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. [z z] PER EQUITY SHARE INCLUDING A SHARE PREMIUM OF RS. [z z] PER EQUITY SHARE, AGGREGATING
z] MILLION (“THE ISSUE”), CONSISTING OF A FRESH ISSUE OF 6,982,042 EQUITY SHARES BY THE COMPANY (“FRESH ISSUE”) AND AN OFFER FOR
RS. [z
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 [z z] 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. [z z] TO RS. [z z] PER EQUITY SHARE OF FACE VALUE OF RS. 10 EACH.
THE FLOOR PRICE IS [z z] TIMES OF THE FACE VALUE AND THE CAP PRICE IS [z z] 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
z]
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 [z
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
z] and [z
and the NSE for the listing of the Equity Shares pursuant to letters dated [z z], respectively. For the purposes of the Issue, the [z
z] shall be the Designated Stock Exchange.
IPO GRADING
This Issue has been graded by [z z] Limited and has been assigned the “IPO Grade [z z]/5”indicating [z
z], through its letter dated [z
z], 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 REGISTRAR TO THE ISSUE

Enam Securities Private Limited Karvy Computershare Private Limited
SEBI Reg. No: INM000006856 SEBI Reg. No.: INR000000221
801/802, Dalamal Towers, Nariman Point, “Karvy House”, No. 46
Mumbai- 400 021, Maharashtra, India. Avenue 4, Street No.1, Banjara Hills,
Telephone: +91 22 6638 1800 Hyderabad- 500 034, Andhra Pradesh, India.
Facsimile: +91 22 2284 6824 Telephone: + 91 40 2343 1553
E-mail: cellebrum.ipo@enam.com Facsimile: + 91 40 2343 1551
Investor Grievance E-mail: complaints@enam.com E-mail: cellebrum.ipo@karvy.com
Website: www.enam.com Website: www.karvy.com
Contact Person: Ms. Kanika Sarawgi Contact Person: Mr. Murali Krishna

BID/ISSUE PROGRAM
z ], 2008
BID/ISSUE OPENING DATE [z z ], 2008
BID/ISSUE CLOSING DATE [z
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
Bidder
Bid Amount
Bid cum Application Form
Bidding/Issue Period
Bid/Issue Opening Date
Bid/Issue Closing Date
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.

i
 Term Description
Book Building Process The book building process as described in Chapter XI of the SEBI
Guidelines, in terms of which the Issue is being made.
BRLMs/Book Running Lead Enam Securities Private Limited and Lehman Brothers Securities Private
Managers Limited.
Business Days All days except Saturday, Sunday and any public holiday.
CAN/Confirmation of The note or advice or intimation sent to the Bidders who have been allocated
Allocation Note Equity Shares, after discovery of the Issue Price in accordance with the Book
Building Process.
Cap Price The higher end of the Price Band, above which the Issue Price will not be
finalised.
Cut-off Price 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.
Designated Date 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.
Designated Stock Exchange [●].
Draft Red Herring This Draft Red Herring Prospectus issued by the Company in accordance
Prospectus/DRHP 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.
Eligible NRI An NRI from such jurisdictions outside India where it is not unlawful to
make an offer or invitation under the Issue.
Eligible Employee/s 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.
Employee Reservation Portion The portion of the Fresh Issue being up to 100,000 Equity Shares available
for allocation to Eligible Employees.
Enam Enam Securities Private Limited having its registered office at 24, B.D.
Rajabahadur Compound, Ambalal Doshi Marg, Fort, Mumbai 400 001,
Maharashtra, India.
Escrow Accounts 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.
Escrow Agreement 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.
First Bidder The Bidder whose name appears first in the Bid cum Application Form or
Revision Form.
Floor Price The lower end of the Price Band, below which the Issue Price will not be
finalised and below which no Bids will be accepted.
Fresh Issue The issue of 6,982,042 Equity Shares by the Company offered for
subscription pursuant to the terms of the Red Herring Prospectus.
Issue The public issue of an aggregate 11,271,012 Equity Shares, consisting of
Fresh Issue and Offer For Sale.
Issue Price 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 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.
Margin Amount 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 Mutual funds registered with SEBI under the SEBI (Mutual Funds)
Regulations, 1996, as amended.
Mutual Fund Portion 5% of the QIB Portion, consisting 335,131 Equity Shares, available for
allocation to Mutual Funds.
Net Issue The Issue less the Equity Shares included in the Employee Reservation
Portion, aggregating 11,171,012 Equity Shares.
Non-Institutional Bidders All Bidders that are neither Qualified Institutional Buyers nor Retail
Individual Bidders and who have bid for an amount more than Rs. 100,000.
Non-Institutional Portion The portion of the Issue being not less than 10% of the Net Issue consisting

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.
Non-Residents All eligible Bidders that are persons resident outside India, as defined under
FEMA, including Eligible NRIs, FIIs and FVCIs.
Offer for Sale The offer for sale of 4,288,970 Equity Shares by the Selling Shareholders,
pursuant to terms of the Red Herring Prospectus.
Pay-in Date 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.
Pay-in Period (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.
Price Band The price band with Floor Price of Rs. [●] per Equity Share and Cap Price of
Rs. [●] per Equity Share and any revisions thereof.
Pricing Date The date on which the Issue Price is finalised by our Company and the
Selling Shareholders, in consultation with the BRLMs.
Prospectus 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.
Public Issue Account 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.
QIBs or Qualified Institutional Public financial institutions specified in section 4A of the Companies Act, FIIs,
Buyers 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.
QIB Margin Amount An amount representing at least 10% of the Bid Amount that the QIBs are
required to pay at the time of submitting a Bid.
QIB Portion 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.
Refund Account 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.
Refund Banker (s) [●].
Registrar to the Issue Karvy Computershare Private Limited having its registered office at 46,
Avenue 4, Street No.1, Banjara Hills, Hyderabad- 500 034, Andhra Pradesh,
India.
Retail Individual Bidders Bidders (including HUFs) who have Bid for an amount less than or equal to
Rs. 100,000.
Retail Portion 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.
Revision Form 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).
Red Herring Prospectus 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.
SEBI Guidelines The Securities and Exchange Board of India (Disclosure and Investor
Protection) Guidelines, 2000, as amended.
Securities Act The U.S. Securities Act of 1933, as amended.
Stock Exchanges The BSE and the NSE.
Syndicate Agreement The agreement to be entered into between our Company, the Selling
Shareholders and members of the Syndicate, in relation to the collection of
Bids.
Syndicate Members [●].
Syndicate or members of the The BRLMs and the Syndicate Members.

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

Abbreviations/Terms

Term Description
Act or Companies Act Companies Act, 1956, as amended from time to time.
AGM Annual General Meeting.
AS Accounting Standards issued by the Institute of Chartered Accountants of
India.
AY Assessment Year.
BIFR Board for Industrial and Financial Reconstruction.
BSE Bombay Stock Exchange Limited.
CDSL Central Depository Services (India) Limited.
CESTAT Customs, Excise and Service Tax Appellate Tribunal (earlier, Customs,
Excise & Gold (Control) Appellate Tribunal).
CIN Corporate Identification Number
CIT Commissioner of Income Tax.
CRPC The Criminal Procedure Code, 1973.
Depository A depository registered with SEBI under the SEBI (Depositories and
Participant) Regulations, 1996, as amended from time to time.
Depositories Act The Depositories Act, 1996, as amended from time to time.
Depository Participant A depository participant as defined under the Depositories Act.
DIN Director’s Identification Number.
DP ID Depository Participant’s Identity.
EGM Extraordinary General Meeting.
EPS 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.
FDI Foreign Direct Investment.
FEMA Foreign Exchange Management Act, 1999 read with rules and regulations
thereunder and amendments thereto.
FEMA Regulations Foreign Exchange Management (Transfer or Issue of Security by a Person
Resident Outside India) Regulations, 2000 and amendments thereto.
FII(s) Foreign Institutional Investors as defined under SEBI (Foreign Institutional
Investor) Regulations, 1995 and registered with SEBI under applicable laws
in India.
Fiscal/ Financial Year/FY Period of twelve months ended March 31 of that particular year, unless
otherwise stated.
FIPB Foreign Investment Promotion Board.
FVCI 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.
GIR Number General Index Registry Number.
GoI/Government Government of India.
HUF Hindu Undivided Family.
IPC The Indian Penal Code, 1860.
IPO Initial Public Offering.
ITAT Income Tax Appellate Tribunal.
I.T. Act The Income Tax Act, 1961, as amended from time to time.
IT Department Income Tax Department.
Merchant Banker Merchant banker as defined under the Securities and Exchange Board of
India (Merchant Bankers) Rules, 1992.
MOU Memorandum of Understanding.
NA Not Applicable.
NAV 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

iv
 Term 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.
NRE Account Non Resident External Account.
NRI 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.
NRO Account Non Resident Ordinary Account.
NSDL National Securities Depository Limited.
NSE The National Stock Exchange of India Limited.
OCB 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.
OSP Other Service Providers.
p.a. Per annum.
PAN Permanent Account Number allotted under the Income Tax Act, 1961.
P/E Ratio Price/Earnings Ratio.
PLR Prime Lending Rate.
QIB Qualified Institutional Buyer.
RBI The Reserve Bank of India.
RoC Registrar of Companies, National Capital Territory of Delhi and Haryana, at
New Delhi.
RONW Return on Net Worth.
SCRA Securities Contracts (Regulation) Act, 1956, as amended from time to time.
SCRR Securities Contracts (Regulation) Rules, 1957, as amended from time to
time.
SEBI The Securities and Exchange Board of India constituted under the SEBI Act,
1992.
SEBI Act Securities and Exchange Board of India Act, 1992, as amended from time to
time.
SICA The Sick Industrial Companies (Special Provisions) Act, 1985.
TRAI Telecom Regulatory Authority of India.
U.K. United Kingdom.
U.S./U.S.A. United States of America.
USD U.S. Dollars, the official currency of U.S.A.
US GAAP Generally Accepted Accounting Principles in the United States of America.

Industry Related Terms/Abbreviations and Clients Specific Abbreviations

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

v
Term Description
IT Information Technology.
ITES Information Technology Enabled Services.
IT Services Information Technology Services.
IUC Interconnection User Charges.
IVR Interactive Voice Response.
IVRS Interactive Voice Response System.
MMP Multi-modal Platform.
MMS Multimedia Messaging Services.
MTNL Mahanagar Telephone Nigam Limited.
MVAS Mobile Value Added Services.
NASSCOM National Association of Software and Services Companies.
OBD Outbound dialer.
P2P Peer to Peer.
NDNC National Do Not Call.
RAID Redundant Array of Independent Disks.
RBT Ring Back Tone.
Reliance Reliance Communication Limited.
R&D Research and Development.
SIM Subscriber Identity Module.
SMS Short Messaging Service.
SMSC Short Message Service Centre.
Spice Spice Communications Limited.
Takeover Code Securities and Exchange Board of India (Substantial Acquisition of Shares
and Takeovers) Regulations, 1997, as amended from time to time.
TDSAT Telecom Disputes Settlement And Appellate Tribunal.
UCC Unsolicited Commercial Communications.
USSD Unstructured Supplementary Service Data.
VAS Value Added Services.
Vodafone Vodafone Essar Limited.
WAP 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 2007 31, 2006
U.S Dollar
As on 39.90 43.44 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 Developments-
Companies 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 end-
user 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 in-
house 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 end-
user 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 non-
metro 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.

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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-on-
demand 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

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 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.

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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, March 31,
2007 2006 2005
1 IO System Limited (7.90) (13.50)1 (11.00)2
3
2 Spice Communications Limited 3801.31 (386.88) 4 46.35 5
3 Twenty First Century Capitals Limited (2.90) 0.46 39.316
4 Assam Plywood Limited 0.04 (0.43) 0.06
5 Hotspots Retails Limited (68.78) (15.19) (1.02)
6 Modikem Limited (3.38) (10.24) (10.59) 6
7 Spice Corp Limited (35.79) 63.527 44.34
8 Ace Airways Private Limited (0.31) 15.90 (3.84)
9 Duro International Rubber Private Limited (0.29) (0.39) (0.24) 6
10 G. M. Modi Hospitals Corporation Private 0.35 (0.35) 7 0.798
Limited
11 Harjas Logic Systems Private Limited 11.14 12.329 (0.03) 10
12 Mcorpglobal Communications Private (0.22) 3 (0.07) 4 (0.80)5
Limited
13 Oasis Cineplex Private Limited 1.85 0.50 (0.01)
14 Super Infosys Private Limited (0.01) 4 (0.19)5 (0.33) 11
15 Teesho Rubbers Private Limited (0.02) (0.01) (0.03) 6
16 Tuberose Investments Private Limited (0.01) (0.12) -
17 VCorp Mercantile Private Limited (0.29) (0.05) -
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 31, March 31, 2005
2007 2006
1 IO System Limited (0.02) 7.881 21.382
2 Jyotsana Investment Company Limited (1.26) (2.08) (2.13)
3 Khatu Investment & Trading Company (0.12) (0.85) (0.89)
Limited
4 Spice Communications Limited 5219.171 (1523.81) 2 (1136.93) 3
5 Hotspots Retails Limited (41.12) (15.35) (0.16)
6 Teesho Rubbers Private Limited (0.25) (0.23) (0.22) 4
7 Tuberose Investments Private Limited (0.08) (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 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.

• In terms of to Rule 19(2)(b) of the SCRR, this being an Issue of less than 25% of the post-
Issue 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 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.

• 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 fixed-
line 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, easy-
to-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) Penetration

800,000 70%

60.7%
700,000
54.8% 60%

600,000 47.8%
50%

500,000 40.0%

40%

400,000 29.7%
737,119
30%
657,488
300,000
19.8% 565,759
466,839 20%
200,000 12.6%
341,536
6.9%
224,388 10%
100,000 4.5%
2.7% 141,136
48,220 75,923
28,442
0 0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(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) Data Revenue (US$ million)

40,000 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 3,000
37,766
2,194.9 34,796

15,000 30,787

25,632 2,000
1,524.6

10,000 19,460
901.8
14,338 1,000
563.8
5,000 9,021
323.4
146.6 6,479
4,645
2,706
0 0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(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)

Particulars As at December 31, As at March 31, 2007
2007
APPLICATION OF FUNDS
Fixed Assets

Gross Block 452.69 185.70

Less: Accumulated Depreciation/ Amortisation (113.51) (52.99)

Net Block 339.18 132.71

Capital Work In Progress including Capital Advances 8.05 31.21

Total 347.23 163.92

Deferred Tax Assets (net) - 1.87

Current Assets, Loans & Advances

Inventories - 1.36

Sundry Debtors 357.24 262.53

Cash and Bank Balances 500.59 648.30

Other Current Assets 84.65 3.34

Loans & Advances 294.27 47.84

Total 1,236.75 963.37

TOTAL (A) 1,583.98 1,129.17

Deferred Tax Liabilities (net) 2.04 -

Liabilities and Provisions

Minority Interest 0.10 0.10

Current Liabilities 181.98 86.85

Provisions 316.73 11.68

Total 498.81 98.63

TOTAL (B) 500.85 98.63

Net Worth (A-B) 1,083.13 1,030.53

8
 Particulars As at December 31, As at March 31, 2007
2007
Represented by
Share Capital and Reserves

Equity Share Capital 145.72 145.72

Reserves and Surplus (Figure for December 31, 2007 is net of
Rs. 5.11million being adjustment for employee provisions 885.92
(Refer Note No. G (3) of the Annexure XIX) 937.41

Less: Miscellaneous Expenditure - 1.11

(to the extent not written off or adjusted)

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

(Amount in Rs. Million)

Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007 2007

INCOME
Operating Income 734.56 661.78
Other Income 42.63 25.02
Total Income 777.19 686.80

EXPENDITURE
Purchase of Goods for Sale 0.99 3.38
Operating Expenses 82.13 50.11
Staff Cost 138.37 66.11
Selling and Distribution Expenses 16.56 7.28
General and Administration Expenses 126.31 78.53
Decrease / (Increase) in Inventories 1.36 (1.36)
Interest 0.94 0.04

Miscellaneous Expenditure written off 1.11 -

Depreciation / Amortization (Refer note no. C(iv) and
G (9) of the Annexure XIX) 60.47 32.90
Total Expenditure 428.24 236.99
PROFIT BEFORE TAX AND PRIOR PERIOD
ITEMS 348.95 449.81
Prior Period Items 5.31 0.38
PROFIT BEFORE TAX AND AFTER PRIOR
PERIOD ITEMS 343.64 449.43
Provision for Tax
Current Tax (Net of MAT Credit entitlement, refer
note no. G (10) of the Annexure XIX) 14.91 24.06
Deferred Tax Charge / (Credit) 3.43 (1.24)
Fringe Benefits Tax 4.65 2.16
Total Tax Expense 22.99 24.98
NET PROFIT AS PER AUDITED
ACCOUNTS 320.65 424.45
Adjustments ( Refer Note no. E of Annexure XIX) 10.45 (15.64)

Current Tax impact of Adjustments (0.42) 1.21

Deferred Tax impact of Adjustments - 0.48

Net Impact of Adjustments 10.03 (13.95)
NET PROFT AS RESTATED, BEFORE
MINORITIES SHARE 330.68 410.50
Less: (Losses) / Profits attributable to minority
shareholders (0.001) 0.001
NET PROFT AS RESTATED 330.68 410.50

Profit & Loss Account at the beginning of the year /

period 201.22 289.42
PROFIT AVAILABLE FOR
APPROPRIATION 531.90 699.92
Appropriations:
Transfer to General Reserve 33.47 42.37

10
 Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007 2007
Proposed Dividend on Equity Shares (at the rate of
Rs. 16.07 per share) 234.28 -
Interim Dividend on Equity Shares (at the rate of Rs.
33.35 per share) - 400.20
Tax on dividend 39.82 56.13

BALANCE CARRIED FORWARD AS

RESTATED 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 11,271,012 Equity Shares*

Of which:

Fresh Issue by the Company 6,982,042 Equity Shares

Of which:
Employee Reservation Portion(1) 100,000 Equity Shares

Offer for Sale by Selling Shareholders** 4,288,970 Equity Shares

Net Issue to public 11,171,012 Equity Shares

Of which:

QIB Portion(2) At least 6,702,608 Equity Shares

Of which:
Mutual Fund Portion 335,131 Equity Shares
Balance for all QIBs including Mutual Funds 6,367,477 Equity Shares

Non-Institutional Portion(1) Not less than 1,117,101 Equity Shares

Retail Portion(1) Not less than 3,351,303 Equity Shares

Equity Shares outstanding prior to the Issue 42,889,685 Equity Shares

Equity Shares outstanding after the Issue 49,871,727 Equity Shares

Use of Issue proceeds 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 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.
(2)
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.

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 Age Address

Mr. K.N. Memani 69 177C, Western Avenue,
Chairman Lane 7, Sainik Farm,
Non-Executive Director New Delhi- 110062, India
Independent Director
Professional
DIN: 00020696
Mr. Dilip Modi 34 36, Amrita Shergill Marg,
Managing Director New Delhi- 110004, India
Non-Independent Director
Industrialist
DIN: 00029062
Mr. Vivek Bali 47 C-66, Defence Colony,
Non-Executive Director New Delhi- 100024, India
Non-Independent Director

13
 Name, Designation, Occupation and DIN Age Address
Service
DIN: 02078398
Mr. Hanif M. Dahya 52 5, Beechwood Road,
Non-Executive Director Allendale, New Jersey,
Independent Director U.S.A
Industrialist
DIN: 01068575
Mr. Andreas Vourloumis 33 FLT D 4, Scenic Villa,
Non-Executive Director 2-28, Scenic Villa,
Non-Independent Director Pok Fu Lam, Hong Kong
Nominee of Lehman Brothers
Opprtunity Limited
Service
DIN: 01058533
Ms. Divya Modi 24 36, Amrita Shergill Marg,
Non-Executive Director New Delhi- 110004, India
Non-Independent Director
Industrialist
DIN: 00031073

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 Lehman Brothers 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
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 Indusind Bank

Limited International Trade Tower
3rd Floor, Ashoka Estate ‘F’ Block, Ground Floor
24, Barakhamba Road, Nehru Place,
New Delhi-110001, India. New Delhi- 110019, India.
Telephone: +91 11 4159 2099 Telephone: +91 11 2644 5809
Facsimile: +91 11 4101 2624 Facsimile: +91 11 2623 6537
E-mail: nitinmadhra@hsbc.co.in E-mail: sangeetam@indusind.com
Contact Person: Mr. Nitin Madhra 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 Responsibility Co-ordinator

(i) Capital structuring with the relative components and Enam Enam
formalities such as type of instruments, etc.
(ii) Due diligence of the Company’s operations/ Enam Enam
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.
(iii) Drafting and approval of all publicity material other than Enam Enam
statutory advertisement as mentioned above including
corporate advertisement, brochure, etc.
(iv) Appointment of other Intermediaries: Enam Enam
(a) Printers;
(b) Registrar;
(c) Grading Agency
(d) Advertising Agency; and
(e) Banker to the Issue

(v) Domestic Institutional marketing of the Offer , which will Enam, Lehman Enam
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
vi) International Institutional marketing of the Offer , which Enam, Lehman Lehman
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
(viii) Preparation of road show marketing presentation and ENAM, Lehman, Lehman
FAQ

16
 Activities Responsibility Co-ordinator
(ix) Retail/Non-institutional marketing strategy which will Enam, Lehman Enam
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
(x) Managing the Book, pricing and allocation to QIB Enam, Lehman Enam
Bidders.
(xi) Post bidding activities including coordination with Stock Enam Enam
Exchanges ,management of Escrow Accounts, co-
ordinate 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.

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) our Company;
(2) the Selling Shareholders;
(3) the BRLMs;
(4) 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;
(5) Registrar to the Issue; and
(6) 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 Bid Price Cumulative equity shares Bid for Subscription
(Rs.)
500 24 500 16.67%
1,000 23 1,500 50.00%
1,500 22 3,000 100.00%
2,000 21 5,000 166.67%
2,500 20 7,500 250.00%

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 [●], 2008

BID/ISSUE CLOSING DATE [●], 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 Amount

Equity Shares to be Underwritten
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 Aggregate Value at
(Rs.) Issue Price
(Rs.)
A) AUTHORISED SHARE CAPITAL(a)
100,000,000 Equity Shares 1,000.00

B) ISSUED, SUBSCRIBED AND PAID UP SHARE

CAPITAL
42,889,685 fully paid up Equity Shares 428,896,850 [•]

C) PRESENT ISSUE IN TERMS OF THE DRAFT

RED HERRING PROSPECTUS
11,271,012 Equity Shares(b) 112,710,120 [•]

Which comprises
a) Fresh Issue of 6,982,042 Equity Shares(c) 69,820,420 [•]
Of which:
Employee Reservation Portion
100,000 Equity Shares 1,000,000 [•]

b) Offer for Sale of 4,288,970 Equity Shares(d) 42,889,700 [•]

Net Issue to the Public

11,171,012 Equity Shares

Of which:
QIB Portion of at least 6,702,608 Equity 67,026,070 [•]
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 11,171,010 [•]

1,117,101 Equity Shares

Retail Portion of not less than 3,351,303 Equity 33,513,040 [•]

Shares

D) PAID-UP SHARE CAPITAL AFTER THE ISSUE

49,871,727 Equity Shares 498,717,270

E) SHARE PREMIUM ACCOUNT

Before the Issue 637,482,588

After the Issue [●]

a) 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.

(c) 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.

(d) 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)
Selling Shareholder Number of Equity Aggregate value at
Shares Issue Price
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

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

Date of No. of Issue Nature of Reasons for Cumulative Cumulative Cumulative Individuals/
Allotment of Equity Price Consideration Allotment number of Issued Share entities to
the Equity Shares per Equity Capital Premium whom Equity
Shares Equity Shares (Rs.) (Rs.) Shares allotted
Shares
(Rs.)
Subscription to the
Memorandum and
Articles of Mr. Atul
April 5, 2000 10 10 Cash Association 10 100 Nil Prakash
Subscription to the
Memorandum and
April 5, 2000 Articles of Mr. Ravinder
10 10 Cash Association 20 200 Nil Lal Ahuja
January 20,
2001 Modicorp
2,000,000 10 Cash Allotment 2,000,020 20,000,200 Nil Private Limited
Omnia
Bonus issue of Investments
January 31, Equity Shares in Private
2006 9,999,600 Nil Bonus shares the ratio of 5:1(a) 11,999,620 119,996,200 Nil Limited*
Bonus issue of
January 31, Equity Shares in
2006 500 Nil Bonus shares the ratio of 5:1(a) 12,000,120 120,001,200 Nil Mr. Dilip Modi*
Lehman
November 28, Brothers
2006 Preferential Opportunity
2,571,454 260.92 Cash allotment(b) 14,571,574 145,715,740 645,229,238 Limited

22
 Date of No. of Issue Nature of Reasons for Cumulative Cumulative Cumulative Individuals/
Allotment of Equity Price Consideration Allotment number of Issued Share entities to
the Equity Shares per Equity Capital Premium whom Equity
Shares Equity Shares (Rs.) (Rs.) Shares allotted
Shares
(Rs.)
Preferential
allotment made
to certain
Preferential employees of
June 23, 2008 320,685 10 Cash allotment 14,892,259 148,922,590 645,229,238 our Company**
Bonus shares
issued to all the
exisiting
shareholders of
June 24, 2008 27,997,426 Nil Bonus shares Bonus issue 42,889,685 428,896,850 645,229,238 the Company

Total 42,889,685 42,889,685 428,896,850 645,229,238

* 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 Ratio of the Number of Equity Face Value of Amount of reserves/
Bonus Shares Bonus Issue Shares issued as Shares profit and loss account
Bonus Shares capitalized
January 31, 2006 5:1 10,000,100 Rs. 10 Rs. 100,001,000
June 24, 2008 47:25 27,997,426 Rs. 10 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 Date of No. of Equity Issue/ Nature of Nature of Transaction

Promoter Allotment/transfer Shares* Acquisition Consideration
Price per
Equity Share
(Rs.)**
Omnia July 9, 2004 1,880,020 5.00 Cash Transfer from Indian
Investments Televentures Private
Private Limited Limited and MCorp
Global Private Limiteda
July 15, 2005 119,900 16.70 Cash Transfer from Mr.
Dheeraj Agarwalb

23
 Name of the Date of No. of Equity Issue/ Nature of Nature of Transaction
Promoter Allotment/transfer Shares* Acquisition Consideration
Price per
Equity Share
(Rs.)**
January 31, 2006 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
September 30, 2006 (50) 34.00 Cash and Dr. B.K Modi
Bonus shares Bonus Issue in the ratio
June 24, 2008 22,559,003 Nil of 47:25

Total 34,558,473

Mr. Dilip Modi September 11, 2000 1 10 Cash Transfer from Mr. Atul
Prakashc
August 11, 2003 (1) 10 Cash Transfer in favour of
Indian Televentures
Private Limited by Mr.
Dilip Modi
July 15, 2005 100 16.70 Cash Transfer from Mr.
Dheeraj Agarwalb
January 31, 2006 500 Nil Bonus shares Bonus Issue in the ratio
of 5:1
Bonus shares Bonus Issue in the ratio
June 24, 2008 1,128 Nil of 47:25
Total 1,728

Transfer from Spicecorp

August 11, 2003 20,020 10 Cash Limited
Indian Transfer in favour of Soft
Televentures July 9, 2004 (20,020) 5 Cash Solution Private Limited
Private Limited Total Nil
Total 34,569,191

* 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).

b. Mr. Dheeraj Agarwal had acquired 120,000 Equity Shares from SpiceCorp Limited.

c. Mr. Atul Prakash was allotted 10 Equity Shares as initial subscriber to Memorandum and Articles of
Association.

b) Details of Promoter’s Contribution locked-in for three years:

Name of the Promoter No. of Equity Percentage of Pre Percentage of Post Issue
Shares locked-in* Issue Capital Capital
Omnia Investments Private
Limited 9,974,345 23.26 20

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 Date of No. of Equity Issue/ Acquisition Nature of Nature of

Promoters Allotment/transfer * Price per Equity Consideration Transaction
Shares **
Share (Rs.)
Transfer from
Omnia Investments
September 30, 2006 10 34.00 Cash Private Limited
Bonus Issue in the
June 24, 2008 18 Nil Bonus shares ratio of 47:25
Ms. Divya Modi Total 28
Transfer from
Omnia Investments
Ms. Veena Modi September 30, 2006 10 34.00 Cash Private Limited
Bonus Issue in the
June 24, 2008 18 Nil Bonus shares ratio of 47:25
Total 28
Transfer from
Omnia Investments
Dr. B. K. Modi September 30, 2006 10 34.00 Cash Private Limited
Bonus Issue in the
June 24, 2008 18 Nil Bonus shares ratio of 47:25
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 (“Pre-
Issue 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 non-
transferable 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 Post-Issue
No. of Equity % No. of Equity %
Shares Shares*
A. Promoters
Omnia Investments Private Limited 34,558,473 80.57 32,840,957** 65.85
Mr. Dilip Modi 1,728 0.00 1,728 0.00
Sub Total (A) 34,560,201 80.58 32,842,685 65.85

B. Promoter Group
Ms. Divya Modi 28 0.00 28 0.00
Ms. Veena Modi 28 0.00 28 0.00
Dr. B.K Modi 28 0.00 28 0.00
Sub Total (B) 84 0.00 84 0.00

C. Others
Lehman Brothers Opportunity Limited 7,405,787 17.27 4,834,333** 9.69
Individiuals 923,613 2.15 923,613 1.85

D. Public in the Issue Nil Nil 11,271,012 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. Key managerial personnel No. of Equity Shares Pre-Issue Percentage
Held of Shareholding
1 Mr. Saket Agarwal 273,928 0.64
2 Mr. Kartar Singh 117,164 0.27
3 Dr. Abhinav Mathur 43,200 0.10
4 Ms. Monika Aggarwal 90,083 0.21
5 Mr. Shehzad Azad 7,200 0.02
6 Mr. Lokesh Gupta 84,847 0.20
7 Mr. Jatinder Verma 11,520 0.03
8 Mr. Pankaj Sharma 11,520 0.03
9 Mr. Rajib Roy 9,737 0.02
10 Mr. Samit Tarafdar 7,200 0.02
Total 656,399 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. Shareholder No. of Equity Shares Pre-Issue Percentage

Held of Shareholding
1 Omnia Investments Private Limited 34,558,473 80.57
2 Lehman Brothers Opportunity Limited 7,405,787 17.27
3 Mr. Saket Agarwal 273,928 0.64
4 Mr. Kartar Singh 117,164 0.27
5 Ms. Monika Agarwal 90,083 0.21
6 Mr. Lokesh Gupta 84,847 0.20
7 Mr. Abhinav Mathur 43,200 0.10
8 Ms. Mona Sharma 31,417 0.07
9 Mr. Amit Dua 31,417 0.07
10 Mr. Amrish Lakhanpal 31,417 0.07
Total 42,667,733 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 No. of Equity Shares Pre-Issue Percentage

Held of Shareholding
1 Omnia Investment Private Limited 11,999,470 82.35
2 Lehman Brothers Opportunity Limited 2,571,454 17.65
3 Mr. Dilip Modi 600 0.00
4 Mr. O. P. Dani 10 0.00
5 Mr. Atul Prakash 10 0.00
6 Dr. B. K Modi 10 0.00
7 Ms. Divya Modi 10 0.00
8 Ms. Veena Modi 10 0.00
Total 14,571,574 100.00

(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:

S. No. Shareholder No. of Equity Shares Percentage of

Held Shareholding
1 Omnia Investments Private Limited 1,999,920 99.99
2 Mr. Dilip Modi 600 0.00
Total 2,001,520 100.00

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.

7. 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. As on the date of this Draft Red Herring Prospectus, the total number of holders of Equity
Shares is 48.

13. Our Company has not raised any bridge loans against the proceeds of the Issue.

14. 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.

15. There are no outstanding warrants, options or rights to convert debentures, loans or other
instruments into the Equity Shares.

16. The Equity Shares held by our Promoters are not subject to any pledge.

17. 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.

28
18. Our Promoters will not Bid in this Issue.

19. 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.

20. 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.

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 Proposed utilization of Net Proceeds
Estimated Year Year Year
Cost ending ending ending
December December December
31, 2009 31, 2010 31, 2011
1 Purchase of equipments for the offices of our 1,705 349 517 839
Company and various customer sites
2 General corporate purposes [•]
Total [•]

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 Usage/Function Quantity Unit cost Price (in Rs.

(in Rs.)* Million)
16 E1card (DMN 160TECW) Used for providing IVR 560 213,444
services 119.53
BOB Kit (32 T1E1W) Used for connecting links 560 19,656
with our carrier customers 11.01
Rear Input Output Used for connecting links 560 15,246
(ODM16TECW) with our carrier customers
8.54
16 E1 card (DMV 4800BCW) Used for providing IVR 560 272,958
services 152.86
Chassis cPCIS (6400US/AC) Used for hosting of voice 540 326,214
cards 176.16
CTADE upgradation string Software to run IVR 268,800 1,806
applications 485.45
Dongle Used for storing the 560 4,300
(CTADE0PROGKEYUSB) licence
2.41
Hard Disk Drive (fpr SS&G2X) Used for storage functions 560 40,614
22.74
ISUP SS7 (BG20) Protocol software to 560 101,346
facilitate IVR services 56.75
Power Supply (TLPACPSU) Used for supply of power 280 10,290
2.88
G21 SIU with 4 Links Used for connectivity and 280 495,600
(SS7G21AQ1) data transfer with our
carriage customers and us 138.77
SCCP license ( SS7 BG20) Protocol software to 560 37,800
enable data applications 21.17
SIU G22 with 64 links (SS7 Used for connectivity and 280 987,000
G22AH1W) data transfer with our
carriage customers and us 276.36
Total excluding duties, taxes 1,474.62
and charges
Duties, taxes and charges 230.30
TOTAL 1,704.92
* 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 % of Issue size % of Issue expenses

million)
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)

Year ended Rupees Weight
Nine months period ended 31.00* 3
December 31, 2007
March 31, 2007 32.29 2
March 31, 2006 18.36 1
WACC 29.32

* Annualized

Note:

34
a) The Earning per Share has been computed on the basis of the restated profits and losses of the
respective years/period.
b) The denominator considered for the purpose of calculating Earnings per Share is the weighted
average number of Equity Shares outstanding during the year/period.
c) EPS calculations have been done in accordance with Accounting Standard 20-“Earning per
share” issued by the Institute of Chartered Accountants of India.
d) 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) For the nine months period ended December 31, 2007 EPS (Basic & Diluted) on Standalone
basis is Rs. 23.25
b) P/E based on nine months period ended December 31, 2007 is [●]
c) 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:

Year/Period Ended RONW (%) Weight

December 31, 2007 31.00 3
March 31, 2007 40.00 2
March 31, 2006 53.00 1
WACC 37.67

B. Minimum Return on Increased Net Worth required to maintain pre-issue EPS is [●]

5. NET ASSET VALUE PER EQUITY SHARE:

a. As of December 31, 2007 on Standalone basis is Rs. 75.24

b. After the Issue [●]
c. Issue Price [●]*

*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
EPS share) RONW
Companies Year/Period (Rs.) (Rs.) P/E (%)
Cellebrum Nine months ended 23.25 75.24 - 31.00
December 31, 2007
Cellebrum Year ended March 31, 32.29 71.16 - 40.00
2007
OnMobile Global Limited Year ended March 31, 8.30 103.50 78.80 26.90
2008

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. BENEFITS AVAILABLE TO THE COMPANY

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

2
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. Capital Gains

7.1. 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’.

7.2. 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]

7.3. 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’).

7.4. 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].

7.5. 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.

7.6. 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.

8. Depreciation

8.1. 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 .

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.

9. Carry forward of the losses

9.1. 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”.

B. BENEFITS AVAILABLE TO SHAREHOLDERS

B.I RESIDENT SHAREHOLDERS

1. Dividends

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 NON-RESIDENT SHAREHOLDERS

1. 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. Capital gains

2.1. 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].

2.2. 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].

2.3. 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].

2.4. 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].

2.5. 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.

2.6. 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

5
With effect from Assessment Year 2009-2010
6
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]

3. STT as deductible expenditure7

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. CAPITAL GAINS

2.1 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].

2.2 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].

2.3 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].

2.4 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].

2.5 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].

2.6 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)

7
With effect from Assessment Year 2009-2010
8
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]

2.8 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].

2.9 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]

B.IV SHAREHOLDERS BEING MUTUAL FUNDS

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) Penetration

800,000 70%

60.7%
700,000
54.8% 60%

600,000 47.8%
50%

500,000 40.0%

40%

400,000 29.7%
737,119
30%
657,488
300,000
19.8% 565,759
466,839 20%
200,000 12.6%
341,536
6.9%
224,388 10%
100,000 4.5%
2.7% 141,136
48,220 75,923
28,442
0 0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(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) Data Revenue (US$ million)

40,000 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 3,000
37,766
2,194.9 34,796

15,000 30,787

25,632 2,000
1,524.6

10,000 19,460
901.8
14,338 1,000
563.8
5,000 9,021
323.4
146.6 6,479
4,645
2,706
0 0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(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) Pe netrati on

1,200,000 90%

74.8% 80%
1,000,000 69.3%
70%
62.3%

800,000 54.8% 60%

46.9%
50%
600,000 39.6%

33.4% 40%
1,025,171
943,862
28.3%
844,212
400,000 24.1% 30%
738,619
19.8% 628,612
527,802 20%
442,013
200,000 374,445
316,373
257,628 10%

0 0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

(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) Data Revenue (US$ million)

12 0 ,0 00 2 5,00 0

20 ,68 3
10 0 ,0 00
2 0,0 00
18 ,09 3

15,9 11
8 0 ,0 00

13 ,46 6 15,0 00

6 0 ,0 00 11,36 4
110 ,73 3
9,32 7 10 2 ,6 95
93 ,20 2 10 ,00 0
7,30 1 82 ,6 81
4 0 ,0 00
5,83 5 72,18 7
60 ,8 85
3,80 0
48 ,2 3 1 5,0 00
2 0 ,0 00
2,2 34

4 0 ,4 97
29 ,111 3 4,62 8
0 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

(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 Year-on- CY 2006 Year-on- CY 2007 Year-on-

shipments year growth shipments year growth shipments year growth
(million (CY 2005 (million (CY 2006 (million (CY 2007
units) over 2004) units) over 2005) units) over 2006)
Total desktop PC 3.9 19% 4.4 14% 4.7 7%
market
Total notebook PC 0.5 148% 1.0 106% 1.8 81%
market
Total client PC 4.3 26% 5.4 24% 6.5 20%
market
(Source: IDC)

India Mobile Phone Shipments (millions) FY2007 vs. FY2008: Unit Shipments, Growth

2007- 2007 2007- 2008 Growth in shipments

65.8 84.9 29%
(Source: IDC)

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-on-
year 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 Entertainment Alerts and News Commerce Social VAS Enterprise VAS
Platforms
SMS SMS Cricket/Match Mobile Location, Contests, voting,
Ringtones/CBRT Alerts banking infotainment information
Customized News Ticketing Search ** Push Advertising
Wallpapers Astrology, Travel and Advertising Enterprise IM
Vaastu, Holiday Group messaging
Animations Fengshui, bookings
Personality Test
Quiz Banking
Info/Alerts
Jokes Travel alerts
details like Train,
Flight details etc.

IVRS Religious chants Astrology Mobile Astrology IVR based Contact

52
 Music on Vaastu banking services Centers
Demand Fengshui Ticketing Voice SMS Self Help centers
Voice Portals
WAP Video Clips Movies related Mobile Mail Location based
Portals Mobile Games info banking Mobile-Greetings information
Mobile Themes Stock Portfolio Ticketing Dating, Chatting, Internet Mobile e-mail
Mobile Radio Managers Travel and Blogging etc. Mobile calendar
News Holiday Infotainment Access to Intranet and
tickers/alerts bookings SNC/UGC Core Business
Advertising Applications
Messengers 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 fixed-
line 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, easy-
to-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

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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.

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Our Principal Products and Services

SEGMENT PRODUCT OFFERINGS

MUSIC, ENTERTAINMENT
BGM
Video Zone

AND INFOTAINMENT
Mobile Radio
Wallpaper
VALUE ADDED SERVICE
CRBT
Astrology

Ringtones
Contests

Jukebox
Devotional and Regional Content

Sports Updates
Recipes

Rural Value Added Service
News
(Voice SMS & Commodity
Logos
Rates)

Content Discovery (Live Agent
Value Added Service and USSD
Value Added Service)

CALL MANAGEMENT VALUE
Select Caller List
Missed Call Alert

ADDED SERVICE
Pay4Me
Device Manager

Voice Mail
Smart Dial

Excuse Me
Call Conferencing

SERVICES & APPLICATION
Content Uploader
Voice Chat

VALUE ADDED SERVICE
Mobile Advertising and OBDs

MOBILE COMMERCE
Mobile Banking

Pre-paid Rechrge

Mobile Bill Payments

Mitr

ENTERPRISE SERVICES
Inbound campaigns

Outbound campaigns

Mitr

ROAMING SOLUTIONS
Welcome Roamer
Roam Privilege

Roam Tracker
Roam Secure

Roam Globe

TELECOM
Gateways (USSD, IVRS,

INFRASTRUCTURE SMSC, GPRS)
SOLUTIONS
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.

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• 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

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 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

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• 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.

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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

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 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.

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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-and-
forward 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.

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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

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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.

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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.

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 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. any earlier patent on such invention in any country;

ii. prior publication of information relating to such invention;
iii. an earlier product showing the same invention; or
iv. 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, non-
disclosure 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

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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. an international phase wherein an international application is filed in the International Bureau;

and
b. 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

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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;
b) 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;
c) 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
d) the making of copies or adapting the computer program from a personal legally obtained copy
for any non-commercial personal use.

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.

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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

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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.

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 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 Delhi-
110 020, India.

Major Events

Year Events
2003 • We launched Tambola on mobile phones in partnership with Zee TV and Aaj Tak television
channels.
2004 • We started providing VAS on IVR/GPRS/SMS platform.
• We established a new development center in Parwanoo (Himachal Pradesh).
2005 • Launched CRBT.
• We established another development center in Parwanoo.
2006 • We introduced products such as BGM and VAS on USSD.
• Lehman Brothers Opportunity Limited invested USD 15 million in our Company.

2007 • 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.

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.

2. 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

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 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 micro-
programming 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.

4. 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.

5. To assist, set up, operate and supervise the operation of the data processing departments of
other organizations.

6. 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.

7. Deleted.

8. 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.

9. 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.

10. The provision, operation and maintainance of telepoint 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.

13. 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.

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:

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 Date Nature of Amendment
January 20, 2001 Increase in authorized share capital from Rs. 1,000,000 to 20,010,000.
June 27, 2003 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.”
October 17, 2005 Change in main objects clause by inserting the following new objects:

8. “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.”
January 30, 2006 Increase in authorized share capital from Rs. 20,010,000 to 12,000,000.
September 25, 2006 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):

7. “To act as agent for selling insurance products and all allied activities related
thereto.”
December 13, 2007 Conversion of the Company to a public company and deletion of the word ‘Private’
from the name of the Company.
May 20, 2008 Increase in authorized share capital from Rs. 320,000,000 to 1,000,000,000.
June 24, 2008 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

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.

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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:

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• 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 1,00,00,000 99.90
Spice Corp Limited 4,995 0.05
Mr. Dilip Modi 4,995 0.05
Mr. Atul Prakash 10 0.00
Total 1,00,10,000 100.00

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)
Nine months period ended For the period between August
on December 31, 2007 12, 2006 and March 31, 2007
Income/Sales 24.49 1.22
Profit (Loss) after Tax (14.03) 0.76
Equity Share Capital 100.10 100.10
Reserves and surplus (excluding (13.27) 0.76

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 revaluation reserves) (1)
Earnings (Loss) per share (1.40) 0.08
Book value per share 8.67 9.97

(1)
Net of miscellaneous expenditure not written off.
(2)
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. Date of Allotment No. of Shares Alloted

1. December 13, 2006 10,00,000
2. February 27, 2007 40,00,000
3. March 7, 2007 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 100 100.00
Total 100 100.00

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.

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 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 Age Other Directorships

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
Indian 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.

DIN: 00020696
Mr. Dilip Modi Indian 34 • Hotspots Retails Limited;
• Spice Communications Limited;
Father’s Name: • Spice Mobiles Limited;
Dr. B. K. Modi • MCorpglobal Communications Private
Limited;
Residential Address: • Super Infosys Private Limited;
36, Amrita Shergill Marg, • Omnia BPO Services Limited;
New Delhi- 110004, India
• Indian Televentures Private Limited;
• MCorp Communications Pte. Limited; and
Managing Director
• Hindustan Retails Private Limited.
Non-Independent Director

Industrialist

Five years

DIN: 00029062
Mr. Vivek Bali Indian 47 Nil

Father’s Name:
Mr. Jeyoti Saroop Bali

Residential Address:
C-66, Defence Colony,
New Delhi- 100024, India

Non-Executive Director

Non-Independent Director

Service

80
Name, Father’s Name, Residential Nationality Age Other Directorships
Address, Designation, Occupation,
Term, DIN

Liable to retire by rotation

DIN: 02078398

Mr. Hanif M Dahya American 52 • Hot Spot Distribution Private

Limited
Father’s Name: • New York Community Bank
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 Greek 33 Nil

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

DIN: 01058533

Ms. Divya Modi Indian 24 • Indian Televentures Private Limited;

• Oasis Cineplex Private Limited;
Father’s Name: • Tuberose Investments Private Limited;
Dr. B. K. Modi • Bougainvillea Multiplex &
Entertainment Centre Private Limited;
Residential Address: and
36, Amrita Shergill Marg, • Mcorp (Europe) Limited; and
New Delhi- 110004, India • Mcorpglobal Communications Private
Limited.
Non-Executive Director

Non-Independent Director

Industrialist

Liable to retire by rotation

81
Name, Father’s Name, Residential Nationality Age Other Directorships
Address, Designation, Occupation,
Term, DIN
DIN: 00031073

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

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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 Fees Payable

As a Director present in the meeting 20,000
As chairman of a committee 20,000
As a sub-committee member 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 Equity Shares owned after the
Issue Issue*
Name of the Director No. of shares % of paid-up No. of shares % of paid-up
capital capital
Mr. Dilip Modi 1,728 Negligible 1,728 Negligible
Ms. Divya Modi 28 Negligible 28 Negligible
Total 1,756 Negligible 1,756 Negligible
* Mr. Dilip Modi and Ms. Divya Modi will not participate in the Issue.

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 Date of Appointment Date of Cessation Reason

Mr. Dheeraj Agarwal June 20, 2003 July, 2005 Resignation
Mr. Lokesh Gupta April 30, 2004 March 7, 2006 Resignation
Mr. Atul Prakash July 15, 2005 August 30, 2006 Resignation
Mr. R L Ahuja March 7, 2006 January 10, 2007 Resignation
Mr. Ashok Kumar Goyal August 30, 2006 September 30, 2007 Resignation
Mr. Hanif M Dahya August 30, 2006 NA Appointment
Dr. B. K. Modi September 30, 2006 September 30, 2007 Resignation
Mr. Dilip Modi September 30, 2006 September 30, 2007 Resignation
Mr. Umang Das September 30, 2006 September 30, 2007 Resignation
Mr. Andreas Vourloumis November 28, 2006 NA Appointment
Mr. Kartar Singh September 29, 2007 January 26, 2008 Resignation
Mr. R C Vaish September 29, 2007 December 5, 2007 Resignation
Mr. Saket Agarwal September 29, 2007 January 26, 2008 Resignation
Mr. Vivek Bali January 26, 2008 NA Appointment
Mr. Dilip Modi January 26, 2008 NA Appointment
Ms. Divya Modi January 26, 2008 NA Appointment
Mr. K. N. Memani January 26, 2008 NA Appointment
Ms. Michelle Crames January 26, 2008 NA Appointment

84
 Name Date of Appointment Date of Cessation Reason
Mr. Dheeraj Agarwal June 20, 2003 July, 2005 Resignation
Ms. Michelle Crames January 26, 2008 June 20, 2008 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 Executive/Non-executive/Independent

Mr. K. N. Memani (Chairman) Independent
Mr. Hanif M Dahya Independent
Mr. Andreas Vourloumis Non-executive

The terms of reference of the Audit Committee include:

1. Overseeing the Company’s financial reporting process and disclosure of its financial
information;
2. Recommending to the Board the appointment, re-appointment, and replacement of the
statutory auditor and the fixation of audit fee;
3. Approval of payments to the statutory auditors for any other services rendered by them;
4. 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.

5. Reviewing, with the management, the quarterly, half-yearly and annual financial statements
before submission to the Board for approval;
6. Reviewing, with the management, the performance of statutory and internal auditors, and
adequacy of the internal control systems;
7. 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;
8. Discussion with internal auditors any significant findings and follow up there on;

85
9. 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;
10. 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;
11. 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;
12. Reviewing the functioning of the whistle blower mechanism, in case the same is existing; and
13. 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 Executive/Non-executive/Independent

Mr. Hanif M Dahya (Chairman) Independent
Mr. K. N. Memani Independent
Mr. Andreas Vourloumis Non-executive

The terms of reference of the Remuneration Committee include:

1. Framing suitable policies and systems to ensure that there is no violation, by an employee of
any applicable laws in India or overseas;
2. 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;
3. 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
4. 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.

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 Executive/Non-executive/Independent

Mr. Hanif M Dahya (Chairman) Independent
Ms. Divya Modi Non-executive
Mr. Vivek Bali Non-executive

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

86
1. Transfer/transmission of shares issued by our Company, issue of duplicate share certificates
and certificates after split/ onsolidation/replacement/rematerialisation;
2. 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
3. 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. Mr. Dilip Modi (Chairman)

2. Mr. Andreas Vourloumis
3. Mr. Hanif M Dahya
4. 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;
2. 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;
3. 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;
4. 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
5. 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.

87
6. Management Organisational Structure

MANAGING DIRECTOR

COMPANY SECRETARY
CHIEF EXECUTIVE &
OFFICER HEAD LEGAL

CHIEF HEAD HEAD HEAD

FINANCIAL MARKETING CONTENT HUMAN HEAD HEAD
OFFICER & & RESOURCE SALES TECHNOLOGY
PRODUCT ALLIANCES & & STRATEGY
INNOVATION ADMINISTRATION

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 C-
DOT, 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 Architect-
Telecom 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 Pre-Issue

Held Percentage of
Shareholding
1 Mr. Saket Agarwal 273,928 0.64
2 Mr. Kartar Singh 117,164 0.27
3 Dr. Abhinav Mathur 43,200 0.10
4 Ms. Monika Aggarwal 90,083 0.21
5 Mr. Shehzad Azad 7,200 0.02
6 Mr. Lokesh Gupta 84,847 0.20
7 Mr. Jatinder Verma 11,520 0.03
8 Mr. Pankaj Sharma 11,520 0.03
9 Mr. Rajib Roy 9,737 0.02
10 Mr. Samit Tarafdar 7,200 0.02
Total 656,399 1.54

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 Date of Appointment Date of Cessation Reason

Ms. Monika Bajpai May 1, 2007 October 31, 2007 Transfer to Global
Mobile
Infrastructure
Private Limited
Mr. Vinod Shingri March 14, 2003 March 31, 2007 Resignation
Mr. Tapas Acharya April 11, 2006 April 30, 2007 Transfer to Spice
Communications
Limited
Mr. Savinder Sarna May 1, 2005 March 31, 2007 Resignation
Mr. Dheeraj Aggarwal February 1, 2004 July 15, 2005 Resignation
Mr. Kartikeya Shukla April 16, 2007 NA Appointment
Mr. Rajib Roy October 8, 2007 NA Appointment
Mr. Samit Tarafdar February 7, 2007 NA Appointment
Mr. Sudhir Kathuria July 16, 2007 May 23, 2008 Resignation
Mr. Jatinder Verma May 15, 2007 NA Appointment
Dr. Abhinav Mathur February 8, 2008 NA Appointment
Mr. Lokesh Gupta* August 12, 2006 NA Appointment

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 Name Date of Appointment Date of Cessation Reason

Mr. Newton Bubber July 19, 2006 February 29, 2008 Resignation
Mr. Shehzad Azad August 20, 2007 NA Appointment
Mr. Pankaj Sharma February 21, 2008 NA Appointment
Mr. Ashok Agarwal May 20, 2008 NA Appointment
Mr. Kartikeya Shukla April 16, 2007 May 31, 2008 Resignation
* Mr. Lokesh Gupta joined MTPL

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 Details

Passport No. F-7680545
Voter ID No. Not available
Driving License No. 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

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The shareholding pattern of Omnia Investments Private Limited as at May 31, 2008 is as under:

Sl. Names of Shareholder No. of Shares held % of

No. Shareholding
1. Indian Televentures Private Limited 97,821 60.00
2. Mcorp Communications Pte Limited 65,214 40.00
Total 163,035 100.00

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 Year ended Year ended
March 31, 2007 March 31, 2006 March 31, 2005

Equity Capital 16.30 9.78 9.78

Reserves and Surplus 679.57 (1.59) (0.26)

Total Income 410.50 0.22 -

Profit/(Loss) after Tax 394.29 (1.33) (0.26)

Earnings per share (Rs.) (Face Value Rs. 10/-) 2,418.42 (13.60) (2.63)

Book Value per equity share (Rs.) 4,268.18 83.52 97.04

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 55-
111304 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. Names of Shareholder No. of Shares held % of

No. Shareholding
1. Mr. Dilip Modi 1,020,000 Shareholding
51.00
2. Mrs. Veena Modi 980,000 49.00
Total 2,000,000 100.00

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 Period ended Year ended
June 30, 2007 June 30, 2006 March 31, 2005
(15 months)
Equity Capital 20.0 10.00 0.10
Reserves and Surplus (0.34) (0.07) (0.08)
Total Income 0.02 0.06 0.05
Profit/(Loss) after Tax (0.27) 0.01 0.04
Earnings per share (0.14) 0.01 3.48
Book Value per equity share 9.83 9.93 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 Name Relationship with Mr. Dilip Modi

Mr. Dilip Modi Dr. B.K. Modi Father
Mrs. Veena Modi Mother
Mrs. Sonal Modi Wife
Baby Siya Modi Daughter
Mrs. Ritika Rungta Sister
Ms. Divya Modi Sister
Mr. Rakesh Himatsingka Father-in-law
Mrs. Anita Himatsingka Mother-in-law
Mr. Shaurya Veer Brother-in-law
Himatsingka
Ms. Maalika Himatsingka 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. Fund Flow Investment & Trading Company Limited;

2. Goneril Investment & Trading Company Limited;
3. IO System Limited;
4. Jyotsana Investment Company Limited;
5. Kallol Investments Limited;
6. Khatu Investment & Trading Company Limited;
7. New Look Investment (Bengal) Limited;
8. Spice Communications Limited;
9. Spice Mobiles Limited; and
10. Twenty First Century Capitals Limited;

Unlisted Public Companies:

1. APL Holdings & Investments Limited;

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

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Private Companies:

1. Ace Airways Private Limited;

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

1. Rakesh Kumar Shaurya Veer (HUF) 45,200 18.83

2. Tower Investment & Trading Company Limited 35,000 14.58
3. Kallol Investments Limited 31,775 13.24
4. Goneril Investment & Trading Company Limited 30,000 12.50
5. Ms. Maalika Himatsingka 15,000 6.25
6. Ms. Sonal Himatsingka 15,000 6.25
7. Assam Plywood Limited 14,300 5.96
8. Mr. Shaurya Veer Himatsingka 10,000 4.17
9. Subarna Plantation and Trading Company Limited 10,000 4.17
10. Jyotsana Investment Company Limited 10,000 4.17
11. Mr. Vivek Himatsingka 7,500 3.13
12. Rakesh Kumar Himatsingka (HUF) 5,000 2.08
13. Mrs. Anita Himatsingka 2,500 1.04
14. Remaining 64 shareholders 8,725 3.64
Total 240,000 100.00

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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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 2.40 2.40 2.40
Reserves and Surplus 1.18 1.33 1.08
Total Income 1.41 3.17 10.49
Profit/(Loss) after Tax 0.02 0.25 1.07
Earnings per share (face value Rs. 10) 0.06 1.02 4.45
Book Value per equity share 14.92 15.52 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

1. Mr. Shaurya Veer Himatsingka 63,800 26.58

2. Ms. Maalika Himatsingka 30,000 12.50
3. New Look Investment (Bengal) Limited 20,000 8.33
4. Ms. Sonal Himatsingka 20,000 8.33
5. Subarna Plantation and Trading Company Limited 15,000 6.25
6. Mr. Vivek Himatsingka 15,000 6.25
7. Kallol Investments Limited 15,000 6.25
8. Rakesh Kumar Shaurya Veer (HUF) 12,900 5.38
9. Fund Flow Investments & Trading Company Limited 10,100 4.21
10. Mr. Dipak Kumar Gaurav Kumar 7,500 3.13
11. Mr. Prabhudayal Himatsingka 5,000 2.08
12. Mr. Bhagwati Prasad Himatsingka 5,000 2.08
13. Remaining 33 shareholders 20,700 8.62
Total 240,000 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 2.40 2.40 2.40
Reserves and Surplus 3.23 3.08 2.47
Total Income 2.38 2.57 2.67
Profit/(Loss) after Tax 0.15 0.60 0.61
Earnings per share (Rs.) (Face Value Rs. 10) 0.63 2.51 2.53
Book Value per equity share (Rs.) 23.45 22.82 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

(A) Shareholding of Promoter and Promoter

Group
(1) Indian
1. Individuals / Hindu Undivided Family 29,600 0.18
2. Bodies Corporate 16,270,400 96.27
(2) Foreign - -
Total shareholding of Promoter and Promoter 16,300,000 96.45
Group (A)
(B) Public Shareholding
(1) Institutions
(2) Non-Institutions
1. Bodies Corporate 19,800 0.12
2. Individuals
Individual shareholders holding nominal share capital 566,100 3.35
up to Rs. 1 lakh
Any Others (Specify) - -
NRIs/OCBs 14,100 0.08
Sub Total 600,000 3.55
Total Public shareholding (B) 600,000 3.55
Total (A) + (B) 16,900,000 100.00

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 Period ended Year ended
March March December
31, 2007 31, 2006 31, 2004

100
 (15 months)
Equity Capital 169.00 169.00 169.00
Reserves and Surplus (169.02) (161.12) (147.62)
Total Income 6.05 20.02 58.14
Profit/(Loss) after Tax (7.90) (13.50) (11.00)
Earnings per share (Rs.) (Face Value Rs. 10/-) (0.47) (0.80) (0.65)
Book Value per equity share (Rs.) (0.00) 0.47 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 Low
May 2008 nil nil
April 2008 25.50 25.00
March 2008 29.20 26.00
February 2008 nil nil
January 2008 29.75 29.75
December 2007 31.55 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. Names of Shareholder No. of Shares held % of

Shareholding
1. Tower Investment & Trading Company Limited 49,000 24.50
2. Mrs. Rohini Himatsingka 40,000 20.00
3. Fund Flow Investment & Trading Company Limited 34,600 17.30
4. Mr. Amrit Kumar Sanghi 20,000 10.00
5. Mr. Vijay Kumar Sanghi 10,000 5.00
6. Mr. Deepika Agarwal 10,000 5.00
7. Goneril Investment & Trading Company Limited 10,000 5.00
8. Kallol Investments Limited 10,000 5.00
9. Remaining 136 shareholders 16,400 8.20
Total 200,000 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 2.00 2.00 2.00
Reserves and Surplus (3.26) (4.08) (4.13)
Total Income 3.23 2.36 2.49
Profit/(Loss) after Tax 0.81 0.05 0.12
Earnings per share (Rs.) (Face Value Rs. 10) 4.07 0.24 0.62
Book Value per equity share (Rs.) (6.32) (10.39) (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 21-
35533 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

1. Tower Investment & Trading Company Limited 35,725 14.89

2. Subarna Plantation and Trading Company Limited 30,000 12.50
3. Jyotsana Investment Company Limited 24,925 10.39
4. Goneril Investment & Trading Company Limited 24,300 10.13
5. Saket Cement Products Private Limited 20,000 8.33
6. Fund Flow Investment & Trading Company Limited 19,450 8.10
7. Rakesh Kumar Shaurya Veer (HUF) 15,000 6.25
8. Mrs. Rohini Himatsingka 14,375 5.99
9. New Look Investment (Bengal) Limited 14,300 5.96
10. Mr. Vivek Himatsingka 10,000 4.17
11. Ms. Maalika Himatsingka 10,000 4.17
12. Mr. Shaurya Veer Himatsingka 10,000 4.17
13. Mrs. Anita Himatsingka 5,000 2.08
14. Mr. Gaurav Himatsingka 5,000 2.08
15. Remaining 14 shareholders 1,925 0.80
Total 240,000 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 2.40 2.40 2.40
Reserves and Surplus 0.94 0.85 0.27

103
 Total Income 1.09 1.69 1.72
Profit/(Loss) after Tax 0.09 0.44 0.50
Earnings per share (Rs.) (Face Value Rs. 10) 0.36 1.83 2.09
Book Value per equity share (Rs.) 13.90 13.54 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

1. Tower Investment & Trading Company Limited 39,100 19.55

2. Kallol Investments Limited 31,900 15.95

104
 3. Fund Flow Investment & Trading Company Limited 22,150 11.08
4. Mr. Dipak Kumar Gaurav Kumar 15,000 7.50
5. Goneril Investment & Trading Company Limited 15,000 7.50
6. Subarna Plantation and Trading Company Limited 15,000 7.50
7. Mrs. Rohini Himatsingka 14,000 7.00
8. Jyotsana Investment Company Limited 13,900 6.95
9. Burlington Investments Private Limited 11,800 5.90
10. New Look Investment (Bengal) Limited 9,000 4.50
11. Mr. Rakesh Himatsingka 5,000 2.50
12. Remaining 64 shareholders 8,150 4.07
Total 200,000 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 2.00 2.00 2.00
Reserves and Surplus (2.12) (2.85) (2.89)
Total Income 1.19 0.38 0.39
Profit/(Loss) after Tax 0.73 0.05 0.01
Earnings per share (Rs.) (Face Value Rs. 10) 3.64 0.24 0.04
Book Value per equity share (Rs.) (0.59) (4.23) (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

1. Goneril Investment & Trading Company Limited 39,750 19.88

2. Tower Investment & Trading Company Limited 38,150 19.08
3. Kallol Investments Limited 21,750 10.88
4. Fund Flow Investment & Trading Company Limited 20,000 10.00
5. Ms. Sushil Himatsingka 19,750 9.88
6. Assam Plywood Limited 15,000 7.50
7. Mrs. Rohini Himatsingka 14,950 7.48
8. Khatu Investment & Trading Company Limited 1,600 0.80
9. Remaining 142 shareholders 29,050 14.53
Total 200,000 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 2.00 2.00 2.00
Reserves and Surplus 0.06 (0.05) (0.08)
Total Income 0.62 0.55 0.60
Profit/(Loss) after Tax 0.10 0.04 0.04
Earnings per share (Rs.) (Face Value Rs. 10) 0.52 0.20 0.18
Book Value per equity share (Rs.) 10.29 9.77 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. of Total shareholding as

Shares held a % of
Total number (as a
% of (A+B)
(A) Shareholding of Promoter & Promoter Group
1 Indian
(a) Individuals/ Hindu Undivided Family 20 0.00
(b) Bodies Corporate 281,489,350 40.80
Total Shareholding of Promoter and 281,489,370 40.80
Promoter Group (A)
(B) Public Shareholding
1 Institutions
(a) Mutual Funds / UTI 12,888,599 1.87
(b) Financial Institutions / Banks 600 0.00
(c) FII 50,801,851 7.36
Sub-Total (B)(1) 63,691,050 9.23
2 Non-Institutions
(a) Bodies Corporate 25,178,766 3.65

107
 Sl. No. Names of Shareholder Total No. of Total shareholding as
Shares held a % of
Total number (as a
% of (A+B)
(b) Individuals
- Individual shareholders holding nominal share 32,695,967 4.74
capital up to Rs.1 lakh
- Individual shareholders holding nominal share 12,409,170 1.80
capital in excess of Rs.1 lakh
(c) Any others specify
Foreign Corporate bodies 270,450,650 39.20
Non Resident Indians 3,480,911 0.50
Trusts 3,246 0.00
Clearing Members 525,870 0.08
Sub-Total (B)(2) 344,744,580 49.97
Total Public Shareholding 408,435,630 59.20
(B)= (B)(1)+(B)(2)
TOTAL (A)+(B) 689,925,000 100.00

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 Period ended Year ended
December December June
31, 2007 31, 2006 30, 2006
(6 months)
Equity Capital 6,899.25 5,519.40 5,519.40
Reserves and Surplus 1,680.08 (7,043.21) (6,656.33)
Total Income 14,738.84 3,957.00 7,492.48
Profit/(Loss) after Tax 3,801.31 (386.88) 46.35
Earnings per share (Rs.) (Face Value Rs. 10/-) 5.51 (0.70) 0.08
Book Value per equity share (Rs.) 11.57 (3.27) (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 Low
May 2008 60.15 38.20
April 2008 45.80 27.55
March 2008 36.85 23.25
February 2008 39.60 30.20

108
 January 2008 69.15 23.25
December 2007 69.65 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, Noida-
201 301, 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. of Total shareholding as

Shares held a % of
Total number (as a
% of (A+B)
(A) Shareholding of Promoter & Promoter Group
1 Indian
(a) Individuals/ Hindu Undivided Family 0 0.00
(b) Bodies Corporate 47,194,234 63.23
Total Shareholding of Promoter and 47,194,234 63.23
Promoter Group (A)
(B) Public Shareholding
1 Institutions
(a) Financial Institutions / Banks 1,545 0.00
(b) Central Government/ State Government(s) 104,596 0.14
FII 3,289,474 4.41
(c) Insurance Companies 0 0.00
Sub-Total (B)(1) 3,395,615 4.55
2 Non-Institutions
(a) Bodies Corporate 16,290,472 21.83
(b) Individuals 7,352,307 9.85
(c) NRIs / OCBs 386,849 0.52
(d) Clearing Members 18,523 0.02
Sub-Total (B)(2) 24,048,151 32.22
Total Public Shareholding 27,443,766 36.77
(B)= (B)(1)+(B)(2)
TOTAL (A)+(B) 74,638,000 100.00

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 Year ended Period ended
December March March
31, 2007 31, 2007 31, 2006
(9 months) (9 months)
Equity Capital 223.91 223.91 111.96
Reserves and Surplus 556.38 448.95 197.31
Total Income 2,912.86 2,044.42 1,180.65
Profit/(Loss) after Tax 146.73 23.86 41.71
Earnings per share (Rs.) (Face Value Rs. 3/-) 1.97 0.32 1.12
Book Value per equity share (Rs.) 10.45 9.01 8.29

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) Low (BSE)

May 2008 35.90 22.15
April 2008 29.15 19.25
March 2008 23.60 16.90
February 2008 27.70 21.00
January 2008 32.20 21.00
December 2007 30.40 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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. Spice Corp Limited 2,825,800 43.08

2. Oasis Cineplex Private Limited 145,000 2.21
3. Fine Instalments Private Limited 427,000 6.51
4. Handsome Investments Private Limited 427,000 6.51
5. Modikem Limited 1,087,800 16.58
6. Avon Mercantile Limited 275,000 4.19
7. Others (233 shareholders) 1,371,964 20.92
Total 6,559,564 100.00

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 Year Period
ended ended ended
March March March
31, 2007 31, 2006 31, 2005
(15
months)
Equity Capital 65.60 65.60 65.60
Reserves and Surplus 6.28 12.37 5.90
Total Income 4.91 33.71 106.61
Profit/(Loss) after Tax (2.90) 0.46 39.31
Earnings per share (Rs.) (Face Value Rs. 10/-) (0.93) 0.99 7.14
Book Value per equity share (Rs.) 10.96 11.85 10.64

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 % of

held Shareholding

1. Mrs. Anita Himatsingka 2,500 25.00

2. Mrs. Rohini Himatsingka 2,500 25.00
3. Mr. Gaurav Himatsingka 900 9.00
4. Mr. Vivek Himatsingka 900 9.00
5. Ms. Sonal Himatsingka 1,000 10.00
6. Ms. Maalika Himatsingka 1,000 10.00
7. Mr. Shaurya Veer Himatsingka 1,000 10.00
8. Mr. Gaurav Himatsingka jointly with Mr. Dipak Himatsingka 100 1.00
9. Mr. Vivek Himatsingka jointly with Mr. Dipak Himatsingka 100 1.00
Total 10,000 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 0.10 0.10 0.10
Reserves and Surplus 2.39 1.95 1.57
Total Income 0.84 0.81 0.77
Profit/(Loss) after Tax 0.44 0.38 0.34
Earnings per share (Rs.) (Face Value Rs. 10) 44.24 37.82 33.96
Book Value per equity share (Rs.) 249.03 204.78 166.96

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 % of

held Shareholding

1. Mrs. Anita Himatsingka 2,500 25.00

2. Mrs. Rohini Himatsingka 2,500 25.00
3. Mr. Gaurav Himatsingka 900 9.00
4. Mr. Vivek Himatsingka 900 9.00
5. Ms. Sonal Himatsingka 1,000 10.00
6. Ms. Maalika Himatsingka 1,000 10.00
7. Mr. Shaurya Veer Himatsingka 1,000 10.00
8. Mr. Gaurav Himatsingka jointly with Mr. Dipak Himatsingka 100 1.00
9. Mr. Vivek Himatsingka jointly with Mr. Dipak Himatsingka 100 1.00
Total 10,000 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 0.10 0.10 0.10

114
 Reserves and Surplus 1.81 1.36 1.04
Total Income 0.78 0.76 0.75
Profit/(Loss) after Tax 0.45 0.32 0.31
Earnings per share (Rs.) (Face Value Rs. 10) 45.09 31.83 31.49
Book Value per equity share (Rs.) 191.38 146.28 114.45

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

1. Subarna Plantation & Trading Company Limited 68,000 18.90

2. Rakesh Kumar Shaurya Veer (HUF) 51,000 14.18
3. Gulmohar Trading Company Private Limited 40,000 11.12
4. Mr. Shaurya Veer Himatsingka 35,050 9.74
5. Ms. Sonal Himatsingka 35,000 9.73
6. Ms. Maalika Himatsingka 35,000 9.73
7. Fund Flow Investment & Trading Company Limited 27,500 7.65
8. Mrs. Rohini Himatsingka 25,000 6.95
9. Mr. Anand Kumar Himatsingka 6,025 1.68
10. Mr. Vivek Himatsingka 5,000 1.39
11. Mr. Mahendra Kumar Himatsingka 4,700 1.31
12. Mr. Rajendra Kumar Himasingka 4,000 1.11
13. New Look Investment (Bengal) Limited 3,750 1.04
14. Remaining 27 shareholders 19,675 5.47
Total 359,700 100.00

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 Year Year
ended ended ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 1.44 1.44 1.44
Reserves and Surplus (0.39) (0.43) (0.11)

115
 Total Income 0.18 0.20 0.87
Profit/(Loss) after Tax 0.04 (0.43) 0.06
Earnings per share (Rs.) (Face Value Rs. 4/-) 0.12 (1.19) 0.17
Book Value per equity share (Rs.) 2.51 2.30 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

1. Juwita Trading Company Private Limited 2,000 0.50

2. Mokara Trading Company Private Limited 2,000 0.50
3. Subhag Mercantile Private Limited 40,000 10.08
4. Jyotsana Investment Company Limited 38,000 9.58
5. Subarna Plantation & Trading Company Limited 38,700 9.76
6. Saket Cement Products Private Limited 40,000 10.08
7. Gulmohur Trading Company Private Limited 40,000 10.08
8. Burlington Investments Private Limited 40,000 10.08
9. Sudama Trading & Investments Limited 5,000 1.26
10. Nortel Cosmetics Private Limited 7,000 1.76
11. Zipper Mercantiles Private Limited 5,000 1.26
12. Veeyu Traders Private Limited 5,000 1.26
13. Nahar Viniyog Private Limited 5,000 1.26
14. Namokar Consultants Private Limited 5,000 1.26
15. Venus Dealing Private Limited. 10,000 2.52
16. Shriste Marketing Private Limited 4,000 1.01
17. Sakambari Commercial Private Limited 5,750 1.45
18. Sheetal Tie-Up Private Limited 7,500 1.89
19. Sati Trexim Private Limited 5,000 1.26
20. Lord Enclave Private Limited 7,000 1.76
21. Tobu Engineering Limited 8,000 2.02
22. Tower Investment and Trading Company Limited 76,750 19.35
Total 396,700 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 3.97 2.93 2.93
Reserves and Surplus 16.87 15.32 5.98
Total Income 2.20 0.91 2.47
Profit/(Loss) after Tax 1.09 0.44 0.53
Earnings per share (Rs.) (Face Value Rs. 10) 2.74 1.50 1.81
Book Value per equity share (Rs.) 52.53 62.35 30.44

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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. Hindustan Retail Private Limited 4,350,015 100.00

2. Mr. Dilip Modi* 5 0.00
3. Dr. B.K. Modi * 10 0.00
4. Mrs. Veena Modi* 10 0.00
5. Ms. Divya Modi* 10 0.00
6. Mr. Ashok Kumar Goyal* 10 0.00
7. Mr. Atul Prakash* 10 0.00
Total 4,350,070 100.00
* as nominees of Hindustan Retail Private Limited.

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 Year ended Year ended
March March March

117
 31, 2007 31, 2006 31, 2005
Equity Capital 43.50 0.50 0.50
Reserves and Surplus (84.62) (15.85) (0.66)
Total Income 839.53 95.35 0.11
Profit/(Loss) after Tax (68.78) (15.19) (1.02)
Earnings per share (Rs.) (Face Value Rs. 10/-) (15.81) (303.47) (20.38)
Book Value per equity share (Rs.) (9.45) (314.64) (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. Names of Shareholder No. of Shares held % of

No. Shareholding
1. Spice Corp Limited 2,916,298 15.60
2. Mudaliar & Sons Hotels Private Limited 6,428,702 34.39
3. Avon Mercantile Limited 2,760,000 14.76
4. GCorp International Limited
5,573,739 29.82
5. Licensintorg & Co. India Private Limited 646,500 3.46
6. Toplight Corporate Management Private Limited 368,400 1.97
7. Mr. R. L Ahuja 10 0.00
8. Mr. R P Goyal 10 0.00
9. Mr. R K Guta 10 0.00
10. Mr. S K Jain 10 0.00
11. Dr. B K Modi 60 0.00
Total 18,693,739 100.00

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 Year ended Period ended
March March March 31, 2005
31, 2007 31, 2006 (15 months)

118
 Equity Capital 186.94 186.94 186.94
Reserves and Surplus 80.88 84.26 94.50
Total Income 0.01 0.01 0.16
Profit/(Loss) after Tax (3.38) (10.24) (10.59)
Earnings per share (Rs.) (Face Value Rs. 10/-) (0.18) (0.55) (0.57)
Book Value per equity share (Rs.) 14.33 14.51 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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. Omnia Investments Private Limited 7,032,470 100.00

2. Mr. Dilip Modi* 1 0.00
3. Mr. Atul Prakash* 1 0.00
4. Mr. Ram Prakash Goyal* 1 0.00
5. Mr. S.K. Jain* 1 0.00
6. Mr. Santosh Kumar Gupta* 1 0.00
7. Mr. Rakesh Kumar Gupta* 1 0.00
Total 7,032,476 100.00
* 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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005

Equity Capital 70.32 52.50 15

Reserves and Surplus 0.98 0.24 0.22
Total Income 283.19 181.62 24.29

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 Profit/(Loss) after Tax 0.74 0.03 0.22
Earnings per share (Rs.) (Face Value Rs. 10/-) 0.11 0.01 0.14
Book Value per equity share (Rs.) 10.14 10.04 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. Names of Shareholder No. of Shares held % of

No. Shareholding
1. Mrs. Ritika Rungta 3,615,900 12.75
2. Mr. Atul Prakash 40 0.00
3. Mr. D.V.Tyagi 30 0.00
4. Mr. R.P.Goyal 30 0.00
5. Mr. R.K.Gupta 30 0.00
6. Mr. S.K.Gupta 30 0.00
7. Mr. S.K.Jain 40 0.00
8. Mr. Nikhil Rungta 3,615,900 12.75
9. Dr. B.K. Modi 7,231,800 25.50
10. Toplight Corporate Management Private Limited 2,350,000 8.29
11. Spice Corp Limited 4,598,200 16.21
12. Spice Mobiles Limited 3,403,000 12.00
13. Odyssey Capital Private Limited 125,000 0.44
14. Accelerate Investments Private Limited 125,000 0.44
15. Brook Trading Company Private Limited 125,000 0.44
16. Radiant (International) Private Limited 125,000 0.44
17. Hinduja Finance Limited 1,045,000 3.68
18. SICOM Limited 1,000,000 3.53
19. Niskalp Investments & Trading Company Limited 1,000,000 3.53
Total 28,360,000 100.00

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 Year ended Year ended
March March March 31, 2005
31, 2007 31, 2006
Equity Capital 283.60 141.80 141.80
Reserves and Surplus 91.71 85.66 77.40
Total Income 236.25 221.29 203.88
Profit/(Loss) after Tax 6.05 8.26 4.72
Earnings per share (Rs.) (Face Value Rs. 10/-) 0.21 0.58 0.33
Book Value per equity share (Rs.) 13.23 16.72 15.92

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, Noida-
201 301, 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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. Mrs. Veena Modi 2,884,637 46.09

2. Mr. Dilip Modi 251,129 4.01
3. Mrs. Ritika Rungta 26,579 0.42
4. Ms. Divya Modi 26,621 0.43
5. Dr. B. K. Modi & Sons (HUF) 42,017 0.67
6. Twenty First Century Capitals Limited 158,112 2.53
7. Mcorp Communications Pte Ltd. 2,859,311 45.69
8. Touchwood Investments Private Limited 1,274 0.02
9. Daisey Investments Private Limited 1,274 0.02
10. Leaf Investments Private Limited 1,274 0.02
11. Momentum Investments Private Limited 1,274 0.02
12. Laoleen Investments Private Limited 1,274 0.02
13. Longwell Investments Private Limited 1,274 0.02
14. Upasana Investments Private Limited 1,274 0.02
15. Swasth Investments Private Limited 1,261 0.02
16. Mr. Atul Prakash 10 0.00
17. Mr. R. P. Goyal 10 0.00
18. Mr. S. K. Jain 10 0.00
19. Mr. S. K. Gupta 10 0.00
20. Mr. R. K. Gupta 10 0.00
21. Mr. G. S. Negi 10 0.00
Total 6,258,645 100.00

Financial Performance

The audited financial results of Spice Corp Limited for the past three years are as follows:

(in Rs. million except for share data)

Year ended Period ended Year ended
March 31, 2007 March December
31, 2006 31, 2004
(15 months)
Equity Capital 62.59 62.59 62.59
Reserves and Surplus 2,646.04 2,686.63 3,038.42
Total Income 90.46 172.17 145.42
Profit/(Loss) after Tax (35.79) 63.52 44.34
Earnings per share (Rs.) (Face Value Rs. 10/-) (5.72) 10.15 7.08
Book Value per equity share (Rs.) 433.38 440.08 495.22

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. Names of Shareholder No. of Shares held % of

Shareholding
1. Twenty First Century Capitals Limited 255,875 23.23
2. Positive Investment Private Limited 178,750 16.23
3. Spice Corp Limited 548,125 49.77
4. MCorp Limited 51,625 4.69
5. Ms. Divya Modi 45,000 4.09
6. Mrs. Ritika Rungta 22,000 2.00
Total 1,101,375 100.00

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 Period ended Year ended
March 31, 2007 March December 31,
31, 2006 (15 2004
months)
Equity Capital 11.01 11.01 11.01
Reserves and Surplus 14.87 15.18 (0.61)
Total Income 0.23 25.77 80.25
Profit/(Loss) after Tax (0.31) 15.90 (3.84)
Earnings per share (Rs.) (Face Value Rs. 10) (0.28) 14.44 (3.48)
Book Value per equity share (Rs.) 20.36 20.35 5.91

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

1. Mr. Rajendra Kanoria 10 0.00

2. Mr. Ashok Chaturvedi 10 0.00
3. Ms. Urmila Kothari 500 0.21
4. Mr. N.K Padmanabhan 500 0.21
5. Ms. Nirmala Jha 500 0.21
6. Ms. Aradhana Jha 500 0.21
7. Ms. Sadhana Jha 500 0.21
8. Mr. Vikram Jha 500 0.21
9. Shree Kunwar Kothari 500 0.21
10. Mr. Ram Gopal Chakraborty 500 0.21
11. Mr. Manoj Kothari 500 0.21
12. Mr. Alok Kothari 500 0.21
13. Mr. Hemanta Kumar Chatterjee 1,160 0.48
14. Ms. Sujata Chatterjee 1,000 0.42
15. Ms. Malay Bhaduari 300 0.13
16. Mr. Basant Kumar Chatterjee 300 0.13
17. Mr. Goutam Mukherjee 400 0.17
18. New Look Investment (Bengal) Limited 1,000 0.42
19. Tower Investment & Trading Company Limited 50,000 20.84
20. Kallol Investments Limited 10,000 4.17
21. Goneril Investment & Trading Company Limited 30,800 12.83
22. Fund Flow Investment & Trading Company Limited 20,000 8.33
23. Subarna Plantation & Trading Company Limited 40,000 16.67
24. Jyotsana Investment Company Limited 20,000 8.33
25. Mr. Gaurav Himatsingka 30,000 12.50
26. Mr. Shaurya Veer Himatsingka 30,000 12.50
Total 239,980 100.00

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 Year ended Year
March March ended
31, 2007 31, 2006 March
31, 2005
Equity Capital 2.40 2.40 2.40
Reserves and Surplus 3.60 3.31 3.18
Total Income 0.60 0.32 0.61
Profit/(Loss) after Tax 0.29 0.13 0.34
Earnings per share (Rs.) (Face Value Rs. 10) 1.20 0.54 1.43
Book Value per equity share (Rs.) 24.99 23.79 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. Names of Shareholder No. of Shares held % of

Shareholding
1. Mr. Nikhil Rungta 22,000 50.00
2. Mrs. Ritika Rungta 22,000 50.00
Total 44,000 100.00

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 Year ended Period ended
March March March
31, 2007 31, 2006 31, 2005 (15
months)
Equity Capital 4.40 4.40 4.40
Reserves and Surplus (3.81) (3.51) (3.12)
Total Income - 0.03 0.55
Profit/(Loss) after Tax (0.29) (0.39) (0.24)
Earnings per share (Rs.) (Face Value Rs. 100) (6.70) (8.86) (5.43)
Book Value per equity share (Rs.) 13.47 20.17 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. Names of Shareholder No. of Shares held % of

Shareholding
1. Mr. R. K. Gupta 10 0.00
2. Mr. S.K. Jain 10 0.00
3. Mr. S.K. Gupta 10 0.00
4. Mr. R.L. Ahuja 10 0.00
5. Mr. R.P. Goyal 30 0.00
6. Mrs. Sukhmani Ganguli 30 0.00
7. Mr. M.C. Mittal 100 0.00
8. Spice Corp Limited 4,050,000 49.10
9. Fine Installments Private Limited 200,000 2.42
10. Mudaliar & Sons Hotels Private Limited 3,999,000 48.48
Total 8,249,200 100.00

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 Period ended Year ended
March 31, 2007 March December
31, 2006 31, 2004
(15 months)
Equity Capital 82.49 82.49 78.49
Reserves and Surplus 0.79 0.45 0.79
Total Income 26.73 39.93 20.79
Profit/(Loss) after Tax 0.35 (0.35) 0.79
Earnings per share (Rs.) (Face Value Rs. 10) 0.04 (0.04) 0.10
Book Value per equity share (Rs.) 10.30 10.27 10.25

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. Names of Shareholder No. of Shares held % of

Shareholding
1. Mudaliar & Sons Hotels Private Limited 6,000 48.00
2. Positive Investment Private Limited 500 4.00
3. Spice Corp Limited 5,999 47.99
4. Mr. O.P. Dani (Beneficial Owner Spice Corp
Limited) 1 0.01
Total 12,500 100.00

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 Period ended Period ended
March 31, 2007 March February 15,
31, 2006 2005 (10.5
(13.5 months) months)
Equity Capital 1.25 1.25 1.20
Reserves and Surplus 23.46 12.32 (0.05)
Total Income 15.63 16.93 0.05
Profit/(Loss) after Tax 11.14 12.32 (0.03)
Earnings per share (Rs.) (Face Value Rs. 100) 891.03 985.73 (2.57)
Book Value per equity share (Rs.) 1,966.86 1,074.40 82.54

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 20-
033258 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. Names of Shareholder No. of Shares held % of

No. Shareholding

1 Ms. Veena Modi 5,000 50

2. Mr. Dilip Modi 5,000 50
Total 1,0000 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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. Super Infosys Private Limited 80,758,354 51.42

2. Orion Telecoms Limited 14,515,043 9.24
3. Asian Infrastructure (Mauritius) Inc 14,779,980 9.41
4. DAI (Mauritius) Co. Limited 14,921,352 9.50
5. Falcon Securities Limited 15,600,000 9.93
6. Guiding Star Limited 7,853,337 5.00
7. ChristChurch Investments Limited 8,638,671 5.50
Total 157,066,737 100

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 Period ended Year ended
December 31, December 31, June 30, 2006
2007 2006 (6
months)
Equity Capital 1,570.67 1,570.67 1,570.67
Reserves and Surplus 1,233.41 1,233.63 1,233.70
Total Income - 0.04 -
Profit/(Loss) after Tax (0.22) (0.07) (0.80)
Earnings per share (Rs.) (Face Value Rs. 10/-) (0.00) (0.00) (0.01)
Book Value per equity share (Rs.) 17.85 17.86 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. Names of Shareholder No. of Shares held % of

Shareholding
1. Dr. B.K. Modi 1,400,000 100.00
Total 1,400,000 100.00

Financial Performance

The audited financial results of MCorp Communications Pte. Limited for the period ended December
31, 2006 (6 months) is as follows:

Amount in SGD
Year ended Year ended Year ended
December 31, December 31, December 31,
2006 2005 2004
Equity Capital 1.40 1.40 1.40
Reserves and Surplus 5.04 (0.58) (0.85)
Total Income 0.25 0.29 0.10
Profit/(Loss) after Tax 5.62* 0.27 0.04
Earnings per share (Rs.) (Face Value Rs. 10/-) 40.12 1.94 0.27
Book Value per equity share (Rs.) 46.00 5.89 3.95
* 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. Names of Shareholder No. of Shares held % of

Shareholding
1. Mcorp Communications Pte. Limited 1 100.00
Total 1 100.00

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. Names of Shareholder No. of Shares held % of

No. Shareholding
1. Spice Corp Limited 390,076 99.99
2. Mr. Hemant Kumar Samor 24 0.01
Total 390,100 100.00

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 Year ended Year ended
March March March 31,
31, 2007 31, 2006 2005
Equity Capital 39.01 39.01 39.01
Reserves and Surplus 2.46 1.97 1.08
Total Income 3.76 2.96 2.96
Profit/(Loss) after Tax 0.49 0.90 0.36
Earnings per share (Rs.) (Face Value Rs. 10/-) 1.24 2.30 0.93
Book Value per equity share (Rs.) 106.25 104.96 102.61

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 55-
72526 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 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. Names of Shareholder No. of Shares held % of

No. Shareholding
1. Spice Corp Limited 200,000 50.00

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 2. Modikem Limited 199,900 49.98
3. Mr. R. K. Gupta 100 0.02
Total 400,000 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005
Equity Capital 4.00 4.00 4.00
Reserves and Surplus 0.43 (0.16) (0.22)
Total Income 10.65 5.62 4.06
Profit/(Loss) after Tax 0.59 0.05 0.15
Earnings per share (Rs.) (Face Value Rs. 10/-) 1.48 0.14 0.37
Book Value per equity share (Rs.) 11.73 9.24 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. Names of Shareholder No. of Shares held % of

No. Shareholding
1. Mr Dilip Modi 600 14.30
2. Mr. Santosh Kumar Gupta 500 11.90
3. Mr. Rakesh Haldia 500 11.90
4. Mr. R. K. Gupta 500 11.90
5. Mr. Ram Prakash Goyal 500 11.90
6. First Choice Enterprises Private Limited 1,600 38.10
Total 4,200 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005

132
 Equity Capital 0.04 0.04 0.04
Preference Capital 10.00 10.00 10.00
Reserves and Surplus 2.32 0.47 (0.02)
Total Income 2.81 1.67 -
Profit/(Loss) after Tax 1.85 0.50 (0.01)
Earnings per share (Rs.) (Face Value Rs. 10/-) 441.56 118.26 (1.81)
Book Value per equity share (Rs.) 562.85 121.29 (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. Names of Shareholder No. of Shares held % of

No. Shareholding
1. Dr. B.K. Modi 2,000,000 100.00
Total 2,000,000 100.00

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 55-
69600 with the RoC. Its registered office is situated at D-60, Street No. C-5, Sainik Farms, New Delhi-
110062, 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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. ITPL 41,664,919 100.00

2. Mr. Dilip Modi 1 0.00
Total 41,664,920 100.00

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 Year ended Year ended
December June June 30, 2005
31, 2006 30, 2006
Equity Capital 416.65 416.65 416.65
Reserves and Surplus 390.18 390.19 390.38
Total Income - - -
Profit/(Loss) after Tax (0.01) (0.19) (0.33)
Earnings per share (Rs.) (Face Value Rs. 10/-) (0.00) (0.00) (0.01)
Book Value per equity share (Rs.) 19.36 19.36 19.37

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

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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. Mr. Ravinder Lal Ahuja 10 0.01

2. Mr. R.K. Gupta 10 0.01
3. Fine Instalments Private Limited 12,500 17.12

134
 4. Modikem Limited 36,000 49.30
5. Toplight Corporate Management Private Limited 12,500 17.12
6. Oasis Cineplex Private Limited 12,000 16.43
Total 73,020 100.00

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 Year ended Period ended
March March March 31, 2005
31, 2007 31, 2006 (15 months)
Equity Capital 0.73 0.73 0.73
Reserves and Surplus (0.98) (0.96) (0.95)
Total Income - - 0.00
Profit/(Loss) after Tax (0.02) (0.01) (0.03)
Earnings per share (Rs.) (Face Value Rs. 10/-) (0.22) (0.19) (0.41)
Book Value per equity share (Rs.) (3.43) (3.21) (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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. Mrs. Veena Modi 20 0.20

2. Ms. Divya Modi 10,000 99.80
Total 10,020 100.00

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 Year ended Year ended
March March March
31, 2007 31, 2006 31, 2005

Equity Capital 0.10 0.10 0.10

135
 Reserves and Surplus (0.18) (0.17) (0.05)
Total Income - - -
Profit/(Loss) after Tax (0.01) (0.12) (0.00)
Earnings per share (Rs.) (Face Value Rs. 10/-) (0.94) (12.24) (0.36)
Book Value per equity share (Rs.) (7.76) (6.81) 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. Names of Shareholder No. of Shares held % of

No. Shareholding

1. Mrs. Veena Modi 49,990 99.98

2. Mr. G.S. Negi 10 0.02
Total 50,000 100.00

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 Period ended
March March 31, 2006
31, 2007
Equity Capital 0.50 0.50
Reserves and Surplus (0.33) (0.05)
Total Income 52.92 -
Profit/(Loss) after Tax (0.29) (0.05)
Earnings per share (Rs.) (Face Value Rs. 10/-) (5.71) (0.92)
Book Value per equity share (Rs.) 4.57 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 Holding Company Subsidiary

Nine- Year Year Fifteen- Year Nine- Year Year Fifteen- Year
months Ended Ended months Ended months Ended Ended months Ended
Period March March Period December Period March March Period December
Ended 31, 31, Ended 31, 2003 Ended 31, 2007 31, Ended 31, 2003
December 2007 2006 March December 2006 March
31, 2007 31, 2005 31, 2007 31, 2005

A) Transactions

i) Revenue from Value Added Services

Spice Communications Limited - - - - - - - - - -

ii) Revenue from Roaming Services

Spice Communications Limited - - - - - - - - - -
iii) Sale of Softwares
- - - - - - - - - -
iv) Other Income (Rental Income)
Hot Spot Retails Private Limited - - - - - - - - - -
iv) Purchase of Fixed Assets
Spice Mobiles Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - - - - - - - - -
MCorpGlobal Private Limited - - - - - - - - - -
v) Roaming Expenses

139
 Spice Communications Limited - - - - - - - - - -
vi) Enterprise Solution Charges
Spice Communications Limited - - - - - - - - - -
vii) Gifts and Prizes
Hot Spot Retails Private Limited - - - - - - - - - -
Spice Communications Limited - - - - - - - - - -
viii) Website Development Charges
Spice Communications Limited - - - - - - - - - -

ix) Hardware and Equipment Maintenance Services

Spice Communications Limited - - - - - - - - - -
x) Rent Paid
Spice Communications Limited - - - - - - - - - -
Harjas Logic Systems Private Limited
- - - - - - - - - -
Wellwisher Holdings Private Limited - - - - - - - - - -
xi) Repair Services
Hot Spot Retails Private Limited - - - - - - - - - -
xii) Business Promotion Expenses
Hot Spot Retails Private Limited - - - - - - - - - -
Spice Mobiles Limited - - - - - - - - - -

xiii) Travelling expenses

Nik Travels Private Limited - - - - - - - - - -
xiv) Communication expenses
Spice Communications Limited - - - - - - - - - -
xv) Sundry Debit Balances Written Off
Spice Communications Limited - - - - - - - - - -
xvi) Balances Provided for
Spice Communications Limited - - - - - - - - - -

140
xvii) Electricity Expenses
Spice Communications Limited - - - - - - - - - -

xiii) Staff Welfare

Spice Communications Limited - - - - - - - - - -

xix) Legal & Professional Charges
Mobisoc Technology Private Limited - - - - - 18.18 - - - -
xx) Corporate Guarantee Commission income
Omnia BPO Services Limited (formerly
known as Stracon Back Office Solutions
Limited) - - - - - - - - - -
xxi) Interest Income
MCorpGlobal Private Limited - - - - - - - - - -

xxii) Remuneration paid

Saket Agarwal - - - - - - - - - -
Kartar Singh - - - - - - - - - -
Dheeraj Agarwal - - - - - - - - - -
Reimbursement of Expenses Incurred by the
xxiii) Company
MCorpGlobal Private Limited - - - - - - - - - -
Spice Global Pvt Ltd. - - - - - - - - - -
Spice Communications Limited - - - - - - - - - -
Reimbursement of Expenses Paid by the
xxiv) Company
Mobisoc Technology Private Limited - - - - - 3.00 - - - -
xxv) Dividend Paid
Omnia Investments Private Limited - 400.18 - - - - - - - -

Dr. B.K Modi - - - - - - - - - -

141
 Mrs. Veena Modi - - - - - - - - - -
Mr. Dilip Modi - - - - - - - - - -
Ms. Divya Modi - - - - - - - - - -
xxvi) Investment in Equity Share Capital
Mobisoc Technology Private Limited - - - - - - 100.00 - - -

xxvii) 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 - - 60.00 - - - - - - -

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 - - 60.00 - - - - - - -

Spice Net Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - - - - - - - - -

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) Loan Given During the Year

MCorpGlobal Private Limited - - - - - - - - - -
xxxiii) Loan received back during the year
MCorpGlobal Private Limited - - - - - - - - - -
B) Balances at As at As at As at As at As at As at As at As at As at As at
the year end December March March March December December March March March December
31, 2007 31, 31, 31, 2005 31, 2003 31, 2007 31, 31, 31, 2005 31, 2003
2007 2006 2007 2006
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 - - - - - 0.51 - - - -
Spice Mobiles Limited - - - - - - - - - -

Spice Communications 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..

144
Particulars Fellow Subsidiary Key Management Personnel

Nine- Year Year Year Nine- Year Year Year

months Ended Ended Fifteen- Ended months Ended Ended Fifteen- Ended
Period March March months December Period March March months December
Ended 31, 31, Period 31, 2003 Ended 31, 2007 31, 2006 Period 31, 2003
December 2007 2006 Ended December Ended
31, 2007 March 31, 2007 March
31, 31,
2005 2005
A) Transactions

i) Revenue from Value Added Services

Spice Communications Limited 7.85 - - - - - - - - -

ii) Revenue from Roaming Services

Spice Communications Limited 3.62 - - - - - - - - -
iii) Sale of Softwares
52.70 - - - - - - - - -
iv) Other Income (Rental Income)
Hot Spot Retails Private Limited 0.20 - - - - - - - - -
iv) Purchase of Fixed Assets
Spice Mobiles Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - 0.01 - - - - - - -
MCorpGlobal Private Limited - - - - - - - - - -
v) Roaming Expenses
Spice Communications Limited 5.97 - - - - - - - - -
vi) Enterprise Solution Charges
Spice Communications Limited 2.96 - - - - - - - - -
vii) Gifts and Prizes

145
 Hot Spot Retails Private Limited - 0.02 - - - - - - - -
Spice Communications Limited - - - - - - - - - -
viii) Website Development Charges
Spice Communications Limited - - - - - - - - - -
Hardware and Equipment Maintenance
ix) Services
Spice Communications Limited - - - - - - - - - -
x) Rent Paid
Spice Communications Limited - - - - - - - - - -
Harjas Logic Systems Private Limited
- - - - - - - - - -
Wellwisher Holdings Private Limited - - - - - - - - - -
xi) Repair Services
Hot Spot Retails Private Limited - - - - - - - - - -
xii) Business Promotion Expenses
Hot Spot Retails Private Limited 0.05 0.03 - - - - - - - -
Spice Mobiles Limited - - - - - - - - - -

xiii) Travelling expenses

Nik Travels Private Limited - - - - - - - - - -
xiv) Communication expenses
Spice Communications Limited 0.44 - - - - - - - - -
xv) Sundry Debit Balances Written Off
Spice Communications Limited - - - - - - - - - -
xvi) Balances Provided for
Spice Communications Limited - - - - - - - - - -
xvii) Electricity Expenses
Spice Communications Limited - - - - - - - - - -

xiii) Staff Welfare

146
 Spice Communications Limited - - - - - - - - - -
xix) Legal & Professional Charges
Mobisoc Technology Private Limited - - - - - - - - - -
xx) Corporate Guarantee Commission income
Omnia BPO Services Limited (formerly known
as Stracon Back Office Solutions Limited) - 0.39 0.02 - - - - - - -
xxi) Interest Income
MCorpGlobal Private Limited - - - - - - - - - -

xxii) Remuneration paid

Saket Agarwal - - - - - 0.99 - - - -
Kartar Singh - - - - - 2.27 - - - -
Dheeraj Agarwal - - - - - - - 0.54 2.55 -
Reimbursement of Expenses Incurred by the
xxiii) Company
MCorpGlobal Private Limited - - - - - - - - - -
Spice Global Pvt Ltd. - - - - - - - - - -
Spice Communications Limited - - - - - - - - - -
Reimbursement of Expenses Paid by the
xxiv) Company
Mobisoc Technology Private Limited - - - - - - - - - -
xxv) Dividend Paid
Omnia Investments Private Limited - - - - - - - - - -

Dr. B.K Modi - - - - - - - - - -

Mrs. Veena Modi - - - - - - - - - -
Mr. Dilip Modi - - - - - - 0.02 - - -
Ms. Divya Modi - - - - - - - - - -
xxvi) Investment in Equity Share Capital
Mobisoc Technology Private Limited - - - - - - - - - -

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 Fellow Subsidiary Key Management Personnel

Nine- Year Year Fifteen- Year Nine- Year Year Fifteen- Year
months Ended Ended months Ended months Ended Ended months Ended
Period March March Period December Period March March Period December
Ended 31, 31, Ended 31, 2003 Ended 31, 31, Ended 31, 2003
December 2007 2006 March December 2007 2006 March
31, 2007 31, 2005 31, 2007 31, 2005

xxvii) Share Application money paid

Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - - - -
Hot Spot Retails Private Limited - 43.20 - - - - - - - -
MCorpGlobal Private Limited - - - - - - - - - -
xxviii) Share Application money received back
Bougainvillea Multiplex & -
Entertainment Center Private Limited ZZZZZZ - - - - - - - - -
Hot Spot Retails Private Limited - 43.20 - - - - - - - -
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 - - 2.50 - - - - - - -
Omnia BPO Services Limited (formerly
known as Stracon Back Office Solutions
Limited) - 0.40 2.50 - - - - - - -
Twenty First Century Capitals Limited - - - - - - - - - -
xxx) Advance received back during the year

149
 Omnia Investments Private Limited - - - - - - - - - -
Spice Net Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - 2.50 - - - - - - -
Twenty First Century Capitals Limited - - - - - - - - - -
Omnia BPO Services Limited (formerly
known as Stracon Back Office Solutions
Limited) - 0.40 2.50 - - - - - - -
xxxi) Security Deposits Given
Mudaliar & Sons Hotels Pvt Ltd - - - - - - - - - -
Harjas Logic Systems Private Limited - - - - - - - - - -

xxxii) Loan Given During the Year

MCorpGlobal Private Limited - - - - - - - - - -
xxxiii) Loan received back during the year
MCorpGlobal Private Limited - - - - - - - - - -
B) Balances As at As at As at As at As at As at As at As at As at As at
at the year December March March March December December March March March December
end 31, 2007 31, 31, 31, 2005 31, 2003 31, 2007 31, 31, 31, 2005 31, 2003
2007 2006 2007 2006
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) - 0.40 0.02 - - - - - - -
Hot Spot Retails Private Limited - - - - - - - - - -

Twenty First Century Capitals Limited - - - - - - - - - -

150
 Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - - - -
Harjas Logic Systems Private Limited - - - - - - - - - -
Kartar Singh - - - - - 0.12 - - - -
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 - - - - - - - - 0.06 -
Harjas Logic Systems Private Limited - - - - - - - - - -
Mobisoc Technology Private Limited - - - - - - - - - -
Spice Mobiles Limited - - - - - - - - - -
Spice Communications 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..

151
Particulars Relatives of Key Management Personnel Enterprises owned or significantly influenced by key
management personnel or their relatives

Nine- Year Year Ended Fifteen- Year Ended Nine- Year Year Fifteen- Year
months Ended March 31, months December months Ended Ended months Ended
Period March 31, 2006 Period 31, 2003 Period March 31, March Period December
Ended 2007 Ended Ended 2007 31, 2006 Ended 31, 2003
December March 31, December March 31,
31, 2007 2005 31, 2007 2005
A) Transactions
i) Revenue from Value Added Services
Spice Communications Limited - - - - - 34.32 117.80 87.74 2.12
133.18
ii) Revenue from Roaming Services
Spice Communications Limited - - - - - 42.80 50.69 78.66 -
13.79
iii) Sale of Softwares
- - - - - 254.76 221.23 - - -
iv) Other Income (Rental Income)
Hot Spot Retails Private Limited - - - - - - - - -
1.60
iv) Purchase of Fixed Assets
Spice Mobiles Limited - - - - - - - - -
0.16
Hot Spot Retails Private Limited - - - - - 0.27 - - - -
MCorpGlobal Private Limited - - - - - - - - 4.67 -
v) Roaming Expenses
Spice Communications Limited - - - - - 21.96 11.87 -
18.72 10.63
vi) Enterprise Solution Charges
Spice Communications Limited - - - - - 9.95 4.07 - - -
vii) Gifts and Prizes
Hot Spot Retails Private Limited - - - - - - - - - -
Spice Communications Limited - - - - - - 0.07 - - -
viii) Website Development Charges
Spice Communications Limited - - - - - - 1.20 - - -

152
 ix) Hardware and Equipment Maintenance Services
Spice Communications Limited - - - - - - - 0.75 3.75 -
x) Rent Paid
Spice Communications Limited - - - - - 0.27 0.36 0.36 0.81 -
Harjas Logic Systems Private Limited - - - - - 2.93 3.91 0.33 - -
Wellwisher Holdings Private Limited - - - - - 1.00 - - -
1.80

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 Relatives of Key Management Personnel Enterprises owned or significantly influenced by key
management personnel or their relatives
Nine- Year Year Fifteen- Year Nine- Year Year Fifteen- Year
months Ended Ended months Ended months Ended Ended months Ended
Period March March Period December Period March March Period December
Ended 31, 2007 31, 2006 Ended 31, 2003 Ended 31, 2007 31, 2006 Ended 31, 2003
December March 31, December March 31,
31, 2007 2005 31, 2007 2005
xi) Repair Services
Hot Spot Retails Private Limited - - - - - - - - - -
xii) Business Promotion Expenses
Hot Spot Retails Private Limited - - - - - - - - - -
Spice Mobiles Limited - - - - - 6.50 - - - -

xiii) Travelling expenses

Nik Travels Private Limited - - - - - 4.59 3.03 0.54 1.39 -
xiv) Communication expenses
Spice Communications Limited - - - - - 1.47 1.26 0.95 1.54 -
Sundry Debit Balances Written
xv) Off
Spice Communications Limited - - - - - - 0.16 - 0.10 -
xvi) Balances Provided for
Spice Communications Limited - - - - - - - 0.30 - -
xvii) Electricity Expenses
Spice Communications Limited - - - - - 1.11 0.58 - - -

xiii) Staff Welfare

Spice Communications Limited - - - - - 0.05 - - - -

xix) Legal & Professional Charges
Mobisoc Technology Private - - - - - - - - - -

154
 Limited
Corporate Guarantee Commission
xx) income
Omnia BPO Services Limited
(formerly known as Stracon Back
Office Solutions Limited) - - - - - - - - - -
xxi) Interest Income
MCorpGlobal Private Limited - - - - - - 5.88 3.20 - -

xxii) Remuneration paid

Saket Agarwal - - - - - - - - - -
Kartar Singh - - - - - - - - - -
Dheeraj Agarwal - - - - - - - - - -
Reimbursement of Expenses
xxiii) Incurred by the Company
MCorpGlobal Private Limited - - - - - - 0.36 - - -
Spice Global Pvt Ltd. - - - - - - - - 0.33 -
Spice Communications Limited - - - - - - 0.59 0.97 49.47 -
Reimbursement of Expenses Paid
xxiv) 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 - - - - - - - - - -
Investment in Equity Share
xxvi) Capital
Mobisoc Technology Private
Limited - - - - - - - - - -

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

xxvii) Share Application money paid - - -

Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - 150.00 - -
Hot Spot Retails Private Limited - - - - - - - - - -
MCorpGlobal Private Limited - - - - - - - 79.50 - -
Share Application money received
xxviii) back
Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - 150.00 - - -
Hot Spot Retails Private Limited - - - - - - - - - -
MCorpGlobal Private Limited - - - - - - 79.50 - - -
xxix) Advance Given During the Year

Omnia Investments Private Limited - - - - - - - - - -

Spice Global Pvt Ltd. - - - - - - - - 17.50 -

Spice Net Limited - - - - - - - - 19.05 -

Hot Spot Retails Private Limited - - - - - - - - - -
Omnia BPO Services Limited
(formerly known as Stracon Back
Office Solutions Limited) - - - - - - - - - -
Twenty First Century Capitals
Limited - - - - - - - 0.50 - -

157
 Advance received back during the
xxx) year

Omnia Investments Private Limited - - - - - - - - - -

Spice Net Limited - - - - - - - - 19.00 -
Hot Spot Retails Private Limited - - - - - - - - - -
Twenty First Century Capitals
Limited - - - - - - 0.50 - - -
Omnia BPO Services Limited
(formerly known as Stracon Back
Office Solutions Limited) - - - - - - - - - -
xxxi) Security Deposits Given
Mudaliar & Sons Hotels Pvt Ltd - - - - - 150.00 - - - -
Harjas Logic Systems Private Limited - - - - - - 1.95 - - -

xxxii) Loan Given During the Year

MCorpGlobal Private Limited - - - - - - 54.10 115.50 - -
xxxiii) Loan received back during the year
MCorpGlobal Private Limited - - - - - - 119.60 50.00 - -
B) As at As at As at As at As at As at As at As at As at As at
Balances December March March March December December March March March December
at the year 31, 2007 31, 2007 31, 2006 31, 2005 31, 2003 31, 2007 31, 2007 31, 2006 31, 2005 31, 2003
end
i) Receivables

Spice Communications Limited - - - - - 265.08 184.13 20.27 47.30 -

Spice Global Pvt Ltd. - - - - - - - - 17.60 -
Spice Net Limited - - - - - - - - 0.05 -

Modi Distributors Pvt. Ltd. - - - - - - - - 5.00 -

Omnia BPO Services Limited - - - - - - - - - -

158
 (formerly known as Stracon Back
Office Solutions Limited)
Hot Spot Retails Private Limited - - - - - 2.07 - - - -
Twenty First Century Capitals
Limited - - - - - - - 0.50 - -
Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - 150.00 - -
Harjas Logic Systems Private Limited - - - - - - 1.95 - - -
Kartar Singh - - - - - - - - - -
Mudaliar & Sons Hotels Pvt Ltd
(against security deposit) - - - - - 150.00 - - - -
Mudaliar & Sons Hotels Pvt Ltd
(against advances recoverable) - - - - - 8.43 - - - -
MCorpGlobal Private Limited - - - - - - - 145.00 - -
ii) Payables
Nik Travels Private Limited - - - - - 0.03 0.01 0.08 0.00* -
Mr. Dheeraj Agarwal - - - - - - - - - -
Harjas Logic Systems Private Limited - - - - - - - 0.25 - -
Mobisoc Technology Private Limited - - - - - - - - - -
Spice Mobiles Limited - - - - - 6.50 - - - -

Spice Communications Limited - - - - - 33.75 0.10 - - -

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 Relatives of Key Enterprises owned or Total
Personnel Management Personnel significantly influenced by
key management
personnel or their
relatives

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 - - 7.85 - - - - - 34.32 117.80 42.17 117.80
ii) Revenue from Roaming
Services
Spice Communications
Limited - - 3.62 - - - - - 13.79 42.80 17.41 42.80
iii) Sale of Products
Spice Communications
Limited - - 52.70 - - - - - 254.76 221.23 307.46 221.23
iv) Other Income (Rental
Income)
Hot Spot Retails Private
Limited - - 0.20 - - - - - 1.60 - 1.80 -
v) Purchase of Fixed Assets
Spice Mobiles Limited
- - - - - - - - 0.16 0.13 0.16 0.13
Hot Spot Retails Private
Limited - - - - - - - - 0.27 0.02 0.27 0.02
vi) Roaming Expenses
Spice Communications
Limited - - 5.97 - - - - - 18.72 21.96 24.69 21.96
vii) Enterprise Solution
Charges

160
 Spice Communications
Limited - - 2.96 - - - - - 9.95 4.07 12.91 4.07
viii) Gifts and Prizes
Hot Spot Retails Private
Limited - - - 0.02 - - - - - - - 0.02
Spice Communications
Limited - - - - - - - - - 0.07 - 0.07
ix) Website Development
Charges
Spice Communications
Limited - - - - - - - - - 1.20 - 1.20
x) Rent Paid
Spice Communications
Limited - - - - - - - - 0.27 0.36 0.27 0.36
Harjas Logic Systems
Private Limited - - - - - - - - 2.93 3.91 2.93 3.91
Wellwisher Holdings
Private Limited - - - - - - - - 1.80 1.00 1.80 1.00
xi) Repair Services
Hot Spot Retails Private
Limited - - - 0.00 - - - - - - - 0.00
xii) Business Promotion
Expenses
Hot Spot Retails Private
Limited - - 0.05 0.03 - - - - 0.00 - 0.05 0.03
Spice Mobiles Limited
- - - - - - - - 6.50 - 6.50 -
xiii) Travelling expenses
Nik Travels Private Limited
- - - - - - - - 4.59 3.24 4.59 3.24
xiv) Communication expenses
Spice Communications
Limited - - 0.44 - - - - - 1.47 1.26 1.91 1.26
xv) Sundry Debit Balances
Written Off
Spice Communications
Limited - - - - - - - - - 0.16 - 0.16
xvi) Electricity Expenses
Spice Communications
Limited - - - - - - - - 1.11 0.58 1.11 0.58
xvii) Staff Welfare
Spice Communications

161
 Limited - - - - - - - - 0.05 - 0.05 -
xviii) Corporate Guarantee
Commission income
Omnia BPO Services
Limited (formerly known as - - - 0.39 - - - - - - - 0.39
Stracon Back Office
Solutions Limited)
xix) Interest Income
MCorpGlobal Private
Limited - - - - - - - - - 5.88 - 5.88
xx) Remuneration paid
Saket Agarwal
- - - - 0.99 - - - - - 0.99 -
Kartar Singh
- - - - 2.27 - - - - - 2.27 -
Lokesh Gupta
- - - - 3.89 3.15 - - - - 3.89 3.15
xxi) Reimbursement of
Expenses Incurred by the
Company
MCorpGlobal Private
Limited - - - - - - - - - 0.36 - 0.36
Spice Communications
Limited - - - - - - - - - 0.59 - 0.59
xxii) Reimbursement by the
Group of expenses incurred
MCorpGlobal Private
Limited - - - - - - - - - 0.43 - 0.43
xxiii) Dividend Paid
Omnia Investments Private
Limited - 400.18 - - - - - - - - - 400.18
Dr. B.K Modi
- - - - - 0.00 - - - - - 0.00
Mrs. Veena Modi
- - - - - - - 0.00 - - - 0.00
Mr. Dilip Modi
- - - - - 0.02 - - - - - 0.02
Ms. Divya Modi
- - - - - - - 0.00 - - - 0.00
xxiv) Share Application money
paid
Hot Spot Retails Private

162
 Limited - - - 43.20 - - - - - - - 43.20
xxv) Share Application money
received back
Bougainvillea Multiplex &
Entertainment Center Private - - - - - - - - - 150.00 - 150.00
Limited
Hot Spot Retails Private
Limited - - - 43.20 - - - - - - - 43.20
MCorpGlobal Private
Limited - - - - - - - - - 79.50 - 79.50
xxvi) Share Application money
received
Omnia Investments Private
Limited - 10.00 - - - - - - - - - 10.00
xxvii Share Application money
) paid back
Omnia Investments Private
Limited - 10.00 - - - - - - - - - 10.00
xxviii Advance Given During the
) Year
Omnia BPO Services
Limited (formerly known as - - - 0.40 - - - - - - - 0.40
Stracon Back Office
Solutions Limited)
xxix) Advance received back
during the year
Twenty First Century
Capitals Limited - - - - - - - - - 0.50 - 0.50
Omnia BPO Services
Limited (formerly known as - - - 0.40 - - - - - - - 0.40
Stracon Back Office
Solutions Limited)
xxx) Security Deposits Given
Harjas Logic Systems
Private Limited - - - - - - - - - 1.95 - 1.95
Mudaliar & Sons Hotels Pvt
Ltd - - - - - - - - 150.00 - 150.00 -
xxxi) Loan Given During the
Year
MCorpGlobal Private
Limited - - - - - - - - - 54.10 - 54.10
xxxii Loan received back during

163
 ) the year
MCorpGlobal Private
Limited - - - - - - - - - 119.60 - 119.60

B) Balances at the year end As at As at March 31, 2007 As at As at As at As at As at As at As at As at

December 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31, March 31,
2007 2007 2007 2007 2007 2007 2007 2007 2007
i) Receivables
Spice Communications
Limited - - - - - - - - 265.08 184.13 265.08 184.13
Omnia BPO Services
Limited (formerly known as - - - 0.40 - - - - - - - 0.40
Stracon Back Office
Solutions Limited)
Hot Spot Retails Private
Limited - - - - - - - - 2.07 - 2.07 -
Harjas Logic Systems
Private Limited - - - - - - - - - 1.95 - 1.95
Mr. Kartar Singh
- - - - 0.12 - - - - - 0.12 -
Mudaliar & Sons Hotels Pvt
Ltd (against security deposit) - - - - - - - - 150.00 - 150.00 -
Mudaliar & Sons Hotels Pvt
Ltd (against advances - - - - - - - - 8.43 - 8.43 -
recoverable)
ii) Payables
Nik Travels Private Limited
- - - - - - - - 0.03 0.01 0.03 0.01
Spice Communications
Limited - - - - - - - - 33.75 0.10 33.75 0.10
Spice Mobiles Limited
- - - - - - - - 6.50 - 6.50 -

Notes:

1) All amounts 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 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 Year Year Fifteen- Year
Period Ended Ended months Ended
Ended March 31, March 31, Period Ended December
December 2007 2006 March 31, 31, 2003
31, 2007 2005
Class of Shares

Equity Share Capital as outstanding at

the year end 14,571,574 14,571,574 12,000,120 2,000,020 2,000,020

Dividend on Equity Shares

- Dividend per equity share ( Rs. ) 16.07* 33.35** - - -

- Dividend rate ( % to paid up
capital) 160.70% 333.5% - - -

- Dividend amount 234.28 400.20 - - -

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 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.

5. 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”)

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 Annexure-
IV 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 Annexure-
IV 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 Annexure-
IV 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.

9. 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) Details of Other Income, as appearing in Annexure V ;

b) Details of Rates of Dividend, as appearing in Annexure VI
c) Capitalization Statement, as appearing in Annexure VII ;
d) Details of Secured Loans, as appearing in Annexure VIII ;
e) Details of Investments, as appearing in Annexure IX ;
f) Details of Sundry Debtors, as appearing in Annexure X;
g) Details of Loans and Advances, as appearing in Annexure XI ;
h) Details of Other Current Assets, as appearing in Annexure XII
i) Statement of Tax Shelters, as appearing in Annexure XIII ;
j) Statement of Accounting Ratios, as appearing in Annexure XIV ; and
k) Details of the Related Parties and transactions with them, as appearing in Annexure XV

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) Details of Other Income, as appearing in Annexure XX ;

b) Details of Rates of Dividend, as appearing in Annexure XXI;
c) Capitalization Statement, as appearing in Annexure XXII ;
d) Details of Sundry Debtors, as appearing in Annexure XXIII ;
e) Details of Loans and Advances as appearing in Annexure XXIV ;
f) Details of Other Current Assets as appearing in Annexure XXV ;
g) Statement of Accounting Ratios as appearing in Annexure XXVI ; and
h) 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.

3. 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.

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.

5. 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.

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 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 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.

9. 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

172
 Offer Document, as approved by the Board of Directors of the Company and attached to this
report.

a) Details of Other Income, as appearing in Annexure V;

b) Details of Rates of Dividend, as appearing in Annexure VI;
c) Capitalisation Statement, as appearing in Annexure VII;
d) Details of Secured Loans, as appearing in Annexure VIII;
e) Details of Investments, as appearing in Annexure IX;
f) Details of Sundry Debtors, as appearing in Annexure X;
g) Details of Loans and Advances, as appearing in Annexure XI ;
h) Details of Other Current Assets, as appearing in Annexure XII;
i) Statement of Tax Shelters, as appearing in Annexure XIII;
j) Statement of Accounting Ratios, as appearing in Annexure XIV ; and
k) 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)

Particulars As at As at March As at March As at March As at
December 31, 2007 31, 2006 31, 2005 December
31, 2007 31, 2003
APPLICATION OF FUNDS
Fixed Assets

Gross Block 451.62 185.26 68.50 29.38 -

Less: Accumulated
Depreciation/ Amortisation (113.29) (52.99) (9.28) (2.22) -

Net Block 338.33 132.27 59.22 27.16 -

Capital Work In Progress
including Capital Advances 8.05 31.21 9.24 - -

Total 346.38 163.48 68.46 27.16 -

Investments 100.00 100.00 - - -

Deferred Tax Assets (net) - 1.87 0.06 - 2.93

Current Assets, Loans &
Advances

Inventories - 1.36 - - -

Sundry Debtors 357.24 262.53 46.09 67.40 0.15

Cash and Bank Balances 414.26 554.95 21.22 90.56 6.42

Other Current Assets 83.44 2.39 2.61 1.39 3.75

Loans & Advances 293.24 47.70 300.77 24.07 0.17

Total 1,148.18 868.93 370.69 183.42 10.49

TOTAL (A) 1,594.56 1,134.28 439.21 210.58 13.42

Deferred Tax Liabilities (net) 2.60 - - 0.55 -

Liabilities and Provisions

Secured Loan - - 0.67 - -

Current Liabilities 179.67 19.57 12.80
85.89 0.43

Provisions 315.88 11.50 4.68 3.33 0.01

Total 495.55 97.39 24.92 16.13 0.44

TOTAL (B) 498.15 97.39 24.92 16.68 0.44

Net Worth (A-B) 1,096.41 1,036.89 414.29 193.90 12.98

Represented by
Share Capital and Reserves

Equity Share Capital 145.72 145.72 120.00 20.00 20.00

174
 Particulars As at As at March As at March As at March As at
December 31, 2007 31, 2006 31, 2005 December
31, 2007 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) 950.69 891.17 294.29 173.90 -

Profit and Loss Account - - - - (6.93)

Less: Miscellaneous
Expenditure - - - - (0.09)
(to the extent not written off
or adjusted)

Net Worth 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 Place: Noida

Date : June 26, 2008 Date : June 26, 2008

Kartar Singh
Chief Finance Officer Company secretary

Place: Noida Place: Noida

Date : June 26, 2008 Date : June 26, 2008

175
CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)

ANNEXURE II : UNCONSOLIDATED SUMMARY STATEMENT OF PROFIT AND LOSS,

AS RESTATED

(Amount in Rs. Million)

Particulars Nine- Year Year Fifteen- Year
months Ended Ended months Ended
Period March 31, March 31, Period December
Ended 2007 2006 Ended 31, 2003
December March 31,
31, 2007 2005
INCOME

Operating Income 734.56 661.78 324.95 268.28 8.54

Other Income 36.31 23.79 7.31 3.49 0.06

Total Income 770.87 685.57 332.26 271.77 8.60

EXPENDITURE

Purchase of Goods for Sale 0.99 3.38 - - -

Operating Expenses 82.13 53.69 21.49 23.45 -

Staff Cost 108.62 66.11 28.53 20.15 0.59

Selling and Distribution
Expenses 16.56 7.28 4.79 5.15 1.92
General and Administration
Expenses 144.82 74.95 23.77 13.45 1.17
Decrease / (Increase) in
Inventories 1.36 (1.36) - - -

Interest 0.94 0.04 0.01 0.53 -

Miscellaneous Expenditure
written off - - 0.03 0.06 0.64
Depreciation / Amortization (Refer
note no. C (ii) and G (11) of the
Annexure IV) 60.31 32.90 14.59 5.54 -

Total Expenditure 415.73 236.99 93.21 68.33 4.32

PROFIT BEFORE TAX AND
PRIOR PERIOD ITEMS 355.14 448.58 239.05 203.44 4.28

Prior Period Items (0.69) 0.38 - - -

PROFIT BEFORE TAX AND

AFTER PRIOR PERIOD
ITEMS
355.83 448.20 239.05 203.44 4.28
Provision for Tax
Current Tax (Net of MAT Credit
entitlement, refer note no. G (13)
of the Annexure IV) 12.64 23.64 20.03 21.22 0.06

Deferred Tax Charge / (Credit) 3.99 (1.24) (0.30) 3.48 1.53

Fringe Benefits Tax 4.51 2.10 1.03 - -

Total Tax Expense 21.14 24.50 20.76 24.70 1.59

NET PROFIT AS PER
AUDITED ACCOUNTS 334.69 423.70 218.29 178.74 2.69

176
 Particulars Nine- Year Year Fifteen- Year
months Ended Ended months Ended
Period March 31, March 31, Period December
Ended 2007 2006 Ended 31, 2003
December March 31,
31, 2007 2005
Adjustments ( Refer Note no. E
of Annexure IV) 4.46 (9.64) 2.46 2.60 0.12
Current Tax impact of
Adjustments (0.42) 1.21 (0.28) (0.51)

Deferred Tax impact of -

Adjustments
- 0.48 (0.09) (0.39)

Particulars Nine- Year Year Fifteen- Year

months Ended Ended months Ended
Period March 31, March 31, Period December
Ended 2007 2006 Ended 31, 2003
December March 31,
31, 2007 2005

Net Impact of Adjustments 4.04 (7.95) 2.09 1.70 0.12

NET PROFT AS
RESTATED 338.73 415.75 220.38 180.44 2.81

Profit & Loss Account at the

beginning of the year / period 206.50 289.45 169.07 (11.37) (14.18)

PROFIT AVAILABLE FOR

APPROPRIATION 545.23 705.20 389.45 169.07 (11.37)

Appropriations:

Transfer to General Reserve 33.47 42.37 - - -

Proposed Dividend on Equity
Shares (at the rate of Rs 16.07 per
share) 234.28 - - - -
Interim Dividend on Equity Shares
(at the rate of Rs. 33.35 per share) 400.20

Tax on dividend 39.82 56.14 - - -

Utilized for Issue of bonus
shares - - 100.00 - -

BALANCE CARRIED
FORWARD
AS RESTATED 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 Place: Noida

Date : June 26, 2008 Date : June 26, 2008

Kartar Singh
Chief Finance Officer Company secretary

Place: Noida Place: Noida

Date : June 26, 2008 Date : June 26, 2008

178
CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)

ANNEXURE III : UNCONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS, AS

RESTATED

(Amount in Rs. Million)

Particulars Nine- months Year Year Fifteen- Year
Period Ended Ended months Ended
Ended March 31, March 31, Period December
December 2007 2006 Ended 31, 2003
31, 2007 March 31,
2005

A. Cash Flow from Operating

Activities

Net Profit Before Tax, As

Restated 360.29 438.56 241.52 206.04 4.40

Net Profit Before Tax, As

Restated 360.29 438.56 241.52 206.04 4.40

Adjustment for:
Depreciation / Amortization
60.31 43.71 7.09 2.24 -
Miscellaneous Expenditure
Written off - - - 0.09 0.64
Loss on Sale of Fixed Assets
- - - 0.10 -
Provision for Doubtful Debts
11.66 8.10 2.24 - -
Foreign Exchange (Gain) /
Loss 0.23 (0.86) 0.19 (0.01) -
Interest Income
(33.61) (22.98) (6.26) (3.28) (0.06)
Interest Expense
0.94 0.04 0.01 0.53 -

Operating Profit Before

Working Capital Changes 399.82 466.57 244.79 205.71 4.98

Movement in Working
Capital:
Decrease / (Increase) in Sundry
Debtors (105.89) (224.51) 18.87 (67.24) (0.12)
Decrease / (Increase) in
Inventories 1.36 (1.36) - - -
(Increase) in Loans and
Advances (216.94) (15.42) (2.93) (1.40) (0.17)
Decrease / (Increase) in Other
Current Assets (77.12) (0.96) 1.18 2.46 (3.75)
Increase in Current Liabilities
and Provisions 103.86 71.83 8.26 13.30 0.42

Cash Generated from

Operations 105.09 296.15 270.17 152.83 1.36

Direct Taxes Paid (including

Fringe Benefits Taxes) (30.79) (49.78) (23.14) (19.34) (0.02)

179
Particulars Nine- months Year Year Fifteen- Year
Period Ended Ended months Ended
Ended March 31, March 31, Period December
December 2007 2006 Ended 31, 2003
31, 2007 March 31,
2005

Net Cash Generated from

Operations (A) 74.30 246.37 247.03 133.49 1.34

Particulars Nine- months Year Year Fifteen- Year

Period Ended Ended months Ended
Ended March 31, March 31, Period December
December 2007 2006 Ended 31, 2003
31, 2007 March 31,
2005

B. Cash Flow from Investing

Activities
Purchase of Fixed Assets
(243.73) (137.94) (48.46) (29.49) -
Proceeds from Sale of Fixed
Assets - - 0.06 - 4.02
Fixed Deposits with Banks
117.17 (498.18) 66.87 (82.05) (0.30)
Share Application Money Paid
- (43.20) (224.50) (5.00) -
Share Application Money
Received Back - 272.70 - - -
Inter Corporate Deposit Given
- (54.10) (119.50) (36.50) -
Inter Corporate Deposit
Received Back - 119.60 71.50 19.00 -
Investment in Subsidiary
- (100.00) - - -
Interest Received
29.67 24.15 3.86 3.18 0.06
Net Cash Generated from /
(Used In) Investing (96.89) (416.97) (250.17) (130.86) 3.78
Activities(B)
C. Cash Flows from
Financing Activities
Proceeds from Issuance of
Share Capital - 25.71 - - -
Securities Premium Received
- 645.23 - - -
Share Issue Expenses
- (7.75) - - -
Proceeds from Long-Term
Borrowings - - 0.67 - -
Repayment of Long-Term
Borrowings - (0.67) - - -
Interest Paid
(0.94) (0.04) (0.01) (0.53) -
Dividend Paid (including tax
on dividend paid) - (456.33) - - -
Net Cash Generated from /
(Used in) Financing Activities
(C) (0.94) 206.15 0.66 (0.53) -
Net Changes in Cash & Cash
Equivalents (A+B+C) (23.53) 35.55 (2.47) 2.10 5.12

180
 Particulars Nine- months Year Year Fifteen- Year
Period Ended Ended months Ended
Ended March 31, March 31, Period December
December 2007 2006 Ended 31, 2003
31, 2007 March 31,
2005
Cash and Cash Equivalents
at the Beginning of the Year /
Period 40.34 4.79 7.26 5.17 0.05
Cash and Cash Equivalents
at the End of the Year /
Period 16.81 40.34 4.79 7.27 5.17
Components of Cash and
Cash Equivalents:

Cash in Hand 0.26 0.05 0.06 0.02 0.10

Cheques in Hand 4.49 - - 2.81 -

Balances with Scheduled
Banks on Current Accounts 10.85 33.21 4.73 4.44 5.07
Balance with Hongkong and
Shanghai Banking Corp.,
Singapore on current account 1.21 7.08 - - -
Total
16.81 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) (Directors)

Place: Noida Place: Noida

Date : June 26, 2008 Date : June 26, 2008

Kartar Singh
Chief Finance Officer Company secretary

Place: Noida Place: Noida

Date : June 26, 2008 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. Background

a. 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.

b. 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.

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 Rates (SLM) (in %) Schedule XIV Rates

(SLM) (in %)
Buildings 3.34 3.34
Data Processing Machines 31.67 16.21
Furniture & Fixtures 13.57 6.33
Office Equipment
Mobile phones 31.67 4.75
Others 13.57 4.75

182
 Vehicles
Motor Cars 9.50 9.50
Motor buses 13.57 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 Estimated Useful Life (Years)

Computer Software 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)

December March March March December
Adjustments for 31, 2007 31, 2007 31, 2006 31, 2005 31, 2003

(0.69) 1.18 (0.36) (0.12) (0.01)

Prior Period Items (Refer note b)
(0.12) (0.04) (0.90) 0.81 0.25
Sundry Balances written back (Refer note c)
4.98 (4.44) (0.54) - -
Provision for doubtful debts (Refer note d)
0.04 0.11 0.09 (0.14) (0.12)
Sundry Balances written off (Refer note e)
- 2.78 (2.58) (0.20) -
Bad Debts written off (Refer note f)
(0.50) - 0.20 0.30 -
Bad Debts recovered (Refer Note g)
- (10.8) 7.49 3.31 -
Depreciation (Refer Note h)
- 1.25 (0.98) (0.27) -
Leave Encashment (Refer Note i)
Miscellaneous Expenditure (to the extent not - - 0.04 (0.04) -
written off) (Refer Note j)
Tax paid for earlier years/ periods (Refer note 0.75 0.30 - (1.05) -
k)
4.46 (9.64) 2.46 2.60 0.12
Total impact of adjustments

Current Tax impact of adjustments (Refer note (0.42) 1.21 (0.28) (0.51) -
l)
Deferred Tax impact of adjustments (Refer - 0.48 (0.09) (0.39) -
note l)
4.04 (7.95) 2.09 1.70 0.12
Net impact of adjustments

b) Prior Period Items

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.

(ii) 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.

(iii) 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

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. Other Significant Notes

1. 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 Nine- For 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 702.30 637.55 301.84 251.02 8.06
Overseas Market 32.26 24.23 23.11 17.26 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)

Particulars As at As at March As at March As at March As at
December 31, 31, 2007 31, 2006 31, 2005 December 31,
2007 2003
Domestic Market 355.90 259.01 44.28 64.55 0.13
Overseas Market 1.34 3.52 1.81 2.86 0.02
Total 357.24 262.53 46.09 67.40 0.15

* 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)
Current service cost 4.25*
Interest cost on benefit obligation 0.32
Expected return on plan assets (0.08)
Net actuarial( gain) / loss recognized in the year 0.62
Past service cost Nil
Net benefit expense charged to Profit and Loss account 5.11

Actual return on plan assets Nil

* Including Rs. 0.23 million being payments made during the current period.

Balance sheet
Details of Provision for gratuity as at December 31, 2007

Gratuity
(Rs. in million)
Defined benefit obligation 9.86
Fair value of plan assets 1.18
8.68
Less: Unrecognised past service cost ---
Plan asset / (liability) (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)
Opening defined benefit obligation 2.17
Interest cost 0.32
Current service cost 4.02
Benefits paid ----
Actuarial (gains) / losses on obligation 3.35
Closing defined benefit obligation 9.86

Changes in the fair value of plan assets are as follows:

Gratuity
(Rs. in million)
Opening fair value of plan assets 1.18
Expected return 0.08
Contributions by employer Nil
Benefits paid Nil
Actuarial gains / (losses) (0.08)
Closing fair value of plan assets 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
Investments with insurer (Life Insurance Corporation of India) 100 %

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 (%)
Discount rate 8.00
Expected rate of return on assets 8.70
Employee turnover 15.00

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

(Amount in Rs. million)
For the nine-months For the year ended March
period ended December 31, 2007
31, 2007
Employer’s Contribution to Provident Fund
7.36 4.33
including Family Pension Fund*
* Included in the head Contribution to Provident and Other Funds

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 Nine- For the Year For the For the Fifteen- For the Year
months Period Ended Year months Period Ended
Ended March 31, Ended Ended March December
December 31, 2007 March 31, 31, 2005 31, 2003
2007 2006
Lease Payment 17.12 12.30 3.42 2.09 NIL
Contingent rent NIL NIL NIL NIL NIL
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 NIL NIL NIL NIL NIL
received during the year
Sub-lease payments 1.80 NIL NIL NIL NIL

191
 receivable at the balance
sheet date

4. Capital Commitments
(Amount in Rs. million)
Particulars For the Nine- For the For the For the Fifteen- For the
months Period Year Ended Year months Period Year
Ended March 31, Ended Ended March Ended
December 31, 2007 March 31, 31, 2005 December
2007 2006 31, 2003
Estimated amount of 29.45 18.36 12.94 NIL NIL
contracts (Net of advances)
remaining to be executed on
capital account and not
provided for.

5. Contingent Liabilities not provided for

(Amount in Rs. million)
Particulars As at As at As at As at As at
December March 31, March 31, March 31, December 31,
31, 2007 2007 2006 2005 2003
Counter Bank Guarantee given to NIL NIL 18.00 NIL NIL
Indusind Bank on behalf of Omnia
BPO Services Limited for bill
discounting
Performance Bank Guarantees NIL NIL 0.40 2.00 NIL
Contingent Liability in respect of 38.89 31.15 NIL NIL NIL
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.

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.
6. Break-up of Deferred Tax Assets / (Liabilities) :
(Amount in Rs. million)
Deferred Tax Asset/ Liability as at
Timing Difference on account of December March March March December
31, 2007 31, 2006 31, 2005 31, 2003
31, 2007
Deferred Tax Liabilities
Difference in depreciation and other 3.69 0.05 0.28 0.81 -
differences in block of fixed assets as per
Tax books and Financial books
Gross Deferred Tax Liabilities 3.69 0.05 0.28 0.81 -

Deferred Tax Assets

Effect of expenditure debited to Profit and 1.09 1.92 0.34 0.26 -
Loss Account but allowed for tax purposes
in the following years

192
 Brought forward losses and depreciation - - - - 2.93
Gross Deferred Tax Assets 1.09 1.92 0.34 0.26 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) Foreign Currency

As at As at As at As at December 31, As at March 31, As at March 31,
December March March 2007 2007 2006
31, 2007 31, 2007 31, 2006
Export 1.29 1.01 1.31 USD 32,785 USD 23,226 USD 29,425
Debtors 0.26 2.48 0.50 EUR 4,456 EUR 42,720 EUR 9,274
0.09 NIL NIL Mauritius Rs. 63,476 NIL NIL
IL
Advances 0.47 0.23 0.22 USD 11,877 USD 5,331 USD 4,903
from 0.88 0.11 0.15 EUR 15,178 EUR 1,973 EUR 2,751
Customers
Import 4.45 7.18 2.12 USD 112,848 USD 164,789 USD 47,631
Creditors

Closing rate as on the closing dates are as follows-

Foreign Currency As at December 31, As at March 31, 2007 As at March 31, 2006
2007
USD 1 Rs. 39.41 Rs 43.59 Rs. 44.61
EUR 1 Rs. 58.12 Rs. 58.14 Rs. 54.20
Mauritius Rs. 1 Rs. 1.43 -- ---

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.

9. 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.

10. 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.

11. 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

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.

13. 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.

14. 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.

As per our report of even date

For S. R. BATLIBOI & ASSOCIATES For and on behalf of the Board of Directors of Cellebrum
Chartered Accountants Technologies Limited
(Director) (Director)

per Raj Agrawal

Partner
Membership No.82028 (Chief Financial officer) (Company Secretary)
June 26, 2008 June 26, 2008
Place : Gurgaon
Date : June 26, 2008

194
CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)

ANNEXURE V : DETAILS OF OTHER INCOME, AS RESTATED

( Amount in Rs. Million)

PARTICULARS Nine- months Year Ended Year Ended Fifteen-months Year Ended
Period Ended March 31, March 31, Period Ended December
December 31, 2007 2006 March 31, 2005 31, 2003
2007

Other income, as restated 35.69 23.46 6.33 3.31 0.06

Net Profit before tax, as

restated after prior 360.29 438.56 241.52 206.04 4.40
period items

Percentage 9.91 5.35 2.62 1.61 1.36

Fifteen-
Nine- months months Related /
Period Year Year Period Year Not
Ended Ended Ended Ended Ended related to
Source of other December March 31, March 31, March 31, December Business
income 31, 2007 2007 2006 2005 31, 2003 Nature Activity
Interest on Bank Not
deposits 33.50 17.08 2.09 2.08 0.06 Recurring Related
Non- Not
Interest Others 0.12 5.90 4.17 1.20 - Recurring Related
Non
Rental Income 1.80 - - - - Recurring Related
Non- Non
Other Income 0.27 0.48 0.07 0.03 - Recurring Related

Total Other
Income, as
restated 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.
(ii) 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.
(iii) The above amounts are as per Unconsolidated Summary Statement of Assets and Liabilities,
as restated of Cellebrum Technologies Limited (formerly Cellebrum.com Private Limited).

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 Year Year Fifteen- Year
Period Ended Ended months Ended
Ended March 31, March 31, Period Ended December
December 2007 2006 March 31, 31, 2003
31, 2007 2005
Class of Shares

Equity Share Capital as outstanding at

the year end 14,571,574 14,571,574 12,000,120 2,000,020 2,000,020

Dividend on Equity Shares

- Dividend per equity share ( Rs. ) 16.07* 33.35** - - -

- Dividend rate ( % to paid up
capital) 160.70% 333.5% - - -

- Dividend amount 234.28 400.20 - - -

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 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 Post Issue

Borrowings

Short Term Debt (A) - [*]

Long Term Debt (B) - [*]

Total Debts (C) - [*]

Shareholders' funds

Equity Share Capital 145.72 [*]

Reserves and Surplus, as restated
- Profit & Loss Account 237.66
- Securities Premium 637.48
- General Reserve 75.58 950.69 [*]

Total shareholders' fund (D) 1,096.41

Long Term debt / Equity ratio (B / D) -

Total Debt / Shareholders' Funds (C / D) -

Notes:

1) Short Term debts represents debts which are due within twelve months from 31st December,
2007.
2) Long Term debt represents debt other than short term debt as defined above.
3) Long term debt/equity :- Long Term Debt / Total Shareholder's funds.
4) 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).
5) The corresponding post issue figures are not determinable at this stage pending the completion
of Book Building Process and hence have not been furnished.

197
CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)

ANNEXURE VIII : DETAILS OF SECURED LOANS

(Amount in Rs. Million)

S. NO Particulars As at As at As at As at As at
December March 31, March 31, March 31, December
31, 2007 2007 2006 2005 31, 2003

I) VEHICLE LOANS

1 Secured by hypothecation of
respective vehicles financed - - 0.67 - -
through the loans

TOTAL - - 0.67 - -

Notes:

1) Interest rate on vehicle loans from bank was payable at the rate of 5.71% for the year ended March 31,
2006.
2) 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

(Amount in Rs. Million)

Particulars As at As at As at
December As at March As at March March 31, December
31, 2007 31, 2007 31, 2006 2005 31, 2003

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 100.00 100.00 - - -
Technology Private Limited)

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

(Amount in Rs. Million)

Particulars As at As at As at As at As at
December March 31, March 31, March 31, December
31, 2007 2007 2006 2005 31, 2003

Debts Outstanding for a period

exceeding 6 Months

Unsecured, Considered Good 16.77 8.76 0.05 0.80 -

Considered Doubtful 11.40 7.94 1.70 - -

Other Debts

Unsecured, Considered Good 340.46 253.77 46.04 66.60 0.15

Considered Doubtful 10.61 2.40 0.54 - -

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

(Amount in Rs. Million)

As at As at As at
Particulars December As at March As at March March 31, December
31, 2007 31, 2007 31, 2006 2005 31, 2003

Unsecured, Considered good

Loan to employees 0.92 2.97 0.27 0.05 -

Advance Recoverable in Cash
or in Kind or for value to be
received 24.37 3.20 1.89 1.08 0.17
Share application money
pending allotment - - 229.50 5.00 -

Inter-corporate deposits - - 65.50 17.50 -

Balances with excise
authorities 15.58 9.41 1.68 0.22 -

Security deposits 195.98 4.33 0.66 0.22 -

MAT credit entitlement (refer
Note No. G (11) of the
Annexure IV) 56.39 27.79 - - -
Advance Income Tax/ Tax
deducted at source (net of
provision for tax) - - 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).

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CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)

ANNEXURE XII : DETAILS OF OTHER CURRENT ASSETS

(Amount in Rs. Million)

Particulars As at As at As at As at As at
December March 31, March 31, March 31, December
31, 2007 2007 2006 2005 31, 2003

Unbilled Revenue 78.18 1.07 0.11 1.29 3.66

Assets Held for Sale - - - - 0.08

Interest Accrued on Deposits 5.26 1.32 2.50 0.10 0.01

Total 83.44 2.39 2.61 1.39 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).

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CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)

ANNEXURE XIII : STATEMENT OF TAX SHELTERS

(Amount in Rs. Million)

Nine- months Year Ended Year Ended Fifteen-months Year Ended
Period Ended March 31, March 31, Period Ended December 31,
December 31, 2007 2006 March 31, 2005 2003
2007
Net Profit Before Tax, As
Restated 360.29 438.56 241.52 206.04 4.40
Tax Rate (A) 33.99% 33.66% 33.66% 37.34% 36.75%

Tax at Notional Rates (B) 122.46 147.62 81.30 76.93 1.62

Permanent Differences

Deduction under Section 80

IC of the Income Tax Act,
1961 (325.68) (373.59) (184.45) (133.77) -
Filing Fees paid to ROC for
increasing Authorised Share
Capital - 1.31 0.65 - -
Interest/ Penalties on Income
Tax 1.40 0.00 0.17 0.53 -

Total Permanent
Difference (C) (324.28) (372.28) (183.63) (133.24) -
Timing Differences
Differences due to
allowability / disallowability
of Section 43B items 3.92 0.99 0.70 0.09 -
Differences between book
depreciation and tax
depreciation 7.93 (2.16) (3.62) (4.02) -
Difference in tax and
accounting treatment of
Miscellaneous Expenditure - - (0.17) (0.15) (0.07)
Amounts inadmissible u/s
40(a) of the Income Tax Act,
1961 (0.05) (3.63) (0.06) - -

Provision for Doubtful Debts 0.44 0.30 1.70 - -

Total Timing Difference
(D) 12.24 (4.50) (1.45) (4.08) (0.07)

Profits Set off against

brought forward losses and - - - (8.83) (4.32)
unabsorbed depreciation of
previous years / periods (E)
Net Adjustments F=
(C+D+E) (312.04) (376.78) (185.08) (146.15) (4.39)
Tax impact of Adjustments
(G=A*F) (106.06) (126.82) (62.30) (55.20) (1.61)

Tax Liability after

considering impact of 16.40 20.80 19.00 21.73 0.01
Adjustments (H=B+G)
Book Profits Before Tax, As
Restated 360.29 438.56 241.52 206.04 4.40

Adjustments in Book profit (4.51) (2.10) (1.03) - (3.57)

203
 Nine- months Year Ended Year Ended Fifteen-months Year Ended
Period Ended March 31, March 31, Period Ended December 31,
December 31, 2007 2006 March 31, 2005 2003
2007

Book Profits for MAT * 355.78 436.46 240.49 206.04 0.83

MAT Rate 11.33% 11.22% 8.42% 8.00% 7.88%

MAT Liability 40.31 48.97 20.24 16.49 0.07

Tax Liability being higher

of Regular Tax liability 0.07
and MAT Liability for the 40.31 48.97 20.24 21.73
year/ period

* 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).
2) 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.
3) 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.

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 CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)

ANNEXURE XIV : STATEMENT OF ACCOUNTING RATIOS (ON RESTATED PROFITS)

Particulars As at As at As at As at As at
December March 31, March 31, March 31, December
31, 2007 2007 2006 2005 31, 2003

Earnings per share -Basic and Diluted

(Rs.) 23.25 32.29 18.36 15.04 0.23

Return on Net Worth % 31% 40% 53% 93% 22%

Net Asset Value per equity share (Rs.) 75.24 71.16 34.52 96.95 6.49

Weighted average number of equity share

used for calculating:

Basic and Diluted Earnings per share 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

Return on Net Worth (%) = Net Profit after Tax, as restated

Net Worth, as restated, at the end of the year/ period

Net Asset Value (NAV) per share (Rs.)= Net Worth, as restated, at the end of the year
Number of equity shares outstanding at the end of year/ period

1. 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.
2. 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.
3. 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.
4. 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
2. Names of other related parties
Fellow Subsidiaries
Key Management Personnel
Relatives of Key Management Personnel
Enterprises significantly influenced by
Management Personnel or their Relatives
Indian Televentures Private Limited
Omnia Investments Private Limited
Mobisoc Technology Private Limited
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)
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)
Mrs. Veena Modi
Mrs. Sonal Modi
Mrs. Ritika Modi Rungta
Ms. Divya Modi
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 Holding Company Subsidiary

Nine- Year Year Fifteen- Year Nine- Year Year Fifteen- Year
months Ended Ended months Ended months Ended Ended months Ended
Period March March Period December Period March March 31, Period December
Ended 31, 2007 31, Ended 31, 2003 Ended 31, 2007 2006 Ended 31, 2003
December 2006 March December March
31, 2007 31, 2005 31, 2007 31, 2005

A) Transactions

i) Revenue from Value Added Services

Spice Communications Limited - - - - - - - - - -

ii) Revenue from Roaming Services

Spice Communications Limited - - - - - - - - - -
iii) Sale of Softwares
- - - - - - - - - -
iv) Other Income (Rental Income)
Hot Spot Retails Private Limited - - - - - - - - - -
iv) Purchase of Fixed Assets
Spice Mobiles Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - - - - - - - - -
MCorpGlobal Private Limited - - - - - - - - - -
v) Roaming Expenses
Spice Communications Limited - - - - - - - - - -
vi) Enterprise Solution Charges

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
ix) Services
Spice Communications Limited - - - - - - - - - -
x) Rent Paid
Spice Communications Limited - - - - - - - - - -
Harjas Logic Systems Private Limited
- - - - - - - - - -
Wellwisher Holdings Private Limited - - - - - - - - - -
xi) Repair Services
Hot Spot Retails Private Limited - - - - - - - - - -
xii) Business Promotion Expenses
Hot Spot Retails Private Limited - - - - - - - - - -
Spice Mobiles Limited - - - - - - - - - -

xiii) Travelling expenses

Nik Travels Private Limited - - - - - - - - - -
xiv) Communication expenses
Spice Communications Limited - - - - - - - - - -
xv) Sundry Debit Balances Written Off
Spice Communications Limited - - - - - - - - - -
xvi) Balances Provided for
Spice Communications Limited - - - - - - - - - -
xvii) Electricity Expenses
Spice Communications Limited - - - - - - - - - -

210
xiii) Staff Welfare

Spice Communications Limited - - - - - - - - - -

xix) Legal & Professional Charges
Mobisoc Technology Private Limited - - - - - 18.18 - - - -
Corporate Guarantee Commission
xx) income
Omnia BPO Services Limited (formerly
known as Stracon Back Office Solutions
Limited) - - - - - - - - - -
xxi) Interest Income
MCorpGlobal Private Limited - - - - - - - - - -

xxii) Remuneration paid

Saket Agarwal - - - - - - - - - -
Kartar Singh - - - - - - - - - -
Dheeraj Agarwal - - - - - - - - - -
Reimbursement of Expenses Incurred by
xxiii) the Company
MCorpGlobal Private Limited - - - - - - - - - -
Spice Global Pvt Ltd. - - - - - - - - - -
Spice Communications Limited - - - - - - - - - -
Reimbursement of Expenses Paid by the
xxiv) Company
Mobisoc Technology Private Limited - - - - - 3.00 - - - -
xxv) Dividend Paid
Omnia Investments Private Limited - 400.18 - - - - - - - -

Dr. B.K Modi - - - - - - - - - -

Mrs. Veena Modi - - - - - - - - - -
Mr. Dilip Modi - - - - - - - - - -

211
 Ms. Divya Modi - - - - - - - - - -
xxvi) Investment in Equity Share Capital
Mobisoc Technology Private Limited - - - - - - 100.00 - - -

xxvii) Share Application money paid

Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - - - - - - - - -
MCorpGlobal Private Limited - - - - - - - - - -
Share Application money received
xxviii) 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 - - 60.00 - - - - - - -

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 - - 60.00 - - - - - - -

Spice Net Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - - - - - - - - -
Twenty First Century Capitals Limited - - - - - - - - - -

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) Loan Given During the Year

MCorpGlobal Private Limited - - - - - - - - - -
xxxiii) Loan received back during the year
MCorpGlobal Private Limited - - - - - - - - - -
B) Balances As at As at As at As at As at As at As at As at As at As at
at the year December March March March December December March March March 31, December
end 31, 2007 31, 2007 31, 31, 2005 31, 2003 31, 2007 31, 2007 31, 2006 2005 31, 2003
2006
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 - - - - - - - - - -

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 - - - - - 0.51 - - - -
Spice Mobiles Limited - - - - - - - - - -

Spice Communications 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..

214
Particulars Fellow Subsidiary Key Management Personnel

Nine- Year Year Year Nine- Year Year Fifteen- Year

months Ended Ended Fifteen- Ended months Ended Ended months Ended
Period March March months December Period March March Period December
Ended 31, 2007 31, 2006 Period 31, 2003 Ended 31, 2007 31, 2006 Ended 31, 2003
December Ended December March 31,
31, 2007 March 31, 2007 2005
31,
2005
A) Transactions

i) Revenue from Value Added Services

Spice Communications Limited 7.85 - - - - - - - - -

ii) Revenue from Roaming Services

Spice Communications Limited 3.62 - - - - - - - - -
iii) Sale of Softwares
52.70 - - - - - - - - -
iv) Other Income (Rental Income)
Hot Spot Retails Private Limited 0.20 - - - - - - - - -
iv) Purchase of Fixed Assets
Spice Mobiles Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - 0.01 - - - - - - -
MCorpGlobal Private Limited - - - - - - - - - -
v) Roaming Expenses
Spice Communications Limited 5.97 - - - - - - - - -
vi) Enterprise Solution Charges
Spice Communications Limited 2.96 - - - - - - - - -
vii) Gifts and Prizes

215
 Hot Spot Retails Private Limited - 0.02 - - - - - - - -
Spice Communications Limited - - - - - - - - - -
viii) Website Development Charges
Spice Communications Limited - - - - - - - - - -
Hardware and Equipment Maintenance
ix) Services
Spice Communications Limited - - - - - - - - - -
x) Rent Paid
Spice Communications Limited - - - - - - - - - -
Harjas Logic Systems Private Limited
- - - - - - - - - -
Wellwisher Holdings Private Limited - - - - - - - - - -
xi) Repair Services
Hot Spot Retails Private Limited - - - - - - - - - -
xii) Business Promotion Expenses
Hot Spot Retails Private Limited 0.05 0.03 - - - - - - - -
Spice Mobiles Limited - - - - - - - - - -

xiii) Travelling expenses

Nik Travels Private Limited - - - - - - - - - -
xiv) Communication expenses
Spice Communications Limited 0.44 - - - - - - - - -
xv) Sundry Debit Balances Written Off
Spice Communications Limited - - - - - - - - - -
xvi) Balances Provided for
Spice Communications Limited - - - - - - - - - -
xvii) Electricity Expenses
Spice Communications Limited - - - - - - - - - -

xiii) Staff Welfare

216
 Spice Communications Limited - - - - - - - - - -
xix) Legal & Professional Charges
Mobisoc Technology Private Limited - - - - - - - - - -
Corporate Guarantee Commission
xx) income
Omnia BPO Services Limited (formerly
known as Stracon Back Office Solutions
Limited) - 0.39 0.02 - - - - - - -
xxi) Interest Income
MCorpGlobal Private Limited - - - - - - - - - -

xxii) Remuneration paid

Saket Agarwal - - - - - 0.99 - - - -
Kartar Singh - - - - - 2.27 - - - -
Dheeraj Agarwal - - - - - - - 0.54 2.55 -
Reimbursement of Expenses Incurred by
xxiii) the Company
MCorpGlobal Private Limited - - - - - - - - - -
Spice Global Pvt Ltd. - - - - - - - - - -
Spice Communications Limited - - - - - - - - - -
Reimbursement of Expenses Paid by the
xxiv) Company
Mobisoc Technology Private Limited - - - - - - - - - -
xxv) Dividend Paid
Omnia Investments Private Limited - - - - - - - - - -

Dr. B.K Modi - - - - - - - - - -

Mrs. Veena Modi - - - - - - - - - -
Mr. Dilip Modi - - - - - - 0.02 - - -
Ms. Divya Modi - - - - - - - - - -
xxvi) Investment in Equity Share Capital

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 Fellow Subsidiary Key Management Personnel

Nine- Year Year Fifteen- Year Nine- Year Year Fifteen- Year
months Ended Ended months Ended months Ended Ended months Ended
Period March March Period December Period March 31, March 31, Period December
Ended 31, 2007 31, 2006 Ended 31, 2003 Ended 2007 2006 Ended 31, 2003
December March 31, December March 31,
31, 2007 2005 31, 2007 2005

xxvii) Share Application money paid

Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - - - -
Hot Spot Retails Private Limited - 43.20 - - - - - - - -
MCorpGlobal Private Limited - - - - - - - - - -
Share Application money received
xxviii) back
Bougainvillea Multiplex & -
Entertainment Center Private Limited ZZZZZZ - - - - - - - - -
Hot Spot Retails Private Limited - 43.20 - - - - - - - -
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 - - 2.50 - - - - - - -
Omnia BPO Services Limited
(formerly known as Stracon Back
Office Solutions Limited) - 0.40 2.50 - - - - - - -
Twenty First Century Capitals Limited - - - - - - - - - -
xxx) Advance received back during the year

219
 Omnia Investments Private Limited - - - - - - - - - -
Spice Net Limited - - - - - - - - - -
Hot Spot Retails Private Limited - - 2.50 - - - - - - -
Twenty First Century Capitals Limited - - - - - - - - - -
Omnia BPO Services Limited
(formerly known as Stracon Back
Office Solutions Limited) - 0.40 2.50 - - - - - - -
xxxi) Security Deposits Given
Mudaliar & Sons Hotels Pvt Ltd - - - - - - - - - -
Harjas Logic Systems Private Limited - - - - - - - - - -

xxxii) Loan Given During the Year

MCorpGlobal Private Limited - - - - - - - - - -
xxxiii) Loan received back during the year
MCorpGlobal Private Limited - - - - - - - - - -
B) As at As at As at As at As at As at As at As at As at As at
Balances December March March March 31, December December March 31, March 31, March 31, December
at the 31, 2007 31, 2007 31, 2006 2005 31, 2003 31, 2007 2007 2006 2005 31, 2003
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) - 0.40 0.02 - - - - - - -
Hot Spot Retails Private Limited - - - - - - - - - -

220
 Twenty First Century Capitals Limited - - - - - - - - - -
Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - - - -
Harjas Logic Systems Private Limited - - - - - - - - - -
Kartar Singh - - - - - 0.12 - - - -
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 - - - - - - - - 0.06 -
Harjas Logic Systems Private Limited - - - - - - - - - -
Mobisoc Technology Private Limited - - - - - - - - - -
Spice Mobiles Limited - - - - - - - - - -
Spice Communications 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..

221
Particulars Relatives of Key Management Personnel Enterprises owned or significantly influenced by key
management personnel or their relatives

Nine- Year Year Ended Fifteen- Year Ended Nine- Year Year Fifteen- Year
months Ended March 31, months December months Ended Ended months Ended
Period March 31, 2006 Period 31, 2003 Period March 31, March Period December
Ended 2007 Ended Ended 2007 31, 2006 Ended 31, 2003
December March 31, December March 31,
31, 2007 2005 31, 2007 2005
A) Transactions
i) Revenue from Value Added Services
Spice Communications Limited - - - - - 34.32 117.80 87.74 2.12
133.18
ii) Revenue from Roaming Services
Spice Communications Limited - - - - - 42.80 50.69 78.66 -
13.79
iii) Sale of Softwares
- - - - - 254.76 221.23 - - -
iv) Other Income (Rental Income)
Hot Spot Retails Private Limited - - - - - - - - -
1.60
iv) Purchase of Fixed Assets
Spice Mobiles Limited - - - - - - - - -
0.16
Hot Spot Retails Private Limited - - - - - 0.27 - - - -
MCorpGlobal Private Limited - - - - - - - - 4.67 -
v) Roaming Expenses
Spice Communications Limited - - - - - 21.96 11.87 -
18.72 10.63
vi) Enterprise Solution Charges
Spice Communications Limited - - - - - 9.95 4.07 - - -
vii) Gifts and Prizes
Hot Spot Retails Private Limited - - - - - - - - - -
Spice Communications Limited - - - - - - 0.07 - - -
viii) Website Development Charges
Spice Communications Limited - - - - - - 1.20 - - -

222
 ix) Hardware and Equipment Maintenance Services
Spice Communications Limited - - - - - - - 0.75 3.75 -
x) Rent Paid
Spice Communications Limited - - - - - 0.27 0.36 0.36 0.81 -
Harjas Logic Systems Private Limited - - - - - 2.93 3.91 0.33 - -
Wellwisher Holdings Private Limited - - - - - 1.00 - - -
1.80

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 Relatives of Key Management Personnel Enterprises owned or significantly influenced by key
management personnel or their relatives
Nine- Year Year Fifteen- Year Nine- Year Year Fifteen- Year
months Ended Ended months Ended months Ended Ended months Ended
Period March March Period December Period March March Period December
Ended 31, 2007 31, 2006 Ended 31, 2003 Ended 31, 2007 31, 2006 Ended 31, 2003
December March 31, December March 31,
31, 2007 2005 31, 2007 2005
xi) Repair Services
Hot Spot Retails Private Limited - - - - - - - - - -
xii) Business Promotion Expenses
Hot Spot Retails Private Limited - - - - - - - - - -
Spice Mobiles Limited - - - - - 6.50 - - - -

xiii) Travelling expenses

Nik Travels Private Limited - - - - - 4.59 3.03 0.54 1.39 -
xiv) Communication expenses
Spice Communications Limited - - - - - 1.47 1.26 0.95 1.54 -
xv) Sundry Debit Balances Written Off
Spice Communications Limited - - - - - - 0.16 - 0.10 -
xvi) Balances Provided for
Spice Communications Limited - - - - - - - 0.30 - -
xvii) Electricity Expenses
Spice Communications Limited - - - - - 1.11 0.58 - - -

xiii) Staff Welfare

Spice Communications Limited - - - - - 0.05 - - - -

xix) Legal & Professional Charges
Mobisoc Technology Private Limited - - - - - - - - - -

224
 Corporate Guarantee Commission
xx) income
Omnia BPO Services Limited (formerly
known as Stracon Back Office Solutions
Limited) - - - - - - - - - -
xxi) Interest Income
MCorpGlobal Private Limited - - - - - - 5.88 3.20 - -

xxii) Remuneration paid

Saket Agarwal - - - - - - - - - -
Kartar Singh - - - - - - - - - -
Dheeraj Agarwal - - - - - - - - - -
Reimbursement of Expenses Incurred
xxiii) by the Company
MCorpGlobal Private Limited - - - - - - 0.36 - - -
Spice Global Pvt Ltd. - - - - - - - - 0.33 -
Spice Communications Limited - - - - - - 0.59 0.97 49.47 -
Reimbursement of Expenses Paid by
xxiv) 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 - - - - - - - - - -

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

xxvii) Share Application money paid - - -

Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - 150.00 - -
Hot Spot Retails Private Limited - - - - - - - - - -
MCorpGlobal Private Limited - - - - - - - 79.50 - -
Share Application money received
xxviii) back
Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - 150.00 - - -
Hot Spot Retails Private Limited - - - - - - - - - -
MCorpGlobal Private Limited - - - - - - 79.50 - - -
xxix) Advance Given During the Year

Omnia Investments Private Limited - - - - - - - - - -

Spice Global Pvt Ltd. - - - - - - - - 17.50 -

Spice Net Limited - - - - - - - - 19.05 -

Hot Spot Retails Private Limited - - - - - - - - - -
Omnia BPO Services Limited
(formerly known as Stracon Back
Office Solutions Limited) - - - - - - - - - -
Twenty First Century Capitals
Limited - - - - - - - 0.50 - -

227
 Advance received back during the
xxx) year

Omnia Investments Private Limited - - - - - - - - - -

Spice Net Limited - - - - - - - - 19.00 -
Hot Spot Retails Private Limited - - - - - - - - - -
Twenty First Century Capitals
Limited - - - - - - 0.50 - - -
Omnia BPO Services Limited
(formerly known as Stracon Back
Office Solutions Limited) - - - - - - - - - -
xxxi) Security Deposits Given
Mudaliar & Sons Hotels Pvt Ltd - - - - - 150.00 - - - -
Harjas Logic Systems Private Limited - - - - - - 1.95 - - -

xxxii) Loan Given During the Year

MCorpGlobal Private Limited - - - - - - 54.10 115.50 - -
xxxiii) Loan received back during the year
MCorpGlobal Private Limited - - - - - - 119.60 50.00 - -
B) As at As at As at As at As at As at As at As at As at As at
Balances December March March March December December March March March December
at the 31, 2007 31, 2007 31, 2006 31, 2005 31, 2003 31, 2007 31, 2007 31, 2006 31, 2005 31, 2003
year end
i) Receivables

Spice Communications Limited - - - - - 265.08 184.13 20.27 47.30 -

Spice Global Pvt Ltd. - - - - - - - - 17.60 -
Spice Net Limited - - - - - - - - 0.05 -

Modi Distributors Pvt. Ltd. - - - - - - - - 5.00 -

Omnia BPO Services Limited - - - - - - - - - -

228
 (formerly known as Stracon Back
Office Solutions Limited)
Hot Spot Retails Private Limited - - - - - 2.07 - - - -
Twenty First Century Capitals
Limited - - - - - - - 0.50 - -
Bougainvillea Multiplex &
Entertainment Center Private Limited - - - - - - - 150.00 - -
Harjas Logic Systems Private Limited - - - - - - 1.95 - - -
Kartar Singh - - - - - - - - - -
Mudaliar & Sons Hotels Pvt Ltd
(against security deposit) - - - - - 150.00 - - - -
Mudaliar & Sons Hotels Pvt Ltd
(against advances recoverable) - - - - - 8.43 - - - -
MCorpGlobal Private Limited - - - - - - - 145.00 - -
ii) Payables
Nik Travels Private Limited - - - - - 0.03 0.01 0.08 0.00* -
Mr. Dheeraj Agarwal - - - - - - - - - -
Harjas Logic Systems Private Limited - - - - - - - 0.25 - -
Mobisoc Technology Private Limited - - - - - - - - - -
Spice Mobiles Limited - - - - - 6.50 - - - -

Spice Communications Limited - - - - - 33.75 0.10 - - -

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

(Amount in Rs. Million)

Particulars As at December 31, As at March 31, 2007
2007
APPLICATION OF FUNDS
Fixed Assets

Gross Block 452.69 185.70

Less: Accumulated Depreciation/ Amortisation (113.51) (52.99)

Net Block 339.18 132.71

Capital Work In Progress including Capital Advances 8.05 31.21

Total 347.23 163.92

Deferred Tax Assets (net) - 1.87

Current Assets, Loans & Advances

Inventories - 1.36

Sundry Debtors 357.24 262.53

Cash and Bank Balances 500.59 648.30

Other Current Assets 84.65 3.34

Loans & Advances 294.27 47.84

Total 1,236.75 963.37

TOTAL (A) 1,583.98 1,129.17

Deferred Tax Liabilities (net) 2.04 -

Liabilities and Provisions

Minority Interest 0.10 0.10

Current Liabilities 181.98 86.85

Provisions 316.73 11.68

Total 498.81 98.63

TOTAL (B) 500.85 98.63

Net Worth (A-B) 1,083.13 1,030.53

230
 Particulars As at December 31, As at March 31, 2007
2007

Represented by
Share Capital and Reserves

Equity Share Capital 145.72 145.72

Reserves and Surplus (Figure for December 31, 2007 is net of
Rs. 5.11 million being adjustment for employee provisions 885.92
(Refer Note No. G (3) of the Annexure XIX) 937.41

Less: Miscellaneous Expenditure - 1.11

(to the extent not written off or adjusted)

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 Place: Noida

Date : June 26, 2008 Date : June 26, 2008

Kartar Singh
Chief Finance Officer Company secretary

Place: Noida Place: Noida

Date : June 26, 2008 Date : June 26, 2008

231
CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)
GROUP

ANNEXURE XVII : CONSOLIDATED SUMMARY STATEMENT OF PROFIT AND LOSS,

AS RESTATED

(Amount in Rs. Million)

Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007 2007

INCOME
Operating Income 734.56 661.78
Other Income 42.63 25.02
Total Income 777.19 686.80

EXPENDITURE
Purchase of Goods for Sale 0.99 3.38
Operating Expenses 82.13 50.11
Staff Cost 138.37 66.11
Selling and Distribution Expenses 16.56 7.28
General and Administration Expenses 126.31 78.53
Decrease / (Increase) in Inventories 1.36 (1.36)
Interest 0.94 0.04

Miscellaneous Expenditure written off 1.11 -

Depreciation / Amortization (Refer note no. C(iv) and
G (9) of the Annexure XIX) 60.47 32.90
Total Expenditure 428.24 236.99
PROFIT BEFORE TAX AND PRIOR PERIOD
ITEMS 348.95 449.81
Prior Period Items 5.31 0.38
PROFIT BEFORE TAX AND AFTER PRIOR
PERIOD ITEMS 343.64 449.43
Provision for Tax
Current Tax (Net of MAT Credit entitlement, refer
note no. G (10) of the Annexure XIX) 14.91 24.06
Deferred Tax Charge / (Credit) 3.43 (1.24)
Fringe Benefits Tax 4.65 2.16
Total Tax Expense 22.99 24.98
NET PROFIT AS PER AUDITED
ACCOUNTS 320.65 424.45
Adjustments ( Refer Note no. E of Annexure XIX) 10.45 (15.64)

Current Tax impact of Adjustments (0.42) 1.21

Deferred Tax impact of Adjustments - 0.48

Net Impact of Adjustments 10.03 (13.95)
NET PROFT AS RESTATED, BEFORE
MINORITIES SHARE 330.68 410.50
Less: (Losses) / Profits attributable to minority
shareholders (0.001) 0.001
NET PROFT AS RESTATED 330.68 410.50

Profit & Loss Account at the beginning of the year /

period 201.22 289.42
PROFIT AVAILABLE FOR
APPROPRIATION 531.90 699.92

232
 Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007 2007

Appropriations:
Transfer to General Reserve 33.47 42.37
Proposed Dividend on Equity Shares (at the rate of
Rs. 16.07 per share) 234.28 -
Interim Dividend on Equity Shares (at the rate of Rs.
33.35 per share) - 400.20
Tax on dividend 39.82 56.13

BALANCE CARRIED FORWARD AS

RESTATED 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 Place: Noida

Date : June 26, 2008 Date : June 26, 2008

Kartar Singh
Chief Finance Officer Company secretary

Place: Noida Place: Noida

Date : June 26, 2008 Date : June 26, 2008

233
CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)
GROUP

ANNEXURE XVIII : CONSOLIDATED SUMMARY STATEMENT OF CASH FLOWS, AS

RESTATED

(Amount in Rs. Million)

Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007
2007

A. Cash Flow from Operating Activities

Net Profit Before Tax, As Restated 354.09 433.79

Net Profit Before Tax, As Restated 354.09 433.79

Adjustment for:
Depreciation / Amortization 60.53 43.71
Miscellaneous Expenditure Wriiten off
1.11 -
Provision for Doubtful Debts 11.66 8.10
Foreign Exchange (Gain) / Loss
0.23 (0.86)
Interest Income (39.93) (24.20)
Interest Expense
0.94 0.04
Operating Profit Before Working Capital Changes 388.63 460.58

Movement in Working Capital:

(Increase) in Sundry Debtors (105.89) (224.51)
Decrease / (Increase) in Inventories 1.36 (1.36)
(Increase) in Loans and Advances (217.82) (15.56)
(Increase) in Other Current Assets
(77.12) (0.96)
Increase in Current Liabilities and Provisions 107.11 72.79
Miscellaneous Expenditure (to the extent not written
off or adjusted) - (1.11)
Cash Generated from Operations 96.27 289.87

Direct Taxes Paid (including Fringe Benefits

Taxes) (34.42) (50.07)

Net Cash Generated from Operations (A) 61.85 239.80

B. Cash Flow from Investing Activities

Purchase of Fixed Assets (244.35) (138.39)
Fixed Deposits with Banks 117.15 (498.19)
Share Application Money Paid
- (43.20)
Share Application Money Received Back
- 272.70
Inter Corporate Deposit Given
- (54.10)
Inter Corporate Deposit Received Back
- 119.60

234
 Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007
2007

Interest Received 35.73 24.43

Net Cash Generated from / (Used In) Investing
Activities(B) (91.47) (317.15)
Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007
2007

C. Cash Flows from Financing Activities

Proceeds from Issuance of Share Capital
- 25.71
Securities Premium Received
- 645.23
Share Issue Expenses
- (7.75)
Minority Interest
- 0.10
Share Application Money received
- 10.00
Share Application Money paid back
- (10.00)
Repayment of Long-Term Borrowings
- (0.67)
Interest Paid
(0.94) (0.04)
Dividend Paid (including tax on dividend paid of Rs.
56,128,611) - (456.33)
Net Cash Generated from / (Used in) Financing
Activities ( C ) (0.94) 206.25
Net Changes in Cash & Cash Equivalents
(A+B+C) (30.56) 128.90
Cash and Cash Equivalents at the Beginning of the
Year / Period 133.69 4.79
Cash and Cash Equivalents at the End of the Year
/ Period 103.13 133.69

Components of Cash and Cash Equivalents:

Cash in Hand
0.30 0.05
Cheques in Hand
4.49 -
Balances with Scheduled Banks on Current Accounts 97.13 126.56
Balance with Hongkong and Shanghai Banking
Corp., Singapore on current account 1.21 7.08
Total 103.13 133.69

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.
2) Negative figures have been shown in brackets.
3) 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

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) (Directors)

Place: Noida Place: Noida

Date : June 26, 2008 Date : June 26, 2008

Kartar Singh
Chief Finance Officer Company secretary

Place: Noida Place: Noida

Date : June 26, 2008 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. Background

a) 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.

b) 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

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.

ii) Insurance spares / stand by equipments are capitalized as part of mother assets.

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 Rates (SLM) (in %) Schedule XIV Rates

(SLM) (in %)
Buildings 3.34 3.34
Data Processing Machines 31.67 16.21
Furniture & Fixtures 13.57 6.33
Office Equipment
- Mobile phones 31.67 4.75
- Others 13.57 4.75
Vehicles
- Motor Cars 9.50 9.50
- Motor buses 13.57 11.31

ii) Cost of Leasehold improvements is amortized over the period of lease or their useful lives
whichever is lower.

iii) Individual assets costing upto Rs.5,000/- are depreciated fully in the month of purchase.

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 Estimated Useful Life (Years)

Computer Software 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.

ii) After impairment, depreciation is provided on the revised carrying amount of the asset over
its remaining useful life.

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.

ii) 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

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.

iv) Actuarial gains / losses are immediately taken to profit and loss account and are not
deferred.

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 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.

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. Material Adjustments

a) 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 December 31, 2007 March 31, 2007

Prior Period Items (Refer note b) (0.69) 1.18

Sundry Balances written back (Refer note c) (0.12) (0.04)

Provision for doubtful debts (Refer note d) 4.98 (4.44)
Sundry Balances written off (Refer note e) 0.04 0.11

Bad Debts written off (Refer note f) - 2.77

Bad Debts recovered (Refer Note g) (0.51) (0.00)

Depreciation (Refer Note h) - (10.80)

Leave Encashment (Refer Note i) - 1.25

Tax paid for earlier years/ periods (Refer note j) 0.75 0.33

Audit Qualification / Prior period Items (Refer note k) 6.00 (6.00)

Total impact of adjustments 10.45 (15.64)

Current Tax impact of adjustments (Refer note l) (0.42) 1.21

Deferred Tax impact of adjustments (Refer note l) - 0.48

Net impact of adjustments 10.03 (13.95)

Prior Period Items

b)

243
 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 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)

Profit and Loss Account as at April 1, 2006 (Audited) 285.51

Prior Period Expenses (Refer Note E (b) above) (0.49)

Sundry Balances written back (Refer Note E (c) above) 0.16
Provision for doubtful debts (Refer Note E (d) above) (0.54)
Balances written off (Refer Note E (e) above) (0.15)
Bad Debts written off (Refer Note E (f) above) (2.77)
Bad Debts recovered (Refer Note E (g) above) 0.51
Depreciation (Refer Note E (h) above) 10.80
Leave Encashment (Refer Note E (i) above) (1.25)
Taxes for earlier years paid (Refer note E (j) above) (1.08)
Total impact of adjustments in earlier years 5.19

Current Tax impact of adjustments (Refer Note E (l) above) (0.79)

Deferred Tax impact of adjustments (Refer Note E (l) above) (0.47)
Profit and Loss Account as at April 1, 2006 (Restated) 289.42

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.

(ii) 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

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. Other Significant Notes

1. 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 under-

Name of the Subsidiary Country of Proportion of Proportion of

Company Incorporation ownership ownership
interest as at interest as at
December 31, March 31, 2007
2007

Mobisoc Technology Private India 99.90% 99.90%

Limited

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 mobile-
related 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 For the Year Ended March
Ended December 31, 2007 (Rs.) 31, 2007 (Rs.)

Domestic Market 702.30 637.55

Overseas Market 32.26 24.23
Total 734.56 661.78

The following table shows the distribution of the Company’s consolidated debtors by
geographical market:

246
 Particulars As at December 31, 2007 As at March 31, 2007 (Rs.)
(Rs.)

Domestic Market 355.90 259.01

Overseas Market 1.34 3.52
Total 357.24 262.53

* 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 4.76*
Interest cost on benefit obligation 0.33
Expected return on plan assets (0.08)
Net actuarial( gain) / loss recognized in the year 0.55
Past service cost Nil
Net benefit expense charged to Profit and Loss account 5.56

Actual return on plan assets 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)
Defined benefit obligation 10.53
Fair value of plan assets 1.18
9.35
Less: Unrecognised past service cost ---
Plan asset / (liability) (9.35)
Changes in the present value of the defined benefit obligation for the nine months period ended
December 31, 2007 are as follows:

247
 Gratuity
(Rs.)
Opening defined benefit obligation 2.26
Interest cost 0.33
Current service cost 4.65
Benefits paid ----
Actuarial (gains) / losses on obligation 3.29
Closing defined benefit obligation 10.53

Changes in the fair value of plan assets are as follows:

Gratuity
(Rs.)
Opening fair value of plan assets 1.18
Expected return 0.08
Contributions by employer Nil
Benefits paid Nil
Actuarial gains / (losses) (0.08)
Closing fair value of plan assets 1.18

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
Investments with insurer (Life Insurance Corporation of India) 100 %

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 (%)
Discount rate 8.00
Expected rate of return on assets 8.70
Employee turnover 15.00

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
For the year ended
period ended
March 31, 2007
December 31, 2007
Employer’s Contribution to Provident Fund
8.58 4.33
including Family Pension Fund*

* 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 For the Year Ended

Period Ended March 31, 2007 (Rs.)
December 31, 2007
(Rs.)
Lease Payment 17.12 12.30
Contingent rent recognized in Profit and Loss NIL NIL
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.

Particulars For the Nine months For the Year Ended

Period Ended March 31, 2007 (Rs.)
December 31, 2007
(Rs.)
Sub-lease payments received during the year NIL NIL
Sub-lease payments receivable at the balance 1.80 NIL
sheet date

5. Capital Commitments

Particulars For the Nine- months For the Year Ended

Period Ended December March 31, 2007
31, 2007 (Rs.) (Rs.)
Estimated amount of contracts (Net of 29.45 18.36
advances) remaining to be executed on capital
account and not provided for.
6. Contingent Liabilities not provided for

Particulars As at December 31, As at March 31,

2007 (Rs.) 2007 (Rs.)

Contingent Liability in respect of non-charging the 38.89 31.15

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 March 31, 2007 (Rs.)
(Rs.)
Difference in depreciation and other differences in 3.69 0.05
block of fixed assets as per Tax books and Financial
books
Gross Deferred Tax Liabilities 3.69 0.05
Effect of expenditure debited to Profit and Loss 1.65 1.92
Account but allowed for tax purposes in the
following years
Gross Deferred Tax Assets 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.) Foreign Currency

As at As at March As at December 31, 2007 As at March
December 31, 2007 31, 2007
31, 2007
Export Debtors 1.29 1.01 USD 32,785 USD 23,226
0.26 2.48 EUR 4,456 EUR 42,720
0.09 NIL Mauritius Rs. 63,476 NIL
Advances from 0.47 0.23 USD 11,877 USD 5,331
Customers 0.88 0.11 EUR 15,178 EUR 1,973

Import 4.45 7.18 USD 112,848 USD 164,789

Creditors

Closing rate as on the closing dates are as follows-

Foreign Currency As at December 31, 2007 As at March 31, 2007

USD 1 Rs. 39.41 Rs 43.59
EUR 1 Rs. 58.12 Rs. 58.14
Mauritius Rs. 1 Rs. 1.43 --
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.

11. 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.

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.

13. 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.

251
CELLEBRUM TECHNOLOGIES LIMITED (FORMERLY CELLEBRUM.COM LIMITED)
GROUP

ANNEXURE XX : DETAILS OF OTHER INCOME, AS RESTATED

(Amount in Rs. Million)

PARTICULARS Nine- months Period Year Ended March 31,
Ended December 31, 2007
2007

Other income, as restated 42.00 24.68

Net Profit before tax, as restated after prior period items 354.09 433.79

Percentage 11.86 5.69

Nine- months Year Ended Related /

Period Ended March 31, 2007 Not related
Source of other income Nature
December 31, to Business
2007 Activity

Interest on Bank deposits 39.81 18.30 Recurring Not Related

Interest Others 0.12 5.90 Non-Recurring Not Related

Rental Income 1.80 - Recurring Non Related

Other Income 0.27 0.48 Non-Recurring Non Related

Total Other Income, as restated 42.00 24.68

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.
2) 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.
3) 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.

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.
(Amount in Rs. Million)
Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007
2007

Class of Shares

Equity Share Capital as outstanding at the year end 14571574 14571574

Dividend on Equity Shares

- Dividend per equity share ( Rs. ) 16.07* 33.35**
- Dividend rate ( % to paid up capital ) 160.70% 333.5%

- Dividend amount 234.28 400.20

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) The amounts 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 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 Post Issue

Borrowings

Short Term Debt (A) - [*]

Long Term Debt (B) - [*]

Total Debts (C) - [*]

Shareholders' funds

Equity Share Capital 145.72 [*]

Reserves and Surplus, as restated
- Profit & Loss Account 224.35
- Securities Premium 637.48
- General Reserve 75.59 937.40 [*]

Total shareholders' fund (D) 1,083.13

Long Term debt / Equity ratio (B / D) -

Total Debt / Shareholders' Funds (C / D) -

Notes:

1) Short Term debts represents debts which are due within twelve months from 31st December,
2007.
2) Long Term debt represents debt other than short term debt as defined above.
3) Long term debt/equity :- Long Term Debt / Total Shareholder's funds
4) 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.
5) The corresponding post issue figures are not determinable at this stage pending the completion
of Book Building Process and hence have not been furnished.

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 16.77 8.76
Considered Doubtful 11.40 7.94

Other Debts
Unsecured, Considered Good 340.46 253.77

2.4
Considered Doubtful 10.61 0

Less : Provision for Doubtful Debts 22.00 10.34

357.24 262.53

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 As at March 31,
31, 2007 2007

Unsecured, Considered good

Loan to employees 1.32 2.97

Advance Recoverable in Cash or in Kind or for value to be received 24.99 3.35
Balances with excise authorities 15.59 9.41
Security deposits 195.98 4.33
MAT credit entitlement (refer Note No. G (10) of the Annexure
XIX) 56.39 27.78

Total 294.27 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 As at December 31, 2007 As at March 31, 2007

Unbilled Revenue 78.18 1.07

Interest Accrued on Deposits 6.47 2.27
Total 84.65 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 As at March 31, 2007

Earnings per share -Basic and Diluted (Rs.) 22.69 31.89

Return on Net Worth % 31% 40%

Net Asset Value per equity share (Rs.) 74.33 70.72

Weighted average number of equity share

used for calculating:

Basic and Diluted Earnings per share 14571574 12873710

Total number of equity shares outstanding at the
end of the year / period* 14571574 14571574

* 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

Return on Net Worth (%) = Net Profit after Tax, as restated

Net Worth, as restated, at the end of the year/ period

Net Asset Value (NAV) per share (Rs.)= Net Worth, as restated, at the end of the year
Number of equity shares outstanding at the end of year/ period

1) 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.
2) 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.
3) 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.
4) 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 Indian Televentures Private Limited

Holding Company 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 Twenty First Century Capitals Limited

Management Personnel or their Relatives
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 Relatives of Key Enterprises owned or Total
Personnel Management Personnel significantly influenced by
key management
personnel or their
relatives

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 - - 7.85 - - - - - 34.32 117.80 42.17 117.80
ii) Revenue from Roaming
Services
Spice Communications
Limited - - 3.62 - - - - - 13.79 42.80 17.41 42.80
iii) Sale of Products
Spice Communications
Limited - - 52.70 - - - - - 254.76 221.23 307.46 221.23
iv) Other Income (Rental
Income)
Hot Spot Retails Private
Limited - - 0.20 - - - - - 1.60 - 1.80 -
v) Purchase of Fixed Assets
Spice Mobiles Limited
- - - - - - - - 0.16 0.13 0.16 0.13
Hot Spot Retails Private
Limited - - - - - - - - 0.27 0.02 0.27 0.02
vi) Roaming Expenses
Spice Communications
Limited - - 5.97 - - - - - 18.72 21.96 24.69 21.96
vii) Enterprise Solution

262
 Charges
Spice Communications
Limited - - 2.96 - - - - - 9.95 4.07 12.91 4.07
viii) Gifts and Prizes
Hot Spot Retails Private
Limited - - - 0.02 - - - - - - - 0.02
Spice Communications
Limited - - - - - - - - - 0.07 - 0.07
ix) Website Development
Charges
Spice Communications
Limited - - - - - - - - - 1.20 - 1.20
x) Rent Paid
Spice Communications
Limited - - - - - - - - 0.27 0.36 0.27 0.36
Harjas Logic Systems
Private Limited - - - - - - - - 2.93 3.91 2.93 3.91
Wellwisher Holdings
Private Limited - - - - - - - - 1.80 1.00 1.80 1.00
xi) Repair Services
Hot Spot Retails Private
Limited - - - 0.00 - - - - - - - 0.00
xii) Business Promotion
Expenses
Hot Spot Retails Private
Limited - - 0.05 0.03 - - - - 0.00 - 0.05 0.03
Spice Mobiles Limited
- - - - - - - - 6.50 - 6.50 -
xiii) Travelling expenses
Nik Travels Private Limited
- - - - - - - - 4.59 3.24 4.59 3.24
xiv) Communication expenses
Spice Communications
Limited - - 0.44 - - - - - 1.47 1.26 1.91 1.26
xv) Sundry Debit Balances
Written Off
Spice Communications
Limited - - - - - - - - - 0.16 - 0.16
xvi) Electricity Expenses
Spice Communications
Limited - - - - - - - - 1.11 0.58 1.11 0.58
xvii) Staff Welfare

263
 Spice Communications
Limited - - - - - - - - 0.05 - 0.05 -
xviii) Corporate Guarantee
Commission income
Omnia BPO Services
Limited (formerly known as - - - 0.39 - - - - - - - 0.39
Stracon Back Office
Solutions Limited)
xix) Interest Income
MCorpGlobal Private
Limited - - - - - - - - - 5.88 - 5.88
xx) Remuneration paid
Saket Agarwal
- - - - 0.99 - - - - - 0.99 -
Kartar Singh
- - - - 2.27 - - - - - 2.27 -
Lokesh Gupta
- - - - 3.89 3.15 - - - - 3.89 3.15
xxi) Reimbursement of
Expenses Incurred by the
Company
MCorpGlobal Private
Limited - - - - - - - - - 0.36 - 0.36
Spice Communications
Limited - - - - - - - - - 0.59 - 0.59
xxii) Reimbursement by the
Group of expenses incurred
MCorpGlobal Private
Limited - - - - - - - - - 0.43 - 0.43
xxiii) Dividend Paid
Omnia Investments Private
Limited - 400.18 - - - - - - - - - 400.18
Dr. B.K Modi
- - - - - 0.00 - - - - - 0.00
Mrs. Veena Modi
- - - - - - - 0.00 - - - 0.00
Mr. Dilip Modi
- - - - - 0.02 - - - - - 0.02
Ms. Divya Modi
- - - - - - - 0.00 - - - 0.00
xxiv) Share Application money
paid

264
 Hot Spot Retails Private
Limited - - - 43.20 - - - - - - - 43.20
xxv) Share Application money
received back
Bougainvillea Multiplex &
Entertainment Center Private - - - - - - - - - 150.00 - 150.00
Limited
Hot Spot Retails Private
Limited - - - 43.20 - - - - - - - 43.20
MCorpGlobal Private
Limited - - - - - - - - - 79.50 - 79.50
xxvi) Share Application money
received
Omnia Investments Private
Limited - 10.00 - - - - - - - - - 10.00
xxvii Share Application money
) paid back
Omnia Investments Private
Limited - 10.00 - - - - - - - - - 10.00
xxviii Advance Given During the
) Year
Omnia BPO Services
Limited (formerly known as - - - 0.40 - - - - - - - 0.40
Stracon Back Office
Solutions Limited)
xxix) Advance received back
during the year
Twenty First Century
Capitals Limited - - - - - - - - - 0.50 - 0.50
Omnia BPO Services
Limited (formerly known as - - - 0.40 - - - - - - - 0.40
Stracon Back Office
Solutions Limited)
xxx) Security Deposits Given
Harjas Logic Systems
Private Limited - - - - - - - - - 1.95 - 1.95
Mudaliar & Sons Hotels Pvt
Ltd - - - - - - - - 150.00 - 150.00 -
xxxi) Loan Given During the
Year
MCorpGlobal Private
Limited - - - - - - - - - 54.10 - 54.10

265
xxxii Loan received back during
) the year
MCorpGlobal Private
Limited - - - - - - - - - 119.60 - 119.60

B) Balances at the year end As at As at March 31, 2007 As at As at As at As at As at As at As at As at

December 31, December 31, March 31, December 31, March 31, December 31, March 31, December 31, March 31,
2007 2007 2007 2007 2007 2007 2007 2007 2007
i) Receivables
Spice Communications
Limited - - - - - - - - 265.08 184.13 265.08 184.13
Omnia BPO Services
Limited (formerly known as - - - 0.40 - - - - - - - 0.40
Stracon Back Office
Solutions Limited)
Hot Spot Retails Private
Limited - - - - - - - - 2.07 - 2.07 -
Harjas Logic Systems
Private Limited - - - - - - - - - 1.95 - 1.95
Mr. Kartar Singh
- - - - 0.12 - - - - - 0.12 -
Mudaliar & Sons Hotels Pvt
Ltd (against security deposit) - - - - - - - - 150.00 - 150.00 -
Mudaliar & Sons Hotels Pvt
Ltd (against advances - - - - - - - - 8.43 - 8.43 -
recoverable)
ii) Payables
Nik Travels Private Limited
- - - - - - - - 0.03 0.01 0.03 0.01
Spice Communications
Limited - - - - - - - - 33.75 0.10 33.75 0.10
Spice Mobiles Limited
- - - - - - - - 6.50 - 6.50 -

Notes:

1) All amounts 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 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.

3. 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.

4. 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.

5. 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.

6. Based on our examination, we further report that the restated standalone profits and losses have
been arrived at:

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.

8. 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.

9. 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.

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
(Amount in Rs. Million)
Particulars As at December 31, 2007 As at March 31, 2007

APPLICATION OF FUNDS
Fixed Assets
Gross Block 1.07 0.44
Less: Accumulated Depreciation/ Amortisation (0.22) (0.06)
Net Block 0.85 0.38

Total 0.85 0.38

Deferred Tax Assets (net) 0.57 0.00

Current Assets, Loans & Advances
Sundry Debtors 0.51 0.00
Cash and Bank Balances 86.33 93.35
Other Current Assets 1.21 0.94
Loans & Advances 4.89 0.42

Total 92.94 94.72

TOTAL (A) 94.36 95.09

Liabilities and Provisions

Current Liabilities 2.82 0.90
Provisions 4.72 0.45
Total (B) 7.54 1.35

Net Worth (A-B) 86.83 93.74

Represented by
Share Capital and Reserves

Equity Share Capital 100.10 100.10

Profit & Loss Account
(5.25)
(13.28)

Less: Miscellaneous Expenditure - 1.11

(to the extent not written off or adjusted)

Net Worth 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 (Director) (Director)

Partner
Membership No: 012399
Place: Delhi
Date: June 22, 2008

270
MOBISOC TECHNOLOGY PRIVATE LIMITED

ANNEXURE II :STANDALONE SUMMARY STATEMENT OF PROFIT AND LOSS, AS

RESTATED

(Amount in Rs. Million)

Particulars Nine- months Year Ended March
Period Ended 31, 2007
December 31, 2007

INCOME
Operating Income 18.18 0.00
Other Income 6.31 1.22

Total Income 24.49 1.22

EXPENDITURE
Personnel expenses 26.75 0.00
Selling and Distribution Expenses 2.67 0.00

Miscellaneous Expenditure written off 1.11 0.00

Depreciation / Amortization 0.16 0.00

Total Expenditure 30.69 -

PROFIT BEFORE TAX AND PRIOR PERIOD ITEMS (6.20) 1.22

Prior Period Items 6.00 -

PROFIT BEFORE TAX AND AFTER PRIOR PERIOD
ITEMS (12.20) 1.22
Provision for Tax

Current Tax 2.26 0.41

Deferred Tax Charge / (Credit) (0.57) 0.00
Fringe Benefits Tax 0.14 0.06
Total Tax Expense 1.83 0.47
NET PROFIT AS PER AUDITED ACCOUNTS (14.03) 0.75
Adjustments - -
Net Impact of Adjustments 6.00 (6.00)

NET PROFT AS RESTATED (8.03) (5.25)

Profit & Loss Account at the beginning of the year / period (5.25) -

PROFIT AVAILABLE FOR APPROPRIATION (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 (Director) (Director)

Partner
Membership No: 012399
Place: Delhi
Date: June 22, 2008

272
MOBISOC TECHNOLOGY PRIVATE LIMITED

ANNEXURE III :STANDALONE SUMMARY STATEMENT OF CASH FLOWS, AS

RESTATED

(Amount in Rs. Million)

Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007
2007

A. Cash Flow from Operating Activities

Net Profit Before Tax, As Restated (6.19) (4.77)

Net Profit Before Tax, As Restated (6.19) (4.77)

Adjustment for:
Depreciation / Amortization 0.16 0.06
Miscellaneous Expenditure Wriiten off
1.11 -
Interest Income
(6.31) (1.22)

Operating Profit Before Working Capital Changes (11.23) (5.93)

Movement in Working Capital:
(Increase) in Sundry Debtors (0.51) 0.00
(Increase) in Loans and Advances
(0.88) (0.15)
Increase in Current Liabilities and Provisions 3.82 0.90
Miscellaneous Expenditure (to the extent not written off
or adjusted) 0.00 (1.11)
Cash Generated from Operations (8.80) (6.29)

Direct Taxes Paid (including Fringe Benefits Taxes)

(3.63) (0.29)

Net Cash Generated from Operations (A) (12.43) (6.58)

B. Cash Flow from Investing Activities

Purchase of Fixed Assets (0.64) (0.44)
Interest Received 6.05 0.27
Net Cash Generated from / (Used In) Investing
Activities(B) 5.41 (0.17)

C. Cash Flows from Financing Activities

Proceeds from Issuance of Share Capital - 100.10
Net Cash Generated from / (Used in) Financing
Activities ( C ) - 100.10
Net Changes in Cash & Cash Equivalents (A+B+C) (7.02) 93.35
Cash and Cash Equivalents at the Beginning of the
Year / Period 93.35
Cash and Cash Equivalents at the End of the Year /
Period 86.33 93.35

Components of Cash and Cash Equivalents:

Cash in Hand
0.04 0.00

273
 Particulars Nine- months Period Year Ended March 31,
Ended December 31, 2007
2007
Balances with Scheduled Banks on Current Accounts 86.28 93.35

Total 86.33 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.
2) Negative figures have been shown in brackets.
3) 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.

For Gupta Garg & Agrawal

Chartered Accountants

Per B.B Gupta (Director) (Director)

Partner
Membership No: 012399
Place: Delhi
Date: June 22, 2008

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. Background

a. 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.

b. 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. 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

a) 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.

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) 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.
ii) 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 Rates (SLM) (in %) Schedule XIV Rates
(SLM) (in %)
Data Processing Machines 31.67 16.21
Furniture & Fixtures 13.57 6.33
Office Equipment 13.57 4.75

ii) Individual assets costing upto Rs.5,000/- are depreciated fully in the month of purchase.

iii) 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. Material Adjustments

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 March 31, 2007

Prior Period Items (Refer note b) 6.00 (6.00)

Total impact of adjustments 6.00 (6.00)

Current Tax impact of adjustments NIL NIL

Net impact of adjustments 6.00 (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. Other Significant Notes
1. 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 Leave encashment
Current service cost 0.64 1.24
Interest cost on benefit obligation NIL NIL
Expected return on plan assets NIL NIL
Net actuarial( gain) / loss recognized in the year (0.07) 0.10
Net benefit expense charged to Profit and Loss account 0.45 0.97
Actual return on plan assets Nil Nil

Balance sheet
Details of Provision for gratuity and leave encashment as at December 31, 2007
( Amount in Rs. million)
Gratuity Leave encashment
Defined benefit obligation (0.66) (1.24)
Fair value of plan assets 0.06 1.24
Less: Unrecognised past service cost NIL NIL
Net asset / (liability) recognised in Balance Sheet (0.66) (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 Leave encashment

Opening defined benefit obligation 0.08 NIL
Interest cost 0.00 NIL
Current service cost 0.64 1.24
Benefits paid ---- (0.10)

277
 Actuarial (gains) / losses on obligation (0.07) 0.10
Closing defined benefit obligation 0.66 1.24

Changes in the fair value of plan assets are as follows:

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

The principal assumptions used in determining gratuity and leave benefit obligations for the
Company’s plans are shown below:

Gratuity (%) Leave encashment (%)

Mortality table LIC 1994-96 ultimate LIC 1994-96 ultimate
Attrition Rate 15% P.A 15% P.A
Discount rate 8% P.A 8% P.A
Return on Plan Assets N.A N.A
Salary Rise 15% P.A 15% P.A
Remaining working life 32.46 years 32.46 years

Break-up of Deferred Tax Assets / (Liabilities) :

2. ( Amount in Rs. million)

Timing Difference on account of December March 31,
2007
31, 2007
Difference in depreciation and other differences in block of fixed assets 0.00 -
as per Tax books and Financial books
Gross Deferred Tax Liabilities 0.00 -
Effect of expenditure debited to Profit and Loss Account but allowed 0.57 -
for tax purposes in the following years
Brought forward losses and depreciation - -
Gross Deferred Tax Assets 0.57 -

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)

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Partner
Membership No: 012399
Place: Delhi
Date: June 22, 2008

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 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 “Forward-
Looking 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 fixed-
line 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, easy-
to-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.

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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.

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• 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

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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 Rates (SLM) (in %) Schedule XIV Rates (SLM)

(in%)
Buildings 3.34 3.34
Data Processing Machines 31.67 16.21
Furniture & Fixtures 13.57 6.33
Office Equipment
- Mobile phones 31.67 4.75
- Others 13.57 4.75
Vehicles
- Motor Cars 9.50 9.50
- Motor buses 13.57 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 Estimated Useful Life (Years)

Computer Software 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.

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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.

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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 December March 31, March 31, March 31, December
31, 2007 2007 2006 2005 31, 2003
Prior Period Items (0.69) 1.18 (0.36) (0.12) (0.01)
Sundry Balances written back (0.04) (0.90) 0.81 0.25
Provision for doubtful debts (0.12) (4.44) (0.54) - -
Sundry Balances written off 4.98 0.11 0.09 (0.14) (0.12)
Bad Debts written off 0.04 2.77 (2.58) (0.20) -
Bad Debts recovered - (0.00) 0.20 0.30 -
Depreciation (0.50) (10.80) 7.49 3.31 -
Leave Encashment - 1.25 (0.98) (0.27) -
Miscellaneous Expenditure (to the - - 0.04 (0.04) -
extent not written off)
Tax paid for earlier years/periods 0.75 0.33 - (1.05) -
Audit Qualification / Prior period 6.00 (6.00) - - -
Items
Total impact of adjustments 10.45 (15.64) 2.46 2.60 0.12
Current Tax impact of adjustments (0.42) 1.21 (0.28) (0.51) -
Deferred Tax impact of adjustments - 0.48 (0.09) (0.39) -
Net impact of adjustments 10.03 (13.95) 2.09 1.70 0.12

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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

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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 March 31, 2007 March 31, 2006 March 31, 2005 December 31, 2003
(9 months) % of (12 % of (12 % of (15 months) % of (12 months) % of
Total months) Total months) Total Total Total
Income Income Income Income Income
INCOME:
Operating 734.56 94.52 661.78 96.36 324.95 97.80 268.28 98.72 8.54 99.30
Income………………
Other 42.63 5.48 25.02 3.64 7.31 2.20 3.49 1.28 0.06 0.70
Income..……….................
TOTAL 777.19 100.00 686.80 100.00 332.26 100.00 271.77 100.00 8.60 100.00
INCOME…………….

EXPENDITURE:
Purchase of Goods for 0.99 0.13 3.38 0.49 - - - - - -
Sale…….
Operating 82.13 10.57 50.11 7.30 21.49 6.47 23.45 8.63 - -
Expenses…………….
Staff 138.37 17.80 66.11 9.63 28.53 8.59 20.15 7.41 0.59 6.86

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 December 31, 2007 March 31, 2007 March 31, 2006 March 31, 2005 December 31, 2003
(9 months) % of (12 % of (12 % of (15 months) % of (12 months) % of
Total months) Total months) Total Total Total
Income Income Income Income Income
Cost…………….................
Selling and Distribution 16.56 2.13 7.28 1.06 4.79 1.44 5.15 1.90 1.92 22.33
Expenses……………………….
.
General and Administration 126.31 16.25 78.53 11.43 23.77 7.15 13.45 4.95 1.17 13.60
Expenses……………………….
.
Decrease/(Increase) in 1.36 0.17 (1.36) (0.20) - - - - - -
Inventories……………………..
.
Interest………………………… 0.94 0.12 0.04 0.01 0.01 0.00 0.53 0.20 - -
.
Miscellaneous Expenditure 1.11 0.14 - - 0.03 0.00 0.06 0.02 0.64 7.44
Written Off
…………………….
Depreciation/Amortisation……. 60.47 7.78 32.90 4.79 14.59 4.39 5.54 2.04 - -
.
TOTAL 428.24 55.10 236.99 34.51 93.21 28.05 68.33 25.15 4.32 50.23
EXPENDITURE…….

Profit Before Tax and 348.95 44.90 449.81 65.49 239.05 71.95 203.44 74.85 4.28 49.77
Prior Period
Items………………
Prior Period 5.31 0.68 0.38 0.06 - - - - - -
Items………………
Profit Before Tax and 343.64 44.22 449.43 65.43 239.05 71.95 203.44 74.85 4.28 49.77
After Prior Period
Items……..…

Provision for Tax

Current 14.91 1.92 24.06 3.50 20.03 6.03 21.22 7.81 0.06 0.70
Tax……………………..
Deferred Tax 3.43 0.44 (1.24) (0.18) (0.30) (0.09) 3.48 1.28 1.53 17.79
Charge/(Credit)….
Fringe Benefits 4.65 0.60 2.16 0.31 1.03 0.31 - - - -
Tax…………….
Total Tax 22.99 2.96 24.98 3.63 20.76 6.25 24.70 9.09 1.59 18.49
Expense…………….

Adjustments………………… 10.45 1.34 (15.64) (2.28) 2.46 0.74 2.60 0.96 0.12 1.39
….
Current Tax impact of (0.42 (0.05) 1.21 0.18 (0.28) (0.08) (0.51) (0.19) (0.00) (.00)
Adjustments…………………
….
Deferred Tax impact of - - 0.48 0.07 (0.09) (0.03) (0.39) (0.14) - -
Adjustments…………………
….
Net impact of 10.03 1.29 (13.95) (2.03) 2.09 0.63 1.70 0.63 0.12 1.40
Adjustments……..

NET PROFIT, AS 330.68 42.55 410.50 59.77 220.38 66.33 180.44 66.39 2.81 32.67
RESTATED…………………..

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.

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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.

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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 For the For the

December 31, 2007 Fiscal 2007 Fiscal 2006

295
 Nine Months ended For the For the
December 31, 2007 Fiscal 2007 Fiscal 2006
Net Cash-Flow From/(Used In) Operating 61.85 239.80 247.03
Activities……………………………….
Net Cash-Flow From/(Used In) Investing (91.47) (317.15) (250.17)
Activities……………………………….
Net Cash-Flow From/(Used In) Financing (0.94) 206.25 0.66
Activities…………………………………
Net Increase/(Decrease) In Cash And Cash (30.56) 128.90 (2.48)
Equivalents……………………

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.

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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:

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(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.

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 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 non-
accountal 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/2007-1084-

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. 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

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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.

2. 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.

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.

2. 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.

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.

7. 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.

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

10. 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.

11. 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

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 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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 -.

18. 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

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 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.

20. 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.

21. 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.

22. 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. .

23. 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.

24. 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.

25. 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.

26. 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.

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 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.

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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.

34. 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.

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 pre-
summoning arguments.

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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 pre-
summoning 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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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

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 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.

8. 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.

9. 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.

10. 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.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

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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.

2. 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.

3. 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.

4. 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.

5. 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.

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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.

9. 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.

10. 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.

11. 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.

12. 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.

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 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

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 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.

17. 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.

18. 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.

19. 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.

20. 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 1998-
1999.

21. 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.

22. 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.

23. 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.

24. 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 2003-
2004.

25. 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

316
 has been made against an amount of Rs. 174,689 being paid for the assessment year 1998-
1999.

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 1999-
2000.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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.

34. 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.

35. 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.

36. 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.

37. 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.

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.

2. 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./2000-
01/664 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.

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.

2. 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.

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 non-
compliance of the above sections. The next date of hearing is July 16, 2008.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

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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.

2. 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.

3. 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.

4. 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.

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.

6. 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.

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.

8. 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.

9. 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

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.

11. 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.

12. 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.

13. 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.

14. 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.

15. 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.

16. 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.

17. 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.

18. 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

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.

20. 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.

21. 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.

22. 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.

23. 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.

24. 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.

25. 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

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 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.

27. 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.

28. 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.

29. 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.

30. 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.

31. 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.

32. 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.

33. 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 before the court.

34. Gursewak Singh and others have filed a civil suit filed before the Civil Judge (Junior
Division), JMIC, Moga against Jaswinder Singh, the company and others, praying for issuance

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 of a decree for permanent injunction restraining the defendants from installation of any tower,
commissioning/operating of tower, in the property in question forcibly, illegally, without due
course of law and for mandatory injunction directing the defendants to restore all the
underground pipes and other fittings/structure which they have installed in the said property
for the said tower purpose, illegally and unjustly. The matter is presently pending before the
court.

35. Jasbir Singh and others have filed a civil suit before the Civil Judge (Senior Division),
Ludhiana against Brij Lal, the company and others, praying for grant of temporary injunction
and permanent injunction restraining the defendants from installing any telephone mobile
tower on the property of defendant no.1. The matter is presently pending before the court.

36. Kartar Singh has filed a civil suit before the Civil Judge (Senior Division), Ropar against the
company praying for permanent injunction restraining the defendants from forcibly and
illegally installing mobile tower on the roof of the house of the plaintiff which is constructed
in the land comprised in Khewat/Khatauni No. 1215/1335, Khasra No. 34//7/9, 8/2, situated in
H.B No. 44, Rupnagar, as the same would be hazardous for the plaintiff as well as inhabitants
of Ropar city. The matter is presently pending before the court.

37. Mahinderpal Singh and others have filed a civil suit before the Civil Judge (Senior Division),
Patiala against Attar Singh, the company and others praying for grant of permanent injunction
restraining the defendants from constructing and regularsing a telephone mobile tower in the
residential colony, at the II floor of H.No. 51-A, Kartar Park Colony, Ward No.14, Patiala.
The matter is presently pending before the court.

38. Vasdeep Singh and others have filed a civil suit before the Civil Judge (Senior Division),
Amritsar against the company and another, praying for permanent injunction restraining the
defendants from installing mobile tower and generator, atop on the property of defendant no.2
situated in the area of VPO, Gumtala, Amritsar. The court vide order dated November 29,
2007 has ordered status quo with regard to installing cell/mobile phone signal transmission
tower of signal and generator atop the property of defendant no.2 till further order. The matter
is presently pending before the court.

39. Rajkumar and others have filed a civil suit before the Civil Judge (Senior Division), Amritsar
against Swaran Singh, the company and others, praying for permanent injunction restraining
the defendants from raising any construction and installing mobile tower and generators on the
property of defendant no.1 situated at Royal Estate Colony, Bal Sachinder, Amritsar and
mandatory injuction directing the defendants to remove the constructions already raised for
the said purpose. Reply to the plaint and application under order 39 rules 1&2 of the CPC has
been filed. The matter is presently pending before the court.

40. Mahinderpal Singh and others have filed an appeal along with an application under order 39
rules 1 and 2 of the CPC in the Court of District Judge, Patiala, against Attar Singh, the
company and others, against the order dated December 13, 2007 passed by the Court of Civil
Judge (Junior Division), Patiala, whereby the court declined the application of the
appellants/plaintiffs under order 39 rules 1 and 2 read with section 151 of the CPC for the
grant of ad-interim injunction restraining the respondent/defendants from installing the mobile
tower at the residential colony, at the II floor of H.No. 51-A, Kartar Park Colony, Ward
No.14, Patiala. The matter is presently pending before the court.

41. Surinder Mohan and others have filed a civil suit before the Civil Judge (Senior Division),
Ropar against Saini Bhawan, the company and others, praying for permanent injunction
restraining the defendants from forcibly and illegally installing mobile tower on the roof of the
Saini Bhawan, Ropar as the same would be hazardous for the inhabitants of Ropar city,
including plaintiffs. The plaintiffs have also filed an application under order 39, R1&2 of the
CPC for temporary injunction. The company has filed its reply to the plaint and the
application for temporary injunction. The matter is presently pending before the court.

42. Rajkumar and others have filed an appeal along with an application under order 39, rules 1
and 2 of the CPC in the Court of District Judge, Amritsar against Swaran Singh, the company

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 and others against the order dated December 22, 2007 passed by the Court of Civil Judge
(Junior Division), Amritsar. The court had stayed further construction of the tower situated at
Royal Estate Colony, Bal Sachinder, Amritsar. The appeal stands disposed off with the
direction to maintain status quo till the decision on the stay application, which is to be decided
by the trial court within one month.

43. Jasvir Singh has filed a civil suit along with an application under order 39, rules 1 and 2 of the
CPC in the Civil Judge (Senior Division), Ropar against Nasib Singh, the company and others,
praying for permanent injunction restraining the defendants from changing the nature of suit
property by raising construction or by installing tower over the land situated at Pipal Majra,
Rupnagar till the partition of land. The company has filed its reply to the plaint and the
application under order 39, rules 1 and 2 of the CPC. The matter is presently pending before
the court.

44. Rupinder Singh and others have filed a civil suit before the Civil Judge (Senior Division),
Muktsar against the company and others, praying for permanent injunction restraining the
defendants from raising construction by installing a tower. The matter is presently pending
before the court.

45. Surjit Singh has filed a civil suit before the Civil Judge (Senior Division), Talwandi Sabo
against the general manager of the company and others, praying for permanent injunction
restraining the defendants from forcibly and illegally installing a mobile tower in the
residential house of defendant no.3, situated at Misar Mohalla, Talwandi Sabo, Bathinda,
alongwith an application under order 39, rules 1 and 2 of the CPC. The matter is presently
pending before the court.

46. Dr. Lt. Colonel Gurdarshan Singh has filed a civil suit along with an application under order
39, rules 1 and 2 of the CPC before the Civil Judge (Senior Division), Talwandi Sabo against
the chief engineer, Quipo and the company, for restraining the defendants from causing any
type of illegal, unlawful and unauthorized interference into the peaceful possession of the
plaintiff over a plot situated within the red line area of Gobindgarh, Abohar. The matter is
presently pending before the court.

47. Amarnath Singh and others have filed a civil suit before the Civil Judge (Senior Division),
Sunam against the company and others, praying for permanent injunction restraining the
defendants from forcibly and illegally installing mobile tower on the roof of the property
situated in the residential area of Shaheed Udham Singh Nagar, Jandu Basti, Jakhal Road,
Sunam as the same is dangerous to human and animal life. The matter is presently pending
before the court.

48. Brij Mohan Lal Aggarwal has filed a civil suit in the Court of Additional Civil Judge (Senior
Division), Batala against the company and others, praying for mandatory injunction directing
the defendants to connect the post paid mobile connection number 9814740844 and damages
to the extent of Rs.150,000. The matter is presently pending before the court.

49. Sahib Singh and others have filed a civil suit along with an application under order 39, rules 1
and 2 of the CPC before the Civil Judge (Senior Division), Talwandi Sabo against Sonu
Singh, the company and others, praying for permanent injunction restraining the defendants
from forcibily and illegally installing mobile tower in Sekhu, Talwandi Sabo, Bathinda, which
is against the health, safety and security of the plaintiffs and their family, as their houses are
within 200 meters of tower. The matter is presently pending before the court.

50. Puran Chand has filed a civil suit before the Civil Judge (Senior Division), Pathnkot against
Parshotam Lal, the company and others, praying for permanent injunction restraining the
defendants from raising construction by installing a tower. The matter is presently pending
before the court.

51. Prem Chand has filed a civil suit against Yograj, the company and others before the Civil
Judge (Senior Division) Gurdaspur, praying for permanent injunction. The plaintiff has also
filed an application under order 39 rules 1 and 2 of the CPC for restraining the defendants

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 from interfering in any manner in the Garha Khad or carving out the passage from the Garha
Khad. The matter is presently pending before the court.

52. Surinder Kumar has filed a civil suit against Charanjit Singh and the company before the
Additional Civil Judge (Senior Division) Garhshankar, praying for permanent injunction
restraining the defendants from installing a mobile tower at the suit land. The matter is
presently pending before the court.

53. Davinder Singh has filed a civil suit against Swinder Singh and the company before the Civil
Judge (Senior Division) Gurdaspur, praying for permanent injunction restraining the
defendants from leasing, renting out for installing the mobile tower at the property adjoining
the house of the plaintiff, whereby causing nuisance, inconvenience and risk to the health of
the plaintiff and other inhabitants of the locality and for mandatory injunction directing the
defendant no1 to restore the wall demolished by the defendants of the house of the plaintiff to
its original condition. The matter is presently pending before the court.

54. Buta Singh and others have filed a civil suit against Avtar Singh, the company and others
before the Civil Judge (Senior Division) Barnala, praying for permanent injunction restraining
the defendants from installing mobile tower at the suit land along with an application under
order 39 rules 1 and 2 of the CPC. The matter is presently pending before the court.

55. Aman Khanna has filed a suit against the company for recovery of Rs. 204,200, Rs. 143,000
as principal amount, Rs. 11,200 as interest and Rs. 50,000 for damages and harassment to the
plaintiff on the basis of oral and documentary evidence along with future interest till
realization. The matter is presently pending before the court.

56. Apple Communications has filed a suit against the company for recovery. The copy of the
plaint is yet to be received by the company. The matter is presently pending before the court.

57. Harjinder Singh has filed a civil suit against Reena Rani, the company and others before the
Civil Judge (Senior Division) praying for permanent injunction restraining the defendants
from installing a mobile tower on the land of the plaintiff situated in the village of Abadi Deh.
The matter is presently pending before the court.

58. Vikram Singh has filed a civil suit against Gurjit Singh the company and others before the
Additional Civil Judge (Senior Division) Khanna, praying for permanent injunction
restraining the defendants from installing a mobile tower on the roof of the house of defendant
no.1 and adjoining the wall of the plaintiff along with an application under order 39 rules 1
and 2 of the CPC for grant of temporary injunction. The matter is presently pending before the
court.

59. Makhan Singh and others have filed a civil suit against Sonu Singh, the company and others,
before the Civil Judge (Senior Division) Talwandi Sabo praying for permanent injunction
restraining the defendants from installing a mobile tower in village Sekhu, tehsil: Talwandi
Sabo, Bathinda, which is against the health, safety and security of the plaintiffs and their
family. The plaintiffs have also filed an application under order 39 rules 1 and 2 of the CPC.
The court had passed an interim ex – parte order restraining the defendants from installing the
tower at the suit land. The matter is presently pending before the court.

60. Nasib Kaur and others have filed a civil suit against Sonu Singh, the company and others,
before the Civil Judge (Senior Division) Talwandi Sabo praying for permanent injunction
restraining the defendants from installing a mobile tower in the residential plot of Gurpal
Singh, tehsil: Talwandi Sabo, Bathinda, which is against the health, safety and security of the
plaintiffs and their family. The plaintiffs have also filed an application under order 39 rules 1
and 2 of the CPC. The court had passed an interim ex – parte order restraining the defendants
from installing the tower at the suit land. The matter is presently pending before the court.

61. Gurmeet Kaur has filed a civil suit against Ajit Singh, the company and others before the Civil
Judge (Senior Division) Dhuri, praying for permanent injunction restraining the defendants
from installing a mobile tower in the residential plot of the plaintiff, village: Kheri Chailha,

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 tehsil: Dhuri, Sangrur, which is a thickly populated area and is situated near the house of the
plaintiff. The matter is presently pending before the court.

62. Balwant Singh has filed a civil suit against Suda Singh, the comapny and others, Civil before
the Civil Judge (Senior Division) Ludhiana, praying for permanent injunction restraining the
defendants from installing a mobile tower and generator set in the plot of Suda Singh, situated
at H.No:125, Raja Garden Colony, village: Partap Singh Wala, Ludhiana. The matter is
presently pending before the court.

63. Jaswant Singh has filed a civil suit against Balwant Singh, the company and others before the
Additional Civil Judge (Senior Division) Rajpura, praying for permanent injunction
restraining the defendants from installing a mobile tower on the land situated at khewat No:
22, khatoni No: 50, khasra No: 769/678/428/688/177 situated within village: Kharola, tehsil:
Rajpura, and further restraining from changing the nature of the suit land. An application
under order 39 rules 1 and 2 for grant of temporary injunction has also been filed. The matter
is presently pending before the court.

64. Pitambar has filed a civil suit against Kulwant Singh, the company and others before the Civil
Judge (Senior Division) Chandigarh, praying for mandatory injunction restraining the
defendants to remove the tower fixed at the common wall of the plaintiff and defendant no.1
as the common wall is not strong to bear the load of tower, machinery and generator set and
further causing nuisance by creating noise and pollution. The matter is presently pending
before the court.

65. Bikkar Singh and others have filed a civil suit against Spice Telecom and others before the
Civil Judge (Senior Division) Zira, praying for permanent injunction restraining the
defendants from installing mobile tower in the plot shown in the site plan attached, situated in
village: Kohala, tehsil: Zira. An application under order 39 rules 1 and 2 for grant of
temporary injunction has also been filed. The matter is presently pending before the court.

66. Vijay Kumar and another has filed a civil writ petition against the Union of India, the
company and others in the nature of mandamus for directing the respondents no:1 and 2 i.e
Union of India and the State Of Punjab, to frame policy/guidelines for installation of mobile
towers in the residential area on the public or privately owned properties taking into
consideration the ill-effects of the mobile towers on the health of the general public living in
the close vicinity and further for directing the respondents no.3 i.e the municipal corporation
Amritsar, not to grant permission to respondent no.4 to 6 i.e Spice Telecom (respondent no:
4&5) and the Bombay Cloth House, Amritsar, to install the mobile towers in the thickly
populated area of Putlighar, Amritsar in violation of the provisions of the telecom policies
issued by the government from time to time. The matter is presently pending before the court.

Litigations against Spice Communications Limited in Karnataka Circle

67. A criminal complaint (1448/2004) has been filed by the Assistant Controller of Legal
Metrology, Tumkur against the company in the Court of Judicial Magistrate, First Class,
Tumkur under the Standard Weights and Measures Act, 1976 and the rules made there under
for not maintaining the pre-paid packet of SIM cards as per the rules i.e. the pre-paid packet
does not contain manufacture date, address of the manufacturer etc. The company has moved
the High Court of Karnataka (756/2006) under section 482 of the CRPC for quashing the
impugned complaint in the lower court. The High Court of Karnataka has passed an interim
order for staying the proceedings before the lower court. The next date of hearing in the High
Court is yet to be fixed. The matter is presently pending in the lower court.

68. Sandeep K. Arjunagi has filed a consumer complaint before the District Forum, Bijapur
alleging that there is a network problem and his incoming calls were barred for some time.
The complainant has claimed Rs. 800,000 as compensation towards loss incurred by his
company, loss of its reputation & mental agony. The company has appeared before the forum.
The matter is presently pending before the court for counter and affidavit.

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69. Shivanand Mitte has filed a complaint against the company (172/2007) in the District
Consumer Forum, Gulbarga for excess deduction of administration fee on recharge claiming
an amount of Rs 52,000 towards compensation and costs. The Company has filed its counter
to the complaint. The matter is presently pending before the court.

70. Shivanand Mitte filed complaint against the company (111/2007) in the District Consumer
Forum, Udupi for excess deduction of administration fee on recharge claiming an amount of
Rs 2,000,000 towards compensation and costs. The District Forum has passed an order on
Fberuary 20, 2008 for transferring the matter to Uttara Kannada District Forum, Karwar from
District Forum Udupi for disposal. The company has filed its counter to the complaint. The
matter is presently pending before the court.

71. Ashok Nayak has filed a complaint against the company (30/2008) in the District Consumer
Forum, Udupi for deduction of excess administrative charges on recharge and claiming
compensation of Rs. 22,087. The company has filed the counter before the District Consumer
Forum. The matter is presently pending adjudication.

72. Pallavi has filed a complaint against the company (34/2008) in the District Consumer Forum,
Udupi for deduction of excess administrative charges on recharge and claiming compensation
of Rs. 22,090. The matter is presently pending before the District Consumer Forum.

73. Chacko Varghesse has filed a civil suit (81/2003) against the company in the court of Civil
Judge, Senior Division at Puttur D.K. seeking vacant possession of the premises leased out by
it to the company on yearly tenancy for a period of 10 years by way of a registered lease deed
on various terms and conditions. The plaintiff has sought vacant possession of the premises in
its original condition and also direction to the company to pay damages/cost of repair of Rs.
50,000. The company has filed its written statement and an application for rejecting/staying
the suit and directing the plaintiff to have recourse to provisions of the Arbitration and
Conciliation Act, 1996 before the District Court at Mangalore. The matter is presently pending
adjudication.

74. A civil suit (260/2006) has been filed by Bhamy Vittaldas Shenoy in the court of the I
Additional Civil Judge (Senior Division), Mangalore D.K. against V. Nagendra Baliga to give
the vacant possession of the subject property and restrain the company from putting up any
telecommunication tower on the suit property. The company has filed an application stating
that it is not a necessary party. This case has been shifted to Civil Judge (Senior Division),
Bantwal. The matter is presently pending adjudication.

75. A civil suit (581/2007) has been filed by Sneha Trading Corporation in the Court of III
Additional Civil Judge (Junior Division), Belgaum against the company for a declaration that
the plaintiff is the exclusive distributor for prepaid services of the company and consequential
relief of permanent injunction restraining the company from disturbing or terminating their
distributorship in Belgaum. The Court has rejected and dismissed the case. However, the
plaintiff has filed an appeal (67/2008) in the Court of Principal Civil Judge (Senior Division),
Belgaum. The matter is presently pending adjudication.

76. K. Bhujanga has filed a civil suit against Jaswanth Singh and the company before the Court of
the Civil Judge (Junior Division), Shivamogga. Jaswanth Singh, owner of the property has
leased out premises to the company for construction of a network tower. The plaintiff being
aggrieved by such construction approached the court seeking perpetual injunction on further
construction of the tower at the premises, for removal of the partially constructed tower and to
pay the litigation costs. The matter is presently pending adjudication.

77. A complaint has been filed against the company for violation of the provisions of Equal
Remuneration Act, 1976 in the Labour Court, Mysore for not maintaining the registers in
prescribed form as required under the Equal Remuneration Act, 1976, non-registration of the
establishment, for not displaying the required statutory notice and for non-submission of the
statutory notices to the inspector under the Contract Labour (Regulation and Abolition) Act,
1970. The matter is presently pending before the labour court.

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Litigation by Spice Communications Limited

1. The company has filed a petition against DOT before the TDSAT challenging the rejections of
UAS license applications by DOT for 16 service areas, namely Assam, Bihar, Gujarat,
Himachal Pradesh, Jammu & Kashmir, Kerala, Kolkatta, Madhya Pradesh, Mumbai, North
East, Orissa, Rajasthan, Tamil Nadu (including Chennai Service Area), Uttar Pradesh (west),
Uttar Pradesh (east) and West Bengal on the ground that the company does not possess the
requisite net-worth for grant of UAS license licenses for these 16 service areas. The company
has contended that it had much more than the required net-worth for the grant of the said
licenses at all times including, as on the date of the applications, i.e. August 31 2006, or at any
time thereafter.

The company has also separately filed a petition before the TDSAT challenging the procedure
adopted by DOT for grant of letters of intent and UAS licenses to various applicants as DOT
allegedly failed to follow its well established policy of first-come-first-serve for processing the
applications filed with it. The company has contended that various applicants were handed
over the letters of intent by DOT simultaneously and in fact some applicants were given the
letters of intent even prior to applicants like the company, who had preferred its applications
much prior to such other applicants. The company further contends that it is has the first
priority for grant of UAS licenses in the majority of the above-mentioned service areas, if the
date of application is considered as the criterion for determining seniority.

The matters are presently pending and in the interim the TDSAT vide its orders dated
February 28, 2008 has directed that till further orders DOT shall take into account the
seniority of the company and reserve its rights in respect of the company’s application dated
August 31, 2006 for grant of UASL license.

Litigation through Cellular Operators Association of India involving Spice Communications Limited

2. Cellular Operators Association of India, of which the company is a member (hereinafter

referred to as “COAI”) and others have filed an execution application (M.A. 26/2006 in
Petition No. 48/2004) before the TDSAT for the enforcement of the pulse petition order
pronounced by TDSAT dated November 11, 2005 with respect to implementation of the
following by BSNL with effect from November 11, 2005: (i) CDR/Reciprocal billing; (ii)
Reciprocity in interest charges; (iii) Application of intra circle carriage charge of only
20p/minute for calls handed over by Cellular Mobile Service Providers (“CMSP”) at Level II
TAX; and (iv) Refund of excess payments made together with interest (at a reciprocal rate).
The matter is presently pending adjudication.

3. COAI and others have filed an appeal (3/2006) before the TDSAT against the TRAI direction
dated November 29, 2005 to operators to ensure strict compliance to the ‘Quality of Service’
benchmarks laid down by TRAI without taking any steps for ensuring that the operators have
the basic back-up infrastructural facility required for the same in form of, inter alia, adequate,
timely and effective interconnection. The appeal further challenges the arbitrary decision
taken by TRAI to issue show cause notices to some operators on a selective basis demanding
an explanation as to why penal action not be taken against them under sections 29, 30 read
with section 34 of the Telecom Regulatory Authority of India Act, 1997 in spite of implicitly
recognizing the fact that the parameters set by it are incapable of being achieved. The appeal
is presently pending adjudication.

4. COAI and others have filed an appeal (4/2006) before the TDSAT challenging TRAI’s
Telecommunication Interconnection Usage Charges (Sixth Amendment) Regulation (1 of
2006) dated February 23, 2006 only insofar as the same has maintained the mobile termination
charge at Rs. 0.30 per minute which is not cost based as is being alleged by TRAI. The appeal
is presently pending adjudication.

5. COAI and others have filed a petition before the TDSAT (140/2005) against Reliance
Infocomm and others for providing their mobile services namely “Unlimited Cordless” in the
garb of fixed wireless services, and thereby forcing the cellular operators to pay Access
Deficit Charge (“ADC”) on such calls on which otherwise no ADC is admissible or payable

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 as per the applicable IUC/ADC regime. Simultaneously, by passing off their said mobile
services as fixed wireless services, Reliance Infocomm is retaining ADC, which otherwise it is
not entitled to retain. This has created and continues to create non-level playing field
conditions for the cellular operators. It is also violative of, inter alia, IUC regulations, the
directions/clarifications issued by TRAI and DoT, terms of the license of Reliance Infocomm
and is also violative of the petitioners’ rights under Article 14 and 19(1)(g) of the Constitution.
The petition is presently pending adjudication.

6. COAI and others have filed a petition before the TDSAT (74/2005) against Tata Teleservices
Limited for providing their mobile services namely “WALKY” in the garb of fixed wireless
services and thereby forcing the cellular operators to pay ADC on such calls on which
otherwise no ADC is admissible or payable. Simultaneously, by passing off their said mobile
services as fixed wireless services, Tata Teleservices Limited is retaining ADC, which
otherwise it is not entitled to retain. This has created and continues to create non-level playing
field conditions for the cellular operators. It is also violative of, inter alia, IUC regulations, the
directions/clarifications issued by TRAI and Department DoT, terms of the license of Tata
Teleservices Limited and is also violative of the petitioners’ rights under Article 14 and
19(1)(g) of the Constitution. The petition is presently pending adjudication.

7. COAI and others have filed a petition before TDSAT (122/2007) against DoT and the
Assistant Wireless Advisor, GOI, challenging their order of November, 2006 for unilaterally
and wrongly increasing manifold the spectrum charges (based on revenue share) for
microwave access and microwave backbone networks of GSM based telecom service
providers and such increase being unfair, unreasonable, violative of the terms of licence
agreement, violative of the contract between cellular operators and the GOI, unilateral and
illegal. The petitioners have prayed for striking down the impugned order and directing the
respondents not to raise any demand notes based on the said impugned order and declaring
that the respondents ought to refund/adjust the excess amounts collected by them from cellular
operators pursuant to said order. The matter is presently pending adjudication.

8. COAI and others have filed a petition (286/2007) before the TDSAT challenging the decision
dated October 19, 2007 of DoT permitting, inter alia, cross over of spectrum allocation and
enhanced subscriber linked criteria for spectrum allocation. The petitioners are further seeking
directions/orders from the tribunal for enforcement of the Petitioners legal rights and for
enforcement of already mutually agreed and executed contract between the cellular operator
and the government. The petitioners have also sought directions to DoT to issue UAS licenses,
on an a priori basis vis-à-vis other applicants, to GSM operators, already holding licenses in
certain service areas and having applied in other service areas for new UAS licenses as per
already existing policy, contractual and licensing framework and issue required spectrum to
them based on and to the extent of availability of spectrum following the principle of ‘First
Come First Serve’ basis. The matter is presently pending adjudication.

9. COAI and others have filed an appeal (4352/2006) before the Supreme Court of India against
the order pronounced by the TDSAT dated November 11, 2005 to the extent that it does not
provide the relief with retrospective effect and has only directed implementation of the
following by BSNL with effect from November 11, 2005: (i) CDR /Reciprocal billing; (ii)
Reciprocity in interest charges; (iii) Application of intra circle carriage charge of only
20p/minute for calls handed over by CMSPs at Level II TAX; and (iii) Refund of excess
payments made together with interest (at a reciprocal rate). The appeal is presently pending
adjudication and is connected to civil appeal no. 1676/2006 filed by BSNL against COAI and
others before the Supreme Court of India, discussed above.

10. COAI and others have filed a special leave petition before the Supreme Court of India against
Mr. Jagbir Singh, Union Territory of Chandigarh and others, against an interim order passed
by the High Court of Punjab & Haryana at Chandigarh which had directed that there will be
no further construction of any tower except in the non-residential areas and that too after the
necessary sanction has been taken. The Supreme Court on November 13, 2006 directed
impleadment of Union of India, DoT as a respondent in the case to get its view on the case and
further grant full stay of the impugned order. The matter is presently pending adjudication.

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Litigation by Spice Communications Limited in Punjab Circle

11. The company and others have filed a petition (284/2007) before the Telecom Disputes
Settlement And Appellate Tribunal (“TDSAT”) against DoT and TRAI challenging the
definition of “Gross Revenue” and “Adjusted Gross Revenue” as applied and implemented by
DoT for the purposes of levying license fees and wireless planning and co-ordination charges
under the cellular license agreement, as being unfair, unjust, unreasonable, arbitrary,
unilateral, violative of the terms of the migration package] and beyond the scope of the powers
vested with DoT under section 4 of the Indian Telegraph Act, 1885. The petitioners have
additionally challenged the various demand notes cum assessment orders raised by DoT, on
which payment had already been made, on grounds that the same are not in consonance with
previous judgments of the TDSAT. The petitioners have prayed for directing DoT to apply
and implement the correct definition of “Adjusted Gross Revenue” and to rework/recompute
all demands/demand notes in consonance with the correct definition of “Adjusted Gross
Revenue” and to refund/adjust all the excess amounts charged by DoT under the demand
notes. The tribunal passed an interim order dated October 23, 2007, stating that the license
fees will be paid by the petitioners, as per the new definition of “Adjusted Gross Revenue”
from the same date. The matter is presently pending adjudication.

12. A writ petition has been filed by the company before the High Court of Punjab & Haryana
(7807/2001) challenging the orders passed by various authorities. The petitioner has
challenged the applicability of the Employees Provident Fund and Miscellaneous Provisions
Act, 1952 (the “EPF Act”) vide letter dated August 12, 1998 made to the Regional Provident
Fund Commissioner (“RPFC”) which rejected the application of the company and directed it
to comply with the provisions of the EPF Act in letter and spirit vide impugned order dated
January 10, 2000. Being aggrieved by the order of RPFC, the petitioner preferred an appeal
before the Employees Provident Fund Appellate Tribunal which was dismissed vide order
dated July 12, 2000. Being aggrieved by the said order(s), the petitioner has filed the present
writ petition. A prayer has also been made by the petitioner for issuance of a writ of certiorari
for quashing the impugned orders and restraining the RPFC from enforcing the provisions of
the EPF Act. An interim prayer was also made for issuing directions to the RPFC for
restraining it from taking further action pursuant to the impugned orders during the pendency
of the writ petition. The interim prayer made by the petitioner was granted by the High Court
vide order dated May 29, 2001 and further proceedings before the Regional Provident Fund
Commissioner, Chandigarh have been stayed. The matter is presently pending adjudication.

13. A writ petition (10982/2004) has been filed by the company before the High Court of Punjab
& Haryana praying for issuance of a writ in the nature of certiorari quashing the orders dated
July 19, 2004 passed by the Land Acquisition Officer, Chandigarh directing the petitioner to
remove the cell sites/towers of the petitioner within three days. The High Court vide its order
dated July 23, 2004 directed that towers shall not be demolished and parties were further
directed to maintain status quo in relation to the structure and functioning of the towers. Vide
its order dated August 5, 2004, the High Court has directed that no further towers will be
erected and status quo to be maintained. Vide its order dated February 7, 2005, the High Court
has modified the order dated August 5, 2004 to the extent that if the petitioner approaches the
Land Acquisition Officer, Chandigarh/administration and applies for permission to set up
cellular mobile telephony provider towers in non-residential areas, the administration would
dispose off the application of the petitioner in accordance with the guidelines framed by it
within a period of four weeks. Vide its order dated May 11, 2006, the High Court has
adjourned the writ petition sine die. The matter is presently pending before the court.

14. A civil suit (230/2004) has been filed in the court of Civil Judge (Senior Division), Jalandhar
by the company for declaration to the effect that various notices issued by the defendant,
Cantonment Board, Jalandhar are illegal, arbitrary and void ab initio and are liable to be
declared as null and void and for permanent injunction restraining the defendant from
proceeding with the said notices and from removing/ demolishing the structures raised by the
plaintiff in the said notices. The matter is presently pending adjudication.

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15. The company has filed an appeal before the District and Sessions Judge, Chandigarh against
the order of the Rent Controller, Chandigarh dated February 18, 2008 in the rent petition
(34/2006) filed by Laj Rani Bansal under section 13 of the East Punjab Urban Rent Restriction
Act, 1949 ejecting the company from the premises given on lease on expiry of lease period.
The Additional District and Sessions Judge has passed a stay order against the ejectment of
the company from the leased premises. The matter is presently pending.

16. The company has filed an appeal (KST A.P. No. 1026/1999-2000) before the Joint
Commissioner of Commercial Taxes (Appeals) against the order of the Assistant
Commissioner of Commercial Taxes levying sales tax of Rs. 9,293 on the sale of SIM cards
for the assessment year 1996-1997. The case is presently pending before the Joint
Commissioner of Commercial Taxes (Appeals).

17. An appeal was preferred by the Service Tax Department before the CESTAT against the order
dated August 17, 2005 of Commissioner (Appeals), Chandigarh made in favour of the
company. The matter pertains to demand of Rs. 2,317,625, as well as interest and penalty
thereon, raised on adjustment of service tax on interconnect bills of DoT for the period
October 1998 – March 1999. The said appeal was decided by the CESTAT vide its order
dated April 11, 2007 in favour of the Service Tax Department against which the company has
filed an appeal (ST/189/05-ST) before Punjab and Haryana High Court.

18. An appeal (Dairy No. O-27101) has been preferred by the company against the CESTAT,
New Delhi and the Deputy Commissioner of Central Excise Division, Chandigarh in the High
Court of Punjab and Haryana at Chandigarh under section 35G of the Central Excise Act,
1994 for setting aside the order dated January 9, 2006 passed by the CESTAT, New Delhi.
The matter pertains to demand of Rs. 660,720, as well as interest and penalty thereon, raised
on adjustment of service tax on interconnect bills of DoT for the period April 2002 –
September 2002. The CESTAT, vide its order dated January 9, 2006 has rejected any
adjustment of service tax made by the company under rule 6 (3) of the Service Tax Rules,
1994. The appeal has been admitted by the High Court and is pending for adjudication.

19. An appeal was preferred by the company before the Commissioner of Central Excise
(Appeals), Chandigarh against the order of the Additional Commissioner, Central Excise
dated December 21, 2006. The issue in dispute is whether cenvat credit on pre-fabricated
building/shelter is admissible as capital goods/inputs or not. The period under dispute is
September 2004 – August 2005. Vide its order dated December 21, 2006, the Additional
Commissioner, Central Excise has held that cenvat credit taken by the company against pre-
fabricated building /shelter is irregular and is required to be recovered and thus has confirmed
the demand alongwith interest and imposed penalty under Rule 14 and 15 of Cenvat Credit
Rules, 2004 read with sections 73 and 75 of Finance Act, 1994. The said appeal has been
decided by the Commissioner of Central Excise (Appeals) vide an order dated July 3, 2007, in
favour of the Service Tax Department against which the company preferred an appeal
(76/CE/CHD/07) before the CESTAT, New Delhi, but same case was remanded back to
Commissioner of Central Excise (Appeals) for reconsideration. After reconsideration, the
Commissioner (Appeals) has disposed off the matter in favour of the Service Tax Department
vide its order dated February 13, 2008, against which the company is planning to file the
appeal before CESTAT – New Delhi. The amount in dispute is Rs. 1,181,895 as demand plus
Rs. 1,181,895 as penalty plus interest.

20. An appeal was filed by the company before the Commissioner of Central Excise (Appeals),
Chandigarh against the order of Additional Commissioner, Central Excise dated December 21,
2006. The issue in dispute is whether cenvat credit on pre-fabricated building/shelter is
admissible as capital goods/inputs or not. The period under dispute is September 2005 –
August 2006. Vide its order dated December 21, 2006, the Additional Commissioner, Central
Excise has held that cenvat credit taken by the company against pre-fabricated building/shelter
is irregular and is required to be recovered and thus, has confirmed the demand alongwith
interest and imposed penalty under rule 14 and 15 of Cenvat Credit Rules, 2004 read with
sections 73 and 75 of Finance Act, 1994. The said appeal has been decided vide an order of

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 the Commissioner of Central Excise (Appeals), dated July 3, 2007, in favour of the Service
Tax Department, against which the company preferred an appeal (77/CE/CHD/07) before
CESTAT, New Delhi, but same was remanded back to the Commissioner of Central Excise
(Appeals ) for reconsideration. After reconsideration, the Commissioner (Appeals) has
disposed off the matter in favour of the Service Tax Department vide its order dated February
13, 2008, against which the company is planning to file the appeal before CESTAT – New
Delhi. The amount in dispute is Rs. 2,933,396 as demand plus Rs. 2,933,396 as penalty plus
interest.

21. The company has filed a suit against Brigadier B.S.Grewal for permanent injunction under
section 38 of the Specific Relief Act, 1963 against the defendant for restraining him from
demolishing the building i.e plot no. 42, Industrial Area, Phase II, Ram Darbar, Chandigarh in
a mobile tower is installed, till the termination of the lease deed executed between the plaintiff
and the defendant in this regard. An application under order 39 rules 1 and 2 for grant of
temporary injunction has also been filed. The matter is presently pending before the court.

In the Punjab Circle, the company has filed an aggregate of 95 civil suits for recovery involving an
amount of Rs. 1,846,505; 609 criminal complaints under section 138 of the N.I. Act involving an
amount of Rs. 5,211,115; and 102 permanent lok adalat matters for recovery involving an amount of
Rs. 216,527.

Litigation by Spice Communications Limited in Karnataka Circle

22. A writ petition (21397/2005) has been filed by the company in the High Court of Karnataka
against the Commissioner Corporation of Belgaum, Bangalore for issuing a writ of certiorari
to quash the demand notice issued by the respondent to pay Rs. 60,000 as tax for three cell
sites put up by the petitioner and 5% share in revenue, as the same is not valid. The High
Court has passed an interim order granting stay on the execution of the demand notice. In the
mean time the petitioner has also received a demand notice from the respondent to pay Rs.
40,000 as service charge for four cell sites and for this, the petitioner has filed a contempt
petition in the High Court of Karnataka against the Commissioner Corporation of Belgaum,
Bangalore. The said contempt petition has been withdrawn since the High Court has instructed
for clarification of the order dated September 12, 2005 passed in writ petition filed by
petitioner. The matter is pending in the High Court. The total amount involved is Rs. 0.1
million. The next date of hearing is yet to be fixed.

23. The company has filed an appeal before the CIT (Appeals)-12, New Delhi against the order of
the DCIT for the assessment year 2005-2006 disallowing expenses amounting to
Rs.31,260,500 on account of advertisement expenses, Rs. 125,318 on account of software
expenses and Rs. 24,468,750 on account of management service charges. The next date of
hearing is yet to be fixed.

In the Karnataka circle, the company has filed one civil suit for recovery involving an amount of Rs.
168,413; and 17 criminal complaints under section 138 of the N.I. Act involving an amount of Rs.
80,827.

Spice Corp Limited

Litigation against Spice Corp 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 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

335
 (“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.

2. An appeal was filed by the Department of Income Tax against the company before the
Allahabad High Court against the order of the Income Tax Appellate Tribunal (“ITAT”)
allowing long term capital loss of Rs. 5,393,943 as against assessed business loss of Rs.
3,226,363 for the assessment year 1995-96. The next date of hearing has not been fixed as yet.

3. An appeal was filed by the Department of Income Tax before the Allahabad High Court
against the order of the ITAT up holding the disallowance of the following amounts from the
company for the assessment year 1996-1997: Rs. 135,000 on account of prior period
expenses; Rs. 80,000 on account of consultancy charges; Rs. 977,765 on account of
disallowance of expenditure on publication of book, Rs. 680,000 on account of disallowance
of expenditure on market survey; Rs. 1,351,732 on account of disallowance of salary and
traveling expenses of Mr. U.R. Saha, as pertaining to new projects; Rs. 906,600 on account of
disallowance of consultancy fee to the business strategy group. The next date of hearing is yet
to be fixed.

4. An appeal was filed by the Department of Income Tax before the Allahabad High Court
against the order of the ITAT for holding the assessment order for the assessment year 2001-
2002 as null and void since the notice in relation to the same was not served within the
statutory period, for allowing business loss of Rs. 2,011,277 as against speculative loss as
assessed in the books of accounts and for disallowance of interest of Rs. 145,000. The next
date of hearing is yet to be fixed.

Litigations against Indian Electricity Supply & Transmission Private Limited (since then amalgamated
with MCorpGlobal Private Limited which is now Spice Corp Limited)

5. Haryana Power Generation Corporation Limited filed a special leave petition (civil)
(17214/2006) against the judgment and order of the High Court of Punjab & Haryana, dated
September 4, 2006 in FAO No. 4676/2002 & FAO No. 5737/2002 passed in favour of the
company (which later amalgamated with MCorpGlobal Private Limited, which is now called
Spice Corp Limited).

The company, which had undertaken a power project at Panipat, provided a bank guarantee of
Rs. 5 million which was invoked by Haryana Power Generation Corporation Limited
(“HPGC”) (formerly Haryana Power Generation Board). The company filed a petition against
the demand of HPGC in the Court of District Judge, Ambala, which was dismissed.
Subsequently, the company filed a revision petition in High Court of Punjab & Haryana for
restraining HPGC and the court restrained HPGC from encashing the bank guarantee till the
disposal of the matter. Meanwhile, HPGC referred the matter for arbitration to the Secretary-
Law, Government of Haryana at Chandigarh. HPGC also lodged a separate additional claim
on January 17, 2000 for recovery of Rs 2,531,750 incurred by them on advisory services from
ICICI, Mumbai for completion of the power project. The Secretary-Law, Government of
Haryana decided the matter on April 27, 2001 in favour of HPGC and ordered for payment of

336
 Rs 2,531,750 by the company and also encashment of the bank guarantee of Rs. five million.
On May 9, 2001, IESTL filed an appeal before the Additional District Judge (I), Panchkula
against the order of the Secretary-Law, Government of Haryana and it was held vide an order
dated August 7, 2002 that HPGC is not entitled to the bank guarantee. However, it was
entitled for its claim of Rs 2,531,750 alongwith interest @ 15% p.a. w.e.f. January 17, 2000.
HPGC preferred an appeal in the High Court of Punjab & Haryana for the modification of the
judgement and order passed by Additional District Judge (I), Panchkula and the restoration of
the award passed by the Secretary-Law, Government of Haryana. The company also preferred
an appeal against the judgement and order of the Additional District Judge (I), Panchkula
wherein it was held that HPGC was entitled to recover an amount of Rs. 2,531,750 with
interest from January 17, 2000 @ 15% per annum. The High Court vide its order dated
September 4, 2006 allowed the appeal filed by the company and dismissed the appeal of
HPGC. HPGC subsequently filed the present special leave petition in the Supreme Court. The
Supreme Court passed an order on November 3, 2006 for issue of notice and stay on the
operation of the order of the High Court. On the last date of hearing on November 26, 2007,
the arguments were held on admission and the Supreme Court granted leave to HPGC and
placed the matter for final hearing in the Supreme Court which will be listed in the cause list.

Litigations against Indian Management Advisors & Leasing Private Limited (since then amalgamated
with MCorpGlobal Private Limited which is now Spice Corp Limited)

6. An appeal has been filed by the Department of Income Tax against the company before the
ITAT at New Delhi on account of the allowability of depreciation of Rs. 10,393,667 on
computers purchased from Pertech Computers Limited and given on lease to Altos India
Limited in the assessment year 1989-1990. The next date of hearing is yet to be scheduled.

7. An appeal has been filed by the Department of Income Tax against the company before the on
the allowability of depreciation of Rs. 1,089,458 on written down value of computers
purchased from Pertech Computers Limited and given on lease to Altos India Limited in the
assessment year 1993-1994. The next date of hearing is yet to be scheduled.

Litigations against Silvertone India Private Limited (since then amalgamated with McorpGlobal Private
Limited which is now Spice Corp Limited)

8. The Department of Income Tax has filed a case before the Allahabad High Court against the
company on the entry of allowability of horticulture expenses of Rs. 39,527 and investment
allowance of Rs. 397,533 in the assessment year 1985-1986. The next date of hearing is still to
be fixed.

9. The Department of Income Tax has filed a case before the Allahabad High Court against the
company for the entry of book profits under section 115 of the IT Act, with regard to transfer
from revaluation reserve and depreciation on revalued assets amounting to Rs. 2,224,361 in
the assessment year 1989-1990. The next date of hearing is still to be fixed.

10. The Department of Income Tax has filed a case before the Allahabad High Court against the
company for reopening of assessment under section 263 of the IT Act, withdrawal under
sections 80HH and 80I of the IT Act and taxability of income from letting out of properties
under the head ‘Income from House Property’ aggregating to Rs. 829,460 in the assessment
year 1990-1991. The next date of hearing is still to be fixed.

11. The Department of Income Tax has filed a case before the Allahabad High Court against the
company for reopening of assessment under section 263 of the IT Act, withdrawal under
sections 80HH and 80I of the IT Act and taxability of income from letting out of properties
under the head ‘Income from House Property’ aggregating to Rs. 333,220 in the assessment
year 1991-1992. The next date of hearing is still to be fixed.

Litigations against Calcutta Installments Private Limited (since then amalgamated with McorpGlobal
Private Limited which is now Spice Corp Limited)

337
12. An appeal has been filed by the Department of Income Tax before the Allahabad High Court
against the order of the ITAT alleging that the ITAT erred in holding the assessment made in
the name of the company in the assessment year 1996-1997 is null and void since the
company stood dissolved w.e.f May 16, 1996 consequent upon its amalgamation with
McorpGlobal Private Limited and was thus a non-entity from the above date. The next date of
hearing is still to be fixed.

13. An appeal has been filed by the Department of Income Tax before the Allahabad High
Court against the order of the ITAT alleging that the ITAT erred in dismissing the appeals
of the Department of Income Tax on the grounds that the assessment for the assessment
year 1995-1996 itself was null and void due to the reason that the notice under section
143(2) of the I.T. Act was not served on the company within the time prescribed under the
proviso to section 143(2) of the I.T. Act. The next date of hearing is still to be fixed.

Litigation by Spice Corp Limited

1. The company has filed a writ petition (13358/2007) in the Allahabad High Court against the
order of the District Magistrate, Kanpur against State of Uttar Pradesh, through the ADM
(Finance & Revenue, Kanpur & Others).

The District Magistrate, Kanpur vide its order dated February 9, 2007 imposed a stamp fee of
Rs. 150 million with interest @ 1.5% per month and penalty of Rs. 30 million on the
company for the alleged violation of non-payment of stamp fee on the amalgamation order for
amalgamation of Modi Infotech Private Limited, Panipat Power Corporation Private Limited,
Radhakrishna Rubber Chem Private Limited, SpiceCorp Private Limited, Indian Electricity
Supply & Transmission Private Limited, Atman Productions Private Limited, B.K. Modi
Capitals Limited, Indian Rubber Machinery Manufacturers Private Limited, Modi
Petrochemicals Private Limited and Privilege Investments Private Limited with the company.
A stay was granted by the Allahabad High Court on March 13, 2007 on the order of the
District Magistrate, Kanpur. The respondents have filed their reply and the case is pending
adjudication.

2. The company has filed a writ petition (13381/2007) in the Allahabad High Court against the
order of the District Magistrate, Kanpur against State of Uttar Pradesh (through the Additional
District Magistrate (Finance & Revenue, Kanpur & Others).

The District Magistrate, Kanpur vide its order dated February 9, 2007 imposed a stamp fee of
Rs. 3.05 million with interest @ 1.5% per month and penalty of Rs. 0.95 million on the
company for the alleged violation of non-payment of stamp fee on the amalgamation order for
amalgamation of Diamondstone (India) Private Limited, Fortunate Holdings Private Limited,
Attractive Investments Private Limited, Veena Modi Agro Private Limited, Kush Investment
Private Limited, Wellvest Investment Private Limited with the company. A stay was granted
by the Allahabad High Court on March 13, 2007 on the order of the District Magistrate,
Kanpur. The respondents have filed their reply. The respondents have filed their reply and the
case is pending adjudication.

3. The company has filed an appeal before the CIT (Appeals) at Ghaziabad on account of
treating long term capital loss of Rs. 8,918,938 as a business loss of Rs. 102,865 and
disallowance on account of membership and subscription of Rs. 1,934,650 in the assessment
year 2004-2005. The next date of hearing is still to be scheduled.

4. The company has filed an appeal before the CIT (Appeals) at Ghaziabad on account of
treating long term capital loss of Rs. 21,464,900 as business profit of Rs. 8,030,800, the
disallowance on account of membership and subscription of Rs. 618,050 and treating the
expenses on advertisements of Rs. 200,000 as donation under 80G of the I.T. Act in the
assessment year 2005-2006. The next date of hearing is still to be scheduled.

5. The company has filed an appeal on account of treating short term capital loss of Rs.
2,511,080 as business loss in the assessment year 2002-2003. Also, the Department of Income
Tax has filed an appeal against the order of the CIT (Appeals) for disallowance of

338
 membership and subscription expenses amounting to Rs. 733,950 and Rs. 68,425 on account
of disallowance of interest in the assessment year 2002-2003. Both these appeals are pending
before the ITAT at New Delhi. The next date of hearing is scheduled for July 16, 2008.

6. The company has filed an appeal before the ITAT, New Delhi on account of treating long
term capital loss of Rs. 19,669,710 as business loss of Rs. 2,825,238 and Rs. 290,000 on
account of membership and subscription for the assessment year 2002-2003. The next date of
hearing is still to be scheduled.

Litigations by Indian Management Advisors & Leasing Private Limited (since then amalgamated with
MCorpGlobal Private Limited which is now Spice Corp Limited)

7. The company has filed an appeal before the ITAT at New Delhi against an order under passed
by the CIT on account of depreciation of Rs. 4,207,107 on certain soft drink bottles for the
assessment year 1992-1993. The next date of hearing is yet to be scheduled.

Spice Mobiles Limited

Litigation against Spice Mobiles Limited

1. A suit has been filed against the company before the High Court of Delhi (1681/2005) by
Super Cassettes Industries Limited for permanent injunction restraining infringement of
copyright in respect of embedded ring tone in the handset marketed by the company. The
plaintiff has also preferred an application under Order 39 Rules 1 and 2 read with section 151
of the CPC for seeking stay/interim injunction restraining the company, its directors, officers,
servants, agents, and representatives, group companies, subsidiaries and all others acting for or
on its behalf from producing, reproducing or making available to the public ring tones/song
clippings produced from the plaintiff’s copyrighted sound recordings in the movies Dus,
Maine Pyar Kyun Kiya and Mujhse Shaadi Karogee for a claim of Rs. 2,100,000. The High
Court passed an ex-parte order dated December 9, 2005 in favour of the plaintiff. Being
aggrieved by the order of the Court, the company filed an application for setting aside of ex-
parte ad-interim order on the ground that plaintiff failed to disclose to the Court about the
memorandum of understanding executed between the parties, under the terms of which the
plaintiff allowed the company to use the ring tones for minimum 90,000 mobile handsets. The
matter is now pending before the Joint Registrar of the Delhi High Court for completion of
pleadings and admission/denial of documents.

2. Dinesh Singh Bisht filed a writ petition against the company (8297/2006). The plaintiff’s
name was struck off from the muster rolls of the company on June 12, 1996 and Rs. 4,802 was
deposited in his account as full and final payment for his services as a technician in the
company. The plaintiff raised an industrial dispute and on March 7, 2005 the Presiding
Officer, Labour Court, Delhi passed an award in favour of the petitioner granting the relief of
lump-sum compensation of Rs. 50,000 and rejected his claim of reinstatement. Being
aggrieved by the order of the Labour Court, the company filed a writ petition on April 21,
2006 before the High Court of Delhi praying for the quashing/setting aside the award dated
March 7, 2005 and the Court granted unconditional stay against the operation of the award.
The matter has not yet come up for hearing till date.

3. Redington India Limited has filed a suit against the company in the High Court of Delhi
(1438/1999) for recovery of Rs. 2,804,626.50 together with future interest at the rate of 24%
p.a. for which a letter of credit was issued by the company and the same was not submitted by
the plaintiff before the bank. The company has filed its reply. The High Court has fixed the
matter for final arguments. The next date of hearing date is not yet fixed.

4. Calicut Engineering Works Limited has filed a suit before the Civil Court at Calcutta
(2731/1993) against the company for the appointment of an arbitrator. The petitioner’s
contention is that the company committed a breach of its contractual obligations under the
agreement for sale entered between the parties for sale in favour of the petitioner of a M-250
computer and an Olivetti DOT Matrix Printer for a price of Rs. 50,420 and Rs. 20,000,
respectively with a warranty of 365 days from the date of installation and 375 days from the

339
 date of dispatch, whichever is earlier. The petitioner, however, failed to produce original
documents before the Court and hence the arbitrator could not be appointed till date.

5. Mr. Ravinder Kumar Jain preferred an appeal in the Court of District Judge Civil, Rampur,
Uttar Pradesh (47/2004), against the judgement and decree dated April 29, 2004 passed by
Civil Judge (Senior Division), Rampur in O.S. 3 of 2000, under which the Civil Judge partly
allowed his claim upto the amount of Rs. 16,000 in lieu of Rs. 34,228. The appellant has
prayed for the setting aside of the findings of the Civil Judge, Rampur and claimed the entire
amount. Mr. Ravinder Kumar Jain also filed an execution application (9/2004) before the
Civil Judge (I), Rampur for the execution of the decree dated April 29, 2004 passed by the
Civil Judge (Senior Division), Rampur for the total amount of Rs.35,200. The matter has been
stayed by the Court vide its order dated August 23, 2004 till the final disposal of the appeal
pending in the Court of District Judge, Rampur (Uttar Pradesh). The next date of hearing in
the matter is yet to be fixed.

Litigation by Spice Mobiles Limited

1. The company has filed a case (730/2006) against Bhushan Kumar and another in the Delhi
High Court. A suit had been filed against the company in the Delhi High Court by Super
Cassettes Industries Limited for permanent injunction restraining infringement of copyright in
respect of embedded ring tone in the handset marketed by the company, damages, delivery of
infringing articles, renditions of accounts, etc. An application under order 39 Rules 1 & 2 read
with section 151 of CPC for seeking stay/interim injunction restraining the company, its
directors, officers, servants, agents, and representatives, group companies, subsidiaries and all
others acting for or on its behalf from producing, reproducing or making available to the
public ring tones/song clippings, etc. produced from the plaintiff’s copyrighted sound
recordings in the movies Dus, Maine Pyar Kyun Kiya, Mujhse Shaadi Karogee had also been
filed along with the suit. The High Court passed an ex parte order dated December 9, 2005
granting interim injunction and restraining the company from producing, reproducing or
making available to the public ring tones/ song clippings produced from the plaintiffs
copyrighted sound recordings in the movies Dus, Maine Pyar Kyun Kiya and Mujhse Shadi
Karogi till the next date of hearing. Being aggrieved by the order of the Court, the company
filed the application for setting aside of the ex-parte ad-interim order of injunction dated
December 9, 2005 on the ground that plaintiff has failed to disclose to the Court about the
memorandum of understanding, which was executed between the parties. Pursuant to the
terms of the memorandum of understanding, the company allowed the defendant to use the
ring tones for minimum 90,000 mobile handsets. The matter is now fixed before Joint
Registrar of the Delhi High Court for completion of pleadings and admission/denial of
documents. In the meantime the company has made a counter claim of Rs. 2,000,000 against
Mr. Bhushan Kumar. The case is posted for hearing on December 1, 2008.

2. The company has preferred an appeal (A-2553/2001) against the order of the District Forum,
Agra directing the company to either rectify the defects in the printer supplied to Mr. S.S.L.
Tandon at its own cost or to refund Rs. 24,832 towards the price of the machine and Rs. 2,000
towards compensation for mental torture and harassment. The State Commission, Lucknow
has vide its order dated August 7, 2002 stayed the operation of the impugned order of the
District Forum and the execution proceedings till further orders. The respondent has not
appeared in the said appeal till date and summons have been issued. The appeal is still
pending and the date of next hearing is still not fixed.

3. The company has preferred an appeal (46/2004) against the order of Civil Judge (Senior
Division), Rampur who partly decreed the amount of Rs. 16,000 plus interest @18% p.a. in
favour of Mr. Ravinder Kumar Jain. The company has prayed for setting aside of the
judgment and decree passed by the Civil Judge, Rampur. The appeal is still pending. The next
date for hearing date is not yet fixed.

4. The company has filed a recovery suit (2094/2000) in the High Court of Delhi for an amount
of Rs. 1,000,798 against Unicorp Industries Limited for defaults in payments of sales tax
claims of Rs. 263,622 and payments against supplies of Rs. 514,080 made by the company.
The company has also claimed a sum of Rs. 223,096 towards interest @ 18% p.a. on the

340
 outstanding amount till the date of filing of the suit. The matter has been transferred from the
High Court of Delhi to the District Court at Tis Hazari and the fresh date of hearing is yet to
be fixed.

5. The company has filed a recovery suit (1442/1999) in the High Court of Delhi for an amount
of Rs. 844,959 against Unicorp Industries Limited for defaults of payment against supplies of
Rs. 685,440 made by the company had supplied the equipments/computer peripherals of Rs.
685,440. The company has also claimed a sum of Rs. 159,519 towards interest @ 21% p.a. on
the outstanding amount till the date of filing of the suit. The matter has been transferred from
the High Court of Delhi to the District Court at Tis Hazari and the fresh date of hearing is yet
to be fixed.

6. The company filed a recovery suit (40/1999) in the Court of District Judge, Tis Hazari Courts,
Delhi for an amount of Rs. 277,544 against Vallabhbhai Patel Chest Institute & Others
through Mr. Atul Mathur for defaults of outstanding payment of Rs. 178,300 for supply of
computers/computer peripherals by the company. The company also claimed a sum of Rs.
99,244 towards interest @ 18% p.a. on the outstanding amount till the date of filing of the suit.
The date of hearing is not yet fixed.

7. The company has filed a recovery suit (33/2001) in the Court of District Judge, Tis Hazari
Courts, Delhi for an amount of Rs. 1,969,230 against Anil Joglekar for defaults of payment
against supply of goods made by the company. The company also claimed a sum of Rs.
99,244 towards interest @ 18% p.a. on the outstanding amount till the date of filing of the suit.
The company also claimed interest @ 21% p.a. on the outstanding amount from the date of
filing of the suit till the date of realisation. The matter has been transferred from the High
Court of Delhi to the District Court at Tis Hazari and the date of hearing is yet to be fixed.

8. The company has filed a recovery suit (925/2000) in the High Court of Delhi against
Crompton Greaves Limited for defaults in payments against supplies of goods/materials of Rs.
10,444,456. The company ahs also claimed a pendente lite and future interest compounded
monthly @ 20% p.a. The matter is pending before the High Court of Delhi and next date of
hearing is due in September 2008. However, the company is in discussions with Crompton
Greaves Limited for out of court settlement.

9. The company has filed a recovery suit (980/1999) against Jayanti Business Systems India for
non-payment against supplies made by the company for an amount of Rs. 621,781 plus
interest @ 18% p.a. from the date of filing of suit till date of realization of the said amount.
The matter is pending before the Tis Hazari Courts, New Delhi. The next date of hearing is
not yet fixed.

10. The company has filed a recovery suit (970/1999) against New India Assurance Company
Limited for non-payment against supplies made by the company for an amount of Rs.
1,060,508 plus interest @ 18% p.a. from the date of filing of suit till date of realization of the
said amount. The matter has been transferred from the High Court of Delhi to the District
Court at Tis Hazari and a fresh date of hearing is still to be scheduled.

11. A criminal complaint (626/2002) has been filed by the company before the Court of
Additional Chief Metropolitan Magistrate, Patiala House Courts, New Delhi under sections
138, 141 and 142 of the Negotiable Instruments Act, 1881 (“N.I. Act”) read with section 420
of the Indian Penal Code, 1860 (“IPC”) against Shivam Telecom for dishonour of cheque.
The company has alleged that Shivam Telecom issued a cheque of Rs. 60,000 bearing No.
540072 in the favour of the company and when the said cheque was presented in the State
Bank of Bikaner and Jaipur, Nehru Place, New Delhi on August 31, 2001, it was dishonoured.
Summons have been issued against Shivam Telecom and the matter has been fixed for hearing
on July 5, 2008.

12. Criminal complaints (67814/2005 and 67816/2005) has been filed by the company before the
Court of Additional Chief Metropolitan Magistrate, Patiala House Courts, New Delhi under
sections 138, 141 of the N.I. Act read with section 420 of the IPC against Gromax Infonet
Limited and its director for dishonour of cheques. The company has alleged that Gromax

341
 Infonet Limited issued two cheques for an amount of Rs. 125,000 each bearing No. 852651
and 852652 dated September, 20 2005 and September, 30 2005 respectively, in favour of the
company for purchase of computers. When the said cheques were presented in the State Bank
of Bikaner & Jaipur, Nehru Place, New Delhi they were dishonoured.
The Magistrate has issued a non-bailable warrant against the accused. The next date of hearing
is fixed for November 6, 2008.

13. A criminal complaint (247/1995) has been filed by the company before the Court of
Additional Chief Metropolitican Magistrate, Bangalore under sections 138, 141 of the N.I. Act
read with section 420 of the IPC against Super Star Confectionary Limited and its managing
director for dishonour of cheque. The company has alleged that Super Star Confectionary
Limited issued three cheques for a total sum of Rs. 83,980, in favour of the company for
purchase of computer software and hardware. When the cheques were presented in the
Corporation Bank Limited, Bangalore they were dihonoured.
The Magistrate had issued the summons against the accused and has also issued a non-bailable
warrant. However, the non-bailable warrants remain unserved till date.

14. A criminal complaint (5608/2006) has been filed by the company before the Chief Judicial
Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with
section 420 of the IPC against Sai Computers and its proprietor, Mr.Pankaj Singh for
dishonour of cheque. The company has alleged that it supplied certain products to Sai
Computers against invoice nos .RIRT050311, RIRT050312, RIRT050313 and RIRTO600004
against which Sai Computers issued two cheques of Rs. 98,336 and Rs.68,748. All the
cheques were duly presented by the company in the State Bank of Hyderabad and State Bank
of Patiala but the same were dihonoured.
The pre-summoning evidence is in process. The matter is fixed for hearing.

15. A criminal complaint (7098/2006) has been filed by the company before the Chief Judicial
Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with
section 420 of the IPC against Mobile Planet and its partners Mr. Rajesh Kumar and Mr.
Satvit Singh for dishonour of cheque. The company has alleged that it supplied certain
products to Mobile Planet against invoice no. RIHPO60052 and RIHPO60053 against which
Mobile Planet issued a cheque of Rs. 158,780. The said cheque was duly presented in the
Corporation Bank but the same was dishonoured.
The pre-summoning evidence is in process. The matter is fixed for hearing.

16. A criminal complaint (7099/2006) has been filed by the company before the Chief Judicial
Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with
section 420 of the IPC against Sai Computers and its proprietor, Mr.Pankaj Singh for
dishonour of cheque. The company has alleged that it supplied certain products to Sai
Computers against invoice no. RIRTO600009 against which Sai Computers issued a cheque
of Rs. 58,749. The said cheque was duly presented by the company with in the State Bank of
Patiala but the same was dihonoured.
The pre-summoning evidence is in process. The matter is fixed for hearing.

17. A criminal complaint (6480/2006) has been filed by the company before the Chief Judicial
Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with
section 420 of the IPC against Allied Systems and its partner Mr. Anoop for dishonour of
cheque. The company has alleged that it supplied certain products to Allied Systems against
invoice no. RIRPO60007 against which Allied Systems issued a cheque of Rs. 54,624. The
said cheque was duly presented in the Corporation Bank but the same was dishonoured.
The pre-summoning evidence is in process. The matter is fixed for hearing.

18. A criminal complaint (7101/2006) has been filed before the Chief Judicial Magistrate, Gautam
Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with section 420 of the IPC
against Allied Systems and its partner Mr. Anoop for dishonour of cheque. The company has
alleged that it supplied certain products to Allied Systems against invoice nos. RIRTO60001
and RIRT060002 against which Allied Systems issued a cheque of Rs. 222,491. The said
cheque was duly presented in the Corporation Bank but the same was dishonoured.
The pre-summoning evidence is in process. The matter is fixed for hearing.

342
19. A criminal complaint (7097/2006) has been filed by the company before the Chief Judicial
Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with
section 420 of the IPC against Computer Software and Service for dishonour of cheque. The
company has alleged that it supplied certain products to Computer Software and Service
against invoice no. TIHA060001 against which Computer Software and Service issued a
cheque of Rs. 58,094. The said cheque was duly presented in the Corporation Bank but the
same was dishonoured.

The pre-summoning evidence is in process. The matter is fixed for hearing.

20. A criminal complaint (5174/2006) has been filed by the company before the Chief Judicial
Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with
section 420 of the IPC against Prime Infosoft Limited for dishonour of cheque. The company
has alleged that it supplied certain products to Prime Infosoft Limited against invoice nos.
TIPU050015 and RIPU050238 against which Prime Infosoft Limited issued two cheques of
Rs. 41,500 each. The cheques were duly presented in the Corporation Bank but the same were
dishonoured.
The pre-summoning evidence is in process. The matter is fixed for hearing.

21. A criminal complaint (No. 6479/2006) has been filed by the company before the Chief
Judicial Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read
with section 420 of the IPC against Pearl Infotech and its proprietor Mr. Deepak Lamba for
dishonour of cheque. The company has alleged that it supplied certain products to Pearl
Infotech against invoice no. RIHP051113 against which Pearl Infotech issued a cheque of Rs.
92,320. The said cheque was duly presented in the State Bank of Hyderabad but the same was
dishonoured. The matter is fixed for hearing.

22. A criminal complaint (6482/2006) has been filed by the company before the Chief Judicial
Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with
section 420 of the IPC against Delhi Computers and its proprietor, Mr. Jagjeet Singh for
dishonour of cheque. The company has alleged that it supplied certain products to Delhi
Computers against invoice nos. RIRT050279 and RIRT050280 against which Delhi
Computers issued a cheque of Rs. 155,316. The said cheque was duly presented in the
Corporation Bank but the same was dishonoured. The pre-summoning evidence is in process.
The matter is fixed for hearing.

23. A criminal complaint (5443/2006) has been filed by the company before the Chief Judicial
Magistrate, Gautam Budh Nagar, Noida under sections 138, 141 of the N.I. Act read with
section 420 of the IPC against Global Education Tree and its director and vice president
Mr.Ajay Changani for dishonour of cheque. The company has alleged that it supplied its
products to Global Education Tree against invoice no. RIHP050721 against which Global
Education Tree issued two cheques of Rs. 100,000 and Rs. 50,000. The cheques were duly
presented in the Corporation Bank but the same were dishonoured. The pre-summoning
evidence is in process. The matter is fixed for hearing.

24. An appeal has been filed by the company against the DCIT Special Range, Meerut before the
ACIT, Meerut for the disallowed entry towards warranty provision of Rs. 910,000 and
entertainment expenses of Rs. 86,000, all in the assessment year 1990-1991.

25. An appeal has been filed by company against the DCIT Special Range, Meerut before the
ITAT for the disallowed entries towards commission to Indian Reprographic Systems Private
Limited, Licensintorg & Company India Private Limited for Rs. 3,7640,00, provisions for
doubtful debts of Rs. 8,630,000, payments to clubs of Rs. 12,000, gifts and articles of Rs.
10,000 and managing director’s remuneration Rs. 240,000, all in the assessment year 1992-93.

26. An appeal has been filed by the company against the Assistant Commissioner, Income Tax,
Meerut before the CIT(Appeals) for the disallowed entry towards change in accounting policy
for Rs. 10,269,000, in the assessment year 2002-03.

343
27. The Commissioner of Central Excise, Noida had charged the company for suppression of sale
arrangement in order to evade excise duty and done a re-quantification of central excise duty
payable. The company filed an appeal (1471/96-A) and got the order from the Customs,
Excise and Service Tax Appellate Tribunal (“CESTAT”) asking the Commissioner of Central
Excise, Noida to reassess the case. The Commissioner of Central Excise, Noida vide its order
dated November 30, 2006 has confirmed a demand of Rs. 38,263,475 and a penalty of Rs.
28,000,000, against the company has filed and appeal before CESTAT which was restored
back the case on the file of Commissioner Meerut for reassessment. The Commissioner
initiated reassessment proceedings and posted the hearing for hearing on February 5, 2008.
Subsequently, the commissioner has not given any fresh date nor issued any order.

28. The company has preferred an appeal (Appeal/Delhi/Customs/D-I/ASU/Import/132/2005)

against the Assistant Commissioner, Customs Group – VA, New Delhi. The company
imported a PIN DOT matrix printer and cleared the same under custom tariff heading
no.8471.60 and was assessed to basic duty @ 20%, countervailing duty @16% while special
additional duty was exempt as per government notification. The department alleged that goods
were imported under completely knocked-down/semi-knocked-down conditions and sold after
assembling and thus, were not exempt from payment of special additional duty under the
relevant government notification. The Commissioner of Customs vide its order dated January
4, 2006 granted waiver of pre deposit of the entire amount of duty demanded in the matter and
agreed to dispose of the appeal on merits, without insisting on any amount to be deposited.
The amount involved is Rs. 129,000. The Commissioner of Customs completed arguments
and orders are awaited.

Super Infosys Private Limited

Litigation against Super Infosys Private Limited

Nil

Litigation by Super Infosys Private Limited

Nil

Teesho Rubbers Private Limited

Litigation against Teesho Rubbers Private Limited

Nil

Litigation by Teesho Rubbers Private Limited

Nil

Tuberose Investments Private Limited

Litigation against Tuberose Investments Private Limited

Nil

Litigation by Tuberose Investments Private Limited

Nil

Twenty First Century Capitals Limited

Litigation against Twenty First Century Capitals Limited

Nil

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Litigation by Twenty First Century Capitals Limited

1. The company has preferred an appeal before the ITAT, New Delhi for the assessment year
2001-02, against the order disallowing foreign travel expenses of Rs. 4,031,589 and interest
expense of Rs. 1,620,000. The next date of hearing is yet to be fixed.

VCorp Merchantile Private Limited

Litigation against VCorp Merchantile Private Limited

Nil

Litigation by VCorp Merchantile Private Limited

Nil

COMPANIES UNDER RBI’S DEFAULTER LIST

1. Modi Stones Limited

Modi Stones Limited (“MSL”) figures on the RBI’s list of defaulters. MSL was declared as a sick
industrial company by the Board for Industrial and Financial Reconstruction (“BIFR”) by its order
dated April 15, 1998. The rehabilitation proposal submitted to BIFR was not acceptable to the secured
creditors and therefore, BIFR by its order dated April 25, 2001 confirmed its prima facie opinion that
MSL is not likely to make its net worth exceed its accumulated losses within the reasonable time while
meeting its financial obligations and as a result MSL should be wound-up in public interest under
section 20(1) of Sick Industrial (Special Provisions) Act 1985. The opinion of BIFR was forwarded to
the Bombay High Court for further actions under law by the Registrar of BIFR by its letter dated May
11, 2001. The Bombay High Court by its order dated July 25, 2002 has confirmed the opinion of BIFR
for winding up of MSL, and also appointed the official liquidator of MSL. Since then the official
liquidator is proceeding in the matter and all records have been handed over to the official liquidator by
the MSL.

Mr. Dilip Modi, one of our Promoters, was a director on the Board of MSL during the period August
20, 1992 till November 7, 1998 and Dr. B.K. Modi, part of our Promoter Group, was also a director on
the board of MSL till December 7, 1998.

State Bank of Bikaner and Jaipur acting in its capacity of Lead Bank, of the consortium of Banks,
which have granted the loan facilities to the MCL, has filed a recovery suit with Debt Recovery
Tribunal (“DRT”) for an amount of Rs.388.92 Million, as detailed in the table below. The said loan
facilities amongst other was guaranteed by Dr. B.K. Modi. The matter came before the DRT on April
22, 2008 and the next hearing for the final arguments is fixed for July 2, 2008.

Sl. No. Name of the Bank Amount Amount Outstanding

(In Rs.)
1. State Bank of Bikaner & Jaipur 131,962,625
2. State Bank of India 48,649,632
3. State Bank of Patiala 113,989,481
4. Canara Bank 51,933,464
5. Punjab National Bank 42,345,021
Total 388,920,229

2. Modi Rubber Limited

Dr. B.K. Modi, part of our Promoter Group, is presently a director on the board of Modi Rubber Ltd.
Modi Rubber Ltd. (“MRL”) was registered with the BIFR as a sick industrial undertaking by
Registration No. 153/2004. Subsequently BIFR declared MRL as sick undertaking by its order dated
May 17, 2006 and appointed an operating agency to prepare the draft revival scheme for MRL. The
revival scheme of the company is under preparation and all the dues of the company including its
bankers will be dealt with as per the revival scheme. As per the balance sheet of MRL as at March 31,
2006, the outstanding of principal amount towards HSBC Bank was Rs. 49.2 million. HSBC Bank has

345
assigned their debt to Deutsche Bank AG vide their letter dated October 4, 2006. The operating agency
is currently preparing the revival scheme and all the dues of the Company including its bankers will be
dealt with as per the draft revival scheme.

Companies under winding up

MBM Limited

MBM Limited (“MBM”) is neither a Promoter nor a Promoter Group Company of our Company and
Dr. Bhupendra Kumar Modi, one of our Promoter Group member, 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.

Material Developments since the last balance sheet date, December 31, 2007

In the opinion of our Board, other than as disclosed in this Draft Red Herring Prospectus, there has not
arisen, since the date of the last financial statements set out herein, any circumstance that materially or
adversely affects our profitability taken as a whole or the value of our consolidated assets or our ability
to pay our material liabilities over the next twelve months.

346
 GOVERNMENT AND OTHER APPROVALS

In view of the approvals listed below, our Company can undertake this Issue and its current business
activities and no further major approvals from any government or regulatory authority are required to
undertake the Issue or continue our business activities. Unless otherwise stated, these approvals are
valid as of the date of this Draft Red Herring Prospectus.

Approvals for the Issue

The following approvals have been obtained or will be obtained in connection with the Issue:

Our Board has, pursuant to resolution passed at its meeting held on June 24, 2008, authorised the Issue
and related matters subject to the approval by the shareholders of our Company under section 81(1A)
of the Companies Act, and such other authorities as may be necessary.

The shareholders of our Company have, pursuant to a resolution dated June 24, 2008, under section
81(1A) of the Companies Act, authorised the Issue and related matters.

Our Company has obtained in-principle listing approvals dated [●] and [●] from the BSE and the
NSE, respectively.

Our Company has also obtained necessary contractual approvals required for the Issue.

RBI approval shall be sought for the transfer of Equity Shares forming part of Offer for Sale in the
Issue.

Company Specific Approvals and Applications

Approvals Obtained

1. 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.

2. As on February 12, 2008, our Company has recevived 45 approvals from National Do Not
Call (“NDNC”) registry administered by TRAI for conducting telemarketing activities, which
is circle specific and operator specific.

Successful Registration at NDNC

No. OPERATOR CIRCLE

1. AIRTEL HP
2. AIRTEL PUNJAB
3. AIRTEL UP(W)
4. AIRTEL DELHI
5. AIRTEL HARYANA
6. AIRTEL ANDRA PRADESH
7. AIRTEL GUJRAT
8. AIRTEL Mumbai
9. AIRTEL Rajasthan
10. AIRTEL Maharastra
11. AIRTEL J&K
12. AIRTEL West Bengal
13. AIRTEL Kolkata
14. AIRTEL Orissa

347
 Successful Registration at NDNC

No. OPERATOR CIRCLE

15. AIRTEL Bihar
16. AIRTEL Karnataka
17. IDEA MADHYA PARADESH
18. IDEA RAJASTHAN
19. IDEA UP(W)
20. IDEA UP(E)
21. IDEA DELHI
22. IDEA MAHARASTRA
23. IDEA KERALA
24. IDEA HP
25. IDEA Haryana
26. IDEA Gujrat
27. SPICE PUNJAB
28. SPICE Karnataka
29. RELIANCE(RTL) MADHYA PARADESH
30. RELIANCE(RTL) WEST BENGAL
31. RELIANCE(RTL) ORISSA
32. RELIANCE(RTL) HP
33. RELIANCE(RTL) Guwahati(Assam)
34. RELIANCE(RTL) NE(Meghalaya)
35. RELIANCE(RTL) Bihar
36. RELIANCE(RTL) Kolkata
37. HFCL Punjab
38. BSNL Kerala
39. BSNL UP (East)
40. BSNL MP
41. BSNL Bihar
42. BSNL AP
43 BSNL Haryana
44. Vodafone (Hutch) UP(W)
45. Reliance PAN India

3. In addition, we have received certificates valid upto 10 years issued by DoT for registration as
as a telemaketer for setting up telemarketing centres for Airtel Himachal Pradesh, Delhi,
Gujrat, Jammu and Uttar Pradesh.

Date Registration No. Address of Telemarketing Centre

November 23, 2007 No. 10-TM/527654*/02/2007-0/1653 Bharti House, Near Income Tax Circle,
Ashram Road.
February 5, 2008 No. 10-TM/767664*/02/2008-0/4459 D-184, Industrial Area, Phase I, Okhla,
New Delhi, India.
March 4, 2008 No. 10-TM/632339*/02/2008-0/4633 Bharti Airtel Limited (MSC), Vill:
Salaempur, Gangagan, Lucknow, Uttar
Pradesh, India.
March 6, 2008 No. 10-TM/470834*/02/2008-10/33 Bharti Airtel Limited, 2nd Floor,
Municipal Corpor, Rajkot, Gujarat,
India.
May 14, 2008 No. 10-TM/696918*/02/2008-0/5888 Airtel MSC, JK PSC, Pragati Bhawan,
Rail Head Comp, Jammu, Jammu and
Kashmir, India.

4. We have also received the sanction of central investment subsidy @ 15% of fixed capital
investment on plant and machinery under Central Investment Subsidy Scheme, 2003.

Date of Description of Issuing Authority Registration Validity Terms and

Issue Approval No. Conditions
Februar Sanction of central State Level 1-1/2004- NA The amount of
y 13, investment subsidy Committee of the Ind.(Dev.)CIS subsidy will be
2008 @ 15% of fixed Government of disbursed by
capital investment Himachal Pradesh, Himachal Pradesh

348
 Date of Description of Issuing Authority Registration Validity Terms and
Issue Approval No. Conditions
amounting to Rs.3 Directorate of State Industrial
million (maximum Industries Development
limit), on plant and constituted under Corporation
machinery. Central Investment subject to the
Subsidy Scheme, availability of
2003. funds with it for
the release of
central investment
subsidy.
However, delayed
disbursement of
subsidy will not
attract any interest
during the period
of delay.
The subsidy will
be disbursed to the
units through the
financial
institutions/banks,
which have
financed the term
loan to the units
and in case of self
financed projects
the subsidy would
be released directly
to the
entrepreneurs.

Unit Specific Approvals

Date of Description of Issuing Authority Registration Validity Terms and

Issue Approval No. Conditions
March Registration of the Regional Provident No.PB/CH- With effect from The Company was
31, Chandigarh unit of Fund 21946/C- February 1, 2004 allotted Code No.
2004 our Company Commissioner, IV/Enf.1/128 PB/CH-21946 for
under the Punjab and U.T. of 31 making
Employees Chandigarh compliance with
Provident Fund the various
and other provisions of the
Miscellaneous Employees
Provisions, Act Provident Fund
1952 and the and other
schemes Miscellaneous
thereunder, namely Provisions, Act
Employees 1952 and the
Provident Fund Employees
Schemes, 1952 and Provident Fund
Deposit Linked Schemes, 1952 and
Insurance Scheme, Deposit Linked
1976. Insurance Scheme,
1976.
October Registration of the Assistant Provident HP- With effect from The Company was
25, Parwanoo unit of Fund 3500/cov/enf/ August 1, 2004 allotted Code No.
2004 our Company Commissioner, 8836 HP-3500
under the Employees
Employees Provident Fund
Provident Fund Organisation,
and other Shimla
Miscellaneous
Provisions, Act
1952 and the

349
Date of Description of Issuing Authority Registration Validity Terms and
Issue Approval No. Conditions
schemes
thereunder, namely
Employees
Provident Fund
Schemes, 1952 and
Deposit Linked
Insurance Scheme,
1976.
April Certificate of Regional Director, 14/32451/67 Covered under the
26, registration of the Employee’s State Employee’s State
2005 Parwanoo unit of Insurance Insurance Act,
our Company Corporation, 1948 w.e.f. March
under the Himachal Pradesh 31, 2005
Employee’s State
Insurance Act,
1948
Decemb Permission to set Section Officer 10- 20 years. The registration is
er 21, up a domestic call (OSP), Ministry of 1187/2005- subject to OSP
2005 centre at Communications OSP terms and
Parwanoo, and Information conditions and the
Himachal Pradesh Technology, terms and
under the Other Department of conditions as
Service Provider Telecommunication enforced by access
(“OSP”) category s providers, at the
as defined in the time of provision
New Telecom of the telecom
Policy, 1999. resources for
setting up the
domestic call
centre.

The Company, for

providing call
centre services,
can take resources
from any
authorised service
provider by
entering into a
separate
agreement.
July 19, Registration Joint Pwn/CE/277/ December 31,
2006 certificate of Commissioner- 2006 2010
establishment cum-Additional
under the Chief Inspector of
Himachal Pradesh Factories, Himachal
Shops and Pradesh
Commercial Government
Establishments
Act, 1969.
January NOC from Environmental Receipt No. 2011-2012
2, 2008 Himachal Pradesh Engineer, Himachal 0033478
State Environment Pradesh State
Protection and Environment
Pollution Control Protection and
Board Pollution Control
Board.
January Consent of Himachal Pradesh 0033478 2007-08 to 2011-
2, 2008 establishment for State Environment 12
commencement of Protection and
production and Pollution Control
renewal of consent Board
January Approval for Electrical Inspector, HIMVINI/Cel NA The inspection
15, Energisation of Himachal Pradesh, lebrum shall be carried out

350
Date of Description of Issuing Authority Registration Validity Terms and
Issue Approval No. Conditions
2008 high and medium Electrical Pwn/2007- by under signed in
voltage Inspectorate. 15757-60 due course of time.
installations, under
Indian Electricity
Rules 1956.
Februar Registration Inspector of Shops, 35/8461 January 7, 2008 –
y 19, certificate of NOIDA March 31, 2012
2008 establishment
under the Uttar
Pradesh Shops and
Commercial
Establishments
Act, 1962.
Februar Fire NOC for the The Chief Fire No. For the year 2008 The NOC is issued
y 18, year 2008 Officer, Directorate HOM/(FS)(H subject to the
2008 of Fire Services, Q)6-10/76- following
Shimla, Himachal XL- conditions:
Pradesh Sml.NOC- (i) that each
894-96 individual working
on the above
premises must be
trained to
handle/operate fire
fighting
equipment/system
installed therein;
and
(ii) that it shall be
the responsibility
of our Company to
maintain the fire
fighting
system/equipment
in perfect running
condition in the
absence of which
this certificate
shall be treated as
cancelled.
March Approval to Electrical Inspector, HIMVINI/m/s The inspection of
3, 2008 energise 1 x 320 Electrical Cellebrum the electrical
KVA, D.G. Set Inspectorate, Parwanoo/ installation was
and 1 x 45 KVA, Himachal Pradesh 2008 17185- found generally in
D.G. Set, under the 88 order except some
Indian Electricity minor defects
Rules, 1956 which may be
rectified as pointed
out at site.
March Commencement of Member Secretary, No. NA The certificate has
18, commercial Department of SWCA/PWN/ been issued since
2008 production Industries, SWCA F(I)/Cellebru the unit has
certificate for Unit Parwanoo, District m (Unit-I)/- graduated to a
I (reference no. Solan, Himachal large scale unit as
02/09/1007/Regn Pradesh the investment
(L&M)) engaging limit in plant and
in the activities of machinery has
“Software exceeded the limit
Development, of Rs.50 million
VAS, Roaming prescribed for the
Operations, SMS small scale units as
Distribution and per C.A.
Support”, as a Certificates dated
large scale unit. March 14, 2008.

For the purpose of

351
 Date of Description of Issuing Authority Registration Validity Terms and
Issue Approval No. Conditions
availing incentives,
eligibility of the
unit will continue
to be determined
as an existing unit
from its initial date
of production, i.e.
July 14, 2004.
March Commencement of Member Secretary, No. NA The certificate has
18, commercial Department of SWCA/PWN/ been issued since
2008 production Industries, SWCA F(II)/Cellebru the unit has
certificate for Unit Parwanoo, District m (Unit-II)/- graduated to a
II of the Company Solan, Himachal large scale unit as
(reference no. Pradesh the investment
02/09/1008/Regn limit in plant and
(L&M)), providing machinery has
the services of exceeded the limit
“CRBT, BGM, of Rs.50 million
GPRS and Mobile prescribed for the
Radio”, as a large small scale units as
scale unit. per C.A.
Certificates dated
March 14, 2008.

For the purpose of

availing incentives,
eligibility of the
unit will continue
to be determined
as an existing unit
from its initial date
of production, i.e.
August 1, 2005.

Tax Related Approvals

Date of Description of Issuing Authority Registration Validity Terms and

Issue Approval No. Conditions
May 5, Certificate of GOI, Ministry of PAN – In case of any
2004 Importer Exporter Commerce AABCC9662 change in
Code (“IEC”) for (Foreign Trade Q name/address or
registration with Development constitution of IEC
the Central Excise Officer) IEC Number Holder, the IEC
Department for – 2204000582 Holder shall cease
payment of service to be eligible to
tax on business import or export
auxiliary services against the IEC
and consultancy. after expiry of 60
days from the date
of such a change
unless in the
meantime, the
consequential
changes are
affected by the
IEC by the
concerned
licensing authority

Every IEC Holder

(except those who
have obtained IEC
in the preceding
licensing year)

352
 Date of Description of Issuing Authority Registration Validity Terms and
Issue Approval No. Conditions
shall furnish yearly
details of imports/
exports made
during the
preceding
licensing year.
July 20, Centralised Central Excise AABCC9662 Registration The registration
2004 Certificate of Officer QST002 Certificate shall Certificate is not
registration of our remain valid till transferable.
Company under the holder carries
section 69 of the on the activity for
Finance Act, 1994 which the
for registration certificate has been
with the Central issued or where
Excise Department surrender of the
for payment of certificate is
service tax on accepted by the
business auxiliary Central Excise
services. Officer.
June 21, Certificate of Assessing SOL-CST- Valid till
2004 registration Authority, 8168 cancelled.
for registration as a Parwanoo Circle, (Central)
dealer under Parwanoo district,
S.7(10/7(2) of the Solan (H.P.)
Central Sales Tax
Act, 1956.
June 21, Certificate of Assessing SOL-III-8239 Valid from June Sale of following
2004 registration Authority, 21, 2004 till goods other than
for registration as a Parwanoo Circle, cancelled. goods liable to tax
dealer under the Parwanoo district, at the first stage of
Himachal Pradesh Solan, Himachal sale and declared
General Sales Tax Pradesh goods made to this
Act, 1968. dealer for use by
him in the
manufacture in
Himachal Pradesh
of any goods, other
than goods
declared tax free
under section 7 of
Himachal Pradesh
General Sales Tax
Act, 1968, for sale
shall be free of tax.

Intellectual Property Related Approvals and Applications

Approvals Obtained

1. Our Company has obtained the following registration of trademark for its logo “Cellebrum”
from the Registrar of Trade Marks, Government of India:

Date Official No. allotted to Trade Mark No. Class Title of work
the application
July 21, 2004 455659 1297539 42 “Cellebrum” logo

2. Our Company has obtained the following registrations of copyright from the Deputy Registrar
of Copyrights, Government of India:

Date Registration Applicant’s Class and Title of work Language of

No. interest in description of work
copyright work
July 31, 2006 SW-3123/2006 Owner Software BGM Computer

353
 Date Registration Applicant’s Class and Title of work Language of
No. interest in description of work
copyright work
programming in
VOS
September 4, SW-3188/2006 Owner Software SCL C
2006
September 4, SW-3187/2006 Owner Software PAY4ME VOS, C
2006
September 25, SW-3214/ 2006 Owner Software EXCUSE ME VOS AND JAVA
2006
September 25, SW-3215/ 2006 Owner Software VAS AND VAS AND STAR
2006 STAR (8) SMS (*) SMS ON
ON USSD USSD
September 25, SW-3216/ 2006 Owner Software Voice SMS VOS AND JAVA
2006
September 25, SW-3217/ 2006 Owner Software Voice Chat VOS
2006
March 15, SW-3391/ 2007 Owner Software Roam Secure C Language
2007
March 15, SW-3392/ 2007 Owner Software Roam Privilege C Language
2007
April 30, SW-3466/2007 Owner Software Welcome C
2007 Roamer
May 11, 2007 SW-3472/2007 Owner Software Classified JAVA, XHTML,
WML
May 11, 2007 SW-3473/2007 Owner Software Roam Globe C Language
May 11, 2007 SW-3474/2007 Owner Software Fastest Finger C++
May 30, 2007 SW-3496/2007 Owner Software Post Card JAVA, XHTML,
WML
May 30, 2007 SW-3497/2007 Owner Software Matrimonial JAVA, XHTML,
WML
May 30, 2007 SW-3498/2007 Owner Software Spot the ball JAVA, XHTML,
WML
Oct 23, 2007 SW-3664/2007 Owner Software Smart Caller English
Assistance
Oct 23, 2007 SW-3665/2007 Owner Software Content Symbian and
Uploader JAVA

Applications Pending

1. Our Company has applied to the Trademarks Registry, New Delhi for alteration of its logo
already registered vide trade mark no. 1297539, above mentioned.

Date Application No. Title of work

June 4, 32820 Alteration of existing logo of our Company.
2008

2. In addition, our Company has also applied for the following registrations of trademark from
the Registrar of Trademarks, Office of Trade Marks Registry, New Delhi:

Date Application No. Official No. allotted to the Title of work

application
May 11, 2007 01557364 4396 BGM
May 11, 2007 01557365 4397 Voice SMS
May 11, 2007 01557366 4398 Voice Chat
May 11, 2007 01557367 4399 Pay4Me
May 11, 2007 01557368 4400 SCL
May 11, 2007 01557369 4407 Roam Privilege
May 11, 2007 01557370 4408 Roam Globe
May 11, 2007 01557371 4409 Roam Secure
May 11, 2007 01557373 4411 Welcome Roamer
June 5, 2007 01565152 7220 Classified

354
 June 5, 2007 01565153 7221 Fastest Finger
June 5, 2007 01565154 7222 Post Card
June 5, 2007 01565155 7223 Spot the Ball
June 5, 2007 01565156 7224 Excuse Me
June 5, 2007 01565157 7225 My Music

In respect of the applications made by it for trademark registration, our Company has been served with
the following examination notices from the Registrar of Trade Marks, New Delhi stating that the trade
marks applied for are open to objection on absolute grounds for being devoid of any distinctive
character; and on relative grounds because the same/similar trade mark(s) is/are already on record of
the register for the same or similar goods/services.

No. Date of Issue of Examination Application No. Trade Mark Applied for
Notice
1. May 16, 2008 1565157 My Music
2. May 17, 2008 1565152 Classified
3. May 16, 2008 1565156 Excuse Me
4. May 17, 2008 1565153 Fastest Finger
5. May 17, 2008 1565154 Post Card
6. May 16, 2008 1565155 Spot The Ball

Our Company has been asked to file its response/submission along with supporting documents within
one month on receipt of the examination notice or apply for a hearing. In the alternate, the application
shall be treated as abandoned for lack of prosecution under Section 132 of the Trade Marks Act.

3. Our Company has applied for the following registrations of copyright from the Deputy
Registrar of Copyrights, Government of India:

Date Application No. Title of work

April 3, 2008 2070/08/COSW Device Manager
April 3, 2008 2071/08/COSW Smart Dial

4. Our Company has applied for the following registrations of patents from the Controller of
Patents, The Patent Office, New Delhi:

Date Diary No. Applied with complete/ Title of work

provisional specification
June 21, 2007 E-2/157/2007-DEL Complete BGM
June 21, 2007 E-158/2007-DEL Complete SCL
June 4, 2008 Receipt No. 4342 Complete PAY4ME
September 19, 2007 1984/DEL/2007 Provisional Excuse Me
September 19, 2007 1982/DEL/2007 Provisional Voice SMS
June 4, 2008 Receipt No. 4342 Complete My Music
September 19, 2007 1985/DEL/2007 Provisional Smart Caller Assistance
September 19, 2007 1983/DEL/2007 Provisional Content Uploader
November 2, 2007 2290/DEL/2007 Provisional Lets Share
November 2, 2007 2291/DEL/2007 Provisional Preferred Calling
February 8, 2008 358/DEL/2008 Provisional Mitr

355
 OTHER REGULATORY AND STATUTORY DISCLOSURES

Authority for the Issue

The Board of Directors has, pursuant to the resolution dated June 24, 2008, authorised the Issue subject
to the approval by the shareholders of our Company under section 81(1A) of the Companies Act, and
such other authorities as may be necessary. The Board has approved and authorised this Draft Red
Herring Prospectus pursuant to its resolution dated June 26, 2008.

The shareholders of our Company have, pursuant to a resolution dated June 24, 2008, under section
81(1A) of the Companies Act, authorised the Issue.

The board of directors of Lehman Brothers Opportunity Limited by way of resolution dated June 25,
2008 has authorized the transfer of 2,571,454 Equity Shares pursuant to the Offer for Sale. The board
of directors of Omnia Investments Private Limited by way of resolution dated May 14, 2008 has
authorized the transfer of 1,717,516 Equity Shares pursuant to the Offer for Sale.

RBI approval shall be sought for the transfer of Equity Shares forming part of Offer for Sale in the Issue.

Prohibition by SEBI, RBI or governmental authorities

Our Company, the Selling Shareholders, the Directors, the Promoters, the directors or person(s) in
control of the Promoter or the Promoter Group, the Subsidiaries and the companies in which the
Directors are associated as directors, have not been prohibited from accessing or operating in the
capital markets or restrained from buying, selling or dealing in securities under any order or direction
passed by SEBI.

Except for those disclosed in the sections “Outstanding Litigation and Material Developments” and
“Risk Factors” beginning on pages 300 and x, respectively, none of our Company, the Subsidiaries, the
directors of the Subsidiaries, our Promoters, Promoter Group Companies or relatives of our Promoters,
our Directors and the companies in which our Directors are associated as directors, have been declared
as willful defaulters by the RBI or any other governmental authority and there has been no violation of
any securities law committed by any them in the past and no such proceedings are pending against any
of them.

Eligibility for the Issue

Our Company is eligible for the Issue in accordance with Clause 2.2.1 of the SEBI Guidelines as
explained under, with the eligibility criteria calculated in accordance with unconsolidated financial
statements under Indian GAAP:

• the Company has net tangible assets of at least Rs. 30 million in each of the preceding three
full years of which not more than 50% is held in monetary assets;

• the Company has a track record of distributable profits in accordance with Section 205 of
Companies Act for at least three of the immediately preceding five years;

• the Company has a net worth of at least Rs. 10 million in each of the three preceding full
years;

• the aggregate of the proposed Issue size and all previous issues made in the same financial
year in terms of size (i.e. offer through the offer document + firm allotment + promoter’s
contribution through the offer document) is not expected to exceed five times the pre-Issue net
worth of the Company as per the audited balance sheet for the nine months period ended
December 31, 2007; and

• the Company has changed its name in the last one year from Cellebrum.Com Private Limited
to Cellebrum Technologies Limited, however no new business activity is suggested by the
new name, therefore all the revenue earned in the preceeding full year has been earned from
the activity suggested by the new name.

356
The net profit, dividend, net worth, net tangible assets and monetary assets derived from the Restated
Financial Statements included in this Draft Red Herring Prospectus under the section “Financial
Statements” for the last five fiscal years of the Company is set forth below:

(Rs. in million)
Particulars Fiscal
Period ended March 31, March 31, March 31, December 31,
Decem 2007 2006 2005 2003
ber 31, (12 (Twelv (Fifete (Twelve
2007 (9 month e en months)
month s) months month
s) ) s)
Distributable Profits 287.85 400.46 214.57 176.47 2.81
Net Tangible Assets 966.14 1002.95 404.81 189.97 12.98
Monetary Assets 414.26 554.95 21.21 90.56 6.42
Monetary 42.85 55.53 5.24 47.67 49.46
Assets as a
Percentage of Net
Tangible Assets
Networth 1096.41 1036.89 414.29 193.90 12.98

For a complete explanation of the above figures please see the section “Financial Statements”
beginning on page 166.

Further, in accordance with Clause 2.2.2A of the SEBI Guidelines, we shall ensure that the number of
prospective allottees to whom the Equity Shares will be Allotted will be not less than 1,000.

Disclaimer Clause

AS REQUIRED, A COPY OF THIS DRAFT RED HERRING PROSPECTUS HAS BEEN

SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF
THE DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD NOT IN ANY WAY BE
DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY
SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL
SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS
PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE
OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING PROSPECTUS. ONE OF THE
BOOK RUNNING LEAD MANAGERS, ENAM SECURITIES PRIVATE LIMITED, HAS
CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT RED HERRING
PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE
SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 IN FORCE FOR
THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN
INFORMED DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE.

IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS

PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE
OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS,
ENAM SECURITIES PRIVATE LIMITED IS EXPECTED TO EXERCISE DUE DILIGENCE
TO ENSURE THAT THE COMPANY AND THE SELLING SHAREHOLDERS DISCHARGE
THEIR RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS
PURPOSE, ONE OF THE BOOK RUNNING LEAD MANAGERS, ENAM SECURITIES
PRIVATE LIMITED HAS FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE
DATED JUNE 26, 2008 IN ACCORDANCE WITH THE SEBI (MERCHANT BANKERS)
REGULATIONS, 1992 WHICH READS AS FOLLOWS:

“1. WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING

TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES,
DISPUTES WITH COLLABORATORS, ETC., AND OTHER MATERIALS IN

357
 CONNECTION WITH THE FINALISATION OF THE DRAFT RED HERRING
PROSPECTUS PERTAINING TO THE SAID ISSUE;

2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE

COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES,
INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE
OBJECTS OF THE ISSUE, PROJECTED PROFITABILITY, PRICE
JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS MENTIONED IN
THE ANNEXURE AND OTHER PAPERS FURNISHED BY THE COMPANY,

WE CONFIRM THAT:

(A) THE DRAFT RED HERRING PROSPECTUS FORWARDED TO SEBI IS IN

CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS
RELEVANT TO THE ISSUE;

(B) ALL THE LEGAL REQUIREMENTS CONNECTED WITH THE SAID ISSUE, AS
ALSO THE GUIDELINES, INSTRUCTIONS, ETC. ISSUED BY SEBI, THE
GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF
HAVE BEEN DULY COMPLIED WITH; AND

(C) THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE
TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL
INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE
AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS
OF THE COMPANIES ACT, 1956, THE SEBI (DISCLOSURE AND INVESTOR
PROTECTION) GUIDELINES, 2000 AND OTHER APPLICABLE LEGAL
REQUIREMENTS.

3. WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES

NAMED IN THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH
SEBI AND TILL DATE SUCH REGISTRATION IS VALID.

4. WHEN UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE

WORTH OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING
COMMITMENTS.

5. WE CERTIFY THAT WRITTEN CONSENT FROM THE PROMOTERS HAS BEEN

OBTAINED FOR INCLUSION OF THEIR EQUITY SHARES AS PART OF THE
PROMOTERS’ CONTRIBUTION SUBJECT TO LOCK-IN AND THE EQUITY
SHARES PROPOSED TO FORM PART OF THE PROMOTERS’ CONTRIBUTION
SUBJECT TO LOCK-IN WILL NOT BE DISPOSED OR SOLD OR TRANSFERRED
BY THE PROMOTERS DURING THE PERIOD STARTING FROM THE DATE OF
FILING THE DRAFT RED HERRING PROSPECTUS WITH SEBI UNTIL THE
DATE OF COMMENCEMENT OF THE LOCK-IN PERIOD AS STATED IN THE
DRAFT RED HERRING PROSPECTUS.

6. WE CERTIFY THAT CLAUSE 4.6 OF THE SEBI (DISCLOSURE AND INVESTOR

PROTECTION) GUIDELINES, 2000, WHICH RELATES TO SECURITIES
INELIGIBLE FOR COMPUTATION OF PROMOTERS' CONTRIBUTION, HAS
BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO
COMPLIANCE WITH THE CLAUSE HAVE BEEN MADE IN THE DRAFT RED
HERRING PROSPECTUS.

7. WE UNDERTAKE THAT CLAUSES 4.9.1, 4.9.2, 4.9.3 AND 4.9.4 OF THE SEBI
(DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000 SHALL BE
COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE
TO ENSURE THAT PROMOTERS’ CONTRIBUTION AND SUBSCRIPTION FROM
ALL FIRM ALLOTTEES WOULD BE RECEIVED AT LEAST ONE DAY BEFORE
THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS’

358
 CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE
BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE
TO ENSURE THAT PROMOTERS’ CONTRIBUTION SHALL BE KEPT IN AN
ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL
BE RELEASED TO THE COMPANY ALONG WITH THE PROCEEDS OF THE
PUBLIC ISSUE. - NOT APPLICABLE.

8. WHERE THE REQUIREMENTS OF PROMOTERS’ CONTRIBUTION IS NOT

APPLICABLE TO THE ISSUER, WE CERTIFY THE REQUIREMENTS OF
PROMOTERS’ CONTRIBUTION UNDER CLAUSE 4.10 {SUB-CLAUSE (A), (B) OR
(C), AS MAY BE APPLICABLE} ARE NOT APPLICABLE TO THE ISSUER. - NOT
APPLICABLE.

9. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH

THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE
‘MAIN OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM
OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE
ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN
TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION.

10. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO

ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT
IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SECTION 73(3)
OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE
RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED
FROM ALL THE STOCK EXCHANGES MENTIONED IN THE PROSPECTUS. WE
FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE
BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS
CONDITION.

11. WE CERTIFY THAT NO PAYMENT IN THE NATURE OF DISCOUNT,

COMMISSION, ALLOWANCE OR OTHERWISE SHALL BE MADE BY THE
ISSUER OR THE PROMOTERS, DIRECTLY OR INDIRECTLY, TO ANY PERSON
WHO RECEIVES SECURITIES BY WAY OF FIRM ALLOTMENT IN THE ISSUE.
NOT APPLICABLE.

12. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED
HERRING PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION
TO GET THE SHARES IN DEMAT OR PHYSICAL MODE. NOT APPLICABLE- AS
THE ISSUE SIZE IS MORE THAN 100 MILLION, HENCE UNDER SECTION 68B
OF THE COMPANIES ACT, 1956, THE EQUITY SHARES ARE TO BE ISSUED IN
DEMAT ONLY.

13. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN

THE DRAFT RED HERRING PROSPECTUS:

(A) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME THERE
SHALL BE ONLY ONE DENOMINATION FOR THE SHARES OF THE COMPANY
AND

(B) AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH
DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM
TIME TO TIME.”

THE FILING OF THE DRAFT RED HERRING PROSPECTUS DOES NOT, HOWEVER,
ABSOLVE THE COMPANY AND THE SELLING SHAREHOLDERS FROM ANY
LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT, 1956 OR
FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY AND OTHER
CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE.

359
SEBI, FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH
ENAM SECURITIES PRIVATE LIMITED ANY IRREGULARITIES OR LAPSES IN THE
DRAFT RED HERRING PROSPECTUS.”

All legal requirements pertaining to the Issue will be complied with at the time of filing of the Red
Herring Prospectus with the RoC in terms of section 60B of the Companies Act. All legal requirements
pertaining to the Issue will be complied with at the time of registration of the Prospectus with the RoC
in terms of sections 56, 60 and 60B of the Companies Act.

Disclaimer from our Company, the Selling Shareholders and the BRLMs

Our Company, the Selling Shareholders, the Directors, the BRLMs accept no responsibility for
statements made otherwise than in this Draft Red Herring Prospectus or in the advertisements or any
other material issued by or at the Company’s instance and anyone placing reliance on any other source
of information, including the Company’s website www.cellebrum.com, or the website of any
Subsidiaries, any Promoter, Promoter Group Company, or of any affiliate of our Company or its
Subsidiaries, would be doing so at his or her own risk.

The BRLMs accept no responsibility, save to the limited extent as provided in the memorandum of
understanding entered into among the BRLMs, our Company and the Selling Shareholders on June 26,
2008, and the Underwriting Agreement to be entered into between the Underwriters, our Company and
the Selling Shareholders.

All information shall be made available by our Company and the BRLMs to the public and investors at
large and no selective or additional information would be made available for a section of the investors
in any manner whatsoever including at road show presentations, in research or sales reports, at bidding
centres or elsewhere.

Neither our Company, nor the Selling Shareholder nor any member of the Syndicate is liable to the
Bidders for any failure in downloading the Bids due to faults in any software/hardware system or
otherwise.

Investors that bid in the Issue will be required to confirm and will be deemed to have represented to our
Company, the Selling Shareholders and the Underwriters and their respective directors, officers, agents,
affiliates and representatives that they are eligible under all applicable laws, rules, regulations,
guidelines and approvals to acquire Equity Shares and will not offer, sell, pledge or transfer the Equity
Shares to any person who is not eligible under applicable laws, rules, regulations, guidelines and
approvals to acquire Equity Shares. Our Company, the Selling Shareholders and the Underwriters and
their respective directors, officers, agents, affiliates and representatives accept no responsibility or
liability for advising any investor on whether such investor is eligible to acquire Equity Shares.

Notwithstanding anything stated in this Draft Red Herring Prospectus, the Selling Shareholders do not
express any opinion with respect to nor do they assume any responsibility for the statements and
disclosures made by the Company or any other person, whether or not relating to the Company, their
respective businesses, the promoters, the financial information or any other disclosures and statements
and the directors and officers of the Selling Shareholders shall not be liable in any situation
whatsoever. Lehman Brothers Opportunity Limited assumes responsibility only for the statements
about or relating to Lehman Brothers Opportunity Limited in this Draft Red Herring Prospectus. Omnia
Investments Private Limited assumes responsibility only for the statements about or relating to Omnia
Investments Private Limited in this Draft Red Herring Prospectus.

Disclaimer in Respect of Jurisdiction

This Issue is being made in India to persons resident in India, including Indian nationals resident in
India who are majors, HUFs, companies, corporate bodies and societies registered under applicable
laws in India and authorised to invest in shares, Indian mutual funds registered with SEBI, Indian
financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI
permission), or trusts under applicable trust law and who are authorised under their constitution to hold
and invest in shares, public financial institutions as specified in section 4A of the Companies Act,

360
scheduled commercial banks, Mutual Funds, venture capital funds registered with SEBI, state industrial
development corporations, insurance companies registered with 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 (subject to applicable
law) with minimum corpus of Rs. 250 million and pension funds with minimum corpus of Rs. 250
million, and permitted Non-Residents, including FIIs registered with SEBI, Eligible NRIs, multilateral
and bilateral development financial institutions, foreign venture capital investors registered with SEBI
and eligible foreign investors, provided that they are eligible under all applicable laws and regulations
to hold Equity Shares. This Draft Red Herring Prospectus does not, however, constitute an offer to sell
or an invitation to subscribe for Equity Shares offered hereby in any jurisdiction other than India to any
person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into
whose possession this Draft Red Herring Prospectus comes is required to inform himself or herself
about, and to observe, any such restrictions.

Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in New
Delhi, India only.

No action has been, or will be, taken to permit a public offering in any jurisdiction where action would
be required for that purpose, except that this Draft Red Herring Prospectus has been filed with the SEBI
for its observations. Accordingly, the Equity Shares represented hereby may not be offered or sold,
directly or indirectly, and this Draft Red Herring Prospectus may not be distributed in any jurisdiction,
except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of
this Draft Red Herring Prospectus nor any sale hereunder shall, under any circumstances, create any
implication that there has been no change in the affairs of our Company from the date hereof or that the
information contained herein is correct as of any time subsequent to this date.

Our Equity Shares have not been and will not be registered under the US Securities Act of 1933 (the
“Securities Act”) or any state securities laws in the United States and may not be offered or sold within
the United States or to, or for the account or benefit of, “U.S. Persons” (as defined in Regulation S
under the Securities Act), except pursuant to an exemption from or in a transaction not subject to, the
registration requirements of the Securities Act. Accordingly, our Equity Shares are only being offered
or sold in the United States to (i) entities that are “Qualified Institutional Buyers” as defined in Rule
144A under the Securities Act and (ii) outside the United States to certain persons in offshore
transactions in compliance with Regulation S under the Securities Act and the applicable laws of the
jurisdictions where those offers and sales occur.

Further, each Bidder may be required to agree in the CAN that such Bidder will not sell or transfer any
Equity Shares or any economic, interest therein, including any so-called ‘Participatory Notes’ or any
similar security, ones than pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.

Disclaimer clause of the BSE

As required, a copy of this Draft Red Herring Prospectus has been submitted to BSE. The disclaimer
clause as intimated to the Company by the BSE, post scrutiny of the Draft Red Herring Prospectus,
shall be included in the Red Herring Prospectus prior to the RoC filing.

Disclaimer clause of the NSE

As required, a copy of this Draft Red Herring Prospectus has been submitted to the NSE. The
disclaimer clause as intimated to the Company by the NSE, post scrutiny of the Draft Red Herring
Prospectus, shall be included in the Red Herring Prospectus prior to the RoC filing.

Filing

A copy of this Draft Red Herring Prospectus will be filed with the SEBI at the Securities and Exchange
Board of India, SEBI Bhavan, G Block, 3rd Floor, Bandra Kurla Complex, Bandra (E), Mumbai 400
051, India.

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A copy of the Red Herring Prospectus, along with the other documents required to be filed under
section 60B of the Companies Act, will be delivered for registration to the RoC and a copy of the
Prospectus to be filed under section 60 of the Companies Act will be delivered for registration to the
RoC.

Listing

Applications have been made to the Stock Exchanges for permission to deal in, and for an official
quotation of the Equity Shares. The [●] will be the Designated Stock Exchange with which the Basis of
Allotment will be finalised.

If the permissions to deal in, and for an official quotation of, the Equity Shares are not granted by any
of the Stock Exchanges, our Company and the Selling Shareholders shall forthwith repay, without
interest, all monies received from applicants in pursuance of this Draft Red Herring Prospectus. If such
money is not repaid within eight days after our Company has become liable to repay it (i.e., from the
date of refusal or within 15 days from the Bid/Issue Closing Date, whichever is earlier), then our
Company shall, on and from expiry of eight days, be liable to repay the monies, with interest at the rate
of 15% per annum on the application monies, as prescribed under section 73 of the Companies Act.

Our Company shall ensure that all steps for the completion of the necessary formalities for listing and
commencement of trading at both the Stock Exchanges are taken within seven Business Days of
finalisation of the Basis of Allotment.

Impersonation

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of section 68 A of
the Companies Act, which is reproduced below:

“Any person who:

(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any
shares therein, or
(b) otherwise induces a company to Allot, or register any transfer of shares therein to him, or any
other person in a fictitious name, shall be punishable with imprisonment for a term which may
extend to five years.”

Consents

Consents in writing of: (a) the Selling Shareholders, the Directors, the Company Secretary and
Compliance Officer, the Auditors, the legal advisors and the bankers to the Company; and (b) the
BRLMs, the Syndicate Members, the Escrow Collection Bankers and the Registrar to the Issue to act in
their respective capacities, will be obtained and filed along with a copy of the Red Herring Prospectus
with the RoC, as required under sections 60 and 60B of the Companies Act and such consents will not
be withdrawn up to the time of delivery of the Red Herring Prospectus for registration with the RoC.

In accordance with the Companies Act and the SEBI Guidelines, S.R. Batliboi & Associates, Chartered
Accountants, our statutory auditors have given their written consent for the inclusion of their report in
the form and context in which it appears in this Draft Red Herring Prospectus and such consent and
report will not be withdrawn up to the time of delivery of the Red Herring Prospectus and the
Prospectus to the RoC.

[●], the agency engaged by us for the purpose of obtaining IPO grading in respect of this Issue, will
give its written consent to the inclusion of their report in the form and context in which it will appear in
the Red Herring Prospectus and such consent and report will not be withdrawn up to the time of
delivery of the Red Herring Prospectus and the Prospectus to the RoC.

Gupta, Garg & Agarwal, our previous auditors have given their written consent for the inclusion of
their report in the form and context in which it appears in this Draft Red Herring Prospectus and such

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consent and report has not been withdrawn up to the time of delivery of this Red Herring Prospectus
for registration with the RoC.

Expert Opinion

Except the report provided by the IPO Grading Agency (a copy of which report will be annexed to the
Red Herring Prospectus), furnishing the rationale for its grading which will be provided to the
Designated Stock Exchange and updated at the time of filing of the Red Herring Prospectus with the
RoC, pursuant to the SEBI Guidelines, we have not obtained any expert opinions.

Issue Related Expenses

The expenses of this Issue include, among others, underwriting and management fees, IPO Grading
fees selling commission, printing and distribution expenses, legal fees, statutory advertisement
expenses and listing fees. The estimated expenses of the Issue are as follows:

Activity Expense (Rs. in Millions)*

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 estimated Issue expenses
* Will be incorporated after finalization of Issue Price.

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 solely by our Company.

Fees Payable to the Book Running Lead Managers and Syndicate Members

The total fees payable to the Book Running Lead Managers and Syndicate Members (including
underwriting commission, selling commission and reimbursement of their out of pocket expenses) will
be as per the memorandum of understanding dated June 26, 2008 among our Company, the Selling
Shareholders and the Book Running Lead Managers, a copy of which is available for inspection at the
Registered Office.

Fees Payable to the Registrar to the Issue

The fees payable to the Registrar to the Issue for processing of applications, data entry, printing of
CANs/refund orders (or revised CANs, if required), preparation of refund data on magnetic tape and
printing of bulk mailing register will be as per the memorandum of understanding between our
Company, the Selling Shareholders and the Registrar to the Issue dated June 26, 2008, a copy of which
is available for inspection at the Registered Office.

The Registrar to the Issue will be reimbursed for all out of pocket expenses including cost of stationery,
postage, stamp duty, and communication expenses. Adequate funds will be provided to the Registrar to
the Issue to enable them to make refunds in any of the modes described in this Draft Red Herring
Prospectus or send Allotment advice by registered post/speed post/under certificate of posting.

Particulars regarding Public or Rights Issues during the last five years

Our Company has not made any previous public issues (including any rights issues to the public) in the
five years preceding the date of this Draft Red Herring Prospectus.

Previous issues of Equity Shares otherwise than for cash

Except as stated in the section “Capital Structure” beginning on page 21, our Company has not issued
any shares for consideration other than cash.

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Underwriting commission, brokerage and selling commission on Previous Issues

Since this is the initial public offering of our Equity Shares, no sum has been paid or has been payable
as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any
of the Equity Shares since our Company’s inception.

Companies Under the Same Management

There are no companies under the same management within the meaning of former section 370 (1B) of
the Companies Act other than the companies disclosed under the section “Our Promoters and Promoter
Group” and Subsidiaries as disclosed under the section “History and Certain Corporate Matters”
beginning on pages 93 and 74, respectively. Except as disclosed in this Draft Red Herring Prospectus,
no company under the same management within the meaning of Section 370(1B) of the Companies Act
has made any public issue (including any rights issues to the public) during the last three years. For
details, see the section “Our Promoters and Promoter Group” beginning on page 93.

Promise v/s Performance

For details of promise versus performance of promoter group companies, refer to section “Our
Promoters and Promoter Group”.

Outstanding Debentures or Bond Issues or Preference Shares

Our Company has no outstanding debentures or bonds or redeemable preference shares as of the date of
this Draft Red Herring Prospectus.

Stock Market Data of the Equity Shares

This being an initial public offering of the Equity Shares, the Equity Shares are not listed on any stock
exchange.

Mechanism for Redressal of Investor Grievances

The memorandum of understanding between the Registrar to the Issue and our Company will provide
for retention of records with the Registrar to the Issue for a period of at least one year from the last date
of dispatch of the letters of Allotment, or refund orders, demat credit or, where refunds are being made
electronically, giving of refund instructions to the clearing system, to enable the investors to approach
the Registrar to the Issue for redressal of their grievances.

All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details
such as name, address of the applicant, application number, number of Equity Shares applied for,
amount paid on application, Depository Participant, and the bank branch or collection centre where the
application was submitted.

Disposal of Investor Grievances by our Company

Our Company estimates that the average time required by our Company or the Registrar to the Issue for
the redressal of routine investor grievances shall be 10 Business Days from the date of receipt of the
complaint. In case of complaints that are not routine or where external agencies are involved, our
Company will seek to redress these complaints as expeditiously as possible.

Our Company has appointed Mr. Ashok Agarwal as the Compliance Officer and he may be contacted
in case of any pre-Issue or post-Issue-related problems. He can be contacted at the following address:

Mr. Ashok Agarwal

Cellebrum Technologies Limited,
D-1, Sector 3,
Noida- 201301, Uttar Pradesh, India.
Telephone: +91 120 4363652

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Facsimile: +91 120 4320467
E-mail: ipo@cellebrum.com

Other Disclosures

Except as disclosed in this Draft Red Herring Prospectus, the Promoter Group, the directors of the
Promoters or the Promoter Group companies or the Directors have not purchased or sold any securities
of our Company during a period of six months preceding the date on which this Draft Red Herring
Prospectus is filed with SEBI.

Purchase of Property

There is no property which has been purchased or acquired or is proposed to be purchased or acquired
which is to be paid for wholly or partly from the proceeds of the present Issue or the purchase or
acquisition of which has not been completed on the date of the Draft Red Herring Prospectus, other
than property, in respect of which:

• The contract for the purchase or acquisition was entered into in the ordinary course of
business, nor was the contract entered into in contemplation of the Issue, nor is the Issue
contemplated in consequence of the contract; or

• The amount of the purchase money is not material.

Except as stated in the Draft Red Herring Prospectus, the Company has not purchased any property in
which any of its Promoters and/or Directors, have any direct or indirect interest in any payment made
thereunder.

Disposal of investor grievances by listed companies under the same management as our
Company

There are no listed companies under the same management as our Company.

Change in Auditors

Gupta Garg & Agrawal resigned as the statutory auditor of the Company on September 30, 2006. S.R.
Batliboi & Associates, our current statutory auditors, were appointed as the statutory auditors of the
Company on September 30, 2006.

Capitalisation of Reserves or Profits

Apart from the bonus issue dated January 30, 2006, pursuant to which 10,000,100 Equity Shares and
bonus issue dated June 24, 2008, pursuant to which 27,997,426 Equity Shares were allotted to
shareholders, our Company has not capitalised its reserves or profits at any time during the last five
years. For details of the bonus issue, see the section “Capital Structure” beginning on page 21.

Tax Implications

Investors that are Allotted Equity Shares in the Issue will be subject to capital gains tax on any resale of
the Equity Shares at applicable rates, depending on the duration for which the investors have held the
Equity Shares prior to such resale and whether the Equity Shares are sold on the stock exchanges. For
details, see the section “Statement of Tax Benefits” beginning on page 37.

Revaluation of Assets

Our Company has not revalued its assets in the last five years.

Interest of Promoters and Directors

Promoters

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Except as stated in the section “Related Party Transactions” beginning on page 139, and to the extent of
compensation and commission, if any, and their shareholding in our Company, the Promoters do not
have any other interest in our business or in our Company.

Directors

All the Directors may be deemed to be interested to the extent of fees, if any, payable to them for
attending meetings of the Board or any committee thereof. The Directors may also be regarded as
interested in the Equity Shares held by or that may be subscribed by and Allotted to the companies,
firms and trusts, in which they are interested as directors, members, partners and/or trustees.

Payment or 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.

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 SECTION VII: ISSUE INFORMATION

TERMS OF THE ISSUE

The Equity Shares being issued are subject to the provisions of the Companies Act, the Memorandum
and Articles of Association, the terms of the Red Herring Prospectus, the Prospectus, the Bid cum
Application Form, the Revision Form, the CAN and other terms and conditions as may be incorporated
in the Allotment advice and other documents/certificates that may be executed in respect of the Issue.
The Equity Shares shall also be subject to all applicable laws, guidelines, rules, notifications and
regulations relating to the issue of capital and listing and trading of securities issued from time to time
by SEBI, the Government of India, the Stock Exchanges, the RoC, the RBI, the FIPB and/or other
authorities, as in force on the date of the Issue and to the extent applicable.

Authority for the Issue

The Board of Directors has, pursuant to resolution passed at its meeting held on June 24, 2008,
authorised the Issue subject to the approval by the shareholders of our Company under section 81(1A)
of the Companies Act, and such other authorities as may be necessary. The shareholders of our
Company have, pursuant to a resolution dated June 24, 2008, under section 81(1A) of the Companies
Act, authorised the Issue.

The Board has approved and authorised this Draft Red Herring Prospectus pursuant to its resolution
dated June 26, 2008.

The Company has obtained in-principle listing approvals dated [●] and [●] from the BSE and the NSE,
respectively.

The board of directors of Lehman Brothers Opportunity Limited by way of resolution dated June 25,
2008 has authorized the transfer of 2,571,454 Equity Shares pursuant to the Offer for Sale. The board
of directors of Omnia Investments Private Limited by way of resolution dated May 14, 2008 has
authorized the transfer of 1,717,516 Equity Shares pursuant to the Offer for Sale.

Ranking of Equity Shares

The Equity Shares being issued shall be subject to the provisions of the Memorandum and Articles of
Association and shall rank pari passu with the existing Equity Shares including rights in respect of
dividends. The Allottees of the Equity Shares in this Issue shall be entitled to dividends and other
corporate benefits, if any, declared by our Company after the date of Allotment. For further details, see
the section “Main Provisions of the Articles of Association” beginning on page 406.

Mode of Payment of Dividend

Our Company shall pay dividends to its shareholders in accordance with the provisions of the
Companies Act.

Face Value and Issue Price

The face value of each Equity Share is Rs. 10. The Floor Price of Equity Shares is Rs. [●] per Equity
Share and the Cap Price is Rs. [●] per Equity Share. At any given point of time there shall be only one
denomination of Equity Shares, subject to applicable law.

Compliance with the SEBI Guidelines

Our Company shall comply with applicable disclosure and accounting norms specified by SEBI from
time to time.

Rights of the Equity Shareholders

Subject to applicable laws, the equity shareholders of our Company shall have the following rights:

367
• The right to receive dividends, if declared;
• The right to attend general meetings and exercise voting powers, unless prohibited by law;
• The right to vote on a poll either in person or by proxy;
• The right to receive offers for rights shares and be allotted bonus shares, if announced;
• The right to receive any surplus on liquidation subject to any statutory and other preferential
claims being satisfied;
• The right to freely transfer their Equity Shares; and
• Such other rights, as may be available to a shareholder of a listed public company under the
Companies Act, the terms of the listing agreements executed with the Stock Exchanges, and
the Memorandum and Articles of Association.

For a detailed description of the main provisions of the Articles of Association relating to voting rights,
dividend, forfeiture and lien, transfer and transmission, and/or consolidation/splitting, see the section
“Main Provisions of the Articles of Association” beginning on page 406.

Market Lot and Trading Lot

Under section 68B of the Companies Act, the Equity Shares shall be Allotted only in dematerialised
form. As per the SEBI Guidelines, the trading of the Equity Shares shall be in dematerialised form
only. Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share.
Allotment in this Issue will be in electronic form in multiples of one Equity Share, subject to a
minimum Allotment of [●] Equity Shares.

Jurisdiction

Exclusive jurisdiction for the purpose of this Issue is with the competent courts in New Delhi, India.

Nomination Facility to Investor

In accordance with section 109A of the Companies Act, the sole or first Bidder, along with other joint
Bidders, may nominate any one person in whom, in the event of the death of sole Bidder or in case of
joint Bidders, the death of all the Bidders, as the case may be, the Equity Shares Allotted shall vest. A
person, being a nominee entitled to the Equity Shares by reason of the death of the original holder(s),
shall in accordance with section 109A of the Companies Act, be entitled to the same benefits to which
he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the
nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any
person to become entitled to the Equity Share(s) in the event of his or her death during the minority. A
nomination shall stand rescinded upon a sale/transfer/alienation of equity share(s) by the person
nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. A fresh
nomination can only be made on the prescribed form available on request at the Registered Office or
with the Registrar and transfer agents of our Company.

In accordance with section 109B of the Companies Act, any person who becomes a nominee by virtue
of the provisions of section 109A of the Companies Act, shall upon the production of such evidence as
may be required by the Board, elect either:

• to register himself or herself as the holder of the Equity Shares; or

• to make such transfer of the Equity Shares, as the deceased holder could have made.

Further, the Board may at any time give notice requiring any nominee to choose either to register
himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period
of 90 days, the Board may thereafter withhold payment of all dividends, bonuses or other monies
payable in respect of the Equity Shares, until the requirements of the notice have been complied with.

Since the Allotment will be made only in dematerialised form, there is no need to make a separate
nomination with our Company. Nominations registered with the respective depository participant of the
applicant will prevail. If the investors wish to change their nomination, they are requested to inform
their respective depository participant.

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Minimum Subscription

If our Company does not receive the minimum subscription of 90% of the Fresh Issue less the
Employee Reservation Portion including devolvement to the Underwriters and an amount of Rs. 1,000
million from the Issue, within 60 days from the Bid/ Issue Closing Date, we shall forthwith refund the
entire subscription amount received. If at least 60% of the Net Issue cannot be allotted to QIBs, then
the entire application money will be refunded. If there is a delay beyond eight days after we become
liable to pay the amount, we shall pay interest as per section 73 of the Companies Act.

The requirement for minimum subscription is not applicable to the Offer for Sale.

In case of under-subscription in the Issue, the Equity Shares in the Fresh Issue will be issued prior to
the sale of Equity Shares in the Offer for Sale. Any expense incurred by the Company on behalf of the
Selling Shareholders with regard to refunds, interest for delays, etc. for the Equity Shares being offered
through the Offer for Sale, will be reimbursed by the Selling Shareholders to the Company.

Further, in accordance with Clause 2.2.2A of the SEBI Guidelines, our Company and the Selling
Shareholders shall ensure that the number of prospective allottees to whom the Equity Shares will be
Allotted will be not less than 1,000.

The Equity Shares have not been and will not be registered under the US Securities Act of 1933
(the “Securities Act”) or any state securities laws in the United States and may not be offered or
sold within the United States or to, or for the account or benefit of, “U.S. persons” (as defined in
Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act. Accordingly, the Equity Shares
are only being offered and sold outside the United States to certain persons in offshore
transactions in compliance with Regulation S under the Securities Act.

The Equity Shares have not been and will not be registered, listed or otherwise qualified in any
other jurisdiction outside India and may not be offered or sold, and Bids may not be made by
persons in any such jurisdiction, except in compliance with the applicable laws of such
jurisdiction.

Application by Eligible NRIs, FIIs registered with SEBI and FVCIs registered with SEBI

It is to be distinctly understood that there is no reservation for NRIs and FIIs registered with SEBI or
FVCIs registered with SEBI.

Arrangement for disposal of Odd Lots

There are no arrangements for disposal of odd lots.

Restriction on transfer of shares

There are no restrictions on transfers and transmission of Equity Share and on their consolidation/
splitting except as provided in our Articles. See the section “Main Provisions of the Articles of
Association” beginning on page 406.

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.

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 ISSUE STRUCTURE

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 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.

Eligible QIBs Non-Institutional Retail Individual

Employees Bidders Bidders
Number of 100,000 Equity At least 6,702,608 Not less than Not less than
Equity Shares** Shares. Equity Shares. 1,117,101 Equity 3,351,303 Equity
Shares or Issue less Shares or Issue less
allocation to QIB allocation to QIB
Bidders and Retail Bidders and Non-
Individual Bidders Institutional Bidders
shall be available for shall be available for
allocation. allocation.

Percentage of Up to 0.89% of At least 60% of the Not less than 10% of Not less than 30% of
Issue available the Issue Issue shall be allotted the Issue or the Issue the Issue or the Issue
for to QIB Bidders. less allocation to QIB less allocation to
Allotment/Alloc Bidders and Retail QIB Bidders and
ation However, 5% of the Individual Bidders Non-Institutional
QIB Portion shall be shall be available for Bidders shall be
available for allocation. available for
allocation allocation.
proportionately to
Mutual Funds only.
Mutual Funds
participating in the
5% reservation in the
QIB Portion will also
be eligible for
allocation in the
remaining QIB
Portion. The
unsubscribed portion
in the Mutual Fund
reservation will be
available to QIBs.

Basis of Proportionate Proportionate as Proportionate. Proportionate.

allocation if subject to a follows:
respective maximum of
category is 100,000 Equity (a) 335,131 Equity
oversubscribed Shares for an Shares shall be
Eligible available for
Employee, in case allocation on a
of over- proportionate basis
subscription to Mutual Funds;
and

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 Eligible QIBs Non-Institutional Retail Individual
Employees Bidders Bidders
(b) 6,367,477 Equity
Shares shall be
Allotted on a
proportionate basis
to all QIBs
including Mutual
Funds receiving
allocation as per
(a) above.

Minimum Bid [●] Equity Shares. Such number of Such number of [●] Equity Shares.
Equity Shares so that Equity Shares so that
the Bid Amount the Bid Amount
exceeds Rs. 100,000. exceeds Rs. 100,000.

Maximum Bid Such number of Such number of Such number of Such number of
Equity Shares Equity Shares not Equity Shares not Equity Shares
whereby the Bid exceeding the size of exceeding the size of whereby the Bid
Amount does not the Issue, subject to the Issue, subject to Amount does not
exceed Rs. [●]. applicable limits. applicable limits. exceed Rs. 100,000.

Mode of Compulsorily in Compulsorily in Compulsorily in Compulsorily in

Allotment dematerialised dematerialised form. dematerialised form. dematerialised form.
form.
Bid Lot [●] Equity Shares [●] Equity Shares and [●] Equity Shares [●] Equity Shares
and in multiples of in multiples of [●] and in multiples of and in multiples of
[●] Equity Shares. Equity Shares. [●] Equity Shares. [●] Equity Shares.

Allotment Lot [●] Equity Shares [●] Equity Shares and [●] Equity Shares [●] Equity Shares
and in multiples of in multiples of [●] and in multiples of and in multiples of
[●] Equity Share. Equity Share. [●] Equity Share. [●] Equity Share.

Trading Lot One Equity Share. One Equity Share. One Equity Share. One Equity Share.

Who can Apply A permanent Public financial Eligible NRIs, Resident Indian
*** employee of the institutions as Resident Indian individuals
Company or its specified in section individuals, HUF (in (including HUF in
Subsidiaries and 4A of the Companies the name of the the name of the
based, working Act, FIIs registered Karta), companies, Karta) and Eligible
and present in with SEBI, scheduled corporate bodies, NRIs applying for
India as on the commercial banks, scientific institutions, Equity Shares such
date of submission mutual funds, societies and trusts. that the Bid Amount
of the Bid cum multilateral and per individual Bidder
Application Form. bilateral development does not exceed
financial institutions, Rs. 100,000 in value.
venture capital funds
registered with SEBI,
foreign venture
capital investors
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

371
 Eligible QIBs Non-Institutional Retail Individual
Employees Bidders Bidders
Gazette of India,
provident funds with
minimum corpus of
Rs. 250 million and
pension funds with
minimum corpus of
Rs. 250 million in
accordance with
applicable law.

Terms of Margin Amount Margin Amount Margin Amount Margin Amount

Payment applicable to applicable to QIBs applicable to Non- applicable to Retail
Eligible shall be payable at the Institutional Bidders Individual Bidders
Employees shall time of submission of shall be payable at shall be payable at
be payable at the the Bid cum the time of the time of
time of Application Form to submission of the Bid submission of the
submission of Bid the Syndicate cum Application Bid cum Application
cum Application Members. Form to the Form to the
Form to the Syndicate Members. Syndicate Members.
Syndicate
Members.
Margin amount Full Bid Amount At least 10% of Bid Full Bid Amount on Full Bid Amount on
on Bidding. Amount. Bidding. Bidding.

* 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.

** Subject to valid Bids being received at or above the Issue Price. In terms of Rule 19(2)(b) of the SCRR, this is an Issue for
less than 25% of the post-Issue capital, therefore, the Issue is being made through a 100% Book Building Process wherein
at least 60% of the Net Issue shall be allotted on a proportionate basis to QIBs. 5% of the QIB Portion 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, subject to valid Bids being received from them at or above the Issue Price. Further, up to 10% of the Net
Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and up to 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.

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.

*** In case the Bid cum Application Form is submitted in joint names, the investors should ensure that the demat account is
also held in the same joint names and the names are in the same sequence in which they appear in the Bid cum Application
Form.

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 therefor. 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.

Letters of Allotment or Refund Orders

Our Company shall give credit of Equity Shares Allotted, if any, to the beneficiary account with
Depository Participants within 2 (two) Business Days from the date of Allotment. Our Company shall
ensure despatch of refund orders, if any, of value up to Rs. 1,500 under Certificate of Posting, and shall
dispatch refund orders above Rs. 1,500, if any, by registered post or speed post or Direct Credit, NEFT,
RTGS or ECS at the sole or First Bidder’s sole risk within 15 (fifteen) days of the Bid/ Issue Closing
Date.

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Interest in Case of Delay in Despatch of Allotment Letters/ Refund Orders

In accordance with the Companies Act, the requirements of the Stock Exchanges and SEBI Guidelines,
our Company undertakes that:

• Allotment shall be made only in dematerialised form within 15 (fifteen) days from the Bid/
Issue Closing Date;
• Despatch of refund orders, except for Bidders who can receive refunds through Direct Credit,
NEFT, RTGS or ECS, shall be done within 15 days from the Bid/ Issue Closing Date; and
• Our Company shall pay interest at 15% per annum if the allotment letters/ refund orders have
not been dispatched to the applicants or if, in a case where the refund or portion thereof is
made in electronic manner through Direct Credit, NEFT, RTGS or ECS, the refund
instructions have not been given to the clearing system in the disclosed manner within 15
(fifteen) days from the Bid/Issue Closing Date.

Our Company will provide adequate funds required for despatch of refund orders or Allotment advice
to the Registrar to the Issue.
Refunds will be made by cheques, pay orders or demand drafts drawn on the Escrow Collection Banks
and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques,
pay orders or demand drafts at other centres will be payable by the Bidders.

Bid/Issue Program

BID/ISSUE OPENS ON [●], 2008

BID/ISSUE CLOSES ON [●], 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 NSE and the BSE, in case of Bids by Retail Individual Bidders and 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, i.e., Monday to Friday (excluding any public holiday).

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 and Bids under Employee Reservation Portion 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. The cap
should not be more than 120% of the floor of the Price Band. Subject to compliance with the
immediately preceding sentence, the floor of the Price Band can move up or down to the extent of 20%
of the floor of the Price Band 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, if
applicable, shall be widely disseminated by notification to the Stock Exchanges, by issuing a press

373
release and also by indicating the change on the websites of the BRLMs and the terminals of the
other members of the Syndicate.

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 ISSUE PROCEDURE

Book Building Procedure

In terms of Rule 19(2)(b) of the SCRR, this is an Issue for less than 25% of the post-Issue capital,
therefore, the Issue is being made through the 100% Book Building Process wherein at least 60% of the
Net Issue shall be allotted on a proportionate basis to QIBs, including up to 5% of the QIB Portion,
which 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, 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 is reserved in the Fresh Issue for subscription by Eligible Employees, available for allocation on
a proportionate basis, under the Employee Reservation Portion, subject to valid bids being received at
or above the Issue Price.

Bidders are required to submit their Bids through the Syndicate. Further, QIB Bids can be procured
only through the BRLMs or their affiliates. In case of QIB Bidders, our Company and the Selling
Shareholders, in consultation with the BRLMs may reject Bids at the time of acceptance of the Bid cum
Application Form provided that the reasons for such rejection shall be disclosed to such Bidder in
writing. In the cases of Non-Institutional Bidders, Retail Individual Bidders and bids under the
Employee Reservation Portion, our Company and the Selling Shareholders will have a right to reject
the Bids only on technical grounds.

Investors should note that Allotment to all successful Bidders will only be in the dematerialised
form. Bidders will not have the option of getting Allotment of the Equity Shares in physical form.
The Equity Shares on Allotment shall be traded only in the dematerialised segment of the Stock
Exchanges.

Bid cum Application Form

Bidders shall only use the specified Bid cum Application Form bearing the stamp of a member of the
Syndicate for the purpose of making a Bid. The Bidders shall have the option to make a maximum of
three Bids in the Bid cum Application Form and such options shall not be considered as multiple Bids.
Upon the allocation of Equity Shares, dispatch of the CAN, and filing of the Prospectus with the RoC,
the Bid cum Application Form shall be considered as the Application Form. Upon completing and
submitting the Bid cum Application Form to a member of the Syndicate, the Bidder is deemed to have
authorised our Company to make the necessary changes in the Red Herring Prospectus and the Bid cum
Application Form as would be required for filing the Prospectus with the RoC and as would be required
by the RoC after such filing, without prior or subsequent notice of such changes to the Bidder.

The prescribed colour of the Bid cum Application Form for various categories is as follows:

Category Colour of Bid cum Application Form

Resident Indians and Eligible NRIs applying on a non-repatriation White

basis
Bidders in the Employee Reservation Portion Pink
Eligible NRIs applying on a repatriation basis, FIIs, Foreign Venture Blue
Capital Funds, registered Multilateral and Bilateral Development
Financial Institutions and other Non-Residents applying on a
repatriation basis

Who can Bid?

1. Persons eligible to invest under all applicable laws, rules, regulations and guidelines;

375
2. Indian nationals resident in India who are not minors in single or joint names (not more
than three);
3. Hindu Undivided Families or HUFs in the individual name of the Karta. The Bidder should
specify that the Bid is being made in the name of the HUF in the Bid cum Application Form as
follows: “Name of sole or first Bidder: XYZ Hindu Undivided Family applying through XYZ,
where XYZ is the name of the Karta”. Bids by HUFs would be considered at par with those
from individuals;
4. Eligible NRIs on a repatriation basis or a non-repatriation basis subject to compliance with
applicable laws. NRIs, other than Eligible NRIs, are not permitted to participate in this Issue;
5. FIIs registered with the SEBI;
6. State Industrial Development Corporations;
7. Insurance companies registered with the Insurance Regulatory and Development Authority,
India;
8. 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;
9. Provident Funds with a minimum corpus of Rs. 250 million and who are authorised under their
constitution to invest in equity shares;
10. Pension funds with a minimum corpus of Rs. 250 million and who are authorised under their
constitution to invest in equity shares;
11. Companies, corporate bodies and societies registered under applicable laws in India and
authorised to invest in equity shares;
12. Venture Capital Funds registered with the SEBI;
13. FVCIs registered with the SEBI;
14. Indian Mutual Funds registered with the SEBI;
15. Indian financial institutions, commercial banks (excluding foreign banks), regional rural banks,
co-operative banks (subject to the RBI regulations and the SEBI Guidelines and regulations,
as applicable);
16. Multilateral and bilateral development financial institutions;
17. Trusts registered under the Societies Registration Act, 1860, as amended, or under any other law
relating to trusts and who are authorised under their constitution to hold and invest in
equity shares;
18. Scientific and/or industrial research organisations in India authorised to invest in equity shares;
and
19. Eligible Employees of our Company.

As per existing regulations, OCBs cannot Bid in the Issue.

Participation by Associates of the BRLMs and Syndicate Members

Associates of BRLMs and Syndicate Members may bid and subscribe to Equity Shares in the Issue
either in the QIB Portion or in the Non-Institutional Portion as may be applicable to such investors.
Such bidding and subscription may be on their own account or on behalf of their clients. Allotment to
all investors including associates of BRLMs and Syndicate Members shall be on a proportionate basis.

However, the BRLMs and Syndicate Members shall not be entitled to subscribe to this Issue in any
manner except towards fulfilling their underwriting obligation.

Bidders are advised to ensure that any single Bid from them does not exceed the investment limits or
maximum number of Equity Shares that can be held by them under applicable law.

Bids by Mutual Funds

An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual
Funds Portion. In the event that the demand is greater than 335,131 Equity Shares, allocation shall be
made to Mutual Funds on a proportionate basis to the extent of the Mutual Funds Portion. The
remaining demand by Mutual Funds shall, as part of the aggregate demand by QIB Bidders, be made
available for allocation proportionately out of the remainder of the QIB Portion, after excluding the
allocation in the Mutual Funds Portion.

376
In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund
registered with the SEBI and such Bids in respect of more than one scheme of the Mutual Fund will not
be treated as multiple Bids provided that the Bids clearly indicate the scheme for which the Bid has
been made.

In accordance with current regulations, the following restrictions are applicable for investments by
Mutual Funds:

No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity
related instruments of any company provided that the limit of 10% shall not be applicable for
investments in index funds or sector or industry-specific funds. No Mutual Fund under all its schemes
should own more than 10% of any company’s paid-up capital carrying voting rights.

In case of a mutual fund, a separate Bid can be made in respect of each scheme of the mutual fund
registered with SEBI and such Bids in respect of more than one scheme of the mutual fund will not be
treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid
has been made.

Bids by Eligible NRIs

Bid cum Application Forms have been made available for Eligible NRIs at the Registered Office and with
members of the Syndicate.

Eligible NRI Bidder should note that only such Bids as are accompanied by payment in free foreign
exchange shall be considered for Allotment under the Eligible NRI category. The Eligible NRIs who
intend to make payment through the NRO Account shall use the Bid cum Application form meant for
Resident Indians (white form).

Bids by FIIs

In accordance with the current regulations, the following restrictions are applicable for investments
by FIls:

The issue of Equity Shares to a single FII should not exceed 10% of the post-Issue paid-up capital of our
Company. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment
on behalf of each sub-account shall not exceed 10% of the total paid-up capital of our Company or 5% of
the total paid-up capital of our Company, in case such sub-account is a foreign corporate or an individual.
In accordance with the foreign investment limits applicable to us, the total FII investment cannot exceed
24% of our Company’s total paid-up capital. With the approval of the board and the shareholders by way
of a special resolution, the aggregate FII holding can go up to 100%. However, our Company has not
obtained board or shareholders approval to increase the FII limit to more than 24%.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in
terms of Regulation 15A(1) of the Securities Exchange Board of India (Foreign Institutional Investors)
Regulations, 1995, as amended, an FII or its sub-account may issue, deal or hold, offshore derivative
instruments such as participatory notes, equity-linked notes or any other similar instruments against
underlying securities listed or proposed to be listed on any stock exchange in India only in favour of those
entities which are regulated by any relevant regulatory authorities in the countries of their incorporation or
establishment subject to compliance of “know your client” requirements. An FII or sub-account shall also
ensure that no further downstream issue or transfer of any instrument referred to hereinabove is made to
any person other than a regulated entity.

Associates and affiliates of the Underwriters, including the BRLMs, that are FIIs or its sub-account may
issue offshore derivative instruments against Equity Shares allocated to them in the Issue.

Bids by the SEBI-registered Venture Capital Funds and Foreign Venture Capital Investors

The SEBI (Venture Capital Funds) Regulations, 1996, as amended and the SEBI (Foreign Venture
Capital Investors) Regulations, 2000, as amended prescribe investment restrictions on Venture Capital
Funds and Foreign Venture Capital Investors registered with SEBI. For example, the holding by any

377
individual VCF should not exceed 25% of the corpus of the VCF in one venture capital undertaking.
Further, VCFs and FVCIs can invest only up to 33.33% of the investible funds by way of subscription to
an initial public offer.

Pursuant to the SEBI Guidelines, the shareholding of SEBI-registered VCF and FVCI held in a company
prior to making an initial public offering would be exempt from lock-in requirements only if the shares
have been held by them for at least one year prior to the time of filing the draft prospectus with SEBI.

The above information is given for the benefit of the Bidders. The Bidders are advised to make
their own enquiries about the limits applicable to them. Our Company, the Selling Shareholders
and the BRLMs do not accept any responsibility for the completeness and accuracy of the
information stated hereinabove. Our Company, the Selling Shareholders and the BRLMs are not
liable to inform the investors of any amendments or modifications or changes in applicable laws or
regulations, which may occur after the date of this Draft Red Herring Prospectus. Bidders are
advised to make their independent investigations and ensure that the number of Equity Shares Bid
for do not exceed the applicable limits under laws or regulations.

Bids by Eligible Employees

For the purpose of the Employee Reservation Portion, Eligible Employee means 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.

Bids under Employee Reservation Portion by Eligible Employees shall be:

• Made only in the prescribed Bid cum Application Form or Revision Form (i.e. pink colour
Form).
• Eligible Employees, as defined above, should mention the Eligible Employee Number at the
relevant place in the Bid cum Application Form.
• The sole/ first Bidder should be an Eligible Employee.
• Only Eligible Employees (as defined above) would be eligible to apply in this Issue under the
Employee Reservation Portion.
• Only those bids, which are received at or above the Issue Price, would be considered for
allocation under this category.
• Eligible Employees who Bid for Equity Shares of or for a value of not more than Rs. 100,000 in
any of the bidding options at Cut-Off Price. This facility is not available to Eligible Employees
whose Bid Amount in any of the bidding options exceeds Rs. 100,000.
• The Bids must be for a minimum of [●] Equity Shares and in multiples of [●] Equity Shares
thereafter. The maximum bid under Employee Reservation Portion by an Eligible Employee
cannot exceed Rs. [●].
• Bid by Eligible Employees can be made also in the “Net Issue” portion and such Bids shall not
be treated as multiple bids.
• If the aggregate demand in this category is less than or equal to 100,000 Equity Shares at or
above the Issue Price, full allocation shall be made to the Eligible Employees to the extent of
their demand. Under-subscription, if any, in the Employee Reservation Portion will be added
back to the Net Issue.
• If the aggregate demand in this category is greater than 100,000 Equity Shares at or above the
Issue Price, the allocation shall be made on a proportionate basis. For the method of
proportionate basis of allocation, see the section “Basis of Allotment” beginning on page 400.
• 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.

This is not an issue for sale within the United States of any Equity Shares or any other security of the
Company. Securities of the Company, including any offering of its Equity Shares, may not be offered or
sold in the United States in the absence of registration under U.S. securities laws or unless exempt from
registration under such laws.

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Maximum and Minimum Bid Size

a) For Retail Individual Bidders: The Bid must be for a minimum of [●] Equity Shares and in
multiples of [●] Equity Shares thereafter, so as to ensure that the Bid Amount payable by the
Bidder does not exceed Rs. 100,000. In case of revision of Bids, the Retail Individual Bidders
have to ensure that the Bid Amount does not exceed Rs. 100,000. Where the Bid Amount is over
Rs. 100,000 due to revision of the Bid or revision of the Price Band or on exercise of the option
to bid at Cut-off Price, the Bid would be considered for allocation under the Non-Institutional
Portion. The Cut-off Price option is given only to Retail Individual Bidders and Eligible
Employees Bidding under Employee Reservation Portion where the Bid Amount does not
exceed Rs. 100,000 indicating their agreement to the Bid and to purchase the Equity Shares at
the Issue Price as determined at the end of the Book Building Process.

(b) For Non-Institutional Bidders and QIB Bidders: The Bid must be for a minimum of such
number of Equity Shares such that the Bid Amount exceeds Rs. 100,000 and is a multiple of [●]
Equity Shares. A Bid cannot be submitted for more than the Issue size. However, the maximum
Bid by a QIB investor should not exceed the investment limits prescribed for them under
applicable laws. Under the SEBI Guidelines, a QIB Bidder cannot withdraw its Bid after
the Bid/Issue Closing Date and is required to pay the QIB Margin Amount upon
submission of the Bid.

In case of revision in Bids, the Non-Institutional Bidders, who are individuals, have to ensure
that the Bid Amount is greater than Rs. 100,000 for being considered for allocation in the Non-
Institutional Portion. In case the Bid Amount reduces to Rs. 100,000 or less due to a revision in
Bids or revision of the Price Band, Bids by Non-Institutional Bidders who are eligible for
allocation in the Non-Institutional Portion would be considered for allocation under the Retail
Portion. Non-Institutional Bidders and QIB Bidders are not allowed to Bid at the Cut-off Price.

(c) For Bidders in the Employee Reservation Portion

The Bid must be for a minimum of [●] Equity Shares and in multiples of [●]Equity Shares
thereafter. Bidders in the Employee Reservation Portion applying for a maximum Bid in any
of the bidding options not exceeding Rs. 100,000 may bid at Cut-off Price. Bidders may note
that the total Bid Amount will be used to determine whether the Bid exceeds Rs 100,000
or not. The Allotment in the Employee Reservation Portion will be on a proportionate basis.
However, in case of an oversubscription in the Employee Reservation Portion, the maximum
Allotment to any Eligible Employee will be capped at 100,000 Equity Shares. Eligible
Employees whose Bid Amount exceeds Rs. 100,000 may not Bid at Cut-off Price.

Bidders are advised to ensure that any single Bid from them does not exceed the investment
limits or maximum number of Equity Shares that can be held by them under applicable law or
regulation or as specified in this Draft Red Herring Prospectus.

Refund amounts following a permitted withdrawal of a Bid shall be paid in the manner described under
paragraph “Payment of Refund” on page 397.

Information for the Bidder:

1. Our Company will file the Red Herring Prospectus with the RoC at least three days before the
Bid/Issue Opening Date.

2. Our Company and the BRLMs will declare the Bid/Issue Opening Date, Bid/Issue Closing
Date and Price Band at the time of filing the Red Herring Prospectus with the RoC and also
publish the same in two national newspapers of wide circulation.

3. The members of the Syndicate will circulate copies of the Bid cum Application Form to
potential investors, and at the request of potential investors, copies of the Red Herring
Prospectus. Any investor (who is eligible to invest in our Equity Shares) who would like to

379
 obtain the Red Herring Prospectus and/or the Bid cum Application Form can obtain the same
from the Registered Office or from any of the members of the Syndicate.

4. Any investor (who is eligible to invest in the Equity Shares) who would like to obtain the Red
Herring Prospectus along with the Bid cum Application Form can obtain the same from our
Registered Office or from any of the members of the Syndicate.

5. Eligible investors who are interested in subscribing for the Equity Shares should approach any of
the BRLMs or Syndicate Members or their authorised agent(s) to register their Bids.

6. The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum
Application Forms should bear the stamp of the member of the Syndicate. Bid cum Application
Forms which do not bear the stamp of a member of the Syndicate will be rejected.

7. The Price Band has been fixed at Rs. [•] to Rs. [•] per Equity Share. The Bidders can bid at
any price within the Price Band, in multiples of Rs. [●]. In accordance with the SEBI
Guidelines, our Company and the Selling Shareholders, in consultation with the BRLMs,
reserve the right to revise the Price Band during the Bidding/Issue Period. The cap on the
Price Band should not be more than 120% of the floor of the Price Band. Subject to
compliance with the immediately preceding sentence, the floor of the Price Band can move up
or down to the extent of 20% of the floor of the Price Band.

8. In case the Price Band is revised, the Bidding/Issue Period may be extended, if required, by an
additional three days, subject to the total Bidding/Issue Period not exceeding 10 Business
Days. The revised Price Band and Bidding/Issue Period, if applicable, will be widely
disseminated by notification to the Stock Exchanges, and by publishing in two national
newspapers (one each in English and Hindi) of wide circulation in the place where our
Registered Office is situated and also by indicating the change on the websites of the Book
Runners and at the terminals of the members of the Syndicate.

9. Our Company and the Selling Shareholders, in consultation with the BRLMs, can finalise the
Issue Price within the Price Band, without the prior approval of, or intimation to, the Bidders.

Method and Process of Bidding

1. Our Company, the BRLMs shall declare the Bid/Issue Opening Date, the Bid/Issue Closing Date
and Price Band in the Red Herring Prospectus to be filed with the RoC and also publish the same
in two widely circulated national newspapers (one each in English and Hindi). This
advertisement shall contain the disclosure requirements as specified under Schedule XX-A of the
SEBI Guidelines. The BRLMs and Syndicate Members shall accept Bids from the Bidders
during the Bidding/Issue Period in accordance with the terms of the Syndicate Agreement.
Investors who are interested in subscribing to our Equity Shares should approach any of the
members of the Syndicate or their authorized agent(s) to register their Bid.

2. The Bidding/Issue Period shall be for a minimum of three Business Days and shall not exceed
seven Business Days. Where the Price Band is revised, the revised Price Band and
Bidding/Issue Period will be published in two national newspapers (one each in English and
Hindi) with wide circulation and also by indicating the change on the website of the BRLMs and
at the terminals of the members of the Syndicate. The Bidding/Issue Period may be extended, if
required, by an additional three Business Days, subject to the total Bidding/Issue Period not
exceeding 10 Business Days.

3. During the Bidding/Issue Period, eligible investors who are interested in subscribing for the
Equity Shares should approach the members of the Syndicate or their authorised agents to
register their Bid.

4. Each Bid cum Application Form will give the Bidder the choice to Bid for up to three optional
prices (for details refer to the paragraph “Bids at Different Price Levels”) within the Price Band
and specify the demand (i.e., the number of Equity Shares Bid for) in each option. The price and
demand options submitted by the Bidder in the Bid cum Application Form will be treated as

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 optional demands from the Bidder and will not be cumulated. After determination of the Issue
Price, the maximum number of Equity Shares Bid for by a Bidder at or above the Issue Price
will be considered for allocation and the rest of the Bid(s), irrespective of the Bid price, will
become automatically invalid.

5. The Bidder cannot Bid on another Bid cum Application Form after Bid(s) on one Bid cum
Application Form have been submitted to any member of the Syndicate. Submission of a second
Bid cum Application Form to either the same or to another member of the Syndicate will be
treated as multiple bidding and is liable to be rejected either before entering the Bid into the
electronic bidding system, or at any point in time before the Allotment. However, the Bidder can
revise the Bid through the Revision Form, the procedure for which is detailed under the
paragraph “Build up of the Book and Revision of Bids”.

6. The members of the Syndicate will enter each Bid option into the electronic bidding system as a
separate Bid and generate a Transaction Registration Slip (“TRS”) for each price and demand
option and give the same to the Bidder. Therefore, a Bidder can receive up to three TRSs for
each Bid cum Application Form.

7. During the Bidding/Issue Period, Bidders may approach the members of the Syndicate to submit
their Bids. Every member of the Syndicate shall accept Bids from all clients/investors who place
orders through them and shall have the right to vet the Bids.

8. Along with the Bid cum Application Form, all Bidders will make payment in the manner
described under the paragraph “Terms of Payment”.

Bids at Different Price Levels and Revision of Bids

1. The Price Band has been fixed at Rs. [●] to Rs. [●] per Equity Share, Rs. [●] being the Floor
Price and Rs. [●] being the Cap Price. The Bidders can Bid at any price within the Price Band in
multiples of Re.1 (Rupee One).

2. 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.
The cap on the Price Band should not be more than 120% of the Floor Price. Subject to
compliance with the immediately preceding sentence, the floor of the Price Band can move up or
down to the extent of 20% of the floor of the Price Band disclosed in the Red Herring
Prospectus.

3. The Bidding/Issue Period shall be for a minimum of three Business Days and not exceeding
seven Business Days. In case of a revision of the Price Band, the Bidding/Issue Period shall be
extended for three additional Business Days, subject to a maximum of 10 Business Days. Any
revision in the Price Band and the revised Bidding/Issue Period, if applicable, will be widely
disseminated by notification to the Stock Exchanges, by issuing a public notice in two widely
circulated national newspapers (one each in English and Hindi) each with a wide circulation, and
also by indicating the change on the website of the BRLMs and at the terminals of the members
of the Syndicate.

4. Our Company and the Selling Shareholders, in consultation with the BRLMs, can finalise the
Issue Price within the Price Band without the prior approval of, or intimation to, the Bidders.

5. The Bidder can Bid at any price within the Price Band. The Bidder has to Bid for the desired
number of Equity Shares at a specific price.

Retail Individual Bidders and Bidders in the Employee Reservation Portion applying for
a maximum Bid in any of the bidding options not exceeding up to Rs. 100,000, may Bid
at the Cut-off Price. However, bidding at the Cut-off Price is prohibited for QIB Bidders
or Non-Institutional Bidders and Eligible Employees bidding under the Employee
Reservation Portion where the Bid Amount is in excess of Rs. 100,000 and such Bids
from QIB Bidders, Non-Institutional Bidders and Eligible Employees shall be rejected.

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6. Retail Individual Bidders and Eligible Employees bidding under the Employee Reservation
Portion who Bid at the Cut-off Price agree that they shall purchase the Equity Shares at any
price within the Price Band. Retail Individual Bidders and Eligible Employees bidding under
the Employee Reservation Portion bidding at the Cut-off Price shall deposit the Bid Amount
based on the Cap Price in the Escrow Accounts. In the event that the Bid Amount is higher than
the subscription amount payable by the Retail Individual Bidders who Bid at Cut-off Price and
Eligible Employees bidding under the Employee Reservation Portion at Cut-Off Price, such
Bidder shall receive the refund of the excess amounts from the Escrow Accounts in the manner
described under the paragraph “Payment of Refund”. However, bidding at the Cut-off Price is
prohibited for QIB Bidders, Non-Institutional Bidders or Bidders in the Employee Reservation
Portion whose Bid Amount exceeds Rs. 100,000 and such Bids from QIB, Non-Institutional
Bidders or Eligible Employees shall be rejected.

7. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders
and Eligible Employees bidding under the Employee Reservation Portion who had Bid at the
Cut-off Price could either (i) revise their Bid or (ii) make additional payment based on the higher
cap of the revised Price Band (such that the total amount i.e., the original Bid Amount plus
additional payment does not exceed Rs. 100,000 if the Bidder wants to continue to Bid at the
Cut-off Price), with the members of the Syndicate to whom the original Bid was submitted. In
case the total amount (i.e., original Bid Amount plus additional payment) exceeds Rs. 100,000,
the Bid will be considered for allocation under the Non-Institutional Portion in terms of the Red
Herring Prospectus. If, however, the Bidder does not either revise the Bid or make additional
payment and the Issue Price is higher than the cap of the Price Band before revision, the number
of Equity Shares Bid for shall be adjusted downwards for the purpose of Allotment, such that no
additional payment would be required from the Bidder and the Bidder is deemed to have
approved such revised Bid at the Cut-off Price.

8. In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders
and Eligible Employees bidding under the Employee Reservation Portion who have Bid at the
Cut-off Price could either revise their Bid or the excess amount paid at the time of bidding would
be refunded from the Escrow Accounts.

9. In the event of any revision in the Price Band, whether upwards or downwards, the minimum
application size shall remain [●] Equity Shares irrespective of whether the Bid Amount payable
on such minimum application is not in the range of Rs. 5,000 to Rs. 7,000.

Escrow Mechanism

Our Company, the Selling Shareholders and the members of the Syndicate shall open Escrow Accounts
with one or more Escrow Collection Banks in whose favour the Bidders make out the cheque or demand
draft in respect of his or her Bid and/or revision of the Bid. Cheques or demand drafts received for the full
Bid Amount from Bidders in a certain category would be deposited in the Escrow Accounts. The Escrow
Collection Banks will act in terms of the Red Herring Prospectus, the Prospectus and the Escrow
Agreement. The monies in the Escrow Accounts shall be maintained by the Escrow Collection Banks for
and on behalf of the Bidders. The Escrow Collection Banks shall not exercise any lien whatsoever over
the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the Designated
Date, the Escrow Collection Banks shall transfer the monies from the Escrow Accounts to the Public
Issue Account and the Refund Account as per the terms of the Escrow Agreement, the Red Herring
Prospectus and the Prospectus.

The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established
as an arrangement between us, the Syndicate, the Escrow Collection Bank(s) and the Registrar to the
Issue to facilitate collections from the Bidders.

Terms of Payment and Payment into the Escrow Accounts

Each Bidder shall pay the applicable Margin Amount, with the submission of the Bid cum Application
Form, draw a cheque or demand draft in favour of the Escrow Accounts of the Escrow Collection Bank(s)
(see the section “Issue Procedure - Payment Instructions” beginning on page 392), and submit such
cheque or demand draft to the member of the Syndicate to whom the Bid is being submitted. The Bidder

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may also provide the applicable Margin Amount by way of an electronic transfer of funds through the
RTGS mechanism. Each QIB shall provide their QIB Margin Amount only to a BRLM. Bid cum
Application Forms accompanied by cash/Stockinvest/money order shall not be accepted. The Margin
Amount based on the Bid Amount has to be paid at the time of submission of the Bid cum Application
Form.

The members of the Syndicate shall deposit the cheque or demand draft with the Escrow Collection
Bank(s), which will hold the monies for the benefit of the Bidders until the Designated Date. On the
Designated Date, the Escrow Collection Bank(s) shall transfer the funds from the Escrow Accounts, as
per the terms of the Escrow Agreement, into the Public Issue Account. The balance amount after transfer
to the Public Issue Account of our Company shall be transferred to the Refund Account on the Designated
Date. No later than 15 days from the Bid/Issue Closing Date, the Refund Bank(s) shall also refund all
amounts payable to unsuccessful Bidders and also the excess amount paid on bidding, if any, after
adjustment for Allotment, to the Bidders.

Each category of Bidders, i.e., QIB Bidders, Non-Institutional Bidders, Retail Individual Bidders and
Eligible Employees bidding under the Employee Reservation Portion would be required to pay their
applicable Margin Amount at the time of submission of the Bid cum Application Form. The Margin
Amount payable by each category of Bidders is mentioned under the heading “Issue Structure”. Where
the Margin Amount applicable to the Bidder is less than 100% of the Bid Amount, any difference
between the amount payable by the Bidder for Equity Shares allocated at the Issue Price and the Margin
Amount paid at the time of Bidding, shall be payable by the Bidder no later than the Pay-in Date. If the
payment is not made favouring the Escrow Accounts within the time stipulated above, the Bid of the
Bidder is liable to be rejected. However, if the applicable Margin Amount for Bidders is 100%, the full
amount of payment has to be made at the time of submission of the Bid cum Application Form.

Where the Bidder has been allocated a lesser number of Equity Shares than he or she had Bid for, the
excess amount paid on Bidding, if any, after adjustment for Allotment, will be refunded to such Bidder
within 15 days from the Bid/Issue Closing Date, failing which our Company shall pay interest according
to the provisions of the Companies Act for any delay beyond the periods as mentioned above.

Electronic Registration of Bids

1. The members of the Syndicate will register the Bids using the on-line facilities of the Stock
Exchanges. There will be at least one on-line connectivity facility in each city where a stock
exchange is located in India and where Bids are being accepted.

2. The NSE and the BSE will offer a screen-based facility for registering Bids for the Issue. This
facility will be available on the terminals of the members of the Syndicate and their authorised
agents during the Bidding/Issue Period. The members of the Syndicate can also set up facilities
for off-line electronic registration of Bids subject to the condition that they will subsequently
upload the off-line data file into the on-line facilities for book building on a regular basis. On the
Bid/Issue Closing Date, the members of the Syndicate shall upload the Bids until such time as
may be permitted by the Stock Exchanges.

3. The aggregate demand and price for Bids registered on electronic facilities of the NSE and the
BSE will be uploaded on a regular basis, consolidated and displayed on-line at all bidding
centres as well as on the NSE’s website at www.nseindia.com and on the BSE’s website
at www.bseindia.com. A graphical representation of consolidated demand and price will be
made available at the bidding centres during the Bidding/Issue Period.

4. At the time of registering each Bid, the members of the Syndicate shall enter the following
details of the investor in the on-line system:

• Name of the Bidder(s). Bidders should ensure that the name given in the Bid cum
Application Form is exactly the same as the name in which the Depositary Account is
held. In case the Bid cum Application Form is submitted in joint names, Bidders should
ensure that the Depository Account is also held in the same joint names and the names
are in the same sequence in which they appear in the Bid cum Application Form;

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 • Investor category—Individual, Corporate, QIBs, Eligible NRI, FVCI, FII or Mutual
Fund, etc.;

• Numbers of Equity Shares bid for;

• Bid price;

• Bid cum Application Form number;

• Margin Amount paid-upon submission of Bid cum Application Form; and

• Depository Participant identification number and client identification number of the

demat account of the Bidder.

5. A system-generated TRS will be given to the Bidder as proof of the registration of each of the
bidding options. It is the Bidder’s responsibility to obtain the TRS from the members of the
Syndicate. The registration of the Bid by the member of the Syndicate does not guarantee that
the Equity Shares shall be allocated either by the members of the Syndicate or our Company.

6. Such TRS will be non-negotiable and by itself will not create any obligation of any kind.

7. In case of QIB Bidders, members of the Syndicate also have the right to accept the Bid or reject
the Bid. However, such rejection should be made at the time of receiving the Bid and only after
assigning a reason for such rejection in writing. In case of Non-Institutional Bidders and Retail
Individual Bidders, Bids would not be rejected except on the technical grounds listed in this
Draft Red Herring Prospectus.

8. The permission given by the NSE and the BSE to use their network and software of the online
IPO system should not in any way be deemed or construed to mean that the compliance with
various statutory and other requirements by our Company or the BRLMs are cleared or approved
by the NSE and the BSE; nor does it in any manner warrant, certify or endorse the correctness or
completeness of compliance with the statutory and other requirements nor does it take any
responsibility for the financial or other soundness of our Company, the Promoters, the
management or any scheme or project of our Company.

9. It is also to be distinctly understood that the approval given by the NSE and the BSE should not
in any way be deemed or construed that the Draft Red Herring Prospectus has been cleared or
approved by the NSE or the BSE; nor does it in any manner warrant, certify or endorse the
correctness or completeness of any of the contents of the Draft Red Herring Prospectus; nor does
it warrant that the Equity Shares will be listed or will continue to be listed on the NSE and
the BSE.

Build Up of the Book and Revision of Bids

1. Bids registered by various Bidders through the members of the Syndicate shall be electronically
transmitted to the NSE or BSE mainframe on a regular basis.

2. The book gets built up at various price levels. This information will be available from the
BRLMs on a regular basis.

3. During the Bidding/Issue Period, any Bidder who has registered his or her interest in the Equity
Shares at a particular price level is free to revise his or her Bid within the Price Band using the
printed Revision Form, which is a part of the Bid cum Application Form.

4. Revisions can be made in both the desired number of Equity Shares and the Bid Amount by
using the Revision Form. The Bidder must complete the details of all the options in the Bid cum
Application Form or earlier Revision Form. For example, if a Bidder has Bid for three options in
the Bid cum Application Form and he is changing only one of the options in the Revision Form,
he must still complete all the details of the other two options that are not being changed in the

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 Revision Form. Incomplete or inaccurate Revision Forms will not be accepted by the members
of the Syndicate.

5. The Bidder can make this revision any number of times during the Bidding/Issue Period.
However, for any revision(s) in the Bid, the Bidders will have to use the services of the same
member of the Syndicate through whom the original Bid was placed.

6. Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be
made only on such Revision Form or copies thereof.

7. Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft
for the incremental amount, if any, to be paid on account of the upward revision of the Bid. The
excess amount, if any, resulting from downward revision of the Bid would be returned to the
Bidder at the time of refund in accordance with the terms of this Draft Red Herring Prospectus.
In the case of QIB Bidders, the members of the Syndicate shall collect the payment in the form
of cheque or demand draft or electronic transfer of funds through RTGS for the incremental
amount in the QIB Margin, if any, to be paid on account of the upward revision of the Bid at the
time of one or more revisions by the QIB Bidders.

8. When a Bidder revises a Bid, the Bidder shall surrender the earlier TRS and get a revised TRS
from the members of the Syndicate. It is the responsibility of the Bidder to request and
obtain the revised TRS, which will act as proof of revision of the original Bid.

9. Only Bids that are uploaded on the online IPO system of the NSE and the BSE shall be
considered for allocation/Allotment. In the event of a discrepancy of data between the Bids
registered on the online IPO system and the physical Bid cum Application Form, the decision of
the BRLMs and the Designated Stock Exchange, based on the physical records of Bid cum
Application Forms, shall be final and binding on all concerned.

Price Discovery and Allocation

1. After the Bid/Issue Closing Date, the BRLMs shall analyse the demand generated at various
price levels and discuss pricing strategy with our Company and the Selling Shareholders.

2. Our Company and the Selling Shareholders, in consultation with the BRLMs, shall finalise the
Issue Price.

3. The Allotment to QIBs will be at least 60% of the Net Issue, on a proportionate basis and the
availability for allocation to Non-Institutional and Retail Individual Bidders will be not less
than 10% and 30% of the Net Issue, respectively, on a proportionate basis, in a manner
specified in the SEBI Guidelines and this Draft Red Herring Prospectus, in consultation with
the Designated Stock Exchange, 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. The allocation under the Employee Reservation Portion would be on
a proportionate basis, in the manner specified in the SEBI Guidelines and the Draft Red
Herring Prospectus, in consultation with the Designated Stock Exchange, subject to valid Bids
being received at or above the Issue Price.

4. In case of over-subscription in all categories, at least 60% of the Net Issue shall be available
for allocation on a proportionate basis to QIBs, out of which 5% shall be reserved for Mutual
Funds. Mutual Funds participating in the 5% share in the QIB Portion will also be eligible for
allocation in the remaining QIB Portion. However, if the aggregate demand by Mutual Funds
is less than 5% of the QIB Portion, the balance Equity Shares from the portion specifically
available for allocation to Mutual Funds in the QIB Portion will first be added to the QIB
Portion and be allocated proportionately to the QIBs in proportion to their Bids. In the event
that the aggregate demand in the QIB Portion has been met, under-subscription, if any, will be
met with spill-over from any other category or combination of categories at the discretion of
our Company and the Selling Shareholders, in consultation with the BRLMs and the
Designated Stock Exchange.

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 Any under-subscription in the Employee Reservation Portion would be included in the Net
Issue. Under-subscription, if any, in the Retail and Non-Institutional categories, would be
allowed to be met with spill-over from any other category or combination of categories at the
sole discretion of our Company and Selling Shareholders, in consultation with the BRLMs.
However, if the aggregate demand by Mutual Funds is less than 335,131 Equity Shares, the
balance Equity Shares available for allocation in the Mutual Fund Portion will first be added
to the QIB Portion and be allotted proportionately to the QIB Bidders.

5. Allotment to Eligible NRIs, FIIs registered with the SEBI or Mutual Funds or FVCIs registered
with the SEBI will be subject to applicable laws, rules, regulations, guidelines and approvals.

6. Our Company and the Selling Shareholders, in consultation with the BRLMs, reserves 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.

7. In terms of the SEBI Guidelines, QIBs shall not be allowed to withdraw their Bid after the
Bid/Issue Closing Date.

8. Our Company and the Selling Shareholders, in consultation with the BRLMs, reserve the right
to reject any Bid procured from QIB Bidders, by any or all members of the Syndicate. Rejection
of Bids made by QIBs, if any, will be made at the time of submission of Bids provided that the
reasons for rejecting the same shall be provided to such Bidder in writing.

Letters of Allotment or Refund Orders

Our Company and the Selling Shareholders shall credit each Equity Share Allotted to the applicable
beneficiary account with its Depository Participant within 15 days of the Bid/Issue Closing Date.
Applicants residing at 68 centres where clearing houses are managed by the RBI will get refunds through
ECS only (subject to availability of all information for crediting the refund through ECS) except where
the applicant is otherwise disclosed as eligible to receive refunds through direct credit and RTGS. In the
case of other applicants, the Bank shall ensure dispatch of refund orders, if any, of value up to
Rs. 1,500 by “Under Certificate of Posting”, and shall dispatch refund orders above Rs. 1,500, if any, by
registered post or speed post, except for Bidders who have opted to receive refunds through the ECS
facility. Applicants to whom refunds are made through electronic transfer of funds will be sent a letter
(refund advice) through ordinary post informing them about the mode of credit of refund within 15 days
of the Closing of Issue.

Interest in Case of Delay in Dispatch of Allotment Letters/Refund Orders.

In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI
Guidelines, our Company and the Selling Shareholders undertake that:

• Allotment shall be made only in dematerialised form within 15 days from the Bid/Issue Closing
Date;

• Dispatch of refund orders shall be done within 15 days from the Bid/Issue Closing Date; and

• Our Company shall pay interest at 15% per annum, if Allotment is not made, refund orders are
not dispatched to the applicant or if, in a case where the refund or portion thereof is made in
electronic mode/manner, the refund instructions have not been given to clearing members,
and/or demat credits are not made to investors within the 15 day time period prescribed above.

Our Company and the Selling Shareholders will provide adequate funds required for dispatch of refund
orders or Allotment advice to the Registrar to the Issue.

Refunds will be made by cheques, pay orders or demand drafts drawn on the Escrow Collection Banks
and payable at par at places where Bids are received, except where the refund or portion thereof is made
in electronic mode/manner. Bank charges, if any, for encashing such cheques, pay orders or demand
drafts at other centres will be payable by the Bidders.

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Signing of Underwriting Agreement and RoC Filing

(a) Our Company, the Selling Shareholders, the BRLMs and the Syndicate Members may enter into
an Underwriting Agreement upon finalisation of the Issue Price.

(b) After signing the Underwriting Agreement, our Company will update and file the Red Herring
Prospectus with RoC, which then will be termed “Prospectus”. The Prospectus will have details
of the Issue Price, Issue size, underwriting arrangements and will be complete in all material
respects.

Filing of the Red Herring Prospectus and the Prospectus with the RoC

We will file a copy of the Red Herring Prospectus and the Prospectus with the RoC in terms of
sections 56, 60 and 60B of the Companies Act.

Announcement of pre-Issue Advertisement

Subject to section 66 of the Companies Act, our Company shall, after receiving final observations, if any,
on this Draft Red Herring Prospectus from the SEBI, publish an advertisement, in the form prescribed by
the SEBI Guidelines, in two widely circulated national newspapers (one each in English and Hindi).

Advertisement regarding Issue Price and Prospectus

A statutory advertisement will be issued by our Company after the filing of the Prospectus with the RoC.
This advertisement, in addition to the information that has to be set out in the statutory advertisement,
shall indicate the Issue Price along with a table showing the number of Equity Shares and the amount
payable by an investor. Any material updates between the date of the Red Herring Prospectus and the
Prospectus shall be included in such statutory advertisement.

Issuance of Confirmation of Allocation Note (“CAN”)

(a) Upon approval of the Basis of Allotment by the Designated Stock Exchange, the BRLMs or the
Registrar to the Issue shall send to the members of the Syndicate a list of their Bidders who have
been allocated Equity Shares in the Issue. The approval of the basis of allocation by the
Designated Stock Exchange for QIB Bidders may be done simultaneously with or before the
approval of the basis of allocation for the Retail Individual Bidders and Non-Institutional
Bidders and Bids from Eligible Employees bidding in the Employee Reservation Portion.
However, the investor should note that our Company shall ensure that the instructions by our
Company for demat credit of the Equity Shares to all investors in this Issue shall be given on the
same date of Allotment.

(b) The BRLMs or the members of the Syndicate will then send a CAN to their Bidders who have
been allocated Equity Shares in the Issue. The dispatch of a CAN shall be deemed a valid,
binding and irrevocable contract for the Bidder to pay the entire Issue Price for all the Equity
Shares allocated to such Bidder. Those Bidders who have not paid the Bid Amount in full into
the Escrow Accounts at the time of bidding shall pay in full the amount payable into the Escrow
Accounts by the Pay-in Date specified in the CAN.

(c) Bidders who have been allocated Equity Shares and who have already paid into the Escrow
Accounts at the time of bidding shall directly receive the CAN from the Registrar to the Issue
subject, however, to realisation of their cheque or demand draft paid into the Escrow Accounts.

(d) The issuance of a CAN is subject to “Notice to QIBs: Allotment Reconciliation and Revised
CANs” as set forth below.

Notice to QIBs: Allotment Reconciliation and Revised CANs

After the Bid/Issue Closing Date, an electronic book will be prepared by the Registrar on the basis of Bids
uploaded on the BSE/NSE system. Based on the electronic book, QIBs will be sent a CAN, indicating the
number of Equity Shares that may be allocated to them. This CAN is subject to the basis of final

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Allotment, which will be approved by the Designated Stock Exchange and reflected in the physical book
prepared by the Registrar. Subject to the SEBI Guidelines, certain Bid applications may be rejected due to
technical reasons, non-receipt of funds, cancellation of cheques, cheque bouncing, incorrect details, etc.,
and these rejected applications will be reflected in the reconciliation and Basis of Allotment as approved
by the Designated Stock Exchange. As a result, a revised CAN may be sent to QIBs and the allocation of
Equity Shares in such revised CAN may be different from that specified in the earlier CAN. QIBs should
note that they may be required to pay additional amounts, if any, by the Pay-in Date specified in the
revised CAN, for any increased allocation of Equity Shares. The CAN will constitute the valid, binding
and irrevocable contract (subject only to the issue of a revised CAN) for the QIB to pay the entire Issue
Price for all the Equity Shares allocated to such QIB. Any revised CAN, if issued, will supersede in its
entirety the earlier CAN.

Designated Date and Allotment

(a) Our Company will ensure that the Allotment is done within 15 days of the Bid/Issue Closing
Date. After the funds are transferred from the Escrow Accounts to the Public Issue Account and
the Refund Account on the Designated Date, our Company will ensure the credit to the
successful Bidder(s) depository account. Allotment of the Equity Shares to the successful
Bidders shall be within 15 days from the Bid/Issue Closing Date.

(b) As per the SEBI Guidelines, Allotment of the Equity Shares will be only in dematerialised form
to the allottees.

(c) Successful Bidders will have the option to re-materialise the Equity Shares so Allotted as per the
provisions of the Companies Act and the Depositories Act.

Investors are advised to instruct their Depository Participant to accept the Equity Shares that may
be allocated to them pursuant to this Issue.

GENERAL INSTRUCTIONS

DOs:

(a) Check if you are eligible to apply having regard to applicable laws, rules, regulations, guidelines
and approvals and the terms of the Red Herring Prospectus;

(b) Ensure that you Bid within the Price Band;

(c) Read all the instructions carefully and complete the Bid cum Application Form;

(d) Ensure that the details about your Depository Participant and beneficiary account are correct and
the beneficiary account is activated as Equity Shares will be Allotted in dematerialised
form only;

(e) Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a
member of the Syndicate;

(f) Ensure that you have collected a TRS for all your Bid options;

(g) Submit Revised Bids to the same member of the Syndicate through whom the original Bid was
placed and obtain a revised TRS;

(h) Each of the Bidders, should mention their PAN allotted under the IT Act;

(i) Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the
name(s) in which the beneficiary account is held with the Depository Participant. Where the Bid
cum Application Form is submitted in joint names, ensure that the beneficiary account is also
held in same joint names and such names are in the same sequence in which they appear in the
Bid cum Application Form; and

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(j) Ensure that the Demographic Details are updated, true and correct in all respects.

DON’Ts:

(a) Do not Bid for lower than the minimum Bid size;

(b) Do not Bid/revise Bid to a price that is less than the Floor Price or higher than the Cap Price;

(c) Do not Bid on another Bid cum Application Form after you have submitted a Bid to the
members of the Syndicate;

(d) Do not pay the Bid amount in cash, postal order, or by Stockinvest;

(e) Do not send Bid cum Application Forms by post; instead submit the same to a member of the
Syndicate only;

(f) Do not Bid at the Cut-off Price (for QIB Bidders, Non-Institutional Bidders and Bidders bidding
under the Employee Reservation Portion, for whom the Bid Amount exceeds Rs. 100,000);

(g) Do not complete the Bid cum Application Form such that the Equity Shares Bid exceeds the
Issue size and/or investment limit or maximum number of Equity Shares that can be held under
the applicable laws or regulations or maximum amount permissible under the applicable
regulations or under the terms of this Draft Red Herring Prospectus;

(h) Do not bid at Bid Amount exceeding Rs. 100,000 for in case of a Bid by a Retail Individual
Bidder;

(i) Do not submit the Bid without the QIB Margin Amount, in the case of a Bid by a QIB; and

(j) Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on
this ground.

INSTRUCTIONS FOR COMPLETING THE BID CUM APPLICATION FORM

Bidders can obtain Bid cum Application Forms and/or Revision Forms from the members of
the Syndicate.

Bids and Revisions of Bids

Bids and revisions of Bids must be:

1. Made only on the prescribed Bid cum Application Form or Revision Form, as applicable (white,
blue or pink).

2. Made in a single name or in joint names (not more than three, and in the same order as their
Depository Participant details).

3. Completed in full, in BLOCK LETTERS in English and in accordance with the instructions
contained herein, on the Bid cum Application Form or in the Revision Form. Incomplete Bid
cum Application Forms or Revision Forms are liable to be rejected.

4. Bids from the Retail Individual Bidders must be for a minimum of [•] Equity Shares and in
multiples of [•] Equity Shares thereafter subject to a maximum Bid Amount of Rs. 100,000.

5. For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of
Equity Shares such that the Bid Amount exceeds Rs. 100,000 and in multiples of [•] Equity
Shares thereafter. Bids cannot be made for more than the Issue size. Bidders are advised to
ensure that a single Bid from them does not exceed the investment limits or maximum number
of shares that can be held by them under the applicable laws and regulations.

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6. For Bidders bidding under the Employee Reservation Portion, the Bid must be for a minimum of
[●] Equity Shares in multiples of [●] thereafter subject to a maximum of Bid Amount does not
exceed Rs. [●].

7. Thumb impressions and signatures other than in the languages specified in the Eighth Schedule
to the Constitution of India must be attested by a Magistrate or a Notary Public or a Special
Executive Magistrate under official seal.

Bidder’s Depository Account and Bank Account Details

Bidders should note that on the basis of the name of the Bidders, Depository Participant’s name,
Depository Participant identification number and beneficiary account number provided by them in
the Bid cum Application Form, the Registrar to the Issue will obtain from the Depository,
demographic details of the Bidders such as their address, bank account details and occupation
(hereinafter referred to as “Demographic Details”) for printing on refund orders or giving credit
through ECS, RTGS or Direct Credit. These Demographic Details would be used for giving refunds
to the Bidders. Hence, Bidders are advised to immediately update their bank account details as
appearing on the records of the Depository Participant. Please note that failure to do so could result
in delays in credit of refunds to Bidders at the Bidders sole risk and neither the BRLMs nor our
Company nor the Selling Shareholders shall have any responsibility or undertake any liability for
the same. Hence, Bidders should carefully fill in their Depository Account details on the Bid cum
Application Form.

IT IS MANDATORY FOR ALL THE BIDDERS TO RECEIVE THEIR EQUITY SHARES IN

DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY
PARTICIPANT’S NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND
BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS
MUST ENSURE THAT THE NAME GIVEN ON THE BID CUM APPLICATION FORM IS
EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD.
IF THE BID CUM APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE
ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT
NAMES AND SUCH JOINT NAMES ARE IN THE SAME SEQUENCE IN WHICH THEY
APPEAR ON THE BID CUM APPLICATION FORM.

These Demographic Details will be used for all correspondence with the Bidders including mailing of the
refund orders/ECS credit for refunds/direct credit of refund/CANs/allocation advice/NEFT or RTGS for
refunds and printing of Company particulars on the refund order. The Demographic Details given by
Bidders in the Bid cum Application Form will not be used for any other purposes by the Registrar to
the Issue. Please note that provision of bank account details in the space provided for in the Bid Cum
Application Form has been mandatory and Bids not containing such details are liable to be rejected.

By signing the Bid cum Application Form, the Bidder will be deemed to have authorised the Depositories
to provide, upon request, to the Registrar to the Issue, the required Demographic Details as available on
its records.

Refund orders/allocation advice/CAN would be mailed to the address of the Bidder as per the
Demographic Details received from the Depositories. Bidders may note that delivery of refund
orders/allocation advice/CANs may get delayed if the same once sent to the address obtained from the
Depositories are returned undelivered. In such an event, the address and other details given by the Bidder
in the Bid cum Application Form would be used only to ensure dispatch of refund orders. Please note that
any such delay shall be at the Bidder’s sole risk and neither the Company nor the Selling Shareholders nor
Escrow Collection Bank(s) nor the BRLMs shall be liable to compensate the Bidder for any losses caused
to the Bidder due to any such delay or pay any interest for such delay. In case of refunds through
electronic modes as detailed in this Draft Red Herring Prospectus, Bidders may note that refunds
may get delayed if bank particulars obtained from the Depository Participant are incorrect.

Where no corresponding record is available with the Depositories that matches three parameters, namely,
names of the Bidder’s (including the order of names of joint holders), the Depository Participant’s identity
and the beneficiary’s identity, then such Bids are liable to be rejected.

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Bids by Non Residents, including Eligible NRIs, FIIs and FVCIs on a repatriation basis

Bids and revision to the Bids must be made:

1. On the Bid cum Application Form or the Revision Form, as applicable (blue in colour), and
completed in full in BLOCK LETTERS in ENGLISH in accordance with the instructions
contained therein.

2. In a single name or joint names (not more than three and in the same order as their Depository
Participant details).

3. Eligible NRIs for a Bid Amount of up to Rs. 100,000 would be considered under the Retail
Portion for the purposes of allocation and for a Bid Amount of more than Rs. 100,000 would
be considered under Non-Institutional Portion for the purposes of allocation. Other Non-
Resident Bidders must Bid for a minimum of such number of Equity Shares and in multiples
of [•] that the Bid Amount exceeds Rs. 100,000. For further details, see the section “Issue
Procedure - Maximum and Minimum Bid Size” beginning on page 379.

4. In the names of individuals, or in the names of FIIs, FVCIs, etc but not in the names of
minors, OCBs, firms or partnerships, foreign nationals (excluding Eligible NRIs) or their
nominees.

Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only, net of bank
charges and/or commission. In case of Bidders who remit money through Indian Rupee drafts
purchased abroad, such payments in Indian Rupees will be converted into U.S. Dollars or any other
freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the
time of remittance and will be dispatched by registered post or if the Bidders so desire, will be credited
to their Non-Resident External (NRE) accounts, details of which should be furnished in the space
provided for this purpose in the Bid cum Application Form. Our Company will not be responsible for
loss, if any, incurred by the Bidder on account of conversion of foreign currency.

It is to be distinctly understood that there is no reservation for Non Residents, including Eligible NRIs,
FIIs and FVCIs and all Non Residents will be treated on the same basis with other categories for the
purpose of allocation.

As per the existing policy of the Government of India, OCBs cannot participate in this Issue. Further,
NRIs, who are not Eligible NRIs, are not permitted to participate in this Issue.

As per the current regulations, the following restrictions are applicable for investments by FIIs:

No single FII can hold more than 10% of the post-Issue paid-up capital of our Company. In respect of
an FII investing in our Equity Shares on behalf of its sub-accounts, the investment on behalf of each
sub-account shall not exceed 10% of our total issued capital or 5% of the total issued capital of our
Company in case such sub-account is a foreign corporate or an individual.

With the approval of the board of directors and the shareholders by way of a special resolution, the
aggregate FII holding limit may be increased to 100%.

Subject to compliance with all applicable Indian laws, rules, regulations, guidelines and approvals in
terms of Regulation 15(A)(1) of the Securities Exchange Board of India (Foreign Institutional
Investors) Regulations 1995, as amended, an FII or its sub-account may issue, deal or hold, offshore
derivative instruments such as participatory notes, equity-linked notes or any other similar instruments
against underlying securities listed or proposed to be listed in any stock exchange in India only in
favour of those entities which are regulated by any relevant regulatory authorities in the countries of
their incorporation or establishment subject to compliance of “know your client” requirements. An FII
or sub-account shall also ensure that no further downstream issue or transfer of any instrument referred
to hereinabove is made to any person other than a regulated entity.

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Bids under Power of Attorney

In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies,
registered societies, a certified copy of the power of attorney or the relevant resolution or authority, as
the case may be, along with a certified copy of the memorandum and articles of association and/or bye
laws must be lodged along with the Bid cum Application Form. Failing this, our Company and the
Selling Shareholders reserve the right to reject such Bids in whole or in part.

In case of the Bids made pursuant to a power of attorney by FIIs, FVCIs, VCFs and Mutual Funds, a
certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along
with a certified copy of their SEBI registration certificate must be lodged along with the Bid cum
Application Form. Failing this, our Company and the Selling Shareholders reserve the right to reject
such Bid in whole or in part.

Our Company and the Selling Shareholders in their absolute discretion, reserve the right to relax the
above condition of simultaneous lodging of the power of attorney along with the Bid cum Application
Form, subject to such terms and conditions that we/the BRLMs may deem fit.

Bids made by Insurance Companies

In case of the Bids made by insurance companies registered with the Insurance Regulatory and
Development Authority, a certified copy of certificate of registration issued by the Insurance
Regulatory and Development Authority must be lodged along with the Bid cum Application Form.
Failing this, our Company and the Selling Shareholders reserve the right to reject such Bids in whole or
in part.

Bids made by Provident Funds

In case of the Bids made by provident funds, subject to applicable law, with minimum corpus of Rs.
250 million and pension funds with minimum corpus of Rs. 250 million, a certified copy of certificate
from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged
along with the Bid cum Application Form. Failing this, our Company and the Selling Shareholders
reserve the right to accept or reject any Bid in whole or in part, in either case, without assigning any
reason thereof.

PAYMENT INSTRUCTIONS

Our Company and the Selling Shareholders shall open Escrow Accounts with the Escrow Collection
Banks for the collection of the Bid Amount payable upon submission of the Bid cum Application Form
and for amounts payable pursuant to allocation in the Issue. Each Bidder shall draw a cheque or demand
draft for the amount payable on the Bid and/or on allocation as per the following terms:

Payment into Escrow Accounts

1. The Bidders for whom the applicable margin is equal to 100% shall, with the submission of the
Bid cum Application Form, draw a payment instrument for the Bid Amount in favour of the
Escrow Accounts and submit the same to the members of the Syndicate.

2. Where the above Margin Amount paid by the Bidders during the Bidding/Issue Period is less
than the Issue Price multiplied by the Equity Shares allocated to the Bidder, the balance amount
shall be paid by the Bidders into the Escrow Accounts within the period specified in the CAN.

3. The payment instruments for payment into the Escrow Accounts should be drawn in favour of:

(a) In the case of Resident QIB Bidders: “Escrow Account— [●]—Public Issue—QIB-R”

(b) In the case of Non-Resident QIB Bidders: “Escrow Account—[●]—Public Issue—

QIB-NR”

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 (c) In the case of Resident Retail and Non-Institutional Bidders: “Escrow Account—[●] —
Public Issue—R”

(d) In the case of Non-Resident Retail and Non-Institutional Bidders: “Escrow Account—
[●] —Public Issue—NR”

(e) In the case of Eligible Employees: “Escrow Account—[●] —Public Issue—Employee”

4. In the case of Bids by Eligible NRIs applying on a repatriation basis, the payments must be made
through Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable
on application remitted through normal banking channels or out of funds held in NRE Accounts
or FCNR Accounts, maintained with banks authorised to deal in foreign exchange in India, along
with documentary evidence in support of the remittance. Payment will not be accepted out of
NRO Account of the Non-Resident Bidder bidding on a repatriation basis. Payment by draft
should be accompanied by a bank certificate confirming that the draft has been issued by
debiting a NRE Account or a FCNR Account.

5. In the case of Bids by Eligible NRIs applying on a non-repatriation basis, the payments must be
made by Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount
payable on application, remitted through normal banking channels or out of funds held in NRE
Accounts or FCNR Accounts, maintained with banks authorised to deal in foreign exchange in
India, along with documentary evidence in support of the remittance or out of an NRO Account
of a Non-Resident Bidder bidding on a non-repatriation basis. Payment by drafts should be
accompanied by a bank certificate confirming that the draft has been issued by debiting an NRE
or a FCNR or an NRO Account.

6. In case of Bids by FIIs and FVCIs the payment should be made out of funds held in a special
rupee account along with documentary evidence in support of the remittance. Payment by draft
should be accompanied by a bank certificate confirming that the draft has been issued by
debiting a special rupee account.

7. Where a Bidder has been allocated a lesser number of Equity Shares than the Bidder has Bid for,
the excess amount, if any, paid on bidding, after adjustment towards the balance amount payable
on the Equity Shares allocated, will be refunded to the Bidder from the Refund Account.

8. The monies deposited in the Escrow Accounts will be held for the benefit of the Bidders until the
Designated Date.

9. On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow
Accounts as per the terms of the Escrow Agreement into the Public Issue Account.

10. No later than 15 days from the Bid/Issue Closing Date, the Escrow Collection Banks shall refund
all amounts payable to unsuccessful Bidders and the excess amount paid on Bidding, if any, after
adjusting for allocation to the Bidders.

11. Payments should be made by cheque, or demand draft drawn on any bank (including a co-
operative bank), which is situated at, and is a member of or sub-member of the bankers’
clearing house located at the centre where the Bid cum Application Form is submitted.
Outstation cheques/bank drafts drawn on banks not participating in the clearing process
will not be accepted and applications accompanied by such cheques or bank drafts are
liable to be rejected. Cash/Stockinvest/money orders/postal orders will not be accepted.

12. Bidders are advised to mention the number of application form on the reverse of the cheque /
demand draft to avoid misuse of instruments submitted along with the Bid cum Application
Form.

13. Incase clear funds are not available in the Escrow Accounts as per final certificates from the
Escrow Collection Banks, such Bids are liable to be rejected.

Payment by Stockinvest

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Under the terms of the RBI Circular No. DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5,
2003, the option to use the stockinvest instrument in lieu of cheques or bank drafts for payment of Bid
money has been withdrawn. Accordingly, payment through Stockinvest will not be accepted in this Issue.

Submission of Bid cum Application Form

All Bid cum Application Forms or Revision Forms duly completed and accompanied by account payee
cheques or drafts shall be submitted to the members of the Syndicate at the time of submission of the Bid.

Separate receipts shall not be issued for the money payable on the submission of Bid cum Application
Forms or Revision Forms. However, the collection centre of the members of the Syndicate will
acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning
to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid
cum Application Form for the records of the Bidder.

OTHER INSTRUCTIONS

Joint Bids in case of Individuals

Bids may be made in single or joint names (not more than three). In the case of joint Bids, all refund
payments will be made in favour of the Bidder whose name appears first in the Bid cum Application
Form or Revision Form. All communications will be addressed to the first Bidder and will be dispatched
to his or her address as per the Demographic Details received from the Depository.

Multiple Bids

A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares
required. Two or more Bids will be deemed to be multiple Bids if the sole or first Bidder is one and
the same.

In this regard, the procedures to be followed by the Registrar to the Issue to detect multiple applications
are given below:

1. All applications with the same name and age will be accumulated and taken to a separate process
file which would serve as a multiple master document.

2. In this master, a check will be carried out for the same PAN. In cases where the PAN numbers
are different, the same will be deleted from this master.

3. The addresses of all these applications from the multiple master will be strung from the address
master. This involves putting the addresses in a single line after deleting non-alpha and non-
numeric characters, i.e., commas, full stops, hashes etc. Sometimes, the name, the first line of the
address and pin code will be converted into a string for each application received and a photo
match will be carried out among all the applications processed. A print-out of the addresses will
be made to check for common names. Applications with the same name and same address will
be treated as multiple applications.

4. The applications will be scanned for similar DP ID and beneficiary account numbers. In cases
where applications bear the same numbers, these will be treated as multiple applications.

5. After the aforesaid procedures, a print-out of the multiple master will be taken and the
applications physically verified to tally signatures and also father’s/husband’s names. On
completion of this, the applications will be identified as multiple applications.

In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Funds and
such Bids in respect of more than one scheme of the Mutual Funds will not be treated as multiple Bids
provided that the Bids clearly indicate the scheme for which the Bid has been made.

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Bids made by Eligible Employees both under Employees Reservation Portion as well as in the Net Issue
shall not be treated as multiple Bids.

Our Company and the Selling Shareholders, in consultation with the BRLMs, reserve the right to reject, in
their absolute discretion, all or any multiple Bids in any or all categories.

Permanent Account Number (“PAN”)

The Bidder or in the case of a Bid in joint names, each of the Bidders, should mention his/her PAN
allotted under the I.T. Act. Applications without this information and documents will be
considered incomplete and are liable to be rejected. It is to be specifically noted that Bidders should
not submit the GIR number instead of the PAN, as the Bid is liable to be rejected on this ground.

Right to reject Bids by our Company and the Selling Shareholders

In case of QIB Bidders, our Company and the Selling Shareholders, in consultation with the
BRLMs, may reject Bids provided that the reason for rejecting the Bid shall be provided to such Bidders
in writing. In case of Non-Institutional Bidders and Retail Individual Bidders, our Company and the
Selling Shareholders will have a right to reject Bids based on technical grounds only. Consequent refunds
shall be made as described in this Draft Red Herring Prospectus and will be sent to the Bidder’s address at
the Bidder’s risk.

Grounds for Technical Rejections

Bidders are advised to note that Bids are liable to be rejected on, inter alia, the following technical
grounds:

1. Amount paid does not tally with the amount payable for the highest value of Equity Shares
Bid for;

2. Age of first Bidder not given;

3. In case of partnership firms, Equity Shares may be registered in the names of the individual
partners and no firm as such shall be entitled to apply;

4. Bids by persons not competent to contract under the Indian Contract Act, 1872 including minors
and insane persons;

5. PAN not stated;

6. Bids for lower number of Equity Shares than specified for that category of investors;

7. Bids at a price less than the lower end of the Price Band;

8. Bids at a price more than the higher end of the Price Band;

9. Bids at Cut-off Price by Non-Institutional Bidders and QIB Bidders and by Bidders in the
Employee Reservation Portion bidding in excess of Rs. 100,000;

10. Bids for a number of Equity Shares, which are not in multiples of [●];

11. Category not ticked;

12. Multiple Bids;

13. In the case of a Bid under power of attorney or by limited companies, corporates, trusts etc.,
relevant documents are not submitted;

14. Bids accompanied by Stockinvest/money order/postal order/cash;

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15. Signature of sole and/or joint Bidders missing;

16. Bid cum Application Form does not have the stamp of the BRLMs or the Syndicate Members;

17. Bid cum Application Form does not have the Bidder’s depository account details;

18. Bid cum Application Form is not delivered by the Bidder within the time prescribed as per the
Bid cum Application Form and the Red Herring Prospectus and as per the instructions in the Red
Herring Prospectus and the Bid cum Application Form;

19. In case no corresponding record is available with the Depositories that matches three parameters,
namely, names of the Bidders (including the order of names of joint holders), the Depository
Participant’s identity (DP ID) and the beneficiary account number;

20. Bids for amounts greater than the maximum permissible amounts prescribed by the regulations;

21. Bids by QIBs not submitted through members of the Syndicate;

22. Bids by OCBs;

23. Bids by U.S. residents or U.S. persons excluding “Qualified Institutional Buyers” as defined in
Rule 144A under the Securities Act or other than in reliance on Regulation S under the
Securities Act;

24. Bids by persons who are not eligible to acquire Equity Shares under any applicable law, rule,
regulation, guideline or approval, inside India or outside India;

25. Bids in respect where the Bid cum Application form do not reach the Registrar prior to the
finalisation of the Basis of Allotment;

26. Bids where clear funds are not available in Escrow Accounts as per final certificate from the
Escrow Collection Banks;

27. Bids by any person outside India if not in compliance with applicable foreign and Indian Law;

28. Bids by persons prohibited from buying, selling or dealing in the shares directly or indirectly
by SEBI or any other regulatory authority;

29. Bids not uploaded in the Book would be rejected;

30. Bids or revision thereof by QIB Bidders and Non – Institutional Bidders where the Bid
amount is in excess of Rs. 100,000, uploaded after 3.00 pm or any such time as prescribed by
Stock Exchange on the Bid / Issue closing Date;

31. Bids by persons who are not Eligible Employees and have submitted their Bids under the
Employee Reservation Portion;

32. Bids not duly signed by sole/joint Bidders; and

33. Bids which do not comply with securties laws at their specific jurisdictions.

Equity Shares in Dematerialised form with NSDL or CDSL

As per the provisions of section 68B of the Companies Act, the Equity Shares in this Issue shall be
allotted only in a dematerialised form (i.e., not in the form of physical certificates but fungible statements
issued in electronic mode).

In this context, two tripartite agreements have been signed among our Company, the respective
Depositories and the Registrar to the Issue:

396
(a) an agreement dated [●], 2008 among NSDL, our Company and the Registrar to the Issue; and

(b) an agreement dated [●], 2008 among CDSL, our Company and the Registrar to the Issue.

Bidders will be allotted Equity Shares only in dematerialised mode. Bids from any Bidder without
relevant details of his or her depository account are liable to be rejected.

1. A Bidder applying for Equity Shares must have at least one beneficiary account with the
Depository Participants of either NSDL or CDSL prior to making the Bid.

2. The Bidder must necessarily fill in the details (including the beneficiary account number and
Depository Participant’s identification number) appearing on the Bid cum Application Form or
Revision Form.

3. Allotment to a successful Bidder will be credited in electronic form directly to the beneficiary
account (with the Depository Participant) of the Bidder.

4. Names in the Bid cum Application Form or Bid Revision Form should be identical to those
appearing in the account details with the Depository. In case of joint holders, the names should
necessarily be in the same sequence as they appear in the account details with the Depository.

5. If incomplete or incorrect details are given under the heading “Bidders Depository Account
Details’ in the Bid cum Application Form or Bid Revision Form, it is liable to be rejected.

6. The Bidder is responsible for the correctness of his or her Demographic Details given in the Bid
cum Application Form vis-à-vis those recorded with his or her Depository Participant.

7. Equity Shares in electronic form can be traded only on the Stock Exchanges having electronic
connectivity with NSDL and CDSL. All the Stock Exchanges where the Equity Shares are
proposed to be listed have electronic connectivity with CDSL and NSDL.

8. The trading of the Equity Shares would be in dematerialised form only for all investors in the
demat segment of the respective Stock Exchanges.

COMMUNICATIONS

All future communications in connection with Bids made in this Issue should be addressed to the
Registrar to the Issue quoting the full name of the sole or first Bidder, Bid cum Application Form number,
details of Depository Participant, number of Equity Shares applied for, date of Bid cum Application
Form, name and address of the member of the Syndicate where the Bid was submitted and cheque or draft
number and issuing bank thereof.

Investors can contact the Contact Person/Compliance Officer or the Registrar to the Issue in the case of
any pre-Issue or post-Issue related problems such as non-receipt of letters of Allotment, credit of allotted
shares in the respective beneficiary accounts, refund orders etc.

PAYMENT OF REFUND

Bidders should note that on the basis of the name of the Bidders, Depository Participant’s name,
Depository Participant identification number and beneficiary account number provided by them in the Bid
cum Application Form, the Registrar to the Issue will obtain from the Depository the Bidder’s bank
account details including a nine digit MICR code. Hence, Bidders are advised to immediately update their
bank account details as appearing on the records of the Depository Participant. Please note that failure to
do so could result in delays in credit of refunds to Bidders at the Bidder’s sole risk and neither our
Company nor the Syndicate Members nor the Escrow Collection Banks nor the BRLMs shall have any
responsibility and undertake any liability for the same.

Mode of making refunds

397
The payment of refund, if any, would be done through various modes in the following order
of preference:

1. ECS – Payment of refund would be done through ECS for applicants having an account at any
of the following 68 centers: Ahmedabad, Bangalore, Bhubaneshwar, Kolkata, Chandigarh,
Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna,
Thiruvananthapuram (managed by RBI); Baroda, Dehradun, Nashik, Panaji, Surat, Trichy,
Trichur, Jodhpur, Gwalior, Jabalpur, Raipur, Calicut, Siliguri (Non-MICR), Pondicherry,
Hubli, Shimla (Non-MICR), Tirupur, Burdwan (Non-MICR), Durgapur (Non-MICR),
Sholapur, Ranchi, Tirupati (Non-MICR), Dhanbad (Non-MICR), Nellore (Non-MICR) and
Kakinada (Non-MICR) (managed by State Bank of India); Agra, Allahabad, Jalandhar,
Lucknow, Ludhiana, Varanasi, Kolhapur, Aurangabad, Mysore, Erode, Udaipur, Gorakpur
and Jammu (managed by Punjab National Bank); Indore (managed by State Bank of Indore);
Pune, Salem and Jamshedpur (managed by Union Bank of India); Visakhapatnam (managed
by Andhra Bank); Mangalore (managed by Corporation Bank); Coimbatore and Rajkot
(managed by Bank of Baroda); Kochi/Ernakulum (managed by State Bank of Travancore);
Bhopal (managed by Central Bank of India); Madurai (managed by Canara Bank); Amritsar
(managed by Oriental Bank of Commerce); Haldia (Non-MICR) (managed by United Bank of
India); Vijaywada (managed by State Bank of Hyderabad); and Bhilwara (managed by State
Bank of Bikaner and Jaipur). This mode of payment of refunds would be subject to
availability of complete bank account details including the MICR code as appearing on a
cheque leaf, from the Depositories. The payment 324 of refunds is mandatory for applicants
having a bank account at any of the abovementioned 68 centers, except where the applicant,
being eligible, opts to receive refund through direct credit or RTGS.

2. NEFT - Payment of refund may be undertaken through NEFT wherever the applicants’ bank
has been assigned the Indian Financial System Code (“IFSC”), which can be linked to a
MICR, if any, available to that particular bank branch. IFSC Code will be obtained from the
website of RBI as at a date immediately prior to the date of payment of refund, duly mapped
with MICR numbers. Wherever the applicants have registered their nine digit MICR number
and their bank account number while opening and operating the demat account, the same will
be duly mapped with the IFSC Code of that particular bank branch and the payment of refund
will be made to the applicants through this method.

3. Direct Credit—Applicants having their bank account with the Refund Banker shall be eligible to
receive refunds, if any, through direct credit. Charges, if any, levied by the Refund Bank(s) for
the same will be borne by our Company.

4. RTGS—Applicants having a bank account at any of the 68 centres detailed above, and whose
Bid Amount exceeds Rs. 1.0 million, shall have the option to receive refunds, if any, through
RTGS. Such eligible applicants who indicate their preference to receive refunds through RTGS
are required to provide the IFSC code in the Bid cum Application Form. In the event of failure to
provide the IFSC code in the Bid cum Application Form, the refund shall be made through the
ECS or direct credit, if eligibility is disclosed. Charges, if any, levied by the Refund Bank(s) for
the same will be borne by our Company. Charges, if any, levied by the applicant’s bank
receiving the credit will be borne by the applicant.

5. Please note that only applicants having a bank account at any of the 68 centres where clearing
houses for ECS are managed by the RBI are eligible to receive refunds through the modes
detailed hereinabove. For all the other applicants, including applicants who have not updated
their bank particulars along with the nine-digit MICR Code, the refund orders will be dispatched
“Under Certificate of Posting” for refund orders of value up to Rs. 1,500 and through Speed
Post/Registered Post for refund orders of Rs. 1,500 and above. Some refunds will be made by
cheques, pay orders or demand drafts drawn on the Escrow Collection Banks and payable at par
at places where Bids are received. Bank charges, if any, for cashing such cheques, pay orders or
demand drafts at other centres will be payable by the Bidders.

Interest on refund of excess Bid Amount

398
Our Company shall pay interest at the rate of 15% per annum on the excess Bid Amount received if
refund orders are not dispatched within 15 days from the Bid/Issue Closing Date.

DISPOSAL OF APPLICATIONS AND APPLICATIONS MONEY AND INTEREST IN CASE

OF DELAY

Our Company shall ensure dispatch of Allotment advice, transfer advice or refund orders and give benefit
to the beneficiary account with Depository Participants and submit the documents pertaining to the
Allotment to the Stock Exchanges within 15 days of the Bid/Issue Closing Date. Our Company shall
dispatch refunds above Rs. 1,500, if any, by registered post or speed post at the sole or first Bidder’s sole
risk, except for Bidders who have opted to receive refunds through the ECS facility or RTGS or
Direct Credit.

Our Company shall use its best efforts to ensure that all steps for completion of the necessary formalities
for Allotment and trading at all the Stock Exchanges where the Equity Shares are proposed to be listed are
taken within seven Business Days of the finalisation of the Basis of Allotment.

In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI
Guidelines, we further undertake that:

• Allotment only in dematerialised form shall be made within 15 days of the Bid/Issue
Closing Date;

• Dispatch refund orders, except for Bidders who have opted to receive refunds through the ECS
facility, shall be made within 15 days of the Bid/Issue Closing Date; and

• Our Company shall pay interest at 15% per annum for any delay beyond the 15 day time period
as mentioned above, if Allotment is not made or if, in a case where the refund or portion thereof
is made in electronic manner, the refund instructions have not been given to the clearing system
in the disclosed manner, and/or demat credits are not made to investors within the 15 day time
period prescribed above.

Our Company will provide adequate funds required for dispatch of refund orders or Allotment
advice to the Registrar to the Issue.

No separate receipts shall be issued for the money payable on the submission of Bid cum Application
Forms or Revision Forms. However, the collection centre of the Syndicate Members will acknowledge
the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning to the Bidder
the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum
Application Form for the records of the Bidder.

Save and except refunds effected through the electronic mode, i.e., ECS, NEFT, direct credit or RTGS,
refunds will be made by cheques, pay orders or demand drafts drawn on a bank appointed by us, as an
Escrow Collection Bank and payable at par at places where Bids are received, except for Bidders who
have opted to receive refunds through the ECS facility. Bank charges, if any, for encashing such cheques,
pay orders or demand drafts at other centres will be payable by the Bidders.

IMPERSONATION

Attention of the applicants is specifically drawn to the provisions of sub-section (1) of section 68A of
the Companies Act, which is reproduced below:

“Any person who:

(a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any
shares therein, or

(b) otherwise induces a company to allot, or register any transfer of shares therein to him, or any
other person in a fictitious name,

399
 shall be punishable with imprisonment for a term which may extend to five years”.

ALLOTMENT

Basis of Allotment

A. For Retail Individual Bidders

• Bids received from Retail Individual Bidders at or above the Issue Price shall be
grouped together to determine the total demand under this portion. The Allotment to all
successful Retail Individual Bidders will be made at the Issue Price.

• The Net Issue size less Allotment to Non-Institutional Bidders and QIB Bidders shall
be available for Allotment to Retail Individual Bidders who have bid in the Issue at a
price that is equal to or greater than the Issue Price.

• If the valid Bids in this portion are less than or equal to [●] Equity Shares at or above
the Issue Price, full Allotment shall be made to Retail Individual Bidders to the extent
of their valid Bids.

• If the valid Bids in this portion are greater than [●] Equity Shares at or above the Issue
Price, the allocation shall be made on a proportionate basis of not less than [●] Equity
Shares and in multiples of one Equity Share thereafter. For the method of proportionate
basis of allocation, refer below.

B. For Non-Institutional Bidders

• Bids received from Non-Institutional Bidders at or above the Issue Price shall be
grouped together to determine the total demand under this portion. The Allotment to all
successful Non-Institutional Bidders will be made at the Issue Price.

• The Net Issue size less allocation to QIB Bidders and Retail Individual Bidders shall be
available for allocation to Non-Institutional Bidders who have bid in the Issue at a price
that is equal to or greater than the Issue Price.

• If the valid Bids in this portion are less than or equal to [●] Equity Shares at or above
the Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent
of their valid Bids.

• If the valid Bids in this portion are greater than [●] Equity Shares at or above the Issue
Price, allocation shall be made on a proportionate basis of not less than [●] Equity
Shares and in multiples of one Equity Share thereafter. For the method of proportionate
basis of allocation, refer below.

C. For Employee Reservation Portion

• Bids received from the Eligible Employees at or above the Issue Price shall be grouped
together to determine the total demand under this category. The allocation to all the
successful Eligible Employees will be made at the Issue Price.

• If the aggregate demand in this category is less than or equal to 100,000 Equity Shares
at or above the Issue Price, full allocation shall be made to the Eligible Employees to
the extent of their demand. The maximum bid under Employee Reservation Portion by
an Eligible Employee cannot exceed Rs. [●].

• If the aggregate demand in this category is greater than 100,000 Equity Shares at or
above the Issue Price, the allocation shall be made on a proportionate basis up to a
minimum of [•] Equity Shares and in multiples of [•] Equity Share thereafter. For the
method of proportionate basis of allocation, refer below.

400
 • Only Eligible Employees are eligible to apply under the Employee Reservation Portion.

D. For QIB Bidders

• Bids received from QIB Bidders at or above the Issue Price shall be grouped together to
determine the total demand under this portion. The allocation to QIB Bidders will be
made at the Issue Price.

• The QIB Portion shall be available for allocation to QIB Bidders who have bid in the
Issue at a price that is equal to or greater than the Issue Price.

• Allotment shall be undertaken in the following manner:

(a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion shall be
determined as follows:

(i) If bids from Mutual Funds exceed 5% of the QIB Portion, allocation to Mutual Funds
shall be made on a proportionate basis for up to 5% of the QIB Portion.

(ii) If the aggregate demand from Mutual Funds is less than 5% of the QIB Portion, then all
Mutual Funds shall get full Allotment to the extent of valid Bids received above the
Issue Price.

(iii) Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds shall be
available to QIB Bidders as set out in (b) below.

(b) In the second instance allocation to all Bidders shall be determined as follows:

(i) In the event of an oversubscription in the QIB Portion, all QIB Bidders who have
submitted Bids above the Issue Price shall be Allotted Equity Shares on a proportionate
basis for up to 95% of the QIB Portion.

(ii) Mutual Funds who have received allocation as per (a) above, for less than the number
of Equity Shares bid for by them, are eligible to receive Equity Shares on a
proportionate basis along with other QIB Bidders.

(iii) Under-subscription below 5% of the QIB Portion, if any, from Mutual Funds, would be
included for allocation to the remaining QIB Bidders on a proportionate basis.

The BRLMs, the Registrar to the Issue and the Designated Stock Exchange shall ensure that the Basis of
Allotment is finalised in a fair and proper manner in accordance with the SEBI Guidelines. The drawing
of lots (where required) to finalise the Basis of Allotment shall be done in the presence of a public
representative on the Governing Board of the Designated Stock Exchange.

Procedure and Time of Schedule for Allotment and demat Credit of Equity

The Issue will be conducted through a “100% Book Building Process” pursuant to which the members of
the Syndicate will accept bids for the Equity Shares during the Bidding/Issue Period. The Bidding/Issue
Period will commence on [●], 2008 and expire on [●], 2008. Following the expiration of the
Bidding/Issue Period, our Company and the Selling Shareholders, in consultation with the BRLMs, will
determine the Issue Price, and, in consultation with the BRLMs and the Selling Shareholders, the basis of
allocation and entitlement to Allotment based on the bids received and subject to confirmation by the
BSE/NSE. Successful bidders will be provided with a confirmation of their allocation (subject to a revised
confirmation of allocation) and will be required to pay any unpaid amount for the Equity Shares within a
prescribed time. The SEBI Guidelines require our Company to complete the Allotment to successful
bidders within 15 calender days of the expiration of the Bidding/Issue Period. The Equity Shares will
then be credited and Allotted to the investors’ demat accounts maintained with the relevant depository
participant. Upon approval by the Stock Exchanges, the Equity Shares will be listed and trading
will commence.

401
Method of proportionate Basis of Allotment

In the event the Issue is oversubscribed, the Basis of Allotment shall be finalised by our Company, in
consultation with the BRLMs and the Designated Stock Exchange. The executive director or managing
director (or any other senior official nominated by them) of the Designated Stock Exchange along with
the BRLMs and the Registrar to the Issue shall be responsible for ensuring that the Basis of Allotment is
finalised in a fair and proper manner. Allotment to Bidders shall be made in marketable lots on a
proportionate basis as explained below:

(a) Bidders will be categorised according to the number of Equity Shares applied for by them.

(b) The total number of Equity Shares to be Allotted to each category as a whole shall be arrived at
on a proportionate basis, which is the total number of Equity Shares applied for in that category
(number of Bidders in the category multiplied by the number of Equity Shares applied for)
multiplied by the inverse of the oversubscription ratio.

(c) The number of Equity Shares to be allotted to the successful Bidders will be arrived at on a
proportionate basis, which is the total number of Equity Shares applied for by each Bidder in that
category multiplied by the inverse of the oversubscription ratio.

(d) If the proportionate Allotment to a Bidder is a number that is more than [●] but is not a multiple
of one (which is the market lot), the decimal will be rounded off to the higher whole number if
that decimal is 0.5 or higher. If that number is lower than 0.5, it will be rounded off to the lower
whole number. Allotment to all Bidders in such categories shall be arrived at after such
rounding off.

(e) In all Bids where the proportionate Allotment is less than [●] Equity Shares per Bidder, the
Allotment shall be made as follows:

• Each successful Bidder shall be Allotted a minimum of [●] Equity Shares; and

• The successful Bidders out of the total Bidders for a portion shall be determined by the
drawing of lots in a manner such that the total number of Equity Shares Allotted in that
category is equal to the number of Equity Shares calculated in accordance with
(c) above; and

(f) If the Equity Shares allocated on a proportionate basis to any category are more than the Equity
Shares Allotted to the Bidders in that portion, the remaining Equity Shares available for
Allotment shall be first adjusted against any other category, where the Equity Shares are not
sufficient for proportionate Allotment to the successful Bidders in that category. The balance of
Equity Shares, if any, remaining after such adjustment will be added to the category comprising
Bidders applying for the minimum number of Equity Shares.

Illustration of Allotment to QIBs and Mutual Funds (“MF”)

Issue details

Particulars Issue details

Issue size 200 million Equity Shares
Allocation to QIB (at least 60% of the Issue) 120 million Equity Shares
Of which:
a. Reservation For Mutual Funds, (5%) 6 million Equity Shares
b. Balance for all QIBs including Mutual Funds 114 million Equity Shares
Number of QIB applicants 10
Number of Equity Shares applied for 500 million Equity Shares

Details of QIB Bids

S. No. Type of QIBs No. of shares bid for

(in million)

402
 S. No. Type of QIBs No. of shares bid for
(in million)
1. A1 50
2. A2 20
3. A3 130
4. A4 50
5. A5 50
6. MF1 40
7. MF2 40
8. MF3 80
9. MF4 20
10. MF5 20
11. Total 500
__________
* A1-A5: (QIBs other than Mutual Funds), MF1-MF5 (QIBs which are Mutual Funds)
Details of Allotment to QIBs Applicants

Aggregate
Allocation of 5% Allocation of 95% Equity allocation to
Type of QIB Shares bid for Equity Shares Shares Mutual Funds
(I) (II) (III) (IV) (V)
(Number of equity shares in million)
A1 50 0 11.52 0
A2 20 0 4.60 0
A3 130 0 29.94 0
A4 50 0 11.52 0
A5 50 0 11.52 0
MF1 40 1.2 8.97 9.68
MF2 40 1.2 8.97 9.68
MF3 80 2.4 17.96 20.36
MF4 20 0.6 4.49 5.09
MF5 20 0.6 4.49 5.09
500 6 114 49.99

Notes:

1. The illustration presumes compliance with the requirements specified in this Draft Red Herring
Prospectus in the section “Issue Structure” beginning on page 370.

2. Out of 120 million Equity Shares allocated to QIBs, 6 million (i.e., 5%) will be Allotted on a
proportionate basis among five Mutual Fund applicants who applied for 200 million Equity
Shares in the QIB Portion.

3. The balance 114 million Equity Shares i.e., 120 - 6 (available for Mutual Funds only) will be
Allotted on a proportionate basis among 10 QIB Bidders who applied for 500 million Equity
Shares (including 5 Mutual Fund applicants who applied for 200 million Equity Shares).

4. The figures in the fourth column entitled “Allocation of balance 114 million Equity Shares to
QIBs proportionately” in the above illustration are arrived at as explained below:

For QIBs other than Mutual Funds (A1 to A5) = Number of Equity Shares Bid for × 114/494

For Mutual Funds (MF1 to MF5) = (No. of shares bid for (i.e., in column II of the table above)
less Equity Shares Allotted (i.e., column III of the table above) × 114/494

The numerator and denominator for arriving at the allocation of 114 million Equity Shares to the
10 QIBs are reduced by 6 million shares, which have already been Allotted to Mutual Funds in
the manner specified in column III of the table above.

403
Undertakings by our Company

Our Company undertakes as follows:

• that complaints received in respect of this Issue shall be dealt with expeditiously and
satisfactorily;

• that all steps will be taken for the completion of the necessary formalities for listing and
commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to
be listed within seven Business Days of finalisation of the Basis of Allotment;

• that our Company shall apply in advance for the listing of Equity Shares;

• that the funds required for making refunds to unsuccessful applicants as per the mode(s)
disclosed shall be made available to the Registrar to the Issue by our Company;

• that where refunds are made through electronic transfer of funds, a suitable communication shall
be sent to the applicant within 15 days of the Bid/Issue Closing Date, giving details of the bank
where refunds shall be credited along with amount and expected date of electronic credit
of refund;

• that the refund orders or Allotment advice to the Non-Resident Bidders shall be dispatched
within the specified time; and

• except any allotment pursuant to the Pre-IPO Placement, no further issue of Equity Shares shall
be made until the Equity Shares offered through the Red Herring Prospectus and the Prospectus
are listed or until the Bid monies are refunded on account of non-listing, under-subscription etc.

Undertakings by Lehman Brothers Opportunity Limited, an affiliate of Lehman Brothers

Securities Private Limited, and Omnia Investments Private Limited as the Selling Shareholders:

The Selling Shareholders severally undertake the following:

• that the Equity Shares being sold pursuant to the Offer for Sale have been held by it for a period
of more than one year and the Equity Shares are free and clear of all liens or encumbrances and
shall be transferred to the successful Bidders within the specified time;

• it shall not have recourse to the proceeds of the Offer for Sale until the final listing and trading
approvals from all the Stock Exchanges have been obtained.

Utilisation of Fresh Issue proceeds

The Board of Directors certifies that:

• all monies received out of the Issue shall be credited/transferred to a separate bank account other
than the bank account referred to in section 73(3) of the Companies Act;

• details of all monies utilised out of the Fresh Issue shall be disclosed under an appropriate
heading in the balance sheet of our Company indicating the purpose for which such monies have
been utilised;

• details of all unutilised monies out of the Fresh Issue, if any, shall be disclosed under the
appropriate head in the balance sheet of our Company indicating the form in which such
unutilised monies have been invested; and

• details of all unutilised monies out of the funds received from the Employee Reservation Portion
shall be disclosed under a separate head in the balance sheet of our Company, indicating the
form in which such unutilised monies have been kept.

404
Our Company shall not have recourse to the proceeds of the Fresh Issue and the Selling Shareholders
shall not have recourse to the proceeds of the Offer for Sale until the final listing and trading approvals
from all the Stock Exchanges have been obtained.

405
 SECTION VIII: MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION

Pursuant to Schedule II of the Companies Act and the SEBI Guidelines, the main provisions of the
Articles of Association relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and
transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below.
Please note that the each provision herein below is numbered as per the corresponding article number
in the Articles of Association. Certain defined terms used in the Articles of Association are set forth
below. All other defined terms used in this section have the meaning given to them in the Articles of
Association.

SHARE CAPITAL

3. The Authorised Share Capital of the Company shall be such amount as stated in the part V of the
Memorandum of Association of the Company or altered thereat, from time to time, with the rights,
privileges and conditions attaching thereto as are provided by the regulations of the Company for
the time being, with power to increase and reduce the capital of the Company and to divide the
shares in capital for the time being into several classes and attach thereto respectively such
preferential rights, privileges or conditions as may be determined by or in accordance with the
regulations of the Company and vary, modify or abrogate any such rights, privileges or conditions
in such manner as may be for the time being be provided by the regulations of the Company.

3A. The Investor shall be entitled to exercise the warrants subscribed by it on the Closing Date on
terms and in the manner agreed with the Company and the Modi Shareholders and evidenced by
the warrant certificate issued to the Investor.

4. Subject to the provisions of section 81 of the Act and these Articles in particular Article 4A,
Article 17A and Article 40B below, the Shares in the Capital of the Company for the time being
shall be under the control of the Directors who may issue, allot or otherwise dispose of the same or
any of them to such person, in such proportion and on such terms and conditions and either at a
premium or at par or (subject to the compliance with the provision of section 79 of the Act) at a
discount and at such time as they may from time to time think fit and with sanction of the
Company in the General Meeting to give to any person or persons the option or right to call for any
Shares either at par or premium during such time and for such consideration as the Directors think
fit, and may issue and allot Shares in the Capital of the Company on payment in full or part of any
property sold and transferred or for any services rendered to the Company in the conduct of its
business and any Shares which may so be allotted may be issued as fully paid up Shares and if so
issued, shall be deemed to be fully paid Shares. Provided that option or right to call shall not be
given to any person or persons without the sanction of the Company in the General Meeting.

4A 1. Subject to this Article 4A, the Shareholders shall have a pre-emptive right with respect to
future issuances by the Company of its Shares, or any securities convertible or exchangeable
into or exercisable for any Shares, or of shares of any class of its capital (“Securities”). Each
time the Company proposes to issue any Securities, the Company shall first offer such
Securities to the Shareholders on a proportionate basis.

2. If the Shareholders elect to subscribe for Securities pursuant to Article 4A.1 above, the
Company will issue and allot the relevant Securities to the relevant Shareholder in accordance
with the terms and conditions of the issue. The Company shall (and the Modi Shareholders
shall procure that the Company shall) obtain all approvals, regulatory and otherwise to
complete the issuance and allotment of the relevant Securities.

3. If either Shareholder does not elect to subscribe for all or a portion of its, respective,
entitlement to Securities pursuant to Clause 4A.2, then the other Shareholder shall be entitled
to subscribe for Securities not elected to be taken up by the first mentioned Shareholder.

4. The Company shall be free to offer any Securities not subscribed by the Shareholders pursuant
to Clauses 4A.2 and 4A.3 above to any third party as the Board determines, at the price and
otherwise on the terms and conditions of the issue.

406
 5. Any issuance of Securities by the Company to which this Article 4A applies shall comply with
the provisions of Section 81 of the Act.

6. The Company shall not issue (and the Modi Shareholders shall procure that the Company shall
not issue) any Securities without complying with this Article 4A.

4B 1. As soon as practicable on or after the first anniversary of the Closing Date and in any event
prior to completion of 24 months from the Closing Date, the Modi Shareholders and the
Company shall use their best endeavours to carry out an Initial Public Offering in accordance
with the rules and regulations of at least one of the Indian Exchanges or other international
exchanges, as appropriate, and other applicable laws. In the event of an Initial Public Offering,
Shares which are to be offered for sale shall be sold by the Shareholders in such proportions as
they may agree in writing at the relevant time but, at its option, the Investor shall have the
right to sell some or all of Shares held by it at that time in priority to Shares being sold by the
other Shareholders.

2. If an Initial Public Offering does not occur by the date of completion of 24 months from the
Closing Date, then the Investor shall have an option (the “Option”) of requiring the Modi
Shareholders to purchase all Shares held by the Investor and its Associated Companies (the
“Option Shares”), on the terms set out below:

2.1 The Option is exercisable by written notice from the Investor to the Modi
Shareholders (the “Option Notice”) given within 30 days after the date of
completion of 24 months from the Closing Date.

2.2 The Option Shares shall be purchased for an aggregate cash consideration in US$ at a
price and in the manner mutually agreed between the Investor and the Modi
Shareholders.

2.3 The completion of the transfer of the Option Shares shall be completed 14 Business
Days after the date of determination of the price of the Option Shares (the “Option
Date”) at such reasonable time and place that the Shareholders agree or, failing
which, at 1.00 p.m. at the registered office of the Company.

2.4 The Investor must deliver to the Modi Shareholders in respect of the Option Shares
on or before the Option Date:

a. duly executed share transfer forms and the relevant share certificates; or
b. where the Option Shares are in dematerialised form, duly executed delivery
instructions to its depository participant for the transfer of the Option Shares
from its depository account to the buyer’s depository account; and
c. a power of attorney in such form and in favour of such person as the buyer
may nominate to enable the buyer to exercise all rights of ownership in respect
of the Option Shares including voting rights.

2.5 The Modi Shareholders shall pay the Option Price to the Investor by telegraphic
transfer on the Option Date to the bank account of the Investor notified to it for this
purpose.
2.6 The Shareholders shall keep the Company informed, at all times, of the issue and
contents of any notice served pursuant to this Article 4B and any election or
acceptance relating to those notices.
2.7 The Shareholders waive their pre-emption rights to the transfer of Shares contained
in these Articles to the extent necessary to give effect to this Article 4B.

4C. 1. In the event of an Initial Public Offering, the Modi Shareholders and the Company shall (i)
take all actions necessary or required to carry out the Initial Public Offering in accordance
with all applicable laws including, without limitation, the Securities Exchange Board of India
(Disclosure and Investor Protection) Guidelines 2000, the Act, and the applicable listing
conditions of the Indian Exchanges and the applicable laws and regulations of the overseas
jurisdictions where Shares may be placed, (ii) appoint a syndicate of underwriters and legal

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 and other advisors and agents on terms satisfactory to the Investor and (iii) prepare a
prospectus and other offering materials in customary form, containing such disclosures as are
required by the applicable regulations and as are deemed necessary or advisable by the
underwriters and the other advisers to the Initial Public Offering.

2. The Investor shall not be obliged to subscribe for any new Shares issued for sale to the public
as part of an Initial Public Offering.

3. Investor shall not be, and the Modi Shareholders and the Company shall ensure that the
Investor is not:
(i) treated as a “promoter” under Indian law in connection with any Initial Public Offering;

(ii) obliged to take on any obligations of a “promoter” in connection with any initial Public
Offering; or

(iii) required to make any representations or warranties or grant any indemnities in connection
with an Initial Public Offering other than representations and warranties as to (i) the
Investor’s ownership of Shares to be offered to the public as part of such offering, (ii)
where the Investor has entered into an underwriting agreement in connection with the
Initial Public Offering, the Investor’s authority to enter into such underwriting agreement
and (iii) such other representations and warranties as may be required by applicable law.

4D. (a) Subject to Article 4A, where at any time after the expiry of two years from the formation of
the Company or at any time after the expiry of one year from the allotment of Equity Shares in
the Company made for the first time after its formation, whichever is earlier, it is proposed to
increase the subscribed Capital of the Company by allotment of further Equity Shares then:

(i) Such further Equity Shares shall be offered to the persons who, at the date of the offer, are
holders of the Equity Shares of the Company, in proportion, as nearly as circumstances
admit, to the Capital paid-up on those Equity Shares at that date;

(ii) The offer aforesaid shall be made by a notice specifying the number of Equity Shares
offered and limiting a time not being less than fifteen days from the date of the offer
within which the offer, if not accepted, will be deemed to have been declined.

(iii) The offer aforesaid shall be deemed to include a right exercisable by the person
concerned to renounce the Equity Shares offered to him or any of them in favour of any
other person and the notice as referred to in sub clause (ii) shall contain a statement of this
right.

(iv) After the expiry of the time specified in the notice aforesaid, or on receipt of earlier
intimation from the person to whom such notice is given that he declines to accept the
Equity Shares offered, the Board may dispose of them in such manner as they think most
beneficial to the Company.

(b) Notwithstanding anything contained in the preceding clause (a), the further equity shares
aforesaid may be offered to any persons (whether or not those persons include the persons
referred to in sub clause (i) of clause (a) hereof) in any manner whatsoever.

(i) If a Special Resolution to that effect is passed by the Company in general meeting, or

(ii) where no such Special Resolution is passed, if the votes cast (whether on a show of
hands, or on a poll, as the case may be) in favour of the proposal contained in the
resolution moved in that General Meeting (including the casting vote, if any, of the
Chairman) by Members who, being entitled so to do, vote in person, or where proxies
are allowed, by proxy, exceeds the votes, if any, cast against the proposal by
Members so entitled and voting and the Central Government is satisfied, on an
application made by the Board of Directors in this behalf, that the proposal is most
beneficial to the Company.

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 (c) Nothing in sub-clause (iii) of (a) hereof shall be deemed:

(i) To extend the time within which the offer should be accepted; or

(ii) To authorize any person to exercise the right of renunciation for a second time, on the
ground that the person in whose favour the renunciation was first made has declined to
take the shares comprised in the renunciation.

(d) Nothing in this Article shall apply to the increase of the subscribed capital of the company
caused by the exercise of an option attached to the debentures issued by the company:

(i) To convert such debentures or loans into shares in the company; or

(ii) To subscribe for shares in the company

PROVIDED THAT the terms of issue of such debentures or the terms of such loans include a term
providing for such option and such term:

(i) Either has been approved by the Central Government before the issue of Debentures or
the raising of the loans or is in conformity with rules, if any, made by that Government in
this behalf; and

(ii) In the case of Debentures or loans or other than Debentures issued to, or loans obtained
from the Government or any institution specified by the Central Government in this
behalf, has also been approved by the Special Resolution passed by the Company in
General Meeting before the issue of the loans.

4E. Any bonds, Debentures, Debenture-book or other securities may be issued at a discount, premium
or otherwise and may be issued on condition that they shall be convertible into Shares of any
denomination, and with any privileges and conditions as to redemption, surrender, drawing,
allotment of Shares and attending (but not voting) at General Meeting, appointment of Directors
and otherwise. Subject to Article 17A, Bonds or Debentures with the right to conversion into or
allotment of Shares shall be issued only with the consent of the Company in General Meeting
accorded by a Special Resolution.

5. Members who are registered jointly in respect of a share shall be severally as well as jointly liable
for the payment of all installments and calls due in respect of such shares.

TRANSFER AND TRANSMISSION OF SHARES

6. 6.1 Each Shareholder can, or can agree to:

(i) sell, transfer or otherwise dispose of, or grant any option over, any of its Shares or any
interest in its Shares; or

(ii) enter into any agreement in respect of the votes attached to any of its Shares, only after
complying with the provisions of Articles 6 and 9 to 12A, as appropriate. Any sale,
transfer, disposal or grant of option in breach of Articles 6 and 9 to 12A, shall be null and
void.

(i) Any Shareholder may transfer all or some of its Shares to an Associated Company on
giving prior written notice to the other Shareholders. An Associated Company must
be under an obligation to retransfer its Shares to the Shareholder or another
Associated Company of that Shareholder immediately if it ceases to be an Associated
Company.

(ii) Following a transfer of Shares to an Associated Company, the original transferring

Shareholder (but not a subsequent transferor in a series of transfers to Associated
Companies) shall remain subject to the terms of these Articles and shall be jointly

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 and severally liable with the transferee under these Articles as a Shareholder in
respect of the transferred Shares.

(iii) Where not all of Shares held by the original transferring Shareholder (but not a
subsequent transferor in a series of transfers) are transferred:

(i) the transferring Shareholder must be granted the exclusive right to exercise votes
in respect of each Share transferred on behalf of the transferee;

(ii) these Articles shall apply as if the transferring Shareholder and the transferee are
one Shareholder;

(iii) all the rights of the transferee under these Articles shall be exercised exclusively
by the transferring Shareholder;

(iv) any notice given by the transferring Shareholder under these Articles shall be
deemed also to be given by the transferee; and

(v) any notice required to be given to the transferee shall be given also to the
transferring Shareholder.

Any transferee of a Shareholder shall be obliged to execute a deed of adherence in a form

acceptable to the Modi Shareholders, the Investor and the Company.

7. Save as provided in Section 108 of the Act, no transfer of shares shall be registered unless a proper
instrument of transfer in writing in prescribed form duly stamped and executed by or on behalf of
the transferor and by or on behalf of the transferee and specifying the name, address and
occupation of the transferee has been delivered to the Company together with the certificate, or if
no such certificate be in existence, the letter of allotment of such shares in accordance with
provisions of Section 108 of the Act. The Company shall use a common form of transfer in all
cases. The transferor shall be deemed to remain a member in respect of such shares until the name
of the transferee shall have been entered in the register of members in respect thereof.

8. No transfer fee shall be charged for registration of transfer, transmission, probate, Succession
Certificate and Letters of Administration, Certificate of Death or Marriage, Power of Attorney or
similar other documents.

9. Transfers by the Investor

9.1 The Investor shall be entitled to transfer all or any of its Shares to a third party at any time
provided that the Modi Shareholders, or any of them, shall have, at their option, a right of
first refusal to purchase such Shares proposed to be sold by the Investor (the “Investor Sale
Shares”) upon the terms and conditions of this Article 9.

9.2 The Investor shall send to the Modi Shareholders a written notice (the “Investor Sale
Notice”) 30 Business Days prior to any Investor Sale Shares being offered to a third party.
The Investor Sale Notice shall specify the number of Shares being offered for sale, the
expected sale price per Investor Sale Share and any other proposed terms and conditions
relating to the sale and purchase of the Investor Sale Shares.

9.3 The delivery of an Investor Sale Notice shall constitute an offer by the Investor to the Modi
Shareholders which shall be irrevocable for 30 Business Days from the date of the Investor
Sale Notice (the “Investor Sale Notice Period”) to transfer to the Modi Shareholders the
Investor Sale Shares at the price and on the terms set out in the Investor Sale Notice.

9.4 Once the Modi Shareholders have received the Investor Sale Notice they may either:
(i) send a written notice to the Investor (an “Acceptance Notice”) within the Investor
Sale Notice Period accepting the offer set out in the Investor Sale Notice; or

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 (ii) send a written notice to the Investor within the Investor Sale Notice Period declining
the offer set out in the Investor Sale Notice; or

(iii) neither send an Acceptance Notice nor reply to the Investor Sale Transfer Notice
within the Investor Sale Notice Period. In this case the Modi Shareholders shall be
deemed not to have accepted the offer set out in the Investor Sale Transfer Notice.

9.5 If the offer set out in the Investor Sale Transfer Notice is:

(i) accepted, then the Investor must sell the Investor Sale Shares to the Modi
Shareholders in the manner contemplated in the Acceptance Notice; and

(ii) not accepted or not deemed to have been accepted, then the Investor shall be entitled,
during a period of 100 Business Days from the last day of the Investor Sale Notice
Period, to transfer the Investor Sale Shares at a price per Share at least equal to the
price, and on the terms and conditions, specified in the Investor Sale Notice.

9.6 If following the non-acceptance or deemed non-acceptance of an Investor Sale Notice

pursuant to Article 9.5(ii), the Investor does not complete the transfer of the Investor Sale
Shares within this 100 Business Day period, it may not thereafter transfer the Investor Sale
Shares except after issuing a further Investor Sale Notice in accordance with this Article 9.

9.7 Following the completion of the transfer of Shares pursuant to Article 9.1 and the execution
of a deed of adherence by the transferee of such Shares in a form acceptable to the Modi
Shareholders, the Investor and the Company:

(i) the Company shall (and the Modi Shareholders will procure that the Company shall)
approve the transfer of Shares to the transferee and register the name of the transferee
in the register of members of the Company as the holder of the transferred Shares;
and

(ii) Upon the request of the Investor, the rights of the Investor under these Articles may
be transferred (in whole or in part) in favour of the transferee of Shares and the
Company and the Modi Shareholders shall execute appropriate agreements and/or
documents to reflect the same. If any of the Company and the Modi Shareholders fail
to execute any such agreement/document within 14 days of the request by the
Investor, the Investor may execute it on behalf of such Parties and for such purpose
the Company and the Modi Shareholders irrevocably appoint the Investor as their
attorney for the purpose of executing any such agreement/document. The Company
and the Modi Shareholders shall ratify and confirm any action taken by the Investor
pursuant to this Article 9.8(ii).

10. 10.1 A Modi Shareholder may transfer its Shares to a third party only if it receives an offer (the
“Offer”):

(i) which is a bona fide Offer in writing;

(ii) from a third party which has its own financial resources to meet its obligations under
the Offer or has an unconditional and legally binding commitment from a lender(s)
for that finance;

(iii) which is irrevocable and unconditional;

(iv) which is for cash consideration only and for Shares of the selling Modi Shareholder
(the “Modi Sale Shares”) and all Shares, or the Shares of the Investor if it also elects
to accept the Offer; and

(v) which contains all material terms and conditions (including the price and the intended
completion date of the Offer) which shall be consistent with the provisions of Article
11.

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 10.2 If a Modi Shareholder(s) receives an Offer which it wishes to accept, it must immediately
give written notice (the “Modi Transfer Notice”) to the Investor, setting out:

(i) the period within which the Offer shall remain open to be accepted. This period must
be at least 40 Business Days from the date of the Modi Transfer Notice (the
“Acceptance Period”);

(ii) full details of all other terms and conditions of the Offer; and

(iii) an offer to sell all the Modi Sale Shares to the Investor or its nominee on the terms
and conditions as those contained in the Offer, and including a written irrevocable
offer by the third party offeror to buy all Shares, or the Relevant Proportion of
Shares, of the Investor at the Offer price.

10.3 Once the Investor has received a Modi Transfer Notice it may either:

(i) send a written notice to the selling Modi Shareholder within the Acceptance Period
declining the offer set out in the Modi Transfer Notice; or

(ii) send a written notice to the selling Modi Shareholder (a “Sale Notice”) within the
Acceptance Period offering to sell up to all of its Shares to the third party on the
same terms and conditions as those contained in the Offer (and the number of Shares
that the Investor proposes to sell shall be specified in the Sale Notice); or

(iii) send a written notice to the selling Modi Shareholder (a “Purchase Notice”) within
the Acceptance Period agreeing to purchase the Modi Sale Shares on the same terms
and conditions contained in the Offer; or

(iv) neither send a Purchase Notice or a Sale Notice nor reply to the Modi Transfer
Notice within the Acceptance Period. In this case, the Investor shall be deemed not to
have accepted the offers set out in the Modi Transfer Notice and not to have issued a
Purchase Notice or a Sale Notice.

11. The transfer of Shares in accordance with Article 6, 9 and 10 shall be made on the following terms:
11.1 completion of the transfer of Shares pursuant to an Acceptance Notice, Purchase Notice
or Sale Notice, as the case may be, shall be completed 14 Business Days after the date of
expiry of the Investor Sale Notice Period or Acceptance Period, as appropriate (the
“Transfer Date”), and at such reasonable time and place as the Shareholders agree or,
failing which, at 1.00 p.m. at the registered office of the Company;

11.2 the selling Shareholder(s) must deliver to the buyer in respect of Shares which it is selling
on or before the Transfer Date:

(i) duly executed share transfer forms, together with the relevant share certificates; or

(ii) where Shares are in dematerialised form, duly executed delivery instructions
to its depository participant for the transfer of the relevant Shares from its depository
account to the depository account of the buyer; and

(iii) a power of attorney in such form and in favour of such person as the buyer may
nominate to enable the buyer to exercise all rights of ownership in respect of Shares to
be sold including voting rights;

11.3 the buyer must pay the total consideration due for Shares to the selling Shareholder(s) by
telegraphic transfer to the bank account of the selling Shareholder(s) notified to it for the
purpose on the Transfer Date;

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 11.4 completion of the sale of Shares of all selling Shareholders must take place
simultaneously; and

11.5 in accordance with Article 12.

11A Refusal by Board to register transfer

Subject to Articles 7, 9 & 10 and provisions of section 111A and other applicable provisions of
the Act or any other law for time being in force, the Board may refuse, whether in pursuance of
any power of the Company under these Articles or otherwise, to register the transfer of, or the
transmission by operation of law of the right to, any Shares or interest of a Member in or
Debentures of the Company. The Company shall within one month from the date on which the
instrument of transfer, or the intimation of such transmission, as the case may be, was delivered
to Company, send notice of the refusal to the transferee and the transferor or to the person giving
intimation of such transmission, as the case may be, giving reasons for such refusal. Provided
that the registration of a transfer shall not be refused on the ground of the transferor being either
alone or jointly with any other person or persons indebted to the Company on any account
whatsoever except where the Company has a lien on Shares.

12. Terms and Consequences of Transfers of Shares

12.1 Transfer terms

Any sale and/or transfer of Shares pursuant to these Articles shall be on terms that those Shares:

i. are transferred free from all claims, pledges, equities, liens, charges and encumbrances;
and

ii. are transferred with the benefit of all rights attaching to them as at the date of the
relevant Deadlock Notice under Article 59.2, Purchase Notice under Article 10.3(iii),
Sale Notice under Article 10.3(ii), Default Notice under Article 60.3 or Option Notice
under Article 4B.2.1, as appropriate.

12.2 Registration

A transfer of Shares will not be approved for registration unless these Articles have been
complied with. Each share certificate issued by the Company shall carry the following
statement:
“Any disposition, transfer, charge of or dealing in any other manner in Shares represented
by this certificate is restricted by the Articles of Association of the Company.”

12.3 Further assurance

Each Shareholder and the Company shall do all things and carry out all acts (including
execution and delivery of all documents and forms required by regulatory authorities) which
are reasonably necessary to effect the transfer of Shares in accordance with these Articles in
a timely fashion. If any of the Company or the Modi Shareholders fail to do all the things
and carry out all such acts (including due execution of Share transfer forms and the relevant
Share certificates or due execution of delivery instructions to the depositary participant for
the transfer of Shares), the Investor may do all things and carry out all such acts on behalf of
such Parties and for such purpose they hereby irrevocably appoint the Investor as their
attorney for the purpose of doing all such things and carrying out all such acts. The
Company and the Modi Shareholders shall notify and confirm any action taken by the
Investor by the virtue of this Article 12.3.

12.4 Return of documents etc.

On ceasing to be a Shareholder, a Shareholder shall hand over to the Company material

correspondence, Budgets, Business Plans, schedules, documents and records relating to the

413
 business of the Company held by it or an Associated Company or any third party which has
acquired such matter through that Shareholder and shall not keep any copies.

12.5 Assumption of obligations

The Shareholders shall procure that no person other than an existing Shareholder acquires
any Shares unless it enters into a deed of adherence in the form acceptable to the Modi
Shareholders, the Investor and the Company.

12A.1 The Shareholders shall keep the Company informed, at all times, of the issue and
contents of any notice served pursuant to Articles 6 and 9 to 12 and any election or
acceptance relating to those notices.

12A.2 The Shareholders waive their pre-emption rights to the transfer of Shares contained in
these Articles to the extent necessary to give effect to Articles 6 and 9 to 12.

13. Deleted.

13B Issue of Certificates

Every member or allottee of Shares shall be entitled without payment, to receive one or more
certificates in marketable lot, for all the Shares of each class or denomination registered in his
name, or if the Directors so approve (upon paying such fees as the Directors may from time to
time determine) to several certificates, each for one or more of such Shares and the Company
shall complete and have ready for delivery such certificates within three months from date of
allotment, unless the conditions of issue thereof otherwise provide or within two months of the
receipt of application of registration of transfer, transmission, sub-division, consolidation or
renewal of any of its Shares as the case may be. Every certificates of Shares shall be under the
seal of the Company and shall specify the number and distinctive number of Shares in respect
of which it is issued and amount paid-up thereon and shall be in such form as the Directors
may prescribe and approve, provided that in respect of a Share or Shares held jointly by
several persons, the Company shall not be bound to issue more than one certificate and
delivery of a certificate of share to one or several joint holders shall be sufficient delivery to
all such holders.

13C Issue of new certificates in place of one defaced, lost or destroyed

If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the
back thereof for endorsement of transfer, then upon production and surrender thereof to the
Company, a new certificate may be issued in lieu thereof, and if any certificate is lost or
destroyed then upon proof thereof to the satisfaction of the Company and on execution of such
indemnity as the Company deems adequate, being given, a new certificate in lieu thereof shall
be given to the party entitled to such lost or destroyed certificate. Every certificate under the
Articles shall be issued without payment of fees or if the Directors so decide, or on payment of
such fees (not exceeding Rs.2/- for each certificate) as the Directors shall prescribe. Provided
that no fee shall be charged for issue of new certificates in replacement of those which are old,
defaced or worn out or where is no further space on the back thereof for endorsement of
transfer.

Provided that notwithstanding what is stated above the Directors shall comply with such rules
or regulations or requirements of any Stock Exchange or the rules made under the Act or the
rules made under Securities Contracts (Regulation) Act, 1956 or any other Act, or rules
applicable in this behalf.

The provisions of this Article shall mutatis mutandis apply to Debentures of the Company

13D Calls in Advance

13D.1 The Board may, if it thinks fit, subject to the provisions of Section 92 of the Act,
agree to and receive from any Shareholder willing to advance the same all or any part

414
 of the money due upon the Share held by him beyond the sums actually called for
and upon the money so paid in advance, or upon so much thereof as from time to
time exceeds the amount of the call then made upon the Shares in respect of which
such advance has been made, the Company may pay interest at such rate as the
Member paying such sum in advance but shall not in respect thereof confer a right to
dividend or to participate in profits. Money so paid in excess of the amount of call
shall not rank for dividends or confer a right to participate in profits. The Board may
at any time re-pay the amount so advanced upon giving to such Member not less than
three months notice in writing.

13D.2 No shareholder paying any such sum in advance shall be entitled to voting rights in
respect of the money so paid by him, until the same would but for such payment,
become presently payable.

13D.3 The provisions of these Articles shall mutatis mutandis apply to the calls on
Debentures of the Company.

13E Company’s Lien on Shares and Debentures

Subject to the Articles, the Company shall have a first and paramount lien upon all the
Shares/Debentures (other then fully paid-up Shares/Debentures) registered in the name of each
Member (whether solely or jointly with others) and upon the proceeds of sale thereof for all
moneys(whether presently payable or not) called or payable at a fixed time in respect of such
Shares/Debentures and no equitable interest in any Share shall be created except on the
condition that this Article will have full effect and such lien shall extend to all dividends and
bonuses from time to time declared in respect of such Shares/Debentures. Unless otherwise
agreed the "registration of a transfer of Shares/Debentures shall operate as a waiver of the
Company's lien, if any, on such Shares/Debentures. The Directors may at any time declare any
Shares/Debentures wholIy or in part to be exempt from the provisions of this Article.

That fully paid Shares shall be free from all liens, and that in the case of partly paid Shares,
the Company's lien shall be restricted to money called for or payable at a fixed time in respect
of such Shares.

PROCEEDINGS OF THE GENERAL MEETINGS

14. No business shall be transacted at any General Meeting unless a quorum of members is present.
Five members personally present shall be the quorum for a General Meeting.

15. If within half an hour from the time appointed for holding a meeting a quorum is not present, the
meeting, if called upon the requisition of members, shall stand dissolved. In any other case the
meeting shall stand adjourned to the same day in the next week at the same time and place or to
such other day and at such other time and place.

16. The chairman of the board of directors shall preside at every general meeting. If there be no such
chairman or if he is not present or if he is not present within 15 minutes of the time appointed for
holding the meeting or is unwilling to act as Chairman of the Meeting, then the members present
shall elect another director present as the chairman and if no director is present or if all the
directors present decline to take the chair, then the members present shall elect one of their
members to be the chairman of the meeting.

17. Subject to Article 17A set out below, on a show of hands every member present in person shall
have one vote. Subject to Article 17A set out below, on a poll, every member in person or by
proxy shall have one vote in respect of each share held by him.

17A. Notwithstanding anything to the contrary contained in these Articles, for so long as the Investor or
any of its Associated Companies owns at least 7.5 per cent of the Shares, the Company shall not,
and the Modi Shareholders shall procure that the Company shall not, take any action or step or
pass any resolution in relation to any of the matters listed below (each a “Reserved Matter”)

415
unless such matter has been approved in writing (or at a General Meeting of the Shareholders, in
accordance with the procedure for such meeting) by the Investor:

(i) any change to the Company’s memorandum of association and these Articles or the articles
of association of any Group Company;

(ii) any material change in the nature of the business of the Company as on the Closing Date or
the way in which the business of the Company is carried on, which is reasonably expected
to result in a material change to the approved Business Plan or the approved Budget;

(iii) the appointment and removal of the Auditors or the auditors of any other Group Company;

(iv) any change of name of any Group Company;

(v) the adoption of the Audited Accounts;

(vi) any change to the accounting reference date or accounting policies of any Group Company,
except as recommended by the statutory auditors of the Company;

(vii) the presentation of any petition for winding-up or the cessation of any business operation of
any Group Company;

(viii) any change in the share capital or the creation, allotment or issue of any shares or of any
other financial instrument or the grant of any option or rights to subscribe for or to convert
any instrument into such shares or financial instruments of any Group Company;

(ix) any reduction of the share capital or variation of the rights attaching to any class of shares or
any redemption, purchase or other acquisition by any Group Company of any shares or
other securities of that company;

(x) the entry into of any joint venture, partnership, consortium or other similar arrangement by
any Group Company;

(xi) the appointment, removal and conditions of employment of the company secretary or any
director or the chief executive officer, chief operating officer, chief financial officer or chief
marketing officer of any Group Company (other than the appointment or removal of
Directors of the Company in accordance with these Articles);

(xii) the appointment, discharge and conditions of employment of any employee of the Group
earning the Rs equivalent of US$100,000 or more each year;

(xiii) the adoption of any amendment by any Group Company of any share option or share
incentive scheme or employee share trust or share ownership plan or retirement benefit
scheme;

(xiv) the sale merger, demerger, acquisition, consolidation, reconstruction, recapitalisation,

amalgamation or other similar business combination of any Group Company with any other
company;

(xv) any material change to the nature or geographical area of the business of the Company
outside India, or the carrying on of any business other than the business as on the Closing
Date or the change in the nature or geographical area of the business of any Group
Company;

(xvi) the adoption of a new business plan (but only if it is materially different from the Business
Plan) and any material amendment to the Business Plan;

(xvii) the adoption of any new budget (but only if it is materially different from the Budget) and
any material amendment to the Budget (for this purpose “material” shall mean in excess of
10 per cent, in aggregate, of the relevant amount set out in a Budget);

416
 (xviii) the entry into, amendment or termination of, any contract or commitment not provided for
in the Budget under which the Company or the Group may incur costs of the Rs equivalent
of US$150,000 or more or which may not be fulfilled or completed within one year;

(xix) any transaction by a Group Company with a Modi Shareholder or any of its Associated
Companies;

(xx) the acquisition or sale or disposition of any assets or property (other than in the ordinary
course of business) at an aggregate cost (in a financial year) of more than the Rs equivalent
of US$150,000 by the Group;

(xxi) the borrowing of amounts which when aggregated with all other borrowings (or
indebtedness in the nature of borrowings) of the Group would exceed the Rs equivalent of
US$100,000, or the creation of any charge or other security over any assets or property of
any Group Company (in each case, in excess of the relevant limits set out in the Business
Plan and Budget) except for the purpose of securing borrowings (or indebtedness in the
nature of borrowings) from bankers in the ordinary course of business of amounts not
exceeding in the aggregate the Rs equivalent of US$10,000;

(xxii) the disposal of or dilution of the Company’s interests, directly or indirectly, in any Group
Company;

(xxiii) any deviation from the approved dividend policy in Article 45A.3 or the payment of any
dividend or the repurchase or redemption of any Shares or securities of the Company or any
Group Company (that involves either a distribution or capitalisation of the profits of the
Company or a Group Company, as the case may be) otherwise than in accordance with
Article 45A.3 or any change thereto;

(xxiv) the commencement or settlement of any litigation, arbitration or other proceedings which
are material in the context of its business (for these purposes, a monetary claim shall be
deemed to be material if the amount in issue exceeds the Rs equivalent of US$10,000);

(xxv) the incorporation of a new subsidiary or the acquisition of any share capital or other
securities of any body corporate by a Group Company;

(xxvi) the giving of any guarantee or indemnity other than in the normal course of its business by
any Group Company;

(xxvii) the making of any loan or advance to any person, firm, body corporate or other
business (including to a Group Company) other than in the normal course of business and
on an arms’ length basis by any Group Company;

(xxviii) effecting an initial public offering of the Company and any steps connected therewith
including the determination of the timing, size and pricing for any such initial public
offering or the selection of underwriters in connection with the same;

(xxix) the granting of any security or creating any encumbrance on any asset of any Group
Company;

(xxx) the making of or committing to capital expenditures and investments exceeding 10 per cent
of the capital expenditure set out in the approved Business Plan or the approved Budget; and

(xxxi) the delegation of authority or any of the powers of the Board to any individual.

For the avoidance of doubt it is clarified that a series of related transactions shall be construed as a
single transaction, and any amounts involved in the related transactions shall be aggregated.

18. Where a body corporate, whether a Company within the meaning of the Act or not (hereinafter
called “member Company”) is a member of the Company, a person duly appointed by a resolution

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 of its board of directors or other governing body in accordance with the provisions of Section 187
of the Act, as its representative at any meeting of the Company, shall not, by reason of such
appointment be deemed to be a proxy, and a copy of such resolution certified as a true copy by a
Director or officer of such member company and lodged with the Company at its office or
produced at the meeting shall be accepted as sufficient evidence of the validity of his appointment.
Such person shall be entitled to exercise the same rights and powers including the right to vote by
proxy on behalf of the member company which he represents, as that member company could
exercise it if were individual member.

18A. The general meeting of the Company at which Audited Accounts are laid before the Shareholders
shall be held not later than two months after the end of the relevant financial year.

MANAGEMENT

19. Subject to the provisions of the Act and these Articles, the control of the Company shall be vested
in the Directors, who shall be entitled to exercise all such powers and to do all such acts and things
as the Company is authorised to exercise and do, subject nevertheless to such regulations not
inconsistent with the aforesaid provisions, as may be prescribed by the Company in general
meeting but on such regulation made by the Company in general meeting shall invalidate any prior
act of the Board if otherwise valid.

DIRECTORS

20. The Board shall consist of not less than 3 and not more than 12 Directors.

20A 1 For so long as the Investor or any of its Associated Companies owns at least 7.5 per cent of the
Shares, the Investor shall be entitled to appoint one Director on the Board of the Company.
The Investor Director shall not have a determinate term of office and shall not be liable to
retire by rotation.

20A 2 The Investor may at any time remove the Investor Director and appoint a new Investor Director
in his or her place by notice in writing to the Company and the Modi Shareholders. In such
event the Company shall and the Shareholders shall procure that the Company shall promptly
remove the Investor Director from his or her position and appoint the new Investor Director in
his or her place.

21. The Director shall not be required to hold any qualification shares in the Company.

22. The following persons are the first Directors of the Company. The Directors of the Company are
not liable to retire by rotation :-

1. ATUL PRAKASH
2. RAVINDER LAL AHUJA

23. 1. The Investor shall be entitled to nominate an alternate director for the Investor Director, and
the Board shall and the Modi Shareholders shall procure that the Board shall appoint
such person as an alternate director. Subject as aforesaid, the Board may appoint any
alternate director to act for a Director (except for the Investor Director) during his absence.
Such appointment by the Investor or the Board, as the case may be, shall be for a period
not less than three months from the State in which meetings of the Board are ordinarily held
and such appointment shall have effect.

2. The alternate director whilst he holds office as such, shall be entitled to notice of meeting of
the Board and to attend and vote thereat accordingly; and shall ipso facto vacate office if and
when the original Director returns to the State in which meetings of the Board are ordinarily
held or the original Director vacates office as a Director subject to Section 313 of the Act.

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24. The Directors shall have power, at any time and from time to time, to appoint any other person to
be additional director, but so that the number of the directors shall not at any time exceed the
maximum fixed by Article 20 above. The Board of Directors shall also have the power to fill any
casual vacancy in the Board. Any Director appointed as an additional director or to fill a casual
vacancy shall continue in office till the next annual general meeting held after such appointment
but shall be eligible for appointment by the Company as a Director at the meeting, subject to the
provisions of the Act.

25. Where any investment and finance corporation, such as the Industrial Finance Corporation of
India, Industrial Credit and Investment Corporation of India or any other Corporation or Bank or
the Central or State Government obtain shares in the Company, makes loans to the Company or
gives guarantee in connection with the grant of a loan to or the supply of machinery or other
equipment for the Company or subscribe to any share capital of the Company and by the terms of
such loan, advance, guarantee or acquisition of shares, any such body becomes entitled to appoint
director or directors of the Company if that be agreed to as a condition of the grant of a loan or
giving such guarantee, the Directors so appointed shall not be liable to retire by rotation and have
the same powers and privileges as other directors of the Company and shall hold office at the
pleasure and shall be removable or substituted by another person by any such Corporation, Bank or
Government as the case may be. In addition to the director’s fee provided in these Articles, such
directors shall be paid such travelling and other expenses for attending the board’s meetings as
may provided under the rules of Corporation, Bank or Government which they represent.

26. The Directors shall be entitled to the following :

(a) A sitting fee as provided under Companies Act, 1956, and Rules farmed thereunder for
attending each meeting of Board of Directors or Sub-Committee thereof respectively.

(b) Such travelling and other expenses for attending meetings of the Board or Sub-committees of
for business of the Company, as the directors may determine, from time to time.

27. Subject to the provisions of Section 314 of the Act, if any director, being willing shall be called
upon to perform extra services or to make any special exertion in going or residing away from the
usual place of his residence for any of the purposes of the Company or as a member of a
committee of the Board or otherwise, then the board may remunerate such directors either by a
fixed sum or by a percentage of profits or otherwise and such remuneration may be either in
addition to or in substitution for any other such remuneration to which he may otherwise be
entitled.

28. Subject to Section 297 and 299 of the Companies Act, 1956, no director shall be disqualified from
his office by contracting with the Company either as vendor, purchaser, consultant, selling agent or
otherwise, nor shall any such contract or arrangement entered into by or on behalf of the Company
in which any director shall be concerned or interested be avoided, nor shall any directors so
contracting or being so concerned or interested be liable to account to the Company for any profit
realised by any such contract or arrangement by reason of such directors holding that office or of
the fiduciary relations thereby established, but the nature of interest must be disclosed by him at
the meeting of the directors at which the contract or arrangement is determined if his interest then
exists or in any other case at the first meeting of the directors after the acquisition of his interest,
but these provisions shall not apply to any contract by or on behalf of the company to give to the
directors or any of them any security by way of indemnity against any loss which they or any of
them may suffer by reasons of becoming sureties for the Company. A general notice that a director
is a member of any subsequent transaction with such firm or Company shall as regards any such
transaction be sufficient disclosure under this clause and after such general notice it shall not be
necessary to give any special notice relating to any particular contract with such firm or Company.

POWERS OF THE DIRECTORS

29. Subject to the provisions of the Act, the business of the Company shall be managed by the
directors who may pay all such expenses, preliminary or incidental, to the promotion, formation,
establishment and registration of the Company and also compensate any promoter for services

419
 rendered therewith, as they think fit, and may exercise all such powers and do all such acts as may
be exercised or done by the Company in General Meeting but subject nevertheless to any
regulation in these Articles, and to the provisions of any of any statute and to any regulations not
inconsistent with these Articles made by the Company in general meeting but no regulation made
by the Company in General Meeting shall invalidate any prior act of the Directors which would
have been valid if such regulation had not been made.

29A The Board may constitute committees of Directors. The Board shall, if requested by the Investor,
appoint the Investor Director to any committee constituted by the Board. The provisions of
Articles 20A.1and 35.1 shall apply mutatis mutandis to the appointment and presence of the
Investor Director on the committees.

30. The Directors may, from time to time and at any time, provide through local boards, attorneys or
agencies, for the management of the affairs of the Company in India and aboard and may appoint
any person to be the member of such local boards or as attorneys or agents and may fix their
remuneration.

31. The Director may, subject to Section 58A and 292 of the Companies Act, 1956, from time to time,
accept money or deposit or raise, borrow any sum of money for and in the name of the Company
from the members or other persons, companies, financial institutions, Government or Semi
Government or public, and/ or from banks or any other source upon such terms and conditions as
the directors may think and approve and in particular issue debentures and debentures stocks,
(perpetual or otherwise).

32. The Directors may secure repayment of such deposits money, borrowed or raised by mortgage,
hypothecation, charge and/or lien upon all or any of the Company’s property, movable or
immovable, assets (both present and future) including its uncalled capital and also by a similar
charge, mortgage hypothecation, or lien to secure or to guarantee the performance by the Company
of any obligation undertaken by the directors for and on behalf of the Company.

33. Any debentures, bonds or other securities may be issued at discount premium or otherwise and
with special privilege or for redemption, surrender, drawing allotment of shares and attending at
General Meeting of the Company and otherwise.

PROCEEDINGS OF THE BOARD

34. 1. Board meetings shall be held at least four times a year and at not more than three-calendar
monthly intervals. At least 10 clear days’ written notice shall be given to each of the Directors
of all Board meetings at address that may be notified by them to the Company from time to
time (except if there are exceptional circumstances or the majority of the Directors agree to
shorter notice, provided that when the meeting is being called to discuss any Reserved
Matter, such majority must also include the Investor Director).

2. Each notice of meeting shall:

(i) specify a reasonably detailed agenda;

(ii) be accompanied by any relevant papers; and
(iii) be sent by courier or facsimile transmission if sent to an address outside India.

35. 1. The quorum at a Board meeting shall be one third of its total strength or two directors,
whichever is higher, present at the time when the relevant business is transacted, except where
the relevant business relates to a Reserved Matter in which case the presence of the Investor
Director shall be necessary to constitute a quorum.
If a quorum is not present within half an hour of the time appointed for the meeting or ceases
to be present, the Director(s) present shall adjourn the meeting to a specified place and time
seven Business Days after the original date. Notice of the adjourned meeting shall be given by
the company secretary of the Company.

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 2. Subject to Section 299 of the Act, any Director may vote on a matter and be taken into
account for the purposes of a quorum even if he or she is interested in that matter.

36. The Chairman of the board of director shall be entitled to take the chair at every meeting of the
Board. If there is no such Chairman or if in any meeting, he is not present within 15 minutes of the
time appointed for holding such meetings, then the directors present shall elect one of their
numbers to be the Chairman of the meeting.

37. A Director may, on the request of a director shall, at any time convene a meeting of the Board.

38. All business arising at any Board meeting shall be determined by resolution passed by a majority
of Directors present (provided that a resolution in relation to a Reserved matter will not be deemed
to have been validly passed unless the majority includes the Investor Director). The Chairman shall
not be entitled to a second or casting vote.

39. A meeting of the directors at which a quorum is present shall be competent to exercise all or any of
the authorities, powers and discretions by or under the Act, and these Articles vested in exercisable
by the directors.

40. Subject to the provisions of the Act and Articles 35.1 and 40B, and except a resolution which the
Act requires specifically to be passed in a Board meeting, a resolution in writing signed by the
majority of the members of the Board or a committee thereof, for the time being entitled to receive
notice of the meeting of the Board or a committee, shall be as valid and effectual as if it had been
passed at a meeting of the Board or committee duly convened and held and may consist of several
documents in the like form each signed by one or more Directors.

40A. Subject to, and when permitted under the Act, the Board, and any committee of the Board, shall
be entitled to meet by conference telephone or other communication equipment which allows
those participating to hear and speak to each other. A Director taking part in such a conference
shall be deemed to be present in person at the meeting and shall be entitled to vote or be counted
in a quorum accordingly. Such a meeting shall be deemed to take place where the largest group
of those participating is assembled or, if there is no such group, where the chairman of the
meeting then is.

40B. Notwithstanding anything to the contrary contained in these Articles, for so long as the Investor
or any of its Associated Companies owns at least 7.5 per cent of the Shares, the Company shall
not, and the Modi Shareholders shall procure that the Company shall not, take any action or step
or pass any resolution in relation to any of the Reserved Matters unless such matter has been
approved in writing (or at a meeting of the Board in accordance with the procedure for such
meeting) by the Investor Director.

CHAIRMAN

41. (a) The Board shall appoint a chairman of its meeting and determine the period for which he is
to hold office.

(b) The Chairman of the Board of the Company shall preside as chairman at every general
meeting of the Company.

(c) If no such chairman is appointed, the directors present will choose some one of their
numbers to be chairman of such meeting.

42. The chairman of the board shall be subject to the same provisions as to appointment and removal
as the other directors and he shall, ipso facto and immediately, cease to be the chairman if he
ceased to hold the office of director for any cause.

MANAGING DIRECTOR

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43. Subject to section 197A of the Act, the Board may from time to time, appoint any one or more
Directors to be the Managing Director(s) of the Company on such terms and conditions as the
Board may think fit and for a fixed terms or without any limitation as to the period for which he is
to hold such office, and may, from time to time, (subject to the provisions of any contract between
him and the Company) remove or dismiss him from office and appoint another in his place.

44. A Managing Director shall, in addition to the remuneration payable to him as a director of the
Company as sitting fee, receive such remuneration as may be sanctioned by the Board, from time
to time and such remuneration may be fixed by way of fixed salary or commission or participation
in profits or by any other modes

DIVIDENDS

45. Subject to Sections 205 and 206 of the Act, the Company or the Board as the case may be may,
from time to time, declare and pay to the Shareholders, such dividends including interim dividends
as may appear to be justified by the profits of the Company.

45A. 1 The Company shall instruct its Auditors to report the amount of the profits available for
distribution by the Company at the same time as they sign their report on the Audited
Accounts.

45A.2 Subject to Article 40B, the Company shall and the Shareholders shall procure that the
Company shall distribute to the Shareholders, in proportion to their holding of Shares in the
Company, the Company’s profits lawfully available for distribution in each financial year in
accordance with Article 45A.3 (“Approved Dividend Policy”).

45A. 3 The Company shall and the Modi Shareholders shall procure that the other Group Companies
shall distribute to their shareholders their available profits in each financial year as follows:

(i) Each Group Company shall pay by way of dividend to its shareholders in each year at
least 70 per cent of its profits available for distribution as determined by the Auditors.
Each Group Company shall seek to pay dividends on a semi-annual basis; the payment
and amount of any such interim dividends shall be at the discretion of the board of
directors of such Group Company.

(ii) Dividends shall, so far as is practicable, be paid on a consistent basis.

46. A transfer of shares shall not pass the right to any dividend declared thereon before the registration
of the transfer by the Company.

47. No dividend shall be paid in respect of any share except to the member registered in respect of
such share or to his order to his bankers but nothing contained in this Article shall be deemed to
require the bankers of a member to make a separate application to the Company for the payment of
the dividend.

48. Where the Company has declared a dividend but which has not been paid or claimed within 30
days from the date of declaration, it shall transfer the total amount of dividend which remains
unpaid or unclaimed within the said period of 30 days, to a special account to be opened by the
company in that behalf in any scheduled bank, to be called the “Unpaid Dividend Account". Any
money transferred to the unpaid dividend account of the Company which remains unpaid or
unclaimed for a period of seven years from the date of such transfer, shall be transferred by the
Company to a fund known as investor education and protection fund established under section
205C of the Act.

No unclaimed or unpaid dividend shall be forfeited by the Board, unless it becomes barred by law.

CAPITALISATION OF PROFITS

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49. (1) The Company in General Meeting may, upon the recommendation of the Board, resolve:

(a) that it is desirable to capitalise any part of the amount for the time being standing to the
credit of the Company’s reserve accounts or to the credit of the Profit and Loss Account,
or otherwise available for distribution; and

(b) that such sum be accordingly set free for the manner specified in clause (2) among the
members, who would have been entitled thereon, if distributed by way of dividend and in
the same proportions.

(2) The sum aforesaid shall not be paid in cash, but shall be applied subject to the provisions
contained in clause (3) either in or towards:-

(i) paying up any amount for the time being unpaid on any shares held by such members
respectively.

(ii) paying up in full, unissued shares of the Company to be allotted and distributed, credited
as fully paid up, to and amongst such members in the proportions aforesaid; or

(iii) partly in the way specified in sub-clause (i) and partly in that specified in sub-clause (ii).

(3) Any share premium account and any capital redemption reserve fund may for the purpose of
this regulation, only be applied the paying up of unissued share to be issued to members of the
Company as fully paid up bonus shares.

(4) The Board shall give effect to the resolution passed by the Company in pursuance of this
regulation.

50. (1) Whenever such a resolution as aforesaid shall have been passed, the Board shall :-

(a) make all appropriations and application of the undivided profits resolved to be capitalise
thereby and allotment and issue of fully paid shares if any; and

(b) do all acts things required to give effect thereto.

(2) The Board shall have full power :-

(a) to make such provisions, by the issue of factional certificate or by payment in cash or
otherwise as it think fit, in the case of shares becoming distributable in fractions; and also.

(b) to authorise any person to enter, on behalf of all the members entitled thereto, into an
agreement with the Company providing for the allotment to be respectively credited as
fully paid up, of any further shares to which they may be entitled upon such
capitatalisation or (as the case may require) for the payment by the Company on their
behalf, by the application thereto of their respective proportions of the profits resolved to
be capitalised or any part of the amounts remaining unpaid on their exiting shares.

(3) Any agreement made under such authority shall be effective and binding on all such members.

BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

51. Balance sheet and Profit and Loss Account of the Company will be audited once in a year by a
qualified auditors for correctness as per provisions of the Act.

51A. The Company shall (and the Modi Shareholders shall procure that the Company shall) prepare
and submit to the Investor the following information as soon as possible and no later than the
dates/times set out below:

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 (i) the unaudited results of the Company and all Group Companies for the previous financial
year within 25 Business Days of the end of each financial year;

(ii) Audited Accounts or audited consolidation returns for the previous financial year within
two months of the end of each financial year;

(iii) a draft Business Plan for the Company and the Group for the following financial year two
months before the end of each financial year;

(iv) a detailed draft Budget for the Company and the Group for the following financial year
two months before the end of each financial year (including estimated major items of
revenue and capital expenditure). The Budget shall be broken down on a monthly basis,
shall contain a cash flow forecast and a balance sheet showing the projected position of
the Company and the Group as at the end of the following financial year;

(v) quarterly unaudited management accounts including (i) a detailed profit and loss account,
balance sheet and cash flow statement, (ii) an analysis of subscriptions and other revenue,
(iii) a review of the Budget including a reconciliation of results with revenue and capital
budgets, and (iv) a statement of the source and application of funds within 20 Business
Days after the end of each quarter;

(vi) written notice of any litigation threatened or initiated against the Company or any Group
Company which, in the reasonable opinion of the Company and/or the Modi
Shareholders, is likely to have a material adverse effect on the business or prospects of
the Company (or Group Company, as the case may be), within 15 Business Days of the
Company becoming aware of the same; which notice shall contain (so far as is
practicable) sufficient details of the relevant matter so as to allow the Investor to
understand its nature and background and the likely impact on the Company (or Group
Company, as the case may be) (for this purpose a monetary claim for the Rs. equivalent
of US$100,000 shall be deemed to have a material adverse effect);

(vii) monthly statements of the revenues of the Company and the Group from each category of
business of the Company and the Group after the end of each month; and

(viii) such further information as any Shareholder may require relating to the Business or
financial condition of the Company or of any Group Company.

INSPECTION OF ACCOUNTS

52. The Board shall cause proper books of accounts to be maintained under Section 209 of the Act.

AUDIT

53. The first auditors of the Company shall be appointed by the Board of directors who shall hold
office till conclusion of the first annual general meeting.

53A. The Company shall appoint one of the Auditors as the auditors of the Company.

54. The Directors may fill up any casual vacancy in the office of the auditors.

55. The remuneration of the auditors shall be fixed by the Company in the annual general meeting
except that remuneration of the first or any auditors appointed by the Directors may be fixed the
Directors.

COMMON SEAL

56. The Company shall have a Common seal and the directors shall provide for the safe custody
thereof. Except as otherwise required by the Act and the rules framed thereunder the seal shall not

424
 be affixed to any instrument except by the authority of a resolution of the board and except in the
presence of at least one director or such other person as the board may appoint for the purpose and
each director and such other person as aforesaid shall sign every instrument to which the seal of
the Company is so affixed in his presence. This is, however, subject to Rule 6 of the Companies
(Issue of Shares Certificates) Rules, 1960.

SECRECY

57. Subject to the provisions of the Act, no member or other person (not being a director) shall be
entitled to require the discovery of any information respecting the Company’s business or any
matter which is or may be in the nature of trade secret or secret process relating to the conduct of
the business of the Company and which in the opinion of the directors will be inexpedient in the
interest of the Company to communicate, or to inspect or examine the premises or properties of the
Company without the permission of the directors.

INDEMNITY

58. Subject to the provision of Section 201 of the Companies Act, 1956, the Directors, Auditors,
Managing Director(s), Secretary and other officers for the time being of the Company and trustees
for the time being in relation to any of the affairs of the Company, their heirs executors and
administrators respectively shall be indemnified out of the assets of the Company from and against
all bonafide suits, proceedings, costs, charges, losses, damages and expenses which they or any of
them shall or may incur or sustained by reason of any act done or omitted to be done in or about
the execution of their duties in their respective offices or trust except such (if any) as they shall or
may incur or sustain by or through their own wilful neglect or default respectively.

58A The Company shall (and the Modi Shareholders shall procure that the Company shall) procure
from a financially reputable insurer a policy of director’s insurance with respect to the Investor
Director in an amount and coverage satisfactory to the Investor. A certificate of insurance and
evidencing such director’s insurance shall be delivered by the Company to the Investor. For as
long as an Investor Director serves as a director on the Board of Directors of the Company or
any other Group Company, the Company shall maintain the said policy of director’s insurance
with respect to the Investor Director in an amount and coverage satisfactory to the Investor and
shall deliver to the Investor certificates of insurance evidencing the existence and timely renewal
of said policy of director’s insurance.

59. Deadlock

59.1 Escalation procedure

If the Board or Shareholders, as the case may be, cannot reach agreement on any
Reserved Matter within 30 Business Days from the date on which such Reserved Matter
was first presented in writing to the Board or the Shareholders, as appropriate (a
“Deadlock Matter”), the Deadlock Matter shall be resolved in accordance with the
procedure mutually agreed between the Shareholders.

59.2 Deadlock resolution

If the Deadlock Matter cannot be resolved in accordance with Article 59.1 within 30
Business Days (or such further period that the Investor and the Modi Shareholders may
agree in writing) and either the Investor or the Modi Shareholders considers in good faith
that the Deadlock Matter may materially and adversely affect their interests or the
interests of the Company, the Investor or the Modi Shareholders may, during the 10
Business Day period from and including the date which is the day after the expiry of the
30 Business Day period (or such further period) referred to above, serve a written notice
on the other (the “Deadlock Notice”). If the Investor and the Modi Shareholders deliver a
Deadlock Notice within seven Business Days of each other, the Deadlock Notice which

425
 states the higher Deadlock Price shall prevail. A Deadlock Notice delivered seven
Business Days after the delivery of an earlier Deadlock Notice shall be invalid and shall
be disregarded for the purposes of these Articles.

59.3 The Deadlock Notice shall set out the per Share price (“Deadlock Price”) at which the
sender(s) of the Deadlock Notice (the “Sender”) is willing to both sell for cash in US$ all
of its Shares to the recipient of the Deadlock Notice (the “Recipient”) or its nominee and
willing to buy all Shares held by the Recipient (in either case, the “Deadlock Shares”).
The Deadlock Price shall be binding on the Investor and the Modi Shareholders.

59.4 The Deadlock Notice is open for acceptance by the Recipient for 30 Business Days from
the date of service of the Deadlock Notice (the “Deadlock Notice Period”). If the
Recipient does not elect to buy the Deadlock Shares before the end of the Deadlock
Notice Period at the Deadlock Price, it constitutes an offer by the Recipient to sell all of
its Shares to the Sender at the Deadlock Price (which shall be binding on the Sender).

59.5 Completion of transfer

The sale and purchase of the Deadlock Shares in accordance with this Article 59 shall be
made on the following terms:

1. completion of the transfer of the Deadlock Shares shall be completed 14 Business

Days after the end of the Deadlock Notice Period (the “Deadlock Sale Date”) at such
reasonable time and place as the Shareholders agree or, failing which, at 1.00 p.m. at
the registered office of the Company

2. the seller must deliver to the buyer in respect of the Deadlock Shares on or before the
Deadlock Sale Date:

(i) duly executed share transfer forms and the relevant share certificates; or

(ii) where the Deadlock Shares are in dematerialised form, duly executed delivery
instructions to its depository participant for the transfer of the Deadlock Shares
from its depository account to the buyer’s depository account; and

(iii) a power of attorney in such form and in favour of such person as the buyer
may nominate to enable the buyer to exercise all rights of ownership in respect
of the Deadlock Shares including voting rights;

3. the buyer shall pay the Deadlock Price per Share to the seller by telegraphic transfer
to the bank account of the seller notified to it for the purpose on the Deadlock Sale
Date; and

4. in accordance with Article 12.

59.6 General

1. The Shareholders shall keep the Company informed, at all times, of the issue and
contents of any notice served pursuant to this Article 59 and any election or
acceptance relating to those notices.

2. The Shareholders waive their pre-emption rights, if any, to the transfer of Shares
contained in these Articles to the extent necessary to give effect to this Article 59.

3. Deadlock Matters shall not be subject to any arbitration proceedings initiated

between the Company, the Investor and the Modi Shareholders except to the extent
that it relates to the interpretation of any agreement between the Shareholders and the
Company or their respective rights and obligations under such agreement.

60. 60.1 Events of Default

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A Modi Shareholder (the “Defaulting Shareholder”) suffers an event of default (each an
“Event of Default”) where:

1. it or any of its Associated Companies commits a breach of the terms of any of the
agreements between the Shareholders and the Company or the terms of the warrants
issued to the Investor and either (i) the breach is not capable of being remedied or (ii)
the Defaulting Shareholder does not remedy that breach within 14 Business Days of the
Investor sending it written notice requiring it to remedy that breach;

2. it is unable or admits inability to pay its debts as they fall due, suspends making
payments on any of its debts or, by reason of actual or anticipated financial difficulties;

3. the value of its assets is less than its liabilities;

4. any corporate action, legal proceedings or other procedure or step is taken (or any
analogous procedure or step is taken in any jurisdiction) in relation to:

(i) the suspension of payments, a moratorium of any indebtedness, winding-up,

dissolution, administration or reorganisation (whether done by way of voluntary
arrangement, scheme of arrangement or otherwise);

(ii) a composition, assignment or arrangement with any creditor (relating to debts in

excess of the Rs equivalent of US$2,000,000);

(iii) the appointment of a liquidator, receiver, administrator, administrative receiver,

compulsory manager or other similar officer in respect of any of its assets; or
(iv) enforcement of any security (the value of which exceeds the Rs equivalent of
US$ 2,000,000) over any of its assets;

5. it is subject to any change of Control (other than where the acquirer and persons acting
in concert with the acquirer are Associated Companies or Modi Shareholders); or

6. any of the events above occurs in relation to any holding company of it.

60.2 Notice of Event of Default

If an Event of Default occurs, the Defaulting Shareholder shall notify the other
Shareholders as soon as reasonably practicable.

60.3 Default Notice

Following an Event of Default, the Investor may give written notice (a “Default Notice”)
to the Defaulting Shareholder within 60 Business Days of receiving notification of the
Event of Default from the Defaulting Shareholder or of its becoming aware of the Event
of Default, whichever is earlier, requiring the Modi Shareholders to, at the Investor’s
option, either:

(i) purchase Shares held by the Investor and its Associated Companies (the “Sale
Shares”) for an aggregate cash consideration in US$ at a price and in the manner
mutually agreed between the Investor and the Modi Shareholders; or

(ii) sell all Shares held by the Modi Shareholders and their Associated Companies (also
the “Sale Shares”) to the Investor or its nominee for an aggregate cash consideration
in US$ at a price and in the manner mutually agreed between the Investor and the
Modi Shareholders.

60.4 Completion of transfer

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 The sale and purchase of the Sale Shares in accordance with this Article 60 shall be made
on the following terms:

(i) completion of the transfer of the Sale Shares shall be completed 14 Business Days
after the date of determination of the price of the Sale Shares (the “Transfer Date”)
at such reasonable time and place that the Shareholders agree or, failing which, at
1.00 p.m. at the registered office of the Company;

(ii) the selling Shareholder shall deliver to the buyer in respect of the Sale Shares on or
before the Transfer Date:

(a) duly executed share transfer forms and the relevant share certificates; or

(b) where the Sale Shares are in dematerialised form, duly executed delivery
instructions to its depository participant for the transfer of the Sale Shares
from its depository account to the relevant buyer’s depository account; and

(c) a power of attorney in such form and in favour of such person as the buyer
may nominate to enable the buyer to exercise all rights of ownership in
respect of the Sale Shares including, without limitation, the voting rights;

(d) the buyer shall pay the consideration for the Sale Shares to the selling
Shareholder by telegraphic transfer to the bank account of the selling
Shareholder notified to it for the purpose on the Transfer Date; and

(iii) in accordance with Article 12.

60.5 General

(i) The Shareholders shall keep the Company informed at all times of the issue and
contents of any notice served pursuant to this Article 60 and any election or
acceptance relating to those notices.

(ii) The Shareholders waive their pre-emption rights on the transfer of Shares contained
in these Articles to the extent necessary to give effect to this Article 60.]

(iii) The Shareholders shall do all things within their power to ensure that the business of
the Company continues to be run as a going concern during the period between the
service of the Default Notice and the completion of the transfer of the Sale Shares.

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 SECTION IX: OTHER INFORMATION

MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION

The following contracts (not being contracts entered into in the ordinary course of business carried on
by our Company or entered into more than two years before the date of this Draft Red Herring
Prospectus), which are or may be deemed material have been entered or to be entered into by our
Company. These contracts, copies of which have been attached to the copy of this Draft Red Herring
Prospectus, delivered to the RoC for registration and also the documents for inspection referred to
hereunder, may be inspected at the Registered Office/corporate office of our Company 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.

Material Contracts to the Issue

1. Letters of appointment, dated June 26, 2008, to the Book Running Lead Managers from our
Company appointing them as the Book Running Lead Managers.
2. Memorandum of Understanding between our Company and the Book Running Lead
Managers, dated June 26, 2008.
3. Memorandum of Understanding between our Company and Registrar to the Issue, dated June
26, 2008.
4. Escrow Agreement, dated [•], 2008 between our Company, the Book Running Lead
Managers, the Escrow Banks and the Registrar to the Issue.
5. Syndicate Agreement, dated [•], 2008 between our Company, the Book Running Lead
Managers and the Syndicate Members.
6. Underwriting Agreement, dated [•], 2008 between our Company, the Book Running Lead
Managers and Syndicate Members.
7. Agreement, dated [•], 2008 between NSDL, our Company and the Registrar to the Issue.
8. Agreement, dated [•], 2008 between CDSL, our Company and the Registrar to the Issue.
9. In-principle listing approval, dated [•], 2008 and [•], 2008 from the BSE and NSE
respectively.
10. Due diligence certificate, dated June 26, 2008 to SEBI from Enam.

Material Documents

1. Our Memorandum and Articles, as amended from time to time.

2. Our certificate of incorporation dated April 4, 2000.
3. Board resolution, dated June 24, 2008 authorizing the Issue.
4. Shareholders’ resolution, dated June 24, 2008 authorizing the Issue.
5. Board resolution, dated March 27, 2008 fixing remuneration of our Managing Director.
6. Summary Statements of Assets and Liabilities and Summary Statement of Profits and Losses,
as Restated and Cash Flows, as Restated, under Indian GAAP as at and for the 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
7. Consolidated Summary Statements of Assets and Liabilities and Consolidated Summary
Statement of Profits and Losses, as Restated and Cash Flows, as Restated, under Indian GAAP
as at and for the for Fiscal 2007 and the nine months ended December 31, 2007

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8. Copies of annual reports of our Company for the years ended 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
9. Consent of our Auditors for inclusion of their reports on restated financial statements and
auditors report on audited financial statements as at and for the Financial 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, in the form and context in which they appear in this Draft Red Herring Prospectus.
10. Consents of IPO Grading Agency, Bankers to our Company, BRLMs, Syndicate Members,
Registrar to the Issue, Escrow Collection Bank(s), Bankers to the Issue, Domestic Legal
Counsel to our Company, Domestic Legal Counsel to the BRLMs, International Legal
Counsel to the BRLMs/Company, Directors, Company Secretary and Compliance Officer, as
referred to, in their respective capacities.
11. IPO Grading Letter by [•] dated [•].
12. SEBI observation letter [•] dated [•] and our in-seriatim reply to the same dated [•].
13. Share and Warrant Subscription Agreement dated November 22, 2006 with Lehman Brothers
Opportunity Limited, Omnia Investments Private Limited and MCorp (BVI) Limited.

14. Investor Rights’ Deed dated November 22, 2006 and an Investor Variance Deed dated June
10, 2008 with Lehman Brothers Opportunity Limited, Omnia Investments Private Limited ,
MCorp (BVI) Limited.

Any of the contracts or documents mentioned in this Draft Red Herring Prospectus may be amended or
modified at any time, if so required in the interest of our Company or if required by the other parties,
without reference to the shareholders, subject to compliance of the provisions contained in the
Companies Act and other relevant statutes.

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 DECLARATION

We, the Directors of the Company, our Chief Financial Officer and our Chief Executive Officer, certify
that all relevant provisions of the Companies Act, 1956, and the guidelines issued by the GoI or the
guidelines issued by Securities and Exchange Board of India, applicable, as the case may be, have been
complied with and no statement made in this Draft Red Herring Prospectus is contrary to the provisions
of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or the rules made
or guidelines issued thereunder, as the case may be, and that all approvals and permissions required to
carry on the business of our Company have been obtained, are currently valid and have been complied
with. We further certify that all the statements in this Draft Red Herring Prospectus are true and
correct. Please see chapter titled “Other Regulatory And Statutory Disclosures”; sub-heading
“Disclaimer from our Company, the Selling Shareholders and the BRLMs” of DRHP in respect of
Selling Shareholders information.

SIGNED BY THE DIRECTORS OF OUR COMPANY

Mr. K.N. Memani

Mr. Dilip Modi

Mr. Vivek Bali

Mr. Hanif M Dahya

Mr. Andreas Vourloumis

Ms. Divya Modi

SIGNED BY THE SELLING SHAREHOLDERS

We certify that all statements in respect of the Selling Shareholders are true and correct.

Lehman Brothers Opportunity Limited

Omnia Invstements Priavte Limited

SIGNED BY THE CHIEF EXECUTIVE OFFICER

Mr. Saket Agarwal

SIGNED BY THE CHIEF FINANCIAL OFFICER

Mr. Kartar Singh

Date: June 26, 2008

Place: Noida

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