CMYK

DRAFT RED HERRING PROSPECTUS
Dated June 26, 2008 Please read Section 60B of the Companies Act, 1956 (This Draft Red Herring Prospectus will be updated upon filing with the RoC) 100% Book Built Issue

CELLEBRUM TECHNOLOGIES LIMITED
(Our Company was incorporated as Cellebrum.Com Private Limited on April 4, 2000 under the Companies Act, 1956 (“Companies Act”). Subsequently, our Company was converted into a public limited company and the name of our Company was changed to “Cellebrum.Com Limited” pursuant to a fresh certificate of incorporation granted to our Company on February 14, 2008, by the Registrar of Companies, National Capital Territory of Delhi and Haryana, at New Delhi (“RoC”). The name of our Company was further changed from “Cellebrum.Com Limited” to “Cellebrum Technologies Limited” pursuant to a fresh certificate of incorporation granted to our Company on April 22, 2008, by the RoC. For details of changes in name and registered office of our Company, see the section “History and Certain Corporate Matters” beginning on page 74. Registered Office: D-4 Okhla Industrial Area, Phase-1, New Delhi- 110020, India. Telephone: +91 11 26814544; Facsimile: +91 11 26817702. Corporate Office: D-1, Sector 3, Noida- 201301, Uttar Pradesh, India. Telephone: +91 120 4035600; Facsimile: +91 120 4265786. Compliance Officer and Company Secretary: Mr. Ashok Agarwal; E-mail: investors@cellebrum.com; Website: www.cellebrum.com PUBLIC ISSUE OF 11,271,012 EQUITY SHARES OF RS. 10 EACH (“EQUITY SHARES”) OF CELLEBRUM TECHNOLOGIES LIMITED (THE “COMPANY” OR THE “ISSUER”) FOR CASH AT A PRICE OF RS. [ ] PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF RS. [ ] PER EQUITY SHARE, AGGREGATING RS. [ ] MILLION (“THE ISSUE”), CONSISTING OF A FRESH ISSUE OF 6,982,042 EQUITY SHARES BY THE COMPANY (“FRESH ISSUE”) AND AN OFFER FOR SALE OF 4,288,970 EQUITY SHARES (“OFFER FOR SALE”) BY LEHMAN BROTHERS OPPORTUNITY LIMITED AND OMNIA INVESTMENTS PRIVATE LIMITED (“THE SELLING SHAREHOLDERS”). THE ISSUE COMPRISES A NET ISSUE TO THE PUBLIC OF 11,171,012 EQUITY SHARES (“NET ISSUE”) AND 100,000 EQUITY SHARES ARE RESERVED FROM THE FRESH ISSUE FOR SUBSCRIPTION BY ELIGIBLE EMPLOYEES (AS DEFINED HEREIN) AT THE ISSUE PRICE (“EMPLOYEE RESERVATION PORTION”). THE ISSUE WILL CONSTITUTE APPROXIMATELY 22.60% OF THE FULLY DILUTED POST-ISSUE PAID-UP SHARE CAPITAL OF THE COMPANY. THE NET ISSUE WILL CONSTITUTE APPROXIMATELY 22.40% OF THE FULLY DILUTED POST-ISSUE PAID-UP SHARE CAPITAL OF THE COMPANY.* *Our Company and the Selling Shareholders are considering a sale of up to [ ] Equity Shares to certain investors, prior to filing of the Red Herring Prospectus with the RoC (“Pre-IPO Placement”). If the Pre-IPO Placement is completed, the number of Equity Shares sold pursuant to the Pre-IPO Placement, will be reduced from the Net Issue, subject to minimum Net Issue size of 10% of the post-Issue paid up share capital of our Company. The Pre-IPO Placement is at the discretion of our Company and the Selling Shareholders. PRICE BAND: RS. [ ] TO RS. [ ] PER EQUITY SHARE OF FACE VALUE OF RS. 10 EACH. THE FLOOR PRICE IS [ ] TIMES OF THE FACE VALUE AND THE CAP PRICE IS [ ] TIMES OF THE FACE VALUE. In case of revision in the Price Band, the Bidding/Issue Period shall be extended for three additional Business Days after such revision, subject to the Bidding/Issue Period not exceeding 10 Business Days. Any revision in the Price Band, and the revised Bidding/Issue Period, if applicable, shall be widely disseminated by notification to the Bombay Stock Exchange Limited (the “BSE”) and the National Stock Exchange of India Limited (the “NSE”), by issuing a press release and also by indicating the change on the website of the Book Running Lead Managers (“BRLMs”) and the terminals of the other members of the Syndicate. Pursuant to Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957, as amended (“SCRR”), this Issue is for less than 25% of the post Issue share capital of the Company and is therefore being made through a 100% Book Building Process (as defined below) wherein at least 60% of the Net Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (“QIBs”), out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only and the remainder shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If at least 60% of the Net Issue cannot be allotted to QIBs, then the entire application money will be refunded forthwith. In addition, in accordance with Rule 19(2)(b) of the SCRR, a minimum of two million securities are being offered to the public and the size of the Issue shall aggregate to at least Rs. 1,000 million. Further, not less than 10% of the Net Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 30% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Further, up to 100,000 Equity Shares shall be available for allocation on a proportionate basis to the Eligible Employees, subject to valid Bids being received at or above the Issue Price. RISKS IN RELATION TO FIRST ISSUE This being the first issue of the Equity Shares, there has been no formal market for the Equity Shares. The face value of the Equity Shares is Rs. 10 each and the Issue Price is [ ] times the face value. The Issue Price (as determined by the Company and the Selling Shareholders, in consultation with the BRLMs, on the basis of the assessment of market demand for the Equity Shares by way of the Book Building Process) should not be taken to be indicative of the market price of the Equity Shares after the Equity Shares are listed. No assurance can be given regarding an active and/or sustained trading in the Equity Shares or regarding the price at which the Equity Shares will be traded after listing. GENERAL RISKS Investments in equity and equity-related securities involve a degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the risk factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue, including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (“SEBI”), nor does SEBI guarantee the accuracy or adequacy of the contents of this Draft Red Herring Prospectus. Specific attention of the investors is invited to the statements in the section “Risk Factors” beginning on page X. ISSUER’S ABSOLUTE RESPONSIBILITY The Issuer having made all reasonable inquiries, accept responsibility for and confirms that this Draft Red Herring Prospectus contains all information with regard to the Company and the Issue that is material in the context of the Issue, that the information contained in this Draft Red Herring Prospectus 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 Draft Red Herring Prospectus 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 offered through the Red Herring Prospectus are proposed to be listed on the BSE and the NSE. The Company has received in-principle approvals from the BSE and the NSE for the listing of the Equity Shares pursuant to letters dated [ ] and [ ], respectively. For the purposes of the Issue, the [ ] shall be the Designated Stock Exchange. IPO GRADING This Issue has been graded by [ ] Limited and has been assigned the “IPO Grade [ ]/5”indicating [ ], through its letter dated [ ], 2008. The IPO grading is assigned on a five point scale from 1 to 5 with an “IPO Grade 5” indicating strong fundamentals and an “IPO Grade 1” indicating poor fundamentals. For further details regarding the grading of the Issue, see the section “General Information” beginning on page 13.

BOOK RUNNING LEAD MANAGER Enam Securities Private Limited
SEBI Reg. No: INM000006856 801/802, Dalamal Towers, Nariman Point, Mumbai- 400 021, Maharashtra, India. Telephone: +91 22 6638 1800 Facsimile: +91 22 2284 6824 E-mail: cellebrum.ipo@enam.com Investor Grievance E-mail: complaints@enam.com Website: www.enam.com Contact Person: Ms. Kanika Sarawgi

REGISTRAR TO THE ISSUE Karvy Computershare Private Limited
SEBI Reg. No.: INR000000221 “Karvy House”, No. 46 Avenue 4, Street No.1, Banjara Hills, Hyderabad- 500 034, Andhra Pradesh, India. Telephone: + 91 40 2343 1553 Facsimile: + 91 40 2343 1551 E-mail: cellebrum.ipo@karvy.com Website: www.karvy.com Contact Person: Mr. Murali Krishna

BID/ISSUE OPENING DATE [ ], 2008

BID/ISSUE PROGRAM BID/ISSUE CLOSING DATE [ ], 2008
CMYK

TABLE OF CONTENTS
SECTION I: GENERAL ................................................................................................................................ i DEFINITIONS AND ABBREVIATIONS ................................................................................................... i CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND CURRENCY OF PRESENTATION ............................................................................................................ vii FORWARD-LOOKING STATEMENTS..................................................................................................... ix SECTION II: RISK FACTORS .................................................................................................................... x SECTION III: INTRODUCTION................................................................................................................. 1 SUMMARY OF BUSINESS ........................................................................................................................ 1 SUMMARY OF INDUSTRY ....................................................................................................................... 6 SUMMARY FINANCIAL INFORMATION ............................................................................................... 8 THE ISSUE................................................................................................................................................... 12 GENERAL INFORMATION ....................................................................................................................... 13 CAPITAL STRUCTURE.............................................................................................................................. 21 OBJECTS OF THE ISSUE ........................................................................................................................... 30 BASIS FOR THE ISSUE PRICE.................................................................................................................. 33 STATEMENT OF TAX BENEFITS ............................................................................................................ 37 SECTION IV: ABOUT THE COMPANY ................................................................................................... 45 INDUSTRY OVERVIEW ............................................................................................................................ 45 BUSINESS .................................................................................................................................................... 54 REGULATIONS AND POLICIES............................................................................................................... 69 HISTORY AND CERTAIN CORPORATE MATTERS.............................................................................. 74 OUR MANAGEMENT................................................................................................................................. 80 OUR PROMOTERS AND PROMOTER GROUP....................................................................................... 93 RELATED PARTY TRANSACTIONS ....................................................................................................... 139 DIVIDEND POLICY .................................................................................................................................... 165 SECTION V: FINANCIAL INFORMATION ............................................................................................. 166 FINANCIAL STATEMENTS ...................................................................................................................... 166 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS........................................................................................................................................ 280 SECTION VI: LEGAL AND OTHER INFORMATION ........................................................................... 300 OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ................................................... 300 GOVERNMENT AND OTHER APPROVALS ........................................................................................... 347 OTHER REGULATORY AND STATUTORY DISCLOSURES................................................................ 356 SECTION VII: ISSUE INFORMATION ..................................................................................................... 367 TERMS OF THE ISSUE............................................................................................................................... 367 ISSUE STRUCTURE ................................................................................................................................... 370 ISSUE PROCEDURE ................................................................................................................................... 375 SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION ................................ 406 SECTION IX: OTHER INFORMATION.................................................................................................... 429 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION ..................................................... 429 DECLARATION .......................................................................................................................................... 431

SECTION I: GENERAL DEFINITIONS AND ABBREVIATIONS Unless the context otherwise indicates or requires, the following terms shall have the meanings given below in this Draft Red Herring Prospectus. Company Related Terms
Term Description

The “Company”, the “Issuer” or Cellebrum Technologies Limited, a public limited company incorporated “Cellebrum” under the Companies Act. “we” or “us” or “our” The Company and where the context otherwise requires or implies, the Company together with its Subsidiaries. Articles/Articles of Association The articles of association of our Company. Auditors The statutory auditors of our Company, being S.R. Batliboi & Associates. Board of Directors/Board The board of directors of our Company, as constituted from time to time, or a committee thereof. Director(s) The director(s) on the Board, as appointed from time to time. Equity Shares Equity shares of our Company, of face value of Rs. 10 each. Lehman Brothers Opportunity A company incorporated in Mauritius, having its registerd office at 608, St. Limited James Court, St. Dennis, Port Louis, Mauritius, an affiliate of Lehman Brothers Securities Private Limted, one of the BRLMs. Memorandum/Memorandum of The memorandum of association of our Company, as amended. Association Promoters Mr. Dilip Modi, Omnia Investments Private Limited and Indian Televentures Private Limited. Promoter Group Individuals, companies and entities enumerated in the section “Our Promoters and Promoter Group” beginning on page 93. Selling Shareholders Lehman Brothers Opportunity Limited and Omnia Investments Private Limited. Registered Office D-4 Okhla Industrial Area, Phase-1, New Delhi- 110020, India. Subsidiaries Mobisoc Technology Private Limited and Spice Mobiles VAS Pte. Limited

Issue Related Terms
Term Allot/Allotment/Allotted Allottee Bankers to the Issue/Escrow Collection Banks Basis of Allotment Bid Description Unless the context otherwise requires or implies, the allotment of Equity Shares pursuant to the Issue. A successful Bidder to whom an Allotment is made. [●]. The basis on which Alltment shall be made as described in the section “Issue Procedure – Basis of Allotment” beginning on page 400. An indication to make an offer during the Bidding Period by a Bidder to subscribe to the Equity Shares at a price within the Price Band by the Bid cum Application Form or the Revision Form, as the case may be. Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and the Bid cum Application Form. The highest value of the optional Bids indicated in the Bid cum Application Form and payable by the Bidder on submission of the Bid. The form in terms of which the Bidder makes an offer to subscribe to the Equity Shares pursuant to the Issue and which will be considered as the application for Allotment. The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date (inclusive of both days) during which Bidders can submit their Bids. The date on which the members of the Syndicate shall start accepting Bids, which shall be the date notified in an English national newspaper and a Hindi national newspaper, each with wide circulation. The date after which the members of the Syndicate will not accept any Bids, which shall be the date notified in an English national newspaper and a Hindi national newspaper, each with wide circulation.

Bidder Bid Amount Bid cum Application Form

Bidding/Issue Period Bid/Issue Opening Date

Bid/Issue Closing Date

i

Term Book Building Process BRLMs/Book Running Lead Managers Business Days CAN/Confirmation of Allocation Note Cap Price Cut-off Price

Description The book building process as described in Chapter XI of the SEBI Guidelines, in terms of which the Issue is being made. Enam Securities Private Limited and Lehman Brothers Securities Private Limited. All days except Saturday, Sunday and any public holiday. The note or advice or intimation sent to the Bidders who have been allocated Equity Shares, after discovery of the Issue Price in accordance with the Book Building Process. The higher end of the Price Band, above which the Issue Price will not be finalised. Any price within the Price Band finalised by our Company and the Selling Shareholders, in consultation with the BRLMs, at which only Retail Individual Bidders and Eligible Employees are entitled to Bid, for a Bid Amount not exceeding Rs. 100,000. The date on which the Escrow Collection Banks transfer the funds from the Escrow Accounts to the Public Issue Account, in terms of the Red Herring Prospectus. [●]. This Draft Red Herring Prospectus issued by the Company in accordance with section 60B of the Companies Act and the SEBI Guidelines, which does not contain, inter alia, complete particulars of the price at which the Equity Shares are offered and the size (in terms of value) of the Issue. An NRI from such jurisdictions outside India where it is not unlawful to make an offer or invitation under the Issue. A permanent employee of the Company or its Subsidiaries and based, working and present in India as on the date of submission of the Bid cum Application Form. The portion of the Fresh Issue being up to 100,000 Equity Shares available for allocation to Eligible Employees. Enam Securities Private Limited having its registered office at 24, B.D. Rajabahadur Compound, Ambalal Doshi Marg, Fort, Mumbai 400 001, Maharashtra, India. Accounts opened with the Escrow Collection Banks for the Issue to which cheques or drafts of the Margin Amount are issued by a Bidder, when submitting a Bid and the remainder of the Bid Amount, if any. An agreement to be entered into by our Company, the Selling Shareholders, the Registrar, the Escrow Collection Banks, the BRLMs and the Syndicate Members for the collection of Bid Amounts and for remitting refunds, if any, to the Bidders on the terms and conditions thereof. The Bidder whose name appears first in the Bid cum Application Form or Revision Form. The lower end of the Price Band, below which the Issue Price will not be finalised and below which no Bids will be accepted. The issue of 6,982,042 Equity Shares by the Company offered for subscription pursuant to the terms of the Red Herring Prospectus. The public issue of an aggregate 11,271,012 Equity Shares, consisting of Fresh Issue and Offer For Sale. The final price at which Equity Shares will be Allotted, as determined by the Book Building Process, as decided by the Company and the Selling Shareholders, in consultation with the BRLMs. Lehman Brothers Securities Private Limited, having its registered office at Ceejay House, 11th Level, Plot F, Shivsagar Estate, Dr. Annie Besant Road, Worli, Mumbai 400 018, India. The amount paid by the Bidder at the time of submission of the Bid, which may range between 10% to 100% of the Bid Amount. Mutual funds registered with SEBI under the SEBI (Mutual Funds) Regulations, 1996, as amended. 5% of the QIB Portion, consisting 335,131 Equity Shares, available for allocation to Mutual Funds. The Issue less the Equity Shares included in the Employee Reservation Portion, aggregating 11,171,012 Equity Shares. All Bidders that are neither Qualified Institutional Buyers nor Retail Individual Bidders and who have bid for an amount more than Rs. 100,000. The portion of the Issue being not less than 10% of the Net Issue consisting

Designated Date

Designated Stock Exchange Draft Red Herring Prospectus/DRHP

Eligible NRI Eligible Employee/s

Employee Reservation Portion Enam

Escrow Accounts

Escrow Agreement

First Bidder Floor Price Fresh Issue Issue Issue Price

Lehman

Margin Amount Mutual Funds Mutual Fund Portion Net Issue Non-Institutional Bidders Non-Institutional Portion

ii

Term

Description of 1,117,101 Equity Shares available for allocation to Non-Institutional Bidders, subject to valid Bids being received at or above the Issue Price. All eligible Bidders that are persons resident outside India, as defined under FEMA, including Eligible NRIs, FIIs and FVCIs. The offer for sale of 4,288,970 Equity Shares by the Selling Shareholders, pursuant to terms of the Red Herring Prospectus. The Bid/Issue Closing Date with respect to the Bidders whose Margin Amount is 100% of the Bid Amount or the last date specified in the CAN sent to the Bidders with respect to the Bidders whose Margin Amount is less than 100% of the Bid Amount. (i) With respect to Bidders whose Margin Amount is 100% of the Bid Amount, the period commencing on the Bid/Issue Opening Date and extending until the Bid/Issue Closing Date; and (ii) With respect to Bidders whose Margin Amount is less than 100% of the Bid Amount, the period commencing on the Bid/Issue Opening Date and extending until the closure of the Pay-in Date specified in the CAN. The price band with Floor Price of Rs. [●] per Equity Share and Cap Price of Rs. [●] per Equity Share and any revisions thereof. The date on which the Issue Price is finalised by our Company and the Selling Shareholders, in consultation with the BRLMs. The prospectus of the Company to be filed with the RoC for the Issue post the Pricing Date which would include the Issue Price and the size of the Issue. The account opened with the Bankers to the Issue by the Company and the Selling Shareholders to receive money from the Escrow Accounts on the Designated Date. Public financial institutions specified in section 4A of the Companies Act, FIIs, scheduled commercial banks, Mutual Funds, multilateral and bilateral development financial institutions, FVCIs, venture capital funds registered with SEBI, state industrial development corporations, insurance companies registered with the Insurance Regulatory and Development Authority, National Investment Fund set up by resolution F. No. 2/3/2005‐DD‐II dated November 23, 2005 of the GOI published in the Gazette of India, provident funds with a minimum corpus of Rs. 250 million and pension funds with a minimum corpus of Rs. 250 million. An amount representing at least 10% of the Bid Amount that the QIBs are required to pay at the time of submitting a Bid. The portion of the Issue being at least 60% of the Net Issue consisting of 6,702,607 Equity Shares, to be Allotted to QIBs on a proportionate basis. The account opened with the Refund Banker(s), from which refunds, if any, of the whole or part of the Bid Amount shall be made. [●]. Karvy Computershare Private Limited having its registered office at 46, Avenue 4, Street No.1, Banjara Hills, Hyderabad- 500 034, Andhra Pradesh, India. Bidders (including HUFs) who have Bid for an amount less than or equal to Rs. 100,000. The portion of the Issue being not less than 30% of the Net Issue consisting of 3,351,303 Equity Shares, available for allocation to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. The form used by the Bidders to modify the quantity of Equity Shares or the Bid price in any of their Bid cum Application Forms or any previous Revision Form(s). The offer document to be issued in accordance with Section 60B of the Companies Act and the SEBI Guidelines, by our Company for the Issue. The Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000, as amended. The U.S. Securities Act of 1933, as amended. The BSE and the NSE. The agreement to be entered into between our Company, the Selling Shareholders and members of the Syndicate, in relation to the collection of Bids. [●]. The BRLMs and the Syndicate Members.

Non-Residents Offer for Sale Pay-in Date

Pay-in Period

Price Band Pricing Date Prospectus

Public Issue Account

QIBs or Qualified Institutional Buyers

QIB Margin Amount QIB Portion Refund Account Refund Banker (s) Registrar to the Issue

Retail Individual Bidders Retail Portion

Revision Form

Red Herring Prospectus SEBI Guidelines Securities Act Stock Exchanges Syndicate Agreement

Syndicate Members Syndicate or members of the

iii

Term Syndicate TRS or Transaction Registration Slip Underwriters Underwriting Agreement

Description The slip or document issued by any of the members of the Syndicate to a Bidder as proof of registration of the Bid. The BRLMs and the Syndicate Members. The agreement to be entered into among the Underwriters, our Company and the Selling Shareholders, on or after the Pricing Date.

Abbreviations/Terms
Term Act or Companies Act AGM AS AY BIFR BSE CDSL CESTAT CIN CIT CRPC Depository Depositories Act Depository Participant DIN DP ID EGM EPS Description Companies Act, 1956, as amended from time to time. Annual General Meeting. Accounting Standards issued by the Institute of Chartered Accountants of India. Assessment Year. Board for Industrial and Financial Reconstruction. Bombay Stock Exchange Limited. Central Depository Services (India) Limited. Customs, Excise and Service Tax Appellate Tribunal (earlier, Customs, Excise & Gold (Control) Appellate Tribunal). Corporate Identification Number Commissioner of Income Tax. The Criminal Procedure Code, 1973. A depository registered with SEBI under the SEBI (Depositories and Participant) Regulations, 1996, as amended from time to time. The Depositories Act, 1996, as amended from time to time. A depository participant as defined under the Depositories Act. Director’s Identification Number. Depository Participant’s Identity. Extraordinary General Meeting. Earnings Per Share i.e., profit after tax for a Fiscal/period divided by the weighted average number of equity shares/potential equity shares during that Fiscal/period. Foreign Direct Investment. Foreign Exchange Management Act, 1999 read with rules and regulations thereunder and amendments thereto. Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 and amendments thereto. Foreign Institutional Investors as defined under SEBI (Foreign Institutional Investor) Regulations, 1995 and registered with SEBI under applicable laws in India. Period of twelve months ended March 31 of that particular year, unless otherwise stated. Foreign Investment Promotion Board. Foreign Venture Capital Investors, as defined under the Securities and Exchange Board of India (Foreign Venture Capital Investor) Regulations, 2000, as amended and registered with SEBI. General Index Registry Number. Government of India. Hindu Undivided Family. The Indian Penal Code, 1860. Initial Public Offering. Income Tax Appellate Tribunal. The Income Tax Act, 1961, as amended from time to time. Income Tax Department. Merchant banker as defined under the Securities and Exchange Board of India (Merchant Bankers) Rules, 1992. Memorandum of Understanding. Not Applicable. Net Asset Value being paid up equity share capital plus free reserves (excluding reserves created out of revaluation, preference share capital and share application money) less deferred expenditure not written off

FDI FEMA FEMA Regulations FII(s)

Fiscal/ Financial Year/FY FIPB FVCI

GIR Number GoI/Government HUF IPC IPO ITAT I.T. Act IT Department Merchant Banker MOU NA NAV

iv

Term

NRE Account NRI

NRO Account NSDL NSE OCB

OSP p.a. PAN P/E Ratio PLR QIB RBI RoC RONW SCRA SCRR SEBI SEBI Act SICA TRAI U.K. U.S./U.S.A. USD US GAAP

Description (including miscellaneous expenses not written off) and debit balance of ‘profit and loss account’, divided by number of issued equity shares outstanding at the end of a Fiscal/Period. Non Resident External Account. Non Resident Indian, is a person resident outside India, as defined under FEMA and the FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000. Non Resident Ordinary Account. National Securities Depository Limited. The National Stock Exchange of India Limited. A company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly as defined under Foreign Exchange Management (Transfer or Issue of Foreign Security by a Person resident outside India) Regulations, 2000. Other Service Providers. Per annum. Permanent Account Number allotted under the Income Tax Act, 1961. Price/Earnings Ratio. Prime Lending Rate. Qualified Institutional Buyer. The Reserve Bank of India. Registrar of Companies, National Capital Territory of Delhi and Haryana, at New Delhi. Return on Net Worth. Securities Contracts (Regulation) Act, 1956, as amended from time to time. Securities Contracts (Regulation) Rules, 1957, as amended from time to time. The Securities and Exchange Board of India constituted under the SEBI Act, 1992. Securities and Exchange Board of India Act, 1992, as amended from time to time. The Sick Industrial Companies (Special Provisions) Act, 1985. Telecom Regulatory Authority of India. United Kingdom. United States of America. U.S. Dollars, the official currency of U.S.A. Generally Accepted Accounting Principles in the United States of America.

Industry Related Terms/Abbreviations and Clients Specific Abbreviations
Term 3G ADC Airtel ARPU BGM BSNL CRBT CDMA CMMI COAI DNC DoT DTMF GPRS GSM HFCL IDEA IN IS ISO Description Third Generation Protocol. Access Deficit Charge. Bharti Airtel Limited. Average Revenue Per User. Background Music Bharat Sanchar Nigam Limited. Caller Ring Back Tone. Code Division Multiple Access. Capability Maturity Model ®Integration. Cellular Operators Association of India. Do Not Call Department of Telecommunications. Dual-tone multi-frequency. General Packet Radio Services. Global System for Mobile Communications. HFCL Infotel Limited. Idea Cellular Limited. Intelligent Network. Information Systems. International Organisation for Standardisation.

v

Term IT ITES IT Services IUC IVR IVRS MMP MMS MTNL MVAS NASSCOM OBD P2P NDNC RAID RBT Reliance R&D SIM SMS SMSC Spice Takeover Code TDSAT UCC USSD VAS Vodafone WAP

Description Information Technology. Information Technology Enabled Services. Information Technology Services. Interconnection User Charges. Interactive Voice Response. Interactive Voice Response System. Multi-modal Platform. Multimedia Messaging Services. Mahanagar Telephone Nigam Limited. Mobile Value Added Services. National Association of Software and Services Companies. Outbound dialer. Peer to Peer. National Do Not Call. Redundant Array of Independent Disks. Ring Back Tone. Reliance Communication Limited. Research and Development. Subscriber Identity Module. Short Messaging Service. Short Message Service Centre. Spice Communications Limited. Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended from time to time. Telecom Disputes Settlement And Appellate Tribunal. Unsolicited Commercial Communications. Unstructured Supplementary Service Data. Value Added Services. Vodafone Essar Limited. Wireless Application Protocol.

vi

CERTAIN CONVENTIONS, USE OF FINANCIAL INFORMATION AND MARKET DATA AND CURRENCY OF PRESENTATION Certain Conventions All references in this Draft Red Herring Prospectus to “India” are to the Republic of India. All references in this Draft Red Herring Prospectus to the “US”, “USA” or “United States” are to the United States of America. Financial Data Unless indicated otherwise, the financial data in this Draft Red Herring Prospectus is derived from our restated consolidated and unconsolidated summary statements, which are based on our audited consolidated and unconsolidated summary statements restated in accordance with paragraph B(1) of Part II of Schedule II of the Companies Act and the SEBI Guidelines for the 12 months ended December 31, 2003, 15 months ended March 31, 2005, Fiscal 2006 and 2007 and the nine months ended December 31, 2007. The audited consolidated and unconsolidated financial statements are prepared in accordance with Indian GAAP. There was no requirement to prepare consolidated summary statements for the periods prior to March 31, 2007 as the Company did not have any subsidiaries and accordingly the Company did not prepare consolidated summary statements for any periods prior to March 31, 2007. Our year ended December 31, 2003 reflects a 12 month fiscal year, our year ended March 31, 2005 reflects a 15 month fiscal year, our year ended March 31, 2006 reflects a 12 month fiscal year, our year ended March 31, 2007 reflects a 12 month fiscal year and our year ended December 31, 2007 reflects a nine month fiscal year, as a result of change of end of financial years of the Company. Our future fiscal years will end on December 31 each year and as a result will not be comparable to our nine months ended December 31, 2007. Currency of Presentation All references to “Rupees” or “Rs.” are to Indian Rupees, the official currency of the Republic of India. All references to “US$”, “U.S. Dollar” or “US Dollars” are to United States Dollars, the official currency of the United States of America. All references “SGD” are to Singapore Dollar, official currency of Singapore. Market and Industry Data Unless stated otherwise, industry and market data used throughout this Draft Red Herring Prospectus 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 are not guaranteed and their reliability cannot be assured. Although our Company believes that industry data used in this Draft Red Herring Prospectus is reliable, it has not been independently verified. Similarly, internal Company reports, while believed by us to be reliable, have not been verified by any independent sources. The extent to which the market and industry data used in this Draft Red Herring Prospectus is meaningful depends on the reader’s familiarity with and understanding of the methodologies used in compiling such data. Exchange Rates This Draft Red Herring Prospectus contains translations of certain foreign currency amounts into Indian Rupees that have been presented solely to comply with the requirements of Clause 6.9.7.1 of the SEBI Guidelines. These convenience translations should not be construed as a representation that those U.S. Dollar. SGD or other currency amounts could have been, or can be converted into Indian Rupees, at any particular rate, the rates stated below or at all.
Year ended March 31, Year ended March 31, Year ended March

vii

2008 U.S Dollar As on 39.90

2007 43.44

31, 2006 44.62

(Source: www.oanda.com)

viii

FORWARD-LOOKING STATEMENTS This Draft Red Herring Prospectus contains certain “forward-looking statements”. These forward looking statements generally can be identified by words or phrases such as “aim”, “anticipate”, “believe”, “expect”, “estimate”, “intend”, “objective”, “plan”, “project”, “shall”, “will”, “would’ “will continue”, “will pursue” or other words or phrases of similar import. Similarly, statements that describe our strategies, objectives, plans or goals are also forward-looking statements. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant statement. These forward-looking statements are based on our current plans and expectations and actual results may differ materially from those suggested by the forward looking statements due to risks or uncertainties associated with our expectations with respect to, but not limited to, regulatory changes pertaining to the industries in India in which we have our businesses and our ability to respond to them, our ability to successfully implement our strategy, our growth and expansion, technological changes, our exposure to market risks, general economic and political conditions in India and which have an impact on our business activities or investments, the monetary and fiscal policies of India, inflation, deflation, unanticipated turbulence in interest rates, foreign exchange rates, equity prices or other rates or prices, the performance of the financial markets in India and globally, changes in domestic laws, regulations and taxes and changes in competition in our industry. Important factors that could cause actual results to differ materially from our expectations include, but are not limited to, the following: • The loss of any one of our major customers, a decrease in the volume of business derived from these customers or a decrease in the prices at which we offer our services to them may adversely affect our operating income and profitability. Our contracts with carrier customers do not obligate the customers to market or promote our services to their end-user subscribers. We cannot provide any assurances that our relationship with Spice Communications will continue on the same terms. Our roaming network solutions and enterprise services products are presently provided only through Spice Communications. A substantial portion of our income is subject to the end-user pricing decisions of our carrier customers and reconciliation of billing information between our records and those of our customers. Failure to develop and introduce new products and solutions that achieve market acceptance could result in a loss of market opportunities.

• • • •

For further discussion of factors that could cause our actual results to differ, see the section “Risk Factors” beginning on page x. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Forward looking statements speak only as of the date of this Draft Red Herring Prospectus. Neither our Company nor the Selling Shareholders, nor the members of the Syndicate, nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI requirements, our Company, the Selling Shareholders and the BRLMs will ensure that investors in India are informed of material developments until such time as the grant of listing and trading permission by the Stock Exchanges for our Equity Shares Allotted pursuant to the Issue.

ix

SECTION II: RISK FACTORS An investment in equity shares involves a high degree of risk. You should carefully consider all the information in this Draft Red Herring Prospectus, including the risks and uncertainties described below, before making an investment in our Equity Shares. To obtain a complete understanding you should read this section in conjunction with the sections “Business” beginning on page 54 and “Management’s Discussion and Analysis on Results of Operations and Financial Conditions” beginning on page 278. Any of the following risks as well as other risks and uncertainties discussed in this Draft Red Herring Prospectus could have a material adverse effect on our business, financial condition and results of operations and could cause the trading price of our Equity Shares to decline which could result in the loss of all or part of your investment. Unless otherwise stated in the relevant risk factors set below, we are not in a position to specify or quantify the financial or other implications of any risk mentioned herein. INTERNAL RISK FACTORS Risks Relating to Our Business 1. Mr. Dilip Modi, one of our Promoters and Dr. Bhupendra Kumar Modi, a person forming part of our Promoter Group, are directors in other group companies which are either appearing on the RBI’s list of defaulters or are under winding up.

All banks and financial institutions are required to submit to the RBI details of debt defaulters where the amount of default exceeds Rs.10 million or where the account holders have been classified as willful defaulters. This data on defaulters is circulated in a consolidated form by RBI to the banks and financial institutions. Mr. Dilip Modi, one of our Promoters, was a director on the board of Modi Stones Limited during the period August 20, 1992 until November 7, 1998 and Dr. Bhupendra Kumar Modi, another individual member of our Promoter Group, is a member of the board of directors in Modi Rubber Limited and was also a director on the board of Modi Stones Limited until December 7, 1998. Both Modi Stones Limited and Modi Rubber Limited appear on the list of defaulting companies as per the RBI database. For more details, please see the section “Outstanding Litigation and Material DevelopmentsCompanies under RBI Defaulter’s list” beginning on page 345. We cannot assure you that Modi Stone Limited and Modi Rubber Limited will not continue to remain on the RBI’s list of defaulters, or that such companies’ status as defaulters will not have any adverse effect on our business. MBM Limited (“MBM”) is neither a Promoter nor a Promoter Group Company of our Company and Dr. Bhupendra Kumar Modi was a director on the board of MBM only uptil October 30, 1993. The Hon’ble Punjab and Haryana High Court vide its order dated February 20, 1997, passed winding up orders against MBM and appointed an official liquidator and MBM is under winding up proceedings and all the documents were handed over to the official liquidator of the company. 2. There are certain criminal proceedings pending against some of our Promoter Group companies.

Certain of our Promoter Group companies have certain criminal proceedings pending against them, details of which are provided below: Omnia BPO Services Limited A criminal case has filed by the labour department against the Omnia BPO Services Limited under sections 23 and 24 of the Contract Labour (Regulation & Abolition) Act, 1970 read with the Central Rules, 1971. Spice Communications Limited A criminal complaint under section 420 of the IPC has been filed against Spice Communications Limited by Sukhjit Singh Chandi in the Court of Judicial Magistrate First Class, Chandigarh.

x

A criminal complaint has been filed by the Assistant Controller of Legal Metrology, Tumkur against Spice Communications Limited in the Court of Judicial Magistrate, First Class, Tumkur under the Standard Weights and Measures Act, 1976. Further, three complaints have been filed against Spice Communications Limited under section 133 of the CRPC for restraining it from installing a cell phone tower. A complaint has been filed against the company for violation of the provisions of Equal Remuneration Act, 1976 in the Labour Court, Mysore under the Equal Remuneration Act, 1976 and the Contract Labour (Regulation and Abolition) Act, 1970. For more details, please see the section “Outstanding Litigation and Material Developments” beginning on page 300. 3. A few major carrier customers account for a significant portion of our income. The loss of any one of our major customers, a decrease in the volume of business derived from these customers or a decrease in the prices at which we offer our services to them may adversely affect our operating income and profitability.

We have derived and believe that we will continue to derive a significant portion of our income from a few major carrier customers. For our nine months ended December 31, 2007, and our Fiscals 2007 and 2006, respectively, our five largest customers accounted for approximately 82%, 78% and 78% of our operating income, respectively. As a result of significant our reliance on a small number of carrier customers, we may face certain issues including pricing pressures. Our contracts with these carrier customers are typically for a limited period, ranging between one and three years, and the terms of such contracts allow the carrier customers to terminate the contracts without cause by giving notice as per the terms of the agreement. In addition, we have no guarantee of income under these agreements or minimum requirements for the use of our services. The loss or significant decrease in the volume of business from one or more of our large carrier customers would have an adverse effect on our business, financial condition and cash flows. Further, the income from these customers may vary from year to year, making it hard to forecast future business needs, particularly since we are not the exclusive service provider for any of our customers. Any significant decreases in spending on MVAS by the enduser subscribers of our major customers may accordingly reduce the demand for our services and adversely affect our income, profitability and results of operations. In addition, our income may be affected by competition and decreasing rates in the telecommunications industry and a number of factors, other than our performance, that could cause the loss of a customer and that may not be predictable such as financial difficulties, bankruptcy or insolvency affecting our customers. These carrier customers may in the future demand price reductions, develop and implement newer technologies, automate some or all of their processes or change their strategy by moving more work inhouse or to other providers, any of which could reduce our profitability. Any of the foregoing events or any delay or default in payment by our customers for services rendered may adversely affect our business, financial condition and results of operations. 4. Our contracts with carrier customers do not obligate the customers to market or promote our services to their end-user subscribers.

Most of our contracts with carrier customers are on a revenue sharing basis and provide that we earn income only if our customers’ end-user subscribers use or subscribe to the value added services offered by our customers. As a result, our income is subject to uncertainties that are beyond our control, such as market acceptance of our products and services by our customers’ end-user subscribers and the subscriber churn rate and are dependent upon the pricing of the services, product placement and marketing and promotion activities conducted by our customers either jointly with us or solely. None of our contracts obligate our customers to market or distribute any of our products or services to their end-user subscribers. Without the appropriate marketing, promotion and pricing of the services we provide to our customers, the subscribers may not be aware of, or may cease to use, or decrease usage of, our products and services. For example, the current practice among our customers generally is to place the most popular wireless applications at the top of the menu on the first page available on their mobile phone portals or in the most prominent positions on their websites. Services at the top of the menu and in more prominent positions are more accessible to subscribers and, in our experience, are

xi

more frequently accessed than those services in less prominent positions. If our customers change their current practices so that our products are displayed less prominently or are less accessible to the enduser subscribers, our services could become more difficult for users to access and could, therefore, become less popular. This could adversely affect the income from our products and services, and thus our overall results of operations and financial condition. In addition, as most of our customer contracts are non-exclusive, our customers may purchase similar products and services from third parties and cease to offer our products and services in the future. Even if our customers retained our services, our customer contracts do not prevent our customers from significantly reducing the level of marketing or promotion of our products or from electing to market or promote similar products purchased from and provided by our competitors. Any of the foregoing may result in the loss of future income from our carrier customers. 5. We cannot provide any assurances that our relationship with Spice Communications will continue on the same terms.

Historically, we have entered into agreements with Spice Communications wherein we have agreed to provide roaming services and value added services at an agreed revenue sharing arrangement. As per the provisions of our agreement with Spice Communications dated June 25, 2008, Spice Communications would continue to avail general VAS services such as mobile radio, BGM, CRBT from our Company for a period of three years, while with respect to SMS, GPRS, roaming and outbound dialer services, Spice Communications, would avail such services from our Company for a period of nine months starting from the date of the agreement.. Historically we have derived significant revenues from Spice Communication and they contributed approximately 50.44 % to our total income during the nine months period ended December 31, 2007 and 38.36% in Fiscal ended March 2007. On June 25, 2008 Spice Communications has communicated to us that one of its promoter shareholder i.e. MCorpGlobal Communication Private Limited has entered into a Share Purchase Agreement with Idea Cellular Limited to divest its entire shareholding comprising 40.8% in Spice Communications to Idea Cellular Limited. The board of directors of Spice Communications has also approved its merger with Idea Cellular Limited. Pursuant to the aforesaid proposed change in shareholding and ownership of Spice Communications, we cannot assure you that we will continue to do business with Spice Communications and through Spice Communications with its customers on the same terms or at all. Any continued business relationship may not be on terms commercially favourable to us. In the event we were to lose our relationship with Spice Communications, our failure to make alternative arrangements in a timely manner and on terms commercially acceptable to us could have an adverse effect on our business, financial condition and results of operations.

6.

Our roaming network solutions and enterprise services products are presently provided only through Spice Communications.

We provide roaming products and solutions and enterprise products to corporate clients through agreements entered into with Spice Communications, which has developed a roaming network through alliances with these operators. On June 25, 2008 Spice Communications has communicated to us that one of its promoter shareholder, MCorpGlobal Communication Private Limited has entered into a Share Purchase Agreement with Idea Cellular Limited to divest its entire shareholding comprising 40.8% of the paid-up share capital in Spice Communications to Idea Cellular Limited. The board of directors of Spice Communications has also approved its merger with Idea Cellular Limited. Subsequent to such ownership change, roaming network of Spice Communication may not be available to us. In such scenario, we will need to establish direct relationships with carriers other than Spice Communications for provision of our roaming solutions and enterprise products for the maintaining growth and expansion of our business. Currently, we are dependent on Spice Communications’ continued relationship with these operators as well as our continued relationship with Spice Communications. In the event of an arrangement being terminated between Spice Communications and the operator, we may suffer a resulting negative effect on our ability to offer our roaming products and services to these operators and enterprise products to corporate clients, which in turn could have an adverse effect on our results of operations.

xii

7.

A substantial portion of our income is subject to the end-user pricing decisions of our carrier customers and reconciliation of billing information between our records and those of our customers.

We earn a substantial portion of our income through revenue sharing agreements with our carrier customers. Under such revenue sharing agreements, we earn as income a percentage of the retail price that our customers charge to their end-user subscribers for the use of our products and applications. We earned approximately 81% and 67% of our income from such revenue sharing agreements in our nine months ended December 31, 2007 and in prior Fiscal 2007. We have no control over their pricing decisions and most of our customer contracts do not provide for guaranteed minimum payments. As a result, our income derived from such revenue sharing agreements may be substantially reduced depending on the pricing decisions and pressures of our customers, which may adversely affect our results of operations and financial condition. Further, according to revenue sharing agreements with our customers, the calculation of net revenue from the usage of our services by their respective subscribers is based on records maintained by our customers or on records maintained by us that are reconciled with those prepared by our customers in the event of a discrepancy. The billing methodologies and management information systems of our customers are critical in preparation of accurate and timely usage reports. Our income realization with respect to such records may become subject to dispute and may adversely affect our business, financial condition and results of operations. 8. Failure to develop and introduce new products and solutions that achieve market acceptance could result in a loss of market opportunities.

Our business depends on developing and providing innovative products and solutions to our customers that will create and fulfill demand by end users. Development of new products and solutions is subject to unpredictable and volatile factors beyond our control, including end user preferences and competing products and solutions. In addition, due to the competitive nature of the telecommunications market in which we operate, and given the fact that time-to-market and service features are key differentiators of MVAS offerings between carriers, products, solutions and applications in our industry have short lifespans. We need to continuously invest in research and development to develop new and differentiated products and solutions for our customers. Further, some or all of such products and solutionsmay not provide adequate returns commensurate with our investments. Our products and solutions could also be rapidly rendered obsolete by the introduction of newer technologies based on more advanced mobile networks using broader bandwidths. Unexpected technical, operational, deployment, distribution or other problems could delay or prevent the timely introduction of new products and solutions, which could result in a loss of market opportunities. Our growth could also suffer if our products and solutions are not responsive to the needs of wireless carriers, the technological advancements of mobile networks or the preferences of the subscribers. 9. Increasingly, a majority of the new subscribers of our carrier customers are from nonmetro areas and they tend to have lower levels of the purchase of value added services per user.

With the expanding penetration of wireless telecommunications in India, a majority of the new subscribers of our carrier customers are increasingly from non-metro areas. These subscribers generally spend less on telecommunications solutions and value added products and services than subscribers from metro areas and may not purchase mobile phones capable of receiving many of our products and services. These end-users tend to purchase fewer and less expensive mobile telecommunication applications and products and hence represent lower revenue potential for the carriers and also for us, since most of our contracts with our carrier customers are on a revenue sharing basis. If this trend continues, it may have an adverse effect on our results of operations. 10. We currently depend on entertainment and music related products/services and solutions, including mobile radio, caller ringback tones, ringtone downloads and Jukebox, for a significant portion of our operating income.

We earned approximately 61% and 63% of our operating income from our music related services, including mobile radio, caller ringback tones, BGM and Jukebox, in nine months ended December 31,

xiii

2007 and in prior Fiscal 2007, respectively. We expect to continue to derive a significant portion of our operating income from these services over the next few years. There could be a decline in the demand for our products/services and solutions due to various factors, including increases in the cost of our products/services and solutions due to an increase in the cost of the content we source, competition or technological advancements rendering our technology obsolete. A decrease in the popularity of our music related services and solutions among mobile phone users, or a failure by us to maintain, improve, update or enhance such services and solutions in a timely manner, enter into new markets, or successfully diversify our products/services and solutions could adversely affect our business, financial condition and results of operations. 11. An affiliate of Lehman Brothers Securities Private Limited, one of the BRLMs, currently has and upon completion of the Issue will continue to have, a significant shareholding in the Company.

Lehman Brothers Opportunity Limited (“LBOL”), an affiliate of Lehman Brothers Securities Private Limited, one of the BRLMs in the Issue, holds 17.27% of the Equity Shares prior to the Issue and will hold 9.69% of the Equity Shares immediately upon the completion of the Issue. For details of the shareholding of LBOL, see the section “Capital Structure” beginning on page 21 and “History and Certain Corporate Matters” beginning on page 74. In addition, LBOL has certain rights under the Investor Rights’ Deed dated November 22, 2006, which inter alia, grants LBOL with (a) a right of first refusal for issuances of securities by our Company and (b) rights in relation to certain corporate actions to be taken by our Company. Also, LBOL is entitled to appoint one director as long as it holds more than 7.5% of the equity share capital of our Company and quorum and affirmative voting rights at board and shareholder meetings. Further, any change in the present business of our Company would require the prior consent of LBOL. The Investor Rights’ Deed would be terminated at the date of completion of initial public offering or when LBOL or any of the associated companies ceasing to hold 7.5% of the total issued Equity Shares, whichever is earlier. For details of the Investors’ Rights’ Deed, see the sections “Capital Structure” beginning on page 21 and “History and Certain Corporate Matters” beginning on page 74. The interests of LBOL may be different from our interests or the interests of our other shareholders. By exercising its rights under the Investor Rights’ Deed, LBOL may take actions with respect to our business that may not be in our or our other shareholders’ best interests. LBOL could delay or defer a change in our capital structure, a merger, consolidation, or other business combination involving us, which may not be in our best interest, or in the best interest of our other shareholders. In accordance with the SEBI Guidelines, the Equity Shares held by LBOL will be subject to a one-year lock-in period commencing from the date of Allotment. However, LBOL is offering part of its shareholding in the Company in the Pre-IPO Placement and the Offer for Sale and there can be no assurance that LBOL will not sell some or all of its Equity Shares either prior to Allotment or immediately upon the expiry of lock-in, one year after the date of Allotment. The sale of such Equity Shares, or the perception that such sales will occur, may adversely impact the Issue Price or the price of the Equity Shares trading in the market. 12. Lehman Brothers Opportunity Limited, is an affiliate of Lehman Brothers Securities Private Limited, one of the BRLMs, and one of the Selling Shareholders in the Issue, which may result in a conflict of interest with investors in the Issue.

LBOL is an affiliate of Lehman Brothers Securities Private Limited, one of the BRLMs in the Issue, and is a Selling Shareholder. LBOL might have interests in the Issue that may conflict with that of an investor in the Issue, including commercial interests such as a high return on its equity investment in the Company, which may in turn influence the decision relating to the Issue Price. 13. Our limited operating history may make it difficult for prospective investors to evaluate our business.

We launched our first product/service in 2001. There is limited historical financial and operating information available to help prospective investors evaluate our past performance and future prospects or to make a decision about an investment in our Equity Shares. In addition, because of our limited

xiv

operating history, and changes in our fiscal year ends since 2003, our historical financial results are not directly comparable and may not accurately predict our future performance. Our financial results in recent years have reflected growth in income as our business was launched, however given our short operating history, we cannot offer any assurances that this positive trend will continue as our business matures and moves through various economic cycles. For example, as a result of industry factors, economic circumstances or factors specific to us, we may have to alter our anticipated methods of conducting our business, such as the nature, amount and types of risks we assume. The telecommunications value added services market is nascent, highly competitive and is rapidly evolving. As a result, any evaluation of our business and our prospects must be considered in light of our industry, our limited operating history and the risks and uncertainties often encountered by companies at our stage of development. 14. Any inability to manage our growth could disrupt our business and reduce our profitability.

We have experienced significant growth in income in recent years. Our operating income has increased from Rs. 324.95 million in our Fiscal 2006 to Rs. 661.78 million in our Fiscal 2007 to Rs. 734.56 million in our nine months ended December 31, 2007. The total number of employees has grown from 265 as of March 31, 2007 to 372 as of May 31, 2008. While these growth rates are not indicative of our future growth, we expect this growth to place significant demands on both our management and our resources. This will require us to continuously evolve and improve our operational, financial and internal controls across the organization. In particular, continued expansion increases the challenges involved in: • • • • • maintaining high levels of customer satisfaction and loyalty; adhering to our high quality and process execution standards; recruiting, training and retaining sufficient skilled technical, sales and management personnel; preserving our culture, values and entrepreneurial environment; and developing and improving our internal administrative infrastructure, particularly our financial, operational, communications and other internal systems.

Any inability to manage growth may have an adverse effect on our business, financial condition and results of operations and could result in decline of the price of our Equity Shares. 15. Failure to meet the expected level of performance in accordance with our contracts with customers could result in a loss of our income or adversely affect the customer relationships or the business of our customers, all of which could be detrimental to our business and reputation.

Mobile telecommunication applications and products such as those we offer are complex and utilize sophisticated software systems which may result in operational errors or performance problems. In connection with the provision of our mobile telecommunication products and applications, we enter into contracts with some of our customers which contain provisions requiring us to maintain the services at or above certain minimum performance standards. In certain cases, we are required to post a bank guarantee against performance. Under these contracts, if we fail to meet the specified standards, we may be subject to liquidated damages or penalties or, if applicable, the customer could require payment under a bank guarantee, and in certain cases, termination of contracts by our carrier customers. In addition, any defects in our intellectual property which we license to our customers could result in a claim against us for substantial damages, regardless of our responsibility for such a failure or defect. We cannot assure prospective investors that in case any claims for damages are made by our customers, the limitations on liability we provide for in our service contracts will be enforceable, or that they will otherwise be sufficient to protect us from liability for damages. Further, any failure of, or technical problems with, our servers, systems or platforms could disrupt the ability of the subscribers of our carrier customers to use our telecom applications and platforms. In the past, we have experienced failures with our servers, systems and/or platforms, which were generally

xv

related to heavy surges in volume associated with holiday entertainment purchase activities or activities relating to promotions being made by our customers. If failures occur on our customers’ multiple networks or software systems, it may be difficult for us to identify the source of the problem and to correct it on a timely basis, in particular as our customers generally use our services together with their own services and services from other vendors. In addition, our systems or platforms are, in most cases, integrated into the voice and data networks of our customers for which we operate and manage applications. Failure of our systems or platforms could disrupt the delivery of voice and data service by our customers. Any of the foregoing problems could result in a loss of income or adversely affect the customer relationships and business of our customers, all of which could be detrimental to our business and reputation generally. 16. Many of our contracts do not have a fixed term or are of short duration and are subject to renewal. If we are unable to renew or extend our contracts with our existing customers on terms acceptable to us or at all, our future financial condition and results of operations may be adversely affected.

Our contracts with our carrier customers are generally term contracts of one year or three years in duration or open ended and in effect until termination by either party after a requisite notice period. All customer contracts are on a non-exclusive basis and we cannot guarantee that they will continue to be our customers. As these contracts reach the end of their stated terms, our customers can seek to renegotiate pricing or other terms with us or not renew the contracts. In addition, all of our contracts allow our customers to terminate a contract without cause after a requisite notice period, typically ranging from 30 to 90 days. There is no assurance that we will be able to maintain our existing business relationships with our customers. If we are unable to renew or extend our contracts with existing customers or if our customers seek to renegotiate the contracts on terms unfavorable to us as they expire, it may be difficult to find a suitable replacement carrier customer with the requisite licenses and permits, infrastructure and customer base. This may have an adverse effect on our growth, financial condition and results of operations.

17.

We will be controlled by our Promoters so long as they control a majority of our Equity Shares.

After the completion of the Issue, our Promoters will hold approximately 65.85% of our outstanding Equity Shares. As a result, one of our Promoters, Omnia Investments Private Limited which, will have the ability to exercise significant control over us and all matters requiring shareholder approval, including election of directors, our business strategy and policies and approval of significant corporate transactions such as mergers and business combinations. The extent of their shareholding in us may also delay, prevent or deter a change in control, even if such a transaction is beneficial to our other shareholders. The interests of our Promoters and Promoter Group as our controlling shareholders could also conflict with our interest or the interests of our other shareholders. We cannot assure prospective investors that our Promoters and Promoter Group will act to resolve any conflicts of interest in our favour. 18. Our carrier customers could develop some or all of our mobile telecommunication applications and products on their own or otherwise bring them in-house, which could result in the loss of future income.

We derived over 94.52% and 96.36% of our income from providing mobile telecommunication applications and products in our nine months ended December 31, 2007 and our Fiscal 2007, respectively. Currently most of our carrier customers do not themselves offer such services and products independently; however, if our carrier customers begin developing these services and products or otherwise were to bring development and provisions in-house, we could be under price pressure in order to maintain our business with existing carrier customers, if at all. Our inability to remain a provider of mobile telecommunication applications and products of choice could result in the loss of future income and may have an adverse effect on our future business, financial condition and results of operations.

xvi

19.

Usage of our applications and services may be difficult to predict and we may not be able to adequately and quickly expand capacity and upgrade our systems to meet increased demand.

It is difficult to predict end-user subscriber adoption of new mobile telecommunication applications and products, particularly in new markets. As a result, while we may launch a new product with a planned or expected capacity, such capacity may not be sufficient to meet demand if it exceeds our expectations. In such situations, we may not be able to expand and upgrade our systems and application platforms quickly enough to accommodate increased usage of our services. If we do not appropriately expand and upgrade our systems and application platforms, we may lose market opportunities or damage our reputation with our carrier customers, which may adversely affect our business, financial condition and results of operations. 20. Our management information systems are critical to our ability to realize income from our operations.

Sophisticated customer management information systems are critical for increasing our income streams, avoid income loss and charge our customers accurately and in a timely manner. We expect new technologies and applications to create increasing demands on our customer management systems. Problems such as reconciliation of payments, revenue recognition and delayed payments will occur in the complexities involved in the process of billing by our customers to their end-user subscribers. We need to expand and adapt our payment and credit control systems as we introduce new services and as our business expands. The development of new businesses may impose a greater burden on our systems and may strain our administrative, operational and financial resources. If adequate payment information, credit control and customer relations systems are unavailable or if upgrades or new systems are delayed or not introduced or integrated in a timely manner, this could adversely affect our business and results of operations. 21. Our agreement with Virtual Marketing Private Limited has expired.

Virtual Marketing Private Limited (“VMIL” or “Hungama”) is one of our largest content providers for us. Our agreement to provide content with Hungama expired on March 31, 2008 and we are currently negotiating terms for renewal of this agreement. We cannot assure you that our agreement with Hungama will get renewed on terms favourable to us, or renewed at all. If we are unable to renew this agreement, we may be prevented from providing content sourced from Hungama and will have to source alternative content which may not be at terms favorable to us, which may result in loss of income or business opportunities or reduced margins that would harm our business, financial condition and results of operations. 22. Consolidation among, or change of ownership of, our carrier customers may result in the loss of carrier customers or reduce our potential customer base, which would negatively affect our financial performance.

Consolidation among carriers may reduce our potential customer base or may negatively affect our ability to expand our customer base or may result in the loss of our current carrier customers. In addition, as fewer carrier customers gain control of the telecom mobile subscriber market, pricing pressure is likely to increase and consequently, a change of ownership of our carrier customers could also result in the loss of our current customers if the new owners select another mobile telecommunication applications and products service provider to provide MVAS and solutions. The occurrence of any of these events could have an adverse effect on our business, financial condition and results of operations. 23. Delay or defaults in payments by our carrier customers or termination of the contract may adversely affect our income realization.

Approximately 87% of our operating income is derived from our contracts with carrier customers, which provide for payments for most of our services on a revenue sharing basis, for the nine months ended December 31, 2007. Typically, delays in payment by our customers will arise primarily due to delays in reconciling our billing and usage records with the records prepared by our customers. In the event of delayed payments beyond a certain period, we are entitled to discontinue our provision of

xvii

services or terminate the contract without any liability of the customer, other than for payments owed. Our income is concentrated in five customers and any delay or default in payment by them, or termination of the contract, decrease in usage of the services provided to them by us or certain loss of end-user subscribers may have an adverse effect on our income, business, financial condition and results of operations. 24. We currently source and aggregate content from a variety of content providers. If we are unable to secure a license designed to aggregate content on terms favorable to us, we may be prevented from providing the customer services, or will need to incur significant costs to seek alternative content, which could adversely affect our business. Further, breach of our contracts with our vendors, third party suppliers or content providers may adversely affect our business, financial condition and results of operations

We have entered into licensing agreements with several content providers to use copyrighted content or works as part of the services we provide to our carrier customers and their subscribers. Most of the licensing agreements we have entered into with our content providers have confidentiality obligations. Some of these agreements also restrict us from entering into similar agreements with other third parties during the term of such agreements. We depend upon vendors and third party suppliers to provide us with the hardware and software required for installation and use of our services by our customers. We may be liable to our vendors, third party suppliers or content providers if we breach our contracts with them. Any failure on our part to comply with such obligations could cause us to be in breach of our contract and could result in a claim against us for substantial damages or even termination of the contract by the content provider. The successful assertion of any claim by a third party would have an adverse effect on our business, financial condition and results of operations. In addition, these agreements are mostly for a term of one year. If we are unable to renew these licenses on terms favorable to us, or at all, upon their expiration we may be prevented from providing content sourced from these content providers and will have to source alternative content may not be at terms favorable to us, which may result in loss of income or business opportunities or reduced margins that would harm our business, financial condition and results of operations. 25. Third parties may successfully sue us for intellectual property infringement which could disrupt our business or require us to pay significant damage awards which we may not succeed in recovering from our content providers.

Third parties may sue us for intellectual property infringement or initiate proceedings to invalidate our intellectual property rights, either of which, if successful, could disrupt the conduct of our business or require us to pay significant damage which we may not recover from our content providers. In addition, in the event of a successful claim against us, we may be subject to injunctions preventing us from using our intellectual property, incur significant licensing fees and/or be forced to develop alternative technologies. Our failure or inability to develop non-infringing technology or applications or to license the infringed or similar intellectual property rights, technology or applications on a timely basis could force us to withdraw services from the market or prevent us from introducing new services on a timely basis, or at all. In addition, even if we are able to license the infringed or similar intellectual property rights, technology or applications, license fees could be substantial and the terms of such licenses could be unfavorable. Any of the foregoing may result in increased costs and loss of income which may have an adverse effect on our business, financial condition and results of operations. We may also incur substantial expenses in defending against third-party infringement claims, regardless of their merit. Such claims may arise frequently, especially with respect to our music-ondemand and music service platform, given the evolving nature of and resulting uncertainty in laws and regulations governing the use and distribution of music and other content in digital format. However, we cannot assure prospective investors that the same would be adequate to cover one or more large claims. For more information, see the section “Our Business — Insurance” beginning on page 68. In the event that we are unsuccessful in defending against infringement claims, our business may be disrupted and we may incur substantial legal costs and infringement liability damages, which in turn could result in a loss of income and could have an adverse effect on our business, financial condition and results of operations. 26. We have made applications for registration of our intellectual property rights, which are currently pending. If we do not adequately protect our intellectual property rights, we may

xviii

have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of management attention and resources. We rely on a combination of copyright, trademark, patents and trade secret laws and restrictions on disclosure, such as confidentiality provisions and non-disclosure agreements, to protect our intellectual property rights. As of May 31, 2008, we have one registered trademark. Our trademark and logo “Cellebrum” is registered with the Trademarks Registry in Delhi, India. We have recently filed an application for alteration of our existing registered trademark “Cellebrum” with the Trademarks Registry in Delhi, India. We have currently applied to register 15 other trademarks with the Trademarks Registry in New Delhi, India. We have also filed 11 patent applications with the Controller of Patents in the Patent Office, New Delhi, India. As of May 31, 2008, we also have 18 registered copyrights with the Registrar of Copyrights and we have applied for two copyright registrations with the Registrar of Copyrights. For more information, see the section “Our Business — Intellectual Property” beginning on page 67. We cannot assure you that the application for registration of such trademarks, copyrights or patents which are pending registration will be granted by the relevant authorities. In the event we do not obtain patents, trademarks and copyrights for which we have applied we may lose protection of the intellectual property associated with the product the subject of the patent, trademark or copyright application, which may provide opportunities to competitors to compete with our products and services, which could be detrimental to our existing and future business. Despite our efforts to protect our intellectual property rights, unauthorized parties may attempt to copy or otherwise obtain and use our technology and applications and the applicable laws may not adequately protect our proprietary rights. Monitoring unauthorized use of our applications is difficult and costly, and we cannot be certain that the steps we have taken will prevent piracy and other unauthorized distribution and use of our technology and applications. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of management attention and resources. Any such litigation could be time consuming and costly and the outcome cannot be guaranteed. We may not be able to detect any unauthorized use or take appropriate and timely steps to enforce or protect our intellectual property. In addition, India is a party to international agreements which may in the future require it to modify its existing intellectual property protection regime, which may in turn impact our ability to secure appropriate levels of such protection for our products. Historically, we have relied on trade secrets, know-how and other proprietary information as well as requiring our principal employees to sign confidentiality agreements and deeds of relinquishment and requiring our subcontractors, vendors and suppliers to sign agreements which impose a confidentiality obligation on them. However, these confidentiality obligations may be breached, and we may not have adequate remedies for any breach. Third parties may otherwise gain access to our proprietary information or may independently develop substantially equivalent proprietary information. 27. Our statutory auditors have made certain qualifications in their audit report, which may adversely affect the trading price of our Equity Shares.

Our statutory auditors in their report dated March 27, 2008 on the audited unconsolidated financial statements of our Company as of and for the nine month period ended December 31, 2007 included, as an Annexure, a statement on certain matters specified in the Companies (Auditor’s Report) Order, 2003, which was qualified to indicate that (i) fixed assets had not been physically verified by the management during the period and discrepancies therein, if any, as compared to book records were not ascertainable, and (ii) undisputed statutory dues have generally been regularly deposited with the appropriate authorities though there have been delays in some cases. In addition, the Auditor’s report dated September 28, 2007 on the audited unconsolidated financial statements of our Company as of and for the year ended March 31, 2007 included, as an Annexure, a statement on certain matters specified in the Companies (Auditor’s Report) Order, 2003, which was qualified to indicate that undisputed statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases. Our statutory auditors report dated June 26, 2008 on the audited consolidated financial statements of our Company as of and for the Fiscal 2007 was qualified to indicate that Mobisoc Technology Private Limited, our subsdiary had capitalized certain costs relating to development of software during the year ended March 31, 2007 for which technical feasibility and probable future economic benefits were yet to be established. As the auditors of the parent Company believed that such costs did not qualify for capitalization as per the guidance given under Accounting

xix

Standard 26 ‘Intangible Assets’ issued by the Institute of Chartered Accountants of India, the consolidated financial statements for the year ended March 31, 2007 were qualified to that extent. For more details, see the sections “Financial Statements” and “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” beginning on pages 166 and 280, respectively. We cannot assure you that our Auditors will not qualify their opinion in their audit report on the audited consolidated or unconsolidated financial statements in the future, which may adversely affect the trading price of our Equity Shares. 28. Security vulnerabilities, illegal downloads, or transfers of audio and video files directly onto handsets may harm our music-on-demand business and the income we earn from it.

Our music solutions business depends on the ability of our carrier customers to receive paid subscription fees from downloads or streaming of music content, including full-track music titles. However, computer and internet technologies that enable or facilitate illegal downloads or transfers of music files, such as MP3 files, to personal computers and mobile handsets pose a significant threat to wireless carriers, service providers and content providers alike. While industry efforts are being made to restrict such functions through development of terminals, encoding technologies and sophisticated customer interface, no assurance can be given that illegal downloads or transfers will be eliminated. There are individuals and groups who develop and deploy software programmes that compromise security and encoding technology. For example, hackers may find or develop and widely circulate software that enables unauthorized decoding of digital rights management technology to download music or other content directly onto mobile phones without using our music-on-demand or other content delivery applications. Prevalence of security vulnerabilities, illegal downloads or transfers of music files or lack of market acceptance of paid subscription for music content could adversely affect our music solutions business and the income we earn from it. 29. If we are unable to successfully protect our information technology infrastructure from security risk, our business may suffer.

Our servers, like those of all businesses, are vulnerable to computer viruses, break-ins, power losses, Internet and telecommunications or data network failures, software theft or destruction and similar disruptions from unauthorized tampering with our computer systems. We maintain disaster recovery capabilities and back-up systems for certain critical functions in our business, which are located at Mohali and Parwanoo. We also maintain checks and systems for ensuring network security against virus or other malignant attacks. However, we cannot assure you that these capabilities will successfully prevent a disruption to or an adverse effect on our business or operations in the event of a disaster or other business interruption. Any extended interruption in our technologies or systems could significantly curtail our ability to conduct our business and generate income. We cannot assure you that we will be able to continue to operate effectively and maintain such information technologies and systems. 30. Our senior management team and other key team members are critical to our continued success and the loss of such personnel or an inability to attract and retain talented personnel could harm our business.

We are dependent on the continued service and performance of our senior management team and other key team members to continue our growth. Our growth strategy will place significant demands on our management and other resources because it requires us to continue to improve operational, financial and other internal controls. These key personnel possess technical and business capabilities that are difficult to replace. We do not maintain key man life insurance for any of our senior management or other key team members. The loss in the services of the members of our senior management or other key team members, particularly to competitors, or our failure to otherwise retain the necessary management and other resources to maintain and grow our business, may have an adverse effect on our results of operations, financial condition and prospects. Our future success and our ability to maintain our competitive position and implement our business strategy are dependent to a large degree on our ability to identify, attract, train and retain technical service operation and application development engineers and personnel with skills that enable us to keep pace with growing demands and evolving industry standards and on the continued service and performance of our senior management team and other key team members in our business units.

xx

Qualified individuals are in high demand and competition for qualified engineers and personnel in our industry is intense, and we may incur significant costs to retain or attract them. The average experience of our senior management and other key team members as of May 31, 2008 is 14 years. We may not be able to retain our existing engineers or personnel or attract and retain new engineers and personnel in the future. Many well-qualified candidates may be subject to contractual non-compete clauses which may restrict our ability to employ them. 31. The acquisition of other companies, businesses or technologies in the future could result in operating difficulties, dilution and other harmful consequences.

As of the date of this Draft Red Herring Prospectus, we have experienced only organic growth. However, as part of our growth strategy, we intend to pursue acquisitions to expand our business. There can be no assurance that we will be able to identify suitable acquisition, strategic investment or joint venture opportunities at acceptable cost and on commercially reasonable terms, obtain the financing necessary to complete and support such acquisitions or investments, integrate such businesses or investments or that any business acquired or investment made will be profitable. Any future acquisitions may result in integration issues and employee retention problems. We may not be able to realize the benefits we might anticipate from any such acquisitions. If we attempt to acquire non-Indian companies, we may not be able to satisfy certain Indian regulatory requirements for such acquisitions and may need prior approval from the RBI which we may not obtain. In addition, acquisitions and investments involve a number of risks, including possible adverse effects on our operating results, diversion of management’s attention, failure to retain key personnel, risks associated with unanticipated events or liabilities and difficulties in the assimilation of the operations, technologies, systems, services and products of the acquired businesses or investments. Foreign acquisitions involve risks related to integration of operations across different cultures and languages, currency risks and the particular economic, political and regulatory risks associated with doing business in other countries. Any failure to achieve successful integration of such acquisitions or investments could have an adverse effect on our business, results of operations or financial condition. In addition, the anticipated benefits of our future acquisitions may not materialize. Future acquisitions could result in potentially dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities or other unforeseen complications or liabilities, any of which could harm our financial condition and may have an adverse effect on the price of our Equity Shares. 32. The markets in which we operate are highly competitive and some of our competitors have greater resources than we do.

Competition is expected to intensify in the telecommunications value added services industry in India, and there may be increasing competition from global players. We expect competition to intensify further as new entrants emerge in the industry due to the growth opportunities available and as existing competitors seek to expand their services. Consolidation among our competitors may also leave us at a competitive disadvantage. In addition, in the event we expand into international markets, we will increasingly compete with both local and global providers of telecommunications value added services. Competitors in the future may include other content aggregators and technology applications providers from India and overseas. Some or all of our competitors may have advantages over us, which include substantially greater financial resources, stronger brand recognition, the capacity to leverage their marketing expenditures across a broader portfolio of products and services and more extensive relationships with customers, content owners and broader geographic presence. Increased competition may result in pricing pressure and force us to lower the selling price of our services or cause a loss of business. In addition, our competitors may offer new or different services in the future which are more popular than our current services. If we are not as successful as our competitors in our target markets, our sales could decline, our margins could be negatively affected and we could lose market share, any of which could harm our business and results of operations. 33. Carrier network congestion or failures could reduce our sales, increase costs or result in a loss of income.

xxi

We rely on our carrier customers’ networks to deliver our products and services and telecom applications to their end-user subscribers. Congestion on, failures of, or technical problems with, our carrier customers’ delivery systems or communications networks could result in the inability of the subscribers to use our applications. If any of these systems fail, including as a result of an interruption in the supply of power, an earthquake, fire, flood or other natural disaster, or an act of war or terrorism, our carrier customers’ subscribers may be unable to access our applications. Any failure of, or technical problem with, our carrier customers’ networks could result in a loss of income and have an adverse effect on our business, financial condition and results of operations. 34. As we propose to expand outside of our existing markets, we may face added business, political, regulatory, operational, financial and economic risks, any of which could increase our costs and hinder our growth.

An important element of our business strategy is the expansion of our sales globally by targeting domestic and international markets in which we do not currently provide our services. However, we have limited experience in global expansion, and thus we face considerable challenges in executing our strategy. These risks include: • • • development of appropriate products and services for non-Indian markets; difficulties in obtaining market acceptance of our services in other global markets; our lack of local presence and familiarity with business practices and conventions in certain markets; difficulties and additional time and expenses in customizing and localizing our applications and systems for new markets, including addressing language and cultural differences; shortages of personnel with both local language skill and experience with our services and applications; legal uncertainties or unanticipated changes in regulatory requirements; and uncertainties of laws and enforcement relating to the protection of intellectual property.

• •

In addition, we are subject to risks generally applicable to international operations such as: • differences in network and system requirements that may require additional time and resources to ensure compatibility between our applications and services and the carrier networks; burdens or cost of complying with a wide variety of foreign laws and regulations, including unexpected changes in regulatory requirements; foreign exchange controls that might prevent us from repatriating income earned in countries outside India; and longer payment cycles and greater difficulty collecting accounts receivable in developing countries.

Any of the foregoing risks could prevent us from introducing services globally on a timely basis or at all and may harm our international expansion efforts and adversely affect our business, operating results and financial condition. In addition, as we expand globally, this will increase our costs of operations which may have an adverse effect on our operational margins. 35. We face risks associated with the challenges faced by the mobile communications value added services industry in which we operate.

xxii

The telecom industry in India faces a number of challenges with respect to the growth of MVAS which translates into a risk for our operations. These include: • Slow penetration of MVAS. While mobile penetration rates in India may rise sharply over the next few years, there is an uncertainty on how much of that penetration may translate into an increase in the penetration of MVAS services, which tend to be comparatively expensive to end-users and require more sophisticated hand-sets to access. Revenue sharing arrangements. Telecom operators keep a significant portion of the revenue generated through MVAS services. In line with this and the constant pricing pressure on telecom operators, MVAS providers will need to gain leverage in relationships with telecom operators in order to obtain a higher percentage share of revenues. Lack of coordination between participants. There exists no common platform for handset manufacturers and MVAS providers to ensure consistency of features and software across various handset models, thus complicating the development of universally accessible value added services and products. Spam. There are high volumes of spam in the mobile value added services market currently. As an industry initiative there is a pressing need to address this as a source of end-user dissatisfaction. Low GPRS connectivity. GPRS connectivity in India continues to be low given limited handset capability and operator constraints and there is a large population of users who are not familiar with accessing GPRS. As GPRS is the most prevalent delivery technology for MVAS, the lack of growth in the technology may hinder the expansion of MVAS in India. Preference for low feature handsets. Consumers generally purchase handsets for the basic utility service, which is voice. However, low cost handsets are not capable of supporting many MVAS products. Since in many of these value added services, like MMS, both the sender and receiver handsets need to support MMS, the scope of expansion and use of the service is limited. High cost to end-user. The cost of value added services is not inexpensive, and end-user acceptance of the costs remains to be proven in India. Lack of infrastructure. A lot of services cannot be introduced in India because of lack of supporting infrastructure, for example, the absence of location-based MVAS. Location based value added services is still not possible due to the current lack of a digitized map of India.

In addition, while we believe that we are currently not subject to any specific governmental regulations, except those specifically mentioned in this Draft Red Herring Prospectus, there can be no assurance that we will not be subject to any approvals, licenses, registrations or permissions for operating our business in the future. If we fail to obtain any of these approvals, licenses, registrations or permissions, in a timely manner, or at all, our business, results of operations, financial condition and prospects could be adversely affected. 36. We face risks associated with currency exchange rate fluctuations.

We have adopted the Indian Rupee as our reporting currency. We currently transact our business primarily in Indian Rupees and, to a lesser extent, in Singapore dollars, U.S. dollars and Euros. In particular, we have capital expenditure costs (in forex) prominently in US Dollars. We spent Rs. 123.49 million and Rs. 62.3 million which amounted to 28.84% and 26.29%, of our total operating costs and expenses, including depreciation, for the nine months ended December 31, 2007 and our Fiscal 2007, respectively. To the extent these currencies appreciate against the Indian Rupee, it would increase our expenses reported in the Indian Rupee. We intend to expand our business overseas, which will increase our exposure to the risk of currency fluctuations in foreign jurisdictions. In addition, conducting business in currencies other than the Indian

xxiii

Rupee subjects us to fluctuations in currency exchange rates that could have a negative effect on our reported operating results. Fluctuations in the value of the Indian Rupee relative to other currencies impact our income, cost of sales and services and operating margins and result in foreign currency translation gains and losses. While we have not engaged in exchange rate hedging activities in the past due to the size of our operations, we may implement hedging strategies to mitigate these risks in the future. However, these hedging strategies may not eliminate our exposure to foreign exchange rate fluctuations and involve costs and risks of their own, such as ongoing management time and expertise, external costs to implement the strategy and potential accounting implications. 37. The proprietary information or data of our carrier customers may be misappropriated by our employees and as a result, cause us to breach our contractual obligations in relation to such confidential information.

We require our employees to enter into confidentiality and non-disclosure agreements to limit access to and distribution of the confidential information of our carrier customers’ subscribers such as their name and address lists. There can be no assurance that the steps taken by us will adequately prevent the disclosure of confidential information by an employee or a subcontractor or a subcontractor’s employee and we do not have internal controls and processes to ensure that our employees comply with their obligations under such confidentiality and non-disclosure agreements. If the confidential information is disclosed by us or is misappropriated by our employees or subcontractors, our customers may raise claims against us for breach of our contractual obligations. The successful assertion of any claim may have an adverse effect on our business, financial condition and results of operations. 38. Our insurance coverage may prove inadequate to satisfy future claims against us.

We may become subject to liabilities against which we are not adequately insured or insured at all or for which we cannot obtain insurance. Our insurance policies contain exclusions and limitations on coverage and we do not have business interruption insurance. In addition, our insurance policies may not continue to be available on reasonable terms, at economically acceptable premiums, or at all. As a result, our insurance coverage may not fully cover the claims against us. Our insurers may not accept all claims made by us. A successful assertion of one or more large claims against us that exceeds our available insurance coverage or changes in our insurance policies, including premium increases or the imposition of a larger deductible or co-insurance requirement, could adversely affect our business, financial condition and results of operations and could cause the price of our Equity Shares to decline. For more information, see the section “Business — Insurance” beginning on page 68. 39. We currently enjoy certain tax benefits, and any change in our eligiblity for these benefits or tax policies applicable to us may affect our results of operations.

Presently, we enjoy certain benefits under Section 80IC of the I.T. Act, 1961. We also enjoy exemption from sales tax with respect to sales tax under a notification issued by the Himachal Pradesh government. The sales tax exemption requires that 65% and 70%of the persons employed at our offices in Parwanoo undertaking I and undertaking II, respectively, within the state continue to be ‘Himachal bonafide’, subject to any exemptions granted by the state government in this regard. As a result of these incentives, most of our business activities (for further information, see the section “Business” beginning on page 54) are not subject to income or sales tax liabilities. There is no assurance that we will continue to enjoy these tax benefits in future. When our tax incentives expire or terminate, our tax expense will materially increase, reducing our profitability to the extent of exemption available during the exemption period. Further, the Government of India could enact laws in the future that may adversely affect our tax incentives and consequently, our tax liabilities and profits. 40. We provide applications and services to our carrier customers who operate in a highly regulated industry and the licenses and the regulatory environment in which they operate are subject to change, which may indirectly adversely affect our operations.

We are subject to Telecommunications Regulatory Authority of India (“TRAI”) regulation under which we are required to apply for a tele-marketing license. However, we cannot guarantee that we may not be subject to other regulations and licensing requirements including new regulations issued by TRAI in the future which may adversely affect the business, financial condition and prospects.

xxiv

We provide applications and services to our carrier customers and are dependent on them to market or distribute our applications or services to their end-user subscribers. Our carrier customers operate in the telecommunications industry which is subject to extensive government regulation and licensing requirements. The extensive regulatory structure under which they operate could constrain their flexibility to respond to market conditions, competition or changes in cost structure. In addition, our carrier customers are required to obtain a wide variety of approvals and licenses from various regulatory bodies. There can be no assurance that such approvals will be granted on a timely basis or at all. The Government of India may also revise regulations or policies related to carriers or operators in the telecommunications industry on terms which may not be favorable to our carrier customers or which may result in uncertainties with respect to their implementation. In addition, the licenses which our carrier customers require to operate in the telecommunications industry reserve broad discretion to the Government of India to influence the conduct of their businesses by giving the Government of India the right to modify at any time the terms and conditions of such licenses, take over our carrier customers’ networks and terminate, modify, revoke or suspend the licenses in the event of default by our carrier customers in complying with the terms and conditions of the licenses. Any unfavorable change in the regulatory environment as it relates to MVAS may adversely affect the business, financial condition and prospects of our carrier customers and this may in turn have an adverse effect on our business and results of operations. See the section “— External Risk Factors — Risks Relating to Our Industry — Our carrier customers are subject to extensive government regulation of the telecommunications industry in India” on page 31 for more information. 41. The new Do Not Call (“DNC”) regulation issued by TRAI imposes an obligation on us. In addition, our new contracts include a clause in relation to imposition of liabilities on us in the event we do not comply with the DNC regulation.

TRAI has recently issued the DNC regulation which provides that if subscribers to telecom operators’ services do not wish to receive unsolicited commercial communication (“UCC”) on their telephone, it will be the operators’ responsibility to register its subscribers’ numbers with the National Do Not Call (“NDNC”) registry. Telemarketers can call only those numbers that are cleared by the NDNC registry. The regulations provide for registration of the telemarketers with the Department of Telecommunications (“DoT”), the registration of subscribers with the NDNC registry, and the mechanisms on which it would operate. We have registered with the DOT for all operational circles of our carrier customers. In the event that we violate these guidelines, marketing our services and products by way of SMS or voice communications may be directed to be stopped which will adversely affect the income from our application services, and thus our overall financial condition. Since TRAI has come out with stringent penalties in case of violations, our customers have passed on the burden of registration with DoT and compliance to these guidelines on us. As per our recent agreement with Airtel, which constituted 18% of our operating income as of December 31, 2007, we have undertaken to comply with the DNC legislation and in case of violation, Airtel has the right to recover any penalties that maybe imposed, from us. In addition, while currently we have this obligation only to Airtel, other operators may also ask for similar obligations in the future. 42. We have entered into, are likely to continue to enter into, related party transactions with our Promoters and Directors in the future.

We have entered into transactions with several related parties for providing our telecommunications value added services, platforms, products and solutions products and services, including our Promoters and Directors. While we believe that all such transactions have been conducted on, and have commercial terms consistent with, an arm’s length basis, there can be no assurance that we could not have achieved more favorable terms had such transactions not been entered into with related parties. Furthermore, it is likely that we will enter into related party transactions in the future. Conflicts may also arise in the ordinary course of our decision-making in connection with our negotiations and dealings with our Promoters and/or Promoter Group companies with respect to services that we provide to them and the arrangements that we may enter into with them. There can be no assurance that such transactions, individually or in the aggregate, will not have an adverse effect on our financial condition and results of operations. For more information regarding our related party transactions, see the section “Related Party Transactions” beginning on page 139.

xxv

43.

We may find ourselves in breach of the terms of our arrangements with one or more carrier customers or be subject to fines and financial penalties because of our failure to help ensure that content is not obscene, defamatory, racist, or otherwise offensive or unlawful in nature.

We take steps to ensure that the content we deploy adheres to the standards and terms of our customer contracts. However, there can be no assurance that such content will not contain obscene, defamatory, racist, or otherwise offensive or unlawful material. If offensive or unlawful material is detected, we are able to take action to prevent the delivery of such material and fine or impose financial penalties on third-party content or service providers responsible for the attempted conveyance of such material. Such fines or financial penalties can be taken from revenue held by us that has not yet been delivered to a third party content or service provider. However, any failure on our part to detect and prevent the conveyance of such material could result in a breach of an arrangement with a carrier customer, which could cause such carrier customer to terminate its arrangement with us. In addition, fines and financial penalties may be imposed on us for such breach and we may not be successful in recovering such fines or financial penalties from our content or service providers. Any of the foregoing may in turn have an adverse effect on our growth, business, financial condition or results of operations. 44. We will have broad discretion in how we use the proceeds of this Issue and we may not use the proceeds as per the stated objects. This could affect our profitability and cause the price of our Equity Shares to decline.

Our management will have considerable discretion in the application of the net proceeds of the Issue, and you will not have the opportunity, as part of your investment decision, to assess whether we are using the proceeds in a manner that you believe enhances our market value. See the section “Objects of the Issue” beginning on page 30. Pending utilization of the proceeds of this Issue for the purposes described in this Draft Red Herring Prospectus, we intend to invest the proceeds of the Issue in interest bearing liquid instruments including money market mutual funds, for the necessary duration. Such investments would be made in accordance with investment policies or investment limits approved by our Board of Directors and shareholders from time to time. We also intend use the net proceeds for general corporate purposes that do not improve our profitability or increase our market value, which could cause the price of our Equity Shares to decline. 45. We have not entered into any definitive agreements to utilize the proceeds of the Fresh Issue and our intended use of proceeds from the Fresh Issue has not been appraised by any bank or financial institution.

We intend to use the net proceeds of the Fresh Issue for purchase of office equipments for our various office premises and various customer sites and general corporate purposes. For more information, see the section “Objects of the Issue” beginning on page 30. We have not entered into definitive arrangements for utilization of net proceeds of the Fresh Issue. Pending use of the funds for these purposes, we intend to invest the funds in high quality, interest/dividend bearing liquid instruments. If we are unable to spend the amount on acquisitions or setting up of additional facilities, the balance funds will be used for augmentation of our working capital and/or for general corporate purposes. The objects of the Issue have not been appraised by any bank or other financial institution. We have not entered into any definitive agreements to utilize such proceeds. 46. Valuations in our industry are presently high and may not be sustained in the future and are also not reflective of future valuations for such industry.

There is no standard valuation methodology for companies in businesses similar to ours. The valuations in our and related sectors such as telecommunications, software and the information technology industries are presently high and may not be sustained in the future. Additionally, current valuations may not be reflective of future valuations within these industries or our industry.

xxvi

47.

Our restated consolidated and unconsolidated summary statements follow different accounting years and as a result, our results of operations for certain periods are not comparable.

Our restated consolidated and unconsolidated summary statements follow different accounting years due to changes in our fiscal year end. Our results for our most recently ended fiscal accounting period reflect a nine-month period ending December 31, 2007, our fiscal years ended March 31, 2007 and March 31, 2006 reflect 12 month periods, our fiscal year ended March 31, 2005 reflects a 15 month period and the fiscal year ended December 31, 2003 reflects a 12 month period. Due to the difference in fiscal year ends, our results of operations discussed under the section “Management’s Discussion and Analysis of Financial Condition and Results of Operations’ beginning on page 280 are not comparable and our historical financial performance may not be considered as an accurate indicative of future financial performance. 48. Our growth requires additional capital which may not be available on terms acceptable to us or at all.

We intend to pursue a strategy of continued investment to grow our business and expand the range of products and services we offer. We anticipate that we may need to obtain financing as we expand our operations. We may not be successful in obtaining additional funds in a timely manner, on favorable terms or at all. If we do not have access to additional capital, we may be required to delay, scale back or abandon some or all of our acquisition plans or growth strategies or reduce capital expenditures and the size of our operations. See the section “External Risk Factors- Risks Relating to India- Any downgrading of India’s debt rating by an independent agency may harm our ability to raise debt financing” beginning on page xxxii for more information. 49. We do not own our registered office or most of our offices from which we operate.

We lease and do not own the premises on which our registered office in New Delhi and most of our other offices in Noida, Kolkata, Mohali, Hyderabad, Parwanoo, Bangalore and Mumbai are located. Although most of the lease agreements provide for an option to renew, this option to renew is on mutually agreed terms. The majority of our lease agreements are not registered with the local or state authorities, and could be terminated without much difficulty by the relevant property owner or manager. If any of the property owners or managers do not renew the agreements under which we occupy the premises or will only renew such agreements on terms and conditions that may be unfavorable to us, or if the property owners or managers were to terminate the lease, we may suffer a disruption in our operations or have to pay increased rental rates which could have an adverse effect on our business, financial conditions and results of operations. For more information, see the section “Our Business – Properties” beginning on page 68. We currently own a property in Singapore. We may in the future purchase other properties. There can be no assurance that any information relating to our decision to purchase such properties will be accurate, complete or current. Any decision based on inaccurate, incomplete or current information may result in risks and liabilities associated with acquiring and owning such properties, being passed onto us. We may also require financing to fund our capital expenditures on these properties which may place restrictions on us which may, among other things, increase our vulnerability to general adverse economic and industry conditions, require us to dedicate a substantial portion of our cash flow to fund capital expenditures, meet working capital requirements and use for other general corporate purposes, either through the imposition of restrictive financial or operational covenants or otherwise. 50. Our ability to pay dividends in the future will depend upon future earnings, financial condition, cash flows, working capital requirements and capital expenditures.

The amount of our future dividend payments, if any, will depend upon our future earnings, financial condition, cash flows, working capital requirements and capital expenditures. There can be no assurance that we will be able to pay dividends. Additionally, we may be restricted in our ability to make dividend payments by the terms of any debt financing we may obtain in the future. 51. Rapid technological changes may render our technologies, products or services obsolete.

xxvii

The telecommunication services industry is characterized by rapid technological change and significant capital requirements. Given the fast pace of technological innovation in the telecommunication sector, we face the risk of our technology becoming obsolete and hence the need to invest significantly large amounts of capital to upgrade our networks or use new technologies. We face the risk of unforeseen complications in the deployment of new value added services and products, and there is no assurance that the estimate of the necessary capital expenditure to offer such services will not be exceeded. New services may not be developed and/or deployed according to expected schedules or may not achieve commercial acceptance or be cost effective. Failure to achieve commercial acceptance of services offered by us could result in additional capital expenditures being required or a reduction in profitability. Any such change may adversely affect our business, financial condition and results of operations. 52. Our employee attrition rate may increase to a level where we are not able to sustain our deliverables at a given point of time.

We believe we pay competitive compensation package and benefits to our employees, however, given the increasing wage levels in India we cannot assure you that our employee attrition rate will not increase to an unsustainable level or that we will be able to recruit experienced professionals to replace the professionals leaving at that particular point of time. Furthermore, increase in compensation payable to employees in India may reduce some of the inherent cost competitiveness enjoyed by us through our operations in India. Employee compensation in India is increasing at a fast rate, which could result in increased costs relating to engineers, managers and other mid-level professionals. We may need to continue to increase the levels of our employee compensation to retain talent and this will reduce our competitiveness compared to competitors. Our attrition rate for the Fiscal 2007 and the nine months ended December 31, 2007 was 16.47% and 16.25%, respectively. 53. One of our Subsidiaries has incurred significant losses and certain of our Promoter Group have incurred significant losses companies have incurred significant losses in the past or have had negative networth.

Mobisoc Technology Private Limited, one of our Subsidiaries, has incurred loss of Rs. 14.03 million for the nine months period ended December 31, 2007. In addition, some of our Promoter Group companies also incurred losses in the last three fiscal years. The details of such companies and their respective losses are as follows: (Rs. in million)
S. No. Promoter Group Company For the year ended March 31, March 31, 2007 2006 (7.90) (13.50)1 3 3801.31 (386.88) 4 (2.90) 0.46 0.04 (0.43) (68.78) (15.19) (3.38) (10.24) (35.79) 63.527 (0.31) 15.90 (0.29) (0.39) 0.35 (0.35) 7 11.14 (0.22) 3 1.85 (0.01) 4 (0.02) (0.01) (0.29) 12.329 (0.07) 4 0.50 (0.19)5 (0.01) (0.12) (0.05) March 2005 31,

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

IO System Limited Spice Communications Limited Twenty First Century Capitals Limited Assam Plywood Limited Hotspots Retails Limited Modikem Limited Spice Corp Limited Ace Airways Private Limited Duro International Rubber Private Limited G. M. Modi Hospitals Corporation Private Limited Harjas Logic Systems Private Limited Mcorpglobal Communications Private Limited Oasis Cineplex Private Limited Super Infosys Private Limited Teesho Rubbers Private Limited Tuberose Investments Private Limited VCorp Mercantile Private Limited

(11.00)2 46.35 5 39.316 0.06 (1.02) (10.59) 6 44.34 (3.84) (0.24) 6 0.798 (0.03) 10 (0.80)5 (0.01) (0.33) 11 (0.03) 6 -

1 For fifteen months period ended March 31, 2006 2 For the year ended December 31, 2004 3 For the year ended December 31, 2007 4 For the six months period ended December 31, 2006 5 For the year ended June 30, 2006

xxviii

6 For the fifteen months period ended March 31, 2005 7 For the fifteen months period ended March 31, 2006 8 For the year ended March 31, 2004 9 For the thirteen and a half month period ended March 31, 2006 10 For the ten and a half month period ended February 15, 2005 11 For the year ended June 30, 2005

Some of these Promoter Group companies had negative net worth during the three fiscal years. The details of such companies and their networth are as follows: (Rs. in million)
S. No. Promoter Group Company For the year ended March 31, March 2007 2006 (0.02) (1.26) (0.12) 5219.171 (41.12) (0.25) (0.08) 31, 7.881 (2.08) (0.85) March 31, 2005 21.382 (2.13) (0.89) (1136.93) 3 (0.16) (0.22) 4 -

1 2 3 4 5 6 7

IO System Limited Jyotsana Investment Company Limited Khatu Investment & Trading Company Limited Spice Communications Limited Hotspots Retails Limited Teesho Rubbers Private Limited Tuberose Investments Private Limited

(1523.81) 2 (15.35) (0.23) (0.07)

1 For the year ended December 31, 2007 2 For the six months period ended December 31, 2006 3 For the year ended June 30, 2006 4 For the fifteen months period ended March 31, 2005

We cannot assure you that our Subsidiaries will not continue to incur losses in future and our Promoter Group companies will not continue to incur losses in future, that their net worth will be positive in the future or that any of the foregoing will not materially affect our business, prospects, financial condition and results of operations. 54. Equity shares of some of our listed Promoter Group companies are infrequently traded/not traded on the stock exchanges and trading of one of our Promoter Group company was suspended in past.

The equity shares of some of our listed Promoter Group companies are infrequently traded/not traded on the Stock Exchanges on which they are listed. The trading of equity shares of one of our listed Promoter Group Company, Spice Mobile Limited (formerly known as Spice Limited), was suspended by BSE due to non compliance of certain provisions of the Listing Agreement from October 6, 1997 to September 2, 2003. In addition, IO System Limited, one of our Promoter Group companies, has received four show cause notices from the BSE and one show cause notice from the Delhi Stock Exchange for alleged violation of the listing agreements with these stock exchanges. Further, it has also received two show cause notices from the BSE on account of non-compliance with certain provisions of the Takeover Code. For further details, see the section “Our Promoters and Promoter Group” beginning on page 93. We cannot assure you that trading of equity shares of Spice Mobile Limited or any other Promoter Group company will not be suspended in the future by the relevant stock exchange. In the event trading of shares of any of our Promoter Group companies is so suspended, it may have an adverse effect on trading of our Equity Shares and which may negatively affect our financial condition and results of operations. 55. Plus Paper Foodpac Limited, one of our Promoter Group company, had withdrawn the draft red herring prospectus filed with SEBI.

Plus Paper Foodpac Limited, one of our Promoter Group company had filed the draft red herring prospectus to SEBI for its proposed initial public offering of its equity shares on November 1, 2004. SEBI vide a letter dated January 3, 2005 has raised certain observations with respect to the promoter’s contribution for the purpose of the eligibility of the proposed initial public offering planned by the company. Subsequently, the lead manager vide letter dated March 4, 2005 withdrew the draft red herring prospectus filed by the company. 56. Our contingent liabilities could adversely affect our financial conditions.

xxix

As of December 31, 2007, we had a contingent liability of Rs. 38.89 million towards not charging of service tax on the ‘short messaging peer to peer services’ including penalties, thereof, as disclosed in our restated consolidated financial statements. For details see the section “Financial Statements” beginning on page 166. 57. We are involved in certain tax proceedings and have received show cause notices under labour laws.

We have received a show cause notice from the Central Excise Division in relation to payment of service tax alleging that we have not filed our tax returns appropriately and has imposed penalties against our Company amounting to Rs. 489,940. In addition, the Central Excise Commissioner has passed an order against our Company for the alleged fraudulent suppression of the material fact of providing services of ‘Short Message Peer to Peer Messaging’ under the self assessment procedure under the service tax laws and procedures, with an intention to evade service tax. The liability of our Company under the said order for the assessment year 2006-2007 is Rs. 15,576,854, with applicable interest; penalty of Rs. 100 for every day for the period during which failure in payment continues, provided the total amount of this penalty should not exceed the amount of service tax and cess that our Company failed to pay; and further penalty of Rs. 1,000. In addition, our Company has received a notice from the Labour Officer cum Additional Officer Inspector of Factories, Office of the Labour Officer, Solan, Himachal Pradesh alleging that our unit in Parwanoo comes under the definition of “factory” under the Factories Act, 1948 and our Company is in the alleged violation of the Factories Act, 1948 and the Himachal Pradesh Factories Rules, 1950 and other labour laws. Subsequently, three complaints dated May 17, 2008 have been filed before the Judicial Magistrate, 1st Class, Kasauli, Solan, Himachal Pradesh against our Company, the Managing Director, the Factory Manager and the Senior Manager (Human Resources) of our Company, alleging that our Company is in violation of certain provisions of the Contract Labour (Regulation and Abolition) Act, 1970 and the Contract Labour (Regulation and Abolition) Himachal Rules 1974; the Payment of Wages Act, 1936 and the Himachal Pradesh Payment of Wages Rules, 1979; and the Minimum Wages Act,1948 read with the Himachal Pradesh Minimum Wages (Amendment) Rules, 2006. It has also been alleged that despite a rectification notice (LO/Solan/Inspections/2007-1084-88) being sent to our Company by the Labour Officer, Solan for submitting a compliance report, our Company failed to do so and is hence liable for punishment under the above-mentioned legislations. All such proceedings are currently pending. For further details see the section “Outstanding Litigation and Material Developments” beginning on page 300. 58. There are outstanding litigations against certain of our Directors, our Promoters and our Promoter Group Companies

There are certain proceedings, including criminal proceedings, pending in various courts and authorities at different levels of adjudication against our Subsidiaries, our Directors, our Promoters and our Promoter Group. These legal proceedings are pending at different levels of adjudication before various courts and tribunals. The amounts claimed in these proceedings have been disclosed to the extent ascertainable, excluding contingent liabilities but including amounts claimed jointly and severally from parties. For further details see the section “Outstanding Litigation and Material Developments” beginning on page 300. 59. Our Company has in the last 12 months, issued Equity Share sat a price that could be lower than the Issue Price

We have, in the last 12 months, issued Equity Shares at a price that could be lower than the Issue Price. For further details regarding such issuances of Equity Shares, see the section “Capital Structure – Notes to the Capital Structure” beginning on page 22. 60. Our Company is considering a Pre-IPO Placement and Equity Shares issued pursuant to the Pre-IPO Placement may be at a price lower than the Issue Price

xxx

Our Company is considering Pre-IPO Placement of up to [●] Equity Shares to certain investors including persons resident outside India, prior to filing of the Red Herring Prospectus with the RoC. Equity Shares issued to such investors pursuant to the Pre-IPO Placement may be at a price lower than the Issue Price. EXTERNAL RISK FACTORS Risks Relating to Our Industry 61. Our carrier customers are subject to extensive government regulation of the telecommunications industry in India.

We are dependent on our carrier customers to market and sell our white label applications and services which we offer. As such, any regulation which may have an adverse effect on our carrier customers may in turn adversely harm our business. The telecommunications industry in which our carrier customers operate is subject to extensive government regulation. The Government of India along with the TRAI regulate many aspects of the telecommunications industry in India. The extensive regulatory structure under which our carrier customers operate could constrain their flexibility to respond to market conditions, competition or changes in their cost structure, and thereby adversely affect them. In addition, they are required to obtain a wide variety of approvals from various regulatory bodies. There can be no assurance that these approvals will be forthcoming on a timely basis or at all, which could have an adverse effect on their business, results of operations, financial condition and prospects. The Government of India may replace or revise regulations or policies, including end-user subscriber pricing rules. TRAI has recently released a consultation paper dated May 28, 2008 on “Growth of Value Added Services and Regulatory Issues” to expolore the possibility for introduction of regulatory regime and licencing for value added services in the telecom industry. Any such changes, and related uncertainties with respect to their implementation, could have an adverse effect on the business, results of operations, financial condition and prospects of our carrier customers which may in turn adversely affect us. Our carrier customers may also need to incur capital expenditures to comply with and benefit from anticipated changes in regulation that are then postponed, not implemented or not implemented on terms favorable to them. In addition, their inability to complete certain actions required by the regulators on time or at all may adversely affect their operations and financial condition. The licenses under which our carrier customers operate their businesses typically reserve broad discretion to the Government of India to influence the conduct of their businesses by giving it the right to modify, at any time, the terms and conditions of the licenses and to terminate or suspend the licenses in the interests of national security or in the event of a national emergency, war or similar situations. In addition, the Government of India may also impose certain penalties including suspension, revocation or termination of a license in the event of default by our carrier customers in complying with the terms and conditions of the license. Our carrier customers’ licenses may also be for a fixed term and there can be no assurance that any of these licenses will be renewed at all or renewed on the same or better terms. Any of the foregoing may have an adverse effect on business, results of operations, financial condition and prospects of our carrier customers which may in turn have an adverse effect on us. 62. We may be adversely affected by future government regulations implemented for the telecommunications value added services industry in which we operate.

Currently, the telecommunications value added services industry is not subject to any specific government regulations. However, there can be no assurance that the Government of India may not implement new regulations and policies which will require us to obtain approvals and licenses from the Government of India and other regulatory bodies or impose onerous requirements and conditions on our operations. Any such changes and the related uncertainties with respect to the implementation of the new regulations, or our inability to obtain these approvals and licenses or perform such requirements and conditions on time or at all, may have an adverse effect on our business and results of operations. In addition, we may have to incur capital expenditures to comply with any new regulations, which may also harm our results of operations. 63. Concerns about health risks relating to the use of mobile handsets may adversely affect our prospects.

xxxi

In recent years, media and other research reports have linked radio frequency emissions from mobile handsets to various health concerns, including cancer, and to interference with various electronic medical devices, including hearing aids and pacemakers. As research and studies are ongoing, we cannot assure you that further research and studies will not demonstrate a link between radio frequency emissions and health concerns, which could have an adverse effect on our business, results of operations, financial condition and prospects. Further, concerns over radio frequency emissions may discourage the use of mobile handsets which could have an adverse effect on our business, results of operations, financial condition and prospects. Risks Relating to India 64. 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 affect our business and financial performance and the price of our Equity Shares. 65. Political instability or changes in the government could delay the liberalization of the Indian economy and adversely affect economic conditions in India generally, which could affect our financial results and prospects.

Since 1991, successive Indian governments have pursued policies of economic liberalization, including significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has remained significant. The leadership of India has changed many times since 1996. The current central government, the United Progressive Alliance, which came to power in May 2004, is a coalition of several political parties and is headed by the Indian National Congress Party. Although the current government has announced policies and taken initiatives that support the economic liberalization policies that have been pursued by previous governments, the rate of economic liberalization could change, and specific laws and policies affecting foreign investment and other matters affecting investment in our securities could change as well. Any significant change in liberalization and deregulation policies could adversely affect business and economic conditions in India generally and our business in particular. 66. 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 an adverse effect on our capital expenditure plans, business and financial performance. 67. Wage pressures in India may prevent us from sustaining our competitive advantage and may reduce our profit margins.

Wage costs in India have historically been significantly lower than wage costs in the United States, Europe and other developed economies for comparably skilled professionals, which has been one of India’s competitive strengths. However, wage increases in India may prevent us from sustaining this competitive advantage and may negatively affect our profit margins. Wages in India are increasing at a faster rate than in the western countries, which could result in increased costs for software professionals, particularly project managers and other mid-level professionals. We may need to continue to increase the levels of our employee compensation to remain competitive and manage attrition. Compensation increases may result in an adverse effect on our business, financial condition and results of operations and could cause the price of our Equity Shares to decline. Risks Relating to this Issue and Investment in our Equity Shares

xxxii

68.

After this Issue, our Equity Shares may experience price and volume fluctuations or an active trading market for our Equity Shares may not develop.

The price of the Equity Shares may fluctuate after this Issue as a result of several factors, including the results of our operations, the performance of our competitors, developments in the Indian telecommunications sector and changing perceptions in the market about investments in the Indian telecommunications sector, adverse media reports on us or the Indian telecommunications sector, changes in the estimates of our performance or recommendations by financial analysts, significant developments in India’s economic liberalization and deregulation policies, and significant developments in India’s fiscal regulations. 69. Any future issuance of Equity Shares may dilute prospective investors’ shareholding and sales of our Equity Shares by our Promoters or other major shareholders may adversely affect the trading price of the Equity Shares.

Any future equity issuances by us, including in a primary offering, may lead to the dilution of investors’ shareholdings in our Company. Any future equity issuances by us or sales of our Equity Shares by our Promoters or other major shareholders may adversely affect the trading price of the Equity Shares. In addition, any perception by investors that such issuances or sales might occur could also affect the trading price of our Equity Shares. 70. Conditions in the Indian securities market may affect the price or liquidity of the Equity Shares.

The Indian securities markets are smaller than securities markets in more developed economies. Stock Exchanges have in the past experienced substantial fluctuations in the prices of listed securities. These exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Stock Exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Stock Exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If similar problems occur in the future, the market price and liquidity of the Equity Shares could be adversely affected. 71. You will not be able to sell immediately on an Indian Stock Exchange any of the Equity Shares you purchase in the Issue.

Under the SEBI Guidelines, we are permitted to allot Equity Shares within 15 days of the closure of the public issue. Consequently, the Equity Shares you purchase in the Issue may not be credited to your demat account with Depository Participants until approximately 15 days after the Bid/Issue Closing Date. You can start trading in the Equity Shares only after they have been credited to your demat account and final listing and trading approvals are received from the Stock Exchanges. Further, there can be no assurance that the Equity Shares allocated to you will be credited to your demat account, or that trading in the Equity Shares will commence, within the specified time periods. 72. There has been no public market for the Equity Shares prior to this Issue so the Issue Price may not be indicative of the value of the Equity Shares.

Prior to this Issue, there has been no public market for the Equity Shares in India or elsewhere. After this Issue, there will be no public market for the Equity Shares in any country other than India. The Issue Price will be determined by our Company in consultation with the BRLMs and could differ significantly from the price at which the Equity Shares will trade subsequent to completion of this Issue. We cannot assure you that even after the Equity Shares have been approved for listing on the Stock Exchanges, any active trading market for the Equity Shares will develop or be sustained after this Issue, or that the offering price will correspond to the price at which the Equity Shares will trade in the Indian public market subsequent to this Issue.

xxxiii

73.

There is no guarantee that the Equity Shares will be listed on the Indian stock exchanges in a timely manner, and prospective investors will not be able to sell immediately on an Indian stock exchange any of the Equity Shares they purchase in the Issue.

In accordance with Indian law and practice, permission for listing of the Equity Shares will not be granted until after those Equity Shares have been issued and allotted. Approval will require all other relevant documents authorizing the issuing of Equity Shares to be submitted. There could be a delay in listing the Equity Shares on the NSE and BSE. Any delay in obtaining the approval would restrict prospective investors’ ability to dispose of their Equity Shares. In addition, pursuant to Indian regulations, certain actions must be completed before the Equity Shares can be listed and trading may commence. Investors’ book entry, or “demat”, accounts with depository participants in India are expected to be credited within two working days of the date on which the basis of allotment is approved by NSE and BSE. Thereafter, upon receipt of final approval from the NSE and the BSE, trading in the Equity Shares is expected to commence within seven working days of the date on which the basis of allotment is approved by the Designated Stock Exchange. We cannot assure that the Equity Shares will be credited to investors’ demat accounts, or that trading in the Equity Shares will commence, within the time periods specified above. 74. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholder’s ability to sell, or the price at which it can sell, Equity Shares at a particular point in time.

We are subject to a daily circuit breaker imposed by all stock exchanges in India, which does not allow transactions beyond a certain volatility in the price of the Equity Shares. This circuit breaker operates independently of the index based market-wide circuit breakers generally imposed by SEBI on Indian stock exchanges. The percentage limit on our circuit breaker is set by the stock exchanges based on the historical volatility in the price and trading volume of the Equity Shares. The stock exchanges do not inform us of the percentage limit of the circuit breaker from time to time, and may change it without our knowledge. This circuit breaker effectively limits the upward and downward movements in the price of the Equity Shares. As a result of this circuit breaker, there can be no assurance regarding the ability of shareholders to sell the Equity Shares or the price at which shareholders may be able to sell their Equity Shares. Notes to Risk Factors • Public issue of 11,271,012 Equity Shares for cash at a price of Rs. [●] per Equity Share including a share premium of Rs. [●] per Equity Share, aggregating Rs. [●] million, consisting of a Fresh Issue of 6,982,042 Equity Shares and an Offer For Sale of 4,288,970 Equity Shares by the Selling Shareholders. The Issue comprises a Net Issue to the public of 11,171,012 Equity Shares and 100,000 Equity Shares are reserved from the Fresh Issue for subscription by Eligible Employees at the Issue Price. The Issue will constitute approximately 22.60% of the fully diluted post-issue paid-up share capital of the Company. The Net Issue will constitute approximately 22.40% of the fully diluted post-issue paid-up share capital of the Company. Our Company and the Selling Shareholders are considering a Pre-IPO Placement of up to [●] Equity Shares to certain investors, prior to filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the number of Equity Shares sold pursuant to the PreIPO Placement, will be reduced from the Net Issue, subject to minimum Net Issue size of 10% of the post-Issue paid up share capital of our Company. The Pre-IPO Placement is at the discretion of our Company and the Selling Shareholders. In terms of to Rule 19(2)(b) of the SCRR, this being an Issue of less than 25% of the postIssue share capital of our Company, the Issue is being made through the 100% Book Building Process wherein at least 60% of the Net Issue will be allocated to QIBs on a proportionate basis, out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only and the remaining QIB Portion shall be available for allocation to the QIBs including Mutual Funds, subject to valid Bids being received at or above the Issue Price. If at least 60% of the Net Issue cannot be allotted to QIBs, then the entire application money will be refunded forthwith. Further, not less than 10% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the

xxxiv

Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Further, up to 100,000 Equity Shares shall be available for allocation on a proportionate basis to the Eligible Employees, subject to valid Bids being received at or above the Issue Price. For further details, see the section “Issue Structure” beginning on page 370. • Under-subscription, if any, in the Non-Institutional Portion and/or Retail Portion would be allowed to be met with spill-over from other categories at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs. Under-subscription, if any, in the Employee Reservation Portion will be added back to the Net Issue portion at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs. In case of undersubscription in the Net Issue, spill-over to the extent of under-subscription shall be permitted from the Employee Reservation Portion subject to the Net Issue constituting at least 10% of the post Issue paid-up share capital of our Company. If at least 60% of the Net Issue cannot be allotted to QIBs, then the entire application money will be refunded forthwith. The average costs of acquisition of Equity Shares by our Promoters, Mr. Dilip Modi, Omnia Investments Private Limited are Rs. 0.97 and Rs. 0.33 per Equity Share, respectively. Our other Promoter, Indian Televentures Private Limited does not hold any Equity Shares. For details see the section “Capital Structure” beginning on page 21. The net worth of our Company, on a consolidated basis, is Rs. 1,083.13 million as at December 31, 2007 as per the restated consolidated summary statements of our Company. For more information, see the section “Financial Statements” beginning on page 166. The net asset value per Equity Share was Rs. 74.33 as at December 31, 2007, as per the restated consolidated summary statements of our Company. For more information, see the section “Financial Statements” beginning on page 166. Other than as stated in the section “Capital Structure” beginning on page 21, our Company has not issued any Equity Shares for consideration other than cash. For details of transactions in the securities of our Company by our Promoters, our Promoter Group and Directors in the last six months, see the section “Capital Structure — Notes to Capital Structure” beginning on page 22. For information on changes in our Company’s name and registered office, see the section “History and Certain Corporate Matters” beginning on page 74. Except as disclosed in the sections, “Our Promoters and Promoter Group” and “Our Management” beginning on pages 93 and 80, respectively, none of our Promoters, Directors or key managerial employees have any interest in our Company except to the extent of remuneration and reimbursement of expenses and to the extent of the Equity Shares held by them or their relatives and associates or held by the companies, firms and trusts in which they are interested as directors, member, partner or trustee and to the extent of the benefits arising out of such shareholding. Trading in Equity Shares for all investors shall be in dematerialised form only. For further details, see the section “Issue Procedure” beginning on page 375. For details pertaining to our related party transactions, refer to the notes on related party transactions in the section “Related Party Transactions” beginning on page 139. Our Company has not made any loans and advances to any person(s)/ company in which the Directors are interested, except as disclosed in the section “Financial Statements” beginning on page 166.

xxxv

Investors may note that in case of over-subscription in the Issue, allocation to QIB Bidders, Non-Institutional Bidders and Retail Bidders shall be on a proportionate basis. For more information, see the section “Issue Procedure - Basis of Allotment” beginning on page 400. Investors are also advised to refer to the section “Basis for the Issue Price” beginning on page 33. Any clarification or information relating to the Issue shall be made available by the BRLMs and our Company to the investors at large and no selective or additional information would be available for a section of investors in any manner whatsoever. Investors may contact the BRLMs, the Compliance Officer and the Syndicate Members for any complaints pertaining to the Issue and for any clarification or information relating to the Issue, who will be obliged to provide the same.

xxxvi

SECTION III: INTRODUCTION SUMMARY OF BUSINESS

Overview Our Company is one of the leading providers of telecommunications value added products, services and solutions in India. We provide a wide range of telecommunications value added services, platforms, products and solutions to telecommunications carrier customers, subscribers of such carriers and enterprises across India. As a value added services provider, we not only conceptualize products to meet our customer needs, we source and aggregate content, provide the relevant platform for delivery of our products and services and integrate these services with the core network elements of our carrier customer. We have the ability to provide a comprehensive suite of value added products, services and solutions across all key technology bearers. Our telecommunications products and services and telecommunications solutions are delivered to subscribers of major telecommunications carriers in India, including Airtel, Spice Communications, BSNL, IDEA, Reliance, Vodafone, MTNL, Tata Teleservices Limited and “Connect” & “Ping” of HFCL. Our product portfolio includes music, information and entertainment based products and services (such as mobile radio, BGM, CRBT, ringtone downloads, videos, contests, astrology, news, sports updates and commodity rates), social networking products and services (such as voice chat), and call management solutions (such as voicemail, voice SMS, select caller list, Pay4Me and missed call alerts), all of which enable subscribers to personalize their mobile phones and enhance user experience. Our products allow subscribers to access informational and entertainment content in more than 17 languages using IVRS speech-based navigation. Using our social networking platform, subscribers are able to generate their own interactive content through messaging and conversations. We provide these value added services and products through our carrier customers to mobile subscribers and enterprise clients using IVRS, SMS, USSD, GPRS and WAP technology and delivery methods. Our applications (other than GPRS) can be deployed on any network and accessed from most mobile handsets and fixedline devices. Many of our products and services can be accessed by subscribers using a variety of delivery platforms, i.e., voice, SMS, USSD, GPRS, WAP and 3G network, thereby enabling us to deploy our products and services across a majority of operators and networks. We focus on multi-modal platforms based on voice, text and data. Our mobile radio platform gives subscribers the interactive option to access content on demand in the language of their choice, using their mobile phones. Given the demographic diversity of India, our platforms offer an efficient, easyto-use and attractive solution to our carrier customers for providing services to their subscribers. The platform enables our carrier customers to introduce better targeted, more innovative content based services. Our data platform, Mitr proposes to provide a unified framework for discovering and accessing content and services, giving the subscriber a personalized experience. Our delivery infrastructure is deployed across most network circles of our carrier customers. Our roaming solutions provide traffic flow information, enable network optimization and identify network bottlenecks for our carrier customers. Subscribers benefit from real-time updates and better coverage while roaming outside their regular network. Through our in-house research and development team, we have developed roaming solutions such as Welcome Roamer, Roam Tracker, Roam Globe, Roam Secure and Roam Privilege. Our value added services and products provide a source of additional revenue to our carrier customers with relatively insignificant capital expenditure. Our music, entertainment and information based value added products and services are dependent on the content which we provide. We have alliances with a number of content owners and license holders and licensed content is delivered to our carrier customers through our delivery platforms. As of May 31, 2008, we had more than 140,000 songs in more than 17 languages, as well as logos, wallpaper and 12,000 ringtones in our content database to cater to the needs of multicultural and multilingual subscribers in India. Our consolidated income increased from Rs. 332.26 million in Fiscal 2006 to Rs. 686.80 million in Fiscal 2007 and to Rs. 777.19 million for the nine months ended December 31, 2007. Our consolidated

1

profit after tax increased from Rs. 220.38 million in Fiscal 2006 to Rs. 410.50 million in Fiscal 2007 and to Rs. 330.68 million for the nine months ended December 31, 2007. We were incorporated in India in April 2000. Our registered office is located in New Delhi, India. We also maintain offices in Noida, Kolkata, Bangalore, Mohali, Hyderabad, Parwanoo and Mumbai and have an overseas office in Singapore. Our Competitive Strengths The telecommunications services industry has grown exponentially in recent years as a result of India’s expanding economy. Land-based telephone connections and services are inadequate for current consumer needs and mobile phones are increasingly filling the growing demand. Competitive pressures have also resulted in decreasing prices and declining average revenue per user in the Indian telecommunications industry and telecommunications operators and service providers are increasingly looking to additional services and products to support and grow their market share, revenues and margins. Innovative platform based product development and diversity of products and services We are continually engaged in the development of new products and services on our platforms to enhance the product portfolio we offer to our telecommunications carrier customers and other enterprises and bring new products and services to the market to address consumer needs and drive demand. We focus on multi-modal platforms based on voice, text and data. Our mobile radio platform gives subscribers the interactive option to access content on demand in the language of their choice using their mobile phones. Given the demographic diversity of India, our platforms offer an efficient, easy-to-use and attractive solution to our carrier customers for providing services to their subscribers. The platform enables carriers to introduce better targeted, more innovative content based services. Our data platform, Mitr, proposes to provide a unified framework for discovering and accessing content and services, giving the subscriber a personalized experience. We continue to invest in the growth of our platforms to ensure that these are in tune with the requirements of our customers. In addition, we are constantly refining our offerings to improve adoption of mobility-related products by consumers and address pricing pressures. We provide a diverse portfolio of services, products and content, with a focus on entertainment, information, music and games. We have introduced new services in India, including tambola via mobile phone, BGM, VAS on USSD, Pay4Me and select caller list. For music, entertainment and infotainment products, we have launched our BGM service, mobile radio and ringtones; for call-related products, we have launched select caller VAS on USSD and Pay4Me; for services and applications, we have launched user generated products such as voice chat; and we have developed and launched innovative roaming solutions such as Welcome Roamer, Roam Tracker, Roam Globe, Roam Secure and Roam Privilege. Our ability to offer a complete suite of products and services allows our customers to offer a wide range of user interface services to their subscribers, resulting in ease of market adoption, revenue growth, and higher subscriber satisfaction. Entrenched customer relationships All of the major telecommunications carriers in India form a part of our customer base, including Airtel, Spice Communications, BSNL, IDEA, Reliance, Vodafone, MTNL, Tata Teleservices Limited and “Connect” & “Ping” of HFCL. We have successfully marketed our solutions to a multitude of diverse telecommunication carriers customers. Service deployments with our customers involve complex hardware systems and software applications deeply embedded within the customer’s core network systems. Since the service deployment on our customers’ network is complex, our relationship development personnel are stationed at our telecommunication carriers office, giving us the ability to expand quickly and efficiently the range of services deployed and benefiting from the revenue growth from their subscriber base. Our presence and deep experience across the mobile industry value chain Our experience in the mobile industry value chain provides us with valuable insight into the mobile eco-system. Our association with Spice Communications has in the past provided us with enhanced and expedited feedback on the ever-changing needs of end-user subscribers and their feedback has been incorporated by our research and development team into new products and services. We believe

2

expedited feedback from the telecommunication carriers perspective gives us a time-to-market advantage for development of new products and services. In addition, we have the capability of managing the entire value added services segment which a telecommunications carrier customer requires in providing value added services to its subscribers. Currently, we provide this management service to Spice Communications. This managed services model benefits the carrier by reducing its investment in the value added services segment and helps the launch of innovative data and multimedia services quickly and efficiently. Strong core technological capabilities We have significant in-house resources and capabilities and a deep domain understanding in the areas of voice, data, and signaling. In the past, this understanding has allowed our Company to build technology intensive applications and products such as BGM (voice domain), mobile radio platform (voice domain), USSD/SMSC (signaling domain) and services, such as call filter (enhanced IN services) and Mitr. Our technology team works closely with the business teams and keeps a close watch on the value added services environment worldwide. We have a sophisticated understanding of the complexities of the operations of our carrier customers, which enables us to better address the technological concerns involved in incorporating products and services into operators’ networks. We were one of the first to develop products and services such as BGM, VAS on USSD, Select Caller List and Pay4Me, resulting in revenue growth for our Company over the last few years. Our diversified content database Our music, entertainment and information based value added services and products are dependent on the content we source, license, reformat and re-position. We have invested significant effort in growing the necessary relationships and have forged alliances with more than 300 content owners and license holders. We have a content database of more than 140,000 songs in more than 17 languages, as well as logos, wallpaper and 12,000 ringtones in our content database, to cater to the needs of multicultural and multilingual users in India. With our pan-India presence and a well diversified offering of value added products and services, we provide relevant services in a convenient manner to our consumers in the language of their choice. Hosting a gamut of content varieties, consisting of music, entertainment, gaming, contesting and information based services, we facilitate continuous access to the content required by our carrier customers. Experienced management and research and development team Our senior management team has an average of, over 14 years of experience in the telecommunications and technology industries with well-established companies. We have a research and development team comprised of 128 members and have in the past created and nurtured innovative products and services in the evolving mobile eco-system and building community brands across product and service verticals. Our experienced senior management tea m has been a primary contributor to our current status as a leading provider of telecommunications value added services and products and solutions in India. Our Strategy Our strategy is to be the preferred VAS business partner of telecommunications carriers and enterprise clients. We strive to offer the most innovative platforms, products and services that can be accessed and used by our carrier customers’ subscribers on mobile phones and by our enterprise clients, delivering value added voice services, data transmission, mobile commerce and communications. Provide innovative applications to fulfill our carrier customers’ total telecommunication needs in new and existing markets Mobile phones have developed beyond simple voice communications and have become a sophisticated multi-utility tool for consumers to enjoy and access a variety of services. We believe that the value added services industry is rapidly evolving to provide rich and varied content and services for subscribers. We intend to utilize our expertise to develop and launch innovative products and services that will meet the evolving needs of the end-user subscribers for our carrier customers and enterprise 3

customers in our current markets, as well as market new products and services to new and existing customers in India and internationally. We continue to focus on and invest in our development activities to anticipate the needs of the growing subscriber market and continue to develop products and services which match consumer preferences as well as foster cross-selling of services to these end-user subscribers that our products and services reach. Deepen our relationships with carrier customers We intend to expand our geographic presence and market penetration in India. Based on our experience serving as an integrated telecommunications solutions provider for some of our carrier customers who want to rapidly and cost-effectively provide a broad range of telecommunications value added services and products to their subscribers and create new revenue streams, we believe we have the leverage to expand our domestic carrier customer base, becoming a value added service provider of choice. We intend to increase our market share with existing customers by providing a broader range of services and products to these customers, and also cross-marketing additional products, such as our roaming solutions to our carrier customers. Furthermore, we intend to enhance our presence in enterprise services by providing a broader range of services to our enterprise clients within India and overseas. In order to develop and support these new customer relationships, we intend to upgrade and expand our network of development, sales and support resources in potential growth markets and to enter into local partnerships and distribution arrangements. We also intend to be present in all aspects of the value added services chain, acting as a partner to our customers by managing the entire value added services offering of our customers. Build on our platforms While we continue to innovate and launch value added services and products, we intend to focus on the development of platforms on which various applications can be hosted, including hosting of third party applications. We have developed a voice platform through mobile radio, which is a one-stop-shop for music, comedy, sports and other such products, a roaming platform allowing a multitude of applications for multiple carrier customers to take advantage of economies of scale and the breadth of our product portfolio, and a service control point platform for offering a multitude of enhanced Intelligent Network (IN) services, such as select caller list, call control and ‘follow me’. Our data platform, Mitr, proposes to provide a unified framework for discovering and accessing content and services and a personalized customer experience. We continue to build platforms for new emerging opportunities such as mobile marketing, mobile commerce and enterprise customer relationship management. Grow our technological capabilities and improve our product deployment We have successfully tested and launched applications such as bulk outbound messaging (through our enterprise solutions platform), select caller list, VAS on USSD, Pay4Me and missed call alerts through voice and data technologies. With the evolution of the mobile phone beyond its basic call functionality, we believe there are opportunities to offer products and services which enable merchants and consumers to sell and purchase goods, mobile content and other products using the wireless handset as a sales channel. Merchants will be able to leverage the increasing reach of telecommunications networks by using products, such as outbound messaging, to access large and difficult to reach markets in India. We intend to leverage the mass customization capabilities of our value added software services deployments with our carrier customers to bring to market advanced capabilities such as demand aggregation and personalized one-to-one direct marketing. We believe that our experience in providing telecommunications value added services and products for delivery to mobile users gives us a deep understanding of subscriber behavior and use of value added products and services, which assists us in formulating new products and services and improving existing products to enhance the user experience. Strengthen our long-standing content sourcing relationships Our current initiatives include providing channels for both user generated and media generated content. We seek to develop one of the strongest content databases in India, cutting across genres and

4

languages. Since most of our products and services are dependent on the content we provide, our focus is to create one of the largest digital and music databases in India. Currently, the major growth in mobile telephony is from semi-urban and rural areas. With coverage expansion by the operators in semi-urban and rural areas where there are few entertainment and information outlets other than television, we expect there will be significant requirements for content focused on semi-urban and rural populations, such as commodity market prices, commodity rates, weather information and education. We intend to have online content in these areas through our partnerships with content providers. Expand our operations into new enterprises and international markets As the cellular subscriber base is growing, enterprises are using the mobile phone as a tool for customer relationship management, mobile advertising and MCommerce. Examples of this growth are banks and insurance companies using the mobile phones for banking transactions and due-date alerts. We intend to focus on growing our enterprise customer base to expand and grow our business. We also believe there is significant market growth potential in emerging telecommunications services markets outside India. We have set up and own an office in Singapore to research the market in Singapore and in the Asia-Pacific region. In addition, we have a presence in Jordan where we provide our telecommunication value added services and products. We intend to market existing products and services and develop customized products and services within the Asia-Pacific region and further to other parts of the world. We believe that with our strong technological, product innovation and bandwidth handling capabilities, we can offer cost efficient, innovative and diverse range of products and services internationally. We believe overseas markets, with potentially higher average revenues per user, offer expansion and business growth opportunities with manageable increased costs. We are in the process of evaluating markets such as Bangladesh, Indonesia, Malaysia and Africa. Pursue selective strategic acquisitions and investments We continually seek new growth and acquisition opportunities in our existing business lines as well as related businesses to expand our geographic presence domestically and internationally, service offerings, customer relationships and technological expertise. By selecting the opportunities for growth and acquisition carefully and leveraging our transactional, project execution and operational skills, we expect to continue to expand our business. We will pursue similar opportunities in other regions to strengthen and grow our business, including investment in or acquisition of minority or majority stakes in companies which support our business and product strategy.

5

SUMMARY OF INDUSTRY

Telecommunications and Mobile Value Added Services (MVAS) Market Opportunity in India The Indian telecommunications industry has experienced significant growth in recent years and is expected to continue as India’s large population and low mobile penetration offer considerable scope for growth. This growth has been highly visible in the mobile sector. India’s cellular market penetration is estimated at approximately 20% as of 2007 and is projected to rise to approximately 61% by 2012, a CAGR of 26.9%. Correspondingly, revenues from cellular services in India are projected to increase from US$14 billion in 2007 to US$37 billion in 2012, an implied CAGR of 18.0% (Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008 1). A more recent analysis by TRAI (no. 54, 2008) estimates the total wireless subscribers as of April 2008 was 269.3 million. India Cellular: Total Market, 2003- 2012
Mobile Connections (in thousands)
800,000 60.7% 700,000 54.8% 600,000 47.8% 50% 500,000 40.0% 40% 400,000 29.7% 657,488 300,000 19.8% 466,839 200,000 6.9% 100,000 2.7% 28,442 2003 4.5% 141,136 48,220 2004 75,923 0% 2005 2006 2007 2008 2009 2010 2011 2012 12.6% 224,388 341,536 10% 565,759 20% 60%

Penetration
70%

737,119 30%

0

(Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008) The growth of telecom subscribers has led to the emergence of the Mobile Value Added Services (MVAS) market. MVAS are those services that are not part of the basic voice offer and are availed separately by the end user. They are used as a tool for differentiation and allow mobile operators to develop another stream of revenue. The nature of value added services changes over time. For example, P2P SMS was the only form of VAS in the early days of adoption of mobile telephony in India. Now VAS includes data offerings such as games, music, video/TV, ringtones, graphics, information services, contests and other. Data service revenue, (including SMS) was estimated to be approximately US$1.5 billion in 2007 and growing to approximately US$5.6 billion in 2012, a CAGR of 26.3% for
1

The Gartner Report(s) described herein, (the "Gartner Report(s)") represent data, research opinion or viewpoints published, as part of a syndicated subscription service available only to clients, by Gartner, Inc., a corporation organized under the laws of the State of Delaware, USA, and its subsidiaries ("Gartner"), and are not representations of fact. The Gartner Report(s) do not constitute a specific guide to action and the reader of this Draft Red Herring Prospectus assumes sole responsibility for his or her selection of, or reliance on, the Gartner Report(s), or any excerpts thereof, in making any decision, including any investment decision. Each Gartner Report speaks as of its original publication date (and not as of the date of this Draft Red Herring Prospectus) and the opinions expressed in the Gartner Report(s) are subject to change without notice. Gartner is not responsible, nor shall it have any liability, to the Company or to any reader of this Draft Red Herring Prospectus for errors, omissions or inadequacies in, or for any interpretations of, or for any calculations based upon data contained in, the Gartner Report(s) or any excerpts thereof.

6

the period 2008-2012 (Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008). India Cellular Services, Total Market — 2003-2012

Total Services Revenue (US$ million)
40,000

Data Revenue (US$ million)
5,576.7 6,000

35,000

4,870.6 5,000

30,000

4,152.5 4,000

25,000 3,230.4 20,000 37,766 2,194.9 15,000 1,524.6 10,000 901.8 14,338 5,000 146.6 2,706 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 563.8 323.4 4,645 6,479 0 9,021 1,000 19,460 25,632 30,787 2,000 34,796 3,000

(Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008) Historically, the telecommunications sector was run by the Indian Government through the Ministry of Telecommunications and Information Technology, Department of Telecommunications. The liberalisation of this key sector began in the early 1990s with the realisation that in order to expedite development of the infrastructure throughout India, wide scale investment was required and this could not be fulfilled exclusively by public investment. Since early 1998, telecommunications services areas have been opened up on a nationwide basis to competition and private sector participation. This transition from a government-controlled monopoly to an industry with widespread private sector participation, coupled with population growth and strong economic trends in recent years has been instrumental in the telecommunications sector becoming one of the fastest growing sectors in India.

7

SUMMARY FINANCIAL INFORMATION
CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED (Amount in Rs. Million) As at March 31, 2007

Particulars APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated Depreciation/ Amortisation Net Block Capital Work In Progress including Capital Advances

As at December 31, 2007

452.69 (113.51) 339.18 8.05

185.70 (52.99) 132.71 31.21

Total

347.23

163.92

Deferred Tax Assets (net) Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances

-

1.87

357.24 500.59 84.65 294.27

1.36 262.53 648.30 3.34 47.84

Total TOTAL (A)

1,236.75 1,583.98

963.37 1,129.17

Deferred Tax Liabilities (net) Liabilities and Provisions Minority Interest Current Liabilities Provisions Total

2.04

-

0.10 181.98 316.73 498.81

0.10 86.85 11.68 98.63

TOTAL (B)

500.85

98.63

Net Worth (A-B)

1,083.13

1,030.53

8

Particulars Represented by Share Capital and Reserves Equity Share Capital Reserves and Surplus (Figure for December 31, 2007 is net of Rs. 5.11million being adjustment for employee provisions (Refer Note No. G (3) of the Annexure XIX) Less: Miscellaneous Expenditure (to the extent not written off or adjusted)

As at December 31, 2007

As at March 31, 2007

145.72

145.72 885.92

937.41 1.11

Net Worth

1,083.13

1,030.53

Notes: The above Statement should be read with the significant accounting policies and Notes to the Consolidated Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure XIX

9

.
CONSOLIDATED SUMMARY STATEMENT OF PROFIT AND LOSS, AS RESTATED
Particulars Nine- months Period Ended December 31, 2007 (Amount in Rs. Million) Year Ended March 31, 2007

INCOME Operating Income Other Income Total Income EXPENDITURE Purchase of Goods for Sale Operating Expenses Staff Cost Selling and Distribution Expenses General and Administration Expenses Decrease / (Increase) in Inventories Interest Miscellaneous Expenditure written off Depreciation / Amortization (Refer note no. C(iv) and G (9) of the Annexure XIX) Total Expenditure PROFIT BEFORE TAX AND PRIOR PERIOD ITEMS Prior Period Items PROFIT BEFORE TAX AND AFTER PRIOR PERIOD ITEMS Provision for Tax Current Tax (Net of MAT Credit entitlement, refer note no. G (10) of the Annexure XIX) Deferred Tax Charge / (Credit) Fringe Benefits Tax Total Tax Expense NET PROFIT AS PER AUDITED ACCOUNTS Adjustments ( Refer Note no. E of Annexure XIX) Current Tax impact of Adjustments Deferred Tax impact of Adjustments Net Impact of Adjustments NET PROFT AS RESTATED, BEFORE MINORITIES SHARE Less: (Losses) / Profits attributable to minority shareholders NET PROFT AS RESTATED Profit & Loss Account at the beginning of the year / period PROFIT AVAILABLE FOR APPROPRIATION Appropriations: Transfer to General Reserve 734.56 42.63 777.19 661.78 25.02 686.80

0.99 82.13 138.37 16.56 126.31 1.36 0.94 1.11 60.47 428.24 348.95 5.31 343.64

3.38 50.11 66.11 7.28 78.53 (1.36) 0.04 32.90 236.99 449.81 0.38 449.43

14.91 3.43 4.65 22.99 320.65 10.45 (0.42) 10.03 330.68 (0.001) 330.68

24.06 (1.24) 2.16 24.98 424.45 (15.64) 1.21 0.48 (13.95) 410.50 0.001 410.50

201.22 531.90 33.47

289.42 699.92 42.37

10

Particulars Proposed Dividend on Equity Shares (at the rate of Rs. 16.07 per share) Interim Dividend on Equity Shares (at the rate of Rs. 33.35 per share) Tax on dividend BALANCE CARRIED FORWARD AS RESTATED

Nine- months Period Ended December 31, 2007 234.28 39.82

Year Ended March 31, 2007 400.20 56.13

224.343

201.22

Notes: The above Statement should be read with the significant accounting policies and Notes to the Consolidated Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure XIX.

11

THE ISSUE
Public Issue Of which: Fresh Issue by the Company Of which: Employee Reservation Portion(1) Offer for Sale by Selling Shareholders** Net Issue to public Of which: QIB Portion(2) Of which: Mutual Fund Portion Balance for all QIBs including Mutual Funds Non-Institutional Portion(1) Retail Portion(1) Equity Shares outstanding prior to the Issue Equity Shares outstanding after the Issue Use of Issue proceeds 11,271,012 Equity Shares*

6,982,042 Equity Shares 100,000 Equity Shares 4,288,970 Equity Shares 11,171,012 Equity Shares

At least 6,702,608 Equity Shares

335,131 Equity Shares 6,367,477 Equity Shares Not less than 1,117,101 Equity Shares Not less than 3,351,303 Equity Shares 42,889,685 Equity Shares 49,871,727 Equity Shares See the section “Objects of the Issue” beginning on page 30. Our Company will not receive any proceeds of the Offer for Sale.

*Our Company and the Selling Shareholders are considering a sale of up to [●] Equity Shares to certain investors, prior to filing of the Red Herring Prospectus with the RoC (“Pre-IPO Placement”). If the Pre-IPO Placement is completed, the number of Equity Shares sold pursuant to the Pre-IPO Placement, will be reduced from the Net Issue, subject to minimum Net Issue size of 10% of the post-Issue paid up share capital of our Company. The Pre-IPO Placement is at the discretion of our Company and the Selling Shareholders.

** Lehman Brothers Opportunity Limited, one of the Selling Shareholders, an affiliate of Lehman Brothers Securities Private Limited, one of the BRLMs, is transferring 2,571,454 Equity Shares as part of the Offer for Sale in this Issue.
(1)

Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in the Non-Institutional Portion and Retail Portion would be allowed to be met with spill-over from other categories at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs. Under-subscription, if any, in the Employee Reservation Portion will be added back to the Net Issue portion at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs. In case of under-subscription in the Net Issue, spill-over to the extent of under-subscription shall be permitted from the Employee Reservation Portion subject to the Net Issue constituting at least 10% of the post Issue paidup share capital of our Company. If at least 60% of the Net Issue cannot be allotted to QIBs, then the entire application money will be refunded forthwith. Allocation to QIBs is proportionate as per the terms of this Draft Red Herring Prospectus. 5% of the QIB Portion shall be available for allocation to Mutual Funds. Mutual Funds participating in the 5% reservation in the QIB Portion will also be eligible for allocation in the remaining QIB Portion. Further attention of all QIBs is specifically drawn to the following: (a) QIBs will not be allowed to withdraw their Bid cum Application Forms after the Bid/Issue Closing Date; and (b) each QIB, is required to deposit a Margin Amount of at least 10% with its Bid cum Application Form.

(2)

12

GENERAL INFORMATION Our Company was incorporated as Cellebrum.Com Private Limited on April 4, 2000 under the Companies Act. Subsequently, our Company was converted into a public limited company and the name of our Company was changed to “Cellebrum.Com Limited” pursuant to a fresh certificate of incorporation granted to our Company on February 14, 2008, by the RoC. Further, the name of our Company was changed from “Cellebrum.Com Limited” to “Cellebrum Technologies Limited” pursuant to a fresh certificate of incorporation granted to our Company on April 22, 2008, by the RoC. For details of changes in name and registered office of our Company, see the section “History and Certain Corporate Matters” beginning on page 74. Registered Office D-4 Okhla Industrial Area, Phase-1, New Delhi- 110020, India. Telephone: +91 11 26814544 Facsimile: +91 2681 7702 Corporate Office D-1, Sector 3, Noida- 201 301, Uttar Pradesh, India. Telephone: +91 120 4035600 Facsimile: +91 120 4265786 Website: www.cellebrum.com Corporate Identity Number: U72900DL2000PLC104989 Registration Number: 55-104989 Address of the Registrar of Companies The Registrar of Companies, National Capital Territory of Delhi and Haryana, 4th Floor, IFCI Tower, Nehru Place, New Delhi- 110 019, India. Board of Directors
Name, Designation, Occupation and DIN Mr. K.N. Memani Chairman Non-Executive Director Independent Director Professional DIN: 00020696 Mr. Dilip Modi Managing Director Non-Independent Director Industrialist DIN: 00029062 Mr. Vivek Bali Non-Executive Director Non-Independent Director Age 69 Address 177C, Western Avenue, Lane 7, Sainik Farm, New Delhi- 110062, India

34

36, Amrita Shergill Marg, New Delhi- 110004, India

47

C-66, Defence Colony, New Delhi- 100024, India

13

Name, Designation, Occupation and DIN Service DIN: 02078398 Mr. Hanif M. Dahya Non-Executive Director Independent Director Industrialist DIN: 01068575 Mr. Andreas Vourloumis Non-Executive Director Non-Independent Director Nominee of Lehman Brothers Opprtunity Limited Service DIN: 01058533 Ms. Divya Modi Non-Executive Director Non-Independent Director Industrialist DIN: 00031073

Age

Address

52

5, Beechwood Road, Allendale, New Jersey, U.S.A

33

FLT D 4, Scenic Villa, 2-28, Scenic Villa, Pok Fu Lam, Hong Kong

24

36, Amrita Shergill Marg, New Delhi- 110004, India

For further details regarding our Board of Directors, see the section “Our Management” beginning on page 80. Company Secretary and Compliance Officer Mr. Ashok Agarwal Cellebrum Technologies Limited, D-1, Sector 3, Noida- 201301, Uttar Pradesh, India. Telephone: +91 120 4363652 Facsimile: +91 120 4320467 E-mail: investors@cellebrum.com Investors can contact the Compliance Officer in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of Allotment, credit of Equity Shares in the respective beneficiary accounts and refund orders. Book Running Lead Managers
Enam Securities Private Limited SEBI Reg. No:INM000006856 801/802, Dalamal Towers, Nariman Point, Mumbai- 400 021, Maharashtra, India. Telephone: + 91 22 6638 1800 Facsimile: + 91 22 2284 6824 E-mail: cellebrum.ipo@enam.com Investor Grievance E-mail: complaints@enam.com Website: www.enam.com Contact Person: Ms. Kanika Sarawgi Lehman Brothers Securities Private Limited SEBI Reg. No.: INM000010957 Ceejay House, 11th Level, Plot F, Shivsagar Estate, Dr. Annie Besant Road, Worli Mumbai- 400 018, Maharashtra, India. Telephone: +91 22 4037 4037 Facsimile: +91 22 4037 4111 Investor Grievance E-mail: cellebrum.ipo@lehman.com E-mail: cellebrum.ipo@lehman.com Website: www.lehman.com/ibd/geographic/asia/ipos_india.htm Contact person: Mr. Harishwar Sukhthankar

Syndicate Members [●] Legal Counsels Domestic Legal Counsel to the Company Khaitan Jayakar Sud & Vohra

14

Solicitors & Advocates, D-41, Defence Colony, New Delhi- 110024, India. Telephone: + 91 11 3294 4972, 4155 2824 Fascimile: +91 11 4151 0266 E-mail: kjsv@kjsv.co.in Domestic Legal Counsel to the Underwriters Luthra & Luthra Law Offices 103, Ashoka Estate, 24, Barakhamba Road, New Delhi- 110 001, India. Telephone: +91 11 4121 5100 Facsimile: +91 11 2372 3909 International Legal Counsel to the Issue Jones Day 29th Floor, Edinburg Towers, The Landmark, 15 Queen’s Road Central, Hong Kong. Telephone: +852 2526 6895 Facsimile: +852 2868 5871 Legal Counsel to Lehman Brothers Opportunity Limited as Selling Shareholder Amarchand & Mangaldas & Suresh A. Shroff & Co. Peninsula Chambers, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai- 400 013, India Telephone: +91 22 2496 4455 Facsimile: +91 22 2496 3666 Registrar to the Issue Karvy Computershare Private Limited SEBI Reg. No.: INR000000221 “Karvy House”, No. 46 Avenue 4, Street No.1 Banjara Hills, Hyderabad 500 034, Andhra Pradesh, India Telephone: + 91 40 2343 1553 Facsimile: + 91 40 2343 1551 E-mail: cellebrum.ipo@karvy.com Website: www.karvy.com Contact Person: Mr. Murali Krishna Bankers to the Issue/Escrow Collection Banks [●] Auditors S.R. Batliboi & Associates (Chartered Accountants)

15

Golf View, Corporate Tower-B Near DLF Golf Course, Sector 42, Sector Road Gurgaon- 122002, Haryana, India. Telephone: +91 124 4644 000 Facsimile: +91 124 4644 050/51 E-mail: raj.agrawal@in.ey.com Contact Person: Mr. Raj Agrawal Bankers to our Company
The Hongkong and Shanghai Banking Corporation Limited 3rd Floor, Ashoka Estate 24, Barakhamba Road, New Delhi-110001, India. Telephone: +91 11 4159 2099 Facsimile: +91 11 4101 2624 E-mail: nitinmadhra@hsbc.co.in Contact Person: Mr. Nitin Madhra Indusind Bank International Trade Tower ‘F’ Block, Ground Floor Nehru Place, New Delhi- 110019, India. Telephone: +91 11 2644 5809 Facsimile: +91 11 2623 6537 E-mail: sangeetam@indusind.com Contact Person: Mrs. Sangeeta Marwah

Statement of Responsibility of the Book Running Lead Managers The following table sets forth the inter se allocation of responsibilities for various activities among the BRLMs:
Activities Capital structuring with the relative components and formalities such as type of instruments, etc. Due diligence of the Company’s operations/ management/ business plans/ legal, etc. Drafting and design of offer document and of statutory advertisement including memorandum containing salient features of the Prospectus. The BRLMs shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges and SEBI including finalisation of the Prospectus and filing with the Stock Exchanges. Drafting and approval of all publicity material other than statutory advertisement as mentioned above including corporate advertisement, brochure, etc. Appointment of other Intermediaries: (a) Printers; (b) Registrar; (c) Grading Agency (d) Advertising Agency; and (e) Banker to the Issue Domestic Institutional marketing of the Offer , which will cover, inter alia: • Institutional marketing strategy Finalise the list and division of investors for one on one meetings Co-ordination for all domestic roadshow logistics International Institutional marketing of the Offer , which will cover, inter alia: • Institutional marketing strategy • Finalise the list and division of investors for one on one meetings • Co-ordination for international roadshow logistics Preparation of road show marketing presentation and FAQ Responsibility Enam Enam Co-ordinator Enam Enam

(i) (ii)

(iii)

Enam

Enam

(iv)

Enam

Enam

(v)

Enam, Lehman

Enam

vi)

Enam, Lehman

Lehman

(viii)

ENAM, Lehman,

Lehman

16

(ix)

(x) (xi)

Activities Retail/Non-institutional marketing strategy which will cover, inter alia, Finalize media, marketing and public relation strategy, Finalize centers for holding conferences for brokers, etc. Finalize collection centers, Follow-up on distribution of publicity and Issue material including form, Prospectus and deciding on the quantum of the Issue material Managing the Book, pricing and allocation to QIB Bidders. Post bidding activities including coordination with Stock Exchanges ,management of Escrow Accounts, coordinate non-institutional allocation, intimation of allocation and dispatch of refunds to Bidders, etc. The post issue activities of the Issue will involve essential follow up steps, which include finalization of trading and dealing instruments and dispatch of certificates and demat delivery of shares, with the various agencies connected with the work such as Registrars to the Issue, Banker to the Issue and the bank handling refund business. The BRLMs shall be responsible for ensuring that these agencies fulfil their functions and enable them to discharge this responsibility through suitable agreements with the Company.

Responsibility Enam, Lehman

Co-ordinator Enam

Enam, Lehman Enam

Enam Enam

Credit Rating As the Issue consists of the issue of equity shares, a credit rating is not required. IPO Grading [●] This Issue has been graded by [●] and has been assigned the “IPO Grade [●]/5”indicating [●] fundamentals, through its letter dated [●]. The IPO grading is assigned on a five point scale from 1 to 5 with an “IPO Grade 5” indicating strong fundamentals and an “IPO Grade 1” indicating poor fundamentals. A copy of the report provided by [●], furnishing the rationale for its grading is available for inspection at our Registered Office from 10.00 am to 4.00 pm on Business Days from the date of the Red Herring Prospectus until the Bid/Issue Closing Date. Monitoring Agency In terms of clause 8.17.1 of the SEBI Guidelines, the size of the Issue being less than Rs. 5,000 million, we are not required to appoint a monitoring agency. Trustees As the Issue consists of the issue of equity shares, the appointment of trustees is not required. Project Appraisal None of the objects of the Issue have been appraised. Book Building Process Book building refers to the process of collection of Bids from investors on the basis of the Red Herring Prospectus and Bid cum Application Forms. The Issue Price is determined by our Company and the Selling Shareholders, in consultation with the BRLMs, after the Bid/Issue Closing Date. The principal parties involved in the Book Building Process are:

17

(1) (2) (3) (4)

(5) (6)

our Company; the Selling Shareholders; the BRLMs; Syndicate Members who are intermediaries registered with SEBI or registered as brokers with BSE/NSE and eligible to act as underwriters. Syndicate Members are appointed by the BRLMs; Registrar to the Issue; and Escrow Collection Banks.

The Equity Shares are being offered to the public through the 100% Book Building Process in accordance with Rule 19(2)(b) of the SCRR and the SEBI Guidelines, wherein at least 60% of the Net Issue shall be Allotted on a proportionate basis to QIBs, of which 5% shall be reserved for allocation on a proportionate basis to Mutual Funds only. The remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIBs, including Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. If at least 60% of the Net Issue cannot be Allotted to QIBs, then the entire application money will be refunded forthwith. Further, not less than 10% of the Net Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Further, up to 100,000 Equity Shares shall be available for allocation on a proportionate basis to our Eligible Employees, subject to valid Bids being received at or above the Issue Price. Under the SEBI Guidelines, QIBs are not allowed to withdraw their Bids after the Bid/Issue Closing Date. In addition, QIBs are required to pay the QIB Margin Amount, representing at least 10% of the Bid Amount, upon submission of their Bids and allocation to QIBs will be on a proportionate basis. For details, see the section “Issue Procedure” beginning on page 375. Our Company and the Selling Shareholders will comply with the guidelines issued by SEBI in connection with the Issue. In this regard, our Company has appointed Enam and Lehman as the Book Running Lead Managers to manage the Issue and to procure subscriptions to the Issue. The process of book building under the SEBI Guidelines is subject to change from time to time. Investors are advised to make their own judgment about an investment through this process prior to submitting a Bid in the Issue. Steps to be taken by the Bidders for bidding: • • • • • Check eligibility for making a Bid. See the section “Issue Procedure” beginning on page 375; Ensure that you have a demat account and the demat account details are correctly mentioned in the Bid cum Application Form; Ensure that the Bid cum Application Form is duly completed as per the instructions given in the Red Herring Prospectus and in the Bid cum Application Form; and Ensure that you have mentioned your PAN in the Bid cum Application Form (see the section “Issue Procedure” beginning on page 375). Ensure the correctness of your demographic details (as defined in the section “Issue Procedure – Bidder’s Depository Account and Bank Account Details” beginning on page 390), given in the Bid cum Application Form, with the details recorded with your Depository Participant.

Illustration of Book Building Process and the Price Discovery Process (Investors should note that the following is solely for the purpose of illustration and is not specific to the Issue) Bidders can bid at any price within the price band. For instance, assuming a price band of Rs. 20 to Rs. 24 per share, an issue size of 3,000 equity shares and receipt of five bids from bidders, details of which are shown in the table below, the illustrative book would be as given below. A graphical representation of the consolidated demand and price would be made available at the bidding centres during the bidding period. The illustrative book as shown below indicates the demand for the shares of the company at various prices and is collated from bids from various investors.

18

Bid Quantity 500 1,000 1,500 2,000 2,500

Bid Price (Rs.) 24 23 22 21 20

Cumulative equity shares Bid for 500 1,500 3,000 5,000 7,500

Subscription 16.67% 50.00% 100.00% 166.67% 250.00%

The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the desired number of shares is the price at which the book cuts off, i.e., Rs. 22 in the above example. The issuer, in consultation with the book running lead managers, will finalise the issue price at or below such cut-off, i.e., at or below Rs. 22. All bids at or above this issue price and cut-off bids are valid bids and are considered for allocation in the respective categories. Withdrawal of the Issue Our Company and the Selling Shareholders, in consultation with the BRLMs, reserve the right not to proceed with the Issue at any time after the Bid/Issue Opening Date but before the Allotment, without assigning any reason thereof. Notwithstanding the foregoing, the Issue is also subject to obtaining the final listing and trading approvals of the Stock Exchanges, which our Company shall apply for after Allotment; and (ii) the final RoC approval of the Prospectus after it is filed with the RoC. Under the SEBI Guidelines, QIBs are not allowed to withdraw their Bids after the Bid/Issue Closing Date. Bid/Issue Program BID/ISSUE OPENING DATE BID/ISSUE CLOSING DATE [●], 2008 [●], 2008

Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time) during the Bidding/Issue Period as mentioned above at the bidding centers mentioned on the Bid cum Application Form except that on the Bid/Issue Closing Date, Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (Indian Standard Time) and uploaded till (i) 5.00 p.m. in case of Bids by QIB Bidders, Non-Institutional Bidders and Eligible Employees bidding under the Employee Reservation Portion where the Bid Amount is in excess of Rs. 100,000 and (ii) till such time as permitted by the Stock Exchanges, in case of Bids by Retail Individual Bidders and Eligible Employees bidding under the Employee Reservation Portion, where the Bid Amount is up to Rs. 100,000. Due to limitation of time available for uploading the Bids on the Bid/Issue Closing Date, the Bidders are advised to submit their Bids one day prior to the Bid/Issue Closing Date and, in any case, no later than 3.00 p.m (Indian Standard Time) on the Bid/Issue Closing Date. Bidders are cautioned that in the event a large number of Bids are received on the Bid/Issue Closing Date, as is typically experienced in public offerings, which may lead to some Bids not being uploaded due to lack of sufficient time to upload, such Bids that cannot be uploaded will not be considered for allocation under the Issue. Bids will only be accepted on Business Days. On the Bid/Issue Closing Date, extension of time will be granted by the Stock Exchanges only for uploading the Bids received by Retail Bidders after taking into account the total number of Bids received upto the closure of timings for acceptance of Bid cum Application Forms as stated herein and reported by the BRLMs to the Stock Exchange within half an hour of such closure. Our Company and the Selling Shareholders, in consultation with the BRLMs, reserve the right to revise the Price Band during the Bidding/Issue Period in accordance with the SEBI Guidelines, provided that the Cap Price is less than or equal to 120% of the Floor Price. The Floor Price can be revised up or down up to a maximum of 20% of the Floor Price disclosed in the Red Herring Prospectus. In case of revision in the Price Band, the Bidding/Issue Period shall be extended for three additional Business Days after such revision, subject to the Bidding/Issue Period not exceeding 10 Business Days. Any revision in the Price Band, and the revised Bidding/Issue Period, shall be widely disseminated by notification to the Stock Exchanges, by issuing a press release and also by

19

indicating the change on the websites of the BRLMs and the terminals of the Syndicate Members. Underwriting Agreement After the determination of the Issue Price but prior to filing of the Prospectus with the RoC, our Company and the Selling Shareholders intend to enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be issued and sold in the Issue. Pursuant to the terms of the Underwriting Agreement, the BRLMs shall be responsible for bringing in the amount devolved in the event that the members of the Syndicate do not fulfill their underwriting obligations. Pursuant to the terms of the Underwriting Agreement, the obligations of the Underwriters are several and are subject to certain conditions to closing, as specified therein. The Underwriters have indicated their intention to underwrite the following number of Equity Shares: (This portion has been intentionally left blank and will be completed before filing of the Prospectus with the RoC.)
Name and Address of the Underwriters Indicated Number of Equity Shares to be Underwritten [●] [●] [●] Amount Underwritten (Rs. Million) [●] [●] [●]

Enam Lehman Total

The above-mentioned amount is an indicative underwriting and will be finalised after determination of the Issue Price and actual allocation of the Equity Shares. The Underwriting Agreement is dated [●], 2008. Allocation among the Underwriters may not necessarily be in the proportion of their underwriting commitments. Notwithstanding the above table, the BRLMs and the Syndicate Members shall be responsible for ensuring payment with respect to the Equity Shares allocated to investors procured by them. In the event of any default in payment, the respective Underwriter, in addition to other obligations defined in the Underwriting Agreement, will also be required to procure/subscribe for Equity Shares to the extent of the defaulted amount in accordance with the Underwriting Agreement. The BRLMs shall be responsible for bringing in amounts devolved in the event that the other members of the Syndicate do not fulfill their underwriting obligations. In the opinion of the Board of Directors (based on a certificate given by the Underwriters), the resources of the above-mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. All the above-mentioned Underwriters are registered with SEBI under section 12(1) of the SEBI Act or registered as brokers with the Stock Exchanges. Lehman Borthers Opportunity Limited, an affiliate of Lehman, one of the BRLMs, owns approximately 17.27% of the Equity Shares prior to the Issue and will own 9.69% of the Equity Shares upon completion of the Issue. Please also see the section “Risk Factors” beginning on page x.

20

CAPITAL STRUCTURE The share capital of our Company as of the date of this Draft Red Herring Prospectus, before and after the proposed Issue is set forth below:
. Aggregate Nominal Value (Rs.) A) AUTHORISED SHARE CAPITAL(a) 100,000,000 Equity Shares B) ISSUED, SUBSCRIBED AND PAID UP SHARE CAPITAL 42,889,685 fully paid up Equity Shares C) PRESENT ISSUE IN TERMS OF THE DRAFT RED HERRING PROSPECTUS 11,271,012 Equity Shares(b) Which comprises a) Fresh Issue of 6,982,042 Equity Shares(c) Of which: Employee Reservation Portion 100,000 Equity Shares b) Offer for Sale of 4,288,970 Equity Shares(d) Net Issue to the Public 11,171,012 Equity Shares Of which: QIB Portion of at least 6,702,608 Equity Shares Of which: Mutual Funds Portion is 335,131 Equity Shares Balance for all QIBs including Mutual Funds is 6,367,477 Non Institutional Portion of not less than 1,117,101 Equity Shares Retail Portion of not less than 3,351,303 Equity Shares D) PAID-UP SHARE CAPITAL AFTER THE ISSUE 49,871,727 Equity Shares E) SHARE PREMIUM ACCOUNT Before the Issue After the Issue a) 11,171,010 [•] Aggregate Value at Issue Price (Rs.)

1,000.00

428,896,850

[•]

112,710,120

[•]

69,820,420

[•]

1,000,000 42,889,700

[•] [•]

67,026,070

[•]

33,513,040

[•]

498,717,270

637,482,588 [●]

The initial authorized share capital of our Company was increased from Rs. 1,000,000 divided into 100,000 Equity Shares to Rs. 20,010,000 divided into 2,001,000 Equity Shares, pursuant to a resolution of the shareholders of our Company dated January 20, 2001. The authorized share capital of our Company was further increased from Rs. 20,010,000 divided into 2,001,000 Equity Shares to Rs. 120,010,000 divided into 12,001,000 Equity Shares pursuant to a resolution of the shareholders of our Company dated January 30, 2006.

21

The authorized share capital of our Company was further increased from Rs. 120,010,000 divided into 12,001,000 to Rs. 320,000,000 divided into 32,000,000 Equity Shares pursuant to a resolution of the shareholders of our Company dated September 30, 2006. The authorized share capital of our Company was further increased from Rs. 320,000,000 divided into 32,000,000 Equity Shares to Rs. 1,000,000,000 divided into 100,000,000 Equity Shares pursuant to a resolution of the shareholders of our Company dated May 20, 2008. b) Our Company and the Selling Shareholders are considering a Pre-IPO Placement of up to [●] Equity Shares to certain investors, prior to filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the number of Equity Shares sold pursuant to the Pre-IPO Placement, will be reduced from the Net Issue, subject to minimum Net Issue size of 10% of the post-Issue paid up share capital of our Company. The Pre-IPO Placement is at the discretion of our Company and the Selling Shareholders. The Issue has been authorized by a resolution of our Board dated June 24, 2008 and by a special resolution passed by the shareholders of our Company pursuant to section 81(1A) of the Companies Act at the EGM of our Company held on June 24, 2008. Lehman Brothers Opportunity Limited, an affiliate of Lehman Brothers Securitites Private Limited, one of the BRLMs, has authorized transfer of 2,571,454 Equity Shares as part of the Offer for Sale pursuant to its board resolution dated June 25, 2008 and Omnia Investments Private Limited authorized transfer of 1,717,516 Equity Shares as part of the Offer for Sale pursuant to its board resolution dated May 14, 2008. The Offer for Sale constitutes:
(Rs. in millions except share data)

(c)

(d)

Number of Equity Shares Lehman Brothers Opportunity Limited* 2,571,454 Omnia Investments Private Limited 1,717,516 * an affiliate of Lehman Brothers Securitites Private Limited, one of the BRLMs

Selling Shareholder

Aggregate value at Issue Price [•] [•]

The Equity Shares constituting the Offer for Sale have been held by the Selling Shareholders for a period of at least one year as on the date of filing of the Draft Red Herring Prospectus with SEBI and hence are eligible for being offered for sale in the Issue. RBI approval shall be sought for the transfer of Equity Shares forming part of Offer for Sale in the Issue.

Notes to the Capital Structure 1. Share Capital History
No. of Equity Shares Issue Price per Equity Shares (Rs.) Nature of Consideration Reasons for Allotment Cumulative number of Equity Shares Cumulative Issued Capital (Rs.) Cumulative Share Premium (Rs.) Individuals/ entities to whom Equity Shares allotted

Date of Allotment of the Equity Shares

April 5, 2000

10

10 Cash

April 5, 2000 10 January 20, 2001 2,000,000 10 Cash 10 Cash

Subscription to the Memorandum and Articles of Association Subscription to the Memorandum and Articles of Association

10

100

Mr. Atul Nil Prakash

20

200

Mr. Ravinder Nil Lal Ahuja Modicorp Nil Private Limited Omnia Investments Private Nil Limited*

Allotment Bonus issue of Equity Shares in the ratio of 5:1(a) Bonus issue of Equity Shares in the ratio of 5:1(a)

2,000,020

20,000,200

January 31, 2006 January 31, 2006 November 28, 2006

9,999,600

Nil Bonus shares

11,999,620

119,996,200

500

Nil Bonus shares

12,000,120

120,001,200

2,571,454

260.92 Cash

Preferential allotment(b)

14,571,574

145,715,740

Nil Mr. Dilip Modi* Lehman Brothers Opportunity 645,229,238 Limited

22

Date of Allotment of the Equity Shares

No. of Equity Shares

Issue Price per Equity Shares (Rs.)

Nature of Consideration

Reasons for Allotment

Cumulative number of Equity Shares

Cumulative Issued Capital (Rs.)

Cumulative Share Premium (Rs.)

Individuals/ entities to whom Equity Shares allotted

June 23, 2008

320,685

10 Cash

Preferential allotment

14,892,259

148,922,590

645,229,238

June 24, 2008 Total

27,997,426 42,889,685

Nil Bonus shares

Bonus issue

42,889,685 42,889,685

428,896,850 428,896,850

645,229,238 645,229,238

Preferential allotment made to certain employees of our Company** Bonus shares issued to all the exisiting shareholders of the Company

*

For details of build up of shareholding of Omnia Investments Private Limited and Mr. Dilip Modi, see “Build-up of Promoter’s share capital in our Company” on page 23. Preferential allotment made to certain of our employees namely, Mr. Saket Agarwal, Mr. Kartar Singh, Ms. Monika Aggarwal, Mr. Lokesh Gupta, Mr. Atul Sachdeva, Mr. Abhinav Mathur, Mr. Atul Mukheja, Mr. Satish Arora, Mr. Varun Gupta, Ms. Mona Sharma, Mr. Amit Dua, Mr. Amrish Lakhanpal, Mr. Amit Khurana, Mr. Sandeep Rajan, Mr. Kishori Lal Sharma, Mr. Arun Dogra, Mr. Pankaj Sharma, Mr. Jatinder Verma, Mr. Rajib Roy, Mr. Shehzad Azad, Mr. Samit Tarafdar, Mr. Anuj Bajpai, Mr. Vineet Singh, Ms. Sumi Dhody, Mr. Vivek Sharma, Mr. Pardeep Kumar, Mr. Amit Sharma, Mr. Amritpal Singh, Mr. Manoj Kashyap, Mr. Avninder Singh, Mr. Amit K Gupta, Mr. Vikas Chandla, Mr. Rahul Bassi, Mr. Amit Kashyap, Mr. Maninder Mandyal,Mr. Sushen Sharma, Mr. Tanuj Chopra, Mr. Rajan Khosla, Mr. Vivek Kapur and Mr. Sunil Kapoor.

**

Other than as mentioned in the table above, our Company has not made any issue of Equity Shares during the preceding one year. a) The bonus issues of Equity Shares have been made by way of capitalization of general reserves/profit and loss account/share premium.
Date of Allotment of Bonus Shares January 31, 2006 June 24, 2008 Ratio of the Bonus Issue 5:1 47:25 Number of Equity Shares issued as Bonus Shares 10,000,100 27,997,426 Face Value of Shares Rs. 10 Rs. 10 Amount of reserves/ profit and loss account capitalized Rs. 100,001,000 Rs. 279,974,260

(b)

2,571,454 Equity Shares were allotted to Lehman Brothers Opportunity Limited pursuant to Share and Warrant Subscription Agreement and Investor’s Rights Deed, both dated November 22, 2006. For further details see the section “History and Certain Corporate Matters” beginning on page 74.

2.

Build up of Promoters’ Capital, Promoters’ Contribution and Lock-in a) Details of build up of Promoters’ share capital in our Company:

Set forth below are the details of the build up of the Promoters’ shareholding in our Company:
Name of the Promoter Date of Allotment/transfer No. of Equity Issue/ Nature of Nature of Transaction Shares* Acquisition Consideration Price per Equity Share (Rs.)** 1,880,020 5.00 Cash Transfer from Indian Televentures Private Limited and MCorp Global Private Limiteda 119,900 16.70 Cash Transfer from Mr. Dheeraj Agarwalb

July 9, 2004 Omnia Investments Private Limited July 15, 2005

23

Name of the Promoter

Date of Allotment/transfer

January 31, 2006

September 30, 2006 June 24, 2008 Total Mr. Dilip Modi September 11, 2000 August 11, 2003

No. of Equity Issue/ Nature of Nature of Transaction Shares* Acquisition Consideration Price per Equity Share (Rs.)** 9,999,600 Nil Bonus shares Bonus Issue in the ratio of 5:1 10 Equity Shares each transferred in favour of Mr. Atul Prakash, Mr. O.P. Dani, Ms. Divya Modi, Mrs. Veena Modi (50) 34.00 Cash and Dr. B.K Modi Bonus shares Bonus Issue in the ratio 22,559,003 Nil of 47:25 34,558,473 1 (1) 10 Cash 10 Cash Transfer from Mr. Atul Prakashc Transfer in favour of Indian Televentures Private Limited by Mr. Dilip Modi Transfer from Mr. Dheeraj Agarwalb Bonus Issue in the ratio of 5:1 Bonus Issue in the ratio of 47:25

July 15, 2005 January 31, 2006

100 500

16.70 Cash Nil Bonus shares Bonus shares

June 24, 2008 Total

1,128 1,728

Nil

August 11, 2003 Indian July 9, 2004 Televentures Private Limited Total Total *

20,020 (20,020) Nil 34,569,191

10 Cash 5 Cash

Transfer from Spicecorp Limited Transfer in favour of Soft Solution Private Limited

The Equity Shares were fully paid up at the time of allotment. Hence, the date of them being made fully paid up is the same as the date of allotment. ** The cost of acquisition includes the stamp duty paid. a. Indian Televentures Private Limited acquired 20,020 Equity Shares by way of transfer from SpiceCorp Limited. MCorp Global Private Limited acquired 1,000,000 Equity Shares by way of transfer from SpiceCorp Limited and 860,000 Equity Shares by way of transfer from from Mr. Ashok Kumar Goyal, Mr. Umang Das, Mr. S.K. Jain and Mr. G.P. Singh (these individuals had acquired the Equity Shares held by them by way of transfer from SpiceCorp Limited). Mr. Dheeraj Agarwal had acquired 120,000 Equity Shares from SpiceCorp Limited. Mr. Atul Prakash was allotted 10 Equity Shares as initial subscriber to Memorandum and Articles of Association.

b. c.

b)

Details of Promoter’s Contribution locked-in for three years:
Name of the Promoter No. of Equity Shares locked-in* 9,974,345 Percentage of Pre Issue Capital 23.26 Percentage of Post Issue Capital 20

Omnia Investments Private Limited

24

*Omnia Investments Private Limited has by a written undertaking dated June 26, 2008 granted their consent to consider Equity Shares held by them, constituting 20% of the post-Issue Equity Share capital of our Company as Promoters’ contribution and be locked-in for a period of three years from the date of Allotment (“Promoters’ Contribution”).

All Equity Shares, which are being locked-in are eligible for computation of Promoters’ Contribution and are being validly locked-in as per SEBI Guidelines. All the Equity Shares are currently in physical form. On finalisation of the Basis of Allotment, Equity Shares forming part of Promoters’ Contribution would be locked-in as required as under the SEBI Guidelines. Such Equity Shares would carry inscription ‘non transferable’ along with duration of specified non-transferable period mentioned in the face of the security certificate and the Equity Shares would be locked-in as per the bye-laws of the depositories. We will also inform the Stock Exchanges about the details of the Equity Shares locked-in for a period of three years. Omnia Investments Private Limited has agreed not to sell/transfer/pledge/or dispose of in any manner, Equity Shares forming part of the Promoters’ Contribution from the date of filing of this Draft Red Herring Prospectus till the date for a period of three years from the date of Allotment. The Equity Shares held by our Promoters may be transferred to and amongst the Promoters/Promoter Group or to a new promoter or persons in control of our Company, subject to continuation of lock-in in the hands of the transferees for the remaining period and compliance with the Takeover Code, as applicable. Further, the locked-in Equity Shares held by the Promoters, including , can be pledged with banks or financial institutions as collateral security for loans granted by such banks or financial institutions provided that the pledge of the Equity Shares is one of the terms of the sanction of such loans. Such loans should have been granted for the purpose of financing one or more of the objects of the Issue. For further details regarding the objects of this Issue, see the section “Objects of the Issue” beginning on page 30. The Equity Shares proposed to be included as part of the minimum Promoters’ Contribution are arising out of bonus issue of Equity Shares to our Promoters which was made out of share premium and free reserves of our Company. c) Details of build up of shareholding of Promoter Group:
Name of the Promoters Date of No. of Equity Issue/ Acquisition Nature of * Allotment/transfer Price per Equity Consideration Shares ** Share (Rs.) Nature of Transaction

September 30, 2006 June 24, 2008 Ms. Divya Modi Total

10 18 28

34.00 Cash Nil Bonus shares

Transfer from Omnia Investments Private Limited Bonus Issue in the ratio of 47:25 Transfer from Omnia Investments Private Limited Bonus Issue in the ratio of 47:25 Transfer from Omnia Investments Private Limited Bonus Issue in the ratio of 47:25

Ms. Veena Modi September 30, 2006 June 24, 2008 Total

10 18 28

34.00 Cash Nil Bonus shares

Dr. B. K. Modi September 30, 2006 June 24, 2008

10 18

34.00 Cash Nil Bonus shares

Total 28 * The Equity Shares were fully paid up at the time of allotment. Hence, the date of them being made fully paid up is the same as the date of allotment. ** The cost of acquisition includes the stamp duty paid.

25

d)

Details of share capital locked-in for one year:

In addition to the Promoters’ Contribution, as specified above, other than those Equity Shares which are transferred under the Offer for Sale, our entire pre-Issue Equity Share capital including the Equity Shares proposed to be issued in the Pre-IPO Placement, constituting 42,889,685 Equity Shares (“PreIssue Equity Shares”) will be locked-in for a period of one year from the date of Allotment. On finalisation of the Basis of Allotment, all of the Pre-Issue Equity Shares would be locked-in for a period of one year and would carry inscription ‘non transferable’ along with duration of specified nontransferable period and the Equity Shares would be locked-in as per the bye-laws of the depositories. We will also inform the Stock Exchanges about the details of the Equity Shares locked-in for a period of one year. The Equity Shares held by persons other than the Promoters, prior to the Issue, may be transferred to any other person holding the Pre-Issue Equity Shares, subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the Takeover Code, as applicable. The Equity Shares subject to lock-in will be transferable in accordance with the provisions of the SEBI Guidelines. 3. Our shareholding pattern

The table below presents the shareholding pattern of our Company before the proposed Issue and as adjusted for the Issue:
Pre-Issue No. of Equity Shares A. Promoters Omnia Investments Private Limited Mr. Dilip Modi Sub Total (A) B. Promoter Group Ms. Divya Modi Ms. Veena Modi Dr. B.K Modi Sub Total (B) C. Others Lehman Brothers Opportunity Limited Individiuals D. Public in the Issue 34,558,473 1,728 34,560,201 % Post-Issue No. of Equity Shares* 32,840,957** 1,728 32,842,685 %

80.57 0.00 80.58

65.85 0.00 65.85

28 28 28 84

0.00 0.00 0.00 0.00

28 28 28 84

0.00 0.00 0.00 0.00

7,405,787 923,613 Nil

17.27 2.15 Nil

4,834,333** 923,613 11,271,012

9.69 1.85 22.60

Total (A+B+C+D) * 42,889,685 100.00 49,871,727 100.00 This is based on the assumption that such shareholders shall continue to hold the same number of Equity Shares after the Issue. This does not include any Equity Shares that such shareholders (excluding Promoter and Promoter Group) may subscribe for and be Allotted in the Issue. This is further based on the assumption that the Equity Shares forming part of Offer for Sale are Allotted in full.

**

Our Directors, other than Mr. Dilip Modi and Ms. Divya Modi (as mentioned above), do not hold any Equity Shares. Shareholding our key managerial personnel Except as mentioned below, none of our key managerial personnel hold any Equity Shares.

26

S. No. 1 2 3 4 5 6 7 8 9 10

Key managerial personnel Mr. Saket Agarwal Mr. Kartar Singh Dr. Abhinav Mathur Ms. Monika Aggarwal Mr. Shehzad Azad Mr. Lokesh Gupta Mr. Jatinder Verma Mr. Pankaj Sharma Mr. Rajib Roy Mr. Samit Tarafdar Total

No. of Equity Shares Held 273,928 117,164 43,200 90,083 7,200 84,847 11,520 11,520 9,737 7,200 656,399

Pre-Issue Percentage of Shareholding 0.64 0.27 0.10 0.21 0.02 0.20 0.03 0.03 0.02 0.02 1.54

4.

Top Ten shareholders

The list of the top ten shareholders of our Company and the number of Equity Shares held by them is provided below: (a) Our top ten shareholders and the number of Equity Shares held by them as on the date of filing this Draft Red Herring Prospectus are as follows:
S. No. 1 2 3 4 5 6 7 8 9 10 Shareholder Omnia Investments Private Limited Lehman Brothers Opportunity Limited Mr. Saket Agarwal Mr. Kartar Singh Ms. Monika Agarwal Mr. Lokesh Gupta Mr. Abhinav Mathur Ms. Mona Sharma Mr. Amit Dua Mr. Amrish Lakhanpal Total No. of Equity Shares Held 34,558,473 7,405,787 273,928 117,164 90,083 84,847 43,200 31,417 31,417 31,417 42,667,733 Pre-Issue Percentage of Shareholding 80.57 17.27 0.64 0.27 0.21 0.20 0.10 0.07 0.07 0.07 99.47

(b)

Our top 10 shareholders and the number of Equity Shares held by them 10 days prior to filing of this Draft Red Herring Prospectus are as follows:
S. No. Shareholder Omnia Investment Private Limited Lehman Brothers Opportunity Limited Mr. Dilip Modi Mr. O. P. Dani Mr. Atul Prakash Dr. B. K Modi Ms. Divya Modi Ms. Veena Modi Total No. of Equity Shares Held 11,999,470 2,571,454 600 10 10 10 10 10 14,571,574 Pre-Issue Percentage of Shareholding 82.35 17.65 0.00 0.00 0.00 0.00 0.00 0.00 100.00

1 2 3 4 5 6 7 8

(c)

Our top 10 shareholders and the number of Equity Shares held by them as of two years prior to filing this Draft Red Herring Prospectus were as follows:
Shareholder Omnia Investments Private Limited Mr. Dilip Modi Total No. of Equity Shares Held 1,999,920 600 2,001,520 Percentage of Shareholding 99.99 0.00 100.00

S. No. 1 2

5.

Our Company, the Selling Shareholders, our Promoters, our Directors, our Promoter Group, their respective directors and the BRLMs have not entered into any buy-back and/or standby

27

arrangements for the purchase of Equity Shares from any person. 6. At least 60% of the Net Issue, that is, 6,702,608 Equity Shares shall be available for allocation on a proportionate basis to QIBs, out of which 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for Allotment on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. Not less than 10% of the Net Issue, i.e. 1,117,101 Equity Shares shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 30% of the Net Issue, that is 3,351,303 Equity Shares shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Further, up to 100,000 Equity Shares shall be available for allocation on a proportionate basis to our Eligible Employees, subject to valid Bids being received at or above the Issue Price. Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in the Non-Institutional Portion and Retail Portion would be allowed to be met with spill-over from other categories at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs. Under-subscription, if any, in the Employee Reservation Portion will be added back to the Net Issue portion at the discretion of our Company and the Selling Shareholders, in consultation with the BRLMs. In case of under-subscription in the Net Issue, spill-over to the extent of under-subscription shall be permitted from the Employee Reservation Portion subject to the Net Issue constituting at least 10% of the post Issue paid-up share capital of our Company. If at least 60% of the Net Issue cannot be allotted to QIBs, then the entire application money will be refunded forthwith. Except as disclosed in this section, the Directors, the Promoters, or the Promoter Group have not purchased or sold any securities of our Company, during a period of six months preceding the date of filing this Draft Red Herring Prospectus with SEBI. An investor cannot make a Bid for more than the number of Equity Shares offered through the Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of investor. Bids by Eligible Employees can be made also in the “Net Issue” portion and such Bids shall not be treated as multiple bids. Except any allotment pursuant to the Pre-IPO Placement, there will be no further issue of capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner during the period commencing from submission of this Draft Red Herring Prospectus with SEBI until the Equity Shares have been listed. There shall be only one denomination of the Equity Shares, unless otherwise permitted by law. Our Company shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time. As on the date of this Draft Red Herring Prospectus, the total number of holders of Equity Shares is 48. Our Company has not raised any bridge loans against the proceeds of the Issue. Our Company has not issued any Equity Shares out of revaluation reserves or for consideration other than cash except for bonus issues dated January 31, 2006 and June 24, 2008. There are no outstanding warrants, options or rights to convert debentures, loans or other instruments into the Equity Shares. The Equity Shares held by our Promoters are not subject to any pledge. Any oversubscription to the extent of 10% of the Issue can be retained for the purpose of rounding off while finalising the Basis of Allotment.

7.

8.

9.

10.

11.

12.

13. 14.

15.

16. 17.

28

18. 19.

Our Promoters will not Bid in this Issue. Our Company presently does not intend or propose to alter its capital structure for a period of six months from the Bid/ Issue Opening Date, by way of split or consolidation of the denomination of Equity Shares or further issue of Equity Shares (including issue of securities convertible into or exchangeable, directly or indirectly for Equity Shares) whether preferential or otherwise. The Equity Shares issued pursuant to the Issue shall be fully paid-up at the time of Allotment, failing which no Allotment shall be made.

20.

29

OBJECTS OF THE ISSUE The objects of the Issue are to (a) purchase equipments for the offices of our Company and various customer sites and (b) fund expenditure for general corporate purposes. The main objects clause of the Memorandum of Association enables our Company to undertake the existing activities and the activities for which funds are being raised through this Issue. Our Company will not receive any proceeds from the Offer for Sale. Except for the listing fee which will be borne by our Company, expenses relating to the Issue, including underwriting and management fees, selling commission and other expenses will be borne by our Company and the Selling Shareholders in proportion of the Equity Shares contributed to the Issue. We intend to utilise the proceeds of the Fresh Issue, after deducting our share of the underwriting and management fees, selling commissions and other expenses associated with the Issue which is estimated at Rs. [•] (“Net Proceeds”) for financing the above mentioned objects. Requirement of funds and deployment of funds The details of utilization of Net Proceeds and the proposed schedule of deployment of funds are as per the table set forth below: (In Rs. Million)
Particulars Total Estimated Cost Proposed utilization of Net Proceeds Year Year Year ending ending ending December December December 31, 2009 31, 2010 31, 2011 349 517 839

1 2

Purchase of equipments for the offices of our Company and various customer sites General corporate purposes Total

1,705 [•] [•]

Our Company’s funding requirement and deployment are based on internal management estimates, vendor quotations and have not been appraised by any bank or financial institution. These are based on current conditions and are subject to change in light of changes in external circumstances, or costs or changes in our financial condition, business or strategy. In case of variations in the actual utilisation of funds earmarked for the purposes set forth above, increased fund requirements for a particular purpose may be financed by surplus funds, if any, available in respect of the other purposes for which funds are bring raised through the Fresh Issue. If surplus funds are unavailable, the required financing will be through our internal accruals and debt. Our Company operates in a highly competitive, dynamic market environment, and may have to revise our estimates from time to time. Consequently, our Company’s funding requirements may also change accordingly. Any such change in our Company’s plans may require rescheduling of its expenditure programs, at the discretion of our management. In case of any shortfall or cost overruns, our Company intends to meet our estimated expenditure from the internal accruals and debt. Details of the Objects Purchase of equipments for the officesof our Company and various customer sites In order to achieve our growth strategy to further penetrate into our exisiting customer base as well as expand our presence in new operators and geographies, we continuosly need to develop innovative platforms, products and services and enhance our existing products and services. We would require significant procurement of new equipments including software capabilities to enhance our products and services.

30

We estimate to incur a total expenditure of approximately Rs. 1,705 million towards purchase of new equipments and for replacement of existing equipments including costs for procurement of software to be installed. The estimates for the aforesaid costs are based on quotations received from Tecnomic Marketing Services Private Limited dated June 25, 2008. The details of costs of the hardware and software required for setting up the offices are:
Description of Items 16 E1card (DMN 160TECW) BOB Kit (32 T1E1W) Rear Input (ODM16TECW) Output Usage/Function Used for providing IVR services Used for connecting links with our carrier customers Used for connecting links with our carrier customers Used for providing IVR services Used for hosting of voice cards Software to run IVR applications Used for storing the licence Used for storage functions Protocol software to facilitate IVR services Used for supply of power Used for connectivity and data transfer with our carriage customers and us Protocol software to enable data applications Used for connectivity and data transfer with our carriage customers and us Quantity 560 560 560 Unit cost (in Rs.)* 213,444 19,656 11.01 15,246 8.54 16 E1 card (DMV 4800BCW) Chassis cPCIS (6400US/AC) CTADE upgradation string Dongle (CTADE0PROGKEYUSB) Hard Disk Drive (fpr SS&G2X) ISUP SS7 (BG20) Power Supply (TLPACPSU) G21 SIU with (SS7G21AQ1) 4 Links 560 540 268,800 560 272,958 152.86 326,214 176.16 1,806 485.45 4,300 2.41 560 560 280 280 40,614 22.74 101,346 56.75 10,290 2.88 495,600 138.77 560 280 37,800 21.17 987,000 276.36 1,474.62 230.30 1,704.92 Price (in Rs. Million) 119.53

SCCP license ( SS7 BG20) SIU G22 with 64 links (SS7 G22AH1W)

Total excluding duties, taxes and charges Duties, taxes and charges TOTAL * The unit cost is based on quotes received in USD, which is converted at the rate of Rs. 42 per USD.

We would not purchase any pre-used equipments from the Net Proceeds. General Corporate Purposes In accordance with the policies set up by our Board, we propose to retain flexibility in applying the remaining Net Proceeds for general corporate purposes, including expansion and upgrade our existing offices and infrastructure. Our Board will have flexibility in utilizing Net Proceeds earmarked for general corporate purposes. The management of our Company, in response to the competitive and dynamic nature of the industry, will have the discretion to revise its business plan from time to time and consequently our Company’s funding requirement and deployment of funds may also change. This may also include rescheduling proposed utilisation of Net Proceeds and increasing or decreasing expenditure for a particular object vis-à-vis the utilisation of Net Proceeds. In case of a shortfall in the Net Proceeds, the management may explore a range of options including utilising our internal accruals or raising debt. The management expects that such alternate arrangements would be available to fund any such shortfall.

31

Issue Related Expenses The expenses of this Issue include, among others, underwriting and management fees, printing and distribution expenses, legal fees, IPO grading, advertisement expenses and listing fees. The Issue expenses, except the listing fee, shall be shared between our Company and the Selling Shareholders in the proportion to the number of Equity Shares sold to the public as part of the issue. The listing fees will be paid by our Company. The estimated Issue expenses are as follows:
Activity Expenses* (Rs. in million) % of Issue size % of Issue expenses

Lead management, underwriting and selling [●] commission IPO Grading fees [●] Advertisement and Marketing expenses [●] Printing, stationery including transportation of the same [●] Others (Registrar’s fees, legal fees, listing [●] fees, etc.) [●] Total * Will be incorporated after finalisation of the Issue Price

[●] [●] [●] [●] [●] [●]

[●] [●] [●] [●] [●] [●]

Interim use of funds Pending utilisation for the purposes described above, our Company intends to invest the funds in high quality interest bearing liquid instruments including money market mutual funds, deposits with banks. The Net Proceeds will not be invested in equity capital markets. The management, in accordance with the policies established by our Board from time to time, will have flexibility in deploying the Net Proceeds. Monitoring of Utilization of Funds Our Board will monitor the utilization of the Net Proceeds. We will disclose the details of the utilization of the Net Proceeds, including interim use, under a separate head in our financial statements for fiscal 2009, fiscal 2010 and fiscal 2011, specifying the purpose for which such proceeds have been utilized or otherwise disclosed as per the disclosure requirements of our listing agreements with the Stock Exchanges and in particular Clause 49 of the Listing Agreement. Working Capital We would not utilize any amount raised from the Net Proceeds towards fulfilling our working capital requirements. Offer for Sale The Issue includes an offer for sale of 4,288,970 Equity Shares aggregating to not less than Rs. [●] million by the Selling Shareholders and our Company will not benefit from such proceeds. Bridge Financing Facilities We have not raised any bridge loan against the proceeds of the Issue. Other Confirmations Except for proceeds from the transfer of 1,717,516 Equity Shares by Omnia Investments Private Limited as part of the Offer for Sale, no part of the proceeds from the Issue will be paid by our Company as consideration to the Promoters, the Directors, the Promoter Group and key managerial employees, except in normal course of business.

32

BASIS FOR THE ISSUE PRICE The Issue Price of Rs. [●] has been determined by our Company and the Selling Shareholders in consultation with the BRLMs, on the basis of demand from the investors for the offered Equity Shares by way of Book Building process. The face value of the equity shares is Rs 10 and the Issue price is [●] times the face value at the lower end of the price band and [●] times the face value at the higher end of the price band. QUALITATIVE FACTORS Innovative platform based product development and diversity of products and services We are continually engaged in the development of new products and services on our platforms to enhance the product portfolio we offer to our telecommunications carrier customers and other enterprises and bring new products and services to the market to address consumer needs and drive demand. We focus on multi-modal platforms based on voice, text and data. Our mobile radio platform gives subscribers the interactive option to access content on demand in the language of their choice using their mobile phones. Given the demographic diversity of India, our platforms offer an efficient, easy-to-use and attractive solution to our carrier customers for providing services to their subscribers. The platform enables carriers to introduce better targeted, more innovative content based services. Our data platform, Mitr, proposes to provide a unified framework for discovering and accessing content and services, giving the subscriber a personalized experience. We continue to invest in the growth of our platforms to ensure that these are in tune with the requirements of our customers. In addition, we are constantly refining our offerings to improve adoption of mobility-related products by consumers and address pricing pressures. We provide a diverse portfolio of services, products and content, with a focus on entertainment, information, music and games. We have introduced new services in India, including tambola via mobile phone, BGM, VAS on USSD, Pay4Me and select caller list. For music, entertainment and infotainment products, we have launched our BGM service, mobile radio and ringtones; for call-related products, we have launched select caller VAS on USSD and Pay4Me; for services and applications, we have launched user generated products such as voice chat; and we have developed and launched innovative roaming solutions such as Welcome Roamer, Roam Tracker, Roam Globe, Roam Secure and Roam Privilege. Our ability to offer a complete suite of products and services allows our customers to offer a wide range of user interface services to their subscribers, resulting in ease of market adoption, revenue growth, and higher subscriber satisfaction. Entrenched customer relationships All of the major telecommunications carriers in India form a part of our customer base, including Airtel, Spice Communications, BSNL, IDEA, Reliance, Vodafone, MTNL, Tata Teleservices Limited and “Connect” & “Ping” of HFCL. We have successfully marketed our solutions to a multitude of diverse telecommunication carriers customers. Service deployments with our customers involve complex hardware systems and software applications deeply embedded within the customer’s core network systems. Since the service deployment on our customers’ network is complex, our relationship development personnel are stationed at our telecommunication carriers office, giving us the ability to expand quickly and efficiently the range of services deployed and benefiting from the revenue growth from their subscriber base. Our presence and deep experience across the mobile industry value chain Our experience in the mobile industry value chain provides us with valuable insight into the mobile eco-system. Our association with Spice Communications has in the past provided us with enhanced and expedited feedback on the ever-changing needs of end-user subscribers and their feedback has been incorporated by our research and development team into new products and services. We believe expedited feedback from the telecommunication carriers perspective gives us a time-to-market advantage for development of new products and services. In addition, we have the capability of managing the entire value added services segment which a telecommunications carrier customer

33

requires in providing value added services to its subscribers. Currently, we provide this management service to Spice Communications. This managed services model benefits the carrier by reducing its investment in the value added services segment and helps the launch of innovative data and multimedia services quickly and efficiently. Strong core technological capabilities We have significant in-house resources and capabilities and a deep domain understanding in the areas of voice, data, and signaling. In the past, this understanding has allowed our Company to build technology intensive applications and products such as BGM (voice domain), mobile radio platform (voice domain), USSD/SMSC (signaling domain) and services, such as call filter (enhanced IN services) and Mitr. Our technology team works closely with the business teams and keeps a close watch on the value added services environment worldwide. We have a sophisticated understanding of the complexities of the operations of our carrier customers, which enables us to better address the technological concerns involved in incorporating products and services into operators’ networks. We were one of the first to develop products and services such as BGM, VAS on USDD, Select Caller List and Pay4Me, resulting in revenue growth for our Company over the last few years. Our diversified content database Our music, entertainment and information based value added services and products are dependent on the content we source, license, reformat and re-position. We have invested significant effort in growing the necessary relationships and have forged alliances with more than 300 content owners and license holders. We have a content database of more than 140,000 songs in more than 17 languages, as well as logos, wallpaper and 12,000 ringtones in our content database, to cater to the needs of multicultural and multilingual users in India. With our pan-India presence and a well diversified offering of value added products and services, we provide relevant services in a convenient manner to our consumers in the language of their choice. Hosting a gamut of content varieties, consisting of music, entertainment, gaming, contesting and information based services, we facilitate continuous access to the content required by our carrier customers. Experienced management and research and development team Our senior management team has an average of, over 14 years of experience in the telecommunications and technology industries with well-established companies. We have a research and development team comprised of 128 members and have in the past created and nurtured innovative products and services in the evolving mobile eco-system and building community brands across product and service verticals. Our experienced senior management team has been a primary contributor to our current status as a leading provider of telecommunications value added services and products and solutions in India. QUANTITATIVE FACTORS Information presented in this section is derived from our restated consolidated financial statements and restated standalone financial statements prepared in accordance with Indian GAAP. Some of the quantitative factors which may form the basis for computing the Issue Price are as follows: 1. STANDALONE EARNING PER SHARE EPS (BASIC & DILUTED):
Face Value per Share (Rs. 10 per share) Weight Rupees 31.00* 3 32.29 18.36 29.32 2 1

Year ended Nine months period ended December 31, 2007 March 31, 2007 March 31, 2006 WACC
* Annualized

Note:

34

a) b) c) d)

The Earning per Share has been computed on the basis of the restated profits and losses of the respective years/period. The denominator considered for the purpose of calculating Earnings per Share is the weighted average number of Equity Shares outstanding during the year/period. EPS calculations have been done in accordance with Accounting Standard 20-“Earning per share” issued by the Institute of Chartered Accountants of India. EPS is not adjusted for the Bonus issue declared by the company during June 2008

PRICE EARNING RATIO (P/E RATIO) Price/Earning (P/E) ratio in relation to issue Price of Rs [●] a) b) c) For the nine months period ended December 31, 2007 EPS (Basic & Diluted) on Standalone basis is Rs. 23.25 P/E based on nine months period ended December 31, 2007 is [●] Peer Group P/E – a. Highest 78.80 b. Lowest 11.57 c. Peer Group Average 28.70

Source: Capital Markets Vol. XXIII/08 dated June 16-29, 2008 (Industry – Telecommunications – Service Provider). Data based on full year results as reported in the edition.
A.

Return on Net Worth on Standalone Basis as per Restated Indian GAAP Financials:
RONW (%) 31.00 40.00 53.00 37.67 Weight 3 2 1

Year/Period Ended December 31, 2007 March 31, 2007 March 31, 2006 WACC
B.

Minimum Return on Increased Net Worth required to maintain pre-issue EPS is [●] NET ASSET VALUE PER EQUITY SHARE: a. b. c. As of December 31, 2007 on Standalone basis is Rs. 75.24 After the Issue [●] Issue Price [●]*

5.

*Issue Price per Share will be determined on conclusion of book building process. Net Asset Value per Equity Share represents Net Worth, as restated, divided by the number of Equity Shares outstanding at the end of the period. 6. COMPARISON WITH INDUSTRY PEERS:
NAV (per share) (Rs.) 75.24 71.16 103.50

Companies Cellebrum Cellebrum OnMobile Global Limited

Year/Period Nine months ended December 31, 2007 Year ended March 31, 2007 Year ended March 31, 2008

EPS (Rs.) 23.25 32.29 8.30

P/E 78.80

RONW (%) 31.00 40.00 26.90

Source: Capital Markets Vol. XXIII/08 dated June 16-29, 2008 (Industry – Telecommunications – Service Provider). Data based on full year results as reported in the edition.

35

Since the Issue is being made through the 100% Book Building Process, the Issue Price will be determined on the basis of investor demand. The face value of our Equity Shares is Rs. 10 each and the Issue Price is [•] times of the face value of our Equity Shares.

36

STATEMENT OF TAX BENEFITS

Auditor’s Report The Board of Directors Cellebrum Technologies Limited D-1, Sector 3, Gautam Buddh Nagar, Noida – 201301 (UP) India

Dear Sirs, We hereby report that the enclosed statement states the possible tax benefits available to Cellebrum Technologies Limited (‘CL’ or ‘the Company’) (formerly known as Cellebrum.com Limited) and to its shareholders under the Income Tax Act, 1961 and Wealth Tax Act, 1957, presently in force in India. Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions prescribed under the relevant provisions of the statute. Hence, the ability of the Company or its shareholders to derive the tax benefits is dependent upon their fulfilling such conditions, which based on business imperatives the Company faces in the future, the Company may or may not choose to fulfill. The benefits discussed in the enclosed statement are not exhaustive. This statement is only intended to provide general information to the investors and is neither designed nor intended to be a substitute for professional tax advice. In view of the individual nature of the tax consequences and the changing tax laws, each investor is advised to consult his or her own tax consultant with respect to the specific tax implications arising out of their participation in the issue. We do not express any opinion or provide any assurance as to whether: i) the Company or its shareholders will continue to obtain these benefits in future; or ii) the conditions prescribed for availing the benefits have been / would be met with. The contents of the enclosed statement are based on information, explanations and representations obtained from the Company and on the basis of the understanding of the business activities and operations of the Company.

For S.R. BATLIBOI & ASSOCIATES Chartered Accountants

per Raj Agrawal Partner Membership No. 82028 Place: Gurgaon Date: June 26, 2008

37

STATEMENT OF POSSIBLE TAX BENEFITS AVAILABLE TO THE COMPANY AND ITS SHAREHOLDERS UNDER THE INCOME TAX ACT, 1961 (‘THE ACT’) A. 1. BENEFITS AVAILABLE TO THE COMPANY Deduction under section 80IC of the Act

Section 80-IC of the Act provides for tax holiday for certain industries located in Himachal Pradesh as follows: • • 100% of the profits of the eligible undertaking for the first five years of operations; 30% of profits of the eligible undertaking for the next five years

The Company is claiming tax holiday under section 80IC of the Act in respect of its two units located in Himachal Pradesh which became operational in the financial years 2004-2005 and 2005-2006 respectively. 2. Amortization of Preliminary Expenses

A company is entitled to a deduction equal to 1/5th of certain specified expenditure by way of amortization over a period of five successive years, beginning with the year in which the business commences or extension of undertaking2 is completed. The total deduction however cannot exceed 5% of the cost of project/ capital employed at the end of the last day of the previous year in which the extension of undertaking gets completed or new industrial undertaking commences business. [section 35D of the Act]. 3. Expenditure on Scientific Research

A company is entitled to claim weighted deduction of 150% of the operating and capital expenses (except land or building) incurred on Research and Development, if the Company complies with the procedures required for obtaining such benefits and obtaining of approval from the Department of Industrial and Scientific Research (DSIR) [section 35(2AB) of the Act]. 4. Credit of Minimum Alternate Tax (‘MAT’)

MAT credit allowable is the difference between MAT paid and the tax computed as per the general provisions of the Act and can be utilized in those years in which tax becomes payable under the general provisions of the Act. MAT credit can be utilized to the extent of difference between any tax payable under the general provisions and MAT payable for the relevant year. MAT credit cannot be carried forward and set off beyond 7 years immediately succeeding the assessment year in which it becomes allowable under section 115JAA(1A) of the Act [section 115 JAA(1A) of the Act]. 5. Dividends

Dividend income (interim or final) received from a domestic company is exempt from tax in the hands of the resident shareholders. Thus the dividend income received by CL from investments made in any domestic company will be exempt in its hands [section 10(34) of the Act read with section 115O]. 6. Income from Units

The following incomes are exempted from tax under the Act: a. b.
2

Income received in respect of the units of a Mutual Fund specified under clause (23D) of section 10; or Income received in respect of units from the Administrator of a specified undertaking; or

Upto Assessment Year 2008-2009, this deduction was available only to an ‘industrial undertaking’

38

c.

Income received in respect of units from a specified company, a company as referred to in clause (h) of section 2 of the Unit Trust of India (Transfer of Undertaking and Repeals Act, 2002 (58 of 2002)).

However, this exemption does not apply to any income arising from transfer of units of the Administrator of the specified undertaking or of the specified company or of a mutual fund, as the case may be [section 10(35) of the Act]. 7. 7.1. Capital Gains Capital assets may be categorized into short-term capital assets and long-term capital assets based on the period of holding. All capital assets (except shares held in a company or any other listed securities or units of UTI or specified Mutual Fund units) are considered to be long-term capital assets if they are held for a period in excess of 36 months. Shares held in a company, any other listed securities, units of UTI and specified Mutual Fund units are considered as long-term capital assets if these are held for a period exceeding 12 months. Consequently, capital gains arising on sale of shares held in a company or other listed securities or units of UTI or specified Mutual Fund units held for more than 12 months are considered as ‘long term capital gains’. In computing the capital gains arising on sale of a capital asset, the cost of acquisition/ improvement and expenses incurred in connection with the transfer of a capital asset shall be deducted from the sale consideration. However, in respect of capital gains arising from transfer of long-term capital assets, the Act offers a benefit by permitting substitution of cost of acquisition/ improvement with the indexed cost of acquisition/ improvement. The indexed cost of acquisition/ improvement is computed by adjusting the cost of acquisition/ improvement by a cost inflation index as prescribed from time to time [section 48 of the Act] As per the provisions of section 10(38) of the Act, long term capital gains arising on sale of equity shares in a company or a unit of an equity oriented fund would be exempt from tax where the sale transaction has been entered into on a recognized stock exchange of India and is liable to securities transaction tax (‘STT’). Such income can however be taxed under the provisions of Minimum Alternate tax (‘MAT’). Long-term capital gains (other than mentioned in point 6.3 above) are taxed at the rate of 20% (plus applicable surcharge and education cess) after claiming indexation benefit. However, the tax liability on long term capital gains arising from the transfer of a long term capital asset being listed security can be restricted to 10% (plus applicable surcharge and education cess) if the indexation benefit is not claimed [section 112 of the Act]. As per the provisions of section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains (which are not exempt under section 10(38) of the Act) would not be chargeable to tax to the extent such capital gains are invested up to Rs 50 lakhs in certain notified bonds within 6 months from the date of transfer. The investment in such bonds would need to be retained for a period of 3 years from the date of acquisition. Under section 111A of the Act, short-term capital gains arising from sale of an equity share in a company or a unit of an equity oriented fund would be taxable at a concessional rate of 15 percent3 (plus applicable surcharge and education cess) where such transaction of sale is entered on a recognized stock exchange in India and is liable to STT. Depreciation Under Section 32 of the Act, the company can claim depreciation allowance at the prescribed rates on tangible assets such as building, plant and machinery, furniture and fixtures, etc. and intangible assets such as patent, trademark, copyright, know-how, licenses etc .

7.2.

7.3.

7.4.

7.5.

7.6.

8. 8.1.

3

With effect from Assessment Year 2009- 2010 (10% upto Assessment Year 2008-2009)

39

8.2.

In terms of sub section (2) of 32 of the Act, the company is entitled to carry forward and set off the unabsorbed depreciation arising due to absence / insufficiency of profits or gains chargeable for the previous year. The amount is allowed to be carried forward and set off for the succeeding previous years until the amount is exhausted without any time limit. Carry forward of the losses As per provisions of section 72 of the Act, the company is entitled to carry forward its business losses for a period of 8 consecutive assessment years commencing from the assessment year when the losses were first computed and set off such losses from income chargeable under the head “Profits and gains from business or profession”. BENEFITS AVAILABLE TO SHAREHOLDERS RESIDENT SHAREHOLDERS Dividends

9. 9.1.

B. B.I 1.

Dividend income (interim or final) received from a domestic company is exempt from tax in the hands of the resident shareholders and accordingly no taxes are required to be deducted at source on the dividend payment [section 10(34) of the read with section 115O]. 2. Capital gains

In computing the capital gains arising on sale of a capital asset, the cost of acquisition/ improvement and expenses incurred in connection with the transfer of a capital asset shall be deducted from the sale consideration. However, in respect of capital gains arising from transfer of long-term capital assets, the Act offers a benefit by permitting substitution of cost of acquisition/ improvement with the indexed cost of acquisition/ improvement. The indexed cost of acquisition/ improvement is computed by adjusting the cost of acquisition/ improvement by a cost inflation index as prescribed from time to time [section 48 of the Act] Long-term capital gains arising on transfer of equity shares of a listed company are exempt from tax in the hands of the shareholders provided the transaction for sale of such equity shares is liable to STT [section 10(38) of the Act]. Long-term capital gains (other than mentioned in point 2.2 above) are taxed at the rate of 20% (plus applicable surcharge and education cess) after claiming indexation benefit. However, the tax liability on long term capital gains arising from the transfer of a long term capital asset being listed security can be restricted to 10% (plus applicable surcharge and education cess) if the indexation benefit is not claimed [section 112 of the Act]. Short-term capital gains from transfer of equity shares are taxed at the rate 15%4 (plus applicable surcharge and education cess) provided the transaction for sale of such equity shares is liable to STT [section 111A of the Act]. As per the provisions of section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains (which are not exempt under section 10(38) of the Act) would not be chargeable to tax to the extent such capital gains are invested up to Rs 50 lakhs in certain notified bonds within 6 months from the date of transfer. The investment in such bonds would need to be retained for a period of 3 years from the date of acquisition. Long-term capital gains (other than those covered in point 2.2 above) arising to an individual or a Hindu Undivided Family (‘HUF’) on transfer of shares are exempt from capital gains tax if the net consideration from transfer of such shares are used for purchase of residential house property within a period of 1 year before or 2 years after the date on which the transfer took place or for construction of residential house property within a period of 3 years after the date of such transfer. If part of the net
4 With effect from Assessment Year 2009-2010 (10% upto Assessment Year 2008-2009)

40

consideration is invested within the prescribed period in a residential house, such gains would be exempt from tax on a proportionate basis. The minimum holding period for the new purchased / constructed house to remain eligible for exemption is 3 years [section 54F of the Act]. 3. Securities Transaction Tax (STT) allowed as deductible expenditure5

In computing the business income, an amount equal to STT paid in respect of taxable securities transactions entered into in the course of business will be allowed as a deductible expense, if the income arising from such taxable securities transactions is included in the income computed under the head ‘Profits and Gains of Business or Profession’ (section 36 (xv) of the Act) B.II 1. NON-RESIDENT SHAREHOLDERS Dividends

Dividend income (interim or final) received from a domestic company is exempt from tax in the hands of the non resident shareholders and accordingly no taxes are required to be withheld on dividend payment [section 10(34) of the Act read with section 115O]. 2. 2.1. Capital gains In computing capital gains arising from transfer of shares acquired in convertible foreign exchange (as per the exchange control regulations), the capital gain/ loss in such a case is computed by converting the cost of acquisition, sales consideration and expenditure incurred wholly and exclusively in connection with such transfer, into the same foreign currency which was utilized for the purchase of shares. Cost indexation benefit is not available in such a case [section 48 of the Act]. Long-term capital gains arising on transfer of equity shares of a listed company are exempt from tax in the hands of the shareholders provided the transaction for sale of such equity shares is liable to STT[section 10(38) of the Act]. Long-term capital gains (other than those covered in point 2.2 above) are taxed at the rate of 20% (plus applicable surcharge and education cess). However, the tax liability on long term capital gains arising from the transfer of a long term capital asset being listed security can be restricted to 10% (plus applicable surcharge and education cess) without considering the indexation benefit [section 112 of the Act]. Short-term capital gains from transfer of equity shares are taxed at the rate 15%6 (plus applicable surcharge and education cess) provided the transaction for sale of such equity shares is liable to STT [section 111A of the Act]. As per the provisions of section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains (which are not exempt under section 10(38) of the Act) would not be chargeable to tax to the extent such capital gains are invested up to Rs 50 lakhs in certain notified bonds within 6 months from the date of transfer. The investment in such bonds would need to be retained for a period of 3 years from the date of acquisition. Long-term capital gains (other than those covered in point 2.2 above) arising to an individual or a Hindu Undivided Family (‘HUF’) on transfer of shares of CL are exempt from capital gains tax if the net consideration from transfer of such shares are used for purchase of residential house property within a period of 1 year before or 2 years after the date on which the transfer took place or for construction of residential house property within a period of 3 years after the date of such transfer. If part of the net consideration is invested within the prescribed period in a residential house, such gains would be exempt from tax on a proportionate basis. The minimum holding period for the new purchased / constructed house

2.2.

2.3.

2.4.

2.5.

2.6.

5 6

With effect from Assessment Year 2009-2010 With effect from Assessment Year 2009-2010 (10% upto Assessment Year 2008-2009)

41

to remain eligible for exemption is 3 years [section 54F of the Act]. 2.7. A non resident taxpayer has an option to be governed by the provisions of the Act or the provisions of a Tax Treaty that India has entered into with another country of which the investor is a tax resident, whichever is more beneficial [section 90(2) of the Act] STT as deductible expenditure7

3.

In computing the business income, an amount equal to STT paid in respect of taxable securities transactions entered into in the course of business will be allowed as a deductible expense, if the income arising from such taxable securities transactions is included in the income computed under the head ‘Profits and Gains of Business or Profession’ (section 36 (xv) of the Act) B.III NON RESIDENT INDIANS

Non resident Indian means an individual, being a citizen of India or person of Indian origin who is not a resident. A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand parents, was born in undivided India. 1. DIVIDENDS

Dividend income (interim or final) received from a domestic company is exempt from tax in the hands of the Non Resident Indian shareholders and accordingly no taxes are required to be withheld on dividend payment [section 10(34) of the Act read with section 115O] 2. 2.1 CAPITAL GAINS In computing capital gains arising from transfer of shares acquired in convertible foreign exchange (as per the exchange control regulations), the capital gain/ loss in such a case is computed by converting the cost of acquisition, sales consideration and expenditure incurred wholly and exclusively in connection with such transfer, into the same foreign currency which was utilized in the purchase of shares. Cost indexation benefit will not be available in such a case [section 48 of the Act]. Long-term capital gain arising on transfer of equity shares of a listed company are exempt from tax in the hands of the shareholders provided the transaction for sale of such equity shares is subject to STT and accordingly no taxes are required to be deducted at source [section 10(38) of the Act]. Short-term capital gains from transfer of equity shares are taxed at the rate 15%8 (plus applicable surcharge and education cess) provided the transaction for sale of such equity shares is subject to STT [section 111A of the Act]. The provisions referred to in point no 2.5 to point no 2.8 below are optional and the tax payer can opt out by filing the declaration along with the return of income [section 115I of the Act]. Long-term capital gains (other than mentioned in point 2.2 above) arising on transfer of shares, are taxed at the rate of 10 percent (plus applicable surcharge and education cess), without indexation benefit [section 115D read with section 115E of the Act and subject to the conditions specified therein]. Long-term capital gains (other than those covered in point 2.2) arising on transfer of shares shall not be chargeable to tax if the entire net consideration received on such transfer is invested within a period of 6 months in any specified asset or savings certificates referred to in Section 10(4B) of the Act. If part of such net consideration is invested within the prescribed period of 6 months in any specified asset or savings certificates referred to in Section 10(4B)

2.2

2.3

2.4

2.5

2.6

7 8

With effect from Assessment Year 2009-2010 With effect from Assessment Year 2009-2010 (10% upto Assessment Year 2008-2009)

42

of the Act, then such gains would be exempt from tax on a proportionate basis. The net consideration means full value of the consideration received or accrued as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. The minimum holding period for the specified asset or savings certificates to remain eligible for exemption is 3 years [section 115Fof the Act]. 2.7 Non-resident Indians are not required to file a return of income under section 139 of the Act, if their only source of income is income from investments or long-term capital gains earned on transfer of such investments or both, provided tax has been deducted at source from such income as per the provisions of Chapter XVII-B of the Act [section 115G of the Act] Where the non-resident Indian becomes assessable as a resident in India, he can continue to avail the benefits as mentioned in point no 2.5 to point no 2.7 above by filing declaration along with his return of income for that year in relation to such investment income derived from the specified assets until such assets are converted into money [section 115H of the Act]. A non resident taxpayer has an option to be governed by the provisions of the Act or the provisions of a Tax Treaty that India has entered into with another country of which the investor is a tax resident, whichever is more beneficial [section 90(2) of the Act] SHAREHOLDERS BEING MUTUAL FUNDS

2.8

2.9

B.IV

Mutual Funds registered under the Securities and Exchange Board of India Act, 1992 or Regulations made thereunder, or Mutual Funds set up by public sector banks or public financial institutions or Mutual Funds authorized by the Reserve Bank of India and subject to the conditions notified by Central Government in this regard, would be eligible for income-tax exemption on their income [section 10(23D) of the Act]. B.V SHAREHOLDERS BEING FOREIGN INSTITUTIONAL INVESTORS (FIIS) 1. DIVIDENDS

Dividend income (interim or final) received from a domestic company is exempt from tax in the hands of the FIIs and accordingly no taxes are required to be withheld on dividend payment [section 10(34) of the Act read with section 115O] 2. CAPITAL GAINS

Long-term capital gain arising on transfer of equity shares of a listed company are exempt from tax in the hands of the shareholders provided the transaction for sale of such equity shares is subject to STT and accordingly no taxes are required to be deducted at source [section 10(38) of the Act]. Short-term capital gains from transfer of equity shares are taxed at the rate 15%9 (plus applicable surcharge and education cess) provided the transaction for sale of such equity shares is subject to STT [section 111A of the Act]. Long term Capital gains arising from transfer of shares [other than those covered in point 2.1 above], are taxed at the rate of 10% (plus applicable surcharge and education cess). The benefits of indexation and foreign currency fluctuation protection as provided under section 48 of the Act are not available to FIIs. [section 115AD of the Act] As per the provisions of section 54EC of the Act and subject to the conditions and to the extent specified therein, long-term capital gains (which are not exempt under section 10(38) of the Act) would not be chargeable to tax to the extent such capital gains are invested up to Rs 50 lakhs in certain notified bonds within 6 months from the date of transfer. The investment in such bonds would need to be retained for a period of 3 years from the date of acquisition. A non resident taxpayer has an option to be governed by the provisions of the Act or the provisions of a
9

With effect from Assessment Year 2009-2010 (10% upto Assessment Year 2008-2009)

43

Tax Treaty that India has entered into with another country of which the investor is a tax resident, whichever is more beneficial [section 90(2) of the Act] 3. STT as deductible expenditure10

In computing the business income, an amount equal to STT paid in respect of taxable securities transactions entered into in the course of business will be allowed as a deductible expense, if the income arising from such taxable securities transactions is included in the income computed under the head ‘Profits and Gains of Business or Profession’ (section 36 (xv) of the Act) UNDER THE WEALTH TAX ACT, 1957 Shares in a Company held by a shareholder will not be treated as an asset within the meaning of Section 2(ea) of Wealth-tax Act, 1957; hence, wealth tax is not leviable on shares held in a Company. UNDER THE GIFT TAX ACT, 1958 Gift of shares of the Company made on or after October 1, 1998 are not liable to gift tax. The tax benefits listed above are the possible benefits available under the current tax laws in India. Several of these benefits are dependent on CL or its Shareholders fulfilling the conditions prescribed under the relevant tax laws (and acceptance of same by the Revenue authorities). Hence the ability of CL or its Shareholders to derive the tax benefits is dependent upon fulfilling such conditions, which based on business imperatives CL faces in the future, it may or may not choose to fulfill. The information provided is generic in nature and each investor is advised to consult his or her own consultant with respect to the specific tax implications arising out of their participation in the issue.

10

With effect from Assessment Year 2009-2010

44

SECTION IV: ABOUT THE COMPANY INDUSTRY OVERVIEW The information in this section is derived from various government and academic publications and industry sources. Neither we nor any other person connected with the Issue have verified this information. Industry sources and publications generally state that the information contained therein has been obtained from sources generally believed to be reliable, but that their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured and, accordingly, investment decisions should not be based on such information. Telecommunications and Mobile Value Added Services (MVAS) Market Opportunity in India The Indian telecommunications industry has experienced significant growth in recent years and is expected to continue as India’s large population and low mobile penetration offer considerable scope for growth. This growth has been highly visible in the mobile sector. India’s cellular market penetration is estimated at approximately 20% as of 2007 and is projected to rise to approximately 61% by 2012, a CAGR of 26.9%. Correspondingly, revenues from cellular services in India are projected to increase from US$14 billion in 2007 to US$37 billion in 2012, an implied CAGR of 18.0% (Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008). A more recent analysis by TRAI (no. 54, 2008) estimates the total wireless subscribers as of April 2008 was 269.3 million. India Cellular: Total Market, 2003- 2012
Mobile Connections (in thousands)
800,000 60.7% 700,000 54.8% 600,000 47.8% 50% 500,000 40.0% 40% 400,000 29.7% 657,488 300,000 19.8% 466,839 200,000 6.9% 100,000 2.7% 28,442 2003 4.5% 141,136 48,220 2004 75,923 0% 2005 2006 2007 2008 2009 2010 2011 2012 12.6% 224,388 341,536 10% 565,759 20% 60%

Penetration
70%

737,119 30%

0

(Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008) The growth of telecom subscribers has led to the emergence of the Mobile Value Added Services (MVAS) market. MVAS are those services that are not part of the basic voice offer and are availed separately by the end user. They are used as a tool for differentiation and allow mobile operators to develop another stream of revenue. The nature of value added services changes over time. For example, P2P SMS was the only form of VAS in the early days of adoption of mobile telephony in India. Now VAS includes data offerings such as games, music, video/TV, ringtones, graphics, information services, contests and other. Data service revenue, (including SMS) was estimated to be approximately US$1.5 billion in 2007 and growing to approximately US$5.6 billion in 2012, a CAGR of 26.3% for the period 2008-2012 (Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008).

45

India Cellular Services, Total Market — 2003-2012

Total Services Revenue (US$ million)
40,000

Data Revenue (US$ million)
5,576.7 6,000

35,000

4,870.6 5,000

30,000

4,152.5 4,000

25,000 3,230.4 20,000 37,766 2,194.9 15,000 1,524.6 10,000 901.8 14,338 5,000 146.6 2,706 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 563.8 323.4 4,645 6,479 0 9,021 1,000 19,460 25,632 30,787 2,000 34,796 3,000

(Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008) Historically, the telecommunications sector was run by the Indian Government through the Ministry of Telecommunications and Information Technology, Department of Telecommunications. The liberalisation of this key sector began in the early 1990s with the realisation that in order to expedite development of the infrastructure throughout India, wide scale investment was required and this could not be fulfilled exclusively by public investment. Since early 1998, telecommunications services areas have been opened up on a nationwide basis to competition and private sector participation. This transition from a government-controlled monopoly to an industry with widespread private sector participation, coupled with population growth and strong economic trends in recent years has been instrumental in the telecommunications sector becoming one of the fastest growing sectors in India. Comparative analysis versus China opportunity Statistical data indicates that much of the growth in the Asia Pacific wireless telecommunication market is due to the growth in demand in countries like India and China. China is currently the largest market in Asia Pacific with 528 million connections accounting for 42.8% of the market share. As India and China have comparable populations, India’s low mobile penetration offers considerable scope for growth. Given below is the forecast for the mobile connections and services revenue in China, from 2003 to 2012 (Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008).

46

China Cellular: Total Market, 2003- 2012

Mobil e C onnecti ons (i n th ousands)
1,200,000

Pe netrati on
90%

74.8% 1,000,000 62.3% 800,000 46.9% 600,000 33.4% 28.3% 400,000 19.8% 527,802 200,000 257,628 316,373 374,445 442,013 24.1% 628,612 738,619 943,862 844,212 39.6% 1,025,171 54.8% 69.3%

80%

70%

60%

50%

40%

30%

20%

10%

0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

0%

(Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008) China Cellular Services, Total Market — 2003-2012

Total Services Revenue (US$ million)
12 0 ,0 00

Data Revenue (US$ million)
2 5,00 0

20 ,68 3 10 0 ,0 00 18 ,09 3 15,9 11 8 0 ,0 00 13 ,46 6 6 0 ,0 00 9,32 7 93 ,20 2 4 0 ,0 00 5,83 5 60 ,8 85 3,80 0 2 0 ,0 00 2,2 34 4 0 ,4 97 0 2 00 3 2 00 4 2 00 5 20 0 6 20 07 2 0 08 2 0 09 20 10 20 11 2 0 12 48 ,2 3 1 5,0 00 7,30 1 72,18 7 82 ,6 81 11,36 4 110 ,73 3 10 2 ,6 95 10 ,00 0 15,0 00 2 0,0 00

29 ,111 0

3 4,62 8

(Source: Gartner Inc., Forecast: Mobile Services, Asia/Pacific, 2003-2012, Madhusudan Gupta and Nick Ingelbrecht, 3 June 2008) Comparative analysis of the growth in PCs vs mobile phones. According to IDC India (February 2008 release), the number of client personal computer (PC) owners in India has increased by 20% over the previous calendar year (CY) 2006 to touch 6.5 Million for CY 2007. This represents a market penetration of 0.65% a in India. As per TRAI’s press release no. 54, 2008, the total wireless subscriber base as of March 2007 stood at 165.11 million and the estimated total wireless subscriber base as of April 2008 according to the same press release was 269.3 million. This accounts for a tele-density of 26.89% according to TRAI’s press release no. 54, 2008. Mobile

47

phones are becoming more popular and common as compared to PCs. Additionally, with the availability of cheap mobile phones and a host of mobile value added services, mobile phones are expected to become the preferred communication device for the mass Indian consumer. The following table shows the growth in commercial shipment of PCs in India.
Product category CY 2005 shipments (million units) 3.9 0.5 4.3 Year-onyear growth (CY 2005 over 2004) 19% 148% 26% CY 2006 shipments (million units) 4.4 1.0 5.4 Year-onyear growth (CY 2006 over 2005) 14% 106% 24% CY 2007 shipments (million units) 4.7 1.8 6.5 Year-onyear growth (CY 2007 over 2006) 7% 81% 20%

Total desktop PC market Total notebook PC market Total client PC market
(Source: IDC)

India Mobile Phone Shipments (millions) FY2007 vs. FY2008: Unit Shipments, Growth 2007- 2007 65.8
(Source: IDC)

2007- 2008 84.9

Growth in shipments 29%

IDC’s Asia/Pacific Quarterly Mobile Phone Tracker, Q1 2008, June 2008 release, indicated that close to 85 million mobile phones were shipped in India between April 2007 and March 2008, compared to just under 66 million units shipped over the equivalent period a year ago which amounts to a year-onyear growth of around 29 % in terms of units. According to the same IDC June 2008 release, shipments in January, February and March (JFM) 2008 stood at more than 22 million handsets, which amounts to around 10,000 mobile phones being shipped every hour during the quarter. In the same quarter in JFM 2007, just under 18 million mobile phones were shipped. Mobile Value Added Services (“MVAS”) Industry Trends Introduction The Indian mobile telephony market has grown at a rapid pace in the past six to seven years. Declining call tariffs in conjunction with favourable regulatory policies have led to a tremendous increase in the subscriber base (Source: A Study of the Mobile Value Added Services (MVAS) Market in India by Boston Analytics (October 2007)). While the growing subscriber base has positively impacted industry revenues (which have risen consistently over the past few years), operator margins also have shrunk, pulling down Average Revenue Per User (“ARPU”). As ARPU declines and voice gets commoditized, the challenge in the industry is to retain customers, develop alternative revenue streams, and create a basis for differentiation in high-churn markets. (Source: Emerging Markets: How to Make Big Margins in the Mobile Telecoms,” December 2006). The charts below depict recent trends in ARPUs in India. Trends in all India Monthly ARPU

48

(Source: “Future Mobile VAS in India” by Stanford University in conjunction with BDA Connect Research, December 2007) In the wake of recent industry trends, telecom operators are looking at MVAS as the next wave of potential growth, and significant source of future revenues. MVAS services can enable customers to play games, enter contests, read news, keep tabs on astrology predictions, conveniently book tickets, make bill payments, choose roaming solutions, listen to music radio and even check their bank balance. Market growth drivers on the supply side include declining ARPU, brand differentiation needs, and increasing access to diverse content; demand-side drivers include the strong Indian economy, increasing user comfort with basic mobility services, personalization of content and devices and the increasing prevalence of more sophisticated handsets. From the early days of Person-to-Person Short Message Service (“P2P SMS”), the industry has witnessed an emergence of a growing portfolio of services including graphics or wallpapers downloads, ringtones and Caller Ring Back Tones (“CRBT”), SMS contests and games. VAS Contribution and Growth In India, the total market size of VAS revenues was estimated to be USD $926 million in 2007, and projected to reach US$2.7 billion by 2010, a CAGR of 44%. (Source: Future of Mobile VAS in India by Stanford University in conjunction with BDA Connect Research, December 2007). Entertainment MVAS is expected to drive the growth of the data services VAS market going forward with Video/TV and games registering the highest growth rates among other segments in the near future. Estimated growth in India’s VAS market and the breakdown of the usage of various services is exhibited below:

(Source: Future of Mobile VAS in India by Stanford University in conjunction with BDA Connect Research, December 2007)

As of December 2007, VAS services contributed approximately 7% of the total telecom revenue for Indian telecom operators. In particular, non-voice revenues have been increasing since 2000. The

49

revenue growth is driven by SMS (including P2P, A2P, P2A), which contributed over 55% of total VAS revenues in 2006. Over the last three years the percentage share of revenues coming from SMS is on a decline as other services gain, with SMS, Ringtones/CRBT, and Voice VAS expected to continue to be the highest revenue generating services in India. (Source: Future of Mobile VAS in India by Stanford University in conjunction with BDA Connect Research, December 2007).

Voice Services Voice VAS has historically generated higher revenues for operators as compared to data revenues due to higher usage by subscribers, and also higher call charges (USD 0.15 per minute, or INR 6/7 per minute for voice-based services as compared to USD 0.07/SMS or INR 3/SMS for text-based services (Source: A Study of the Mobile Value Added Services (MVAS) Market in India by Boston Analytics (October 2007)). Higher usage of voice-based services is significantly being driven by IVRS, particularly in rural India, due to a multilingual subscriber base and the relative ease of use of the voice interactive system. Data Services Data services, consisting primarily of SMS (including P2P, A2P and P2A), games, enterprise services and mobile commerce-oriented products are expected to see significant revenue growth in the future. The impetus for growth in services is being driven primarily by the following factors: Increasing consumer demand for value added services Globally, there has been a trend towards consumers utilizing their phones for music, entertainment, games and to obtain information. This has been driven by with the development and availability of richer content through telecom networks as well as more sophisticated handsets which provide easy user interfaces and will support delivery of the content and use of MVAS applications. Increasing Comfort Levels with Basic Mobility Services The Indian mobile telephony market has attained critical mass due to the increasing affordability of mobile services, as well as the increasing comfort with basic mobility services. Most users are comfortable with operating their mobile phones for basic voice services, and would progress into demanding addition of more value beyond basic voice applications, driving the next phase of growth (Source: A Study of the Mobile Value Added Services (MVAS) Market in India by Boston Analytics (October 2007)). Certain Market Initiatives Contributing to Growth in MVAS

50

SMS Contests Television is an integral part of the daily lives of average Indians. The proliferation of global television channels has changed TV viewing from a passive activity to an interactive activity. Daily soaps, music, and contest shows provide the option for viewers to participate through SMS. The popularity of contests can be gauged from the fact that during November 2004–March 2005 “Indian Idol” (a singing competition hosted by Sony Television) received over 55 million votes via SMS, amounting to a total revenue of US$3.75 million (Rs. 165 million) at US$0.07/SMS (Rs. 3/SMS). Of this amount, telecom companies earned US$2.61 million (Rs. 115 million), and Sony TV earned about US$1.14 million (Rs. 50 million). Further, a popular television game show “Kaun Banega Crorepati,” on Star Television, generated 58 million SMSs over a period of three months. These shows have increased the familiarity of low usage segments such as housewives and the senior population with SMS utilities (Source: A Study of the Mobile Value Added Services (MVAS) Market in India by Boston Analytics (October 2007)). Music Mobile music comprises ringtones, CRBTs, and music clips. Indians are known for their affinity for music and movies. According to an official of Sony–BMG, approximately US$0.22–0.26 million (Rs. 10–12 million)—about 5% of an album’s sales—can be generated from mobile revenues. A popular radio station, Radio Mirchi, receives approximately 40,000–50,000 SMSs daily with requests for songs to be played on air. Saregama (an Indian music company) generates 50% of its revenues from ringtones offered through its catalogue (Source: A Study of the Mobile Value Added Services (MVAS) Market in India by Boston Analytics (October 2007)). Video/TV and Games Services such as mobile TV/video, full-motion videos, wireless teleconferencing, multi-player online games, and M-commerce. These services typically require high bandwidth and a superior level of support technology than the currently available 2.5G. The introduction of 3G/4G in the near future is therefore expected to facilitate a wider portfolio of MVAS available to mobile users. The video/TV and games segment of the MVAS market are expected to register the highest CAGR during 2004–2009 (Source: A Study of the Mobile Value Added Services (MVAS) Market in India by Boston Analytics (October 2007)). VAS Value Chain The Indian VAS market remains fragmented with most VAS providers operating in niche segments. However, the MVAS market in India has evolved into a complex eco-system with multiple entities involved in the value chain as illustrated below, many with overlapping roles and functions.

51

(Source: A Study of the Mobile Value Added Services (MVAS) Market in India by Boston Analytics (October 2007) The increased importance of MVAS has also inspired content and application developers to constantly innovate to produce new concepts and services. In addition, the respective roles of content aggregators, software developers and technology enablers have expanded. Content/application owners develop or own copyrighted content and applications such as songs, entertainment news, movies, games and promotional media content. Aggregators bring together content and applications such as games, wallpapers, ringtones and all other types of content, from owners and/or smaller boutiques to distribute in accordance with customer needs. Aggregators may also manage IVR, billing, quality control and accounting. Software developers may develop software on a for-hire basis or in-house, and develop items such as security applications, games, and other applications for mobile VAS. Technology enablers provide the platform for items such as ringtone downloads, games, streaming, audio and video downloads, IVR and WAP for the telecom operators and create a bridge between aggregators and operators and manage and maintain the platform and integrate the applications (Source: “Future Mobile VAS in India” by Stanford University in conjunction with BDA Connect Research, December 2007). Delivery Methods and Categories of Mobile Value Added Services The spectrum of VAS offerings is illustrated below:
Delivery Platforms SMS Entertainment SMS Ringtones/CBRT Customized Wallpapers Animations Quiz Jokes Alerts and News Cricket/Match Alerts News Astrology, Vaastu, Fengshui, Personality Test Banking Info/Alerts Travel alerts details like Train, Flight details etc. Astrology Commerce Mobile banking Ticketing Travel and Holiday bookings Social VAS Location, infotainment Search ** Advertising Enterprise VAS Contests, voting, information Push Advertising Enterprise IM Group messaging

IVRS

Religious chants

Mobile

Astrology

IVR based Contact

52

Music on Demand WAP Portals Video Clips Mobile Games Mobile Themes Mobile Radio

Vaastu Fengshui Movies related info Stock Portfolio Managers News tickers/alerts

banking Ticketing Mobile banking Ticketing Travel and Holiday bookings

services Voice SMS Mail Mobile-Greetings Dating, Chatting, Blogging etc. Infotainment SNC/UGC Advertising Messengers

Centers Self Help centers Voice Portals Location based information Internet Mobile e-mail Mobile calendar Access to Intranet and Core Business Applications Mobile VPA Push E-mail over handheld devices (e.g. BlackBerry)/ Wireless e-mail

(Source: “Future Mobile VAS in India” by Stanford University in conjunction with BDA Connect Research, December 2007)

The above reflects innovation of only the past few years. The breadth of the potential for MVAS offerings in a multitude of usages is still evolving.

53

BUSINESS Overview Our Company is one of the leading providers of telecommunications value added products, services and solutions in India. We provide a wide range of telecommunications value added services, platforms, products and solutions to telecommunications carrier customers, subscribers of such carriers and enterprises across India. As a value added services provider, we not only conceptualize products to meet our customer needs, we source and aggregate content, provide the relevant platform for delivery of our products and services and integrate these services with the core network elements of our carrier customer. We have the ability to provide a comprehensive suite of value added products, services and solutions across all key technology bearers. Our telecommunications products and services and telecommunications solutions are delivered to subscribers of major telecommunications carriers in India, including Airtel, Spice Communications, BSNL, IDEA, Reliance, Vodafone, MTNL, Tata Teleservices Limited and “Connect” & “Ping” of HFCL. Our product portfolio includes music, information and entertainment based products and services (such as mobile radio, BGM, CRBT, ringtone downloads, videos, contests, astrology, news, sports updates and commodity rates), social networking products and services (such as voice chat), and call management solutions (such as voicemail, voice SMS, select caller list, Pay4Me and missed call alerts), all of which enable subscribers to personalize their mobile phones and enhance user experience. Our products allow subscribers to access informational and entertainment content in more than 17 languages using IVRS speech-based navigation. Using our social networking platform, subscribers are able to generate their own interactive content through messaging and conversations. We provide these value added services and products through our carrier customers to mobile subscribers and enterprise clients using IVRS, SMS, USSD, GPRS and WAP technology and delivery methods. Our applications (other than GPRS) can be deployed on any network and accessed from most mobile handsets and fixedline devices. Many of our products and services can be accessed by subscribers using a variety of delivery platforms, i.e., voice, SMS, USSD, GPRS, WAP and 3G network, thereby enabling us to deploy our products and services across a majority of operators and networks. We focus on multi-modal platforms based on voice, text and data. Our mobile radio platform gives subscribers the interactive option to access content on demand in the language of their choice, using their mobile phones. Given the demographic diversity of India, our platforms offer an efficient, easyto-use and attractive solution to our carrier customers for providing services to their subscribers. The platform enables our carrier customers to introduce better targeted, more innovative content based services. Our data platform, Mitr proposes to provide a unified framework for discovering and accessing content and services, giving the subscriber a personalized experience. Our delivery infrastructure is deployed across most network circles of our carrier customers. Our roaming solutions provide traffic flow information, enable network optimization and identify network bottlenecks for our carrier customers. Subscribers benefit from real-time updates and better coverage while roaming outside their regular network. Through our in-house research and development team, we have developed roaming solutions such as Welcome Roamer, Roam Tracker, Roam Globe, Roam Secure and Roam Privilege. Our value added services and products provide a source of additional revenue to our carrier customers with relatively insignificant capital expenditure. Our music, entertainment and information based value added products and services are dependent on the content which we provide. We have alliances with a number of content owners and license holders and licensed content is delivered to our carrier customers through our delivery platforms. As of May 31, 2008, we had more than 140,000 songs in more than 17 languages, as well as logos, wallpaper and 12,000 ringtones in our content database to cater to the needs of multicultural and multilingual subscribers in India. Our consolidated income increased from Rs. 332.26 million in Fiscal 2006 to Rs. 686.80 million in Fiscal 2007 and to Rs. 777.19 million for the nine months ended December 31, 2007. Our consolidated

54

profit after tax increased from Rs. 220.38 million in Fiscal 2006 to Rs. 410.50 million in Fiscal 2007 and to Rs. 330.68 million for the nine months ended December 31, 2007. We were incorporated in India in April 2000. Our registered office is located in New Delhi, India. We also maintain offices in Noida, Kolkata, Bangalore, Mohali, Hyderabad, Parwanoo and Mumbai and have an overseas office in Singapore. Our Competitive Strengths The telecommunications services industry has grown exponentially in recent years as a result of India’s expanding economy. Land-based telephone connections and services are inadequate for current consumer needs and mobile phones are increasingly filling the growing demand. Competitive pressures have also resulted in decreasing prices and declining average revenue per user in the Indian telecommunications industry and telecommunications operators and service providers are increasingly looking to additional services and products to support and grow their market share, revenues and margins. Innovative platform based product development and diversity of products and services We are continually engaged in the development of new products and services on our platforms to enhance the product portfolio we offer to our telecommunications carrier customers and other enterprises and bring new products and services to the market to address consumer needs and drive demand. We focus on multi-modal platforms based on voice, text and data. Our mobile radio platform gives subscribers the interactive option to access content on demand in the language of their choice using their mobile phones. Given the demographic diversity of India, our platforms offer an efficient, easy-to-use and attractive solution to our carrier customers for providing services to their subscribers. The platform enables carriers to introduce better targeted, more innovative content based services. Our data platform, Mitr, proposes to provide a unified framework for discovering and accessing content and services, giving the subscriber a personalized experience. We continue to invest in the growth of our platforms to ensure that these are in tune with the requirements of our customers. In addition, we are constantly refining our offerings to improve adoption of mobility-related products by consumers and address pricing pressures. We provide a diverse portfolio of services, products and content, with a focus on entertainment, information, music and games. We have introduced new services in India, including tambola via mobile phone, BGM, VAS on USSD, Pay4Me and select caller list. For music, entertainment and infotainment products, we have launched our BGM service, mobile radio and ringtones; for call-related products, we have launched select caller VAS on USSD and Pay4Me; for services and applications, we have launched user generated products such as voice chat; and we have developed and launched innovative roaming solutions such as Welcome Roamer, Roam Tracker, Roam Globe, Roam Secure and Roam Privilege. Our ability to offer a complete suite of products and services allows our customers to offer a wide range of user interface services to their subscribers, resulting in ease of market adoption, revenue growth, and higher subscriber satisfaction. Entrenched customer relationships All of the major telecommunications carriers in India form a part of our customer base, including Airtel, Spice Communications, BSNL, IDEA, Reliance, Vodafone, MTNL, Tata Teleservices Limited and “Connect” & “Ping” of HFCL. We have successfully marketed our solutions to a multitude of diverse telecommunication carriers customers. Service deployments with our customers involve complex hardware systems and software applications deeply embedded within the customer’s core network systems. Since the service deployment on our customers’ network is complex, our relationship development personnel are stationed at our telecommunication carriers office, giving us the ability to expand quickly and efficiently the range of services deployed and benefiting from the revenue growth from their subscriber base. Our presence and deep experience across the mobile industry value chain Our experience in the mobile industry value chain provides us with valuable insight into the mobile eco-system. Our association with Spice Communications has in the past provided us with enhanced and expedited feedback on the ever-changing needs of end-user subscribers and their feedback has been incorporated by our research and development team into new products and services. We believe

55

expedited feedback from the telecommunication carriers perspective gives us a time-to-market advantage for development of new products and services. In addition, we have the capability of managing the entire value added services segment which a telecommunications carrier customer requires in providing value added services to its subscribers. Currently, we provide this management service to Spice Communications. This managed services model benefits the carrier by reducing its investment in the value added services segment and helps the launch of innovative data and multimedia services quickly and efficiently. Strong core technological capabilities We have significant in-house resources and capabilities and a deep domain understanding in the areas of voice, data, and signaling. In the past, this understanding has allowed our Company to build technology intensive applications and products such as BGM (voice domain), mobile radio platform (voice domain), USSD/SMSC (signaling domain) and services, such as call filter (enhanced IN services) and Mitr. Our technology team works closely with the business teams and keeps a close watch on the value added services environment worldwide. We have a sophisticated understanding of the complexities of the operations of our carrier customers, which enables us to better address the technological concerns involved in incorporating products and services into operators’ networks. We were one of the first to develop products and services such as BGM, VAS on USSD, Select Caller List and Pay4Me, resulting in revenue growth for our Company over the last few years. Our diversified content database Our music, entertainment and information based value added services and products are dependent on the content we source, license, reformat and re-position. We have invested significant effort in growing the necessary relationships and have forged alliances with more than 300 content owners and license holders. We have a content database of more than 140,000 songs in more than 17 languages, as well as logos, wallpaper and 12,000 ringtones in our content database, to cater to the needs of multicultural and multilingual users in India. With our pan-India presence and a well diversified offering of value added products and services, we provide relevant services in a convenient manner to our consumers in the language of their choice. Hosting a gamut of content varieties, consisting of music, entertainment, gaming, contesting and information based services, we facilitate continuous access to the content required by our carrier customers. Experienced management and research and development team Our senior management team has an average of, over 14 years of experience in the telecommunications and technology industries with well-established companies. We have a research and development team comprised of 128 members and have in the past created and nurtured innovative products and services in the evolving mobile eco-system and building community brands across product and service verticals. Our experienced senior management tea m has been a primary contributor to our current status as a leading provider of telecommunications value added services and products and solutions in India. Our Strategy Our strategy is to be the preferred VAS business partner of telecommunications carriers and enterprise clients. We strive to offer the most innovative platforms, products and services that can be accessed and used by our carrier customers’ subscribers on mobile phones and by our enterprise clients, delivering value added voice services, data transmission, mobile commerce and communications. Provide innovative applications to fulfill our carrier customers’ total telecommunication needs in new and existing markets Mobile phones have developed beyond simple voice communications and have become a sophisticated multi-utility tool for consumers to enjoy and access a variety of services. We believe that the value added services industry is rapidly evolving to provide rich and varied content and services for subscribers. We intend to utilize our expertise to develop and launch innovative products and services that will meet the evolving needs of the end-user subscribers for our carrier customers and enterprise 56

customers in our current markets, as well as market new products and services to new and existing customers in India and internationally. We continue to focus on and invest in our development activities to anticipate the needs of the growing subscriber market and continue to develop products and services which match consumer preferences as well as foster cross-selling of services to these end-user subscribers that our products and services reach. Deepen our relationships with carrier customers We intend to expand our geographic presence and market penetration in India. Based on our experience serving as an integrated telecommunications solutions provider for some of our carrier customers who want to rapidly and cost-effectively provide a broad range of telecommunications value added services and products to their subscribers and create new revenue streams, we believe we have the leverage to expand our domestic carrier customer base, becoming a value added service provider of choice. We intend to increase our market share with existing customers by providing a broader range of services and products to these customers, and also cross-marketing additional products, such as our roaming solutions to our carrier customers. Furthermore, we intend to enhance our presence in enterprise services by providing a broader range of services to our enterprise clients within India and overseas. In order to develop and support these new customer relationships, we intend to upgrade and expand our network of development, sales and support resources in potential growth markets and to enter into local partnerships and distribution arrangements. We also intend to be present in all aspects of the value added services chain, acting as a partner to our customers by managing the entire value added services offering of our customers. Build on our platforms While we continue to innovate and launch value added services and products, we intend to focus on the development of platforms on which various applications can be hosted, including hosting of third party applications. We have developed a voice platform through mobile radio, which is a one-stop-shop for music, comedy, sports and other such products, a roaming platform allowing a multitude of applications for multiple carrier customers to take advantage of economies of scale and the breadth of our product portfolio, and a service control point platform for offering a multitude of enhanced Intelligent Network (IN) services, such as select caller list, call control and ‘follow me’. Our data platform, Mitr, proposes to provide a unified framework for discovering and accessing content and services and a personalized customer experience. We continue to build platforms for new emerging opportunities such as mobile marketing, mobile commerce and enterprise customer relationship management. Grow our technological capabilities and improve our product deployment We have successfully tested and launched applications such as bulk outbound messaging (through our enterprise solutions platform), select caller list, VAS on USSD, Pay4Me and missed call alerts through voice and data technologies. With the evolution of the mobile phone beyond its basic call functionality, we believe there are opportunities to offer products and services which enable merchants and consumers to sell and purchase goods, mobile content and other products using the wireless handset as a sales channel. Merchants will be able to leverage the increasing reach of telecommunications networks by using products, such as outbound messaging, to access large and difficult to reach markets in India. We intend to leverage the mass customization capabilities of our value added software services deployments with our carrier customers to bring to market advanced capabilities such as demand aggregation and personalized one-to-one direct marketing. We believe that our experience in providing telecommunications value added services and products for delivery to mobile users gives us a deep understanding of subscriber behavior and use of value added products and services, which assists us in formulating new products and services and improving existing products to enhance the user experience. Strengthen our long-standing content sourcing relationships Our current initiatives include providing channels for both user generated and media generated content. We seek to develop one of the strongest content databases in India, cutting across genres and

57

languages. Since most of our products and services are dependent on the content we provide, our focus is to create one of the largest digital and music databases in India. Currently, the major growth in mobile telephony is from semi-urban and rural areas. With coverage expansion by the operators in semi-urban and rural areas where there are few entertainment and information outlets other than television, we expect there will be significant requirements for content focused on semi-urban and rural populations, such as commodity market prices, commodity rates, weather information and education. We intend to have online content in these areas through our partnerships with content providers. Expand our operations into new enterprises and international markets As the cellular subscriber base is growing, enterprises are using the mobile phone as a tool for customer relationship management, mobile advertising and MCommerce. Examples of this growth are banks and insurance companies using the mobile phones for banking transactions and due-date alerts. We intend to focus on growing our enterprise customer base to expand and grow our business. We also believe there is significant market growth potential in emerging telecommunications services markets outside India. We have set up and own an office in Singapore to research the market in Singapore and in the Asia-Pacific region. In addition, we have a presence in Jordan where we provide our telecommunication value added services and products. We intend to market existing products and services and develop customized products and services within the Asia-Pacific region and further to other parts of the world. We believe that with our strong technological, product innovation and bandwidth handling capabilities, we can offer cost efficient, innovative and diverse range of products and services internationally. We believe overseas markets, with potentially higher average revenues per user, offer expansion and business growth opportunities with manageable increased costs. We are in the process of evaluating markets such as Bangladesh, Indonesia, Malaysia and Africa. Pursue selective strategic acquisitions and investments We continually seek new growth and acquisition opportunities in our existing business lines as well as related businesses to expand our geographic presence domestically and internationally, service offerings, customer relationships and technological expertise. By selecting the opportunities for growth and acquisition carefully and leveraging our transactional, project execution and operational skills, we expect to continue to expand our business. We will pursue similar opportunities in other regions to strengthen and grow our business, including investment in or acquisition of minority or majority stakes in companies which support our business and product strategy.

58

Our Principal Products and Services
SEGMENT PRODUCT OFFERINGS

MUSIC, ENTERTAINMENT AND INFOTAINMENT VALUE ADDED SERVICE

BGM Mobile Radio CRBT Ringtones Jukebox Sports Updates Rural Value Added Service (Voice SMS & Commodity Rates)

Video Zone Wallpaper Astrology Contests Devotional and Regional Content Recipes News Logos Content Discovery (Live Agent Value Added Service and USSD Value Added Service)

CALL MANAGEMENT VALUE ADDED SERVICE

Select Caller List Pay4Me Voice Mail Excuse Me

Missed Call Alert Device Manager Smart Dial Call Conferencing

SERVICES & APPLICATION VALUE ADDED SERVICE

Content Uploader Mobile Advertising and OBDs

Voice Chat

MOBILE COMMERCE

Mobile Banking Pre-paid Rechrge Mobile Bill Payments Mitr

ENTERPRISE SERVICES

Inbound campaigns Outbound campaigns Mitr

ROAMING SOLUTIONS

Welcome Roamer Roam Tracker Roam Globe

Roam Privilege Roam Secure

TELECOM INFRASTRUCTURE SOLUTIONS

Gateways (USSD, IVRS, SMSC, GPRS) Outbound Dialers (OBDs)

Music, Entertainment and Infotainment Value Added Service • Mobile Radio. Mobile radio is a voice based platform which gives the subscriber an experience of a radio by listening and dedicating songs and comedies of their choice, download songs as ringtones and save them in their personalized album. This feature which was initially launched by Airtel through ‘Airtel Music Station’ for its subscribers is currently also offered to a few other carrier customers. Currently, subscribers can choose from more than 100,000 songs in more than 17 different languages.

59

BGM. Our BGM application allows pre-paid and post-paid subscribers to play music in the background when the call is in progress. Subscribers can select music of their choice or any other pre-recorded sound such as traffic noise for playing in the background during a call to any number. We have applied for a patent for this application. CRBT. We have a CRBT platform where subscribers can choose ring back tones of their choice and select it to be played for various callers. Our CRBT platform provides other special features like time based caller songs and group caller songs. We also source CRBT content from major music label companies and provide it to various mobile carrier customers. Ringtones. We source and aggregate ringtone content from major music label companies and unbranded content from local musicians. Our ringtone repository is updated regularly (usually between a week to a month), to provide subscribers with the latest content. Our ringtone application provides subscribers the option to download ringtones over voice, SMS, USSD, GPRS and WAP and supports multiple carrier technologies, such as GSM and CDMA. Jukebox. Our jukebox application allows subscribers to access content and services in multiple languages from one place. Subscribers can download songs from our music jukebox and set them as ringtones and ringback tones or sing to selected songs in karaoke style, record it and forward it to other subscribers. Our music jukebox application supports multiple carrier technologies, such as GSM and CDMA. Video Zone. Video Zone provides subscribers an option to download videos from a wide range of categories. We provide high quality videos which can be downloaded and viewed by the subscribers on their video enabled handsets. Wallpaper. Our wallpaper application allows subscribers to download colored wallpaper from a wide range of categories, such as religion, bollywood, nature and sports. The subscribers can connect to the data network via GPRS and a wide range of wallpaper is made available to them to choose from. Astrology. Our astro zone application allows subscribers to download personalized horoscopes on their mobile phones based on astrology or numerology, tips on feng shui and personality analysis. Contests. Our contest application enables carriers, media and advertising companies, corporations and merchants to set up contests for mobile phone and wireline subscribers. As part of our services, we provide the technology as well as the content for this application. Our contest application enables us, for example, to create a question bank, set up different quiz formats, conduct a post-contest analysis of the scores and manage the distribution of prizes to winners of the contests. We also offer “Fastest Finger”, an interactive game where the subscriber competes with other players to see who is the fastest to respond. Subscribers are rewarded with prizes. In addition to having the prestige of being crowned the “ultimate texter”, there is also the excitement of beating prior scores, the anticipation of waiting for the next challenge and the chance to meet other people. Sponsors and advertisers can use the opportunity to make subscribers aware of their brands and new products. Devotional and Regional Content. This application gives subscribers access to a repository of devotional songs in multiple languages using voice. We provide content related to a variety of religions around the world. Sports Updates. Our sports update application allows subscribers to receive live updates and commentary on sporting events, such as cricket, on their mobile phones. In addition, subscribers can browse other sports-related content and subscribe for scores updates. We regularly update and archive our content to ensure that subscribers can access updates and information even when a live event is not occurring. Rural Value Added Service. With mobile handsets becoming cheaper, subscribers in rural markets have embraced mobile handsets to enhance their daily lives. The usage is primarily to

60

access commodity rates, agricultural product rates and weather related information through SMS, IVRS and USSD. Commodity Rates. Given the significant percentage of the Indian population whose livelihood is based on agriculture, we provide information on the latest market rates of vegetables, seeds and grains in various regions across India. Subscribers simply dial a preconfigured number to hear the current rates. Voice SMS. Our voice SMS application is a short messaging service that addresses the limitations of conventional SMS messages such as character limitations and the lack of support for vernacular languages by using voice instead of text. Our voice SMS application provides flexibility to subscribers by supporting multiple languages and enabling subscribers to customize the duration of their messages. Subscribers can review their messages and re-record their messages, have the option of sending their voice messages during non-peak hours and can customize the application to ensure that the voice messages are not sent to roaming recipients. • Recipes. Subscribers can access cookbooks and recipes from media including newspapers and magazines. News. We provide news content on a real-time basis in multiple languages accessible by categories such as politics, business or international news. Subscribers can subscribe for alerts with callbacks for breaking news. Logos. We provide a wide variety of logos that subscribers can select and download onto their mobile phones using voice. Content Discovery Live Agent Value Added Service. This application provides subscribers an option to talk directly to our live agents and request various value added service content links, such as caller songs, ringtones, astrology and wallpaper. Once requested, the agents deliver the content to the subscriber’s mobile handset. USSD Value Added Service. We provide a unique USSD mechanism to subscribers to view and request subscription based services, such as ring tones, select caller list, caller songs and cricket scores. USSD is a session based protocol where subscribers can view value added service content through an online menu. The subscriber can access this menu and request content for download. CP-NXT1000. This platform provides a plug and play model for interfacing all current and future bearers, and it also interfaces with network management, billing and customer care application. The platform offers to the users access to services using speech, text and touch inputs with graphics, text and audio output. The content discovery services which are supported by the platform in combination to the above enrich the users experience and encourage users to use the offered service extensively. The platform reduces the time to market for operators by enabling network wide deployment of services and applications rapidly, supports all bearers such as Voice, SMS, USSD, GPRS, WAP allowing the development of truly converged applications which can work across wireline, 2G, 2.5G and 3G networks and mobile handsets, enables mobile banking and payment applications for subscribers allowing them to make banking transactions and make payments from their mobile phones for their utility bills and other transactions, enables the delivery of applications in multiple languages and supports the storage, classification and management of content. Call Management Value Added Service

61

Select Caller List. Our select caller list product is a customized solution in which the subscriber can select the calls to receive. This can be done by creating a list of callers whose calls the subscriber wishes to receive and can also contain a similar list of callers whose calls will get barred and automatically deferred to a voicemail or an automatic message. This solution helps in barring spam or unwanted calls and preventing calls outside of the defined list from going through if the subscriber is roaming. We have applied for a patent for this application. Pay4Me/Collect Call. This product is useful for prepaid subscribers running out of credit in their account. This service requires the called party to agree to pay for the calling party, which is made possible by opening a number wherein outgoing barred subscribers can call and can log their request to get connected to the other party, which will pay for the call. Pay4Me is particularly convenient for calls between parents and children, emergency phone calls and corporate calls. Even non-subscribers can use the Pay4Me code. Subscribers can also create a list from whom the caller agrees to bear charges for every call made from a caller on that list. A monthly subscription fee is charged from the subscribers for this service. We have applied for a patent for this application in India. Voice Mail Service. Our voice mail service allows subscribers to handle their calls by an IVR based assistant in cases when the mobile is switched off, out of coverage or other diverted settings. The subscriber can receive, save, edit, forward, delete send or broadcast voicemail messages. Other key features include the ability to stay connected, create customized greetings, customer-oriented voicemail menu navigation and real-time call control. Missed Call Alert Service. Our missed call alert service is a customized service where a subscriber can get missed call alerts when unable to take calls, and the caller receives an alert when the subscriber is back on the network. As a result, subscribers stay connected even if they are on another call, their mobile is switched off, they are out of their coverage area, or they cannot pick up the call in time. Other key features are notification of the date and time of multiple missed calls and notification of the number of missed calls from one calling number. This service allows for subscribers’ mailboxes to be managed dynamically and is particularly useful in countries where a majority of subscribers are pre-paid. Additionally, the service enables subscribers to quickly access their voicemail as they have the option to navigate and manage their voice mailbox using our speech technology. Device Manager. Device Manager is a solution which pushes GPRS/MMS settings over the air to the mobile subscribers whenever requested or on other subscriber generated events, such as a new handset. These settings configure the subscriber’s handset for accessing the data services provided by the network operator. Once configured, the subscriber can connect to the data network anytime and browse online. Smart Dial. Our smart dial service allows subscribers to send a request to the system to initiate a call if another party’s number is busy or out of reach when the subscriber tried to speak the first time. These calls are retried by the Smart Dial system and are patched on the consent of both the parties, hence regenerating revenues that were actually lost. Call Conferencing. Our call conferencing service provides a ‘chatting’ environment to mobile subscribers. Based on a conference feature of the network, multiple parties can have a joint discussion at a specific time slot. The features of this service include custom entry/exit announcements and defining the maximum number of parties in a conference. Excuse Me. This application provides the subscriber an option to auto-generate a call from the system on their handsets providing an impression that a normal call has come in for the subscriber. The subscriber can request an auto call through a very simple process of accessing a USSD menu. After the request is received from the subscriber, the system generates an auto call to the subscriber and the subscriber can use this excuse to move out of a gathering.

62

Services & Application Value Added Service • Content Uploader. This utility provides subscribers an option to create a backup of the content on their handsets such as phone book contacts, multimedia content such as videos and tones and text messages to a central server. This content can be retrieved by the subscriber at any time. This utility provides subscribers the option of retrieving content in situations where their handset may be lost or damaged. Privacy for the uploaded content is maintained by allowing access of the uploaded content only through a user name and password. Mobile Advertising and OBDs. We provide a platform to advertisers to advertise through various mobile platforms including SMS, GPRS and IVRS. We also provide an option wherein smaller P2P messages are appended with advertisements. Voice Chat. This is a community service which allows mobile subscribers to make friends without revealing their own identities. Customers can dial in to an IVR short code and make their own profile including age, likes and sex. They can also leave their own recording. The system then intelligently searches for all the matching profiles and provides an option to the subscriber to talk to those profiles. Also, the system makes the subscriber’s profile available to all other users so they can also get in touch with the customer. The mobile number of the users is not revealed to the other users and they know each other via chat identity numeric codes.

Mobile Commerce (MCommerce) Solutions MCommerce is the ability to conduct commercial transactions using mobile phones. This solution facilitates charging an amount to a mobile phone or a user by using certain MCommerce applications, such as mobile banking, mobile bill payments, pre-paid recharge and mobile ticketing. This amount can be charged to the mobile subscriber’s account, or to an alternative account such as a bank account or a credit card account. Some of the commonly used MCommerce solutions include: • Mobile Banking (MBanking). Banks and other financial institutions are extending banking services using MCommerce to allow customers to not only access account information and confirm transactions, but also enable subscribers to conduct financial transactions such as purchase stocks, remit money and pay bills using their mobile phones. Pre-paid Recharge. Our pre-paid recharge solution allows carriers to offer subscribers the option to top up directly their own or any other person’s mobile account using their mobile phones at any time and anywhere using their credit cards and the airtime re-charge is sent directly to the number specified. Mobile Bill Payments. Our mobile bill payment solution allows subscribers to pay their utility bills conveniently using their mobile devices and allows a subscriber to navigate to a specific utility company, check the outstanding bill and choose to make the required payment. This facility can also be used by the utility company to alert the subscribers of the payment due date and the outstanding amounts.

Enterprise Services • SMS / Outbound Campaigns. Our outbound calling facility is designed to send out automated messages about new promotions and offers on products and services to a specific list of subscribers based on the target profile. Our enterprise solutions enable the advertiser or corporate client or merchant to direct their marketing efforts to a target subscriber group based on a pre-defined set of profile parameters set by the advertiser, and thereby helps the advertiser to avoid wasting a significant portion of their advertising budget on non-target subscribers due to the inability to profile the subscriber. Current outbound messaging clientele sectors include consumer durables, airways, railways, automotive and financial institutions. When our outbound dialing facility contacts a subscriber and the subscriber is connected, the system becomes an interactive sales tool and information on a product or service can be gathered or dispersed. Our solution can be customized so that outbound calls are only made to

63

subscribers who are not on roaming and to remember preferences from the previous calls, such as choice of language. • Lead Generation SMS Inbound Campaigns. Our inbound calling CRM solution is designed to allow the subscriber to be in touch with the enterprise through a short code (5 digit number) or a long code (10 digit number). subscribers can use inbound messaging for customer service complaints and feedback, opinion polls, surveys, media-voting and electronic media. Our enterprise service provides subscriber benefits, such as instant access to desired information and a cheaper SMS. In addition, this service reduces call center cost and promotional budgets for our carrier and enterprise customers. • Mitr. Mitr, a mobile centric and content services platform, is a user friendly single mobile interface that will deliver a host of attractive web based applications and provides a unified framework for discovering and accessing content and services and a rich, personalized and intuitive customer experience. The Mitr software enables any application written using the Mitr software development kit to run on the mobile phone irrespective of the mobile phone model or operating system. Mitr products consist of Mitr SDK (a software development kit that enables rapid development of mobile applications), Mitr VM ( a virtual machine that provides an execution environment for applications developed using Mitr SDK) and Mitr Mart (a market place of all applications developed using Mitr SDK).

Roaming Solutions • Welcome Roamer. Welcome Roamer is a combined monitoring and SMS delivery product that gives a carrier customer visibility of subscribers who roam in the local network, as well as subscribers from the local network roaming in any another network. The carrier customer can use this information to issue a greeting SMS to the subscriber informing the roaming subscriber of the services available in that network. It identifies the inbound and outbound roamers by tapping a roaming link in real-time enabling the carrier customer to deliver accurately targeted and personalized messages to the roaming subscriber. Roam Tracker. Roam Tracker helps carrier customers achieve increased revenue by monitoring and managing the profitability of the carrier’s roaming business by providing traffic flow information, enabling network dimensioning, capacity planning, as well as allowing carrier customers to gain a better insight into subscriber behavior. This solution also helps carrier customers in providing traffic flow information and identifying any network glitches. Roam Globe. Carrier Customers find negotiating multiple roaming service agreements with operators worldwide a time consuming and expensive process. Our Roam Globe service offers carrier customers a quick route to enhanced international roaming, by building on the existing roaming agreements of a host mobile network. Our solution works on the principle of dual international mobile subscriber identity (IMSI), which can be deployed as a standalone application or as a bundled product. With Roam Globe, new carrier customers operators are in a position to offer roaming services from inception without having to carry out bilateral roaming negotiations with other operators. Roam Secure. Roam Secure allows carrier customers to retain inbound subscribers, assuring revenue, network monitoring and customer loyalty, while providing access to the subscriber, independent of the SIM card. Roam Privilege. Roam Privilege allows carrier customers to control the selection of roaming networks, ensuring that out-roamer subscribers log onto a network of preferred operators. This influences the selection of roaming networks according to pre-defined rules and criteria. Carrier customers benefit from greater revenues, subscriber loyalty and wide accessibility. The subscriber also benefits from easier access outside their network and from cost-effective roaming.

64

Telecommunications Infrastructure Solutions • Unstructured Supplementary Services Data (USSD). USSD is a GSM service that allows high speed interactive communication between the subscribers and applications across a GSM network. USSD requests are processed instantaneously in contrast to SMPP requests which are stored for transmission on the SMSC. In addition, unlike SMS, which is a store-andforward technology, USSD is a session oriented protocol, thus reducing the turn around response time for interactive applications as compared to SMS. As a result, USSD allows for larger transmissions of information in real-time, such as ringtones, picture messages, news flashes, sports updates, account balance inquiries and call histories. Short Message Service (SMS). SMS messages are an alternative to voice communication over the telephone when silent, private, or very brief communications are best. Since they are somewhat non-traditional, SMS messages have an element of playfulness that often encourages creativity, and subscribers can find this novelty addictive. SMS messages can be sent between users or to and from an application, which gives service development an extra flexibility that encourages innovation. Short Message Service Center (SMSC). SMSC is an open system architecture which allows easy integration with various network elements. We offer an innovative load-sharing option, where the mobile switching centre shares the load for several SMSC units. This enables a server cluster to be seen as a single large SMSC by the carrier customers thus providing an opportunity of easy and fast scaling of SMSC capacity by adding server units. The features of our SMSC include: Message Priority: Allows setting of message priority levels to enable customization of message deliveries as in high, medium or low. Validity Period Definition: Enables customization of time period after which undelivered messages will be deleted from the queue. Alert Based Retry: Provides an inbuilt mechanism which entails automatic attempt of retrying message delivery in the event of an alert message of non-delivery of the SMS. Configured Retry Intervals: Allows customization of intervals at which undelivered messages would be retried for delivery. Scheduled Delivery: Offers a feature of scheduled delivery through which messages are delivered based on scheduled date/time rather than immediate delivery. SMS Forwarding: Enables a subscriber to forward the SMS to an email id. Message Tracking and Logging: Offers database based logging features to track status of message delivery at any point of time. • General Packet Radio Service (GPRS). GPRS is the world's most ubiquitous wireless data service, available with almost every GSM network. GPRS is a connectivity solution based on Internet Protocols that supports a wide range of enterprise and consumer applications. GPRS subscribers enjoy advanced, feature-rich data services such as internet browsing, e-mail on the move, powerful visual communications such as video streaming, multimedia messages and location-based services. Outbound Dialer (OBD). OBD is an important mechanism for selling value added service. The system generates an auto call and provides pre-recorded information to the subscriber about the value added service once the subscriber picks up that call. The subscriber is given an option to subscribe for that particular value added service immediately through DTMF input. Our OBD supports special features such as Do Not Disturb (DND) filter, and online subscription of service requests received via OBDs.

65

Our Customers As of May 31, 2008, we had a diverse carrier customer base of more than 60 customers across a variety of industries. Our major customers include Airtel, Spice Communications, BSNL, IDEA, Reliance, Vodafone, MTNL, Tata Teleservices Limited, HFCL, Route SMS, SMS Junction, Nazara, Pinnacle Media, People Infocom Private Limited, Eastern Power Distribution Company, Axis Convergence Private Limited and ACL Wireless. Customer Contracts Most of our carrier customer contracts are on a revenue sharing basis pursuant to which we receive a fixed percentage of the net revenue generated by our products and services for our customers, thus providing a recurring revenue stream for us. These contracts are typically master contracts which allow our new products and services to be quickly deployed under the contracts’ existing terms and conditions without the need to enter into and negotiate a new contract. However, under our enterprise client contracts we get paid for each SMS successfully delivered or not delivered to the end users, based on the volume of SMSs that are sent per month. Under most of our carrier customer contracts, we have agreed to indemnify our customers against loss or damage arising from our breach of contract, including for the infringement of intellectual property rights in respect of the content that we have sourced and aggregated from third party content providers. Under certain of our enterprise client contracts we typically agree to indemnify these customers against loss or damage for any infringement of intellectual property rights and any violation of laws or regulations of any governmental, regulatory or judicial authority arising from the performance of obligations under the contract. In such enterprise client contracts the enterprise clients further indemnify us from any liability from the contents of the SMS. Our contracts with our carrier customers are typically on a non-exclusive basis. While some of our contracts have terms varying between one to three years, which are subject to an annual review in case of renewal, others are typically valid until termination. Our customer contracts also allow either party to terminate the contract for specific reasons, including for a breach of a material term or condition that is not rectified within a specified cure period. Either party is also allowed to terminate the contract without cause by giving written notice of between 30 to 90 days and without termination-related penalties. Content Database Our applications are dependent on our ability to source and provide content to fulfill subscriber needs and interests. We source content through licensing contracts with content developers and content aggregators and re-position such content at our end. Our licensing contracts with content providers are usually for a term of one year which is renewable by mutual consent and generally contain a provision that the content provider will indemnify us against any third party claim for infringement of intellectual property rights in respect of the content sourced by them. Music based services and products claim a significant share of the Indian value added services market, including CRBT and ring tones. With 140,000 music tracks, we are a significant provider in the mobile entertainment space in India. We cover 17 regional languages across bollywood, regional, devotional and international music. These songs are accessible via various services, such as ring-tone download, CRBT, BGM and full song streaming and cut across 25 diverse file formats. Music contributes a majority of the revenue on content based services and products provided by us. Apart from music and entertainment, we have also diversified the reach of our content across visual, gaming, contesting and infotainment genres. We partner with international gaming houses and have access to over 3,000 gaming titles catering to our mobile internet enabled subscribers. Since most of the products and services are dependent on the content we provide, our focus is to create one of the largest digital and mobile ready music databases in India. Currently, the major growth in mobile telephony is from semi-urban and rural areas. With coverage expansion by the our carrier customers in semi-urban and rural areas where there are few entertainment and information outlets

66

other than television, we believe there will be high demand for content focused on semi-urban and rural population, such as commodity market rates and education. We intend to have online content in these areas through our partnerships with content providers. Sales, Marketing and Business Development In order to cater to our carrier customers, enterprise clients and other opportunities, we have equipped ourselves with a sales and marketing structure to work on carefully identified focus areas for each team. We have structured our sales/marketing and business development structure as follows: • Product Marketing – Our product marketing group owns the products once launched, maximizing the revenues and managing the product life cycle. Business Development and Pre Sales – This team focuses on new customer acquisitions and pitching new products and applications to the existing carrier customers. Sales – Sales team focuses on maximizing revenues from the live products and services. This team is also responsible for maintaining relationship with the carrier and other customers at local levels.

Since the service deployment on our carrier customers’ network is complex, our relationship development personnel is stationed at our carrier customers office, helping us to expand quickly and efficiently the range of services deployed and growing revenue from their subscriber base. Our sales, marketing and business development team is responsible for the development of strategic distribution partnerships, alliances and direct sales, including contract negotiations. As of May 31, 2008, we had over 100 employees working in our sales, marketing and business development team, all of whom are permanent employees. Competition The telecommunication value added services industry is fragmented, nascent and highly competitive and is characterized by frequent introductions of new solutions and products, evolving wireless platforms and new and improved technologies. However, we believe we compete effectively because of our track record, the sophistication of our technology, products and platforms, our proven ability to consistently deliver new innovative products, our operational expertise and project execution, our insight into the subscriber market, demand and preferences, the technology and systems which we have installed and integrated in our carrier customers’ infrastructure, our service level commitments and due to our established relationships with carrier customers. We believe that OnMobile and Bharti Telesoft are our biggest competitors in certain aspect of the services and products we offer. Intellectual Property Our success depends in large part on our proprietary technology and know-how. We rely primarily on a combination of trade secrets and copyright laws and restrictions on access to protect our trade secrets and proprietary rights. We have also applied for 11 patents with the Indian Patents Office. We distribute our software products under license agreements, which grants customers a non-exclusive license to use the software and contain terms and conditions prohibiting its unauthorized reproduction or transfer. In addition, we enter into confidentiality agreements with our carrier customers when we disclose proprietary information to them. We also enter into confidentiality agreements and deeds of relinquishment with our employees and consultants. As of May 31, 2008, we have one registered trademark. Our trademark and logo “Cellebrum” is registered with the Trademarks Registry in Delhi, India. We have recently filed an application to register a new logo for “Cellebrum”. As of May 31, 2008, we have applied to register 16 other trademarks with the Trademarks Registry in India. As of May 31, 2008, we have also filed 11 patent applications with the Indian Patents Office. As of May 31, 2008, we have 19 registered copyrights and two pending applications with the Registrar of Copyrights.

67

Technology and Product Development We follow a product development process which allows the launch of a product and services in an expeditious yet controlled manner, after careful market research and conceptual tests. Once we receive market and end-user feedback through our carrier customers, we develop products and services which are initially tested within our R&D facility located at Parwanoo, wherein we have sophisticated equipments replicating a mobile network in which we can test all aspects of our products’ operational feasibility, which help stimulate the real mobile networks. Once the offerings are refined and suitably established, we then propose introduction of the offering with our carrier customers. Our ability to test the offerings in our R&D facility provides valuable and direct insight into consumer needs, adoption, preferences and price-points, which are all important in making the offerings successful and managing the uncertainties of new product and services development. We have multiple teams focusing on conceptualizing, architecting, implementing, testing, delivering, securing and maintaining our platform, products and services. These include our R&D, information technology, quality assurance, configuration management and delivery teams. As of May 31, 2008, we had 186 employees working in our R&D, information technology, quality assurance, configuration management and delivery teams. We have a dedicated team of technology experts to explore new technology and develop value added services and products. To date, we have developed numerous value added services applications including BGM, select caller list, Pay4Me, my music, call conferencing and voice mail. We have filed for 11 patents in India as a result of our research and development efforts. Employees We have a strong focus on recruitment, training and retention of our employees. As of 31 May, 2008, we had a total of 372 permanent employees. We have 58 employees on our operations and deployment team, 113 employees on our sales, marketing and business development team, 128 employees on our R&D team and 73 employees in our finance and administration department. We continuously review and deliver effective training programs on smart hiring process, provide strategic oversight to business units in their recruitment efforts, and successfully promote our business to potential new hires. By building our brand presence in the market, we intend to identify, attract and train skilled personnel across all our business segments. For our existing employees, we encourage rewards and recognition programs, training and development to continuously improve overall employee caliber. Our employees are not unionized and we have never experienced any work stoppages. We believe that our employee relations are good. Insurance We maintain standard insurance policies for our physical assets and our employees as required by applicable laws and regulations. Properties Our registered office is located at D-4, Okhla Industrial Estate, Phase –I, New Delhi, India. We also maintain offices in Noida, Kolkata, Bangalore, Mohali, Hyderabad, Parwanoo and Mumbai and have an overseas office in Singapore to cater to our international business. We lease most of our office space under various lease agreements, subject to renewal by mutual consent. We own our office space in Singapore. We believe that our existing facilities are adequate for our current requirements and that additional space can be obtained on commercially reasonable terms to meet our future requirements.

68

REGULATIONS AND POLICIES The following description is a summary of the relevant regulations and policies as prescribed by the GOI, state governments, certain international treaties and conventions to which India is a signatory. The information detailed in this chapter has been obtained from the various legislations, international treaties and conventions.. Intellectual Property Our intellectual property includes our registered intellectual property rights, including patents and patent applications made by us in relation to various inventive products and processes and registered, as well as unregistered rights in intellectual property including copyrights in relation to software. The salient features of the legal regime governing the acquisition and protection of intellectual property in India are briefly outlined below. For further details on the above, see the section “Business” beginning on page 54. Patent Protection The Patents Act, 1970 (“Patents Act”) is the primary legislation governing patent protection in India. In addition to broadly requiring that an invention satisfy the requirements of novelty, utility and non obviousness in order for it to avail patent protection, the Patents Act further provides that patent protection may not be granted to certain specified types of inventions and materials even if they satisfy the above criteria. The tern of a patent granted under the Patents Act is for a period of twenty years from the date of filing of application for the patent. The Patents Act deems that computer programmes per se are not ‘inventions’ and are therefore not entitled to patent protection. This position was diluted by the the Patents Amendment Ordinance, 2004 which included as patentable subject matter: a) Technical applications of computer programs to industry; and b) Combinations of computer programs with the hardware. However, the Patents Amendment Act, 2005 does not include this specific amendment and consequently, the Patents Act, as it currently stands, disentitles computer programs per se from patent protection. The public use or publication of an invention prior to the making of an application for a patent, may disentitle the said invention to patent protection on grounds of lack of novelty. Under the Patents Act, an invention will be regarded as having censed to be novel (and hence unpatentable), inter alia, by the existence of: i. ii. iii. iv. any earlier patent on such invention in any country; prior publication of information relating to such invention; an earlier product showing the same invention; or a prior disclosure or use of the invention that is sought to be patented

For details in relation to the risks arising from the above position see the section “Risk Factors” beginning on page x. Following its amendment by the Patents Amendment Act, 2005, the Patents Act permits opposition to grant of a patent to be made, both pre-grant and post—grant. The grounds for such patent opposition proceedings, inter alia, include lack of novelty, inventiveness and industrial applicability, nondisclosure or incorrect mention of source and geographical origin of biological material used in the invention and anticipation of invention by knowledge (oral or otherwise) available within any local or indigenous community in India or elsewhere. The Patents Act also prohibits any person resident in India from applying for patent for an invention outside India without making an application for the invention in India. Following a patent application in India, a resident must wait for six weeks prior to making a foreign application or may obtain the

69

written permission of the Controller of Patents to make foreign applications prior to this six week period. The Controller of Patents is required to obtain the prior consent of the Government before granting any such permission in respect of inventions relevant for defense purpose or atomic energy. This prohibition on foreign applications does not apply, however, to an invention for which a patent application has first been filed in a country outside India by a person resident outside India. International Patent Protection Mechanisms The extent of patent protection granted by any national patent law is limited to the jurisdiction of the country of registration of the said patent. Therefore, the protection of patents on an international scale ordinarily requires that patent applications be filed and granted in multiple jurisdictions. In order to avoid multiplicity of applications, mechanisms under various international treaties have evolved providing for the effective filing of simultaneous patent applications in multiple jurisdictions by filing of a single international application. The Patent Co-operation Treaty, 1970, (“PCT”) creates one such mechanism whereby filing an application under the treaty results in the effective filing of a separate application in each of several designated countries under the PCT. An application under the PCT is processed in two phases: a. b. an international phase wherein an international application is filed in the International Bureau; and a national phase consisting of the conversion of the application into national patent applications in designated countries.

A PCT application may be filed by a national or resident of a state which is a signatory to the PCT at the patent office of such state at the WIPO International Bureau. At the filing stage, the applicant indicates those contracting states in which he wishes his application to form an effective filing. Upon filing, the invention, which is claimed under the application, is selected to an “international search” which is carried out by an International Searching Authority identified by the patent filing office. In the event that the international search results in any evidence of prior art, which resembles the claim being searched for, the applicant has the option to either withdraw his application, or defend the claim at the national level with each national patent office. If the application is not withdrawn, it is published in the International Bureau along with the international search report and communicated to the patent office in each designated country. Subsequently, upon the applicant electing to do so, patent applications are submitted to the national phase wherein the claimed invention is examined by the national patent offices of the designated countries for grant of the patent. Another international treaty governing international patent protection is the Paris Convention for the Protection of Industrial Property, 1883, which requires its member countries to guarantee to the citizens of the other countries the same rights in patent and trademark matters that it gives to its own citizens. Further, in case of patent filings in multiple jurisdictions, this treaty grants a right of priority to the applicant which means that the applicant who has filed an application in any contracting states, may apply for protection in any other contracting states within 12 months and claim priority over other applications which have been filed by other applicants during the said 12 month period. Copyright Protection The Copyright Act, 1957 (“Copyright Act”) governs copyright protection in India. Under the Copyright Act, copyright may subsist in original literary, dramatic, musical or artistic works, cinematograph films, and sound recordings. Software, both in source and object code, constitutes a literary work under Indian law and is afforded copyright protection. Following the issuance of the International Copyright Order, 1999, subject to certain exceptions, the provisions of the Copyright Act apply to nationals of all member states of the World Trade Organisation. While copyright registration is not a prerequisite for acquiring or enforcing a copyright in an otherwise copyrightable work, registration constitutes prima fade evidence of the particulars entered therein and creates a rebuttable presumption favoring the ownership of the copyright by the registered owner. Copyright registration may expedite infringement proceedings and reduce delay caused due to

70

evidentiary considerations. Once registered, copyright protection of a work lasts for a 60-year period following the death of the author. Reproduction of a copyrighted work for sale or hire, issuing of copies to the public, performance or exhibition in public, making a translation of the work, making an adaptation of the work and making a cinematograph film of the work without consent of the owner of copyright are all acts which expressly amount to an infringement of copyright. With respect to computer software, in addition to the above, any unauthorised sale and commercial rental of software also amount to infringement of copyright. The Copyright Act also prescribes certain fair use exceptions which permit certain acts which are otherwise considered copyright infringement. In respect of computer software, these fair use exceptions would include: a) the making of copies or adaptations of a computer program by the lawful possessor of a copy of such computer program in order that it may be utilised for the purposes for which it was supplied; the right of the lawful possessor to obtain any other essential information for interoperability of an independently created computer program, if that information is not otherwise readily available; the observation, study, or test of functioning of the computer program in order to determine the ideas and principle which underline any elements of the program while performing such acts necessary for the functions for which the computer program is supplied; and the making of copies or adapting the computer program from a personal legally obtained copy for any non-commercial personal use.

b)

c)

d)

The remedies available in the event of infringement of copyright under the Copyright Act include civil proceedings for damages, account of profits, injunction and the delivery of the infringing copies to the copyright owner. The Copyright Act also provides for criminal remedies including imprisonment of the accused and the imposition of tines and seizures of infringing copies. A third set of remedies are administrative or quasi judicial remedies which are prosecuted before the Registrar of Copyright to ban the import of infringing copies into India and the confiscation of infringing copies. Trademarks The Trade Marks Act, 1999 (the “Trade Marks Act”) governs the statutory protection of trademarks in India. In India, trademarks enjoy protection under both statutory and common law. Indian trademarks’ law permits the registration of trademarks for goods and services. Certification trademarks and collective marks are also registrable under the Trade Marks Act. An application for trademark registration may be made by any person claiming to be the proprietor of a trademark and can be made on the basis of either current use or intention to use a trademark in the future. The registration of certain types of trade marks are absolutely prohibited, including trademarks that are not distinctive and which indicate the kind or quality of the goods. Applications for a trademark registration may be made for in one or more international classes. Once granted, trademark registration is valid for 10 years unless cancelled. If not renewed after 10 years, the mark lapses and the registration for such mark has to be obtained afresh. While both registered and unregistered trademarks are protected under Indian law, the registration of trademarks offers significant advantages to the registered owner, particularly with respect to proving infringement. Registered trademarks may be protected by means of an action for infringement, whereas unregistered trademarks may only be protected by means of the common law remedy of passing off. In case of the latter, the plaintiff must, prior to proving passing off, first prove that he is the owner of the trademark concerned In contrast, the owner of a registered trademark is prima facie regarded as the owner of the mark by virtue of the registration obtained.

71

Trade Secrets and Confidential Information In India, trade secrets and confidential information enjoy no special statutory protection and are protected under Common Law. Labour laws There are various legislations in India which have defined ‘employee’ and ‘workman’ based on factors which inter a/ia include nature of work and remuneration. People who come under the definition of workman or employee are entitled to various statutory benefits including gratuity, bonus, retirement benefits and insurance protection. Termination of the employment of a non-workman is governed by the terms of the relevant employment contract As regards a ‘workman’, the IDA sets out certain requirements in relation to the termination of services. These include a detailed procedure prescribed for resolution of disputes with labour, removal and certain financial obligations upon retrenchment. The applicability of such laws depends on the number of workers employed and their monthly remuneration. Shops and Commercial Establishments Legislation The conditions of service of employees of IT companies are regulated, inter a/ia, by the relevant shops and establishments law. Employees State Insurance Act, 1948 The Employees State Insurance Act, 1948 provides for certain benefits to employees in case of sickness, maternity and employment injury. All employees in establishments covered by the Employees State Insurance Act, 1948 are required to be insured, with an obligation imposed on the employer to make certain contributions in relation thereto. In addition, the employer is also required to register itself under the Employees State Insurance Act, 1948 and maintain prescribed records and registers. Payment of Gratuity Act, 1972 The Payment of Gratuity Act, 1972 provides for payment of gratuity to employees employed in factories, shops and other establishments who have put in a continuous service of five years, in the event of their superannuation, retirement, resignation, death or disablement due to accidents or diseases. The rule of five year continuous service’ is however relaxed in case of death or disablement of an employee. Gratuity is calculated at the rate of 15 days wages for every completed year of service with the employer. Presently, an employer is obliged for a maximum gratuity payout of Rs. 350,000 for an employee. Employees Provident Fund and Miscellaneous Provisions Act, 1952. The Employees Provident Fund and Miscellaneous Provisions Act, 1952 provides for the institution of compulsory provident fund, pension fund and deposit linked insurance funds for the benefit of employees in factories and other establishments. A liability is placed both on the employer and the employee to make certain contributions to the funds mentioned above. The Maternity Benefit Act, 1961 The purpose of the Maternity Benefit Act, 1961 is to regulate the employment of pregnant women and to ensure that they get paid leave for a specified period during and after their pregnancy. It provides, inter alia, for payment of maternity benefits, medical bonus and enacts prohibitions on dismissal, reduction of wages paid to pregnant women, etc. The Contract Labour (Regulation and Abolition) Act, 1979

72

The purpose of the Contract Labour (Regulation and Abolition) Act, 1970 is to regulate the employment and protect the interests of labourers who are hired on the basis of individual contracts. In the event that any aspect of the activity is outsourced and is carried out by labourers hired on a contractual basis, then compliance with the Contract Labour (Regulation and Abolition) Act, 1970 will also be necessary. The Telecom Unsolicited Commercial Communications Regulations, 2007 (as amended on the March 17, 2008) TRAI has introduced the Telecom Unsolicited Commercial Communications Regulations, 2007 (“Regulations”) to curb unsolicited telemarketing communications, thereby reducing the nuisance and inconvenience to subscribers. TRAI has set up the NDNC registry, which is operational since October, 2007 for this purpose. The Regulations aim at balancing the right to privacy of the subscriber and the rights to freedom of speech and profession of the telemarketing industry. TRAI has therefore set out an ‘opt-out approach’ where a subscriber has an option of opting out of receiving the UCC. All service providers have to maintain a “Private Do Not Call List” of the subscribers who request non-reception of the UCC. This list is then subsequently uploaded on to a NDNC registry. The telemarketers undertake to not make UCC to any subscriber registered on the NDNC registry, failing which disconnection of connection may be a possibility. Further, UCC made to other subscribers, who have not requested non-reception of the UCC, has to be prefixed with a message informing the subscriber of the UCC and to approach the service provider if it is unwanted. All these services, above mentioned, are provided free of charge to the subscribers under the Regulations. The service provider has an obligation to incorporate the registration of a subscriber into the NDNC registry within 30 days of such a request. If the subscriber after 45 days from the day of his request still receives the UCC, he can file a complaint with his service provider. The complaint is then forwarded to the originating service provider who shall charge the tariff from the telemarketer, which is Rs. 500 for each UCC and Rs. 1,000 for every subsequent UCC. The connection of the telemarketer shall also be disconnected if he has made an UCC even after one UCC has been charged as above. The 2008 amendment to the Regulations provides for a detailed procedure for conducting an inquiry by a committee consisting of three officers, not below the rank of ‘Advisor’ in the TRAI, for violation of certain provisions of the Regulations. Chapter IVA specifically laid down the payment that was needed to be made by service providers violating the Regulations by way of financial disincentive not exceeding Rs. 5,000 for the first non-compliance and Rs, 20,000 for subsequent non-compliance(s). Any decision made by the TRAI in this respect may be appealed to the Telecom Disputes Settlement and Appellate Tribunal. Registration of Other Service Providers (“OSPs”) The New Telecom Policy, 1999 mandates that OSPs, providing services such as call centres, network operation centres, tele-marketing, tele-education, tele-banking, tele-trading, e-commerce, bill payment terminal, vehicle tracking system etc. and using infrastructure provided by various access providers, shall be registered under the OSP category for specific services being offered by them. The registration, which does not require any license fee to be paid, shall be valid for three years unless revoked earlier, and may be extended for a further period of maximum three years after expiry. The registration requirement has been put inbto place to ensure that the OSPs will not infringe upon the jurisdiction of other authorized telecom service providers and shall not provide switched telephony. The OSPs shall take telecom resources only from an authorized service provider. Further, interconnectivity of an international OSP with a domestic OSP is not permitted. However, interconnectivity of two or more domestic OSP centres of the same company or group of companies in permitted.

73

HISTORY AND CERTAIN CORPORATE MATTERS Our Company was incorporated as Cellebrum.Com Private Limited on April 4, 2000 under the Companies Act. Subsequently, our Company was converted into a public limited company and the name of our Company was changed to “Cellebrum.Com Limited” pursuant to a fresh certificate of incorporation granted to our Company on February 14, 2008, by the RoC. Further, the name of our Company was changed from “Cellebrum.Com Limited” to “Cellebrum Technologies Limited” pursuant to a fresh certificate of incorporation granted to our Company on April 22, 2008, by the RoC. Changes in the registered office At the time of incorporation, the registered office of our Company was situated at 13th Floor SpiceCorp Tower, 98, Nehru Place, New Delhi- 110019, India. By a Board resolution dated June 20, 2003 the registered office was shifted to Ground Floor, Modi Tower, 98 Nehru Place, New Delhi-110019. Subsequently, by a Board resolution dated December 9, 2003 the registered office was shifted to “M Square”, Press Enclave Road, Saket, New Delhi- 110 017, India. Further, by a Board resolution dated April 30, 2004 the registered office was shifted to D-4, Okhla Industrial Area, Phase -1, New Delhi110 020, India. Major Events
Year 2003 2004 2005 2006 • • • • • • • • • Events We launched Tambola on mobile phones in partnership with Zee TV and Aaj Tak television channels. We started providing VAS on IVR/GPRS/SMS platform. We established a new development center in Parwanoo (Himachal Pradesh). Launched CRBT. We established another development center in Parwanoo. We introduced products such as BGM and VAS on USSD. Lehman Brothers Opportunity Limited invested USD 15 million in our Company. We launched products such as Roam Privilege, Welcome Roamer, Roam Secure, Roam Tracker, Mobile Radio, Select Caller List, Pay4Me. Launched our services internationally in Jordan.

2007

Pre-IPO Placement Our Company and the Selling Shareholders are considering a Pre-IPO Placement of up to [●] Equity Shares to certain investors, prior to filing of the Red Herring Prospectus with the RoC. If the Pre-IPO Placement is completed, the number of Equity Shares sold pursuant to the Pre-IPO Placement, will be reduced from the Net Issue, subject to minimum Net Issue size of 10% of the post-Issue paid up share capital of our Company. The Pre-IPO Placement is at the discretion of our Company and the Selling Shareholders. Main Objects The main objects of our Company as contained in its Memorandum of Association are: 1. To design, develop, maintain, sell, distribute, market and licence computer software and programmes for educational, commercial and industrial use, service and other applications and to provide business, commercial and productivity solutions and network based information and other services including licensing of computer software and programmes and to provide customer support, training and consultancy services relating to all or any of the foregoing matters and things including relating or incidental thereto. To design, develop, invent improve, carry out research, prepare, own, make use of, manufacture, buy, sell, import, export, maintain, repair, alter, convert, distribute, market, licence, hire, lease and otherwise deal in all kinds of computer software and programmes and

2.

74

for applications of any kind or for any purpose including computers, data processing machines, cards, memory equipments or any other equipments and materials including computer peripherals and accessories of every kind and description useful in connection with computer and electronic hardware and software, programmes, design or other substance or thing used in or with computers and in telecommunications and in data processing, preparation and retrieval products and equipments and telecommunication equipment and products. 3. To develop systems applications, general purposes and all kinds of software including microprogramming for demonstration, sales within and outside the country and to carry on research or assist in the carrying on of research by individuals, research institutes and other institutions and to do all such acts connected therewith. To plan, design, develop, programme and implement: (i) Systems for the use of all kind of data processing equipments and techniques. (ii) Systems for the collection arrangement and analysis of any information. (iii) The application of data processing techniques and equipments. To assist, set up, operate and supervise the operation of the data processing departments of other organizations. To design and develop websites and portals of varied contents for targeting different communities, wherever located for information dissemination, community building and other commercial applications, accessable through personal computers, mobile phones or any other wireline or wireless devices. Deleted. To provide value added services to cellular and fixed line subscribers like SMS, SMS based content services, games, interactive voice response systems for content, entertainment services, voice mail system, alert services. To assemble, distribute, operate, sell, export, import, trade, maintain, run, improve, repair, service, research, develop all type of telecommunication and electronic system, cellular telephone units and equipments and systems, pagers, components, accessories, assemblies, apparatus, spares, hardware, software and services including subscribers and telecommunication equipment and apparatus for line telephony/telegraphy. The provision, operation and maintainance of telepoint service and the sale of telephone handset units and equipment. To render consultancy and technical services in areas of telecommunications, electronics, multimedia etc. To provide Services {whether in relation to Information Technology Enabled Services (ITES) or not} including, without limitation, remote help desk management, remote hardware and/or software management, remote customer interaction, customer relationship management and customer servicing through contact/call centre, Business Process Outsourcing, Back Office Operation and Management Services, Network Management Support, and any other activities related to the business of the Company. To acquire, develop, install, maintain and run all types of services in the telecommunication (including cellular mobile telephone or fixed telephone), electronics and multimedia and also to manufacture, produce, acquire, import, export and deal in any manner in any product relating to telecommunication electronics and multimedia.

4.

5.

6.

7. 8.

9.

10.

11.

12.

13.

Amendments to the Memorandum of Association of our Company Since the incorporation of our Company, the following changes have been made to its Memorandum of Association:

75

Date January 20, 2001 June 27, 2003

Nature of Amendment Increase in authorized share capital from Rs. 1,000,000 to 20,010,000. Change in main objects clause to include insurance selling: “Clause 7) To act as agent for selling insurance products and all allied activities related thereto.” Change in main objects clause by inserting the following new objects: “To provide value added services to Cellular and Fixed Line Subscribers like SMS, SMS based Content Services, Games, Interactive Voice Response Systems for content, entertainment services, Voice Mail System, Alert Services etc. 9. To manufacture, assemble, distribute, operate, sell, export, import, trade, maintain, run, improve, repair, service, research, develop all type of telecommunication and electronic system, cellular telephone units and equipments and systems, pagers, components, accessories, assemblies, apparatus, spares, hardware, software and services including subscribers and telecommunication equipment and apparatus for line telephony/telegraphy. 10. The provision, operation and maintenance of telephonic service and the sale of telephone handset units and equipment. 11. To render consultancy and technical services in areas of telecommunications, electronics, multimedia etc. 12. To provide Services {whether in relation to Information Technology Enabled Services (ITES) or not} including, without limitation, remote help desk management, remote hardware and/or software management, remote customer interaction, customer relationship management and customer servicing through contact/call centre, Business Process Outsourcing, Back Office Operation and Management Services, Network Management Support, and any other activities related to the business of the Company.” Increase in authorized share capital from Rs. 20,010,000 to 12,000,000. Increase in authorized share capital from Rs. 12,000,000 to 320,000,000. Change in main objects clause by deleting the existing Clause III (A) of the Memorandum of Association comprising of the ‘Main Objects’ of the Company by deleting sub-clause 7 from the existing Clause III (A): “To act as agent for selling insurance products and all allied activities related thereto.” Conversion of the Company to a public company and deletion of the word ‘Private’ from the name of the Company. Increase in authorized share capital from Rs. 320,000,000 to 1,000,000,000. Change in main objects clause by inserting the following new object: 13. “To acquire, develop, install, maintain telecommunication (including cellular electronics and multimedia and also to export and deal in any manner in any electronics and multimedia.” and run all types of services in the mobile telephone or fixed telephone), manufacture, produce, acquire, import, product relating to telecommunication 7. 8.

October 17, 2005

January 30, 2006 September 25, 2006

December 13, 2007 May 20, 2008 June 24, 2008

Material Agreements and Arrangements Share and Warrant Subscription Agreement Our Company has entered into a share and warrant subscription agreement dated November 22, 2006 (“Share and Warrant Subscription Agreement”) with Lehman Brothers Opportunity Limited, an affiliate of Lehman Brothers Securities Private Limited, one of the BRLMs, (“LBOL”), Omnia Investments Private Limited (“Omnia”) and MCorp (BVI) Limited (“MCorp”) by which LBOL had subscribed to 2,571,454 Equity Shares and 1,023,607 warrants of our Company each representing one Equity Share for a total consideration of USD 15 million. Our Company, Omnia and MCorp had agreed to indemnify LBOL for all losses, costs and expenses incurred by LBOL as a result of breach of any of the warranties provided by then under the Share and Warrant Subscription Agreement.

76

As per the provisions of the Share and Warrant Subscription Agreement, LBOL was entitled to exercise the warrants issued to it provided the EBIDTA of our Company as at March 31, 2007 was lesser than USD 10 million.* * (As our EBIDTA as at March 31, 2007 was more than USD 10 million there was no conversion of warrants and such warrants lapsed as on March 31, 2007) Investor Rights’ Deed Our Company has entered into an Investor Rights’ Deed dated November 22, 2006 and an Investor Variance Deed dated June 10, 2008 (“Investor Rights’ Deed”) with Lehman Brothers Opportunity Limited (“LBOL”), Omnia Investments Private Limited (“Omnia”), MCorp (BVI) Limited (“MCorp”) which grants LBOL with inter alia (a) right to appoint a director on the board of our Company; (b) rights in relation to the initial public offering of our Company; (c) right of first refusal with respect to issuances of securities by our Company; (d) certain rights in relation to certain corporate actions to be taken by our Company and (e) to amend certain provisions of our articles of association our Company. It was agreed that our board should constitute of not less than two directors and not more than 12 directors and LBOL and would be entitled to appoint one director as long as it holds more than 7.5% of the Equity Share capital of our Company. In addition, certain items are reserved where the presence of the director appointed by LBOL is compulsory for determining quorum of the meeting including affirmative voting rights in board and shareholders’meetings of our Company. It is represented that our Company and all of our wholly owned subsidiaries would distribute a minimum of 70 percent of their profits as dividend to its shareholders. It was further agreed that any future issuance of securities by our Company, such securities should be first offered to LBOL and Omnia (including Mr. Dilip Modi or any other associated company of Omnia which would be holding Equity Shares) on a proportionate basis. In addition, there are certain restrictions on the transfer of Equity Shares under the terms of the agreement and any transfer can be approved only if such transfer is in compliance with the agreement. Further, in terms of the Investor Rights’ Deed, business of our Company would be confined to such businesses as is described in the agreement unless approved by LBOL or the director appointed by LBOL. It is represented that our Company is obligated to make best efforts to carry out an initial public offering within 24 months from the closing date of the agreement. The initial public offering must be of (a) upto 25% of post issued share capital of our Company; (b) at a price per Equity Shares so that the total market capitalisation is more than 150 million USD if the initial public offering is made post 12 months of the closing date. In the event initial public offering is not carried out within 24 months from the closing date of the agreement then LBOL would be entitled to sell all the Equity Shares held by it at a price as determined by the formula prescribed in the agreement. The Investor Rights’ Deed would be terminated at the date of completion of initial public offering or when LBOL or any of the associated companies ceasing to hold 7.5% of the total issued Equity Shares, whichever is earlier. Our Company is also obliged to procure director’s insurance with respect to the director appointed by LBOL for an amount and coverage satisfactory to LBOL. Arrangements with carrier customers We have entered into various agreements with all of our carrier customers, including Airtel, Spice Communications, Reliance, IDEA, Vodafone, BSNLand MTNL. Under the terms of such agreements, as amended from time to time, our Company would be developing, running, maintaining and/or providing content for, value added services, including, BGM, ASR/IVRS services and certain SMS based services, to the carrier customers’ subscribers. The essential terms of the said agreements are as follows:

77

• • • • •

• • •

The carrier customer would pay our Company a certain percentage of the revenue generated by each service provided under these agreements, as per the terms of each agreement; Our Company shall raise invoices based upon the revenue data/statement provided by the carrier customer for a particular month; Most of the agreements are for a tenure of one-three years and can be renewed for further periods on such terms and conditions as mutually agreed in writing; Either party may terminate the agreements by serving a prior written notice of specified number of days; Our Company shall be solely responsible for obtaining, at its own cost, all necessary approvals, sanctions, permissions and licenses for providing the services under the agreements; Our Company shall not sub-contract or appoint an agent to perform its obligations under the agreements without the prior written consent of the carrier customer; Our Company has agreed to comply with the Regulations and Guide for Telemarketers and other regulations and guidelines issued by DoT; The parties would treat in confidence all documents, materials and other information, which it would have obtained regarding any other party during the course of the negotiations and/or preparation and/or implementation of the agreement; and The agreement shall terminate with immediate effect if the license of the carrier customer to provide cellular mobile telephone services is terminated by DoT or if any party ceases or threatens to cease to carry on its business.

Subsidiaries Mobisoc Technology Private Limited Mobisoc Technology Private Limited (“MTPL”) was incorporated on August 12, 2006 with the main object to carry on in India or outside the business of developing, selling and providing software solutions in the field of telecommunication like mobile and internet services and other related areas. The registered office of MTPL is D-60, Street no. C-5, Sainik Farm, New Delhi- 110 062, India. Shareholding Pattern The shareholding pattern of MTPL as of May 31, 2008 was as follows:
Name of Shareholder No. of Shares % of Issued Capital Cellebrum Technologies Limited Spice Corp Limited Mr. Dilip Modi Mr. Atul Prakash Total 1,00,00,000 4,995 4,995 10 1,00,10,000 99.90 0.05 0.05 0.00 100.00

Directors as of June 19, 2008 The board of directors of MTPL comprises Mr. Ashok Kumar Goyal, Mr. S.K. Jain and Mr. Kartar Singh. Financial Performance The audited financial results of MTPL from the date of its incorporation to December 31, 2007 is as follows: (in Rs.millions except for share data)
Income/Sales Profit (Loss) after Tax Equity Share Capital Reserves and surplus (excluding Nine months period ended For the period between August on December 31, 2007 12, 2006 and March 31, 2007 24.49 1.22 (14.03) 0.76 100.10 100.10 (13.27) 0.76

78

revaluation reserves) (1) Earnings (Loss) per share Book value per share
(1) (2)

(1.40) 8.67

0.08 9.97

Net of miscellaneous expenditure not written off. The face value is Rs. 10/- per equity share.

MTPL is an unlisted company and has not made any public issue (including any rights issue to the public) in the preceding three years. It has not become a sick company under the meaning of SICA, is not under winding up and does not have negative net worth. MTPL became one of our Subsidiary by way of allotment of 1,00,00,000 shares constituting 99.90% of the total paid up share capital of MTPL. The allotment of the shares of MTPL in favour of our Company was as follows:
Sl. No. 1. 2. 3. Date of Allotment December 13, 2006 February 27, 2007 March 7, 2007 No. of Shares Alloted 10,00,000 40,00,000 50,00,000

Spice Mobiles VAS Pte. Limited Spice Mobiles VAS Pte. Limited was incorporated on February 28, 2008. It is registered with the Registrar of Companies and Businesses, Singapore under the registration number 200803978D. The registered office of Spice Mobiles VAS Pte. Limited is 1 North Bridge Road, #19-04/05, High Street Centre, Singapore- 179 094. The main object of the company is to design, develop, maintain, sell, distribute, market amd licence computer software and programmes for educational, commercial and industrial use, service and other applications and to provide business, commercial and productivity solutions and network based information and other services including licencing of computer software and programmes and to provide customer support, training and consultancy services relating to all or any of the foregoing matters and things including relating or incidental thereto. Shareholding Pattern The shareholding pattern of Spice Mobiles VAS Pte. Limited as of May 31, 2008 was as follows:
Name of Shareholder No. of Shares % of Issued Capital Cellebrum Technologies Limited Total 100 100 100.00 100.00

Directors as of May 31, 2008 The board of directors of Spice Mobiles VAS Pte. Limited comprises Dr. B.K. Modi, Mr. Hemant Samor and Mr. Vangal Rangarajan Ranganathan. Financial Performance The audited financial results of Spice Mobiles VAS Pte. Limited are not available as it was incorporated only in February 28, 2008. Spice Mobiles VAS Pte. Limited is an unlisted company and has not made any public issue (including any rights issue to the public) since its incorporation. It has not become a sick company under the meaning of SICA, is not under winding up and does not have negative net worth.

79

OUR MANAGEMENT Under the Articles of Association, our Company cannot have lesser than three Directors and more than twelve directors. Our Company currently has six Directors. The following table sets forth details of the Board as of the date of this Draft Red Herring Prospectus.
Name, Father’s Name, Residential Nationality Address, Designation, Occupation, Term, DIN Mr. K.N. Memani Father’s Name: Late Mr. Bhagwan Das Memani Residential Address: 177C, Western Avenue, Lane 7, Sainik Farm, New Delhi- 110062, India Chairman Non-Executive Director Independent Director Professional Liable to retire by rotation DIN: 00020696 Mr. Dilip Modi Father’s Name: Dr. B. K. Modi Residential Address: 36, Amrita Shergill Marg, New Delhi- 110004, India Managing Director Non-Independent Director Industrialist Five years DIN: 00029062 Mr. Vivek Bali Father’s Name: Mr. Jeyoti Saroop Bali Residential Address: C-66, Defence Colony, New Delhi- 100024, India Non-Executive Director Non-Independent Director Service Indian Age Other Directorships

69

• • • • • • • • • • • • • •

DLF Limited; Emami Limited; Great Eastern Energy Corporation Limited; HEG Limited; HT Media Limited; ICICI Venture Funds Management Company Limited; India Glycols Limited; Indo Rama Synthetics (India) Limited; Aegon India Business Services Private Limited; Global Education Management System India Private Limited; HT Consultancy Services Private Limited; Kaleidoscope Entertainment Private Limited; National Engineering Industries Limited; and KNM Advisory Private Limited.

Indian

34

• • • • • • • • •

Hotspots Retails Limited; Spice Communications Limited; Spice Mobiles Limited; MCorpglobal Communications Private Limited; Super Infosys Private Limited; Omnia BPO Services Limited; Indian Televentures Private Limited; MCorp Communications Pte. Limited; and Hindustan Retails Private Limited.

Indian

47

Nil

80

Name, Father’s Name, Residential Nationality Address, Designation, Occupation, Term, DIN Liable to retire by rotation DIN: 02078398 Mr. Hanif M Dahya Father’s Name: Mr. Sadrudin Dahya Residential Address: 5, Beechwood Road, Allendale, New Jersey, U.S.A Non-Executive Director Independent Director Industrialist Liable to retire by rotation DIN: 01068575 Mr. Andreas Vourloumis Father’s Name: Mr. Panagis Vourloumis Residential Address: FLT D 4, Scenic Villa, 2-28, Scenic Villa, Pok Fu Lam, Hong Kong Non-Executive Director Non-Independent Director Nominee of Lehman Brothers Opprtunity Limited Service American

Age

Other Directorships

52

• •

Hot Spot Distribution Private Limited New York Community Bank

Greek

33

Nil

DIN: 01058533 Ms. Divya Modi Father’s Name: Dr. B. K. Modi Residential Address: 36, Amrita Shergill Marg, New Delhi- 110004, India Non-Executive Director Non-Independent Director Industrialist Liable to retire by rotation Indian 24 • • • • Indian Televentures Private Limited; Oasis Cineplex Private Limited; Tuberose Investments Private Limited; Bougainvillea Multiplex & Entertainment Centre Private Limited; and Mcorp (Europe) Limited; and Mcorpglobal Communications Private Limited.

• •

81

Name, Father’s Name, Residential Nationality Address, Designation, Occupation, Term, DIN DIN: 00031073

Age

Other Directorships

Brief profile of our Directors Mr. K.N. Memani, is the Chairman of our Company. He was formerly the Chairman and Country Managing Partner of Ernst & Young, India. He was also a member of Ernst & Young Global Council for a period of 10 years. Mr. Memani specializes in business and corporate advisory, foreign taxation, financial consultancy among other things. He has also assisted several multi-national companies in setting up businesses in India. Mr. Memani is a chartered accountant from the Institute of Chartered Accountants of India and is currently a member of the National Advisory Committee on Accounting Standards. Mr. Memani was also a member of the Expert Committee constituted by the Ministry of the Company Law for the amendment of the Companies Act. Mr. Memani was on the External Audit Committee (“EAC”) of the International Monetary Fund for two consecutive years and was appointed as the Chairman of EAC for the year 1999-2000. He is the only Indian appointed in this committee by International Monetary Fund. Mr. Memani is also on the board of various Indian companies including, HEG Limited, HT Media Limited, Indo Rama Synthetics (India) Limited, DLF Limited and Agon India Business Services Private Limited. Mr. Memani is also associated with various chambers of commerce. He is the immediate Past President of PHD Chamber of Commerce and Industry, former Chairman of American Chamber of Commerce in India, former President of FIEO and Indo American Chamber of Commerce. Currently he is member of managing committees of PHD Chamber of Commerce, Assocham, FICCI, American Chamber of Commerce and Indo American Chamber of Commerce. Mr. Memani is also member of governing bodies of some business schools, social, educational, service and charity organizations. He joined our Board on January 26, 2008. Mr. Dilip Modi, is the Managing Director of our Company. He is an alumnus of the Brunel University, London, UK, having obtained a bachelor’s degree in science (management and technology) with first class honours. He has also done his masters in business administration from the Management School, Imperial College, London, UK, with specialisation in finance. Mr. Modi has experience in the telecom business for over 10 years and had been the President of COAI. He has developed many companies in last few years in the areas of telecom value added services and IT enabled business. He joined our Board on January 26, 2008. Mr. Vivek Bali, is a Non-Executive and Non-Independent Director of our Company and is currently working as a Group President - Global Brand and Marketing with Spice Corp Limited. Mr. Bali holds a masters of business management degree from Faculty of Management Studies, Delhi University. He has 27 years of varied experience in marketing, brand management and new product launch in India and international markets in FMCG and telecom services. Mr. Bali has previously been associated with Bharti Airtel Limited as Senior Vice President (Marketing), heading the Marketing and Consumer business from 2003 to 2007, where he spearheaded the building of the USD 40 Bn Market Cap “Airtel” Brand, the dominant telecom service provider in India. Prior to working at Bharti Airtel Limited, he was the International Business Consultant based out of USA for Bristol Myers Squibb in 2002. Mr, Bali has also worked with The Gillette Company in India, Middle East, Africa and Europe from 1986 to 2001(last designation being as Regional Business Director); with Godfrey Philips, from 1982 to 1985 as Product Executive; and with Wimco Limited from 1981 to 1982 as Management Trainee. He joined our Board on January 26, 2008. Mr. Hanif M Dahya, is a Non-Executive and Independent Director of our Company. Mr. Dahya has an experience of 14 years in the field of securities related business in New York. He started his career in investment banking with E.F. Hutton and Co. Inc., and was Managing Director at L.F. Rothschild and Co. Inc. He also ran the mortgage-backed securities group at UBS Securities Inc. and was a partner at Sandler O’Neill and Partners LLC. Mr. Dahya is currently the Chief Executive Officer of The Y

82

Company LLC, a private investment firm involved in the investment and restructuring of companies in the emerging markets. Mr. Dahya received his masters in business administration degree from Harvard Business School, Cambridge, Massachusetts, USA and obtained his bachelor’s degree in technology from Loughborough University of Technology in the UK. He joined our Board on August 30, 2006. Mr. Andreas Vourloumis, is a Non-Executive and Non-Independent Director of our Company. He is appointed as a nominee of Lehman Brothers Opportunity Limited. He holds a bachelors degree in economics and a masters degree in economic history, both from the London School of Economics and Political Science. He has nine years of experience in the banking industry. Prior to joining Lehman Brothers Opportunity Limited in 2006, he was associated with Deutsche Bank since 1999. He joined our Board November 28, 2006. Ms. Divya Modi, is a Non-Executive and Non-Independent Director of our Company. Ms. Modi obtained her masters of accounting degree from University of Southern California in 2007 and a bachelor of science in economics and business finance (honors) from Brunel University, West London in the year 2003. She has also obtained professional training in certificate in business accounting from the Chartered Institute of Management Accountants, London. She has passed Level-1 of the professional development course in International Council of Shopping Centers and Level I of the Chartered Financial Analyst examination. She has three years of experience in the entertainment and real estate industry. Prior to joining our Company, she was associated with SpiceCorp Limited and Bougainvillea Multiplex & Entertainment Centre Private Limited. She joined our Board on January 26, 2008. Mr. Dilip Modi is the brother of Ms. Divya Modi. None of our other Directors are related to each other. Borrowing powers of the Board Our Board can borrow from time to time, any sum or sums of money for the purposes of our Company, upon such terms and conditions and with or without security, in Indian/foreign currency, as the Board may in its discretion think fit, notwithstanding that the money or monies to be so borrowed by our Company (apart from the temporary loans obtained or to be obtained from time to time from our Company’s bankers in the ordinary course of business) together with the sums already borrowed, provided however that it may not exceed the aggregate of the paid-up capital of our Company and its free reserves that is to say, reserves not set apart for any specific purposes. Remuneration of the Directors Executive Directors The remuneration of the Managing Director, Mr. Dilip Modi was fixed by way of a resolution of the Board dated March 27, 2008. Mr. Dilip Modi is entitled to: (a) Salary, allowances and perquisites of Rs. 20,000,000 p.a.; and (b) Performance linked bonus to be paid annually as determined by the remuneration committee of the Board. The remuneration under clause (a) and (b) as aforesaid taken together shall not exceed 5% of the net profits of the Company computed in the manner prescribed in Section 349 and 350 of the Companies Act for each of the financial year as determined by the remuneration committee of the Board and approved by the Board from time to time. Further, during the tenure of his appointment, in case the Company has no profits or its profits are inadequate, Mr. Dilip Modi shall be entitled to remuneration, in the aggregate, including salary, allowance and perquisites as per the limits laid down in Schedule XIII to the Companies Act. Non-executive and Independent Directors

83

The Non-Executive and Independent Directors are not paid any remuneration, but are paid sitting fees for attending meetings. The sitting fees to which the Directors are entitled was decided by a resolution of the Board dated January 3, 2008 the details of which are as follows.
Designation As a Director present in the meeting As chairman of a committee As a sub-committee member Fees Payable 20,000 20,000 20,000

Shareholding of our Directors The Articles of Association do not require the Directors to hold any qualification Equity Shares in our Company. The following table details the shareholding of the Directors in their personal capacity, as at the date of this Draft Red Herring Prospectus.
Equity Shares owned before the Issue Name of the Director No. of shares % of paid-up capital Mr. Dilip Modi 1,728 Negligible Ms. Divya Modi 28 Negligible Negligible Total 1,756 * Mr. Dilip Modi and Ms. Divya Modi will not participate in the Issue. Equity Shares owned after the Issue* No. of shares % of paid-up capital 1,728 Negligible 28 Negligible Negligible 1,756

Interest of Directors Except as stated in the section “Related Party Transactions” beginning on page 139, and to the extent of compensation and their shareholding in our Company, the Directors do not have any other interest in our business. All the Directors, including Independent Directors, may be deemed to be interested to the extent of fees payable to them for attending meetings of the Board or a committee thereof as well as to the extent of other remuneration and reimbursement of expenses, if any, payable to them under the Articles of Association and the executive Directors are also interested to the extent of remuneration paid to them for services rendered as an officer or employee of our Company. The Directors have no interest in any property acquired by our Company or its Subsidiaries during two years prior to the date of filing of this Draft Red Herring Prospectus except as stated in the section “Related Party Transactions” beginning on page 139. Changes in the Board of Directors during the last three years
Name Mr. Dheeraj Agarwal Mr. Lokesh Gupta Mr. Atul Prakash Mr. R L Ahuja Mr. Ashok Kumar Goyal Mr. Hanif M Dahya Dr. B. K. Modi Mr. Dilip Modi Mr. Umang Das Mr. Andreas Vourloumis Mr. Kartar Singh Mr. R C Vaish Mr. Saket Agarwal Mr. Vivek Bali Mr. Dilip Modi Ms. Divya Modi Mr. K. N. Memani Ms. Michelle Crames Date of Appointment June 20, 2003 April 30, 2004 July 15, 2005 March 7, 2006 August 30, 2006 August 30, 2006 September 30, 2006 September 30, 2006 September 30, 2006 November 28, 2006 September 29, 2007 September 29, 2007 September 29, 2007 January 26, 2008 January 26, 2008 January 26, 2008 January 26, 2008 January 26, 2008 Date of Cessation July, 2005 March 7, 2006 August 30, 2006 January 10, 2007 September 30, 2007 NA September 30, 2007 September 30, 2007 September 30, 2007 NA January 26, 2008 December 5, 2007 January 26, 2008 NA NA NA NA NA Reason Resignation Resignation Resignation Resignation Resignation Appointment Resignation Resignation Resignation Appointment Resignation Resignation Resignation Appointment Appointment Appointment Appointment Appointment

84

Name Mr. Dheeraj Agarwal Ms. Michelle Crames

Date of Appointment June 20, 2003 January 26, 2008

Date of Cessation July, 2005 June 20, 2008

Reason Resignation Resignation

Corporate Governance The provisions of the listing agreements to be entered into with the Stock Exchanges with respect to corporate governance become applicable to our Company at the time of seeking in-principle approval of the Stock Exchanges. Our Company has taken steps to comply with such provisions, including with respect to the appointment of Independent Directors to the Board and the constitution of the following committees of the Board: the Audit Committee, the Remuneration Committee and the Shareholders/Investors Grievance Committee. Our Company undertakes to take all necessary steps to comply with all the requirements of the guidelines on corporate governance and adopt the corporate governance code as per Clause 49 of the Listing Agreement to be entered into with the Stock Exchanges, as would be applicable to our Company upon the listing of its Equity Shares. Our Board has six Directors and the Chairman of our Board is a Non-Executive Director. In compliance with the requirements of Clause 49 of the Listing Agreement, our Company has (i) not less than 50% Non-Executive Directors; and (ii) at least one third Independent Directors on the Board. Audit Committee The Audit Committee was constituted by the Board by their resolution dated March 27, 2008. The Audit Committee has been constituted in accordance with Clause 49 of the Listing Agreement. The constitution of the Audit Committee is as follows.
Name of the Directors Mr. K. N. Memani (Chairman) Mr. Hanif M Dahya Mr. Andreas Vourloumis Executive/Non-executive/Independent Independent Independent Non-executive

The terms of reference of the Audit Committee include: 1. 2. 3. 4. Overseeing the Company’s financial reporting process and disclosure of its financial information; Recommending to the Board the appointment, re-appointment, and replacement of the statutory auditor and the fixation of audit fee; Approval of payments to the statutory auditors for any other services rendered by them; Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to: (a) Matters required to be included in the ‘Director’s Responsibility Statement’ to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act; (b) Changes, if any, in accounting policies and practices and reasons for the same; (c) Major accounting entries involving estimates based on the exercise of judgment by management; (d) Significant adjustments made in the financial statements arising out of audit findings; (e) Compliance with listing and other legal requirements relating to financial statements; (f) Disclosure of any related party transactions; and (g) Qualifications in the draft audit report. Reviewing, with the management, the quarterly, half-yearly and annual financial statements before submission to the Board for approval; Reviewing, with the management, the performance of statutory and internal auditors, and adequacy of the internal control systems; Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit; Discussion with internal auditors any significant findings and follow up there on;

5. 6. 7.

8.

85

9.

10. 11. 12. 13.

Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board; Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern; To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors; Reviewing the functioning of the whistle blower mechanism, in case the same is existing; and Review of management discussion and analysis of financial condition and results of operations, statements of significant related party transactions submitted by management, management letters/letters of internal control weaknesses issued by the statutory auditors, internal audit reports relating to internal control weaknesses, and the appointment, removal and terms of remuneration of the chief internal auditor.

Remuneration Committee The Remuneration Committee was constituted by the Board by their resolution dated March 27, 2008. The Remuneration Committee has been constituted in accordance with Clause 49 of the Listing Agreement. The constitution of the Remuneration Committee is as follows.
Name of the Directors Mr. Hanif M Dahya (Chairman) Mr. K. N. Memani Mr. Andreas Vourloumis Executive/Non-executive/Independent Independent Independent Non-executive

The terms of reference of the Remuneration Committee include: 1. 2. Framing suitable policies and systems to ensure that there is no violation, by an employee of any applicable laws in India or overseas; Determine on behalf of the Board and the shareholders the Company’s policy on specific remuneration packages for executive directors including pension rights and any compensation payment; Perform such functions as are required to be performed by the Remuneration Committee under the ESOP Guidelines, in particular, those stated in Clause 5 of the ESOP Guidelines; and Such other matters as may from time to time be required by any statutory, contractual or other regulatory requirements to be attended to by such committee.

3.

4.

Shareholders/Investors Grievance Committee The Shareholders/Investors Grievance Committee was constituted by the Board by way of their resolution dated March 27, 2008. The Shareholders and Investors Grievance Committee is responsible for the redressal of investor grievances. The Shareholders/Investors Grievance Committee has been constituted in accordance with Clause 49 of the Listing Agreement. The constitution of the Shareholders/Investors Grievance Committee is as follows:
Name of the Directors Mr. Hanif M Dahya (Chairman) Ms. Divya Modi Mr. Vivek Bali Executive/Non-executive/Independent Independent Non-executive Non-executive

The terms of reference of the Shareholders/Investors Grievance Committee are as follows.

86

1. 2. 3.

Transfer/transmission of shares issued by our Company, issue of duplicate share certificates and certificates after split/ onsolidation/replacement/rematerialisation; Investor relations and redressal of shareholders grievances in general and in particular relating to non receipt of dividends, interest, non- receipt of balance sheet etc.; and Such other matters as may from time to time be required by any statutory, contractual or other regulatory requirements to be attended to by such committee.

Other Committees In addition to the above, the Board has constituted an IPO Committee at the Board meeting held on January 26, 2008. The constitution of the IPO Committee is as follows. 1. 2. 3. 4. Mr. Dilip Modi (Chairman) Mr. Andreas Vourloumis Mr. Hanif M Dahya Mr. Ashok Agarwal

The IPO Committee was constituted for the following purposes: 1. to take all decisions relating to the Issue, including the appointment of various intermediaries and other advisors for the Issue such as inter alia, the Registrar to the Issue, escrow collection banks, bankers to the Issue, brokers, sub-brokers, Syndicate Members, decide on the fees and other terms and conditions of such intermediaries and advisors; to prepare and finalise, along with the BRLMs, the Draft Red Herring Prospectus, Red Herring Prospectus and Prospectus, do all requisite filings with SEBI, the Stock Exchanges, the FIPB, RBI, if required and any other concerned authority; to execute all documents and contracts for the Issue including the memorandum of understanding with the BRLMs, Escrow Agreement, Syndicate Agreement, memorandum of understanding with the Registrar to the Issue and the Underwriting Agreement; to determine and finalise the Price Band, approve the basis for allocation and confirm allocation of the Equity Shares to various categories of persons as disclosed in the Draft Red Herring Prospectus, the Red Herring Prospectus and the Prospectus, in consultation with the BRLMs and do all such acts and things as may be necessary and expedient for, and incidental and ancillary to the Issue; and modify, reapply, redo, make necessary changes, approach and do all such acts and deeds that are necessary to do, to modify the Articles Of Association subject to the approval of the shareholders of our Company, the Draft Red Herring Prospectus, Red Herring Prospectus and the Prospectus, all approvals thereunder and as required under applicable law, and to approach the SEBI, Stock Exchanges and/or any other statutory authority to resubmit any such modified documentation in this regard.

2.

3.

4.

5.

87

6.

Management Organisational Structure

MANAGING DIRECTOR

CHIEF EXECUTIVE OFFICER

COMPANY SECRETARY & HEAD LEGAL

CHIEF FINANCIAL OFFICER

HEAD MARKETING & PRODUCT INNOVATION

HEAD CONTENT & ALLIANCES

HEAD HUMAN RESOURCE & ADMINISTRATION

HEAD SALES

HEAD TECHNOLOGY & STRATEGY

88

Key Managerial Personnel The key managerial personnel are of the ranks of General Manager and above. All the key managerial personnel are permanent employees of our Company or our Subsidiaries. Key Managerial Personnel who are employees of our Company Mr.Saket Agarwal, 37 years, is the Chief Executive Officer of our Company. He joined our Company in 2004 and has 15 years of experience in the field of telecom – global system for mobile communication, operation support system/business support system, software development, relational database management syatem, enterprise resource planning and research and development. He holds a masters (honours) degree in Physics and bachelors (honours) in elecrtical and electronics engineering from Birla Institute of Technology and Science, Pilani. He has previously worked with Spice Communications Limited as an Assistant General Manager and Crompton Greaves Limited as Senior Engineer. The gross compensation paid to him during the nine months period ended December 31, 2007 was Rs. 4.65 million. Mr. Kartar Singh, 35 years, is the Chief Financial Officer of our Company. He joined our Company in 2004 and has 12 years of experience in finance, accounts, taxation, legal and audit. He is a fellow member of Institute of Chartered Accountants of India and Associate Member of Institute of Cost and Works Accountants of India. He has previously worked with Spice Communications Limited as Senior Manager (Finance) and with Mcorp Global Private Limited as internal auditor. He is currently responsible for handling finance, accounts, taxation and legal in our Company. The gross compensation paid to him during the nine months period ended December 31, 2007 was Rs. 4.65 million, which includes incentive of Rs. 1.5 million. Dr. Abhinav Mathur, 36 years, is the Chief Technical Officer of our Company and is the overall in charge of technology strategy of our Company. He has over 15 years of experience in the telecom industry. He holds a bachelors of engineering degree in computer science from NSIT, Delhi University, a PhD in electrical engineering from Indian Institute of Technology, Delhi and post graduate diploma in management from Indian Institute of Management, Lucknow, with specialization in strategy, finance and marketing. He has previously worked with the Indian subsidary of Lotus Interworks Inc and CDOT, which is the research and development arm of the DoT. He has held various leadership roles for more than nine years. He is currently responsible for new generation technology innovation in our Company. He joined our Company on February 8, 2008. Since he joined our Company in February 8, 2008 no compensation was paid to him during the nine months period ended December 31, 2007. Mr. Ashok Agarwal, 50 years, is the Vice President (Legal) and the Company Secretary of our Company. Mr. Agarwal is a fellow member of the Institute of Company Secretaries of India and is a law graduate. He has around 22 years of varied experience in the fields of secretarial and legal functions with various companies in the telecom and software industries, including Spice Communications Limited, Samsung SDS Infotech Private Limited, Modi Telstra Limited and Modi Olivetti Limited. Prior to joining our Company, he was the General Manager (Legal) in Spice Communications Limited. He joined our Company on May 20, 2008. Since he joined our Company in May 2008 no compensation was paid to him during the nine months period ended December 31, 2007. Ms. Monika Aggarwal, 34 years, is the Assistant Vice President (Technical) of our Company. She joined our Company in 2004 and has 11 years of experience in the field of telecom – global system for mobile communication, infrastructure and solutions, software development and relational database management syatem and research and development. She holds a bachelor’s degree in engineering from C.R. State College of Engineering, Murthal Chottu State College of Engineering, Sonepat. She has previously worked with Spice Communications Limited as a Manager and Senior Faculty at Aptech Computers Limited. She is currently responsible for technology and product innovation in our Company. The gross compensation paid to her during the nine months period ended December 31, 2007 was Rs. 2.40 million. Mr. Shehzad Azad, 35 years, is the Vice President – Sales and Marketing of our Company. He joined our Company in August, 2007 and and has 14 years of experience in business development, strategic

89

planning, alliance development, sales and marketing in the software and telecom industry. He holds a master’s degree in management from Indian Institute of Foreign Trade, Delhi and a bachelor’s degree in engineering from Jamia Millia Islamia University, Delhi. His last assignment was with Alacre, Inc as Vice President – Sales and Marketing. He is currently responsible for sales and operations of the social networking business of our Company. The gross compensation paid to him during the nine months period ended December 31, 2007 was Rs. 1.07 million. Mr. Lokesh Gupta, 36 years, is the Assistant Vice President (Sales and Marketing) of our Company. He carries the overall responsibility of the enterprise and roaming business of our Company. He joined our Company in 2004 and has over 13 years of experience in the telecom industry. He holds a bachelor’s of technology degree in computer science from Punjab University, Patiala. Prior to joining our Company, he worked with telecom divisions of Mercury Corporation & Punjab Communication Limited in various leadership roles for more than nine years. The gross compensation paid to him during the nine months period ended December 31, 2007 was Rs. 2.25 million. Mr. Jatinder Verma, 36 years, is the Program Director (Delivery) of our Company. He joined our Company in May, 2007 and has about 12 years of experience in the field of telecom - GSM infrastructure, network/systems engineering, it security, telecom billing operations and office automation. He holds a master’s degree in management sciences from the University of Pune and a diploma in business management from Dr. Babasaheb Ambedkar Marathwada University, Aurangabad. He has previously worked as a Group Leader with Unicorp Overseas Limited and as Deputy General Manager – Information Technology in Spice Communications Limited and as a Principal ArchitectTelecom at Wipro Limited. He is currently responsible for project implementation and delivery in our Company. The gross compensation paid to him during the nine months period ended December 31, 2007 was Rs. 1.57 million. Mr. Pankaj Sharma, 41 years, is the Assistant Vice President – Product Innovation and Management of our Company. He joined our Company in 2008 and has 19 years of experience in the field of marketing management, brand management, new product development and managing revenues, sales and marketing. He holds masters degrees in technology and business administration from Kurukshetra University. He has previously worked with Bharti Telesoft Limited as a Product Director. He is currently responsible for managing our key customer accounts. Since he joined our Company in February 21, 2008 no compensation was paid to him during the nine months period ended December 31, 2007. Mr. Rajib Roy, 36 years, is the General Manager (Human Resource and Administration) of our Company. He joined our Company in October 2007 and has 10 years of experience in the field of human resource management. He holds a masters degree in personnel management from Symbiosis Institute of Business Management, Pune. He has previously worked with Pricewaterhouse Coopers, Ernst &Young and Microsoft Corporation in the capacity of a team manager, human resources. He is currently responsible for human resource management and administration in our Company. The gross compensation paid to him during the nine months period ended December 31, 2007 was Rs. 0.58 million. Mr. Samit Tarafdar, 39 years, is the General Manager (Finance) of our Company. He joined our Company in February, 2007 and has 15 years of experience in the field of accounts, revenue assurance and billing, collections & recovery, credit management, fraud management and provisioning. He holds a bachelor’s degree in commerce from Punjab University. He has previously worked with Bharti Airtel Limited as Subscriber Management Group Head for Haryana Circle. He is currently responsible for revenue assurance, collections, billing and quality assurance in our Company. The gross compensation paid to him during the nine months period ended December 31, 2007 was Rs. 1.57 million. Key Managerial Personnel who are employees of our Subsidiaries: MTPL, is in the business of research in mobile platform development, among other things, Mr. Lokesh Gupta is one of the key personnel in the field of mobile platform development, therefore has been included as one of the key managerial personnel of our Company, whose details are mentioned below: Mr. Lokesh Gupta, 34 years, is the Chief Executive Officer of MTPL. He has previously worked with Spice Communications Limited. He joined MTPL on August 12, 2006 and has over 10 years of

90

management experience in diversified domains. He holds his management diploma from Indian Institute of Management, Ahmedabad and bachelor’s degree in computers from Indian Institute of Technology, Delhi. Mr. Gupta started his management career with ICICI Bank Limited before founding Hexys, an IT services company in 2000. The gross compensation paid to him during the nine months period ended December 31, 2007 was Rs. 3.75 million. Shareholding of the key managerial personnel Except as mentioned below, none of our key managerial personnel hold any Equity Shares.
S. No. Key managerial personnel No. of Equity Shares Held 273,928 117,164 43,200 90,083 7,200 84,847 11,520 11,520 9,737 7,200 656,399 Pre-Issue Percentage of Shareholding 0.64 0.27 0.10 0.21 0.02 0.20 0.03 0.03 0.02 0.02 1.54

1 2 3 4 5 6 7 8 9 10

Mr. Saket Agarwal Mr. Kartar Singh Dr. Abhinav Mathur Ms. Monika Aggarwal Mr. Shehzad Azad Mr. Lokesh Gupta Mr. Jatinder Verma Mr. Pankaj Sharma Mr. Rajib Roy Mr. Samit Tarafdar Total

Bonus or profit sharing plan for the key managerial personnel There is no bonus or profit sharing plan for key managerial personnel of our Company. Interest of Key Managerial Personnel The key managerial personnel of our Company do not have any interest in our Company and/or our Subsidiaries other than the extent of any remuneration or benefits to which the key managerial personnel are entitled as per their terms of appointment and company policy,reimbursement of expenses incurred by them during the ordinary course of business and to the extent of the Equity Shares held by them. Changes in the Key Managerial Personnel The following are the changes in the key managerial personnel of our Company and/or our Subsidiaries in the last three years preceding the date of filing this Draft Red Herring Prospectus otherwise than by way of retirement in the normal course.
Name Ms. Monika Bajpai Date of Appointment May 1, 2007 Date of Cessation October 31, 2007 Reason Transfer to Global Mobile Infrastructure Private Limited Resignation Transfer to Spice Communications Limited Resignation Resignation Appointment Appointment Appointment Resignation Appointment Appointment Appointment

Mr. Vinod Shingri Mr. Tapas Acharya

March 14, 2003 April 11, 2006

March 31, 2007 April 30, 2007

Mr. Savinder Sarna Mr. Dheeraj Aggarwal Mr. Kartikeya Shukla Mr. Rajib Roy Mr. Samit Tarafdar Mr. Sudhir Kathuria Mr. Jatinder Verma Dr. Abhinav Mathur Mr. Lokesh Gupta*

May 1, 2005 February 1, 2004 April 16, 2007 October 8, 2007 February 7, 2007 July 16, 2007 May 15, 2007 February 8, 2008 August 12, 2006

March 31, 2007 July 15, 2005 NA NA NA May 23, 2008 NA NA NA

91

Name Mr. Newton Bubber Mr. Shehzad Azad Mr. Pankaj Sharma Mr. Ashok Agarwal Mr. Kartikeya Shukla * Mr. Lokesh Gupta joined MTPL

Date of Appointment July 19, 2006 August 20, 2007 February 21, 2008 May 20, 2008 April 16, 2007

Date of Cessation February 29, 2008 NA NA NA May 31, 2008

Reason Resignation Appointment Appointment Appointment Resignation

Payment of Benefit to Officers of our Company Except the normal remuneration rendered to Directors, officers or employees during the course of their employment and statutory benefits upon termination of their employment in our Company or superannuation, no officer of our Company is entitled to any benefit upon termination of such officer’s employment in our Company or superannuation. However, our Company has a policy of perfomance linked bonus wherein employees are paid variable amount based on their performance at their respective functions and levels. In addition, our Company also has an incentive policy by virtue of which our employees are entitled to various incentives in the event they achieve certain pre-set targets. Loans taken by Directors/Key Managerial Personnel Except Mr. Rajib Roy, General Manager (Human Resource and Administration), one of our key managerial personnel, who has taken a loan of Rs. 2 million from our Company at an interest rate of 10%, none of our Directors and key managerial personnel have taken any loan from our Company:

92

OUR PROMOTERS AND PROMOTER GROUP Promoters Mr. Dilip Modi, Omnia Investments Private Limited and Indian Televentures Private Limited are the promoters of our Company: The details of our Promoters are as follows: 1. Mr. Dilip Modi

Identification Particulars Passport No. Voter ID No. Driving License No.

Details F-7680545 Not available 9209087

For more details of Mr. Dilip Modi, see the section “Our Management” beginning on page 80. 2. Omnia Investments Private Limited

Omnia Investments Private Limited was incorporated on November 27, 1980 as T.R. Metal Industries Private Limited under registration number 55-11082 with the RoC. Its registered office is situated at D-4, Okhla Industrial Area, Phase I, New Delhi- 110 020, India. The name of the company was changed to Spicesoft Solutions Private Limited on April 21, 2003 and thereafter to its present name, Omnia Investments Private Limited on January 20, 2005. Promoter: Indian Televentures Private Limited CIN: U27203DN1980PTC011082 The main objects of the company are investment and acquisition of shares, debentures, bonds, securities etc issued or guaranteed by any company or body corporate, to carry on the business of technical, financial and management consultants and advisors, and to manufacture, assemble, import, undertake service contract and other wise deal in all kinds of computers, data processing machines, IT equipments, office automation equipments etc. Directors as on May 31, 2008 The board of directors of Omnia Investments Private Limited as on May 31, 2008 comprises Dr. B.K. Modi, Mr. H. N. Nanani and Mr. Ashok Kumar Goyal. There have been no changes in the management of Omnia Investments Private Limited in the last three years preceding the date of filing this Draft Red Herring Prospectus. Shareholding pattern

93

The shareholding pattern of Omnia Investments Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. Names of Shareholder Indian Televentures Private Limited Mcorp Communications Pte Limited Total No. of Shares held 97,821 65,214 163,035 % of Shareholding 60.00 40.00 100.00

There have been no changes in the capital structure of Omnia Investments Private Limited in the last six months preceding the date of filing this Draft Red Herring Prospectus. Financial Performance The audited financial results of Omnia Investments Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.) 16.30 679.57 410.50 394.29 2,418.42 4,268.18 Year ended March 31, 2006 9.78 (1.59) 0.22 (1.33) (13.60) 83.52 (0.26) (2.63) 97.04 Year ended March 31, 2005 9.78 (0.26)

Omnia Investments Private Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. 3. Indian Televentures Private Limited

Indian Televentures Private Limited was incorporated on June 18, 2001 under registration number 55111304 with the RoC. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The main object of the company is to develop, install, maintain and run all type of services in the telecommunication sector (including cellular mobile telephone or fixed telephone), IT, electronics and multi-media, and also to manufacture, produce, import, export, and deal in any manner in any product relating to telecommunication, electronics, IT and multimedia. Promoter: Mr. Dilip Modi CIN: U64202DL2001PTC111304 Directors as on May 31, 2008 The board of directors of Indian Televentures Private Limited as at May 31, 2008 comprises Mr. Dilip Modi, Ms. Divya Modi, Mr. Ravinder Lal Ahuja and Mr. Atul Prakash. There have been no changes in the management of Indian Televentures Private Limited in the last three years preceding the date of filing this Draft Red Herring Prospectus. Shareholding pattern

94

The shareholding pattern of Indian Televentures Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. Names of Shareholder Mr. Dilip Modi Mrs. Veena Modi Total No. of Shares held 1,020,000 980,000 2,000,000 % of Shareholding Shareholding 51.00 49.00 100.00

There have been no changes in the capital structure of Indian Televentures Private Limited in the last six months preceding the date of filing this Draft Red Herring Prospectus. Financial Performance The audited financial results of Indian Televentures Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended June 30, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share Book Value per equity share 20.0 (0.34) 0.02 (0.27) (0.14) 9.83 Period ended June 30, 2006 (15 months) 10.00 (0.07) 0.06 0.01 0.01 9.93 Year ended March 31, 2005 0.10 (0.08) 0.05 0.04 3.48 1.93

Indian Televentures Private Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Interest in the property of our Company The Promoters do not have any interest in any property acquired by our Company during the two years preceding the date of this Draft Red Herring Prospectus or proposed to be acquired by our Company except as disclosed in the section “Related Party Transactions” beginning on page 139. Payment of benefits to our Promoters during the last two years Except as stated in the section “Related Party Transactions” beginning on page 139, there has been no payment of benefits to our Promoters during the last two years prior to the date of filing of this Draft Red Herring Prospectus. Related Party Transactions For details of the related party transactions, see the section “Related Party Transactions” beginning on page 139. Undertakings We undertake that the details of the PANs, bank account numbers and passport numbers (for individuals), company registration number and the addresses of the registrar of companies where our Promoter companies are registered will be submitted to the Stock Exchanges at the time of filing this Draft Red Herring Prospectus with the Stock Exchanges. Further, our Promoters and Promoter Group, including relatives of the Promoters, have confirmed that they have not been detained as willful defaulters by the RBI or any other governmental authority except for those disclosed in the sections “Outstanding Litigation and Material Developments” and “Risk Factors” beginning on pages 300 and x, respectively.

95

There are no violations of securities laws committed by them in the past or are pending against them and none of our Promoters or persons in control of bodies corporate forming part of our Promoter Group have been restricted from accessing the capital markets for any reasons, by SEBI or any other authorities, except for those disclosed in the section “Outstanding Litigation and Material Developments” and “Risk Factors” beginning on pages 300 and x, respectively. Common Pursuits Our Promoters do not have an interest in any venture that is involved in any activities similar to those conducted by our Company, our Subsidiaries or any member of our Promoter Group. Promoter Group In addition to the Promoters named above, the following natural persons, companies and entities form part of our Promoter Group: The natural persons who are part of the Promoter Group (being immediate relatives of our Promoters), apart from the individual Promoters mentioned above, are as follows:
Promoter Mr. Dilip Modi Name Dr. B.K. Modi Mrs. Veena Modi Mrs. Sonal Modi Baby Siya Modi Mrs. Ritika Rungta Ms. Divya Modi Mr. Rakesh Himatsingka Mrs. Anita Himatsingka Mr. Shaurya Veer Himatsingka Ms. Maalika Himatsingka Relationship with Mr. Dilip Modi Father Mother Wife Daughter Sister Sister Father-in-law Mother-in-law Brother-in-law Sister-in-law

Promoter Group Companies and Entities The entities which are part of the Promoter Group have been provided below: Listed Public Companies: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Fund Flow Investment & Trading Company Limited; Goneril Investment & Trading Company Limited; IO System Limited; Jyotsana Investment Company Limited; Kallol Investments Limited; Khatu Investment & Trading Company Limited; New Look Investment (Bengal) Limited; Spice Communications Limited; Spice Mobiles Limited; and Twenty First Century Capitals Limited;

Unlisted Public Companies: 1. 2. 3. 4. 5. 6. 7. 8. 9. APL Holdings & Investments Limited; APL Investments Limited; Assam Plywood Limited; Budge Budge Carbon Limited; Hotspots Retails Limited; Modikem Limited; Omnia BPO Services Limited Plus Paper Foodpac Limited; and Spice Corp Limited

96

Private Companies: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. Ace Airways Private Limited; Burlington Investments Private Limited; Duro International Rubber Private Limited; G. M. Modi Hospitals Corporation Private Limited; Harjas Logic Systems Private Limited; Hindustan Retail Private Limited; Mcorpglobal Communications Private Limited; Mcorp Communications Pte Limited; Mcorp Investments Pte. Limited; Mudaliar & Sons Hotels Private Limited; Nik Travels Private Limited; Oasis Cineplex Private Limited; Shenzhen SIBASI Catering Management Company Limited; Super Infosys Private Limited; Teesho Rubbers Private Limited; Tuberose Investments Private Limited; and VCorp Mercantile Private Limited

Listed companies forming part of our Promoter Group companies: Fund Flow Investment & Trading Company Limited Fund Flow Investment & Trading Company Limited was incorporated on November 25, 1982 under registration number 21-35482 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to invest and trade in shares, stocks, debentures and other securities issued by any government, public bodies, local bodies and companies. Directors as of May 31, 2008 The board of directors of Fund Flow Investment & Trading Company Limited as at May 31, 2008 comprises Mr. Jyotish Chandra Goswami, Mr. Arun Das and Mrs. Bimla Bajaj. Shareholding as of May 31, 2008 The shareholding pattern of Fund Flow Investment & Trading Company Limited as at May 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding 18.83 14.58 13.24 12.50 6.25 6.25 5.96 4.17 4.17 4.17 3.13 2.08 1.04 3.64 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Rakesh Kumar Shaurya Veer (HUF) Tower Investment & Trading Company Limited Kallol Investments Limited Goneril Investment & Trading Company Limited Ms. Maalika Himatsingka Ms. Sonal Himatsingka Assam Plywood Limited Mr. Shaurya Veer Himatsingka Subarna Plantation and Trading Company Limited Jyotsana Investment Company Limited Mr. Vivek Himatsingka Rakesh Kumar Himatsingka (HUF) Mrs. Anita Himatsingka Remaining 64 shareholders Total

45,200 35,000 31,775 30,000 15,000 15,000 14,300 10,000 10,000 10,000 7,500 5,000 2,500 8,725 240,000

97

Financial Performance The audited financial results of Fund Flow Investment & Trading Company Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (face value Rs. 10) Book Value per equity share 2.40 1.18 1.41 0.02 0.06 14.92 Year ended March 31, 2006 2.40 1.33 3.17 0.25 1.02 15.52 Year ended March 31, 2005 2.40 1.08 10.49 1.07 4.45 14.50

Disclosure on Capital Issue The company came out with a public issue of 200,000 equity shares of Rs. 10 each for cash at a price of Rs. 10 each pursuant to a statement in lieu of prospectus dated November 30, 1982. The equity shares of the company are listed on the Calcutta Stock Exchange Association Limited. The equity shares of the company are not actively traded since last five years and accordingly no market price may be provided for the shares of the company. Promise vs. Performance The proceeds of the issue were applied for the objects of the issue as disclosed in the prospectus for the said issue i.e. raising long term capital. There were no deviation from the objects and the manner in which the issue proceeds were utilized. No projections were made since the issue was to meet the long term requirement of funds. Details of Public/Rights Issue in the Last Three Years The company has not made any public issue or rights issue of equity shares of the company during the last three years. Mechanism for redressal of investor grievance For redressal of investor grievances, the company has nominated its Director as the compliance officer. The compliance officer is responsible for attending to investor queries / complaints etc to present the same before the shareholder grievance committee on a regular basis for their review and comments/suggestions. Generally, investor queries are attended in three days and the complaints are resolved with in the next two days. As of March 31, 2008, there were no investor complaints pending against the company. Goneril Investment & Trading Company Limited Goneril Investment & Trading Company Limited was incorporated on November 29, 1982 under registration number 21-35494 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to trade in shares, stocks, debentures and other securities issued by any government, public bodies, local bodies and companies. Directors as of May 31, 2008 The board of directors of Goneril Investment & Trading Company Limited as at May 31, 2008 comprises Mr. Jyotish Chandra Goswami, Mr. Sujit Kumar Das and Mr. Arun Das. Shareholding as of May 31, 2008

98

The shareholding pattern of Goneril Investment & Trading Company Limited as at May 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding 26.58 12.50 8.33 8.33 6.25 6.25 6.25 5.38 4.21 3.13 2.08 2.08 8.62 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

Mr. Shaurya Veer Himatsingka Ms. Maalika Himatsingka New Look Investment (Bengal) Limited Ms. Sonal Himatsingka Subarna Plantation and Trading Company Limited Mr. Vivek Himatsingka Kallol Investments Limited Rakesh Kumar Shaurya Veer (HUF) Fund Flow Investments & Trading Company Limited Mr. Dipak Kumar Gaurav Kumar Mr. Prabhudayal Himatsingka Mr. Bhagwati Prasad Himatsingka Remaining 33 shareholders Total

63,800 30,000 20,000 20,000 15,000 15,000 15,000 12,900 10,100 7,500 5,000 5,000 20,700 240,000

Financial Performance The audited financial results of Goneril Investment & Trading Company Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.) 2.40 3.23 2.38 0.15 0.63 23.45 Year ended March 31, 2006 2.40 3.08 2.57 0.60 2.51 22.82 Year ended March 31, 2005 2.40 2.47 2.67 0.61 2.53 20.31

Disclosure on Capital Issue The company came out with a public issue of 200,000 equity shares of Rs. 10 each for cash at a price of Rs. 10 each pursuant to a statement in lieu of prospectus dated December 8, 1982. The equity shares of the company are listed on at Calcutta Stock Exchange Association Limited. The equity shares of the company are not actively traded since last five years and accordingly no market price may be provided for the shares of the company. Promise vs. Performance The proceeds of the issue were applied for the objects of the issue as disclosed in the prospectus for the said issue i.e. raising long-term capital. There were no deviation from the objects and the manner in which the issue proceeds were utilized. No projections were required and hence not made. Details of Public/Rights Issue in the Last Three Years The company has not made any public issue or rights issue of its equity shares during the last three years. Mechanism for redressal of investor grievance For redressal of investor grievances, the company has nominated its director as the compliance officer. The compliance officer is responsible for attending to investor querries/complaints etc to present the same before the shareholder grievance committee on a regular basis for their review and

99

comments/suggestions. Generally, investor querries are attended in three days and the complaints are resolved with in next two days. As of March 31, 2008 there were no investor complaints pending against the company. IO System Limited IO System Limited was incorporated on May 25, 1987 as GBC Hi-Tech (India) Limited under registration number 20-08764 and is registered with the Registrar of Companies, Uttar Pradesh. The name of the company was changed from GBC Hi-Tech (India) Limited to Modi GBC Limited on July 9, 1992 and was further changed to GBC Modicorp Limited on July 13, 2000 and to Spice Systems Limited on January 1, 2003. Further, the name of the company was changed from Spice Systems Limited to the present name IO System Limited on August 14, 2007. Its registered office is situated at E-53, Sector-3, Noida- 201 301, Uttar Pradesh, India. The main object of the company is to carry on business as manufacturers, distributors, importers, exporters, buyers, sellers, agents, stockists of and to market, transport, supply assemble, alter, service, repair, store, and deal in printing machinery and equipment and their systems, components, including spiral punching and/or binding machines, laminating machines, lettering machines and consumables items used therein. Directors as of May 31, 2008 The board of directors of IO System Limited as at May 31, 2008 is comprised of Mr. Arun Seth (Chairman), Mr. Satish Kumar Gupta and Mr. Ramesh Chandra Agarwal. Shareholding as of March 31, 2008 The shareholding pattern of IO System Limited as at March 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding

1. 2.

1. 2.

(A) Shareholding of Promoter and Promoter Group (1) Indian Individuals / Hindu Undivided Family Bodies Corporate (2) Foreign Total shareholding of Promoter and Promoter Group (A) (B) Public Shareholding (1) Institutions (2) Non-Institutions Bodies Corporate Individuals Individual shareholders holding nominal share capital up to Rs. 1 lakh Any Others (Specify) NRIs/OCBs Sub Total Total Public shareholding (B) Total (A) + (B)

29,600 16,270,400 16,300,000

0.18 96.27 96.45

19,800 566,100 14,100 600,000 600,000 16,900,000

0.12 3.35 0.08 3.55 3.55 100.00

Financial Performance The audited financial results of IO System Limited for the past three years are as follows:

(in Rs. million except for share data)
Year ended March 31, 2007 Period ended March 31, 2006 Year ended December 31, 2004

100

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

169.00 (169.02) 6.05 (7.90) (0.47) (0.00)

(15 months) 169.00 (161.12) 20.02 (13.50) (0.80) 0.47

169.00 (147.62) 58.14 (11.00) (0.65) 1.27

Disclosure on Capital Issue The company’s equity shares are listed on the BSE, Delhi Stock Exchange and Uttar Pradesh Stock Exchange. Out of the total paid up equity share capital of Rs.169 million, three million equity shares of Rs.10 each amounting to Rs. 30 million are listed with the above mentioned stock exchanges and continue to remain listed and there has been no suspension/discontinuance of these equity shares in the past. The balance 13,900,000 shares of Rs.10 each amounting to Rs.139 million, allotted on preferential basis on September 28, 1999 to the two corporate promoters of the company, continue to remain unlisted for which the company was served with show cause notices, last received dated July 10, 2003 from the Delhi Stock Exchange Association Limited.

The company has applied to the BSE, Delhi Stock Exchange and Uttar Pradesh Stock Exchange on February 20, 2008 for delisting of its shares in accordance with the Securities and Exchange Board of India (Delisting of Securities) Guidelines, 2003. The delisting of the shares of the company from the BSE, Delhi Stock Exchange and Uttar Pradesh Stock Exchange has been approved by a special resolution of the shareholders of the company in an extra-ordinary general meeting held on February, 8 2008. The said applications of the company for delisting of its shares are pending. The company has negative net worth of Rs. 17,680. Information about the Share Price of IO System Limited The existing equity shares of IO System Limited are listed at the Uttar Pradesh Stock Exchange, the BSE and the Delhi Stock Exchange. There has been no trading of the equity shares in the last six months at Uttar Pradesh Stock Exchange and Delhi Stock Exchange. The monthly high and low of the market price of the shares on BSE for the last six months are as follows:
High May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 nil 25.50 29.20 nil 29.75 31.55 Low nil 25.00 26.00 nil 29.75 30.35

Details of Public/Rights Issue in the Last Three Years The company has not made any public issue or rights issue of equity shares during the last three years. Mechanism for redressal of investor grievance For redressal of investor grievances, the company has nominated its company secretary as the compliance officer, who is responsible for attending to investor queries/complaints etc., to present the same before shareholders grievance committee on a quarterly basis for their review and comment/suggestions. The normal time taken to process the share transfer/transmission is within 15 days and for redressal of grievances/ complaints received from the shareholders is within 30 days.

101

As of March 31, 2008, there were no investor complaints pending against the company. Jyotsana Investment Company Limited Jyotsana Investment Company Limited was incorporated on May 10, 1974 under registration number 21-29417 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to trade in shares, stocks, debentures and other securities issued by any government, public bodies, local bodies and companies. Directors as of May 31, 2008 The board of directors of Jyotsana Investment Company Limited as at May 31, 2008 comprises Mr. Sujit Kumar Das, Mr. Narayan Kar and Mr. Jyotish Chandra Goswami. Shareholding as of March 31, 2008 The shareholding pattern of Jyotsana Investment Company Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. Names of Shareholder Tower Investment & Trading Company Limited Mrs. Rohini Himatsingka Fund Flow Investment & Trading Company Limited Mr. Amrit Kumar Sanghi Mr. Vijay Kumar Sanghi Mr. Deepika Agarwal Goneril Investment & Trading Company Limited Kallol Investments Limited Remaining 136 shareholders Total No. of Shares held 49,000 40,000 34,600 20,000 10,000 10,000 10,000 10,000 16,400 200,000 % of Shareholding 24.50 20.00 17.30 10.00 5.00 5.00 5.00 5.00 8.20 100.00

Financial Performance The audited financial results of Jyotsana Investment Company Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.) 2.00 (3.26) 3.23 0.81 4.07 (6.32) Year ended March 31, 2006 2.00 (4.08) 2.36 0.05 0.24 (10.39) Year ended March 31, 2005 2.00 (4.13) 2.49 0.12 0.62 (10.63)

The Company currently has a negative networth. Disclosure on Capital Issue The company came out with a public issue in 1974. Since the relevant papers/documents relating to the said issue are not in the custody of the company as the income-tax department has taken the same into their custody during a routine survey and scrutiny conducted on September 23, 1983, details related to the issue are not available. The shares of the company are listed on the Calcutta Stock Exchange Association Limited since May 14, 1974. The shares of the company are not actively traded since last five years and accordingly no market price may be provided for the shares of the company.

102

Details of Public/Rights Issue in the Last Three Years The company has not made any public issue or rights issue of its equity shares during the last three years. Mechanism for redressal of investor grievance For redressal of investor grievances, the company has nominated one of its directors as the compliance officer. The compliance officer is responsible for attending to investor queries / complaints etc, to present the same before the shareholder grievance committee on a regular basis for their review and comments/suggestions. Generally, investor queries are attended to in three days and the complaints are resolved within next two days. As of March 31, 2008, there were no investor grievances pending. Kallol Investments Limited Kallol Investments Limited was incorporated on December 8, 1982 under registration number 2135533 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to trade in shares, stocks, debentures and other securities issued by any government, public bodies, local bodies and companies. Directors as of May 31, 2008 The board of directors of Kallol Investments Limited as at May 31, 2008 comprises Mr. Susheel Kumar Sharma, Mr. Swarup Kumar Maity and Mr. Narayan Kar. Shareholding as on March 31, 2008 The shareholding pattern of Kallol Investments Limited as at March 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding 14.89 12.50 10.39 10.13 8.33 8.10 6.25 5.99 5.96 4.17 4.17 4.17 2.08 2.08 0.80 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15.

Tower Investment & Trading Company Limited Subarna Plantation and Trading Company Limited Jyotsana Investment Company Limited Goneril Investment & Trading Company Limited Saket Cement Products Private Limited Fund Flow Investment & Trading Company Limited Rakesh Kumar Shaurya Veer (HUF) Mrs. Rohini Himatsingka New Look Investment (Bengal) Limited Mr. Vivek Himatsingka Ms. Maalika Himatsingka Mr. Shaurya Veer Himatsingka Mrs. Anita Himatsingka Mr. Gaurav Himatsingka Remaining 14 shareholders Total

35,725 30,000 24,925 24,300 20,000 19,450 15,000 14,375 14,300 10,000 10,000 10,000 5,000 5,000 1,925 240,000

Financial Performance The audited financial results of Kallol Investments Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus 2.40 0.94 Year ended March 31, 2006 2.40 0.85 Year ended March 31, 2005 2.40 0.27

103

Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.)

1.09 0.09 0.36 13.90

1.69 0.44 1.83 13.54

1.72 0.50 2.09 11.13

Disclosure on Capital Issue The company came out with a public issue of 200,000 equity shares of Rs. 10 each for cash at a price of Rs. 10 each pursuant to a statement in lieu of prospectus dated January 18, 1983. The equity shares of the company are listed on at Calcutta Stock Exchange Association Limited since September 15, 1983. The equity shares of the company are not actively traded since last five years and accordingly no market price may be provided for the equity shares of the company. Promise vs. Performance The proceeds of the issue were applied for the objects of the issue as disclosed in the prospectus for the said issue i.e. raising long-term capital. There were no deviation from the objects and the manner in which the issue proceeds were utilized. No projections were made since the issue was to meet the long term requirement of funds. Details of Public/Rights Issue in the Last Three Years The company has not made any public issue or rights issue of its equity shares during the last three years. Mechanism for redressal of investor grievance For redressal of investor grievances, the company has nominated one of its directors as the compliance officer. The compliance officer is responsible for attending to investor queries/complaints etc. to present the same before the shareholder grievance committee on a regular basis for their review and comments/suggestions. Generally, investor queries are attended to in three days and the complaints are resolved with in next two days. As of March 31, 2008 there were no investor grievances pending against the company. Khatu Investment & Trading Company Limited Khatu Investment & Trading Company Limited was incorporated on December 10, 1979 under registration number 21-32406 with the Registrar of Companies, Kolkata. The company received its certificate of commencement of business on December 17, 1979. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to trade in shares, stocks, debentures and other securities issued by any government, public bodies, local bodies and companies. Directors as of May 31, 2008 The board of directors of Khatu Investment & Trading Company Limited as at May 31, 2008 comprises Mr. Sujit Kumar Das, Mr. Goutam Kumar Das and Mr. Jyotish Chandra Goswami. Shareholding as of March 31, 2008 The shareholding pattern of Khatu Investment & Trading Company Limited as at March 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding 19.55 15.95

1. 2.

Tower Investment & Trading Company Limited Kallol Investments Limited

39,100 31,900

104

3. 4. 5. 6. 7. 8. 9. 10. 11. 12.

Fund Flow Investment & Trading Company Limited Mr. Dipak Kumar Gaurav Kumar Goneril Investment & Trading Company Limited Subarna Plantation and Trading Company Limited Mrs. Rohini Himatsingka Jyotsana Investment Company Limited Burlington Investments Private Limited New Look Investment (Bengal) Limited Mr. Rakesh Himatsingka Remaining 64 shareholders Total

22,150 15,000 15,000 15,000 14,000 13,900 11,800 9,000 5,000 8,150 200,000

11.08 7.50 7.50 7.50 7.00 6.95 5.90 4.50 2.50 4.07 100.00

Financial Performance The audited financial results of Khatu Investment & Trading Company Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.) 2.00 (2.12) 1.19 0.73 3.64 (0.59) Year ended March 31, 2006 2.00 (2.85) 0.38 0.05 0.24 (4.23) Year ended March 31, 2005 2.00 (2.89) 0.39 0.01 0.04 (4.47)

The Company currently has a negative networth. Disclosure on Capital Issue The company came out with a public issue of 169,300 equity shares of Rs. 10 each for cash at a price of Rs. 10 each pursuant to a statement in lieu of prospectus dated December 13, 1979. The equity shares of the company are listed on at Calcutta Stock Exchange Association Limited since May 2, 1980. The equity shares of the company have not actively been traded since the last five years and accordingly no market price may be provided for the equity shares of the company. Promise vs. Performance The proceeds of the issue were applied for the objects of the issue as disclosed in the prospectus for the said issue i.e. raising long term capital. There were no deviations from the objects and the manner in which the issue proceeds were utilized. No projections were made since the issue was to meet the long term requirement of funds. Details of Public/Rights Issue in the Last Three Years The company has not made any public issue or rights issue of its equity shares during the last three years. Mechanism for redressal of investor grievance For redressal of investor grievances, the company has nominated one of its directors as the compliance officer. The compliance officer is responsible for attending to investor queries / complaints etc to present the same before the shareholder grievance committee on a regular basis for their review and comments/suggestions. Generally, investor queries are attended to in three days and the complaints are resolved within next two days. As of March 31, 2008 there were no investor grievances pending.

105

New Look Investment (Bengal) Limited New Look Investment (Bengal) Limited was incorporated on May 27, 1975 under registration number 21-30035 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to trade in shares, stocks, debentures and other securities issued by any government, public bodies, local bodies and companies. Directors as of May 31, 2008 The board of directors of New Look Investment (Bengal) Limited as at May 31, 2008 comprises Mr. Susheel Kumar Sharma, Mrs. Manju Jalan and Mrs. Bimla Bajaj. Shareholding as of March 31, 2008 The shareholding pattern of New Look Investment (Bengal) Limited as at March 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding 19.88 19.08 10.88 10.00 9.88 7.50 7.48 0.80 14.53 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9.

Goneril Investment & Trading Company Limited Tower Investment & Trading Company Limited Kallol Investments Limited Fund Flow Investment & Trading Company Limited Ms. Sushil Himatsingka Assam Plywood Limited Mrs. Rohini Himatsingka Khatu Investment & Trading Company Limited Remaining 142 shareholders Total

39,750 38,150 21,750 20,000 19,750 15,000 14,950 1,600 29,050 200,000

Financial Performance The audited financial results of New Look Investment (Bengal) Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.) 2.00 0.06 0.62 0.10 0.52 10.29 Year ended March 31, 2006 2.00 (0.05) 0.55 0.04 0.20 9.77 Year ended March 31, 2005 2.00 (0.08) 0.60 0.04 0.18 9.58

Disclosure on Capital Issue The company’s shares are listed on the Calcutta Stock Exchange. Since the relevant papers/documents relating to the last issue are not in the custody of the company as income-tax department has taken the same into their custody during a routine survey and scrutiny conducted on September 23, 1983, details related to the issue are not available. The equity shares of the company have not been actively traded since the last five years and accordingly no market price may be provided for the equity shares of the company. Details of Public/Rights Issue in the Last Three Years The company has not made any public issue or rights issue of its equity shares during the last three years. 106

Mechanism for redressal of investor grievance For redressal of investor grievances, the company has nominated of its directors as the compliance officer. The compliance officer is responsible for attending to investor queries / complaints etc to present the same before the shareholder grievance committee on a regular basis for their review and comments/suggestions. Generally, investor queries are attended to in three days and the complaints are resolved within next two days. As of March 31, 2008 there were no investor grievances pending against the company. Spice Communications Limited Spice Communications Limited was incorporated on March 28, 1995 as a private limited company in the name of Modicom Network Private Limited under registration number 55-66827 with the RoC. The company subsequently became a deemed public company under section 43(1A) of the Companies Act with effect from April 1, 1999 and the name of the company was changed to Modicom Network Limited. The name of the company was further changed to Spice Communications Limited vide fresh certificate of incorporation dated December 3, 1999. Subsequently, the name was again changed to Spice Communications Private Limited with effect from October 28, 2003. On December 28, 2006, the company was converted into a public limited company and the name was changed to Spice Communications Limited. Its registered office is situated at 60-D, Sainik Farms, New Delhi- 110 062. The company is engaged in the business of providing unified access services in the telecom circles of Punjab and Karnataka under licence from DoT. Its main object is to develop, install, maintain and run all types of services in the telecommunication (including cellular mobile telephone or fixed telephone), IT, electronics and multimedia and also to manufacture, produce, acquire, import, export and deal in any manner in any product relating to telecommunication, electronics, IT and multimedia. The company has recently been given licences by DoT to provide unified access services in the telecom circles of Delhi, Haryana, Maharashtra and Andhra Pradesh. The company also has licences from DoT to provide national long distance and international long distance services. Directors as of May 31, 2008 The board of directors of Spice Communications Limited as at May 31, 2008 comprises Dr. B.K. Modi, Mr. Dilip Modi (Managing Director), Dr. S.S Hansawijayasuriya, Mr. Yusof Annuar Bin Yaacob, Mr. Prabahar N.K. Singam, Mr. Devendra Raj Mehta, Mr. Krishan Lal Chugh, Mr. Hetal Gandhi and Mr. Mahesh Prasad. Shareholding as of March 31, 2008 The shareholding pattern of Spice Communications Limited as of March 31, 2008 is as under:
Sl. No. Names of Shareholder Total No. Shares held of Total shareholding as a % of Total number (as a % of (A+B)

(A) 1 (a) (b)

(B) 1 (a) (b) (c) 2 (a)

Shareholding of Promoter & Promoter Group Indian Individuals/ Hindu Undivided Family Bodies Corporate Total Shareholding of Promoter and Promoter Group (A) Public Shareholding Institutions Mutual Funds / UTI Financial Institutions / Banks FII Sub-Total (B)(1) Non-Institutions Bodies Corporate

20 281,489,350 281,489,370

0.00 40.80 40.80

12,888,599 600 50,801,851 63,691,050 25,178,766

1.87 0.00 7.36 9.23 3.65

107

Sl. No.

Names of Shareholder

Total No. Shares held

of

Total shareholding as a % of Total number (as a % of (A+B) 4.74 1.80

(b)

(c)

Individuals - Individual shareholders holding nominal share capital up to Rs.1 lakh - Individual shareholders holding nominal share capital in excess of Rs.1 lakh Any others specify Foreign Corporate bodies Non Resident Indians Trusts Clearing Members Sub-Total (B)(2) Total Public Shareholding (B)= (B)(1)+(B)(2) TOTAL (A)+(B)

32,695,967 12,409,170

270,450,650 3,480,911 3,246 525,870 344,744,580 408,435,630 689,925,000

39.20 0.50 0.00 0.08 49.97 59.20 100.00

Financial Performance The audited financial results of Spice Communications Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended December 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.) 6,899.25 1,680.08 14,738.84 3,801.31 5.51 11.57 Period ended December 31, 2006 (6 months) 5,519.40 (7,043.21) 3,957.00 (386.88) (0.70) (3.27) Year ended June 30, 2006 5,519.40 (6,656.33) 7,492.48 46.35 0.08 (2.49)

Disclosure on Capital Issue Public Issue in fiscal 2007 The company has last completed initial public offering (IPO) comprising of fresh issue of 113,111,111 equity shares of Rs. 10/- each for cash at a premium of Rs.36 (issue price of Rs. 46) per equity share aggregating to Rs. 5203,111,106/- through 100% book building route. In pursuance to Pre-IPO Placements, the company also made an allotment of 24,873,889 equity shares of Rs. 10/- each for cash at Rs. 45 per equity share including a premium of Rs. 35 per equity share. The opening date of the issue was June 25, 2007 and the closing date was June 27, 2007. The objects of the Issue were to achieve the benefits of listing on the Stock Exchange and to raise funds for (a) part payment of the long term debt, (b) payment for NLD/ILD license fees, (c) meet the capital expenditure requirements, (d) for other general corporate purposes and (e) meet the expenses of the Issue. Information about the Share Price of Spice Communications Limited The existing equity shares of Spice Communications Limited are listed at the BSE since July 19, 2007. The monthly high and low of the market price of the shares on BSE for the last six months are as follows:
High May 2008 April 2008 March 2008 February 2008 60.15 45.80 36.85 39.60 Low 38.20 27.55 23.25 30.20

108

January 2008 December 2007

69.15 69.65

23.25 46.80

The existing equity shares of Spice Communications Limited are listed at the BSE since July 19, 2007. Promise vs. Performance The objects of the initial public offering of the company completed in fiscal 2007 were to to raise funds for (a) part payment of the long term debt; (b) payment for NLD/ILD license fees; (c) meet the capital expenditure requirements; (d) for other general corporate purposes; and (e) meet the expenses of the initial public offering. The proceeds of the initial public offering were used as disclosed in the prospectus. The company had not made any future forecasts for financial performances in the prospectus. Mechanism for redressal of investor grievance For redressal of investor grievances, Spice Communications Limited has nominated its company secretary as the compliance officer. The compliance officer is responsible for attending to investor queries/complaints etc. to present the same before the investors’ grievance and share transfer committee on periodical basis for their review and comments/suggestions. As a matter of practice, queries of the investors are attended to and the complaints are resolved within fifteen to thirty days. The company confirms that its name has not appeared in the list of SEBI with the highest number of outstanding investor complaints. As of March 31, 2008, there was no investor complaint pending against Spice Communications Limited. Material development On June 25, 2008 one of the promoter shareholder of Spice Communications Limited, MCorpGlobal Communication Private Limited has entered into a Share Purchase Agreement with Idea Cellular Limited to divest its entire shareholding comprising 40.8% in Spice Communications Limited, one of our Promoter Group Companies, to Idea Cellular Limited. The board of directors of Spice Communications Limited has also approved its merger with Idea Cellular Limited. Spice Mobiles Limited Spice Mobiles Limited was incorporated on December 23, 1986 as a public limited company in the name of Modi Olivetti Limited under registration number 20-08448 with the Registrar of Companies, Uttar Pradesh. The name of the company was changed to MOL India Limited with effect from August 23, 1999. The name of the company was further changed to Spice Net Limited on December 5, 2000 and subsequently to Spice Limited with effect from July 4, 2005 to reflect the increase in the diversified nature of company’s area of operations. The name of the company has recently been changed to Spice Mobiles Limited with effect from April 26, 2007 by issuance of a fresh certificate of incorporation. Its registered office is situated at D-1, Sector-3, District Gautam Budh Nagar, Noida201 301, Uttar Pradesh, India. The company is engaged in two business segments: • Mobile Handsets; and • IT Mobile handset segment represents the business of trading in mobile handsets. The IT segment is primarily engaged in the business of manufacturing, trading and installation/erection of computer hardware, including maintenance and servicing thereof. The shareholders of the company have under section 293(1) (a) of the Companies Act passed the necessary resolution effective from April 24, 2007 to discontinue the manufacturing/assembling of IT products carried out at its manufacturing unit located at Baddi, Himachal Pradesh and the sale/transfer/disposal of the said manufacturing unit excluding land and building.

109

Directors as of May 31, 2008 The board of directors of Spice Mobiles Limited as at May 31, 2008 comprises Dr. B.K. Modi (Chairman), Mr. Dilip Modi (Vice Chairman), Mr. Radha Krishna Pandey, Mr. Ram Nath Bansal, Mr. K.L. Chugh, Mr. S.K. Jain and Mr. Ashok Kumar Goyal. Shareholding as of March 31, 2008 The shareholding pattern of Spice Mobiles Limited as at March 31, 2008 is as under:
Sl. No. Names of Shareholder Total No. Shares held of Total shareholding as a % of Total number (as a % of (A+B)

(A) 1 (a) (b)

(B) 1 (a) (b) (c) 2 (a) (b) (c) (d)

Shareholding of Promoter & Promoter Group Indian Individuals/ Hindu Undivided Family Bodies Corporate Total Shareholding of Promoter and Promoter Group (A) Public Shareholding Institutions Financial Institutions / Banks Central Government/ State Government(s) FII Insurance Companies Sub-Total (B)(1) Non-Institutions Bodies Corporate Individuals NRIs / OCBs Clearing Members Sub-Total (B)(2) Total Public Shareholding (B)= (B)(1)+(B)(2) TOTAL (A)+(B)

0 47,194,234 47,194,234

0.00 63.23 63.23

1,545 104,596 3,289,474 0 3,395,615 16,290,472 7,352,307 386,849 18,523 24,048,151 27,443,766 74,638,000

0.00 0.14 4.41 0.00 4.55 21.83 9.85 0.52 0.02 32.22 36.77 100.00

Financial Performance The audited financial results of Spice Mobiles Limited for the past three years are as follows: (in Rs. million except for share data)
Period ended December 31, 2007 (9 months) 223.91 556.38 2,912.86 146.73 1.97 10.45 Year ended March 31, 2007 223.91 448.95 2,044.42 23.86 0.32 9.01 Period ended March 31, 2006 (9 months) 111.96 197.31 1,180.65 41.71 1.12 8.29

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 3/-) Book Value per equity share (Rs.)

Disclosure on Capital Issue Rights Issue in fiscal 2007 The company has last completed rights issue of 37,319,000 equity shares of Rs. 3 each for cash at a premium of Rs. 7 (issue price of Rs. 10) per equity share on rights basis to the existing equity shareholders of the company in the ratio of 1 (One) equity share for every 1 (One) equity share (1:1) held as on December 1, 2006 (record date) aggregating to Rs. 373.19 million. The objects of the issue

110

of equity shares on rights basis were to meet working capital requirements, to repay existing unsecured loans and to meet the general corporate purposes. Rights Issue in fiscal 2004 Spice Mobiles Limited had earlier completed a rights issue of 18,659,500 equity shares of Rs. 3 each for cash at a premium of Rs. 2 per share aggregating to Rs. 93,297,500 to the existing equity shareholders of the company in the ratio of one equity share for every existing one equity share held on the record date of December 13, 2003 to augment the working capital resources of the company. The opening date of the issue was January 27, 2004 and the closing date was February 26, 2004. Information about the Share Price of Spice Mobiles Limited The existing equity shares of Spice Mobiles Limited are listed at the BSE since January 1, 1990 and on the NSE since May 27, 2008. The trading of the equity shares of the company was suspended in the BSE from October 6, 1997 to September 2, 2003 due to non-compliance of certain provisions of the Listing Agreement. Subsequently, on payment of reinstatement fee of Rs. 240,000 by the company, the suspension was revoked by the BSE and the trading of the equity shares of the company on the BSE resumed with effect from September 3, 2003. The monthly high and low of the market price of the shares on BSE for the last six months are as follows:
High (BSE) May 2008 April 2008 March 2008 February 2008 January 2008 December 2007 35.90 29.15 23.60 27.70 32.20 30.40 Low (BSE) 22.15 19.25 16.90 21.00 21.00 20.25

Promise vs. Performance Rights Issue in fiscal 2007 The objects of the issue of equity shares on rights basis were to meet working capital requirements, to repay existing unsecured loans and to meet the general corporate purposes. The proceeds of the rights issue were used as disclosed in the letter of offer. The company had not made any future forecasts for financial performances in the letter of offer. Rights Issue in fiscal 2004 The objects of the rights issue of the company completed in fiscal 2004 were to augment the working capital resources of the company. The proceeds of the rights issue were used as disclosed in the letter of offer. The company had not made any future forecasts for financial performances in the letter of offer. Mechanism for redressal of investor grievance For redressal of investor grievances, Spice Mobiles Limited has nominated its company secretary as the compliance officer. The compliance officer is responsible for attending to investor queries/complaints etc. to present the same before the share transfer and investor grievance committee on fortnightly basis for their review and comments/suggestions. As a matter of practice, queries of the investors are attended to and the complaints are resolved within fifteen to thirty days. The company confirms that its name has not appeared in the list of SEBI with the highest number of outstanding investor complaints. As of March 31, 2008, there was no investor complaint pending against Spice Mobiles Limited.

111

Twenty First Century Capitals Limited Twenty First Century Capitals Limited was incorporated on January 25, 1985 as Progressive Automobiles Limited with the RoC under registration number 55-019941. The name of the company was changed to Twenty First Century Capitals Limited on June 27, 1994 by issuance of a fresh certificate of incorporation. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The company is registered with RBI as an NBFC under registration number 1400303. The company is engaged in asset financing, purchase, sale or otherwise dealing in equity shares, debentures, bonds and other types of securities and acting in the capacity of general financiers and providing corporate advisory services. Directors as of May 31, 2008 The board of directors of Twenty First Century Capitals Limited as at May 31, 2008 comprises Mr. R.K. Gupta, Mr. S.K. Jain and Mr. G.S. Negi. Shareholding as of March 31, 2008 The shareholding pattern of Twenty First Century Capitals Limited as at March 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. Names of Shareholder No. of Shares held % of Shareholding 43.08 2.21 6.51 6.51 16.58 4.19 20.92 100.00

Spice Corp Limited Oasis Cineplex Private Limited Fine Instalments Private Limited Handsome Investments Private Limited Modikem Limited Avon Mercantile Limited Others (233 shareholders) Total

2,825,800 145,000 427,000 427,000 1,087,800 275,000 1,371,964 6,559,564

Financial Performance The audited financial results of Twenty First Century Capitals Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Year ended March 31, 2006 Period ended March 31, 2005 (15 months) 65.60 5.90 106.61 39.31 7.14 10.64

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

65.60 6.28 4.91 (2.90) (0.93) 10.96

65.60 12.37 33.71 0.46 0.99 11.85

Disclosure on Capital Issue The company completed its initial public offering of 150,000 equity shares of Rs. 10 each for cash at par pursuant to a prospectus dated December 30, 1985. Further, company completed the right issue of one million equity shares of the company for cash at par pursuant to a letter of offer dated April 4, 1990. Thereafter, the company came out with a further right issue of 979,200 equity shares of Rs. 10 each for cash at par, pursuant to letter of offer dated December 3, 1991.

112

The equity shares of the company are listed on the Delhi Stock Exchange since 1986 and the Uttar Pradesh Stock Exchange since 1991. However, the equity shares have not been traded since the last three years and accordingly no market price may be provided for the equity shares of the company. Promise vs. Performance The proceeds of the aforesaid issues were duly applied for the objects of the issue as disclosed in the offer documents i.e. working capital requirements of the company. No projections were made in the offer document. Details of Public/Rights Issue in the Last Three Years The company has not made any public issue or rights issue of its equity shares during the last three years. Mechanism for redressal of investor grievance For redressal of investor grievances, the company has nominated its manager and company secretary as the compliance officer. The compliance officer is responsible for attending to investor queries/complaints etc and to present the same before the shareholder grievance committee on a quarterly basis for their review and comments/suggestions. As of March 31, 2008, there were no investor complaints pending against the company. Unlisted public companies forming part of our Promoter Group companies: APL Holdings & Investments Limited APL Holdings & Investments Limited was incorporated on October 10, 1991 under registration number 21-53342 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to invest in security and sell or otherwise deal with shares, stocks, bonds and debentures etc. issued by any body corporate and to purchase, lease, hire and develop land, buildings and flats. Directors as of May 31, 2008 The board of directors of APL Holdings & Investments Limited as at May 31, 2008 comprises Mrs. Rohini Himatsingka, Mr. Hemant Kumar Ruia, Mr. Rakesh Himatsingka and Mrs. Anita Himatsingka. Shareholding as of May 31, 2008 The shareholding pattern of APL Holdings & Investments Limited as at May 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held 2,500 2,500 900 900 1,000 1,000 1,000 100 100 10,000 % of Shareholding 25.00 25.00 9.00 9.00 10.00 10.00 10.00 1.00 1.00 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9.

Mrs. Anita Himatsingka Mrs. Rohini Himatsingka Mr. Gaurav Himatsingka Mr. Vivek Himatsingka Ms. Sonal Himatsingka Ms. Maalika Himatsingka Mr. Shaurya Veer Himatsingka Mr. Gaurav Himatsingka jointly with Mr. Dipak Himatsingka Mr. Vivek Himatsingka jointly with Mr. Dipak Himatsingka Total

Financial Performance

113

The audited financial results of APL Holdings & Investments Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.) 0.10 2.39 0.84 0.44 44.24 249.03 Year ended March 31, 2006 0.10 1.95 0.81 0.38 37.82 204.78 Year ended March 31, 2005 0.10 1.57 0.77 0.34 33.96 166.96

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. APL Holdings & Investments Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. APL Investments Limited APL Investments Limited was incorporated on May 30, 1991 under registration number 21-51882 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to invest in securities and sell or otherwise deal in shares, stocks, bonds and debentures issued by any body corporate. Directors as of May 31, 2008 The board of directors of APL Investments Limited as at May 31, 2008 comprises Mrs. Anita Himatsingka, Mr. Dipak Himatsingka and Mr. Susheel Kumar Sharma. Shareholding as of May 31, 2008 The shareholding pattern of APL Investments Limited as at May 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held 2,500 2,500 900 900 1,000 1,000 1,000 100 100 10,000 % of Shareholding 25.00 25.00 9.00 9.00 10.00 10.00 10.00 1.00 1.00 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9.

Mrs. Anita Himatsingka Mrs. Rohini Himatsingka Mr. Gaurav Himatsingka Mr. Vivek Himatsingka Ms. Sonal Himatsingka Ms. Maalika Himatsingka Mr. Shaurya Veer Himatsingka Mr. Gaurav Himatsingka jointly with Mr. Dipak Himatsingka Mr. Vivek Himatsingka jointly with Mr. Dipak Himatsingka Total

Financial Performance The audited financial results of APL Investments Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital 0.10 Year ended March 31, 2006 0.10 Year ended March 31, 2005 0.10

114

Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.)

1.81 0.78 0.45 45.09 191.38

1.36 0.76 0.32 31.83 146.28

1.04 0.75 0.31 31.49 114.45

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. APL Investments Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Assam Plywood Limited Assam Plywood Limited was incorporated on June 25, 1952, under registration number 21-20483 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to invest in the security and sell or otherwise deal with shares, stocks, bonds and debentures etc. issued by any body corporate and to acquire by purchase or otherwise of any business of plywood. Directors as of May 31, 2008 The board of directors of Assam Plywood Limited as at May 31, 2008 is comprised of Mr. Dhirendra Nath Maity, Mr. Ashok Jajra, Mr. Santosh Kumar Bajaj and Mr. Sagar Sarkar. Shareholding as of May 31, 2008 The shareholding pattern of Assam Plywood Limited as at May 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding 18.90 14.18 11.12 9.74 9.73 9.73 7.65 6.95 1.68 1.39 1.31 1.11 1.04 5.47 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14.

Subarna Plantation & Trading Company Limited Rakesh Kumar Shaurya Veer (HUF) Gulmohar Trading Company Private Limited Mr. Shaurya Veer Himatsingka Ms. Sonal Himatsingka Ms. Maalika Himatsingka Fund Flow Investment & Trading Company Limited Mrs. Rohini Himatsingka Mr. Anand Kumar Himatsingka Mr. Vivek Himatsingka Mr. Mahendra Kumar Himatsingka Mr. Rajendra Kumar Himasingka New Look Investment (Bengal) Limited Remaining 27 shareholders Total

68,000 51,000 40,000 35,050 35,000 35,000 27,500 25,000 6,025 5,000 4,700 4,000 3,750 19,675 359,700

Financial Performance The audited financial results of Assam Plywood Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 1.44 (0.39) Year ended March 31, 2006 1.44 (0.43) Year ended March 31, 2005 1.44 (0.11)

Equity Capital Reserves and Surplus

115

Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 4/-) Book Value per equity share (Rs.)

0.18 0.04 0.12 2.51

0.20 (0.43) (1.19) 2.30

0.87 0.06 0.17 3.62

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Assam Plywood Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Budge Budge Carbon Limited Budge Budge Carbon Limited was incorporated on June 26, 1980 under registration number 21-32824 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to invest in security and sell or otherwise deal with shares, stocks, bonds and debentures etc issued by any body corporate and to manufacture, refine, import, export, graphitize, coke, coal, hydrocarbons and other by-products. Directors as of May 31, 2008 The board of directors of Budge Budge Carbon Limited as at May 31, 2008 comprises Mr. Susheel Kumar Sharma, Mr. Siddhartha Chatterjee and Mr. Sandip Modi. Shareholding as of May 31, 2008 The shareholding pattern of Budge Budge Carbon Limited as at May 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding 0.50 0.50 10.08 9.58 9.76 10.08 10.08 10.08 1.26 1.76 1.26 1.26 1.26 1.26 2.52 1.01 1.45 1.89 1.26 1.76 2.02 19.35 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22.

Juwita Trading Company Private Limited Mokara Trading Company Private Limited Subhag Mercantile Private Limited Jyotsana Investment Company Limited Subarna Plantation & Trading Company Limited Saket Cement Products Private Limited Gulmohur Trading Company Private Limited Burlington Investments Private Limited Sudama Trading & Investments Limited Nortel Cosmetics Private Limited Zipper Mercantiles Private Limited Veeyu Traders Private Limited Nahar Viniyog Private Limited Namokar Consultants Private Limited Venus Dealing Private Limited. Shriste Marketing Private Limited Sakambari Commercial Private Limited Sheetal Tie-Up Private Limited Sati Trexim Private Limited Lord Enclave Private Limited Tobu Engineering Limited Tower Investment and Trading Company Limited Total

2,000 2,000 40,000 38,000 38,700 40,000 40,000 40,000 5,000 7,000 5,000 5,000 5,000 5,000 10,000 4,000 5,750 7,500 5,000 7,000 8,000 76,750 396,700

Financial Performance The audited financial results of Budge Budge Carbon Limited for the past three years are as follows:

116

(in Rs. million except for share data)
Year ended March 31, 2007 3.97 16.87 2.20 1.09 2.74 52.53 Year ended March 31, 2006 2.93 15.32 0.91 0.44 1.50 62.35 Year ended March 31, 2005 2.93 5.98 2.47 0.53 1.81 30.44

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.)

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Budge Budge Carbon Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Hotspots Retails Limited Hotspots Retails Limited was incorporated on February 19, 1988 as Modi Telematics Limited under registration number 06-08020 with the Registrar of Companies, Punjab, Chandigarh & Himachal Pradesh. The name of the company was changed to Modi Distributors Private Limited on July 27, 2004 and was further changed to Hotspots Retails Private Limited on January 10, 2005 by issuance of a fresh certificate of incorporation and then changed to Hotspots Retails Limited on April 8, 2008. The registered office of the company is situated at Village Billanwali Labana, Post Office Baddi, Tehsil Nalagarh, District Solan, Himachal Pradesh- 173 205, India. The main object of the company is to carry on business as retailers, sellers, buyers, traders, dealers, importers and exporters of telecommunication, electronics, digital, electrical, photographic, home appliances, IT and hardware products and their components, accessories, assemblies, apparatus and spares and music/video/games software. Directors as of May 31, 2008 The board of directors of Hotspots Retails Limited as at May 31, 2008 comprises Mr. Dilip Modi, Mr. H. N. Nanani and Mr. Ashok Kumar Goyal. Shareholding as of May 31, 2008 The shareholding pattern of Hotspots Retails Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. Names of Shareholder No. of Shares held % of Shareholding 100.00 0.00 0.00 0.00 0.00 0.00 0.00 100.00

Hindustan Retail Private Limited Mr. Dilip Modi* Dr. B.K. Modi * Mrs. Veena Modi* Ms. Divya Modi* Mr. Ashok Kumar Goyal* Mr. Atul Prakash* Total * as nominees of Hindustan Retail Private Limited.

4,350,015 5 10 10 10 10 10 4,350,070

Financial Performance The audited financial results of Hotspots Retails Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March Year ended March Year ended March

117

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

31, 2007 43.50 (84.62) 839.53 (68.78) (15.81) (9.45)

31, 2006 0.50 (15.85) 95.35 (15.19) (303.47) (314.64)

31, 2005 0.50 (0.66) 0.11 (1.02) (20.38) (3.17)

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Hotspots Retails Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. The company currently has a negative net worth. Modikem Limited Modikem Limited was incorporated on October 31, 1995 as Modikem Private Limited. Subsequently, on conversion to a public limited company on July 25, 2001, the name of the company was changed to Modikem Limited by issuance of a fresh certificate of incorporation. It is incorporated under registration number 55-73505 with the RoC. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The main objects of the company are to carry on the business of manufacturers of and dealers in chemical products of any nature and kind whatsoever, importers, exporters; and to engage in the business of manufacturers of and dealers in heavy chemicals, alkalies, acids, chemicals, petrochemical, industrial and other preparations, and articles of any nature and kind whatsoever, waxes natural and synthetic industrial solvents, and gases, extenders, anti-oxidants, inhibitors, catalysts, iron-exchanger, resin, water treatment chemicals and special chemical substance, plasticizers and extenders. Directors as of May 31, 2008 The board of directors of Modikem Limited as at May 31, 2008 comprises Mr. B.K. Gupta (wholetime director), Mr. G.S. Negi and Mr. R.K. Gupta. Shareholding as of May 31, 2008 The shareholding pattern of Modikem Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Names of Shareholder Spice Corp Limited Mudaliar & Sons Hotels Private Limited Avon Mercantile Limited GCorp International Limited Licensintorg & Co. India Private Limited Toplight Corporate Management Private Limited Mr. R. L Ahuja Mr. R P Goyal Mr. R K Guta Mr. S K Jain Dr. B K Modi Total No. of Shares held 2,916,298 6,428,702 2,760,000 5,573,739 646,500 368,400 10 10 10 10 60 18,693,739 % of Shareholding 15.60 34.39 14.76 29.82 3.46 1.97 0.00 0.00 0.00 0.00 0.00 100.00

Financial Performance The audited financial results of Modikem Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Year ended March 31, 2006 Period ended March 31, 2005 (15 months)

118

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

186.94 80.88 0.01 (3.38) (0.18) 14.33

186.94 84.26 0.01 (10.24) (0.55) 14.51

186.94 94.50 0.16 (10.59) (0.57) 15.05

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Modikem Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Omnia BPO Services Limited Omnia BPO Services Limited was incorporated on June 23, 2004 under the name of Stracon Back Office Solutions Limited under registration number 55-127093 with the RoC. Subsequently, the name of the company was changed to Omnia BPO Services Limited in January 4, 2007. Its registered office is situated at Flat No. 417, 4th Floor, Vishal Tower, 10, District Centre, Janak Puri, New Delhi- 110 058, India. The main object of the company is to carry on the business of operating, managing, running and developing call centers, voice call centers and contact centers and providing all kinds of telemarketing, teleservices, IT based and ITES, business process outsourcing, back office processing, electronic remote processing services, e-services in India and internationally. Directors as of May 31, 2008 The board of directors of Omnia BPO Services Limited as at May 31, 2008 comprises Mr. Dilip Modi, Mr. Pravin Kumar and Mr. Atul Prakash. Shareholding as of May 31, 2008 The shareholding pattern of Omnia BPO Services Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. Names of Shareholder No. of Shares held % of Shareholding 100.00 0.00 0.00 0.00 0.00 0.00 0.00 100.00

Omnia Investments Private Limited

7,032,470 1 1 1 1 1 1 7,032,476

Mr. Dilip Modi* Mr. Atul Prakash* Mr. Ram Prakash Goyal* Mr. S.K. Jain* Mr. Santosh Kumar Gupta* Mr. Rakesh Kumar Gupta* Total * as nominee of Omnia Investments Private Limited.

Financial Performance The audited financial results of Omnia BPO Services Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income 70.32 0.98 283.19 Year ended March 31, 2006 52.50 0.24 181.62 Year ended March 31, 2005 15 0.22 24.29

119

Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

0.74 0.11 10.14

0.03 0.01 10.04

0.22 0.14 10.13

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Omnia BPO Services Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Plus Paper Foodpac Limited Plus Paper Foodpac Limited was incorporated on January 28, 1994 as Modi Federal Limited under registration number is 55-57146 with the RoC. On December 9, 1996, the name of the company was changed from Modi Federal Limited to Modi International Paper Limited. The name was further changed to International Paper Food Services Packaging Limited on October 3, 2001 and further to Plus Paper Foodpac Limited on July 1, 2003. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The main object of the company is to carry on business as manufacturers, distributors, importers, exporters, buyers, sellers, agents, stockists of and to market, transport, supply, assemble, alter, service, repair, store, and deal, in paperboards and other forest based products, pulp of all kinds including, soda pulp, chemical pulp, paper including paper cups for hot and cold drinks, copier paper, printing and packaging material, cartons and containers and consumable for based products. Directors as of May 31, 2008 The board of directors of Plus Paper Foodpac Limited as at May 31, 2008 comprises Dr. Surendra Ambalal Dave (Chairman), Mr. Nikhil Rungta (Managing Director), Mrs. Ritika Rungta, Mr. B.K. Gupta and Mr. Atul Prakash. Shareholding as of May 31, 2008 The shareholding pattern of Plus Paper Foodpac Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. Names of Shareholder Mrs. Ritika Rungta Mr. Atul Prakash Mr. D.V.Tyagi Mr. R.P.Goyal Mr. R.K.Gupta Mr. S.K.Gupta Mr. S.K.Jain Mr. Nikhil Rungta Dr. B.K. Modi Toplight Corporate Management Private Limited Spice Corp Limited Spice Mobiles Limited Odyssey Capital Private Limited Accelerate Investments Private Limited Brook Trading Company Private Limited Radiant (International) Private Limited Hinduja Finance Limited SICOM Limited Niskalp Investments & Trading Company Limited Total No. of Shares held 3,615,900 40 30 30 30 30 40 3,615,900 7,231,800 2,350,000 4,598,200 3,403,000 125,000 125,000 125,000 125,000 1,045,000 1,000,000 1,000,000 28,360,000 % of Shareholding 12.75 0.00 0.00 0.00 0.00 0.00 0.00 12.75 25.50 8.29 16.21 12.00 0.44 0.44 0.44 0.44 3.68 3.53 3.53 100.00

Financial Performance The audited financial results of Plus Paper Foodpac Limited for the past three years are as follows:

120

(in Rs. million except for share data)
Year ended March 31, 2007 283.60 91.71 236.25 6.05 0.21 13.23 Year ended March 31, 2006 141.80 85.66 221.29 8.26 0.58 16.72 Year ended March 31, 2005 141.80 77.40 203.88 4.72 0.33 15.92

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

Plus Paper Foodpac Limited on November 1, 2004 had filed the draft offer document for its proposed initial public offering. The SEBI vide a letter dated January 3, 2005 raised observations with respect to the promoter’s contribution for the purpose of the eligibility of the proposed initial public offering planned by the company. Subsequently, the lead manager vide letter dated March 4, 2005 withdrew the draft offer document. Plus Paper Foodpac Limited had offered 14,180,000 equity shares of Rs. 10 each for cash at par aggregating to Rs. 141,800,000 to the existing shareholders of the company on rights basis in the ratio of 1:1. The offer opened on May 15, 2006 and closed on September 7, 2006 after getting extended thrice to June 15, 2006; to July 15, 2006; and to August 31, 2006. On September 16, 2006, the company allotted 14,180,000 equity shares to Dr. B.K. Modi (7,231,800 equity shares), Toplight Corporate Management Private Limited (2,350,000 equity shares) and Spice Corp Limited (4,598,200 equity shares). Post the rights issue, the paid-up capital of the company is Rs. 283,600,000 divided into 28,360,000 equity shares of Rs.10 each. There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Plus Paper Foodpac Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Spice Corp Limited Spice Corp Limited was incorporated on January 24, 1992 as Modi Holdings Limited under registration number 20-13974 with the Registrar of Companies, Uttar Pradesh at Kanpur. Subsequently, on conversion to a private limited company, the name of the company was changed to Modi Holdings Private Limited by issuance of a fresh certificate of incorporation. Thereafter, the company again got converted into a public limited company and its name was changed to Modi Holdings Limited on July 18, 2001 by issuance of a fresh certificate of incorporation. On March 6, 2002, the name of the company was changed from Modi Holdings Limited to MCorp Limited. On May 8, 2003 the company was again converted to a private limited company and its name was changed to MCorp Private Limited by issuance of a fresh certificate of incorporation. The name of the company was further changed to MCorpglobal Private Limited on February 23, 2004. The company again got converted into a public limited company and its name was changed to MCorpglobal Limited on September 5, 2007 by issuance of a fresh certificate of incorporation. The name of the company was further changed to Spice Corp Limited on October 8, 2007. The registered office of the company is situated at D-1, Sector-3, Noida201 301, Uttar Pradesh, India. Spice Corp Limited is an investment company and is managing its subsidiaries/associate companies engaged in the information, communication and entertainment sector. Spice Corp Limited is running its operations under the brand “SPICE” which stands for ‘Synchronized Performance through Information, Communication and Entertainment’. The main object of the company is to invest in and acquire and hold either in the name of the company or in that of any nominees of the company, shares, stocks, debentures, debenture stocks, bonds, obligation and securities issued or guaranteed by any company or body corporate and debentures, debenture stocks, bonds, obligations and securities issued or guaranteed by any government, public body or authority or corporation central or state, municipal, local or otherwise, whether in India or elsewhere.

121

Directors as of May 31, 2008 The board of directors of Spice Corp Limited as at May 31, 2008 comprises of Dr. B.K. Modi (Chairman), Mrs. Veena Modi (Executive Vice Chairman), Mr. Hemant Kumar Samor, Mr. Yagya Prakash Gupta and Mr. Atul Prakash. Shareholding as of May 31, 2008 The shareholding pattern of Spice Corp Limited as on May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Names of Shareholder No. of Shares held % of Shareholding 46.09 4.01 0.42 0.43 0.67 2.53 45.69 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.00 0.00 0.00 0.00 0.00 0.00 100.00

Mrs. Veena Modi Mr. Dilip Modi Mrs. Ritika Rungta Ms. Divya Modi Dr. B. K. Modi & Sons (HUF) Twenty First Century Capitals Limited Mcorp Communications Pte Ltd. Touchwood Investments Private Limited Daisey Investments Private Limited Leaf Investments Private Limited Momentum Investments Private Limited Laoleen Investments Private Limited Longwell Investments Private Limited Upasana Investments Private Limited Swasth Investments Private Limited Mr. Atul Prakash Mr. R. P. Goyal Mr. S. K. Jain Mr. S. K. Gupta Mr. R. K. Gupta Mr. G. S. Negi Total

2,884,637 251,129 26,579 26,621 42,017 158,112 2,859,311 1,274 1,274 1,274 1,274 1,274 1,274 1,274 1,261 10 10 10 10 10 10 6,258,645

Financial Performance The audited financial results of Spice Corp Limited for the past three years are as follows:
Year ended March 31, 2007 (in Rs. million except for share data) Period ended Year ended March December 31, 2006 31, 2004 (15 months) 62.59 62.59 2,686.63 3,038.42 172.17 145.42 63.52 44.34 10.15 7.08 440.08 495.22

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

62.59 2,646.04 90.46 (35.79) (5.72) 433.38

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Spice Corp Limited is an unlisted company and has not made any public or rights issue in the preceding three years. It has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Private companies forming part of our Promoter Group companies: Ace Airways Private Limited

122

Ace Airways Private Limited was incorporated on January 9, 1984 as Delhi Gulf Airways Services Private Limited under registration number 55-17298 with the RoC. The name of the company was changed to Ace Airways Private Limited with effect from January 23, 1996 by issuance of a fresh certificate of incorporation. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The main objects of the company are to construct, equip, maintain, work, to take or give on lease, purchase or hire airplanes, helicopters and hovercrafts for the carriage of passengers or freight; and to carry on the business of carriers by air or hovercraft. Directors as of May 31, 2008 The board of directors of Ace Airways Private Limited as at May 31, 2008 comprises Mr. Hemant Kumar, Mr. R.K. Gupta and Mr. Harish Nag. Shareholding as of May 31, 2008 The shareholding pattern of Ace Airways Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. Names of Shareholder Twenty First Century Capitals Limited Positive Investment Private Limited Spice Corp Limited MCorp Limited Ms. Divya Modi Mrs. Ritika Rungta Total No. of Shares held 255,875 178,750 548,125 51,625 45,000 22,000 1,101,375 % of Shareholding 23.23 16.23 49.77 4.69 4.09 2.00 100.00

Financial Performance The audited financial results of Ace Airways Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Period ended March 31, 2006 (15 months) 11.01 15.18 25.77 15.90 14.44 20.35 Year ended December 31, 2004 11.01 (0.61) 80.25 (3.84) (3.48) 5.91

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.)

11.01 14.87 0.23 (0.31) (0.28) 20.36

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Ace Airways Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Burlington Investments Private Limited Burlington Investments Private Limited was incorporated on September 12, 1983 under registration number 21-36763 with the Registrar of Companies, Kolkata. Its registered office is situated at 6, Old Post Office Street, 4th Floor, Kolkata- 700 001, West Bengal, India. The main object of the company is to invest in the security and to sell or otherwise deal with shares, stocks, bonds and debentures etc. issued by any body corporate; and to purchase, lease, hire develop land, buildings, flats etc.

123

Directors as of May 31, 2008 The board of directors of Burlington Investments Private Limited as at May 31, 2008 is comprised of Mrs. Manju Jalan, Mr. Jyotish Chandra Goswami and Mr. Ashok Jajra. Shareholding as of May 31, 2008 The shareholding pattern of Burlington Investments Private Limited as at May 31, 2008 is as under:
Sl. No. Names of Shareholder No. of Shares held % of Shareholding 0.00 0.00 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.21 0.48 0.42 0.13 0.13 0.17 0.42 20.84 4.17 12.83 8.33 16.67 8.33 12.50 12.50 100.00

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26.

Mr. Rajendra Kanoria Mr. Ashok Chaturvedi Ms. Urmila Kothari Mr. N.K Padmanabhan Ms. Nirmala Jha Ms. Aradhana Jha Ms. Sadhana Jha Mr. Vikram Jha Shree Kunwar Kothari Mr. Ram Gopal Chakraborty Mr. Manoj Kothari Mr. Alok Kothari Mr. Hemanta Kumar Chatterjee Ms. Sujata Chatterjee Ms. Malay Bhaduari Mr. Basant Kumar Chatterjee Mr. Goutam Mukherjee New Look Investment (Bengal) Limited Tower Investment & Trading Company Limited Kallol Investments Limited Goneril Investment & Trading Company Limited Fund Flow Investment & Trading Company Limited Subarna Plantation & Trading Company Limited Jyotsana Investment Company Limited Mr. Gaurav Himatsingka Mr. Shaurya Veer Himatsingka Total

10 10 500 500 500 500 500 500 500 500 500 500 1,160 1,000 300 300 400 1,000 50,000 10,000 30,800 20,000 40,000 20,000 30,000 30,000 239,980

Financial Performance The audited financial results of Burlington Investments Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.) 2.40 3.60 0.60 0.29 1.20 24.99 Year ended March 31, 2006 2.40 3.31 0.32 0.13 0.54 23.79 Year ended March 31, 2005 2.40 3.18 0.61 0.34 1.43 23.26

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus.

124

Burlington Investments Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Duro International Rubber Private Limited Duro International Rubber Private Limited was incorporated on June 22, 1987 as Royal Rubber Private Limited under registration number 55-127404. The name of the company was changed to Duro International Rubber Private Limited with effect from October 22, 1997 by issuance of a fresh certificate of incorporation. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The company is engaged in the business of manufacturers, fabricators, traders, importers, exporters and distributors of tyres, tubes, flaps, fan-belts, tread rubber and other related rubber and polymer products for cycles, automobiles and airplanes, including manufacturing and maintaining the machines and presses thereof. Directors as of May 31, 2008 The board of directors of Duro International Rubber Private Limited as at May 31, 2008 comprises Mr. S.K. Jain and Mr. Rakesh Haldia. Shareholding as of May 31, 2008 The shareholding pattern of Duro International Rubber Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. Names of Shareholder Mr. Nikhil Rungta Mrs. Ritika Rungta Total No. of Shares held 22,000 22,000 44,000 % of Shareholding 50.00 50.00 100.00

Financial Performance The audited financial results of Duro International Rubber Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 100) Book Value per equity share (Rs.) 4.40 (3.81) (0.29) (6.70) 13.47 Year ended March 31, 2006 4.40 (3.51) 0.03 (0.39) (8.86) 20.17 Period ended March 31, 2005 (15 months) 4.40 (3.12) 0.55 (0.24) (5.43) 29.02

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Duro International Rubber Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. G. M. Modi Hospitals Corporation Private Limited G. M. Modi Hospitals Corporation Private Limited was incorporated on January 8, 1991 as G.M. Modi Hospitals Corporation Limited under registration number 55-42646 with the RoC. Subsequently, on conversion to a private limited company, the name of the company was changed to G.M. Modi Hospitals Corporation Private Limited on June 18, 2003 by issuance of a fresh certificate of

125

incorporation. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The main objects of the company are to purchase, lease or otherwise acquire, establish, maintain, operate, run, manage or administer hospitals, medicare, day care and health care centres, nursing homes, clinics for in-door and out-door patients and facilities for reception and treatment of persons suffering from injuries and illness, disabilities and deficiencies of any kind or nature whatsoever, contagious or otherwise and treatment of persons, during convalescence or of persons requiring medical attention or rehabilitation; and to provide for free treatment to a reasonable number of patients belonging to economically weaker sections of society in the specialty and super specialty departments. Directors as of May 31, 2008 The board of directors of G. M. Modi Hospitals Corporation Private Limited as at May 31, 2008 comprises Dr. N.K. Gupta, Mr. S.K. Jain and Mr. Rakesh Haldia. Shareholding as of May 31, 2008 The shareholding pattern of G. M. Modi Hospitals Corporation Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Names of Shareholder Mr. R. K. Gupta Mr. S.K. Jain Mr. S.K. Gupta Mr. R.L. Ahuja Mr. R.P. Goyal Mrs. Sukhmani Ganguli Mr. M.C. Mittal Spice Corp Limited Fine Installments Private Limited Mudaliar & Sons Hotels Private Limited Total No. of Shares held 10 10 10 10 30 30 100 4,050,000 200,000 3,999,000 8,249,200 % of Shareholding 0.00 0.00 0.00 0.00 0.00 0.00 0.00 49.10 2.42 48.48 100.00

Financial Performance The audited financial results of G. M. Modi Hospitals Corporation Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Period ended March 31, 2006 (15 months) 82.49 0.45 39.93 (0.35) (0.04) 10.27 Year ended December 31, 2004 78.49 0.79 20.79 0.79 0.10 10.25

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10) Book Value per equity share (Rs.)

82.49 0.79 26.73 0.35 0.04 10.30

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. G. M. Modi Hospitals Corporation Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Harjas Logic Systems Private Limited

126

Harjas Logic Systems Private Limited was incorporated on February 19, 2002 under registration number 55-114284 with the RoC. Its registered office is situated at 60-D, Street No.C-5, Sainik Farms, New Delhi- 110 062, India. The main object of the company is to carry on the business of manufacturers, importers, exporters of computer, computer parts, accessories and other items connected with or incidental to computer hardware and to import, export, manufacture, develop or deal-in software, data storage devices and management information systems. Directors as of May 31, 2008 The board of directors of Harjas Logic Systems Private Limited as at May 31, 2008 comprises Mr. Ashok Agarwal and Ms. Preeti Malhotra. Shareholding as of May 31, 2008 The shareholding pattern of Harjas Logic Systems Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. Names of Shareholder Mudaliar & Sons Hotels Private Limited Positive Investment Private Limited Spice Corp Limited Mr. O.P. Dani (Beneficial Owner Spice Corp Limited) Total No. of Shares held 6,000 500 5,999 1 12,500 % of Shareholding 48.00 4.00 47.99 0.01 100.00

Financial Performance The audited financial results of Harjas Logic Systems Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Period ended March 31, 2006 (13.5 months) 1.25 12.32 16.93 12.32 985.73 1,074.40 Period ended February 15, 2005 (10.5 months) 1.20 (0.05) 0.05 (0.03) (2.57) 82.54

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 100) Book Value per equity share (Rs.)

1.25 23.46 15.63 11.14 891.03 1,966.86

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Harjas Logic Systems Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Hindustan Retail Private Limited Hindustan Retail Private Limited was incorporated on May 7, 2007 under registration number 20033258 and is registered with the Registrar of Companies, Uttar Pradesh. The registered office of the company is situated at D-1, Sector-3, Noida- 201 301, Uttar Pradesh, India. The main business of the company is to carry on the business as retailers, traders and dealers of telecommunication, electronics and digital equipments. Directors as of May 31, 2008

127

The board of directors of Hindustan Retail Private Limited as at May 31, 2008 comprises Mr. Dilip Modi and Ms. Veena Modi Shareholding as of May 31, 2008 The shareholding pattern of Hindustan Retail Private Limited as at May 31, 2008 is as under:
Sl. No. 1 2. Names of Shareholder Ms. Veena Modi Mr. Dilip Modi Total No. of Shares held 5,000 5,000 1,0000 % of Shareholding 50 50 100

Financial Performance The company was incorporated on May 7, 2007 therefore no audited financials are available. There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Hindustan Retail Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Mcorpglobal Communications Private Limited Mcorpglobal Communications Private Limited was incorporated on January 1, 1995 under name of Modi Wellvest Private Limited company under registration number 20-17382 with Registrar of Companies, Uttar Pradesh at Kanpur. The name of the company was changed to Mcorpglobal Communications Private Limited with effect from July 24, 2007. The company’s registered office is situated at D-1, Sector-3, Noida 201 301, Uttar Pradesh, India. The main business activity of the company is to carry on the business of investment and to buy, sell, underwrite, invest, acquire and hold shares and other securities issued by any company. Directors as of June 9, 2008 The board of directors of Mcorpglobal Communications Private Limited as at June 9, 2008 comprises Dr. B.K. Modi, Mr. Dilip Modi, Ms. Divya Modi and Mr. Atul Prakash. Shareholding as of June 9, 2008 The shareholding pattern of Mcorpglobal Communications Private Limited as at June 9, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. 7. Names of Shareholder Super Infosys Private Limited Orion Telecoms Limited Asian Infrastructure (Mauritius) Inc DAI (Mauritius) Co. Limited Falcon Securities Limited Guiding Star Limited ChristChurch Investments Limited Total No. of Shares held 80,758,354 14,515,043 14,779,980 14,921,352 15,600,000 7,853,337 8,638,671 157,066,737 % of Shareholding 51.42 9.24 9.41 9.50 9.93 5.00 5.50 100

Financial Performance The audited financial results of Mcorpglobal Communications Private Limited for the past three years are as follows:

128

(in Rs. million except for share data)
Year ended December 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.) 1,570.67 1,233.41 (0.22) (0.00) 17.85 Period ended December 31, 2006 (6 months) 1,570.67 1,233.63 0.04 (0.07) (0.00) 17.86 Year ended June 30, 2006

1,570.67 1,233.70 (0.80) (0.01) 17.85

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Mcorpglobal Communications Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. MCorp Communications Pte. Limited MCorp Communications Pte. Limited was incorporated on July 25, 1996 in the name of Gil Singapore Pte. Limited. The company was registered with the Registrar of Companies and Businesses, Singapore under the registration no. 199605439C. The name of the company was changed to MCorp Far East Pte. Limited with effect from October 1, 2003 and subsequently to MCorp Communication Pte. Limited with effect from September 4, 2006. The registered office of the company is situated at 1 North Bridge Road, #19-04/05, High Street Centre, Singapore- 179 094. The company is engaged in the business of marketing, sales, distribution and service of computers and related products. Directors as of May 31, 2008 The board of directors of MCorp Communications Pte. Limited as at May 31, 2008 comprises Dr. B.K. Modi, Mr. Dilip Modi, Mr. Yagya Prakash Gupta and Mr. Vangal Rangarajan Ranganathan. Shareholding as of May 31, 2008 The shareholding pattern of MCorp Communications Pte. Limited as at May 31, 2008 is as under:
Sl. No. 1. Names of Shareholder Dr. B.K. Modi Total No. of Shares held 1,400,000 1,400,000 % of Shareholding 100.00 100.00

Financial Performance The audited financial results of MCorp Communications Pte. Limited for the period ended December 31, 2006 (6 months) is as follows:
Year ended December 31, 2006 1.40 5.04 0.25 5.62* 40.12 46.00 Year ended December 31, 2005 1.40 (0.58) 0.29 0.27 1.94 5.89 Amount in SGD Year ended December 31, 2004 1.40 (0.85) 0.10 0.04 0.27 3.95

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

* including share of results of Associated Company as per Audit report

129

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. MCorp Communications Pte. Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Mcorp Investments Pte. Limited Mcorp Investments Pte. Limited was incorporated on June 14, 2007. The company was registered with the Registrar of Companies and Businesses, Singapore under the registration no. 200710572E. The registered office of the company is situated at 1 North Bridge Road, #19-04/05, High Street Centre, Singapore- 179 094. The main object of the company is to carry on the business of fund management, financial advisors and trading in futures, to undertake, carry on and execute all kinds of investment and commercial, trading and other operations; to invest the capital and other monies of the company in the purchase or upon the security of shares, stocks, debentures, debenture stocks, bonds, mortgages, obligations and securities of any kind issued or guaranteed by any company corporation or undertaking of whatever nature or wheresoever constituted and carrying on business, and shares, stocks, debentures, debenture stocks, bonds, mortgages, obligations and other securities issued or guaranteed by any government, sovereign ruler, commissioners, public body or authority, supreme, municipal, local or otherwise, whether at home or abroad. Directors as of May 31, 2008 The board of directors of Mcorp Investments Pte. Limited as at May 31, 2008 comprises Mr. Vangal Rangarajan Ranganathan Shareholding as of May 31, 2008 The shareholding pattern of Mcorp Investments Pte. Limited as at May 31, 2008 is as under:
Sl. No. 1. Names of Shareholder Mcorp Communications Pte. Limited Total No. of Shares held 1 1 % of Shareholding 100.00 100.00

Financial Performance The audited financial results of Mcorp Investments Pte. Limited for the past three years are not available as the company was incorporated only on June 14, 2007. There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Mcorp Investments Pte. Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Mudaliar & Sons Hotels Private Limited Mudaliar & Sons Hotels Private Limited was incorporated on April 8, 1981 under registration number 24215 with the Registrar of Companies, Mumbai. Its registered office is situated at 1, Shreyas, Madam Cama Road, opposite Air India Building, Nariman Point, Mumbai- 400 020, Maharashtra, India. The main objects of the company are to acquire, take on lease or otherwise to carry on the business of hotels, tourist hotels, guest houses, loading and boarding houses and to arrange for and provide all manner of entertainment, amusement and recreation for the public as caterers. Directors as of May 31, 2008

130

The board of directors of Mudaliar & Sons Hotels Private Limited as at May 31, 2008 comprises Mr. G.S. Negi and Mr. R.K. Gupta. Shareholding as of May 31, 2008 The shareholding pattern of Mudaliar & Sons Hotels Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. Names of Shareholder Spice Corp Limited Mr. Hemant Kumar Samor Total No. of Shares held 390,076 24 390,100 % of Shareholding 99.99 0.01 100.00

Financial Performance The audited financial results of Mudaliar & Sons Hotels Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 39.01 2.46 3.76 0.49 1.24 106.25 Year ended March 31, 2006 39.01 1.97 2.96 0.90 2.30 104.96 Year ended March 31, 2005 39.01 1.08 2.96 0.36 0.93 102.61

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Mudaliar & Sons Hotels Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. NIK Travels Private Limited NIK Travels Private Limited was incorporated on September 18, 1995 under registration number 5572526 with the RoC. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi110 062, India. The main objects of the company are to carry on business as travel agents and tour operators by land, sea and air; to facilitate travelling and to provide for tourist and travellers, or promote the provisions of conveniences of all kinds in the way of through tickets, circular tickets, sleeping cars or berths, reserved places, hotel and boarding and/or lodging accommodation and guides, safe, deposits, enquiry, bureau, libraries, resting rooms, baggage transport, and otherwise; and to charter steamships and airplanes for fixed periods or for particular voyages and flights. Directors as of May 31, 2008 The board of directors of NIK Travels Private Limited as at May 31, 2008 comprises Mr. Ramesh Nair, Mr. Atul Prakash and Mr. R.K.Gupta. Shareholding as of May 31, 2008 The shareholding pattern of NIK Travels Private Limited as at May 31, 2008 is as under:
Sl. No. 1. Names of Shareholder Spice Corp Limited No. of Shares held 200,000 % of Shareholding 50.00

131

2. 3.

Modikem Limited Mr. R. K. Gupta Total

199,900 100 400,000

49.98 0.02 100.00

Financial Performance The audited financial results of NIK Travels Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.) 4.00 0.43 10.65 0.59 1.48 11.73 Year ended March 31, 2006 4.00 (0.16) 5.62 0.05 0.14 9.24 Year ended March 31, 2005 4.00 (0.22) 4.06 0.15 0.37 8.90

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. NIK Travels Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Oasis Cineplex Private Limited Oasis Cineplex Private Limited was incorporated on February 10, 1987 as Oasis Overseas Private Limited under registration number 55-26953 with the RoC. The name of the company was changed to Oasis Cineplex Private Limited on May 6, 2004 by issuance of a fresh certificate of incorporation. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The main object of the company is to carry on the business of exhibition of films, cinema owners, film distributors, studio owners and all other allied materials, traders and techniques. Directors as of May 31, 2008 The board of directors of Oasis Cineplex Private Limited as at May 31, 2008 comprises Ms. Divya Modi, Mr. Hemant Kumar Samor and Mr. S.K. Jain. Shareholding as of May 31, 2008 The shareholding pattern of Oasis Cineplex Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. 4. 5. 6. Names of Shareholder Mr Dilip Modi Mr. Santosh Kumar Gupta Mr. Rakesh Haldia Mr. R. K. Gupta Mr. Ram Prakash Goyal First Choice Enterprises Private Limited Total No. of Shares held 600 500 500 500 500 1,600 4,200 % of Shareholding 14.30 11.90 11.90 11.90 11.90 38.10 100.00

Financial Performance The audited financial results of Oasis Cineplex Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Year ended March 31, 2006 Year ended March 31, 2005

132

Equity Capital Preference Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

0.04 10.00 2.32 2.81 1.85 441.56 562.85

0.04 10.00 0.47 1.67 0.50 118.26 121.29

0.04 10.00 (0.02) (0.01) (1.81) (34.37)

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Oasis Cineplex Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Shenzhen SIBASI Catering Management Company Limited Shenzhen SIBASI Catering Management Company Limited was incorporated on January 17, 2006. The company registered with the Shenzhen City Industry and Commerce Administration under registration number 440301503283387. Its registered office is situated at P119, Tianjun mansion, South DongMen RD. LuoHu district Shenzhen GuangDong China. The company is engaged in the business of catering of western-style food. Directors as of May 31, 2008 The board of directors of Shenzhen SIBASI Catering Management Company Limited as at May 31, 2008 comprises Dr. B.K. Modi - Chairman, Mr. Gupta Prabhakar and Mr. Hemant Samor. Shareholding as of May 31, 2008 The shareholding pattern of Shenzhen SIBASI Catering Management Company Limited as at May 31, 2008 is as under:
Sl. No. 1. Names of Shareholder Dr. B.K. Modi Total No. of Shares held 2,000,000 2,000,000 % of Shareholding 100.00 100.00

Financial Performance The audited financial results of Shenzhen SIBASI Catering Management Company Limited for the past three years are not available as the company was incorporated on January 17, 2006 only. The registered capital of the company has increased from 1,000,000 RMB to 2,000,000 RMB on January 8, 2008. Shenzhen SIBASI Catering Management Company Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth. Super Infosys Private Limited Super Infosys Private Limited was incorporated on June 9, 1995 under the registration number 5569600 with the RoC. Its registered office is situated at D-60, Street No. C-5, Sainik Farms, New Delhi110062, India. The main objects of the company are relating to the services in the telecommunication, IT, electronics, multimedia and software industry as well as to deal in the products of telecommunication, IT, electronics, multimedia and software industry.

133

Directors as of May 31, 2008 The board of directors of Super Infosys Private Limited as at May 31, 2008 is comprised of Mr. Dilip Modi and Dr. B.K. Modi. Shareholding as of May 31, 2008 The shareholding pattern of Super Infosys Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. Names of Shareholder No. of Shares held % of Shareholding 100.00 0.00 100.00

ITPL Mr. Dilip Modi Total

41,664,919 1 41,664,920

Financial Performance The audited financial results of Super Infosys Private Limited for the past three years are as follows: (in Rs. million except for share data)
Period ended December 31, 2006 416.65 390.18 (0.01) (0.00) 19.36 Year ended June 30, 2006 416.65 390.19 (0.19) (0.00) 19.36 Year ended June 30, 2005 416.65 390.38 (0.33) (0.01) 19.37

Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. Super Infosys Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. Teesho Rubbers Private Limited Teesho Rubbers Private Limited was incorporated on December 24, 1993 under registration number 55-56621 with the RoC. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The company is engaged in the business of manufacture of and dealers in all types of natural rubber, synthetic rubbers and other rubber products, plastic products and goods. Directors as of May 31, 2008 The board of directors of Teesho Rubbers Private Limited as at May 31, 2008 comprises Mr. S.K. Gupta and Mr. S.K. Jain. Shareholding as of May 31, 2008 The shareholding pattern of Teesho Rubbers Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. 3. Names of Shareholder No. of Shares held % of Shareholding 10 10 12,500 0.01 0.01 17.12

Mr. Ravinder Lal Ahuja Mr. R.K. Gupta Fine Instalments Private Limited

134

4. 5. 6.

Modikem Limited Toplight Corporate Management Private Limited Oasis Cineplex Private Limited Total

36,000 12,500 12,000 73,020 100.00

49.30 17.12 16.43

Financial Performance The audited financial results of Teesho Rubbers Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.) 0.73 (0.98) (0.02) (0.22) (3.43) Year ended March 31, 2006 0.73 (0.96) (0.01) (0.19) (3.21) Period ended March 31, 2005 (15 months) 0.73 (0.95) 0.00 (0.03) (0.41) (3.01)

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. The company currently has a negative net worth. Teesho Rubbers Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. Tuberose Investments Private Limited Tuberose Investments Private Limited was incorporated on November 27, 1996 under registration number 55-83487 with the RoC. Its registered office is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110 062, India. The main object of the company is to carry on the business of investment and to buy, sell, acquire and hold shares, debentures, stocks etc. issued by any body corporate. Directors as of May 31, 2008 The board of directors of Tuberose Investments Private Limited as at May 31, 2008 comprises Mrs. Veena Modi, Ms. Divya Modi, Mr. R.P. Goyal, Mr S.K. Gupta and Mr. Harish Nag. Shareholding as of May 31, 2008 The shareholding pattern of Tuberose Investments Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. Names of Shareholder No. of Shares held % of Shareholding 20 10,000 10,020 100.00 0.20 99.80

Mrs. Veena Modi Ms. Divya Modi Total

Financial Performance The audited financial results of Tuberose Investments Private Limited for the past three years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital 0.10 Year ended March 31, 2006 0.10 Year ended March 31, 2005 0.10

135

Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.)

(0.18) (0.01) (0.94) (7.76)

(0.17) (0.12) (12.24) (6.81)

(0.05) (0.00) (0.36) 5.42

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. The company has negative net worth. Tuberose Investments Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. VCorp Mercantile Private Limited VCorp Mercantile Private Limited was incorporated on October 18, 2005 under registration number 55-141853 with the RoC. The registered office of the company is situated at 60-D, Street No. C-5, Sainik Farms, New Delhi- 110062, India. The main object of the company is to carry on business as retailers, sellers, buyers, traders, dealers, importers and exporters of consumer and household goods such as clothes, jewellery, perfumes, watches, fancy goods and plastic products. Directors as of May 31, 2008 The board of directors of VCorp Mercantile Private Limited as at May 31, 2008 comprises Mr. Abhay Kumar Agarwal, Mrs. Savita Agarwal and Ms. Dwiti Agarwal. Shareholding as of May 31, 2008 The shareholding pattern of VCorp Mercantile Private Limited as at May 31, 2008 is as under:
Sl. No. 1. 2. Names of Shareholder No. of Shares held % of Shareholding 49,990 10 50,000 99.98 0.02 100.00

Mrs. Veena Modi Mr. G.S. Negi Total

Financial Performance The audited financial results of VCorp Mercantile Private Limited are available for the past two years alone as the company was incorporated in October 2005. The audited financial results of VCorp Mercantile Private Limited for the past two years are as follows: (in Rs. million except for share data)
Year ended March 31, 2007 Equity Capital Reserves and Surplus Total Income Profit/(Loss) after Tax Earnings per share (Rs.) (Face Value Rs. 10/-) Book Value per equity share (Rs.) 0.50 (0.33) 52.92 (0.29) (5.71) 4.57 Period ended March 31, 2006 0.50 (0.05) (0.05) (0.92) 1.01

There have been no changes in the capital structure in the last six months preceding the date of filing this Draft Red Herring Prospectus. VCorp Mercantile Private Limited has not become a sick company within the meaning of SICA nor is it subject to a winding-up order or petition. It does not have a negative net worth.

136

Dr B K Modi & Sons (HUF) Constitution of Dr. B. K. Modi & Sons (HUF) • • • • Dr. B. K. Modi, Karta Mrs. Veena Modi, Member Mr. Dilip Modi, Member Ms. Divya Modi, Member

Dr. B. K. Modi & Sons (HUF) is in the business of investments. Rakesh Kumar Shaurya Veer (HUF) Constitution of Rakesh Kumar Shaurya Veer (HUF) • • • Mr. Rakesh Himatsingka, Karta Mrs. Anita Himatsingka, Member Mr. Shauryaveer Himatsingka, Member

Rakesh Kumar Shaurya Veer (HUF) is in the business of investments. Interest of our Promoter Group in our Company Except as disclosed in the the section “Related Party Transactions” beginning on page 139 and to the extent of their shareholding in our Company, our Promoters and Promoter Group do not not have any other interest in our Company. Other Confirmations There are no defaults by any of the Promoters or Promoter Group companies in respect of payment of interest and/or principal to the debenture/ bond/ fixed deposit holders. In addition, there are no disciplinary actions taken by any of the stock exchanges and regulatory authorities against any of the Promoters or Promoter Group companies. Past Ventures of our Promoters Our Promoters have not disassociated with any company in the last three years, however, on June 25, 2008 one of the promoter shareholder of Spice Communications Limited, MCorpGlobal Communication Private Limited has entered into a Share Purchase Agreement with Idea Cellular Limited to divest its entire shareholding comprising 40.8% in Spice Communications Limited, one of our Promoter Group Companies, to Idea Cellular Limited. The board of directors of Spice Communications Limited has also approved its merger with Idea Cellular Limited. Public/Rights Issue Our Promoter Group companies have not made public or rights issue in the preceding three years, other than as mentioned above in this section. Winding up or Sick Company Our Promoter Group companies have neither become a sick company within the meaning of the Sick Industrial Companies (Special Provisions) Act, 1995 nor are they under winding up. Defunct Promoter Group Companies None of our Promoter Group companies are defunct companies. Conflict of Interest There is no conflict of interest between our Promoters and our Company.

137

Related Party Transactions For details of the related party transactions, see the section “Related Party Transactions” beginning on page 139.

138

RELATED PARTY TRANSACTIONS CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) DETAILS OF TRANSACTIONS WITH RELATED PARTIES
Particulars Ninemonths Period Ended December 31, 2007 Holding Company Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003 Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007 Subsidiary Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

A) Transactions i) Revenue from Value Added Services Spice Communications Limited Revenue from Roaming Services Spice Communications Limited Sale of Softwares iv) iv) Other Income (Rental Income) Hot Spot Retails Private Limited Purchase of Fixed Assets Spice Mobiles Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited v) Roaming Expenses -

-

-

-

-

-

-

-

-

-

-

ii) iii)

-

-

-

-

-

-

-

-

-

-

139

Spice Communications Limited vi) vii) Enterprise Solution Charges Spice Communications Limited Gifts and Prizes Hot Spot Retails Private Limited Spice Communications Limited viii) Website Development Charges Spice Communications Limited Hardware and Equipment Maintenance Services Spice Communications Limited Rent Paid Spice Communications Limited Harjas Logic Systems Private Limited Wellwisher Holdings Private Limited xi) xii) Repair Services Hot Spot Retails Private Limited Business Promotion Expenses Hot Spot Retails Private Limited Spice Mobiles Limited xiii) xiv) xv) xvi) Travelling expenses Nik Travels Private Limited Communication expenses Spice Communications Limited Sundry Debit Balances Written Off Spice Communications Limited Balances Provided for Spice Communications Limited -

-

-

-

-

-

-

-

-

-

-

-

-

ix) x)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

140

xvii)

Electricity Expenses Spice Communications Limited -

xiii)

Staff Welfare Spice Communications Limited 18.18 -

xix) xx)

Legal & Professional Charges Mobisoc Technology Private Limited Corporate Guarantee Commission income Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Interest Income MCorpGlobal Private Limited Remuneration paid Saket Agarwal Kartar Singh Dheeraj Agarwal Reimbursement of Expenses Incurred by the Company MCorpGlobal Private Limited Spice Global Pvt Ltd. Spice Communications Limited Reimbursement of Expenses Paid by the Company Mobisoc Technology Private Limited Dividend Paid Omnia Investments Private Limited Dr. B.K Modi 400.18 -

-

-

-

-

-

-

-

-

-

-

xxi)

xxii)

-

-

-

-

-

-

-

-

-

-

xxiii)

xxiv) xxv)

-

-

-

-

-

3.00

-

-

-

-

141

Mrs. Veena Modi Mr. Dilip Modi Ms. Divya Modi xxvi) Investment in Equity Share Capital Mobisoc Technology Private Limited Share Application money paid Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited xxviii) Share Application money received back Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited xxix) Advance Given During the Year Omnia Investments Private Limited Spice Global Pvt Ltd. Spice Net Limited Hot Spot Retails Private Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Twenty First Century Capitals Limited xxx) Advance received back during the year Omnia Investments Private Limited Spice Net Limited Hot Spot Retails Private Limited

-

-

-

-

-

-

100.00

-

-

-

xxvii)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

60.00 -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

60.00 -

-

-

-

-

-

-

-

142

Twenty First Century Capitals Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) xxxi) Security Deposits Given Mudaliar & Sons Hotels Pvt Ltd Harjas Logic Systems Private Limited xxxii) xxxiii) B) Balances at the year end Loan Given During the Year MCorpGlobal Private Limited Loan received back during the year MCorpGlobal Private Limited

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

i)

Receivables Spice Communications Limited Spice Global Pvt Ltd. Spice Net Limited Modi Distributors Pvt. Ltd. Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Hot Spot Retails Private Limited Twenty First Century Capitals Limited Bougainvillea Multiplex & Entertainment Center Private Limited Harjas Logic Systems Private Limited Kartar Singh -

-

-

-

-

-

-

-

-

-

-

143

Mudaliar & Sons Hotels Pvt Ltd (against security deposit) Mudaliar & Sons Hotels Pvt Ltd (against advances recoverable) MCorpGlobal Private Limited ii) Payables Nik Travels Private Limited Mr. Dheeraj Agarwal Harjas Logic Systems Private Limited Mobisoc Technology Private Limited Spice Mobiles Limited Spice Communications Limited

-

-

-

-

-

0.51 -

-

-

-

-

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

144

Particulars

Fellow Subsidiary

Key Management Personnel

Ninemonths Period Ended December 31, 2007

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteenmonths Period Ended March 31, 2005

Year Ended December 31, 2003

Ninemonths Period Ended December 31, 2007

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteenmonths Period Ended March 31, 2005

Year Ended December 31, 2003

A) Transactions i) Revenue from Value Added Services Spice Communications Limited Revenue from Roaming Services Spice Communications Limited Sale of Softwares 52.70 iv) iv) Other Income (Rental Income) Hot Spot Retails Private Limited Purchase of Fixed Assets Spice Mobiles Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited v) vi) vii) Roaming Expenses Spice Communications Limited Enterprise Solution Charges Spice Communications Limited Gifts and Prizes 5.97 2.96 0.01 0.20 -

7.85

-

-

-

-

-

-

-

-

-

ii) iii)

3.62

-

-

-

-

-

-

-

-

-

145

Hot Spot Retails Private Limited Spice Communications Limited viii) Website Development Charges Spice Communications Limited Hardware and Equipment Maintenance Services Spice Communications Limited Rent Paid Spice Communications Limited Harjas Logic Systems Private Limited Wellwisher Holdings Private Limited xi) xii) Repair Services Hot Spot Retails Private Limited Business Promotion Expenses Hot Spot Retails Private Limited Spice Mobiles Limited xiii) xiv) xv) xvi) xvii) Travelling expenses Nik Travels Private Limited Communication expenses Spice Communications Limited Sundry Debit Balances Written Off Spice Communications Limited Balances Provided for Spice Communications Limited Electricity Expenses Spice Communications Limited Staff Welfare

-

0.02 -

-

-

-

-

-

-

-

-

ix) x)

0.05 -

0.03 -

-

-

-

-

-

-

-

-

0.44 -

-

-

-

-

-

-

-

-

-

xiii)

146

Spice Communications Limited xix) xx) Legal & Professional Charges Mobisoc Technology Private Limited Corporate Guarantee Commission income Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Interest Income MCorpGlobal Private Limited xxii) Remuneration paid Saket Agarwal Kartar Singh Dheeraj Agarwal xxiii) Reimbursement of Expenses Incurred by the Company MCorpGlobal Private Limited Spice Global Pvt Ltd. Spice Communications Limited Reimbursement of Expenses Paid by the Company Mobisoc Technology Private Limited xxv) Dividend Paid Omnia Investments Private Limited Dr. B.K Modi Mrs. Veena Modi Mr. Dilip Modi Ms. Divya Modi xxvi) Investment in Equity Share Capital Mobisoc Technology Private Limited

-

-

-

-

-

-

-

-

-

-

-

0.39 -

0.02 -

-

-

-

-

-

-

-

xxi)

-

-

-

-

-

0.99 2.27 -

-

0.54

2.55

-

-

-

-

-

-

-

-

-

-

-

xxiv)

-

-

-

-

-

-

0.02 -

-

-

-

147

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

148

Particulars Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007

Fellow Subsidiary Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003 Ninemonths Period Ended December 31, 2007

Key Management Personnel Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

xxvii)

Share Application money paid Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited

ZZZZZZ -

43.20 -

-

-

-

-

-

-

-

-

xxviii)

Share Application money received back Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited

43.20 -

-

-

-

-

-

-

-

-

xxix)

Advance Given During the Year Omnia Investments Private Limited Spice Global Pvt Ltd. Spice Net Limited Hot Spot Retails Private Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Twenty First Century Capitals Limited 2.50 -

-

0.40 -

2.50 -

-

-

-

-

-

-

-

xxx)

Advance received back during the year

149

Omnia Investments Private Limited Spice Net Limited Hot Spot Retails Private Limited Twenty First Century Capitals Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) xxxi) Security Deposits Given Mudaliar & Sons Hotels Pvt Ltd Harjas Logic Systems Private Limited xxxii) xxxiii) B) Balances at the year end i) Receivables Spice Communications Limited Spice Global Pvt Ltd. Spice Net Limited Modi Distributors Pvt. Ltd. Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Hot Spot Retails Private Limited Twenty First Century Capitals Limited Loan Given During the Year MCorpGlobal Private Limited Loan received back during the year MCorpGlobal Private Limited

-

-

2.50 -

-

-

-

-

-

-

-

-

0.40 -

2.50 -

-

-

-

-

-

-

-

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

-

-

-

-

-

-

-

-

-

-

-

0.40 -

0.02 -

-

-

-

-

-

-

-

150

Bougainvillea Multiplex & Entertainment Center Private Limited Harjas Logic Systems Private Limited Kartar Singh Mudaliar & Sons Hotels Pvt Ltd (against security deposit) Mudaliar & Sons Hotels Pvt Ltd (against advances recoverable) MCorpGlobal Private Limited ii) Payables Nik Travels Private Limited Mr. Dheeraj Agarwal Harjas Logic Systems Private Limited Mobisoc Technology Private Limited Spice Mobiles Limited Spice Communications Limited

-

-

-

-

-

0.12 -

-

-

0.06 -

-

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties. Cont..

151

Particulars

Relatives of Key Management Personnel

Enterprises owned or significantly influenced by key management personnel or their relatives Year Ended December 31, 2003 NineYear Year months Ended Ended Period March 31, March Ended 2007 31, 2006 December 31, 2007 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

Ninemonths Period Ended December 31, 2007 A) Transactions i) Revenue from Value Added Services Spice Communications Limited ii) Revenue from Roaming Services Spice Communications Limited Sale of Softwares iv) Other Income (Rental Income) Hot Spot Retails Private Limited Purchase of Fixed Assets Spice Mobiles Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited Roaming Expenses Spice Communications Limited Enterprise Solution Charges Spice Communications Limited Gifts and Prizes Hot Spot Retails Private Limited Spice Communications Limited Website Development Charges Spice Communications Limited -

Year Year Ended Ended March 31, March 31, 2006 2007

Fifteenmonths Period Ended March 31, 2005

-

-

-

-

-

34.32

117.80 133.18

87.74

2.12

-

-

-

-

13.79

42.80

50.69

78.66

-

iii)

-

-

-

-

254.76

221.23 -

-

-

-

1.60 iv) 18.72 vi) vii) 9.95 4.07 0.07 1.20 0.16 0.27 21.96 10.63 4.67 11.87 -

v)

viii)

152

ix) x)

Hardware and Equipment Maintenance Services Spice Communications Limited Rent Paid Spice Communications Limited Harjas Logic Systems Private Limited Wellwisher Holdings Private Limited

-

-

-

-

-

0.27 2.93 1.80

0.36 3.91 1.00

0.75 0.36 0.33 -

3.75 0.81 -

-

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

153

Particulars Ninemonths Period Ended December 31, 2007 xi) xii) Repair Services Hot Spot Retails Private Limited Business Promotion Expenses Hot Spot Retails Private Limited Spice Mobiles Limited xiii) xiv) Travelling expenses Nik Travels Private Limited Communication expenses Spice Communications Limited Sundry Debit Balances Written Off Spice Communications Limited xvi) xvii) Balances Provided for Spice Communications Limited Electricity Expenses Spice Communications Limited Staff Welfare Spice Communications Limited xix) Legal & Professional Charges Mobisoc Technology Private -

Relatives of Key Management Personnel Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

Enterprises owned or significantly influenced by key management personnel or their relatives Ninemonths Period Ended December 31, 2007 6.50 Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

-

-

-

-

-

-

-

-

-

-

-

4.59 1.47

3.03 1.26

0.54 0.95

1.39 1.54

-

xv)

-

-

-

-

-

1.11

0.16 0.58

0.30 -

0.10 -

-

xiii)

-

-

-

-

0.05 -

-

-

-

-

154

Limited xx) Corporate Guarantee Commission income Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Interest Income MCorpGlobal Private Limited xxii) Remuneration paid Saket Agarwal Kartar Singh Dheeraj Agarwal xxiii) Reimbursement of Expenses Incurred by the Company MCorpGlobal Private Limited Spice Global Pvt Ltd. Spice Communications Limited Reimbursement of Expenses Paid by the Company Mobisoc Technology Private Limited Dividend Paid Omnia Investments Private Limited Dr. B.K Modi Mrs. Veena Modi Mr. Dilip Modi Ms. Divya Modi Investment in Equity Share Capital Mobisoc Technology Private Limited 0.36 0.59 0.97 0.33 49.47 5.88 3.20 -

-

-

-

-

-

-

-

-

-

-

xxi)

-

-

-

-

-

-

-

-

-

-

xxiv)

-

-

-

-

-

-

-

-

-

-

xxv)

-

-

-

-

-

-

-

-

-

-

xxvi)

-

-

-

-

-

-

-

-

-

-

155

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

156

Particulars

Relatives of Key Management Personnel Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

Enterprises owned or significantly influenced by key management personnel or their relatives Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

xxvii)

Share Application money paid Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited Share Application money received back Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited

-

-

150.00 79.50 -

xxviii)

-

-

-

-

-

-

150.00 79.50

-

-

-

xxix)

Advance Given During the Year Omnia Investments Private Limited Spice Global Pvt Ltd. Spice Net Limited Hot Spot Retails Private Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Twenty First Century Capitals Limited 17.50 19.05 -

-

-

-

-

-

-

-

0.50

-

-

157

xxx)

Advance received back during the year Omnia Investments Private Limited Spice Net Limited Hot Spot Retails Private Limited Twenty First Century Capitals Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) 0.50 19.00 -

-

-

-

-

-

150.00 -

1.95

-

-

-

xxxi)

Security Deposits Given Mudaliar & Sons Hotels Pvt Ltd Harjas Logic Systems Private Limited

xxxii) xxxiii) B) Balances at the year end i)

Loan Given During the Year MCorpGlobal Private Limited Loan received back during the year MCorpGlobal Private Limited As at December 31, 2007 As at March 31, 2007 As at March 31, 2006 As at March 31, 2005 As at December 31, 2003 As at December 31, 2007 119.60 As at March 31, 2007 50.00 As at March 31, 2006 As at March 31, 2005 As at December 31, 2003 54.10 115.50 -

Receivables Spice Communications Limited Spice Global Pvt Ltd. Spice Net Limited Modi Distributors Pvt. Ltd. Omnia BPO Services Limited 265.08 184.13 20.27 47.30 17.60 0.05 5.00 -

158

(formerly known as Stracon Back Office Solutions Limited) Hot Spot Retails Private Limited Twenty First Century Capitals Limited Bougainvillea Multiplex & Entertainment Center Private Limited Harjas Logic Systems Private Limited Kartar Singh Mudaliar & Sons Hotels Pvt Ltd (against security deposit) Mudaliar & Sons Hotels Pvt Ltd (against advances recoverable) MCorpGlobal Private Limited ii) Payables Nik Travels Private Limited Mr. Dheeraj Agarwal Harjas Logic Systems Private Limited Mobisoc Technology Private Limited Spice Mobiles Limited Spice Communications Limited 0.03 6.50 33.75 0.01 0.10 0.08 0.25 0.00* 2.07 150.00 8.43 1.95 0.50 150.00 145.00 -

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

159

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP DETAILS OF TRANSACTIONS WITH RELATED PARTIES
Particulars Holding Company Fellow Subsidiary Key Management Personnel Relatives of Key Management Personnel Enterprises owned or significantly influenced by key management personnel or their relatives Total

For the nine For the For the nine For the For the nine For the For the nine For the For the nine For the For the nine For the months year ended months year ended months year ended months year ended months year ended months year ended period ended March 31, period ended March 31, period ended March 31, period ended March 31, period ended March 31, period ended March 31, December 31, 2007 December 31, 2007 December 31, 2007 December 31, 2007 December 31, 2007 December 31, 2007 2007 2007 2007 2007 2007 2007 A) Transactions i) Revenue from Value Added Services Spice Communications Limited ii) Revenue from Roaming Services Spice Communications Limited iii) Sale of Products Spice Communications Limited iv) Other Income (Rental Income) Hot Spot Retails Private Limited v) Purchase of Fixed Assets Spice Mobiles Limited Hot Spot Retails Private Limited vi) Roaming Expenses Spice Communications Limited vii) Enterprise Solution Charges

-

-

7.85

-

-

-

-

-

34.32

117.80

42.17

117.80

-

-

3.62

-

-

-

-

-

13.79

42.80

17.41

42.80

-

-

52.70

-

-

-

-

-

254.76

221.23

307.46

221.23

-

-

0.20

-

-

-

-

-

1.60

-

1.80

-

-

-

-

-

-

-

-

-

0.16 0.27

0.13 0.02

0.16 0.27

0.13 0.02

-

-

5.97

-

-

-

-

-

18.72

21.96

24.69

21.96

160

viii)

ix)

x)

xi)

xii)

Spice Communications Limited Gifts and Prizes Hot Spot Retails Private Limited Spice Communications Limited Website Development Charges Spice Communications Limited Rent Paid Spice Communications Limited Harjas Logic Systems Private Limited Wellwisher Holdings Private Limited Repair Services Hot Spot Retails Private Limited Business Promotion Expenses Hot Spot Retails Private Limited Spice Mobiles Limited

-

-

2.96

-

-

-

-

-

9.95

4.07

12.91

4.07

-

-

-

0.02 -

-

-

-

-

-

0.07

-

0.02 0.07

-

-

-

-

-

-

-

-

-

1.20

-

1.20

-

-

-

-

-

-

-

-

0.27 2.93 1.80

0.36 3.91 1.00

0.27 2.93 1.80

0.36 3.91 1.00

-

-

-

0.00

-

-

-

-

-

-

-

0.00

-

-

0.05 -

0.03 -

-

-

-

-

0.00 6.50

-

0.05 6.50

0.03 -

xiii) Travelling expenses Nik Travels Private Limited xiv) Communication expenses Spice Communications Limited xv) Sundry Debit Balances Written Off Spice Communications Limited xvi) Electricity Expenses Spice Communications Limited xvii) Staff Welfare Spice Communications 4.59 3.24 4.59 3.24

-

-

0.44

-

-

-

-

-

1.47

1.26

1.91

1.26

-

-

-

-

-

-

-

-

-

0.16

-

0.16

-

-

-

-

-

-

-

-

1.11

0.58

1.11

0.58

161

Limited xviii) Corporate Guarantee Commission income Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) xix) Interest Income MCorpGlobal Private Limited xx) Remuneration paid Saket Agarwal Kartar Singh Lokesh Gupta xxi) Reimbursement of Expenses Incurred by the Company MCorpGlobal Private Limited Spice Communications Limited xxii) Reimbursement by the Group of expenses incurred MCorpGlobal Private Limited xxiii) Dividend Paid Omnia Investments Private Limited Dr. B.K Modi Mrs. Veena Modi Mr. Dilip Modi Ms. Divya Modi xxiv) Share Application money paid Hot Spot Retails Private

-

-

-

-

-

-

-

0.05

-

0.05

-

-

-

0.39

-

-

-

-

-

-

-

0.39

-

-

-

-

-

-

-

-

5.88

-

5.88

-

-

-

0.99 2.27 3.89

3.15

-

-

-

-

0.99 2.27 3.89

3.15

-

-

-

-

-

-

-

-

0.36 0.59

-

0.36 0.59

-

-

-

-

-

-

-

-

0.43

-

0.43

400.18 -

-

-

-

-

0.00 -

-

0.00 -

-

-

400.18 0.00 0.00 0.02 0.00

0.02 -

-

0.00 -

162

Limited xxv) Share Application money received back Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited xxvi) Share Application money received Omnia Investments Private Limited xxvii Share Application money ) paid back Omnia Investments Private Limited xxviii Advance Given During the ) Year Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) xxix) Advance received back during the year Twenty First Century Capitals Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) xxx) Security Deposits Given Harjas Logic Systems Private Limited Mudaliar & Sons Hotels Pvt Ltd xxxi) Loan Given During the Year MCorpGlobal Private Limited xxxii Loan received back during

-

-

-

43.20

-

-

-

-

-

-

-

43.20

-

-

-

-

-

-

-

-

-

150.00

-

150.00

-

-

-

43.20 -

-

-

-

-

-

79.50

-

43.20 79.50

-

10.00

-

-

-

-

-

-

-

-

-

10.00

-

10.00

-

-

-

-

-

-

-

-

-

10.00

-

-

-

0.40

-

-

-

-

-

-

-

0.40

-

-

-

0.40

-

-

-

-

-

0.50 -

-

0.50 0.40

-

-

-

-

-

-

-

-

150.00

1.95 -

150.00

1.95 -

-

-

-

-

-

-

-

-

-

54.10

-

54.10

163

)

the year MCorpGlobal Private Limited

As at December 31, 2007

-

-

-

-

-

-

-

-

119.60

-

119.60

B) Balances at the year end

As at March 31, 2007

As at As at As at As at As at As at As at As at December 31, March 31, December 31, March 31, December 31, March 31, December 31, March 31, 2007 2007 2007 2007 2007 2007 2007 2007

i)

Receivables Spice Communications Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Hot Spot Retails Private Limited Harjas Logic Systems Private Limited Mr. Kartar Singh

-

-

-

0.40

-

-

-

-

265.08 -

184.13 -

265.08 -

184.13 0.40

-

-

-

-

0.12 -

-

-

-

2.07 150.00 8.43

1.95 -

2.07 0.12 150.00 8.43

1.95 -

ii)

Mudaliar & Sons Hotels Pvt Ltd (against security deposit) Mudaliar & Sons Hotels Pvt Ltd (against advances recoverable) Payables Nik Travels Private Limited Spice Communications Limited Spice Mobiles Limited -

-

-

-

-

-

-

-

0.03 33.75 6.50

0.01 0.10 -

0.03 33.75 6.50

0.01 0.10 -

Notes: 1) 2) All amounts are in Rs. Million. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rate.

164

DIVIDEND POLICY The declaration and payment of dividend will be recommended by our Board and approved by the shareholders of our Company at their discretion and will depend on a number of factors, including the results of operations, earnings, capital requirements and surplus, general financial conditions, contractual restrictions, applicable Indian legal restrictions and other factors considered relevant by the Board. The Board may also from time to time pay interim dividend. All dividend payments are made in cash to the shareholders of our Company. The dividend declared by the company during the period ended December 31, 2007 and the last four years/periods are presented below. (Amount in Rs. Million)
Particulars Nine- months Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

Class of Shares Equity Share Capital as outstanding at the year end Dividend on Equity Shares - Dividend per equity share ( Rs. ) - Dividend rate ( % to paid up capital) - Dividend amount 16.07* 160.70% 234.28 33.35** 333.5% 400.20 -

14,571,574

14,571,574

12,000,120

2,000,020

2,000,020

Dividend Tax

39.82

56.13

-

-

-

*Proposed Dividend on equity shares for the nine months period ended December 31, 2007.
**Interim Dividend on equity shares for the year ended December 31, 2007. Notes: 1) The amount paid as dividend in the past is not indicative of the dividend policy in the future. 2) The figures disclosed above are based on the Unconsolidated Summary Statement of Profits and Losses, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Limited )

165

SECTION V: FINANCIAL INFORMATION FINANCIAL STATEMENTS RESTATED FINANCIAL INFORMATION FOR CELLBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)

UNCONSOLIDATED SUMMARY STATEMENTS OF ASSETS AND LIABILITIES AS AT DECEMBER 31, 2007, MARCH 31, 2007, 2006, 2005 AND DECEMBER 31, 2003 AND PROFITS AND LOSSES AND CASH FLOWS FOR THE NINE MONTHS PERIOD ENDED DECEMBER 31, 2007, AND THE YEARS ENDED MARCH 31, 2007, MARCH 31, 2006 AND FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2005 AND YEAR ENDED DECEMBER 31, 2003, AS RESTATED UNDER INDIAN GAAP FOR CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) AND CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES AS AT DECEMBER 31, 2007 AND MARCH 31, 2007 AND PROFITS AND LOSSES AND CASH FLOWS FOR THE NINE MONTHS PERIOD ENDED DECEMBER 31, 2007, AND FOR THE YEAR ENDED MARCH 31, 2007, AS RESTATED UNDER INDIAN GAAP FOR CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) Auditors’ Report as required by Part II of Schedule II to the Companies Act, 1956 The Board of Directors Cellebrum Technologies Limited D-1, Sector 3, Gautam Buddh Nagar, Noida – 201301 (UP) India Dear Sirs, 1. We have examined (read together with the para 5(b) below) the attached restated financial information of Cellebrum Technologies Limited (formerly Cellebrum.com Limited) (the “Company”) for the purposes of inclusion in the offer document (“Offer Document”) prepared by the Company in connection with its proposed Initial Public Offer (“IPO”). Such financial information, which has been approved by the Board of Directors of the Company, has been prepared in accordance with the requirements of: a) paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 (“the Act”) as amended; b) the Securities & Exchange Board of India (Disclosure & Investor Protection) Guidelines 2000 (the “Guidelines”) issued by the Securities and Exchange Board of India (“SEBI”) on January 19, 2000, as amended from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992; 2. We have examined such restated financial information taking into consideration: a) the terms of reference received from the Company vide their letter dated February 27, 2008, requesting us to carry out work on such financial information, proposed to be included in the Offer Document of the Company in connection with its proposed IPO; b) the Guidance Note on Reports in Company Prospectuses (Revised) issued by the Institute of Chartered Accountants of India. 3. Such restated financial information has been compiled by the management from: a) the audited unconsolidated balance sheets of the Company as at December 31, 2007, March 31, 2007, 2006, 2005 and December 31, 2003 and the related audited unconsolidated profit

166

and loss accounts and cash flow statements, for the nine months period ended December 31, 2007 and the years ended March 31, 2007, 2006, fifteen months period ended March 31, 2005 and year ended December 31, 2003. The audit of the unconsolidated financial Statements of the Company as at and for the year ended March 31, 2006, fifteen months period ended March 31, 2005 and year ended December 31, 2003 was conducted by Gupta Garg & Agrawal, Chartered Accountants. The restated financial information of the Company as at and for the year ended March 31, 2006, fifteen months period ended March 31, 2005 and year ended December 31, 2003 has been examined by Gupta Garg & Agrawal. Accordingly, we have placed reliance on the restated financial information examined and reported upon by Gupta Garg & Agrawal for the said years / periods and have not carried out any additional procedures thereon. b) the audited consolidated balance sheets of the Company and Mobisoc Technology Private Limited (the ‘subsidiary’) (collectively hereinafter referred to as the “Group”) as at December 31, 2007 and March 31, 2007 and the related audited consolidated profit and loss accounts and cash flow statements for the nine months period ended December 31, 2007 and the year ended March 31, 2007. We have not audited the financial statements of the subsidiary of the Company as at and for the nine months period ended December 31, 2007 and year ended March 31, 2007; those financial statements have been audited by Gupta Garg & Agrawal, Chartered Accountants and our opinion, in so far as it relates to amounts included for the subsidiary, is based solely on the reports of Gupta, Garg & Agrawal. 4. This report is being issued for the purpose of incorporating the same in the Offer Document to be issued by Cellebrum Technologies Limited in connection with the proposed offer of issue of fresh equity shares by the Company. In accordance with the requirements of Schedule II of the Act, the SEBI Guidelines and the terms of our engagement agreed with you, we report that : a) We have examined the restated unconsolidated summary statement of assets and liabilities of the Company as at December 31, 2007 and March 31, 2007 and the related restated unconsolidated summary statement of profits and losses and cash flows for the nine months period ended December 31, 2007 and the year ended March 31, 2007 and the notes thereon (these statements hereinafter are collectively referred to as the “Restated Current Unconsolidated Summary Statements”)

5.

b) Gupta Garg & Agrawal, the immediate previous auditors of the Company, have examined the restated unconsolidated summary statement of assets and liabilities of the Company as at March 31, 2006, 2005 and December 31, 2003 and the related restated unconsolidated summary statement of profits and losses and cash flows for the year ended March 31, 2006, fifteen months period ended March 31, 2005 and year ended December 31, 2003 (these restated unconsolidated summary statements of assets and liabilities, profits and losses and cash flows and the notes thereon, as examined and reported upon by Gupta Garg & Agrawal, hereinafter are collectively referred to as “Restated Prior Years Unconsolidated Summary Statements”). The report dated June 26, 2008 submitted by them is attached herewith; The Restated Current Unconsolidated Summary Statements and the Restated Prior Years Unconsolidated Summary Statements are hereinafter collectively referred to as “Restated Unconsolidated Summary Statements” and are attached as Annexures I to IV to this report. c) We have also examined the restated consolidated summary statement of assets and liabilities of the Group as at December 31, 2007 and March 31, 2007 and the related restated consolidated summary statement of profits and losses and cash flows for the nine months period ended December 31, 2007 and the year ended March 31, 2007 and the notes thereon (these statements hereinafter are collectively referred to as the “Restated Consolidated Summary Statements”) The Restated Consolidated Summary Statements are attached as Annexures XVI to XIX to this report.

167

6.

a) Without qualifying our opinion and as further elaborated in Note F (i) appearing in AnnexureIV to Restated Unconsolidated Summary Statements and Note E (l) (i) appearing in Annexure- XIX to Restated Consolidated Summary Statements, we draw attention to the fact that for the purpose of these Restated Unconsolidated Summary Statements and Restated Consolidated Summary Statements, the changes in estimates of useful lives of fixed assets have not been restated as the management believes that such changes in estimates of useful lives of fixed assets were bonafide and occasioned by technical / environmental factors and hence do not require restatement. Accordingly, the impact of such changes in accounting estimates has not been considered as an adjustment item for the purpose of the restatement of all the other years/ periods presented. b) Without qualifying our opinion and as further elaborated in Note F (ii) appearing in AnnexureIV to Restated Unconsolidated Summary Statements and Note E (l) (ii) appearing in Annexure- XIX to Restated Consolidated Summary Statements, we draw attention to the fact that for the purpose of these Restated Unconsolidated Summary Statements and Restated Consolidated Summary Statements, due to practical difficulties in retrospective application of Accounting Standard (“AS”) 15, the Company has adopted the revised AS 15 on ‘Employee Benefits’ issued by the Institute of Chartered Accountants of India (“ICAI”) effective April 1 , 2007. Accordingly, the impact of the revised AS 15 has not been considered as an adjustment item for the purpose of the restatement of all the other years/ periods presented. c) Without qualifying our opinion and as further elaborated in Note F (iii) appearing in AnnexureIV to Restated Unconsolidated Summary Statements and Note E (l) (iii) appearing in Annexure- XIX to Restated Consolidated Summary Statements, we draw attention to the fact that for the purpose of these Restated Unconsolidated Summary Statements and Restated Consolidated Summary Statements, due to practical difficulties in retrospective application of the notified Accounting Standard (‘AS’) 11 which is mandatory from the accounting periods commencing on or after December 7, 2006, the Company has adopted the AS 11 on ‘The Effect of Changes in Foreign Exchange Rates’ notified under the Companies (Accounting Standard) Rules, 2006 effective April 1, 2007. Accordingly, the impact of revised AS 11 has not been considered as an adjustment item for the purpose of the restatement of all the other years/ periods presented. In our opinion, the impact of such adjustment will not be material in relation to the Restated Unconsolidated Summary Statements and Restated Consolidated Summary Statements.

7.

Based on our examination and also as per the reliance placed on the report dated June 26, 2008 submitted by Gupta Garg & Agrawal as referred in paragraph 5 above, we further report that the restated unconsolidated and consolidated profits and losses have been arrived at: a) after making such adjustments and regroupings as, in our opinion, are appropriate and more fully described in the notes appearing in Annexure IV and Annexure XIX to Restated Unconsolidated Summary Statements and Restated Consolidated Summary Statements respectively;

b) after incorporating the impact of changes in accounting policies adopted by the Company and the Group as at and for the nine months period ended December 31, 2007, which have been adjusted with retrospective effect in the Restated Unconsolidated Summary Statements and Restated Consolidated Statements respectively, except to the extent stated in 6 (b) and (c) above; c) after making adjustments for the material amounts relating to prior years in the Restated Unconsolidated Summary Statements and Restated Consolidated Summary Statements in the respective financial years/ periods to which they relate;

d) after making adjustment for rectification of the qualification in the auditors’ report on the financial statements relating to the year ended March 31, 2007 in the Restated Consolidated Summary Statements. There are no qualifications in the auditors’ reports, which require any adjustments to the Restated Unconsolidated Summary Statements.

168

There are no extraordinary items which need to be disclosed separately in the Restated Unconsolidated Summary Statements and Restated Consolidated Summary Statements. 8. We have not audited any unconsolidated financial statements of the Company or consolidated financial statements of the Group as of any date or for any period subsequent to December 31, 2007. Accordingly, we express no opinion on the financial position, results of operations or cash flows of the Company or the Group as of any date or for any period subsequent to December 31, 2007. We have also examined the unconsolidated financial information of the Company as at and for the nine months period ended December 31, 2007 and year ended March 31, 2007, listed below, which is proposed to be included in the Offer Document, as approved by the Board of Directors of the Company and attached to this report. Gupta Garg & Agrawal, vide their report dated June 26, 2008 attached herewith, have examined (except Annexure VII) such unconsolidated financial information of the Company as at and in respect of the year ended March 31, 2006, fifteen months period ended March 31, 2005 and year ended December 31, 2003, proposed to be included in the Offer Document, as approved by the Board of Directors of the Company and attached to this report. a) b) c) d) e) f) g) h) i) j) k) Details of Other Income, as appearing in Annexure V ; Details of Rates of Dividend, as appearing in Annexure VI Capitalization Statement, as appearing in Annexure VII ; Details of Secured Loans, as appearing in Annexure VIII ; Details of Investments, as appearing in Annexure IX ; Details of Sundry Debtors, as appearing in Annexure X; Details of Loans and Advances, as appearing in Annexure XI ; Details of Other Current Assets, as appearing in Annexure XII Statement of Tax Shelters, as appearing in Annexure XIII ; Statement of Accounting Ratios, as appearing in Annexure XIV ; and Details of the Related Parties and transactions with them, as appearing in Annexure XV

9.

10. We have also examined the consolidated financial information of the Group as at and for the nine months period ended December 31, 2007 and year ended March 31, 2007 listed below, which is proposed to be included in the Offer Document, as approved by the Board of Directors of the Company and attached to this report. a) b) c) d) e) f) g) h) Details of Other Income, as appearing in Annexure XX ; Details of Rates of Dividend, as appearing in Annexure XXI; Capitalization Statement, as appearing in Annexure XXII ; Details of Sundry Debtors, as appearing in Annexure XXIII ; Details of Loans and Advances as appearing in Annexure XXIV ; Details of Other Current Assets as appearing in Annexure XXV ; Statement of Accounting Ratios as appearing in Annexure XXVI ; and Details of the Related Parties and transactions with them, as appearing in Annexure XXVII

11. In our opinion, the financial information as disclosed in the Annexures to this report, read with the respective significant accounting policies and notes disclosed in Annexure IV and XIX, and after making adjustments and re-groupings as considered appropriate and disclosed in Annexure IV and XIX, has been prepared in accordance with Part II of Schedule II of the Act and the Guidelines. 12. This report should not in any way be construed as a reissuance or redating of any of the previous audit reports issued by us, nor should this report be construed as a new opinion on any of the financial statements referred to herein. 13. Our audits referred to in paragraph 3 above were carried out for the purpose of certifying the general purpose financial statements taken as a whole. For none of the years/ periods referred to in paragraph 3 above, did we perform audit tests for the purpose of expressing an opinion on individual balances of accounts or summaries of selected transactions, and accordingly, we express no such opinion thereon.

169

14. We have no responsibility to update our report for events and circumstances occurring after the date of the report. 15. This report is intended solely for your information and for inclusion in Offer Document prepared in connection with the proposed IPO of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For S.R. BATLIBOI & ASSOCIATES Chartered Accountants per Raj Agrawal Partner Membership No. 82028 Place: Gurgaon Date: June 26, 2008

Enclosed: Report of Gupta Garg & Agrawal dated June 26, 2008

170

RESTATED FINANCIAL INFORMATION FOR CELLBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) UNCONSOLIDATED SUMMARY STATEMENTS OF ASSETS AND LIABILITIES AS AT MARCH 31, 2006, 2005 AND DECEMBER 31, 2003 AND PROFITS AND LOSSES AND CASH FLOWS FOR THE YEAR ENDED MARCH 31, 2006, FIFTEEN MONTHS PERIOD ENDED MARCH 31, 2005 AND YEAR ENDED DECEMBER 31, 2003, AS RESTATED UNDER INDIAN GAAP FOR CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) Auditors’ Report as required by Part II of Schedule II to the Companies Act, 1956 The Board of Directors Cellebrum Technologies Limited D-1, Sector 3, Gautam Buddh Nagar, Noida – 201301 (UP) India Dear Sirs, 1. We have examined the attached restated financial information of Cellebrum Technologies Limited (formerly Cellebrum.com Limited) (the “Company”) for the purposes of inclusion in the offer document (“Offer Document”) prepared by the Company in connection with its proposed Initial Public Offer (“IPO”). Such financial information, which has been approved by the Board of Directors of the Company, has been prepared in accordance with the requirements of: a) paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 (“the Act”) as amended; b) the Securities & Exchange Board of India (Disclosure & Investor Protection) Guidelines 2000 (the “Guidelines”) issued by the Securities and Exchange Board of India (“SEBI”) on January 19, 2000, as amended from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992; 2. We have examined such restated financial information taking into consideration: a) the terms of reference received from the Company vide their letter dated February 27, 2008, requesting us to carry out work on such financial information, proposed to be included in the Offer Document of the Company in connection with its proposed IPO; b) the Guidance Note (Revised) on Reports in Company Prospectuses issued by the Institute of Chartered Accountants of India. Such restated financial information has been compiled by the management from the audited unconsolidated balance sheets of the Company as at March 31, 2006, 2005 and December 31, 2003 and the related audited unconsolidated profit and loss accounts and cash flow statements, for the year ended March 31, 2006, fifteen months period ended March 31, 2005 and year ended December 31, 2003. This report is being issued for the purpose of incorporating the same in the Offer Document to be issued by Cellebrum Technologies Limited in connection with the proposed offer of issue of fresh equity shares by the Company. In accordance with the requirements of Schedule II of the Act, the SEBI Guidelines and the terms of our engagement agreed with you, we report that we have examined the restated unconsolidated summary statement of assets and liabilities of the Company as at March 31, 2006, 2005 and December 31, 2003 and the related restated unconsolidated summary statement of profits and losses and cash flows for the year ended March 31, 2006, fifteen months period ended March 31, 2005 and year ended December 31, 2003 and the notes thereon (these statements hereinafter are collectively referred to as the “Restated Prior Years Unconsolidated Summary Statements”) and are attached as Annexures I to IV to this report.

3.

4.

5.

171

6. a) Without qualifying our opinion and as further elaborated in Note F (i) appearing in Annexure-IV to Restated Prior Years Unconsolidated Summary Statements, we draw attention to the fact that for the purpose of these Restated Prior Years Unconsolidated Summary Statements, the changes in estimates of useful lives of fixed assets have not been restated as the management believes that such changes in estimates of useful lives of fixed assets were bonafide and occasioned by technical / environmental factors and hence do not require restatement. Accordingly, the impact of such changes in accounting estimates has not been considered as an adjustment item for the purpose of the restatement of all the other years/ periods presented. b) Without qualifying our opinion and as further elaborated in Note F (ii) appearing in Annexure-IV to Restated Prior Years Unconsolidated Summary Statements, we draw attention to the fact that for the purpose of these Restated Prior Years Unconsolidated Summary Statements, due to practical difficulties in retrospective application of Accounting Standard (“AS”) 15, the Company has adopted the revised AS 15 on ‘Employee Benefits’ issued by the Institute of Chartered Accountants of India (“ICAI”) effective April 1 , 2007. Accordingly, the impact of the revised AS 15 has not been considered as an adjustment item for the purpose of the restatement of all the other years/ periods presented. c) Without qualifying our opinion and as further elaborated in Note F (iii) appearing in AnnexureIV to Restated Prior Years Unconsolidated Summary Statements, we draw attention to the fact that for the purpose of these Restated Prior Years Unconsolidated Summary Statements, due to practical difficulties in retrospective application of the notified Accounting Standard (‘AS’) 11 which is mandatory from the accounting periods commencing on or after December 7, 2006, the Company has adopted the AS 11 on ‘The Effect of Changes in Foreign Exchange Rates’ notified under the Companies (Accounting Standard) Rules, 2006 effective April 1, 2007. Accordingly, the impact of revised AS 11 has not been considered as an adjustment item for the purpose of the restatement of all the other years/ periods presented. In our opinion, the impact of such adjustment will not be material in relation to the Restated Unconsolidated Summary Statements. 7. Based on our examination, we further report that the restated unconsolidated profits and losses have been arrived at: a) after making such adjustments and regroupings as, in our opinion, are appropriate and more fully described in the notes appearing in Annexure IV to Restated Prior Years Unconsolidated Summary Statements:

b) after incorporating the impact of changes in accounting policies adopted by the Company as at and for the nine months period ended December 31, 2007, which have been adjusted with retrospective effect in the Restated Prior Years Unconsolidated Summary Statements, except to the extent stated in 6(b) and (c) above; and c) after making adjustments for the material amounts relating to prior years in the Restated Prior Years Unconsolidated Summary Statements in the respective financial years / periods to which they relate. There are no extraordinary items which need to be disclosed separately in the Restated Prior Years Unconsolidated Summary Statements. There are no qualifications in the auditors’ reports, which require any adjustments to the Restated Prior Years Unconsolidated Summary Statements. 8. We have not audited any unconsolidated financial statements of the Company as of any date or for any period subsequent to March 31, 2006. Accordingly, we express no opinion on the financial position, results of operations or cash flows of the Company or as of any date or for any period subsequent to March 31, 2006. We have also examined (except Annexure VII) the unconsolidated financial information of the Company as at and for the year ended March 31, 2006, fifteen months period ended March 31, 2005, and year ended December 31, 2003, listed below, which is proposed to be included in the

9.

172

Offer Document, as approved by the Board of Directors of the Company and attached to this report. a) b) c) d) e) f) g) h) i) j) k) Details of Other Income, as appearing in Annexure V; Details of Rates of Dividend, as appearing in Annexure VI; Capitalisation Statement, as appearing in Annexure VII; Details of Secured Loans, as appearing in Annexure VIII; Details of Investments, as appearing in Annexure IX; Details of Sundry Debtors, as appearing in Annexure X; Details of Loans and Advances, as appearing in Annexure XI ; Details of Other Current Assets, as appearing in Annexure XII; Statement of Tax Shelters, as appearing in Annexure XIII; Statement of Accounting Ratios, as appearing in Annexure XIV ; and Details of the Related Parties and transactions with them, as appearing in Annexure XV

10. In our opinion, the financial information as disclosed in the Annexures to this report, read with the respective significant accounting policies and notes disclosed in Annexure IV, and after making adjustments and re-groupings as considered appropriate and disclosed in Annexure IV, has been prepared in accordance with Part II of Schedule II of the Act and the Guidelines. 11. This report should not in any way be construed as a reissuance or redating of any of the previous audit reports issued by us, nor should this report be construed as a new opinion on any of the financial statements referred to herein. 12. Our audits referred to in paragraph 3 above were carried out for the purpose of certifying the general purpose financial statements taken as a whole. For none of the years/ periods referred to in paragraph 3 above, did we perform audit tests for the purpose of expressing an opinion on individual balances of accounts or summaries of selected transactions, and accordingly, we express no such opinion thereon. 13. We have no responsibility to update our report for events and circumstances occurring after the date of the report. 14. This report is intended solely for your information and for inclusion in Offer Document prepared in connection with the proposed IPO of the Company and is not to be used, referred to or distributed for any other purpose without our prior written consent.

For GUPTA GARG & AGRAWAL Chartered Accountants

per B. B. Gupta Partner Membership No. 012399 Place: Delhi Date: June 26, 2008

173

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE I : UNCONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED
(Amt in Rs. million) As at March As at 31, 2005 December 31, 2003

Particulars

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated Depreciation/ Amortisation Net Block Capital Work In Progress including Capital Advances Total Investments Deferred Tax Assets (net) Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances Total TOTAL (A) Deferred Tax Liabilities (net) Liabilities and Provisions Secured Loan Current Liabilities 179.67 85.89 Provisions Total TOTAL (B) Net Worth (A-B) Represented by Share Capital and Reserves Equity Share Capital 145.72 145.72 120.00 20.00 20.00 315.88 495.55 498.15 1,096.41 11.50 97.39 97.39 1,036.89 4.68 24.92 24.92 414.29 3.33 16.13 16.68 193.90 0.67 19.57 12.80 0.43 0.01 0.44 0.44 12.98 451.62 (113.29) 338.33 8.05 346.38 100.00 185.26 (52.99) 132.27 31.21 163.48 100.00 1.87 68.50 (9.28) 59.22 9.24 68.46 0.06 29.38 (2.22) 27.16 27.16 2.93

357.24 414.26 83.44 293.24 1,148.18 1,594.56 2.60

1.36 262.53 554.95 2.39 47.70 868.93 1,134.28 -

46.09 21.22 2.61 300.77 370.69 439.21 -

67.40 90.56 1.39 24.07 183.42 210.58 0.55

0.15 6.42 3.75 0.17 10.49 13.42 -

174

Particulars

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

Reserves and Surplus (Figure for December 31, 2007 is net of Rs. 5.11 million being adjustment for employee provisions (Refer Note No. C (iii ) and G (2) of the Annexure IV) Profit and Loss Account Less: Miscellaneous Expenditure (to the extent not written off or adjusted) Net Worth

950.69 -

891.17 -

294.29 -

173.90 -

(6.93) (0.09)

1,096.41

1,036.89

414.29

193.90

12.98

Notes: The above Statement should be read with the significant accounting policies and Notes to the Unconsolidated Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure IV. As per our report of even date FOR S.R. BATLIBOI & ASSOCIATES Chartered Accountants Per Raj Agrawal Partner Membership No. : 82028 Place: Gurgaon Date: June 26, 2008

For and on behalf of the Board of Cellebrum Technologies Limited

(Directors)

(Directors)

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

Kartar Singh Chief Finance Officer

Company secretary

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

175

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE II : UNCONSOLIDATED SUMMARY STATEMENT OF PROFIT AND LOSS, AS RESTATED
Particulars Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 (Amount in Rs. Million) FifteenYear months Ended Period December Ended 31, 2003 March 31, 2005

INCOME Operating Income Other Income Total Income EXPENDITURE Purchase of Goods for Sale Operating Expenses Staff Cost Selling and Distribution Expenses General and Administration Expenses Decrease / (Increase) in Inventories Interest Miscellaneous Expenditure written off Depreciation / Amortization (Refer note no. C (ii) and G (11) of the Annexure IV) Total Expenditure PROFIT BEFORE TAX AND PRIOR PERIOD ITEMS Prior Period Items PROFIT BEFORE TAX AND AFTER PRIOR PERIOD ITEMS 355.83 Provision for Tax Current Tax (Net of MAT Credit entitlement, refer note no. G (13) of the Annexure IV) Deferred Tax Charge / (Credit) Fringe Benefits Tax Total Tax Expense NET PROFIT AS PER AUDITED ACCOUNTS 448.20 239.05 203.44 4.28 0.99 82.13 108.62 16.56 144.82 1.36 0.94 3.38 53.69 66.11 7.28 74.95 (1.36) 0.04 21.49 28.53 4.79 23.77 0.01 0.03 23.45 20.15 5.15 13.45 0.53 0.06 0.59 1.92 1.17 0.64 734.56 36.31 770.87 661.78 23.79 685.57 324.95 7.31 332.26 268.28 3.49 271.77 8.54 0.06 8.60

60.31 415.73 355.14 (0.69)

32.90 236.99 448.58 0.38

14.59 93.21 239.05 -

5.54 68.33 203.44 -

4.32 4.28 -

12.64 3.99 4.51 21.14 334.69

23.64 (1.24) 2.10 24.50 423.70

20.03 (0.30) 1.03 20.76 218.29

21.22 3.48 24.70 178.74

0.06 1.53 1.59 2.69

176

Particulars

Ninemonths Period Ended December 31, 2007 4.46 (0.42)

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteenmonths Period Ended March 31, 2005 2.60 (0.51)

Year Ended December 31, 2003

Adjustments ( Refer Note no. E of Annexure IV) Current Tax impact of Adjustments Deferred Tax impact of Adjustments

(9.64) 1.21

2.46 (0.28)

0.12

0.48 Year Ended March 31, 2007 (0.09) Year Ended March 31, 2006 (0.39) Fifteenmonths Period Ended March 31, 2005 1.70 Year Ended December 31, 2003

Particulars

Ninemonths Period Ended December 31, 2007 4.04

Net Impact of Adjustments NET PROFT AS RESTATED Profit & Loss Account at the beginning of the year / period PROFIT AVAILABLE FOR APPROPRIATION Appropriations: Transfer to General Reserve Proposed Dividend on Equity Shares (at the rate of Rs 16.07 per share) Interim Dividend on Equity Shares (at the rate of Rs. 33.35 per share) Tax on dividend Utilized for Issue of bonus shares BALANCE CARRIED FORWARD AS RESTATED

(7.95)

2.09

0.12

338.73

415.75

220.38

180.44

2.81

206.50

289.45

169.07

(11.37)

(14.18)

545.23

705.20

389.45

169.07

(11.37)

33.47

42.37

-

-

-

234.28

400.20

-

-

-

39.82 -

56.14

100.00 -

-

-

237.66

206.50

289.45

169.07

(11.37)

Notes: The above Statement should be read with the significant accounting policies and Notes to the Consolidated Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure XIX. As per our report of even date FOR S.R. BATLIBOI & ASSOCIATES Chartered Accountants

177

Per Raj Agrawal Partner Membership No. : 82028 Place: Gurgaon Date: June 26, 2008 For and on behalf of the Board of Cellebrum Technologies Limited

(Directors)

(Directors)

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

Kartar Singh Chief Finance Officer

Company secretary

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

178

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE III : UNCONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS, AS RESTATED
Particulars Nine- months Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 (Amount in Rs. Million) FifteenYear months Ended Period December Ended 31, 2003 March 31, 2005

A. Cash Flow from Operating Activities Net Profit Before Tax, As Restated Net Profit Before Tax, As Restated Adjustment for: Depreciation / Amortization 60.31 Miscellaneous Expenditure Written off Loss on Sale of Fixed Assets Provision for Doubtful Debts 11.66 Foreign Exchange (Gain) / Loss Interest Income Interest Expense 0.94 Operating Profit Before Working Capital Changes Movement in Working Capital: Decrease / (Increase) in Sundry Debtors Decrease / (Increase) in Inventories (Increase) in Loans and Advances Decrease / (Increase) in Other Current Assets Increase in Current Liabilities and Provisions 0.04 0.01 0.53 0.23 (33.61) 8.10 (0.86) (22.98) 2.24 0.19 (6.26) (0.01) (3.28) (0.06) 43.71 7.09 2.24 0.09 0.10 0.64 -

360.29

438.56

241.52

206.04

4.40

360.29

438.56

241.52

206.04

4.40

399.82

466.57

244.79

205.71

4.98

(105.89) 1.36 (216.94) (77.12) 103.86

(224.51) (1.36) (15.42) (0.96) 71.83

18.87 (2.93) 1.18 8.26

(67.24) (1.40) 2.46 13.30

(0.12) (0.17) (3.75) 0.42

Cash Generated from Operations Direct Taxes Paid (including Fringe Benefits Taxes)

105.09

296.15

270.17

152.83

1.36

(30.79)

(49.78)

(23.14)

(19.34)

(0.02)

179

Particulars

Nine- months Period Ended December 31, 2007

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteenmonths Period Ended March 31, 2005

Year Ended December 31, 2003

Net Cash Generated from Operations (A)

74.30

246.37

247.03

133.49

1.34

Particulars

Nine- months Period Ended December 31, 2007

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteenmonths Period Ended March 31, 2005

Year Ended December 31, 2003

B. Cash Flow from Investing Activities Purchase of Fixed Assets (243.73) Proceeds from Sale of Fixed Assets Fixed Deposits with Banks Share Application Money Paid Share Application Money Received Back Inter Corporate Deposit Given Inter Corporate Deposit Received Back Investment in Subsidiary Interest Received 29.67 Net Cash Generated from / (Used In) Investing Activities(B) C. Cash Flows from Financing Activities Proceeds from Issuance of Share Capital Securities Premium Received Share Issue Expenses Proceeds from Long-Term Borrowings Repayment of Long-Term Borrowings Interest Paid Dividend Paid (including tax on dividend paid) Net Cash Generated from / (Used in) Financing Activities (C) Net Changes in Cash & Cash Equivalents (A+B+C) (0.94) (7.75) (0.67) (0.04) (456.33) 0.67 (0.01) (0.53) (96.89) 24.15 (416.97) 3.86 (250.17) 3.18 (130.86) 0.06 3.78 (43.20) 272.70 (54.10) 119.60 (100.00) (224.50) (119.50) 71.50 (5.00) (36.50) 19.00 117.17 (137.94) (498.18) (48.46) 0.06 66.87 (29.49) (82.05) 4.02 (0.30)

-

25.71 645.23

-

-

-

(0.94) (23.53)

206.15 35.55

0.66 (2.47)

(0.53) 2.10

5.12

180

Particulars

Nine- months Period Ended December 31, 2007

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteenmonths Period Ended March 31, 2005

Year Ended December 31, 2003

Cash and Cash Equivalents at the Beginning of the Year / Period Cash and Cash Equivalents at the End of the Year / Period Components of Cash and Cash Equivalents: Cash in Hand Cheques in Hand Balances with Scheduled Banks on Current Accounts Balance with Hongkong and Shanghai Banking Corp., Singapore on current account Total

40.34

4.79

7.26

5.17

0.05

16.81

40.34

4.79

7.27

5.17

0.26 4.49 10.85

0.05 33.21

0.06 4.73

0.02 2.81 4.44

0.10 5.07

1.21 16.81

7.08 40.34

4.79

7.27

5.17

Notes: a) Cash Flow Statement has been prepared under the 'Indirect Method' as set out in Accounting Standard -3 on cash flow statement issued by the Institute of Chartered Accountants of India. b) Negative figures have been shown in brackets. c) The above Statement should be read with the significant accounting policies and Notes to the Unconsolidated Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP ,as appearing in annexure IV As per our report of even date FOR S.R. BATLIBOI & ASSOCIATES Chartered Accountants Per Raj Agrawal Partner Membership No. : 82028 Place: Gurgaon Date: June 26, 2008

For and on behalf of the Board of Cellebrum Technologies Limited

(Directors) Place: Noida Date : June 26, 2008

(Directors) Place: Noida Date : June 26, 2008

Kartar Singh Chief Finance Officer

Company secretary

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

181

ANNEXURE IV - NOTES TO THE RESTATED UNCONSOLIDATED SUMMARY STATEMENTS OF ASSETS AND LIABILITIES, PROFITS AND LOSSES AND CASH FLOWS, AS RESTATED UNDER INDIAN GAAP, FOR CELLEBRUM TECHNOLOGIES LIMITED [FORMERLY CELLEBRUM.COM LIMITED]
A. a. Background The Company is into the Information and Communication Technology business providing Value Added Services, Mobile Content and Roaming Management Services to the Telecom Operators. Also, the Company undertakes development and sale of telecom related software. The Restated Unconsolidated Summary Statement of Assets and Liabilities of the Company as at December 31, 2007, March 31, 2007, March 31, 2006, March 31, 2005 and December 31, 2003 and the related Restated Unconsolidated Summary Statement of Profits and Losses and Cash Flows for the nine months period ended December 31, 2007, years ended March 31, 2007 and March 31, 2006, fifteen months period ended March 31 2005 and year ended December 31, 2003 (hereinafter collectively referred to as “Restated Unconsolidated Summary Statements”) relate to Cellebrum Technologies Limited (formerly Cellebrum.com Limited) (“the Company”) and have been prepared specifically for inclusion in the Offer Document to be filed by the Company with the Securities and Exchange Board of India (“SEBI”) in connection with its proposed Initial Public Offering of its equity shares.

b.

These Restated Unconsolidated Summary Statements have been prepared to comply in all material respects with the requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (“the SEBI Guidelines”) issued by SEBI on January 19, 2000, as amended from time to time, except to the extent stated in Note F (i), (ii) and (iii) below. B. Statement of Significant Accounting Policies adopted by the Company in the preparation of Financial Statements as at and for the nine-months period ended December 31, 2007

Basis of Preparation The financial statements have been prepared to comply in all material respects with the Notified Accounting Standards by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on an accrual basis. The accounting policies have been consistently applied by the Company except for the changes in accounting policy discussed more fully in (C) below, are consistent with those used in the previous years / periods. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Fixed Assets Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Insurance spares / stand by equipments are capitalized as part of mother assets. Depreciation Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, 1956 whichever is higher as under: Tangible Assets Buildings Data Processing Machines Furniture & Fixtures Office Equipment Mobile phones Others Rates (SLM) (in %) 3.34 31.67 13.57 31.67 13.57 Schedule XIV Rates (SLM) (in %) 3.34 16.21 6.33 4.75 4.75

182

Vehicles Motor Cars Motor buses

9.50 13.57

9.50 11.31

Cost of Leasehold improvements is amortized over the period of lease or their useful lives whichever is lower. Individual assets costing upto Rs.5,000/- are depreciated fully in the month of purchase. Insurance spares / standby equipments are depreciated prospectively over the remaining useful lives of the respective mother assets. Intangibles Intangibles assets acquired from outside are amortized using the Straight Line Method over their estimated useful lives as follows: Intangible Assets Computer Software Estimated Useful Life (Years) 3 years

ii) Costs incurred towards development of computer software products meant for sale, lease or otherwise marketed, are capitalized subsequent to establishing technical feasibility. Capitalization ceases when the product is available for general release to customers. Capitalized software product costs are amortized on a product-by-product basis. The amortization shall be greater of the amount computed using (a) the ratio that current gross revenue for a product bears to the total of current and anticipated future gross revenues for that product or (b) straight line method over the remaining estimated useful life of the product. The unamortized cost of Capitalized software products is carried at cost, less accumulated amortization less impairment, if any. Impairment The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. Leases Where the Company is the lessee Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight-line basis over the lease term. Where the Company is the lessor Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account. Investments Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of such investments. Inventories Inventories are valued as follows: Traded goods At Cost or Net Realizable Value, whichever is lower. Cost is determined on FIFO basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

183

Revenue Recognition Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Rendering of Services Service revenue is recognized at the end of each month in which the services are rendered. Service revenue includes income on value added services, revenue from roaming management services and providing mobile content. Sale of goods Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, which coincides with their delivery to the customer. Interest Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable. Foreign Currency Translation Foreign currency transactions Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Exchange Differences Exchange differences arising on the settlement of monetary items or on reporting Company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise. Exchange differences arising in respect of fixed assets acquired from outside India on or before accounting period commencing after December 7, 2006 are capitalized as a part of fixed asset. Translation of Integral foreign operation The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself. Retirement and other employee benefits Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the statutory authorities. Retirement Gratuity is a defined benefit obligation. The Company has taken insurance policy under the Group Gratuity Scheme of Life Insurance Corporation of India (LIC) to cover the gratuity liability of the employees and the premium paid/payable to LIC, in respect of the present value for liability of past services is charged to the Profit and Loss account every year. Also, the difference between amount paid/payable to LIC and the actuarial valuation on projected unit credit method made at the end of each financial year is charged to the Profit and Loss account. Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method. Actuarial gains / losses are immediately taken to profit and loss account and are not deferred. Income Taxes Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes

184

reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Earning per share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Provisions A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best management estimates. Segment Reporting Policies Identification of segments The analysis of geographical segments is based on the geographical location of the customers. Cash and Cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. C. Changes in Accounting Policies

(i) Change in the method of providing Depreciation The Company was following Straight Line Method of providing depreciation on fixed assets upto the financial year ended December 2003 and Written Down Value method for the fifteen months period ended March 31, 2005 and year ended March 31, 2006. During the financial year ended March 31, 2007, the Company changed, with retrospective effect, its method of providing depreciation on fixed assets, other than leasehold buildings, from the Written Down Value (‘WDV’) method at the rates prescribed in Schedule XIV to the Companies Act, 1956 to the Straight Line Method (‘SLM’) at the rates which are higher of the useful lives of assets and the rates prescribed in Schedule XIV to the Companies Act, 1956.

185

As a result of this change, the charge to the Profit and Loss Account before taxation for the year ended March 31, 2007 was lower by Rs. 25.60 million and the net block of fixed assets was correspondingly higher by the same amount. The effect of such change in accounting policy has been appropriately adjusted in the years/ periods to which it pertains [refer Note E (h) below]. (ii) Change in the method of accounting for Earned Leaves The Company changed its accounting policy during the year ended March 31, 2007 and accounted for the liability for employees’ earned leaves based on actuarial valuation as at the end of the year in line with Accounting Standard 15 issued by the Institute of Chartered Accountants of India. Till the year ended March 31, 2006, leave liability was accounted for based on actual amount payable as per current encashable salary as at the end of the year. As a result of this change, the accumulated liability of earned leaves was higher and the profit for the year ended March 31, 2007 was lower by Rs. 3.10 million. The effect of such change in accounting policy has been appropriately adjusted in the years/ periods to which it pertains [refer Note E (i) below].

(iii) Adoption of Accounting Standard AS 15 (Revised) Employee Benefits Till the year ended March 31, 2007, the Company was providing for gratuity based on actuarial valuation as per LIC certificate and leave benefits based on actuarial valuation. During the period ended December 31, 2007, the Company has adopted Accounting Standard 15 (Revised) which is mandatory for accounting periods commencing on or after December 7, 2006. Accordingly the Company has provided for gratuity based on actuarial valuation done as per projected unit credit method. Also, the Company has changed the method of providing short-term leave benefits from actuarial valuation to estimate basis. As a result, actuarial valuation of leave liability and gratuity liability as at April 1, 2007 is higher by Rs. 5.11 million (net of tax of Rs. 0.65 million) which, in accordance with the transitional provision in the revised accounting standard, has been adjusted to the General Reserve. (iv) Adoption of Accounting Standard 11 ‘The Effect of Changes in Foreign Exchange Rates’ As per the requirements of the Companies (Accounting Standards) Rules, 2006 read in consonance with notified Accounting Standard 11 which is mandatory for the accounting periods commencing on or after December 7, 2006, the exchange differences on foreign currency transactions relating to fixed assets acquired from a country outside India have been adjusted to revenue as against the hitherto followed practice of adjusting the same to the carrying amount of fixed assets. As a result, net exchange gain of Rs 0.53 million which otherwise would have been adjusted against the carrying amount of fixed assets, has been credited to the Profit and Loss Account during the period ended December 31, 2007 and thus the profit before tax for the nine-months period ended December 31, 2007 is higher by the same amount. D. Material Regroupings Appropriate adjustments have been made in the Restated Summary Statements of Assets and Liabilities, Profits and Losses and Cash Flows, wherever required, by a reclassification of the corresponding items of income, expenses, assets, liabilities and cash flows, in order to bring them in line with the groupings as per the audited financials of the Company for the nine months period ended December 31, 2007. E. Material Adjustments

186

a)

Below mentioned is the summary of results of restatements made in the audited accounts for the respective years and its impact on the profits of the Company.

(Amount in Rs. million)
Adjustments for December 31, 2007 (0.69) (0.12) 4.98 0.04 (0.50) 0.75 4.46 March 31, 2007 1.18 (0.04) (4.44) 0.11 2.78 (10.8) 1.25 0.30 (9.64) March 31, 2006 (0.36) (0.90) (0.54) 0.09 (2.58) 0.20 7.49 (0.98) 0.04 2.46 March 31, 2005 (0.12) 0.81 (0.14) (0.20) 0.30 3.31 (0.27) (0.04) (1.05) 2.60 December 31, 2003 (0.01) 0.25 (0.12) 0.12

Prior Period Items (Refer note b) Sundry Balances written back (Refer note c) Provision for doubtful debts (Refer note d) Sundry Balances written off (Refer note e) Bad Debts written off (Refer note f) Bad Debts recovered (Refer Note g) Depreciation (Refer Note h) Leave Encashment (Refer Note i) Miscellaneous Expenditure (to the extent not written off) (Refer Note j) Tax paid for earlier years/ periods (Refer note k) Total impact of adjustments Current Tax impact of adjustments (Refer note l) Deferred Tax impact of adjustments (Refer note l) Net impact of adjustments b) Prior Period Items

(0.42) 4.04

1.21 0.48 (7.95)

(0.28) (0.09) 2.09

(0.51) (0.39) 1.70

0.12

In the financial statements for the year ended March 31, 2007 and the period ended December 31, 2007, certain items of income / expenses have been identified as prior period items. For the purpose of this statement, such prior period items have been appropriately adjusted in the respective years/ periods. c) Sundry Balances Written Back In the financial statements for the years ended March 31, 2006 and 2007 and periods ended March 31, 2005 and December 31, 2007, certain liabilities created in the earlier years/ periods were written back. For the purpose of this statement, the said liabilities, wherever required, have been appropriately adjusted in the respective years/ periods in which the same were originally created. d) Provision for Doubtful Debts During the year ended March 31, 2006 and period ended December 31, 2007, certain provisions for doubtful debts which pertained to debtors of earlier years/ periods were created. For the purpose of this statement, the said provisions, wherever required, have been appropriately adjusted in the respective years/ periods in which these debtors and revenue were accounted for. e) Sundry Balances Written off In the financial statements for the years ended March 31, 2007 and March 31, 2006 and period ended December 31, 2007, certain advances paid in the earlier years/ periods were written off. For the purpose of this statement, the said advances, wherever required, have been appropriately adjusted in the respective years/ periods in which the same were originally paid. f) Bad Debts Written off During the year ended March 31, 2007, certain bad debts which pertained to debtors of earlier years/ periods were

187

written off. For the purpose of this statement, the said bad debts have been appropriately adjusted in the respective years/ periods in which these debtors and revenue were accounted for. g) Bad Debts Recovered During the period ended December 31, 2007, and year ended March 31, 2007, certain bad debts written off in earlier years/ periods were recovered. For the purpose of this statement, the said recoveries have been appropriately adjusted in the respective years/ period in which the same were originally written off. h) Depreciation During the year ended March 31, 2007, the Company has changed the method of providing depreciation on fixed assets, as referred to in Note no. C (i) above. For the purpose of this statement, the retrospective effect of depreciation has been appropriately adjusted in the year ended March 31, 2006 and period ended March 31, 2005. i) Leave Encashment During the year ended March 31, 2007, the Company has changed its accounting policy for provisioning of earned leaves, as referred to in Note no. C (ii) above. For the purpose of this statement, the effect of such change in policy has been appropriately adjusted in the year ended March 31, 2006 and period ended March 31, 2005. j) Miscellaneous Expenditure (to the extent not written off) Upto the year ended March 31, 2006, amounts carried forward under the head ‘Miscellaneous Expenditure (to the extent not written off)’ representing preoperative expenditure, were being amortized on a pro-rata basis over a period of 5 years from the date of commencement of commercial operations. However, Accounting Standard -26 issued by the Institute of Chartered Accountants of India, which became applicable to the Company during the period ended March 31, 2005, did not permit such carrying forward of expenditure. For the purpose of this statement, the effect of amortisation of such Miscellaneous Expenditure has been appropriately adjusted in the year ended March 31, 2006 and fifteen months period ended March 31, 2005. k) Taxes for earlier years/ periods During the year ended March 31, 2007 and period ended December 31, 2007, certain taxes pertaining to the period ended March 31, 2005 were paid. For the purpose of this statement, such tax expense has been appropriately adjusted in the period ended March 31, 2005. l) Current Tax and Deferred Tax impact of adjustments In the preparation of the Restated Unconsolidated Summary Statements, the Company has made adjustments for the current tax and deferred tax impact of the adjustments in the respective years / periods to which such adjustments pertain. F. Non – Adjustment Items (i) The Company has changed the estimates of useful lives of some of its fixed assets during the year ended March 31, 2007 and the period ended December 31, 2007, more fully described in Note No. 11 below. The management believes that such change in estimated useful lives is bonafide and occasioned by technical/ environmental factors and hence should not be restated in previous periods/ years financials, as restated. The Company has adopted revised Accounting Standard 15 on Employee Benefits issued by the Institute of Chartered Accountants of India effective April 1, 2007. However, due to practical difficulties in retrospective application of the same, it has not been possible for the management to determine the effect on the profits for the year ended December 31, 2003, fifteen-months period ended March 31, 2005, and years ended March 31, 2006 and 2007 as if the revised Standard had been adopted by the Company for each of those years/periods. Accordingly, such adjustment has not been made in the attached unconsolidated restated summary statements. As per the requirements of Companies (Accounting Standards) Rules, 2006 read in consonance with notified Accounting Standard 11 which is mandatory for the accounting periods commencing on or after

(ii)

(iii)

188

December 7, 2006, the exchange differences on foreign currency transactions relating to fixed assets acquired from a country outside India have been adjusted to revenue as against the hitherto followed practice of adjusting the same to the carrying amount of fixed assets. However, due to practical difficulties in retrospective application of the same, it has not been possible for the management to determine the effect of such change on the financial statements of earlier years / periods. Accordingly, such adjustment has not been made in the attached unconsolidated restated summary statements. The impact of such adjustment will not be material in relation to the Restated Unconsolidated Summary Statements. G. 1. Other Significant Notes Segment Information Business Segments: The Company is into the Information and Communication Technology business rendering mobile-related services to telecom service providers. Based on identical services the Company deals in, which have similar risks and rewards, the entire business is considered as operating as a single business segment in terms of Accounting Standard-17 ‘Segment Reporting’ issued by the Institute of Chartered Accountants of India and hence, there are no additional disclosures to be provided other than those already provided in the financial statements. Geographical Segments * The following table shows the distribution of the Company’s consolidated sales by geographical market, regardless of where the goods were produced / services were rendered: (Amount in Rs. million) Particulars For the NineFor the Year For the Year For the Fifteen- For the Year months Ended Ended months Period Ended Period Ended March 31, March 31, Ended March December December 31, 2007 2006 31, 2005 31, 2003 2007 Domestic Market Overseas Market 702.30 32.26 637.55 24.23 301.84 23.11 251.02 17.26 8.06 0.48

Total

734.56

661.78

324.95

268.28

8.54

The following table shows the distribution of the Company’s consolidated debtors by geographical market: (Amount in Rs. million) As at March As at 31, 2005 December 31, 2003 64.55 2.86 67.40 0.13 0.02 0.15

Particulars

As at December 31, 2007 355.90 1.34 357.24

As at March 31, 2007 259.01 3.52 262.53

As at March 31, 2006 44.28 1.81 46.09

Domestic Market Overseas Market Total

* The Company has common assets for producing goods / rendering services for Domestic market and Overseas Markets. Hence, separate figures for fixed assets / additions to fixed assets cannot be furnished. 2. Defined Benefits Plan Gratuity (Revised Accounting Standard 15) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet: Profit and Loss account

189

Net employee benefit expense (recognised in Employee Cost) for the nine-months period ended December 31, 2007 Gratuity (Rs. in million) 4.25* 0.32 (0.08) 0.62 Nil 5.11 Nil

Current service cost Interest cost on benefit obligation Expected return on plan assets Net actuarial( gain) / loss recognized in the year Past service cost Net benefit expense charged to Profit and Loss account Actual return on plan assets * Including Rs. 0.23 million being payments made during the current period. Balance sheet Details of Provision for gratuity as at December 31, 2007

Defined benefit obligation Fair value of plan assets Less: Unrecognised past service cost Plan asset / (liability)

Gratuity (Rs. in million) 9.86 1.18 8.68 --(8.68)

Changes in the present value of the defined benefit obligation for the nine months period ended December 31, 2007 are as follows: Gratuity (Rs. in million) 2.17 0.32 4.02 ---3.35 9.86

Opening defined benefit obligation Interest cost Current service cost Benefits paid Actuarial (gains) / losses on obligation Closing defined benefit obligation Changes in the fair value of plan assets are as follows:

Opening fair value of plan assets Expected return Contributions by employer Benefits paid Actuarial gains / (losses) Closing fair value of plan assets

Gratuity (Rs. in million) 1.18 0.08 Nil Nil (0.08) 1.18

The Company’s expected contribution to Gratuity during the next year is not presently ascertainable. The major categories of plan assets as a percentage of the fair value of total plan assets are as follows: Gratuity 100 %

Investments with insurer (Life Insurance Corporation of India)

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

190

The principal assumptions used in determining gratuity obligations for the Company’s plans are shown below: Gratuity (%) 8.00 8.70 15.00

Discount rate Expected rate of return on assets Employee turnover

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Notes: a) The Institute of Chartered Accountants of India has issued a limited revision to AS 15 (Revised) which allows an entity to make disclosures required by paragraph 120(n) of AS 15 (Revised) prospectively from the transition date. The limited revision has not yet been incorporated in AS 15 notified under Companies (Accounting Standard) Rules, 2006. The Company expects that limited revision will be incorporated in notified standards shortly and hence, the information in respect of defined benefit obligation for previous four years / periods as required by Para 120(n) of AS -15 (Revised) are not furnished. b) Period ended December 31, 2007 being the first period of adoption of AS 15 (revised) by the Company, the previous years/ periods comparative information has not been furnished. Defined Contribution Plan For the nine-months period ended December 31, 2007 Employer’s Contribution to Provident Fund including Family Pension Fund* * Included in the head Contribution to Provident and Other Funds 7.36 (Amount in Rs. million) For the year ended March 31, 2007 4.33

3.

Leases – In case of assets taken on lease Operating Lease: Vehicles, office premises and guest houses are obtained on operating lease. In the case of vehicles, the lease term is for 1 year and renewable for further 1 year at the option of the Company. In the case of office premises and guest houses, the lease terms vary between 3 to 5 years. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements. (Amount in Rs. million) Particulars For the Ninemonths Period Ended December 31, 2007 17.12 NIL For the Year Ended March 31, 2007 12.30 NIL For the Year Ended March 31, 2006 3.42 NIL For the Fifteenmonths Period Ended March 31, 2005 2.09 NIL For the Year Ended December 31, 2003 NIL NIL

Lease Payment Contingent rent recognized in Profit and Loss Account

The Company has sub-let a portion of the above office premises on operating lease. The lease term is for 11 months and thereafter renewable on mutual agreement. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. (Amount in Rs. million) Particulars For the Nine For the For the Year For the Fifteen- For the months Period Year Ended months Period Year Ended Ended March 31, Ended March Ended December 31, March 31, 2006 31, 2005 December 2007 2007 31, 2003 Sub-lease payments received during the year Sub-lease payments NIL 1.80 NIL NIL NIL NIL NIL NIL NIL NIL

191

receivable at the balance sheet date 4. Capital Commitments Particulars For the Ninemonths Period Ended December 31, 2007 29.45 For the Year Ended March 31, 2007 18.36 For the Year Ended March 31, 2006 12.94 (Amount in Rs. million) For the Fifteen- For the months Period Year Ended March Ended 31, 2005 December 31, 2003 NIL NIL

Estimated amount of contracts (Net of advances) remaining to be executed on capital account and not provided for.

5.

Contingent Liabilities not provided for Particulars As at December 31, 2007 NIL As at March 31, 2007 NIL As at March 31, 2006 18.00 (Amount in Rs. million) As at As at March 31, December 31, 2005 2003 NIL NIL

Counter Bank Guarantee given to Indusind Bank on behalf of Omnia BPO Services Limited for bill discounting Performance Bank Guarantees Contingent Liability in respect of non-charging the service tax on the Short messaging peer-to-peer service including penalty thereon. The matter is under adjudication with the Commissioner of Central Excise, Chandigarh. The Company is of the view that it is an ‘information technology service’ and thus is exempt from the service tax.

NIL 38.89

NIL 31.15

0.40 NIL

2.00 NIL

NIL NIL

6.

Based on discussions with the solicitors/legal opinion taken by the Company, the management believes that the Company has a good chance of success in the above mentioned case and hence, no provision there against is considered necessary. Break-up of Deferred Tax Assets / (Liabilities) : (Amount in Rs. million) Deferred Tax Asset/ Liability as at Timing Difference on account of December 31, 2007 Deferred Tax Liabilities Difference in depreciation and other differences in block of fixed assets as per Tax books and Financial books Gross Deferred Tax Liabilities Deferred Tax Assets Effect of expenditure debited to Profit and Loss Account but allowed for tax purposes in the following years 3.69 0.05 0.28 0.81 March 31, 2007 March 31, 2006 March 31, 2005 December 31, 2003

3.69

0.05

0.28

0.81

-

1.09

1.92

0.34

0.26

-

192

Brought forward losses and depreciation Gross Deferred Tax Assets

1.09

1.92

0.34

0.26

2.93 2.93

Net Deferred Tax (Liabilities) / Assets

(2.60)

1.87

0.06

(0.55)

2.93

7.

The amount of foreign currency exposures that are not hedged by a derivative instrument or otherwise are as under:
Particulars Amount (in Rs. million) As at As at As at December March March 31, 2007 31, 2007 31, 2006 1.29 1.01 1.31 0.26 2.48 0.50 0.09 NIL NIL 0.47 0.88 4.45 0.23 0.11 7.18 0.22 0.15 2.12 As at December 31, 2007 USD 32,785 EUR 4,456 Mauritius Rs. 63,476 USD 11,877 EUR 15,178 USD 112,848 Foreign Currency As at March 31, 2007 USD 23,226 EUR 42,720 NIL USD 5,331 EUR 1,973 USD 164,789 As at March 31, 2006 USD 29,425 EUR 9,274 NIL IL Advances from Customers Import Creditors USD 4,903 EUR 2,751 USD 47,631

Export Debtors

Closing rate as on the closing dates are as followsForeign Currency USD 1 EUR 1 Mauritius Rs. 1 As at December 31, 2007 Rs. 39.41 Rs. 58.12 Rs. 1.43 As at March 31, 2007 Rs 43.59 Rs. 58.14 -As at March 31, 2006 Rs. 44.61 Rs. 54.20 ---

Note: This disclosure has been given as required by the Announcement issued by the Institute of Chartered Accountants of India which was made applicable in respect of the financial statements for the accounting period(s) ending on or after March 31, 2006 and hence, the prior years/ periods comparative disclosures have not been furnished. 8. Accounting Standard “ AS 22 “ “Taxes on Income “ issued by the Institute of Chartered Accountants of India, had become mandatory from the financial year ended December 31, 2003. As required by the Accounting Standard, the Company, at the beginning of that year, recognized deferred tax assets of Rs. 4.46 million on its carried forward unabsorbed depreciation of Rs. 8.61 million and business losses of Rs. 3.82 million and carried it to General Reserves of that year in terms of the transitional provisions of the said Standard. Deferred tax liabilities for the year ended December 31, 2003 amounting to Rs.1.53 million were adjusted against the above deferred tax assets. During the financial year ended March 31, 2006, the Company had increased its authorised share capital from Rs. 20.01 million divided into 2,001,000 equity shares of Rs. 10 each to Rs. 120.01 million divided into 12,001,000 equity shares of Rs. 10 each pursuant to the ordinary resolution passed in its Extra Ordinary General Meeting of shareholders held on January 30, 2006. During the financial year ended March 31, 2006, the Company had issued 10,000,110 bonus shares by capitalising its profits, in the ratio of 5:1 pursuant to the resolution passed in its Extra Ordinary General Meeting of shareholders held on January 30, 2006. During the year ended March 31, 2007, the Company reassessed the estimates of useful lives of Data Processing Machines and Computer Software as 3 years (as against the hitherto followed practice of depreciating the same over a period of 6 years) and provided depreciation on the same based on the revised estimates of their economic useful lives. As a result of this change, the charge to the Profit and Loss Account before taxation for the year ended March 31, 2007 was higher by Rs. 25.89 million and the net block of fixed assets was correspondingly lower by the same amount. Further, during the period ended December 31, 2007, the Company has reassessed the estimates of useful lives of Furniture-Fixtures, Office Equipments & Vehicles, as 7 years (as against the hitherto followed practice of depreciating the same over a period of 15 years, 20 years and 8.4 years respectively) and provided depreciation on the same based on the revised estimates of their economic useful lives. As a result of this change, the charge to the Profit and Loss Account before taxation for the period ended December 31, 2007 was higher by Rs. 1.59 million and

9.

10.

11.

193

the net block of fixed assets was correspondingly lower by the same amount. 12. The Company has obtained expert opinions stating that the two units set up at Parwanoo, Himachal Pradesh, would be eligible for income tax benefits under Section 80-IC of the Income Tax Act, 1961, resulting in deduction of 100% of profits and gains of such units for the first five assessment years commencing with the initial assessment year and thereafter thirty per cent of the profits and gains for the next five years. Income tax provision has been made in the books of account accordingly. The asset of Rs. 56.39 million recognised by the Company as ‘MAT Credit Entitlement’ in respect of the MAT payment during the year ended March 31, 2006 and 2007 and period ended December 31, 2007 and shown under ‘Loans and Advances’ represents that portion of MAT liability, which can be recovered and set off in subsequent years based on the provisions of Section 115JAA of the Income Tax Act, 1961. The management based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets. Previous Year Comparatives The Company was following calendar year as its accounting year till December 31, 2003. However, the Company changed its statutory accounting year to end on March 31, 2005 instead of December 31, 2004 and thus accounts were prepared for the fifteen months ended March 31, 2005. The Company continued to follow the financial year as its statutory year for the years ended March 31, 2006 and March 31, 2007. Further, the Company has again changed its statutory year to end on December 31, 2007 instead of March 31, 2008. Accordingly, the restated unconsolidated summary statements have been made for the year ended December 31, 2003, fifteen months period ended March 31, 2005, years ended March 31, 2006 and March 31, 2007 and nine months period ended December 31, 2007. 15. Change of Name Subsequent to the Restated Unconsolidated Summary Statements as at December 31, 2007, the Company got itself converted into a public limited Company and consequently, the name of the Company was changed from ‘Cellebrum.com Private Limited’ to ‘Cellebrum.com Limited’ with effect from February 14, 2008. Further, the name of Company was again changed from ‘Cellebrum.com Limited’ to ‘Cellebrum Technologies Limited’ with effect from April 22, 2008.

13.

14.

As per our report of even date

For S. R. BATLIBOI & ASSOCIATES Chartered Accountants

For and on behalf of the Board of Directors of Cellebrum Technologies Limited (Director) (Director)

per Raj Agrawal Partner Membership No.82028 Place : Gurgaon Date : June 26, 2008

(Chief Financial officer) June 26, 2008

(Company Secretary) June 26, 2008

194

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE V : DETAILS OF OTHER INCOME, AS RESTATED
PARTICULARS Nine- months Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 ( Amount in Rs. Million) Fifteen-months Year Ended Period Ended December March 31, 2005 31, 2003

Other income, as restated Net Profit before tax, as restated after prior period items

35.69

23.46

6.33

3.31

0.06

360.29

438.56

241.52

206.04

4.40

Percentage

9.91

5.35

2.62 Fifteenmonths Period Ended March 31, 2005 2.08 1.20 0.03

1.61

1.36

Source of other income Interest on Bank deposits Interest Others Rental Income Other Income Total Other Income, as restated

Nine- months Period Ended December 31, 2007 33.50 0.12 1.80 0.27

Year Ended March 31, 2007 17.08 5.90 0.48

Year Ended March 31, 2006 2.09 4.17 0.07

Year Ended December 31, 2003 0.06 -

Nature Recurring NonRecurring Recurring NonRecurring

Related / Not related to Business Activity Not Related Not Related Non Related Non Related

35.69

23.46

6.33

3.31

0.06

Notes: (i) The details of ''Other Income'' disclosed above are stated after adjusting the effect of restatement. The same have been shown gross of restatement in the summary Statement of Profits & Losses, as restated and the adjustments have been listed separately under the head "Adjustments" in the Notes to Accounts. The classification of other income as recurring/non-recurring and related/not related to business activity is based on the current operation and business activity of the Company as determined by the management. The above amounts are as per Unconsolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

(ii)

(iii)

195

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE VI : DETAILS OF RATES OF DIVIDEND The dividend declared by the company during the period ended December 31, 2007 and the last four years/periods are presented below. (Amount in Rs. Million)
Particulars Nine- months Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

Class of Shares Equity Share Capital as outstanding at the year end Dividend on Equity Shares - Dividend per equity share ( Rs. ) - Dividend rate ( % to paid up capital) - Dividend amount 16.07* 160.70% 234.28 33.35** 333.5% 400.20 -

14,571,574

14,571,574

12,000,120

2,000,020

2,000,020

Dividend Tax

39.82

56.13

-

-

-

*Proposed Dividend on equity shares for the nine months period ended December 31, 2007. **Interim Dividend on equity shares for the year ended December 31, 2007. Notes: 1) The amount paid as dividend in the past is not indicative of the dividend policy in the future. 2) The figures disclosed above are based on the Unconsolidated Summary Statement of Profits and Losses, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

196

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE VII : CAPITALISATION STATEMENT AS AT DECEMBER 31, 2007 (Amount in Rs. Million)
Pre Issue Borrowings Short Term Debt (A) Long Term Debt (B) Total Debts (C) Shareholders' funds Equity Share Capital Reserves and Surplus, as restated - Profit & Loss Account - Securities Premium - General Reserve Total shareholders' fund (D) Long Term debt / Equity ratio (B / D) Total Debt / Shareholders' Funds (C / D) 237.66 637.48 75.58 950.69 1,096.41 [*] 145.72 [*] [*] [*] [*] Post Issue

Notes: 1) 2) 3) 4) Short Term debts represents debts which are due within twelve months from 31st December, 2007. Long Term debt represents debt other than short term debt as defined above. Long term debt/equity :- Long Term Debt / Total Shareholder's funds. The above amounts are as per the Unconsolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited). The corresponding post issue figures are not determinable at this stage pending the completion of Book Building Process and hence have not been furnished.

5)

197

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE VIII : DETAILS OF SECURED LOANS
S. NO Particulars As at December 31, 2007 As at March 31, 2007 As at March 31, 2006 (Amount in Rs. Million) As at As at March 31, December 2005 31, 2003

I) 1

VEHICLE LOANS Secured by hypothecation of respective vehicles financed through the loans

-

-

0.67

-

-

TOTAL Notes: 1) 2)

-

-

0.67

-

-

Interest rate on vehicle loans from bank was payable at the rate of 5.71% for the year ended March 31, 2006. The above amounts are as per Unconsolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

198

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE IX : DETAILS OF INVESTMENTS
Particulars As at December 31, 2007 (Amount in Rs. Million) As at As at March 31, December 2005 31, 2003

As at March 31, 2007

As at March 31, 2006

Long Term Investments ( At Cost), in a Subsidiary Company Unquoted, Trade fully paid-up (10,000,000 Equity Shares of Rs.10/- each in Mobisoc Technology Private Limited)

100.00

100.00

-

-

-

Total

100.00

100.00

-

-

-

Notes: 1) The above amounts are as per Unconsolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

199

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE X : DETAILS OF SUNDRY DEBTORS
Particulars As at December 31, 2007 As at March 31, 2007 As at March 31, 2006 (Amount in Rs. Million) As at As at March 31, December 2005 31, 2003

Debts Outstanding for a period exceeding 6 Months Unsecured, Considered Good Considered Doubtful Other Debts Unsecured, Considered Good Considered Doubtful 340.46 10.61 253.77 2.40 46.04 0.54 66.60 0.15 16.77 11.40 8.76 7.94 0.05 1.70 0.80 -

Less : Provision for Doubtful Debts

22.00

10.34

2.24

-

-

Total

357.24

262.53

46.09

67.40

0.15

Notes: 1) The above amounts are as per Unconsolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

200

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE XI : DETAILS OF LOANS & ADVANCES
As at December 31, 2007 (Amount in Rs. Million) As at As at March 31, December 2005 31, 2003

Particulars

As at March 31, 2007

As at March 31, 2006

Unsecured, Considered good

Loan to employees Advance Recoverable in Cash or in Kind or for value to be received Share application money pending allotment Inter-corporate deposits Balances with excise authorities Security deposits MAT credit entitlement (refer Note No. G (11) of the Annexure IV) Advance Income Tax/ Tax deducted at source (net of provision for tax)

0.92

2.97

0.27

0.05

-

24.37 15.58 195.98

3.20 9.41 4.33

1.89 229.50 65.50 1.68 0.66

1.08 5.00 17.50 0.22 0.22

0.17 -

56.39

27.79

-

-

-

-

-

1.27

-

-

Total

293.24

47.70

300.77

24.07

0.17

Notes: 1) The above amounts are as per Unconsolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

201

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE XII : DETAILS OF OTHER CURRENT ASSETS
Particulars As at December 31, 2007 As at March 31, 2007 As at March 31, 2006 (Amount in Rs. Million) As at As at March 31, December 2005 31, 2003

Unbilled Revenue Assets Held for Sale Interest Accrued on Deposits Total

78.18 5.26 83.44

1.07 1.32 2.39

0.11 2.50 2.61

1.29 0.10 1.39

3.66 0.08 0.01 3.75

Notes: 1) The above amounts are as per Unconsolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

202

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE XIII : STATEMENT OF TAX SHELTERS
Nine- months Period Ended December 31, 2007 Net Profit Before Tax, As Restated Tax Rate (A) Tax at Notional Rates (B) Permanent Differences Deduction under Section 80 IC of the Income Tax Act, 1961 Filing Fees paid to ROC for increasing Authorised Share Capital Interest/ Penalties on Income Tax Total Permanent Difference (C) Timing Differences Differences due to allowability / disallowability of Section 43B items Differences between book depreciation and tax depreciation Difference in tax and accounting treatment of Miscellaneous Expenditure Amounts inadmissible u/s 40(a) of the Income Tax Act, 1961 Provision for Doubtful Debts Total Timing Difference (D) Profits Set off against brought forward losses and unabsorbed depreciation of previous years / periods (E) Net Adjustments F= (C+D+E) Tax impact of Adjustments (G=A*F) Tax Liability after considering impact of Adjustments (H=B+G) Book Profits Before Tax, As Restated Adjustments in Book profit 360.29 33.99% 122.46 Year Ended March 31, 2007 Year Ended March 31, 2006 (Amount in Rs. Million) Fifteen-months Year Ended Period Ended December 31, March 31, 2005 2003

438.56 33.66% 147.62

241.52 33.66% 81.30

206.04 37.34% 76.93

4.40 36.75% 1.62

(325.68)

(373.59)

(184.45)

(133.77)

-

1.40

1.31 0.00

0.65 0.17

0.53

-

(324.28)

(372.28)

(183.63)

(133.24)

-

3.92

0.99

0.70

0.09

-

7.93

(2.16)

(3.62)

(4.02)

-

-

-

(0.17)

(0.15)

(0.07)

(0.05) 0.44 12.24

(3.63) 0.30 (4.50)

(0.06) 1.70 (1.45)

(4.08)

(0.07)

-

-

-

(8.83)

(4.32)

(312.04) (106.06)

(376.78) (126.82)

(185.08) (62.30)

(146.15) (55.20)

(4.39) (1.61)

16.40

20.80

19.00

21.73

0.01

360.29 (4.51)

438.56 (2.10)

241.52 (1.03)

206.04 -

4.40 (3.57)

203

Nine- months Period Ended December 31, 2007 Book Profits for MAT * MAT Rate MAT Liability Tax Liability being higher of Regular Tax liability and MAT Liability for the year/ period 355.78 11.33% 40.31

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteen-months Year Ended Period Ended December 31, March 31, 2005 2003

436.46 11.22% 48.97

240.49 8.42% 20.24

206.04 8.00% 16.49

0.83 7.88% 0.07

0.07 40.31 48.97 20.24 21.73

* MAT refers to Minimum Alternate Tax as referred to in section 115 JB of the Income Tax Act, 1961. Notes: 1) The aforesaid Statement of Tax Shelters is based on the Profits as per the 'Restated Unconsolidated Summary Statement of Profits and Losses’ of Cellebrum Technologies Limited (Formerly Cellebrum.com Private Limited). The permanent / timing differences for the years ended March 31, 2007 and 2006, fifteen months period ended March 31, 2005 and year ended December 31, 2003 have been computed considering the acknowledged copy of the income- tax return filed by the Company and considering the impact of broken period included therein. Disallowances on account of assessment proceedings, notices, appeals etc have been adjusted in the tax liability of the year/ period to which they pertain. The figures for nine months ended December 31, 2007 are based on provisional computation of total income prepared by the Company and are subject to any changes that may be considered at the time of filing final return of income.

2)

3)

204

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE XIV : STATEMENT OF ACCOUNTING RATIOS (ON RESTATED PROFITS)
Particulars As at December 31, 2007 As at March 31, 2007 As at March 31, 2006 As at March 31, 2005 As at December 31, 2003

Earnings per share -Basic and Diluted (Rs.) Return on Net Worth % Net Asset Value per equity share (Rs.) Weighted average number of equity share used for calculating: Basic and Diluted Earnings per share

23.25 31% 75.24

32.29 40% 71.16

18.36 53% 34.52

15.04 93% 96.95

0.23 22% 6.49

14,571,574

12,873,710

12,000,120

12,000,120

12,000,120

Total number of equity shares outstanding at the end of the year / period*

14,571,574

14,571,574

12,000,120

2,000,020

2,000,020

* Face value Rs. 10/Ratios have been computed as per the following formulae

Earnings per share (Rs.) =

Net Profit after Tax, as restated attributable to equity shareholders Weighted average number of equity shares outstanding during the year/ period Net Profit after Tax, as restated Net Worth, as restated, at the end of the year/ period Net Worth, as restated, at the end of the year Number of equity shares outstanding at the end of year/ period

Return on Net Worth (%) =

Net Asset Value (NAV) per share (Rs.)=

1.

2. 3.

4.

Weighted average number of equity shares is the number of equity shares outstanding at the beginning of the year/ period, adjusted by the number of equity shares issued during the year/ period multiplied by the time - weighting factor. The time weighting factor is the number of days for which the specific shares are outstanding as a proportion of the total number of days during the year/ period. Net profit, as appearing in the statement of profit and loss of the respective years/ periods, has been considered for the purpose of computing the above ratios. Earnings per share calculations are done in accordance with Accounting Standard 20 "Earnings per Share" issued by the Institute of Chartered Accountants of India. In terms of para 24 of AS-20, in case of a bonus issue, the number of equity shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event had occurred at the beginning of the earliest period reported. Weighted average number of equity shares outstanding during all the previous years/ periods have been considered accordingly. Net worth means Equity Share capital + Reserves and Surplus (including Securities Premium) Miscellaneous Expenditure not written off or adjusted.

205

5.

These ratios are computed on the basis of Unconsolidated Summary Statements, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

206

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE XV (A): DETAILS OF THE NAMES OF RELATED PARTIES AND NATURE OF RELATIONSHIPS
1. Names of related parties where control exists irrespective of whether transactions have occurred or not. Ultimate Holding Company Holding Company Subsidiary Company Indian Televentures Private Limited Omnia Investments Private Limited Mobisoc Technology Private Limited

2. Names of other related parties Fellow Subsidiaries Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Spice Communications Limited (upto June 5, 2007) Super Infosys Private Limited Mcorp Communication Private Limited (formerly known as Modi Wellvest Private Limited) Hot Spot Retails Private Limited (upto May 9, 2007) Key Management Personnel Dr. B.K. Modi (Sep 30, 2006 – Sep 30, 2007) Mr. Dilip Modi Mr. Saket Agarwal Mr. Kartar Singh Mr. Dheeraj Agarwal (Feb 1, 2004 – July 15, 2005)

Relatives of Key Management Personnel

Mrs. Veena Modi Mrs. Sonal Modi Mrs. Ritika Modi Rungta Ms. Divya Modi

Enterprises significantly influenced by Management Personnel or their Relatives

Key

Twenty First Century Capitals Limited Wellwisher Holdings Private Limited Harjas Logic Systems Private Limited Nik Travels Private Limited Spice Corp Private Limited (formerly known as MCorp Global Private Limited) Spice Communications Limited (from June 6, 2007) Spice Mobiles Limited Ace Airways Private Limited Duro International Rubber Private Limited G.M.Modi Hospitals Corporation Private Limited Modikem Limited Plus Paper Foodpac Limited I O Systems Limited (formerly known as Spice Systems Limited) Tuberose Investments Private Limited Mudaliar & Sons Hotels Private Limited Vcorp Mercantile Private Limited

207

Hindustan Retails Private Limited Hot Spot Retails Private Limited (from May 10, 2007)

208

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) ANNEXURE XV (B) : DETAILS OF TRANSACTIONS WITH RELATED PARTIES
Particulars Ninemonths Period Ended December 31, 2007 Holding Company Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003 Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007 Subsidiary Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

A) Transactions i) Revenue from Value Added Services Spice Communications Limited Revenue from Roaming Services Spice Communications Limited Sale of Softwares iv) iv) Other Income (Rental Income) Hot Spot Retails Private Limited Purchase of Fixed Assets Spice Mobiles Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited v) vi) Roaming Expenses Spice Communications Limited Enterprise Solution Charges -

-

-

-

-

-

-

-

-

-

-

ii) iii)

-

-

-

-

-

-

-

-

-

-

209

Spice Communications Limited vii) Gifts and Prizes Hot Spot Retails Private Limited Spice Communications Limited viii) Website Development Charges Spice Communications Limited Hardware and Equipment Maintenance Services Spice Communications Limited Rent Paid Spice Communications Limited Harjas Logic Systems Private Limited Wellwisher Holdings Private Limited xi) xii) Repair Services Hot Spot Retails Private Limited Business Promotion Expenses Hot Spot Retails Private Limited Spice Mobiles Limited xiii) xiv) xv) xvi) xvii) Travelling expenses Nik Travels Private Limited Communication expenses Spice Communications Limited Sundry Debit Balances Written Off Spice Communications Limited Balances Provided for Spice Communications Limited Electricity Expenses Spice Communications Limited -

-

-

-

-

-

-

-

-

-

-

-

-

ix) x)

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

210

xiii)

Staff Welfare Spice Communications Limited 18.18 -

xix)

Legal & Professional Charges Mobisoc Technology Private Limited Corporate Guarantee Commission income Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Interest Income MCorpGlobal Private Limited -

xx)

-

-

-

-

-

-

-

-

-

-

xxi)

xxii)

Remuneration paid Saket Agarwal Kartar Singh Dheeraj Agarwal Reimbursement of Expenses Incurred by the Company MCorpGlobal Private Limited Spice Global Pvt Ltd. Spice Communications Limited Reimbursement of Expenses Paid by the Company Mobisoc Technology Private Limited Dividend Paid Omnia Investments Private Limited Dr. B.K Modi Mrs. Veena Modi Mr. Dilip Modi

-

-

-

-

-

-

-

-

-

-

xxiii)

-

-

-

-

-

-

-

-

-

-

xxiv) xxv)

-

400.18 -

-

-

-

3.00 -

-

-

-

-

211

Ms. Divya Modi xxvi) Investment in Equity Share Capital Mobisoc Technology Private Limited Share Application money paid Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited Share Application money received back Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited xxix) Advance Given During the Year Omnia Investments Private Limited Spice Global Pvt Ltd. Spice Net Limited Hot Spot Retails Private Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Twenty First Century Capitals Limited xxx) Advance received back during the year Omnia Investments Private Limited Spice Net Limited Hot Spot Retails Private Limited Twenty First Century Capitals Limited

-

-

-

-

-

-

100.00

-

-

-

xxvii)

-

-

-

-

-

-

-

-

-

-

xxviii)

-

-

-

-

-

-

-

-

-

-

-

-

60.00 -

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

60.00 -

-

-

-

-

-

-

-

212

Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) xxxi) Security Deposits Given Mudaliar & Sons Hotels Pvt Ltd Harjas Logic Systems Private Limited xxxii) xxxiii) B) Balances at the year end i) Receivables Spice Communications Limited Spice Global Pvt Ltd. Spice Net Limited Modi Distributors Pvt. Ltd. Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Hot Spot Retails Private Limited Twenty First Century Capitals Limited Bougainvillea Multiplex & Entertainment Center Private Limited Harjas Logic Systems Private Limited Kartar Singh Mudaliar & Sons Hotels Pvt Ltd Loan Given During the Year MCorpGlobal Private Limited Loan received back during the year MCorpGlobal Private Limited

-

-

-

-

-

-

-

-

-

-

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

213

(against security deposit) Mudaliar & Sons Hotels Pvt Ltd (against advances recoverable) MCorpGlobal Private Limited ii) Payables Nik Travels Private Limited Mr. Dheeraj Agarwal Harjas Logic Systems Private Limited Mobisoc Technology Private Limited Spice Mobiles Limited Spice Communications Limited 0.51 -

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

214

Particulars

Fellow Subsidiary

Key Management Personnel

Ninemonths Period Ended December 31, 2007

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteenmonths Period Ended March 31, 2005

Year Ended December 31, 2003

Ninemonths Period Ended December 31, 2007

Year Ended March 31, 2007

Year Ended March 31, 2006

Fifteenmonths Period Ended March 31, 2005

Year Ended December 31, 2003

A) Transactions i) Revenue from Value Added Services Spice Communications Limited Revenue from Roaming Services Spice Communications Limited Sale of Softwares 52.70 iv) iv) Other Income (Rental Income) Hot Spot Retails Private Limited Purchase of Fixed Assets Spice Mobiles Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited v) vi) vii) Roaming Expenses Spice Communications Limited Enterprise Solution Charges Spice Communications Limited Gifts and Prizes 5.97 2.96 0.01 0.20 -

7.85

-

-

-

-

-

-

-

-

-

ii) iii)

3.62

-

-

-

-

-

-

-

-

-

215

Hot Spot Retails Private Limited Spice Communications Limited viii) Website Development Charges Spice Communications Limited Hardware and Equipment Maintenance Services Spice Communications Limited Rent Paid Spice Communications Limited Harjas Logic Systems Private Limited Wellwisher Holdings Private Limited xi) xii) Repair Services Hot Spot Retails Private Limited Business Promotion Expenses Hot Spot Retails Private Limited Spice Mobiles Limited xiii) xiv) xv) xvi) xvii) Travelling expenses Nik Travels Private Limited Communication expenses Spice Communications Limited Sundry Debit Balances Written Off Spice Communications Limited Balances Provided for Spice Communications Limited Electricity Expenses Spice Communications Limited Staff Welfare

-

0.02 -

-

-

-

-

-

-

-

-

ix) x)

0.05 -

0.03 -

-

-

-

-

-

-

-

-

0.44 -

-

-

-

-

-

-

-

-

-

xiii)

216

Spice Communications Limited xix) Legal & Professional Charges Mobisoc Technology Private Limited Corporate Guarantee Commission income Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Interest Income MCorpGlobal Private Limited Remuneration paid Saket Agarwal Kartar Singh Dheeraj Agarwal xxiii) Reimbursement of Expenses Incurred by the Company MCorpGlobal Private Limited Spice Global Pvt Ltd. Spice Communications Limited Reimbursement of Expenses Paid by the Company Mobisoc Technology Private Limited Dividend Paid Omnia Investments Private Limited Dr. B.K Modi Mrs. Veena Modi Mr. Dilip Modi Ms. Divya Modi xxvi) Investment in Equity Share Capital

-

-

-

-

-

-

-

-

-

-

xx)

-

0.39 -

0.02 -

-

-

-

-

-

-

-

xxi)

xxii)

-

-

-

-

-

0.99 2.27 -

-

0.54

2.55

-

-

-

-

-

-

-

-

-

-

-

xxiv) xxv)

-

-

-

-

-

-

0.02 -

-

-

-

217

Mobisoc Technology Private Limited

-

-

-

-

-

-

-

-

-

-

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

218

Particulars Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007

Fellow Subsidiary Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003 Ninemonths Period Ended December 31, 2007

Key Management Personnel Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

xxvii)

Share Application money paid Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited Share Application money received back Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited

-

43.20 -

-

-

-

-

-

-

-

-

xxviii)

ZZZZZZ -

43.20 -

-

-

-

-

-

-

-

-

xxix)

Advance Given During the Year Omnia Investments Private Limited Spice Global Pvt Ltd. Spice Net Limited Hot Spot Retails Private Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Twenty First Century Capitals Limited 2.50 -

-

0.40 -

2.50 -

-

-

-

-

-

-

-

xxx)

Advance received back during the year

219

Omnia Investments Private Limited Spice Net Limited Hot Spot Retails Private Limited Twenty First Century Capitals Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) xxxi) Security Deposits Given Mudaliar & Sons Hotels Pvt Ltd Harjas Logic Systems Private Limited xxxii) xxxiii) B) Balances at the year end i) Receivables Spice Communications Limited Spice Global Pvt Ltd. Spice Net Limited Modi Distributors Pvt. Ltd. Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Hot Spot Retails Private Limited

-

-

2.50 -

-

-

-

-

-

-

-

-

0.40 -

2.50 -

-

-

-

-

-

-

-

Loan Given During the Year MCorpGlobal Private Limited Loan received back during the year MCorpGlobal Private Limited

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

As at December 31, 2007

As at March 31, 2007

As at March 31, 2006

As at March 31, 2005

As at December 31, 2003

-

-

-

-

-

-

-

-

-

-

-

0.40 -

0.02 -

-

-

-

-

-

-

-

220

Twenty First Century Capitals Limited Bougainvillea Multiplex & Entertainment Center Private Limited Harjas Logic Systems Private Limited Kartar Singh Mudaliar & Sons Hotels Pvt Ltd (against security deposit) Mudaliar & Sons Hotels Pvt Ltd (against advances recoverable) MCorpGlobal Private Limited ii) Payables Nik Travels Private Limited Mr. Dheeraj Agarwal Harjas Logic Systems Private Limited Mobisoc Technology Private Limited Spice Mobiles Limited Spice Communications Limited

-

-

-

-

-

0.12 -

-

-

0.06 -

-

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

221

Particulars

Relatives of Key Management Personnel

Enterprises owned or significantly influenced by key management personnel or their relatives Year Ended December 31, 2003 NineYear Year months Ended Ended Period March 31, March Ended 2007 31, 2006 December 31, 2007 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

Ninemonths Period Ended December 31, 2007 A) Transactions i) Revenue from Value Added Services Spice Communications Limited ii) Revenue from Roaming Services Spice Communications Limited Sale of Softwares iv) Other Income (Rental Income) Hot Spot Retails Private Limited Purchase of Fixed Assets Spice Mobiles Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited Roaming Expenses Spice Communications Limited Enterprise Solution Charges Spice Communications Limited Gifts and Prizes Hot Spot Retails Private Limited Spice Communications Limited Website Development Charges Spice Communications Limited -

Year Year Ended Ended March 31, March 31, 2006 2007

Fifteenmonths Period Ended March 31, 2005

-

-

-

-

-

34.32

117.80 133.18

87.74

2.12

-

-

-

-

13.79

42.80

50.69

78.66

-

iii)

-

-

-

-

254.76

221.23 -

-

-

-

1.60 iv) 18.72 vi) vii) 9.95 4.07 0.07 1.20 0.16 0.27 21.96 10.63 4.67 11.87 -

v)

viii)

222

ix) x)

Hardware and Equipment Maintenance Services Spice Communications Limited Rent Paid Spice Communications Limited Harjas Logic Systems Private Limited Wellwisher Holdings Private Limited

-

-

-

-

-

0.27 2.93 1.80

0.36 3.91 1.00

0.75 0.36 0.33 -

3.75 0.81 -

-

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

223

Particulars Ninemonths Period Ended December 31, 2007 xi) xii) Repair Services Hot Spot Retails Private Limited Business Promotion Expenses Hot Spot Retails Private Limited Spice Mobiles Limited xiii) xiv) xv) xvi) xvii) Travelling expenses Nik Travels Private Limited Communication expenses Spice Communications Limited Sundry Debit Balances Written Off Spice Communications Limited Balances Provided for Spice Communications Limited Electricity Expenses Spice Communications Limited xiii) Staff Welfare Spice Communications Limited xix) Legal & Professional Charges Mobisoc Technology Private Limited -

Relatives of Key Management Personnel Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

Enterprises owned or significantly influenced by key management personnel or their relatives Ninemonths Period Ended December 31, 2007 6.50 Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

-

-

-

-

-

-

-

-

-

-

-

4.59 1.47 1.11

3.03 1.26 0.16 0.58

0.54 0.95 0.30 -

1.39 1.54 0.10 -

-

-

-

-

-

0.05 -

-

-

-

-

224

xx)

Corporate Guarantee Commission income Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Interest Income MCorpGlobal Private Limited Remuneration paid Saket Agarwal Kartar Singh Dheeraj Agarwal Reimbursement of Expenses Incurred by the Company MCorpGlobal Private Limited Spice Global Pvt Ltd. Spice Communications Limited Reimbursement of Expenses Paid by the Company Mobisoc Technology Private Limited Dividend Paid Omnia Investments Private Limited Dr. B.K Modi Mrs. Veena Modi Mr. Dilip Modi Ms. Divya Modi

-

-

-

-

-

-

5.88

3.20

-

-

xxi)

xxii)

-

-

-

-

-

-

-

-

-

-

xxiii)

-

-

-

-

-

-

0.36 0.59

0.97

0.33 49.47

-

xxiv) xxv)

-

-

-

-

-

-

-

-

-

-

xxvi)

Investment in Equity Share Capital Mobisoc Technology Private Limited

Note: 1. All figures are in Rs. Million

225

2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

Cont..

226

Particulars

Relatives of Key Management Personnel Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

Enterprises owned or significantly influenced by key management personnel or their relatives Ninemonths Period Ended December 31, 2007 Year Ended March 31, 2007 Year Ended March 31, 2006 Fifteenmonths Period Ended March 31, 2005 Year Ended December 31, 2003

xxvii)

Share Application money paid Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited Share Application money received back Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited

-

-

150.00 79.50 -

xxviii)

-

-

-

-

-

-

150.00 79.50

-

-

-

xxix)

Advance Given During the Year Omnia Investments Private Limited Spice Global Pvt Ltd. Spice Net Limited Hot Spot Retails Private Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Twenty First Century Capitals Limited 17.50 19.05 -

-

-

-

-

-

-

-

0.50

-

-

227

xxx)

Advance received back during the year Omnia Investments Private Limited Spice Net Limited Hot Spot Retails Private Limited Twenty First Century Capitals Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) 0.50 19.00 -

-

-

-

-

-

150.00 -

1.95

-

-

-

xxxi)

Security Deposits Given Mudaliar & Sons Hotels Pvt Ltd Harjas Logic Systems Private Limited

xxxii) xxxiii) B) Balances at the year end i)

Loan Given During the Year MCorpGlobal Private Limited Loan received back during the year MCorpGlobal Private Limited As at December 31, 2007 As at March 31, 2007 As at March 31, 2006 As at March 31, 2005 As at December 31, 2003 As at December 31, 2007 119.60 As at March 31, 2007 50.00 As at March 31, 2006 As at March 31, 2005 As at December 31, 2003 54.10 115.50 -

Receivables Spice Communications Limited Spice Global Pvt Ltd. Spice Net Limited Modi Distributors Pvt. Ltd. Omnia BPO Services Limited 265.08 184.13 20.27 47.30 17.60 0.05 5.00 -

228

(formerly known as Stracon Back Office Solutions Limited) Hot Spot Retails Private Limited Twenty First Century Capitals Limited Bougainvillea Multiplex & Entertainment Center Private Limited Harjas Logic Systems Private Limited Kartar Singh Mudaliar & Sons Hotels Pvt Ltd (against security deposit) Mudaliar & Sons Hotels Pvt Ltd (against advances recoverable) MCorpGlobal Private Limited ii) Payables Nik Travels Private Limited Mr. Dheeraj Agarwal Harjas Logic Systems Private Limited Mobisoc Technology Private Limited Spice Mobiles Limited Spice Communications Limited 0.03 6.50 33.75 0.01 0.10 0.08 0.25 0.00* 2.07 150.00 8.43 1.95 0.50 150.00 145.00 -

Note: 1. All figures are in Rs. Million 2. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rates or with sales of similar products to other parties.

229

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XVI : CONSOLIDATED SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED
Particulars APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated Depreciation/ Amortisation Net Block Capital Work In Progress including Capital Advances 452.69 (113.51) 339.18 8.05 185.70 (52.99) 132.71 31.21 As at December 31, 2007 (Amount in Rs. Million) As at March 31, 2007

Total

347.23

163.92

Deferred Tax Assets (net) Current Assets, Loans & Advances Inventories Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances

-

1.87

357.24 500.59 84.65 294.27

1.36 262.53 648.30 3.34 47.84

Total TOTAL (A)

1,236.75 1,583.98

963.37 1,129.17

Deferred Tax Liabilities (net) Liabilities and Provisions Minority Interest Current Liabilities Provisions Total

2.04

-

0.10 181.98 316.73 498.81

0.10 86.85 11.68 98.63

TOTAL (B)

500.85

98.63

Net Worth (A-B)

1,083.13

1,030.53

230

Particulars

As at December 31, 2007

As at March 31, 2007

Represented by Share Capital and Reserves Equity Share Capital Reserves and Surplus (Figure for December 31, 2007 is net of Rs. 5.11 million being adjustment for employee provisions (Refer Note No. G (3) of the Annexure XIX) Less: Miscellaneous Expenditure (to the extent not written off or adjusted) 145.72 145.72 885.92 937.41 1.11

Net Worth

1,083.13

1,030.53

Notes: The above Statement should be read with the significant accounting policies and Notes to the Consolidated Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure XIX As per our report of even date FOR S.R. BATLIBOI & ASSOCIATES Chartered Accountants Per Raj Agrawal Partner Membership No. : 82028 Place: Gurgaon Date: June 26, 2008 For and on behalf of the Board of Cellebrum Technologies Limited (Directors) (Directors)

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

Kartar Singh Chief Finance Officer

Company secretary

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

231

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XVII : CONSOLIDATED SUMMARY STATEMENT OF PROFIT AND LOSS, AS RESTATED
Particulars Nine- months Period Ended December 31, 2007 (Amount in Rs. Million) Year Ended March 31, 2007

INCOME Operating Income Other Income Total Income EXPENDITURE Purchase of Goods for Sale Operating Expenses Staff Cost Selling and Distribution Expenses General and Administration Expenses Decrease / (Increase) in Inventories Interest Miscellaneous Expenditure written off Depreciation / Amortization (Refer note no. C(iv) and G (9) of the Annexure XIX) Total Expenditure PROFIT BEFORE TAX AND PRIOR PERIOD ITEMS Prior Period Items PROFIT BEFORE TAX AND AFTER PRIOR PERIOD ITEMS Provision for Tax Current Tax (Net of MAT Credit entitlement, refer note no. G (10) of the Annexure XIX) Deferred Tax Charge / (Credit) Fringe Benefits Tax Total Tax Expense NET PROFIT AS PER AUDITED ACCOUNTS Adjustments ( Refer Note no. E of Annexure XIX) Current Tax impact of Adjustments Deferred Tax impact of Adjustments Net Impact of Adjustments NET PROFT AS RESTATED, BEFORE MINORITIES SHARE Less: (Losses) / Profits attributable to minority shareholders NET PROFT AS RESTATED Profit & Loss Account at the beginning of the year / period PROFIT AVAILABLE FOR APPROPRIATION 734.56 42.63 777.19 661.78 25.02 686.80

0.99 82.13 138.37 16.56 126.31 1.36 0.94 1.11 60.47 428.24 348.95 5.31 343.64

3.38 50.11 66.11 7.28 78.53 (1.36) 0.04 32.90 236.99 449.81 0.38 449.43

14.91 3.43 4.65 22.99 320.65 10.45 (0.42) 10.03 330.68 (0.001) 330.68

24.06 (1.24) 2.16 24.98 424.45 (15.64) 1.21 0.48 (13.95) 410.50 0.001 410.50

201.22 531.90

289.42 699.92

232

Particulars Appropriations: Transfer to General Reserve Proposed Dividend on Equity Shares (at the rate of Rs. 16.07 per share) Interim Dividend on Equity Shares (at the rate of Rs. 33.35 per share) Tax on dividend BALANCE CARRIED FORWARD AS RESTATED

Nine- months Period Ended December 31, 2007

Year Ended March 31, 2007

33.47 234.28 39.82

42.37 400.20 56.13

224.343

201.22

Notes: The above Statement should be read with the significant accounting policies and Notes to the Consolidated Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure XIX. As per our report of even date FOR S.R. BATLIBOI & ASSOCIATES Chartered Accountants Per Raj Agrawal Partner Membership No. : 82028 Place: Gurgaon Date: June 26, 2008 For and on behalf of the Board of Cellebrum Technologies Limited

(Directors)

(Directors)

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

Kartar Singh Chief Finance Officer

Company secretary

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

233

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XVIII : CONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS, AS RESTATED
Particulars Nine- months Period Ended December 31, 2007 (Amount in Rs. Million) Year Ended March 31, 2007

A. Cash Flow from Operating Activities Net Profit Before Tax, As Restated Net Profit Before Tax, As Restated Adjustment for: Depreciation / Amortization Miscellaneous Expenditure Wriiten off 1.11 Provision for Doubtful Debts Foreign Exchange (Gain) / Loss 0.23 Interest Income Interest Expense 0.94 Operating Profit Before Working Capital Changes Movement in Working Capital: (Increase) in Sundry Debtors Decrease / (Increase) in Inventories (Increase) in Loans and Advances (Increase) in Other Current Assets (77.12) Increase in Current Liabilities and Provisions Miscellaneous Expenditure (to the extent not written off or adjusted) Cash Generated from Operations Direct Taxes Paid (including Fringe Benefits Taxes) Net Cash Generated from Operations (A) B. Cash Flow from Investing Activities Purchase of Fixed Assets Fixed Deposits with Banks Share Application Money Paid Share Application Money Received Back Inter Corporate Deposit Given Inter Corporate Deposit Received Back 119.60 (54.10) 272.70 (43.20) (244.35) 117.15 (138.39) (498.19) 107.11 96.27 (0.96) 72.79 (1.11) 289.87 (105.89) 1.36 (217.82) (224.51) (1.36) (15.56) 388.63 0.04 460.58 (39.93) (0.86) (24.20) 11.66 8.10 354.09 354.09 433.79 433.79

60.53

43.71

(34.42) 61.85

(50.07) 239.80

234

Particulars

Nine- months Period Ended December 31, 2007 35.73 (91.47) Nine- months Period Ended December 31, 2007

Year Ended March 31, 2007

Interest Received Net Cash Generated from / (Used In) Investing Activities(B) Particulars

24.43 (317.15) Year Ended March 31, 2007

C. Cash Flows from Financing Activities Proceeds from Issuance of Share Capital Securities Premium Received Share Issue Expenses Minority Interest Share Application Money received Share Application Money paid back Repayment of Long-Term Borrowings Interest Paid (0.94) Dividend Paid (including tax on dividend paid of Rs. 56,128,611) Net Cash Generated from / (Used in) Financing Activities ( C ) Net Changes in Cash & Cash Equivalents (A+B+C) Cash and Cash Equivalents at the Beginning of the Year / Period Cash and Cash Equivalents at the End of the Year / Period Components of Cash and Cash Equivalents: Cash in Hand 0.30 Cheques in Hand 4.49 Balances with Scheduled Banks on Current Accounts Balance with Hongkong and Shanghai Banking Corp., Singapore on current account Total 97.13 1.21 103.13 126.56 7.08 133.69 0.05 (0.94) (30.56) 133.69 103.13 (0.04) (456.33) 206.25 128.90 4.79 133.69 (0.67) (10.00) 10.00 0.10 (7.75) 645.23 25.71

Notes: 1) Cash Flow Statement has been prepared under the 'Indirect Method' as set out in Accounting Standard -3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. Negative figures have been shown in brackets. The above Statement should be read with the significant accounting policies and Notes to the Consolidated Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure XIX.

2) 3)

As per our report of even date FOR S.R. BATLIBOI & ASSOCIATES

235

Chartered Accountants Per Raj Agrawal Partner Membership No. : 82028 Place: Gurgaon Date: June 26, 2008 For and on behalf of the Board of Cellebrum Technologies Limited

(Directors) Place: Noida Date : June 26, 2008 Kartar Singh Chief Finance Officer

(Directors) Place: Noida Date : June 26, 2008

Company secretary

Place: Noida Date : June 26, 2008

Place: Noida Date : June 26, 2008

236

ANNEXURE XIX: NOTES TO THE RESTATED CONSOLIDATED SUMMARY STATEMENTS OF ASSETS AND LIABILITIES, PROFITS AND LOSSES AND CASH FLOWS, AS RESTATED UNDER INDIAN GAAP, FOR CELLEBRUM TECHNOLOGIES LIMITED [FORMERLY CELLEBRUM.COM LIMITED] A. a) Background Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) (‘the Company’) is into the Information and Communication Technology business providing Value Added Services, Mobile Content and Roaming Management Services to the Telecom Operators. Also, the Company and its subsidiary undertake development and sale of telecom related software. Further, the subsidiary is engaged in the business of providing management and support services in the field of telecommunication technology to the Parent Company. The Restated Consolidated Summary Statement of Assets and Liabilities of the Company as at December 31, 2007 and March 31, 2007 and the related Restated Consolidated Summary Statement of Profits and Losses and Cash Flows for the nine months period ended December 31, 2007 the year ended March 31, 2007 (hereinafter collectively referred to as “Restated Consolidated Summary Statements”) relate to Cellebrum Technologies Limited (formerly Cellbrum.com Private Limited) (“the Company”) and its subsidiary (Mobisoc Technology Private Limited) (such subsidiary, together with the Company hereinafter collectively referred to as the “Group”) and have been prepared specifically for inclusion in the Offer Document to be filed by the Company with the Securities and Exchange Board of India (“SEBI”) in connection with its proposed Initial Public Offering of its equity shares. These Restated Consolidated Summary Statements have been prepared to comply in all material respects with the requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (“the SEBI Guidelines”) issued by SEBI on January 19, 2000, as amended from time to time, except to the extent stated in Note F (i), (ii) and (iii) below. B. Statement of Significant Accounting Policies adopted in the preparation of Consolidated Financial

b)

Statements as at and for the nine-months period ended December 31, 2007

a)

Basis of Preparation The consolidated financial statements have been prepared to comply in all material respects with the Notified Accounting Standards by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The restated consolidated financial statements have been prepared under the historical cost convention and on an accrual basis except in case of assets for which provision for impairment is made and revaluation is carried out. The accounting policies have been consistently applied by the Group and except for the changes in accounting policy discussed more fully in (C) below, are consistent with those used in the previous year.

b)

Principles of Consolidation The consolidated financial statements relate to Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) (hereinafter referred to as the “Company”) and its subsidiary (hereinafter collectively referred to as ‘the Group’). In the preparation of these consolidated financial statements, investment in subsidiary has been accounted for in accordance with Accounting Standard (AS) 21 (Consolidated Financial Statements) as notified by Companies Accounting Standard Rules, 2006. The consolidated financial statements are prepared on the following basis:(i) Subsidiary company is consolidated on a line-by-line basis by adding together the book values of the like items of assets, liabilities, income and expenses after eliminating all significant intra-group balances and intra-group transactions and also unrealized profits or

237

losses, except where cost cannot be recovered. The results of operations of a subsidiary are included in the consolidated financial statements from the date on which the parent subsidiary relationship came into existence. (ii) Minorities’ interest in net profits of the consolidated subsidiary for the period is identified and adjusted against the income in order to arrive at the net income attributable to the shareholders of the Group. Their share of net assets is identified and presented in the consolidated balance sheet separately. Where accumulated losses attributable to the minorities are in excess of their equity, in the absence of the contractual obligation on the minorities, the same is accounted for by the holding company. (iii) As far as possible, the consolidated financial statements are prepared using uniform accounting policies for like transactions and other events in similar circumstances and are presented, to the extent possible, in the same manner as the Company's stand alone financial statements. Differences in accounting policies are disclosed separately. (iv) The financial statements of the subsidiary used for the purpose of consolidation are drawn up to the same reporting date as that of the Company i.e. the nine months period ended December 31, 2007.
c)

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

d)

Fixed Assets
i)

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Insurance spares / stand by equipments are capitalized as part of mother assets.

ii) e)

Depreciation
i)

Depreciation is provided using the Straight Line Method (‘SLM’) as per the useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, 1956 whichever is higher as under:
Tangible Assets Buildings Data Processing Machines Furniture & Fixtures Office Equipment Mobile phones Others Vehicles Motor Cars Motor buses Rates (SLM) (in %) 3.34 31.67 13.57 31.67 13.57 9.50 13.57 Schedule XIV Rates (SLM) (in %) 3.34 16.21 6.33 4.75 4.75 9.50 11.31

ii)

Cost of Leasehold improvements is amortized over the period of lease or their useful lives whichever is lower. Individual assets costing upto Rs.5,000/- are depreciated fully in the month of purchase.

iii)

238

iv)

Insurance spares / standby equipments are depreciated prospectively over the remaining useful lives of the respective mother assets.

f)

Intangibles
i)

Intangibles assets acquired from outside are amortized using the Straight Line Method over their estimated useful lives as follows:
Intangible Assets Computer Software Estimated Useful Life (Years) 3 years

ii)

Costs incurred towards development of computer software products meant for sale, lease or otherwise marketed, are capitalized subsequent to establishing technical feasibility. Capitalization ceases when the product is available for general release to customers. Capitalized software product costs are amortized on a product-by-product basis. The amortization shall be greater of the amount computed using (a) the ratio that current gross revenue for a product bears to the total of current and anticipated future gross revenues for that product or (b) straight line method over the remaining estimated useful life of the product. The unamortized cost of Capitalized software products is carried at cost, less accumulated amortization less impairment, if any.

g)

Impairment
i)

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

ii)

h)

Leases Where the Company is the lessee Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight-line basis over the lease term. Where the Company is the lessor Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Profit and Loss Account. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the Profit and Loss Account.

i)

Inventories Inventories are valued as follows:
Traded goods At Cost or Net Realizable Value, whichever is lower. Cost is determined on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

j)

Revenue Recognition

239

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Rendering of Services Service revenue is recognized at the end of each month in which the services are rendered. Service revenue for the Company includes income on value added services, revenue from roaming management services and providing mobile content. Service Revenue for the Subsidiary includes income from management and support services in the field of telecommunication technology. Sale of goods Revenue is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, which coincides with their delivery to the customer. Interest Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
k)

Foreign Currency Translation Foreign currency transactions
i)

Initial Recognition

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii)

Conversion

Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
iii)

Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting Company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expenses in the year in which they arise. Exchange differences arising in respect of fixed assets acquired from outside India on or before accounting period commencing after December 7, 2006 are capitalized as a part of fixed asset.
iv)

Translation of Integral foreign operation

The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself.
l)

Retirement and other employee benefits
i)

Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the statutory authorities. Retirement Gratuity is a defined benefit obligation. The Company has taken insurance policy under the Group Gratuity Scheme of Life Insurance Corporation of India (LIC) to cover the gratuity liability of the employees and the premium paid/payable to LIC, in respect of the present value for liability of past services is charged to the Profit and Loss account every year. Also, the difference between amount paid/payable to LIC and the

ii)

240

actuarial valuation on projected unit credit method made at the end of each financial year is charged to the Profit and Loss account.
iii)

Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation at the end of each financial year. The actuarial valuation is done as per projected unit credit method. Actuarial gains / losses are immediately taken to profit and loss account and are not deferred.

iv)

m)

Income Taxes Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period.

n)

Miscellaneous Expenditure Miscellaneous expenditure of the subsidiary is written off in the first year of commencement of commercial operations.

o)

Earnings per share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

241

p)

Provisions A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best management estimates.

q)

Segment Reporting Policies Identification of segments The analysis of geographical segments is based on the geographical location of the customers.

r)

Cash and Cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

C.

Changes in Accounting Policies i) Adoption of Accounting Standard AS 15 (Revised) Employee Benefits Till the year ended March 31, 2007, the Company was providing for gratuity based on actuarial valuation as per LIC certificate and leave benefits based on actuarial valuation. During the period ended December 31, 2007, the Company has adopted Accounting Standard 15 (Revised) which is mandatory from accounting periods commencing on or after December 7, 2006. Accordingly the Company has provided for gratuity based on actuarial valuation done as per projected unit credit method. Also, the Company has changed the method of providing shortterm leave benefits from actuarial valuation to estimate basis. As a result, actuarial valuation of leave liability and gratuity liability as at April 1, 2007 is higher by Rs. 5.11 million (net of tax of Rs.0.65 million) which, in accordance with the transitional provision in the revised accounting standard, has been adjusted to the General Reserve. ii) Adoption of Accounting Standard) 11 ‘The Effect of Changes in Foreign Exchange Rates’ As per the requirements of the Companies (Accounting Standards) Rules, 2006 read in consonance with notified Accounting Standard 11 which is mandatory from the accounting periods commencing on or after December 7, 2006, the exchange differences on foreign currency transactions relating to fixed assets acquired from a country outside India have been adjusted to revenue as against the hitherto followed practice of adjusting the same to the carrying amount of fixed assets. As a result, net exchange gain of Rs 0.53 million which otherwise would have been adjusted against the carrying amount of fixed assets, has been credited to the Profit and Loss Account during the period ended December 31, 2007 and thus profit before tax for the nine-months period ended December 31, 2007 is higher by the same amount. iii) Change in the method of accounting for Earned Leaves The Company changed its accounting policy during the year ended March 31, 2007 and accounted for the liability for employees’ earned leaves based on actuarial valuation as at the end of the year in line with Accounting Standard 15 issued by the Institute of Chartered Accountants of India. Till the previous year ended March 31, 2006, leave liability was accounted for based on actual amount payable as per current encashable salary as at the end of the year. As a result of this change, the accumulated liability of earned leave was higher and the profit for the year ended March 31, 2007 was lower by Rs. 3.10 million The effect of such change in accounting policy has been appropriately adjusted in the years/ periods to which it pertains (refer Note E (i) below).

242

iv) Change in the method of providing Depreciation The Company was following Straight Line Method of providing depreciation on fixed assets upto the financial year ended December 2003 and Written Down Value method for the fifteen months period ended March 31, 2005 and year ended March 31, 2006. During the financial year ended March 31, 2007, the Company changed, with retrospective effect, its method of providing depreciation on fixed assets, other than leasehold buildings, from the Written Down Value (‘WDV’) method at the rates prescribed in Schedule XIV to the Companies Act, 1956 to the Straight Line Method (‘SLM’) at the rates which are higher of the useful lives of assets and the rates prescribed in Schedule XIV to the Companies Act, 1956. As a result of this change, the charge to the Profit and Loss Account before taxation for the year ended March 31, 2007 was lower by Rs. 25.60 million and the net block of fixed assets was correspondingly higher by the same amount. The effect of such change in accounting policy has been appropriately adjusted in the years/ periods to which it pertains [refer Note E (h) below]. D. Material Regroupings Appropriate adjustments have been made in the Restated Summary Statements of Assets and Liabilities, Profits and Losses and Cash Flows, wherever required, by a reclassification of the corresponding items of income, expenses, assets, liabilities and cash flows, in order to bring them in line with the groupings as per the audited financials of the Group for the nine months period ended December 31, 2007. E. a) Material Adjustments Below mentioned is the summary of results of restatement made in the audited accounts for the respective years and its impact on the profits of the Group. (Amount in Rs.)
Adjustments for Prior Period Items (Refer note b) Sundry Balances written back (Refer note c) Provision for doubtful debts (Refer note d) Sundry Balances written off (Refer note e) Bad Debts written off (Refer note f) Bad Debts recovered (Refer Note g) Depreciation (Refer Note h) Leave Encashment (Refer Note i) Tax paid for earlier years/ periods (Refer note j) Audit Qualification / Prior period Items (Refer note k) Total impact of adjustments Current Tax impact of adjustments (Refer note l) Deferred Tax impact of adjustments (Refer note l) Net impact of adjustments December 31, 2007 (0.69) (0.12) 4.98 0.04 (0.51) 0.75 6.00 10.45 (0.42) 10.03 March 31, 2007 1.18 (0.04) (4.44) 0.11 2.77 (0.00) (10.80) 1.25 0.33 (6.00) (15.64) 1.21 0.48 (13.95)

b)

Prior Period Items

243

c)

In the financial statements for the year ended March 31, 2007 and the period ended December 31, 2007, certain items of income / expenses have been identified as prior period items. For the purpose of this statement, such prior period items have been appropriately adjusted in the respective years/ periods. Sundry Balances Written Back In the financial statements for the year ended March 31, 2007 and nine months period ended December 31, 2007, certain liabilities created in the earlier years/ periods were written back. For the purpose of this statement, the said liabilities, wherever required, have been appropriately adjusted in the respective years in which the same were originally created.

d)

Provision for Doubtful Debts During the nine months period ended December 31, 2007, certain provisions for bad debts which pertained to debtors of earlier years/ periods were created. For the purpose of this statement, the said provisions, wherever required, have been appropriately adjusted in the respective years/ periods in which these debtors and revenue were accounted for.

e)

Sundry Balances Written off In the financial statements for the years ended March 31, 2007 and nine months period ended December 31, 2007, certain advances paid in the earlier years/ periods were written off. For the purpose of this statement, the said advances, wherever required, have been appropriately adjusted in the respective years/ periods in which the same were originally paid.

f)

Ba Debts Written off During the year ended March 31, 2007, certain bad debts which pertained to debtors of earlier years/ periods were written off. For the purpose of this statement, the said bad debts have been appropriately adjusted in the respective years/ periods in which these debtors and revenue were accounted for.

g)

Bad Debts Recovered During the nine months period ended December 31, 2007, and year ended March 31, 2007, certain bad debts written off in earlier years/ periods were recovered. For the purpose of this statement, the said recoveries have been appropriately adjusted in the respective years/ period in which the same were originally written off.

h)

Depreciation During the year ended March 31, 2007, the Company has changed the method of providing depreciation on fixed assets, as referred to in Note no. C (iv) above. For the purpose of this statement, the retrospective effect of depreciation has been appropriately adjusted in the year ended March 31, 2006 and period ended March 31, 2005.

i)

Leave Encashment During the year ended March 31, 2007, the Company has changed its accounting policy and accounted for provisioning of earned leaves, as referred to in Note no. 2(iii) above. For the purpose of this statement, the effect of such change in policy has been appropriately adjusted in earlier years.

j)

Taxes for earlier years/ periods During the year ended March 31, 2007 and period ended December 31, 2007, certain taxes pertaining to the period ended March 31, 2005 were paid. For the purpose of this statement, such tax expense has been appropriately adjusted in the period ended March 31, 2005.

244

k)

Audit Qualification/ Prior Period Items The Subsidiary of the Company had capitalized certain costs relating to development of software during the year ended March 31, 2007 for which technical feasibility and probable future economic benefits were yet to be established. As the auditors of the parent Company believed that such costs did not qualify for capitalization as per the guidance given under Accounting Standard 26 ‘Intangible Assets’ issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements for the year ended March 31, 2007 were qualified to that extent. In the current year, such costs have been charged to profit and loss account by the management and disclosed under the head ‘Prior Period expenses’ in the Consolidated Financial Statements for the nine months period ended December 31, 2007 and accordingly have been appropriately adjusted in the year ended March 31, 2007 for the purpose of this statement.

l)

Current Tax and Deferred Tax Impact of adjustments The Group has, for the purpose of the Restated Summary Statements, made adjustments for the current tax and deferred tax impact of the adjustments in the respective years to which the adjustments pertain.

m)

Profit and Loss Account as at April 1, 2006 as Restated
(Amount in Rs. million) 285.51 (0.49) 0.16 (0.54) (0.15) (2.77) 0.51 10.80 (1.25) (1.08) 5.19 (0.79) (0.47) 289.42

Profit and Loss Account as at April 1, 2006 (Audited) Prior Period Expenses (Refer Note E (b) above) Sundry Balances written back (Refer Note E (c) above) Provision for doubtful debts (Refer Note E (d) above) Balances written off (Refer Note E (e) above) Bad Debts written off (Refer Note E (f) above) Bad Debts recovered (Refer Note E (g) above) Depreciation (Refer Note E (h) above) Leave Encashment (Refer Note E (i) above) Taxes for earlier years paid (Refer note E (j) above) Total impact of adjustments in earlier years Current Tax impact of adjustments (Refer Note E (l) above) Deferred Tax impact of adjustments (Refer Note E (l) above) Profit and Loss Account as at April 1, 2006 (Restated)

F.

Non – Adjustment Items (i) The Company has changed the estimates of useful lives of some of its fixed assets during the year ended March 31, 2007 and the period ended December 31, 2007 more fully described in Note No. 9 below. The management believes that such change in estimated useful lives is bonafide and occasioned by technical/ environmental factors and hence should not be restated in previous year financials in the statement of assets and liabilities, as restated. The Company has adopted revised Accounting Standard 15 on Employee Benefits issued by the Institute of Chartered Accountants of India effective April 1, 2007. However, due to practical difficulties in retrospective application of the same, it has not been possible for the management to determine the effect on the profits for the year ended March 31, 2007 had the revised standard been adopted by the Company for the earlier year(s). Accordingly, such adjustment has not been made in the

(ii)

245

attached consolidated restated financial statements. (iii) As per the requirements of Companies (Accounting Standards) Rules, 2006 read in consonance with notified Accounting Standard 11 which is mandatory from the accounting periods commencing on or after December 7, 2006, the exchange differences on foreign currency transactions relating to fixed assets acquired from a country outside India have been adjusted to revenue as against the hitherto followed practice of adjusting the same to the carrying amount of fixed assets. However, due to practical difficulties in retrospective application of the same, it has not been possible for the management to determine the effect of such change in the financial statements of the earlier year(s). Accordingly, such adjustment has not been made in the attached consolidated restated financial statements.

G. 1.

Other Significant Notes Composition of the Group The details of the Subsidiary consolidated on a line by line basis in the preparation of the consolidated financial statements of the Company is as underName of the Subsidiary Company Country of Incorporation Proportion of ownership interest as at December 31, 2007 99.90% Proportion of ownership interest as at March 31, 2007

Mobisoc Technology Private Limited

India

99.90%

The subsidiary was incorporated on August 12, 2006 and commenced its commercial operations during the nine months period ended December 31, 2007. 2. Segment Information Business Segments: The Group is into the Information and Communication Technology business rendering mobilerelated services to telecom service providers. Based on identical services the Group deals in, which have similar risks and rewards, the entire business is considered as operating as a single business segment in terms of Accounting Standard-17 ‘Segment Reporting’ issued by the Institute of Chartered Accountants of India and hence, there are no additional disclosures to be provided other than those already provided in the financial statements. Geographical Segments * The following table shows the distribution of the Company’s consolidated sales by geographical market, regardless of where the goods were produced / services were rendered:
Particulars For the Nine- months Period Ended December 31, 2007 (Rs.) For the Year Ended March 31, 2007 (Rs.) 637.55 24.23 661.78

Domestic Market Overseas Market Total

702.30 32.26
734.56

The following table shows the distribution of the Company’s consolidated debtors by geographical market:

246

Particulars

As at December 31, 2007 (Rs.) 355.90 1.34 357.24

As at March 31, 2007 (Rs.)

Domestic Market Overseas Market Total

259.01 3.52 262.53

* The Company has common assets for producing goods / rendering services for Domestic market and Overseas Markets. Hence, separate figures for fixed assets / additions to fixed assets cannot be furnished. 3. Defined Benefits Plan Gratuity and leave benefits (Revised Accounting Standard 15) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The Subsidiary also has a defined benefit gratuity plan. Every employee who has completed two years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans: Profit and Loss account Net employee benefit expense (recognised in Employee Cost) for the nine-months period ended December 31, 2007
Gratuity (Rs. in million) Current service cost Interest cost on benefit obligation Expected return on plan assets Net actuarial( gain) / loss recognized in the year Past service cost Net benefit expense charged to Profit and Loss account Actual return on plan assets 4.76* 0.33 (0.08) 0.55 Nil 5.56 Nil

* Including Rs 0.23 million being payments made during the current period and excluding Rs. 0.12 million against Gratuity of the employees of the Software division of the Subsidiary. Balance sheet Details of Provision for gratuity as at December 31, 2007
Gratuity (Rs. in million) 10.53 1.18 9.35 --(9.35)

Defined benefit obligation Fair value of plan assets Less: Unrecognised past service cost Plan asset / (liability)

Changes in the present value of the defined benefit obligation for the nine months period ended December 31, 2007 are as follows:

247

Opening defined benefit obligation Interest cost Current service cost Benefits paid Actuarial (gains) / losses on obligation Closing defined benefit obligation

Gratuity (Rs.) 2.26 0.33 4.65 ---3.29 10.53

Changes in the fair value of plan assets are as follows:
Gratuity (Rs.) 1.18 0.08 Nil Nil (0.08) 1.18

Opening fair value of plan assets Expected return Contributions by employer Benefits paid Actuarial gains / (losses) Closing fair value of plan assets

The Company’s expected contribution to Gratuity during the year ending December 31, 2008 is not presently ascertainable. The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
Gratuity 100 %

Investments with insurer (Life Insurance Corporation of India)

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. The principal assumptions used in determining gratuity and leave benefit obligations for the Company’s plans are shown below:
Gratuity (%) 8.00 8.70 15.00

Discount rate Expected rate of return on assets Employee turnover

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Notes: a) The Institute of Chartered Accountants of India has issued a limited revision to AS 15 (Revised) which allows an entity to make disclosures required by paragraph 120(n) of AS 15 (Revised) prospectively from the transition date. The limited revision has not yet been incorporated in AS 15 notified under Companies (Accounting Standard) Rules, 2006. The Company expects that limited revision will be incorporated in notified standards shortly and hence, the information in respect of defined benefit obligation for previous four years as required by Para 120(n) of AS -15 (Revised) are not furnished. b) Period ended December 31, 2007 being the first period of adoption of AS 15 (revised) by the Company, the previous years/ periods comparative information has not been furnished. Defined Contribution Plan

248

For the nine-months period ended December 31, 2007 Employer’s Contribution to Provident Fund including Family Pension Fund* 8.58

For the year ended March 31, 2007 4.33

* Included in the head Contribution to Provident and Other Funds 4. Leases – In case of assets taken on lease Operating Lease: Vehicles, office premises and guest houses are obtained on operating lease. In the case of vehicles, the lease term is for 1 year and renewable for further 1 year at the option of the Company. In the case of office premises and guest houses, the lease terms vary between 3 to 5 years. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements.
Particulars For the Nine- months Period Ended December 31, 2007 (Rs.) 17.12 NIL For the Year Ended March 31, 2007 (Rs.)

Lease Payment Contingent rent recognized in Profit and Loss Account

12.30 NIL

The Company has sub-let a portion of the above office premises on operating lease. The lease term is for 11 months and thereafter renewable on mutual agreement. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements.
Particulars For the Nine months Period Ended December 31, 2007 (Rs.) NIL 1.80 For the Year Ended March 31, 2007 (Rs.)

Sub-lease payments received during the year Sub-lease payments receivable at the balance sheet date

NIL NIL

5.

Capital Commitments
Particulars For the Nine- months Period Ended December 31, 2007 (Rs.) 29.45 For the Year Ended March 31, 2007 (Rs.) 18.36

Estimated amount of contracts (Net of advances) remaining to be executed on capital account and not provided for.

6.

Contingent Liabilities not provided for
Particulars As at December 31, 2007 (Rs.) 38.89 As at March 31, 2007 (Rs.) 31.15

Contingent Liability in respect of non-charging the service tax on the Short messaging peer-to-peer service including penalty thereon. The matter is under adjudication with the Commissioner of Central Excise, Chandigarh. The Company is of the view that it is an ‘information technology service’ and thus is exempt from the service tax.

249

Based on discussions with the solicitors/legal opinion taken by the Company, the management believes that the Company has a good chance of success in the above mentioned case and hence, no provision there against is considered necessary.

7.

Break-up of Deferred Tax Assets / (Liabilities) :
Timing Difference on account of Deferred Tax Asset/ Liability as at December 31, 2007 (Rs.) 3.69 March 31, 2007 (Rs.) 0.05

Difference in depreciation and other differences in block of fixed assets as per Tax books and Financial books Gross Deferred Tax Liabilities Effect of expenditure debited to Profit and Loss Account but allowed for tax purposes in the following years Gross Deferred Tax Assets

3.69 1.65

0.05 1.92

1.65

1.92

Net Deferred Tax (Liabilities) / Assets

(2.04)

1.87

8.

The amount of foreign currency exposures that are not hedged by a derivative instrument or otherwise are as under:
Particulars Amount (in Rs.) As at As at March December 31, 2007 31, 2007 1.29 1.01 0.26 2.48 0.09 NIL 0.47 0.23 0.88 0.11 4.45 7.18 Foreign Currency As at December 31, 2007 As at March 31, 2007 USD 32,785 EUR 4,456 Mauritius Rs. 63,476 USD 11,877 EUR 15,178 USD 112,848 USD 23,226 EUR 42,720 NIL USD 5,331 EUR 1,973 USD 164,789

Export Debtors

Advances from Customers Import Creditors

Closing rate as on the closing dates are as followsForeign Currency USD 1 EUR 1 Mauritius Rs. 1 As at December 31, 2007 Rs. 39.41 Rs. 58.12 Rs. 1.43 As at March 31, 2007 Rs 43.59 Rs. 58.14 --

9.

During the year ended March 31, 2007, the Company reassessed the estimates of useful lives of Data Processing Machines and Computer Software as 3 years (as against the hitherto followed practice of depreciating the same over a period of 6 years) and provided depreciation on the same based on the revised estimates of their economic useful lives. As a result of this change, the charge to the Profit and Loss Account before taxation for the year ended March 31, 2007 was higher by Rs. 25.89 million and the net block of fixed assets was correspondingly lower by the same amount. Further, during the period ended December 31, 2007, the Company has reassessed the estimates of useful lives of Furniture-Fixtures, Office Equipments & Vehicles, as 7 years (as against the hitherto followed practice of depreciating the same over a period of 15 years, 20 years and 8.4 years respectively) and provided depreciation on the same based on the revised estimates of

250

their economic useful lives. As a result of this change, the charge to the Profit and Loss Account before taxation for the period ended December 31, 2007 was higher by Rs. 1.5 million and the net block of fixed assets was correspondingly lower by the same amount. 10. The asset of Rs. 56.39 million recognised by the Company as ‘MAT Credit Entitlement’ in respect of the MAT payment during the year ended March 31, 2006 and 2007 and period ended December 31, 2007 under ‘Loans and Advances’ represents that portion of MAT liability, which can be recovered and set off in subsequent years based on the provisions of Section 115JAA of the Income Tax Act, 1961. The management based on the present trend of profitability and also the future profitability projections, is of the view that there would be sufficient taxable income in foreseeable future, which will enable the Company to utilize MAT credit assets. Period ended December 31, 2007 being the first year of commercial operations of the Subsidiary, the total of “Miscellaneous Expenditure (to the extent not written off)” representing preliminary and pre-operative expenditure amounting to Rs. 1.11 million, has been written off during the nine months period ended December 31, 2007. The Company has obtained expert opinions stating that the two units set up at Parwanoo, Himachal Pradesh, would be eligible for income tax benefits under Section 80-IC of the Income Tax Act, 1961, resulting in deduction of 100% of profits and gains of such units for the first five assessment years commencing with the initial assessment year and thereafter thirty per cent of the profits and gains for the next five years. Income tax provision has been made in the books of account accordingly. Previous Year Comparatives The Group has changed its statutory accounting year to end on December 31, 2007 instead of March 31, 2008. Thus, the accounts for the period ended December 31, 2007 have been prepared for 9 months and are not comparable with the previous year accounts prepared for 12 months. 14. Change of Name Subsequent to the Balance Sheet date of December 31, 2007, the Company has got itself converted into a public limited Company and consequently, the name of the Company has changed from ‘Cellebrum.com Private Limited’ to ‘Cellebrum.com Limited’ with effect from February 14, 2008. Further, the name of the Company was again changed from “Cellebrum.Com Limited” to “Cellebrum Technologies Limited” with effect from April 22, 2008.

11.

12.

13.

251

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XX : DETAILS OF OTHER INCOME, AS RESTATED
PARTICULARS Nine- months Period Ended December 31, 2007 (Amount in Rs. Million) Year Ended March 31, 2007

Other income, as restated Net Profit before tax, as restated after prior period items Percentage

42.00 354.09 11.86

24.68 433.79 5.69

Source of other income

Nine- months Period Ended December 31, 2007 39.81 0.12 1.80 0.27 42.00

Year Ended March 31, 2007

Nature

Related / Not related to Business Activity Not Related Not Related Non Related Non Related

Interest on Bank deposits Interest Others Rental Income Other Income Total Other Income, as restated

18.30 5.90 0.48 24.68

Recurring Non-Recurring Recurring Non-Recurring

Notes: 1) The details of ''Other Income'' disclosed above are stated after adjusting the effect of restatement. The same have been shown gross of restatement in the summary Statement of Profits & Losses, as restated and the adjustments have been listed separately under the head "Adjustments" in the Notes to Accounts. The classification of other income as recurring/non-recurring and related/not related to business activity is based on the current operation and business activity of the Company as determined by the management. The above amounts are as per Consolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) Group.

2)

3)

252

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XXI : DETAILS OF RATES OF DIVIDEND The dividends declared by the Group during the period ended December 31, 2007 and the year ended March 31, 2007 are presented below.
Particulars Nine- months Period Ended December 31, 2007 (Amount in Rs. Million) Year Ended March 31, 2007

Class of Shares

Equity Share Capital as outstanding at the year end Dividend on Equity Shares - Dividend per equity share ( Rs. ) - Dividend rate ( % to paid up capital ) - Dividend amount

14571574

14571574

16.07* 160.70% 234.28

33.35** 333.5% 400.20

Dividend Tax

39.82

56.13

* Proposed Dividend on Equity Shares for the nine months period ended December 31, 2007

** Interim Dividend on Equity Shares for the year ended March 31, 2007 Notes: 1) 2) The amounts paid as dividend in the past is not indicative of the dividend policy in the future. The figures disclosed above are based on the Consolidated Summary Statement of Profits and Losses, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) Group.

253

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XXII : CAPITALISATION STATEMENT AS AT DECEMBER 31, 2007
(Amount in Rs. Million) Pre Issue Borrowings Short Term Debt (A) Long Term Debt (B) Total Debts (C) Shareholders' funds Equity Share Capital Reserves and Surplus, as restated - Profit & Loss Account - Securities Premium - General Reserve Total shareholders' fund (D) Long Term debt / Equity ratio (B / D) Total Debt / Shareholders' Funds (C / D) 224.35 637.48 75.59 937.40 1,083.13 [*] 145.72 [*] [*] [*] [*] Post Issue

Notes: 1) 2) 3) 4) Short Term debts represents debts which are due within twelve months from 31st December, 2007. Long Term debt represents debt other than short term debt as defined above. Long term debt/equity :- Long Term Debt / Total Shareholder's funds The above amounts are as per the Consolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) Group. The corresponding post issue figures are not determinable at this stage pending the completion of Book Building Process and hence have not been furnished.

5)

254

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XXIII : DETAILS OF SUNDRY DEBTORS
(Amount in Rs. Million) Particulars As at December 31, 2007 As at March 31, 2007

Debts Outstanding for a period exceeding 6 Months Unsecured, Considered Good Considered Doubtful Other Debts Unsecured, Considered Good 16.77 11.40 8.76 7.94

340.46

253.77 2.4 0 10.34 262.53

Considered Doubtful Less : Provision for Doubtful Debts

10.61 22.00 357.24

Notes: 1) The above amounts are as per the Consolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) Group.

255

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XXIV : DETAILS OF LOANS & ADVANCES
(Amount in Rs. Million) Particulars As at December 31, 2007 As at March 31, 2007

Unsecured, Considered good Loan to employees Advance Recoverable in Cash or in Kind or for value to be received Balances with excise authorities Security deposits MAT credit entitlement (refer Note No. G (10) of the Annexure XIX) Total 1.32 24.99 15.59 195.98 56.39 294.27 2.97 3.35 9.41 4.33 27.78 47.84

Notes: 1) The above amounts are as per the Consolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) Group.

256

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XXV : DETAILS OF OTHER CURRENT ASSETS
(Amount in Rs. Million) Particulars Unbilled Revenue Interest Accrued on Deposits Total As at December 31, 2007 78.18 6.47 84.65 As at March 31, 2007 1.07 2.27 3.34

Notes: 1) The above amounts are as per the Consolidated Summary Statement of Assets and Liabilities, as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) Group.

257

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XXVI : STATEMENT OF ACCOUNTING RATIOS (ON RESTATED PROFITS)
Particulars As at December 31, 2007 Earnings per share -Basic and Diluted (Rs.) Return on Net Worth % Net Asset Value per equity share (Rs.) Weighted average number of equity share used for calculating: Basic and Diluted Earnings per share Total number of equity shares outstanding at the end of the year / period* 14571574 14571574 12873710 14571574 22.69 31% 74.33 As at March 31, 2007 31.89 40% 70.72

* Face Value of Rs. 10

Ratios have been computed as per the following formula

Earnings per share (Rs.) =

Net Profit after Tax, as restated attributable to equity shareholders Weighted average number of equity shares outstanding during the year/ period Net Profit after Tax, as restated Net Worth, as restated, at the end of the year/ period Net Worth, as restated, at the end of the year Number of equity shares outstanding at the end of year/ period

Return on Net Worth (%) =

Net Asset Value (NAV) per share (Rs.)=

1)

2) 3)

4)

Weighted average number of equity shares is the number of equity shares outstanding at the beginning of the year/ period, adjusted by the number of equity shares issued during the year/ period multiplied by the time - weighting factor. The time weighting factor is the number of days for which the specific shares are outstanding as a proportion of the total number of days during the year. Net profit, as appearing in the statement of profit and loss of the respective years/ periods, has been considered for the purpose of computing the above ratios. Earnings per share calculations are done in accordance with Accounting Standard 20 "Earnings per Share" issued by the Institute of Chartered Accountants of India. In terms of para 24 of AS-20, in case of a bonus issue, the number of equity shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event had occured at the beginning of the earliest period reported. Weighted average number of equity shares outstanding during all the previous years have been considered accordingly. Net worth means Equity Share capital + Reserves and Surplus (including Securities Premium) - Miscellaneous Expenditure not written off or adjusted.

258

5)

The figures above are based on the Restated Consolidated Summary Statements of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited) Group.

259

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XXVII (A): DETAILS OF THE NAMES OF RELATED PARTIES AND NATURE OF RELATIONSHIPS
1. Names of related parties where control exists irrespective of whether transactions have occurred or not. Ultimate Holding Company Holding Company Indian Televentures Private Limited Omnia Investments Private Limited

2. Names of other related parties Fellow Subsidiaries Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Spice Communications Limited (upto June 5, 2007) Super Infosys Private Limited Mcorp Communication Private Limited (formerly known as Modi Wellvest Private Limited) Hot Spot Retails Private Limited (upto May 9, 2007) Key Management Personnel Dr. B.K. Modi (Sep 30, 2006 – Sep 30, 2007) Mr. Dilip Modi Mr. Saket Agarwal Mr. Kartar Singh Mr. Lokesh Gupta Relatives of Key Management Personnel Mrs. Veena Modi Mrs. Sonal Modi Mrs. Ritika Modi Rungta Ms. Divya Modi Enterprises significantly influenced by Key Management Personnel or their Relatives Twenty First Century Capitals Limited Wellwisher Holdings Private Limited Harjas Logic Systems Private Limited Nik Travels Private Limited Spice Corp Private Limited (formerly known as MCorp Global Private Limited) Spice Communications Limited (from June 6, 2007) Spice Mobiles Limited Ace Airways Private Limited Duro International Rubber Private Limited G.M.Modi Hospitals Corporation Private Limited Modikem Limited Plus Paper Foodpac Limited I O Systems Limited (formerly known as Spice Systems Limited) Tuberose Investments Private Limited Mudaliar & Sons Hotels Private Limited Vcorp Mercantile Private Limited

260

Hindustan Retails Private Limited Hot Spot Retails Private Limited (from May 10, 2007)

261

CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED) GROUP ANNEXURE XXVII (B) DETAILS OF TRANSACTIONS WITH RELATED PARTIES
Particulars Holding Company Fellow Subsidiary Key Management Personnel Relatives of Key Management Personnel Enterprises owned or significantly influenced by key management personnel or their relatives Total

For the nine For the For the nine For the For the nine For the For the nine For the For the nine For the For the nine For the months year ended months year ended months year ended months year ended months year ended months year ended period ended March 31, period ended March 31, period ended March 31, period ended March 31, period ended March 31, period ended March 31, December 31, 2007 December 31, 2007 December 31, 2007 December 31, 2007 December 31, 2007 December 31, 2007 2007 2007 2007 2007 2007 2007 A) Transactions i) Revenue from Value Added Services Spice Communications Limited ii) Revenue from Roaming Services Spice Communications Limited iii) Sale of Products Spice Communications Limited iv) Other Income (Rental Income) Hot Spot Retails Private Limited v) Purchase of Fixed Assets Spice Mobiles Limited Hot Spot Retails Private Limited vi) Roaming Expenses Spice Communications Limited vii) Enterprise Solution

-

-

7.85

-

-

-

-

-

34.32

117.80

42.17

117.80

-

-

3.62

-

-

-

-

-

13.79

42.80

17.41

42.80

-

-

52.70

-

-

-

-

-

254.76

221.23

307.46

221.23

-

-

0.20

-

-

-

-

-

1.60

-

1.80

-

-

-

-

-

-

-

-

-

0.16 0.27

0.13 0.02

0.16 0.27

0.13 0.02

-

-

5.97

-

-

-

-

-

18.72

21.96

24.69

21.96

262

viii)

ix)

x)

xi)

xii)

Charges Spice Communications Limited Gifts and Prizes Hot Spot Retails Private Limited Spice Communications Limited Website Development Charges Spice Communications Limited Rent Paid Spice Communications Limited Harjas Logic Systems Private Limited Wellwisher Holdings Private Limited Repair Services Hot Spot Retails Private Limited Business Promotion Expenses Hot Spot Retails Private Limited Spice Mobiles Limited

-

-

2.96

-

-

-

-

-

9.95

4.07

12.91

4.07

-

-

-

0.02 -

-

-

-

-

-

0.07

-

0.02 0.07

-

-

-

-

-

-

-

-

-

1.20

-

1.20

-

-

-

-

-

-

-

-

0.27 2.93 1.80

0.36 3.91 1.00

0.27 2.93 1.80

0.36 3.91 1.00

-

-

-

0.00

-

-

-

-

-

-

-

0.00

-

-

0.05 -

0.03 -

-

-

-

-

0.00 6.50

-

0.05 6.50

0.03 -

xiii) Travelling expenses Nik Travels Private Limited xiv) Communication expenses Spice Communications Limited xv) Sundry Debit Balances Written Off Spice Communications Limited xvi) Electricity Expenses Spice Communications Limited xvii) Staff Welfare 4.59 3.24 4.59 3.24

-

-

0.44

-

-

-

-

-

1.47

1.26

1.91

1.26

-

-

-

-

-

-

-

-

-

0.16

-

0.16

-

-

-

-

-

-

-

-

1.11

0.58

1.11

0.58

263

Spice Communications Limited xviii) Corporate Guarantee Commission income Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) xix) Interest Income MCorpGlobal Private Limited xx) Remuneration paid Saket Agarwal Kartar Singh Lokesh Gupta xxi) Reimbursement of Expenses Incurred by the Company MCorpGlobal Private Limited Spice Communications Limited xxii) Reimbursement by the Group of expenses incurred MCorpGlobal Private Limited xxiii) Dividend Paid Omnia Investments Private Limited Dr. B.K Modi Mrs. Veena Modi Mr. Dilip Modi Ms. Divya Modi xxiv) Share Application money paid

-

-

-

-

-

-

-

0.05

-

0.05

-

-

-

0.39

-

-

-

-

-

-

-

0.39

-

-

-

-

-

-

-

-

5.88

-

5.88

-

-

-

0.99 2.27 3.89

3.15

-

-

-

-

0.99 2.27 3.89

3.15

-

-

-

-

-

-

-

-

0.36 0.59

-

0.36 0.59

-

-

-

-

-

-

-

-

0.43

-

0.43

400.18 -

-

-

-

-

0.00 -

-

0.00 -

-

-

400.18 0.00 0.00 0.02 0.00

0.02 -

-

0.00 -

264

xxv)

xxvi)

xxvii )

xxviii )

xxix)

xxx)

xxxi)

Hot Spot Retails Private Limited Share Application money received back Bougainvillea Multiplex & Entertainment Center Private Limited Hot Spot Retails Private Limited MCorpGlobal Private Limited Share Application money received Omnia Investments Private Limited Share Application money paid back Omnia Investments Private Limited Advance Given During the Year Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Advance received back during the year Twenty First Century Capitals Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Security Deposits Given Harjas Logic Systems Private Limited Mudaliar & Sons Hotels Pvt Ltd Loan Given During the Year MCorpGlobal Private Limited

-

-

-

43.20

-

-

-

-

-

-

-

43.20

-

-

-

-

-

-

-

-

-

150.00

-

150.00

-

-

-

43.20 -

-

-

-

-

-

79.50

-

43.20 79.50

-

10.00

-

-

-

-

-

-

-

-

-

10.00

-

10.00

-

-

-

-

-

-

-

-

-

10.00

-

-

-

0.40

-

-

-

-

-

-

-

0.40

-

-

-

0.40

-

-

-

-

-

0.50 -

-

0.50 0.40

-

-

-

-

-

-

-

-

150.00

1.95 -

150.00

1.95 -

-

-

-

-

-

-

-

-

-

54.10

-

54.10

265

xxxii Loan received back during ) the year MCorpGlobal Private Limited B) Balances at the year end As at December 31, 2007

-

-

-

-

-

-

-

-

119.60

-

119.60

As at March 31, 2007

As at As at As at As at As at As at As at As at December 31, March 31, December 31, March 31, December 31, March 31, December 31, March 31, 2007 2007 2007 2007 2007 2007 2007 2007

i)

Receivables Spice Communications Limited Omnia BPO Services Limited (formerly known as Stracon Back Office Solutions Limited) Hot Spot Retails Private Limited Harjas Logic Systems Private Limited Mr. Kartar Singh

-

-

-

0.40

-

-

-

-

265.08 -

184.13 -

265.08 -

184.13 0.40

-

-

-

-

0.12 -

-

-

-

2.07 150.00 8.43

1.95 -

2.07 0.12 150.00 8.43

1.95 -

ii)

Mudaliar & Sons Hotels Pvt Ltd (against security deposit) Mudaliar & Sons Hotels Pvt Ltd (against advances recoverable) Payables Nik Travels Private Limited Spice Communications Limited Spice Mobiles Limited -

-

-

-

-

-

-

-

0.03 33.75 6.50

0.01 0.10 -

0.03 33.75 6.50

0.01 0.10 -

Notes: 1) 2) All amounts are in Rs. Million. Sales of softwares to Spice Communications Limited are of unique and specialized nature, and hence, in such a case, it is not possible to make the comparison of prices with the market rate.

266

RESTATED FINANCIAL INFORMATION FOR MOBISOC TECHNOLOGY PRIVATE LIMITED STANDALONE SUMMARY STATEMENTS OF ASSETS AND LIABILITIES AS AT DECEMBER 31, 2007 AND MARCH 31, 2007 AND PROFITS AND LOSSES AND CASH FLOWS FOR THE NINE MONTHS PERIOD ENDED DECEMBER 31, 2007 AND PERIOD ENDED MARCH 31, 2007, AS RESTATED UNDER INDIAN GAAP FOR MOBISOC TECHNOLOGY PRIVATE LIMITED Auditors’ Report as required by Part II of Schedule II to the Companies Act, 1956 The Board of Directors Mobisoc Technology Pvt. Limited D-1, Sector 3, Gautam Buddh Nagar, Noida – 201301 (UP) India Dear Sirs, 1. We have examined the attached restated financial information of Mobisoc Technology Pvt. Limited (the “Company”) for the purposes of inclusion in the offer document (“Offer Document”) prepared by the Company in connection with the proposed Initial Public Offer (“IPO”) of its Holding Company(“Cellebrum Technologies Limited”). Such financial information, which has been approved by the Board of Directors of the Company, has been prepared in accordance with the requirements of: a) paragraph B (1) of Part II of Schedule II to the Companies Act, 1956 (“the Act”) as amended; b) the Securities & Exchange Board of India (Disclosure & Investor Protection) Guidelines 2000 (the “Guidelines”) issued by the Securities and Exchange Board of India (“SEBI”) on January 19, 2000, as amended from time to time in pursuance of Section 11 of the Securities and Exchange Board of India Act, 1992; 2. We have examined such restated financial information taking into consideration: a) the terms of reference received from the Company vide their letter dated February 27, 2008, requesting us to carry out work on such financial information, proposed to be included in the Offer Document of its Holding Company in connection with proposed IPO; b) the Guidance Note (Revised) on Reports in Company Prospectuses issued by the Institute of Chartered Accountants of India. Such restated financial information has been compiled by the management from the audited Standalone balance sheets of the Company as at December 31, 2007 and March 31,2007 and the related audited Standalone profit and loss accounts and cash flow statements, for the Nine months period ended December 31, 2007 and period ended March 31, 2007. This report is being issued for the purpose of incorporating the same in the Offer Document to be issued by Cellebrum Technologies Limited, its Holding Company in connection with the proposed initial public offering of its Holding Company. In accordance with the requirements of Schedule II of the Act, the SEBI Guidelines and the terms of our engagement agreed with you, we report that we have examined the restated Standalone summary statement of assets and liabilities of the Company as at December 31, 2007 and March 31, 2007 and the related restated Standalone summary statement of profits and losses and cash flows for the nine months period ended December 31, 2007 and period ended March 31, 2007 and the notes thereon (these statements hereinafter are collectively referred to as the “Restated Standalone Summary Statements”) and are attached as Annexures I to IV to this report. Based on our examination, we further report that the restated standalone profits and losses have been arrived at:

3.

4.

5.

6.

267

(a) after making such adjustments and regroupings as, in our opinion, are appropriate and more fully described in the notes appearing in Annexure IV to Restated Standalone Summary Statements: (b) after incorporating the impact of changes in accounting policies adopted by the Company as at and for the nine months period ended December 31, 2007, which have been adjusted with retrospective effect in the Restated Standalone Summary Statements, and (c) after making adjustments for the material amounts relating to prior years in the Restated Standalone Summary Statements in the respective financial years / periods to which they relate. There are no extraordinary items which need to be disclosed separately in the Restated Standalone Summary Statements. There are no qualifications in the auditors’ reports, which require any adjustments to the Restated Standalone Summary Statements. 7. We have not audited any Standalone financial statements of the Company as of any date or for any period subsequent to December 31, 2007. Accordingly, we express no opinion on the financial position, results of operations or cash flows of the Company or as of any date or for any period subsequent to December 31, 2007. In our opinion, the financial information as disclosed in the Annexures to this report, read with the respective significant accounting policies and notes disclosed in Annexure IV, and after making adjustments and re-groupings as considered appropriate and disclosed in Annexure IV, has been prepared in accordance with Part II of Schedule II of the Act and the Guidelines. This report should not in any way be construed as a reissuance or redating of any of the previous audit reports issued by us, nor should this report be construed as a new opinion on any of the financial statements referred to herein.

8.

9.

10. Our audits referred to in paragraph 3 above were carried out for the purpose of certifying the general purpose financial statements taken as a whole. For none of the years/ periods referred to in paragraph 3 above, did we perform audit tests for the purpose of expressing an opinion on individual balances of accounts or summaries of selected transactions, and accordingly, we express no such opinion thereon. 11. We have no responsibility to update our report for events and circumstances occurring after the date of the report. 12. This report is intended solely for your information and for inclusion in Offer Document prepared in connection with the proposed IPO of its Holding Company and is not to be used, referred to or distributed for any other purpose without our prior written consent. For GUPTA GARG & AGRAWAL Chartered Accountants

per B. B. Gupta Partner Membership No. 012399 Place: Delhi Date: June 22, 2008

268

MOBISOC TECHNOLOGY PRIVATE LIMITED ANNEXURE I : STANDALONE SUMMARY STATEMENT OF ASSETS AND LIABILITIES, AS RESTATED
Particulars APPLICATION OF FUNDS Fixed Assets Gross Block Less: Accumulated Depreciation/ Amortisation Net Block Total 1.07 (0.22) 0.85 0.85 0.44 (0.06) 0.38 0.38 As at December 31, 2007 (Amount in Rs. Million) As at March 31, 2007

Deferred Tax Assets (net) Current Assets, Loans & Advances Sundry Debtors Cash and Bank Balances Other Current Assets Loans & Advances Total TOTAL (A) Liabilities and Provisions Current Liabilities Provisions Total (B) Net Worth (A-B) Represented by Share Capital and Reserves Equity Share Capital Profit & Loss Account

0.57 0.51 86.33 1.21 4.89 92.94 94.36

0.00 0.00 93.35 0.94 0.42 94.72 95.09

2.82 4.72 7.54 86.83

0.90 0.45 1.35 93.74

100.10

100.10 (5.25)

(13.28) Less: Miscellaneous Expenditure (to the extent not written off or adjusted) Net Worth 1.11

86.83

93.74

Notes: The above Statement should be read with the significant accounting policies and Notes to the Standalone Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure IV

269

As per our report of even date

For and on behalf of the Board of Directors of Mobisoc Technology Pvt. Ltd.

For Gupta Garg & Agrawal Chartered Accountants Per B.B Gupta Partner Membership No: 012399 Place: Delhi Date: June 22, 2008 (Director) (Director)

270

MOBISOC TECHNOLOGY PRIVATE LIMITED ANNEXURE II :STANDALONE SUMMARY STATEMENT OF PROFIT AND LOSS, AS RESTATED
Particulars (Amount in Rs. Million) Nine- months Year Ended March Period Ended 31, 2007 December 31, 2007

INCOME Operating Income Other Income Total Income EXPENDITURE Personnel expenses Selling and Distribution Expenses Miscellaneous Expenditure written off Depreciation / Amortization Total Expenditure PROFIT BEFORE TAX AND PRIOR PERIOD ITEMS Prior Period Items PROFIT BEFORE TAX AND AFTER PRIOR PERIOD ITEMS Provision for Tax Current Tax Deferred Tax Charge / (Credit) Fringe Benefits Tax Total Tax Expense NET PROFIT AS PER AUDITED ACCOUNTS Adjustments Net Impact of Adjustments 2.26 (0.57) 0.14 1.83 (14.03) 6.00 0.41 0.00 0.06 0.47 0.75 (6.00) 26.75 2.67 1.11 0.16 30.69 (6.20) 6.00 (12.20) 0.00 0.00 0.00 0.00 1.22 1.22 18.18 6.31 24.49 0.00 1.22 1.22

NET PROFT AS RESTATED

(8.03)

(5.25)

Profit & Loss Account at the beginning of the year / period PROFIT AVAILABLE FOR APPROPRIATION

(5.25) (13.28)

(5.25)

BALANCE CARRIED FORWARD AS RESTATED

(13.28)

(5.25)

Notes: The above Statement should be read with the significant accounting policies and Notes to the Standalone Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure IV

271

As per our report of even date

For and on behalf of the Board of Directors of Mobisoc Technology Pvt. Ltd.

For Gupta Garg & Agrawal Chartered Accountants Per B.B Gupta Partner Membership No: 012399 Place: Delhi Date: June 22, 2008 (Director) (Director)

272

MOBISOC TECHNOLOGY PRIVATE LIMITED ANNEXURE III :STANDALONE SUMMARY STATEMENT OF CASH FLOWS, AS RESTATED
Particulars Nine- months Period Ended December 31, 2007 (Amount in Rs. Million) Year Ended March 31, 2007

A. Cash Flow from Operating Activities Net Profit Before Tax, As Restated Net Profit Before Tax, As Restated Adjustment for: Depreciation / Amortization Miscellaneous Expenditure Wriiten off 1.11 Interest Income (6.31) (1.22) (6.19) (6.19) 0.16 (4.77) (4.77) 0.06

Operating Profit Before Working Capital Changes Movement in Working Capital: (Increase) in Sundry Debtors (Increase) in Loans and Advances

(11.23) (0.51) (0.88)

(5.93) 0.00 (0.15) 0.90 (1.11) (6.29)

Increase in Current Liabilities and Provisions Miscellaneous Expenditure (to the extent not written off or adjusted) Cash Generated from Operations Direct Taxes Paid (including Fringe Benefits Taxes)

3.82 0.00 (8.80)

(3.63) Net Cash Generated from Operations (A) B. Cash Flow from Investing Activities Purchase of Fixed Assets Interest Received Net Cash Generated from / (Used In) Investing Activities(B) C. Cash Flows from Financing Activities Proceeds from Issuance of Share Capital Net Cash Generated from / (Used in) Financing Activities ( C ) Net Changes in Cash & Cash Equivalents (A+B+C) Cash and Cash Equivalents at the Beginning of the Year / Period Cash and Cash Equivalents at the End of the Year / Period Components of Cash and Cash Equivalents: Cash in Hand 0.04 (7.02) 93.35 86.33 (0.64) 6.05 5.41 (12.43)

(0.29) (6.58)

(0.44) 0.27 (0.17)

100.10 100.10 93.35

93.35

0.00

273

Particulars

Balances with Scheduled Banks on Current Accounts Total

Nine- months Period Ended December 31, 2007 86.28 86.33

Year Ended March 31, 2007 93.35 93.35

Notes: 1) Cash Flow Statement has been prepared under the 'Indirect Method' as set out in Accounting Standard -3 on Cash Flow Statements issued by the Institute of Chartered Accountants of India. Negative figures have been shown in brackets. The above Statement should be read with the significant accounting policies and Notes to the Standalone Summary Statement of Assets and Liabilities, Profits and Losses and Cash Flows as restated under Indian GAAP, as appearing in Annexure IV. As per our report of even date For and on behalf of the Board of Directors of Mobisoc Technology Pvt. Ltd.

2) 3)

For Gupta Garg & Agrawal Chartered Accountants Per B.B Gupta Partner Membership No: 012399 Place: Delhi Date: June 22, 2008 (Director) (Director)

274

ANNEXURE IV - NOTES TO THE RESTATED STANDALONE SUMMARY STATEMENTS OF ASSETS AND LIABILITIES, PROFITS AND LOSSES AND CASH FLOWS, AS RESTATED UNDER INDIAN GAAP, FOR MOBISOC TECHNOLOGY PRIVATE LIMITED

A. a.

Background The Company is into the business of developing, selling, and providing Software Solutions in the field of telecommunication like mobile, internet and other related areas to various users. The Restated Standalone Summary Statement of Assets and Liabilities of the Company as at December 31, 2007, March 31, 2007 and the related Restated Standalone Summary Statement of Profits and Losses and Cash Flows for the nine months period ended December 31, 2007, years ended March 31, 2007 (hereinafter collectively referred to as “Restated Standalone Summary Statements”) relate to Mobisoc Technology Private Limited (“ the Company”) and have been prepared specifically for inclusion in the Offer Document to be filed by its holding company Cellebrum Technologies Limited (formerly Cellebrum.Com Limited) with the Securities and Exchange Board of India (“SEBI”) in connection with its proposed Initial Public Offering of its equity shares. These Restated Standalone Summary Statements have been prepared to comply in all material respects with the requirements of Schedule II to the Companies Act, 1956 (“the Act”) and the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines, 2000 (“the SEBI Guidelines”) issued by SEBI on January 19, 2000, as amended from time to time, except to the extent stated in Note F (i), (ii) and (iii) below.

b.

B.

Statement of Significant Accounting Policies adopted by the Company in the preparation of Financial Statements as at and for the nine-months period ended December 31, 2007 Basis of Preparation The financial statements have been prepared to comply in all material respects with the Notified Accounting Standards by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention and on an accrual basis. The accounting policies have been consistently applied by the Company except for the changes in accounting policy discussed more fully in (C) below, are consistent with those used in the previous years / periods.

a)

b)

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

c)

Fixed Assets
i)

ii)

Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Insurance spares / stand by equipments are capitalized as part of mother assets.

d)

Depreciation
i)

Depreciation is provided using the Straight Line Method as per the useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, 1956 whichever is higher as under:

275

Tangible Assets Data Processing Machines Furniture & Fixtures Office Equipment ii) iii)

Rates (SLM) (in %) 31.67 13.57 13.57

Schedule XIV Rates (SLM) (in %) 16.21 6.33 4.75

Individual assets costing upto Rs.5,000/- are depreciated fully in the month of purchase. Insurance spares / standby equipments are depreciated prospectively over the remaining useful lives of the respective mother assets.

e)

Taxes on Income Current tax and Fringe Benefit Tax are determined as the amount of tax payable in respect of taxable income/ fringe benefits for the year. Deferred Tax Asset is recognised, subject to consideration of prudence, on timing differences, being the difference between taxable income and accounting income that originate in one period and is capable of reversal in one or more subsequent years. The Deferred tax Assets are recognised only to the extent that there is reasonable certainty of sufficient future profits against which such deferred tax assts can be realised.

f)

Retirement and other employee benefits Retirement benefits in the form of Provident Fund are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. Provision for leave encashment and gratuity are charged to the Profit & Loss Account on the basis of actuarial valuation made at the end of each financial year.

g)

Segment Reporting Policies The Company operates in only in business of software development and maintainence.

h)

Cash and Cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

C.

Material Regroupings Appropriate adjustments have been made in the Restated Summary Statements of Assets and Liabilities, Profits and Losses and Cash Flows, wherever required, by a reclassification of the corresponding items of income, expenses, assets, liabilities and cash flows, in order to bring them in line with the groupings as per the audited financials of the Company for the nine months period ended December 31, 2007.

D. a)

Material Adjustments Below mentioned is the summary of results of restatements made in the audited accounts for the respective years and its impact on the profits of the Company. ( Amount in Rs. million)
Adjustments for Prior Period Items (Refer note b) Total impact of adjustments December 31, 2007 6.00 6.00 March 31, 2007 (6.00) (6.00)

Current Tax impact of adjustments Net impact of adjustments

NIL 6.00

NIL (6.00)

276

b) Prior Period Items The Company had capitalized certain costs relating to development of some software during the year ended March 31, 2007 for which technical feasibility and probable future economic benefits were yet to be established. As the auditors of the parent Company believed that such costs did not qualify for capitalization as per the guidance given under Accounting Standard 26 ‘Intangible Assets’ issued by the Institute of Chartered Accountants of India, such costs have been charged to profit and loss account by the management and disclosed under the head ‘Prior Period expenses’ in the Standalone Financial Statements for the nine months period ended December 31, 2007 and accordingly have been appropriately adjusted in the year ended March 31, 2007 for the purpose of this statement. E. 1. Other Significant Notes Defined Benefits Plan Gratuity and leave benefits (Revised Accounting Standard 15) The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Company also provides leave encashment benefits to its employees during the tenure of service on reaching specified levels as well as on resignation / retirement. These benefits are unfunded. The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans: Profit and Loss account Net employee benefit expense (recognised in Employee Cost) for the nine-months period ended December 31, 2007 ( Amount in Rs. million)
Gratuity Current service cost Interest cost on benefit obligation Expected return on plan assets Net actuarial( gain) / loss recognized in the year Net benefit expense charged to Profit and Loss account Actual return on plan assets 0.64 NIL NIL (0.07) 0.45 Nil Leave encashment 1.24 NIL NIL 0.10 0.97 Nil

Balance sheet Details of Provision for gratuity and leave encashment as at December 31, 2007 ( Amount in Rs. million)
Defined benefit obligation Fair value of plan assets Less: Unrecognised past service cost Net asset / (liability) recognised in Balance Sheet Gratuity (0.66) 0.06 NIL (0.66) Leave encashment (1.24) 1.24 NIL (1.24)

Changes in the present value of the defined benefit obligation for the nine months period ended December 31, 2007 are as follows:
Gratuity 0.08 0.00 0.64 ---Leave encashment NIL NIL 1.24 (0.10)

Opening defined benefit obligation Interest cost Current service cost Benefits paid

277

Actuarial (gains) / losses on obligation Closing defined benefit obligation

(0.07) 0.66

0.10 1.24

Changes in the fair value of plan assets are as follows:
Gratuity NIL NIL Nil Nil NIL NIL

Opening fair value of plan assets Expected return Contributions by employer Benefits paid Actuarial gains / (losses) Closing fair value of plan assets

The principal assumptions used in determining gratuity and leave benefit obligations for the Company’s plans are shown below:
Gratuity (%) LIC 1994-96 ultimate 15% P.A 8% P.A N.A 15% P.A 32.46 years Leave encashment (%) LIC 1994-96 ultimate 15% P.A 8% P.A N.A 15% P.A 32.46 years

Mortality table Attrition Rate Discount rate Return on Plan Assets Salary Rise Remaining working life

Break-up of Deferred Tax Assets / (Liabilities) : 2.
Timing Difference on account of

( Amount in Rs. million)
December 31, 2007 Difference in depreciation and other differences in block of fixed assets as per Tax books and Financial books Gross Deferred Tax Liabilities Effect of expenditure debited to Profit and Loss Account but allowed for tax purposes in the following years Brought forward losses and depreciation Gross Deferred Tax Assets 0.00 0.00 0.57 0.57 March 31, 2007 -

Net Deferred Tax (Liabilities) / Assets

0.57

-

3.

Previous Year Comparatives The Company has changed its statutory accounting year to end on December 31, 2007 instead of March 31, 2008. Thus, the accounts for the period ended December 31, 2007 have been prepared for 9 months and are not comparable with the previous year accounts prepared for 12 months.

As per our report of even date

For and on behalf of the Board of Directors of Mobisoc Technology Pvt. Ltd.

For Gupta Garg & Agrawal Chartered Accountants Per B.B Gupta (Director) (Director)

278

Partner Membership No: 012399 Place: Delhi Date: June 22, 2008

279

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations is based upon, and should be read in conjunction with our restated consolidated financial statements for Fiscal 2007 and the nine months ended December 31, 2007 and our unconsolidated restated financial statements for Fiscal 2006, 15 months ended March 31, 2005 and 12 months ended December 31, 2003 including the schedules, annexures and notes thereto and the report thereon. Our consolidated and unconsolidated summary statements are prepared in accordance with Indian GAAP. All references to ‘Fiscal’ are to the twelve month period ended March 31 of that year. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. For additional information regarding such risks and uncertainties, see “ForwardLooking Statements” and “Risk Factors”. Overview Our company is one of the leading providers of telecommunications value added products, services and solutions in India. We provide a wide range of telecommunications value added services, platforms, products and solutions to telecommunications carrier customers, subscribers of such carriers and enterprises across India. As a value added services provider, we not only conceptualize products to meet our customer needs, we source and aggregate content, provide the relevant platform for delivery of our products and services and integrate these services with the core network elements of our carrier customer. We have the ability to provide a comprehensive suite of value added products, services and solutions across all key technology bearers. Our telecommunications products and services and telecommunications solutions are delivered to subscribers of major telecommunications carriers in India, including Airtel, Spice Communications, BSNL, IDEA, Reliance Communication, Vodafone, MTNL, Tata Teleservices Limited and “Connect” & “Ping” of HFCL. Our product portfolio includes music, information and entertainment based products and services (such as mobile radio, BGM, CRBT, ringtone downloads, videos, contests, astrology, news, sports updates and commodity rates), social networking products and services (such as voice chat), and call management solutions (such as voicemail, voice SMS, select caller list, Pay4Me and missed call alerts), all of which enable subscribers to personalize their mobile phones and enhance user experience. Our products allow subscribers to access informational and entertainment content in more than 17 languages using IVRS speech-based navigation. Using our social networking platform, subscribers are able to generate their own interactive content through messaging and conversations. We provide these value added services and products through our carrier customers to mobile subscribers and enterprise clients using IVRS, SMS, USSD, GPRS and WAP technology and delivery methods. Our applications (other than GPRS) can be deployed on any network and accessed from most mobile handsets and fixedline devices. Many of our products and services can be accessed by subscribers using a variety of delivery platforms, i.e., voice, SMS, USSD, GPRS, WAP and 3G network, thereby enabling us to deploy our products and services across a majority of operators and networks. We focus on multi-modal platforms based on voice, text and data. Our mobile radio platform gives subscribers the interactive option to access content on demand in the language of their choice, using their mobile phones. Given the demographic diversity of India, our platforms offer an efficient, easyto-use and attractive solution to our carrier customers for providing services to their subscribers. The platform enables our carrier customers to introduce better targeted, more innovative content based services. Our data platform, Mitr proposes to provide a unified framework for discovering and accessing content and services, giving the subscriber a personalized experience. Our delivery infrastructure is deployed across most network circles of our carrier customers. Our roaming solutions provide traffic flow information, enable network optimization and identify network bottlenecks for our carrier customers. Subscribers benefit from real-time updates and better coverage while roaming outside their regular network. Through our in-house research and development team, we have developed roaming solutions such as Welcome Roamer, Roam Tracker, Roam Globe, Roam Secure and Roam Privilege.

280

Our value added services and products provide a source of additional revenue to our carrier customers with relatively insignificant capital expenditure. Our music, entertainment and information based value added products and services are dependent on the content which we provide. We have alliances with a number of content owners and license holders and licensed content is delivered to our carrier customers through our delivery platforms. As of May 31, 2008, we had more than 140,000 songs in more than 17 languages, as well as logos, wallpaper and 12,000 ringtones in our content database to cater to the needs of multicultural and multilingual subscribers in India. Basis of Preparation The following discussion is based on our restated consolidated and unconsolidated financial statements, which are based on our audited consolidated and unconsolidated financial statements restated in accordance with paragraph B(1) of Part II of Schedule II of the Companies Act and the SEBI Guidelines for the 12 months ended December 31, 2003, 15 months ended March 31, 2005, Fiscal 2006 and 2007 and the nine months ended December 31, 2007. The audited consolidated and unconsolidated financial statements are prepared in accordance with Indian GAAP. There was no requirement to prepare consolidated financial statements for the periods prior to March 31, 2007 as the Company did not have any subsidiaries and accordingly the Company did not prepare consolidated financial statements for any periods prior to March 31, 2007. Our year ended December 31, 2003 reflects a 12 month fiscal year, our year ended March 31, 2005 reflects a 15 month fiscal year, our year ended March 31, 2006 reflects a 12 month fiscal year, our year ended March 31, 2007 reflects a 12 month fiscal year and our year ended December 31, 2007 reflects a nine month fiscal year, as a result of change of fiscal year ends. As a result, our results of operations for the periods presented below are not comparable. Our historical financial performance may not be considered as indicative of future financial performance. Our future fiscal years will end on December 31 each year and as a result will not be comparable to our nine months ended December 31, 2007. We prepare our consolidated financial statements in accordance with the requirements of Accounting Standard 21 – Consolidated Financial Statements (“AS–21”) and Accounting Standard 23 – Accounting for Investments in Associates in Consolidated Financial Statements (“AS–23”). We consolidate financial statements of our Subsidiary in our consolidated financial statements. Factors Affecting our Results of Operations Our financial condition and results of operations are affected by numerous factors and the following are of particular importance: • General economic and business conditions. As a company operating in India, we are affected by the general economic conditions in the country and in particular the factors affecting the telecommunications industry in general. The Indian economy has grown steadily over the past several years. GDP growth was 7.5% in Fiscal 2004, 8.1% in Fiscal 2005, 8.4% in Fiscal 2006 and 9.2% in the Fiscal 2007. The overall economic growth will impact the results of our operations. The growth prospects of our business and our ability to implement our strategies will be influenced by macro-economic growth. Change in technology and our ability to innovate and develop new products and services. Our business depends on developing and providing innovative solutions to our customers that will create and fulfill demand by end users. Development of new products is subject to unpredictable and volatile factors beyond our control, including end user preferences and competing solutions. In addition, due to the competitive nature of the telecommunications market in which we operate, and because time-to-market and service features are key differentiators of mobile value added services offerings between carriers, solutions and applications in our industry have short life-spans. We need to continuously invest in research and development in the past to develop new and differentiated products and services for our customers. Further, some or all of such products may not provide adequate returns commensurate with our investments. Our solutions could also be rapidly rendered obsolete by the introduction of newer technologies based on more advanced mobile networks using broader bandwidths. Our inability to deal with the above factors would impact our results of operations.

281

Competition. Our results of operations have been affected by competition in the telecommunications value added services industry in India in the past. We expect competition to intensify in the future due to possible new entrants in the market, existing competitors further expanding their operations and our entry into new markets where we may compete with well-established telecommunications value added services companies. This we believe may impact our financial condition and operations. Dependency on entertainment and music related services. We earned approximately 61% and 63% of our operating income from our music related services including mobile radio, caller ring back tones, BGM and Jukebox in nine months ended December 2007 and in prior fiscal 2007, respectively. We expect to continue to derive a significant portion of our operating income from these services over the next few years. There could be a decline in the demand for our products/services and solutions due to various factors, including increase in cost of our products/ services and solutions. A decrease in the popularity of our music related services and solutions among mobile phone users, or a failure by us to maintain, improve, update or enhance such services and solutions in a timely manner, enter into new markets, or successfully diversify our products/services and solutions could materially and adversely affect our business, financial condition and results of operations. Content availability. We procure our content from various content providers (who license these to us) for use as part of the services we provide to our carrier customers. Any failure on our part to comply with our obligations under the content license agreements could cause us to be in breach of our contract and could result in a claim against us for substantial damages or even termination of the contracts by the content provider. In addition, these licencing arrangements are typically for a term of one year. If we are unable to renew these licenses on terms favourable to us, or at all, upon their expiration we may be prevented from providing content sourced from these content providers and will have to source alternative content which may result in loss of income or business opportunities or reduced margins that would harm our business, financial condition and results of operations. Intellectual property protection. Third parties may sue us for intellectual property infringement or initiate proceedings to invalidate our intellectual property rights, either of which, if successful, could disrupt the conduct of our business or require us to pay significant damage awards which we may not succeed in recovering from our content providers. In addition, in the event of a successful claim against us, we may be subject to injunctions preventing us from using our intellectual property, incur significant licencing fees and/or be forced to develop alternative technologies. Our failure or inability to develop non-infringing technology or applications or to licence the infringed or similar intellectual property rights, technology or applications on a timely basis could force us to withdraw services from the market or prevent us from introducing new services on a timely basis, or at all. In addition, even if we are able to licence the infringed or similar intellectual property rights, technology or applications, licence fees could be substantial and the terms of such licenses could be unfavorable. Any of the foregoing may result in increased costs and loss of income which may have an adverse effect on our business, financial condition and results of operations.

Our Significant Accounting Policies Our restated summary statements are prepared in accordance with Indian GAAP, the accounting standards prescribed by ICAI and the relevant provisions of the Companies Act, and the accompanying notes thereto included in this Draft Red Herring Prospectus include information that is relevant to this discussion and analysis of our financial condition and results of operations. The financial statements require our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenditures, and the related disclosure of cash flows and contingent liabilities, among other items. Certain key accounting policies that are relevant and specific to our business and operations have been described below. The financial accounts have been prepared based on historical cost convention on an accrual basis in accordance with applicable accounting standards. Fixed Assets. Fixed Assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost comprises of the purchase price and any attributable cost of bringing the asset to its working

282

condition for its intended use. Insurance spares/stand by equipments are capitalized as part of mother assets. Depreciation. Depreciation is provided using the straight line method as per the useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, whichever is higher as under:
Tangible Assets Buildings Data Processing Machines Furniture & Fixtures Office Equipment Mobile phones Others Vehicles Motor Cars Motor buses Rates (SLM) (in %) 3.34 31.67 13.57 31.67 13.57 9.50 13.57 Schedule XIV Rates (SLM) (in%) 3.34 16.21 6.33 4.75 4.75 9.50 11.31

Cost of leasehold improvements is amortised over the period of lease or their useful lives whichever is lower. Individual assets costing up to Rs. 5,000 are depreciated fully in the month of purchase. Insurance spares / standby equipments are depreciated prospectively over the remaining useful lives of the respective mother assets. Intangibles. Intangible assets acquired from third parties are amortised using the straight line method over their estimated useful lives as follows:
Intangible Assets Computer Software Estimated Useful Life (Years) 3 years

Costs incurred towards development of computer software products meant for sale, lease or otherwise marketed, are capitalized subsequent to establishing technical feasibility. Capitalization ceases when the product is available for general release to customers. Capitalized software product costs are amortized on a product-by-product basis. The amortization shall be greater of the amount computed using (a) the ratio that current gross revenue for a product bears to the total of current and anticipated future gross revenues for that product or (b) straight line method over the remaining estimated useful life of the product. The unamortized cost of Capitalized software products is carried at cost, less accumulated amortization less impairment, if any. Cost Impairment. The carrying amounts of assets are reviewed at each balance sheet data if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. Leases. Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments by the Company are recognised as an expense in the profit and loss account on a straight-line basis over the lease term. Assets subject to operating leases from the Company are included in fixed assets. Lease income is recognised in the profit and loss account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the profit and loss account. Initial direct costs such as legal costs and brokerage costs are recognised immediately in the profit and loss account. Investments. Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis.

283

Long term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of such investments. Inventories: Inventories are valued as follows:
Traded goods At Cost or Net Realizable Value, whichever is lower. Cost is determined on FIFO basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

Revenue Recognition. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Rendering of Services: Service revenue is recognised at the end of each month in which the services are rendered. Service revenue includes income on value added services, revenue from roaming management services, short message service distribution services and providing mobile content. Sale of Goods: Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, which coincides with their delivery to the customer. Interest: Interest revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate interest applicable. Foreign Currency. Initial Recognition: Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. Conversion: Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Exchange Differences: Exchange differences arising on the settlement of monetary items or on reporting Company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise. Exchange differences arising in respect of fixed assets acquired from outside India on or before accounting period commencing after December 7, 2006 are capitalized as a part of fixed asset. Translation of Integral Foreign Operation: The financial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the Company itself. Retirement and other employee benefits Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the statutory authorities. Retirement Gratuity is a defined benefit obligation. The Company has taken insurance policy under the Group Gratuity Scheme of Life Insurance Corporation of India (LIC) to cover the gratuity liability of the employees and the premium paid/payable to LIC, in respect of the present value for liability of past services is charged to the Profit and Loss account every year. Also, the difference between amount paid/payable to LIC and the actuarial valuation on projected unit credit method made at the end of each financial year is charged to the Profit and Loss account. Short term compensated absences are provided for on based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method.

284

Actuarial gains / losses are immediately taken to profit and loss account and are not deferred.
Income Taxes.

Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the I.T. Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax loses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. At each balance sheet date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become unreasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by ICAI, the asset is created by way of a credit to the profit and loss account and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period. Changes in Accounting Policies Change in the Method of Accounting for Earned Leaves. The Company changed its accounting policy during the year ended March 31, 2007 and accounted for the liability for employees' earned leaves based on actuarial valuation as at the end of the year in line with Accounting Standard-15 (“AS-15”) issued by ICAI. Until the previous fiscal year ended March 31, 2006, leave liability was accounted for based on actual amount payable as per current encashable salary as at the end of the year. As a result of this change, the accumulated liability of earned leaves was higher and the profit for the year ended March 31, 2007 was lower by Rs. 3.10 million. The effect of such change in accounting policy has been appropriately adjusted in the years/periods to which it pertains. Change in the Method of Providing Depreciation. The Company was following the straight line method of providing depreciation on fixed assets up to the 12 months ended December 2003 and the written down value method for the fifteen months period ended March 31, 2005 and Fiscal 2006. During Fiscal 2007, the Company changed, with retrospective effect, its method of providing depreciation on fixed assets, other than leasehold buildings, from the written down value method at the rates prescribed in Schedule XIV to the Companies Act to the straight line method at the rates which are higher of the useful lives of assets and the rates prescribed in Schedule XIV to the Companies Act. As a result of this change, the charge to the profit and loss account before taxation for Fiscal 2007 was lower by Rs. 25.60 million and the net block of fixed assets was correspondingly higher by the same

285

amount. The effect of such change in accounting policy has been appropriately adjusted in the years/periods to which it pertains. Adoption of AS-15 (Revised) Employee Benefits. Until Fiscal 2007, the Company was providing for gratuity based on actuarial valuation as per LIC certificate and leave benefits based on actuarial valuation. During the nine months ended December 31, 2007, the Company adopted AS-15 (Revised), which is mandatory from accounting periods commencing on or after December 7, 2006. Accordingly, the Company has provided for gratuity based on actuarial valuation done as per the projected unit credit method. In addition, the Company has changed the method of providing short-term leave benefits from an actuarial valuation to an estimate basis. As a result, actuarial valuation of leave liability and gratuity liability as at April 1, 2007 was higher by Rs. 5.11 million (net of tax of Rs. 0.65 million) which, in accordance with the transitional provision in the revised accounting standard, has been adjusted to the general reserve. Adoption of Accounting Standard-11 'The Effect of Changes in Foreign Exchange Rates' (“AS-11”). As per the requirements of the Companies (Accounting Standards) Rules, 2006 and with AS-11, which is mandatory from the accounting periods commencing on or after December 7, 2006, the exchange differences on foreign currency transactions relating to fixed assets acquired from a country outside India have been adjusted to revenue as against the previously followed practice of adjusting the same to the carrying amount of fixed assets. As a result, net exchange gain of Rs 0.53 million which otherwise would have been adjusted against the carrying amount of fixed assets, previously credited to the profit and loss account for the nine months ended December 31, 2007. Therefore, the profit before tax for the nine months period ended December 31, 2007 was higher by the same amount. Material Regroupings Appropriate adjustments have been made in the Restated Summary Statements of Assets and Liabilities, Profits and Losses and Cash Flows, wherever required, by a reclassification of the corresponding items of income, expenses, assets, liabilities and cash flows, in order to bring them in line with the groupings as per the audited financials of the Company for the nine months ended December 31, 2007. Material Adjustments The summary of results of restatements made in the audited accounts for the respective years and its impact on the profits of the Company is set forth below.
Adjustments for Prior Period Items Sundry Balances written back Provision for doubtful debts Sundry Balances written off Bad Debts written off Bad Debts recovered Depreciation Leave Encashment Miscellaneous Expenditure (to the extent not written off) Tax paid for earlier years/periods Audit Qualification / Prior period Items Total impact of adjustments Current Tax impact of adjustments Deferred Tax impact of adjustments Net impact of adjustments December 31, 2007 (0.69) (0.12) 4.98 0.04 (0.50) 0.75 6.00 10.45 (0.42) 10.03 March 31, 2007 1.18 (0.04) (4.44) 0.11 2.77 (0.00) (10.80) 1.25 0.33 (6.00) (15.64) 1.21 0.48 (13.95) March 31, 2006 (0.36) (0.90) (0.54) 0.09 (2.58) 0.20 7.49 (0.98) 0.04 2.46 (0.28) (0.09) 2.09 March 31, 2005 (0.12) 0.81 (0.14) (0.20) 0.30 3.31 (0.27) (0.04) (1.05) 2.60 (0.51) (0.39) 1.70 December 31, 2003 (0.01) 0.25 (0.12) 0.12 0.12

286

Prior Period Items. In the financial statements for Fiscal 2007 and the nine months ended December 31, 2007, certain items of income/expenses have been identified as prior period items. Such prior period items have been appropriately adjusted in the respective years/periods. Sundry Balances Written Back. In the financial statements for Fiscal 2006 and 2007 and the 15 months ended March 31, 2005 and nine months ended December 31, 2007, certain liabilities created in the earlier years/periods were written back. These liabilities, wherever required, have been appropriately adjusted in the respective years/periods in which they were originally created. Provision for Doubtful Debts. During Fiscal 2006 and the nine months ended December 31, 2007, certain provisions for doubtful debts which pertained to debtors of earlier years/periods were created. These provisions, wherever required, have been appropriately adjusted in the respective years/periods in which these debtors and revenue were accounted for. Sundry Balances Written off. In the financial statements for Fiscal 2007 and 2006 and the nine months ended December 31, 2007, certain advances paid in the earlier years/periods were written off. These advances, wherever required, have been appropriately adjusted in the respective years/periods in which they were originally paid. Bad Debts Written off. During Fiscal 2007 certain bad debts which pertained to debtors of earlier years/periods were written off. These bad debts have been appropriately adjusted in the respective years/periods in which these debtors and revenue were accounted for. Bad Debts Recovered. During the nine months ended December 31, 2007 and Fiscal 2007, certain bad debts written off in earlier years/periods were recovered. These recoveries have been appropriately adjusted in the respective years/period in which they were originally written off. Depreciation. During Fiscal 2007, the Company changed the method of providing depreciation on fixed assets. The retrospective effect of depreciation has been appropriately adjusted in Fiscal 2006 and the 15 months ended March 31, 2005. Leave Encashment. During Fiscal 2007,the Company changed its accounting policy and accounted for provisioning of earned leaves. The effect of such change in policy has been appropriately adjusted in Fiscal 2006 and the 15 months ended March 31, 2005. Miscellaneous Expenditure (to the extent not written off). Up to Fiscal 2006, amounts carried forward under the head 'Miscellaneous Expenditure (to the extent not written off)' representing pre-operative expenditure, were being amortized on a pro-rata basis over a period of five years from the date of commencement of commercial operations. However, Accounting Standard – 26 issued by ICAI, which became applicable to the Company during the 15 month period ended March 31, 2005, did not permit such carrying forward of expenditure. The effect of amortisation of such miscellaneous expenditure has been appropriately adjusted in Fiscal 2006 and the 15 months ended March 31, 2005. Taxes for earlier years/periods. During Fiscal 2007 and the nine months ended December 31, 2007, certain taxes pertaining to the 15 months ended March 31, 2005 were paid. Such tax expense has been appropriately adjusted in the 15 months ended March 31, 2005. Audit Qualification/ Prior Period Items The Subsidiary of the Company had capitalized certain costs relating to development of some software during the year ended March 31, 2007 for which technical feasibility and probable future economic benefits were yet to be established. As the auditors of the parent Company believed that such costs did not qualify for capitalization as per the guidance given under Accounting Standard 26 ‘Intangible Assets’ issued by the Institute of Chartered Accountants of India, the Consolidated Financial Statements for the year ended March 31, 2007 were qualified to that extent. In the current year, such costs have been charged to profit and loss account by the management and disclosed under the head ‘Prior Period expenses’ in the Consolidated Financial Statements for the nine months period ended December 31, 2007 and accordingly have been appropriately adjusted in the year ended March 31, 2007 for the purpose of this statement. Current Tax and Deferred Tax impact of adjustments. In the preparation of the Restated Unconsolidated Summary Statements, the Company has made adjustments for the current tax and

287

deferred tax impact of the adjustments in the respective years/periods to which such adjustments pertain. Non-Adjustment Items (i) The Company has changed the estimates of useful lives of some of its fixed assets during Fiscal 2007 and the nine months ended December 31, 2007. The management believes that such change in estimated useful lives is bonafide and occasioned by technical/environmental factors and hence should not be restated in previous periods/years financials in the statement of assets and liabilities, as restated. (ii) The Company has adopted revised AS-15 on Employee Benefits issued by ICAI effective from April 1, 2007. However, due to practical difficulties in retrospective application of the same, it has not been possible for the management to determine the effect on the profits for the 12 months ended December 31, 2003, the 15 months ended March 31, 2005, and Fiscal 2006 and 2007 had the revised standard been adopted by the Company for each of those years/periods. Accordingly, such adjustment has not been made in the attached unconsolidated restated financial statements. (iii) As per the requirements of Companies (Accounting Standards) Rules, 2006 and AS-11, which is mandatory from the accounting periods commencing on or after December 7, 2006, the exchange differences on foreign currency transactions relating to fixed assets acquired from a country outside India have been adjusted to revenue as against the previously followed practice of adjusting the same to the carrying amount of fixed assets. However, due to practical difficulties in retrospective application of the same, it has not been possible for the management to determine the effect of such change in the financial statements of earlier years/periods. Accordingly, such adjustment has not been made in the attached unconsolidated restated financial statements. The impact of such adjustment is not material in relation to the Restated Unconsolidated Summary Statements. Our Results of Operations Unless otherwise stated, “Fiscal” refers to the twelve month period ending March 31 of that year. Our year ended December 31, 2003 reflects a 12 month fiscal year, our year ended March 31, 2005 reflects a 15 month fiscal year, our year ended March 31, 2006 reflects a 12 month fiscal year, our year ended March 31, 2007 reflects a 12 month fiscal year and our year ended December 31, 2007 reflects a nine month fiscal year, as a result of change of fiscal year ends. As a result, our results of operations for the periods presented below are not comparable. Our historical financial performance may not be considered as indicative of future financial performance. Our results of operations are consolidated for the nine months ended December 31, 2007 and for Fiscal 2007 and unconsolidated for Fiscal 2006, 15 months ended March 31, 2005 and 12 months ended December 31, 2003. There was no requirement to prepare consolidated financial statements for the periods prior to March 31, 2007 as the Company did not have any subsidiaries and accordingly the Company did not prepare consolidated financial statements for any periods prior to March 31, 2007 The table below summarizes our results of operations, including as a percentage of total income, for the periods indicated:
(Rs. In millions)
December 31, 2007 (9 months) % of Total Income INCOME: Operating Income……………… Other Income..………................. TOTAL INCOME……………. EXPENDITURE: Purchase of Goods for Sale……. Operating Expenses……………. Staff 734.56 42.63 777.19 94.52 5.48 100.00 March 31, 2007 (12 % of months) Total Income 661.78 25.02 686.80 96.36 3.64 100.00 March 31, 2006 (12 % of months) Total Income 324.95 7.31 332.26 97.80 2.20 100.00 March 31, 2005 (15 months) % of Total Income 268.28 3.49 271.77 98.72 1.28 100.00 December 31, 2003 (12 months) % of Total Income 8.54 0.06 8.60 99.30 0.70 100.00

0.99 82.13 138.37

0.13 10.57 17.80

3.38 50.11 66.11

0.49 7.30 9.63

21.49 28.53

6.47 8.59

23.45 20.15

8.63 7.41

0.59

6.86

288

December 31, 2007 (9 months) % of Total Income Cost……………................. Selling and Distribution Expenses………………………. . General and Administration Expenses………………………. . Decrease/(Increase) in Inventories…………………….. . Interest………………………… . Miscellaneous Expenditure Written Off ……………………. Depreciation/Amortisation……. . TOTAL EXPENDITURE……. Profit Before Tax and Prior Period Items……………… Prior Period Items……………… Profit Before Tax and After Prior Period Items……..… Provision for Tax Current Tax…………………….. Deferred Tax Charge/(Credit)…. Fringe Benefits Tax……………. Total Tax Expense……………. Adjustments………………… …. Current Tax impact of Adjustments………………… …. Deferred Tax impact of Adjustments………………… …. Net impact of Adjustments…….. NET PROFIT, AS RESTATED………………….. 16.56 2.13

March 31, 2007 (12 % of months) Total Income 7.28 1.06

March 31, 2006 (12 % of months) Total Income 4.79 1.44

March 31, 2005 (15 months) % of Total Income 5.15 1.90

December 31, 2003 (12 months) % of Total Income 1.92 22.33

126.31

16.25

78.53

11.43

23.77

7.15

13.45

4.95

1.17

13.60

1.36

0.17

(1.36)

(0.20)

-

-

-

-

-

-

0.94 1.11

0.12 0.14

0.04 -

0.01 -

0.01 0.03

0.00 0.00

0.53 0.06

0.20 0.02

0.64

7.44

60.47 428.24

7.78 55.10

32.90 236.99

4.79 34.51

14.59 93.21

4.39 28.05

5.54 68.33

2.04 25.15

4.32

50.23

348.95

44.90

449.81

65.49

239.05

71.95

203.44

74.85

4.28

49.77

5.31 343.64

0.68 44.22

0.38 449.43

0.06 65.43

239.05

71.95

203.44

74.85

4.28

49.77

14.91 3.43 4.65 22.99

1.92 0.44 0.60 2.96

24.06 (1.24) 2.16 24.98

3.50 (0.18) 0.31 3.63

20.03 (0.30) 1.03 20.76

6.03 (0.09) 0.31 6.25

21.22 3.48 24.70

7.81 1.28 9.09

0.06 1.53 1.59

0.70 17.79 18.49

10.45 (0.42

1.34 (0.05)

(15.64) 1.21

(2.28) 0.18

2.46 (0.28)

0.74 (0.08)

2.60 (0.51)

0.96 (0.19)

0.12 (0.00)

1.39 (.00)

-

-

0.48

0.07

(0.09)

(0.03)

(0.39)

(0.14)

-

-

10.03

1.29

(13.95)

(2.03)

2.09

0.63

1.70

0.63

0.12

1.40

330.68

42.55

410.50

59.77

220.38

66.33

180.44

66.39

2.81

32.67

Income. Our income comprises of operating income and other income. We derive our operating income primarily from the rendering of services, which includes income on value added services, income from roaming management services, short message service distribution services and providing mobile content and the sale of goods, which includes sale of telecom related software and computer hardware and other operating income. Our other income consists of income from interest on bank deposits, sundry balances written back, bad debts recovered, rental income and interest from others. Expenditure. Our expenditure consists of expenses on purchase of goods for sale, operating expenses, staff cost, selling and distribution expenses, general and administration expenses, decrease/increase in inventories, interest on taxes, miscellaneous expenditure written off and depreciation/amortisation. Expenses on Purchase of Goods for Sale. Our expenses on purchase of goods for sale includes expenses on hardware which are sold to carrier customers as a part of our telecom solution sale. Expenses on purchase of goods for sale accounted for 0.23% and 1.42% of our total expenditure for the nine months ended December 31, 2007 and Fiscal 2007. We had no expenses on purchase of goods for sale for Fiscal 2006 and the fifteen months ended March 31, 2005 since we did not have any sale of software and related hardware during such period.

289

Operating Expenses. Our operating expenses consists of expenses on provisioning of content, roaming charges and charges on account of short message service distribution. Operating expenses accounted for 19.18%, 21.14%, 23.05% and 34.32% of our total expenditure for the nine months ended December 31, 2007, Fiscal 2007 and 2006 and the fifteen months ended March 31, 2005. Staff Cost. Staff cost consists of salaries, wages and bonuses paid to our officers and employees, contributions to provident and other funds for the benefit of our officers and employees and other workmen and staff welfare expenses. Staff cost accounted for 32.31%, 27.90%, 30.61% and 29.49% of our total expenditure for the nine months ended December 31, 2007, Fiscal 2007 and 2006 and the fifteen months ended March 31, 2005. Selling and Distribution Expenses. Selling and distribution expenses primarily constitute our sales and marketing expenses including expenses on contesting , expenses on advertisement, publicity and sales promotion. Selling and distribution expenses accounted for 3.87%, 3.07%, 5.14% and 7.54% of our total expenditure for the nine months ended December 31, 2007, Fiscal 2007 and 2006 and the fifteen months ended March 31, 2005. General and Administrative Expenses. General and administrative expenses include expenses on rent, rates and taxes, insurance, repairs and maintenance of plant and machinery and buildings, travelling and conveyance, communications costs, legal and professional fees, auditor’s remuneration, vehicle running and maintenance and electricity and water. General and administrative expenses accounted for 29.50%, 33.13%, 25.50% and 19.68% of our total expenditure for the nine months ended December 31, 2007, Fiscal 2007 and 2006 and the fifteen months ended March 31, 2005. Decrease/(Increase) in Inventories. Decrease and increase in inventories deals with the change in inventory including both, hardware and software which are provided to our customers. Interest. Interest expenses consists of interest paid on a term loan obtained for the purchase of a car, as well as the related processing charges. Miscellaneous Expenditure Written Off. Miscellaneous expenditure written off consists of preliminary expenses incurred at the time of incorporation of the company and pre-operative expenses. Depreciation/Amortisation. Depreciation is provided using the straight line method as per the useful lives of the assets estimated by the management, or at the rates prescribed under Schedule XIV of the Companies Act, whichever is higher as provided under “– Significant Accounting Policies – Depreciation” on page 182. Intangible assets acquired from outside are amortized using the straight line method over their estimated useful lives as provided under “– Significant Accounting Policies – Intangibles” on page 183. Taxation. We provide for current taxes, fringe benefit tax and deferred taxes. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the I.T. Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Nine Months Ended December 31, 2007 Compared to Fiscal 2007 Our results of operations for the nine months ended December 31, 2007 were particularly affected by the following factors: • • • • Pan-India launch of Mobile Radio with Airtel. Pan-India launch of Select Caller List with Vodafone. Launch of USSD, BGM and Mobile Radio with Reliance. Significant increase in user base for existing services.

Income. Our total income was Rs. 777.19 million for the nine months ended December 31, 2007 and Rs. 686.80 million for the Fiscal 2007.

290

Operating Income. Our operating income was Rs. 734.56 million for the nine months ended December 31, 2007 and Rs. 661.78 million for the Fiscal 2007. Our income from rendering of services was 57.90% of our total operating income for the nine months ended December 31, 2007 and our income from sale of telecom solutions comprised 42.10% of our total operating income for the nine months ended December 31, 2007. Other Income. Our other income was Rs. 42.63 million, or 5.48% of our total income for the nine months ended December 31, 2007 and Rs. 25.02 million, or 3.64% or our total income for the Fiscal 2007. A majority of our other income for the nine months ended December 31, 2007 was attributable to interest accrued on bank deposits and rental income from sub-leasing our office premises at Noida. Expenditure. Our total expenditure was Rs. 428.24 million for the nine months ended December 31, 2007 and Rs. 236.99 million for the Fiscal 2007. Our total expenditure for the nine months ended December 31, 2007 comprised primarily of staff cost, general and administration expenses and operating expenses, which constituted 32.31%, 29.50% and 19.18%, respectively, of our total expenditure for such period. Purchase of Goods for Sale. Our expenses on purchase of goods for sale were Rs. 0.99 million, or 0.13% of our total income for the nine months ended December 31, 2007 and Rs. 3.38 million, or 0.49% of our total income for the Fiscal 2007. Operating Expenses. Our operating expenses were Rs. 82.13 million, or 10.57% of our total income for the nine months ended December 31, 2007 and Rs. 50.11 million, or 7.30% of our total income for the Fiscal 2007. Our operating expenses for the nine months ended December 31, 2007 primarily constituted expenses on provisioning of content, roaming services and enterprise messaging. Staff Cost. Our staff cost was Rs. 138.37 million, or 17.80% of our total income for the nine months ended December 31, 2007 and Rs. 66.11 million, or 9.63% of our total income for the Fiscal 2007. Our expenses on salaries and contribution to welfare funds constituted 13.98% and 1.12% of our total income for the nine months ended December 31, 2007. Selling and Distribution Expenses. Our selling and distribution expenses were Rs. 16.56 million, or 2.13% of our total income for the nine months ended December 31, 2007 and Rs. 7.28 million, or 1.06% of our total income for the Fiscal 2007. Our selling and distribution expenses for the nine months ended December 31, 2007 primarily constituted expenses on advertisement, publicity and sales promotions. General and Administrative Expenses. Our general and administrative expenses were Rs. 126.31 million, or 16.25% of our total income for the nine months ended December 31, 2007 and Rs. 78.53 million, or 11.43% of our total income for the Fiscal 2007. Our general and administrative expenses for the nine months ended December 31, 2007 primarily constituted expenses on rent, travelling and conveyance, communication cost and legal and professional fees. Decrease/(Increase) in Inventories. Our expense to (increase)/decrease in inventories were Rs. 1.36 million, or 0.17% of our total income for the nine months ended December 31, 2007 and Rs. (1.36) million, or 0.21% of our total income for the Fiscal 2007. Interest. Our interest expense on account of interest paid on taxes was Rs. 0.94 million, or 0.12% of our total income for the nine months ended December 31, 2007 and Rs. 0.04 million, or 0.01% of our total income for the Fiscal 2007. Miscellaneous Expenditure Written Off. Our miscellaneous expenditure written off was Rs. 1.11 million, or 0.14% of our total income, for the nine months ended December 31, 2007. We did not have any miscellaneous expenditure written off for the Fiscal 2007. Depreciation/Amortisation. Our depreciation and amortisation costs were Rs. 60.47 million, or 7.78% of our total income for the nine months ended December 31, 2007 and Rs. 32.90 million, or 4.79% of our total income for the Fiscal 2007.

291

Taxation. Our taxes were Rs. 22.99 million for the nine months ended December 31, 2007 and Rs. 24.98 million for the Fiscal 2007. Net Profit, as Restated. Our net profit, as restated was Rs. 330.68 million for the nine months ended December 31, 2007 and Rs. 410.50 million for the Fiscal 2007. Fiscal 2007 Compared to Fiscal 2006 Our results of operations for the Fiscal 2007 were particularly affected by the following factors: • • • Launch of various services for Spice Communications such as Select Caller List and Pay4me. Launch of BGM with Airtel in all circles and IVR and Mobile radio in four circles of Airtel. Overall growth in the telecom industry resulting in an increase in user base for existing and new services.

Income. Our total income increased by 106.71% to Rs. 686.80 million for the Fiscal 2007 from Rs. 332.26 million for the Fiscal 2006, primarily due to an increase in the value added services rendered to our carrier customers and sale of software solutions to our carrier customers. Operating Income. Our operating income increased by 103.66% to Rs. 661.78 million for the Fiscal 2007 from Rs. 324.95 million for the Fiscal 2006, primarily due to an increase in the members of our carrier customers (including Airtel), the launch of new products such as back ground music, voice chat, select caller list, mobile radio and collect call, the addition of new users in existing products and addition of enterprise customers. Other Income. Our other income increased by 242.27% to Rs. 25.02 million for the Fiscal 2007 from Rs. 7.31 million for the Fiscal 2006, primarily because of an increase in interest received on bank deposits. Expenditure. Our total expenditure increased by 154.26% to Rs. 236.99 million for the Fiscal 2007 from Rs. 93.21 million for the Fiscal 2006, primarily as a result of an increase in operating expenses, staff cost and general and administrative expenses as a result of the overall growth of our business and operations. Purchase of Goods for Sale. Our expenses on purchase of goods for sale were Rs. 3.38 million for the Fiscal 2007. We did not have any expenses on purchase of goods for sale for the Fiscal 2006 since we did not have any software sales with hardware during such period. Operating Expenses. Our operating expenses increased by 133.18% to Rs. 50.11 million for the Fiscal 2007 from Rs. 21.49 million for the Fiscal 2006, primarily as a result of growth of our business and change in product revenue mix. Staff Cost. Our staff cost increased by 131.72% to Rs. 66.11 million for the Fiscal 2007 from Rs. 28.53 million for the Fiscal 2006, primarily as a result of growth in our business, which required additional regional offices resulting in an increase in the number of employees from 95 to 265 and a normal increase in the salaries, bonuses and ex-gratia paid to our officers and employees. We also had a addition of employees due to the addition of our Subsidiary. Selling and Distribution Expenses. Our selling and distribution expenses increased by 51.98% to Rs. 7.28 million for the Fiscal 2007 from Rs. 4.79 million for the Fiscal 2006, primarily as a result of additional customers and due to promotions through contests and overall growth of our business General and Administrative Expenses. Our general and administrative expenses increased by 230.37% to Rs. 78.53 million for the Fiscal 2007 from Rs. 23.77 million for the Fiscal 2006, primarily as a result of and increase in rents due to addition of new offices, consequent increase in electricity and water, travelling and conveyance expenses due to increased geographical presence, expenses on site maintenance and increase in our communication expenses.

292

Decrease/(Increase) in Inventories. Our expense to (increase)/decrease in inventories increased to Rs. 1.36 million, or 0.20% of our total income for the Fiscal 2007. We had no inventories in Fiscal 2006. Interest. Our interest expenses increased by 300.00% to Rs. 0.04 million for the Fiscal 2007 from Rs. 0.01 million for the Fiscal 2006 since interest paid in Fiscal 2006 was for part of the year and interest paid in Fiscal 2007 was for a full year and also due to prepayment charges on early repayment of Car loan Miscellaneous Expenditure Written Off. Our miscellaneous expenditure written off was Rs. 0.03 million for the Fiscal 2006. We had no miscellaneous expenditure written off in Fiscal 2007. Depreciation/Amortisation. Our depreciation and amortisation costs increased by 125.50% to Rs. 32.90 million for the Fiscal 2007 from Rs. 14.59 million for the Fiscal 2006, due to addition of Rs. 117.20 million of fixed assets required for overall business growth, including hardware & software, and due to change in estimated useful life of the fixed assets. Taxation. Our provision for taxation increased by 20.35% to Rs. 24.98 million for Fiscal 2007 from Rs. 20.76 million for Fiscal 2006. The primary component of this increase was an increase in our current tax liability to Rs. 24.06 million in Fiscal 2007 from Rs. 20.03 million for Fiscal 2006 corresponding with an increase in its profit before tax. The Company’s effective tax rate calculated as provision for taxation divided by profit before taxation, for Fiscal 2007 was 5.55% as compared to its effective tax rate of 8.69% for Fiscal 2006. Net Profit, as Restated. Our net profit, as restated increased by 86.27% to Rs. 410.50 million for Fiscal 2007 from Rs. 220.38 million for Fiscal 2006. Fiscal 2006 Compared to the 15 months ended March 31, 2005 Our results of operations for the Fiscal 2006 were particularly affected by the following factors: • • • Launch of IVR and BGM in all existing circles of Idea. Launch of new services for Spice Communications such as BGM and CRBT. Launch of IVR services for BSNL/MTNL and another major carrier customer.

Income. Our total income was Rs. 332.26 million for the Fiscal 2006 and Rs. 271.77 million for the 15 months ended March 31, 2005. Operating Income. Our operating income was Rs. 324.95 million for the Fiscal 2006 and Rs. 268.28 million for the 15 months ended March 31, 2005. Our operating income primarily constituted income from rendering of services, which was 99.20% of our total operating income for Fiscal 2006 and 99.90% of our operating income for the 15 months ended March 31, 2005. Other Income. Our other income was Rs. 7.31 million for the Fiscal 2006 and Rs. 3.49 million for the 15 months ended March 31, 2005, and comprised 2.20% and 1.28% of our total income, respectively, for such periods. A majority of our other income in each of such periods was attributable to interest on bank deposits. Expenditure. Our total expenditure was Rs. 93.21 million, or 28.05% of our total income, for the Fiscal 2006 and Rs. 68.33 million, or 25.15% of our total income, for the 15 months ended March 31, 2005. Purchase of Goods for Sale. We did not incur any expenses on purchase of goods for sale in Fiscal 2006 and 15 months ended March 31, 2005. Operating Expenses. Our operating expenses were Rs. 21.49 million, or 6.47% of our total income, for the Fiscal 2006 and Rs. 23.45 million, or 8.63% of our total income, for the 15 months ended March 31, 2005. Our operating expenses for such period primarily constituted expenses on provisioning of content and roaming services. Staff Cost. Our staff cost was Rs. 28.53 million, or 8.59% of our total income, for the Fiscal 2006 and Rs. 20.15 million, or 7.41% of our total income, for the 15 months ended March 31, 2005. Our staff

293

cost increased in Fiscal 2006 as a result of an increase in the number of employees from 64 to 95 and a normal increase in the salaries, bonuses and ex-gratia paid to our officers and employees. Selling and Distribution Expenses. Our selling and distribution expenses were Rs. 4.79 million, or 1.44% of our total income, for the Fiscal 2006 and Rs. 5.15 million, or 1.90% of our total income, for the 15 months ended March 31, 2005. Our selling and distribution expenses were attributable to expenses on sales promotion and publicity during such period. General and Administrative Expenses. Our general and administrative expenses were Rs. 23.77 million, or 7.15% of our total income, for the Fiscal 2006 and Rs. 13.45 million, or 4.95% of our total income, for the 15 months ended March 31, 2005. General and administrative expenses for such periods constituted expenses on communication, rent, legal and professional fees and travelling and conveyance. Decrease/(Increase) in Inventories. We had no expense on inventories in Fiscal 2006 and the 15 months ended March 31, 2005. Interest. Our interest expenses was Rs. 0.01 million in Fiscal 2006 and Rs. 0.53 million for the 15 months ended March 31, 2005. Our interest expenses in Fiscal 2006 were attributable to interest paid on a car loan obtained by the Company and for the 15 months ended March 31, 2005 were attributable to interest on taxes due to delay in payment of advance tax. Miscellaneous Expenditure Written Off. Our miscellaneous expenditure written off was Rs. 0.03 million for the Fiscal 2006 and Rs. 0.06 million for the 15 months ended March 31, 2005. Depreciation/Amortisation. Our depreciation and amortisation costs were Rs. 14.59 million, or 4.39% of our total income, for the Fiscal 2006 and Rs. 5.54 million, or 2.04% of our total income, for the 15 months ended March 31, 2005. The increase in depreciation costs for the Fiscal 2006 as compared to for the 15 months ended March 31, 2005, was primarily due to Rs. 39.12 million of fixed assets, including hardware and software. Taxation. Our provision for taxation was Rs. 20.76 million, or 6.25% of our total income, for the Fiscal 2006 and Rs. 24.70 million, or 9.09% of our total income, for the 15 months ended March 31, 2005. Our effective tax rate, calculated as provision for taxation divided by profit before taxation, for the Fiscal 2006 was 8.69% as compared to 12.14% for the 15 months ended March 31, 2005. Net Profit, as Restated. Our net profit, as restated was Rs. 220.38 million, or 66.33% of our total income for the Fiscal 2006 and Rs. 180.44 million, or 66.39% of our total income, for the 15 months ended March 31, 2005. 15 months ended March 31, 2005 Compared to 12 months ended December 31, 2003 Our results of operations for the 15 months ended March 31, 2005 was particularly affected by the launch of IVR services for Idea, Spice Communications and Reliance. Income. Our total income was Rs. 271.77 million for the 15 months ended March 31, 2005 and Rs. 8.60 million for the 12 months ended December 31, 2003. Operating Income. Our operating income was Rs. 268.28 million for the 15 months ended March 31, 2005 and Rs. 8.54 million for the 12 months ended December 31, 2003. Our operating income for such period were attributable to income from rendering of services. Other Income. Our other income was Rs. 3.49 million for the 15 months ended March 31, 2005 and Rs. 0.06 million for the 12 months ended December 31, 2003, and comprised 1.28% and 0.69% of our total income, respectively, for such periods. A majority of our other income during such period was attributable to insurance comission and interest on bank deposits. Expenditure. Our total expenditure was Rs. 68.33 million, or 25.15% of our total income, for the 15 months ended March 31, 2005 and Rs. 4.32 million, or 50.23% of our total income, for the 12 months ended December 31, 2003.

294

Purchase of Goods for Sale. We did not incur any expenses on purchase of goods for sale for the 15 months ended March 31, 2005 and for the 12 months ended December 31, 2003. Operating Expenses. Our operating expenses were Rs. 23.45 million, or 8.63% of our total income, for the 15 months ended March 31, 2005 We had no operating expenses for the 12 months ended December 31, 2003 since we only started our business of value added services on January 1, 2004. Staff Cost. Our staff cost was Rs. 20.15 million, or 7.41% of our total income, for the 15 months ended March 31, 2005 and Rs. 0.59 million, or 6.87% of our total income, for the 12 months ended December 31, 2003. The increase in staff cost was as a result of an increase in the number of employees from 10 to 64 and a normal increase in the salaries, bonuses and ex-gratia paid to our officers and employees. Selling and Distribution Expenses. Our selling and distribution expenses were Rs. 5.15 million, or 1.90% of our total income, for the 15 months ended March 31, 2005 and Rs. 1.92 million, or 22.33% of our total income, for the 12 months ended December 31, 2003. Our selling and distribution expenses were attributable to expenses on sales promotion and marketing. General and Administrative Expenses. Our general and administrative expenses were Rs. 13.45 million, or 4.95% of our total income, for the 15 months ended March 31, 2005 and Rs. 1.17 million, or 13.60% of our total income, for the 12 months ended December 31, 2003. General and administrative expenses for 15 months ended March 31, 2005 constituted expenses on communication, travelling and conveyance, rent and legal and professional fees. We had minimal general and administrative expenses in the 12 months ended December 31, 2003 since our business was in the initial phase. Decrease/(Increase) in Inventories. We had no exoense on inventories for the 15 months ended March 31, 2005 and for the 12 months ended December 31, 2003. Interest. Our interest expense for the 15 months ended March 31, 2005 was Rs. 0.53 million, or 0.20% of our total income which were attributable to interest on taxes due to delay in payment of advanced tax. We did not have any interest expenses for the 12 months ended December 31, 2003. Miscellaneous Expenditure Written Off. Our miscellaneous expenditure written off was Rs. 0.06 million, or 0.02% of our total income, for the 15 months ended March 31, 2005 and Rs. 0.64 million, or 7.44% of our total income, for the 12 months ended December 31, 2003. Depreciation/Amortisation. Our depreciation and amortisation costs were Rs. 5.54 million, or 2.04% of our total income, for the 15 months ended March 31, 2005. We did not incur any depreciation and amortisation costs for the 12 months ended December 31, 2003 since we had no fixed assets. Taxation. Our provision for taxation was Rs. 24.70 million, or 9.09% of our total income, for the 15 months ended March 31, 2005 and Rs. 1.59 million, or 18.49% of our total income, for the 12 months ended December 31, 2003. Our effective tax rate, calculated as provision for taxation divided by profit before taxation, for the 15 months ended March 31, 2005 was 12.14% as compared to 37.22% for the 12 months ended December 31, 2003. The decrease in the effective rate of tax and provision for taxation for the 15 months ended March 31, 2005 compared to the 12 months ended December 31, 2003 is due to the availibilty of a tax exemption for our undertaking I at Parwanoo. Net Profit, as Restated. Our net profit, as restated was Rs. 180.44 million, or 66.39% of our total income for the 15 months ended March 31, 2005 and Rs. 2.81 million, or 32.67% of our total income, for the 12 months ended December 31, 2003. Financial Condition, Liquidity and Capital Resources Cash Flows The table below summarises our cash flows on a consolidated basis for the period indicated:
Nine Months ended December 31, 2007 For the Fiscal 2007 For the Fiscal 2006

295

Net Cash-Flow From/(Used In) Operating Activities………………………………. Net Cash-Flow From/(Used In) Investing Activities………………………………. Net Cash-Flow From/(Used In) Financing Activities………………………………… Net Increase/(Decrease) In Cash And Cash Equivalents……………………

Nine Months ended December 31, 2007 61.85 (91.47) (0.94) (30.56)

For the Fiscal 2007 239.80 (317.15) 206.25 128.90

For the Fiscal 2006 247.03 (250.17) 0.66 (2.48)

Cash in form of bank deposits, current account balances and cash on hand represents our cash and cash equivalents. Operating Activities. Net cash from operating activities was Rs. 61.85 million for the nine months ended December 31, 2007, and consisted of net profit before taxation, as restated of Rs. 354.09 million, as adjusted for a number of non-cash items, primarily depreciation and amortisation of Rs. 60.53 million, and other items, primarily interest income of Rs. 39.93 million, interest expense of Rs. 0.94 million, provision for doubtful debt of Rs. 11.66 million and changes in working capital, such as increases/(decreases) in sundry debtors, inventories, loans and advances, other current assets and increase in current liabilities and provisions of Rs. 105.89 million, Rs. (1.36) million, Rs. 217.82 million, Rs. 77.12 million and Rs. 107.11 million, respectively. Net cash from operating activities was Rs. 239.80 million for Fiscal 2007, and consisted of net profit before taxation, as restated of Rs. 433.79 million, as adjusted for a number of non-cash items, primarily depreciation and amortisation of Rs. 43.71 million, and other items, primarily interest income of Rs. 24.20 million, interest expense of Rs. 0.04 million, provision for doubtful debt of Rs. 8.10 million and changes in working capital, such as increases/(decreases) in sundry debtors, inventories, loans and advances, other current assets and increase in current liabilities and provisions of Rs. 224.51 million, Rs. 1.36 million, Rs. 15.56 million, Rs. 0.96 million and Rs. 72.79 million, respectively. Net cash from operating activities was Rs. 247.03 million for Fiscal 2006, and consisted of net profit before taxation, as restated of Rs. 241.52 million, as adjusted for a number of non-cash items, primarily depreciation and amortisation of Rs. 7.09 million, and other items, primarily interest income of Rs. 6.26 million, interest expense of Rs. 0.01 million, provision for doubtful debt of Rs. 2.24 million and changes in working capital, such as increases/(decreases) in sundry debtors, loans and advances, other current assets and increase in current liabilities and provisions of Rs. (18.87) million, Rs. 2.93 million, Rs. (1.18) million and Rs. 8.26 million, respectively. Investing Activities. Net cash used in investing activities was Rs. 91.47 million for the nine months ended December 31, 2007, primarily as a result of purchases of fixed assets of Rs. 244.35 million. Net cash used in investing activities was Rs. 317.15 million for Fiscal 2007, primarily as a result of purchases of fixed assets of Rs. 138.39 million and fixed deposits with banks of Rs. 498.19 million, partially offset by share application money received of Rs. 272.70 million. Net cash used in investing activities was Rs. 250.17 million for Fiscal 2006, primarily as a result of share application money paid to some of our group companies of Rs. 224.50 million and purchase of fixed assets of Rs. 48.46 million. Financing Activities. Net cash used in financing activities was Rs. 0.94 million for the nine months ended December 31, 2007, primarily as a result of interest paid on the additional interest demand by the income tax authorities of Rs. 0.94 million. Net cash generated from financing activities was Rs. 206.25 million for Fiscal 2007, primarily as a result of securities premium received of Rs. 645.23 million, proceeds from issuance of share capital of Rs. 25.71 million, partially offset by dividend paid of Rs. 456.33 million. Net cash generated from financing activities was Rs. 0.66 million for Fiscal 2006, primarily as a result of proceeds from borrowings of Rs. 0.67 million, partially offset by interest paid of Rs. 0.01 million.

296

Capital Expenditures During the nine months ended December 31, 2007, we spent Rs. 267 million on capital expenditure, primarily on computer hardware and software. During Fiscal 2008, we expect to spend approximately Rs. 480 million on capital expenditures, primarily on computer and hardware. We believe that we will have sufficient capital resources from our operations, net proceeds of this offering of equity shares and other financings from banks, financial institutions and other lenders to meet our capital requirements for at least the next 12 months. Our Investments We have an investment in our subsidiary, Mobisoc Technology Private Limited. Our total investment in our subsidiary was Rs. 100 million as of December 31, 2007. Transactions with Related Parties We have certain transactions with our Promoter Group Companies. For details, please refer to the section titled “Related Party Transactions” beginning on page 139. Off-Balance Sheet Arrangements All of our obligations are reflected on our balance sheet. Auditors Qualification Our Auditors in their report dated March 27, 2008 on the audited unconsolidated financial statements of the Company as of and for the nine month period ended December 31, 2007 included, as an Annexure, a statement on certain matters specified in the Companies (Auditor’s Report) Order, 2003, which was qualified to indicate that (i) fixed assets had not been physically verified by the management during the period and discrepancies therein, if any, as compared to book records were not ascertainable, and (ii) undisputed statutory dues have generally been regularly deposited with the appropriate authorities though there have been delays in some cases. Further, in this Annexure, without qualifying, the Auditors have drawn attention that in respect of sales of telecom related software, the same being of unique and specialised nature, comparison with market rates or with sales of similar products to other parties are not possible. The Auditor’s report dated September 28, 2007 on the audited unconsolidated financial statements of the Company as of and for the year ended March 31, 2007 included, as an Annexure, a statement on certain matters specified in the Companies (Auditor’s Report) Order, 2003, which was qualified to indicate that undisputed statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases. Further, in this Annexure, without qualifying, the Auditors have drawn attention that in respect of sales of certain software to a group company, the same being of unique and specialised nature, comparison with market rates or with sales of similar products to other parties are not possible. Our statutory auditors in their report dated June 26, 2008 on the audited consolidated financial statements of our Company as of and for the Fiscal 2007 was qualified to indicate that Mobisoc Technology Private Limited, one of our Subsdiaries had capitalized certain costs relating to development of software during the year ended March 31, 2007 for which technical feasibility and probable future economic benefits were yet to be established. As the auditors of the parent Company believed that such costs did not qualify for capitalization as per the guidance given under Accounting Standard 26 ‘Intangible Assets’ issued by the Institute of Chartered Accountants of India, the consolidated financial statements for the year ended March 31, 2007 were qualified to that extent. In addition, in the examination report dated June 26, 2008 on the Restated Unconsolidated Summary Statements and Restated Consolidated Summary Statements, the Auditors without qualifying, have drawn attention to the following items:

297

(i) the Company has adopted the revised AS 15 on ‘Employee Benefits’ issued by ICAI effective April 1 , 2007. Accordingly, the impact of the revised AS 15 has not been considered as an adjustment item for the purpose of the restatement of all the other years/ periods presented. (ii) the changes in estimates of useful lives of fixed assets effective April 1, 2006 and April 1, 2007 have not been considered as an adjustment item for the purpose of the restatement of all the other years/periods presented. (iii) the Company has adopted AS 11 on ‘The Effect of Changes in Foreign Exchange Rates’ notified under the Companies (Accounting Standard) Rules, 2006 effective April 1, 2007. Accordingly, the impact of revised AS 11 has not been considered as an adjustment item for the purpose of the restatement of all the other years/ periods presented. Quantitative and Qualitative Disclosure about Market Risk Inflation In recent years, India has experienced significant inflation and accordingly inflation may have material impact on our business and results of operations. Inflation in India was approximately 5.5%, 6.5%, 4.4%, 5.5% and 8.1% in Fiscal 2004, 2005, 2006, 2007 and May 2008, respectively, which has increased to 11.05% for the week ending June 5, 2008. Although GOI has initiated several economic measures to curb the rise in inflation rates, it is unclear at this stage whether these measures will have the desired effect. This rise in inflation rates in recent years may adversely affect growth in the Indian economy and our results of operations. Unusual or Infrequent Events or Transactions Except as described in this Draft Red Herring Prospectus, there have been no events or transactions to our knowledge which may be described as “unusual” or infrequent”. Known Trends or Uncertainties Other than as described in the sections titled “Risk Factors”, and this section and elsewhere in this Draft Red Herring Prospectus, to the best of our knowledge there are no known trends or uncertainties that have had, or are expected to have, a material adverse impact on our income from continuing operations. Total Turnover of Each Major Industry Segment We report industry segments under consolidated financial statements prepared in accordance with Indian GAAP. New Product or Business Segment Other than as described in the section “Business” beginning on page 54, to our knowledge, there are no new products or business segments. Seasonality of business Seasonal variations do not materially impact our results of operations. Dependence on a Single or Few Customers As described in the sections “Risk Factors” and “Business” beginning on pages x and 54 respectively, we depend on a few customers, for a substantial portion of our income. Competitive Conditions In view of the long-term concession or license agreements, subject to capacity augmentation requirements set forth in the concession agreements, we do not foresee any competition in our business during the term of these agreements. For further details, please refer to the discussions of our

298

competition in the sections titled “Risk Factors” and “Business” beginning on pages x and 54, respectively. Significant Developments after December 31, 2007 Except as stated in this Draft Red Herring Prospectus, to our knowledge, no circumstances have arisen since December 31, 2007, the date of the last financial statements included in the Draft Red Herring Prospectus, which materially and adversely affect, or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next twelve months. Except as stated above and elsewhere in this Draft Red Herring Prospectus, there are no subsequent developments after the date of the Auditor’s report which we believe are expected to have a material and adverse impact on our reserves, profits, earnings per share or book value. New Accounting Standards Our management believes that there would not be any material impact on our financial statements on account of changes in accounting policies under Indian Accounting Standards as announced by Institute of Chartered Accountants of India.

299

SECTION VI: LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS Except as disclosed in this section, there is no outstanding material litigation, suits, criminal or civil prosecutions, proceedings or tax liabilities against our Company, and there are no material defaults, non payment of statutory dues, over-dues to banks or financial institutions, defaults against banks or financial institutions, defaults in dues payable to holders of any debenture, bonds or fixed deposits or arrears of preference shares issued by our Company, defaults in creation of full security as per terms of issue/other liabilities, proceedings initiated for economic, civil or any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule XIII of the Companies Act) other than unclaimed liabilities of our Company and no disciplinary action has been taken by SEBI or any stock exchanges against our Company, its Subsidiaries, its Promoters or Directors, that may have a material adverse effect on our unconsolidated financial position, nor, so far as we are aware, are there any such proceedings pending or threatened. Neither our Company nor our Promoters, members of the Promoter Group, Subsidiaries and Directors have been declared as wilful defaulters by the RBI or any other Governmental authority and, there are no violations of securities laws committed by them in the past or pending against them, except as mentioned below. Show Cause Notices 1. Our Company received a notice (C.No. IV(16)STC/SCN/CELLEBRUM/37/SML/07/9307) dated August 3, 2007 from the Assistant Commissioner, Central Excise Division, stating that for the period 2006-2007 education cess, under section 73 of the Finance Act, 1994 was not mentioned separately while service tax was paid by our Company through TR-6 Challan. The said nonaccountal of payment in the proper head of education cess was treated as non-payment of education cess. The liability of our Company under the said notice is Rs. 489,940 with applicable interest and penal action for contravention of section 68 of the Finance Act, 1994. Our Company has filed a reply to the said notice dated August 29, 2007.

2.

Our Company received two notices (V(STC)15/CE/Adj/43/07/5077-79 and V(STC)15/CE/Adj/44/07/5080-82) dated October 24, 2007 from the Commissioner, Central Excise, Chandigarh. Our Company was alleged to have fraudulently suppressed the material fact of providing services of ‘Short Message Peer to Peer Messaging’ under the self assessment procedure under the service tax laws and procedures, with an intention to evade service tax. Since the facts and submissions made in relation to the two show cause notices were identical and our Company was the noticee in both, the two show cause notices were clubbed together. Our Company duly filed its reply. The Central Excise Commissioner passed an order (05-06/ST/CHD/2008) dated February 12, 2008 against our Company demanding: • • • Service tax of Rs. 15,576,854 under section 73 of the Finance Act, 1994 for the assessment year 2006-2007. Interest for delayed payment at the applicable rate under section 75 of the Finance Act, 1994. Penalty of Rs. 100 under Section 76 of the Finance Act, 1994 for every day for the period during which failure in payment continues. However, the total amount of this penalty should not exceed the amount of service tax and cess that our Company failed to pay; and Penalty of Rs. 1,000 under section 77 of the Finance Act, 1994.

Our Company had filed a stay application and an appeal dated May 13, 2008 before the Customs, Excise and Service Tax Appellate Tribunal, Delhi to set aside said order. The appeal is currently pending adjudication.

300

In eventuality of appeal, adjudicated against our Company, in addition to the amount aforementioned , the amount of Rs. 23,317,878 for nine months period ended on December 31, 2007 and Rs. 10,807,000/- for the period January 1, 2008 to May 31, 2008 shall also stand as contingent liability. Interest and penalty as aforementioned would also be applicable on this contingent liability. 3. Our Company received a notice (LO/Solan/Inspections/2007-1085) dated December 10, 2007 from the Labour Officer cum Additional Officer Inspector of Factories, Office of the Labour Officer, Solan district, Solan, Himachal Pradesh. It is alleged by the Labour Officer that during his inspectional visit to our Company’s Parwanoo unit, it was discovered that our Company is running a factory employing 165 direct workers and 26 contract labour and thus, our Company is in the alleged violation of the Factories Act, 1948 and the Himachal Pradesh Factories Rules, 1950, the Minimum Wages Act, 1948 and the Himachal Pradesh Rules, 1978 , the Payment of Wages Act, 1936 and the Himachal Pradesh Rules, 1979, the Payment of Gratuity Act, 1972 and Himachal Pradesh Rules, 1972, the Himachal Pradesh Industrial Establishments (National Festival, Casual and Sick Leave) Act, 1979, the Equal Remuneration Act, 1976, the Maternity Benefit Act, 1961, the Payment of Bonus Act, 1965 and the Contract Labour (R&A) Act, 1970 and the Himachal Pradesh Rules, 1974. Our Company has filed a reply dated December 31, 2007 to the Labour Officer cum Additional Officer Inspector of Factories. Three complaints (3/2008) dated May 17, 2008 under labour laws have been filed before the Judicial Magistrate, 1st Class, Kasauli, Solan, Himachal Pradesh against our Company, the Managing Director, the Factory Manager and the Senior Manager (Human Resources) of our Company. The three complaints further allege that our Company is in violation of the following legislations, respectively: • sections 7, 8 and 29 of the Contract Labour (Regulation and Abolition) Act, 1970 and rules 17, 74, 75, 76, 78 and 80(4) of the Contract Labour (Regulation and Abolition) Himachal Rules 1974 for non- maintenance of relevant registers and records and non-registration of the establishment; sections 3, 4, 13, 14, 26(3) and rules 4 to 5 and 18 of the Payment of Wages Act, 1936 and the Himachal Pradesh Payment of Wages Rules, 1979 for non-maintenance of relevant registers and records and non-fixation of wage periods and rates thereto; and sections 18 and 19 and rules 27, 28 and 30 of the Minimum Wages Act,1948 read with the Himachal Pradesh Minimum Wages (Amendment) Rules, 2006 for non-maintenance of relevant registers and records. It has also been alleged that despite a rectification notice (LO/Solan/Inspections/2007-108488) being sent to our Company by the Labour Officer, Solan for submitting a compliance report, our Company failed to do so and is hence liable for punishment under the abovementioned legislations. Further, under the said complaints the Labour Inspector also seeks permission to alter/amend in the said complaints, if and when necessary. The next date of hearing is fixed for July 18, 2008.

Litigation involving our Directors Mr. Dilip Modi, Managing Director 1. Three complaints (3/2008) under labour laws has been filed with the Judicial Magistrate First Class, Kasauli by the Himachal Pradesh state government through the Labour Inspector against our Company, the Managing Director, the Factory Manager and the Senior Manager Human Resource of our Company for non-compliance under:

301

sections 7, 8 and 29 of the Contract Labour (Regulation and Abolition) Act, 1970 and rules 17, 74, 75, 76, 78 and 80(4) of the Contract Labour (Regulation and Abolition) Himachal Rules 1974 for non- maintenance of relevant registers and records and non-registration of the establishment; sections 3, 4, 13, 14, 26(3) and rules 4 to 5 and 18 of the Payment of Wages Act, 1936 and the Himachal Pradesh Payment of Wages Rules, 1979 for non-maintenance of relevant registers and records and non-fixation of wage periods and rates thereto; and sections 18 and 19 and rules 27, 28 and 30 of the Minimum Wages Act,1948 read with the Himachal Pradesh Minimum Wages (Amendment) Rules, 2006 for non-maintenance of relevant registers and records. The next date of hearing is fixed for July 18, 2008.

Mr. K.N. Memani, Chairman Nil Mr. Vivek Bali Nil Mr. Hanif M Dahya Nil Mr. Andreas Vourloumis Nil Ms. Divya Modi Nil

Litigation involving our Subsidiaries

Mobisoc Technology Private Limited Nil Spice Mobiles VAS Pte. Limited Nil

Litigation involving our Promoters We have been intimated by the Company that there is no outstanding material litigation involving the Promoters, there are no suits or criminal prosecutions or civil proceedings involving the Promoters, and there are no material defaults, non-payment of statutory dues, over dues to banks/financial institutions or defaults against banks/financial institutions by the Promoters (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (i) of part 1 of Schedule XIII of the Companies Act), other than as disclosed in this section. Mr. Dilip Modi

302

For outstanding litigations against Mr. Dilip Modi, please see the section “Outstanding Litigation and Material Developments – Litigation involving our Directors” on page 301. Indian Televentures Private Limited Litigation against Indian Televentures Private Limited 1. Mohd Irfan Alamgir Mulla, Mohd Nasir Alamgir Mulla and Mohd Asim Alamgir Mulla (the “Plaintiffs”) have filed a suit (310/2007) for injunction and declaration in the Civil Court, Thane against Jauss Polymers Limited (“Jauss”), MCorpGlobal Private Limited, Indian Televentures Private Limited, Mr. Harish Chota Bhai Patel, the Talathi Saja Met, the Circle Officer, Wada Revenue Circle, the Tehsildar Wada, State of Maharashtra and Mrs. Safiyabibi Gulam Mohd Mulla, contending that they are the absolute owners in possession of the suit schedule property. It is contended that the Plaintiffs had executed a registered sale deed on September 29, 1995 in favour of Jauss for sale of land at Gram Panchayat Nara, Taluka Wada, Thane, Maharashtra (“Land”) for Rs. 3.5 million. Subsequently, Jauss executed a registered sale deed on March 24, 1998 in favour of Modifin Private Limited (“Modifin”) for the Land at Rs 3.5 million. Modifin further executed a registered sale deed on September 28, 1998 in favour of Modicorp Private Limited (“Modicorp”) for Land at Rs 3.67 million. Subsequently, MCorpGlobal Private Limited (since Modicorp merged with MCorpGlobal Private Limited) executed a registered sale deed on December 26, 2005 in favour of Indian Televentures Private Limited (“ITPL”) for the Land at Rs. 4 million. The contention of the Plaintiffs is that they had sold the Land to Jauss but had not handed over the possession of the same. They further contend that they have possession of the Land and are occupying, holding and cultivating the Land as owners of the same. Moreover, they have not sold the Land to Modicorp or to ITPL and sale deed dated December 26, 2005 between Modicorp and ITPL is illegal. The Civil Judge, Thane had issued a notice on May 3, 2007. Thereafter, Spice Corp and ITPL have filed their reply. The next date of hearing is June 27, 2008 for reply of the other parties. Litigation by Indian Televentures Private Limited Nil Omnia Investments Private Limited Litigation against Omnia Investments Private Limited Nil Litigation by Omnia Investments Private Limited Nil Litigation involving our Promoter Group Companies Ace Airways Private Limited Litigation against Ace Airways Private Limited Nil Litigation by Ace Airways Private Limited Nil

303

APL Holdings & Investments Limited Litigation against APL Holdings & Investments Limited 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed. The contempt proceeding in the matter filed against the defendant have been disposed of by the court against which an appeal (APO355/2007) has been preferred before the division bench of the Kolkata High Court. An application (112/2007) has been filed against the company by Dipak Himatsingka under sections 397, 398, 399, 402, 405 and 406 of the Companies Act before the Company Law Board, Principal Bench, New Delhi. The application is pending for hearing.

2.

Litigation by APL Holdings & Investments Limited Nil APL Investments Limited Litigation against APL Investments Limited 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed. An application (113/2007) has been filed against the company by Dipak Himatsingka under sections 397, 398, 399, 402, 405 and 406 of the Companies Act before the Company Law Board, Principal Bench, New Delhi. The application is pending for hearing.

2.

Litigation by APL Investments Limited Nil Assam Plywood Limited Litigation against Assam Plywood Limited 1. Dipak Himatsingka and others have filed a civil family partition suit suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed.

Litigation by Assam Plywood Limited Nil Budge Budge Carbon Limited Litigation against Budge Budge Carbon Limited 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed.

Litigation by Budge Budge Carbon Limited Nil

304

Burlington Investments Private Limited Litigation against Burlington Investments Private Limited 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed.

Litigation by Burlington Investments Private Limited Nil Duro International Rubber Private Limited Litigation against Duro International Rubber Private Limited Nil Litigation by Duro International Rubber Private Limited Nil Fund Flow Investment & Trading Co. Limited Litigation against Fund Flow Investment & Trading Co. Limited 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed.

Litigation by Fund Flow Investment & Trading Co. Limited Nil G.M. Modi Hospitals Corporation Private Limited Litigation against G.M. Modi Hospitals Corporation Private Limited Nil Litigation by G.M. Modi Hospitals Corporation Private Limited Nil Goneril Investment & Trading Company Limited Litigation against Goneril Investment & Trading Company Limited 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed.

Litigation by Goneril Investment & Trading Company Limited Nil Harjas Logic Systems Private Limited Litigation against Harjas Logic Systems Private Limited

305

Nil Litigation by Harjas Logic Systems Private Limited Nil Hindustan Retail Private Limited Litigation against Hindustan Retail Private Limited Nil Litigation by Hindustan Retail Private Limited Nil Hotspots Retails Limited Litigation against Hotspots Retails Limited 1. Nilabh Sharma has filed a complaint (938/2006) in the Consumer Forum against the company and Nokia India Private Limited. The complainant has alleged deficiency in service against the company and Nokia India Private Limited. The complainant has alleged that the power button of his handset, Nokia 6151 does not operate and the service centre of Nokia has failed to redress his grievance. The complainant was informed by the service centre of Nokia that his handset has been repaired but he refused to accept the repaired handset. The extent of claim is Rs. 41,120. The matter is pending adjudication. 2. Sushil Kumar Kabra Kumar has filed a complaint (1133/2007) in the Consumer Forum against the company, Motorola India Private Limited and Service Centre of Motorola. Sushil Kumar Kabra Kumar has alleged deficiency in service against the company, Motorola India Private Limited and Service Centre of Motorola. The complainant has alleged that his handset, Motorola L6 suffers from inherent manufacturing defect and the service centre of Motorola has failed to redress his grievance. The extent of claim is Rs. 167,500. The Consumer Forum reserved its order on April 3, 2008. The order will be conveyed to the parties by post. 3. Ashok Nigam has filed a complaint (1170/2007) in the Consumer Forum against the company, Nokia India Private Limited and Nokia Care. Ashok Nigam has alleged deficiency in service against the company, Nokia India Private Limited and Nokia Care. The complainant has alleged that his handset, Nokia 6270 has stopped reading the memory card and frequently gets switched off automatically. Further, the service centre of Nokia has failed to redress his grievance. The complainant has claimed replacement of the handset, refund of the cost thereof and compensation. The next date of hearing is July 18, 2008 for filing of written statement. 4. Santosh Paul has filed a complaint (815/2007) in the Consumer Forum against the company and Nokia India Private Limited. Santosh Paul has alleged deficiency in service against the company and Nokia India Private Limited. The complainant has alleged that his handset, Nokia 6708 has frozen on three occasions and the data was deleted in the process of repairing the handset. Further, the service centre of Nokia has failed to redress his grievance. The extent of claim is Rs. 34, 250 along with interest @ 12% on the cost of the handset. The Consumer Forum reserved its order on March 28, 2008. The order will be conveyed to the parties by post.

306

5.

Hariharnath Singh has filed a complaint (1176/2007) in the Consumer Forum against the company, FLY and FLY Service Centre. Hariharnath Singh has alleged deficiency in service against the company, FLY and FLY Service Centre. The complainant has alleged that his handset, FLY SX210 has a connectivity problem and the service centre for FLY failed to redress his grievance. The extent of claim is Rs.50, 900. The Consumer Forum reserved its order on April 28, 2008. The order will be conveyed to the parties by post.

6.

Madhuri has filed a complaint (993/2007) in the Consumer Forum against the company and Nokia India Private Limited. Madhuri has alleged deficiency in service against the company and Nokia India Private Limited. The complainant has alleged that her handset, Nokia 3230 suffers from inherent manufacturing defect and the service centre of Nokia has failed to redress her grievance. The extent of claim is Rs. 25, 000 and replacement of the handset. The matter is pending adjudication. Abhisekh Khanna has filed a complaint (1060/2007) in the Consumer Forum against the company and Salora International and Suri Telecom. Abhisekh Khanna has alleged deficiency in service against the company and Salora International and Suri Telecom. The complainant has alleged that his handset, Sony Ericsson J230I hanged and is not getting charged. Further, the service centre has failed to redress his grievance. The extent of claim is Rs.50, 000. The Consumer Forum passed its order on May 23, 2008 against the company and Salora International, to refund the cost of handset, i.e. Rs. 2,550, as well as pay Rs.1,000 as compensation and Rs. 500 as costs of litigation to the complainant. The said payment is pending on behalf of the company.

7.

8.

Manikant Jha has filed a complaint (165/2007) in the Consumer Forum against the company, LG Electronics India Private Limited, Digital Service Point and M.R. Telecom. Manikant Jha has alleged deficiency in service against the company and LG Electronics India Private Limited, Digital Service Point and M.R. Telecom. Manikant Jha alleges that his handset, LG S-5200 suffers from battery problem and the service centre of LG has failed to redress his grievance. The extent of claim is Rs. 58,100. The next date of hearing is July 3, 2008 for settlement by LG Electronics India Private Limited.

9.

Mritunjay Pal has filed a complaint (561/2007) in the Consumer Forum against the company and Nokia India Private Limited and Nokia Care. Mritunjay Pal has alleged deficiency in service against the company and Nokia India Private Limited and Nokia Care. The complainant has alleged that his handset, Nokia 6300 suffers from inherent manufacturing defect and the service centre of Nokia has failed to redress his grievance. The complainant has asked for compensation and replacement of his handset. The next date of hearing is August 11, 2008 for filing of written statement Raghuvir Singh has filed a complaint (235/2007) in the Consumer Forum against the company and Spice Limited and Selection Zone. Raghuvir Singh has alleged deficiency in service against the company and Spice Limited and Selection Zone. The complainant has alleged that the USB data Cable was not getting connected to the handset and the service centre of Spice has failed to redress his grievance. The Consumer Forum rejected the plea that the jack was damaged due to moisture and hence the warranty was void. The Consumer Forum directed to refund Rs. 350 along with some compensation which is not yet fixed. The extent of claim is Rs. 90, 000. The Consumer Forum passed an order on March 12, 2008 directing Spice Limited and the company to jointly and severally pay Rs. 350 alongwith interest @ 9% p.a. from the date of payment till the date of realization and compensation of Rs.3,000 to the complainant. The said payment is pending on behalf of the company. Paramjit Singh has filed a complaint (235/2007) in the Consumer Forum against the company and Spice Limited and Spice Service centre. Paramjit Singh has alleged deficiency in service against the company and Spice Limited and Spice Service centre. Paramjit Singh alleges that his handset, Spice 1000 suffers from shortcomings and defects which are not specified and the

10.

11.

307

service centre of Spice has failed to redress his grievance. The fact remains that the handset has been duly repaired and Paramjit Singh has refused to pick up the handset. The extent of claim is Rs. 1, 00,000 and issue of a fresh handset. The matter is pending adjudication. 12. Ankur Khanna has filed a complaint (1602/2007) in the Consumer Forum against the company and Nokia India Private Limited. Ankur Khanna has alleged deficiency in service against the company and Nokia India Private Limited. The complainant has alleged that his handset, Nokia N-70M suffers from poor access, poor incoming audio quality, bad transmission, flickering display, etc. and the service centre of Nokia has failed to redress his grievance. The matter has to come up for further proceedings on July 22, 2008. The extent of claim is Rs. 70,000 and refund of the cost of the handset. Subhash Chandra has filed a complaint (1461/2007) in the Consumer Forum against the company and Nokia India Private Limited. Subhash Chandra has alleged deficiency in service against the company and Nokia India Private Limited. The complainant has alleged that his handset, Nokia 3230 suffers from inherent manufacturing defect and the service centre of Nokia has failed to redress his grievance. Subhash Chandra has asked for compensation and replacement of the handset. The matter is to come up for further proceedings on July 22, 2008. Nirmal Chawla Bhalla has filed a complaint (1320/2007) in the Consumer Forum against the company and Nokia India Private Limited. Nirmal Chawla Bhalla has alleged deficiency in service against the company and Nokia India Private Limited. The complainant has alleged that his handset, Nokia 3110 has been in use prior to the purchase and the same has been confirmed by the service centre of Nokia India Private Limited. Further, the service centre of Nokia India Private Limited and the company has failed to redress his grievance. The extent of claim is refund of the cost along with 24% interest and Rs. 55,000. The next date of hearing is July 1, 2008 for final hearing. Mohamad Yusuf has filed a complaint (265/2007) in the District Consumer Forum against the company and HCL alleging deficiency in service. The complainant has alleged that the display on screen and back light on the keypad, Nokia N- 72 does not work and the service centre of Nokia has failed to redress his grievance. The complainant has claimed cost of the handset, i.e., Rs. 12,941, 24% interest p.a., Rs. 50,000 as compensation and Rs.500 litigation charges. The next date of hearing is July 2, 2008 for filing of the rejoinder by the complainant. S.M. Sana UL Haq has filed a complaint (76/2008) in the District Consumer Forum against the company and Sony Ericsson, alleging deficiency in service. The complainant has alleged that his Sony Ericsson W550i had ceased to function within the guarantee period and that the service centre of Sony Ericsson had failed to redress his grievance. The complainant has claimed replacement of the defective mobile handset, Rs. 100,000 with pending interest @18% p.a. as compensation for harassment and mental agony, Rs. 50,000 with interest @18% p.a, as compensation for damages and Rs.6,000 for litigation charges. The next date of hearing is July 16, 2008. Rajinder Singh has filed a complaint (107/2008) in the District Consumer Forum against the company, Nokia India Private Limited and Nokia Service Centre (Bright Point) alleging deficiency in service. The complainant has alleged that his handset, Nokia 6300 has been generating heat at the time of hearing and seeing video clips. Further, the service centre of Nokia has failed to redress his grievance and has given in writing that “this hand set is not repairable”. The complainant has claimed replacement of the handset. The company has duly filed its written statement. The next date of hearing is July 16, 2008 for filing of the written statement by Nokia India Private Limited -. Krishan Kumar has filed a complaint (61/2008) in the District Consumer Forum against the company, Nokia India Private Limited and Nokia Care alleging deficiency in service. The complainant has alleged that his handset, Nokia 6252 (Reliance) has vital defect wherein the phone did not have any incoming audio. Further, the service centre of Nokia has failed to redress his grievance. The complainant has claimed replacement with a new handset or the old handset properly repaired or Rs. 14,990, Rs. 5,000 as convenience charges, Rs. 200,000 as

13.

14.

15.

16.

17.

18.

308

compensation, Rs. 5,000 as litigation and Rs. 30,000 for deficiency in services. The next date of hearing is July 4, 2008 for filing of written statement. 19. Gurvinder Singh Kohli has filed a complaint (136/08) in the District Consumer Forum against the company, Nokia India Private Limited and Ace communication alleging deficiency in service. The complainant has alleged that his handset, Nokia N-72 has problems in network connectivity, display etc. and the service centre of Nokia has failed to redress his grievance. The complainant has claimed replacement with a new handset or return of cost of the handset (the billing price being Rs. 9,030), Rs. 50,000 as compensation and Rs. 5,500 as cost of legal notice. The next date of hearing is July 16, 2008 for filing of rejoinder by the complainant. Trinater Gupta has filed a complaint (CC/08/109 - Patiala) in the District Consumer Forum against the company alleging deficiency in service. The complainant has alleged that his headset, Nokia Bluetooth Headset BH - 700 was not functioning properly. The complainant has claimed refund of cost of the headset, i.e., Rs. 3,850 and Rs. 20,000 as compensation. The matter is pending adjudication. Rajesh Kumar has filed a complaint (CC/238/07) in the District Consumer Forum against the company, Nokia and Gulati Communication alleging deficiency in service. The complainant has alleged that his handset, Nokia 5300 was malfunctioning and it neither received calls nor enabled the complainant to make calls and that the service centre of Nokia has failed to redress her grievance. The complainant has claimed refund of the full sale amount, Rs. 8,350 with interest and Rs. 25,000 as compensation. The matter is pending adjudication. Vibhu Benal has filed a complaint (137/2008 - Chandigarh) in the District Consumer Forum against the company alleging deficiency in service. The complainant has alleged that his handset, Spice D - 80 has problem in display and networking etc. and that the service centre has failed to redress his grievance. The complainant has claimed Rs. 56,350 with interest from the date of purchase @ 12% p.a. The District Consumer Forum passed an orderagainst the company to replace the handset of the complainant or the cost of the handset, i.e., Rs. 6,350 along with interest @ 9% p.a. from the date of purchase of the handset, Rs. 5,000 as compensation and Rs. 1,500 as litigation cost. The company has filed a review petition against the above-mentioned order of the District Consumer Forum. The next date of hearing is July 14, 2008. . Deepak Kumar has filed a complaint (180/2008) in the District Consumer Forum against the company alleging deficiency in service. He has alleged that his handset, Spice S-808 creates hanging and speaker problem and the service centre of LG has failed to redress his grievance. The complainant has not mentioned the claimed amount. The matter is pending adjudication. Kusum Chattlani has filed a complaint (251/2008) in the District Consumer Forum against the company, Nokia and Nokia Care alleging deficiency in service. The complainant has alleged that her handset, Nokia N – 73 has not been functioning properly. Further, the service centre of Nokia has failed to redress her grievance. The complainant has claimed replacement of the handset and Rs. 50,000 as compensation and litigation costs. The next date of hearing is July 14, 2008 for filing of written statement. Attar Singh has filed a complaint in the District Consumer Forum, Gurgaon against the company, Sony Ericsson and Mobile Repair Centre alleging deficiency in service. The complainant has alleged that his handset, Sony Ericsson V580i has problems in switching of power on, and that the service centre of Sony Ericsson has failed to redress his grievance. The complainant has asked for replacement of the handset or refund of the cost with interest @ 24% p.a., as well as Rs. 10,000 as compensation and litigation charges. The next date of hearing is July 14, 2008 for further proceedings. Vishal Juneja has filed a complaint (137/2008 - Faridabad) in the District Consumer Forum against the company and Nokia Customer Care alleging deficiency in service. The complainant has alleged that the handset, Nokia 5200L is malfunctioning and fails to save any data, and has charging and other problems and that the service centre of Nokia has failed to redress his grievance. The complainant has claimed replacement of defected handset, Rs.

20.

21.

22.

23.

24.

25.

26.

309

4,500 as compensation and Rs. 3,100 as litigation expenses. The next date of hearing is July 8, 2008 for filing of written statement. 27. Gurdeep Singh has filed a complaint (CC/08/187) in the District Consumer Forum against the company and Spice Service Centre alleging deficiency in service. The complainant has alleged that the mobile set – Spice Dual GSM D-80, has problems in receiving signals, poor voice quality etc. and that the service centre of Spice has failed to redress his grievance. The complainant has claimed replacement of the defected handset or refund of the amount of Rs.6,750, Rs.50,000 as compensation and Rs. 11,000 as litigation expenses. The matter is pending adjudication. Satish Sharma has filed a complaint (CC/08/195 - Patiala) in the District Consumer Forum against the company and Nokia care alleging deficiency in service. Satish Singh alleges that his handset, Nokia N-95 suffers from some technical problem and the service centre of Nokia has failed to redress his grievance. The complainant has claimed replacement of the defected handset with fresh warranty, or refund of the purchase price of the handset, Rs. 31,019.41 along with interest @ @ 24% p.a. or Rs. 10,000 as compensation and Rs. 5,000 as litigation expenses. The matter is pending adjudication. Vimal Verma has filed a complaint (151/2008 - Noida) in the District Consumer Forum against the company, Motorola India Pvt. Ltd. and Kamal Communication alleging deficiency in service. The complainant has alleged that his handset, Motorola A -780 suffers from stopped working and the service centre has failed to redress his grievance. The complainant has claimed for Rs. 90,000 as compensation (comprising of Rs. 13,500 as handset costs, Rs. 20,000 as compensation for negligence, Rs. 20,000 as compensation for harassment and Rs. 8,000 as journey expenses). The matter is pending adjudication. Puneet K Bansal has filed a complaint (287/2008) in the District Consumer Forum against the company, Nokia India Private Limited and Nokia Care alleging deficiency in service. The complainant has alleged that his handset, Nokia N-95 suffers from display problem and defective sound system and that the service centre of Nokia has failed to redress his grievance. The complainant has claimed refund of cost of handset, Rs. 21,110 and Rs. 75,000 as compensation and litigation expenses. The next date of hearing is July 14, 2008 for filing of written statement. Siddnat Chatwal has filed a complaint (82/08) in the District Consumer Forum against the company and Nokia India Private Limited alleging deficiency in service. The complainant has alleged that his handset, Nokia N-91 suffers from stop working within three months and the service centre of Nokia has failed to redress his grievance. Siddant Chatwal has asked for compensation and replacement of the handset (compensation amount not mentioned). The matter is pending adjudication. Sanjeev Saxena has filed a complaint (324/2008) in the District Consumer Forum against the company. The company has only received summons in the said matter and a copy of the complaint was not received. The matter is pending adjudication. Gaurav Gupta has filed a complaint (353/07) in the District Consumer Forum against the company. The company has only received summons in the said matter and a copy of the complaint was not received. The matter is pending adjudication. Rajesh Kumar has filled a complaint (CC/238/08) in the District Consumer Forum against Nokia through the company. The company has only received summons in the said matter and a copy of the complaint was not received. The matter has to come up for further proceeding on July 7, 2008.

28.

29.

30.

31.

32.

33.

34.

Litigation by Hotspots Retails Limited 1. The company has filed a case (2309/2008) under section 138 of the N.I. Act against Raj Veer Iyyer for an amount of Rs.115,000. The next date of hearing is June 30, 2008 for presummoning arguments.

310

2.

The company has filed a case (2310/2008) under section 138 of the N.I. Act against Raj Veer Iyyer for an amount of Rs. 163,000. The next date of hearing is June 30, 2008 for presummoning arguments.

IO System Limited Litigation against IO System Limited 1. An appeal has been filed by the Department of Income Tax in the High Court, Allahabad by the CIT, Ghaziabad for expenses disallowed in the financial statements of the company with reference to the change of accounting policy for sale cum lease back transactions amounting to Rs 4,561,000 for the assessment year 1996-97. The appeal is pending for hearing at the Allahabad High Court. Mr. Devender Vatsal has filed a suit (159/2001) against the company in the court of Civil Judge (Senior Division), Chandigarh for recovery of an amount of Rs. 25,494. The contention of Mr. Devender Vatsal is that he has qualified in the General’s Club qualifiers list of Spice Systems Limited by achieving his target as Customer Engineer], together with interest thereon at the rate of 24% per annum amounting to Rs. 4,494. The case was dismissed on May 21, 2008. The order of court is yet to be received. Damani Shipping Private Limited had filed a summary suit (3807/1997) against the company in the High Court of Bombay under order 37 rule 2 of the CPC. The contention of Damani Shipping Private Limited was that the amount due to them on account of clearing and forwarding was not paid to them. The High Court of Bombay vide its order dated August 10, 2001 passed an ex-parte decree against the company, against which the company has filed an appeal in the High Court of Bombay. The claim is for Rs. Rs. 586,664. The appeal is pending and date of hearing is not yet finalized. Jaswinder Singh had filed a complaint (1238/2002) against the company before the District Consumer Disputes Redressal Forum. The contention of the complainant is that he had purchased a LCD projector from the company for Rs. 306,000 and the company was liable for deficiency in service to remove the alleged defect in the LCD projector. The company contented that the said complaint is not maintainable as the complainant is not a consumer as per Consumer Protection Act and is a company running a cinema hall. Further, the complainant has given two satisfaction letters for the services provided by the company. The District Consumer Disputes Redressal Forum dismissed the complaint. Aggrieved by the order of the District Forum, the complainant has appealed to the State Consumer Disputes Redressal Commission, Punjab at Chandigarh. The matter is fixed for arguments on July 10, 2008. The company has received a show-cause notice dated September 8, 1994 from the Zonal Joint Director of Foreign Trade, New Delhi for non-fulfillment of export obligations of Rs. 2,731,264 against advance license no. P/L/2309067 of cost, insurance and freight (“CIF”) value Rs. 2,008,256. The company is required to submit the prescribed documents within two months of to fulfill export obligations which were not filed by the company on time. In response to show-cause notices, the company has deposited some of the documents like duty entitlement exemption certificate books, advance licenses and some bank realization certificates. The rest of the documents and will be submitted at the time of the next date of hearing to be called by the Joint Director General Foreign Trade Office. The company has received a show-cause notice dated September 8, 1994 from the Zonal Joint Director of Foreign Trade, New Delhi for non-fulfillment of export obligations of Rs. 1,536,864 against advance license no. P/L/2309068 of cost, insurance and freight (“CIF”) value Rs. 1,057,472. The company is required to submit the prescribed documents within two months of to fulfill export obligations which were not filed by the company on time. In response to show-cause notices, the company has deposited some of the documents like duty entitlement exemption certificate books, advance licenses and some bank realization

2.

3.

4.

5.

6.

311

certificates. The rest of the documents and will be submitted at the time of the next date of hearing to be called by the Joint Director General Foreign Trade Office. 7. The company has received a show-cause notice dated December 12, 1994 from the Zonal Joint Director of Foreign Trade, New Delhi for non-fulfillment of export obligations of Rs. 7,223,360 against advance license no. P/L/2270704 of cost, insurance and freight (“CIF”) value Rs. 2,118,848. The company is required to submit the prescribed documents within two months of to fulfill export obligations which were not filed by the company on time. In response to show-cause notices, the company has deposited some of the documents like duty entitlement exemption certificate books, advance licenses and some bank realization certificates. The rest of the documents and will be submitted at the time of the next date of hearing to be called by the Joint Director General Foreign Trade Office. The company has received a show-cause notice dated March 30, 1995 from the Zonal Joint Director of Foreign Trade, New Delhi for non-fulfillment of export obligations of Rs. 743,375 against advance license no. P/L/3492181 of cost, insurance and freight (“CIF”) value Rs. 546,599. The company is required to submit the prescribed documents within two months of to fulfill export obligations which were not filed by the company on time. In response to show-cause notices, the company has deposited some of the documents like duty entitlement exemption certificate books, advance licenses and some bank realization certificates. The rest of the documents and will be submitted at the time of the next date of hearing to be called by the Joint Director General Foreign Trade Office. The company has received a show-cause notice dated May 13, 1996 from the Zonal Joint Director of Foreign Trade, New Delhi for non-fulfillment of export obligations of Rs. 2,344,999 against advance license no. P/L/0002573 of cost, insurance and freight (“CIF”) value Rs. 1,611,898. The company is required to submit the prescribed documents within two months of to fulfill export obligations which were not filed by the company on time. In response to show-cause notices, the company has deposited some of the documents like duty entitlement exemption certificate books, advance licenses and some bank realization certificates. The rest of the documents and will be submitted at the time of the next date of hearing to be called by the Joint Director General Foreign Trade Office. The company has received a show cause notice dated October 18, 2002 from the BSE on account of non-submission of quarterly results for the period ended March 31, 2002 and June 30, 2002 under the provisions of clause 41 of the Listing Agreement. The company has submitted its reply dated November 16, 2002. The company has received a show cause notice dated July 10, 2003 from the Delhi Stock Exchange on account of clarifications about the difference in the issued share capital and the listed share capital. The company has submitted its reply dated August 13, 2003. The company has received a show cause notice dated July 7, 2003 from the BSE on account of clarifications on the difference in the issued share capital and the listed share capital and dematerialisation of unlisted share capital. The company has submitted its reply dated August 13, 2003. The company has received a show cause notice dated January 15, 2007 from the BSE on account of non-compliance with Clauses 15 and 16 of the Listing Agreement. The company has submitted its reply dated January 24, 2007. The company has received a show cause notice dated January 17, 2007 from the BSE on account of non-submission of certificate under Clause 47(c) of the Listing Agreement. The company has submitted its reply dated February 2, 2007. The company has received a show cause notice dated May 11, 2007 from the BSE on account of non-compliance with the provisions of regulation 6(4) and/or 6(2) and/or 8(3) of the Takeover Code. The company has submitted its reply dated July 23, 2007.

8.

9.

10.

11.

12.

13.

14.

15.

312

16.

The company has received a show cause notice dated March 3, 2008 from the BSE on account of non-compliance with clause 40A of the Takeover Code and as a reminder of earlier letters dated March 21, 2007, August 24, 2007 and December 17, 2007. The company has submitted its reply dated March 15, 2008.

Litigation by IO System Limited 1. The company has filed a recovery suit (48/2000) before the Civil Judge, Tis Hazari Courts, Delhi for Rs. 201,650 against Mr. Gurpreet Singh Bedi & others for defaults in payment of outstanding principal amount of Rs.146,350 along with interest till the date of the filing of the suit and also to pay interest and damages @ 18% p.a. during the pendency of the suit till the recovery of the suit amount. The company has alleged that it supplied a lamination machine, model no. GBC 5400 LM (40”), to the defendants for an amount of Rs. 260,100 (inclusive of sales tax). Against the total amount due the company received an amount of Rs. 113,750 only. The next date of hearing is July 16, 2008. The company has filed a criminal complaint (1347/2001) before the Metropolitan Magistrate, Patiala House Courts, Delhi under sections 138, 141 and 142 of the N.I. Act read with section 200 of the Criminal Procedure Code, 1973 (“CRPC”) against Winsome Enterprises Private Limited and its managing director for dishonour of cheque. The company has alleged that it supplied certain goods to Winsome Enterprises Private Limited and against the said supply, Winsome Enterprises Private Limited through its managing director issued a cheque of Rs. 78,324 bearing No. 930321 in favour of the company which was dishonoured due to insufficiency of funds in the accounts of the accused persons. The Metropolitan Magistrate has issued summons to the accused. The next date of hearing is fixed for July 25, 2008. The company has filed a criminal complaint (4491/2002) before the Metropolitan Magistrate, Patiala House Courts, Delhi under sections 138 and 141 of the N.I. Act read with section 200 of the CRPC and section 420 of the IPC against Indigo Images Private Limited and others for dishonour of cheque. The company has alleged that it supplied certain goods to Indigo Images Private Limited and others and against the said supply, Indigo Images Private Limited, through its director issued five cheques bearing Nos. 310558 to 310562 for a total amount of Rs. 205,000 in favour of the company which were dishonoured due to insufficiency of funds in the bank account of the accused persons. The next date of hearing is fixed for July 25, 2008. The company has filed a criminal complaint (2493/2001) before the Metropolitan Magistrate, Patiala House Courts, Delhi under sections 138, 141 and 142 of the N.I. Act read with section 200 of the CRPC against Communication Media Products (India) Private Limited and its director for dishonour of cheque. The company has alleged that it supplied certain goods to Communication Media Products (India) Private Limited and against the supply of the said goods, Communication Media Products (India) Private Limited through its director, issued a cheque of Rs. 165,000 bearing No. 765521 in favour of the company which was dishonoured due to insufficiency of funds in the bank account of the accused persons. The case is pending before the Metropolitan Magistrate, who has issued summons to the accused. The next date of hearing is fixed for August 11, 2008. The company has filed a criminal complaint (647/2001) before the Metropolitan Magistrate, Patiala House Courts, Delhi under section 138 of the N.I. Act read with section 200 of the CRPC and section 420 of the IPC against Mr. Sanjeev Prasad, the area sales manager of the company. The company has alleged that it issued two drafts bearing Nos. 209542 and 209543 for an amount of Rs. 25,470 and Rs. 25,000, respectively, in the name of Mr. Sanjeev Prasad for the purpose of product launch and other promotional expenses. However, the cheques and the amounts thereunder were not utilized by the accused for the said purpose. After regular reminders, he issued a cheque bearing No. 437285 for an amount of Rs. 39,150 in favour of the company, which was dishonoured due to insufficiency of funds in his bank account. The case is pending before the Metropolitan Magistrate who has issued summons to the accused. The next date of hearing is fixed for November 7, 2008.

2.

3.

4.

5.

313

6.

The company has filed a criminal complaint (870/2001) before the Metropolitan Magistrate, Patiala House Courts, Delhi under section 138 of the N.I. Act read with section 200 of the CRPC and section 420 of the IPC against Parth Khakkas and others. The company has alleged that against the supply of certain goods by the company, Creative Papers through its proprietor issued a cheque bearing No. 739689 for an amount of Rs. 61,971.87 in favour of the company which was dishonoured due to insufficiency of funds in the bank account of the accused persons. The case is pending before the Metropolitan Magistrate who has issued summons to the accused. The next date of hearing is fixed for July 23, 2008.

7.

The company has filed a criminal complaint (8347/2001) before the Metropolitan Magistrate, Chennai under sections 138 and 141 of the N.I. Act against Mr. Umakanth, proprietor of Mega Lazers. The company has alleged that it supplied certain goods to Mega Lazers against invoice No. 259 dated July 28, 2000 and 261 dated July 29, 2000 against which Mega Lazers issued two cheques bearing nos. 185121 dated September 10, 2000 drawn at Punjab National Bank, Chennai for Rs. 410,000 and 949531 dated November 29, 2000 drawn at Standard Chartered Bank, Chennai for Rs. 86,743. The said cheques were duly presented by the company with its bankers but the same were dishonoured due to insufficiency of funds in the accounts of Mega Lazers. Despite the receipt of notice Mega Lazers failed to make the payment of the dishonoured cheques within the stipulated period of time. The next date for hearing was fixed for July 16, 2008.

8.

The company has filed a criminal complaint (3230/2007) before the Chief Judicial Magistrate, Noida filed under sections against 120-B, 418 and 420 of the IPC against Neopost and its directors for encashing a letter of credit worth Rs. 6,000,000 without sending the complete set of goods and fraudulently inducing the company not to sign any maintenance contract. The case is posted for summoning parties on July 10, 2008. A first appeal has been preferred by the company at the CIT (Appeals) Ghaziabad against the Assistant CIT, Noida for expenses disallowed in financial statements of the company for the assessment year 2003-04 in relation to bad debts amounting to Rs. 11,076,000, addition of Rs. 351,000 under section 43B of the I.T. Act, depreciation of Rs. 577,000 on demo machines, commission advertising of Rs. 3,486,000 and marketing expenses amounting to Rs. 1,334,000. The next date of hearing is fixed for July 9, 2008. A second appeal has been preferred by the company at the ITAT, New Delhi against the Assistant CIT, Noida for expenses disallowed in financial statements of the company for the assessment year 2004-05 in relation to depreciation of Rs. 464,000 on demo machines and commission amounting to Rs. 839,000. The date of hearing is yet to be finalised. The Department of Central Excise issued 35 show cause notices for recovery of differential amount of wholesale price and retail price for an aggregate amount of Rs. 4,139,612 pertaining to period from April 1992 to September 2000, out of which 25 notices have been dropped in favour of the company. The company filed two appeals against the Commissioner of Excise, Meerut before the Commissioner (Appeals), Meerut against six show cause notices in one appeal and against four show cause notices in second appeal. Both the appeals were dismissed vide common order both dated April 27, 2006 against which the company has filed two separate appeals before the CESTAT. The two appeals (2201/2006 and 2202/2006) are pending with the CESTAT, New Delhi, which has granted stay on August 1, 2006 on demand raised by the department. The next date of hearing is yet to be scheduled. The Department of Central Excise issued show cause notices for recovery of short paid duty (excise duty) on the additional amount arising on account of sale of the machines at higher prices for the period from July 1999 to September 2001.

9.

10.

11.

12.

314

The Deputy Commissioner, Central Excise, Noida decided the above said show cause notices against the company vide its order dated September 30, 2002 and demanded the duty amount of Rs. 54,969 and penalty of equal amount. On appeal filed by the company, the Commissioner Central Excise reduced the penalty amount to Rs. 15,000 while disposing off the appeal vide its order dated August 9, 2004 against which the company has filed an appeal before CESTAT. An appeal filed by the Company is pending with the CESTAT, New Delhi. The next date of hearing is yet to be fixed. 13. The Department of Central Excise issued show cause notices for recovery of short paid duty (excise duty) on the additional amount arising on account of sale of the machines at higher prices for the period from October 1, 2001 to March 31, 2002. The Deputy Commissioner, Central Excise, Noida decided the above said show cause notices against the company vide its order dated December 26, 2002 and demanded the duty amount of Rs. 14,427 with interest and penalty of equal amount. On appeal filed by the company, the Commissioner Central Excise reduced the penalty amount to Rs. 5,000 while disposing off the appeal vide its order dated August 9, 2004, against which the company has filed an appeal before CESTAT, New Delhi. The next date of hearing is yet to be fixed. 14. The company has preferred an appeal (1140/96-B) under the Central Excise and Salt Act, 1944 before the CEGAT, New Delhi along with a stay petition against the order of the Commissioner of Central Excise dated March 23, 1996. The company had been availing the benefit of exemption under Notification No.175/86 dated March 1, 1986 during the assessment year 1988-98 to 1990-91. The company used to sell goods to wholesalers as well as to retailers and was paying duty in respect of retail sales on the basis of the wholesale price declared by it in its price list filed with the department. The Department initiated proceedings against the company vide show cause notice (C.No. V(15) off/Adj/32/95/7797) dated April, 20 1995 wherein it was proposed to : (a) demand a sum of Rs. 892,500 as due for the period April 1, 1990 to November 27, 1990 invoking the extended time limit provisions on the ground that the company was not entitled to the benefit of exemption under Notification No.175/86 as the company was using the trade mark “GBC” on their products and that this trade mark ‘GBC’ belongs to General Binding Corporation of USA who were not eligible for the benefit of notification; The company has filed an appeal with CEGAT New Delhi alongwith stay petition against the Commissioner’s order. CEGAT has decided the stay application and ordered the company to deposit Rs. 700,000 in pursuance of stay order. The company has deposited the same on April 30, 1997. Hearing on appeal (1140/96-B) is awaited. (b) demand a sum of Rs.467,376 as due for the period April 1, 1991 to March 31, 1992 invoking the extended time limit provisions on the ground that the company had charged an amount of Rs.3,236,138 in excess of the price declared by the department. (c) impose penalty of Rs.150,000 for the alleged contravention of the Central Excise Rules, 1944. The Commissioner of Central Excise has passed the adjudication order dated March 23, 1996 and confirmed the demand made in the show cause notice and imposed a penalty of Rs.150,000. In appeal, the CEGAT ordered the company to deposit Rs. 0.7 milllion. The company has deposited the same on April 30, 1997. The hearing on appeal is awaited. 15. The company has preferred an appeal (C/605/95-B-2) against the Additional Collector of Customs. A show cause notice dated January 28, 1995 was issued against the company alleging that a paper shredder machine - model 926X imported by the company vide bill of entry 268219 dated September 27, 1994 is a consumer good requiring an import license and asked to show cause why the goods valued at Rs. 414,587 should not be confiscated under section 111 of the Customs Act, 1962 and penalty under section 112 of the Customs Act, 1962 should not be imposed. The Additional Collector of Customs imposed a redemption fine of Rs. 50,000 and a penalty of Rs. 25,000. On appeal by the company, the Commissioner of

315

Customs (Appeals) vide order-in-appeal (134-C/DLH/95) dated August 31, 1995 confirmed the same. The company has paid the said redemption fine and penalty and cleared the material from the Customs. However, the appeal is still pending with the CESTAT. 16. An appeal has been preferred by the company (S/49-273/98 TE) against the order-in-original (S/40-B-1078/90 VA) of the Assistant Commissioner of Customs, VA, NCH, Mumbai dated February 27, 1998. As per the conditions of an end use bond, the company was required to file a consumption certificate for imported goods. The said certififcate was submitted, but the department has not accepted the same and passed an order for recovery of Rs. 67,000. The appeal by the company was decided by the Commissioner (Appeals), who set aside the impugned order-in-original and remanded the matter back to the lower authority for deciding the matter in de-novo proceedings. An appeal (S/49-110/98 LIC) has been preferred by the company against against the order of the Additional Commissioner of Customs, Mumbai (S/10-45/98 2B(I)) dated May 15, 1998. The company imported plastic binding strips under customs tariff heading 3920.42 as plastic strips which are freely importable under the export-import (“EXIM”) policy. On examination by the department, it was noticed that the said plastic strips were molded plastic articles and were not in regular geometric shapes of a square or a rectangle in order to merit classification under customs tariff heading 3920.42 as a ‘strip’ and thus, the department wanted to classify the same under EXIM Code No. 392690 09 90 the import of which is restricted in terms of the Indian Trade Classification (Harmonized System) classification. The department asked for specific import license for the clearance of goods and accordingly allowed the goods to be redeemed on payment of fine of Rs. 50,000 and penalty of Rs. 10,000 for import without license. The redemption fine and penalty were paid, however, the appeal is still pending. An appeal (SCN No. F.No. S/26-Misc-459/98-4) has been preferred by the company against the order of the Assistant Commissioner of Customs dated November 17, 1998. A notice was served on the company asking why imported goods, which are classified as restricted items under customs tariff heading 8308.90 and require a specific import license should not be confiscated under section 111(d) of the Customs Act, 1962 and penal action under section 112 of the Customs Act, 1962 should not be taken . The appeal is still pending. A first appeal has been preferred by the company before the Joint Commissioner of Trade Tax, Noida for a dispute arising on the amount of taxes due, whereby a claim of Rs. 151,436, as compared to an amount of Rs. 34,900 being paid, for the assessment year 1997-1998. A first appeal has been preferred by the company before the Joint Commissioner of Trade Tax, Noida for a dispute arising out of a claim of Rs. 45,254 for the assessment year 19981999. An appeal has been preferred by the company before the Tribunal of Tax, Noida for a dispute arising out of a claim of Rs. 1,151,438 for the assessment year 2000-2001. An appeal has been preferred by the company before the Tribunal of Tax, Noida for a dispute arising on the amount of taxes due, whereby a claim of Rs. 6,887,262 has been made against an amount of Rs. 237,684 being paid, for the assessment year 2001-2002. An appeal has been preferred by the company before the Tribunal of Tax, Noida for a dispute arising on the amount of taxes due, whereby a claim of Rs. 6,665,954 has been made against an amount of Rs. 1,041,158 being paid for the assessment year 2002-2003. A first appeal has been preferred by the company before the Joint Commissioner of Trade Tax, Noida for a dispute arising on the amount of taxes due, whereby a claim of Rs. 622,657 has been made against an amount of Rs. 155,665 being paid for the assessment year 20032004. A first appeal has been preferred by the company before the Joint Commissioner of Trade Tax, Delhi for a dispute arising on the amount of taxes due, whereby a claim of Rs. 516,329

17.

18.

19.

20.

21.

22.

23.

24.

25.

316

has been made against an amount of Rs. 174,689 being paid for the assessment year 19981999. 26. A first appeal has been preferred by the company before the Joint Commissioner of Trade Tax, Delhi for a dispute arising on the amount of taxes due, whereby a claim of Rs. 643,840 has been made against an amount of Rs. 293,000 being paid, for the assessment year 19992000. A first appeal has been preferred by the company before the Assistant Commissioner IX, Delhi for a dispute arising on the amount of taxes due, whereby a claim of Rs. 198,506 has been made against an amount of Rs. 126,717 being paid for the assessment year 2000-2001. A first appeal has been preferred by the company before the Additional Commissioner II, Delhi for a dispute arising on the amount of taxes due, whereby a claim of Rs. 2,628,528 has been made against an amount of Rs. 110,000 being paid for the assessment year 2001-2002. A first appeal has been preferred by the company before the Deputy Commissioner (Appeal IV), Delhi for a dispute arising on the amount of taxes due, whereby a claim of Rs. 350,535 has been made against an amount of Rs. 221,300 being paid, for the assessment year 2002-03. A first appeal has been preferred by the company before the Additional Commissioner, Delhi for a dispute arising on the amount of taxes due, whereby a claim of Rs. 2,261,574 has been made against an amount of Rs. 396,000 being paid for the assessment year 2003-04. An application has has been filed by the company for rectification of order dated March, 23 2006 passed by the Sales Tax Officer Ward 92, Delhipertaining to a dispute arising on the amount of taxes due, whereby a claim of Rs. 230,073 has been raised in the assessment year 2004-2005. The said application is pending and the rectified order pursuant to the same is awaited. A first appeal has been preferred by the company before the Appellate Additional Commissioner CT III, Tamil Nadu for a dispute arising on the amount of taxes due, whereby a claim of Rs. 328,621 has been made against an amount of Rs. 143,772 being paid, for the assessment year 2000-01. A first appeal has been preferred by the company before the Appellate Additional Commissioner CT III, Tamil Nadu for a dispute arising on the amount of taxes due, whereby a claim of Rs. 289,271, has been made against an amount of Rs. 149,160 being paid, for the assessment year 2002-03. A first appeal has been preferred by the company before the Deputy Commissioner CTT 13, Karnataka for a dispute arising on the amount of taxes due, whereby a claim of Rs. 395,894 has been raised in the assessment year 2001-02. A first appeal has been preferred by the company before the Assistant Commissioner South Circle, Directorate of Commercial Taxes, West Bengal for a dispute arising on the amount of taxes due, whereby a claim of Rs. 288,098 has been raised in the assessment year 1999-2000. A first appeal has been preferred by the company before the Assistant Commissioner South Circle, Directorate of Commercial Taxes, West Bengal for a dispute arising on the amount of taxes due, whereby a claim of Rs. 1,016,606 has been made against an amount of Rs. 5,500 the assessment year 2000-01. A first appeal has been preferred by the company before the Assistant Commissioner South Circle, Directorate of Commercial Taxes, West Bengal for a dispute arising on the amount of taxes due, whereby a claim of Rs. 90,650 has been raised in the assessment year 2002-03.

27.

28.

29.

30.

31.

32.

33.

34.

35.

36.

37.

Jyotsana Investment Company Limited Litigation against Jyotsana Investment Company Limited

317

1.

Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed. The Deputy Commissioner of Income Tax has initiated prosecution proceedings (Ref. No. DCIT(P)/J-13/2000-01/609) against the company under section 276B/278B of the I.T. Act for failure to timely deposit tax deducted at source with the Central Government for the assessment year 1976-77 to 1983-84. Pursuant to order no. DC, Cir-5(4)/CQ-4126/ Cal./200001/664 dated February 7, 2001 passed by Deputy Commissioner of Income Tax, Kolkata, the company has deposited an amount of Rs. 396,943 on April 6, 2001 as composition fees and establishment expenses. Accordingly, the company has requested several times for withdrawal of the prosecution proceedings. The official communication regarding withdrawal of the prosecution proceedings is yet to be received.

2.

Litigation by Jyotsana Investment Company Limited 1. Jyotsana Investment Company Limited has filed an eviction suit (196/1999) against Dipak Kumar Himatsingka in Kolkata High Court for eviction of premises being flat no. 9A at 46C, 9th Floor, Chowringee Road, Kolkatta, given to defendant on lease. The suit is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed. Jyotsana Investment Company Limited has preferred an appeal (1445/CIT (Appeals) – XXXVI/Wd 55(1)/CQ-4126/01-02) before the CIT (Appeals) XXXVI Kolkata, against the assessment order dated March 29, 2001 passed by Deputy Commissioner, Income Tax, Circle 5 (4)/Cal for the assessment year 1998-99 making disallowance of certain miscellaneous expenses amounting to Rs. 260,384. The appeal is pending before CIT (Appeals) XXXVI, Kolkata. The next date of hearing is yet to be fixed.

2.

Kallol Investments Limited Litigation against Kallol Investments Limited 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed.

Litigation by Kallol Investments Limited Nil Khatu Investment and Trading Company Litigation against Khatu Investment and Trading Company 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed. Litigation by Khatu Investment and Trading Company Nil Mcorpglobal Communications Private Limited Litigation against Mcorpglobal Communications Private Limited Nil Litigation by Mcorpglobal Communications Private Limited

318

Nil Mcorp Communications Pte.Limited Litigation against Mcorp Communications Pte.Limited Nil Litigation against Mcorp Communications Pte.Limited Nil Mcorp Investments Pte.Limited Litigation against Mcorp Investments Pte.Limited Nil Litigation by Mcorp Investments Pte.Limited Nil Modikem Limited Litigation against Modikem Limited Nil Litigation by Modikem Limited Nil Mudaliar & Sons Hotels Private Limited Litigation against Mudaliar & Sons Hotels Private Limited Nil Litigation by Mudaliar & Sons Hotels Private Limited Nil New Look Investment (Bengal) Limited Litigation against New Look Investment (Bengal) Limited 1. Dipak Himatsingka and others have filed a civil family partition suit (450/1998) in the Kolkata High Court against the defendants, one of which is the company. The matter is pending before Kolkata High Court for adjudication. The next date of hearing is yet to be fixed.

Litigation by New Look Investment (Bengal) Limited Nil Nik Travels Private Limited Litigation against Nik Travels Private Limited Nil

319

Litigation by Nik Travels Private Limited Nil Oasis Cineplex Private Limited Litigation against Oasis Cineplex Private Limited Nil Litigation by Oasis Cineplex Private Limited Nil Omnia BPO Services Limited Litigation against Omnia BPO Services Limited 1. A criminal case (No. 141/2007) was filed by the labour department against the company before the Chief Judicial Magistrate, Ropar, under sections 23 and 24 of the Contract Labour (Regulation & Abolition) Act, 1970 read with the Central Rules, 1971 for alleged noncompliance of the above sections. The next date of hearing is July 16, 2008. The company has also been served with a notice as a witness to testify that an employee who met with an accident was working with the company, in the court of Ms. Sukhvinder Kaur, Judge, MACT, Room No. 3, Patiala House Courts, New Delhi. The proceedings are to decide upon the compensation to be paid in the accident case. Next date of hearing is fixed for September 24, 2008. Deepak Ahluwalia has filed a suit (737/2007) against the company for vacation of premises in the court of Shri Satish Kumar Arora, Civil Judge, Tis Hazari Courts, Delhi. The company’s contention is that the lease agreement for the premises was to be renewed for a further term of three years on mutually agreed terms/with enhancement of rentals specified in lease agreement, which the company offered. However, the landlords were asking for exorbitant rents. The next date of hearing is August 7, 2008. Shanti Swaroop Goyal has filed a suit (587/2007) against the company for vacation of premises in the court of Shri Gaurav Rao, Civil Judge, Tis Hazari Courts, Delhi. The company’s contention is that the lease agreement for the premises was to be renewed for a further term of three years on mutually agreed terms/with enhancement of rentals specified in lease agreement, which the company offered. However, the landlords were asking for exorbitant rents. The next date of hearing is July 30, 2008. Mr. Kulbhushan Sood has filed a civil suit (160/2008) in the Court of Mr. Manoj Jain, Additional District Judge, Tis Hazari Courts, Delhi for recovery of possession and mesne profits/damages in respect of premises bearing no. 615 at Vishal Tower, District Centre, Janak Puri, New Delhi, on account of expiration of the lease for the said premises on August 9, 2007. The company’s contention is that the lease agreement for the premises was to be renewed for a further term of three years on mutually agreed terms/with enhancement of rentals specified in lease agreement, which the company offered. However, the landlords were asking for exorbitant rents. The next date of hearing is fixed for July 18, 2008. Mr. Kulbhushan Sood has filed a civil suit (161/2008) in the Court of Mr. Manoj Jain, Additional District Judge, Tis Hazari Courts, Delhi for recovery of possession and mesne profits/damages in respect of premises bearing no. 612 at Vishal Tower, District Centre, Janak Puri, New Delhi, on account of expiration of the lease for the said premises on August 9, 2007. The company’s contention is that the lease agreement for the premises was to be renewed for a further term of three years on mutually agreed terms/with enhancement of rentals specified in lease agreement, which the company offered. However, the landlords were asking for exorbitant rents. The next date of hearing is fixed for July 18, 2008.

2.

3.

4.

5.

6.

320

Litigation by Omnia BPO Services Limited Nil Plus Paper Foodpac Limited Litigation against Plus Paper Foodpac Limited Nil Litigation by Plus Paper Foodpac Limited 1. Plus Paper Foodpac Limited filed an appeal (1015/2005) against the assessment order passed by the Assessing Officer, for the assessment year 1996-1997, adding Rs. 1,675,541 to the total income of the company. The appeal was dismissed by the CIT(Appeals). However, the CIT(Appeals) allowed the appeal of the company against which the CIT, Mumbai filed an appeal before the Bombay High Court for a sum of Rs. 1,041,846. The matter is currently pending and the next date of hearing has not been fixed.

Shenzhen SIBASI Catering Management Compnay Limited Litigation against Shenzhen SIBASI Catering Management Company Limited Nil Litigation by Shenhzen SIBASI Catering Management Company Limited Nil Spice Communications Limited Litigation against Spice Communications Limited Litigations through Cellular Operators Association of India involving Spice Communications Limited 1. BSNL has filed an appeal against TRAI and COAI and others (1/2006) before the TDSAT challenging TRAI’s IUC Regulation of October 29, 2003 prescribing a charge of 20p/minute for calls handed over by CMSPs to BSNL at Level II TAX, on the ground that it is contrary to the principles of work done and TRAI has no jurisdiction to frame such regulations that override the terms and conditions of interconnect agreement between the service providers. The appeal is presently pending adjudication. BSNL has filed an appeal against TRAI and COAI and others (8/2006) before the TDSAT seeking the quashing of impugned communication of TRAI dated May 17, 2006 pertaining to carriage charges collectible by BSNL from private cellular operators and for stay of operation of the said communication. The appeal is presently pending adjudication. BSNL has filed an appeal before the TDSAT (4/2007) against TRAI, COAI and others challenging TRAI’s Port Charges Regulation issued on February 2, 2007 on the grounds that TRAI does not have the jurisdiction to amend the interconnect agreements, which have been mutually agreed between the operators, and further, that TRAI has not taken into account all costs while determining the port charges. The matter is presently pending adjudication. BSNL has filed an appeal against COAI and others before the Supreme Court of India (1676/2006) challenging the directions of the TDSAT in the judgment given in petition no. 48/2004 dated November 11, 2005 on the primary ground that the TRAI has no jurisdiction to modify or override any of the term or condition of the interconnection agreement between the parties as laid down in earlier judgments of the TDSAT dated April 27, 2005 in appeal no.

2.

3.

4.

321

11/2002 and judgment dated May 3, 2005 in appeal no. 31/2003. The appeal is presently pending adjudication. 5. BSNL has filed an appeal against COAI and others before the Supreme Court of India (5546/2004) challenging the order of the TDSAT dated March 29, 2004 on a petition (10/2003) filed by COAI and others against DoT and others in which they had sought credit of 5% of revenues (for the period from January 8, 2001 to January 31, 2002) that were allowed to be retained by the cellular operators vide TRAI’s interconnection determination dated January 8, 2001. The TDSAT in its order dated March 29, 2004 had allowed the said petition and directed BSNL and MTNL to implement the TRAI recommendations dated January 8, 2001 allowing the petitioners to retain the 5% of their passed through revenue paid to them for calls made by the petitioners w.e.f. January 25, 2001 and both BSNL and MTNL shall refund/adjust all the excess amounts received from the petitioners towards the 5% of their passed through revenues w.e.f. January 25, 2001 up to January 31, 2002. On January 3, 2005 COAI has filed its reply to the BSNL appeal and the Supreme Court has ordered BSNL to adjust the amount to the respondents subject to respondents giving a bank guarantee of the refunded amount to BSNL. The appeal is presently pending adjudication. MTNL has filed an appeal against COAI and others before the Supreme Court of India (6969/2004). In this appeal, MTNL has challenged the order of the TDSAT dated March 29, 2004 on a petition (10/2003) filed by COAI and others against DoT and others in which they had sought credit of 5% of revenues (for the period from January 8, 2001 to January 31, 2002) that were allowed to be retained by the cellular operators vide TRAI’s interconnection determination dated January 8, 2001. TDSAT in its order dated March 29, 2004 had allowed the said petition and directed BSNL and MTNL to implement the TRAI recommendations dated January 8, 2001 allowing the petitioners to retain the 5% of their passed through revenue paid to them for calls made by the petitioners w.e.f. January 25, 2001 and both BSNL and MTNL shall refund/adjust all the excess amounts received from the petitioners towards the 5% of their passed through revenues w.e.f. January 25, 2001 up to January 31, 2002. On January 3, 2005 COAI has filed its reply to the MTNL appeal and the Supreme Court has ordered MTNL to adjust the amount to the respondents subject to respondents giving a bank guarantee of the refunded amount to MTNL. The appeal is presently pending adjudication.

6.

Litigations against Spice Communications Limited in Punjab Circle 7. A criminal complaint (324/1998) under section 420 of the IPC has been filed by Sukhjit Singh Chandi in the Court of Judicial Magistrate First Class, Chandigarh against the company alleging misrepresentation and suppression of material facts as the complainant had purchased a mobile Subscriber Identity Module (“SIM”) card from a dealer of the company under a scheme floated by the company and the SIM card got locked and was unable for future usage and thus, the complainant has alleged that the SIM card was projected by the company as similar in quality to the other marketed cards if not of a better quality, whereas they are of an inferior quality. The matter is presently pending before the court. A complaint (200 T/2003) has been filed by Municipal Commissioner, Mandi Gobindgarh in the Court of Sub-Divisional Judicial Magistrate, Amloh, Fatehgarh Sahib, Punjab against the company and other alleging violations of provisions under sections 195, 195-A, 220 and other provisions of the Punjab Municipal Act, 1911 in relation to construction and installation of transmission tower. The stand taken by the company in an application filed in the court is that the complaint is not maintainable as offences under sections 195, 195A and 220 of Punjab Municipal Act, 1911 are compoundable offences and transmission tower has been installed as per the policy of the government of Punjab. However, the said application has been dismissed. The matter is presently pending before the court. Pritam Kaur has filed a complaint under section 133 of the CRPC before the Sub-Divisional Magistrate, Jalandhar against the company and others, restraining it from installing the cell phone tower at 85, Modern Market, adjoining Babu Labh Singh Trust, Jalandhar and praying that the respondents be further restrained from using the cell phone tower and directed to remove the so made construction of the cell phone tower, as it shall cause nuisance to the petitioners, as well as to the occupiers of the neighbourhood and it shall also cause nuisance

8.

9.

322

to the general public, which shall also cause number of health problems. The matter is presently pending. 10. Gurdarshan Singh and others have filed a complaint under section 133 of the CRPC before the Sub Divisional Magistrate Faridkot, against the company and others restraining it from installing the cell phone tower at the shop of Ravinder Kumar c/o Dadsons near Clock Tower, Faridkot and further praying that the same is injurious to public health and would also endanger the existence of adjoining buildings and destroy the grace of Clock Tower, its existence etc. and it would also cause discomfort and health hazards and such trade activity should be removed to some other place. The court has ordered stay on the installation of the tower. The matter is presently pending. Kewal Krishan has filed a complaint under section 133 of the CRPC before Sub Divisional Magistrate, Zira, against the company and others seeking to restrain them from installing a cell phone tower at Kehr Mohalla, Ward No:5, Zira. The matter is presently pending. 31 consumer cases are pending against the company. The issues involved in these cases include deficiency of services, excess bill amount, refunds, rectification of bills, disconnection due to non-verification, compensation for damages, unwanted promotional calls, and mental agony. The contingent liability with regard to the pending consumer cases is approximately Rs. 2,993,814. 16 consumer appeals, both by and against the company, are pending in the State Consumer Commission at Chandigarh. The contingent liability with regard to the pending consumer commission cases (Appeals) is approximately Rs. 1,096,400. One appeal is pending against the company in the National Consumer Commission at Delhi. The contingent liability (based on the prayer by the complainant) involved is Rs. 276,000 with 18% p.a. interest as well as Rs. 6,000 per month for damages and compensation. A civil suit (35/2005) has been filed by Charanjit Singh before the Additional Civil Judge (Senior Division) Garhshankar against the company praying for permanent injunction for restraining it from disbursing/paying Rs. 68,000 as licence fees for the period from August 4, 2003 to January 4, 2005 at the rate of Rs. 4,000 per month for the use and occupation of the site admeasuring 12 Marlas out of 3 Kanals 8 Marlas bearing Khasra no. 168/335, Khasra No. 6/16 (3-8) situated in the area of village Sekhowal H.B. No. 493 to any other person except the co-owners recorded in farad jamabandi 2001-2002 without the consent of the plaintiff. The plaintiff has also prayed for mandatory injunction for directing the company to pay the licence fee allegedly due to the plaintiff and other co-sharer as per their share. The company has filed the written statement. The matter is presently pending before the court. A civil suit (1631/2006) has been filed by M/s. Super Scientific Works Private Limited before the Additional Civil Judge (Senior Division), Kharar praying for declaration that the plaintiff is the owner/subscriber of the mobile phone connection bearing no. 98140 08241 issued by the company and for consequential relief of mandatory injunction directing the company to transfer the said mobile connection in the name of the plaintiff or its nominee. The matter is presently pending adjudication. A civil suit (1376/A/2006) has been filed by Hatish Kataria against the company and others before the Additional Civil Judge (Senior Division), Kharar for recovery of an amount of Rs. 3,846,619 from the company. The plaintiff has alleged that he used to earn commission over sales and marketing of services and products of the company and that the disputed amount was transferred from the account of the plaintiff by the company to the accounts of the defendants no. 2 and 3 without the consent of the plaintiff. The company has filed its written statement and its reply to an interim application. The total amount involved in this case is Rs. 3,846,619 plus interest. The matter is presently pending in the court. Assistant Estate Officer (Appeals) Estate Office, U.T. Chandigarh has initiated proceedings against the company (Memo No. 35063/SDE (E) CPL 5249/17/11/05) on the basis of a notice dated July 25, 2006 from the said authority wherein it is alleged that the company has effected

11.

12.

13.

14.

15.

16.

17.

18.

323

unauthorized construction of transmission towers on buildings at site no. B-219, Sector 39-C and D, Chandigarh in contravention of the provisions of section 15 of the Capital of Punjab (Development and Regulation) Act, 1952. The company has represented before the said authority for grant of permission to install the transmission towers as per policy framed by the Chandigarh administration and has stated that the company has submitted all necessary papers along with demand draft of Rs. 0.5 million as installation fee. The matter is pending for orders. 19. A civil suit (34/2006) has been filed by the Lovenish Kumar and others against the company and others in the Court of Civil Judge, Mansa, Punjab under order 39 rule 1&2 read with section 151 of the CPC restraining the company from installing any transmission tower in the residential area as the height of the tower may cause damage to the adjoining properties on falling and it also causes health hazard to human life. The written statement and reply have been filed on behalf of the company. The matter is presently pending adjudication. A civil suit (124/2006) has been filed by Chabeel Dass and others against the company and others in the Court of the Civil Judge (Senior Division), Faridkot praying for permanent injunction restraining the defendants from installing the transmission tower over the first floor of the house of the defendant no.1. The plaint is accompanied with an application under order 39 rules 1 & 2 of the CPC praying for grant of temporary injunction restraining the defendants from installing transmission tower at the above mentioned premises. The matter is presently pending before the court. A civil suit (283/2004) has been filed by Thakural Transport Corporation in the Court of Civil Judge (Senior Division), Chandigarh against the company claiming for damages of Rs. 1,000,000 on account of alleged deficiency of services, cheating and mental harassment (inadequate services, bad signals, disturbances in calls etc.). The plaintiff has further prayed that a permanent injunction be granted in favor of the plaintiff for restraining the defendants from discontinuing the connection bearing no. 98149-08872 and a mandatory injunction directing the defendant to restore the connections of mobile numbers which have been discontinued by the defendant. The matter is presently pending before the court. The Cantonment Board, Jalandhar has initiated eviction proceedings under section 5(b) and (c) of Public Premises (Eviction of Unauthorised Occupants) Act, 1971 against the company on the basis of notice no. JCB/4563/C dated March 23, 2004; JCB/ENGG/693/C dated May 17, 2004; and JCB/ENGG/691/C dated May 17, 2004 issued by the said authority alleging unauthorised construction and illegal occupancy of the cantonment land by the company. The matter is presently pending before the court. The land acquisition officer has initiated proceedings against the company (Memo No. 4509/SDE (E) RP – CP 10) on the basis of a notice dated February 3, 2006 issued under section 15 of the Capital of Punjab (Development and Regulation) Act, 1952 from the said authority wherein it is alleged that the company has effected unauthorized construction at site no. 10, Sector 16, Chandigarh in contravention of building rules of the Capital of Punjab (Development and Regulation) Act, 1952. It has been alleged that the sanctioned plan of the building has been changed and an unauthorized tower has been installed at the terrace without getting the permission from the competent authority. The company has represented before the land acquisition officer for grant of permission to install the transmission towers as per policy framed by the Chandigarh administration and has stated that it has submitted all necessary papers along with demand draft of Rs. 0.1 million as installation fee. The matter is presently pending adjudication. A civil suit (167/2006) has been filed by Praveen Anand and others against the company and others before the Court of Civil Judge (Senior Division), Ludhiana for grant of permanent injunction restraining the company from constructing a transmission tower in their locality since the same is claimed to pose a risk to people and property. The matter is presently pending before the court. Ramesh Kumar, Bhagwan Dass and Surinder Singh have filed a civil suit against the company before the court of Additionl Civil Judge, Nabha seeking permanent injunction for restraining

20.

21.

22.

23.

24.

25.

324

the company from installing transmission tower on the roof of their shop at old sabzi mandi, Nabha. The written statement has been filed by the company. The matter is presently pending before the court. 26. Baltej Singh has filed a civil suit (308/2006) before the Court of Civil Judge (Senior Division), Bathinda for permanent injunction restraining the company and other defendants from encroaching upon, raising of any sort of construction and installation of transmission tower over the land in dispute. The matter is presently pending before the court. Tarsem Singh has filed a civil suit before the court of Civil Judge (Senior Division), Anandpur Sahib against Ram Singh, the company and others for issuance of permanent injunction restraining the defendants from any way or in any manner forcibly and illegally occupying the specific portion of the land measuring 2 kanal 5 marla without partition of land by metes and bounds or in alternative, suit for possession by way of partition of the land mentioned above. The matter is presently pending before the court. Darshanlal has filed a civil suit before the court of Additional Civil Judge (Senior Division), Ludhiana against the company and others. The suit is for grant of mandatory injunction for a direction to the defendants for removing the generator set and mobile tower installed on the top of the building and for permanent injunction for restraining the defendants, their representatives and agents from parking their vehicles in front of the shops of the plaintiff. The matter is presently pending before the court. The municipal corporation of Chandigarh has issued a notice (MC/Estate/2007/391) under rule 20 of the Chandigarh Lease Hold of Sites and Building Rules, 1973 for breach of rule 5 of the Punjab (Development and Regulation) Building Rules, 1952 stating that the tower has been constructed in the violation of the rules mentioned above. The matter is presently pending before the court. Harbhajan Singh and others have filed a civil suit in the Court of Civil Judge (Senior Division), Gurdaspur against Ram Nath, the company and other defendants for grant of decree for mandatory injunction directing the defendants to remove the mobile phone tower from the site as marked in the site plan, installed by defendant no. 4 in the roof of the house of defendants nos. 1 to 3. The plaintiffs have alleged that said installation of mobile phone tower caused disturbance, harassment, physical and mental pain to the plaintiffs and other residents of the residential locality. The matter is presently pending before the court. Kulbhushan Sharma has filed a civil suit (43/2007) before the Court of Civil Judge (Senior Division), Ludhiana against the company for recovery of Rs. 100,000 and interest thereon towards rent and damages alleging breach of contract with respect to earlier termination of lease deed executed between the plaintiff and the company for lease of the premises by the plaintiff to the company for installing its transmission tower. The plaintiff has also alleged that termination of the lease deed by the company is illegal, void and arbitrary and without any sufficient reason and cause. The matter is presently pending before the court. Mukhtiar Singh has filed a civil suit filed before the Civil Judge, JMIC.RC. Moga praying for issuance of a decree of permanent injunction restraining the company from encroaching, making any construction, raising telecommunication tower or commissioning the same and decree for mandatory injunction directing the company from removing the material of the tower. The matter is presently pending before the court. Manjit Singh has filed a civil suit filed before the Civil Judge (Junior Division), Amritsar praying for permanent injunction restraining the company and the other defendants from installing any mobile towers on the roof of the property owned by defendant no. 3 in any manner and suit for permanent injunction restraining defendant no. 4 from issuing any licence/permission to defendant no.1 to 3 for installation of the said mobile tower. The matter is presently pending befor