INFORMATION MEMORANDUM Reliance Media … III – Introduction Summary 20 ... Dividend Policy 93 ......

INFORMATION MEMORANDUM

Reliance Media World Limited (Formerly known as Reliance Unicom Limited)

(Our Company was originally incorporated on December 27, 2005 as Reliance Unicom Limited as a Public Limited Company under the

Companies Act, 1956. For details of changes in the name, see “General Information” on Page 21 of this Information Memorandum.)

Registered Office: 401, 4th Floor, INFINITI, Link Road, Oshiwara, Andheri West, Mumbai – 400 053, Maharashtra Contact person: Gururaja Rao, Company Secretary & Compliance Officer

Tel: 022 - 3068 9444, Fax: 022 - 3988 8927, Email: [email protected] Website: www.big927fm.com

INFORMATION MEMORANDUM FOR LISTING OF 4,61,26,170 EQUITY SHARES OF RS. 5 EACH

NO EQUITY SHARES ARE PROPOSED TO BE SOLD OR OFFERED PURSUANT TO THIS

INFORMATION MEMORANDUM

GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest in the equity shares of Reliance Media World Limited 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 shares of Reliance Media World Limited. For taking an investment decision, investors must rely on their own examination of the Company including the risks involved. The securities 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 document. Specific attention of the investors is invited to the chapter entitled “Risk Factors” beginning on page 10 of this Information Memorandum.

ABSOLUTE RESPONSIBILITY OF RELIANCE MEDIA WORLD LIMITED

Reliance Media World Limited having made all reasonable inquiries, accepts responsibility for, and confirms that this Information Memorandum contains all information with regard to Reliance Media World Limited, which is material, that the information contained in this Information Memorandum 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 Information Memorandum as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect.

LISTING

The Equity Shares of Reliance Media World Limited are proposed to be listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. We have received ‘in-principle’ approvals from BSE and NSE for listing the Equity Shares vide letters dated August 24, 2009 and September 25, 2009, respectively. The Bombay Stock Exchange Limited shall be the Designated Stock Exchange.

REGISTRAR AND TRANSFER AGENT

Karvy Computershare Private Limited (Unit: Reliance Media World Limited)

Plot No. 17 – 24, Vittal Rao Nagar, Madhapur

Hyderabad - 500 081 Email: [email protected]

Tel : +91-40-23420818 - 25 Fax: +91-40-23420859

Contact Person: Praveen Chaturvedi

TABLE OF CONTENTS

Section I – General

Definitions, Abbreviations & Industry Related Terms 3

Certain Conventions; Use Of Market Data 8

Forward Looking Statements 9

Section II – Risk Factors

Risk Factors 10

Section III – Introduction

Summary 20

General Information 21

Capital Structure 23

Scheme of Arrangement 28

Statement of General Tax Benefits 31

Section IV – About Reliance Media World Limited

Overview of FM Radio Industry 37

Business 45

History 55

Management 56

Our Promoters and Group Companies 64

Currency of Presentation 93

Dividend Policy 93

Section V – Financial Information

Financial Information of the Company 94

Management Discussion & Analysis 131

Key Investments 138

Consolidated Financial Statements of The Company 139

Section VI - Legal & Other Information

Outstanding Litigation And Material Developments 140

Government Approvals 170

Section VII –Regulatory And Statutory Disclosures

Regulatory And Statutory Disclosures 171

Main Provisions Of The Articles Of Association 175

Section VIII – Other Information

Material Contracts And Documents For Inspection 208

Declaration 209

2

DEFINITIONS, ABBREVIATIONS & INDUSTRY RELATED TERMS

Term Description

“RMWL” or “Company” or

“Our Company” or “Resulting

Company” or “Reliance

Media World Limited”

Reliance Media World Limited (formerly Reliance Unicom Limited), a

Public Limited Company incorporated under the provisions of the

Companies Act, 1956

“We” or “us” and “our” Refers to Reliance Media World Limited

Articles/Articles of

Association

Articles of Association of Reliance Media World Limited

Auditors The Statutory Auditors of Reliance Media World Limited

Bankers to the Company The banks which are the bankers to Reliance Media World Limited

Board of Directors/Board The Board of Directors of Reliance Media World Limited

BSE Bombay Stock Exchange Limited

CDSL Central Depository Services (India) Limited

Companies Act / Act The Companies Act, 1956, as amended from time to time

Current year April 1, 2008 to March 31, 2009

DSE Designated Stock Exchange

EPS Earnings per Equity Share

Equity Shares Equity Shares of the Company of Rs. 5 each unless otherwise specified

in the context thereof

Financial year / fiscal / FY The twelve months ended 31st March, unless otherwise stated

Group Persons constituting group coming within the definition of ‘group’ as

defined in the Monopolies and Restrictive Trade Practices Act, 1969 as

stated in the last published Annual Report of the Company

GOPA Grant of Permission Agreement executed between the Company and

the Ministry of Information and Broadcasting, Government of India

HUF Hindu Undivided Family

Indian GAAP Generally Accepted Accounting Principles in India

Information Memorandum This document filed with the Stock Exchanges is known as and referred

to as the Information Memorandum

IPRS Indian Performing Rights Society

I.T. Act The Income Tax Act, 1961, as amended from time to time, except as

stated otherwise

ITAT Income Tax Appellate Tribunal

Memorandum or MoA or

Memorandum of Association

The Memorandum of Association of Reliance Media World Limited

MIB Ministry of Information and Broadcasting, Government of India

NSDL National Securities Depository Limited

NSE National Stock Exchange of India Limited

3

Term Description

PPL Phonographic Performance Limited

RBI Reserve Bank of India

Registered Office of the

Company

401, 4th Floor, INFINITI, Link Road, Oshiwara, Andheri West,

Mumbai – 400 053

‘‘RML’’ or ‘’Reliance

MediaWorks Limited’’ or

“Demerged Company”

Refers to Reliance MediaWorks Limited (formerly Adlabs Films Limited),

a company incorporated under Act and having its registered office at

Film City Complex, Goregaon (East), Mumbai – 400 065

ROC Registrar of Companies, Maharashtra at Mumbai

Scheme Scheme of Arrangement (‘Scheme’) under Sections 391 to 394 of the

Companies Act, 1956 between erstwhile Adlabs Films Limited now

Reliance MediaWorks Limited and erstwhile Reliance Unicom Limited

now Reliance Media World Limited and their respective shareholders

and creditors, sanctioned by the Hon’ble High Court of Judicature at

Bombay on April 4, 2009. Upon coming into effect of the Scheme on

June 30, 2009 and with effect from the Appointed Date on April 1, 2008,

the radio business stands Demerged from RML and transferred to and

vested in the Company on a going concern basis.

SEBI Securities and Exchange Board of India constituted under the Securities

and Exchange Board of India Act,1992

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

time to time

SEBI Guidelines Securities and Exchange Board of India (Disclosure and Investor

Protection) Guidelines, 2000 issued by Securities and Exchange Board

of India effective from January 27, 2000, as amended, including

instructions and clarifications issued by Securities and Exchange Board

of India from time to time

State/ GoI /Government Government of India

Stock Exchanges BSE and NSE

Radio Business Radio Business means the Demerged Company’s undertaking,

business, activities and operations pertaining to Radio comprising all the

assets (movable and immovable) and liabilities which relate thereto or

are necessary therefore and including specifically:

i) All assets of the Demerged Company in Radio Business through

which the Demerged Company carries on its business, activities and

operations pertaining to radios described in Part ‘2’ of the Scheme;

ii) All the debts (whether secured or unsecured), liabilities

(including contingent liabilities), duties and obligations of the Demerged

Company of every kind, nature and description whatsoever and

howsoever accruing or arising out of, and all loans and borrowings

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Term Description

raised or incurred and utilized for its businesses, activities and

operations pertaining to Radio Business described in Part ‘2’ of the

Scheme;

iii) All agreements, permits, quotas, rights, entitlements, bids,

tenders, letters of intent, expressions of interest, municipal and other

statutory permissions, approvals, consents, licenses, including licenses

to operate FM stations by MIB, rights, contracts, licenses, approvals,

consents, engagements, arrangements and all other privileges and

benefits of every kind, nature and description whatsoever relating to the

Demerged Company’s business, activities and operations pertaining to

Radio Business;

iv) All intellectual property rights, records, files, papers, data and

documents relating to the Demerged Company’s business, activities and

operations pertaining to Radio Business; and

v) All employees engaged in or relating to the Demerged Company’s

business, activities and operations pertaining to Radio Business.

5

GENERAL INDUSTRY TERMS Term Description

Ad Spend Advertisement spending

Ad Ex Advertisement Expenditure

Aircheck data Information provided by Aircheck Broadcast Monitoring, which offers an

audio identification service providing airplay information for radio stations

in the Metro Cities.

A+/Metro Cities/

Metropolitan Cities

Delhi, Mumbai, Chennai and Kolkata as specified in the Phase II Policy

and Tender Document

A Cities Cities in India with a population of more than 2 million, as specified in the

Phase II Policy and the Tender Document.

B Cities Cities in India with a population of more than 1 million and up to 2

million, as specified in the Phase II Policy and the Tender Document.

C Cities Cities in India with a population of more than 0.3 million and up to 1


D Cities Cities in India with a population of more than 0.1 million and upto 0.3


AM Amplitude Modulated waves, which are sound waves in the range of

535KHz to 1705KHz.

DAB Digital Audio Broadcast, a radio service that provides digital radio

through a terrestrial broadcast format.

DVD Digital Versatile Disk.

FICCI Federation of Indian Chambers of Commerce and Industry.

Gross Revenue Gross Revenue has been defined under the Grant of Permission

Agreement (GOPA) as “gross inflow of cash, receivables or other

consideration arising in the course of ordinary activities of the FM radio

broadcasting enterprise from rendering of services and from use by

others of the enterprise resources yielding rent, interest, dividend,

royalties, commissions etc. Gross Revenue shall, therefore, be

calculated, without deduction of taxes and agency commission, on the

basis of billing rates, net of discounts to advertisers. Barter advertising

contracts shall also be included in the gross revenues on the basis of

relevant billing rates. In the case of a permission holder providing or

receiving goods and services from other companies that are owned or

controlled by the owners of the permission holder, all such transactions

shall be valued at normal commercial rates and included in the profit and

loss account of the permission holder to calculate its gross revenue.”

FM Frequency Modulated waves, which are sound waves in the range of

87.5 MHz to 108 MHz.

IMRB IMRB International, a market research organization.

KHz Kilo Hertz, a unit of frequency.

LED Displays Displays using light emitting diode technology.

MHz Mega Hertz, a unit of frequency.

6

Term Description

OOH Out of Home.

Phase I

License(s)/License(s)

License(s) issued by MIB under Phase I Policy to operate private FM

radio broadcasting stations.

Phase II

License(s)/License(s)

License(s) issued by MIB under Phase II Policy to operate private FM

radio broadcasting stations.

OTEF One-Time-Entry Fee, as specified under the Phase II Policy, is (i) the

entry fee quoted by the successful bidder of a new radio channel under

the Phase II bidding process and (ii) the entry fee payable by licensees

under Phase I Policy who migrate to the Phase II Policy, and for such

licensee is equal to average of all successful bids under Phase II for that

city, or region, as applicable

Phase I Policy Policy of MIB issued as per Tender Notice No. 212/2/99-B (D) issued in

October 1999 to auction 108 frequencies in the FM spectrum across 40

cities in India through an open bidding auction process.

Phase II Policy Policy on Expansion of FM Radio Broadcasting Services Through

Private Agencies (Phase –II) issued by MIB on July 13, 2005.

Prasar Bharati Act The Prasar Bharati (Broadcasting Corporation of India) Act, 1990, as

amended from time to time

RAPA award Awards issued by the Radio and Television Advertising Practitioners’

Association, India.

RF Spectrum Radio Frequency Spectrum

Satellite Radio A radio service that provides radio signals directly via satellite.

SACFA Standing Advisory Committee on Radio Frequency Allocation of

Wireless and Planning Coordination wing of Ministry of Communication

and Information Technology

RAM Radio Audience Measurement

Tender Document The tender document issued by MIB on September 21, 2005, under the

Phase II Policy, as amended from time to time.

SEC Socio Economic Classification, a classification of population in India

based upon social and economic factors.

Telegraph Act The Indian Telegraph Act, 1885, as amended from time to time.

TRAI The Telecom Regulatory Authority of India, as constituted under the

TRAI Act.

TDSAT The Telecom Disputes Settlement and Appellate Tribunal, as constituted

under the TRAI Act.

TRAI Act The Telecom Regulatory Authority of India Act, 1997, as amended from

time to time.

VHF band Very High Frequency waves, which are sound waves in the range of 30

MHz to 300 MHz.

WPC Wireless Planning and Co-ordination Wing, Department of Radios,

Ministry of Communication and Information Technology.

7

CERTAIN CONVENTIONS; USE OF MARKET DATA

Unless stated otherwise, the financial data in this Information Memorandum is derived from our financial

statements prepared in accordance with Indian GAAP. Our last financial year commenced on April 1, 2008

and ended on March 31, 2009. In this Information Memorandum, any discrepancies in any table between the

total and the sums of the amounts listed may be due to rounding-off.

For definitions, please see the section titled “Definitions, Abbreviations & Industry Related Terms” .

All references to “India” contained in this Information Memorandum are to the Republic of India. All

references to “Rupees” or “Rs.” are to Indian Rupees, the legal currency of the Republic of India.

Unless stated otherwise, industry data used throughout this Information Memorandum has been obtained

from industry publications. Industry publications generally state that the information contained in those

publications has been obtained from sources believed to be reliable but that their accuracy and

completeness is not guaranteed and their reliability cannot be assured. Although we believe that industry

data used in this Information Memorandum is reliable, it has not been independently verified. The

information included in this Information Memorandum about the various other Companies is based on their

respective Annual Reports and information made available by the respective companies.

8

FORWARD-LOOKING STATEMENTS

We have included statements in this Information Memorandum, that contain words or phrases such as “will”,

“aim”, “will likely result”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”,

“contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” and similar expressions

or variations of such expressions that are “forward-looking statements”.

All forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual

results to differ materially from those contemplated by the relevant forward-looking statement. Important

factors that could cause actual results to differ materially from our expectations include, among others:

• General economic and business conditions in India and other countries;

• Our ability to successfully implement our strategy, our growth and expansion plans and

technological changes;

• Increased competition in these industries;

• Changes in laws and regulations relating to the industries in which we operate;

• Our ability to capitalize on synergies between the radio broadcasting, event management and OOH

media businesses;

• Advertising Demand

• Our ability to meet our capital expenditure requirements;

• Fluctuations in operating costs;

• Our ability to attract and retain qualified personnel;

• Changes in technology;

• Changes in the value of the Rupee and other currency changes;

• Changes in Indian or international interest rates;

• Changes in laws and regulations in India;

• Changes in political conditions in India; and

• Changes in the foreign exchange control regulations in India.

For further discussion of factors that could cause our actual results to differ, see the section titled “Risk

Factors” on Page No. 10. By their nature, certain 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.

Additional factors that could cause actual results, performance or achievements to differ materially include,

but are not limited to, those discussed under “Management’s Discussion & Analysis” , “Industry” and

“Business” .

9

RISK FACTORS

An investment in equity shares involves a high degree of risk. You should carefully consider all of the

information in this Information Memorandum, including the risks and uncertainties described below. If any of

the following risks actually occur, our business, financial condition and results of operations could suffer, the

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

Internal Risk Factors

1. We are heavily dependent on advertisements as the main source of our income. Our inability to

attract new customers could have a material adverse effect on our business, results of operations

and financial condition.

We are heavily dependent on advertisements as the main source of our revenue, especially as our FM

radio stations are ‘free to air’, and therefore we do not derive any subscription revenue from our listeners.

Our inability to attract new advertising customers could have a material adverse effect on our business,

results of operations and financial condition. Ad-spend by customers, effective advertising rates, and our

ability to attract new customers is also influenced by our broadcast content, the quality of our broadcasts,

the amount of time we play advertisements in a given time period, the number and demographics of our

listeners, listener preference and preference of advertising customers for one media over another. In

addition, ad-spend is influenced by a number of factors including the state of the Indian economy, the

performance of particular industry sectors, shifts in consumer spending patterns and changes in consumer

sentiments and tastes. We have no long-term contracts guaranteeing us advertising revenue. The industry

practice is for Advertising agencies to place advertisement orders for their clients with media either for

short periods or as part of a comprehensive advertising campaign. Some of these advertisers or

advertising agencies may pre-maturely terminate such advertisements or such advertisement campaigns

and switch to our competitors or other media platforms, which may adversely affect our business,

operations and financial performance. Our revenues and profits are difficult to predict and may vary

significantly from period to period, which could cause the price of our Equity Shares to fluctuate.

2. The FM radio broadcasting industry is competitive and the competition is likely to intensify

further.

The FM radio broadcasting industry is competitive. In the four metropolitan and two major cities, of Delhi,

Mumbai, Chennai , Kolkata, Bangalore and Hyderabad we face intense competition from private FM radio

operators who have entered the industry during Phase I and Phase II, for listenership, utilization of

available broadcasting time for advertising and advertising rates. We are the only private FM operator in

the Jammu, Srinagar, Bikaner, Jhansi and Aligarh where we have already setup and operationalised radio

stations. In all our markets, we also compete with Private FM Players and All India Radio (“AIR”), the state

public service radio broadcaster. As the private FM radio broadcasting industry grows and matures, we

expect competition to intensify as new entrants who are likely to seek license from MIB under the

proposed Phase III, will begin to compete against us, our existing competitors may further expand their

operations and we may enter into newer markets where we compete with well established competitors.

Our existing and future competitors or new entrants into the market may result in a reduction in our

effective advertisement rates in the future and could have an effect on our income and profitability. The

level of competition we face may further increase due to future changes in policies of the Government. For

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example, the number of our competitors may increase if the Government grants additional private FM

radio broadcasting licenses in the proposed Phase III tender bid process, permits license holders for other

services to offer private FM radio broadcasting services or removes the requirement to obtain licenses in

our industry. We also face competition from other segments of the media industry including television

channels, magazines, newspapers, internet and other emerging technologies. In addition, new

technologies, such as satellite radio, a radio service that provides radio signals directly via satellite and

digital audio broadcast (“DAB”), a radio service that provides digital radio through a terrestrial broadcast

format, may also provide a competitive threat to our business. These new technologies provide many

more channels with features, which cater to different listener preferences and taste, such as news, current

affairs and sports programs and different kinds of music. These segments compete with FM radio

broadcasters for advertisers and also for the time and attention of our listeners. These technologies are

not governed by the conditions of the Phase II Policy and accordingly, such operators using such

technologies may enjoy benefits not available to us, such as the absence of license fees, and may face

lesser restrictions than those applicable to private FM radio broadcasters.

The relaxation of foreign ownership restrictions under the Phase II Policy and any other relaxation could

intensify the competition we face from companies that have a strategic or business participation of foreign

media and entertainment corporations. Our market position will depend upon effective marketing initiatives

and our ability to anticipate and respond to various competitive factors affecting the industry. Any failure by

us to compete effectively, including in terms of pricing or providing innovative services, could have an

adverse effect on our income and profitability.

3. We have a limited operating history on which to gauge our business and financial condition and

future prospects.

We were incorporated on December 27, 2005 under the Companies Act, 1956, but until April 1, 2008, we

were a dormant company with no material business or assets. On June 30, 2009, pursuant to the Scheme

of Arrangement, the radio business and allied assets of RML were transferred to our Company with effect

from April 1, 2008. For a detailed description of the Demerger, see “Scheme of Arrangement” on page 28

of this Information Memorandum.

Because of our limited operating history, there is little data on which to evaluate our past performance. Our

business is evolving and we believe that historical period-to-period comparisons of our financial

statements are not meaningful and should not be relied on as an indication of future performance. In

addition, our future prospects must be considered in the light of the risks and uncertainties frequently

encountered by companies in their early stages of development, and in particular new companies in a new

and evolving industry. Our business strategy is unproven and there can be no assurance that we will be

able to develop a successful business. We have a substantially new management and operational team,

the majority of which joined our Company from RML pursuant to the Scheme, and the assets that now

constitute the core of our business, principally the radio business and allied assets that were transferred to

us in the Scheme, were previously operated as part of an integrated business of RML. We cannot assure

you that we will be able to transform our Company into a successful integrated and independent business.

Operating as a stand-alone business subjects us to significant regulatory and reporting requirements and

we must develop and maintain effective internal control and management systems to ensure compliance

with these requirements and to otherwise operate effectively. We cannot assure you that we will be able to

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do so, or that the challenges of operating as a stand-alone company will not occupy a significant amount

of our management’s time and resources to the detriment of the development of our business.

4. There is only a limited amount of historical financial information available in respect of our

business.

Although in this Information Memorandum we present our restated historical financial results for the four

fiscal years ended March 31, 2009, and first quarter of fiscal ending March 31, 2010, for a significant part

of this period of time we were effectively a dormant company with no material business or assets.

Pursuant to the Scheme, we acquired radio business and related assets which constitute the core of our

business at their fair value as approved by the court.

While we have presented in this Information Memorandum financial statements as of and for the quarter

ended June 30, 2009, the cash flow and income statement components of the radio business and related

assets that we have acquired, including revenues, expenses, cash generated and cash expended, were

not separately accounted for prior to the Effective Date and we are therefore unable to present this

information. As a result, we have not presented any historical track record of the revenues, expenses and

cash flows of the asset groups that constitute the core of our business, which makes it significantly more

difficult to assess our operating track record and to form expectations with regard to our future financial

performance.

5. Our business is dependant upon the performance of key personnel and on-air talent and radio

hosts.

Our success is substantially dependent on the expertise and services of our management team and key

personnel. We employ or independently contract with several on-air personalities that have significant

loyalty among listeners in their respective markets. We also undertake training programmes and other

initiatives to develop their skills. However, we can give no assurance that these personnel will remain with

us and that the number of our listeners will not reduce if our popular on-air-personalities terminate their

services with us. We have not entered into any long-term employment contract with any of our key

managerial personnel or with any on-air talent or radio show host. Competition for these individuals is

expected to intensify, and these employees are at will employees who are under no legal obligation to

remain with us. The loss of the services of such key personnel could have an adverse effect on our

listenership and consequently our business.

6. The licenses for operating FM radio broadcasting channels are for a limited duration of ten years.

As per Grant of Permission Agreement (GOPA), the grant of permissions to successful bidders under the

Phase II Policy will be valid for a period of ten years from the date of operationalisation of a FM Radio

channel or twelve months from the date of grant of permission, whichever is earlier.

There is no provision for the extension of the licenses and these shall automatically lapse at the end of

their validity period. Under the license terms, we shall have no rights whatsoever to continue to operate

the channel after the date of expiry. Further, the Government at the appropriate time may determine the

procedure for issue of fresh licenses and the current licensees shall not be eligible for any concessional

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treatment. If we are unable to renew any of our licenses on reasonable terms and within a reasonable

timeframe, this could adversely impact our business, operations and financial performance.

7. Private FM Radio broadcasters are restricted from broadcasting any news and current affairs on

their stations.

We are restricted under the GOPA from broadcasting news and current affairs on our radio stations. This

restriction may adversely affect our ability to compete with other segments of the media industry that are

not subject to such restrictions. We may also not be able to compete with providers of radio broadcasting

that may not be subject to such restrictions such as satellite radio broadcasters or AIR.

8. Scientific and organized independent research to measure and analyze FM radio listenership is

limited in India.

RAM in India is currently at a fairly nascent stage. In 2007, RAM was launched in India by TAM & Nielsen

Media, heralding a new era of radio listenership measurement. The RAM weekly measurement system is

limited to 4 metros currently - Mumbai, Delhi, Bangalore and Kolkata. In order to independently measure

our stations performance in other markets we run periodical dipsticks through independent research

agencies. However we believe that absence of organized research to measure listenership with respect to

other cities in India may cause an adverse impact on the growth of the private FM radio industry as

advertisers, media planners and advertising agencies may not have adequate data to make media buying

decisions, which may result in curtailed spending on FM radio broadcasting.

9. We are responsible for the broadcast content on our FM radio channels and broadcast of any

content inconsistent with the license conditions could lead to termination of the license thereof

and also make us liable under other applicable laws.

We have the responsibility to ensure that no objectionable, obscene, defamatory or racist comments or

comments hurting any religious sentiment, including those forming part of a live interview, or any

unauthorised or other content infringing any third party’s intellectual property rights and any other

broadcasting laws in any form are carried on our FM radio channels. We are required to follow the

program and advertising codes followed by AIR, which prescribe standards of conduct to develop and

promote advertising practices. Our failure to adhere to these regulations, codes and policies may lead to

adverse consequences, including the termination of our licenses.

10. Restriction on foreign investment in our Company limits our ability to raise capital outside India.

According to the prescribed limits under the Foreign Exchange Management Act, 1999 (“FEMA”), not

more than 20% of our Paid up equity capital, as a company in the news broadcasting business, can be

held by foreign investors and such investment can only be made in our company through the foreign direct

investment (“FDI”) route. Further, prior permission shall be required to be sought for any alteration in the

foreign shareholding patterns. While calculating 20% foreign investment in the equity of the Company,

FDI/FII investments in the Company, as at the end of each quarter of the financial year, shall be taken into

account. In addition, the foreign direct holding component, if any, in the equity of the Promoters and

Majority shareholding companies of the Company, as defined above, as well as FII investments in them as

on 31st March of every year, will be duly reckoned on pro rata basis so as to arrive at the total foreign

13

holding in the Company. These regulations limit our ability to seek and obtain additional equity

investments from foreign investors, which may adversely affect our ability to raise capital, value of our then

listed Shares traded on the stock exchanges and expansion of our business.

11. Technical failures and natural disasters can damage our existing set up.

Uplinking and other infrastructure used for broadcasting are vulnerable to technological failures and also

to natural disasters such as earthquakes and floods. We maintain insurance for our assets against fire,

natural calamities including earthquakes and floods, burglary and special contingencies, depending upon

the nature of the asset. We do not maintain business interruption insurance to protect us from

technological failures or from any other factors that could result in disruption of our business operations.

While we do have insurance for replacement of most of our existing infrastructure, the disruption of our

services, due to damage of this equipment, would lead to loss of revenues and since we have no

insurance against this loss of revenue, our business may be adversely affected.

12. A decrease in our listenership may adversely affect our business and results of operations.

Listenership of our FM radio channels is the prime indicator of our popularity compared to other operators

in the FM radio broadcasting industry. Our listenership significantly influences the ad-spend by our

advertisers and our advertising rates. Listenership is dependent on various factors, including the program

content and quality of our broadcasts and the loyalty of our listeners.

Radio Listenership is currently reported by the Radio Audience Measurement (RAM) system run by

Television Audience Measurement (TAM). This is currently operational in 4 metros – Mumbai, Delhi,

Bangalore and Kolkata, where listenership is reported on a weekly basis.

RAM reported listenership becomes the yardstick for us to evaluate the performance of our shows and

content while it is also a measurement of the efficacy of our brand for advertisers. Hence maintaining a

high rating is essential to keep listeners engaged as well as advertisers satisfied to continue advertising on

our stations. Any failure by us to meet to our listeners’ preferences, including due to departure of our on-

air talent, or if research agencies provide different data on listenership, could adversely affect our income

from advertising. A decline in our listenership for any reason could adversely affect our business,

operations and financial performance.

13. We rely on third parties for the sound recordings we broadcast.

The sound recordings that we broadcast are supplied or licensed by third parties and we pay royalties to

these third parties for the right to broadcast these sound recordings. If these providers do not provide us

access to their sound recordings, or if there is any significant increase in the rate of royalties they charge

from us, our operations and profitability may be adversely affected. A proceeding filed by some of the

other Private FM Channels before the Copyright Board in connection with fixation of the Royalty rate is

pending. The outcome of the said proceedings may have an impact on the Company.

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14. We may face libel, defamation or intellectual property rights infringement charges.

We rely on our creative team, on-air talent and other artistes for our program content in our FM

broadcasting business. We also rely on a creative team for ideas in connection with our event

management businesses. Also, some of our programs include live interviews and interactive participation

of our listeners, and inadvertently, some of such content may be construed as offensive or insensitive by a

certain section of the society or certain individuals and may expose us and/or employees to litigation for

libel, defamation or infringement of intellectual property rights, which could adversely affect our reputation

as well as our business, operations and financial performance.

15. We may expand nationally and internationally, including through strategic acquisitions, joint

ventures or partnerships. Such expansion may expose us to risks that could adversely affect our

business.

This expansion may be through setting up our own subsidiary or branch office, or through entry into

partnerships, consulting and marketing arrangements, joint ventures, or acquisitions.

Our expansion strategy involves numerous risks, including the following:

• our international operations may prove unprofitable and fail to generate anticipated income, profits and

cash flows;

• we may be unsuccessful in managing offices in widely disparate locations with different economies,

legal systems, languages and culture;

• we may need to recruit additional senior management and on-air talent and we cannot be certain that

any of our recruiting efforts will succeed;

• we may enter into markets and geographic areas where we have limited or no experience and may not

be able to develop content or audience loyalty in our targeted markets;

• we may encounter difficulties in the integration of personnel and systems; and

• our management’s attention may be diverted from other business concerns

16. Risk of Force Majeure, Political, Economic and War Risks.

Our operations are dependent upon our ability to protect our transmission and studio infrastructure against

damage from fire, earthquake, floods, weather conditions, transmission failures, software flaws,

transmission cable cuts, power loss and similar events and to construct networks that are not vulnerable to

the effects of such events. The occurrence of a natural disaster or other unanticipated problem at our

facilities could cause interruptions in broadcasting. Any damage or failure that causes interruptions in the

operations could have a material adverse effect on their business, operating results and financial

condition. Performance may be affected by a number of factors beyond our control including political and

economic developments both inside and outside India.

17. Outstanding litigation.

The results of operations, financial position and liquidity of the company could be affected by legal

proceedings or investigations which are adverse to the interests of the company. Moreover, such litigation

15

or investigations may be time consuming, distracting to management, expensive and difficult to predict,

and this may adversely affect the business.

Cases filed against the Company / Notices received by the Company:

• Summons have been served on the Company with respect to a suit filed by M/s Aces Events and

Promos in the City Civil Court at Secunderabad claiming an amount of about Rs. 3 lakhs towards

services rendered.

• The Jammu and Kashmir sales tax department has served a demand notice for payment of sales tax

amounting to Rs. 68 lakhs.

• Our service tax audit was completed and there are certain audit observations. If the said audit

observations are considered unsatisfactory by the service tax department, then we may incur a liability

of Rs. 1,200 lakhs plus interest.

• The Assistant Controller, Chandigarh Transport Undertaking, Chandigarh (AC, CTU) has served a

notice directing us to deposit an amount of Rs.14.18 lakhs (including interest) for non-payment of

monthly rent for space utilized for advertisements.

• We have received a notice from the Joint Commissioner of Bruhat Bangalore Mahanagara Palike

(BBMP) to pay Rs.48 lakhs as penalty for delay in construction of the bus shelters.

• Five summary suits under order XXXVII rule 2 of the Code of Civil Procedure, 1908 have been filed

against us by Mr. Amin Pawar, proprietor of M/s Leading Edge before the Bombay High Court for

recovery of Rs. 63.2 lakhs.

• Five winding up petitions under sections 433, 434 and 439 of the Companies Act, 1956 have been filed

against the Company by M/s Leading Edge (CP/817/2009, CP/808/2009, CP/805/2009, CP/807/2009

and CP/806/2009) alleging that the Company is indebted to the said party to the tune of Rs. 63.2 lakhs

for which Leading Edge had also filed Summary suits under Order XXXVII rule 2 of the Code of Civil

Procedure, 1908 as stated above.

• Actor Sunny Deol has served a notice on RMWL alleging that he and his family members have been

defamed in a show aired titled “Son Sunny” on Big 92.7 FM. Mr. Deol has also claimed a sum of Rs.

20000 lakhs as damages for defamation.

• Notice has been received from Labour cum conciliation officer, Hisar, to clear a month’s salary and

Provident Fund dues of an employee of one of our Contractor in view of default by the said Contractor.

• Notice has been received from Additional PF commissioner, Jammu for PF contributions not paid by one

of the Contractor engaged by the Company amounting to Rs. 69,024/-.

• Two suits for declaration filed against us in the court of civil judge, senior division, Patiala by two former

employees alleging that their dismissal was wrong and illegal.

• A claim has been filed by a former employee in the Industrial Tribunal, Government of Goa at Panaji

alleging wrongful termination of employment contract and seeking reinstatement along with payment of

outstanding wages.

• Summons have been received from Labour Court, Bhubaneshwar in connection with complaint filed by

an ex-employee claiming an amount of Rs. 2.28 lakhs towards performance incentive for the period 1st

April 2008 to 31st March, 2009.

• A Writ Petition was filed in the High Court of Karnataka at Bangalore by an ex-employee questioning the

jurisdiction of the Civil Court in connection with the case filed by the Company against the said ex-

employee wherein the Company was seeking injunction from the Civil Court restraining him to join the

competitor, when there was an Arbitration Clause in the Agreement.

16

Please also refer Page 140 - section on “Outstanding Litigations and Material Developments.”

18. Any future issuance of Equity Shares may dilute your shareholding.

Any future equity issuances by us may lead to the dilution of investors’ shareholdings in our Company.

Any future equity issuances by us may adversely affect the trading price of the Equity Shares. In addition,

any perception by investors that such issuances might occur could also affect the trading price of our

Equity Shares.

External Risk Factors

1. Our business is substantially dependent on Government policies.

The FM radio broadcasting industry is subject to extensive Government regulation. There is often

significant initial uncertainty concerning the scope and impact of many liberalization and deregulation

measures introduced by the Government and various interested parties often contest such measures.

While proposed Government measures are challenged from time to time, including in the courts in India,

many private FM radio broadcasters, including us, may not be able to properly evaluate whether a

proposed initiative will ultimately be implemented and, if so, in what form, and we may incur expenditure to

take advantage of a liberalization measure that is ultimately not implemented or, if implemented, takes a

form that we did not anticipate. The MIB currently regulates key policy matters relating to licensing,

ownership, content and operation of our network, including the transfer and assignment of licenses and

ownership interests in private FM radio broadcasting entities, the granting, maintenance and renewal of

licenses and frequency spectrum allocations. In addition, the Government also regulates the foreign

investment limits and imposes restrictions on foreign investment in the private FM radio broadcasting

industry. The Government has designated TRAI and the TDSAT, which are autonomous bodies, to

regulate and adjudicate matters in this industry. Our licenses reserve broad discretion to MIB to influence

the conduct of our business by giving it the right to unilaterally modify, at any time, the terms and

conditions of the licenses. The Government has the right to take over networks or terminate or suspend

the licenses in the interests of national security or in public interest or in the event of a national

emergency, war or similar situation. Under the existing terms of our licenses, the Government may also

impose certain penalties including suspension, revocation or termination of a license or suspension of a

license, in the event of default by us.

Our business might suffer in case there are adverse changes to the regulatory framework, which could

include new regulations that we are unable to comply with or those that allow our competitors an

advantage. We cannot assure you that changes in regulations would not adversely impact our ability to

manage and expand our business or our ability to generate income or profits. Our business is also subject

to competition from AIR, the state public service radio broadcaster in India. Unlike private FM operators,

AIR is not required to pay any license fees, and is not subject to various other license conditions that

currently apply to us or may apply to us in future. While TRAI, as the regulator, and TDSAT, as the

appellate authority, have been granted certain powers to ensure a level playing field among various

service providers, there can be no assurance that there will be a level playing field among the private FM

radio broadcasters, or among AIR and private FM radio broadcasters. The Government may introduce

additional legislation and constitute other regulatory bodies in relation to our business. Any of these events

could adversely affect us.

17

2. Future sales by shareholders could cause the price of equity shares to decline.

As there is no lock-in provision on the equity shares after listing (except to the extent of 20% of the total

equity capital of the Company by Promoters for the period of 3 years from the date of Listing) sale of

substantial number of equity shares could lead to fall in market prices of the equity shares.

3. Our Promoters retain majority control of our Company. It may have interests that are adverse to,

and conflict with, the interests of other shareholders.

Our Promoters own or control majority of our total equity share capital. As a result, they will continue to be

able to exert significant influence over our corporate decisions, including the election or removal of

directors of our Board, the approval of our annual financial information, the declaration of dividends and

the determination of other matters to be decided by our shareholders, and will be able to influence other

aspects of our management, strategy and operations. As non promoter and public shareholders hold less

than half of our total capital, they will likely not be able to determine the outcome of any resolution

proposed at a shareholder meeting or influence any decisions made by the Promoters in respect of the

operation of our business.

The interests of the Promoters may be different from our interests or the interests of our other

shareholders and they may take actions with respect to our business that may not be in ours or our other

shareholders’ best interests. By exercising its powers of control, the Promoters could delay, defer or cause

a change of our control or a change in our capital structure, delay, defer or cause a merger, consolidation,

takeover or other business combination involving us, discourage or encourage a potential acquirer from

making a tender offer or otherwise attempting to obtain control of our Company or take actions adverse to

the interests of our other shareholders.

4. Our revenues could decrease due to perceived health risks from radio emissions, especially if

these perceived risks are substantiated.

Public perception of potential health risks associated with wireless communications media could slow the

growth of wireless and radio broadcasting companies, which could in turn slow our growth. In particular,

negative public perception of, and regulations regarding, these perceived health risks could slow the

market acceptance of wireless communications services, which could materially restrict our ability to

expand our business.

The potential connection between radio frequency emissions and certain negative health effects has been

the subject of substantial study by the scientific community in recent years, and numerous health-related

lawsuits have been filed against wireless carriers and wireless device manufacturers in various

jurisdictions. To date, we are not aware that any such petitions have been decided in a manner that would

adversely impact or restrict our business. However, we do not maintain any insurance with respect to

these matters. If a scientific study or court decision resulted in a finding that radio frequency emissions

posed health risks to consumers, it could negatively impact the market for wireless communications and

radio broadcasting services, as well as our customers, which would adversely affect our business,

prospects, results of operations and financial condition.

18

5. We will not be in position to pay dividends to our shareholders in the foreseeable future.

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. Further, we

plan to make substantial capital expenditures to complete our current expansion plans.

Since we have recently commenced operations as an independent entity pursuant to the Scheme, we do

not expect having distributable funds or paying any dividends in the foreseeable future. Additionally, we

have taken unsecured loans, which may be recalled at any time by the lenders.

We may be unable to pay dividends in the near or medium term, and our future dividend policy will depend

on our capital requirements and financing arrangements for further expansion, financial condition and

results of operations.

6. After this listing, the prices of our Company’s equity shares may be volatile, or an active trading

market for our Company’s equity shares may not develop.

There has been no public market for our Company’s equity shares till now, and no history of public

disclosure of information relating to our company and/or our operating companies, and the prices of our

Company’s equity shares may fluctuate after this listing. There can be no assurance that an active trading

market for the equity shares will develop or be sustained after this listing. Our Company’s share price

could be volatile.

7. A slowdown in economic growth in India could cause our business to suffer.

Our performance and growth are dependent on the health of the Indian economy. The economy could be

adversely affected by various factors such as political or regulatory action, including adverse changes in

liberalization policies, social disturbances, terrorist attacks and other acts of violence or war, natural

calamities, interest rates, commodity and energy prices and various other factors. Any slowdown in the

Indian economy may adversely impact our business and financial performance and the price of our

Shares. Any downgrading of India’s debt rating by an independent agency may harm our ability to raise

debt financing. Any adverse revisions to India’s credit ratings for domestic and international debt by

international rating agencies may adversely affect our ability to raise additional financing and the interest

rates and other commercial terms at which such additional financing is available. This could have a

material adverse effect on our capital expenditure plans, business and financial performance.

19

SUMMARY

Please read the following summary together with the risk factors and the more detailed information about us and our financial results included elsewhere in this Information Memorandum. Industry and Business Overview The past couple of years have witnessed a flurry of activity in the radio sector. Radio has accounted for nearly Rs. 8,800 million worth of advertising for the CY 2008 and Rs. 10120 million for the CY 2009 (estimated) (Source: Group M – India Media Forecast 2009). The current situation of the radio industry is akin to that of the TV industry in the early and mid 1990s. Radio today accounts for close to 4% of the Indian advertising industry.

Advertising spend on radio grew by a whopping 49%, from Rs. 590 cr in 2007 to Rs. 880 cr in 2008 and

Radio’s contribution to the overall AdEx rose from 3% in 2007 to 4% in 20081. The opening up of several

new markets in 2008 resulted in growth of 62% for private FM players who contributed Rs. 590 cr. While the

national advertisers buying inventory across markets, contributed to 70% of total revenue and the remaining

30% came from local advertising (which in some cases accounted for 60% in smaller towns), clearly

suggests that radio can no longer be a pushover in any media plan2.

About 80% of the FM stations licensed in January 2006 were on air by the end of 2008. There are currently a total of 238 FM radio stations from 40 broadcasters across 90 cities in India. More than half are in towns of under a million population3. Big FM has the highest number of operational stations with 45 stations. Due to a cap on the number of stations per broadcaster many large players have formed JVs with small regional owners in a bid to offer wider market coverage and to prompt national advertisers to spend more. Combining their synergies, RML along with the Reliance Anil Dhirubhai Ambani Group, are looking at rapidly expanding their presence across all relevant segments of the Entertainment Space and have already taken steps in the direction of Film Production, Production Services, Processing, Film Exhibition, Overseas Distribution and FM Radio. Pursuant to the scheme, the Radio Business of RML stands vested in the Company.

In terms of the Scheme, the Company has issued and allotted equity shares to all shareholders of RML, in

the ratio of 1 (One) Equity Share of the Company for every 1 (One) Equity Share of RML. The Company is

proposed to be separately listed on BSE and NSE, to provide liquidity to all shareholders. The above

demerger will not have any impact on the share capital of RML. The Company’s main source of income presently is from Ad sales and Event Management Activities. Please refer to the section “Risk Factors” and “Overview of FM Radio Industry” at Page No. 10 and Page No. 37 respectively for more details.

1 Source: This Year Next Year – India Media Forecasts, April 2009, Published Group M 2 Source: This Year Next Year – India Media Forecasts, April 2009, Published Group M 3 Source: This Year Next Year – India Media Forecasts, April 2009, Published Group M

20

GENERAL INFORMATION

RMWL was originally incorporated on December 27, 2005 as Reliance Unicom Limited, under the

Companies Act, 1956 as a Company limited by shares and obtained the certificate of Commencement of

Business on February 13, 2006. The name of the Company was changed from Reliance Unicom Limited 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, Maharashtra, Mumbai. The name of the Company was then

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, Maharashtra, Mumbai. The name

of the Company was again changed to RMWL vide the fresh Certificate of Incorporation consequent upon

change of name dated July 22, 2009 issued by the Registrar of Companies, Maharashtra, Mumbai. The

Company was wholly owned subsidiary of RML and was reorganized by way of a de-merger pursuant to the

Scheme.

Address of Registered Office of Company

Reliance Media World Limited

401, 4th Floor, INFINITI,

Link Road, Oshiwara, Andheri West,

Mumbai – 400 053

Tel: + 91 22 30689444

Fax: + 91 22 39888927

Registration Number / CIN: U64 200 MH 2005 PLC 158355

ISIN: INE445K01018

Address of Registrar of Companies

Registrar of Companies,

100 Everest, Marine Drive

Mumbai – 400 002, Maharashtra

Board of Directors as on the date of filing of the Information Memorandum

No. Name

1. Shri Gautam Doshi

2. Shri Rajesh Sawhney

3. Shri Anil Sekhri

4. Shri Darius Jehangir Kakalia

5. Shri Pradeep Shah

For further details of the Board of Directors of the Company, please refer the Section titled “Management”

on Page No. 56 of this Information Memorandum.

21

Company Secretary and Compliance Officer

Shri Gururaja Rao


Link Road, Oshiwara, Andheri West,

Mumbai – 400 053

Tel: + 91 22 30689444

Fax: + 91 22 39888927

Email: [email protected]

Bankers to the Company

Sr. No. Name of Banker Address

1. HDFC Bank Limited

GR Floor, Conwood House,

Yashodham, Gen A.K.Vaidya Marg,

Goregaon E,

Mumbai - 400 063

2. ICICI Bank Limited

Free Press House, 215

Free Press Journal Marg,

Nariman Point,

Mumbai - 400 021

3. Yes Bank Limited

G1, Ground Floor,

Valecha Chambers,

Plot B6, New Link Road,

Andheri West,

Mumbai - 400 053

Auditors Chaturvedi & Shah

Chartered Accountants

714-715, Tulsiani Chambers,

212, Nariman Point,

Mumbai – 400 021

Email id: [email protected]

Telephone No. 022- 30218500

Fax No. 022- 30218595 Registrar and Transfer Agent Karvy Computershare Private Limited

Plot No. 17 – 24, Vittal Rao Nagar,

Madhapur, Hyderabad - 500 081

Tel: +91-40-23420818 - 25

Fax: +91-40-23420859


Contact Person: Praveen Chaturvedi

22

CAPITAL STRUCTURE

Share Capital: Pre and post Scheme of Arrangement Authorised Share Capital Particulars Pre Scheme Post Scheme No. of Equity Shares 21,10,000 10,00,00,000 Aggregate Nominal Value (Rs.5/- per equity share) (Rs.) 1,05,50,000 50,00,00,000 No. of Preference Shares - 10,00,00,000 Aggregate Nominal Value (Rs.5/- per preference share) (Rs.) - 50,00,00,000 Issued, Subscribed and Paid up Capital Particulars Pre Scheme Post Scheme No. of Equity Shares 21,10,000 4,61,26,170 Aggregate Nominal Value (Rs.5/- per equity share) (Rs.) 1,05,50,000 23,06,30,850

1) The Authorised share capital of the Company at the time of incorporation was Rs. 5,00,000 divided

into 50,000 equity shares of Rs. 10/- each. Subsequently the equity share of the face value of Rs. 10/-

each fully paid up was divided into equity share of Rs. 5/- each fully paid up and Authorised share

capital was increased to Rs. 1,05,50,000 divided into 21,10,000 Equity Shares of Rs. 5/- each vide

Ordinary Resolution passed at the Extraordinary General Meeting held on April 25, 2007. Further, the

Authorised share capital of the Company was increased to Rs. 100,00,00,000 divided into

10,00,00,000 Equity Shares of Rs. 5/- each and 10,00,00,000 Preference Shares of Rs. 5/- each vide

Ordinary Resolution passed at the Extraordinary General Meeting held on July 17, 2009.

2) Prior to the allotment of shares as per the Scheme, the Issued, Subscribed and Paid up share capital

of the Company was Rs.1,05,50,000 divided into 21,10,000 equity shares of Rs. 5/- each which was

entirely held by RML and its nominees. As per the Clause 3.3.1 of the Scheme the existing

shareholding of RML (i.e. 21,10,000 equity shares of Rs. 5/-) in the Company stands cancelled.

3) As per Clause 3.1.1 of the Scheme the Company has issued and allotted 4,61,26,170 equity shares to

the eligible members of RML on August 8, 2009.

4) The Paid up share capital of the Company is Rs. 23,06,30,850/- divided into 4,61,26,170 equity shares

of Rs. 5/- each.

Notes to Capital Structure

1) Equity Share Capital History of the Company:

Sr.

No.

Date of

Allotment

Date when

Fully Paid-

up

Consideration No of

Equity

Shares

Face

Value

(Rs.)

Issue

Price

(Rs.)

Share

Premium

(Rs.)

% of post

Arrangement

paid-up

Capital

Lock-

in

period

1 27.12.2005 27.12.2005 Cash 50,000 10 10 Nil Pre

Arrangement

Capital

No

lock in

Period

23

Sr.

No.

Date of

Allotment

Date when

Fully Paid-

up

Consideration No of

Equity

Shares

Face

Value

(Rs.)

Issue

Price

(Rs.)

Share

Premium

(Rs.)

% of post

Arrangement

paid-up

Capital

Lock-

in

period

2 Sub divided

into equity

Shares of

Es.5/- each*

25.04.2007* Nil 1,00,000# 5 N.A. Nil No

lock in

Period

3 30.04.2007# 30.04.2007 Cash 20,10,000 5 50 45 Per

Share

No

lock in

Period

4 08.08.2009 08.08.2009 Pursuant to

the Scheme

4,61,26,170 5 5 Nil 100% 3

years**

* The equity share of the face value of Rs. 10/- each fully paid up was divided into equity share of Rs. 5/- each

fully paid up vide Ordinary Resolution passed at the Extraordinary General Meeting held on April 25, 2007.

# Prior to the allotment of shares as per Scheme, the Issued, Subscribed and Paid up Share Capital of the

Company was Rs.1,05,50,000 divided into 21,10,000 equity shares of Rs. 5/- each which was entirely held by

RML and its nominees. As per the Clause 3.3.1 of the Scheme the existing shareholding of RML (i.e. 21,10,000

equity shares of Rs. 5) in the Company stands cancelled.

** 92,25,234 equity shares of Rs. 5 each representing 20% of the Company’s total paid up equity share capital

(after effectuating the Scheme) held by Promoters will be locked in for the period of 3 years from the date of

Listing of Shares.

2) The Promoters of the Company and associates and their directors have not purchased or sold or

financed, directly or indirectly, any equity shares of the Company from the date of approval of the

Scheme till the date of submission of this Information Memorandum.

3) Shareholding pattern of the Company:

Before the Scheme

Prior to the effectiveness of the Scheme, the Company was a wholly owned subsidiary of RML and

the entire share capital of the Company comprising 21,10,000 equity shares of Rs. 5 each were held

by RML and its nominees. Pursuant to the scheme such shares stand cancelled.

After the Scheme (as on the date of Information Memorandum)

Total shareholding as a percentage of total number of shares

Category code

Category of Shareholder

No. of Shareholders

Total number

of shares

No. of shares held in

dematerialized form As a % of

(A+B) As a % of (A+B+C)

(A) Shareholding of Promoter and Promoter Group

(1) Promoters

(a) Reliance Land Private Limited

1 20600000 20600000 44.66 44.66

24

(b) Reliance Capital Limited 1 2955000 2955000 6.41 6.41

Sub Total (A)(1) 23555000 23555000 51.07 51.07

(2) Person Acting in concert

(PAC)

(a) AAA Entertainment Pvt. Ltd. 1 4800000 4800000 10.40 10.40

Sub Total (A)(2) 4800000 4800000 10.40 10.40

Total Shareholding of

Promoter and Promoter

Group (A)= (A)(1)+(A)(2)

3 28355000 28355000 61.47 61.47

(B) Public shareholding

(1) Institutions

(a) Mutual Funds/ UTI 2 78000 78000 0.17 0.17

(b) Financial Institutions / Banks 8 188523 188523 0.41 0.41

(c) Foreign Institutional

Investors

23 989156 989156 2.14 2.14

Sub-Total (B)(1) 33 1255679 1255679 2.72 2.72

(2) Non-institutions

(a) Bodies Corporate 1999 4979102 4979102 10.79 10.79

(b) Individuals –

i. Individual shareholders

holding nominal share

capital up to Rs 1 lakh

118556 8631159 8595874 18.71 18.71

ii. Individual shareholders


capital in excess of Rs. 1

lakh.

14 2659510 2659510 5.77 5.77

(c) NRI /OCBs 966 245720 245670 0.53 0.53

Sub-Total (B)(2) 121535 16515491 16480156 35.81 35.81

(B) Total Public

Shareholding (B)=

(B)(1)+(B)(2)

121568 17771170 17735835 38.53 38.53

TOTAL (A)+(B) 121571 46126170 46090835 100 100

(C) Shares held by Custodians

and against which

Depository Receipts have

been issued

Nil Nil Nil Nil Nil

GRAND TOTAL

(A)+(B)+(C)

121571 46126170 46090835 100 100

25

List of the persons/entities comprising Promoter Group

As on the date of this Information Memorandum, the Promoter group of the Company is as under:

Sr.

No.

Name of the Shareholder Initial

Subscription

at the time of

incorporation

No. of

shares held

(Prior to

the

Scheme)

No. of shares

allotted

Total No.

of shares

%

Holding

(A) Promoter

1. Reliance Capital Limited Nil Nil 29,55,000 29,55,000 6.41

2. Reliance Land Private

Limited*

Nil Nil 2,06,00,000 2,06,00,000 44.66

Total of (A) Nil Nil 2,35,55,000 2,35,55,000 51.07

(B) Person Acting in

concert

1. AAA Entertainment

Private Limited

Nil Nil 48,00,000 48,00,000 10.40

Total of (B) Nil Nil 48,00,000 48,00,000 10.40

(C) Promoter Group Total

of (A+B)

283,55,000 283,55,000 61.47

* 92,25,234 equity shares of Rs. 5 each representing 20% of the Company’s total paid up equity share

capital (after effectuating the Scheme) held by Reliance Land Private Limited is locked in for the period of 3

years from the date of Listing of Shares.

For further details of the Promoters of the Company, please refer – the Section titled “Our Promoters and

Group Companies” on Page No. 64 of this Information Memorandum.

The list of top 10 shareholders of the Company and the number of Equity Shares held by them

a) Top 10 shareholders as on the date of filing of the Information Memorandum.

Sr. No. Name of the Shareholder No. of Equity Shares % Holding

1 Reliance Land Private Limited 2,06,00,000 44.66

2 AAA Entertainment Private Limited 48,00,000 10.40

3 Reliance Capital Limited 29,55,000 6.41

4 Manmohan Shetty 21,69,234 4.70

5 Religare Securities Limited 3,91,191 0.85

6 Deutsche Securities Mauritius Limited 3,60,594 0.78

7 Acacia Institutional Partners, Lp 2,83,500 0.61

8 Globe Capital Market Ltd 2,70,554 0.59

9 Angel Broking/Capital And Debt Market Limited. 2,70,303 0.59

10 Thalia Infratech Private Limited 2,04,000 0.44

26

b) Top ten shareholders 10 days prior to the date of the Information Memorandum

Sr.

No.

Name of the Shareholder No. of Equity

Shares

% Holding

1 Reliance Land Private Limited 2,06,00,000 44.66

2 AAA Entertainment Private Limited 48,00,000 10.40

3 Reliance Capital Limited 29,55,000 6.41

4 Manmohan Shetty 21,69,234 4.70

5 Religare Securities Limited 3,91,191 0.85

6 Deutsche Securities Mauritius Limited 3,60,594 0.78

7 Acacia Institutional Partners, Lp 2,83,500 0.61

8 Globe Capital Market Ltd 2,70,554 0.59

9 Angel Broking/Capital And Debt Market Limited. 2,70,303 0.59

10 Thalia Infratech Private Limited 2,04,000 0.44

c) Top ten shareholders of the Company on the date of incorporation

Sr. No. Name of the Shareholder No. of Equity Shares % Holding

1 Shri Ramesh Shenoy 10 0.02

2 Shri Abhijit Banerjee 10 0.02

3 Shri Ashish Karyekar 10 0.02

4 Shri Paresh Rathod 10 0.02

5 Reliance Energy Global Private Limited 16,650 33.30

6 Reliance Energy Management Services Private Limited 16,650 33.30

7 Powersurfer Interactive (India) Private Limited 16,660 33.32

Total 50,000 100

Notes:

1) As on the date of this Information Memorandum, there are no outstanding warrants, options or

rights to convert debentures, loans or other instruments convertible into equity shares of the

Company.

2) The Company, its directors, its promoters have not entered into any buy-back, standby or similar

arrangements to purchase equity shares of the company from any person.

3) There will be no further issue of capital by the Company whether by way of issue of bonus shares,

preferential allotment, and rights issue or in any other manner during the period commencing from

the date of approval of the Scheme till listing of the Equity Shares.

4) There shall be only one denomination for the Equity Shares of the Company, subject to applicable

regulations and Company shall comply with such disclosure and accounting norms specified by

SEBI, from time to time.

5) The Company has 1,21,571 members as on the date of filing this Information Memorandum.

6) None of the Equity Shares of the Company were under lock-in prior to the Scheme.

27

SCHEME OF ARRANGEMENT

Rationale for demerger as set forth in the Scheme of Arrangement with respect to Radio Business of

RML

The business carried on by RML by itself and through its subsidiaries and affiliate companies and through

strategic investments in the Radio Business, has significant potential for growth. The nature of risk and

competition involved in each of the businesses undertaken by the Demerged Company, including the Radio

Business, is distinct from others and consequently each business or undertaking is capable of attracting a

different set of investors, strategic partners, lenders and other stakeholders. In order to enable distinct focus

of investors to invest in some of the key businesses and to lend greater focus to the operation of each of its

diverse businesses, the Company proposes to re-organize and segregate by way of a demerger, its

business and undertakings engaged in the Radio Business.

The Radio Business has tremendous growth and profitability potential and is at a stage where it requires

focused leadership and management attention. Hence, simultaneously, with the re-organisation and

segregation of the business, the Demerged Company also intends to re-organise the management of the

business and undertaking to provide focused management attention and leadership required by the

business which is to be segregated and demerged.

Under the Scheme of Arrangement, the Demerged Company’s undertakings comprising its interests and

strategic investments in the radio business be segregated and demerged, pursuant to a Scheme of

Arrangement under Sections 391 to 394 of the Act and transferred to the Company for achieving

independent focus in these areas. The Demerged Company will continue its interests in its other businesses

of production, processing, exhibition, and overseas distribution of films.

As per the original tender conditions there were restrictions on transfer of the FM Licenses to another entity

and also does not allow for the change of majority shareholding for the first five years. However, MIB vide its

order no. 104/1/2007-FM dated September 11, 2008 modified the policy guidelines on “expansion of FM

radio Broadcasting services through Private Agencies (Phase II), following are the amendments to Para 8.3

of the FM Phase – II Policy;

“8.3 No permission holder, whether with or without foreign investment, shall be permitted to change the

ownership pattern of the company through transfer of shares of the majority shareholders/promoters to any

new shareholders without the written permission of the Ministry of Information & Broadcasting, which shall

not be granted for a period of five years from the date of operationalization of the permission, subject to the

condition that the new shareholders conform to all the prescribed eligibility criteria. However, requests for

transfer of shares for the purpose of creation of a subsidiary company, amalgamation of companies of the

same group, de-merger of company etc. may be allowed within the period of five years also subject to the

fulfillment of the following conditions : -

(a) The majority shareholders/promoters would continue to remain as majority shareholders/promoters

and together should hold at least 51% of the total shares.

(b) The new corporate entities would maintain their FDI component within the prescribed limit and would

not violate the terms and conditions of the Tender Document and Grant of Permission Agreement.

28

(c) The new corporate entities should have minimum prescribed net worth and adhere to all the terms

and conditions of the Tender Document and the provisions of the agreement.

(d) The new company shall sign a fresh agreement with Government on identical terms and conditions

(except for transferability of shares as provided herein) for the remaining period of licence of the

original company.

(e) Such transfer of shares would be permitted only once during the first five years period from the date

of operationalization.

(f) No new tax regime will be designed to provide any incentive to encourage creation of subsidiaries,

merger/demerger amalgamation of FM Broadcasting companies

(g) Any tax implication arising out of such mergers/demergers or amalgamation would be governed by

the provisions of the Income Tax Act, 1961 as applicable from time to time.

(h) The processes/action taken by the licensee companies including for formation of new

companies/subsidiaries/mergers/amalgamations and/or disinvestment of undertakings, or part

thereof, of existing companies etc., need to be compliant with the Companies Act, 1956. The

applicant shall not dilute such requirement through its Articles of Association or any Agreement.”

Vide the above modifications permitted to FM Broadcasters, RML had filed the Scheme of Arrangement with

the Hon’ble High Court of Judicature at Bombay effecting demerger of radio business into the Company,

pursuant to which the shareholders and the creditors approval have been received for the demerger.

The Company has received approval from MIB vide its letter dated May 29, 2009 giving its no-objection for

transfer and vesting of the Radio Business from RML to the Company subject to the conditions imposed as

aforesaid. The Company has submitted fresh Bank Guarantees and has duly executed GOPAs with the MIB

for all its 45 FM Radio Stations.

Approvals with respect to the Scheme of Arrangement

The Hon’ble High Court of Judicature at Bombay, vide its Orders dated April 4, 2009 have approved the

Scheme of Arrangement amongst RML and erstwhile Reliance Unicom Limited now Reliance Media World

Limited and their respective shareholders and creditors. Pursuant to this Scheme the Radio Business held

by RML has been transferred to and vested in the Company w.e.f. 1st April, 2008 (i.e. the Appointed Date

under the Scheme). In accordance with the said Scheme, the Equity Shares of the Company issued

pursuant to the Scheme, subject to applicable regulations shall be listed and admitted to trading on BSE and

NSE. Such listing and admission for trading is not automatic and will be subject to such other terms and

conditions as may be prescribed by the Stock Exchanges at the time of application by the Company seeking

listing.

The Certified copy of the Order of the Hon’ble High Court of Judicature at Bombay was obtained on June 30,

2009 and filed by RML and the Company with ROC, Maharashtra on June 30, 2009, which is the Effective

Date of the Scheme.

Subsequently, SEBI, vide its letter no. CFD/DIL/PB/VT/177960/2009 dated September 24, 2009 has

granted relaxation from the strict enforcement of the requirement of Rule 19(2)(b) of the Securities Contract

Regulation (Rules), 1957 (SCRR) for the purpose of listing of shares of the Company subject to the

transferee company, viz., the Company, complying with all the provisions of Circular No.

SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009.

29

The Company has submitted its Information Memorandum, containing information about itself, making

disclosures in line with the disclosure requirement for public issues, as applicable, to BSE and NSE for

making the said Information Memorandum available to public through its website.

This Information Memorandum will be made available on the website of BSE (www.bseindia.com) and

website of NSE (www.nseindia.com ).

The Company will publish an advertisement in the newspapers containing its details in line with the details

required as per Circular No. SEBI/CFD/SCRR/01/2009/03/09 dated September 3, 2009.The advertisement

will draw a specific reference to the availability of this Information Memorandum on the website of the Stock

Exchanges.

The Company also undertakes that all material information about itself shall be disclosed to stock

exchanges on a continuous basis so as to make the same available to public, in addition to the

requirements, if any, specified in Listing Agreement for disclosures about the subsidiaries.

30

STATEMENT OF GENERAL TAX BENEFITS

To,

The Board of Directors


Dear Sirs,

We hereby report that the enclosed annexure states “General Tax Benefits” available to Reliance Media

World Limited (formerly known as Reliance Unicom Limited) (the “Company”) and its shareholders under the

current tax laws in force in India as amended by the Finance Act, 2009. 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, the changing tax laws and the

fact that the Company will not distinguish between the shares offered for subscription and the shares offered

for sale by the selling shareholders, 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.

For Chaturvedi & Shah


C. D. Lala

Partner

Membership No.: 35671

Place: Mumbai

Date: 30 October, 2009

31

Annexure to Statement of “General Tax Benefits” available to Reliance Media World Limited

(formerly known as Reliance Unicom Limited) and its shareholders:

A. To the Company

1. Under the Income Tax Act, 1961 (“IT Act”)

• Under Section 32 of the Act, the Company is entitled to claim depreciation allowance at the prescribed

rates on all its tangible and intangible assets acquired and put to use for its business.

• In accordance with and subject to the provisions of Section 35(i) and (iv), the Company would be entitled

to deduction in respect of revenue or capital expenditure incurred, other than expenditure on the

acquisition of land, laid out or expended on scientific research related to the business. Subject to

conditions as specified, the company is also entitled to a weighted deduction to the extent of one and

one-fourth times of the sum paid to a scientific research association which has as its objects the

undertaking of scientific research or to any approved university, college or other institution to be used for

scientific research or for research in social science or statistical research, in accordance with Section

35(1)(ii) and (iii).

• By virtue of Section 10(34) of the IT Act, income earned by way of dividend income from another

domestic company referred to in Section 115(O) of the Act, is exempt from tax in the hands of the

company. However, the allowability of expenses incurred for earning dividend income claimed as

exempt is restricted under Section 14A of the IT Act read with Rule 8D of the IT Rules.

Statement of possible Tax Benefits available to the Company’s Shareholders under the Income Tax

Act, 1961 (“It Act”) and other Direct Tax Laws presently in force in India, Tax Benefits available to the

Company’s Shareholders

This Statement sets out below the possible tax benefits available to the Company’s shareholders under the

current tax laws presently in force in India. Several of these benefits are dependent on such shareholders

fulfilling the conditions prescribed under the relevant tax laws. Hence, the ability of the shareholders to

derive the tax benefits is dependent upon fulfilling such conditions, which based on the business

imperatives, the shareholders may or may not choose to fulfill;

This Statement sets out below the provisions of law in a summary manner only and is not a complete

analysis or listing of all potential tax consequences of the subscription, ownership and disposal of equity

shares. This statement is only intended to provide general information to the investors and is neither

designed nor intended to be a substitute for a professional tax advice. In view of the individual nature of tax

consequences and the changing tax laws, each investor is advised to consult his or her or their own tax

consultant with respect to the specific tax implications arising out of their participation in the issue;

In respect of non-residents, the tax rates and the consequent taxation, mentioned in this section shall be

further subject to any benefits available under the Double Taxation Avoidance Agreement, if any, between

India and the country in which the non-resident has fiscal domicile; and

32

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

shareholders.

I. Tax Benefits available to shareholders of the Company under the IT Act

A. Resident shareholders

1. The Company is required to pay a ‘dividend distribution tax’ currently at the rate of 16.995% (including

applicable surcharge and education cess) on the total amount distributed or declared or paid as dividend.

Under Section 10(34) of the IT Act, income by way of dividend referred to in Section 115-O of the IT Act,

received on the Shares of the Company is exempt from income tax in the hands of shareholders. However,

the allowability of expenses incurred for earning dividend income claimed as exempt is restricted under

Section 14A of the IT Act read with Rule 8D of the IT Rules.

2. The characterization of the 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 shareholder and various other factors.

3. (a) The long-term capital gains (under section 2(29B) of the IT Act) accruing to the shareholders of the

Company on sale of the Company’s Shares in a transaction carried out through a recognized stock

exchange in India, and where such transaction is chargeable to securities transaction tax (“STT”), is exempt

from tax as per provisions of Section 10(38) of the IT Act.

(b) The short-term capital gains (under section 2(42A) of the IT Act) accruing to the shareholders of the

Company on sale of the Company’s Shares in a transaction carried out through a recognized stock

exchange in India, and where such transaction is chargeable to STT, tax will be chargeable at 15% (plus

applicable surcharge and education cess) as per provisions of Section 111A of the IT Act. Further no

deduction under Chapter VI-A of the IT Act, would be allowed in computing such short term capital gains

subjected to tax under Section 111A. In other cases, where the transaction is not subjected to STT, the short

term capital gains would be chargeable as a part of the total income and the tax rates would depend on the

income slab.

(c) As per the provisions of Section 112 of the IT Act, long term gains accruing to the shareholders of the

Company from the transfer of Shares of the Company being listed in recognized stock exchanges, otherwise

than as mentioned in point 4(a) above, is chargeable to tax at 10% (plus applicable surcharge and education

cess) after deducting from the sale proceeds the cost of acquisition without indexation. However, the

shareholders claiming the benefit of indexation would be subject to tax at 20% plus applicable surcharge

and education cess on the long term gains. Further no deduction under Chapter VI-A would be allowed in

computing such long term capital gains subject to tax under Section 112 of the IT Act.

(d) Shareholders are entitled to claim exemption in respect of tax on long term capital gains (other than

those exempt under Section 10(38) of the IT Act) under Section 54EC of the IT Act, if the amount of capital

gains is invested in certain specified bonds / securities within six months from the date of transfer, subject to

the fulfillment of the conditions specified therein. The maximum investment permissible on and after 1 April

2007 for the purposes of claiming the exemption in the above bonds, by any person in a financial year, is

Rs. 5 million. However, according to Section 54EC(2) of the IT Act, if the shareholder transfers or converts

the notified bonds into money within a period of three years from the date of their acquisition, the amount of

33

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.

(e) Shareholders that are individuals or Hindu undivided families can avail of an exemption under Section

54F of the IT Act, by utilization of the sales consideration arising from the sale of the Company’s Share held

for a period of more than 12 months (which is not exempt under Section 10(38)), for purchase / construction

of a residential house within the specified time period and subject to the fulfillment of the conditions specified

therein.

B.1 Non-resident shareholders – other than Foreign Institutional Investors

1. The Company is required to pay a ‘dividend distribution tax’ currently at the rate of 16.995 percent.

(including applicable surcharge and education cess) on the total amount distributed or declared or paid as

dividend. Dividend (whether interim or final) declared, distributed or paid, under Section 115-O of the IT Act,

by the Company are exempt in the hands of shareholders as per the provisions of Section 10(34) of the IT

Act. However the allowability of expenses incurred for earning dividend income claimed as exempt is

restricted under Section 14A of the IT Act read with Rule 8D of the IT Rules.



3. The long-term capital gains accruing to a shareholder of the Company, being a non-resident, on sale of

the Company’s Shares in a transaction carried out through a recognized stock exchange in India, and where

such transaction is chargeable to STT, is exempt from tax as per provisions of Section 10(38) of the IT Act.

4. The short-term capital gains accruing to a shareholder of the Company on sale of the Company’s Shares

in a transaction carried out through a recognized stock exchange in India, and where such transaction is

chargeable to STT, tax is chargeable at 15% plus applicable surcharge and education cess as per

provisions of Section 111A of the IT Act. Further, no deduction under Chapter VI-A would be allowed in

computing such short term capital gains subjected to tax under Section 111A. In other case, i.e. where the

transaction is not subjected to STT, the short term capital gains would be chargeable as a part of the total

income and the tax rate would depend on the income slab.

5. As per the provisions of Section 112 of the IT Act, long term gains accruing to the shareholders of the

Company, being non-residents, from the transfer of Shares of the Company being listed in recognized stock

exchanges, otherwise than as mentioned in point 4 above, are chargeable to tax at 20% plus applicable

surcharge and education cess after deducting from the sale proceeds the cost of acquisition. Such non-

resident shareholders are allowed to adjust the cost of acquisition by the amount of foreign exchange rate

fluctuations in computing long-term capital gains. Further, no deduction under Chapter VI-A would be

allowed in computing such long term capital gains subjected to tax under Section 112.

6. Under the provisions of Section 90(2) of the IT Act, if the provisions of the Double Taxation Avoidance

Agreement (“DTAA”) between India and the country of residence of the non-resident are more beneficial to

the non-resident, then the provisions of the DTAA shall be applicable.

34

7. The shareholders are entitled to claim exemption in respect of tax on long term capital gains other than

those exempt under Section 10(38) of the IT Act under Section 54EC of the IT Act, if the amount of capital

gains is invested in certain specified bonds / securities within six months from the date of transfer subject to

the fulfilment of the conditions specified therein. The maximum investment permissible for the purposes of

claiming the exemption in the above bonds by any person in a financial year is Rs. 5 million. However,

according to Section 54EC(2) of the IT Act, if the shareholder 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.

8. Individual shareholders can avail of an exemption under Section 54F by utilization of the sales

consideration arising from the sale of the Company’s Share held for a period more than 12 months (which is

not exempt under Section 10(38)), for purchase/construction of a residential house within the specified time

period and subject to the fulfillment of the conditions specified therein.

B.2 Non-resident shareholders – Foreign Institutional Investors

1. The Company is required to pay a ‘dividend distribution tax’ currently at the rate of 16.995% (including

applicable surcharge and education cess) on the total amount distributed or declared or paid as dividend.

Under Section 10(34) of the IT Act, income by way of dividend referred to in Section 115-O received on the

Shares of the Company is exempt from income tax in the hands of shareholders. However, the allowability of

expenses incurred for earning dividend income claimed as exempt is restricted under Section 14A of the IT

Act read with Rule 8D of the IT Rules.



3. (a) The long-term capital gains accruing to the shareholders of the Company on sale of the Company’s

Shares in a transaction carried out through a recognized stock exchange in India, and where such

transaction is chargeable to STT, is exempt from tax as per provisions of Section 10(38).

(b) The short-term capital gains accruing to the members of the Company on sale of the Company’s Shares

in a transaction carried out through a recognized stock exchange in India, and where such transaction is

chargeable to STT, tax will be chargeable at 15% plus applicable surcharge and education cess as per

provisions of Section 111A. In other case, i.e. where the transaction is not subjected to STT, as per the

provisions of Section 115AD of the Act, the short term capital gains would be chargeable to tax at 30% plus

applicable surcharge and education cess.

(c) As per the provisions of Section 115AD of the Act, long term gains accruing to the shareholders of the

Company from the transfer of Shares of the Company being listed in recognized stock exchanges and

purchased in foreign currency, otherwise than as mentioned in point 3(a) above, are chargeable to tax at

10% Plus applicable surcharge and education cess. The benefit of indexation and the adjustment with

respect to fluctuation in foreign exchange rate would not be allowed to such shareholders. The filing of

return under section 139(1) for income computed under Section 115AD is mandatory. Further, where the

Gross Total Income (GTI) of the members includes any income on which tax has been paid as per special

35

rates provided under Section 115AD, then the GTI shall be reduced by the amount of such income and

deduction under chapter VIA shall be allowed in respect of reduced GTI.

(d) The shareholders are entitled to claim exemption in respect of tax on long term capital gains under

Section 54EC of the IT Act, if the amount of capital gains is invested in certain specified bonds /securities

within six months from the date of transfer subject to the fulfilment of the conditions specified therein. The

maximum investment permissible for the purposes of claiming the exemption in the above bonds by any

person in a financial year is Rs. 5 million. However, according to section 54 EC(2) of the IT Act, if the

shareholder 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.

4. Under the provisions of Section 90(2) of the IT Act, if the provisions of the Double Taxation Avoidance

Agreement (DTAA) between India and the country of residence of the non-resident are more beneficial, then

the provisions of the DTAA shall be applicable.

a. Tax Benefits available to the shareholders under the Wealth-Tax Act, 1957

Shares of company held by the shareholder will not be treated as an asset within the meaning of Section

2(ea) of Wealth Tax Act, 1957. Hence no Wealth Tax will be payable on the market value of Shares of the

Company held by the shareholder of the Company.

b. Benefits available to Mutual Funds

As per the provisions of Section 10(23D) of the IT Act, any income of Mutual Funds registered under the

SEBI Act, 1992 or regulations made thereunder, Mutual Funds set up by public sector banks or public

financial institutions and Mutual Funds authorised by the Reserve Company of India would be exempt from

income tax, subject to the conditions as the Central Government may by notification in the Official Gazette

specify in this behalf. However, Mutual Funds will be liable to pay tax on distributed income to unit holders

under Section 115R of the IT Act.

c. Tax Deduction at Source

No income-tax is deductible at source from income by way of capital gains under the present provisions of

the IT Act, in case of residents. However, as per the provisions of section 195 of the IT Act, any income by

way of capital gains, payable to non residents (long-term capital gains exempt under section 10(38) of the IT

Act), may be eligible to the provisions of with-holding tax, subject to the provisions of the relevant DTAA with

the country of Residence of the non-resident. Accordingly income tax may have to be deducted at source in

the case of a non- resident at the rate under the domestic tax laws or under the DTAA, whichever is

beneficial to the non-resident, unless a lower withholding tax certificate is obtained by the non-resident from

the Indian Tax authorities and the same is submitted to the Company.

36

OVERVIEW OF FM RADIO INDUSTRY

A. Industry Overview

India has been among the fastest growing economies in the world. From the fiscal 2005 to 2009, the

average GDP growth is 8.7%. According to CSO estimates, nominal GDP growth for fiscal 2009 is at

14.2%. As the Indian economy has grown, the upwardly mobile Indian is able to allocate a higher

percentage of monthly expenditure on services including ‘Entertainment & Media’ (E&M). The key drivers of

the revenue growth in the E&M industry in recent years include improving literacy levels, penetration of

internet and mobile telephony, and an expanding audience base. Thus, there is an established correlation

between the economic growth rates of a country and growth rates of the advertising industry.1 Industry size as % of GDP INDIA

ADVANCED MARKET

Source: PWC, FICCI Report, 2008

In India, radio broadcasting started on July 23, 1927 at Mumbai and a month later on August 26, 1927 in

Kolkata with two privately owned transmission stations. In 1930, the government acquired these stations and

started operating them under the Indian Broadcasting Service. This service was later renamed AIR in 1936

and has since been operated as an independent Government Department. Radio service from the year 1957

also came to be referred to as 'Akashvani.'

Vividh Bharati, AIR's main entertainment channel, was started in the 1960s. Commercial Broadcasting was

first introduced on Indian radio in 1967. In the mid-1970s, AIR started offering sponsored programs. Radio's

commercials started during the early 1980s on its primary channel Vividh Bharati and were extended to

other channels by the mid-1980s. All these initiatives increased the popularity of radio in the country and

also generated huge revenues for AIR (from sponsorship fees and commercial advertisements).

AIR also operated an External Services Division (ESD) that broadcasted programs in 24 languages (16

foreign and 8 Indian, languages). These programs generally consisted of commentaries on current affairs;

1This Year Next Year, Indian Media Forecast, 2009 and The Entertainment Law Book – FICCI, 2009

37

review of Indian press coverage; news bulletins; talk shows on socio-economic, cultural, historical and

political subjects; and classical, folk and popular music from all corners of the country. The major ESD

services included the General Overseas Service, Hindi Service and Urdu Service. Though FM radio had

long been popular in Western countries, AIR started offering FM channels only in 1977. The first FM station

was started in Chennai.

In 1999, during the first phase of the licensing, 32 circles were opened up, for private players to broadcast

and eventually 21 stations were set up across 12 cities. Big players who entered the foray were

Entertainment Network (India) Limited (Radio Mirchi), Music Broadcast Pvt. Ltd. (Radio City), Radio Mid-Day

West (India) Ltd (GO), Radio Today Broadcasting Private Ltd. (Red FM). The private participation was

shadowed by strict governmental policies, unviable high license fee and low advertisement flow. The major

economic deterrent in terms of an annually escalating license fee, limited duration of license for 10 years

with no provision for renewal, restricted FDI inflow at 20% for raising capital and high reserve entry fees

dampened the commitment of many bidders. The radio industry was plagued with many problems - although

listenership improved, it remained stagnant beyond a point, no industry standard for ‘reach’ measurement is

present and lastly music rights issues, forced channels to limit playlists.

The Tenth Five Year Plan (2002 - 2007) emphasized the need for substantially enhancing the FM coverage

from present 30% population coverage to 60% by the end of the plan. One of the thrust areas of the plan

was to encourage private participation in providing quality services and replacing the existing system of

bidding for licenses with a revenue sharing mechanism. In the light of the above facts and the report of the

Radio Broadcast policy Committee, Govt. of India, MIB opened up Phase II of FM Radio Broadcasting

recommended, inter alia, revision of license fee structure and migration and migration of license terms from

fixed license fee basis to a one time entry fee with an annual revenue sharing arrangement. 1

Salient features of the current Radio industry

� 338 frequencies in 91 cities for Private FM Players

� One time entry fee

� Annual Revenue sharing at 4% of gross revenue

� Submission of Bank Guarantee (50% of financial bid) as tender deposit

� License valid for 10 years.

� Only 1 channel per city, per applicant.

� No single player can operate more than 15% of the total operational stations

� FDI limit of not more than 20% of paid up equity capital

� No news and current affairs programs are permitted.

1The Entertainment Law Book – FICCI, 2009

38

Indian Ad Industry Snapshot:

Source: FICCI KPMG Media Entertainment Industry Report, 2009 • Industry size expected INR 396.8 Bn in 2013 up from INR 221.6 Bn in 2008 • Healthy CAGR of 19.7 %

MIB had opened up Phase II of FM Radio Broadcasting to private participation with the objective of

attracting private agencies to complement the efforts of All India Radio by operationalising radio stations that

provide programmes with local content and relevance, improve the quality of fidelity in reception and

generation, encouraging local talent and generating employment. RML has been awarded license to provide

FM Radio services in 45 locations across India. The license would be period of 10 years from the date of

operationalisation of the stations.

The Government is currently in the stages of formulating the policies for Phase – III licensing. To give effect

to the TRAI recommendations on utilization of spectrum resource, it has been recommended that there is

change in the bidding from City level to District level. 1

The next licensing tender is likely to attract bidding for 700 new FM channels in 237 cities, several not

presently served by FM2. Telecom Regulatory Authority of India (TRAI), the regulatory body for radio in

India, has proposed many reforms which could stimulate revenue growth. The growth in Radio will be

primarily driven by:

• Increased spends on radio from categories like Telecom, Media and FMCG who now have a more

cost effective option compared to TV and Print to reach more markets

• Radio being an effective and efficient medium for local advertisements, smaller markets will gain

from categories like retail and education

• Six-city coverage by RAM, plus AdEx tracking, increasing credibility of the medium2

Key milestones for Radio in India

• 1927 First ever News Bulletin went on air

• 1935 Radio broadcast begins with AIR

• 1977 First FM service begins in Chennai

1 Comments of TRAI on the views of the Government on recommendations on 3rd Phase of FM Radio Broadcasting, 28.11.2008, The Entertainment Law Book, 2009. 2 Group M, TYNY India Media Forecasts, April 2009 and FICCI Report, 2009

39

• 1993 AIR sells time slots to Private FM players

• 1999 Privatization of FM – PHASE I

• 2001 Licenses given to Private radio broadcasters

• 2005 PHASE II of the privatization policy announced

• 2007 Establishment of RAM

• 2008 Formation of Association of Radio Operators of India (AROI)

• 2009 Announcement of Phase III Indian Media & Entertainment Industry:

Source: FICCI KPMG Media Entertainment Industry Report, 2009 As regional business in India start to spend more aggressively on advertising to build brand consciousness,

they are likely to turn to media like print and radio which are highly cost effective for regional ad campaigns.

Advertising revenues is one of the main drivers behind the growth of the Indian Media & Entertainment

Industry. Over the past three years, the advertising industry has grown at a CAGR of 17.1%1, whereas the

growth of Radio industry is ahead of the industry growth at 19.7%. I. Revenue Intensification

Advertisement revenues are one of the growth drivers of the Indian Media & Entertainment industry. Radio

ad spends account for about 4% of the total advertising spends in India today having grown from just 2% in

2004.2 The growth has been propelled by the emergence of the private FM industry in India. Due to the

Phase II policy success story, the numbers of stations have shot up from 21 to over 205 by March 2005.3

Consequently the radio industry is estimated to have grown at an impressive CAGR of 19.7% over 2006 –

2008 and is expected to have reached a size of INR 9.2 billion by end of 2009.

1 KPMG Analysis, FICCI KPMG Media Entertainment Industry Report, 2009 1. KPMG Analysis, FICCI KPMG Media Entertainment Industry Report, 2009 3 KPMG Analysis, FICCI KPMG Media Entertainment Industry Report, 2009

40

Source: Group M KPMG Interviews, KPMG Analysis, FICCI KPMG Media Entertainment Industry Report, 2009 On the Whole, the Radio Industry is expected to grow at a CAGR of 14.2% over the 2009 – 2013 (compared

to 19.7% over 2006 -2008) and reach a size of INR 16.3 billion by 20131.

Source: FICCI KPMG Report, 2009 Ad revenues are expected to maintain healthy double digit growth rate over next 4 years ie, from Rs. 221.6 Billion in 2009 to Rs. 396.8 Billion in 2013.The Radio and outdoor will grow faster than the Indian Media & Entertainment industry.

II. The FM Radio Industry- An International Perspective As per 2008 estimates of PWC and Industry analysis, Radio in India is today a Rs. 830 crore business and its share of the Rs. 21,600 crore total ad spends is about 4%. Globally in growing markets share is 10% - 12% and in mature markets between 8% to 10%. Comparison of global region wise spend is given in the chart below. Radio As % Of Ad Spent:

Source: FICCI Report

1 FICCI KPMG Media Entertainment Industry Report, 2009

3.24.4

6.5

9.4

12.5

15.3

8.7

0

2

4

6

8

10

12

14

16

18

India China Thailand Singapore New Zealand Philppines World

41

The radio industry is expected to grow globally at 8.7% in 2009. The global share of radio of total Ad Spend

is 9%, and in matured markets the share is 12 % - 14%. Global Radio Market by region (US $Millions):

Source:PwC Global Entertainment & Media Outlook 2009 -2013 (Indian Entertainment and Media Outlook, 2009, Pricewaterhouse

Coopers) III. International Perspective Learning’s:

• The right product can create a vibrant & profitable Radio Industry, in any type of economy

• Sustained growth is possible, despite increasing intrusion of newer media – internet, mobile phones,

Ipods etc.

• The right mix and content, for the right Target Audience (TA), can deliver loyal and profitable listeners.

• Brands have been able to corner a higher share, despite the presence of multiple players in a

market.

B. Strengths

Inherent Strengths

• Private FM now reaches close to 400 Million Indians

• Powerful Interactive, personal and localized medium

• Low content cost for creation of advertisements

• Cost effectiveness combined with local reach

• One of the “Best Mass Localised Reach vehicle in India”

Evolution Post Privatisation

The significant changes in the industry post the Phase II are as follows:

42

i. Programming & Promotion

• More competition has bred better quality and more innovation in programming.

• Increased category promotion has led to consumption increase.

ii. Improved Investment options for advertisers

• From Vanilla spots to Content integrations, activations, events, digital solutions etc.

• Pan India FM networks now attracts multi-city campaigns for major brands in India.

• This has led to upsell opportunities for Radio medium like ours, for advertisers who require multi-city

presence, and so far, had to make do with far more expensive options in TV and/ or Print media for

their advertising requirements.

• With changing trends in economic scenario, increasingly businesses are shifting their focus beyond

Metros. With Tier II focus as a core strategy, and with the Indian Youth being a key driver target

audience for brands, FM Radio has emerged as the lead medium for many advertisers. BIG FM’s

strong presence in these markets coupled with the medium’s inherent strengths of “built in

interactivity” and low threshold advertising costs, make us the first choice for key advertisers across

categories.

With the array of media, BIG FM offers opportunities for brands to extend their campaigns and thrusts

beyond Metros into Tier II markets and Rural areas (through solutions offered on Radio & Activations),

leveraging multiple partners by the creation of properties besides providing a single point contact to

enable all of the above.

iii. Measurement

• Advent of RAM- a measurement instrument introduced by TAM/AC NIELSEN.

• Measurement has resulted in better yields growth in the overall Radio pie.

iv. Industry Integration

• Formation of AROI (Association of Radio Operators of India)

• Championing the Cause of the Industry with Government & Legislative bodies

C. Weakness

I. Regulatory Challenges

• FDI capped at 20% of the paid up equity capital

• No broadcast of Live sports, News & current affairs

• No Multiple frequency ownership, even in A+ markets

• Non tradable licenses for first 5 years

• 10 year license tenure puts pressure on cost recovery

• Co Channel Spacing 800 khz against 200 khz in US cities

• Limitations on networking of stations.

• High rentals payable for Government owned infrastructure - transmission towers

43

II. Operational Issues

Music Royalties

• Music Royalties range between 7% and 43% of total costs.

• No scientific measurement to determine Royalty rates by Music Labels.

• Impacts financials of smaller stations

III. Operating processes and controls

• Credit Control mechanism currently absent for Radio

• Compulsory Co Location of Transmission facilities at Prasar Bharati

IV. License Fees

• Payable even on Service Tax and Agency Commission.

V. Revenue Challenges and Opportunities

• Category still nascent and requires educating advertisers, agency buyers & planners

• Smaller buys in smaller cities.

• Retail Advertising growth can be driven only through adoption of more “feet on the street”, which

requires investments

• Greater measurement system coverage would enable better yields

• Prohibition of Multiple frequencies in one city, prevents players from offering platforms that cater to

niche but monetizable segments.

D. The Future – Phase III Radio Licensing

• The Government is currently in the stages of formulating the policies for Phase – III licensing. Growth in the future is likely to come through continued increase in the number of radio stations after Phase III licensing, further liberalization of regulations as well as better ability of the radio stations to sell ad space.

• TRAI has given some very important recommendations for Phase III licensing of the sector:

o Allowing radio stations to broadcast news & current affairs.

o Increase in FDI limits from current 20%.

o Allow networking within the radio stations owned by the same company.

o Tradability of licenses and allowing ownership of multiples frequencies.

The recommendations could help in improving the operational efficiencies of radio companies, getting in

more foreign investments in the sector as well as moving the industry from being centered on a single

genre (i.e., hit music) to offering more differentiated content. Emergence of niche radio stations could

help the industry in attracting new listeners and driving up overall radio listenership1.

1 Source: FICCI KPMG Media Entertainment Industry Report, 2009

44

BUSINESS

Pursuant to “the Scheme”, the Radio Business of RML stands vested in the Company. RML had signed 45

GOPA with MIB in the name of RML itself. Pursuant to the Scheme, post the permission from MIB, these will

have to be vested in the Company. For content and music, the Company has commissioned research by

agencies like IMRB, Probe Qualitative Research etc., in all the markets it is entering to understand the music

likeability of the target audience to ensure that the music playlists reflect the market preference and retain

the local flavor. On the technology front RML has imported equipments to be used in the Radio Stations

from United States of America, United Kingdom, Austria, Denmark, Singapore, Hong Kong, Australia and

Ireland.

Our primary business is radio broadcasting and we operate radio broadcasting stations in forty five cities in

India, including the four metropolitan cities of Delhi, Mumbai, Chennai and Kolkata under the name and

style/brand of BIG 92.7 FM. In all we have obtained 45 licenses. All our stations are fully operational. Our

stations are located in the following cities as per the category detailed below:

Category A+ Bhubaneswar

Chennai Bikaner

Delhi Chandigarh

Kolkata Guwahati

Mumbai Gwalior

Category A Jalandher

Bangalore Jammu

Hyderabad Jhansi

Kanpur Jodhpur

Surat Kota

Category B Mangalore

Agra Mysore

Allahabad Patiala

Amritsar Pondicherry

Asansol Ranchi

Bhopal Rourkela

Indore Sholapur

Jamshedpur Srinagar

Rajkot Thiruvananthapuram

Vadodara Tirupathi

Vishakhapatnam Udaipur

Category C Category D

Ajmer Hisar

Aligarh Panaji

Bareily Simla

45

Big FM’s Radio Business and Allied Activities

A. BIG 92.7FM

I. ADVANTAGE BIG 92.7 FM

BIG 92.7 FM offers advertisers a plethora of advantages over conventional media. i. Reach On the back of a network of 45 stations, our brand reaches out to approximately 25 millions listeners across India, each week. (Source: RAM, IRS 2009, Internal Dipsticks) The network itself has the potential to touch 200 Millions Indians across both urban and rural markets. ii. Cost Effectiveness BIG 92.7 FM’s reach far exceeds that of leading print publications in the measured Metros:

46

Source: RAM 2009.

Give this clear superiority in reach at very reasonable rates, the Cost Per Thousand (CPT) that advertisers

need to pay for similar reach, if far lower on BIG FM as compared to even leading print.

BIG 92.7 FM CPT Vs Leading Print in RAM Markets:

Source: RAM 2008

iii. Stickiness Time Spent Listening (TSL) to a radio station is a measure of the stickiness of the content of that radio station. From an advertiser’s perspective higher TSL means more engaged customers and therefore higher probability of cut through of their advertising.

Radio’s TSL as compared to print is another area of clear dominance:

47

Source: RAM Establishment Study, 2007 and IRS 2008 R2

iv. Versatility

As a Radio brand BIG 92.7 FM, offers advertisers a truly versatile medium, with benefits that other

media cannot compete on.

a. Contextualization of messages:

Advertising for products/brands placed in day parts when consumption of those categories is high

resulting in higher impact of communication. Eg: Tea Brands advertising in the Morning and Early

Evenings

b. Frequency Of Messaging:

Radio is a 24X7 Live medium on which advertising can be played out of high frequency through the

day creating great impact than print ads.

c. Customization of communication strategy by region/cluster:

Given the size of the BIG FM network advertisers have the option of choosing sets of stations for

specific communication messages based on their regional strategy. While Television cannot be

isolated for the majority of regions in India, the BIG FM network allows advertisers to run specific

campaigns in regions of their choice, without any worries of spillover into other regions.

d. Localization of creatives:

Language plays a critical roll in the impact of creatives. India has numerous dialects that come into

play within states itself. BIG FM offers advertisers the distinct advantage of being able to run the

same communication in numerous dialects thereby positively impacting effectiveness of campaigns. II. BRAND BIG 92.7 FM 1. Positioning As the largest FM network in the country, taking FM to new markets across the country, the brand is positioned to create greater affinity and loyalty for the category.

48

Suno Sunao, Life Banao! signifies our commitment to always broadcast content that not only entertains but

makes a positive difference in consumers lives. 2. Metro Vs Non Metro Strategy:

Extensive research carried out across markets has indicated that consumers affinity for the medium lies in

two areas: FUN (entertainment) and SUBSTANCE (Locally relevant information). All our stations

programming is designed to deliver a consistent experience based on these 2 pivots.

The above strategy ensures that BIG 92.7 FM stations are always in sync with local consumer needs

delivering entertainment that resonates with local tastes, while being distinct from other FM brands

While the above is essential in the new Non Metros markets, in the more evolved Metro stations we have

created further differentiation in our product by localising our positioning in metros. While competitive brands

choose to have a single positioning across stations, we recognised that Metros demand greater localization

in order to be successful.

This super localization strategy, gives each of our 6 Metro stations a distinct sound and personality in sync

with local tastes leading to greater affinity. We believe that avoiding the ‘one shoe fits all’ strategy that

competition follows, is a more long strategic advantage for us.

Mumbai Delhi Bangalore Hyderabad Chennai Kolkatta BIG FM

BIG CHILLAX

HITS

BIG CHILLAX

HITS

BEJAN HITS MASTU MUSIC

MUSIC THAT TOUCHES

MONER GAAN,

PRANER SUR

RED FM Super Hits!

RADIO CITY

Whatte Fun! NA

Mirchi sunnewale humesha khush ! RADIO MIRCHI

III. BRAND PERFORMANCE

BIG 92.7 FM has made great strides despite being a late entrant in the market, having launched only in PHASE II.

Across the RAM markets BIG 92.7 FM’s performance is follows:

Station Mumbai Bangalore Delhi Kolkata

Market Share 12.52% 18.95% 6.89% 16.34%

Source: RAM, Last 26 weeks

IV. RECOGNITION

In a short period of time BIG 92.7 FM has not only won numerous awards nationally but has also performed

exceedingly well on the International Arena.

49

Both in 2008 and 2009, BIG 92.7 FM won awards at the prestigious New York Festival in the programming &

Creative categories.

In 2009, BIG 92.7 FM was responsible for creation and implementation of an on ground property for Nokia

8300 Xpress, which won a Cannes Lion for excellence in Activation.

In 2008, BIG 92.7 FM won the Initiative Media True Award for the fastest, growing Media brand in 2007.

In India, the brand has won awards across many platforms – RAPA, ABBYS, Promax Radio Excellence

Awards, HR Forums and Technical Awards etc.

V. CLIENT SOLUTIONS APPROACH

At BIG 92.7 FM, building Value Creating Solutions for clients, has always been our approach when dealing

with client communication or marketing issues.

We believe that clients are increasingly looking for more holistic solutions, which we need to be geared to

deliver to.

To facilitate better servicing of clients, we are one of the few Radio Networks to have a specialised Client

Solutions team, which works closely with clients to arrive at more effective and efficient solutions for their

specific brand problems.

We are committed to adding value to clients businesses by creating solutions that deliver:

• Build brand messages

• Build brand affinity/loyalty

• Create the urge to try

• Provide a holistic brand experience to consumers

• Leverage our Multi platform advantage

• Use the scale and reach of the network

B. ALLIED ACTIVITIES

I. BIG STREET - OOH MEDIA

• OOH today contributes to 7.26% (INR 16.1 Billion) of the total advertising spend; Total Advertising

Spend: INR 221.6 Billion (Period: 2008(E), Source: FICCI-KPMG Media & Entertainment Industry

Report FICCI Frames 2009)

• Is currently controlled more by local regional players and there is a sign of more corporate

companies entering into the fray – Times OOH, Laqshya, Jindal, Jagran Group, JC Decaux (JCD)

(International) etc.

• Changes in infrastructure developments, urbanization notwithstanding a change in mass media

habits (Multiplex, Malls, Game Zones) is creating more growth opportunities for this medium

50

• OOH media is an unavoidable media by consumers; hence messages in relevant locations tend to

deliver high rates of recall by potential consumers and build a certain familiarity for the

brand/Product with the consumer, which is critical for trials and enquiries.

• Income is generated from the sale of Outdoor space (Formats) facing moving traffic – static Formats

(Hoardings, billboards, Bus Shelters, Public Utility, Bus Panels, Gantries etc), Dynamic Formats

(LCD/LED Screens – Video Advertising)

• In India, OOH business is largely contributed by Billboard formats followed by Street Furniture and

Transit; it has been observed that as the economy grows and modernizes, Street furniture and

Transit contribute more than Billboards due to evolution in regulatory laws favoring aesthetics.

• OOH media is sold on the blocks of 7 days (Weekly, Fortnightly, monthly etc)

• OOH media is created through – Government body tenders, Permission from Municipal

Corporations for hosting out to Media on private spaces facing road/traffic, through Public Private

Partnerships and Build Operate Transfer models.

o There is different expertise in the business of OOH that exists: Identifying properties, getting

requisite permissions in time, Design/Erection and finally trading and marketing, Sales and

operation of those properties.

o Hence it employs different types of skill levels – Business Management, Engineers,

Designers, Logistics and Operations, Sales Professionals and lastly manual labor for

maintenance.

• OOH remains an unmeasured medium hence pricing is key, but with entry of Corporates like BIG

Street, Measurement is being commissioned through recognized research firms like AC Nielson and

IMRB to demonstrate Value besides building transparency/Accountability.

• BIG Street was started about two years back, given synergy with our FM business and associate

services like BIG Events, BIG Reach etc.

• The vision is to “ENHANCE PEOPLE’S LIFE OUT OF HOME”, ensuring the relevance of OOH at all

times and thereby creating a customer pull (Advertisers)

• BIG Street’s key properties acquired /traded include: Delhi Metro Line II, Airoli Bridge Pole Kiosks

and Gantries, Mobile Vans in Hyderabad and Cochin, Bus Panels in Intercity and Intra City buses in

Chandigarh etc.

• Delhi Metro Line II remains our key contributing inventory (On the average 63% of the total revenue

– Last three months average, 42% of the total revenue – Last Fiscal)

• Focus will continue to build Smart OOH properties using tenders from different government entities

(Central / State / PSU etc) besides looking at investing behind Public Private Partnership and Build

Transfer Operate models to expand into Tier 1 and 2 cities to start with: PPP / BOT models while

having higher initial investment give the opportunity to monetize over longer term (10-15 years).

• Business growth arises out of better yield and occupancy of current properties besides getting high

demand properties at reasonable costs.

• Key costs that are directly related to our business: License Fee for properties leased and tendered

Electricity and Maintenance costs besides Capital Expenditures on erection and fabrication. II. BIG DIGITAL Big Digital is BIG 92.7 FM’s initiative in the digital space formed with the following objectives:

• To create & strengthen value-preposition for internal & external customers by providing a surround of

Digital media integration. Digital media integration covers both mobile as well as online service.

51

• To be the first port of recall for quality content deployed in a device-agnostic environment

Services offered by Big Digital 1 a. Integration across All GSM & CDMA Operators In India:

• GSM: Airtel, Vodafone, Idea, Aircel, BPL (Loop), BSNL, MTNL, Spice, RTL, Ping

• CDMA: Tata, Reliance Mobile

• Close to signing with Virgin Mobile, RCom GSM

• SMS, Content, Wap, CRBT, Voice Activities across all Operators

• Integration support to customized/standard SMS Applications

• Content/Contests with Promotion & Sponsorship Options

• Suffix Support: Client can use the Suffix Short code of 55454 like 5545456, 5545459 etc.

b. Offerings in the Mobile Space

• Pull SMS Services:

� Keyword Specific Eg. sms BIG to 55454

� Application Based SMS Services: Contests, Polls, Comments etc…

• Push SMS Services:

� Lead Generation Activity

� Sender ID customisation

� URL Push (integrate with Existing CRM/other software)

� Reach to the target audience. Extensive Database Available for Bulk Push (City/Age/Gender

Specific) • CRBT – Festive, Humor, Greetings, Jokes & Mimicry in all languages • IVR Services on 5055454 – Contests, Advertisement & Sponsorship options, leave a Message, Requests etc.

• Content (Audio, Video, Text): Ringtones, Wallpapers, Animations etc. - These are GPRS dependant

for downloading

2. Offerings In The Online Space

• Online Banners on our website : www.big927fm.com

• Microsites customised to meet client communication needs. These micro sites are developed and

deployed by the BIG DIGITAL team, on www.big927fm.com.

• SMS Pull/Push based services for clients across sectors

• IVR Activities

52

Client Base – Apart from various companies and division in Reliance Anil Dhirubhai Ambani Group, the other major corporate and retail clients are as follows:

MCX South African Airways

Mahendra British Airways

HLL British Council

Fame Cinemas Cadbury

United Spirits TVS Tyres

Tata Lufthansa

Panasonic Godrej – Good Night

ICICI McDonalds

III. BIG REACH – ACTIVATIONS

Big Reach conducts activities on ground for a direct interface with the consumer and Air Integration on the

basis of a client brief. Activation briefs are received from brands, which often see diminishing returns from

only on-air campaigns and wish to renew their consumer interface.

Our revenues are accrued from the management fees as well as the expertise and economies of scale

derived from multiple activities. The Primary source of revenue is from hiring venues and other required

infrastructure, besides the management fees. The organising, control and reporting are key aspects of the

revenue stream too.

Leveraging our network of over 54 Offices and multiple execution platforms besides Radio Coverage helps

us differentiate in the market. Big Reach helps brands reach out:

o Across multiple cities

o Across Target Audience (TA’s)

o Across Touch Points

Few Key Activations done are as follows:

o Wagon R Smart Challenge (7 cities)

o Dabur Chawanprash School Champs (12 cities)

o Nokia 5800 – Xpress Music (Winner of Prestigious Cannes Award)

o NIIT – Hunt for the Network Kings (5 Metro)

o Good Year Long Drive 20 City Car Rally

o Cadilla Sugar Free – Sampling at parks

o Thums Up – Thunderwheels License Hai Kya (13 Cities activity)

o Mountain Dew – Darr ke aage jeet hai, Goa Beach

o Nestle Milky Bar School Activation (7 Cities)

IV. BIG LIVE – ACTIVATION PROPERTIES

On the basis consumer needs Big Live conceptualises activation properties where brands targeting the

same consumer can be part of. These properties help address key consumer needs thus aiding a high

53

footfall / participation into the activations. Leveraging multiple media, (often within the reliance network) we

enable a higher participation and amplification to the event. The combination of both above, enables high

return for the sponsors as compared to a brand activation or on air campaign only.

The execution on ground is the conduct of activities for a direct interface with the consumer and Air

Integration on the basis of property construct. The Primary source of revenue is from hiring venues and

other required infrastructure. The other sources of revenues are from management fees, expertise and

economies of scale as also the revenues from multiple sponsors. The organising, controlling and reporting

are key aspects of the revenue stream too.

Leveraging our network of Reliance Entertainment Media Assets, a great concept for the activation property,

54+ Offices and multiple execution platforms helps us differentiate in the market.

Properties done till date

o Close Up SING WITH SONU - India’s first radio singing reality show.

o LIVE Concerts 5 cities - 5 days with the winners

o IDEA ITA Awards – Television’s BIGGEST Celebration successfully executed for last two years

o Kodak – Paper Ganesh (Eco Friendly Celebrations)

V. BIG EVENTS

BIG Events cover the entire live entertainment universe, ranging from corporate events to lifestyle shows

covering a vast gamut of events including Conferences, Product Launches, Live concerts, Television shows

(non fiction), Fashion etc. The clientele is from media companies, corporate houses, Banking, Financial

Services, Insurance Sector and major consumer durable companies, Consulates and trade commissions

etc.

Big Events handle events for various clients. Post the brief from the client we conceptualize, design and

execute events for the target audiences. The event is taken on a turnkey basis with in house teams for

servicing, creative and operations.

The revenues are largely, from the management fee and in some cases from design fee. Also, the margins

are drawn with strong vendor management and negotiation skills.

54

HISTORY

The Company was originally incorporated as Reliance Unicom Limited on December 27, 2005 under the Companies Act, 1956 with CIN U64200MH2005PLC158355.

The objects for which the Company has been established are set out in its Memorandum of Association. The main objects are set out hereunder:

1 To own, establish, manage and operate Radio Broadcast Station(s), subject to necessary governmental

approvals, allotment of frequency, license(s) on FM / MW / SW / AM, if any, anywhere in India or out of

India, including but not limited to digital broadcast, web broadcast, satellite broadcast and broadcast by

any medium now known or that may be developed in the future and to produce talk shows, promos,

jingles, capsules, serials, program software, advertisements etc., and to make, buy, sell and/or trade in

content, programmes, software either produced by the Company or outsourced; to hire equipments and

to set up transponders to broadcast programmes subject to necessary approvals and to own, establish,

run and operate a recording studio, sound mixing studio, dubbing studio, editing unit and theatre.

2* To broadcast television programmes by hiring, leasing, buying transponders on satellites and also to

carry on, subject to the necessary government and other approvals, the activities or businesses of

broadcasters of sound and/or audio-visual recordings and cable and wireless communications.

* Substituted vide Special Resolution passed at the Extraordinary General Meeting held on

September 21, 2006.

Changes in Memorandum of Association since the Company’s inception

Date Particulars

October 6, 2006 Change of object clause by replacement of Main Objects of the Company to undertake Radio Business

October 6, 2006 Change of Name Form “Reliance Unicom Limited” to “Big Radio Limited”.

April 25, 2007 Equity share of the face value of Rs. 10/- each fully paid up was divided into equity share of Rs. 5/- each fully paid up. Increase in Authorised Share Capital from Rs. 5,00,000 (Rupees Five lacs) divided into 50,000 (Fifty thousand) Equity Shares of Rs. 10/- (Rupees Ten) each to Rs.1,05,50,000/- (Rupees One Crore Five Lakh Fifty Thousand) comprising of 21,10,000 (Twenty One Lacs Ten Thousand) Equity Shares of Rs. 5/- each

September 18, 2007 Change of Name Form “Big Radio Limited” to “Reliance Unicom Limited”.

July 17, 2009 Increase in Authorised Share Capital from Rs.1,05,50,000/- (Rupees One Crore Five Lakh Fifty Thousand) divided into 21,10,000 (Twenty One Lacs Ten Thousand) Equity Shares of Rs.5/- (Rupees Five) each to Rs.1,00,00,00,000/- (Rupees One Hundred Crore ) comprising of 10,00,00,000 (Ten crore) Equity Shares of Rs.5/- (Rupees Five) each and 10,00,00,000 (Ten Crore) Preference Shares of Rs. 5/- (Rupees Five) each.

July 22, 2009 Change of Name from “Reliance Unicom Limited” to “Reliance Media World Limited”.

Subsidiaries We do not have any Subsidiaries.

55

MANAGEMENT Under our Articles of Association we cannot have fewer than three directors or more than such number of

directors as may be stipulated by the Companies Act for the time being in force. We currently have five

directors on our Board.

The following table sets forth details regarding our Board as of the date of filing the Information

Memorandum with BSE/NSE:

Board of Directors as on the date of the Information Memorandum:

I. Shri Gautam Doshi

Sr. No. Requirements Details

1 Fathers’ name Late Shri Bhailal K Doshi

2 Address 402, Hamilton Court, Tagore Road, Santacruz (W),

Mumbai- 400 054

3 DIN 00004612

4 Status of the Director Director

5 Date of Birth 23/12/1952

II. Shri Rajesh Sawhney


1 Fathers’ name Late Shri Yogesh Sawhney

2 Address Apartment no:12, 5th Flr, Breach Candy Gardens,

Breach Candy, Mumbai – 400026

3 DIN 01519511



III. Shri Anil Sekhri


1 Fathers’ name Shri Avtar Sekhri

2 Address 23A, Krishna Kunj, Opp. Millat Nagar,

Off New Link Road, Andheri (West),

Mumbai- 400053.

3 DIN 00506790



56

IV. Shri Darius Jehangir Kakalia


1 Fathers’ name Shri Jehangir Kakalia

2 Address Rebello House, 132 Hill Road, Bandra (West),

Mumbai- 400050.

3 DIN 00029159



V. Shri Pradeep Shah


1 Fathers’ name Shri Sevantilal Chunilal Shah

2 Address 8-A, Sanjay Co-operative Housing Society Ltd., 2nd

Floor, Opp. Bengal Chemicals, Veer Savarkar Marg,

Mumbai- 400025

3 DIN 00664204



Brief Profile of the Directors

Shri Gautam Doshi

Shri Gautam Doshi, 56, is a Fellow Chartered Accountant. He has experience in the areas of mergers and

acquisition, income-tax, international taxation, accounting, auditing, finance, banking, legal, and general

management. Till recently he was associated with RSM & Co., a well-known firm of Chartered Accountants,

as a Senior Partner and with Ambit Corporate Finance Private Limited, a leading investment banker, as a

founder director. Shri Doshi is the Group Managing Director of Reliance Anil Dhirubhai Ambani Group. Shri

Doshi is also on the Board of Piramal Life Sciences Limited, Reliance Anil Dhirubhai Ambani Group Limited,

Reliance MediaWorks Limited, Reliance Big TV Limited, Reliance Communications Infrastructure Limited,

Reliance Life Insurance Company Limited, Reliance Telecom Limited, Sonata Investments Limited, Sterlite

Industries (India) Limited, Digital Bridge Foundation, Connect Capital Private Limited, Nahata Film Infotain

Private Limited, Reliance Home Finance Private Limited and Telecom Infrastructure Finance Private Limited.

Shri Rajesh Sawhney

Shri Rajesh Sawhney, 43, is an alumnus of Harvard Business School [AMP], and has a fellowship from the

London School of Economics. He has vast experience in entertainment, media and communication sector.

Previously, he has worked with The Times of India Group in different leadership roles. Currently, Shri

Sawhney heads Reliance Anil Dhirubhai Ambani Group’s foray into entertainment and media sectors and

online businesses. Shri Sawhney is also on the Board of Big Flicks Private Limited, Big Animation (India)

Private Limited, RRA Media & Entertainment Private Limited, Reliance Big News Private Limited, Reliance

Big Broadcasting Private Limited and ND’s Art World Private Limited.

57

Shri Anil Sekhri

Shri Anil Sekhri, 53, is a Chartered Accountant and Company Secretary with over 25 years experience. He

founded Anil Sekhri & Co, a well known Chartered Accountant practitioner firm. He specialises in

accounting, taxation and legal matters with focus on the Media and Entertainment sector. Shri Sekhri is also

on the Board of Reliance MediaWorks Limited, Sprint Tours & Travels Private Limited and ND’s Art World

Private Limited.

Shri Darius Jehangir Kakalia

Shri Darius Jehangir Kakalia, 60, is Partner of Mulla & Mulla & Craigie Blunt & Caroe (Advocates, Solicitors

& Notaries) since 1992. He is an Advocate and Solicitor of the Bombay High Court and Supreme Court of

India, since 1976 and a Solicitor of the Supreme Court of England and Wales and Solicitor of the Supreme

Court of Hong Kong. He specializes in civil litigation, including arbitration and electricity laws, documentation

relating to infrastructure projects, joint ventures and collaborations, capital market transactions, mergers and

amalgamations, power projects and real estate sectors. Shi Kakalia is also on the Board of Reliance

MediaWorks Limited, Birla Global Finance Co. Limited and Brics Securities Limited.

Shri Pradeep Shah

Shri Pradeep Shah, 54, is an eminent Practicing Chartered Accountant and also a partner with M/s.

Chandrakant & Sevantilal, Chartered Accountants and also three other Associate firms. He specializes and

has authored various Commentaries and articles on the Indian Taxation both direct taxation and indirect

taxation, including income tax, sales tax, VAT etc. Shri Shah is also on the Board of Akola Rubber and Tyre

Industries Private Limited, Swan Finance Management Private Limited, Swan Infrastructure Finance Private

Limited, Abhay Telecom Services Private Limited, Navketan Telecom Private Limited and Medi Assist India

TPA Private Limited.

Borrowing Powers of the Board

Pursuant to a resolution passed by our shareholders at the Extra-ordinary General Meeting (EGM) held on

July 17, 2009, our Board of Directors has been authorized to borrow money upon such terms and conditions

and with or without security as the Board of Directors may think fit, provided that the money or monies to be

borrowed together with the monies already borrowed by our Company (apart from temporary loans obtained

from the bankers of our Company in ordinary course of business) shall not exceed Rs. 5000 Crores above

the paid-up share capital and free reserves of our Company.

Corporate Governance

The provisions of the Listing Agreement to be entered into with the Stock Exchanges with respect of

corporate governance will be applicable to the Company immediately upon the listing of its Equity Shares on

the Stock Exchanges. The Company is fully compliant with the provisions of Clause 49 of the Listing

Agreement.

The Board of the Company comprising five Directors has 3 independent Directors. The Board has also

constituted the Audit Committee, Shareholders/Investors’ Grievance Committee and Remuneration

58

Committee as required under Clause 49 of the Listing Agreement as under:

Director Category Member of

Audit

Committee

Member of

Shareholders/Investors’

Grievance Committee

Member of

Remuneration

Committee

Shri Gautam

Doshi

Non-executive and

Non-independent

- - -

Shri Rajesh

Sawhney

Non-executive and

Non-independent

Yes Yes Yes

Shri Anil Sekhri Non-executive and

Independent

Yes Yes Yes

Shri Darius

Jehangir Kakalia

Non-executive and

Independent

- Yes Yes

Shri Pradeep

Shah

Non-executive and

Independent

Yes - Yes

The role, powers, scope of functions and duties of the Audit Committee, Shareholders/Investors’ Grievance

Committee and Remuneration Committee of the Board are as per the applicable provisions of the

Companies Act, 1956, Clause 49 of the Listing Agreement and the Reliance Anil Dhirubhai Ambani Group –

Corporate Governance Policies and Code of Conduct.

The Status of the Company’s compliance with the provisions of Clause 49 of the Listing Agreement is given

below:

Particulars Clause of Listing

Agreement

Compliance Status

(Yes/No/N.A.)

I. Board of Directors 49 I Yes

(A) Composition of Board 49 (IA) Yes

(B) Non-executive Directors’ compensation & disclosures 49 (IB) NA

(C) Other provisions as to Board and Committees 49 (IC) Yes

(D) Code of Conduct 49 (ID) Yes

II. Audit Committee 49 (II)

(A) (A) Qualified & Independent Audit Committee 49 (IIA) Yes

(B) Meeting of Audit Committee 49 (IIB) Yes

(C) Powers of Audit Committee 49 (IIC) Yes

(D) Role of Audit Committee 49 II(D) Yes

(E) Review of Information by Audit Committee 49 (IIE) Yes

III. Subsidiary Companies 49 (III) NA

IV. Disclosures 49 (IV)

(A) Basis of related party transactions 49 (IV A) Yes

(B) Disclosure of Accounting Treatment 49 (IV B) Yes

(C) Board Disclosures 49 (IV C) Yes

(D) Proceeds from public issues, rights issues, preferential

issues etc. 49 (IV D) NA

59

(E) Remuneration of Directors 49 (IV E) NA

(F) Management 49 (IV F) Yes

(G) Shareholders 49 (IV G) Yes

V. CEO/CFO Certification 49 (V) Yes

VI. Report on Corporate Governance 49 (VI) Yes

VII. Compliance 49 (VII) Yes

Interest of our Directors

All the Directors, including 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 payable to them under the Articles of Association. In

addition, the compensation payable to Directors may include commission representing a percentage of

profits subject to the limit prescribed under law.

All the Directors, including independent Directors, may also be deemed to be interested to the extent of

Equity Shares, if any, already held by or that may be subscribed for and allotted to them or to the

companies, firms and trusts, in which they are interested as directors, members, partners and/or trustees,

out of the present offer and also to the extent of any dividend payable to them and other distributions in

respect of the said Equity Shares.

The Directors, including independent Directors, may also be regarded as interested in the Equity Shares, if

any, held by or that may be subscribed by and allotted to the companies, firms and trust, in which they are

interested as directors, members, partners or trustees. The Directors may also be deemed to be interested

to the extent of the fees and other payments that may be made to companies in which they are directors. Shareholding of Directors in the Company

None of the Directors hold any Equity Share in the Company.

Change in Board of Directors since the Company’s inception

Name of the Director Date of Appointment Date of Cessation Reasons

Shri Abhijit Banerjee December 29, 2005 July 30, 2009 Resignation

Shri Ashish Karyekar December 29, 2005 July 30, 2009 Resignation

Shri Paresh Rathod December 29, 2005 July 30, 2009 Resignation

Shri Tarun Katial July 10, 2007 July 30, 2009 Resignation

Shri Gautam Doshi June 30, 2009 - Appointed as Additional Director

Shri Rajesh Sawhney June 30, 2009 - Appointed as Additional Director

Shri Anil Sekhri June 30, 2009 - Appointed as Additional Director

Shri Darius Jehangir Kakalia June 30, 2009 - Appointed as Additional Director

Shri Pradeep Shah June 30, 2009 - Appointed as Additional Director

60

Date of expiration of current term of Office of Directors

Shri Gautam Doshi, Shri Rajesh Sawhney, Shri Anil Sekhri, Shri Darius Jehangir Kakalia and Shri Pradeep

Shah were appointed as Additional Directors on the Board of the Company and hold office upto the date of

next Annual General Meeting.

Key Management Personnel

Tarun Katial: Chief Executive Officer

Tarun Katial, the affable 34-year-old, is one of the most successful executives in the Indian Television

Industry. After completing his MBA in marketing in 1998, Tarun worked with Saatchi & Saatchi, Enterprise

Nexus, and Ogilvy & Mather before joining Star Network where he worked as Executive Vice President -

Content and Communications and thereafter with Sony Entertainment Television as Executive Vice

President – Programming & Response. He has conceived, produced and marketed various trendsetting

programs which have kept the Indian audiences spellbound. Amongst the other achievements in Tarun’s

cap, a significant one is for being voted the NewsCorp Achiever for Asia and another for being included

amongst the best in the India Today 30 on 30 list.

Ismail Dabhoya: Chief Financial Officer

A ‘hands on’ finance professional over eighteen years of work experience, Ismail has worked with

multinational companies like John Wyeth, Hutchison Max; Raptakos, Brett & Co., and Star Network. A

qualified Chartered Accountant, Ismail has had exposure to all aspects of finance and treasury and his

expertise lies in managing the entire accounting and auditing systems, MIS & reporting, commercial,

planning and budgeting, cash flow management and taxation. His last posting was with Star TV as Deputy

Financial Controller.

Praveen Malhotra: National Sales Head

A veteran in the entertainment space, Praveen has over 14 years of rich experience in the Media and

Entertainment industry. She started her career in 1992 with Times of India and moved on to STAR India Pvt

Ltd. in 1995. In 2001 she joined Radio City 91 FM in the capacity of Sr. Vice President and Station Head. At

Radio City, she was instrumental in the entire set-up and management of the Delhi radio station. Praveen

further went on to set-up and launch Radio City in Lucknow. Her achievements include driving successfully

the radio city launch at north as well as a nomination for News Corp’s Global Excellence Awards

John Lancelot Cutinha: Sr. Vice President, Human Resources

John Lancelot is qualified in Personal Management and Foreign Trade. He is also an erstwhile fighter pilot.

Prior to BIG 92.7 fm, Lancelot was the Director Human Resources at The J.W. Marriott Hotel, Mumbai. His

past employers also include Royal Airways Pvt. Ltd and Jet Airways. Amongst the achievements, he has to

his credit is The Shell NCPEDP Helen Keller Award 2004 for Community Service initiatives from the Finance

Minister, Shri P. Chidambaram. Lancelot has also introduced Best Human Resource practices like – The

61

Buddy system, One Position, One Salary, Internal Customership Evaluation, Rap Session Format and

Proactive Recruitment Strategy.

Gururaja Rao: Vice President (Legal) & Company Secretary & Manager

The Board has appointed Shri Gururaja Rao as the Manager of the Company with effect from July 30, 2009.

Shri Gururaja Rao is also the Company Secretary and Compliance Officer of the Company. Gururaja is a

commerce graduate with a Masters in Law Degree from Mumbai University and also holding a Post

Graduate Diploma in Media Laws, NALSAR. He is an Associate member of the Institute of Company

Secretaries of India and has also completed his Post Graduate Diploma in Intellectual Property Rights. He

has around 12 years of experience in wide range of industries which includes media, pharmaceuticals and

hospitality. Gururaja has worked with companies like Thomas Cook India, UTV, McDonalds, Glaxo

SmithKlime Pharmaceuticals and People Group.

Soumen Ghosh Choudhury: Chief Technology Officer and Sr. Vice President - Regional Head (South

& East)

An engineer by qualification, Soumen has specialized in Electronics and Communications, with over 15

years of rich experience. Soumen began his career as an R&D engineer, before he moved on to the telecom

sector in project management and operations across an array of entertainment channels and other service

sectors. He was responsible for design and installation of first Private FM radio station in India, Radio City in

Bangalore in the year 2000. Soumen’s achievements include planning, execution and launch of the

encrypted satellite TV channels in record time, designing the country’s first state-of-the-art private FM radio

station, and even developing VHF radio amplifier modules for the Indian Army.

Himanshu Shekhar: Sr. Vice President & Business Head North & West

He has been the youngest country head of MindShare Fulcrum (the unit of MindShare dedicated to manage

Hindustan Unilever’s Media duties). He has worked on HUL’s media duties for eight years (2000- 2008)

covering different functions of media planning and buying. He has been instrumental in creating many firsts

in Media planning space with properties like Wheel Smart Srimati (WSS), Sunsilkgangofgirls.com, Lifebuoy

Healthy Hindustan etc. An MBA from FMS (BHU) batch of 1997 he has been awarded not just for Media

Innovations in the eight year stint at MindShare fulcrum but has also been decorated for internal awards on

Process innovation among HUL Asia Pacific businesses.

Anand Chakravarthy: Sr. Vice President Marketing

A reckoning and well known name in the world of Advertising, Anand brings with him the creativity and

knowledge apt for an ambitious set-up that’s poised to revolutionize the radio industry. Armed with a Masters

in Business Administration and nine years of rich and diverse ecxperience in Advertising Anand has had his

most recent stint at Lowe India, prior to his promising move to BIG 92.7 fm. He has led the servicing of

diverse clientele including a wide product range from the Unilever stable, ICICI Prudential Life Insurance,

ICICI Bank, Tata Mutual Fund, IL&FS Investsmart, and HSBC among others.

62

P. Vijaya Raghavan: Senior, Vice President – Client Promotions & Projects

PGP (Systems Management) from JBIMS and has a vast experience of over 30 years. Worked with

Raymond, B Rahejas, Canteen Stores Department, Ministry of Defence and Air India besides serving in the

Air Force.

Nirupam Sonu: Senior Vice President, Programming

With over 13 years’ experience in various industries and as freelancer, instrumental in producing and

directing television shows. He has also worked with Star India as Executive Producer – On Air promotions.

Rabe Iyer: Business Head Allied Business

Rabe while holding a Bachelors degree in Maths from Bombay University, completed senior management

program in marketing conducted by Professors of Columbia University in Vietnam. With fifteen years of

experience spanning Media, Advertising & Communication industry both in India and abroad, Rabe started

his career in 1992 with Dainik Bhasker Group He moved to Saatchi & Saatchi to drive P&G Hair care brand,

later to work as Director Media on Hyundai, Nokia, and Morepen in Delhi. After that he, was transferred to

Vietnam in 2003 to manage P&G Vietnam account. Rabe’s expertise lies in building growth through effective

trouble shooting and leading through people management.

Shareholding of Key Managerial Personnel

None of the Key Managerial Personnel hold any shares of the Company.

63

OUR PROMOTERS AND GROUP COMPANIES

Our Company is a part of the Reliance Anil Dhirubhai Ambani Group. The Reliance Anil Dhirubhai Ambani

Group constitutes and interests in various sectors, including energy, communications, financial services and

entertainment.

Our Promoters

Reliance Capital Limited (RCap) and Reliance Land Private Limited (RLPL) are the promoters of our

Company. AAA Entertainment Private Limited (AAA) is a Person Acting in Concert (PAC) with the

Promoters. Details of our Promoters are given below: Reliance Capital Limited

Reliance Capital Limited (RCap) was incorporated as Reliance Capital & Finance Trust Limited on March 5,

1986 under the Companies Act, 1956 and obtained the certificate of commencement of business on March

27, 1986. The name of the Company was changed to Reliance Capital Limited on January 6, 1995. The

registered office of RCap is situated at H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai

400 710, India. The promoters of RCap are listed below under the head “Shareholding Pattern of RCap”.

Principal Business of RCap

RCap is a NBFC registered with the Reserve Bank of India under Section 45-IA of the RBI Act, 1934.

Board of Directors of RCap

The board of directors of RCap, as of October 30, 2009, is set below:

Name Age Designation

Date of Appointment

Mr. Anil Dhirubhai Ambani 50 Chairman June 19, 2005

Mr. Amitabh Jhunjhunwala 52 Vice Chairman March 7, 2003

Mr. Rajendra P. Chitale 47 Independent Director June 19, 2005

Mr. C. P. Jain 63 Independent Director April 24, 2006

Dr. Bidhubhusan Samal 66 Independent Director October 30, 2009

64

Shareholding Pattern of RCap The shareholding pattern of RCap of October 30, 2009 is set out below:

Total Shareholding

as % of total

number of shares Category

Code

(I)

Category of Shareholder

(II)

No of

Shareholders

(III)

Total No of

Shares (IV)

Number of

shares held in

dematerilised

Form

(V)

As a % of

(A+B) (VI)

As a %

of

(A+B+C)

(VII )


(1) Indian

(a) Individuals/Hindu Undivided Family 12 11 65 983 11 65 978 0.48 0.47

(b) Bodies Corporate 12 13 02 16 291 13 02 16 289 53.42 53.01

Total of Promoter and Promoter Group (A) 24 13 13 82 274 13 13 82 267 53.89 53.49

(B) Public Shareholding

(1) Institutions

(a) Mutual Funds /UTI 256 33 12 877 32 45 595 1.36 1.35

(b) Financial Institutions/Banks 343 5 38 530 5 22 095 0.22 0.22

(c) Central Government/State Governments

53 52 803 2 812 0.02 0.02

(d) Insurance Companies 18 90 78 912 90 78 732 3.72 3.70

(e) Foreign Institutional Investors 547 4 88 08 289 4 88 02 230 20.02 19.87

Sub -Total (B)(1) 1 217 6 17 91 411 6 16 51 464 25.35 25.16

(2) Non-Institutions

(a) Bodies Corporate 7 099 1 26 27 459 1 25 46 036 5.18 5.14

(b) I. Individual shareholders holding nominal share capital up to Rs.1Lakh.

13 11 418 3 27 50 543 2 65 06 577 13.43 13.33

II. Individual shareholders holding nominal share capital in excess of Rs.1Lakh.

65 37 20 812 36 98 312 1.53 1.51

(c) Any Other (Specify)

1 NRIs / OCBs 16 532 15 09 529 12 31 210 0.62 0.61

Sub –Total (B)(2) 13 35 114 5 06 08 343 4 39 82 135 20.76 20.60

Total Public Shareholding B=(B)(1)+(B)(2)

13 36 331 11 23 99 754 10 56 33 599 46.11 45.76

TOTAL (A) +(B) 13 36 355 24 37 82 028 23 70 15 866 100.00 99.25

(C)

Shares held by Custodians and against which Depository Receipts have been issued

1 18 50 772 18 50 772 0.00 0.75

GRAND TOTAL (A)+(B)+(C) 13 36 356 24 56 32 800 23 88 66 638 100.00 100.00

65

Financial Performance of RCap (Standalone)

(Rs. in million, except share data) Particulars Fiscal 2007 Fiscal 2008 Fiscal 2009

Sales & Other Income 8,838.6 20,797.9 30,172.90 PAT 6,461.8 10,254.5 9,680.2 Equity Capital 2,461.6 2,461.6 2,461.6 Reserves (excluding revaluation reserves)* 49,150.7 57,790.7 64,512.70 EPS (Rs.) 28.4 41.8 39.4 Book Value (Rs.) 210.1 245.3 272.60 * Reserves are net of miscellaneous expenditure to the extent not written off.

Financial Performance of RCap (Consolidated)*

(Rs. in million, except share data) Particulars Fiscal 2007 Fiscal 2008 Fiscal 2009

Sales & Other Income 21,578.6 49,191.9 60,191.40 PAT 7,032.1 1,009.1 1,015.7 Equity Capital 2,461.6 2,461.6 2,461.6 Reserves (excluding revaluation reserves)# 50,562.2 62,570.4 70,941.80 EPS (Rs.) 30.9 41.1 41.35 Book Value (Rs.) 215.9 268.9 298.80

* The consolidated figures reflect the impact of the financial performance of the subsidiaries, which may have made losses.

# Reserves are net of miscellaneous expenditure to the extent not written off.

Details of listing and Highest & Lowest market price during the preceding six months

Equity shares of RCap are listed on BSE and NSE. GDRs are listed at Luxembourg Stock Exchange.

Monthly High and Low price of the equity shares of RCap at BSE and NSE BSE NSE

Month High (Rs) Low (Rs) High (Rs) Low (Rs)

May 2009 972.00 530.00 972.90 530.00 June 2009 1066.00 855.00 1067.70 860.00 July 2009 959.50 700.70 960.00 700.00 August 2009 938.00 780.00 938.00 780.00 September 2009 944.5 850.05 944.45 850 October 2009 800.00 736.00 762.00 736.20

(Source: BSE and NSE websites)

The share price of RCap on BSE was Rs. 745.65 as on October 30, 2009. The market capitalization of

RCap on BSE was Rs. 183156.10 million as on October 30, 2009.

The share price of RCap on NSE was Rs. 745.90 as on October 30, 2009. The market capitalization of

RCap on NSE was Rs. 183463.14 million as on October 30, 2009.

Promise v/s Performance

In January 1995, RCap made a public issue of 42,857,200 equity shares of Rs. 10 each for cash at premium

of Rs. 130 per share aggregating Rs. 6,000 million.

66

In January 1995, RCap made a rights issue of 14,229,500 equity shares of Rs. 10 each for cash at premium

of Rs. 40 per share aggregating Rs. 711.0 million.

The proceeds from the aforesaid issues were used for the objects as stated in the offer document. The

following table compares the performance vis a vis the projections given in the offer document for the

aforesaid issues.

(Rs. in million, except share data)

Year ended March 31,

1995 1996 1997

Projection Performance Projection Performance Projection Performance

Total Income 1,070.00 1,064.70 3,980.00 2,175.50 5,370.00 2,228.60

Profit After Tax 460.00 463.70 1,190.00 1,109.20 1,380.00 1,015.10

Earnings per

Share (Rs.)

7.80 7.40 9.40 9.30 10.90 8.20

Dividend (%) 22.00 24.00 25.00 27.00 25.00 28.00

1994-1995: There was no material variation between the projected and actual figures in this period.

1995-1996: The variation between the projected and actual figures is attributable to tight money conditions

impacting resource mobilization and depressed capital markets.

1996-1997: The variation between the projected and actual figures is attributable to the then depressed

conditions in the capital markets which affected resource mobilization and the overall volume of business;

higher provisioning and write offs; and incidence of corporate tax consequent to legislative amendments. Mechanism for Redressal of Investor Grievance

All share related matters namely transfer, transmission, transposition, nomination, dividend, change of

name, address and signature, registration of mandate and power of attorney, replacement, split,

consolidation, demat and remat of shares, issue of duplicate certificates etc. are handled by RCap’s

Registrars and Transfer Agents (“R&TA”) Karvy Computershare Private Limited (“Karvy”).

Investors correspond directly with Karvy, on all share related matters. RCap has an established mechanism

for investor service and grievance handling, with Karvy and the Compliance Officer appointed by RCap for

this purpose being the important functional nodes. RCap has appointed two firms of Chartered Accountants

as Internal Security Auditors to concurrently audit the transactions and to communicate with investors,

regulatory and other concerned authorities.

RCap has prescribed service standards for various investor related activities that are handled by Karvy. Any

deviation there from is examined by the Internal Security Auditors who also advise the corrective action

thereon and inform RCap on these matters on a monthly basis.

The Board of Directors of RCap has constituted a Shareholder/Investor Grievance Committee which, inter

alia, approves the issue of duplicate certificates and oversees and reviews all matters connected with

securities transfers and other processes.

67

The Committee also looks into redressal of shareholders’ complaints related to transfer of shares, non-

receipt of declared dividend, etc. The Committee oversees performance of the R&TA and recommends

measures for overall improvement in the quality of investor services. The summary statement of investor

related transactions and details are also considered by the Board of Directors of RCap.

As of October 30, 2009, there are 208 investor complaints pending against RCap.

There are certain investor related disputes pending before various courts.

For more details, see “Outstanding Litigation and Material Development” on Page140 of this Information

Memorandum.

Other Information

RCap is neither a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act,

1985 nor is it under the process of winding up.

Reliance Land Private Limited Reliance Land Private Limited (RLPL ) was incorporated as Reliance Homes Limited, a public limited

company on December 23, 1993 under the Companies Act, 1956. RLPL obtained the certificate of

commencement of business on January 3, 1994. Subsequently, the name of the Company was changed to

‘Reliance Land Limited’ pursuant to fresh certificate of incorporation dated May 25, 1995. The company was

then converted into a private limited company and was renamed as ‘Reliance Land Private Limited’ pursuant

to a fresh certificate of incorporation, consequent to conversion, dated September 7, 2001. The Promoters of

RLPL are listed below under the head ‘Shareholding Pattern of RLPL’ below.

The registered office of the company is situated at Avdesh House, 2nd Floor, Pritam Nagar, 1st Slope,

Ellisbridge, Ahmedabad – 380 006. Main business of RLPL Reliance Land Private Limited is engaged in the real estate sector apart from holding strategic investments. Board of Directors of RLPL

The board of directors of RLPL, as of October 30, 2009 is set out below:

Name Age Designation Date of Appointment

Mr. Surendra Pipara 45 Director June 19, 2005

Mr. Nilesh Doshi 56 Director June 30, 2006

Mr. Vinod K. Tripathi 52 Whole-time Director June 12, 2008

68

Shareholding Pattern of RLPL

The shareholding pattern of RLPL as on October 30, 2009 is set out below:

S. No. Category No. of shares % of Shareholding

1. Reliance Capital Limited 5,000,000 50

2. Body Corporate 5,000,000 50

Total 10,000,000 100

Financial Performance of RLPL


Particulars Fiscal 2006 Fiscal 2007 Fiscal 2008

Sales & Other Income 374.73 1,421.44 2,326.79

PAT 1.92 408.46 1,056.19

Equity Capital 1,000.00 1,000.00 1,000.00

Reserves (567.58) (159.13) 897.07

EPS (Rs.) 0.02 4.08 9.76

Book Value (Rs.) 4.32 8.41 18.97

Promoter of the Promoters Mr. Anil Dhirubhai Ambani, age 50 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. Mr. Ambani is also the Chairman of Reliance Communications

Limited, Reliance Capital Limited, Reliance Infrastructure Limited, Reliance Natural Resources Limited and

Reliance Power Limited. He is a member of the Wharton Board of Overseers, The Wharton School, USA,

the Central Advisory Committee, Central Electricity Regulatory Commission, and the Board of Governors of

the Indian Institute of Management (IIM), Ahmedabad and the Indian Institute of Technology, Kanpur (IIT),

and Executive Board, Indian School of Business (ISB), Hyderabad. Mr. Ambani is also the Chairman of the

Board of Governors of Dhirubhai Ambani Institute of Information and Communication Technology,

Gandhinagar, Gujarat.

OUR GROUP COMPANIES

The following are details of top five group companies, on the basis of turnover. Except as specifically mentioned the EPS and diluted EPS data for all the companies mentioned below are identical.

1. Reliance MediaWorks Limited (formerly Adlabs Films Limited) (RML)

Reliance MediaWorks Limited (formerly Adlabs Films Limited) (RML) is a public limited company

incorporated in India on November 30, 1987. The registered office of the RML is situated at Film City

Complex, Goregaon East, Mumbai – 400 065.

69

Principal business of RML

It is involved in the business of entertainment and media sector including production, distribution, exhibition

and post production services for the motion picture films.

Board of Directors:

Name Age Designation

Date of appointment

Mr. Gautam Doshi 57 Non Executive Director October 7, 2005

Mr. Amit Khanna 58 Non Executive Director April 26, 2007

Mr. Sujal Shah 41 Non Executive Independent Director April 26, 2007

Mr. Darius Kakalia 60 Non Executive Independent Director September 13, 2007

Mr. Anil Sekhri 53 Non Executive Independent Director September 13, 2007

Mr. Prasoon Joshi 42 Non Executive Independent Director September 3, 2009

Shareholding Pattern of RML as on October 30, 2009:

Category No. of equity shares % shareholding

Promoter Shareholding 2,83,55,000 61.47

Non-Promoter Shareholding 1,77,71,170 38.53

Total 4,61,26,170 100

Financial Performance of RML (Consolidated) for the last three years:

(Rs. in million)

Particulars 2006-07 2007-08 2008-09

Sales & Other Income 4312.54 3644.48 7333.32

PAT 904.88 474.73 (513.78)

Equity Capital 199.0 230.63 230.63

Reserves 3153.53 6665.52 5334.03

EPS(Rs.) 22.74 11.28 (11.33)

Book Value(Rs.) 84.23 149.50 113.63

Contingent liability as of March 31, 2009 is Rs. 889.39 millions. Details of listing and particulars of high, low and average prices of the shares of RML during preceding three years The equity shares of RML are listed on BSE and NSE:

NSE 2007 2008 2009 Month High Low Average High Low Average High Low Average

Jan 457.84 439.90 448.87 1939.90 650.00 1294.95 230.00 152.60 191.30

Feb 482.92 453.98 468.45 1144.70 727.00 935.85 180.80 152.15 166.47

Mar 425.46 428.31 426.88 829.10 485.50 657.30 184.00 136.10 160.05

70

Apr 433.93 416.27 425.10 780.00 591.05 685.52 251.45 165.25 208.35

May 513.25 488.32 500.78 789.70 570.65 680.17 360.00 223.60 291.80

Jun 554.17 531.49 542.83 629.00 433.70 531.35 463.80 330.00 396.90

Jul 595.00 489.00 542.00 549.90 340.00 444.95 377.00 247.50 312.25

Aug 510.00 415.00 462.50 576.00 465.10 520.55 354.95 302.00 328.47

Sep 563.40 425.00 494.20 549.45 308.00 428.72 370.90 325.00 347.95

Oct 865.00 490.00 677.50 354.00 130.00 242.00 369.45 251.00 310.22

Nov 1092.70 802.35 947.52 213.00 142.70 177.85 - - -

Dec 1496.00 965.00 1230.50 198.00 140.05 169.02 - - -

BSE 2007 2008 2009 Month High Low Average High Low Average High Low Average

Jan 475.00 428.50 451.75 1945.00 666.00 1305.50 230.00 152.00 191.00

Feb 518.40 408.00 463.20 1148.00 700.00 924.00 181.40 152.00 166.70

Mar 442.80 380.00 411.40 835.00 485.00 660.00 182.90 136.00 159.45

Apr 461.00 388.05 424.53 781.00 591.50 686.25 251.45 167.50 209.48

May 573.90 430.00 501.95 789.50 606.00 697.75 359.90 223.10 291.50

Jun 585.50 480.00 532.75 629.90 433.00 531.45 463.50 333.25 398.38

Jul 595.00 488.00 541.50 549.95 342.70 446.33 376.20 249.15 312.68

Aug 512.50 417.00 464.75 576.10 465.00 520.55 355.00 307.30 331.15

Sep 564.00 456.10 510.05 532.90 308.50 420.70 370.80 326.00 348.40

Oct 863.30 487.25 675.28 354.00 130.15 242.08 369.50 250.40 309.95

Nov 1030.00 802.00 916.00 211.00 140.00 175.50 - - -

Dec 1495.00 965.25 1230.13 197.30 141.00 169.15 - - - Source: NSE and BSE websites The share price of RML on BSE was Rs. 253.15 as on October 30, 2009. The market capitalization on the BSE was Rs.1,16,768 lakhs as on October 30, 2009. The share price of RML on NSE was Rs. 253.35 as on October 30, 2009. The market capitalization on the

NSE was Rs.1,16,860 lakhs as on October 30, 2009. Promise vs Performance In December 2000, RML made an IPO of 44,00,000 equity shares for cash, at a price of Rs. 120 per equity

share (including a premium of Rs. 115) aggregating Rs. 5,280 lakhs through a prospectus dated November

21, 2000. As stated in that prospectus, the proceeds of the issue were used to establish the IMAX Dome

theatre and a four screen multiplex capable of accommodating 1,225 persons, in Mumbai and to upgrade its

film processing facilities. The IMAX Dome theatre scheduled to be established in December 2000 was

established in March 2001 and the four screen multiplex project scheduled to be operational in September

2001 was opened to the public in phases, in October and November 2001.

Mechanism for Redressal of Investor Grievance

RML has a Shareholders / Investor Grievance Committee which meets as and when required, to deal and

monitor redressal of complaints from shareholders. Generally, the investor grievances are dealt within seven

working days of the receipt of the complaint. RML has adequate arrangements for redressal of Investor

complaints. Well-arranged correspondence system developed for letters of routine nature. Letters are filed

category wise after having attended to. Redressal norm for response time for all correspondence including

71

shareholders complaints is 15 working days. In case of non-routine complaints and complaints where

external agencies are involved, RML seeks Redressal of these complaints as expeditiously as possible.

As of October 30, 2009, there were Nil investor complaints pending against RML.

For more details, see “Outstanding Litigation and Material Development” on page 140 of this Information

Memorandum.

Other Information

RML is neither a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act,


2. Reliance Capital Asset Management Limited (RCAM) Reliance Capital Asset Management Limited (RCAM) is a public limited company incorporated in India on

February 24, 1995. RCAM has its registered office at Reliance House, Near Mardia Plaza, Off C.G. Road,

Ahmedabad, Gujrat.

Primary Business of RCAM

It is primarily engaged in the business of providing investment management and advisory services to mutual

funds. Board of directors

Name Age Designation Date of appointment

Mr. Kanu Doshi 72 Director August 12, 2005

Mr. Manu Chadha 55 Director January 18, 2006

Mr. S. C. Tripathi 63 Director February 1, 2007

Mr. Soumen Ghosh 50 Additional Director October 28, 2009 Shareholding Pattern RCAM is subsidiary of RCap with 93.37% shareholding. Financial Performance (Rs in Lakhs except per share data) (on standalone basis)

Particulars Fiscal 2007 Fiscal 2008 Fiscal 2009 Sales and Other Income 20,264.2 37,764.5 44,435.37 PAT 5,065.4 9,618.0 13,294.55 Equity Capital 750.07 1051.0 1051.0 Reserves (excluding revaluation reserves)

10,356.9 69,887.5 83,182.07

EPS (Rs.)/Diluted EPS 67.81 107.55 126.49 Book Value (Rs.) 148.08 662.54 786.68


Memorandum.

72

3. Reliance General Insurance Company Limited (RGICL)

Reliance General Insurance Company Limited (RGICL) is a public limited company incorporated in India on

August 17, 2000. RGICL has its registered office at Reliance Centre, 19, Walchand Hirachand Marg, Ballard

Estate, Mumbai – 400 001. Principal business of RGICL It is engaged in the business of providing general insurance services. Board of Directors


Mr S. P.Talwar 70 Director 29.8.2005

Mr D. Sengupta 67 Director 29.8.2005

Mr Rajendra P Chitale 48 Director 29.12.2005

Mr Soumen Ghosh 50 Director 21.4.2008

Mr K.A.Somasekharan 60 Director & CEO 24.10.2009

Shareholding Pattern RGICL is subsidiary of RCap with 96.20% shareholding. Financial Performance (Rs in Lakhs except per share data)

Particulars Fiscal 2007 Fiscal 2008 Fiscal 2009 Sales and Other Income 91,441.3 2,10,394.4 2,07,532.1 PAT 162.9 (16,555.1) (5,232.0) Equity Capital 10,307.2 10,715.4 11,308.0 Reserves (excluding revaluation reserves)

15,633.2 38,670.0

51,851.6 EPS (Rs.) 0.16 (15.92) (4.81) Book Value (Rs.) 25.17 46.09 55.85

Contingent liability as of March 31, 2009 is Rs. 4,620.88 lakhs.


Memorandum.

4. Reliance Securities Limited (RSL) Reliance Securities Limited (RSL) is a public limited company incorporated in India on June 17, 2005. RSL

has its registered office at 4th Floor, Parijat House, Manjrekar Lane, Off Dr. E. Moses Road, Worli Naka,

Mumbai – 400 018. Principal business of RSL It is primarily engaged in the business of stock brokering and acting as a depository participant of CDSL.

RSL also provides portfolio management and merchant banking services.

73

Board of Directors


Mr.Vikrant Gugnani 39 Additional Director October 14, 2009

Mr. Ramesh Shenoy 60 Director June 17, 2005

Mr. Soumen Ghosh 50 Director June 27, 2008 Shareholding Pattern RSL is a wholly owned subsidiary of RCap. Financial Performance (Rs in lakhs except per share data)

Particulars Fiscal 2007 Fiscal 2008 Fiscal 2009 Sales and Other Income 990.8 6,853.7 28,048.3 PAT (1,013.7) 637.9 2,046.2 Equity Capital 2,500.0 2500.0 2,500.0 Reserves (excluding revaluation reserves)

- - 1,846.6

EPS (Rs.) (6.13) (2.22) 1.17 Book Value (Rs.) 5.00 9.20 17.38 For more details, see “Outstanding Litigation and Material Development” on page 140 of this Information

Memorandum.

5. Reliance Life Insurance Company Limited (RLICL) Reliance Life Insurance Company Limited (RLICL) is a public limited company incorporated in India on May

14, 2001. RLICL has its registered office at H Block, Ist Floor, Dhirubhai Ambani Knowledge Centre, Kopar

Khairne, Navi Mumbai, Maharashtra – 400 710. Principal business It is engaged in the business of life insurance and annuity Board of Directors


Mr. Gautam Doshi 57 Director October 4, 2005

Mr. S.P. Talwar 70 Director October 4, 2005

Mr. Soumen Ghosh 50 Director April 23, 2008 Shareholding Pattern The major shareholders of RLICL are as follows:

Name of shareholders % of shareholding Viscount Management Services (Alpha) Limited 47.89 Viscount Management Services Limited 35.92 Reliance Capital Limited 15.96

74

Financial Performance (Rs in Lakhs except per share data)

Particulars Fiscal 2007 Fiscal 2008 Fiscal 2009 Sales and Other Income 1,36,387.8 3,94,773.4 5,05,047.0 PAT (31,510.8) (76,806.8) (1,08,491.0) Equity Capital 66400.0 114770.0 1,16,233.5 Reserves (excluding revaluation reserves) - 36630.0 1,58,101.4

EPS (Rs.) (7.29) (8.10) (9.40) Book Value (Rs.)* 1.91 1.80 2.98 For more details, see “Outstanding Litigation and Material Development” on page 140 of this Information

Memorandum. The other listed Companies belonging to Reliance Anil Dhirubhai Ambani Group are as follows:

• Reliance Capital Limited

• Reliance Communications Limited

• Reliance Infrastructure Limited

• Reliance Power Limited

• Reliance Natural Resources Limited

The details of the above listed companies belonging to Reliance Anil Dhirubhai Ambani Group are given as

under, as additional information:

Reliance Capital Limited

For details, see “Our Promoters and Group Companies” on page 64 above.

Reliance Communications Limited Reliance Communications Limited (“RCOM”) was incorporated on July 15, 2004, as Reliance Infrastructure

Developers Private Limited. The status of this company was changed to public limited company on July 25,

2005. The name was changed to Reliance Communication Ventures Limited on August 3, 2005 and to

Reliance Communications Limited on June 7, 2006. RCOM has its registered office at H Block, 1st Floor,

Dhirubhai Ambani Knowledge City, Navi Mumbai 400 710, India. The promoters of RCOM are listed below

under the head “Shareholding Pattern of RCOM”. Principal Business of RCOM

RCOM is an integrated communications service provider in the private sector having pan-India operations

across the spectrum of wireless, wireline, and long distance, voice, data, and internet communication

services. RCOM also has an international presence through the provision of long distance voice, data and

internet services and submarine cable network infrastructure.

75

Board of Directors of RCOM


Mr. Anil Dhirubhai Ambani 50 Chairman February 7, 2006

Mr. S.P. Talwar 70 Independent Director February 7, 2006

Mr. J. Ramachandran 52 Independent Director February 7, 2006

Mr. Deepak Shourie 60 Independent Director April 30, 2006

Mr. A.K.Purwar 63 Independent Director July 17, 2007 Shareholding Pattern of RCOM as of October 30, 2009

Total Shareholding as

percentage of total number of

shares Category Code (I)

Category of Shareholder (II)

No of Shareholders

(III)

Total No of Shares (IV)

Number of shares held in dematerilised

Form (V) As a

percentage of (A+B) (VI)

As a percenta

ge of (A+B+C)

(VII) (A) Shareholding of

Promoter and Promoter Group

(1) Indian (a) Individuals/Hindu

Undivided Family 11 9845089 9844989 0.48 0.48 (b) Bodies Corporate 34 1368295971 1368274468 66.74 66.29 © Any Other (Specify) 1 15200000 15200000 0.74 0.74

Total of Promoter and Promoter Group (A) 46 1393341060 1393319457 67.96 67.51

(B) Public Shareholding (1) Institutions (a) Mutual Funds /UTI 282 294 66 366 28993401 1.44 1.43 (b) Financial Institutions/Banks 404 4477448 4354832 0.22 0.22 © Central Government/State

Governments 62 1056375 56256 0.05 0.05 (d) Insurance Companies 29 163385180 163378601 7.97 7.92 (e) Foreign Institutional

Investors 571 155699436 155576667 7.59 7.54

Sub –Total (B)(1) 1348 3540 84 805 352359757 17.27 17.16 (a) Bodies Corporate 9470 66048360 65370270 3.22 3.20 (b) I. Individual shareholders

holding nominal share capital up to Rs.1Lakh. 2145369 207373876 160343926 10.12 10.05

ii. Individual shareholders holding nominal share capital in excess of Rs.1Lakh. 153 15065195 14489099 0.73 0.73

(c) Any Other (Specify) 1 NRIs/OCBs 21710 14177192 10263545 0.69 0.69

76

Sub –Total (B)(2) 2176702 302664623 250466840 14.76 14.66

Total Public Shareholding B=(B)(1)+(B)(2) 2178050 6567 49 428 602826597 32.04 31.82

TOTAL (A) +(B) 2178096 20500 90 488 1996146054 100.00 99.32

(c) Shares held by Custodians and against which Depository Receipts have been issued 1 13936393 13936393 0.00 0.68

GRAND TOTAL (A)+(B)+(C) 2178097 20640 26 881 2010082447 100 100

Financial Performance of RCOM (Standalone)

(Rs. in Million, except share data) Particulars FY 2007* FY 2008# FY 2009@

Sales and Other Income 117,619.1 134,266.5 136946.7

PAT 24,088.5 25,864.5 48026.7

Equity Capital 10,223.1 10,320.1 10,320.1

Reserves (excluding revaluation reserves) 195,032.3 238,080.2 506583.1

EPS (Rs.) 12.0 12.6 23.27

Book Value (Rs.) 100.4 120.35 250.44 * Financial Year from January 1, 2006 to March 31, 2007. # Financial Year from April 2007 to March 31, 2008. @ Financial Year from April 2008 to March 31, 2009 Financial Performance of RCOM (Consolidated)* (Rs. in Million, except share data)

Particulars ** FY 2007# FY 2008 FY 2009@

Sales and Other Income 174,402.5 190,677.6 229,484.6

PAT 35,308.20 67,926.7 62,485.1

Equity Capital 10,223.1 10,320.1 10,320.1

Reserves (excluding revaluation reserves)## 219,083.4 279,943.2 229,484.6

EPS (Rs.) 17.6 26.32 30.27

Book Value (Rs.) 112.2 140.63 184.55

* RCOM has prepared consolidated results for the first time for Financial Year 2007. ** The consolidated figures reflect the impact of the financial performance of the subsidiaries, which may

have made losses. # Financial Year from January 1, 2006 to March 31, 2007. ## Reserves are net of miscellaneous expenditure to the extent not written off. @ Financial Year from April 1, 2008 to March 31, 2009 Details of listing and Highest & Lowest market price during the preceding six months The equity shares of RCOM are listed on BSE and NSE and its GDRs are listed at the Luxembourg Stock Exchange.

77

Monthly High and Low price of the equity shares of RCOM at BSE and NSE:

BSE NSE Month

High (Rs.) Low (Rs.) High (Rs.) Low (Rs.)

May 2009 322.30 218.95 324.10 219.45

June 2009 349.30 218.95 350.25 289.45

July 2009 298.55 237.05 298.65 236.75

August 2009 289.90 240.25 290.00 240.20

September 2009 311.60 264.00 312.65 263.80

October 2009 319.70 175.00 319.85 175.00

(Source: BSE and NSE websites) The share price of RCOM on BSE was Rs. 175.95 as on October 30, 2009. The market capitalization of

RCOM on BSE was Rs. 36,316.55 crore as on October 30, 2009.

The share price of RCOM on NSE was Rs. 175.85 as on October 30, 2009. The market capitalization of

RCOM on NSE was Rs. 36,295.91 crore as on October 30, 2009. Promise vs. Performance RCOM has not made any public or rights issue since its inception. Mechanism for Redressal of Investor Grievance All share related matters, namely, transfer, transmission, transposition, nomination, dividend, change of


consolidation, demat and remat of shares, issue of duplicate certificates etc. are handled by RCOM’s

Registrars and Transfer Agents (“R&TA”), Karvy Computershare Private Limited (“Karvy”).

Investors correspond directly with Karvy on all share related matters. RCOM has an established mechanism

for investor service and grievance handling, with Karvy and the Compliance Officer appointed by RCOM for

this purpose being the important functional nodes. RCOM has appointed two firms of Chartered Accountants

as Internal Security Auditors to concurrently audit the transactions and to communicate with investors,


RCOM has prescribed service standards for various investor related activities that are handled by Karvy.

Any deviation there from is examined by the Internal Security Auditors who also advise the corrective action

thereon and inform RCOM on the matters on a monthly basis.

The Board of Directors of RCOM has constituted a Shareholder/Investor Grievance Committee which, inter

alia, approves the issue of duplicate certificates and oversees and reviews all matters connected with

securities transfers and other processes.

The Committee also looks into the redressal of shareholders’ complaints related to transfer of shares, non-



related transactions and details are also considered by the Board of Directors of RCOM.

78

As of October 30, 2009, there were Nil investor complaints pending against RCOM.

Further, there are certain investor related disputes pending before various courts.


Memorandum.

Other Information

RCOM is neither a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act,


Reliance Infrastructure Limited

Reliance Infrastructure Limited (RINFRA) was incorporated on October 1, 1929 under the Indian Companies

Act, VII of 1913, as Bombay Suburban Electric Supply Limited. It changed its name on December 23, 1992

to BSES Limited and to Reliance Energy Limited on February 24, 2004 consequent to the Reliance Anil

Dhirubhai Ambani Group acquiring the management and control and on April 28, 2008 the name of the

Company changed to Reliance Infrastructure Limited. RINFRA’s registered office is situated at Reliance

Energy Centre, Santa Cruz (E), Mumbai 400 055, India. The promoters of RINFRA are listed below under

the head the ‘Shareholding Pattern of RINFRA’.

Principal Business of RINFRA

RINFRA is an integrated private sector power utility company. RINFRA is engaged in generation,

transmission, distribution and trading of power. It also provides a portfolio of value-added services in

electrical contracting, engineering, EPC contracts. RINFRA is participating in emerging opportunities in the

areas of trading and transmission of power. RINFRA along with Power Grid Corporation of India Limited is

setting up the transmission network for Parbati and Koldam hydro electric projects in Himachal Pradesh.

RINFRA has also entered in to the exploration and production business segment. RINFRA, through a

consortium with its group company RNRL, has been awarded four CBM blocks. It has also been awarded

one Mizoram block for exploration and production of petroleum and natural gas. RINFRA has entered the

infrastructure business by developing and operating the Versova-Andheri-Ghatkopar and Charkop-Bandra-

Mankhurd rail-based mass rapid transit system in Mumbai through a joint venture by an affiliate company.

RINFRA has also been awarded Five road projects from the National Highways Authority of India.

The Shareholders of Rinfra has approved a Scheme of Arrangement envisaging transfer of Dahanu Thermal

Power Station Division, Goa & Samalkot Power stations Divisions, Power Transmission Division, Power

Distribution Division, Toll Roads Division and Real Estate Division of Rinfra to various wholly owned

Resulting subsidiary companies. The certified copy of the order of the High Court approving the Scheme is

awaited.

79

Board of Directors of RINFRA:


Mr. Anil Dhirubhai Ambani 50 Chairman January 18, 2003

Mr. Satish Seth 53 Vice Chairman November 24, 2000

Mr. S. C. Gupta 60 Director (Operations) January 18, 2003

Mr. Lalit Jalan 52 Whole-time Director April 25, 2007

Gen V.P. Malik 69 Director April 21, 2003

Mr. S. L. Rao 73 Director April 21, 2003

Dr. Leena Srivastava 48 Director April 21, 2003

Mr. V. R. Galkar 65 Director June 9, 2003 Shareholding Pattern of RINFRA as of October 30, 2009 Category Code (I)


No of Shareholders

(III)

Total No of Shares

(IV)

Number of shares held in dematerilised

Form (V)


percentage of total number of

shares As a %

of (A+B) (VI)

As a % of

(A+B+C) (VII)


1 Indian

(a) Individuals/Hindu Undivided Family

11 663378 663371 0.3 0.29

(b) Bodies Corporate 16 84365268 84363612 37.62 37.45

Total of Promoter and Promoter Group (A)

27 85028646 85026983 37.92 37.75


1 Institutions

(a) Mutual Funds /UTI 318 15444999 15402305 6.89 6.86

(b) Financial Institutions/Banks 371 756992 741236 0.34 0.34


56 80804 4218 0.04 0.04

(d) Insurance Companies 26 43139441 43139070 19.24 19.15

(e) Foreign Institutional Investors

692 41003998 40783462 18.29 18.2

Sub -Total (B)(1) 1463 100426234 100070291 44.79 44.58

2 Non-Institutions

(a) Bodies Corporate 6979 9227050 9111490 4.11 4.1 (b) I. Individual shareholders

holding nominal share capital up to Rs.1Lakh.

1494962 26741278 21004877 11.93 11.87

ii. Individual shareholders holding nominal share capital in excess of Rs.1Lakh.

42 1315426 1274164 0.59 0.58

(c) Any Other (Specify) 0 0

80

1 NRIs/OCBs 17648 1491387 1107741 0.67 0.66

Sub -Total (B)(2) 1519631 38775141 32498272 17.29 17.21


1521094 139201375 132568563 62.08 61.79

TOTAL (A) +(B) 1521121 224230021 217595546 100 99.54 (C) Shares held by

Custodians and against which Depository Receipts have been issued

2 1040241 1039514 0 0.46

GRAND TOTAL (A)+(B)+(C)

1521123 225270262 218635060 100 100

Financial Performance of RINFRA (Standalone) (Rs. in million, except share data)

Particulars Fiscal 2007 Fiscal 2008 Fiscal 2009 Sales and Other Income 65,752.5 75,012.0 109,587.9

PAT 8,014.5 10,846.3 11,388.8

Equity Capital 2,285.7 2,356.2 2,260.60

Reserves (excluding revaluation reserves)* 84,127.4 100,241.6 103,081.4

EPS (Rs.) 37.2 46.85 49.45

Book Value (Rs.) 378.13 468.77 500.73 * Reserves are net of miscellaneous expenditure to the extent not written off.

Financial Performance of RINFRA (Consolidated) (Rs. in million, except share data)

Particulars ** Fiscal 2007 Fiscal 2008 Fiscal 2009 Sales and Other Income 77,745.30 97,600.10 140,554.50

PAT 8,344.80 11,782.10 13,532.3

Equity Capital 2,285.70 2,356.20 2,260.6

Reserves(excluding revaluation reserves)# 86,078.80 146,959.10 152,983.0

EPS (Rs.) 38.74 50.89 58.75

Book Value (Rs.) 386.66 667.08 721.51 ** The consolidated figures reflect the impact of the financial performance of the subsidiaries, which may have made losses. # Reserves are net of miscellaneous expenditure to the extent not written off.

Details of listing and Highest & Lowest market price during the preceding six months Equity shares of RINFRA are listed on BSE and NSE. GDRs of the company are listed at London Stock Exchange. Monthly High & Low price of the Equity shares of RINFRA at BSE and NSE

BSE NSE

Month High (Rs) Low (Rs) High (Rs) Low (Rs)

May 2009 1321 705.25 1165.00 715.00

June 2009 1373.70 1098 1324.20 1095.35

July 2009 1346.55 951.60 1346.95 951.00

August 2009 1222.85 1080.55 1221.95 1081.30

September 2009 1261.85 1105.00 1261.00 1108.10

October 2009 1,404.45 1,048.00 1,404.50 1045.00

(Source: BSE and NSE websites)

81

The share price of RINFRA on BSE was Rs. 1058.40 as on October 30, 2009. The market capitalization of

RInfra on BSE was Rs.23842 Crores as on October 30, 2009.

The share price of RINFRA on NSE was Rs.1056.35 as on October 30, 2009. The market capitalization of

RInfra on NSE was Rs.23796 Crores as on October 30, 2009.


In December 1993 RINFRA made a public issue of 25,269,000 - 15% secured fully convertible debentures

of Rs. 70 each, each of which was converted into one equity share of Rs. 10 each, at a premium of Rs. 60

each, for cash at par. RINFRA simultaneously also made a rights issue of 28,851,760 fully convertible

debentures of Rs. 60 each, each of which was converted into one equity share of Rs. 10 each at a premium

of Rs. 50 each.

The proceeds from the aforesaid issues were used for the objects as stated in the offer document. The

following table compares the performance vis a vis the projections given in the offer document for the

aforesaid issues.


Year ended March 31

1993-94 1994-95 1995-96

Projection Performance Projection Performance Projection Performance

Total Income 9,206.1 10,087.8 10,464.9 12,143.9 11,380.7 15,848.5

Profit After Tax 818.7 708.4 1,279.3 1,466.6 1,370.6 1734.7

Earning per Share

(Rs.)

14.2 12.3 11.4 13.1 12.3 15.0

1993-94: The variation between the projected and actual figures is attributable to the Provision for Taxation,

which in projected financials was Nil while Actual was Rs.496.00 million.

The performance in 1994-95 and 1995-96, were higher than those projected, due to the benefits accrued as

a result of the commissioning of the Company’s power station at Dahanu.

Mechanism for redressal of investor grievance

All share related matters, namely, transfer, transmission, transposition, nomination, dividend, change of


consolidation, demat and remat of shares, issue of duplicate certificates, etc. are handled by RINFRA’s


Investors correspond directly with Karvy, on all share related matters. RINFRA has an established

mechanism for investor service and grievance handling, with Karvy and the Compliance Officer appointed by

RINFRA for this purpose being the important functional nodes. RINFRA has appointed two firms of

Chartered Accountants as Internal Security Auditors to concurrently audit the transactions and

communication with investors, regulatory and other concerned authorities.

82

RINFRA has prescribed service standards for various investor related activities that are handled by Karvy.


thereon and inform RINFRA on the matters on a monthly basis.

The Board of Directors of RINFRA has constituted a Shareholder/Investor Grievance Committee which, inter

alia, approves issue of duplicate certificates and oversees and reviews all matters connected with securities

transfers and other processes.




related transactions and details are also considered by the Board of Directors of RINFRA.

As of October 30, 2009 there were nil investor complaints pending against RINFRA.


For more details see “Outstanding Litigation and Material Development” on page 140 of this information

memorandum.

Other Information

RINFRA is neither a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act,


Reliance Power Limited

Reliance Power Limited (RPower) was incorporated on January 17, 1995 under the Companies Act, 1956,

as Bawana Power Private Limited. It changed its name on February 3, 1995 to Reliance Delhi Power Private

Limited and to Reliance EGen Private Limited on February 17, 2004. The name was further changed to

Reliance Energy Generation Private Limited on March 10, 2004. On March 31, 2004 the Company became

a public Company and named as Reliance Energy Generation Limited. The name was further changed to

Reliance Power Limited on July 7, 2007. RPower’s registered office is situated at H Block, 1st Floor,

Dhirubhai Ambani Knowledge City, Navi Mumbai 400 710, India. The promoters of RPower are listed below

under the head the ‘Shareholding Pattern of RPower’.

Principal Business of RPower

RPower is engaged in development, construction and operation of power projects. The Company is currently

developing various medium and large sized power projects with a combined planned installed capacity of

more than 32,000 MW.

83

Board of Directors of RPower


Shri Anil Dhirubhai Ambani 50 Chairman September 30, 2007

Shri S. L. Rao 73 Director September 30, 2007

Shri J L Bajaj 70 Director September 30, 2007

Dr Yogendra Narain 67 Director September 30, 2007

Dr V K Chaturvedi 66 Director September 30, 2007

Shri K H Mankad 66 Whole-time Director November 7, 2007

Shareholding Pattern of RPower as of October 30, 2009


percentage of total

number of shares Category

Code

( I )

Category of

Shareholder

(II)

No of

Shareholders

(III)

Total No of

Shares

(IV)

Number of

shares held in

dematerilised

Form

( V )

As a % of

(A+B)

(VI)

As a % of

(A+B+C)

(VII )

(A) Shareholding of

Promoter and Promoter

Group

(1) Indian

(a) Individuals/Hindu

Undivided Family 1 1000 - - -


Sub -Total (A)(1) 18 2032000000 2031997994 84.78 84.78

Total of Promoter and

Promoter Group

(A)=(A)(1) 18 2032000000 2031997994 84.78 84.78


(1) Institutions


(b) Financial

Institutions/Banks 52 16534578 16534578 0.69 0.69

(c) Insurance Companies 15 18142831 18142831 0.76 0.76

(d) Foreign Institutional

Investors 86 86898124 86898124 3.63 3.63

Sub -Total (B)(1) 210 130736468 130736468 5.45 5.45

(2) Non-Institutions

(a) Bodies Corporate 6025 48118616 48118616 2.01 2.01

(b) i.Individual shareholders

holding nominal

sharecapital up to

Rs.1Lakh. 3619488 175013634 174985730 7.30 7.30

84

ii. Individual shareholders


capital in excess of

Rs.1Lakh. 264 7781275 7781275 0.32 0.32

(c) Any Other (Specify) - -

1 NRIs/OCBs 13299 3150007 3150007 0.13 0.13

Sub -Total (B)(2) 3639076 234063532 234035628 9.77 9.77

Total Public

Shareholding

B=(B)(1)+(B)(2) 3639286 364800000 364772096 15.22 15.22

TOTAL (A) +(B) 3639304 2396800000 2396770090 100 100

GRAND TOTAL (A)+(B) 3639304 2396800000 2396770090 100 100

Financial Performance of RPower (Standalone)


Particulars Fiscal 2007 Fiscal 2008 Fiscal 2009

Sales & Other Income 22.5 1,328.7 3,347.2

PAT 1.6 946.7 2,489.0

Equity Capital 2,000.4 22,599.5 23,968.0

Reserves (excluding revaluation reserves) 0.2 112,827.2 113,960.1

EPS (Rs.) 0.01 0.17 1.04

Book Value (Rs.)* 10.00 59.92 57.55

* Book value for the partly paid equity of Rs. 2 per share is Rs. 2 per share.

Financial Performance of RPower (Consolidated)* (Rs. in million, except share data)

Particulars Fiscal 2008 Fiscal 2009

Sales & Other Income 1328.9 3,603.7

PAT 853.7 2,445.1

Equity Capital 22599.5 23,968.0

Reserves(excluding revaluation reserves) 112,734.5 113,823.5

EPS(Rs.) 0.15 1.02

Book Value(Rs.) 61.87 63.05

* The consolidated figures reflect the impact of the financial performance of the subsidiaries, which may have made losses.


Equity shares of RPower are listed on BSE and NSE. Monthly High & Low price of the Equity shares of RPower at BSE and NSE

BSE NSE Month


May 2009 189.80 125.25 185.75 125.55

June 2009 210.10 165.10 210.00 165.15

July 2009 180.90 139.25 180.50 139.20

85

BSE NSE Month


August 2009 173.80 153.80 172.15 153.60

September 2009 175.00 158.00 175.00 157.50

October 2009 169.80 166.50 168.75 137.70 (Source: BSE and NSE websites)

The share price of RPower on BSE was Rs. 138.55 as on October 30, 2009. The market capitalization of

RPower on BSE was Rs. 3320.77 Crore as on October 30, 2009.

The share price of RPower on NSE was Rs. 138.45 as on October 30, 2009. The market capitalization of

RPower on NSE was Rs. 3318.37 Crore as on October 30, 2009.


In January 2008, RPower made a initial public offering of 26,00,00,000 equity shares of Rs. 10 each for cash

at a price of Rs. 450 per equity share aggregating Rs. 11,563.20 crore (net of retail discount). Further on

June 11, 2008, the Company had issued and allotted 13,68,00,000 equity shares of Rs.10 each aggregating

Rs. 136,80,00,000 as bonus shares, in the ratio of three new fully paid equity shares of Rs.10 each for every

five equity shares of Rs.10 each held to all the shareholders except the promoters.

The equity shares issued and allotted are listed at the Bombay Stock Exchange Limited and the National

Stock Exchange of India Limited.

The proceeds from the aforesaid IPO were to be used for the objects as stated in the offer document dated

January 19, 2008, are as under:

(Rs. in million)

Objects Amount

Funding Subsidiaries to part finance the construction and development

costs of certain Identified Projects 86,424.3

600 MW Rosa Phase I 3,931.5

600 MW Rosa Phase II 6,149.5

300 MW Butibori 4,114.2

3,960 MW Sasan 54,613.5

1,200 MW Shahapur Coal 11,458.0

400 MW Urthing Sobla 6,157.6

General Corporate Purposes 28,017.2

Issue Expenses 1,190.5

Total 115,632.0

86

Funding Subsidiaries to part-finance the construction and development costs of the Identified Projects

The Company projected an aggregate amount of Rs. 86,424.3 million from the Net Proceeds of IPO to be

expended for its subsidiaries to part finance the development of the projects mentioned above. The

projected vis-à-vis actual amount invested in various projects is given in the table below:

(Rs. In million)

Annual break up of the projection vis-à-vis

utilization of fund

Sr.

No.

Name of

Subsidiaries

Name of

Project

Amount

proposed

to be

financed

from Net

Proceeds*

Projected

as on

31.03.08*

Actual

as on

31.03.08

Projected

as on

31.03.09*

Actual as

on

31.03.09

1 RPSCL

Rosa Phase

I 3,931.5 36.9 20.0 1,645.8 2,418.5

2 RPSCL

Rosa Phase

II 6,149.5 584.4 0.0 1,129.3 3,003.6

3 VIPL Butibori 4,114.2 375.3 7.0 855.0 2,085.1

4 SPL Sasan 54,613.5 15,000.0 86.0 7,072.8 8,777.2

5 MEGL

Shahapur

Coal 11,458.0 4375.0 5.4 480.8 25.0

6 USHPPL

Urthing

Sobla 6,157.6 75.0 89.1 225.0 18.5

Total 86,424.3 20,446.6 207.5 11,408.0 16,327.8

* As stated in the Prospectus dated January 19, 2008.

RPSCL – Rosa Power Supply Company Limited

VIPL – Vidarbha Industries Power Limited

SPL – Sasan Power Limited

MEGL – Maharashtra Energy Generation Limited

USHPPL – Urthing Sobla Hydro Power Private Limited

Reasons for variation:

Most of the projects of the Company are in fast track mode. In Fiscal 2009, the Company has spent 43%

more than budgeted.

Rosa I: The pace of construction on the Project has been increased to advance the commercial

operation by at least 3 months. This has resulted into advancement of capital expenditure

leading to advancement in equity infusion. This is mainly change in project schedule and

payment schedule of EPC Contractors vis-à-vis as envisaged in Prospectus which has resulted

into differences in actual investments against projection in IPO prospectus.

Rosa II: There was no expenditure on the project during 2007-2008 as project was in initial development

phase and EPC contract was signed on March 23, 2008. The project has achieved significant

milestones in 2008-2009 including obtaining coal linkage and issuance of notice to proceed

87

requiring payment of initial advance to EPC contractors. This is mainly change in project

schedule and payment schedule of EPC Contractors vis-à-vis as envisaged in Prospectus which

has resulted into differences in actual investments against projection in IPO prospectus.

VIPL: The project is in fast track mode and we expect to achieve financial closure shortly. The same

can be observed from the deployment of funds in 2008-2009 which far exceeds the budgeted

amount. Construction work has commenced and the spending in 2008-2009 reflects the same.

Cumulatively in 2007-2008 & 2008-2009 we have spent 70% more than budgeted.

SPL: The Project achieved financial closure recently. This project is on fast track mode and advance

for EPC has been made in 2008-2009. Hence, in 2008-2009 the actual spending is 24% more

than budgeted. With the project achieving financial closure this year, the spending is expected

to increase. Due to delay in handing over land leading to delay in achieving Financial Closure

the amount envisaged to have been spent in 2007-2008 was lower than budgeted.

MEGL: The project was expected to move into construction phase as against which it is in development

phase due to delay in land acquisition related activities. Spending will pickup, once it enters

construction phase post completion of land acquisition.

USHPPL: The project was expected to move into construction phase as against which it is in development

phase due to delay in land acquisition related activities. Spending will pickup, once it enters

construction phase.


All share and investors related matters, namely, transfer, transmission, transposition, nomination, dividend,

change of name, address and signature, registration of mandate and power of attorney, replacement, split,

consolidation, demat and remat of shares, issue of duplicate certificates, etc. are handled by RPower’s


Investors correspond directly with Karvy, on all share related matters. RPower has an established

mechanism for investor service and grievance handling, with Karvy and the Compliance Officer appointed by

RPower for this purpose being the important functional nodes.

RPower has appointed two firms of Chartered Accountants as Internal Security Auditors to concurrently

audit the transactions and correspondence with the investors, regulatory and other concerned authorities.

RPower has prescribed service standards for various investor related activities that are handled by Karvy.


thereon and inform RPower on the matters on a monthly basis.

The Board of Directors of RPower has constituted a Shareholder/Investor Grievance Committee which, inter

alia, approves issue of duplicate certificates and oversees and reviews all matters connected with securities,

transfers, investor grievances and other processes.

The Committee also looks into redressal of investors grievances related to transfer of shares, non-receipt of

fractional warrants, etc. The Committee oversees performance of the R&TA and recommends measures for

88

overall improvement in the quality of investor services. The summary statement of investor related

transactions and details are also considered by the Board of Directors of RPower.

As of October 30, 2009, 2 investor complaints were pending against RPower.



memorandum.

Other Information

RPower is neither a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act,

1985 nor is it under winding up.

Reliance Natural Resources Limited

Reliance Natural Resources Limited (RNRL) was incorporated on March 24, 2000 as Reliance Platforms

Communications.com Private Limited. The name of the Company was thereafter changed to Reliance

Energy Private Limited on January 3, 2003; Reliance Wattage Private Limited on January 16, 2003 and the

status of the Company was changed to public limited company on July 25, 2005. The name of this company

was thereafter changed to Reliance Fuel Management Limited on August 3, 2005; Global Fuel Management

Services Limited on August 10, 2005 and Reliance Natural Resources Limited on January 9, 2006. The

registered office of RNRL is situated at H Block, 1st Floor, Dhirubhai Ambani Knowledge City, Navi Mumbai

400 710, India. The promoters of RNRL are listed below under the head the ‘Shareholding Pattern of RNRL’.

Principal Business of RNRL

RNRL recently commenced the business of sourcing, supplying and transporting gas, coal and liquid fuels,

as well as the exploration and production of gas, captive coal mining and city gas distribution.

Board of Directors of RNRL


Shri Anil Dhirubhai Ambani 50 Chairman February 7, 2006

Shri S L Rao 73 Director February 7, 2006

Dr. Bakul Dholakia 61 Director February 7, 2006

Shri J L Bajaj 69 Director February 7, 2006

Shri Anil Singhvi 49 Vice Chairman July 25, 2008

89

Shareholding Pattern of RNRL as of October 30, 2009

Total Shareholding as percentage of total number of shares

Category Code

(I)


No of Share holders

(III)

Total No of Shares

(IV)

Number of shares held in dematerialised

form (V) As a % of

(A+B) (VI)

As a % of

(A+B+C) (VII)


1 Indian (a) Individuals/Hindu

Undivided Family 11 8845089 8844989 0.54 0.54


Sub -Total (A)(1) 33 895608142 895586539 55.02 54.84

Total of Promoter and Promoter Group (A)=(A)(1)

33 895608142 895586539 55.02 54.84

(B) Public Shareholding 1 Institutions


(b) Financial Institutions/Banks 374 1017898 895256 0.06 0.06


60 1056375 56256 0.06 0.06

(d) Insurance Companies 13 36340072 36336443 2.23 2.23

(e) Foreign Institutional Investors

406 84974328 84851559 5.22 5.2

Sub -Total (B)(1) 1033 136954531 135232407 8.41 8.39

2 Non-Institutions (a) Bodies Corporate 8646 97228199 96552903 5.97 5.95

(b) i. Individual shareholders holding nominal share capital up to Rs.1 Lakh.

2535606 451635294 405344446 27.75 27.65

ii. Individual shareholders holding nominal share capital in excess of Rs.1Lakh.

475 27765262 27189166 1.71 1.7

(c) Any others (please specify)

1 NRIs / OCBs 20089 18495986 14627969 1.14 1.13

Sub -Total (B)(2) 2564816 595124741 543714484 36.56 36.44


2565849 732079272 678946891 44.98 44.83

TOTAL (A) +(B) 2565882 1627687414 1574533430 100 99.67

(C) Shares held by Custodians and against which Depository Receipts have been issued

1 5443008 5443008

- -

GRAND TOTAL (A)+(B)+(C)

2565883 1633130422 1579976438 100 100

90

Financial Performance of RNRL (Standalone)


Particulars Fiscal 2007* Fiscal 2008 Fiscal 2009

Sales & Other Income 2,501.60 3,673.10 4,718.40

PAT 298.60 685.90 698.70

Equity Capital 7,365.70 8,165.70 8,165.70

Reserves (excluding revaluation reserves)# 5,146.60 9,137.40 9,836.10

EPS (Rs.) 0.20 0.40 0.40

Book Value (Rs.) 8.50 10.60 11.00

* Financial Year from January 1, 2006 to March 31, 2007.

# Reserves are net of miscellaneous expenditure to the extent not written off.

Financial Performance of RNRL (Consolidated )^

(Rs. in million, except share data) Particulars Fiscal 2007* Fiscal 2008 Fiscal 2009

Sales & Other Income 2,501.59 3,673.07 4,734.72

PAT 298.58 685.99 715.47

Equity Capital 7,365.65 8,165.65 8,165.65

Reserves (excluding revaluation reserves)# 5,146.61 9,137.22 9,852.69

EPS (Rs.) 0.23 0.44 0.44

Book Value (Rs.)

8.49

10.59

11.03 * The Financial for the Fiscal 2007 was for a period 15 months and there were no subsidiaries for that period # Reserves are net of miscellaneous expenditure to the extent not written off. ^ The consolidated figures reflect the impact of the financial performance of the subsidiaries, which may have made

losses.


Equity shares of RNRL are listed on BSE and NSE. GDRs of the company are listed at Luxembourg Stock

Exchange.

Monthly High & Low price of the equity shares of RNRL at BSE and NSE

BSE NSE Month


May 2009 84.90 55.75 84.90 54.00

June 2009 112.25 82.25 112.45 80.70

July 2009 90.75 67.15 90.80 67.00

August 2009 89.2 76.6 90.90 75.10

September 2009 92.90 83.75 92.95 83.7

October 2009 92.40 63.00 96.00 62.75

The share price of RNRL on BSE was Rs.63.65 as on October 30, 2009. The market capitalization of RNRL

on BSE was Rs. 1,03,94 Crores as on October 30, 2009.

91

The share price of RNRL on NSE was Rs. 63.70 as on October 30, 2009. The market capitalization of RNRL

on BSE was Rs.1,04,03 Crores as on October 30, 2009.


RNRL has not made any public issue or rights issue since its inception.


All share related matters, namely, transfer, transmission, transposition, nomination, dividend, change of


consolidation, demat and remat of shares, issue of duplicate certificates, etc. are handled by RNRL’s


Investors correspond directly with Karvy, on all share related matters. RNRL has an established mechanism

for investor service and grievance handling, with Karvy and the Compliance Officer appointed by RNRL for

this purpose being the important functional nodes. RNRL has appointed two firms of Chartered Accountants

as Internal Security Auditors to concurrently audit the transactions and communication with investors,


RNRL has prescribed service standards for various investor related activities that are handled by Karvy. Any

deviation there from is examined by the Internal Security Auditors who also advise the corrective action

thereon and inform RNRL on the matters on a monthly basis.

The Board of Directors of RNRL has constituted a Shareholder/Investor Grievance Committee which, inter

alia, approves issue of duplicate certificates and oversees and reviews all matters connected with securities

transfers and other processes.


receipt of annual report, etc. The Committee oversees performance of the R&TA and recommends


related transactions and details are also considered by the Board of Directors of RNRL.

As of October 30, 2009 , there were nil investor complaints pending against RNRL.



memorandum.

Other Information

RNRL is neither a sick company within the meaning of Sick Industrial Companies (Special Provisions) Act,

1985 nor it is under the process of winding up.

92

CURRENCY OF PRESENTATION

In this Information Memorandum all references to “Rupees” or “Rs.” are to Indian Rupees, the legal currency

of the Republic of India.

DIVIDEND POLICY

There is no set dividend payment policy. Dividend is intended to be declared based on the quantum and

availability of future profits and will be disbursed based on shareholder approval based on the recommendation of

the Board of Directors.

We have not paid any dividend in the past.

93

FINANCIAL INFORMATION OF THE COMPANY

AUDITORS’ REPORT ON FINANCIAL INFORMATION

To,

The Board of Directors

Reliance Media World Limited,

401, 4th Floor, Infiniti,

Link Road, Oshiwara,

Andheri (West),

Mumbai – 400 053

Dear Sirs,

1. We have examined the attached restated financial statements of Reliance Media World Limited (formerly

Reliance Unicom Limited upto July 17, 2009, Big Radio Limited upto September 18, 2007, Reliance Unicom

Limited upto October 6, 2006) (“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 of the Companies Act, 1956

(“the Act”) and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines

2000 as amended to date (SEBI Guidelines) and in accordance with the terms of our engagement agreed

upon with you in accordance with our engagement letters in connection with listing of its fully paid up Equity

Shares.

2. We have examined the accounts of the Company for financial year ended March 31, 2009 comparing the

information in the restated financial statements for the year / period ended March 31, 2006, March 31, 2007

and March 31, 2008 with the accounts as audited by M/s S.V. Doshi & Co., Chartered Accountants.

3. As the Company was incorporated on December 27, 2005, the restated financials of the Company as

attached herewith are for the period / year ended March 31, 2006, March 31, 2007, March 31, 2008 and

March 31, 2009.

4. We draw attention to note no.1(B) of Annexure - 4 regarding the audited accounts of the Company for the

year ended March 31, 2009 has been adopted by the Board of Directors and approved by the Shareholders

in the Annual General Meeting held on May 25, 2009 and the scheme was effective on June 30, 2009

pursuant to filing the same with registrar of Companies, hence, the radio business of Adlabs Films Limited

has not been incorporated into the books of account for the purpose of presenting the restated financial

statements.

5. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI

guidelines and terms of our engagement agreed with you, we further report that:

a. The restated assets and liabilities of the Company as at March 31, 2006, March 31, 2007, March 31, 2008

and March 31, 2009 are set out in Annexure - 1 to this report to be read together with significant accounting

policies and notes to accounts appearing in Annexure - 4 to this report.

94

b. The restated profit and loss account of the company for the year / period ended March 31, 2006, March

31, 2007, March 31, 2008 and March 31, 2009 are set out in Annexure - 2 to this report to be read together

with significant accounting policies and notes to accounts appearing in Annexure - 4 to this report.

c. The restated cash flows of the Company for the year / period ended March 31, 2006, March 31, 2007,

March 31, 2008 and March 31, 2009 are set out in Annexure - 3 to this report to be read together with

significant accounting policies and notes to the accounts appearing in Annexure - 4 to this report.

d. We have examined the following financial information relating to the Company and as approved by the

Board of Directors for the purpose of inclusion in the Information Memorandum:

i. Statement of Fixed Assets, as restated enclosed as Annexure – 5

ii. Statement of Loans and Advances, as restated enclosed as Annexure – 6

iii. Statement of Unsecured Loans, as restated enclosed as Annexure – 7

iv. Statement of Current Liabilities, as restated enclosed as Annexure – 8

v. Statement of Provisions, as restated enclosed as Annexure – 9

vi. Statement of Other Operating and General Administrative Expenses, as restated, enclosed as

Annexure – 10

vii. Summary of Accounting Ratios, as restated enclosed as Annexure - 11

viii. Capitalization statement, as restated enclosed as Annexure – 12

ix. Statement of Tax Shelters, as restated enclosed as Annexure - 13

x. Statement of Related Party Disclosure, as restated, enclosed as Annexure – 14

xi. The Company does not have investments as at March 31, 2006, March 31, 2007, March 31, 2008

and March 31, 2009; hence the information regarding details of Investments in accordance with the

paragraph 6.10.2.2(b) of the SEBI Guidelines have not been disclosed

xii. The Company has not declared dividends during any financial year / period covered in this report

hence, the information regarding rates of dividend in respect of each class of shares in accordance

with the paragraph 6.10.2.1(b) of the SEBI Guidelines have not been disclosed.

6. In our opinion the financial information of the Company and notes attached to this report, after making

adjustments and re-grouping as considered appropriate has been prepared in accordance with Part II of

Schedule II of the Act and SEBI Guidelines.

7. We have no responsibility to update our report for events and circumstances occurring after the date of the

report.

8. This report is intended solely for your information and for inclusion in the Information Memorandum in

connection with the listing of the equity shares of the Company and is not to be used, referred to or

distributed for any other purpose without our prior written consent. For Chaturvedi & Shah Chartered Accountants C. D. Lala Partner Membership No.35671 Place: Mumbai Date: September 16, 2009

95

Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 1 STATEMENT OF ASSETS AND LIABILITIES, RESTATED

Amount in Rupees

Particulars 2009 2008 2007 2006

A Fixed assets

Gross Block 103,137 103,137 - - Less : Accumulated depreciation/ amortisation 32,706 15,987 - - Net Block 70,431 87,150 - -

B Current assets, loan and advancesCash and bank balances 118,503,240 336,327,788 689,730,246 101,000,000 Loans and advances 14,970,474 10,538,112 14,897,006 - Total 133,473,714 346,865,900 704,627,252 101,000,000

C Current liabilities and provisionsUnsecured loans - 234,894,871 600,000,000 - Current liabilities 17,588,751 2,985,382 4,475,740 16,836 Provision 798,461 - - - Deferred tax liability (net) - 15,600 - - Total 18,387,212 237,895,853 604,475,740 16,836

D Net Worth (A+B-C) 115,156,933 109,057,197 100,151,512 100,983,164

E Represented byPaid Up Share Capital 10,550,000 10,550,000 500,000 500,000 Share Application Money - - 100,500,000 100,500,000 Total (i) 10,550,000 10,550,000 101,000,000 101,000,000 Reserve and surplusProfit and Loss Account 14,156,933 8,057,197 - - Share Premium Account 90,450,000 90,450,000 - - Less : - Debit balance in Profit & Loss Account - - 848,488 16,836 Total (ii) 104,606,933 98,507,197 (848,488) (16,836)

F Net Worth ( i+ ii ) 115,156,933 109,057,197 100,151,512 100,983,164

As at March 31,

96

Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 2 STATEMENT OF PROFIT AND LOSS, AS RESTATED Amount in Rupees

Particulars 2009 2008 2007 2006

A. Income

Interest Income 11,132,283 42,632,803 19,044,176 - Total 11,132,283 42,632,803 19,044,176 -

B. Expenditure

Operating and general administrative expenses 172,416 608,900 9,951,170 16,836 Interest 1,628,767 28,424,154 9,924,658 - Depreciation/ amortisation 16,719 15,987 - - Total 1,817,902 29,049,041 19,875,828 16,836

C Profit before tax (A-B) 9,314,381 13,583,762 (831,652) (16,836)

less - Provision for taxes- Current tax 3,230,245 4,662,477 - - - Deferred tax charge/ (credit) (15,600) 15,600 - - - Fringe benefit tax - - - -

D Profit after tax 6,099,736 8,905,685 (831,652) (16,836)

E Accumulated balance brought forward 8,057,197 (848,488) (16,836) -

F Balance carried to balance sheet 14,156,933 8,057,197 (848,488) (16,836)

AppropriationsTransfer to general reserveProposed dividendDividend taxBalance carried to balance sheet 14,156,933 8,057,197 (848,488) (16,836)

For the year/ period ended on March 31,

97

Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 3 CASH FLOW STATEMENT, AS RESTATED

Amount in Rupees

Particulars 2009 2008 2007 2006

A Cash Flow from operating activitiesNet Profit/(loss) before tax 9,314,381 13,583,762 (831,652) (16,836)Adjustment for Depreciation/ amortization 16,719 15,987 - - Interest Income (11,132,283) (42,632,803) 9,924,658 - Interest expenses 1,628,767 28,424,154 - - Operating profit (loss) before working capital changes (172,416) (608,900) 9,093,006 (16,836)

Adjustment for :(Increase) / decrease in loans and advances - (303,583) (14,897,006) - Increase / (decrease) in trade and other payable (2,920,269) 3,172,119 - 16,836Cash generated/ (used in) operating activities (3,092,685) 2,259,636 (5,804,000) -

Taxes paid (net of refunds) (2,431,784) (4,662,477) - -

Net cash Generated / (used in) operating activities (A) (5,524,469) (2,402,841) (5,804,000) -

B Cash flow from investing activitiesPurchase of fixed assets - (103,137) - - Interest Income 6,699,921 42,632,803 - - Net Cash (used)/ generated in investing activities (B) 6,699,921 42,529,666 - -

C Cash flow from financing activitiesProceeds from issue of shares - - - 500,000Share application money received - - - 100,500,000Proceeds from Unsecured Loan - 234,894,871 600,000,000 - Repayment Unsecured Loan (219,000,000) (600,000,000) - - Interest paid - (28,424,154) (5,465,754) - Net cash flow from financing activities ( C ) (219,000,000) (393,529,283) 594,534,246 101,000,000Net increase in cash and cash equivalent (A+B+C) (217,824,548) (353,402,458) 588,730,246 101,000,000

Cash and cash equivalents as at beginning of the period/year 336,327,788 689,730,246 101,000,000 - Cash and cash equivalents as at end of the period/year 118,503,240 336,327,788 689,730,246 101,000,000

For the year / period ended March 31,

98

Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 4 NOTES TO RESTATED ASSETS AND LIABILITIES, RESTATED PROFIT AND LOSS ACCOUNT AND RESTATED CASHFLOW STATEMENT FOR THE YEAR/PERIOD ENDED MARCH 31, 2009 A - Significant accounting policies 1. Basis of preparation The financial statements are prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with the Accounting Standards (‘AS’) as prescribed under the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956 (‘the Act’), to the extent applicable. 2. 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 and the disclosures of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. 3. Revenue recognition Interest income is recognized on a time proportion basis. 4. Fixed assets and depreciation/ amortisation Tangible fixed assets are stated at cost 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 Schedule VI rates which, in management’s opinion, reflects the estimated useful lives of those fixed assets. 5. 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 recognized for timing differences between the profits/ losses offered for income taxes 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 realized 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 realized.

99

Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) B – Notes to Accounts 1. Demerger of the Radio Division of Adlabs Films Limited (AFL), to the Company The accounts of the Company for the financial year 2008-09 have been approved by the shareholders in the Annual General Meeting held on May 25, 2009. The Scheme of Arrangement between the Company and AFL was approved by the High Court of Judicature at Bombay on April 4, 2009 and the same was filed with the Registrar of Companies, Mumbai, Maharashtra on June 30, 2009, the effective date. As per the Scheme the radio business of AFL stands transferred to the Company from April 1. 2008. In the preparation of the restated financials the accounts approved by the shareholders in the Annual General Meeting have been considered for financial year 2008-09. The accounts for financial year 2008-09 with the demerger effect would be separately presented in the Information Memorandum. Details of the Scheme are as below a. The Scheme of Arrangement (the Scheme) under Section 391 to 394 of the Companies Act 1956, between Adlabs Films Limited, the Company and their respective Shareholders is sanctioned by the honorable High Court of Judicature at Bombay vide Order Dated April 4, 2009 and copy of the Order has been filed with the Registrar of Companies, Mumbai, Maharashtra on June 30, 2009. Pursuant to the Scheme, the radio business stands de-merged from AFL and transferred to and vested in the Company on a going concern basis. b. The Scheme of Arrangement provided for the following-

1. Transfer of the Radio business of AFL to the Company with effect from April 1, 2008 2. Extinguishment of shares held by AFL in the Company 3. Issue of shares of the Company to shareholders of AFL as of the record date to be decided by the Board of Directors

of AFL and the Company in the ratio of 1:1. 4. Transfer of Reserves created under demerger upto Rs 1,000,000,000 to Securities Premium and balance to Capital

Reserve. In case of there being shortfall, the same shall be debited to and carried forward as Goodwill. 5. Cost of the Scheme to be borne by the Company

As per the Scheme, the radio business of AFL stands transferred to the Company. All assets and liabilities of the radio business of AFL as at April 1, 2008 have been transferred at their respective book values. Further, general borrowings of AFL as on April 1, 2008 have been allocated between AFL and the Company on the basis of ratio of net assets. c. The following assets and liabilities of Radio Business are transferred as on April 1, 2008 pursuant to the Scheme Particulars Amount Gross Block of Fixed Assets 3,272,822,986 Less: Depreciation 384,538,275 Net Block of Fixed Assets 2,888,284,711 Capital Work In Progress 230,916,872 Current Assets , Loans and Advances 1,392,795,262 Total – A 4,511,996,845 Loan Funds 204,627,687 Current Liabilities and Provisions 497,564,555 Total –B 702,192,242 Net Balance 3,809,804,603

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Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) As per the provisions of the scheme, excess balances of assets transferred over liabilities and the gain on cancellation of shares held by AFL will be credited to Securities Premium Account and Capital Reserve as follows:

Amount in Rupees Particulars Amount Allocated net assets of Radio Division as of April 1,2008 transferred as per the provisions of the Scheme (A)

3,809,804,603

Less: General borrowings of the Company as of April 1,2008 allocated between the Company and AFL as per the provisions of the Scheme (B)

2,240,000,000

Excess of net assets transferred to the Company (Radio Division) (A-B) 1,569,804,603

Less: Issue of Shares to Shareholders of AFL 230,630,850

Add: Cancellation of Share Capital held by AFL 10,550,000

Reserves Created under demerger 1,349,723,753 Recognised as Securities Premium Account as per Scheme Para 5.1.3 1,000,000,000

Balance Recognised as Capital Reserve 349,723,753

As explained above the Scheme has not been given effect to in these financial statements. 2. Sundry creditors There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2009. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development. Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. 3. Deferred Tax Since there is no timing difference between the expenses offered for income tax and expenses as per financial statements no deferred tax liability needs to be recognised in the financial statements. Hence the deferred tax liability for depreciation recorded in the previous year has been reversed. 4. Disclosure of Related Party under AS 18 Parties where control exists Holding Company Adlabs Films Limited Transactions with Related Parties

Particulars Year ended

March 31,2009 Year ended

March 31,2008 Holding Company Transactions during the year

Loan & Advances Taken - 219,000,000

Loan & Advances Repaid 219,000,000 -

Interest Income - 23,378,767

Interest Expenses 1,629,767 13,033,743

Amounts Payable As on 31 March 17,523,638 237,848,317

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Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) 5. Earnings per Share (‘EPS’) Particulars Year ended

March 31,2009 Year ended

March 31,2008

Net Profit/(loss) available for equity shareholders 60,99,736 8,905,685

Weighted average number of equity shares outstanding during the year 2,110,000 2,110,000

Basic/ Diluted EPS 2.89 4.22

Nominal value per share 5.00 5.00 6. Prior year comparatives The figures for the previous years/period have been regrouped/ rearranged as necessary to conform to current years presentation.

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Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE – 5 STATEMENT OF FIXED ASSETS, AS RESTATED ANNEXURE – 5A – FIXED ASSETS AS RESTATED FOR THE YEAR ENDED MARCH 31, 2009

Amount in Rupees

As on April 1 2008

Additions Deletions As on March 31 2009

As on April 1 2008

During The Year

Deletions As on March 31 2009

As on March 31 2009

As on March 31 2008

Data Processing Equipments 103,137 - - 103,137 15,987 16,719 32,706 70,431 87,150 TOTAL 103,137 - - 103,137 15,987 16,719 - 32,706 70,431 87,150

Particulars Gross Block Accumulated Depreciation Net Block

ANNEXURE – 5B – FIXED ASSETS AS RESTATED FOR THE YEAR ENDED MARCH 31, 2008 Amount in Rupees

As on April 1 2007

Additions Deletions As on March 31 2008

As on April 1 2007

During The Year

Deletions As on March 31 2008

As on March 31 2008

As on March 31 2007

Data Processing Equipments - 103,137 - 103,137 - 15,987 - 15,987 87,150 - TOTAL - 103,137 - 103,137 - 15,987 - 15,987 87,150 -

Net BlockParticulars Gross Block Accumulated Depreciation

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Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 6 LOANS AND ADVANCES, AS RESTATED Amount in Rupees

Particulars 2009 2008 2007 2006

A Advance recoverable in cash or in kind or for value to be received - Considered good - - 10,623,493 -

B Interest Accrued but not due 6,095,476 1,663,116 - -

CAdvance tax, tax deposited at source, advance fringe benefit tax (net of provision for tax 2009: 46,62,477 [2008: 46,62,477] [2007: Nil] [2006: Nil]) 8,874,997 8,874,996 4,273,513 -

14,970,474 10,538,112 14,897,006 -

As at March 31,

ANNEXURE - 7 STATEMENT OF SECURED AND UNSECURED LOAN, AS RESTATED Amount in Rupees

Particulars 31-Mar-09 31-Mar-08 31-Mar-07 31-Mar-06

Unsecured Loana) From banksi) Term loan - - 600,000,000 -

- - 600,000,000 - b) From Othersi) Term loan - 234,894,871 - -

Total - 234,894,871 600,000,000 -

As at March 31,

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Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 8 STATEMENT OF CURRENT LIABILITIES AS RESTATED Amount in Rupees

Particulars 2009 2008 2007 2006

Sundry Creditors for goods and services: 65,113 31,936 Other current liabilities 17,523,638 2,953,446 4,475,740 16,836

Total 17,588,751 2,985,382 4,475,740 16,836

As at March 31,

ANNEXURE - 9 STATEMENT OF PROVISIONS AS RESTATED Amount in Rupees

Particulars 2009 2008 2007 2006Taxation (Net of Advance Tax 2431784 [2008:NIL] [2007: NIL] 798,461 - - - [2006: NIL])Total 798,461 - - -

As at March 31,

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Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 10 STATEMENT OF OTHER OEPRATING AND GENERAL ADMINISTRATIVE EXPENSES AS RESTATED Amount in Rupees

Particulars 2009 2008 2007 2006Bank charges 1,512 4,407 9,903,010 - Rent, rates and taxes - 178,084 - - Remuneration to Auditors 55,150 410,096 - - Legal and professional fees 115,754 1,250 11,224 - Other miscellaneous expenses - 15,063 16,836 16,836 Preliminary Expenses Written off - - 20,100 -

Total 172,416 608,900 9,951,170 16,836

For the year / period ended 31 March

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Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 11 STATEMENT OF ACCOUNTING RATIOS AS RESTATED Amount in Rupees

2009 2008 2007 20061 Earnings Per Share

Net Profit / (Loss) After Tax 6,099,736 8,905,685 (831,652) (16,836)Weighted average number of equity shares 2,110,000 2,110,000 50,000 50,000 Earnings Per Share (Basic/ Diluted) 2.89 4.22 (16.63) (0.34)

2 Return on Net WorthNet Profit / (Loss) After Tax 6,099,736 8,905,685 (831,652) (16,836)Net Worth 115,156,933 109,057,197 100,151,512 100,983,164 Return on Net Worth (%) 5.30 8.17 (0.83) (0.02)

3 Net Assets ValueNet Assets 115,156,933 109,057,197 100,151,512 100,983,164 Number of Shares 2,110,000 21,10,000* 50,000 50,000 Net Assets Value per share 54.58 51.69 2,003.03 2,019.66

Particulars For the period / year ended on March 31,

*The equity share of the face value of Rs.10/- each fully paid up was subdivided into equity share of Rs.5/- each fully paid up vide ordinary resolution passed at the Extra Ordinary General Meeting held on April 25, 2007. The paid up equity share capital of the Company was further increased by allotment of 2,010,000 shares of Rs. 5/- each fully paid up on April 30, 2007. ANNEXURE - 12 CAPITALISATION STATEMENT AS RESTATED

Amount in Rupees Particulars Pre Issue Post Issue A Borrowing : Short Term Debt - 2,814,079,098 Long Term Debt - - Total Debt - 2,814,079,098 B Shareholders Funds Share Capital Equity Share Capital 10,550,000 230,630,850 Reserves and Surplus Securities Premium Account 90,450,000 10,904,50,000 Capital Reserve arising pursuant to demerger 349,723,753 Profit and Loss account 14,156,933 (975,323,143) Total 115,156,933 695,481,460 Debt - Equity Ratio (A/B) 0.00 4.05

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Reliance Media World Limited (Formerly Known as Reliance Unicom Limited) ANNEXURE - 13 STATEMENT OF TAX SHELTERS

Amount in Rupees

2009 2008 2007 2006

Profit / (Loss) before current and deferred taxes, as restated 9,314,381 13,583,762 (831,652) (16,836)

Add: Expenses and depreciation not offered for tax 189,135

Taxable profits 9,503,516 Tax Rate, %Normal 33.99 33.99 33.99 33.66Tax impact at applicable tax rate on taxable restated profits (A) 3,230,245 - - -

Adjustments (B) NilTax Savings thereon (C) Nil - - -Net tax liability ( A+C) 32,30,245 - - -

Particulars For the year / period ended on March 31,

ANNEXURE - 14 STATEMENT OF TRANSACTIONS WITH RELATED PARTIES AS RESTATED

Amount in Rupees For the year/ period ended March 31,

Particulars 2009 2008 2007 2006

A Interest Income Adlabs Films Limited - 23,378,767 14,857,534 -

B Interest Expense Adlabs Films Limited 16,28,767 13,033,743 - -

C Loan given

Adlabs Films Limited - -

579,099,990 -

D Loan taken/ (repaid) Adlabs Films Limited (219,000,000) 219,000,000 - -

E Outstanding Balances as at year end Adlabs Films Limited Dr (Cr) (17,523,638) (237,848,317) 10,623,493 -

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AUDITORS’ REPORT

To the Board of Directors of

Reliance Media World Limited (Formerly known as Reliance Unicom Limited)

1. We have audited the attached Interim Financial Statements comprising of the Balance Sheet of Reliance

Media World Limited (Formerly known as Reliance Unicom Limited) as at June 30, 2009, the Profit and Loss

Account and the Cash Flow Statement (together the Interim Financial Statements) for the period ended on

that date attached herewith. These Interim Financial Statements have been prepared for the purpose of the

management of the Company for submitting the Information Memorandum with the Bombay Stock

Exchange, National Stock Exchange and Securities and Exchange Board of India pursuant to the Scheme

being effective on June 30, 2009 by filing the copy of the Scheme along with the order of the High Court with

the Registrar of Companies. These Interim Financial Statements are responsibility of the Company’s

management. Our responsibility is to express an opinion on these Interim Financial Statements based on

our audit which have been prepared in accordance with the recognition and measurement principles laid

down in Accounting Standard (AS) 25, “Interim Financial Reporting”, issued pursuant to the Companies

(Accounting Standards) Rules, 2006 as per Section 211(3C) of the Companies Act, 1956 and other

accounting principles generally accepted in India.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those

Standards require that we plan and perform the audit to obtain reasonable assurance about whether the

Interim Financial Statements are free of material misstatement. An audit includes examining, on a test basis,

evidence supporting the amounts and disclosures in the Interim Financial Statements. An audit also includes

assessing the accounting principles used and significant estimates made by management, as well as

evaluating the overall Interim Financial Statement presentation. We believe that our audit provides a

reasonable basis for our opinion.

3. As explained in note 1 of schedule 18 to the Interim Financial Statements, during the period the

Honorable High Court of Judicature at Bombay vide its order dated April 4, 2009 sanctioned the Scheme of

Arrangement (the Scheme) between the Company and Adlabs Films Ltd (now known as Reliance

MediaWorks Limited) . The Scheme inter-alia provides for the demerger of the radio business and other

allied businesses of AFL to the Company effective April 1, 2008. The Company has filed the Scheme with

the Registrar of Companies on June 30, 2009, the effective date. Pursuant to which the Company has given

the effect of the Scheme in the Interim Financial Statements as the approval of the Honorable High Court of

Judicature at Bombay has been obtained and all other legal and procedural formalities have been completed

including the NOC Letter from the Ministry of Information and Broadcasting.

4. Further to our comments referred to in paragraph 3 above, we report that:

a. We have obtained all the information and explanations, which to the best of our knowledge and

belief, were necessary for the purposes of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company and so

far as appears from our examination of those books;

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are

in agreement with the books of account;

109

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by

this report comply with the accounting standards referred to in Section 211 (3C) of the Act;

e. In our opinion and to the best of our information and according to the explanations given to us, the

said Interim Financial Statements together with the notes thereon and attached thereto, give in the

prescribed manner, the information required by the Act and also give, a true and fair view in

conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 2009;

(ii) in the case of the Profit and Loss Account, of the loss for the period ended on that date; and

(iii) in the case of the Cash Flow Statement, of the cash flows for the period ended on that date.

For Chaturvedi & Shah


C. D. Lala

Partner

Membership No.35671

Place: Mumbai

Date: October 30, 2009

110

Reliance Media World Limited (Formerly Reliance Unicom Limited)

0.41

BALANCE SHEET AS AT 30 JUNE 2009

(Currency: Indian Rupees) Sch. 30 June 2009

SOURCES OF FUNDS

Shareholders FundsShare Capital 2 230,630,850 Reserves and Surplus 3 1,440,173,753

1,670,804,603 Loan FundsUnsecured Loans 4 2,875,729,952

2,875,729,952

4,546,534,555

APPLICATION OF FUNDS

Fixed Assets 5Gross Block 3,483,865,558 Less : Depreciation 836,073,838 Net Block 2,647,791,720 Capital Work in Progress (Including Capital Advances) 95,845,176

2,743,636,896 Current Assets, Loans and AdvancesInventories 6 2,263,312 Sundry Debtors 7 742,776,643 Cash and Bank Balances 8 238,229,843 Loans and Advances 9 456,508,990

1,439,778,788 Current Liabilities and ProvisionsCurrent Liabilities 10 851,847,375 Provisions 11 31,558,940

883,406,315 Net Current Assets 556,372,473

Profit and Loss Account Debit Balance 3A 1,246,525,186

4,546,534,555

Significant accounting policies 1Notes to the accounts 18

As per our report of even date attached.

For Chaturvedi & Shah For and on behalf of the BoardChartered Accountants

C. D. Lala Gautam DoshiPartner DirectorMembership No.35671

Place: Mumbai Gururaja RaoDate: 30 October 2009 Company Secretary

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0.41 PROFIT AND LOSS ACCOUNT FOR THE PERIOD ENDED 30 JUNE 2009

(Currency: Indian Rupees) Sch. Period ended 30 June

2009

INCOME

Service Revenue and Other Operating Income 12 450,345,316 Other Income 13 9,768,085

460,113,401

EXPENDITURE

Direct Costs 14 201,031,005 Personnel Costs 15 121,101,291 Other Operating and General Administrative Expenses 16 252,042,027 Interest & Finance Charges 17 67,583,562 Depreciation/Amortisation 5 89,557,561

731,315,446

Profit/(loss) Before Tax (271,202,045)

Less : Provision for taxation -

Net Profit / (loss) After Tax (271,202,045)

Balance Carried to Balance Sheet (271,202,045)

Earnings Per Share Basic/ Diluted (Not Annualised) (5.88) (Refer note 14 of Schedule 18)

Significant accounting policies 1Notes to the accounts 18





112

Reliance Media World Limited (Formerly Reliance Unicom Limited)Radio Consolidated

CASH FLOW STATEMENT FOR THE PERIOD ENDED 30 JUNE, 2009(Currency: Indian Rupees) 30 June 2009

A Cash flows from operating activities

Net profit / (loss) before taxes (271,202,045) Less: Interest Income (3,086,787) Add: Interest Expense 67,583,562 Add: Depreciation/Amortisation 89,557,561 Add: Provision for Doubtful debts 1,254,748 Less: Provision for Doubtful advances written back (141,334) Less: Income Accrued (868,679) Less: Profit on sale of fixed assets (61,516) Operating profit/ (loss) before working capital changes (116,964,490) (Increase)/ Decrease in Inventories 260,082 (Increase)/ Decrease in Loans and Advances 22,976,527 (Increase)/ Decrease in Debtors 67,908,979 Increase/(Decrease) in Current Liabilities and Provisions 45,899,156 Cash generated from operations 20,080,254 Taxes Paid (5,600,741) Net cash generated from / (used in) operating activities (A) 14,479,513

B Cash flows from investing activities

Purchase of fixed assets 882,198 Sale Proceeds from Fixed Assets 89,348 Interest Income 8,832,643 Net cash generated from investing activities (B) 9,804,189

C Cash flows from financing activities

Interest Payment on Unsecured Loan (4,525,978)

Net cash used in financing activities (C) (4,525,978)

Net increase in cash and cash equivalents (A + B + C) 19,757,724

Cash and cash equivalents at beginning of the period 218,472,119

Cash and cash equivalents at end of the period 238,229,843

As per our Report of even date attachedFor Chaturvedi & Shah For and on behalf of the BoardChartered Accountants


Gururaja RaoPlace: Mumbai Company SecretaryDate: 30 October 2009

Note: Transaction arising out of Scheme of Arrangement, as stated in Note No.1 of Schedule 18 is a non cash transaction and not considered in the above cash flow workings.

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SCHEDULES TO THE FINANCIAL STATEMENTS

Schedule – 1

Summary of significant accounting policies

1. Basis of preparationThe financial statements are prepared and presented under the historical cost convention on the accrual basis ofaccounting and in accordance with the Accounting Standards (‘AS’) as prescribed under the Companies(Accounting Standards) Rules, 2006, and the relevant provisions of the Companies Act, 1956 (‘the Act’), to theextent applicable.

2. Use of estimatesThe preparation of financial statements in conformity with generally accepted accounting principles (‘GAAP’) inIndia requires management to make estimates and assumptions that affect the reported amounts of assets andliabilities and the disclosures of contingent liabilities on the date of the financial statements. Actual resultscould differ from those estimates. Any revision to accounting estimates is recognised prospectively in currentand future periods.

3. Fixed assets and depreciation/ amortisation

a. Tangible assetsTangible fixed assets are stated at cost less accumulated depreciation and any provision for impairment. Costincludes freight, duties, taxes (other than those recoverable from tax authorities) and other expenses relateddirectly/indirectly to the acquisition/ construction and installation of the fixed assets for bringing the asset to itsworking condition for its intended use.

Depreciation on fixed assets is provided on the straight line method, at following rates which, in management’sopinion, reflects the estimated useful lives of those fixed assets:

Particulars of Fixed AssetsPlant and Machinery excluding Bus Queue Shelters 10%Furniture and Fixture 10%Office Equipments for Radio Division 10%Office Equipments for OOH Division 20%Data Processing equipments 20%Motor car 20%Display Vans 11.31%

Leasehold improvements are depreciated over the lower of the useful life of the asset and the lease term, on astraight line basis.

Bus Queue Shelters under BOT Schemes are depreciated over the useful life being the contract period onuniform basis.

Individual assets costing up to Rs 5,000 are depreciated fully in the year of acquisition.

Rate of Depreciation

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SCHEDULES TO THE FINANCIAL STATEMENTSb. Intangible assets

Intangible assets, all of which have been acquired and are controlled through custody or legal rights, arecapitalised at cost, where they can be reliably measured. Where capitalised, intangible assets are regarded ashaving a limited useful economic life and the cost is amortised over the lower of useful life and 10 years.

Application software purchased, which is not an integral part of the related hardware, is shown as intangibleassets and amortised on a straight line basis over its useful life, not exceeding ten years, as determined bymanagement.

One Time Entry Fees paid for acquiring FM radio broadcasting licenses has been capitalised as an asset and isamortised over a period of ten years, being the period of the license, from the date of operationalisation of thestation.

4. Impairment

In accordance with AS 28 – ‘Impairment of Assets’, where there is an indication of impairment of the Company’sasset, the carrying amounts of the Company’s assets are reviewed at each balance sheet date to determinewhether there is any impairment. The recoverable amount of the asset (or where applicable, that of the cashgenerating 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 itsrecoverable amount. Impairment loss is recognised in the profit and loss account.

Value in use is present value of estimated future cash flows expected to arise from the continuing use of theasset and from its disposal at the end of its useful life.

5. Inventories

Inventories (comprises of content cost not aired and events in progress) are stated at lower of cost and netrealisable value.

6. Employee benefits

Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and lossaccount of the year in which the related service is rendered.

The Company’s contribution to provident fund, which is a defined contribution scheme, is charged to the profitand loss account as incurred.

Post employment and other long term employee benefits are recognised as an expense in the profit and lossaccount for the year in which the employee has rendered services.

The expense is recognised at the present value of the amount payable determined using actuarial valuationcarried out by an independent actuary at the balance sheet date using Projected Unit Credit Method.

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SCHEDULES TO THE FINANCIAL STATEMENTS7. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company andthe revenue can be reliably measured. The amount recognised as Revenue is net of trade discounts and servicetax.

Revenue from sale of airtime

Revenue from radio broadcasting is recognised on an accrual basis on the airing of the customers commercials.

Out of Home Media

Advertising space revenue, net of taxes, rebate and discount is recognised on the display of advertisementsover the period of the contract.

Revenue from event management and activation activities

Revenue from event management and activation is recognised on the completion of the event and on the basisof related services performed, as per the contracted terms.

Interactive Revenue

Revenue from short code short messaging service (‘SMS’) is recognised on acceptance of the hits by telecomoperators.

Interest income

Interest income is recognised on a time proportion basis.

8. License Fees

As per the new Frequency Module (FM) broadcasting policy, effective 1 April 2005 license fees are charged torevenue at the rate of 4% of gross revenue for the period or 10% of Reserve One Time Entry Fee (ROTEF) forthe concerned city, whichever is higher. Gross Revenue for this purpose shall mean revenue on the basis of billingrates without deduction of taxes and agency commission and net of discounts to advertisers. Barter advertisingcontracts shall also be included in the gross revenue on the basis of relevant billing rates. ROTEF means 25% ofhighest valid bid in the city.

9. Foreign currency transactions

Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of thetransactions. Exchange differences arising on foreign exchange transactions settled during the year arerecognised in the profit and loss account of the year.

Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date are translated atthe closing exchange rates on that date; the resultant exchange differences are recognised in the profit and lossaccount.

In respect of integral foreign operations of the company, fixed assets are translated at the rates on the date ofacquisition, monetary assets and monetary liabilities are translated at the rate on the date of the balance sheetand income and expenditure are translated at the average of weekly average rates during the year.

116


SCHEDULES TO THE FINANCIAL STATEMENTS10. Taxation

Income-tax expense comprises current tax expense computed in accordance with the relevant provisions of theIncome tax Act, 1961 and deferred tax charge or credit.

Current tax provision is made based on the tax liability computed after considering tax allowances andexemptions, in accordance with the Income tax Act, 1961. Deferred tax charge or credit and the correspondingdeferred tax liability or asset is recognised for timing differences between the profits/ losses offered for incometaxes and profits/ losses as per the financial statements. Deferred tax assets and liabilities are measured usingthe 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 realizedin future. However, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferredtax assets are recognised only if there is a virtual certainty of realisation of such assets. Deferred tax assets arereviewed as at each balance sheet date and written down/up to reflect the amount that is reasonably/virtuallycertain (as the case may be) to be realized.

11. Provisions and contingencies

Provisions comprise liabilities of uncertain timing or amount. Provisions are recognised when the Companyrecognizes it has a present obligation as a result of past events, it is more likely than not that an outflow ofresources 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 thatmay, but probably will not require an outflow of resources. When there is a possible obligation or a presentobligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure ismade.

Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it isprobable that a liability has been incurred and the amount can be reasonably estimated.

12. Leases

The Company has various operating leases, principally for radio stations and office space, with various renewaloptions. Substantially all operating leases are cancellable as well as renewable on expiry of lease term. Rentalexpense in agreements with scheduled rent increases is recorded on a straight-line basis as applicable over thelease term.

13. Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets arecapitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantialperiod of time to get ready for its intended use. All other borrowing costs are charged to revenue.

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0.41 SCHEDULES TO THE FINANCIAL STATEMENTS(Currency: Indian Rupees) 30 June 2009

2 Share CapitalAuthorised:21,10,000 Equity Shares of Rs.5/- each 10,550,000

Issued, Subscribed and Paid Up:21,10,000 Equity Shares of Rs.5/- each 10,550,000 Less: Cancelled pursuant to Scheme of Arrangement * (10,550,000)

Share Suspense Account *46,126,170 Equity Shares of Rs.5/- each to be issued to the Shareholders of Reliance MediaWorks Ltd. (Formerly Adlabs Films Ltd.)

230,630,850

230,630,850

3 Reserves and Surplusa Securities premium account:

At the commencement of the year 90,450,000 Additions during the yearAddition pursuant to Scheme of Arrangement* 1,000,000,000

1,090,450,000

b Capital Reserves:Arising pursuant to Scheme of Arrangement* 349,723,753

349,723,753

1,440,173,753

3A Profit & Loss Account:Profit at the commencement of the year 14,156,933

Add : Profit / (Loss) for the year 2008-09 of RadioDivision pursuant to the Scheme of Arrangement(Refer Note 3 of Schedule 18) (989,480,074)

Add : Profit / (Loss) for the period (271,202,045)

(1,246,525,186)

4 Unsecured LoansShort Term Loan from Body Corporates * 2,875,729,952 [Repayable On Demand]

2,875,729,952 * Refer Note 1 of Schedule 18

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SCHEDULES TO THE FINANCIAL STATEMENTS(Currency: Indian Rupees)

5 Fixed Assets

Net Block

As on 1 April 2009

Additions

Acquired as per the Scheme w.e.f 1 April

2008

DeletionsAs on 30 June

2009As on 1

April 2009For the Period

Acquired as per the

Scheme w.e.f 1 April 2008

DeletionsAs on 30 June

2009As on 30 June

2009

Tangible AssetPlant & Machinery - 169,921,238 1,167,574,424 60,737 1,337,434,925 - 172,290,387 133,015,388 - 305,305,775 1,032,129,150 Office Equipments - 6,249,790 29,266,856 1,852,425 33,664,221 - 5,336,703 2,951,821 1,083,275 7,205,249 26,458,972 Furniture & Fixtures - 1,388,193 20,174,468 - 21,562,661 - 2,339,863 7,089,216 - 9,429,079 12,133,582 Data Processing Machines 103,137 5,435,031 68,546,920 - 74,085,088 32,706 16,802,615 14,777,175 - 31,612,496 42,472,592 Leasehold Improvements - 19,756,393 297,566,551 - 317,322,944 - 41,262,842 33,301,043 - 74,563,885 242,759,059 Vehicles - 4,161,290 34,250,888 - 38,412,178 - 7,129,279 1,935,013 - 9,064,292 29,347,886

Intangible AssetRadio broadcasting license (Refer Note 3(b) of Schedule 1) - 5,130,090 1,597,756,860 - 1,602,886,950 - 199,611,573 185,090,923 - 384,702,496 1,218,184,454 Computer Software - 810,570 53,535,754 - 54,346,324 - 7,294,372 5,746,628 - 13,041,000 41,305,324 Copyrights - - 4,150,267 - 4,150,267 - 518,498 631,068 - 1,149,566 3,000,701

Total 103,137 212,852,595 3,272,822,988 1,913,162 3,483,865,558 32,706 452,586,132 384,538,275 1,083,275 836,073,838 2,647,791,720 Capital Work In Progress (Including Capital Advances) 95,845,176

Note: - - 29,163,620 16,719 - 89,496,051 (60,332,432) 1. Intangible assets are other than internally generated2. Balance Life of Intangible Assets is 7-10 years3. Additions include assets for the period from 1 April 2008 to 31 March 2009 of radio division transferred from Reliance MediaWorks Ltd. (Formerly Adlabs Films Limited)4. Depreciation for the period also includes depreciation on the assets acquired for the period from 01/04/2008 to 31/03/2009 and on the assets acquired pursuant to the Scheme.5. Capital Work In Progress comprises of the following :Particulars AmountCapital Advances 47,082,807 Capital Stores/Inventory 48,762,369

95,845,176

Gross Block Depreciation/Amortisation

Particulars

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6 InventoriesContent 2,263,312

2,263,312

7 Sundry debtors (Unsecured)Debts outstanding for a period exceeding six months- Considered Good 387,324,860 - Considered Doubtful 50,320,801

437,645,661 Other debts- Considered Good 355,451,783 - Considered Doubtful 14,712,328

370,164,111 807,809,772

Less: Provision for doubtful debts 65,033,129 742,776,643

8 Cash and Bank BalancesCash in Hand 562,245 Balance with Scheduled Banks

In current accounts 47,196,876 In fixed deposit 190,470,722

238,229,843

9 Loans and Advances Loans and advances to employees 825,000 Advances recoverable in cash or in kind or for value to be received- Considered Good 135,079,835 - Considered Doubtful 12,265,961

147,345,796 Less: Provision for doubtful advances 12,265,961

135,079,835 2,071,419

Prepaid Expenses 76,077,588 Deposits- Considered Good 194,074,364 - Considered Doubtful 79,000,000

273,074,364 Less: Provision for doubtful deposits 79,000,000

194,074,364

48,380,784 456,508,990

10 Current Liabilities Due to Micro Small and Medium Enterprises 48,719 (Refer Note 6 of Schedule 18)Sundry Creditors for Goods and Services 182,142,782 Sundry Creditors for Expenses 460,400,957 Advance Payments by Customers 77,282,301 Other Current Liabilities 131,972,616

851,847,375

Income Accrued but not due

Advance tax, including Fringe Benefit Tax (Net of Provision for Taxation 37,872,556)

120



11 ProvisionsGratuity 8,999,013 Leave Encashment 22,559,927

31,558,940

Period ended 30 June 2009

12Sale of Airtime 378,272,315 Activation Revenue 27,364,787 Event Income 20,672,943 Out of Home Media Income 22,949,809 Others 1,085,462

450,345,316

13 Other IncomeInterest income from: -Bank deposits (TDS: 5,95,416) 3,086,787 Income from facility sharing 4,836,999 Miscellaneous income 4,117 Profit on sale of assets (net) 61,517 Provision for Doubtful Advances Written Back 141,334 Foreign Exchange Gain (net) 1,637,331

9,768,085

14 Direct Costs

Royalty 47,851,415 Event Expenses 37,288,605 Agency Commission and Incentive 40,369,581 Transmission Expenses 15,297,551 Out of Home Media Expenses 28,537,199 Revenue Sharing License Fees 21,042,615 Other Production Expenses 10,644,039

201,031,005

15 Personnel Cost

Salaries, Wages and Allowances 111,459,815 Contribution to Provident Fund 5,214,132 Gratuity 280,265 Leave encashment 1,962,202 Staff Welfare Expenses 1,615,964 Provident Fund Admin Expenses 568,913

121,101,291

Service Revenue and Other Operating Income

121


0.41 SCHEDULES TO THE FINANCIAL STATEMENTS

(Currency: Indian Rupees) Period ended 30 June 2009

16Other Operating and General Administrative Expenses

Advertisement 58,314,095 Bank Charges 2,122,328 Bad Debts 17,430,921 Business Promotion 355,181 Rent, Rates and Taxes 40,624,122 Travelling and Conveyance 11,712,157 Audit Fees 1,125,000 Electricity Charges 10,491,089 Insurance Charges 497,692 Legal and Professional Fees 5,546,517 Membership and Subscription 81,927 Other Miscellaneous Expenses 1,675,102 Communication Expenses 3,893,099 Printing and Stationery 512,495 Provision for Doubtful Debts 1,254,748 Provision for Doubtful Deposits 79,000,000 Repairs and Maintenance

- Repairs to Machinery 1,976,326 - Repairs to Others 4,907,901

Security Charges 1,779,192 Housekeeping Charges 1,049,965 Recruitment Charges 274,082 Computer / Internet / Intranet 4,079,589 Conference Expense 3,338,499

252,042,027

17 Interest & Finance ChargesOn Loans 67,583,562

67,583,562

122



18 Notes to the accounts

1. Demerger of the Radio Division of Reliance MediaWorks Ltd. (Formerly Adlabs Films Limited) (AFL) with theCompany.

a The Scheme of Arrangement (the Scheme) under Section 391 to 394 of the Companies Act 1956, between Reliance MediaWorksLtd. (Formerly Adlabs Films Limited) and Reliance Media World Limited (formerly Reliance Unicom Limited) and their respectiveShareholders is sanctioned by the honorable High Court of Judicature at Bombay vide Order Dated 4 April 2009 and copy of theOrder has been filed with the Registrar of Companies, Mumbai , Maharashtra on 30 June 2009. Pursuant to the Scheme , the radiobusiness stands de-merged from AFL and transferred to and vested in the Company on a going concern basis. The Scheme has beengiven effect to in these financial statements.

b The Scheme of Arrangement provided for the following-

1. Transfer of the Radio business of AFL to the Company with effect from 1 April 20082. Extinguishment of shares held by AFL in the Company3. Issue of shares of the Company to shareholders of AFL as of the record date to be decided by the Board of Directors of

AFL and the Company in the ratio of 1:1.4. Transfer of Reserves created under demerger upto Rs 1,000,000,000 to Securities Premium and balance to Capital Reserve5. Cost of the Scheme to be borne by the Company

As per the Scheme, the radio business of AFL stands transferred to the Company.All assets and liabilities of the radio business of AFL as at 1 April 2008 have been transferred at their respective book values.Further, general borrowings of AFL as on 1 April 2008 have been allocated between AFL and the Company on the basis of ratioof net assets.

c The following assets and liabilities of Radio Business are transferred as on 1 April 2008 , pursuant to the Scheme

Particulars AmountGross Block of Fixed Assets 3,272,822,986 Less: Depreciation 384,538,275 Net Block of Fixed Assets 2,888,284,711 Capital Work In Progress 230,916,872 Current Assets , Loans and Advances 1,392,795,262 Total - A 4,511,996,845 Loan Funds 204,627,687 Current Liabilities and Provisions 497,564,555 Total -B 702,192,242 Net Balance 3,809,804,603

As per the provisions of the scheme, excess balances of assets transferred over liabilities and the gain on cancellation of shares heldby AFL is credited to Securities Premium Account and Capital Reserve as follows:

Particulars AmountAllocated net assets of Radio Division as of 1 April 2008 transferred as per the Scheme (A) 3,809,804,603 Less: General borrowings of the Company as of 1 April 2008 allocated between the Company and the AFLas per the provisions of the Scheme (B) 2,240,000,000 Excess of net assets transferred to the Company (Radio Division) (A-B) 1,569,804,603 Less: Issue of Shares to Shareholders of AFL 230,630,850 Add: Cancellation of Share Capital held by AFL 10,550,000 Reserves Created under demerger 1,349,723,753 Recognised as Securities Premium Account as per Scheme Para 5.1.3 1,000,000,000 Balance Recognised as Capital Reserve 349,723,753

Had the Scheme been accounted for in compliance with the Accounting Standard 14 "Accounting for Amalgamation" as prescribedby the Companies (Accounting Standards) Rules 2006, the Capital Reserves would have been stated at Rs. 1,349,723,753.

123



d The assets and liabilities taken over pursuant to the Scheme of Arrangement is considered as per the certificate received by theStatutory Auditors of AFL.

e The shares to be issued to the shareholders of AFL has been shown as share suspense account. The same has been subsequentlyissued to the shareholders of AFL.

2 The accounts of the Company for the financial year 2008-09 have been approved by the shareholders in the Annual General Meetingheld on May 25, 2009, without considering the effect of the transfer of radio business from AFL to the Company. The Scheme of arrangement between the Company and AFL was approved by the High Court of Judicature at Bombay on April 4, 2009 and thesame was filed with the Registrar of Companies, Mumbai, Maharashtra on June 30, 2009, the effective date. As per the Scheme theradio business of AFL stands transferred to the Company from April 1 2008. These accounts are intended solely for the use by themanagement of the Company for submitting the Information Memorandum with the Bombay Stock Exchange, National StockExchange and Securities and Exchange Board of India.

3 The net results for the period 01.04.2008 to 31.03.2009 of Radio Division as shown in the Profit & Loss Appropriation Accountcomprises of the following:

Particulars Amount Rs.

IncomeService Revenue & Other Operating Income 1,962,540,372 Other Income 30,391,153

1,992,931,525 ExpenditureDirect Costs 1,003,720,969 Personnel Costs 575,920,671 Other Operating and General Administration Expenses 707,795,249 Interest & Finance Charges 282,487,674 Depreciation/Amortisation 363,028,564

2,932,953,127

Profit / (Loss) Before Tax & Prior Period Adjustments (940,021,602) Less : Prior Period Adjustments 35,293,472 Profit / (Loss) Before Tax (975,315,074) Fringe Benefit Tax 14,165,000 Net Profit / (Loss) After Tax (989,480,074)

4 Contingent Liabilities

30 June 2009

Bank Guarantees 286,342,044 Claims against the company not acknowledged as debt 19,719,890

306,061,934

5 Capital Commitment

30 June 2009

Estimated amount of contracts remaining to be executed on capital account not providedfor (net of advances) 4,118,688

Particulars

Particulars

124



6 Sundry creditors

Under the Micro, Small and Medium Enterprise Development Act, 2006 which came into force from 2nd October 2006, certaindisclosures are required to be made relating to micro and small enterprises. The Company has taken necessary steps to seek relevantinformation from its suppliers about the coverage under the Act. According to the information available with the management,outstanding amount pertaining to covered creditors for a period of more than 45 days is Rs. 9,170/-.

7 Remuneration to Directors

Remuneration to the director and manager as appointed under Section 269 of Companies Act, 1956:

Period Ended 30 June, 2009

Salary 4,484,499 Contribution to provident fund 190,500

4,674,999

The above does not include gratuity and leave encashment benefits as the provision for these are determined for the Companyas a whole and therefore separate amounts for the directors are not available.

No commission is paid to directors and hence disclosure under Section 198 of the Companies Act,1956 is not made.

8 Expenditure in foreign currency


License Fees 1,357,595 Staff Cost 1,365,383 Travelling 522,144 Others 1,561,663

4,806,785

9 Earnings in foreign exchange


Sale of Airtime 2,117,052 Event Income 1,174,922

10 Lease disclosure under AS 19

The Company has taken various office premises, towers and other licenses on cancellable operating lease, where the leaseagreements are normally renewed on expiry. The Lease rentals recognised in the profit and loss account is amounting toRs.56,319,353.

Particulars

Particulars

Particulars

125



11 Deferred Tax

Deferred tax asset of Rs.381,231,274 as at 30th June, 2009 comprises of the following:

30 June 2009

Deferred Tax Asset

Carry forward loss 524,272,269 Disallowances which would be allowed on payment basis 31,833,950 Employee Benefits 9,751,712

(A) 565,857,931 Deferred Tax Liability

On account of Depreciation 184,626,657 (B) 184,626,657

Net deferred tax asset/ (liability) (A-B) 381,231,274

As a matter of prudence, deferred tax asset to the extent of deferred tax liability has been recognised and the balance has notbeen recognised in the books of account.

12 Disclosure of Segment Reporting under AS 17

Radio Broadcasting Outdoor Others Total

RevenueOperating Revenue 415,440,064 27,574,809 11,955,443 454,970,316 Other Income 6,360,709 253,681 62,791 6,677,181 Net Revenue 421,800,773 27,828,490 12,018,234 461,647,497 Inter Segment Sales - (4,625,000) - (4,625,000) Total Segment Revenue 421,800,773 23,203,490 12,018,234 457,022,497

ResultSegment Result (97,242,245) (99,950,199) 499,672 (196,692,772) Unallocated Corporate Expenses (Net of Income) 10,012,498 Interest Income 3,086,787 Interest Expenses 67,583,562 Income Taxes - Net Profit After Tax (271,202,045) Other InformationSegment Assets 3,652,155,507 392,383,342 43,377,555 4,087,916,404 Unallocated Corporate Assets 133,450,216

Segment Liabilities 788,926,524 64,298,909 30,259,261 883,484,694 Unallocated Corporate Liabilities 2,913,602,508

Capital Expenditure 25,490,981 3,761,987 - 29,252,968 Depreciation and amortisation 87,361,751 2,192,655 3,155 89,557,561 Non cash expenses other than depreciation - - - -

Particulars

126



The group has disclosed the Business Segment as primary segment The business of the group is primarily divided into three segments– Radio Business, Outdoor Business and Others. The segments have been identified taking into account the nature of the business,the differing risk and returns, the organization structure and internal reporting system. Radio operations primarily consist of FM radio broadcasting services in the cities where the company have been allotted radio broadcasting licenses. Radio business also includes allied businesses like Activation, Live and Digital. Outdoor operations primarilyconsists of operating advertisement contracts on outdoor media properties awarded under tender and through private tenders /contracts. Segment Revenues, Segment Results, Segment Assets and Segment Liabilities include the respective amounts identifiable to eachsegment as also the amounts allocable on a reasonable basis. Income and Expenses which are not directly attributable to anyBusiness Segment as shown as unallocated corporate income / expenses. Assets and Liabilities that cannot be allocated between thesegments are shown as part of unallocated corporate as sets and liabilities respectively.The Company's operations are mainly confined within India. The Company does not have material earnings outside India. As suchthere are no reportable geographical segments

13 Disclosure of Related Party under AS 18

Parties where control exists

Holding CompanyReliance MediaWorks Ltd. (Formerly Adlabs Films Limited) ( upto 31 March 2008) (Refer Note 1 )

Other related parties with whom transactions have taken place during the period

Significant Shareholders, Key Management Personnel and their relatives

Relationship RemarksKey Managerial Personnel Tarun Katial Director / Chief Executive Officer

(Ceased to be a Director from 30.07.2009 andappointed as Chief Executive Officer from30.07.2009)

Key Managerial Personnel Gururaja Rao Manager (w.e.f. 30.07.2009)

Transactions with Related PartiesPeriod Ended 30

June, 2009

Key Managerial Personnel

Remuneration to Tarun Katial 3,750,000 Remuneration to Gururaja Rao 924,999

14 Earnings per Share (‘EPS’)


Net Profit / (loss) available for equity shareholders (271,202,045)

*Weighted average number of equity shares outstanding during the period 46,126,170

Basic/ Diluted EPS (Not Annualised) (5.88) Nominal value per share 5

* Based on Re-organization of share capital pursuant to the scheme (Refer Note 1)

Name of the Related party

Particulars

Particulars

127



15 Foreign currency exposures (other than investments) not covered by forward contracts

ParticularsCurrency Foreign Currency

AmountAmount - Indian

Rupees

Sundry Creditors USD 321,571 15,393,611 Sundry Debtors USD 1,636 78,315 Sundry Debtors MYR 16,401 222,890 Sundry Debtors THB 172,273 241,182

16 Employee Benefits

Defined Contribution Plan

Contribution to Defined Contribution Plan, recognised as expense for the period are as under :

ParticularsPeriod Ended 30

June, 2009

Employers contribution to Provident fund and other funds 5,214,132

Other long term employee benefits comprises encashment of leave. Total expenses recognised for the period Aprilto June, 09 is Rs. 19,62,202/-.

Defined Benefit PlanGratuityThe present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, whichrecognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unitseparately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity.

I. Reconciliation of opening and closing balances of Defined Benefit obligation


June, 2009

Gratuity (Unfunded)

Defined Benefit obligation at beginning of the period 8,718,748 Transferred as per provisions of Scheme -

(Refer Note 1 above)Current Service Cost 1,078,029 Interest Cost 255,404 Actuarial (gain)/loss (1,053,168) Defined Benefit obligation at the end of the period 8,999,013


128



II. Reconciliation of opening and closing balances of fair value of plan assets


June, 2009Gratuity (Unfunded)Fair value of plan assets at beginning of the period - Actuarial (gain)/loss - Expected return on plan assets - Employer Contribution - Benefits paid - Settlement cost - Fair value of plan assets at the end of the period - Actual return on plan assets -

III. Reconciliation of fair value of assets and obligations


June, 2009

Gratuity (Unfunded)Fair value of plan assets at the end of the period - Present value of obligation at the end of the period 8,999,013 Liability recognised in the Balance Sheet 8,999,013

IV. Expense/(Income) recognised during the period


June, 2009

Gratuity

Current Service Cost 1,078,029 Interest Cost 255,404 Expected return on plan assets - Actuarial (gain) / loss (1,053,168)Expense/(Income) recognised during the period 280,265

V. Investment details NIL

129



VI. Actuarial assumptions

Gratuity (Unfunded)

LeaveEncashment (Unfunded)

Mortality Table (LIC) 1994-96 (Ultimate) 1994-96 (Ultimate)Discount rate (per annum) 7.75% 7.75%Expected rate of return on plan assets (per annum) - -

Rate of escalation in salary (per annum)

10% for the first three years and 7% thereafter

10% for the first three years and 7%

thereafter

The estimates for rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotionand other relevant factors including supply and demand in the employment market. The above information is certified by theactuary.

17 As the financial statements in accordance with the Accounting Standard -25 "Interim Financial Reporting" as prescribed under the Companies (Accounting Standards) Rules, 2006 has been prepared by the Company for the first time, hence, the comparable figuresin the financial statements has not been shown.





Particulars

130

MANAGEMENT DISCUSSION & ANALYSIS

Forward Looking Statement

You should read the following discussion of our financial condition and results of operations together with

our financial statements, as restated, for each of the fiscal years ended March 31, 2009 and March 31,

2008, including the notes thereto and the reports, schedules and annexures thereon, which appear in the

Auditor’s Report included elsewhere in this Information Memorandum. These financial statements are

prepared in accordance with Indian GAAP and the Companies Act and are restated in accordance with SEBI

Guidelines. Financial information relating to the year ended March 31, 2009 included in this Draft Information

Memorandum have been derived from the audited financial statements for such period, prepared in

accordance with Indian GAAP as set forth in a report of the Auditors which has not been included herein. Industry Overview Please refer “Overview of FM Radio Industry ” section in Page No. 37. Business and Financial Performance

Our primary business is radio broadcasting and we operate radio broadcasting stations in 45 cities in India,

including the four metropolitan cities of Delhi, Mumbai, Chennai and Kolkata. The details of the broadcasting

stations are given in Page No. 45 under section “Business” .

Radio Business

We derive income primarily from the sale of commercial airtime on our radio channels. In fiscal ended June

30, 2007 (i.e. 15 months), fiscal ended March 31, 2008 (i.e. 9 months), fiscal ended March 31, 2009 and

Quarter ended June 30, 2009 income from airtime sales Rs. 299.22 million, Rs. 925.15 million, Rs. 1561.64

million and Rs. 378.27 million respectively.

The Company incurred losses from fiscal 2007 to fiscal 2009. In fiscal 2007 (15 months), fiscal 2008 (9

months), fiscal 2009 and Quarter ended June 30, 2009, the Company had net loss before tax and

adjustment of Rs. 937.47 million, Rs. 670.57 million, Rs. 881.40 million and Rs. 97.24 million respectively.

The Company’s license fees in fiscal 2007 (15 months), 2008 (9 months), 2009 and Quarter ended june 30,

2009 were Rs. 24.83 million, Rs. 53.73 million, Rs. 88.33 million and Rs. 21.04 million respectively.

OOH Business

Income from the OOH Business in fiscal 2009 and Quarter ended June 30, 2009 was Rs. 156.03 million and

Rs. 22.95 million respectively.

The OOH division incurred loss in fiscal 2009 and Quarter ended June 30, 2009. The division had net loss

before tax and adjustment of Rs. 87.83 million and 99.95 million respectively.

The Company’s license fees in fiscal 2009 and Quarter ended June 30, 2009 was Rs. 129.30 million and Rs.

24.38 million respectively.

131

International foray

BIG 92.7 FM, has also launched Singapore’s only Bollywood Radio Station aptly christened ‘BIG Bollywood

96.3 FM’. The Station, launched in June 2008 is a result of an alliance with MediaCorp, Singapore’s leading

media company with the most complete range of platforms spanning radio, television, newspapers,

magazines, movies and digital media. BIG Bollywood 96.3 FM marked the first foray for BIG 92.7 FM into

territories outside of India which have a strong Indian diaspora. The radio station broadcasts ‘live’ Bollywood

entertainment everyday, prime time, from 5:00pm to 8:00pm, which includes Bollywood Hits from the 2000’s

onwards. The Station is targeted at Asians who love Bollywood and seek Bollywood entertainment. This

collaboration between the two media powerhouses caters to the entertainment requirements of not only the

fast growing Indian expat community in Singapore, but also all Asians who enjoy Bollywood music and

content.

The wholesome entertainment mix has been put together, after much research of the local tastes and

requirements to ensure ultimate listener pleasure. The Station, after 10 months of operations reaches out

to about 50% Indians in Singapore (expats & locals).The Station extremely popular amongst not just Indians

but also Malays & local Singaporeans who have a penchant for Bollywood Music. However, in view of the

current depressed economic scenario, especially in Singapore, the Company has decided to discontinue its

Singapore operations.

Sources of Income

Our airtime sales income is derived primarily from the sale of radio broadcasting time to national and local

agencies and advertisers. Our licenses to operate FM radio channels are ‘free to air’ and therefore we are

dependent upon the sale of advertisements to generate income. Our income is recognized on an accrual

basis once we play the advertisement on-air and invoice the client. This income is recognized gross of

agency commissions and other discounts. Income from national advertising consists of sales made to

advertisers that operate in more than one city (irrespective of whether they advertise only in a single city)

and income from local advertising is comprised of advertising sales advertisers that operate only in a single

city. Within each market, we have separate teams that focus on corporate accounts and retail accounts. Our

airtime sales are supervised by our head of sales that is based in Delhi. We do not have an external sales

agency to assist us with our sales and marketing efforts. Most of our sales are made to agencies that

negotiate with us for advertising rates and capacity on-air; however, some sales are also made directly to

end clients, such as to companies in the local markets.

Our airtime sales income also includes income from sponsorship of event and promotional activities relating

to our radio broadcasting, which we term as “BIG Reach” events. We utilize our airtime inventory to promote

an event, which also increase our brand profile and generates an additional source of income. For example,

we organized a event to launch new car, where we arranged the attendance of certain celebrities for such

event and also promoted the event on-air in the local station. We charge a fixed-fee for such activities and

the income is recognized once we invoice the client upon the completion of such event. We also offer

customized deals with incentives to large value customers and advertisements for multiple reasons. Our

airtime sales are a function of the amount of airtime utilised for advertising and the rates we are able to

effectively realize from the sale of this airtime. Our income from airtime sales is based primarily on the

following factors:

132

• the radio station’s reach and listenership, within each market and across multiple markets;

• share of radio broadcasting in a client’s total advertising budget and competition from other media,

including print and television;

• the size of the market;

• the time of the day the advertisement airs; and

• the amount of airtime used for advertisements.

Radio listenership in India is currently being measured by the Radio Audience Measurement system being

maintained by TAM Media Services. This system is currently operational in Mumbai, Delhi, Bangalore and

Kolkata.

Our advertising rates are based typically on 5 time slots in a 24-hour period, comprising Male & Family (7am

to 12 noon), Family/Youth/Housewives (12 noon to 5pm), Male/ Youth (5pm to 9pm), Male/ Youth (9pm till

Midnight), and BPO Employees & Youth (12am to 7:00 am).

Our effective advertising rates are higher in the morning (7:00 am to 12:00 pm) and evening (5:00 pm to

9pm) time slots. Our content consists primarily of music and programs based on the Indian film and

entertainment industry.

Under our licenses, we are not permitted to broadcast news or current affairs programs.

We monitor our capacity utilisation for each of our radio broadcasting stations. The amount of airtime utilised

in advertisements compared to airtime for radio jockey talk and music broadcast is an important determinant

of our income. Our capacity utilization depends on factors such as the city, time of the day, as well as the

time of the year in which the advertisement is broadcast. During peak times in a day and in busy months, we

increase the amount of airtime for advertisements, and experience an increase in capacity utilisation.

Typically, we allocate 10 minutes every hour from 7:00 am until 11:00 pm for advertisers. During months of

peak demand, typically between September and February, we may increase the time available for

advertisements. Our future capacity utilisation may be affected by many factors, including an increase in

competition and our ability to increase our effective advertising rates.

Our operations are in forty five cities spread across different regions in India. This gives access to a higher

number of listeners compared to any other private FM radio operator in the country. We use our multiple

stations and market presence to negotiate favorable rates with advertisers. Our markets have differing

demographics and listener preferences and effective advertising rates and capacity utilisation differ among

these cities. Four Metros and two major cities, viz Delhi, Mumbai, Kolkata, Bangalore, Chennai and

Hyderabad are our most important markets and we expect them to continue to be important to our business

and results of Operations. We also focus to the non-metro and tier II & III markets to identify advertising

potentials in Small and Medium size Enterprises (SMEs).

In the radio broadcasting industry, seasonal fluctuations in income are common and are due primarily to

variations in expenditures by advertisers. Typically, our income is higher between the months of September

and February, when there are greater numbers of festivals and holidays in India and demand for radio

advertising time is high.

133

We generate income from multiple advertisers and advertiser segments including companies in sectors such

as fast moving consumer goods (“FMCG”), banking and financial services, consumer durables,

telecommunications, automotive, media, property & infrastructure, petroleum, retail stores, and others. Our

relationship is primarily with the advertising agency representing the end client, although we also have direct

relationships with many clients.

Components of Expenditure

• Production expenses,

• Employee costs

• Administration and General Operating expenses

• License fees.

Production Expenses

Production expenses primarily consist of music royalty, other programming costs and transmission expenses

Music Royalty

We pay royalty to PPL, an industry organization, and various music companies that are not a part of PPL. In

addition, for each sound recording from PPL, we also pay royalty to IPRS, a collective society that

represents artists. We pay royalty on a per needle hour basis, which is based on the duration of sound

recordings of the licensor that we broadcast.

We pay royalties to PPL and Super Cassettes industries Limited for sound recordings at our radio stations at

rates negotiated with them. We pay IPRS for musical and lyrical works on behalf of its members at rates

negotiated with them. For some of the cities we have regional agreements with various regional film

production and music companies. If we expand our business and operate additional radio broadcasting

stations, the number of songs we play will increase and our expenditure on music royalty will

correspondingly increase.

Other Production expenses

Other production expenses include tower rents payable to Prasar Bharati, power and fuel expenses,

transmitter link chargesand fees paid to external talent.

Employee Cost / Human Capital

As at 30th June, 2009, we had 740 employees, of whom more than 241 comprised sales personnel. We have

not experienced significant attrition in our senior management and radio talent. As competition increases we

may face difficulty in retaining employees, including our sales force since we are the largest FM radio

operator in the country. Employee costs relate to salaries, wages, commissions and allowances, contribution

to provident fund and other medical and retirement benefits.

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Administration and General Operating Expenses

Administration expenses consist primarily of marketing, advertising and publicity expenses, traveling and

conveyance, premises related cost including rent, electricity, communications, legal and consultancy costs,

software costs and other general operating expenses.

License Fees

License fees are paid to the MIB separately for each radio broadcasting station and to the WPC and SACFA

for frequency and spectrum allocation.

Under the Phase II Policy, a licensee is required to pay license fees based on a revenue sharing formula,

which is the higher of:

(1) 4% of Gross Revenues for each year, which includes income from airtime sales, service tax and

agency commissions as specified in our invoice and

(2) 10% of the “Reserve OTEF” limit for the concerned city, which is equal to 25% of the highest financial

bid received for such city (or region, as applicable) under the Phase II bidding process.

Once the final fee for the financial year is determined on the basis of Gross Revenue share formulae, and is

higher than 10% of the Reserve OTEF for the city, the Permission holder shall pay the balance in one lump

sum within a period of one month from the date of such determination and in any case not later than 30th

September of the following year.

From the second year onwards, the permission holder shall pay advance Annual fee @ 4% of gross revenue

of the previous year or the last year for which the gross revenue has been determined or 10% of reserve

OTEF, whichever is higher, within the first fortnight of each quarter and the balance due of final annual fee

by 30th September each year.

License fees are paid Quarterly in advance.

Acquisition of Licenses under the proposed Phase III Policy

Our income and expenditure will increase if we acquire new licenses under the Phase III Policy. We will

incur expenses to acquire licenses and meet other operating expenses, including production, administration

and employee expenses, and other costs, such as depreciation. Therefore, we expect that in the initial

phase, the growth in income from such new stations may not be commensurate with the growth in expenses.

Other restrictions in our licenses or permissions under the Phase II Policy

We have separate license agreements for each of the forty five radio channels that we currently operate.

These license agreements were granted under the Government’s Phase II Policy. Each license is valid for a

period of ten years from the date of the grant of the operational license by the WPC, and payment of license

fees for each channel commences from such date. The license states that the ten-year period is fixed and is

not subject to change or extension on any ground whatsoever. Currently, the ten-year period expires

between 2016 and 2018 for all our licenses.

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The licensor has extensive rights under these licenses, including the ability to revoke our license if we

commit a breach or the right to take-over our broadcasting station or revoke, suspend or terminate the

license in the interest of national security or in the event of a national emergency or conflict or other

situations of public interest as determined by the licensor.

Our licenses terms requires us to co-locate our transmission facilities on the same transmission tower as

that of the Government operator, AIR, and pay fees to Prasar Bharati for the use of such tower. We require

security clearance prior to employing foreign personnel in certain operations. There are restrictions on

foreign ownership under our licenses and the Phase II Policy, which are also reflected in regulations issued

by the Ministry of Finance and the Reserve Bank of India. These limit foreign investment in the Company to

20%, with certain restrictions, and may affect our ability to raise additional capital.

Under the Phase II Policy, the term of the new licenses will be ten years from the date of operationalisation.

We will also need to comply with additional conditions under the Phase II policy, the Tender Document and

any further amendments, including as may be stated in any grant of permission or license. These

conditions/restrictions currently include the following:

• Permission is non-transferable and non-assignable.

• No hire or lease of more than 50% of broadcast equipment.

• More than 50% content cannot be outsourced.

• More than 25% content cannot be outsourced to a single entity.

• No borrowing or lending arrangement with other Permission holders, which may restrict its

management or creative discretion to procure or broadcast content or its marketing rights.

• No linkage between outsourced Producer and Advertising Agency.

• No change in ownership pattern except with MIB's permission.

• One hour time slot reservation per day for public announcement.

• At least 50% of content produced in India.

• No networking with other channels except in C & D category in same region.

• Studio should be exclusively devoted to FM and located within city.

• Not to use existing brand names, company names, etc.

• Radio to be Free- to-air service.

• No broadcasting of News and Current affairs.

• Content not to be objectionable, obscene, unauthorized or inconsistent with the laws

• Compliance with government guidelines pertaining to cross media ownership

• Abide by certain technical standards and parameters for the transmission and quality of its services;

and

• Co-locate transmission facilities on either existing AIR/DD towers or new towers to be constructed by

the Government.

• Continued compliance with eligibility and disqualification criteria,

The above restrictions may limit our ability to conduct our operations, obtain financing or expand our

business.

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Opportunities

Future Opportunities

• Satellite Radio / Digital Audio Broadcast (“DAB”)

o High quality music, news, weather, sports, talk radio.

o Currently, World Space India Private Limited is the only player of Satellite radio in India,

providing about 40 radio channels.

• Internet Radio

o Free, downloadable audio players. Gives stations the advantage of delivering graphics, data

and video at the same time, to enhance the audiences listening experience.

o Extends the reach of radio stations beyond broadcasting limits.

• Privatization of AM

• FM Phase III increase cities and geographical coverage per licence

New Revenue Opportunities

• Telephony

- Short-code & Premium Telephony – Audio content leverage on the telephone platform.

• Ground Activation

- On ground solutions with radio amplification for clients across the country.

• Content Syndication

• LIVE Sports

• Multiple Frequencies

• Tradability of licenses

• Event management

• Talent Management Cell

• Leveraging network strength to effectively manage Talent both music and Non music.

Threats

• Continued prohibition on Private players in certain key areas:

- News & Current Affairs

- Multiple Frequencies

- Growth of new media & entertainment platforms like DTH, Internet, Mobile etc

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KEY INVESTMENTS

The Company does not have any investment as on June 30, 2009.

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CONSOLIDATED FINANCIAL STATEMENTS

The Company does not have any subsidiary or associate as on June 30, 2009, hence preparation of

consolidation financial statements is not required.

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OUTSTANDING LITIGATIONS AND MATERIAL DEVELOPMENTS

Except as described below, in relation to the persons named as Promoters, to the best of knowledge of the

Company, there are no outstanding material litigations against or any disputes, tax liabilities, non payment of

statutory dues, overdues to banks / financial institutions, defaults against banks / financial institutions,

defaults in dues towards instrument holders like debenture holders, fixed deposits and arrears on cumulative

preference shares issued by the 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, 1956), no disciplinary action has been taken by SEBI / Stock

Exchanges against the Company, its Directors, its promoters, and the companies/firms promoted by the

Promoters.

I. Cases filed for and against the Company / Notices received by the Company

Cases filed against the Company / Notices received by the Company

• There are two suits for declaration filed against us in the court of civil judge, senior division, Patiala by two

former employees alleging that their dismissal was wrong and illegal. These former employees have also

sought re-instatement along with a payment of their outstanding wages. We had offered to pay them three

months’ salary as per the terms of their employment contract. A reply has been filed to the petition, along

with an application for referring the matter to arbitration in accordance with the terms of the employment

contract. Application for referring the matter to arbitration was disallowed. The matter is currently pending.

• A claim has been filed by a former employee in the Industrial Tribunal, Government of Goa at Panaji

alleging wrongful termination of employment contract and seeking reinstatement along with payment of

outstanding wages. We have filed our written statement. The matter is currently pending.

• Summons have been received from Labour Court, Bhubaneshwar in connection with complaint filed by

an ex-employee claiming an amount of Rs. 2.28 lakhs towards performance incentive for the period 1st April

2008 to 31st March, 2009.

• Notice has been received from Labour cum conciliation officer, Hisar, to clear a month’s salary and

Provident Fund dues of an employee of one of our Contractor in view of default by the said Contractor.

• Notice has been received from Additional PF commissioner, Jammu for PF contributions not paid by one

of the Contractor engaged by the Company. In view of the default by the said Contractor, the company has

been asked to pay an amount of Rs. 69,024/- towards PF contributions of persons employed by the said

Contractor.

• Our service tax audit was completed in August 2009. The audit observations pertain to various services

provided and Central VAT credit availed. If the observations are considered unsatisfactory by the service tax

department, then we may incur a liability of Rs. 1,200 lakhs plus interest.

• The Jammu and Kashmir sales tax department has served a demand notice for payment of sales tax

amounting to Rs. 68 lakhs. The department has alleged evasion of sales tax dues to be paid by us for our

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advertising services. An appeal has been filed with the Deputy Commissioner of Commercial Taxes

(Appeals) Jammu against this notice.

• Actor Sunny Deol has served a notice on RMWL alleging that he and his family members have been

defamed in a show aired titled “Son Sunny” on Big 92.7 FM. Mr. Deol has also claimed a sum of Rs. 20000

lakhs as damages for defamation. RMWL has sent a detailed response to the said notice through its

advocate.

• The Assistant Controller, Chandigarh Transport Undertaking, Chandigarh (AC, CTU) has served a

notice dated February 2, 2009 for non-payment of monthly rent for space utilized for advertisements. We

had entered into an agreement with the Chandigarh Transport Undertaking for display of advertisements in

417 buses run under its authority. The AC, CTU has alleged that monthly dues for December 2008 and

January 2009 have not been paid on the respective due dates, i.e., December 10, 2008 and January 10,

2009 and therefore, in addition to payment of the outstanding amount, we are also liable to pay a penalty at

the rate of 1%. Accordingly, we have been directed to deposit a total amount of Rs.14.18 lakhs. We have

taken up the issue with the concerned authority justifying the delay and requesting for waiving off the

penalty. The matter is under consideration.

• A notice dated August 6, 2009 from the Joint Commissioner of Bruhat Bangalore Mahanagara Palike

(BBMP) was received instructing us to stop work on the bus shelters which we had undertaken to construct

pursuant to a license granted for the erection of 172 bus shelters. Under that license, these shelters were to

be constructed within a period of 90 days. The construction work was not completed within the stipulated

time and a notice from the BBMP was served to pay Rs.48 lakhs as penalty. The license was also

withdrawn. The allegations have been refuted and a request has been made to revoke the notice and waive

off the penalty amount. The matter is under consideration.

• Five summary suits under order XXXVII rule 2 of the Code of Civil Procedure, 1908 have been filed

against us by Mr. Amin Pawar, proprietor of M/s Leading Edge before the Bombay High Court for recovery of

Rs. 63.2 lakhs.

• Five winding up petitions under sections 433, 434 and 439 of the Companies Act, 1956 have been filed

against the Company by M/s Leading Edge (CP/817/2009, CP/808/2009, CP/805/2009, CP/807/2009 and

CP/806/2009) alleging that the Company is indebted to the said party to the tune of Rs. 63.2 lakhs for which

Leading Edge had also filed Summary suits under Order XXXVII rule 2 of the Code of Civil Procedure, 1908

as stated above.

• A Writ Petition was filed in the High Court of Karnataka at Bangalore by an ex-employee questioning the

jurisdiction of the Civil Court in connection with the case filed by the Company against the said ex-employee

wherein the Company was seeking injunction from the Civil Court restraining him to join the competitor,

when there was an Arbitration Clause in the Agreement. In view of this Writ Petition the proceedings in the

suit filed by the Company in the Civil Court have been stayed. The Writ Petition is still pending to be

disposed off.

• Summons have been served on the Company with respect to a suit filed by M/s Aces Events and

Promos in the City Civil Court at Secunderabad claiming monies for services rendered. The amount involved

is about Rs. 3 lakhs.

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Cases filed by the Company

• A petition has been filed against a former radio jockey before a sole arbitrator in New Delhi for claiming

compensation to the tune of Rs. 43.7 lakhs for breach of the employment contract and bond executed by the

said radio jockey. The proceedings are currently pending.

• A petition has been filed before a sole arbitrator in Mumbai for an amount of Rs. 34.3 lakhs in respect of

the services rendered by the Company. We have filed our Statement of Claim before the Arbitrator. The

proceedings are currently pending.

• A special civil application has been filed by us in the High Court of Gujarat against Ahmedabad

Municipal Corporation (Respondent) under article 226 of the Constitution of India for setting aside an order

of the Respondent asking us to remit an amount of Rs. 250.2 lakhs, Rs. 30.9 lakhs and Rs. 3.9 lakhs

(totaling to Rs. 285.0 lakhs) towards the license fees, service tax and penalty respectively and directing the

Respondent to refund us an amount of Rs. 105.7 lakhs towards the full and final settlement from the security

deposit amount. The arguments are over and the court has opined that the issue should be the subject

matter of recovery proceedings and does not warrant invocation of Article 226 of the Constitution of India.

The Company is evaluating the option of filing an appeal in the Supreme Court against the order of the High

Court of Gujarat.

• There are 23 cases filed by us in various criminal courts for dishonour of cheques which were provided

to us in consideration of the services rendered. The cases involve an amount of Rs.101.05 lakhs and are at

various stages of adjudication.

• A notice dated April 30, 2007 was issued to us by the Court of Additional Commissioner (Stamps),

Aligarh under section 33 of the Indian Stamp Act, alleging evasion of stamp duty on the ground that the

stamp duty is required to be paid even on the renewal period, because of a clause contained in the lease

deed providing for the ‘option for renewal’. We had filed our reply and written submissions against the stand

taken by the Commissioner, after which an order was passed against us. Appeal was filed by us against the

said order. However the appeal has been dismissed. The Company is in the process of filing an Appeal

against the said order in the High Court at Allahabad. Amount involved Rs. 6.70 Lakhs.

• Goods belonging to us being transferred from our Chandigarh office to Amritsar office were detained by

a Taxation Inspector and on the basis of his report, and a notice was issued under section - 51(6)(a) of the

Punjab VAT Act, 2005 by the Excise & Taxation Officer (ETO). We had given a detailed reply to the charges

made. However, the arguments raised by us were rejected; an order dated July 28, 2007 detaining the

goods was passed. However, the goods were released upon furnishing a bank guarantee & making requisite

payments. An appeal has now been filed before the Deputy Excise and Taxation Commissioner cum Joint

Director of Enforcement, Patiala division (Taxation Commissioner), against the impugned order. This appeal

was disposed off and the case was remanded back to the ETO, who passed a fresh order, once again

implicating us for alleged default. A new appeal has therefore been filed before the Taxation Commissioner.

The amount involved is Rs. 2.57 lakhs.

• A suit has been filed by us in the city civil court at Bangalore against a former radio jockey seeking

injunction from the court for restraining him to join a competitor in breach of the terms and conditions of the

employment contract and also to prevent him from copying a popular show on our Big 92.7 FM Radio

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Channel. An interim order was passed by the court restraining him to carry on a program similar to the one

aired by Big FM on the competitor’s radio station. The proceedings in this suit have been stayed in view of

the Writ Petition filed by the said employee in the High Court of Karnataka, Bangalore. We are evaluating

the option to invoke the Arbitration Clause of the employment contract to seek relief.

• We have filed a complaint under section 2(o) read with section 10(a)(i) of the Monopolies and Restrictive

Trade Practices Act, 1969 in the MRTP Commission, Delhi against a newspaper publication company

refusing to publish RMWL advertisements in their newspaper. Interim relief was denied by MRTP and also

by the Supreme Court on appeal. The matter is currently being argued on merits before the “Competition

Appellate Tribunal” since all matters of MRTP have been shifted to the said tribunal.

• A Winding-up petition has been filed by the Company against Subhiksha Trading Services Limited in the

High Court of Chennai for non-payment of outstanding amount of Rs.43,49,211.52/-.

• We and several other FM radio channels have received a notice from the Karyalaya Nagar Palika

Nigam, Bhopal, wherein a tax at the rate of Re. 1 per second has been levied on all advertisements

broadcasted by FM radio channels. We have sent a detailed reply challenging this notice on the ground that

the notice is arbitrary and issued without any authority, as the power to impose tax on advertisements

broadcasted by radio or television lies with the Union parliament and not a state legislature.

II. Cases involving Directors

Shri Anil Sekhri - Shri Anil Sekhri had filed criminal complaint u/s 138 of the NI Act, 1881, for cheque

bouncing of Rs. 6,00,000 issued by JB Singh to Anil Sekhri. Bombay High Court has fined JB Singh Rs.

12.00.000 and sentenced him to 3 months imprisonment vide order dated 15.06.2009. Also Shri Anil Sekhri

has got decree against JB Singh for Rs. 35 lakhs. JB Singh filed a counter complaint (case no 28277 S

2005) against Shri Anil Sekhri in 1996 u/s 420, 406, 384 and 477 of Indian Penal Code, 1860 alleging that

he paid Rs. 50,000 to Shri Anil Sekhri as CA for which he did not receive any services.

III. Pending Material litigation in which Promoters are associated

A. Reliance Capital Limited (RCap)

Cases filed against RCap

• One Harinarayan Bajaj & Ors have filed a suit against RCap in the Bombay High Court which pertains to

loans of Rs.1000 lakhs granted by RCap to the plaintiff secured by a pledge of shares. The loan amount was

recovered by enforcement of security. The plaintiff has alleged that sale of part of the shares was not correct

and has claimed refund of shares and benefits accrued on the said shares or payment of Rs.164.5 lakhs

together with interest @ 24%. The case involves 322,172 shares of Sesa Goa Limited and also Rs.149

lakhs towards accrued dividend and interest. Surplus proceeds out of sale of pledged shares have been

deposited by RCap in the court. The matter is pending for further proceedings.

• Ms. Bharatiben & Ors. have filed a suit against RCap in the Bombay High Court which pertains to some

equity shares delivered by Manubhai Maneklal and his business associates to RCap (as a custodian) in

connection with the transactions carried out by Reliance Enterprises Limited. The Plaintiffs are the heirs and

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legal representatives of the late Manubhai Maneklal who have filed the suit for recovery against RCap. The

case involves an amount of Rs.757 lakhs. Plaintiffs have completed their evidence. The case is now posted

for evidence by RCap.

• There are some investor related disputes with respect to shares of RCap which involve 33 cases where

RCap has to purchase shares from the open market and deliver the same to the complainants. There are 23

cases where shares have to be recovered/compensated for settlement as the same have been transferred

out. There are 10 cases in relation to monetary claims against RCap.

• There are certain investor related disputes in which RCap has been made a party, but there would be no

financial impact on RCap. Out of these, 32 cases are in relation to settlement involving a broker or third

parties, 55 cases which involve the complainant making a payment to RCap or providing suitable

indemnities. There are 29 cases where settlement is pending completion of procedural formalities. In

addition, there are 26 cases where copies of relevant court documents/complaints are not available with

RCap.

• There are 36 investor related disputes filed after the demerger of Reliance Industries Limited, where

parties claim to have lost shares pursuant to the demerger. These cases relate to 1084 shares in total.

RCap 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 demerger and merger.

• There are 92 consumer cases filed against RCap in various courts in respect of disbursement of loan

amount. These cases involve an amount of Rs.250.4 lakhs and are at various stages of adjudication.

Cases filed by RCap

• There are 13 cases filed by RCap in the Bombay High Court for recovery of dues in respect of the

financial assistance or bill discount facility granted by it to the defendants. The cases involve an aggregate

of Rs. 6677 lakhs and are at various stages of adjudication.

• There are 14,111 cases filed by RCap in various criminal courts with respect to dishonour of cheques

which were given for purchase of mobiles. The cases involve an amount of Rs.277.3 lakhs and are at

various stages of adjudication. B. Reliance Land Private Limited (RLPL) RLPL does not have any outstanding litigation as on October 30, 2009. Outstanding Material Litigation of top five Group Companies 1. Reliance MediaWorks Limited (formerly Adlabs Films Limited) (“RML”) Cases filed against RML

• One Mr. Sunil Kumar Boobna has filed a criminal complaint (No. 1168 (c) of 2005) against various

persons including RML and its erstwhile directors before the court of the Chief Judicial Magistrate, Patna.

RML had through its erstwhile directors agreed to provide security for the amount advanced by the

Complainant to accused No. 2 for a film he was producing. It was agreed that the movie would not be

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released without a ‘No Objection Certificate’ from the Complainant. The name of the film was subsequently

changed and the film was released but an amount of Rs. 36,85,900/- allegedly due was not paid to the

Complainant. Instead a cheque of Rs. 4,45,889/- was issued in favour of the Complainant. The Complainant

filed a case for breach of trust and cheating against the accused. The matter is pending before the trial

court. RML has filed a quashing application (No. 3424 of 2006) before the Patna High Court, which is

presently pending.

• There are 16 civil cases filed against RML (in some of the cases the directors and erstwhile directors

have been made parties) in the different civil courts relating to possession of negative of films, processing

the prints of films, overseas distribution rights for the film, infringement of copy right and other civil disputes.

The cases are currently pending before the court and are at various stages of adjudication. The aggregate

amount involved in these cases is approximately Rs 3.55 Crores.

• A Recovery suit has been filed by M/s Kulwant Singh Harbhajan Singh Pictures Pvt. Ltd and Others

against RML in the court of Civil Judge, Junior Section at Moradabad by Chaddha Palace, Moradabad (UP)

for an amount of Rs 35,11,587/- being unpaid Conducting fee for the property situated at Chaddha Palace,

Moradabad.

• There are four labour cases filed against RML in labour courts and various related authorities with

respect to various labour issues pending at various stages of adjudication. The aggregate amount involved

in these cases is approximately Rs 9.35 Lacs.

• There are two consumer complaints filed against RML in various District Consumer Forums related to

selling of food and beverages at a price in excess of Maximum Retail Price and charging parking fee. There

is no financial implication in any of these cases.

• 6 cases have been filed against RML in various courts with respect to tax assessment and payment.

These cases are at various stages of adjudication and involve approximately an amount of Rs. 1415.18

Lacs.

• Mr. Manmohan Shetty, the former managing director, allegedly traded in RML’s shares during the

closure of the trading window thereby violating the internal code of conduct for SEBI (Prohibition of Insider

Trading Regulations), 1992. Taking note of this violation, SEBI initiated its investigations against RML and

Mr. Manmohan Shetty and the same was intimated vide its letter dated November 7, 2006. As per regulation

12(1) of the Insider Trading Regulations, Ms Kirti Desai being the compliance officer was required to inform

SEBI about the violation of the code of conduct. However, such information was not made available. Ms Kirti

Desai was, therefore, warned by SEBI vide its letter dated December 31, 2007.

• RML filed a consent petition with SEBI and based on further discussions offered a payment of Rs. 15

lakhs as settlement charges without admission or denial of guilt on RML’s part to the finding of fact or

conclusion of law. Accordingly, the required amount was paid and a consent order was passed by SEBI on

March 6, 2009, wherein the fact of such settlement was recorded. It was also noted therein that since

Manmohan Shetty was no longer RML’s chairman or managing director, SEBI would continue its

proceedings against him separately. Therefore, the proceedings against RML had been settled and there

are no other outstanding issues which affect RML.

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• Dilsa Distributors (Applicant) filed an execution application (No. 51 of 2007) against Vivek Arts

(Respondent) before the Bombay High Court. RML was served with a Garnishee Notice (No. 2082 of 2007)

in pursuance of an order passed by the Court in the above proceedings to attach various film material of the

film “Ek Hindustani” for the purposes of execution. RML replied to the above notice stating that they had a

first and primary lien over the film negatives since their dues to the tune of Rs.61,42,093/- have not been

paid by the Respondents. RML had objected to the above notice where they have been added as a

garnishee to the execution proceedings. A person by the name of Shanlal Goenka has obtained an

injunction from a Civil Court in Guwahati against the release of final prints of the film. They have prayed for

quashing of the garnishee notice served upon RML. No new orders have been passed in the matter

thereafter.

• UTV Software Communications Limited (UTV) has served RML with a legal notice for infringement of

copyrights of its film titled “What’s your Rashee”. UTV has claimed that the master print of the film, which

was processed at RML laboratories, was illegally copied and distributed to persons engaged in piracy of film

prints. Further, UTV has alleged that persons employed by RML were involved in this act of piracy and that

they have purportedly not ensured adequate safety measures to protect the films which were in their

possession. Consequently, UTV has, through this notice, demanded a payment of Rs.5,000 lakhs from RML

as damages for purported losses suffered by them as a result of the alleged infringement, and has

threatened to take appropriate legal action, if such payment is not made within a period of 7 days from the

date of the notice. RML has refuted all the allegations through their reply dated September 24, 2009.

• RML has received a show cause notice dated 24th September, 2009 from Indian Motion Picture

Producers’ Association (IMPPA) alleging rampant piracy of films being carried out from their premises. The

IMPPA has threatened to issue a general mandate to all producers to refrain from dealing with RML in any

manner and to remove all their deposited film prints from the laboratories unless a satisfactory reply is given

to the issues raised in their notice. RML has replied to the show cause by its letter dated 28th September,

2009.

• RML has received a notice dated September 25, 2009 from the Film and Television Producers Guild of

India Limited (FTPGIL). FTPGIL, acting on a letter received by them from UTV on September 23, 2009

alleging rampant piracy of films and lack of adequate security resulting in alleged copyright infringement of

its film titled “What’s your Rashee”, has asked RML to give their comments in reply to the these allegations.

The FTPGIL has also stated that in the event RML is unable to provide a satisfactory reply, appropriate

action would be initiated against RML. RML has refuted all allegations through its reply dated September 29,

2009.

• The Collector of Stamps, Mumbai has served a demand notice dated March 9, 2009 on RML demanding

payment of stamp duty aggregating Rs. 7,34,700/- in connection with various agreements executed by RML

during the period of December 2006 to October 2007. The agreements deal with distribution and co-

production of various films. Appropriate steps to resolve the issue are being taken.

Cases filed by RML

• RML has filed a criminal complaint (No. 2865 of 2007) against Gaurang Doshi (accused) before the

Court of the Metropolitan Magistrate at Andheri, Mumbai for misappropriation of funds. The accused had

represented that he was producing a movie titled “Happy Birthday – Those who don’t believe in magic, will

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never find it” and based on that representation, RML agreed to take all distribution rights, including the

existing and all future rights in respect to the same for the purpose of commercial exploitation and

distribution. Consequently, a sum of Rs. 3,25,00,000/- was paid to the accused. However, the accused could

neither provide proper updates on the progress of the film nor produce copies of the agreements entered

into with various actors and actresses. On realizing that the representations made by the accused were false

and fraudulent, RML has instituted the present complaint. An investigation has been initiated by the police

but no report has been submitted.

• Mr. Ravi Diwan, sole proprietor of Suryodaya Productions (Complainant No. 1), has filed a complaint

(No. 441 (S) of 2003) against M/s. Gola Brothers and it sole proprietor Mr. Hyder Gola (accused) before the

Court of Metropolitan Magistrate. The accused is a distributor of films in Mumbai and had issued two

cheques of Rs.10,00,000/- and Rs.3,00,000/- to the Complainant No. 1 as consideration for obtaining the

rights to distribute the film titled ‘Aanrth’. However, these cheques were dishonoured and consequently,

Complainant No. 1 filed the present complaint. RML has been added as a complainant to the above

complaint since the Complainant No. 1 maintains an account for the purpose of receiving such royalty

amounts from various distributors. However, RML is not directly involved in the recovery of the amounts

mentioned.

• M/s Runwal Mutiplex Limited (subsequently merged into RML along with its two directors, Mr. Subhash

Runwal and Mr. Sandeep Runwal (Applicants) have filed a revision application before the Sessions Court at

Mumbai, against the order of the Metropolitan Magistrate, Mumbai. The Metropolitan Magistrate issued a

process against the Applicants on a complaint filed by the Inspector, Security Guard Board for the Mumbai

and Thane District. The charges related to engaging non-exempted security guards in non compliance with

the Private Security Guards (Regulation of Employment & Welfare) Scheme, 2002 and Maharashtra Private

Security Guards (Regulation of Employment & Welfare) Act 1981. Hearings before the Metropolitan

Magistrate and the Sessions Court are pending.

• A complaint has been filed by RML before the Council of Architecture, New Delhi and a private

complaint before the Metropolitan Magistrate's court at Borivali (Mumbai) against an Interior Designer Firm

namely Era Architects for cheating us by misrepresenting. A complaint u/s 420 of the IPC at Metropolitan

Magistrate's Court, Borivali (Mumbai) has also been filed regarding the same.

• There are 4 civil cases filed by RML in the different civil courts relating to recovery of dues and the

aggregate amount involved in these cases is approximately of Rs. 482.85 Lacs. The cases are at various

stages of adjudication.

• RML has served a notice on Construction Catalysers Private Limited (CCPL) for termination of its

agreement dated February 11, 2008. Under the agreement, CCPL had agreed to construct and develop a

pre-fabricated modular movie theatre. RML paid an amount of Rs. 19,26,855/- as the first tranche payment

to CCPL for starting work. However, CCPL failed to start construction of the structure as agreed. Frustrated

with the delay, the constant shifting of timelines and the abysmal nature of work of CCPL, RML terminated

the agreement by serving a notice on CCPL and claimed a refund of Rs.96,61,085/- along with damages

amounting to Rs.1,00,00,000/-. The matter has now been placed for arbitration before Justice M.S. Jamdar

(sole arbitrator).

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• There are four pending disputes initiated by RML before different arbitrators and arbitral tribunals in

relation to various disputes related to conducting agreements. The aggregate amount involved in these

cases is approximately Rs 1834.21 Lacs.

• RML has served a notice on Mr. Sagarmal Kothari, proprietor of Nirmal Sagar Talkies, Ujjain for

termination of the conducting agreement entered into by the parties on December 21, 2006. In pursuance of

the agreement, RML took over the operations of the theatre. Soon thereafter it faced a lot of trouble and

resistance from certain influential people of the locality, namely, Mr. Raja Yadav and Mr. Shakti Singh, who

had operated certain ancillary services in the same premises prior to RML’s takeover. Upon the assurances

of Mr. Kothari that the issues would be resolved amicably, RML extended a loan of Rs.8,00,000/- to him for

the purpose of clearing all outstanding dues of Mr. Shakti Singh and Mr. Raja Yadav. However the issue

could not be resolved. RML has claimed a total sum of Rs.3,12,53,003/- along with interest at the rate of

12% as amount in dues from Mr. Kothari, which has not yet been deposited. In view of the ensuing dispute,

both parties have agreed to resort to arbitration for a resolution.

• RML has terminated our conducting agreement with Mr. Radheshyam Rathore dated June 27, 2007

through a notice served upon him on January 28, 2009. RML entered into the agreement with Mr. Rathore

for the purpose of taking over the operations of “Sri Ram Smarati Talkies” and “Jyoti Chhabigrah” and for

refurbishing/redecorating/remodeling the theatres. During the process of carrying out such refurbishments/

redecorations, our engineers and technicians discovered several structural deficiencies in the theatres

thereby making them unsafe for public use. Consequently, RML was compelled to terminate the conducting

agreement with Mr. Rathore. It has claimed a total amount of Rs.5,63,38,388/- from Mr. Rathore on

termination of the conducting agreement. Mr. Rathore has however failed and/or refused to pay the amount.

The matter has now been set up for resolution through arbitration.

• RML through its notice dated December 12, 2008 terminated its conducting agreement with

Chandragupta Cinema Private Ltd. (CCPL) under which it was supposed to operate its theatre in Indore,

Madhya Pradesh. Under the agreement CCPL was supposed to obtain permission for converting the single

screen theatres into twin screen theatres and the costs were to be borne by RML. In addition to the

conducting agreement, RML had also entered into a financial assistance agreement with CCPL wherein it

agreed to pay all outstanding municipal dues of CCPL including property tax. Based on this agreement,

CCPL entered into a compromise with the Indore Municipal Corporation, which had filed a suit against CCPL

for non-payment of dues and the matter was disposed off by the Madhya Pradesh High Court. Under the

terms of the financial assistance agreement, CCPL was supposed to obtain all permissions for

alterations/additions in the theatre within 30 days of the disbursement of the amount through cheque. CCPL

failed to perform its obligations under the financial assistance agreement. RML was therefore forced to

terminate its conducting agreement with CCPL through its notice dated December 12, 2008 and demanded

a payment of Rs.4,76,05,822/- as dues with interest. The matter was thereafter referred to arbitration.

• RML has filed a winding up petition (No. 654 of 2009) against M/s WEG Entertainment Private Limited

(Respondent) before the Bombay High Court. RML had entered into a joint distribution agreement dated

September 22, 2007 with the Respondent for acquisition and distribution of 95 English films. RML also paid

a sum of Rs. 1,00,00,000/- as its share of the acquisition costs. A total sum of Rs. 3,39,26,875/- is due from

the Respondent. The parties agreed to terminate the distribution agreement. The Respondent issued 7 post

dated cheques in favour of RML. The first three cheques, each amounting to Rs. 50,00,000/-, were returned

dishonoured. A notice was sent by RML to the Respondent to pay the sum due which was not adhered to

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and therefore RML had filed the present winding up petition against the Respondent. However, RML has

reached a settlement with the Respondent and the same was set out in their letter dated September 1,

2009. The consent terms under that settlement have been filed in the High Court. A final order has not yet

been passed in the matter.

• RML has filed a criminal complaint (No. 1231 of 2009) dated April 6, 2009 against WEG Entertainment

Private Limited (accused) and others before the Court of the Learned Metropolitan Magistrate, Mumbai. RML

entered into a joint distribution agreement dated September 22, 2007 with the accused for acquisition and

distribution of 95 English films. RML paid a sum of Rs. 1,00,00,000/- as its share of the acquisition costs.

The accused owes a total sum of Rs. 3,39,26,875/- to RML. The parties agreed to terminate the distribution

agreement on payment of the abovementioned sum to RML. The accused issued 7 post dated cheques in

its favour. The first two cheques, each amounting to Rs. 50,00,000/-, were returned dishonoured which led

to filing the present complaint under section 138 of the Negotiable Instruments Act, 1881. However, RML

has reached a settlement with the accused and the same was set out in their letter dated September 1,

2009. RML is in the process of filing an application for withdrawal of the compliant pursuant to this

settlement.

• Eight other cases have been filed by RML under section 138 of the Negotiable Instruments Act, 1881,

which are pending before various forums in the country, aggregating to Rs. 25918182/-.

• RML served a notice on Mr. Jagdish Vasudev Agarwal, proprietor of Rajmandir Cinema, Jalna for

termination of the conducting agreement entered into with him on July 31, 2007. It was agreed between the

parties that Mr. Agarwal would hand over the premises of Rajmandir Cinema to RML on or before

September 1, 2007 with all the necessary licenses, permissions, certifications and requirements for the

purposes of refurbishing and operating the same. However, Mr. Agarwal failed to carry out his obligations.

Further, the ownership of the property is not clear, as it appears that the Marathwada Wakf Board, and not

Mr. Agarwal, is the real owner of the land on which the theatre has been constructed. Mr. Agarwal has been

unable to procure a no-objection certificate from the board. RML terminated the conducting agreement. RML

has also claimed a sum aggregating Rs.42,50,000 from Mr. Agarwal. No suit has been filed in the matter as

on date.

• RML has filed two complaints against the Brihan Mumbai Corporation before the Joint Assessor &

Collector, Mumbai Municipal Corporation. In the complaints RML has asked for adoption of the profit basis

method for assessment of its property at Wadala (I Max) and R Adlabs, respectively, rather than the

currently followed gross method (box office collection method). The complaints are presently pending.

2. Reliance Life Insurance Company Limited (RLIC)

Cases filed against RLIC

• A writ petition (No. 34256 of 2007) has been filed by Bal Natrajan in the Kerala High Court in 2007

against RLIC, challenging the order passed by the Ombudsman in relation to cancellation of the policy. The

amount involved in the matter is Rs. 0.5 lakhs. The matter is currently pending for hearing.

• 100 consumer complaints have been filed before various district consumer forums against RLIC by

various individuals in relation to various issues including, claims repudiation, non receipt of policy documents

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and for deficiency of service. The aggregate amount involved in the cases is approximately Rs. 255.44

lakhs. The matters are pending at various stages of adjudication.

• Appeals have been filed by Jagdish Chand (first appeal no. A/08/1013 of 2009) and Jayshree

Chandrakant Kapure (first appeal no. 9 of 2009) in the respective state commissions against RLIC

challenging the orders of district consumer forums. The aggregate amount involved in the cases is

approximately Rs. 10 lakhs. The cases are pending at various stages of adjudication.

• 12 civil cases have been filed by former employees in different civil courts against RLIC, in relation to

issues pertaining to claims repudiation, recovery of commission, commercial disputes and an injunction for

termination of services. The aggregate amount involved in the cases is approximately Rs. 2.9 lakhs. The

cases are pending at various stages of adjudication.

• Pedalu Purushottam has filed a criminal complaint numbered 61 of 2009 before the Sub-Divisional

Judicial Magistrate at Berhampur against RLIC and its the Head–legal, compliance and company secretary,

manager claims under different sections of the Indian Penal Code, 1860. The complaint pertains to claim

repudiation. The case is currently pending.

• Three cases have been filed against RLIC in the Lok Adalat at Vishakhapatnam by Polamarasett Yeruku

Naidu (No. 1290 of 2008) and K. V. Samba Murthy (No. 567 of 2009) in relation to claims repudiation and

deficiency in services. The aggregate amount involved in the cases Rs. 13.4 lakhs. The matter is currently

pending.

• 40 legal notices have been issued against RLIC in relation to issues pertaining to non-processing of their

claims, wrongful cancellation of policy, non cancellation of policies upon request, non refund of the premium

amount, deficiency of service and non issuance of premium receipt. The aggregate amount involved in these

cases is approximately Rs. 118 lakhs. RLIC is in the process of replying to these notices.

• 220 legal notices were issued against RLIC in relation to issues pertaining to non-processing the claim,

wrongful cancellation of policy, non cancellation of policies, non refund of the premium amount, deficiency of

service and non issuance of premium receipt. The aggregate amount involved in these cases is

approximately Rs.1459.92 lakhs. RLIC has replied to all these notices.

• 48 legal notices were issued against RLIC in relation to various issues pertaining to non payment of the

lease rentals, commercial disputes, unilaterally termination/breach of lease/leave and license agreements.

The aggregate amount involved in these cases is approximately Rs. 88.67 lakhs. RLIC has replied to all the

45 legal notices.

• 9 complaints have been filed against RLIC before various Ombudsmen in relation to issues pertaining to

non processing of claims, non receipt of the policy document, non cancellation of policies upon request,

recovery of money, fraud committed by RLIC’s employees, for re-issue of the policy and deficiency in

service. The amount involved in these cases is not ascertainable. RLIC is in the process of replying to these

complaints.

• 141 complaints were filed by various individuals before various Ombudsmen against RLIC in relation to

various issues including, non processing the claim, repudiation of claim, rejection of the claim, refusal to

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refund the premium, non issuance of premium receipt, unilaterally changing the terms of the policy, recovery

of money, fraud done by an employee of RLIC, deficiency in service, etc. The amount involved in these

cases is not ascertainable. RLIC has replied to all the grievances set out in these complaints.

• 30 complaints have been filed against RLIC before various Ombudsmen in relation to various issues

such as non processing of claims, repudiation of claims, rejection of claims, refusal to refund premiums, non

issuance of premium receipt, unilaterally changing the terms of the policy, non receipt of the policy

documents, non cancellation of policies upon request, recovery of money, fraud done by an employee of

RLIC, deficiency in service, etc. The amount involved in these cases is not ascertainable. The Ombudsman

has passed orders in favour of RLIC. One of the complainants has filed an appeal against the order of an

Ombudsman before the High Court of Kerala.

• 19 complaints were filed by various individuals before the various Ombudsman against RLIC in relation

to various issues including, refusal to refund the premium, cancellation of policy, unilaterally changing the

terms of the policy, etc. In these complaints the Ombudsman had passed orders against RLIC. RLIC has

filed an appeal in one matter before the High Court of Allahabad. In other cases RLIC had duly complied

with the orders.

• 151 inspection notices were issued by various labour enforcement officers against various branches of

RLIC in relation to various compliances under labour law provisions. RLIC has replied to all these notices.

• 11 complaints have been filed against RLIC before various labour conciliation officers by some of its

former employees. The cases pertain to various issues including, illegal termination and non-payment of

wages. The aggregate amount involved in these cases is approximately Rs. 1.70 lakhs. RLIC has filed its

replies before the respective labour authorities.

• 8 cases have been filed against RLIC including some of its directors and branch heads, in the various

courts of judicial magistrates. Most of these cases pertain to non compliance of the provisions of certain

Shops & Establishment laws in Mumbai, Uttar Pradesh, West Bengal, and the Equal Remuneration Act,

1976. One case at Phusro (No. 32 of 2009) is pending for adjudication. RLIC has paid fines aggregating to

Rs. 0.37 lakhs in seven cases.

• 79 complaints have been filed before the Insurance Regulatory and Development Authority (IRDA)

against RLIC in relation to various matters including non processing the claims, repudiation of claims,

rejection of the claims, refusal to refund the premiums, non issue of premium receipts, unilaterally changing

the terms of the policies, non receipt of the policy document, recovery of money, fraud committed by

employees of RLIC and deficiency in services. The amount involved in these complaints is not ascertainable.

RLIC is in process of replying to these complaints.

• 315 complaints have been lodged before the IRDA against RLIC in relation to issues such as 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 RLIC and deficiency in services. The amount involved

in these cases is not ascertainable. RLIC has replied to all the grievances set out in these complaints.

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Cases filed by RLIC

• 4 civil suits have been filed by RLIC in the Bombay High Court against M/s. Dawnay Day (No. 554 of

2009), Sanjay Jadhav (No. 225 of 2009), Rajiv Lohia (No. 97 of 2009) and Naizi Mohammad (No.226 of

2009) for recovery of amount due from them. These cases relate to issues such as unsatisfactory services

rendered by service provider, breach of contract and excess payment of remuneration. The aggregate

amount involved in the cases is Rs. 765.52 lakhs. The cases are currently at various stages of adjudication.

• 5 civil suits have been filed by RLIC in the City Civil Court at Mumbai against Abhinav Chahad (No. 2411

of 2008), Rajeev Singh (No. 2675 of 2008), Jasmine Kapadia (2677 of 2008), Santosh Singh (2677 of 2008)

and Rajendra Bartiya (2678 of 2008), all former employees of RLIC, for recovery of amount due to breach of

employment contract. The aggregate amount involved in these cases is Rs. 2.28 lakhs. The cases are

pending at various stages of adjudication.

• A writ petition (No.21126 of 2008) has been filed by RLIC in the Allahabad High Court for quashing the

first information report filed by Mrs. Sadhana Gupta against certain employees of RLIC, under provisions of

the Indian Penal Code, 1860. Mrs. Gupta has alleged that these employees of the Ghaziabad branch of

RLIC have malafidely procured the documents without her knowledge and subsequently forged the

signatures on those documents on a proposal form of a life insurance policy and submitted the same. She

has also alleged that a forged cheque of Rs. 0.25 lakhs was deposited for payment of premium for the

policy. Aggrieved by these alleged facts, Ms. Sadhana Gupta has filed a FIR no. 1367 of 2008 in the

Kavinagar police station in Ghaziabad. The matter is currently pending.

• A writ petition (No. 2825 of 2009) has been filed by RLIC in the Allahabad High Court challenging an

award of the Insurance Ombudsman, Lucknow, pertaining to computation of the premium amount. A

complaint was lodged by Mr. Vijay Kumar Gupta, who had availed a policy issued by RLIC for an assured

sum of Rs. 60 lakhs with an annual premium of Rs. 1 lakh.However, the premium was not enough to sustain

the mortality charges and hence Mr. Gupta was requested either to increase the premium amount or to

decrease the assured amount. He was also given an option to cancel the policy. However, Mr. Gupta filed a

complaint with Ombudsman, pursuant to which the Ombudsman directed RLIC to reinstate the policy on

original terms & conditions. The instant writ petition filed pertains to quashing of this order. The matter is

currently pending.

• A writ petition (No.23642 of 2009) has been filed by RLIC in the Patna High Court for cancellation for

anticipatory bail granted to a former employee, Mr. Adarsh Pandey (accused), for his involvement in

fraudulent activities. The accused was working in Raxaul branch of RLIC. Several complaints were received

against him from customers regarding his involvement in wrong sale of policies, non deposition of premium

amounts collected and other fraudulent activities. Relying on these facts, a FIR bearing no. 286 of 2008 was

filed. Consequently, the accused had applied for an anticipatory bail application bearing no. 56 of 2009 in

the Sessions Court at Patna, wherein he suppressed the fact that he was involved in cash misappropriation

amounting to Rs. 9 lakh, but only admitted to the commission of fraud to the tune of Rs. 2 lakhs. The court

vide order dated February 2, 2009 allowed the application subject to condition that the accused deposits a

monthly instalment of Rs. 0.10 lakhs. Being aggrieved by this decision, RLIC has filed the instant writ petition

on June 26, 2009 for cancellation of the anticipatory bail. The matter is currently pending.

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• A writ petition (No. 19389 of 2009) has been filed by RLIC in the Kerala High Court seeking a stay on

the recovery proceedings initiated by deputy tehsildar, Thodupuzha under Kerala Value Added Tax Act

(KVAT Act). The proceedings were initiated based on a recovery notice sent by the Intelligence Officer,

Idukki for the payment of a penalty amount of Rs. 5.06 lakhs for alleged failure of RLIC to deduct tax under

KVAT Act while the awarding of a contract to a certain contractor. The High Court vide its order dated July

10, 2009 has granted stay to the recovery proceedings.

• RLIC have filed an application (No.218 of 2009) in the Bangalore High Court for appointment of

arbitrator for resolution of a dispute pertaining to the services agreement entered into with Azilon Software

Solutions (Azilon). The agreement entered was for providing software solutions to RLIC, for which RLIC

released 30% of the agreed service fees to Azilon, amounting to Rs. 9.36 lakhs. Azilon realized the amount,

but failed to provide the services as agreed between the parties. Hence, the present petition was filed. The

matter is currently pending.

• RLIC have filed a writ petition (No.22713 of 2009) in the Allahabad High Court for quashing of a private

complaint filed by a former employee against the territory manager, Kerakat in the Sessions Court at

Jaunpur, bearing case no.12 of 2009 . The complaint was filed under section 393, 504, 506 and 323 of

Indain Penal Code, 1860. The High Court has disposed off the petition and has directed the lower court to

consider the bail application on merits.

• An appeal (No. 624 of 2008) has been filed by RLIC before Small Causes Court at Bombay against an

order passed by the Municipal Corporation of Greater Mumbai (MCGM) directing RLIC to pay the property

tax in accordance with the enhanced value of the property. The amount involved in this case is Rs. 21.3

lakhs. The matter is currently pending as MCGM has to file the details of computation of the property tax

before the court.

• RLIC has filed Civil Suit bearing no.792/2009 before the Civil Judge Senior Division, Delhi seeking

permanent injunction against Bhartiya Labour Union, Delhi restraining them from holding any agitation

against RLIC. The court vide order dated October 10, 2009 had restrained the labour union from holding any

agitation before the branch office of RLIC at Delhi.

• RLIC has filed a revision petition (No.217 of 2009) in the National Commission, New Delhi (NC)

challenging the order of the State Commission, Bangalore wherein RLIC was ordered to pay a monetary

relief of Rs.1.1 lakhs to one Mr. Madhavacharya for the alleged hardship and agony caused to him for the

repudiation of his medical claim. The NC has stayed the order of the state commission and has directed

RLIC to deposit Rs. 1.08 lakhs with the district commission. The matter is currently pending.

• RLIC has filed original complaint bearing no.183/2009 before the State Consumer Dispute redressal

commission, Mumbai against ICICI Bank for deficiency of Service for excess debit of amount form its current

account maintained with ICICI Bank for banking transaction. The amount involved in the matter is 22 lakhs.

• 12 appeals have been filed by RLIC in various state commissions against various persons against

orders of district forums. The total amount involved in the matter is Rs. 42.81 lakhs. The cases are at various


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• 16 first information reports have been filed by RLIC in various police stations, against various

individuals. These cases relate to misappropriation of premium amount, dishonest misappropriation of

cheques, issuance of fake receipt, theft at office premise, etc. The aggregate amount involved in the cases

is Rs. 59.74 lakhs. The investigations are ongoing and the matters are currently pending.

• 2 criminal cases have been filed by RLIC against its former employees, viz. Siddharth Patel (No.996 of

2007) and Parin Mistry (No. 632 of 2008), for misappropriation of premium amount, cheating and forgery.

The total amount involved in these cases is Rs. 8.5 lakhs. Both matters are currently pending.

• A case (No. 11737 of 2008) has been filed by RLIC in the Chief Metropolitan Court, Bangalore against

Azilon Software Solutions under various sections of the Indian Penal Code, alleging an intention to defraud

and misappropriation of funds. The matter has been referred to the police for investigation. The amount

involved in the matter is Rs. 10 lakhs. The matter is currently pending.

• An appeal (No. KVAT 865 of 2009) has been filed by RLIC before the Deputy Commissioner (Appeals),

Commercial Taxes Department, Ernakulam against an order passed by the Intelligence Officer, Commercial

Taxes, Idukki for alleged failure of RLIC to deduct tax under Kerala Value Added Tax Act from the payments

made by the contractors. The amount involved in the case is Rs. 5.06 lakhs. The appeal is currently

pending.

• An appeal (No. 37 of 2007) has been filed by RLIC before the Commissioner (Appeals) in CESTAT,

South Zonal Bench, Chennai against an order passed by the Commissioner, Appeal, in relation to

disallowance of ineligible credit of service tax. The amount involved in the case is Rs. 33.8 lakhs. The

CESTAT has ordered RLIC to deposit the amount with the CESTAT. RLIC has deposited the amount with

the CESTAT. The appeal is pending.

• An appeal (No. 35 of 2005) has been filed by RLIC before the (CIT) (Appeals), against an order passed

by the Assistant Director of Income Tax, International Taxation, Chennai, in relation to classification of

payment made to the AMP Group, Australia, as royalty. The aggregate amount involved in the case is Rs.

5.23 lakhs. The CIT has ordered RLIC to deposit the amount with the CIT. RLIC has deposited the amount

with the CIT. The appeal is currently pending.

• 10 legal notices have been issued by RLIC against various individuals and entities for issues pertaining

to appointment of an arbitrator, tampering of cheques issued by RLIC and recovery of money. The amount

involved in these cases aggregates to approximately Rs. 796.89 lakhs. RLIC has initiated appropriate legal

action against the individuals and entities after expiry of the notice period.

3. Reliance Capital Asset Management Limited (RCAM) Cases filed against RCAM

• Ms. Vinny Trehan (through Mrs. Radha Rani) (Plaintiff) has filed a civil suit in the Court of the Civil

Judge, Junior Division, Amritsar against RCAM for making a transmission of mutual fund units on the basis

of the nomination made by the deceased investor, against the terms of the will produced by the Plaintiff. The

matter is currently pending. The total amount involved is Rs.3.67 lakhs.

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• PAN Securities Limited filed a suit (No.2126 of 2008) against Gopal M Mahubani and others in the Court

of the Junior Civil Judge, City Civil Court, Hyderabad. RCAM has been made a party to a dispute for

redemption of units provided by RCAM against which a lien request was received subsequent to such

redemption. The total amount involved is Rs.2.43 lakhs.

• RCAM has been added as a party to a suit (No.1937 and 1938 of 2000) filed between Siddharth Deepak

Chury and Prabhakar Deepak Chury in the Bombay High Court. The suit pertains to possession of a flat

belonging to one of the parties, which was taken on leave and license basis by RCAM. The term of the

license is over and RCAM is ready to vacate the flat. However, RCAM has retained possession since the

security deposit was not refunded upon expiry of the license. Pending the resolution of the matter, the Court

has appointed RCAM as the agent of the receiver appointed by the court. The amount involved is Rs. 10

lakhs.

• RCAM has been made a party to a civil suit (No.1936 of 2008) between Mrs. Pramila Lodha (Plaintiff)

and Edelweiss Securities Limited (Defendant) in the Bombay High Court. The Plaintiff had provided a power

of attorney to the Defendant and requested RCAM to mark a lien on her folio in favour of the Defendant. In

the present dispute, Mrs. Lodha has moved the High Court for issuing directions to RCAM not to act on

instructions of the Defendant. The amount involved is Rs.12.73 lakhs.

• Mr. Bhumanagoudar (Plaintiff) has filed an original suit (No. 1118 of 2008) against RCAM in the Court of

the Additional Civil Judge, Junior Division, Dharwad for failing to making allotment of units against the

investments allegedly made by him. RCAM has contended that it has not made the allotment of units as no

money was received from the Plaintiff. The Plaintiff has in fact been defrauded by the employees of a

distributor in whose favour he had given the cheques meant for investment in certain scheme(s) of Reliance

Mutual Fund. The amount involved is Rs. 1.25 lakhs.

• There are 16 consumer related cases filed against RCAM in various district and state consumer

disputes redressal fora. Further, in certain cases, the branch manager, regional managers and chief

executive officer/ managing director of RCAM have been added as parties. Deficiency in services provided

by RCAM, fraud committed on the investors by third parties, rejection of application for allotment of units,

rejection of redemption etc. are some common allegations raised in these cases. The approximate amount

involve is Rs. 318.3 lakhs.

• SEBI has issued an ad-interim ex-parte order cum show cause notice dated June 3, 2009 pertaining to

an advertisement issued in respect of a scheme of Reliance Mutual Fund. The instruction contained in the

said notice has been complied with and a reply has been filed with SEBI.

Cases filed by RCAM

• RCAM had moved an application in the Bombay High Court for permission to act as an agent of the

receiver appointed by the High Court in the suit (No. 1937 and 1938 of 2000) between Siddharth Deepak

Chury and Deepak Prabhakar Chury and Others for a flat which has been taken by the company on a leave

and license basis and in relation to which the security deposit is still to be refunded by the licensors. The

matter is currently pending. The total outstanding amount involved is Rs. 10 lakhs.

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• RCAM has filed an appeal against an order passed by the Additional Collector (Department of

Revenues), Moradabad for alleged insufficient payment of stamp duty by RCAM and the penalty thereon, in

respect of a lease deed pertaining for its branch office in Moradabad (U.P.). The matter is currently pending

and involves an amount of Rs. 2.5 lakhs.

• RCAM has filed 2 appeals in the State Consumer Disputes Redressal Commission at Hyderabad

against an order passed by the District Consumer Disputes Redressal Forum. The amount involved in these

matters is approximately Rs. 0.7 lakhs. 4. Reliance General Insurance Company Limited (RGICL) Cases filed by RGICL

• RGICL has filed 6 appeals in the Income Tax Appellate Tribunal (ITAT) against orders of various income

tax authorities between the assessment year 2000-01 to 2006-07. These appeals, (Nos. 6262/Mum/2008,

3126/Mum/2008, 1520/Mum/2008, 781/Mum/2007, 2951/Mum/2008 and 2950/Mum/2008) are all currently

pending.

• There are 15,600 claims in the Motor Accidents’ Claims Tribunal (MACT) involving a total amount Rs.

12,867.70 lakhs outstanding as on September 30, 2009. These MACT claims are routine to normal business

operations of RGICL, for which the premium for covering the insurance risks have been received.

• RGICL has filed 2 Arbitration Applications bearing Nos 386/09 and 387/09 in the Delhi High Court for

appointment of Arbitrators, as the Premises, furniture and fixtures belonging to M/s Mac Overseas and M/s

Allied Enterprises have been taken on Lease by the Company. The Company has terminated the Lease as

per the terms of the Agreement, but the Lessors have not refunded the security deposit amounts. The matter

is currently pending and the total outstanding amount is Rs. 18.60 Lakhs. 5. Reliance Securities Limited (“RSL”) Cases filed against RSL

• There are 08 arbitration matters filed before NSE & BSE. The total claim involved is approximately

Rs1959.77lakhs. There are 09 investor grievances’ complaints filed against RSL pending before various

stock exchanges. The total claim involved is approximately Rs.1.17 lakhs.

• There are 3 complaints filed against RSL in different consumer disputes redressal forum for a total claim

of Rs. 22.9 lakhs.

• A former employee has filed a petition against RSL in the labour court at Jammu claiming payment of

salaries totaling to Rs. 1.1 lakhs approximately.

• A former employee has filed a petition against RSL in the Court of the Civil Judge, Panipat seeking

salaries amounting to Rs.1 lakh approximately.

• Two petitions filed against RSL U/s 9 of the Arbitration and Conciliation Act, regarding disputes relating

to reimbursement of service tax and claim towards balance Lease Rent totaling to Rs.15 lakhs under Lease

Agreements relating two office premises in Delhi.

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Cases filed by RSL

• RSL has filed 12 arbitration matters against its clients before the Stock Exchanges at various locations

for the recovery of outstanding ledger balance in client’s account totaling to Rs.32.62 lakhs.

• RSL has filed an appeal before Delhi High Court (FAO-330/09 & CM No15325/09) against the

Arbitration Award passed by NSE Delhi in the matter of Mr.Vivek Sharma Vs Reliance Securities Limited.

The Claim amount is approximately Rs. 3,96,741/-. IV. Pending material litigations of other listed companies belonging to Reliance Anil Dhirubhai

Ambani Group

Apart from the above companies, pending litigations of other listed companies belonging to Anil Dhirubhai

Ambani Group are given as under, as additional information:

Reliance Communications Limited (RCOM)

Cases filed against RCOM

Investor Related Disputes

• There are 11 cases filed against RCOM where the Legal heirs of shareholders have filed these cases

claiming succession certificates 4994 shares of RCOM are involved.

• There are 30 cases filed against RCOM where the plaintiffs have claimed ownership of 11893 shares of

RCOM along with subsequent demerged company shares. RCOM has received plaint copies in all these

cases.

Civil Cases

• There are 73 civil cases filed against RCOM (in some of the cases, the Manager, Managing Director,

Chief Managing Director and Chairman of RCOM have been made parties) in the different civil courts

relating to money recovery and civil disputes. The cases are currently pending before the court and are at

various stages of adjudication. The aggregate amount involved in these cases is Rs. 50.35 million.

Consumer Cases

• There are 437 cases filed against RCOM (in some of the cases, the Manager, Managing Director, Chief

Managing Director and Chairman of RCOM have been made parties) in various district consumer dispute

resolution fora. The cases relate to deficiency of service by RCOM. The aggregate amount involved in these

cases is Rs. 46.78 million. (In some of these cases, Mr. Anil Dhirubhai Ambani has also been made a party

to the dispute).

• There are 27 appeal cases filed against RCOM in various state consumer dispute resolution fora. The

aggregate amount involved in these cases is Rs. 1.15 million and are at various stages of adjudication.

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High Court Cases

• Mr. S. Anantharaman and Webdunia.com (India) Private Limited (“Webdunia”) have filed separate

appeals before the High Court of Bombay challenging the order dated July 18, 2009 passed by the High

Court of Bombay sanctioning the scheme of arrangement between RCOM and the Company for the transfer

and vesting of the Optic Fibre Undertaking of RCOM into the Company (“OFC Demerger Scheme”).

Webdunia is a creditor of RCOM and has alleged that the High Court of Bombay erred in dispensing with the

requirement of holding the meeting of creditors to approve the Scheme. Mr. Anantharaman, a shareholder of

RCOM, has claimed that the valuation report was inadequate and the High Court ought to have directed the

furnishing of the complete valuation report and also that the independent findings on various aspects of

valuation in the impugned order are incorrect in law and in fact. The said appeals are yet to be admitted by

the High Court. The High Court has, by its order dated September 23, 2009 disposed the appeals. A copy of

the order has not yet been received.

• There are 20 civil cases filed against RCOM in various High Courts (in some of the cases, the Manager,

Managing Director, Chief Managing Director and Chairman of RCOM have been made parties) for money

recovery and civil disputes. The cases are currently pending before the court and are at various stages of

adjudication. The aggregate amount involved in these cases is Rs. 284.27 million.

Tax cases

• There are three cases filed against RCOM in various High Courts with respect to tax assessment and

payment. These cases are at various stages of adjudication and the aggregate amount involved in these

cases is approximately Rs. 42.64 million.

Company Cases

• Mrs. Anjali Aney, sole proprietress of Maheash Aney Productions (“Petitioner”) has filed a company

petition before the High Court of Bombay against RCOM. Petitioner has claimed an amount of Rs. 2.91

million as due and payable by RCOM. The Petitioner has also sought winding up of RCOM in accordance

with the provision of the Companies Act. The petition is posted on October 9, 2009. Since the claimed is

disputed RCOM has already filed recovery suit against the Petitioner before the High Court of Bombay for

the amount claimed by Petitioner in the Company Petition. The matter is currently pending.

Labour cases

• There are 9 cases filed against RCOM in various labour tribunals with respect to various labour issues

pending at various stages of adjudication. The aggregate amount involved in these cases is approximately

Rs. 1.56 million.

Regulatory Cases before TDSAT

• BSNL (Bharat Sanchar Nigam Limited) has filed an appeal against the Telecom Regulatory Authority of

India (“TRAI”), Association of Unified Telecom Service Providers of India (AUSPI) and Cellular Operators

Association of India (COAI) challenging regulation dated February 2, 2007 notified by TRAI being the

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Telecommunication Inter Connection (Port Charges) Amendment Regulation, 2007, on the ground that it is

without jurisdiction and without any basis.

• An appeal has been filed by BSNL against TRAI in TDSAT inter-alia challenging Explanatory

Memorandum 84 to the IUC Regulation dated October 29, 2003, issued by TRAI imposing a uniform

carriage charge of 20 paise on calls terminating from mobile network on Level II TAX and doing away with

the distance based carriage charge. AUSPI is a respondent in the case. The amount involved in this case is

Rs. 15 million per month.

• COAI has filed a case against RCOM, BSNL, DoT (Department of Telecommunications) and TRAI

before TDSAT on the issue of access deficit charge on fixed wireless services of RCOM under the brand

name ‘Unlimited Cordless’. COAI is seeking a refund of the access deficit charge till January 30, 2005. The

amount involved in this case is Rs. 20 million.

• BSNL has filed an appeal against TRAI before TDSAT inter alia challenging that part of the IUC

Regulations, whereby the quantum of ADC receivable by BSNL has been reduced. AUSPI has been

impleaded as a respondent.

Cases before the Supreme Court of India

• BSNL filed an appeal before TDSAT challenging TRAI’s directive, by which it held that terminating

network operator is entitled only to termination charges and not to additional revenue sharing for roaming

call charges. TDSAT dismissed the appeal, against which an appeal was filed by BSNL.

• MTNL has filed an appeal before the Supreme Court of India against a TDSAT judgment. RCOM had

filed a petition against MTNL, inter alia, challenging the unilateral and exorbitant determination and revision

of charges towards infrastructure sharing and also unilateral deduction of RCOM’s IUC payments. The

appeal was allowed by TDSAT, against which MTNL approached the Supreme Court. The order of TDSAT

has been stayed. The impugned order has been stayed till such time as both parties file their respective

replies. The amount involved in this case is approximately Rs. 20 million to Rs. 30 million during the validity

of the licence.

• DoT filed an appeal against the TDSAT judgment on the validity of the definition of Adjusted Gross

Revenue (AGR) in licenses issued by DoT. A petition was filed by AUSPI against the Union of India and

TRAI before TDSAT, challenging the same. TDSAT had referred the matter back to TRAI for its

recommendations. Against this order, DoT filed an appeal before the Supreme Court, which dismissed the

appeal and granted liberty to DoT to raise their contentions before TDSAT, which decided the petition

against them. An appeal is filed against this order.

• BSNL has filed a transfer petition before the Supreme Court seeking transfer of a petition filed by RCOM

against BSNL pending before the TDSAT to the Supreme Court. This petition is filed on the issue of HCD

limitation.

• MTNL has filed a transfer petition before the Supreme Court seeking transfer of a petition filed by RCOM

against MTNL pending before the TDSAT to the Supreme Court. This petition is filed on the issue of HCD

limitation.

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• BSNL filed an appeal before the Supreme Court challenging TDSAT Judgment dated 11.05.09 passed

in Petition No. 209 of 2006 wherein the TDSAT allowed Petition filed by RCOM inter- alia seeking

implementation of the Judgment and Order dated 3.3.06 on the issue of charge for passive links. The

amount involved in this case is Rs. 20 million.

• BSNL has filed an appeal before the Supreme Court against the Judgment and Order dated 31.03.09

passed by TDSAT in Petition No. 286 of 2007. Against the same Order COAI has filed an appeal against

the Union of India and TRAI has also filed a separate appeal. RCOM is party to all the appeals.

• BSNL has filed an appeal before the Supreme Court challenging TDSAT Judgment dated 05.05.09 and

27.05.09 passed in Petition No. 224 of 2006 wherein the TDSAT allowed the Petition filed by RCOM

challenging BSNL circular dated 12.06.06 which was issued by BSNL inter- alia amending/ modifying clause

7.6.0 to 7.6.3 of the interconnect agreements.

Criminal Cases

• There are 26 criminal cases filed against RCOM in various criminal courts against various other parties

on grounds of fraud and cheating. There is no financial implication in any of these cases.

MRTP Cases

• There are Six MRTP cases filed against RCOM before MRTP Commission alleging that the company

has indulged in certain unfair trade practices. The financial implications in these cases are Rs. 6.50 million.

Cases filed by RCOM

Cases filed under Section 138, Negotiable Instruments Act, 1881

• There are 6,761 cases filed by RCOM under Section 138, Negotiable Instruments Act, 1881 against

various defendants which relate to the dishonouring of cheques received by RCOM towards payment of bill

amounts. The aggregate amount involved in these cases is approximately Rs. 39.64 million. These cases

are at various stages of adjudication.

Consumer Cases

• There are 42 cases where appeals have been filed by RCOM in various state consumer dispute

resolution commissions against the orders of the various consumer dispute resolution fora. The aggregate

amount involved in these cases is approximately Rs. 1.03 million. All these cases are currently pending.

Civil Cases

• There are 131 civil cases filed by RCOM in various civil courts relating to recovery of dues and the

aggregate amount involved in these cases is approximately of Rs. 8.86 million. The cases are at various


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Criminal Cases

• There are 32 criminal cases filed by RCOM in various criminal courts against various other parties on

grounds of fraud and cheating. The aggregate amount involved in these cases is approximately Rs.

12.45million and are at various stages of adjudication.

Lok Adalat Cases

• There are 169 cases filed by RCOM before the District Legal Services Authority for recovery of dues. In

all these cases, a notice has been sent to the respondent. The cases involve claims worth Rs. 0.29 million.

High Court Cases

• There are 55 civil cases filed by RCOM in various High Courts against various parties relating to money

recovery and civil disputes. The cases are currently pending before the courts and are at various stages of

adjudication. The aggregate amount involved in these cases is approximately Rs. 378.06 million.

Tax cases

• There are eight cases filed by RCOM in various High Courts with respect to tax assessment and

payment. These cases are at various stages of adjudication and the aggregate amount involved in these

cases is approximately Rs. 73.64 million.

Cases before the Supreme Court of India

• RCOM has filed an appeal before the Supreme Court of India against the Department of

Telecommunications which had imposed a penalty of Rs. 1,500 million on RCOM for alleged violation of

license conditions in relation to Home Country Direct services. TDSAT upheld the imposition of penalty by

DoT. The aforesaid amount has been paid by way of deposit to DoT. The case is listed for hearing and the

amount involved in this case is Rs. 1,500 million.

• RCOM has filed an appeal before the Supreme Court of India against TRAI against a TDSAT judgement

and order. RCOM had filed a petition before the TDSAT challenging the levy of transit charge of Rs. 0.19 by

BSNL on RCOM for accessing CellOne subscribers. The Cellular Operators have already obtained a relief

with respect to transit charges from TDSAT by an order earlier. The matter is pending in the Supreme Court

of India. The only issue pending relates to refund for the period from the order to the date of implementation

of agreement for direct connectivity.

Cases before TDSAT

• RCOM has filed a reconciliation petition against BSNL in TDSAT for compliance with the provisions of

the Interconnect Agreement regarding reconciliation of bills. The matter is pending.

• There are two limitation petitions filed by RCOM against BSNL and MTNL in TDSAT in relation to cases

pending before TDSAT on Home Country Direct services. The cases have been adjourned to a later date

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and the amounts involved in these cases are Rs. 3,190 million and Rs. 3,400 million respectively. Both

BSNL and MTNL have filed transfer petitions before the Supreme Court.

• RCOM has filed a petition against BSNL seeking interim relief against disconnection notices issued by

BSNL's Kerala Unit. The amount involved in this case is Rs. 9.65 million.

• RCOM has filed a petition against allocation of spectrum in excess of the license mandated quantum to

the existing private GSM Operators and seeking to reclaim the excess already allocated and further to stop

issuing any additional spectrum to the existing private GSM Operator.

• RCOM has filed a petition against the Government of India seeking a direction inter alia to direct the

respondent i.e., DOT to amend the UAS licenses in pursuance of in-principle approval dated October 18,

2007, issued to RCOM in respect of six service areas.

• A petition has been filed against BSNL on the issue of quantification of payable amount by each party in

accordance with Supreme Court Judgment in FWP case.

• RCOM has filed a petition against the Government of India and the DOT in relation to license fee and

spectrum charges charged by DOT. RCOM has sought to set aside the letter dated November 5, 2008

issued by the DOT and a direction requiring DOT to recalculate the license fee and spectrum charges in

consonance with the definition of AGR determined by TDSAT in its order dated August 30, 2007.

Reliance Infrastructure Limited (RInfra)

Cases filed against RInfra

Tax related Cases

• SLP (C) – 14829 of 2007 – Sales Tax Officer (WC & LT) & others Vs. RInfra - The Sales Tax Officer,

Pallakad has filed a special leave petition before the Supreme Court of India against RInfra alleging that

RInfra is liable to pay entry tax and penalty of Rs.850 million plus interest as demanded by the Sales Tax

Officer vide their notice dated November 15, 2006. The Petitioner has challenged the Judgment of Kerala

High Court, where by RInfra’s petition had been allowed and the notices issued by the Petitioners had been

set aside. The case is still pending before the Court.

Civil Cases

• There are 181 cases filed against RInfra alleging in the various Civil Courts and High Courts. These

cases are having financial implications as they pertain to challenging the bills/ excess bill/ supplementary

bill/ final assessment order issued by RInfra on the grounds of tampering, stopped meter, unauthorised

extension of load, theft and involve an amount of Rs. 484 million.

• There are 91 cases filed against RInfra in various Consumer, Civil Courts and High Court in relation to

Consumer Disputes wherein the financial implication is either nil or negligible.

• There are five cases filed against RInfra in Small Causes Courts praying for removal of sub- station and/

or other reliefs.

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Investor Related Disputes

• There are some investor related disputes in which RInfra is involved out of which, 20 cases relate to loss

of share certificates transferred to third parties and which were dematerialised. 31 cases relate to loss of

share certificates transferred to third parties and which were not dematerialised. It has been claimed in this

dispute that the shares are required to be recovered/ or the claimant be compensated for settlement as the

shares have been transferred out. If the matters are decided against RInfra, it may have result into a

financial liability on RInfra to the extent of such compensation.

• There are some investor related disputes in which RInfra has been made a party, but these cases would

not result into a financial liability on REL. Out of these, 16 cases have already been resolved and are

awaiting withdrawal/dismissal orders. 15 cases relate to disputes between brokers, buyers, sellers and

requirement of succession certificates. There are also certain cases which do not have an immediate impact

on RInfra. Of these, 19 cases relate to loss/ non- receipt of share certificates sent for transfer and the shares

stand in the name of the plaintiff. The cases are pending at various levels of adjudications.

• 39 cases have been filed after the demerger of RInfra, where parties have claimed that they have lost

shares pursuant to the demerger. These cases relate to 1393 shares in total. RInfra has not been made a

party in all of these cases. These cases relate to ownership of shares and shares to be allotted subsequent

to the demerger and merger.

Criminal Contempt Cases

• Misc Criminal Complaint (ULP) No. 49/2007 - Sanjay Gujar v/s REL & Others - Mr. Sanjay Gujar has

filed a criminal contempt case in the Labour Court, Mumbai against RInfra alleging that RInfra has not paid

the back wages, as directed by the order of the Bombay High Court dated November 13, 2006 in Writ

Petition No. 4554/2006. RInfra’s contention is that they have already made the payment of back wages as

per the directions of the High Court. This case involves an amount of Rs. 0.25 million.

Labour Cases

• There are 35 cases against RInfra in the various labour/industrial courts in Mumbai and the Bombay

High Court. These cases involve different issues like implementing the clause regarding employment of kin

of deceased employees, discussing issues of the employees with other unions, restraining RInfra from

terminating services of the applicant or implementing the order of transfer, challenging an enquiry filed

against an employee, allegation of RInfra engaging in unfair labour practices, for reinstatement and back

wages and claiming contribution with respect to contract workers. These cases involve an aggregate amount

of Rs. 354.7 million.

Regulatory Matters

• C.A. No. 4161 of 2008 – Tata Power V/s RInfra - Tata Power Company Limited (TPCL) has filed a

petition before the Maharashtra Electricity Regulatory Commission (MERC) in March 2002 claiming Rs.

1,250 million from RInfra towards “Take or Pay and Additional Energy Charges” pursuant to an agreement

dated January 31, 1998. The appeals are currently pending in Supreme Court.

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• TPCL has filed a civil appeal before the Supreme Court of India against RInfra alleging that RInfra had

offered certain rebate with effect from 1998 to retain high value consumers and prevent their migration to

TPCL. MERC by its order dated February 20, 2004, disallowed such rebate and treated this rebate of Rs.

3,500 million as a notional income while computing the aggregate revenue requirement for the period 1998

to 2004. RInfra has challenged the said order by filing an appeal before the Appellate Tribunal for Electricity

(ATE). The said appeal was allowed by ATE and the order of MERC was set aside. TPCL has challenged

the judgment by filing a second appeal before the Supreme Court of India bearing C.A. 3101 of 2006 and

the said appeal is pending.

• TPCL has filed a civil appeal bearing C.A. 415/2007 before the Supreme Court of India against RInfra

claiming that RInfra should pay the standby charges to them at the same rate per KVA as TPCL pays to

MSEB. RInfra has contended that the part of standby charges payable by TPCL to MSEB is recovered

through tariff and hence they are not liable to pay at the same rate as TPCL pays to MSEB. RInfra has

received Rs. 2,270 million from TPCL pending disposal of the appeal, as directed by the Supreme Court of

India.

• ATE Appeal No. 163 of 2009– Trent Limited ATE Appeal No. 164 of 2009– Hard Castle Rest, ATE

Appeal No. 165 of 2009– Spencers Retail Limited, ATE Appeal No. 172 of 2009 - Consumers have

challenged the tariff orders passed by MERC In case No. 121/2008 classifying them in LT2 Commercial

Category.

• C.A. No. 4128 of 2007 - Bombay Small Scale Industries Association has challenged ATE Judgment

which allowed certain expenditure for FY 2006-2007 to RInfra.. The said appeal is pending.before Supreme

Court.

• C.A. 1985 of 2009 Padmakar Balkrishna Samant v. MERC & Ors. And (2) C.A. 2116 of 2009 Padmakar

Balkrishna Samant v. MERC & Ors - Mr. P B Samant and others have challenged before ATE that RInfra

accounting reports for FY-06-07 and FY 07-08 are not in line with the Regulations framed by MERC. ATE

dismissed both the Appeals. Mr. P B Samant and others have now filed two Appeals before the Hon’ble

Supreme Court and the same is pending..

• ATE Appeal No. 170 of 2009 & Appeal No. 110 of 2009 - Association of Hospitals Vs. MERC & others

has challenged the MERC Tariff Orders for FY 2009-10 & FY. 2008 -2009 before ATE. The appeal is

pending.

• ATE Appeal No. 144 of 2009 – MIAL Vs. MERC & IA No. 260 of 2009 - MIAL has filed an appeal for

classifying them under HT-Commercial. The appeal in pending before ATE.

Arbitration Proceedings

• ARBP No.7 (GCW) of 2005 - Mukund Engineering V/s Reliance Energy Limited (GCW) – The arbitration

relates to the contract for supply of construction material and construction and erction of civil works for 24

MW power plant for M/S GSML at Sameerwadi, Karnataka by BSES to Mukund Engg. The claimant has

demanded inter alia compensation and damages for Escalation and delay. REL has filed counter claim for

LD and on other heads. The case involves an approximate amount of Rs. 3.5 crores claim.

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• ARBP No.8 (RWR) of 2005 - Mukund Engineering V/s Reliance Energy Limited (RWR) - The arbitration

relates to the contract for construction of raw water reservoir for 24 MW power plants for M/S GSML at

Sameerwadi, Karnataka by BSES to Mukund Engg. The claimant has demanded inter alia compensation

and damages for Escalation and delay. REL has filed counter claim for LD and on other heads. The case

involves an approximate amount of Rs. 2.2 crores claim.

• Fenner India Limited V/s BSES Limited - M/s Godavari Sugar Mills Limited (GSML), the company

awarded a turnkey EPC contract for the execution of 24 MW Bagasse fired captive project to REL. REL

entered into three separate contract with Fenner (India) Limited, and one separate contract BMF Beltings

Limited. Dispute arose regarding default or negligence on the Part of the Claimants. The Dispute is now

before the Arbitrator. The case involves an approximate amount of Rs. 4.73 crores claim.

• M/s Rapti contractors V/s Reliance Energy Limited & Ors - The matter relates to the contract for

errection of sub station for BSES to the petitioner. The same was to be executed within 80 days. However

the contractor took approx. 2 years to complete.hence the dispute arose and Delhi High Court referred the

same for arbitration - The case involves an approximate amount of Rs. 1.42 crores claim.

• Maytas V/s Reliance Energy Limited & Ors.- Maytas, a construction contractor, appointed for

construction of Salem Ulunderapet Phase-II, was not able to make sufficient progress of work due to the

adverse effect of "Satyam-Maytas" Episode. As such, after giving, sufficient opportunities and notice we

firstly encashed the Mobilisation Advance Granted to them. Maytas approached the High court to restrain us

from encashing the Performance Bank Guarantee which was opposed by RInfra. The court, in view of

established principles regarding invocation of Irrevocable Performance Bank Guarantee, passed an order in

our favour. The matter is now before the arbitrators. The case involves an approximate amount of Rs. 133.

72 crores claim.

Cases filed by RInfra

Labour Cases

• There are seven cases filed by RInfra are pending before various Labour/Industrial/ High Court. The

cases have been filed on the following grounds:

• Breach of order of the Industrial Disputes Court restraining BEW Union, its office bearers/members and

employees of the company from carrying out any labour agitations or any other demonstration within 100

meters radius form the company’s premises. Restraint BEW Union to hold dharanas and agitation at all the

company’s offices in Mumbai and also at Bhaidas Auditorium where RInfra organizes its AGM. Complaint

(MRTU & PULP) No. 610 of 2001 before Industrial Court (Justice MULYE) – R Infra v/s BEW Union - Cross

examination of Company's witness.

• Appeal application (IC) No. 40 of 2007 - REL v. Ramesh Bhoir. The Complainant Mr. Ramesh Bhoir has

filed a case against the Company for reinstatement and back wages in (BIR) Appln No. 81 of 2004. The

Labour Court directed the Company to reinstate Mr. Bhoire. The Company therefore filed appeal against the

order dated 10.01.2007 and the appeal is now pending before the Industrial Court.

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• Suit No. 2111 of 2000 - REL v. BEW Union— The Company received a letter on 06.05.2000 from an

unknown body calling itself as The Bombay Electrical Workers Committee. On perusal of the letter it

appeared that this committee has been created for and at the behest of BEW Union. The Committee put

posters at all the establishments of the Company on 07.05.2000 demanding various demands such as

Retrospective wage revision of contract Labour, recruitment of workers children and permanency of contract

Labour etc. The defendants further threatened that unless these demands were immediately acceded to,

the contract workers would proceed on strike on and from 10.05.2000 and regular workers on and from

12.05.2000 which was illegal strike and therefore, the Company filed the said application against the Union

before Mumbai High Court on 09.05.2000.To declare the strike call given on 10.05.2000 and 12.05.2000 to

be ex-facie illegal and granted permanent injunction restraining the dependents together with their action

committee from proceeding on strike.

• Appeal No. 2225 of 1998 - REL V/s. Manuel D'Souza & Others - Air India Project based temporary

workers (11 Nos.): The workmen had initially approached Ind. Court for regularization in REL. The Ind. Court

upheld the case of the workmen & directed the Company to take the workmen as permanent workmen in

Contracts Division. The case is now pending before Hon’ble High Court for final hearing.

• Writ Petition No. – 4694 of 2006 - REL v/s Sanjay Gujar & Others - Voucher based temporary workers

(05 Nos.): The workmen had initially approached Ind. Court for regularization in REL. The Ind. Court upheld

the case of the workmen & directed the Company to take the workmen as permanent workmen w.e.f their

completion. The case is pending before Hon’ble High Court

• Revision Application No. 157 of 2007 - REL & Others v/s Sanjay Gujar - Revision Appln filed by the

Company against the criminal complaint filed by Mr. Sanjay Gujar in Hon'ble Labour Court Mumbai seeking

to go through the legality, validity and propriety thereof, quash and or set aside the impugned summon. The

case is now pending for records and proceedings before Industrial Court.

• Writ Petition No. 4554/2006 - REL v/s Yadayya Giri & Others, The appeal lies before Bombay High

Court against the voucher based temporary workers ( 14 Nos.) where in the workmen had initially

approached Ind. Court for regularization in REL. The Ind. Court upheld the case of the workmen & directed

the Company to take the workmen as permanent workmen w.e.f. their compilation.

• Writ petition No 12388 of 2009 – Reliance Infra V/S Manuel D’Souza & Others. In ULP No 30 /98, the

appeal lies before Bombay High Court against the order of Industrial Court for paying back wages. The

Industrial Court has ordered to pay that the recovery certificate for the amount shown in Annex B to the

application i.e. Rs 93,35,000/- be issued along with 9% interest after adjusting the amount already paid to

the applicant.

Consumer Cases

• Twelve appeals have been filed by RInfra against the decisions of the respective consumers forums

which are pending before the Maharashtra State Consumer Dispute Redressal Commission, Mumbai in the

State Commission. The issues involved in these cases include claiming of refunds, compensation for cost of

damages, deficiency of service, rectification of bills, mental anguish, restoration of connection and

electrocution. The amount involved in these cases is Rs. 0.3 million.

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Arbitration Proceedings

• A dispute is under arbitration between Cipla Limited and RInfra for its Goa Power Project. Cipla Limited

is claiming rebate of Rs. 172.15 million under the Power Supply Agreement. The matter is now pending

before the arbitrator.

Cases under Section 138, Negotiable Instruments Act, 1881

• There is one case filed by the RInfra involving Section 138 of the Negotiable Instruments Act regarding

cheque issued towards billing. The case involves an amount of Rs. 0.17 million.

Regulatory Proceedings

• RInfra’s appeals bearing ATE Appeal No. 147, ATE Appeal 148 of 2009, 149 of 2009 and 150 of 2009 -

RInfra. v. MERC against determination of tariff for Generation, Transmission and Distribution is pending

before ATE

• RInfra’s appeal bearing ATE Appeal No.116/08-- RInfra. Limited v. JSERC, against rejection of our

expression of interest for distribution of electricity at Ranchi is pending before ATE.

• RInfra vs. Spencer and Multiplex - C.A. No. 1602 of 2009 and C. A. 1603 of 2009. Hon’ble Supreme

Court has stayed the operation of ATE judgment till further order in two Appeals filed by RInfra

Writ Petitions

• RInfra has filed a writ petition bearing W .P. No. 7427 of 2007 in the Bombay High Court challenging the

order of the Tehsildar, Dahanu dated September 13, 2007 directing RInfra to pay Rs. 720 million to the

Government of Maharashtra towards unearned income for sale of the Dahanu Thermal Power Station land

by BSES Limited to RInfra. RInfra has contended that there has only been a change of name of the

company from BSES Limited to Reliance Energy Limited and the corporate entity remains the same. The

Hon’ble Bombay High Court has stayed the Tehsildar Order. The writ petition is pending.

• Reliance Infrastructure Limited & Ors. Vs. Maharashtra State Road Development Corporation & Ors -

Writ Petition - WP No. 1542 of 2009 filed by SMS consortium (RInfra) against MSRDC regarding the bidding

for securitization of five Mumbai Entry Points along with maintenance of flyovers. MSRDC disqualified SMS

consortium (RInfra) to participate in second stage of bidding for securitization of five Mumbai Entry Points.

The petition is kept for admission before division Bombay High Court Chief Justice & Justice A M Khanwilkar

Reliance Power Limited (RPower)

Cases filed against RPower Writ Petitions

• Petitioners have filed 44 writ petitions seeking to quash the notification issued for acquisition of land for

Dadri Power Project, Uttar Pradesh. All the petitions have been clubbed with W.P 537/2006 and have been

transferred to the Supreme Court.

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Cases relating to non receipt of refund and/or equity shares

a. Consumer forum

• There are 99 cases pending before various consumer redressal forums in the matter of claiming of

shares and refund order.

b Civil Court

• There are 3 cases pending before Civil Court in the matter of claim for shares and refund order.

c. Criminal Court

• There are 4 criminal cases pending against the Company and its directors in the matter of claim for

refund amount, interest and compensation for refund order.

Reliance Natural Resources Limited (RNRL)

Cases filed against RNRL

• There are 12 cases filed against RNRL where the legal heirs of shareholders have filed these cases

claiming succession certificates. 4724 shares of RNRL are involved.

• There are 25 cases filed against RNRL where the plaintiffs have claimed ownership of 10996 shares

and shares to be allotted subsequent to demerger of companies. RNRL is in the process of replying to the

same.

Cases filed by RNRL

• Pursuant to the scheme of demerger of RIL, the gas based energy undertaking was to be transferred to

RNRL from RIL. A Gas Supply Master Agreement was signedon January 12, 2006 (“GSMA”), purporting to

provide for a fixed amount of gas from the gas fields operated by RIL at US$ 2.34 per mmbtu, which is not

bankable and the effectiveness of which is subjected to certain extraneous conditions. RNRL filed a

company application against Reliance Industries Limited (“RIL”) in the Bombay High Court claiming that the

agreement was not a suitable arrangement under the scheme and rendered the demerger of the Gas Based

Energy Undertaking under the scheme unworkable. RIL claimed that the High Court did not have jurisdiction

and that the scheme was implemented. The court by way of its judgment delivered on October 15, 2007 held

that the GSMA is in breach of the scheme and that it would be appropriate for both parties to renegotiate,

reconsider and settle the terms of the existing GSMA afresh within four months. RIL subsequently filed an

appeal before the High Court, Bombay on December 14, 2007 against the said judgment of the Bombay

High Court. On December 17, 2007, RNRL also filed an appeal before the High Court, Bombay challenging

certain inconsistent observations that crept into the judgment. On January 30, 2009, the Division Bench of

the Bombay High Court disposed of the appeals on June 15, 2009 directing the parties to enter into a

suitable arrangement within one month so that RNRL gets an assured supply of 28 mmscmd gas from RIL’s

Krishna-Godavari (KG) basin at $2.34 per mmbtu for 17 years for its the power plants of the Reliance ADA

Group.

168

Both RNRL and RIL have filed SLPs in the Supreme Court against the Bombay High Court Judgment dated

June 15, 2009 and the same are pending. RIL has filed SLP (Civil) Nos.15063 and 15064 of 2009

challenging the entire Bombay High Court Judgment and RNRL has filed SLP (Civil) No.14997 of 2009 for

directions to RIL to supply gas to RNRL as per the Bombay High Court Judgment. Union of India has also

challenged the Bombay High Court Judgment in SLP (Civil) No.18929 of 2009.

169

GOVERNMENT APPROVALS

Incorporation Details

CIN No. U64 200 MH 2005 PLC 158355

Tax Related Details

PAN No. AADCR1885L

TAN No. MUMR19417G

Service Tax Registration No. AADCR1885LST001

Human Resource Related Details

Provident Fund Registration No. MH/210159

Business Related Approvals

The Company has received approval from MIB vide its letter dated May 29, 2009 giving its no-objection for

transfer and vesting of the Radio Business from RML, to the Company subject to the conditions imposed as

aforesaid. The Company had procured fresh Bank Guarantees and has duly executed GOPAs with the MIB

for all its 45 FM Radio Stations.

170

REGULATORY AND STATUTORY DISCLOSURES

Authority for the Scheme

The Honorable High Court of Judicature at Bombay, by its Order dated April 4, 2009 has approved the

Scheme of Arrangement between RML and erstwhile RUL now RMWL and their respective shareholders

and creditors (the “Scheme”).

Prohibition by SEBI

The Company, its directors, its promoters, other companies promoted by the promoters and companies with

which the Company’s directors are associated as directors have not been prohibited from accessing the

capital markets under any order or direction passed by SEBI.

General Disclaimer from the Company

The Company accepts no responsibility for statements made otherwise than in the Information

Memorandum or in the advertisements to be published in terms of Clause 5 of Part A of the SEBI Circular

No. SEBI/CFD/SCRR/01/2009/03/09 dated Sept 3, 2009 or any other material issued by or at the instance

of the Company and anyone placing reliance on any other source of information would be doing so at his or

her own risk. All information shall be made available by the Company to the public and investors at large

and no selective or additional information would be available for a section of the investors in any manner.

Disclaimer Clause of the BSE

As required, a copy of this Information Memorandum has been submitted to BSE. The BSE has vide its letter

dated November 25, 2008 , approved the said Scheme under Clause 24(f) of the Listing Agreement and by

virtue of that approval the BSE’s name in this Information Memorandum has been incorporated as one of the

Stock Exchanges on which the Company’s securities are proposed to be listed.

The BSE does not in any manner:

• warrant, certify or endorse the correctness or completeness of any of the contents of this Information

Memorandum; or

• warrant that this Company’s securities will be listed or will continue to be listed on the BSE; or

• 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 to mean that this Information Memorandum has

been cleared or approved by the BSE. Every person who desires to apply for or otherwise acquire any

securities of this Company may do so pursuant to independent inquiry, investigation and analysis and shall

not have any claim against the BSE 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.

171

Disclaimer Clause of the NSE

As required, a copy of this Information Memorandum has been submitted to NSE. The NSE has vide its

letter dated December 23, 2008, approved the said Scheme under Clause 24(f) of the Listing Agreement

and by virtue of that approval the NSE’s name in this Information Memorandum has been incorporated as

one of the Stock Exchanges on which the Company’s securities are proposed to be listed.

As required, a copy of the Information Memorandum has been submitted to NSE. It is to be distinctly

understood that it should not in any way be deemed or construed that this Information Memorandum 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 the Information Memorandum; nor does it warrant that our securities

will be listed or will continue to be listed on the NSE; nor does it take any responsibility for the financial or

other soundness of this Company, its promoters, its management or any scheme or project of this Company.

Every Person who desires to acquires any of our securities may do so pursuant to independent inquiry,

investigation and analysis and shall not have any claim against NSE 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 any other reason whatsoever.

Filing

Copies of this Information Memorandum have been filed with BSE and NSE on August 11, 2009.

Listing

Pursuant to Clause 3.1.5 of the Scheme the Company shall make application to BSE and NSE for

permission to deal in and for an official quotation of the Equity Shares of the Company. The Company has

nominated BSE as the Designated Stock Exchange for the aforesaid listing of the shares.

The Company shall ensure that all steps for the completion of necessary formalities for listing and

commencement of trading at all the Stock Exchanges mentioned above.

Demat Credit

The Company has executed Agreements with NSDL and CDSL for admitting its securities in demat form and

has been allotted ISIN INE445K01018. On August 8, 2009 the Company made allotment of the equity

shares and such shares were allotted in demat form to those shareholders who have provided necessary

details to the Company and/or who were holding their shares in RML in demat form, as on the Record Date

i.e. August 7, 2009.

Dispatch of Share Certificates

Upon allotment of shares to eligible shareholders pursuant to the Scheme on August 8, 2009, the Company

dispatched share certificates to those shareholders who were holding shares in RML in physical form, as on

the Record Date i.e. August 7, 2009.

172

Expert Opinions

Save as stated elsewhere in this Information Memorandum, we have not obtained any expert opinions.

Previous rights and public issues

The Company has not made any public or rights issue since incorporation.

Commission and brokerage on previous issues

Since the Company has not issued shares to the public in the past, no sum has been paid or has been

payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for

any of the Equity Shares since its inception.

Promise vis-à-vis performance

This is for the first time the Company is getting listed on the Stock Exchange.

Outstanding debentures or bonds and redeemable preference shares and other instruments issued

by the Issuer Company

There are no outstanding debentures or bonds and redeemable preference shares and other instruments

issued by the Company.

Stock Market Data for Equity shares of the Company

Equity shares of the Company are not listed on any stock exchanges. The Company is seeking approval for

listing of its shares through this Information Memorandum.

Disposal of Investor Grievances

Karvy Computershare Private Limited (Karvy) are the Registrars and Transfer Agents of the Company.

Karvy has set up Investor Relation Centres (IRCs) across the country to accept the

documents/requests/complaints from the investors/shareholders of the Company.

The letters that are accepted at the IRCs are forwarded to the Central Processing Unit of Karvy’s Hyderabad

office. Documents/Letters are also received from the Investors directly at Hyderabad by courier/post.

All documents are received at the inward department, where the same are classified based on the nature of

the queries/actions to be taken and coded accordingly. The documents are then electronically captured

before forwarding to the respective processing units.

The documents are processed by professionally trained personnel. Subsequent to the completion of the

process the documents are scrutinized thoroughly by independent firm(s) of Chartered Accountants

appointed by the company.

173

The company has set up service standards for each of the various processors involved such as affecting the

transfer/dematerialisation of securities/change of address ranging from 3-7 days. Karvy maintains an

agewise analysis of the process to ensure that the standards are duly adhered to.

The Company has appointed Shri Gururaja Rao, Company Secretary as the Compliance Officer and he may

be contacted in case of any problems. He can be contacted at the following address:

Shri Gururaja Rao



Link Road, Oshiwara

Andheri (West)

Mumbai 400 053

Tel No : + 91 22 30689444

Fax No: + 91 22 39888927


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MAIN PROVISIONS OF THE ARTICLE OF ASSOCIATION

The main provisions of the Articles of Association relating to voting rights, restrictions on transfer and

transmission of Equity Shares or debentures are detailed below: Please note that each provision herein

below is numbered as per the corresponding article number in the Articles of Association and defined terms

herein have the meaning given to them in the Articles of Association

TABLE ‘A’ No regulations contained in Table A in the First Schedule to the Companies Act, 1956, shall apply to this

Company, but the regulations for the management of the Company and for the observance of the Members

thereof and their representatives, shall, subject to any exercise of the statutory powers of the Company with

reference to the repeal or alteration of or addition to its regulations by Special Resolution as prescribed by

the said Companies Act, 1956, be such as are contained in these Articles.

SHARE CAPITAL Article 3 provides that

(A) The Authorised Capital of the Company shall be as per Capital Clause of the Memorandum of

Association of the Company with power to increase or reduce the capital of the Company and/or the

nominal value of the shares and to divide the shares in the capital for the time being into several

classes and to attach thereto respectively such preferential, deferred, qualified or special rights,

privileges or conditions with or without voting rights as may be determined by or in accordance with

the Articles of Association of the Company or as may be decided by the Board of Directors or by the

Company in General Meeting , as applicable, in conformity with the provisions of the Act, and to

vary, modify, amalgamate or abrogate any such rights, privileges or conditions and to consolidate

or sub-divide the shares and issue shares of higher or lower denominations.

(B) Subject to the rights of the holders of any other shares entitled by the terms of issue to preferential

repayment over the Equity Shares in the event of winding up of the Company, the holders of the

Equity Shares shall be entitled to be repaid the amounts of capital paid up or credited as paid up on

such Equity Shares and all surplus assets thereafter shall belong to the holders of the Equity Shares

in proportion to the amount paid up or credited as paid up on such Equity Shares respectively at the

commencement of the winding up.

(C) Subject to the provisions of the Act and all other applicable provisions of law, the Company may

issue shares either equity or any other kind with non-voting rights and the resolutions authorising

such issue shall prescribe the terms and conditions of the issue. PREFERENCE SHARES Article 4 provides that (A) Redeemable Preference Shares

The Board shall subject to the provisions of the Act and the consent of the Company have power to

issue on a cumulative or non-cumulative basis Preference Shares liable to be redeemed in any

175

manner permissible under the Act and the Directors may, subject to the provisions of the Act,

exercise such power in any manner as they deem fit and provide for redemption of such Shares on

such terms including the right to redeem at a premium or otherwise as they deem fit.

(B) Convertible Redeemable Preference Shares

The Board shall subject to the provisions of the Act and the consent of the Company have power to

issue on a cumulative or non-cumulative basis Convertible Redeemable Preference Shares liable to

be redeemed in any manner permissible under the Act and the Directors may, subject to the

provisions of the Act, exercise such power in any manner as they deem fit and provide for

redemption at a premium or otherwise and/or conversion of such Shares into such Securities on

such terms as they may deem fit.

PROVISIONS IN CASE OF PREFERENCE SHARES

Article 5 provides that

Upon the issue of Preference Shares pursuant to Article 4 above, the following provisions shall apply:

(A) No such shares shall be redeemed except out of profits of the Company which would otherwise be

available for Dividend or out of the proceeds of a fresh issue of Shares made for the purposes of the

redemption;

(B) No such Shares shall be redeemed unless they are fully paid;

(C) The premium, if any, payable on redemption shall have been provided for out of the profits of the

Company or out of the Company’s Securities Premium Account before the Shares are redeemed;

(D) Where any such Shares are redeemed otherwise than out of the proceeds of a fresh issue, there

shall, out of the profits which would otherwise have been available for Dividend, be transferred to a

reserve fund, to be called “The Capital Redemption Reserve Account” a sum equal to the nominal

amount of the Share redeemed; and the provisions of the Act relating to the reduction of the Share

Capital of the Company shall, except as provided in the Act, apply as if the Capital Redemption

Reserve Account were Paid up Share Capital of the Company;

(E) The redemption of Preference Shares under this Article by the Company shall not be taken as

reduction of Share Capital;

(F) The Capital Redemption Reserve Account may, notwithstanding anything in this Article, be applied

by the Company, in paying up un-issued Shares of the Company to be issued to the Members as

fully paid bonus Shares.

SHARE EQUIVALENT Article 6 provides that

The Company shall subject to the provisions of the Act, compliance with all applicable laws, rules and

regulations, have power to issue Share Equivalents on such terms and in such manner as the Board deems

fit including their conversion, repayment, and redemption whether at a premium or otherwise.

176

ADRs / GDRs Article 7 provides that

The Company shall, subject to the provisions of the Act, compliance with all applicable laws, rules and

regulations, have power to issue ADRs or GDRs on such terms and in such manner as the Board deems fit

including their conversion and repayment. Such terms may include, at the discretion of the Board, limitations

on voting by holders of ADRs or GDRs, including without limitation, exercise of voting rights in accordance

with the directions of the Board or otherwise. ALTERATION OF SHARE CAPITAL Article 8 provides that

(A) The Company may, by Ordinary Resolution in General Meeting from time to time alter the conditions

of its Memorandum as follows, that is to say, it may:

(a) increase its Share Capital by such amount as it thinks fit and expedient by issuing new

Shares of such amount as may be deemed expedient and the new Shares shall be issued

on such terms and conditions and with such rights and privileges annexed thereto, as the

General Meeting resolving upon the creation thereof, shall direct and if no direction be

given, the Board of Directors shall determine, and in particular such Shares maybe issued

with a preferential right to Dividends and in the distribution of the assets of the Company;

(b) consolidate and divide all or any of its Share Capital into Shares of larger amount than its

existing Shares;

(c) convert all or any of its fully Paid up Shares into stock and reconvert that stock into fully

Paid up Shares of any denomination

(d) sub-divide its Shares, or any of them, into Shares of smaller amount than is fixed by the

Memorandum, so however, that in the sub-division the proportion between the amount paid

and the amount, if any, unpaid on each reduced Share shall be the same as it was in the

case of the Share from which the reduced Share is derived;

(e) Cancel Shares which, at the date of the passing of the resolution in that behalf, have not

been taken or agreed to be taken by any person, and diminish the amount of its Share

Capital by the amount of the Shares so cancelled. A cancellation of Shares in pursuance of

this Article shall not be deemed to be a reduction of Share Capital within the meaning of the

Act.

(B) The Board will have power, from time to time, to divide or classify any unclassified shares forming part

of the authorized capital for the time being into several classes and to attach thereto respectively such

equity, preferential, deferred, qualified or special rights, privileges or conditions as may be determined

by or in accordance with the Articles of Association of the Company and to vary, modify, amalgamate

or abrogate any such rights, privileges or conditions in such manner as may be for the time being be

provided in the Articles of Association of the Company.

REDUCTION OF SHARE CAPITAL Article 9 provides that

The Company may (subject to the provisions of Sections 78, 80 and 100 to 105 [both inclusive] of the Act),

from time to time by Special Resolution, reduce its Capital, any Capital Redemption Reserve Account and

177

the Securities Premium Account in any manner for the time being authorised by law, and in particular,

Capital may be paid off on the footing that it may be called up again or otherwise. This Article is not to

derogate any power the Company would have, if it were omitted.

POWER OF COMPANY TO PURCHASE ITS OWN SHARES


Pursuant to a resolution of the Board of Directors, the Company may purchase its own Shares by way of a

buy-back arrangement, in accordance with Section 77A of the Act and the Securities and Exchange Board

of India (Buy-Back of Securities) Regulations, 1998, subject to compliance with all applicable Requirements

of Law.

POWER TO MODIFY RIGHTS


Where, the Capital, by reason of the issue of 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 or abrogated

or dealt with by agreement between the Company and any Person purporting to contract on behalf

of that class, provided the same is affected with the sanction of a Special Resolution passed at a

separate meeting of the holders of the issued Shares of that class and all the provisions hereafter

contained as to General Meetings (including the provisions relating to quorum at such meetings)

shall mutatis mutandis apply to every such meeting.

SHARES AND CERTIFICATES


(A) The Company shall cause to be kept a Register and Index of Members in accordance with

Sections 150 and 151 of the Act and Register and Index of Debentureholders in accordance

with Section 152 of the Act. The Company shall also be entitled to keep in any State or

Country outside India, a foreign register or a branch Register of Members and Debenture

holders in accordance with Section 157 of the Act. The Board may make and vary such

regulations as it may think fit respecting the keeping of any such register(s).

(B) The Shares in the Capital shall be numbered progressively according to their denominations,

provided however, that the provisions relating to progressive numbering shall not apply to

the Shares of the Company which are dematerialized or may be dematerialized in future or

issued in future in a dematerialized form. Except in the manner hereinbefore mentioned, no

Share shall be sub-divided. Every forfeited or surrendered Share held in material form shall

continue to bear the number by which the same was originally distinguished.

(C) The Company shall be entitled to dematerialize its existing Shares, rematerialize its Shares

held in the Depository and/or to offer its fresh Shares in a dematerialized form pursuant to

the Depositories Act, 1996, and the rules framed thereunder, if any.

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FURTHER ISSUE OF SHARES


(A) The Share Capital of the Company shall be in accordance with requirements of Law, as in

force from time to time.

Where at any time after the expiry of two years from the formation of the Company or at any

time after the expiry of one year from the allotment of shares in the Company made for the

first time after its formation, whichever is earlier, it is proposed to increase the subscribed

capital of the Company by the allotment of further shares then:

(a) Such further shares shall be offered to the person who, at the date of the offer, are

holders of the equity shares of the Company, in proportion, as nearly as circumstances

admit, to the capital paid-up on those shares at that date;

(b) The offer aforesaid shall be made by a notice specifying the number of shares offered

and limiting a time not being less than fifteen days from the date of the offer within which

the offer, if not accepted, will be deemed to have been declined;

(c) The offer aforesaid shall be deemed to include a right exercisable by the person

concerned to renounce the shares offered to him or any of them in favour of any other

person and the notice referred to in sub-clause (b) shall contain a statement of this right;

(d) After the expiry of the time specified in the notice aforesaid, or on receipt of earlier

intimation from the person to whom such notice is given that he declines to accept the

shares offered, the Board of Directors may dispose of them in such manner as they

think most beneficial to the Company.

Notwithstanding anything contained above, the further shares aforesaid may be offered

to any persons (whether or not those persons include the persons referred to above in

any manner whatsoever

(i) If a special resolution to that effect is passed by the Company in general

meeting, or;

(ii) Where no such resolution is passed, if the votes cast (whether on a show of

hands or poll as the case may be) in favour of the proposal contained in the

resolution moved in that general meeting (including the casting vote, if any, of

the Chairman) by members who, being entitled so to do, vote in person, or

where proxies are allowed, by proxy, exceed the votes, if any, cast against the

proposal by members, so entitled and voting and the Central Government is

satisfied, on an application made by the Board of Directors in this behalf, that

the proposal is most beneficial to the Company.

Nothing in sub-clause (c) hereof shall be deemed:

(i) To extend the time within which offer should be accepted; or

179

(ii) To authorize any person to exercise the right of renunciation for a second time,

on the ground that the person in whose favour the renunciation was first made

has declined to take the shares comprised in the renunciation.

Nothing in this Article shall apply to the increase of the subscribed capital of the

Company caused by the exercise of an option attached to the debentures issued or

loans raised by the Company:

(i) To convert such debentures or loans into shares in the Company; or

(ii) To subscribe for shares in the Company;

Provided that the terms of issue of such debentures or terms of such loans include a

term providing for such options and such term:

(i) Either has been approved by the Central Government before the issue of

debentures or the raising of the loans or is in conformity with Rules, if any,

made by that Government in this behalf; and

(ii) In the case of debentures or loans or other than debentures issued to, or loans

obtained from the Government or any institution specified by the Central

Government in this behalf, has been approved by the special resolution passed

by the Company in General Meeting before the issue of the debentures or the

raising of the loans.

(B) Any increase in the Subscribed Capital of the Company by allotment of further Shares,

whether out of un-issued Share Capital or out of increased Share Capital or otherwise, shall

be effected in accordance with the applicable requirements of Law.

(C) Any acquisition of Shares or other Securities of the Company by the persons, who can

acquire Securities of a company incorporated in India, shall be in compliance with any

applicable laws, regulations or guidelines or any requirements of Law.

SHARES AT THE DISPOSAL OF THE DIRECTORS


(A) Subject to the provisions of Section 81 of the Act, if applicable, and these Articles, the

Shares in the Capital of the Company for the time being (including any Shares forming part

of any increased Capital of the Company) shall be under the control of the Board who may

issue, allot or otherwise dispose of the same or any of them to such Persons, in such

proportion and on such terms and conditions and either at a premium or at par or at a

discount (subject to compliance with the provisions of Section 78 and 79 of the Act) at such

time as they may from time to time think fit and with the sanction of the Members to give to

any Person or Persons the option or right to apply for any Shares either at par or premium

or at a discount during such time and for such consideration as the Directors think fit, and

may issue and allot Shares in the Capital of the Company on payment in full or part of any

property sold and transferred or for any services rendered to the Company in the conduct of

180

its business and any Shares which may so be allotted may be issued as fully paid up

Shares and if so issued, shall be deemed to be fully paid Shares, provided however,

notwithstanding the foregoing, the option or right to call on Shares shall not be given to any

Person or Persons without the sanction of the Company in the General Meeting.

(B) In addition to and without derogating from powers for that purpose conferred on the Board

under these Articles, the Members may, subject to the provisions of Section 81 of the Act,

determine that any Shares (whether forming part of the original capital or of any increased

Capital of the Company), shall be offered to such Persons, (whether Members or holders of

Debentures or any other Securities or not), in such proportion and on such terms and

conditions and either (subject to compliance with the provisions of Sections 78 and 79 of the

Act) at a premium or at par or at a discount, as the Members shall determine and with full

power to give any person, (whether a Member or holders of Debentures or any other

Securities or not), the option to call for or be allotted Shares of any class of the Company,

either (subject to compliance with the provisions of Sections 78 and 79 of the Act), at a

premium or at par or at a discount, such option being exercisable at such time and for such

consideration as may be directed by the Members or the Members make any other provision

whatsoever for the issue, allotment or disposal of any Shares.

(C) Any application signed by or on behalf of an applicant for Shares in the Company, followed

by an allotment of any Shares 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 on the Register of Members shall for the purposes of these Articles be a Member.

(D) The money, (if any), which the Board 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 insertion of the name of the allottee, 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 allottee thereof, and shall be paid by him accordingly.

(E) Every Member, or his heirs, Executors, or Administrators shall pay to the Company, the

portion of the Capital represented by his Share or Shares which may for the time being

remain unpaid thereon in such amounts at such time or times and in such manner as the

Board shall from time to time in accordance with the Articles require or fix for the payment

thereof.

(F) If any Share stands in the names of two or more Members, the Member first named in the

Register of Members shall as regards receipt of Dividends or bonus, or service of notices

and all or any other matters connected with the Company except voting at Meetings and the

transfer of Shares, be deemed the sole holder thereof, but the joint holders of a Share shall

be severally as well as jointly liable for the payment of all installments and calls due in

respect of such Shares, and for all incidents thereof according to these Articles.

(G) Except as ordered by a Court of competent jurisdiction or as by law required, the Company

shall be entitled to treat the Member 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 be bound

to recognise any benami, trust or equity or equitable, contingent or other claim to or interest

in such Share on the part of any other Person whether or not he shall have express or

implied notice thereof. The Board shall be entitled at their sole discretion to register any

Shares in the joint names of any two or more Persons or the survivor or survivors of them.

181

ISSUE OF SHARE CERTIFICATES


(A) The issue of certificates of shares or of duplicate or renewal of certificates of shares shall be

governed by the provisions of Section 84 and other provisions of the Act, as may be

applicable and by the Rules or notifications or orders, if any, which may be prescribed or

made by competent authority under the Act or Rules or any other law. The Directors may

also comply with the provisions of such rules or regulations of any stock exchange where the

shares of the Company may be listed for the time being. The certificate of title to shares shall

be issued under the Seal of the Company and shall be signed by such Directors

Provided that, notwithstanding what is stated above, the Directors shall comply with such

rules or regulations or requirements of any stock exchange or the rules made under the Act

or the rules made under the Securities Contracts (Regulation) Act, 1956 or any other act or

rules applicable in this behalf.

(B) Every member shall be entitled, without payment to one or more certificates in marketable

lots, for all the shares of each class or denomination registered in his name, or if the

directors so approve (upon paying such fees as the Directors so time determine) to several

certificates, each for one or more of such shares and the company shall complete and have

ready for delivery such certificates within three months from the date of allotment, unless the

conditions of issue thereof otherwise provide, or within two months of the receipt of

application of registration of transfer, transmission, sub-division, consolidation or renewal of

any of its shares as the case may be. Every certificates of shares shall be under the seal of

the Company and shall specify the number and distinctive numbers of shares in respect of

which it is issued and amount paid-up thereon and shall be in such form as the directors may

prescribe and approve, provided that in respect of a share or shares more than one

certificate and delivery of a certificate of shares to one or several joint holders shall be

sufficient delivery to all such holder.

(C) If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the

back thereof for endorsement of transfer, then upon production and surrender thereof to the

Company, a new certificate may be issued in lieu thereof, and if any certificate lost or

destroyed then upon proof thereof to the satisfaction of the Company and on execution of

such indemnity as the Company deem adequate, being given, a new certificate in lieu

thereof shall be given to the party entitled to such lost or destroyed certificate. Every

certificate under the article shall be issued without payment of fees if the Directors so decide,

or on payment of such fees (not exceeding Rs. 2/- for each certificate) as the Directors shall

prescribe. Provided that no fee shall be charged for issue of new certificates in replacement

of those which are old, defaced or worn out or where there is no further space on the back

thereof for endorsement of transfer.

Provided that notwithstanding what is stated above the Directors shall comply with such

rules or regulation or requirement of any Stock Exchange or the rules made under the Act or

rules made under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules

applicable thereof in this behalf.

(D) The provisions of this Article shall mutatis mutandis apply to Debentures and other

Securities of the Company.

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CALLS


(A) Subject to the provisions of Section 91 of the Act, the Board may, from time to time, subject

to the terms on which any Shares may have been issued and subject to the conditions of

allotment, by a resolution passed at a meeting of the Board, (and not by circular resolution),

make such call as it thinks fit upon the Members in respect of all moneys unpaid on the

Shares held by them respectively and each Member shall pay the amount of every call so

made on him to the Person or Persons and at the times and places appointed by the Board.

A call may be made payable by installments.

(B) Advance notice in writing of every call (otherwise than on allotment) shall be given by the

Company specifying the time and place of payment and if payable to any Person other than

the Company, the name of the person to whom the call shall be paid, provided that before

the time for payment of such call the Board may by notice in writing to the Members revoke

the same.

(C) A call shall be deemed to have been made at the time when the resolution of the Board

authorizing such call was passed and may be made payable by the Members whose names

appear on the Register of Members on such date or at the discretion of the Board on such

subsequent date as shall be fixed by the Board.

(D) A call may be revoked or postponed at the discretion of the Board.

(E) The joint holder of a Share shall be jointly and severally liable to pay all installments and

calls due in respect thereof.

(F) The Board may, from time to time at its discretion, extend the time fixed for the payment of

any call and may extend such time as to all or any of the Members, but no Members shall be

entitled to such extension save as a matter of grace and favour.

(G) If any Member or allottee fails to pay the whole or any part of any call or installment, due

from him on the day appointed for payment thereof, or any such extension thereof as

aforesaid, he shall be liable to pay interest on the same from the day appointed for the

payment thereof to the time of actual payment at such rate as shall from time to time be fixed

by the Board.

(H) Any sum, which by the terms of issue of a Share or otherwise, becomes payable on

allotment or at any fixed date or by installments at a fixed time whether on account of the

nominal value of the Share or by way of premium shall for the purposes of these Articles be

deemed to be a call duly made and payable on the date on which by the terms of issue or

otherwise the same became payable, and in case of non-payment, all the relevant provisions

of these Articles as to payment of call, interest, expenses, forfeiture or otherwise shall apply

as if such sum became payable by virtue of a call duly made and notified.

(I) On the trial or hearing of any action or suit brought by the Company against any Member or

his Legal Representatives for the recovery of any money claimed to be due to the Company

in respect of his Shares, it shall be sufficient to prove that the name of the Member in

respect of whose Shares the money is sought to be recovered appears entered on the

Register of Members as the holder, or one of the holders at or subsequently to the date at

which the money sought to be recovered is alleged to have become due on the Shares in

respect of which such money is sought to be recovered; that the resolution making the call is

duly recorded in the minute book; and that notice of such call was duly given to the Member

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or his representatives so sued in pursuance of these Articles; and it shall not be necessary

to prove the appointment of the Directors who made such call nor that a quorum of Directors

was present at the Board at which any call was made, nor that the meeting at which any call

was made was duly convened or constituted nor any other matters whatsoever; but the proof

of the matters aforesaid shall be conclusive evidence of the debt.

(J) Neither a judgment or decree in favour of the Company for calls, nor 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, nor any

indulgence granted by the Company in respect of the payment of any such money shall

preclude the Company from thereafter proceeding to enforce a forfeiture of such Shares as

hereinafter provided.

(K) The Board may, if it thinks fit (subject to the provisions of Section 92 of the Act) agree to and

receive from any Member willing to advance the same, the whole or any part of the amounts

due upon the Shares held by him beyond the sums actually called up, and upon the amount

so paid or satisfied in advance or upon so much thereof as from time to time and at any time

thereafter as exceeds the amount of the calls then made upon and due in respect of the

Shares in respect of which such advance has been made, the Board may pay interest , as

the Member paying such sum in advance and the Board agree upon. The Board may agree

to repay at any time any amount so advanced or may at any time repay the same upon

giving to the Member three (3) months notice in writing. Provided that the money paid in

advance of calls on any Shares may carry interest but shall not in respect thereof confer a

right to participate in profits or dividend. The Directors may at any time repay the amount so

advanced.

(L) No Member paying any such sum in advance shall be entitled to voting rights in respect of

the moneys so paid by him until the same become presently payable.

(M) The above provisions of these Articles shall mutatis mutandis apply to the calls on

Debentures of the Company.

(N) The option or right to call of shares shall not be given to any person except with the sanction

of the company in general meeting.

COMPANY’S LIEN ON SHARES


(A) The Company shall have a first and paramount lien upon all the Shares/Debentures (other

than fully paid-up Shares/Debentures) 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/Debentures and no equitable interest in any Share shall be created except upon the

condition that this Article will have full effect, and such lien shall extend to all Dividends and

bonuses from time to time declared in respect of such Shares and interest in respect of

Debentures. Unless otherwise agreed, the registration of a transfer of Shares/Debentures

shall operate as a waiver of the Company’s lien, if any, on such Shares/Debentures. The

Directors may at any time declare any Shares/Debentures wholly or in part to be exempt

from the provisions of this Article.

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(B) For the purpose of enforcing such lien the Board may sell the Shares subject thereto in such

manner as they shall think fit, and for that purpose may cause to be issued a duplicate

certificate in respect of such Shares and may authorise one of their number to execute a

transfer thereof on behalf of and in the name of such Member. No sale shall be made until

such period as aforesaid shall have elapsed and until notice in writing of the intention to sell

shall have been served on such Member or his Legal Representative, and default shall have

been made by him or them in payment, fulfillment, or discharge of such debts, liabilities or

engagements for fourteen days after such notice.

(C) The net proceeds of any such sale shall be received by the Company and applied in or

towards payment of such part of the amount in respect of which the lien exists as is

presently payable and the residue if any shall (subject to a like lien for sums not presently

payable as existed upon the Shares before the sale) be paid to the Person entitled to the

Shares at the date of the sale.

FORFEITURE OF SHARES


(A) If any Member fails to pay any call or installment or any part thereof or any money due in

respect of any Shares either by way of principal or interest on or before the day appointed

for the payment of the same or any such extension thereof as aforesaid, the Board may, at

any time thereafter, during such time as the call or installment or any part thereof or other

moneys remain unpaid or a judgment or decree in respect thereof remain unsatisfied, give

notice to him or his Legal Representatives 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.

(B) The notice shall name a day, (not being less than fourteen days from the date of the notice),

and a place or places on or before which such call or installment or such part or other

moneys as aforesaid and interest thereon, (at such rate as the Board shall determine and

payable from the date on which such call or installment ought to have been paid), and

expenses as aforesaid are to be paid. The notice shall also state that in the event of non-

payment at or before the time and at the place appointed, the Shares in respect of which the

call was made or installment is payable, will be liable to be forfeited.

(C) If the requirements of any such notice as aforesaid shall not be complied with, any Share in

respect of which such notice has been given, may at any time thereafter before payment of

all calls, installments, other moneys due in respect thereof, interest and expenses as

aforesaid, be forfeited by a Resolution of the Board to that effect. Such forfeiture shall

include all Dividends declared or any other moneys payable in respect of the forfeited Share

and not actually paid before the forfeiture.

(D) 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 or if any of his Legal

Representatives or to any of the Persons entitled to the Shares by transmission, 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.

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(E) Any Share so forfeited shall be deemed to be the property of the Company and may be

sold, re-allotted, or otherwise disposed of either to the original holder thereof or to any other

Person upon such terms and in such manner as the Board shall think fit.

(F) Any Member whose shares have been forfeited shall, not withstanding the forfeiture, be

liable to pay and shall forthwith pay to the Company on demand all calls, amounts,

installments, interest and expenses and other moneys 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 as the Board may determine and the Board may

enforce, (if it thinks fit), payment thereof as if it were a new call made at the date of forfeiture.

(G) The forfeiture of a Share shall involve extinction at the time of the forfeiture of all interest in

all claims and demands against the Company, in respect of the Share and all other rights

incidental to the Share, except only such of these rights as by these Articles are expressly

saved.

(H) A declaration in writing that the declarant is a Director or Secretary of the Company and that

a Share in the Company has been duly forfeited in accordance with these Articles on a date

stated in the declaration, shall be conclusive evidence of the facts therein stated as against

all Persons claiming to be entitled to the Shares.

(I) Upon any sale after forfeiture or for enforcing a lien in purported exercise of the powers

hereinbefore given, the Board may appoint some Person to execute an instrument of

transfer of the Shares sold and cause the purchaser’s name to be entered in the Register of

Members in respect of the Shares sold and the purchaser shall not be bound to see to the

regularity of the proceedings, or to the application of the purchase money, and after his

name has been entered in the Register of Members in respect of such Shares, the validity of

the sale shall not be impeached by any person and the remedy of any person aggrieved by

the sale shall be in damages only and against the Company exclusively.

(J) Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles,

the certificate or certificates originally issued in respect of the related 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

Board shall be entitled to issue a new certificate or certificates in respect of the said Shares

to the person or persons entitled thereto.

(K) The Board may at any time before any Share so forfeited shall have been sold, re-allotted or

otherwise disposed of, annul the forfeiture thereof upon such conditions as it thinks fit.

TRANSFER AND TRANSMISSION OF SHARES


(A) The Company shall keep a “Register of Transfers” and shall have recorded therein fairly and

distinctly particulars of every transfer or transmission of any Share, Debenture or other

Security held in a material form.

(B) Every instrument of transfer of Shares shall be in writing in the usual common form or in

such form as may be prescribed under Section 108 of the Act and shall be delivered to the

Company within such time as may be prescribed under the Act.

(C) (a) An application for the registration of a transfer of the Shares in the Company may be

made either by the transferor or the transferee.

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(b) Where the application is made by the transferor and relates to partly paid Shares, the

transfer shall not be registered unless the Company gives notice of the application to

the transferee and the transferee makes no objection to the transfer within two weeks

from the receipt of the notice.

(D) Every such instrument of transfer shall be executed both by the transferor and the transferee

and attested and the transferor shall be deemed to remain the holder of such Share until the

name of the transferee shall have been entered in the Register of Members in respect

thereof.

(E) The Board shall have power on giving not less than seven days previous notice by

advertisement in a newspaper circulating in the city, town or village in which the Office of the

Company is situated to close the transfer books, the Register of Members and/or Register of

Debenture-holders at such time or times and for such period or periods, not exceeding thirty

days at a time and not exceeding in the aggregate forty-five days (45) in each year, as it may

deem expedient.

(F) Subject to the provisions of Sections 111 and 111A of the Act, or any statutory modification

of the said provisions for the time being in force and any other Requirements of Law, the

Board may, at its own absolute and uncontrolled discretion and without assigning any

reason, decline to register or acknowledge any transfer of Shares and in particular may so

decline in any case in which:

(a) the proposed transferee is a Person who is not permitted by any applicable law,

regulation or guideline or any Requirements of Law, to acquire securities of the

Company or

(b) if the Company has a lien upon the Shares or any of them or

(c) whilst any moneys in respect of the Shares desired to be transferred or any of them

has remained unpaid or not or unless the transferee is approved by the Board and

such refusal shall not be affected by the fact that the proposed transferee is already a

Member. But in such cases it shall, within one (1) month from the date on which the

instrument of transfer was lodged with the Company send to the transferee and the

transferor notice of refusal to register such transfer. The registration of a transfer shall

be conclusive evidence of the approval of the Board of the transferee.

Provided that registration of a transfer shall not be refused on the ground of the transferor

being either alone or jointly with any other Person or Persons indebted to the Company on

any account whatsoever except where the Company has a lien on Shares.

(G) Subject to the provisions of the Act and these Articles, the Directors shall have the absolute

and uncontrolled discretion to refuse to register a Person entitled by transmission to any

Shares or his nominee as if he were the transferee named in any ordinary transfer presented

for registration, and shall not be bound to give any reason for such refusal and in particular

may also decline in respect of Shares upon which the Company has a lien.

(H) Transfer of Shares in whatever lot should not be refused, though there would be no

objection to the Company refusing to split a share certificate into several scrips of any small

denominations or to consider a proposal for transfer of Shares comprised in a share

certificate to several Members, involving such splitting, if on the face of it such

splitting/transfer appears to be unreasonable or without a genuine need. The Company

should not, therefore, refuse transfer of Shares in violation of the stock exchange listing

requirements on the ground that the number of Shares to be transferred is less than any

specified number.

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(I) In the case of the death of any one or more of the Members named in the Register of

Members as the joint-holders of any Share, the survivors shall be the only Member or

Members recognized by the Company as having any title to or interest in such Share, but

nothing herein contained shall be taken to release the estate of a deceased joint-holder from

any liability on Shares held by him jointly with any other Person.

(J) The Executors or Administrators or holder of the Succession Certificate or the Legal

Representatives of a deceased Member, (not being one of two or more joint-holders), shall

be the only Members recognized by the Company as having any title to the Shares

registered in the name of such Member, and the Company shall not be bound to recognize

such Executors or Administrators or holders of Succession Certificate or the Legal

Representatives unless such Executors or Administrators or Legal Representatives shall

have first obtained Probate or Letters of Administration or Succession Certificate, as the

case may be, from a duly constituted court in the Union of India, provided that the Board

may in its absolute discretion dispense with production of Probate or Letters of

Administration or Succession Certificate, upon such terms as to indemnity or otherwise as

the Board may in its absolute discretion deem fit and may under these Articles register the

name of any Person who claims to be absolutely entitled to the Shares standing in the name

of a deceased Member, as a Member.

(K) The Board shall not knowingly issue or register a transfer of any share to a minor or

insolvent or Person of unsound mind.

(L) A Person becoming entitled to a Share by reason of the death or insolvency of a Member

shall be entitled to the same Dividends and other advantages to which he would be entitled if

he were the registered holder of the Shares, except that he shall not, before being registered

as a Member in respect of the Shares, be entitled to exercise any right conferred by

membership in relation to meetings of the Company; PROVIDED THAT the Directors shall,

at any time, give notice requiring any such person to elect either to be registered himself or

to transfer the shares, and if the notice is not complied with within ninety days, the Directors

may thereafter withhold payment of all Dividends, bonuses or other moneys payable in

respect of the Shares until the requirements of the notice have been complied with.

(M) Every instrument of transfer shall be presented to the Company duly stamped for registration

accompanied by such evidence as the Board may require to prove the title of the transferor,

his right to transfer the Shares and every registered instrument of transfer shall remain in the

custody of the Company until destroyed by order of the Board.

(N) In case of transfer and 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 any electronic and fungible form in a Depository, the provisions of the Depositories

Act, 1996 shall apply.

(O) Before the registration of a transfer, the certificate or certificates of the Share or Shares to

be transferred must be delivered to the Company along with (save as provided in Section

108 of the Act) a properly stamped and executed instrument of transfer.

(P) No fee shall be payable to the Company, in respect of the transfer or transmission of Shares,

or for registration of any power of attorney, probate, letters of administration and succession

certificate, certificate of death or marriage or other similar documents.

(Q) The Company shall incur no liability or responsibility whatsoever in consequence of its

registering or giving effect to any transfer of Shares made or purporting to be made by any

apparent legal owner thereof, (as shown or appearing in the Register of Members), to the

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prejudice of a Person or Persons having or claiming any equitable right, title or interest to or

in the said Shares, notwithstanding that the Company may have had any notice of such

equitable right, title or interest or notice prohibiting registration of such transfer, and may

have entered such notice or referred thereto, in any book of the Company and the Company

shall not be bound or required to regard or attend or give effect to any notice which may be

given to it of any equitable right, title or interest or be under any liability whatsoever for

refusing or neglecting so to do, though it may have been entered or referred to in some book

of the Company but the Company shall nevertheless be at liberty to regard and attend to any

such notice, and give effect thereto if the Board shall so think fit.

(R) The provision of these Articles shall subject to the provisions of the Act and any

requirements of law mutatis mutandis apply to the transfer or transmission by operation of

law to other Securities of the Company.

DEMATERIALISATION OF SECURITIES


(A) Dematerialisation:

Notwithstanding anything contained in these Articles, the Company shall be entitled to

dematerialise its existing Securities, rematerialise its Securities held in the Depositories

and/or to offer its fresh Securities in a dematerialised form pursuant to the Depositories Act,

and the rules framed there under, if any.

(B) Options for Investors:

(a) Subject to Section 68B of the Act, every Person subscribing to Securities offered by

the Company shall have the option to receive security certificates or to hold the

Securities with a Depository. Such a Person who is the Beneficial Owner of the

Securities can at any time opt out of a Depository, if permitted by law, in respect of

any Securities in a manner provided by the Depositories Act, and the Company shall,

in the manner and within the time prescribed, issue to the Beneficial Owner the

required Certificate of Securities.

(b) If a Person opts to hold his Securities with a Depository, the Company shall intimate

such Depository the details of allotment of the Securities and on receipt of the

information, the Depository shall enter in its record the name of the allottee as the

Beneficial Owner of the Securities.

(C) Securities in Depositories to be in fungible form:

All Securities held by a Depository shall be dematerialized and be in fungible form. Nothing

contained in Sections 153, 153A, 153B, 187B, 187C and 372A of the Act shall apply to a

Depository in respect of the Securities held by it on behalf of the Beneficial Owners.

(D) Rights of Depositories & Beneficial Owners:

(a) Notwithstanding anything to the contrary contained in the Act or these Articles, a

Depository shall be deemed to be the Registered Owner for the purposes of effecting

transfer of ownership of Securities on behalf of the Beneficial Owner.

(b) Save as otherwise provided in (a) above, the Depository as the Registered Owner of

the Securities shall not have any voting rights or any other rights in respect of the

Securities held by it.

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(c) Every person holding Shares of the Company and whose name is entered as the

Beneficial Owner in the records of the Depository shall be deemed to be a Member of

the Company.

(d) The Beneficial Owner of Securities shall, in accordance with the provisions of these

Articles and the Act, be entitled to all the rights and subject to all the liabilities in

respect of his Securities, which are held by a Depository.

(E) Service of Documents:

Notwithstanding anything contained in the Act or these Articles to the contrary, where

Securities are held in a Depository, the records of the Beneficial Ownership may be served

by such Depository on the Company by means of electronic mode or by delivery of floppies

or discs.

(F) Transfer of Securities:

a. Nothing contained in Section 108 of the Act or these Articles shall apply to a transfer of

Securities effected by transferor and transferee both of whom are entered as Beneficial

Owners in the records of a Depository.

b. 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 any electronic or fungible form in a Depository, the provisions of the

Depositories Act shall apply.

(G) Allotment of Securities dealt with in a Depository:

Notwithstanding anything in the Act or these Articles, where Securities are dealt with by a

Depository, the Company shall intimate the details of allotment of relevant Securities thereof

to the Depository immediately on allotment of such Securities.

(H) Certificate No. of Securities in Depository:

Nothing contained in the Act or these Articles regarding the necessity of having certificate

number/distinctive numbers for Securities issued by the Company shall apply to Securities

held with a Depository.

(I) Register and Index of Beneficial Owners:

The Register and Index of Beneficial Owners maintained by a Depository under the

Depositories Act, shall be deemed to be the Register and Index (if applicable) of Members

and Security-holders for the purposes of these Articles.

RESTRICTED RIGHT OF TRANSFER


No Person shall exercise any rights or privileges of Members until he shall have paid all sums

(whether in respect of call or otherwise) for the time being due in respect of the Shares held by him

or due in any manner whatsoever to the Company.

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COPIES OF MEMORANDUM AND ARTICLES TO BE SENT TO MEMBERS


Copies of the Memorandum and Articles of Association of the Company and other documents

referred to in Section 39 of the Act shall be sent by the Company to every Member at his request

within seven days of the request on payment of the sum of Rupee One for each copy.

BORROWING POWERS


(A) Subject to the provisions of Section 58A, 292 and 293 of the Act the Board may, from time

to time at its discretion by resolution passed at the meeting of a Board:

(a) accept or renew deposits from Directors, their relatives, Members or the public;

(b) borrow moneys otherwise than on Debentures;

(c) accept deposits from Members either in advance of calls or otherwise; and

(d) generally raise or borrow or secure the payment of any sum or sums of money for the

purposes of the Company.

Provided, however, 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) exceed 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 shall not borrow

such moneys without the consent of the Company in General Meeting.

(B) Subject to the provisions of the Act and these Articles, the payment or repayment of moneys

borrowed or other monies in relation thereto, as aforesaid may be secured in such manner

and upon such terms and conditions in all respects as the resolution of the Board shall

prescribe including by the issue of bonds, perpetual or redeemable Debentures or

debenture–stock, or any mortgage, charge, hypothecation, pledge, lien or other security on

the undertaking of the whole or any part of the property of the Company, both present and

future.

(C) Any bonds, Debentures, debenture-stock or other Securities may if permissible in Law be

issued at a discount, premium or otherwise by the Company and shall with the consent of

the Board be issued upon such terms and conditions and in such manner and for such

consideration as the Board shall consider to be for the benefit of the Company, and on the

condition that they or any part of them may be convertible into Shares of any denomination,

and with any privileges and conditions as to the redemption, surrender, allotment of Shares

or other Securities, appointment of Directors or otherwise. Provided that Debentures with

rights to allotment of or conversion into Shares shall not be issued except with, the sanction

of the Company in General Meeting accorded by a Special Resolution.

(D) Subject to the provisions of the Act and these Articles, if any uncalled Capital of the

Company is included in or charged by any mortgage or other security, the Board shall make

calls on the Members in respect of such uncalled Capital in trust for the Person in whose

favour such mortgage or security is executed, or if permitted by the Act, may by instrument

under seal authorize the Person in whose favour such mortgage or security is executed or

any other Person in trust for him to make calls on the Members in respect of such uncalled

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Capital and the provisions hereinafter contained in regard to calls shall mutatis mutandis

apply to calls made under such authority and such authority may be made exercisable either

conditionally or unconditionally or either presently or contingently and either to the exclusion

of the Board’s power or otherwise and shall be assignable if expressed so to be.

(E) The Board shall cause a proper Register to be kept in accordance with the provisions of

Section 143 of the Act of all mortgages, Debentures and charges specifically affecting the

property of the Company; and shall cause the requirements of Section 118, 125 and 127 to

144 (both inclusive) of the Act in that behalf to be duly complied with within the time

prescribed by the said Sections or such extensions thereof as may be permitted by the

Central Government, The Company Law Board, the National Company Law Tribunal, or any

other authority as may be prescribed or the Court or the Registrar, as the case may be, so

far as they are required to be complied with by the Board.

(F) The Company shall, if at any time it issues Debentures, keep a Register and Index (if

applicable) of Debenture–holders in accordance with Section 152 of the Act. The Company

shall have the power to keep in any State or Country outside India, a Branch Register of

Debenture-holders resident in that State or Country.

(G) Any capital required by the Company for its working capital and other capital funding

requirements may be obtained in such form as decided by the Board of Directors from

time to time.

MANAGEMENT OF COMPANY’S AFFAIRS


Subject to the provisions of the Act and these Articles, the entire management of the Company’s

affairs including all decisions and resolutions shall be entrusted by the Members of the Company to

its Board of Directors. All matters arising at a meeting of the Board of Directors, other than those

otherwise specified in these Articles if any shall be decided by a majority vote, subject to any casting

vote of the Chairman in the event of a tie.

NOTICE OF GENERAL MEETINGS


(A) Number of days notice of general meeting to be given: A General Meeting of the Company

may be called by giving not less than twenty one (21) days clear notice in writing, but a

General Meeting may be called after giving shorter notice if consent is accorded thereto:

(a) In case of an Annual General Meeting, by all the Members entitled to vote thereat;

and

(b) In the case of any other meeting, by the Members of the Company holding not less

than 95 per cent of such part of the Paid up Share Capital of the Company as gives a

right to vote at the meeting,

(B) Notice of meeting to specify place, etc., and to contain statement of business: Notice of

every meeting of the Company shall specify the place, date and hour of the meeting, and

shall contain a statement of the business to be transacted thereat.

192

(C) contents and manner of service of notice and persons on whom it is to be served: Every

notice may be served by the Company on any Member thereof either personally or by

sending it by post to their/its registered address in India and if there be no registered

address in India, to the address supplied by the Member to the Company for giving the

notice to the Member.

(D) Special business: Where any items of business to be transacted at the meeting are deemed

to be special, there shall be annexed to the notice of the meeting a statement setting out all

material facts concerning each item of business including any particular nature of the

concern or interest if any therein of every Director and where any item of special business

relates to or affects any other company, the extent of shareholding interest in that other

company of every Director of the first mentioned company shall also be set out in the

statement if the extent of such interest is not less than 2 per cent of the paid up share capital

of that other company. All business transacted at any meeting of the Company shall be

deemed to be special and all business transacted at the Annual General Meeting of the

Company with the exception of the business specified in Section 173(1)(a) of the Act shall

be deemed to be special.

(E) Resolution requiring special notice: With regard to resolutions in respect of which special

notice is required to be given by the Act, a special notice shall be given as required by

Section 190 of the Act.

(F) Notice of adjourned meeting when necessary: When a meeting is adjourned for thirty days or

more, notice of the adjourned meeting shall be given as in the case of an original meeting.

(G) Notice when not necessary: Save as aforesaid, it shall not be necessary to give any notice

of an adjournment or of the business to be transacted at an adjourned meeting.

CHAIRMAN OF THE GENERAL MEETING


The Chairman of the Board shall preside as Chairman at every general meeting of the Company. In

absence of the Chairman, or if he is not present within fifteen minutes after the time appointed for

holding the meeting, or is unwilling to act as Chairman of the meeting, the Vice-Chairman of the

Board shall preside as Chairman of the meeting. If there is no Chairman or Vice Chairman, or none

of them are present within fifteen minutes after the time appointed for holding the meeting, or are

unwilling to act as Chairman of the meeting, the directors present shall elect one of their number to

be the Chairman of the meeting. If at any meeting no Director is willing to act as Chairman or if no

director is present within fifteen minutes after the time appointed for holding the meeting, the

members present shall choose one of the member to be the Chairman of the meeting. No business

shall be discussed at any General Meeting except the election of a Chairman while the chair is

vacant.

QUESTIONS AT GENERAL MEETING HOW DECIDED


(A) At any General Meeting, a resolution put to the vote of the Meeting shall, unless a poll is

demanded, be decided on a show of hands. Before or on the declaration of the result of the

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voting on any resolution on a show of hands, a poll may be ordered to be taken by the

Chairman of the Meeting of his own motion and shall be ordered to be taken by him on a

demand made in that behalf by any Member or Members present in person or by proxy and

holding shares in the Company which confer a power to vote on the resolution not being

less than one-tenth of the total voting power in respect of the resolution, or in which an

aggregate sum of not less than fifty thousand rupees has been Paid-up. Unless a poll is

demanded, a declaration by the Chairman that a resolution has, on a show of hands, been

carried or carried unanimously, or by a particular majority, or lost and an entry to that effect

in the Minute Book of the Company shall be conclusive evidence of the fact, without proof of

the number or proportion of the votes recorded in favour of or against that resolution.

(B) In the case of an equality of votes, the Chairman shall both on a show of hands and at a

poll, (if any), have a casting vote in addition to the vote or votes to which he may be entitled

as a Member.

(C) If a poll is demanded as aforesaid, the same shall subject to anything stated in these

Articles save and except otherwise than in the Extra-Ordinary General Meeting be taken at

such time, (not later than forty-eight hours from the time when the demand was made), and

place within the City, Town or Village in which the Office of the Company is situate and

either by a show of hands or by ballot or by postal ballot, as the Chairman shall direct and

either at once or after an interval or adjournment, or otherwise and the result of the poll shall

be deemed to be the decision of the Meeting at which the poll was demanded. Any business

other than that upon which a poll has been demanded may be proceeded with, pending the

taking of the poll. The demand for a poll may be withdrawn at any time by the Person or

Persons who made the demand.

(D) Where a poll is to be taken, the Chairman of the Meeting shall appoint two scrutineers to

scrutinise the votes given on the poll and to report thereon to him. One of the scrutineers so

appointed shall always be a Member, (not being an officer or employee of the Company),

present at the Meeting provided such a Member is available and willing to be appointed.

The Chairman shall have power at any time before the result of the poll is declared, to

remove a scrutineer from office and fill vacancies in the office of scrutineer arising from such

removal or from any other cause.

(E) Any poll duly demanded on the election of a Chairman of a Meeting or any question of

adjournment, shall be taken at the Meeting forthwith.

(F) The demand for a poll except on the question of the election of the Chairman and of an

adjournment shall not prevent the continuance of a Meeting for the transaction of any

business other than the question on which the poll has been demanded.

(G) No report of the proceedings of any General Meeting of the Company shall be circulated or

advertised at the expense of the Company unless it includes the matters required by these

Articles or Section 193 of the Act to be contained in the Minutes of the proceedings of such

Meeting.

(H) The Members will do nothing to prevent the taking of any action by the Company or act

contrary to or with the intent to evade or defeat the terms as contained in these Articles.

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VOTES OF MEMBERS


(A) No Member shall be entitled to vote either personally or by proxy at any General Meeting or

Meeting of a class of Members either upon a show of hands or upon a poll in respect of any

Shares registered in his name on which 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.

(B) Subject to the provisions of these Articles, without prejudice to any special privilege or

restrictions as to voting for the time being attached to any class of shares for the time being

forming a part of the Capital of the Company, every Member not disqualified by the last

preceding Article, shall be entitled to be present, and to speak and vote at such Meeting,

and on a show of hands, every Member present in person shall have one vote and upon a

poll, the voting right of such Member present, either in person or by proxy, shall be in

proportion to his share of the Paid Up Share Capital of the Company held alone or jointly

with any other Person or Persons.

Provided however, if any Member holding Preference Shares be present at any Meeting of

the Company, save as provided in Clause (b) of Sub-Section (2) of Section 87 of the Act, he

shall have a right to vote only on resolutions placed before the Meeting, which directly affect

the rights attached to his Preference Shares.

(C) On a poll taken at a Meeting of the Company, a Member entitled to more than one vote, or

his proxy, or any other Person entitled to vote for him (as the case may be), need not, if he

votes, use or cast all his votes in the same way.

(D) A Member of unsound mind or in respect of whom an order has been made by any Court

having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, through a

committee or through his legal guardian; and any such committee or guardian may, on a poll

vote by proxy. If any Member be a minor his vote in respect of his Share(s) shall be

exercised by his guardian(s), who may be selected (in case of dispute), by the Chairman of

the meeting.

(E) If there be joint registered holders of any shares, any one of such Persons may vote at any

Meeting or may appoint another Person, (whether a Member or not) as his proxy in respect

of such Shares, as if he were solely entitled thereto; but the proxy so appointed shall not

have any right to speak at the Meeting and if more than one of such joint-holders be present

at any Meeting, then one of the said Persons so present whose name stands higher in the

Register of Members shall alone be entitled to speak and to vote in respect of such Shares,

but the other joint- holders shall be entitled to be present at the Meeting. Several Executors

or Administrators of a deceased Member in whose name Shares stand shall for the purpose

of these Articles be deemed joint-holders thereof.

(F) Subject to the provision of these Articles, votes may be given personally or by an attorney or

by proxy. A body corporate, whether or not a Company within the meaning of the Act, being

a Member may vote either by a proxy or by a representative duly authorised in accordance

with Section 187 of the Act and such representative shall be entitled to exercise the same

rights and powers, (including the right to vote by proxy), on behalf of the body corporate

which he represents as that body could have exercised if it were an individual Member.

(G) Any Person entitled to transfer any Shares of the Company may vote at any General

Meeting in respect thereof in the same manner as if he were the registered holder of such

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Shares, provided that forty-eight hours at least before the time of holding the Meeting or

adjourned Meeting as the case may be at which he proposes to vote, he shall satisfy the

Board of his right to such Shares and give such indemnity (if any) as the Board may require

unless the Board shall have previously admitted his right to vote at such Meeting in respect

thereof.

(H) Every proxy, (whether a Member or not), shall be appointed in writing under the hand of the

appointer or his attorney, or if such appointer is a corporation under the Common Seal of

such corporation or be signed by an officer or an attorney duly authorised by it, and any

committee or guardian may appoint proxy. The proxy so appointed shall not have any right

to speak at a Meeting.

(I) An instrument of proxy may appoint a proxy either for (i) the purposes of a particular Meeting

(as specified in the instrument) or (ii) for any adjournment thereof or (iii) it may appoint a

proxy for the purposes of every Meeting of the Company, or (iv) of every Meeting to be held

before a date specified in the instrument for every adjournment of any such Meeting.

(J) A Member present by proxy shall be entitled to vote only on a poll.

(K) An instrument appointing a proxy and a power of attorney or other authority (including by

way of a Board Resolution, (if any),) under which it is signed or a notarially certified copy of

that power or authority or resolution as the case may be, shall be deposited at the Office not

later than forty-eight hours before the time for holding the Meeting at which the Person

named in the instrument proposes to vote and in default the instrument of proxy shall not be

treated as valid. An attorney shall not be entitled to vote unless the power of attorney or

other instrument or resolution as the case may be appointing him or a notarially certified

copy thereof has either been registered in the records of the Company at any time not less

than forty-eight hours before the time for holding the Meeting at which the attorney proposes

to vote, or is deposited at the Office of the Company not less than forty-eight hours before

the time fixed for such Meeting as aforesaid. Notwithstanding that a power of attorney or

other authority has been registered in the records of the Company, the Company may, by

notice in writing addressed to the Member or the attorney, given at least 48 hours before the

Meeting, require him to produce the original power of attorney or authority or resolution as

the case may be and unless the same is deposited with the Company not less than forty-

eight hours before the time fixed for the Meeting, the attorney shall not be entitled to vote at

such Meeting unless the Board in their absolute discretion excuse such non-production and

deposit.

(L) Every instrument of proxy whether for a specified Meeting or otherwise should, as far as

circumstances admit, be in any of the forms set out in Schedule IX of the Act or a form as

near thereto as circumstance admit.

(M) If any such instrument of appointment be confined to the object of appointing an attorney or

proxy for voting at Meetings of the Company it shall remain permanently or for such time as

the Directors may determine in the custody of the Company; if embracing other objects a

copy thereof, examined with the original, shall be delivered to the Company to remain in the

custody of the Company.

(N) A vote given in accordance with the terms of an instrument of proxy shall be valid

notwithstanding the previous death of the principal, or revocation of the proxy or of any

power of attorney under which such proxy was signed, or the transfer of the Share in respect

of which the vote is given, provided that no intimation in writing of the death, revocation or

transfer shall have been received at the Office before the Meeting.

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(O) No objection shall be made to the validity of any vote, except at the Meeting or poll at which

such vote shall be tendered, and every vote whether given personally or by proxy, not

disallowed at such Meeting or poll shall be deemed valid for all purposes of such Meeting or

poll whatsoever.

(P) 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 in the sole judge of the

validity of every vote tendered at such poll.

(a) The Company shall cause minutes of all proceedings of every General Meeting to be

kept by making within thirty days of the conclusion of every such Meeting concerned,

entries thereof in books kept for that purpose with their pages consecutively

numbered.

(b) Each page of every such book shall be initialed or signed and the last page of the

record of proceedings of each Meeting in such book shall be dated and signed by the

Chairman of the same Meeting within the aforesaid period of thirty days or in the

event of the death or inability of that Chairman within that period, by a Director duly

authorised by the Board for that purpose.

(c) In no case the minutes of proceedings of a Meeting shall be attached to any such

book as aforesaid by pasting or otherwise.

(d) The Minutes of each Meeting shall contain a fair and correct summary of the

proceedings thereat.

(e) All appointments of Directors of the Company made at any Meeting aforesaid shall be

included in the minutes of the Meeting.

(f) Nothing herein contained shall require or be deemed to require the inclusion in any

such Minutes of any matter which in the opinion of the Chairman of the Meeting (i) is

or could reasonably be regarded as, defamatory of any person, or (ii) is irrelevant or

immaterial to the proceedings, or (iii) is detrimental to the interests of the Company.

The Chairman of the Meeting shall exercise an absolute discretion in regard to the

inclusion or non-inclusion of any matter in the Minutes on the aforesaid grounds.

(g) Any such Minutes shall be evidence of the proceedings recorded therein.

(h) The book containing the Minutes of proceedings of General Meetings shall be kept at

the Registered Office of the Company and shall be open, during business hours, for

such periods not being less in the aggregate than two hours in each day as the Board

determines, for the inspection of any Member without charge.

(i) The Company shall cause minutes to be duly entered in books provided for the

purpose of: -

(i) the names of the Directors and Alternate Directors present at each General

Meeting;

(ii) all Resolutions and proceedings of General Meeting;

(Q) The Members shall vote (whether in person or by proxy) all of the Shares owned or held of

record by them at any Annual or Extraordinary General Meeting of the Company called for

the purpose of filling positions to the Board of Directors, appointed as a Director of the

Company under Section 274(1) of the Act in accordance with these Articles.

(i) The Members will do nothing to prevent the taking of any action by the Company or act

contrary to or with the intent to evade or defeat the terms as contained in these

Articles.

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(ii) All matters arising at a General Meeting of the Company, other than as specified in the

Act or these Articles if any, shall be decided by a majority vote.

(iii) The Members shall exercise their voting rights as shareholders of the Company to

ensure that the Act and/or these Articles are implemented and acted upon by the

Members, and by the Company and to prevent the taking of any action by the

Company or by any Member, which is contrary to or with a view or intention to evade

or defeat the terms as contained in these Articles.

PROMOTERS OF THE COMPANY


ADA Group shall be the promoter group of the Company as defined under the Securities and

Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 or

any other statute, rules, regulations, guidelines or provisions of law (including any amendments,

modifications or re-enactment thereof, for the time being in force) and shall exercise control over the

Company, as defined under any such law.

DIRECTORS


Unless otherwise determined by the Company in the General Meeting, the number of Directors shall

not be less than 3 (three) and not more than such number as may be stipulated by the Act for the

time being in force.

CHAIRMAN OF THE BOARD OF DIRECTORS


(A) ADA shall be and shall continue as the non-retiring Chairman of the Board so long as he is

willing to be a Director and Chairman of the Company and shall not be liable to retire by

rotation. The Chairman shall preside at all meetings of the Board and the General Meetings

of the Company. The Chairman shall have a casting vote in the event of a tie.

(B) In the event of Article 46 (a) becomes inoperative as envisaged in Article 85(c), the Board of

Directors of the Company shall be entitled to appoint one among themselves as Chairman of

the Board and determine the period for which each of them to hold such office.

(C) In absence of ADA or any appointed or nominated Chairman, or in the event of their being

unwilling to act as the Chairman at any meeting of the Board, the members present at the

Board meeting shall designate one among themselves to preside at such meeting as

Chairman.

(D) All the Directors shall exercise their voting rights to ensure that these Articles are

implemented and acted upon by them to prevent the taking of any action by the Company or

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by any Member, which is contrary to or with a view or intention to evade or defeat the terms

as contained in these Articles.

APPOINTMENT OF ALTERNATE DIRECTORS


Subject to Section 313 of the Act, any Director shall be entitled to nominate an alternate director to

act for him during his absence for a period of not less than 3 months (subject to such person being

acceptable to the Chairman). The Board may appoint such a person as an Alternate Director to act

for a Director (hereinafter called “the Original Director”) (subject to such person being acceptable to

the Chairman) during the Original Director’s absence for a period of not less than three months from

the State in which the meetings of the Board are ordinarily held. An Alternate Director appointed

under this Article shall not hold office for a period longer than that permissible to the Original Director

in whose place he has been appointed and shall vacate office if and when the Original Director

returns to the State. If the term of the office of the Original Director is determined before he so

returns to the State, any provisions in the Act or in these Articles for automatic re-appointment shall

apply to the Original Director and not to the Alternate Director.

CASUAL VACANCY AND ADDITIONAL DIRECTORS


Subject to the provisions of the Act and these Articles, the Board shall have the power at any time

and from time to time to appoint any qualified Person to be a Director either as an addition to the

Board or to fill a casual vacancy but so that the total number of Directors shall not at any time

exceed the maximum number fixed under these Articles. Any Person so appointed as an addition

shall hold office only up to the date of the next Annual General Meeting. Any person appointed to fill

a casual vacancy shall hold office only up to the date to which the Original Director in whose place

he is appointed would have held office if it had not been vacated but shall be eligible for election.

DEBENTURE OR LENDER DIRECTORS


If it is provided by a Trust Deed, securing or otherwise, in connection with any issue of Debentures

of the Company, that any Person/ Lender or Persons/ Lenders shall have power to nominate a

Director of the Company, then in the case of any and every such issue of Debentures, the Person/

Lender or Persons/ Lenders having such power may exercise such power from time to time and

appoint a Director accordingly. Any Director so appointed is herein referred to a Debenture Director.

A Debenture Director may be removed from office at any time by the Person/ Lender or Persons/

Lenders in whom for the time being is vested the power under which he was appointed and another

Director may be appointed in his place. A Debenture Director shall not be bound to hold any

qualification shares.

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NO QUALIFICATION SHARES FOR DIRECTORS


A Director shall not be required to hold any qualification Shares of the Company.

REMUNERATION OF DIRECTORS


(A) Subject to the provisions of the Act, a Managing Director (s), and any other Director/s who

is/are in the whole time employment of the Company may be paid remuneration either by a

way of monthly payment or at a specified percentage of the net profits of the Company or

partly by one way and partly by the other, subject to the limits prescribed under the Act.

(B) Subject to the provisions of the Act, a Director (other than a Managing Director or an

Executive Director) may be paid remuneration either:

(a) by way of monthly, quarterly or annual payment, or

(b) by way of commission.

(C) The remuneration payable to each Director for every Meeting of the Board or Committee of

the Board attended by them shall be such sum as may be determined by the Board from time

to time within the maximum limits prescribed from time to time by the Central Government

pursuant to the first proviso to Section 310 of the Act.

SPECIAL REMUNERATION FOR EXTRA SERVICES RENDERED BY A DIRECTOR


If any Director be called upon to perform extra services or special exertions or efforts (which

expression shall include work done by a Director as a member of any Committee formed by the

Directors), the Board may arrange with such Director for such special remuneration for such extra

services or special exertions or efforts either by a fixed sum or otherwise as may be determined by

the Board and such remuneration may be either in addition to or in substitution for his remuneration

otherwise provided.

TRAVEL EXPENSES OF DIRECTORS


The Board may allow and pay to any Director who is not a bonafide resident of the place where the

meetings of the Board/committee meetings are ordinarily held and who shall come to such place for

the purpose of attending any meeting, such sum as the Board may consider fair compensation for

authorize, lodging and/ or other expenses, in addition to his fee for attending such Board Meetings /

committee meetings as above specified; and if any Director be called upon to go or reside out of his

ordinary place of his residence on the Company’s business, he shall be entitled to be repaid and

reimbursed authorize and other expenses incurred in connection with the business of the Company.

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REMOVAL OF DIRECTORS


The Members may by passing a special resolution remove a director, before the expiry of his period

of office.

DIRECTORS MAY CONTRACT WITH COMPANY


(A) A Director or his relative, a firm in which such Director or relative is a partner, any other

Person in such firm, or a private company of which the Director is a member or director may

enter into any contract with the Company for the sale, purchase or supply of any goods,

materials or services or for underwriting the subscription of any shares in, or Debentures, of

the Company, provided that the prior sanction of the Board and the Central Government is

obtained in accordance with Section 297 of the Act.

(B) No sanction however shall be necessary to: -

(a) any sale, purchase or lease of immovable property; or

(b) any purchase of goods and materials from the Company, or the sale of goods or

materials to the Company, by any such Director, relative, firm, partner or private

Company as aforesaid for cash at prevailing market prices; or

(c) any contract or contracts between the Company on one side and any such Director,

relative, firm, partner or private company on the other, for sale, purchase or supply of

any goods, materials and services, in which either the Company or the Director,

relative, firm, partner or private company, as the case may be, regularly trades or

does business, where the value of the goods and materials or the cost of such

services do not exceed Rs.5,000 in the aggregate in any year comprised in the period

of the contract or contracts.

Provided that in circumstances of urgent necessity, the Company may without

obtaining the consent of the Board enter into any such contract or contracts with the

Director, relative, firm, partner or private company, even if the value of such goods or

materials or the cost of such services exceeds Rs.5,000 in the aggregate in any year

comprised in the period of the agreement, if the consent of the Board shall be

obtained to such contract or contracts at a Meeting within three months of the date on

which the contract was entered into.

(B) The Director, so contracting or being so interested shall not be liable to the Company for any

profit authorise by any such contract or the fiduciary relation thereby established.

DISCLOSURE OF INTEREST


(A) A Director of the Company who is in any way, whether directly or indirectly concerned or

interested in a contract or arrangement, or proposed contract or arrangement entered into or

to be entered into by or on behalf of the Company, shall disclose the nature of his concern or

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interest at a Meeting of the Board in the manner provided in Section 299(2) of the Act;

Provided that it shall not be necessary for a Director to disclose his concern or interest in any

such contract or arrangement entered into or to be entered into with any other company

where any of the Directors of the company or two or more of them together holds or hold not

more than 2 per cent of the paid-up share capital in the other company or the Company as

the case may be. A general notice given to the Board by the Director, to the effect that he is

a director or member of a specified body corporate or is a member of a specified firm and is

to be regarded as concerned or interested in any contract or arrangement which may, after

the date of the notice, be entered into with that body corporate or firm, shall be deemed to

be a sufficient disclosure of concern or interest in relation to any contract or arrangement so

made. Any such general notice shall expire at the end of the Financial Year in which it is

given but may be renewed for a further period of one Financial Year at a time by a fresh

notice given in the last month of the Financial Year in which it would have otherwise expired.

No such general notice, and no renewal thereof shall be of effect unless, either it is given at

a Meeting of the Board or the Director concerned takes reasonable steps to secure that it is

brought up and read at the first Meeting of the Board after it is given.

(B) No Director shall as a Director, take any part in the discussion of, vote on any contract or

arrangement entered into or to be entered into by or on behalf of the Company, if he is in

any way, whether directly or indirectly, concerned or interested in such contract or

arrangements; nor shall his presence count for the purpose of forming a quorum at the time

of any such discussion or vote; and if he does vote, his vote shall be void; provided however

that nothing herein contained shall apply to:-

(a) any contract or indemnity against any loss which the Directors, or any one or more of

them, may suffer by reason of becoming or being sureties or a surety for the

Company;

(b) any contract or arrangement entered into or to be entered into with a public company

or a private company which is subsidiary of a public company in which the interest of

the Director consists solely,

(c) in his being –

(i) a director of such company, and

(ii) the holder of not more than shares of such number or value therein as is

requisite to qualify him for appointment as a Director thereof, he having been

nominated as such Director by this Company, or

(C) in his being a member holding not more than 2 per cent of its Paid-up Share Capital.

(D) Subject to the provisions of Section 314 and other applicable provisions, if any, of the Act,

any Director of the Company, any partner or relative of such Director, any firm in which such

Director or a relative of such Director is a partner, any private company of which such

Director is a director or member, and any director or manager of such private company, may

hold any office or place of profit in the Company.

(E) The Company shall keep a Register in accordance with Section 301(1) of the Act and shall

within the time specified in Section 301(2) of the Act enter therein such of the particulars as

may be relevant having regard to the application thereto of Section 297 or Section 299 of the

Act, as the case may be. The Register aforesaid shall also specify, in relation to each

Director of the Company, the names of the bodies corporate and firms of which notice has

been given by him under Article 57 (a). The Register shall be kept at the Registered Office of

the Company and shall be open to inspection at such Office, and extracts may be taken

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there from and copies thereof may be required by any Member of the Company to the same

extent, in the same manner, and on payment of the same fee as in the case of the Register

of Members of the Company and the provisions of Section 163 of the Act shall apply

accordingly.

(F) A Director may be or become a Director of any Company promoted by the Company, or on

which it may be interested as a vendor, shareholder, or otherwise, and no such Director shall

be accountable for any benefits received as director or shareholder of such Company except

in so far as Section 309(6) or Section 314 of the Act may be applicable.

DISCLOSURE BY DIRECTOR OF APPOINTMENT TO ANY OTHER BODY CORPORATE


(A) Every Director, (including a person deemed to be a Director by virtue of the Explanation to

Sub-Section (1) of Section 303 of the Act), a Managing Director, Manager, or Secretary of

the Company shall, within twenty days of his appointment to any of the above offices or as

the case may be, relinquishment of, such offices, in any other body corporate disclose to the

Company, the particulars relating to his office in the other body corporate which are required

to be specified under Sub-Section (1) of Section 303 of the Act.

(B) Every Director and every person deemed to be a Director of the Company by virtue of sub-

section (10) of Section 307 of the Act, shall give notice to the Company of such matters

relating to himself as may be necessary for the purposes of enabling the Company to comply

with the provisions of that Section.

MANAGING DIRECTOR(S)/ EXECUTIVE DIRECTOR(S)/ MANAGER


Subject to the provisions of the Act and of these Articles, the Board shall have power to appoint from

time to time Managing Director/s or Manager or Executive Director(s), of the Company for a fixed

term not exceeding five years at a time and upon such terms and conditions as the Board thinks fit,

and the Board may by resolution vest in such Managing Director/s or Manager or Executive

Director(s), such of the powers hereby vested in the Board generally as it thinks fit, and such powers

may be made exercisable for such period or periods and upon such conditions and subject to such

restrictions as it may determine. The terms of appointment of Managing Director/s or Manager or

Executive Director(s), shall be the terms on which such persons shall be appointed by the Board.

The Managing Director/s or Manager or Executive Director(s), as the case may be, so appointed,

shall be responsible for and in charge of the day to day management and affairs of the Company

and subject to the provisions of the Act and these Articles, the Board shall vest in such Managing

Director/s or Manager or Executive Director(s), as the case may be, all the powers vested in the

Board generally.

POWERS OF THE BOARD


Subject to the provisions of the Act and these Articles: -

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(A) The Board of Directors shall be entitled to exercise all such power and to do all such acts

and things as the Company is authorized to exercise and do.

(B) The Board of Directors is vested with the entire management and control of the Company,

including as regards any and all decisions and resolutions to be passed, for and on behalf of

the Company.

DIVIDEND POLICY


(A) The divisible profits of the Company, subject to any special rights relating thereto being

created or authorised to be created by the Memorandum or these Articles and subject to the

provisions of these Articles shall be divisible among the Members in proportion to the

amount of Capital Paid-up or credited as Paid-up and to the period during the year for which

the Capital is Paid-up on the Shares held by them respectively. Provided always that,

(subject as aforesaid), any Capital Paid-up on a Share during the period in respect of which

a Dividend is declared, shall unless the Directors otherwise determine, only entitle the holder

of such Share to an apportioned amount of such Dividend as from the date of payment.

(B) Subject to the provisions of Section 205 of the Companies Act, 1956 the Company in

General Meeting may declare Dividends, to be paid to Members according to their

respective rights and interests in the profits but no Dividends shall exceed the amount

recommended by the Board, but the Company in General Meeting may declare a smaller

Dividend, and may fix the time for payments not exceeding 30 days from the declaration

thereof.

(a) No Dividend shall be declared or paid otherwise than out of profits of the Financial

Year arrived at after providing for depreciation in accordance with the provisions of

Section 205 of the Act or out of the profits of the Company for any previous Financial

Year or years arrived at after providing for depreciation in accordance with those

provisions and remaining undistributed or out of both provided that:

(i) if the Company has not provided for depreciation for any previous Financial

Year or years it shall, before declaring or paying a Dividend for any

Financial Year provide for such depreciation out of the profits of that Financial

Year or out of the profits of any other previous Financial Year or years,

(ii) if the Company has incurred any loss in any previous Financial Year or years

the amount of the loss or an amount which is equal to the amount provided for

depreciation for that year or those years whichever is less, shall be set off

against the profits of the Company for the year for which the Dividend is

proposed to be declared or paid or against the profits of the Company for any

previous Financial Year or years arrived at in both cases after providing for

depreciation in accordance with the provisions of sub-section (2) of Section 205

of the Act or against both.

(iii) The decision of the Board as to the amount of the divisible profits shall be

conclusive.

(b) The Board may from time to time, pay to the Members such interim Dividend as in

their judgment the position of the Company justifies.

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(c) Where Capital is paid in advance of calls upon the footing that the same shall carry

interest, such Capital shall not whilst carrying interest, confer a right to participate in

profits or Dividend.

(f) (i) Subject to the rights of Persons, if any, entitled to Shares with special rights as

to Dividend, all Dividends shall be declared and paid according to the amounts

paid or credited as paid on the Shares in respect whereof 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 amount of the Shares.

(ii) No amount paid or credited as paid on Shares in advance of calls shall be

treated for the purpose of this regulation as paid on Shares.

(iii) All Dividends shall be apportioned and paid proportionately to the amounts paid

or credited as paid on the Shares during any portion or portions of the period in

respect of which the Dividend is paid, but if any Shares are issued on terms

providing that it shall rank for Dividend as from a particular date such Shares

shall rank for Dividend accordingly.

(g) Subject to the provisions of the Act and these Articles, the Board may retain the

Dividends payable upon Shares in respect of any Person, until such Person shall

have become a Member, in respect of such Shares or until such Shares shall have

been duly transferred to him.

(h) Any one of several Persons who are registered as the joint-holders of any Share may

give effectual receipts for all Dividends or bonus and payments on account of

Dividends or bonus or sale proceeds of fractional certificates or other moneys payable

in respect of such Shares.

(i) Subject to the provisions of the Act, no Member shall be entitled to receive payment

of any interest or Dividends in respect of his Share(s), whilst any money may be due

or owing from him to the Company in respect of such Share(s); either alone or jointly

with any other Person or Persons; and the Board may deduct from the interest or

Dividend payable to any such Member all sums of money so due from him to the

Company.

(j) A transfer of Shares shall not pass the right to any Dividend declared thereon before

the registration of the transfer.

(k) Unless otherwise directed any Dividend may be paid by cheque or warrant or by a

pay slip or receipt (having the force of a cheque or warrant) and sent by post or

courier or by any other legally permissible means to the registered address of the

Member or Person entitled or in case of joint-holders to that one of them first named

in the Register of Members in respect of the joint-holding. Every such cheque or

warrant shall be made payable to the order of the Person to whom it is sent and in

case of joint-holders to that one of them first named in the Register of Members in

respect of the joint-holding. The Company shall not be liable or responsible for any

cheque or warrant or pay slip or receipt lost in transmission, or for any Dividend lost to

a Member or Person entitled thereto, by a forged endorsement of any cheque or

warrant or a forged signature on any pay slip or receipt of a fraudulent recovery of

Dividend. If two or more Persons are registered as joint-holders of any Share(s) any

one of them can give effectual receipts for any moneys payable in respect thereof.

Several Executors or Administrators of a deceased Member in whose sole name any

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Share stands shall for the purposes of this Article be deemed to be joint-holders

thereof.

(l) No unpaid Dividend shall bear interest as against the Company.

(m) Any General Meeting declaring a Dividend may on the recommendation of the Board,

make a call on the Members of such amount as the Meeting fixes, but so that the call

on each Member shall not exceed the Dividend payable to him, and so that the call

will be made payable at the same time as the Dividend; and the Dividend may, if so

arranged as between the Company and the Members, be set-off against such calls. DIRECTORS’ AND OTHERS’ RIGHTS TO INDEMNITY Article 83(D) provides that

Subject to the provisions of Section 201 of the Act, every Director, Manager and other officer or

employee of the Company shall be indemnified by the Company against any liability incurred by him

and it shall be the duty of the Directors to pay out of the funds of the Company all costs, losses and

expenses which any Director, Manager, officer or employee may incur or become liable to by reason

of any contract entered into by him on behalf of the Company or in any way in the discharge of his

duties and in particular, and so as not to limit the generality of the foregoing provision, against all

liabilities incurred by him as such Director, Manager, officer or employee in defending any

proceedings, whether civil or criminal, in which judgment is given in his favour or he is acquitted or in

connection with any application under Section 633 of the Act in which relief is granted by the Court

and the amount for which such indemnity is provided shall immediately attach as a lien on the

property of the Company and have priority as between the Members over all claims.

DIRECTORS ETC. NOT LIABLE FOR CERTAIN ACTS


Subject to the provisions of Section 201 of the Act, no Director, Manager, officer or employee of the

Company shall be liable for the acts, defaults, receipts and neglects of any other Director, Manager,

officer or employee or for joining in any receipts or other act for the sake of conformity or for any loss

or expenses happening to the Company through the insufficiency, or deficiency of any security in or

upon which any of the monies of the Company shall be invested or for any loss or damage arising

from the bankruptcy, insolvency or tortuous act of any Person with whom any moneys, Securities or

effects shall be deposited or for any loss occasioned by an error of judgment or oversight on his

part, or for any other loss, damage or misfortune whatsoever which shall happen in the execution

thereof unless the same shall happen through his own negligence, default, misfeasance, breach of

duty or breach of trust.

AMENDMENT TO MEMORANDUM AND ARTICLES OF ASSOCIATION


(A) The Members shall vote all the Shares owned or held of record by such Members at any

Annual or Extraordinary General Meeting of the Company in accordance with these Articles.

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(B) The Members shall not pass any resolution or take any decision which is contrary to any of

the terms of these Articles.

Notwithstanding anything stated in these Articles, if the ADA Group ceases to be the largest

shareholder of the Company, then neither ADA nor the ADA Group will be entitled to the rights as

stipulated in Articles 40, 44, and 46.

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MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on by our

Company or entered into more than two years before the date of this Information Memorandum) which are

or may be deemed material have been entered or to be entered into by our Company.

Copies of the following documents will be available for inspection at the Registered office of the Company

on any working day (i.e. Monday to Friday and not being a bank holiday in Mumbai) between 11.00 am to

1:00 pm upto seven days from the date of filing of this Information Memorandum.

Documents for Inspection:

1. Memorandum and Articles of Association, as amended till date.

2. Certification of incorporation.

3. Fresh Certificate of Incorporation consequent to the Change of Name of the Company from Reliance Unicom Limited to Reliance Media World Limited.

4. Reports of the Statutory Auditors of the Company dated September 16, 2009 and October 30, 2009 prepared as per Indian GAAP and mentioned in this Information Memorandum.

5. Scheme of Arrangement sanctioned by the Hon’ble High Court of Judicature of Bombay vide its order dated April 4, 2009 between RML and erstwhile RUL now RMWL and their respective shareholders and creditors.

6. Copy of the Order dated April 4, 2009 of the Hon’ble High Court of Judicature at Bombay approving the Scheme of Arrangement.

7. Form 21 filed with the ROC on June 30, 2009 for making the Scheme effective.

8. Letters of approval from BSE and NSE dated November 25, 2008 and December 23, 2008 respectively, conveying their ‘No Objection’ to the Scheme under Clause 24(f) of the Listing Agreement.

9. Tripartite Agreement with NSDL dated July 27, 2009 and CDSL dated July 28, 2009.

10. Letters of approval from BSE and NSE granting In – Principle approval for listing of Equity Shares pursuant to Scheme received on August 24, 2009 and September 25, 2009 respectively.

11. SEBI letter no. CFD/DIL/PB/VT/177960/2009 dated September 24, 2009 granting relaxation from the strict enforcement of the requirement of Rule 19(2)(b) of the Securities Contract Regulation (Rules), 1957 (SCRR) for the purpose of listing of shares of the Company.

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DECLARATION All statements made in this Information Memorandum are true and correct.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

FOR RELIANCE MEDIA WORLD LIMITED

GAUTAM DOSHI

DIRECTOR

Place: Mumbai

Date: November 27, 2009

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INFORMATION MEMORANDUM Reliance Media … III – Introduction Summary 20 ... Dividend Policy 93 ......

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