shall be disclosed under an appropriate separate head in the balance sheet

of our Company indicating the form in which such unutilized monies have been invested; and

(iv) Our Company may utilize the funds collected in the Issue only after the basis of Allotment is finalized.

Undertakings by our Company

Our Company undertakes the following:

1. The complaints received in respect of the Issue shall be attended to by our Company expeditiously and satisfactorily.

2. All steps for completion of the necessary formalities for listing and commencement of trading at all Stock exchanges where the Equity

Shares are to be listed will be taken within seven working days of finalization of basis of Allotment.

3. The funds required for making refunds to unsuccessful applicants as per the modes disclosed shall be made available to the Registrar

to the Issue by our Company.

4. Our Company undertakes that where refunds are made through electronic transfer of funds, a suitable communication shall be sent to

the Investor within 15 days of the Issue Closing Date, giving details of the banks where refunds shall be credited along with amount

and expected date of electronic credit of refund.

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5. Our Company accepts full responsibility for the accuracy of information given in this Letter of Offer and confirms that to the best of

its knowledge and belief, there are no other facts the omission of which makes any statement made in this Letter of Offer misleading

and further confirms that it has made all reasonable enquiries to ascertain such facts.

6. Adequate arrangements shall be made to collect all ASBA applications and to consider them similar to non-ASBA applications while

finalising the basis of Allotment.

7. At any given time there shall be only one denomination for the Equity Shares of our Company.

8. We shall comply with such disclosure and accounting norms specified by SEBI from time to time.

9. The certificates of the securities or refund orders to non-resident shareholders will be dispatched within specified time

10. No further issue of securities shall be made till the securities offered through this Letter of Offer are listed or till the application

moneys are refunded on account of non-listing, under-subscription, etc

Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Issue, our Company shall forthwith refund the entire subscription

amount received within 15 days from the Issue Closing Date. If such money is not repaid within eight days from the day our Company becomes

liable to repay it, (i.e. 15 days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is earlier) our

Company and every Director of our 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 sub-section (2) and (2A) of Section 73 of the Companies Act.

Important

Please read this Letter of Offer carefully before taking any action. The instructions contained in the accompanying CAF are an

integral part of the conditions of this Letter of Offer and must be carefully followed; otherwise the application is liable to be

rejected.

All enquiries in connection with this Letter of Offer or accompanying CAF and requests for SAFs must be addressed (quoting the Registered

Folio Number/ DP and Client ID, the CAF number and the name of the first Eligible Equity Shareholder as mentioned on the CAF and super

scribed ‘Reliance MediaWorks Limited – Rights Issue - R” in case of resident shareholders/applicants or shareholders/applicants applying on

non repatriable basis or “Reliance MediaWorks Limited - Rights Issue -NR” in case of non resident shareholders/applicants applying on

repatriable basis on the envelope and postmarked in India) to the Registrar to the Issue at the following address:




Mumbai 400 078

Tel: +91 22 2596 7878

Facsimile: +91 22 2596 0329






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It is to be specifically noted that this Issue of Equity Shares is subject to the risk factors mentioned in the section entitled “Risk

Factors” at page 11.

The Rights Entitlements and the Equity Shares are not intended to be offered or sold to persons in the United States or any other

jurisdiction where such offer or sale may be prohibited. The offering to which this Letter of Offer relates is not, and under no

circumstances is to be construed as, an offering of any shares or rights to sale in the United States, the territories or possessions

thereof, or a solicitation therein of an offer to buy any of the said shares or rights. Accordingly, this Letter of Offer and the CAF

should not be dispatched or forwarded to or transmitted in or to, the United States at any time. Our Company and the Lead

Manager reserve absolute discretion in determining whether to allow such participation as well as the identity of the persons who

may be allowed to do so. Any person who acquires Rights Entitlements or Equity Shares will be deemed to have declared,

warranted and agreed, by accepting the delivery of the Letter of Offer, 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 or any other jurisdiction where such acquisition may

be prohibited.

THE ISSUE WILL REMAIN OPEN FOR A MINIMUM 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

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RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES

Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the Government of India and FEMA. While the

Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian

economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically

restricted, foreign investment is freely permitted in all sectors of the Indian economy up to any extent and without any prior approvals, but the

foreign investor is required to follow certain prescribed procedures for making such investment. The government bodies responsible for granting

foreign investment approvals are FIPB and RBI.

Subscription by foreign investors (NRIs/FIIs)

FIIs are permitted to subscribe to shares of an Indian company in a public offer without the prior approval of the RBI, so long as the price of the

equity shares to be issued is not less than the price at which the equity shares are issued to residents.

The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that (i)

the activities of the investee company are under the automatic route under the foreign direct investment (“FDI”) Policy and transfer does not

attract the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (ii) the non-resident shareholding is

within the sectoral limits under the FDI policy; and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI.

As per the existing policy of the Government of India, OCBs cannot participate in this Issue.

353

SECTION VIII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION

Capitalised terms used in this section have the meaning that has been given to such terms in the Articles of Association of our Company.

Pursuant to Schedule II of the Companies Act and the ICDR Regulations, the main provisions of the Articles of Association of our Company are

detailed below:

The regulations contained in Table 'A' in Schedule I of the Companies Act shall not apply to our Company on its registration, but instead thereof

regulations contained in these Articles shall apply.

Capital

Article 3 provides that “The Authorised Capital of the Company shall be as per Capital Clause of the Memorandum of Association of the

Company with power to increase, reduce, divide and/or sub-divide the Share Capital or reclassify them into several classes and attach thereto

respectively such preferential, priority, deferred, qualified or special rights, privileges, conditions or restrictions, whether in regard to dividend,

voting, return of capital, distribution of assets or otherwise, as may be determined in accordance with the laws, rules and regulations applicable

to the Company and to vary, modify or abrogate such rights, privileges, conditions or restrictions in such manner as may from time to time be

provided by the regulations/resolutions of the Company or are provided for in the Articles of Association of the Company and to consolidate or

sub-divide or re-organise shares or issue shares of higher or lower denominations..”

Article 4 provides that “Such shares of the authorised capital to carry such rights, privileges and conditions attached thereto as are provided by

the regulations of the Company for the time being and with the power to increase and reduce the Share Capital of the Company and to divide the

Shares in the Capital for the time being into several classes and to attach thereto respectively such preferential rights, privileges or conditions as

may be determined by or in accordance with the regulations of the Company and to vary, modify or abrogate any such rights, privileges or

conditions in such manner as may for the time being be provided by the regulations of the Company. The rights of the preference shares shall be

determined at the time of issue thereof.”

Increase of Capital by the Company at how carried into effect

Article 5 provides that “The Company may in General Meeting, from time to time by ordinary resolution, increase its capital by creation of new

shares which may be unclassified and may be classified at the time of issue in one or more classes and of such amount or amounts as may be

deemed expedient. The new shares shall be issued upon such terms and conditions with such rights and privileges annexed thereto as the

resolution shall be prescribed and in particular, such shares may be issued with a preferential or qualified right to dividends and in the

distribution of assets of the Company and with a right of voting at General Meeting of the Company in conformity with Section 87 and 88 of

Act, Whenever the Capital of the Company has been increased under the provisions of this Article, the Directors shall comply with the

provisions of Section 97 of the Act.”

Article 5a provides that “The Company may by special resolution, reduce or adjust in any manner, subject to any authorizations and approvals

required by Law-

(a) its Share Capital

(b) any Capital Redemption Reserve Account

(c) any Securities Premium Account

Notwithstanding the above any amounts standing to the credit of Securities Premium Account may also be utilized other than for capitalization,

for any other purposes as are in accordance with the provisions of law.”

Redeemable Preference Shares

Article 7 (1) provides that “Subject to the provision of Section 80 of the Act, the Company shall have the power to issue preference shares which

are or at the option of the Company are liable to be redeemed in accordance with Section 80A of the Act and the resolution authorizing such

issue shall prescribe the manner, terms and conditions of redemption.”

Further Issue of Capital

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Article 8(a) provides that “The Company shall have right to issue further shares in accordance with the provision of Section 81 of the Act.”

Sub-division, consolidation and cancellation of Shares

Article 8(b) provides that “Subject to the provisions of Section 94 and other applicable provisions of the Act, the Company in General

Meeting may, from time to time, sub-divide or consolidate its shares or any of them and the resolution where by any share is sub-divided may

determine that, as between the holders of the shares resulting from such sub-division one or more of such shares shall have same preference or

special advantage as regards dividend, capital or otherwise over or as compared with the other or other subject as aforesaid, the Company in

General Meeting may also cancel shares which have not been taken or agreed to be taken by any person and diminish the amount of its share

capital by the amount of the shares so cancelled.”

Modification of rights

Article 9 provides that “Wherever the capital, by reason of the issue of the preference shares or otherwise is divided into different classes of

shares, all or any of the rights and privileges attached to each class may, subject to the provisions of sections 106 and 107 of the Act, be

modified, commuted, affected, abrogated, dealt with or varied with the consent in writing of the holders, of not less than three fourth of the

issues capital of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of shares of that class

and all the provisions hereinafter contained as to general meeting shall mutatis mutandis apply to every such meeting. This Article is not to

derogate from any power the Company would have if this Article was omitted.

The rights conferred upon the holders of the shares (including preference shares if any) of any class issued with preferred or other rights or

privileges shall unless otherwise expressly provided by the terms of issue of shares of that class, be deemed not to be modified, commuted,

affected, abrogated dealt with or varied by the creation of issue of further shares ranking pari passu therewith.”

Beneficial Owner (Including Depository)

Article 12 provides that “Save as herein otherwise provided, the Company shall be entitled to treat the person whose name appears on the

Register of Members as the holder of any share or whose name appears as the beneficial owner of shares in the records of the depository, as

the absolute owner thereof and accordingly shall not except as ordered by a court of competent jurisdiction or as by law require, be bound to

recognize any benami trust or equity or equitable, contingent, future or partial or other claim or claims or right to or interest in such share on

the part of any other person whether or not it shall have express or implied notice thereof.

No Notice of any trust, express, implied or constructive shall be entered in the Register of Members or of debenture holders.”

The Board may issue shares as fully paid-up

Article 14 provides that “Subject to the provisions of the Act and these Articles, the Board may allot and issue shares in the Capital of the

Company as payment of any property sold or transferred or for services rendered to the Company in the conduct of its business or in

satisfaction of any shares, which may be so issued shall be deemed to be fully paid-up or partly paid-up shares.”

Acceptance of shares

Article 15 provides that “Any application signed by or on behalf of an applicant for shares in the Company followed by an allotment of any

share therein, shall be an acceptance of shares within the meaning of these Articles and every person who thus or otherwise accepts any shares

and whose name is therefore placed on the register shall, for the purpose of this Articles, be a member.”

Deposit and Call etc. to be a debt payable

Article 16 provides that “The money, if any, which the Board of Directors shall on the allotment of any shares being made by them, require or

direct to be paid by way of deposit, call or otherwise, in respect of any shares allotted by them shall immediately on the inscription of the name

of the allotted in the register of members as the name of the holder of such shares, become a debt due to and recoverable by the Company from

the allotted thereof and shall be paid by him accordingly.”

Liability of Members

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Article 17 provides that “Every member or his heirs, executors or administrators to the extent of his assets which come to their hands shall be

liable to pay of the Company the portion of the capital represented by his shares or shares which may, for the time being remain unpaid

thereon in such amount at such time or times and in such manner as the Board of Directors shall from time to time, in accordance with the

Company’s requisitions, require or fix for the payment thereof.”

Share Certificate

Article 18 provides that “(a) Every member or allottee of shares shall be entitled, without payment to receive one certificate for all the shares

of the same class registered in his name. Every share certificate shall specify the name of the person in whose favour it is issued, the share

certificate number and the distinctive number(s) of the shares to which it relates and the amount paid up thereon. Such certificate shall be

issued only in pursuance of resolution passed by the Board and on surrender to the Company of its letter of allotment or its fractional coupons

of requisite value, save in cases of issues, against letters of acceptance or of renunciation or in cases of issue of bonus shares PROVIDED

THAT if the letter of allotment is lost or destroyed, the Board may impose such reasonable terms, if, any as it think fit, as to evidence and

indemnity and the payment of out of pocket expenses incurred by the Company in investigating the evidence. If any member shall require

additional certificate he shall pay for each additional certificate (not being in the marketable lot) such sum not exceeding One Rupee as the

Directors shall determine. The certificates of title to shares shall be issued under the seal of the Company and shall be signed in conformity

with the provisions of the Companies (Issue of Share Certificates) Rules, 1960 or any statutory modification or re-enactment thereof for the

time being in force. Printing of blank forms to be used for issue of share certificates and maintenance of books and documents relating to issue

of Share Certificate shall be in accordance with the provisions of the aforesaid rules. Such certificates of title to shares shall be completed and

kept ready for delivery within three months after the allotment and within one month after the application for the registration of the transfer of

any such shares unless the conditions of issue of share provide otherwise.

(b) Any two or more joint allottee or holders of shares shall, for the purpose of this Article, be treated as a single member and the certificate of

any share which may be the subject of joint ownership may be delivered to any one of such joint owners on behalf of all of them.

(c) Provided, however, that no share certificate (s) shall be issued in respect of shares held in Depository.”

Renewal of Shares Certificate

Article 19 provides that “No Certificate of any share or share shall be issued either in exchange for those which are sub-divided or

consolidated or in replacement of those which are defaced, torn or old, decrepit, worn out or where the pages on the reverse for recording

transfer have been duly utilized unless the certificate in lieu of which it is issued is surrendered to the Company.

PROVIDED THAT no fees shall be charged for issue of new certificates in replacement of those which are old, decrepit or worn out or where

the pages on the reverse for recording transfer have been fully utilized.

In case of rematerialisation of shares, procedure thereof as may be prescribed under law, shall be followed.”

Dematerialisation of shares

Article 21 provides that “The Company shall be entitled to dematerialize its existing shares, debentures and other securities, rematerialize its

shares, debentures and other securities held in Depositories and other securities, in a dematerialized form pursuant to the Depositories

Act,1996 and the rules, bye laws, regulations framed thereunder, if any.”

Company not bound to recognize any interest in share other than of registered holder

Article 22 provides that “Except as ordered by a Court of Competent jurisdiction or as by law required, the Company shall not be bound to

recognize, even when having notice thereof, any equitable, contingent, future or partial interest in any share of (except only as is by these

Articles otherwise expressly provided) any right in respect of a share other than an absolute right thereto, in accordance with these Articles, of

the person from time to time registered as holder thereof but the Board shall be at liberty at their sole discretion to register any share in the

joint names of any two or more persons (but not exceeding 4 persons) or the survivor or survivors of them.”

Trust not recognized

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Article 23 provides that “(a) Save as herein otherwise provided, the Company shall be entitled to treat the person whose name appears on the

Register of Members as the holder of any share as the absolute owner thereof and accordingly shall not ( except as ordered by a Court of

Competent jurisdiction or as by law required) be bound to recognize any benami, trust or equity or equitable, contingent, future or partial or

other claim or claim s or rights to or interest in such share in the part of any other person whether or not it shall have express or limited notice

thereof. The provisions of Section 153 of the Act, shall apply.

(b) Shares may be registered in the name of an incorporated Company or other body corporate but not in the name of a minor (except in case

where they are fully paid) or in the name of a person of unsound mind or in the name of any firm or partnership.”

Calls

Directors may make call

Article 28 provides that “(a)Subject to the provisions of Section 91 of the Act the Board of Directors may, from time to time by a Resolution

passed at a meeting of a Board ( and not be a circular resolution) make such calls as it think fit upon the members in respect of all moneys

unpaid on the shares whether on account of the nominal value of the shares or by way of premium, held by them respectively and not be

conditions of allotment thereof made payable at fixed time and each member shall pay the amount of every calls so made payable at fixed

time and each member shall pay the amount of every call so made on him to the person or person and at the times and places appointed by the

Board of Directors. A call may be made payable by installments. A call may be postponed or revoked as the Board may determine.

Liability of joint-holders

Article 28 provides that “(b) The joint holders of a share shall be jointly and severally liable to pay all calls in respect thereof.”

Notice or calls

Article 29 provides that “Not less than thirty days notice in writing of any calls shall be given by the Company specifying the time and place

of payment and the person or persons to whom such calls shall be paid.”

When call deemed to have been made

Article 30 provides that “A call shall be deemed to have been made at the time when the resolution authorizing such call was passed at a

meeting of the Board of Directors and may be made payable to the members on such date or at the discretion of the Directors on such

subsequent date as shall be fixed by the Board of Directors.”

Evidence in action by Company against shareholders.

Article 34 provides that “On the trial or hearing of any action or suit brought by the Company against any member or his legal representative

for the recovery of any moneys claimed to be due to the Company in respect of his shares it shall be sufficient to prove that the name of the

members in respect of whose shares the money is sought to be recovered and entered on the register of member as the holder or as one of the

holders at or subsequent to the date at which in money sought to be recovered is alleged to have become due on the shares in respect of which

the money is sought to be recovered that the resolution making the call is duly recorded in the minute book and the notice of such call was

duly given to the member or his legal representative sued in pursuance of these Articles and it shall not be necessary to prove the appointment

of Directors who made such call, not that a quorum of Directors was present at the Board at which any call was made not that the meeting at

which any call was made was duly convened or constituted nor any other matter whatsoever but the proof of the matters aforesaid shall be

conclusive evidence of the debt.”

Lien

Partial payment not to preclude forfeiture

Article 36 provides that “Neither the receipt by the Company of a portion of any money which shall, from time to time, be due from any

member to the Company in respect of his shares, either by way of principal or interest of any indulgence granted by the Company in respect of

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the payment of such money, shall preclude the Company from thereafter proceeding to enforce a forfeiture of such shares as hereinafter

provided.”

Company to have lien on shares

Article 37 provides that “The Company shall have a first and paramount lien upon all 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 interests in any share shall be created except upon the

footing and condition that this Article is to have full legal effect. Any such lien shall extend to all dividends from time to time declared in

respect of shares, PROVIDED THAT the Board of Directors may, at any time, declare any share to be wholly or in exempt from the

provisions of this Article.”

As to enforcing lien by sale

Article 38 provides that “The Company may sell, in such manner as the Board thinks, fit, any shares on which the Company has a lien for the

purpose of enforcing the same PROVIDIED THAT no sale shall be made:

(a) Unless a sum in respect of which the lien exists is presently payable or

(b) Until the expiration of fourteen days after a notice in writing starting and demanding payment of such part of the amount in respect of

which the lien exists as is presently payable has been given to the registered holder for the time being of the share or the person entitled

thereto by reason of his death or insolvency.

For the purposes of such sale, the Board may cause to be issued a duplicate certificate in respect of such shares and may authorize one of their

members to execute a transfer thereof on behalf of and in the name of such members.

(c) The purchaser shall not be bound to see 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.”

Application of proceeds of sale

Article 39 provides that “(a)The net proceeds of any such sale shall be received by the Company and applied in or towards satisfaction of such

part of the amount in respect of which the lien exists as is presently payable; and

(b) The residue, if any, after adjusting costs and expenses, if any, incurred shall be paid to the person entitled to the shares at the date of the

sale (subject to a like lien for sums not presently payable existed on the shares before the sale.)”

Forfeiture of Shares

If money payable on share not paid notice to be given

Article 40 provides that “If any member fails to pay the whole or any part of any call or any installment of a call on or before the day

appointed for the payment of the same or any such extension thereof, the Board of Directors may, at any time thereafter, during such time as

the call for installment remains unpaid, give notice to his requiring him to pay the same together with any interest that may have accrued and

all expenses that may have been incurred by the Company by reason of such non-payment.”

In default of payment shares to be forfeited

Article 43 provides that “If the requirements of any such notice as aforesaid are not complied with any share or shares in respect of which such

notice has been given may at any time thereafter before payment of all calls or installments, interests and expenses due in respect thereof, be

forfeited by a resolution of the Board of Directors to that effect. Such forfeiture shall include all dividends declared or any other moneys

payable in respect of the forfeited shares and not actually paid before the forfeiture.”

Notice of forfeiture to a member

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Article 44 provides that “When any share shall have been so forfeited, notice of the forfeiture shall be given to the member in whose name it

stood immediately prior to the forfeiture and an entry of the forfeiture, with the date thereof, shall forthwith be made in the Register of

Members, but no forfeiture shall be in any manner invalidated by any omission or neglect to give such notice or to make any such entry as

aforesaid.”

Forfeited share to be the property of the Company and may be sold etc.

Article 45 provides that “Any share so forfeited, shall be deemed to be the property of the Company and may be sold, re-allotted or otherwise

disposed off, either to the original holder or to any other person upon such terms and in such manner as the Board of Directors shall think fit.

Member still liable to pay money owing at the time of forfeiture and interest

Article 46 provides that “Any member whose shares have been forfeited shall notwithstanding the forfeiture be liable to pay and shall

forthwith pay to the Company on demand all calls, installments, interest and expenses owing upon or in respect of such shares at the time of

the forfeiture together with interest thereon from the time of the forfeiture until payment, at such rate not exceeding eighteen percent per

annum as the Board of Directors may determine and the Board of Directors may enforce the payment of such moneys or any part thereof, if it

thinks fit, but shall not be under any obligation to do so.”

Effect of forfeiture

Article 47 provides that “The forfeiture of a share shall involve the extinction at the time of the forfeiture of all interest in and all claims and

demand against the Company in respect of the share and all other rights incidental to the share, except only such to those rights as by these

Articles are expressly saved.”

Power to annual forfeiture

Article 48 provides that “The Board of Directors may at any time before any share so forfeited shall have been sold, re-allotted or otherwise

disposed off, annul the forfeiture thereof upon such conditions as it thinks fit.”

Cancellation of share certificate in respect of forfeited shares

Article 51 provides that “Upon sale, re-allotment or other disposal, under the provisions of these Articles, the certificate or certificates

originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to

it by the defaulting member) stand cancelled and become null and void and of no effect and the Directors shall be entitled to issue a new

certificate or certificates in respect of the said shares to the person of persons entitled thereto.”

Surrender of Shares

Article 54 provides that “The Directors may, subject to the provisions of the Act, accept a surrender of any share from any member desirous of

surrendering on such terms and condition as they think fit.”

Transfer and Transmission of Shares

Article 55 provides that “The Company shall keep a book to be called “Register of Transfer’ and therein shall be fairly and distantly entered

particulars of every transfer or transmission of any share held in a material form.”

Article 56 provides that “In the case of transfer or transmission of shares or other marketable securities where the Company has not issued any

certificates and where such shares or securities are being held in an electronic and fungible form in a Depository, the provisions of the

Depositories Act, 1996 shall Apply.”

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Form of transfer

Article 57 provides that “The instrument of transfer of any share shall be in the prescribed form under the Companies (Central Government)

General Rules and Forms, 1956 and in accordance with the requirements of Section 108 of the Act.”

Transfer to be presented with evidence of title

Article 59 provides that “Every instrument of transfer shall be presented to the Company duly stamped for registration accompanied by such

evidence as the Board may required to prove the tile of the transferor, his right to transfer the shares and generally under the subject to such

conditions and regulations as the Board may, from time to time, prescribe and every registered instrument of transfer shall remain in the

custody of the Company until destroyed by order of the Board. In case of securities being dematerialized, procedure as applicable to demat, to

be followed.”

Nomination facility

Article 61 provides that “(1) Every holder of shares in, or holder of debentures of, a Company may, at any time nominate, in the prescribed

manner, a person to whom his shares in, or debentures of, the Company shall vest in the event of his death.

(2) Where the shares in, or debentures of, a Company are held by more than one person jointly, the joint holders may together nominate, in the

prescribed manner, a person to whom all the rights in the shares or debentures of the Company shall vest in the event of death of all the joint

holders.

(3) Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise,

in respect of such shares in, or debentures of, the Company, where a nomination made in the prescribed manner purports to confer on any

person the right to vest the shares in or debentures of the Company, the nominee shall, on the death of the share holder or holder of debentures

of the Company or, as the case may be, on the death of the joint holders become entitled to all the rights in the shares or debentures of the

Company or, as the case may be, all the joint holders, in relation to such shares in, or debentures of the Company to the exclusion of all other

persons, unless the nomination is varied or cancelled in the prescribed manner.

(4) Where the nominee is a minor, it shall be lawful for the holder of the shares or holder of debentures, to make the nomination to appoint in

the prescribed manner any person to become entitled to shares in or debentures of the Company, in the event of his death, during the

minority.”

Transmission of shares

Article 62 provides that “(1) Any person who becomes a nominee by virtue of the provisions of section 109A, upon the production of such

evidence as may be required by the Board and subject as hereinafter provided, elect, either.

(a) to be registered himself as holder of the share of debenture, as the case may be ; or

(b) to make such transfer of the share or debenture , as the case may be, as the deceased shareholder or debenture holder, as the case may be,

could have made.

(2) The Board shall, in either case, have the same right to decline or suspend registration, as it would have had, if the deceased shareholder or

debenture holder, as the case may be, had transferred the share of debenture, as the case may be, before his death.

(3) If the person being a nominee, so becoming entitled, elects to be registered as holder of the share or debenture, as the case may be, himself,

he shall deliver or send to the Company a notice in writing signed by him stating that he so elects and such notice shall be accompanied with

the death certificate of the deceased shareholder or debenture holder, as the case may be.

(4) All the limitations, restrictions and provisions of this Act relating to the right to transfer and the registration of the transfers of shares or

debentures shall be applicable to any such notice of transfer as aforesaid as if the death of the member had not occurred and the notice of

transfer were a transfer signed by that shareholder or debenture holder, as the case may be.

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(5) A person, being a nominee, becoming entitled to a share or debenture by reason of the death of the holder shall be entitled to the same

dividends and other advantages to which he would be entitled if he were the registered holder of the share or debenture except that he shall

not, before being registered a member in respect of his share or debenture, be entitled in respect of it to exercise any right conferred by

membership in relation to meetings of the Company.

Provided that the Board may, at time, give notice requiring any such person to elect either to be registered himself or to transfer the share or

debenture, and if the notice is not complied with within ninety days, the Board may thereafter with hold payment of all dividends, bonuses or

other moneys payable in respect of the share or debenture, until the requirements of the notice have been complied with.”

Buy Back of securities

Article 63 provides that “The Company shall have the power subject to and in accordance with all other applicable provisions of the Act to

purchase any of its own shares, whether or not they are redeemable, at such rate(s) and to keep them alive and/or reissue from time to time

such number(s) of shares, purchased at such rate (s) and on such terms and conditions as the Board may deem fit and appropriate.

Except to the extent permitted by Section 77 or other applicable provisions (if any) of the Act, the Company shall not give whether directly or

indirectly and whether by means of a loan, guarantee, provisions of security or otherwise any financial assistance for the purpose of, or in

connection with the purchase or subscription made or to be made by any person of or for any shares in the Company.”

Power of Company to purchase its own securities.

Article 64 provides that “(1) The Company may purchase its own shares or other specified securities (hereinafter referred to as “buy-back”)

out of –

(i) its free reserves; or

(ii) the securities premium account ; or

(iii) the proceeds of any shares or other specified securities

However, no buy-back of any kind of shares or other specified securities shall be made out of the proceeds of an earlier issue of the same kind

of shares or same kind of other specified securities.

(2) The company shall not purchase its own shares or other specified securities under sub-section (1) unless –

(a) a special resolution has been passed in general meeting of the company authorising the buy back;

(b) the buy-back does not exceed twenty five percent of the total paid-up capital and free reserves of the company.

However the buy-back of the equity shares in any financial year shall not exceed twenty five percent of its total paid-up equity capital in that

financial year;

(c) the ratio of the debt owed by the company is not more than twice the capital and its free reserves after such buy-back or such other ratio as

the Central Government may prescribe.

(d) all the shares or other specified securities for buy-back are fully paid-up;

(3) The notice of the meeting at which special resolution is proposed to be passed shall be accompanied by an explanatory statement stating -

(a) a full and complete disclosure of all material facts;

(b) the necessity for the buy-back;

(c) the class of security intended to be purchased under the buy-back;

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(d) the amount to be invested under the buy-back; and

(e) the time limit for completion of buy-back.

(4) Every buy-back shall be completed within twelve months from the date of passing the special resolution under clause (b) of sub-section

(2).

(5) The buy-back under sub-section (1) may be

(a) from the existing security holders on a proportionate basis; or

(b) from the open market; or

(c) from old lots, that is to say, where the lot of securities is listed public company, whose shares are listed on a recognized stock exchange, is

smaller than such market lot, as may be specified by the stock exchange; or

(d) by purchasing the securities issued to employees of the company pursuant to a scheme of stock option or sweat equity.

(6) Where the company has passed a special resolution under sub-clause (b) if Clause (2) to buy-back its own shares or other securities under

this section, it shall, before making such purchases, file with the Registrar and the Securities and Exchange Board of India a declaration of

solvency in the form prescribed, verified an affidavit to the effect that the Board has made a full inquiry into the affairs of the company as a

result of which it is capable of meeting its liabilities and will not be rendered insolvent within period of one year of the date of declaration

adopted by the Board, and signed by at least two directors of the company, one of whom shall be the managing director, if any:

However the company shall file no declaration of solvency with the Securities and Exchange Board of India so long its share is not listed on

any recognized stock exchange.

(7) Where the company buys-back its own securities, it shall extinguish and physically destroy the securities so bought-back within seven days

of the last date of completion of buy-back.

(8) Where the company completes a buy-back of its shares or other securities, it shall not make further issue of the same kind of shares

(including allotment of further shares under clause (a) of sub-section (1) of section 81) or other specified securities within a period of twenty-

four months except by way of bonus issue or in the discharge of subsisting obligations such as conversion of warrants, stock option schemes

sweat equity or conversion of preference shares or debentures into equity shares.

(9) Where the company buys-back its securities under this section, it shall maintain a register of the securities so bought, the consideration

paid for the securities bought-back the date of cancellation of securities, the date of extinguishing and physically destroying of securities and

such other particulars as may be prescribed.

(10) The company shall, after the completion of the buy-back under this section, file with the Registrar and the Securities and Exchange Board

of India, a return containing such particulars relating to the buy-back within thirty days of such completion, as may be prescribed.

However no return shall be filed with the Securities and Exchange Board of India as long as the shares of the Company are not listed on any

recognised stock exchange.

Transfer of certain sums to capital redemption reserve account

Article 65 provides that “Where the company purchases its own shares out of free reserves, then sum equal to the nominal value of the share

so purchased shall be transferred to the capital redemption reserve account referred to in clause (d) of the provision to sub-section (1) of

section 80 and details of such transfer shall be disclosed in the balance-sheet.”

Prohibition for buy-back in certain circumstances

Article 66 provides that (1) The Company shall not directly or indirectly purchase its own shares or other specified securities –

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(a) through any subsidiary company including its own subsidiary companies; or

(b) through any investment company or group of investment company; or

(c) if a default, in repayment of deposit, redemption of debenture of preference shares or payment of dividend to any share holder or

repayment of a term loan or interest payable thereon to any financial institution or bank is subsisting.

(2) The company shall not directly or indirectly purchase its own shares or other specified securities in case such company has not complied

with provisions of Section 159, 207 and 211.

Issue of sweat equity shares

Article 67 provides that “(1) The company may issue sweat equity shares of a class of shares already issued if the following conditions are

fulfilled, namely:

(a) the issue of sweat equity shares is authorised by a special resolution passed by the company in the general meeting;

(b) the resolution specifies the number of shares, current market price, consideration if any, and the class or classes of directors or employees

to whom such equity shares are to be issued;

(c) not less than one year has at the date of the issue elapsed since the date on which the company was entitled to commence business

(d) the sweat equity shares of a company whose shares are listed on a recognised stock exchange are issued in accordance with the regulations

made by the Securities Exchange Board of India in this behalf.

However, so long as the equity shares of the Company are not listed on any recognized stock exchange, the sweat equity shares are to be

issued in accordance with the guidelines as may be prescribed.

(2) All the limitations, restrictions and provisions relating to equity shares shall be applicable to such sweat equity shares issued under clause

(1).”

Power to issue share warrants

Article 68 provides that “The Company may issue warrants subject to and in accordance with the provisions of Section 114 and 115 of the Act

and accordingly the Board may in its discretion with respect to any share which is fully paid upon application in writing signed by the persons

registered as holder of the share and authenticated by such evidence (if any) as the Board may, from time to time, require as to the identity of

the person signing the application and on receiving the certificates (if any) of the share and the amount of the stamp duty on the warrant and

such fee as the Board may, from time to time, require, issue a share warrant.”

Deposit of Share Warrants

Article 69 provides that “(a) The bearer of a share warrant may, at any time, deposit the warrant at the office of the Company and so long as

the warrant remains so deposited, the depositor shall have the same right of signing a requisition for calling a meeting of the Company and of

attending and voting and exercising the other privileges of the member at any meeting held after the expiry of two clear days from the time of

deposit, as if his name were inserted in the Register of Members as the holder of the share included in the deposit warrant.

(b) Not more than one person shall be recognized as depositor of the share warrant.

(c) The Company shall, on two days’ written notice, return the deposited share warrant to the depositor;”

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Privileges and disabilities of the holders of share warrant

Article 70 provides that “(a) Subject as herein otherwise expressly provided, no person shall as bearer of a share warrant, sign a requisition for

calling a meeting of the Company or attend or vote or exercise any other privileges of a member at a meeting of the Company or be entitled to

receive any notice from the Company.

(b) The bearer of a share warrant shall be entitled in all other respects to the same privileges and advantages as if he were named in the

Register of members as the Holder of the Share included in the warrant and he shall be a member of the Company.”

Issue of new share warrant or coupon

Article 71 provides that “The Board may, from time to time, make bye-laws as to the terms on which (if it shall think fit), a new share warrant

or coupon maybe issued by way of renewal in case of defacement, loss or destruction.”

Conversion of Shares into Stock and reconversion

Article 72 provides that “Share may be converted into stock

The Company may, by Ordinary Resolution:

(a) convert any paid up share into stock; and

(b) reconvert any stock into paid-up shares of any denomination.”

Transfer of Stock

Article 73 provides that “The several holders of such stock may transfer their respective interest therein or any part thereof in the same

manner and subject to the same regulations under which the stock arose might, before the conversion, have been transferred or as near thereto

as circumstances admit.

PROVIDED THAT the Board may, from time to time, fix the minimum amount of stock transferable, so however that such minimum shall not

exceed the nominal amount of the shares from which the stock arose.”

Right of stockholders

Article 74 provides that “The holders of stock shall, according to the amount of stock held by them, have the same right, privileges and

advantages as regards dividends, voting at meeting of the Company and other matters, as if they held shares from which the stock arose, but

no such privilege or advantage (except participation in the dividends and profits of the Company and in the assets on winding up) shall be

conferred by an amount of stock which would not, if existing in shares, have conferred those privileges or advantages.”

Power of Borrow

Article 76 provides that “Subject to the provisions of Section 58A, 292 and 293 of the Act and of these Article, the Board of Directors may,

from time to time at its discretion by a resolution passed at a meeting of the Board, borrow, accept, deposits from members either in advance

of calls or otherwise and generally raise or borrow or secure the payment of any such sum or sums of money for the purpose of the Company

from any source. PROVIDED THAT, where the moneys to be borrowed together with the moneys already borrowed (apart from temporary

loans obtained from the Company’s bankers in the ordinary course of business) exceeds the aggregate of the paid up capital of the Company

and its free reserves (not being reserves set apart for any specific purpose) the Board of Directors shall not borrow such money without the

sanction of the Company in general meeting. No debt incurred by the Company in excess of the limit imposed by this Article shall be valid or

effectual unless the lender proves that he advanced the loan in good faith and without knowledge that the limit imposed by this Article had

been exceeded.”

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The payment or repayment of money borrowed

Article 77 provides that “The payment or repayment of moneys borrowed as aforesaid may be secured in such manner and upon such terms

and conditions in all respects as the Board of Directors may think fit and in particular in pursuance of a resolution passed at a meeting of the

Board(and not by circular Resolution) by the issue of bonds, debentures or debenture-stock of the Company, charged upon all or any part of

the property of the Company, (both present and future) including its uncalled capital for the time being and the debentures and the debenture-

stock and other securities may be made assignable free from any equities between the Company and the person to whom the same may be

issued.”

Term of issue of debenture

Article 78 provides that “Any debentures, debenture-stock or other securities may be issued at a discount, premium or otherwise and may be

issued on condition that they shall be convertible into share of any denomination and with any privileges and conditions as to redemption,

surrender, drawing, allotment of shares, attending (but not voting) at General Meeting, appointment of Directors and otherwise, debentures

with the right to conversion into or allotment of shares shall be issued only with the consent of the Company in General Meeting by a Special

Resolution.”

Mortgage of uncalled capital

Article 79 provides that “If any uncalled capital of the company is included in or charged by an mortgage or other security, the Directors may,

subject to the provisions of the Act and these Articles, make calls on the members in respect of such uncalled capital in trust for the person in

whose favour such mortgage or security executed.”

Statutory Meeting

Article 80 provides that “The Statutory Meeting shall be held in accordance with the provisions of Section 165 of the Act within a period of

not less than one month and not more than six months from the date on which the Company shall be entitled to commence business.”

Annual General Meeting

Article 81 provides that “The Company shall in each year hold a General Meeting as its Annual General Meeting in addition to any other

Meeting in that year. All General Meetings other than Annual General Meetings shall be called Extra-ordinary General Meetings. An Annual

General Meeting of the company shall be held within six months after the expiry of each financial year, provided that not more than fifteen

months shall lapse between the date of the Annual General Meeting and that of next. Nothing contained in the foregoing provision shall be

taken as affecting the right conferred upon the Registrar under the provisions of section 166 (1) of the Act to extend the time within which any

Annual General Meeting may be held. Every Annual General Meeting shall be called for a time during business hours, on a day that is not a

public holiday and shall be held at the office of the company or at some other place within the city in which the Registered Office of the

Company is situated as the Board may determine and the notices calling the Meeting specify as the Annual General Meeting. The company

may in any one Annual General Meeting fix the time for its subsequent Annual General Meeting. Every member of the company shall be

entitled to attend either in person or by proxy and the Auditors of the company shall have the right to attend and to be heard at any General

Meeting, which he attends on any part of the business, which concerns him as Auditor. At every Annual General Meeting of the company

there shall be laid on the table the Director’s Report and Audited Statement of Accounts, the Proxy Register with proxies and the Register of

Director’s Share holding which Register shall remain open and accessible during the continuance of the Meeting.”

Extra-ordinary General Meeting

Article 83 provides that “All General Meetings other than Annual General Meetings shall be called Extra-ordinary General Meetings.”

Requisitionists’ Meeting

Article 84 provides that “(1) Subject to the provisions of Section 188 of the Act, the Directors shall on the requisition in writing of such

number of members as hereinafter specified and (unless the General Meeting otherwise resolves) at the expense of requisitionists:

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(a) give to the members of the Company entitled to receive notice of the next Annual General Meeting, notice of any resolution, which may

properly be moved and is intended to be moved at the meeting.

(b) circulate to members entitled to have notice of any general meeting sent to them, any statement of not more than one thousand words with

respect to the matter referred to in any proposed resolution or any business to be dealt with at the meeting.

(2) The number of members necessary for a requisition under clause (1) hereof shall be

(a) Such number of members as represent not less than one-twentieth of the total voting power of all the members having at the date of the

resolution a right to vote on the resolution or business to which the requisition related; or

(b) not less than one hundred member having the rights aforesaid and holding shares in the Company on which there has been paid up an

aggregate sum of not less than rupees one lakh in all.

(3) Notice of any such resolution shall be given and any such statement shall be circulated to members of the Company entitled to have notice

of the meeting sent to them by serving a copy of the resolution or statement on each member in any manner permitted by the Act for service of

notice of the meeting and notice of any such resolution shall be given to any other member of the Company be giving notice of the general

effect of the resolution in any manner permitted by the Act, for giving him notice of meeting of the Company. The copy of the resolutions

shall be served or notice of the effect of the resolution shall be given, as the case may be , in the same manner and so far as practicable, at the

same time as notice of the meeting and where it is not practicable for it to be served or given at that time, it shall be served or given as soon as

practicable thereafter.

(4) The Company shall not be bound under this Article to give notice of any resolution or to circulate any statement unless:

(a) a copy of requisition signed by the requisitionists (or two or more copies which between them contain the signature of all the

requisitionists) is deposited at the registered office of the Company.

(i) in the case of requisition, requiring notice resolution, not less than six weeks before the meeting;

(ii) in the case of any holder requisition, not less than two weeks before the meeting; and

(b) there is deposited or tendered with the requisition sum reasonably sufficient to meet the Company expenses in giving effect thereto.

PROVIDED THAT if after a copy of the requisition requiring notice of a resolution has been deposited at the registered office of the Company

and an Annual General Meeting is called for a date of six weeks or less after such copy has been deposited, the copy although not deposited

within the time required by this clause, shall be deemed to have been properly deposited for the purposes also thereof.

(5) The Company shall also not be bound under this Article to circulate any statement if, on the application either of the Company or of any

other person who claims to be aggrieved is satisfied that the rights conferred by this Article are being abused to secure needless publicity for

defamatory matter.

(6) Notwithstanding anything in these Articles, the business which maybe dealt with at an Annual General Meeting shall include any

resolution of which notice is given in accordance with this Article and for the purposes of this clause, notice shall be deemed to have been so

given, notwithstanding the accidental commission, in giving it, to one or more members.”

Extra-ordinary General Meeting by Board and by requisition

Article 85 (a) provides that “The Directors may, whenever they think fit, convene an Extra-Ordinary General Meeting and they shall on

requisition of the members as hereinafter provided, forthwith proceed to convene Extra-ordinary General Meeting of the Company.”

When a Director or Any Two Members May Call an Extra-Ordinary General Meeting

Article 85 (b) provides that “If at any time there are not within India sufficient Directors capable of acting to form a quorum or if the number

of Directors be reduced in number to less than the minimum number of Directors prescribed by these Articles and continuing Directors fail or

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neglect to increase the number of Directors to that number or to convene a general meeting, any Director or any two or more members of the

Company holding not less than one-tenth of the total paid up share capital of the Company may call an Extra-Ordinary General Meeting in the

same manner as nearly as possible as that in which meeting may be called by the Directors.”

Quorum

Article 92 provides that “Five members entitled to vote and present in person shall be quorum for General Meeting and no business shall be

transacted at the general meeting unless the quorum requisite be present at the commencement of the meeting. A body corporate being a

member shall be deemed to be personally present if it is represented in accordance with Section 187 of the Act. The President of India or the

Governor of a State being a member of the Company shall be deemed to be personally present if he is presented in accordance with Section

187A of the Act.”

If quorum not present when meeting to be dissolved and when to be adjourned

Article 93 provides that “If within half an hour from the time appointed for holding a meeting of the Company a quorum is not present, the

meeting if called by or upon the requisition of members shall stand adjourned to the same day in the next week or if that day is a public

holiday until the next succeeding day which is not a public holiday at the time and place or to such other day and at such other time and place

as the Board may determine. If at the adjourned meeting also a quorum is not present with half an hour from the time appointed for holding

the meeting, the members present shall be quorum and may transact the business for which the meeting was called.”

Resolutions passed at adjourned meeting

Article 94 provides that “Where a resolution is passed at an adjourned meeting of the Company, the resolution for all purposes, be treated as

having been passed on the date on which it was in fact passed and shall not be deemed to have been passed on any earlier date.”

Chairman of General Meeting

Article 95 provides that “At every General Meeting the Chair shall be taken by the Chairman of the Board of Directors. If at any

meeting, the Chairman of the Board of Directors be not present within ten minutes after the time appointed for holding the meeting or though

present, be unwilling to act as Chairman, the Vice-Chairman of the Board of Directors would act as Chairman of the meeting and if Vice-

Chairman of the Board of Directors be not present or though present, be unwilling to act as and in default of their doing so or if no Directors

shall be present and willing to take the Chair, then the members present shall choose one of themselves, being a member entitled to vote to be

Chairman.

(a) Act for resolution sufficiently done or passed in General Meeting by ordinary resolution unless otherwise require. Any Act or resolution

which, under the provisions of this Article or of the Act, is permitted or enquired to be done or passed by the Company in General Meeting

shall be sufficiently so done or passed if effected by an ordinary resolution unless either the Act or the Articles specifically require such act to

be done or resolution passed by a Special resolution.”

Chairman's casting vote

Article 102 provides that “In the case of equality of votes the Chairman shall both on a show of hands and a poll (if any) have a casting vote in

addition to the vote or votes to which he may be entitled as a member.”

Votes of Members

Member paying money in advance no to be entitled to vote in respect thereof

Article 106 provides that “A member paying the whole or a part of the amount remaining unpaid on any share held by him although on part of

that amount has been called up, shall not entitled to any voting rights in respect of the moneys so paid by him until the same would but for

such payment become presently payable.”

Article 106A provides that “The Company may pass a resolution by postal ballot in the manner prescribed by Section 192A of the Act and

such other applicable provisions of the Act. Notwithstanding anything contained in the provisions of the Act, the Company, being a listed

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Company, may, and in the case of resolutions relating to such business as the Central Government may be notification declare to be conducted

only by postal ballot, shall get any resolution passed by means of a postal ballot instead of transacting the business in a general meeting of the

Company.”

Restriction on exercise of voting rights of members who have not paid calls

Article 107 provides that “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 the Company has exercised any right of lien.”

Number of votes to which member entitled

Article 108 provides that “Subject to the provisions of Article 106 every member of the Company, holding any equity share capital and

otherwise entitled to vote shall, on a show of hands when present in person (or being a body corporate present by a representative duly

authorised) have one vote on a poll, when present (including a body corporate by a duly authorised representative) or by an agent duly

authorised under a Power of Attorney or by proxy, his voting right shall be in proportion to his share of the paid-up equity share capital of the

Company. Provided however, if any preference share-holder be present at any meeting of the Company, save as provided in clause (b) of

such-section(2) of Section 87, he shall have a right to vote only on resolutions before the meeting which directly affect the rights attached to

his preference shares. A member is not prohibited from exercising his voting rights on the ground that he has not held his shares or interest in

the Company for any specified period proceeding the date on which the vote is taken.”

Voting in person or by proxy

Article 113 provides that “Subject to the provisions of these Articles, vote may be given either personally or by proxy. A body corporate

being a member may vote either by a proxy or by a representative duly authorised in accordance with Section 187 of the Act.”

Proxies

Article 115 provides that “Any member of the Company entitled to attend and vote at a meeting of the Company shall be entitled to appoint

another person (whether a member or not) as his proxy to attend and vote instead of himself PROVIDED ALWAYS that a proxy so appointed

shall not have any right whatever to speak at the meeting. Every notice convening a meeting of the Company shall state that a member

entitled to attend and vote is entitled to appoint one or more proxies.”

Chairman of any meeting to be the judge of validity of any vote

Article 122 provides that “The Chairman of any meeting shall be the sole judge of the validity of every vote tendered at such meeting. The

Chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll. The decision of the

Chairman shall be final and conclusive.”

Directors

Number of Directors

Article 124 provides that “Until otherwise determined by a General Meeting of the Company and subject to the provisions of Section 252 of

the Act, the number of Directors shall not be less than three and not more than twelve.”

Debenture Directors

Article 126 provides that “Any Trust Deed for securing debentures or debenture-stocks, may, if so arranged, provide for the appointment, from

time to time by the Trustees thereof or by the holders of debentures or debenture-stocks, of some person to be a Director of the Company and

may empower such Trustees or holder or debentures or debenture-stocks, from time to time, to remove and re-appoint any Director so

appointed. The Director appointed under Article is herein referred to as "Debenture Director" and the term "Debenture Director" means the

Director for the time being in office under this Article. The Debenture Director shall be liable to retire by rotation or be removed by the

Company. The Trust Deed may contain such ancillary provisions as may be arranged between the Company and the Trustees and all such

provisions shall have effect notwithstanding any of the other provisions herein contained.”

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Corporation Directors

Article 127 provides that “Any bond or any other writing giving security issued or executed by the company in favour of any Credit

Corporation or any agreement executed by the company in favour of a Credit Corporation may provide for the appointment of a Director (in

these presents referred to as "The Corporation Directors") for and on behalf of the holder of such bonds of such Credit Corporation for such

period as therein provided for not exceeding the period for which any amount may be outstanding under such bond or writing or agreement

and for removal from the office of such Director and on a casual vacancy being caused whet her by resignation, death removal or otherwise,

for the appointment of another Director in the vacant place. The Corporation Director shall not be liable to retire by rotation and subject to the

provisions of the Act be removed from his office by the company.”

Nominee Director

Article 128 provides that “(a) Notwithstanding anything to the contrary contained in these Articles, so long as any moneys remain owning by

the Company to Bank, Industrial Finance Corporation of India(IFCI),Industrial Credit and Investment Corporation of India Limited (ICICI)

The Industrial Development Bank of India (IDBI) or to any other Financing Company or so long as IFCI, ICICI, IDBI or any other Financing

Corporation or any other Financing Company or Body (each of which IFCI, ICICI, IDBI or any other Finance Corporation or Credit

Corporation or any other Financing Company or Body is hereinafter in this Article referred to as "the Corporation") continued to hold

debentures in the Company as a result of underwriting or by direct subscription or private placement or so long as the Corporation holds shares

in the Company as result of underwriting or direct subscription or so long as any liability of the Company arising out of any guarantee

furnished by the Corporation on behalf of the Company remains outstanding the Corporation shall have a right to appoint from time to time

any person or persons as a Director or Directors, Whole-time or non-Whole-time (which Director or Directors is/are hereinafter referred to as

"Nominee Director/s") on the Board of the Company and to the Company and to remove from such office any person or persons so appointed

and to appoint any person or persons in his or their place/s.

(b) The Board of Directors of the Company shall have no power to remove from office the Nominee Director/s. At the option of the

Corporation, such Nominee Director/s shall not be required to hold any share qualification in the Company. Also at the option of the

Corporation, such Nominee Director/s shall not be liable to retirement by rotation, Subject as aforesaid the Nominee Director/s shall be

entitled to the same rights and privileges and be subject to the same obligation as any other Director of the Company.

(c) The Nominee Director/s so appointed shall hold the said office only so long as moneys remained owing by the Company to the

Corporation or so long as the Corporation or private placement or so long as the Corporation holds shares in the Company as a result of

underwriting or direct subscription or liability of the company arising out of any guarantee is outstanding and the Nominee Director/s so

appointed in exercise of the said power shall ipso facto vacate such office immediately on the moneys owing by the Company to the

Corporation is paid off or on the Corporation shall ceasing to hold debentures/shares in the Company or on the satisfaction of the liability of

the Company arising out of any guarantee furnished by the Corporation.

(d) The Nominee Director/s appointed under this Article shall be entitled to receive all notices of and attend all General Meeting, Board

meetings or the Committee of which the Nominee Director/s is/are member/s as also the minutes of such meetings. The Corporation shall also

be entitled to receive all such notice and minutes.

(e) The Company shall pay to the Nominee Director/s sitting fees and expenses which the other Directors of the Company are entitled but if

any others fees, commission, moneys or remuneration in any other form is payable to the Directors of the Company. The fees, commission,

moneys, remuneration in relation to such Nominee Director/s shall accrue to the Corporation and same shall accordingly be paid by the

company directly to the Corporation Any expenses that may be incurred by the Corporation or such Nominee Director/s in connection with

their appointment or Directorship shall also be paid or reimbursed by the Company to the Corporation or as the case may be to such Nominee

Director/s. Provided that if any such Nominee Director/s is an officer of the Corporation , the sitting fees in relation to such Nominee

Director/s shall also accrue to the Corporation and the same shall accordingly be paid by the Company directly to the Corporation.

(f) Provided also that in the event of the Nominee Director/s being appointed as whole time Director/s such Nominee Director/s shall exercise

such power and duties as may be approved by the Lenders and have such rights as are usually exercised or available to a whole time Director,

in the management of the affairs of the Borrower and such Nominee Director/s shall be entitled to receive any remuneration, fees, commission

and moneys as may be approved by the Lenders.”

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Limit on number of non-retiring Directors

Article 129 provides that “The provisions of Articles 124, 125 and 126 are subject to the provisions of Section 256 of the Act and number of

such Directors appointed under Article 132 shall not exceed in the aggregate one-third of the total number of Directors for the time being in

office.”

Qualification of shares

Article 133 provides that “A Director need not hold any qualification shares.”

Director's sitting fees

Article 134 provides that “The fees payable to a Director for attending Board Meeting shall be such sum as may be prescribed under Section

310 of the Act or may be prescribed by the Central Government from time to time for each of the meetings of the Board or a Committee

thereof and adjournments thereto attended by him. The Directors, subject to the sanction of the Central Government (if any required), may be

paid such higher fees as the company in General Meeting shall from time to time determine.”

Extra remuneration to Directors for special work

Article 135 provides that “Subject to the provisions of Section 198, 309,310,311 and 314 of the Act, if any Director, being willing shall be

called, upon to perform extra services (which expression shall include work done by a Director as a member of any committee formed by the

Directors or in relation to signing Share Certificates) or to make special exertions in going or residing out of his usual place of residence or

otherwise for any of the purposes of the Company, the Company shall remunerate the Director so doing either by a fixed sum or otherwise as

may be determined by the Directors and such remuneration may be either in addition to or in substitution for his share in the remuneration

above provided. The Directors (other than the Managing Director or any other Whole-time paid Director) shall also be entitled to further

remuneration by way of commission at the rate of 1 per cent of the net profits of the company calculated in accordance with the provisions of

the Companies Act and such remuneration shall be divided among the Directors (other than the Managing Director or Whole-time paid

Directors) in such proportion and manner as may be agreed upon between them and the Board of Directors and in the absence of agreement,

equally.”

Directors and Managing Director may contract with company

Article 138 provides that “Subject to the provisions of the Act, the Directors (including a Managing Director and Whole-time Director) shall

not be disqualified by reason of his or their office as such from holding office under the company or form contracting with the company either

as vendor, purchaser, lender, agent, broker, lessor or lessee or otherwise, nor shall any such contract or any contract or arrangement entered

into by or on behalf of the company with any Director or with any company or partnership, of or in which any Director shall be member or

otherwise interested be avoided, nor shall any Director so contracting or being such member or so interested be liable to account to the

company for any profit realised by such contract or arrangement by reason only of such Director holding that office or of the fiduciary

relation thereby established, but it is declared that the nature of his interest shall be disclosed as provided by Section 299 of the Act and in this

respect all the provisions of Sections 300 and 301 of the Act shall be duly observed and complied with.”

Rotation and Appointment of Directors

Rotation of Directors

Article 139 provides that “Not less than two-thirds of the total number of Director shall (a) be persons whose period of the office is liable to

termination by retirement of Directors by rotation and (b) save otherwise expressly provided in the Articles be appointed by the company in

General Meeting.”

Retirement of Directors

Article 140 provides that “Subject to the provisions of Articles 129 the non-retiring Directors should be appointed by the Board for such

period or periods as it may in its discretion deem appropriate.”

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Retirement of Directors

Article 141 provides that “Subject to the provisions of Section 256 of the Act and Articles 129 at every Annual General Meeting of the

Company, one-third of such of the Directors for the time being as are liable to retire by rotation or if their number is not three or a multiple of

three the number nearest to one-third shall retire from office. The Debenture Directors, Nominee Directors, Corporation Directors, subject to

Articles 126,127,128 and 146 Managing Directors, if any, shall not be subject to retirement under this Article and shall not be taken into

account in determining the number of Directors to retire by rotation. In these Articles, a "Retiring Director" means a Director retiring by

rotation.”

Eligibility for re-election

Article 143 provides that “A retiring Director shall be eligible for re-election and shall act as a Director throughout and till the conclusion of

the meeting at which he retires.”

Managing Director

Power to appoint Managing Director

Article 146 provides that “Subject to the provisions of Sections 267, 268, 269, 316 and 317 of the Act, the Board may, from time to time,

appoint one or more Directors to be Managing Director or Managing Directors or Whole-time Directors of the Company, either for a fixed

term of five years as to the period for which he or they is or are to hold such office and may, from time to time (subject to the provisions of

any contract between him or them and the company) remove or dismiss him or them from office and appoint another or others in his or their

place or places.”

Proceedings of the Board of Directors

Article 150 provides that “The Directors may meet together as a Board for the dispatch of business from time to time unless the Central

Government by virtue of the provision of Section 285 of the Act otherwise directs, shall so meet at least once in every three months and at

least four such meetings shall be held in every year. The Directors may adjourn and otherwise regulate their meetings as they think fit. The

provision of this Article shall not be deemed to have been contravened merely by reason of the fact that the meeting of the Board which had

been called in compliance with the terms of this Article could not be held for want of a quorum.”

Quorum

Article 151 provides that “(a) Subject to Section 287 of the Act, the quorum for a meeting of the Board of Directors shall be one-third of its

total strength (excluding Directors, if any, whose place may be vacant at the time and any fraction contained in that one-third being rounded

off as one) or two Directors whichever is higher.

PROVIDED THAT where at any time the number of interested Directors at any meeting exceeds or is equal to two-third of the total strength,

the number of the remaining Directors (that is to say, the number of remaining who are not interested) present at the meeting being not less

than two shall be the quorum during such time.

(b) For the purpose of clause (a):

(i) “Total Strength” means total strength of the Board of Directors of the Company determined in pursuance of the Act, after deducting

therefrom number of the Directors, if any, whose place may be vacant at the time; and

(ii) “Interested Directors” means any Director whose presence cannot, by reason of any provisions in the Act, count for the purpose of forming

a quorum at a meeting of the Board, at the time of the discussion or vote or any matter.

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Chairman of Meeting

Article 153 provides that “(a) The Directors from time to time elect one of their number to be the Chairman and one to be the Vice-Chairman,

if required of the Board of Directors and determine the period for which they have to hold such office, but if no such Chairman or Vice-

Chairman is elected, the Directors present shall choose one of their number to be the Chairman of such meeting.

(b) The Chairman of the Board of Directors shall be the Chairman of the Meeting of Directors and shall also preside over all General Meetings

of the company. Provided that if the Chairman of the Board of Directors is not present, the Vice-Chairman of the Board of Directors shall

preside the meeting and if the Vice-Chairman of the Board of Directors is also not present, the Directors present shall choose one of their

number to be the Chairman of such meeting.”

Questions at Board Meeting how decided

Article 154 provides that “Subject to the provisions of Sections 316, 375(5) and 386 of the Act, questions arising at any meeting of the Board

shall be decided by a majority of votes and in case of any equality of votes, the Chairman shall have a second or casting vote.”

Powers of Board Meeting

Article 155 provides that “A meeting of the Board of the Directors for the time being at which a quorum is present shall be competent to

exercise all or any of the authorities, powers and discretion which by or under the Act or these Articles or the regulations for the time being of

the Company are vested in or exercisable by the Board of Directors generally.

Directors may appoint committee

Article 156 provides that “The Board of Directors may subject to the provisions of Section 292 and other relevant provisions of the Act or

these Articles, delegate any of the powers other than the powers to make calls and to issue debentures to such committee or committees and

may from time to time revoke and discharge any such committee of the Board either wholly or in part and either as to the persons or purposes,

but every committee of the Board so formed shall in exercise of the powers so delegated conform to any regulation that may from time to time

be imposed on it by the Board of Directors. All acts done by any such committee of the Board in conformity with such regulations and in

fulfillment of the purpose of their appointments, but not otherwise, shall have the like force and effect, as if done by the Board.”

Powers of the Board

General Powers of Management vested in Directors

Article 160 provides that “The business of the Company shall be managed by the Directors who may exercise all such powers of the Company

and do all such acts and things as are not by the Act or any other Act or by the Memorandum or by the Articles of Company required to be

exercised by the Company in General Meeting, subject nevertheless to any regulation of these Articles or the provisions of the Act or any

other Act and to such regulation being not inconsistent with the aforesaid regulations or provisions as may be prescribed by the Company in

General Meeting but no regulations made by the Company in General Meeting shall invalidate any prior act of the Directors which would have

been valid if that regulation had not been made, provided that the Board of Directors shall not except with the consent of the Company in

General Meeting :

(a) Sell, lease or otherwise dispose off the whole or substantially the whole of the undertaking of the Company or where the Company owns

more than one undertaking, of the whole or substantially the whole of any such undertaking;

(b) Remit or give time for the payment of any debt due by a Director

(c) Invest, otherwise than in trust securities, the amount of compensation received by the Company in respect of the compulsory acquisition, of

any such undertaking as is referred to in clause (a) or of any premises or properties used for any such undertaking and without which it cannot

be carried on or can be carried on only with difficulty or only after a considerable time;

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(d) Borrow moneys, where moneys to be borrowed, together with the money already borrowed by the Company (apart from temporary loans

obtained from the Company's bankers in the ordinary course of business) will 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; or

(e) Contribution to charitable and other funds not directly relating to the business of the Company or the welfare of its employees any amounts

the aggregate of which will, in any financial year, exceed fifty thousand rupees or five per cent of its average net profits as determined in

accordance with the provisions of Sections 349 and 350 of the Act during the three financial years immediately preceding, whichever is

greater, provided that the Company in General Meeting or the Board of Directors shall not contribute any amounts to any political party or for

any political purpose to any individual or body;

(i) Provided that in respect of the matter referred to in clause (d) and (e), such consent shall be obtained by a resolution of the Company which

shall specify the total amount upto which moneys may be borrowed by the Board under clause (d) or as the case may be, total amount which

may be contributed to charitable or other funds in any financial year under clause (e).

(ii) Provided further that the expression "temporary loans" in clause (d) above shall mean loans repayable on demand or within six months

from the date of the loan such as short term cash credit arrangements, the discounting of bills and the issue of other short term loans of a

seasonal character, but does not include loans raised for the purpose of financing expenditure of a capital nature.”

Certain powers to be exercised by the Board only at meeting.

Article 161 provides that “(1) Without derogating from the powers vested in the Board of Directors under these Articles, the Board shall

exercise the following powers on behalf of the Company and they shall do so only by means of resolutions passed at the meeting of the Board

:

(a) The power to make calls on shareholders in respect of moneys unpaid on their shares;

(b) The power to issue debentures ;

(c) The power to borrow moneys otherwise than on debentures ;

(d) The power to invest the funds of the Company; and

(e) The power to make loans.

Provided that the Board may, by resolution passed at a meeting, delegate to any committee of Directors, the Managing Director or any other

principal officer of the Company, the powers specified in sub-clauses (c), (d) and (e) to the extent specified below.

(2) Every resolution delegating the power referred to in sub-clause (1)(c) shall specify the total amount outstanding at any one time, upto

which money may be borrowed by the delegate.

(3) Every resolution delegating the power referred to in sub-clause (1)(d) shall specify the total amount upto which the funds of the Company

may be invested and the nature of the investments which may be made by the delegate.

(4) Every resolution delegating the power referred to in sub-clause (1)(e) shall specify the total amount upto which loans may be made by the

delegate, the purpose for which the loans may be made and the maximum amount of loans which may be for each such purpose in individual

cases.”

Certain powers of the Board

Article 162 provides that “Without prejudice to the general powers conferred by the last preceding Article and so as not in any way to limit or

restrict those powers and without prejudice to the other powers conferred by these Articles but subject to the restrictions contained in the last

preceding Articles, it is hereby declared that the Directors shall have the following powers, that is to say, power :

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(1) To pay the costs, charges and expenses preliminary and incidental to the formation, promotion, establishment and registration of the

Company.

(2) To pay and charge to the Capital Account of the Company any commission or interest, lawfully payable thereout under the provisions of

Sections 76 and 208 of the Act.

(3) Subject to Sections 292 and 297 and other applicable provisions of the Act, to purchase or otherwise acquire for the Company any

property, rights or privileges which the Company is authorised to acquire at or for such price or consideration and generally on such terms and

conditions as they may think fit in any such purchase or other acquisition, accept such title as the Director may believe or may be advised to be

reasonably satisfactory.

(4) At their discretion and subject to the provisions of the Act, to pay for any property, rights or privileges by or services rendered to the

Company, either wholly or partially in cash or in shares, bonds, debentures, mortgages or other securities of the Company and any such shares

may be issued either as fully paid up or with such amount credited as paid up thereon as may be agreed upon and any such bonds, debentures,

mortgages or other securities as may be either specifically charged upon all or any part of the property of the Company and its uncalled capital

or not so charged.

(5) To secure the fulfillment of any contracts or engagements entered into by the Company by mortgage or charge of all or any of the property

of the Company and its uncalled capital for the time being or in such manner as they may think fit.

(6) To accept from any member, so far as may be permissible by law, a surrender of his shares or any part thereof, on such terms and

conditions as shall be agreed.

(7) To appoint any person to accept and hold in trust for the Company property belonging to the Company or in which it is interested or for

any other purposes and to execute and to do all such deeds and things as may be required in relation to any such trust and to provide for the

remuneration of such trustee or trustees.

(8) To institute, conduct, defend, compound or abandon any legal proceedings by or against the Company or its officer or otherwise

concerning the affairs of the Company and also to compound and allow time for payment on satisfaction of any debts due and of any claim or

demands by or against the Company and to refer any difference to arbitration and observe the terms of any awards made therein either

according to Indian Law or according to Foreign Law and either in India or abroad and observe and perform or challenge any award made

therein.

(9) To act on behalf of the Company in all matters relating to bankruptcy, insolvency, winding up and liquidation of Companies.

(10) To make and give receipts, release and other discharge for moneys payable to the Company and for the claims and demands of the

Company.

(11) Subject to the provisions of Sections 291(1), 295, 370 and 372 and other applicable provisions of the Act and these Articles, to invest and

deal with any moneys of the Company not immediately required for the purpose thereof, upon such security (not being the shares of this

Company) or without security and in such manner as they may think fit and from time to vary or realise such investment. Save as provided in

Section 49 of the Act, all investments shall be made and held in the Company's own name.

(12) To execute in the name and on behalf of the Company in favour of any Director or other person who may incur or be about to incur any

personal liability whether as principal or surety, for the benefit of the Company, such mortgage of the Company's property (present and future)

as they think fit and any such mortgage may contain a power of sale and other powers, provisions, covenants and agreements as shall be

agreed upon.

(13) To open bank accounts and to determine from time to time who shall be entitled to sign, on the Company's behalf, bills, notes, receipt,

acceptance, endorsements, cheques, dividend warrants, release, contracts and documents and to give the necessary authority for such purposes.

(14) To distribute by way of bonus amongst the staff of the Company a share or shares in the profits of the Company and do give to any

Director, officer or other person employed by the Company a commission on the profits of any particular business and or transaction and to

charge such bonus or commission as part of working expenses of the Company.

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(15) To provide for the welfare of Directors or Ex-Directors or employees or ex-employees of the Company and the wives, widows and

families of the dependents or connections of such persons by building or contributing to the building of houses, dwellings or chawls or by

grants of money, pension, gratuities, allowances, bonus or other payments or by creating and from time to time, subscribing or contributing to

provident and other associations, institutions and by providing or subscribing or contributing towards places of interests and recreation,

hospitals, dispensaries, medical and other attendance and other assistance as the Board shall think fit and subject to the provisions of Section

293(1)(e) of the Act, to subscribe or contribute or otherwise to assist or to guarantee money to charitable, benevolent, religious, scientific,

national or other institutions or objects which shall have any moral or other claim to support or aid by the Company either by reason of locality

of operation or the public and general utility or otherwise.

(16) Before recommending any dividend, to set aside, out of the profits of the Company, such sums as they may think proper for depreciation

or the depreciation fund or to an insurance fund or as a reserve fund or sinking fund or any special or other fund or funds or account or

accounts to meet contingencies or to repay redeemable preference shares, debentures or debenture-stock or for special dividends or for

equalising dividends for repairing, improving, extending and maintaining any part of the property of the Company and such other purposes

(including the purposes referred to in the preceding clause) as the Board may, in their absolute discretion think conducive to the interest of the

company and subject to Section 292 of the Act, to invest the several sums so set aside or so much thereof as required to be invested, upon such

investments (other than share of this Company) as they may think fit and from time to time to deal with and vary such investments and dispose

off and apply and expend all or any part thereof for the benefit of the Company, in such manner and for such purposes as the Board in their

absolute discretion think conducive to the interest of the Company notwithstanding that the matters to which the Board apply or upon which

they expend the same or any part thereof or upon which the capital moneys of the Company might rightly be applied or expended and to divide

the General Reserve or Reserve Fund into such special funds as the Board may think fit with full power to transfer the whole or any portion of

a Reserve Fund to another Reserve Fund and/or division of a Reserve Fund and with full power to employ the assets constituting all or any of

the above funds including the depreciation fund in the business of the Company or in purchase or repayment of redeemable preference shares,

debentures or debenture-stock and without being bound to keep the same separate from the other assets and without being bound to pay

interest on the same with power however to the Board at their discretion to pay or allow to the credit of such funds interest at such rate as the

Board think proper.

(17) To appoint and at their discretion remove or suspend such general managers, managers, secretaries, assistants, supervisors, scientists,

technicians, engineers, consultants, legal, medical or economic advisers, research workers, labourers, clerks, agents and servants for

permanent, temporary or special services as they may from time to time think fit and to determine their powers and duties and to fix their

salaries or emoluments or remuneration and acquire security in such instances and to such amounts as they may think fit and also from time to

time provide for the management and transactions of the affairs of the company in any specified locality in India or elsewhere in such manner

as they think fit.

(18) From time to time and at any time to establish any local Board for managing of the affairs of the Company in any specified locality in

India or elsewhere and to appoint any person to be members of such local Board or managers or agencies and to fix their remuneration.

(19) Subject to Section 292 of the Act, from time to time and at any time, to delegate to any persons so appointed any of the powers,

authorities and discretion for the time being vested in the Board, other than their powers to make calls or to make loans or borrow moneys and

to authorise the members for the time being of such local Board or any of them to fill up any vacancies therein and to act notwithstanding

vacancies and such appointment or delegation may be made on such terms subject to such conditions as the Board may think fit and the Board

may at any time remove any person so appointed and may annul or vary any such delegation.

(20) At any time and from time to time by power of Attorney under the Seal of the Company, to appoint any person or persons to be the

Attorney or Attorneys of the Company, for such purposes and with such powers, authorities and discretion (not exceeding those vested in or

exercisable by the Board under these presents and excluding the power to make calls and excluding also, except in their limits authorised by

the Board, the power to make loans and borrow moneys) and for such period and subject to such conditions as the Board may from time to

time think fit and any such appointments may (if the Board thinks fit) be made in favour of the members of any local Board established as

aforesaid or in favour of any Company or the shareholders, Directors, Nominees or Managers of any Company or firm or otherwise in favour

of any fluctuating body or persons whether nominated directly or indirectly by the Board and any such power of Attorney may contain such

powers for the protection of convenience of persons dealing with such Attorneys as the Board may think fit and may contain powers enabling

any such delegating Attorneys as aforesaid to sub-delegate all or any of the powers, authorities and discretion for the time being vested in

them.

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(21) Subject to Sections 294, 297, 300 and other applicable provisions of the Act, for or in relation to any of the matters aforesaid or otherwise

for the purposes of the Company, to enter into all such negotiations and contracts and rescind and vary all such contracts and execute and do

all such acts, deeds and things in the name and on behalf of the company as they may consider expedient.

(22) From time to time make, vary and repeal bye-laws for the regulations of the business of the Company, its officers and servants.

(23) To purchase or otherwise acquire any lands, buildings, machinery, premises, hereditaments, property, effects, assets, rights, credits,

royalties, business and goodwill of any Joint Stock Company carrying on the business which the Company is authorised to carry on in any

part of India.

(24) To purchase, take on lease for any term of years or otherwise acquire any factories, or any land or lands, with or without buildings and out

houses thereon, situate in any part of India, at such price or rent and under and subject to such terms and conditions as the Directors may think

fit and in any such purchase, lease or other acquisition to accept such title as the Directors may believe or may be advised to be reasonably

satisfactory.

(25) To insure and keep insured against loss or damage by fire or otherwise for such period and to such extent as it may think proper all or any

part of the buildings, machinery, goods, stores, produce and other movable property of the Company, either separately or co-jointly, also to

insure all or any portion of the goods, produce, machinery and other articles imported or exported by the Company and to sell, assign,

surrender or discontinue any policies of assurance effected in pursuance of this power.

(26) To purchase or otherwise acquire or obtain license for the use of and to sell, exchange or grant license for the use of any trademark,

patent, invention or technical know-how.

(27) To sell from time to time any articles, materials, machinery, plants, stores and other articles and things belonging to the Company as the

Board may think proper and to manufacture, prepare and sell waste and bye-products.

(28) From time to time to extend any business any undertaking of the Company by adding, altering or enlarging all or any of the buildings,

factories, workshops, premises, plant and machinery, for the time being the property of or in the possession of the Company or by erecting

new or additional building and to expend such sum of money for the purpose aforesaid or any of them as may be thought necessary or

expedient.

(29) To undertake on behalf of the Company any payment of all rents and the performance of the convenants, conditions and agreements

contained in or reserved by any lease that may be granted or assigned to or otherwise acquired by the Company and to purchase the reversion

or reversions and otherwise to acquire the free hold simple of all or any of the lands of the Company for the time being held under lease or for

an estate less than free hold estate.

(30) To improve, manage, develop, exchange, lease, sell, resell and repurchase, dispose off, deal or otherwise turn to account, and property

(movable or immovable) or any rights or privileges belonging to or at the disposal of the Company or in which the Company is interested.

(31) To let, sell or otherwise dispose off, subject to the provisions of Section 293 of the Act and of the other Articles, any property of the

Company, either absolutely or conditionally and in such manner and upon such terms and conditions in all respects as it thinks fit and to

accept payment of satisfaction for the same in cash or otherwise as it thinks fit.

(32) Generally, subject to the provisions of the Act and these Articles, to delegate the powers, authorise and discretion vested in the Directors

to any person, firm, Company or fluctuating body of persons as aforesaid.”

The Seal

The Seal its custody and use

Article 167 provides that “(a)The Board of Directors shall provide a Common Seal for the purpose of the Company and shall have power from

time to time to destroy the same and substitute a new seal in lieu thereof and the Board shall provide for the safe custody of the Seal for the

time being, under such regulations as the Board may prescribe.

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(b) The Seal shall not be affixed to any instrument except by the authority of the Board of Directors or a Committee of the Board previously

given and in the presence of at least two Directors of the Company or at least one Director and Secretary or any other person duly authorised

by the Board, both of whom shall sign every instrument to which the seal is affixed. Provided further that the certificates of shares or

debentures shall be sealed in the manner and in conformity with the provisions of the Companies (Issue of Share Certificates) Rules, 1960 and

their statutory modifications for the time being in force.

Dividend

Division of profits

Article 168 provides that “(a) Subject to the rights of persons, if any, entitled to shares with special rights as to dividends, all dividends shall

be declared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividend is paid but if and so long

as nothing is paid upon any shares in the Company, dividends may be declared and paid according to the amounts of the shares.

(b) No amount paid or credited as paid on a share in advance of calls shall be treated for the purpose of this regulation as paid on the shares.”

The Company in General Meeting may declare dividends

Article 169 provides that “The Company in General Meeting may declare dividends, to be paid to members according to their respective rights

and interest in the profits and may fix the time for payment and the Company shall comply with the provisions of Section 207 of the Act, but

no dividends shall exceed the amount recommended by the Board of Directors but the Company may declare a smaller dividend in General

Meeting.”

Dividend out of profits only

Article 170 provides that “No dividend shall be payable except out of profits of the Company arrived at in the manner provided for in Section

205 of the Act.”

Interim Dividend

Article 171 provides that “The Board of Directors may from time to time pay to the members such interim dividends as in their judgment the

position of the Company justifies.”

Debts may be deducted

Article 172(a) provides that “The Directors may retain any dividends on which the Company has a lien and may apply the same in or towards

the satisfaction of the debts, liabilities or engagements in respect of which the lien exists.”

Company may retain dividends

Article 172(b) provides that “The Board of Directors may retain the dividend payable upon shares in respect of which any person is under the

transmission Article entitled to become a member or which any person under that Article is entitled to transfer until such person shall become

a member or shall duly transfer the same.“

No member to receive dividend whilst indebted to the Company and the Company’s right of reimbursement thereof

Article 175 provides that “No member shall be entitled to receive payment of any interest or dividend or bonus in respect of his share or

shares, whilst any money may be due or owing from him to the Company in respect of such share or shares (or otherwise however either alone

or jointly with any other person or persons) and the Board of Directors may deduct from the interest or dividend to any member, all such sums

of money so due from him to the Company.”

Effect of Transfer of shares

Article 176 provides that “A transfer of shares shall not pass the right to any dividend declared therein before the registration of the transfer.”

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Dividend to joint holders

Article 177 provides that “Any one of several persons who are registered as joint holders of any share may give effectual receipts for all

dividends or bonus and payments on account of dividends in respect of each shares.”

Capitalisation

Article 182 provides that “(1) The Company in General Meeting may, upon the recommendation of the Board, resolve:

(a) that it is desirable to capitalize any part of the amount for the time being standing to the credit of the Company’s reserve accounts or to the

credit of the profit and loss account or otherwise available for distribution; and

(b) that such sum be accordingly set free for distribution in the manner specified in clause (2) amongst the members who would have been

entitled thereto, if distributed by way of dividend and in the same proportions.

(2) The sum aforesaid shall not be paid in cash but shall be applied, subject to the provision contained in clause (3) either in or towards:

(i) paying up any amount 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 allocated and distributed, credited as fully paid up to and amongst members in the

proportions aforesaid; or

(iii) partly in the way specified in such clause (i) and partly in that specified in sub-clause (ii).

(3) A share premium account and a capital redemption reserve account may, for the purpose of this regulation, only be applied in the paying

up of unissued shares to be issued to members of the Company as fully paid bonus shares.

(4) The Board shall give effect to the resolution passed by the Company in pursuance of this regulation.”

Fractional certificates

Article 183 provides that “ (1) Whenever such a resolution as aforesaid shall have been passed, the Board shall

(a) make all appropriations and applications of the undivided profits resolved to be capitalized thereby and all allotments and issues of fully

paid shares and

(b) generally do all acts and things required to give effect thereto

(2) The Board shall have full power:

(a) to make such provision, by the issue of fractional cash certificate or by payment in cash or otherwise as it think fit, in the case of shares

becoming distributable in fractions, also

(b) to authorise any person to enter, on behalf of all the members entitled thereto, into an agreement with the Company providing for the

allotment to them respectively credited as fully paid up, of any further shares to which they may be entitled upon such capitalization or (as the

case may require) for the payment by the Company on their behalf, by the application thereof of either respective proportions of the profits

resolved to be capitalized of the amounts remaining unpaid on their existing shares.

(3) Any agreement made under such authority shall be effective and binding on all such members.

(4) That for the purpose of giving effect to any resolution, under the preceding paragraph of this Article, the Directors may give such

directions as may be necessary and settle any question of difficulties that may arise in regard to any issue including distribution of new equity

shares and fractional certificates as they think fit.”

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Accounts

Article 184 provides that “ Books to be kept

(1) The Company shall keep at its registered office proper books of account as would give a true and fair view to the state of affairs of the

Company or its transaction with respect to:

(a) all sums of money received and expended by the Company and the matters in respect of which the receipt and expenditure take place;

(b) all sales and purchases of goods by the Company;

(c) the assets and liabilities of the Company; and

(d) if so required by the Central Government, such particulars relating to utilization of material or labour or other items of cost as may be

prescribed by that Government.

Provided that all or any of the books of account aforesaid may be kept at such other place in India as the Board of Directors may decide and

when the Board of Directors so decides, the Company shall, within seven days of the decision file with the Registrar a notice in writing giving

the full address of that other place.

(2) Where the Company has branch office, whether in or outside India, the Company shall be deemed to have complied with the provisions of

clause (1) if proper books of account relating to the transactions effected at the branch are kept at that office and proper summarised returns,

made upto date at intervals of not more than three months, are sent by the branch office to the Company at its registered office or the other

place referred to in clause (1). The books of account and other books and papers shall be open to inspection by any Director during business

hours.”

Accounts to be audited

Article 187 provides that “Once at least in every year the accounts of the Company shall be examined, balanced and audited and the

correctness of the Profit and Loss Account and Balance Sheet ascertained by one or more Auditor or Auditors.”

Winding Up

Distribution of Assets

Article 195 provides that “If the Company shall be wound up and the assets available for distribution among the members as such shall be

insufficient to repay the whole of the paid up capital, such assets shall be distributed so that as nearly as may be the losses shall be borne by

the members in the proportion to the capital paid up or which ought to have been paid up at the commencement of winding up on the shares

held by them respectively and if in the winding up, the assets available for distribution among the members shall be more than sufficient to

repay the whole of the capital paid at the commencement of the winding up, the excess shall be distributed amongst members in proportion to

the capital at the commencement of the winding up, paid up or which ought to have been paid up on the shares held by them respectively. But

this article is to be without prejudice to the rights of the holders of shares issued upon special terms and conditions.”

Distribution in specie or kind

Article 196 provides that “(a) If the Company shall be wound up, whether voluntarily or otherwise, the liquidator may, with the sanction of a

special resolution, divide amongst the contributories in specie or kind, any part of the assets of the Company and may with the like sanction

vest any part of the assets of the Company in Trustees upon such trusts for the benefit of the contributories or any of them as the Liquidator,

with the like sanction, shall think fit.

(b) If thought expedient any such division may subject to the provisions of the Act be otherwise than in accordance with the legal rights of the

contributories (except where unalterably fixed by the Memorandum of Association) and in particular any class may be given preferential or

special rights or may be excluded altogether or in part but in case any division otherwise than in accordance with the legal rights of the

contributories, shall be determined on any contributory who would be prejudicial thereby shall have a right to dissent any ancillary rights as if

such determination were a special resolution passed pursuant to Section 494 of the Act.

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(c) In case any shares to be divided as aforesaid involve a liability to calls or otherwise, any person entitled under such division to any of the

said shares may within ten days after the passing of the special resolution by notice in writing direct the liquidator to sell his proportion and

pay him the net proceeds and the liquidator shall, if practicable, act accordingly.”

Directors and other’s right to indemnity

Article 197 provides that “Subject to the provisions of Section 201 of the Act, every Director or officer or servant of the Company or any

person (whether an officer of the Company or not) employed by the Company as auditor, shall be indemnified by the Company against and it

shall be the duty of the Directors out of the funds of the Company, to pay all costs, charges, losses and damages which any such person may

incur or become liable to by reason of any contract entered into or any act, deed, matter or thing done, concurred in or omitted to be done by

him in any way in or about the execution or discharge of his duties or supposed duties (except such, if any, as he shall incur or sustain through

or by his own wrongful act, neglect or default including expenses and in particular and so as not to limit the generality of the foregoing

provisions against all liabilities incurred by him as such Director, Officer or Auditor or other Officer of the Company in defending any

proceedings whether civil or criminal in which judgement is given in his favour or in which he is acquitted or in connection with any

application under Section 633 of the Act in which relief is granted to him by the Court.”

Director, Officer not responsible for acts of others

Article 198 provides that “Subject to the provisions of Section 201 of the Act, no Director, Auditor or other Officer of the Company shall be

liable for the acts, receipts, neglects or defaults of any other Director or Officer or for joining in any receipt or other act for conformity or for

any loss or expenses happening to the Company through the insufficiency or deficiency of title to any property acquired by order of the

Directors for or on behalf of the Company or for the insufficiency or deficiency of any security in or upon which any of the money of the

Company shall be invested or for any loss or damages arising from the insolvency or tortuous act of any person, firm or Company to or with

whom any moneys, securities or effects shall be entrusted or deposited or any loss occasioned by any error of judgement, omission, default or

oversight on his part or for any other loss, damage or misfortune whatever shall happen in relation to execution of the duties of his office or in

relation thereto unless the same shall happen through his own dishonesty.”

Secrecy Clause

Article 199 provides that “Every Director, Manager, Auditor, Treasurer, Trustee, Member of a Committee, Officer, servant, Agent,

Accountant or other person employed in the business of the Company shall, if so required by the Director, before entering upon his duties, sign

a declaration pledging himself to observe a strict secrecy respecting all transactions and affairs of the Company with the customers and the

state of the accounts with individuals and in matter thereto and shall, by such declaration pledge himself not to reveal any of the matters which

may come to his knowledge in the discharge of his duties, except when required to do so by the directors or by law or by the person to whom

such matters relate and except so far as may be necessary in order to comply with any of provisions in these presents contained.”

No member to enter the premises of the Company without permission

Article 200 provides that “No member or other person (not being a Director) shall be entitled to visit or inspect any property or premises of the

Company without the permission of the Board of Directors or Managing Director or to inquire discovery of or any information respecting any

details of the Company’s trading or any matter which is or may be in the nature of the trade secret, mystery of trade, secret process or any

other matter which relate to the conduct of the business of the Company and which in the opinion of the Directors, it would be inexpedient in

the interest of the Company to disclose.”

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SECTION IX: OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The copies of the following contracts which have been entered, or are to be entered into by our Company (not being contracts entered into in the

ordinary course of business carried on by our Company or contracts entered into more than two years before the date of this Letter of Offer)

which are or may be deemed material have been attached to the copy of the Letter of Offer delivered to the RoC for registration. Copies of the

abovementioned contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office between 10

a.m. and 5 p.m. on all Working Days until the Bid/Issue Closing Date.

A. Material Contracts for the Issue

1. Engagement Letter dated February 8, 2013 between our Company and the LM.

2. Escrow Agreement dated July 1, 2013 between our Company, the LM, the Banker to the Issue and the Registrar to the Issue.

3. Monitoring Agency Agreement dated July 1, 2013 between our Company and Axis Bank Limited

4. Issue Agreement dated March 8, 2013 between our Company and the LM.

5. Memorandum of Understanding dated March 8, 2013 between our Company and the Registrar to the Issue.

B. Material Documents

1. Certified copies of the updated Memorandum and Articles of Association of our Company as amended.

2. Certificate of Incorporation dated October 5, 2009.

3. Prospectus of our Company dated November 21, 2000.

4. Consents of our Directors, Company Secretary and Compliance Officer, Auditors, Lead Manager to the Issue, Lenders, Legal

Counsel, Sandeep S. Shah and Associates, Chartered Accountants and the Registrar to the Issue to include their names in this

Letter of Offer to act in their respective capacities, as applicable.

5. Resolution of our Board of Directors dated July 25, 2012 authorising the Issue and other related matters.

6. Resolution of our Board of Directors dated July 24, 2013 approving the Letter of Offer.

7. The Report of the Auditors being, B S R & Co. and Chaturvedi & Shah, as set out herein dated July 3, 2013 in relation to the

audited financial information of our Company.

8. Annual Reports of our Company for the Fiscals 2008, 2009, 2010 and 2011 and 2012 and the condensed financial statements

of our Company for the six months ended March 31, 2013.

9. The Statement of Tax Benefits dated June 29, 2013 from Jitendra Sanghavi & Co., Chartered Accountants.

10. Due Diligence Certificate dated March 11, 2013 addressed to SEBI from the LM.

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11. In principle listing approvals dated April 18, 2013 and April 10, 2013 issued by BSE and NSE respectively.

12. The Service Agreement dated July 1, 2011 entered between our Company with Ashish Agarwal.

Any of the contracts or documents mentioned in this Letter of Offer may be amended or modified at any time if so required in the of our

Company or if required by the other parties, without reference to the Equity Shareholders, subject to compliance with applicable law.

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DECLARATION

No statement made in this Letter of Offer contravenes any of the provisions of the Companies Act and the rules made thereunder. All the legal

requirements connected with the Issue as also the guidelines, instructions etc. issued by SEBI, Government and any other competent authority in

this behalf, have been duly complied with. We further certify that all the statements in this Letter of Offer are true and correct.

Signed by the Directors of our Company

Gautam Doshi

__________________________________________

Amit Khanna

__________________________________________

Sujal Shah

__________________________________________

Anil Sekhri

__________________________________________

Prasoon Joshi

__________________________________________

Venkatesh Roddam

Chief Executive Officer

__________________________________________

Ashish Agarwal

Company Secretary & Manager

__________________________________________

Mohan Umrotkar

Chief Financial Officer

__________________________________________

Date: July 24, 2013 Place: Mumbai