Saregama

DRAFT LETTER OF OFFER
(Private and Confidential)

For Equity Shareholders of the Company only
Saregama India Limited

(Incorporated on August 13, 1946 with the name of “The Gramophone Co. (India) Limited”. The name of the Company
was subsequently changed to “The Gramophone Co. of India Limited” and with effect from April 1, 1956, the word
“Private” was added to its name. The Company was converted into a public Company on October 28, 1968 and
consequently the name of the Company was changed to “The Gramophone Company of India Limited”. Effective
November 3, 2000, the name of the Company was changed from “The Gramophone Company of India Limited” to
“Saregama India Limited” vide a fresh Certificate of Incorporation issued by the Registrar of Companies, West Bengal).
Registered Office: 33, Jessore Road, Dum Dum, Kolkata – 700 028, West Bengal, INDIA
Tel: +91 33 2551 2984 Fax: +91 33 2551 2461 E-mail: co.sec@saregama.co.in Website: www.saregama.com
DRAFT LETTER OF OFFER
Issue of upto 53,38,628 Equity Shares of Rs10 each for cash at a premium of Rs35 (Issue Price of Rs45)
per Equity Share on rights basis to the existing Equity Shareholders of the Company in the ratio of 4
(Four) Equity Shares for every 7 (Seven) Equity Shares held on Record Date [••] aggregating
Rs24,02,38,260.
The face value of the Equity Shares is Rs10 per share and the Issue Price is 4.5 times the face value.
GENERAL RISKS
Investment 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 on
Page i carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely
on their own examination of the Issuer and the Issue including the risks involved. The securities have not been
recommended or approved by Securities and Exchange Board of India (“SEBI”) nor does SEBI guarantee the accuracy or
adequacy of this document.
ISSUER’S ABSOLUTE RESPONSIBILITY
The Issuer, having made all reasonable inquiries, accepts responsibility for, and confirms that this Letter of Offer contains
all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information
contained in this Letter of Offer is true and correct in all material respects 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 document as a whole or any of such information or the expression of any such opinions or intentions
misleading in any material respect.
LISTING
The existing Equity Shares of the Company are listed on the National Stock Exchange of India Limited (“NSE”)
(“Designated Stock Exchange”), The Stock Exchange, Mumbai (“BSE”), The Calcutta Stock Exchange Association
Limited (“CSE”). Accordingly, the Company proposes to list the Equity Shares on NSE, BSE and CSE. The Company
has received in-principle approvals from BSE, NSE and CSE vide letters dated ___, 2005, ___, 2005 and ___, 2005
respectively.
LAST DATE FOR RECEIVING
ISSUE OPENS ON ISSUE CLOSES ON
REQUESTS FOR SPLIT FORMS
LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE
Securities
ICICI Securities Limited MCS Limited
ICICI Centre 77/2A, Hazra Road
H. T. Parekh Marg Ground Floor
Churchgate, Mumbai – 400 020, INDIA Kolkata – 700 029, INDIA
Tel: +91 22 2288 2460 Tel: +91 33 2476 7350 – 54
Fax: +91 22 2282 6580 Fax: +91 33 2454 1961, 2474 7674
E-mail: saregamarights@isecltd.com E-mail: mcscal@cal2.vsnl.net.in
TABLE OF CONTENTS
I. RISK FACTORS AND MANAGEMENT PERCEPTION THEROF i
II. GENERAL INFORMATION 1

III. CAPITAL STRUCTURE 8
IV. TERMS OF THE ISSUE 14
V. TAX BENEFITS 25
VI. PARTICULARS OF THE ISSUE 31
VII. MAIN OBJECTS UNDER THE MEMORANDUM OF ASSOCIATION 32
VIII. HISTORY AND BUSINESS OF THE COMPANY 33

IX. PROMOTER AND PROMOTER GROUP 40
X. MANAGEMENT OF THE COMPANY 49
XI. THE INDIAN ENTERTAINMENT INDUSTRY 57

XII. FINANCIAL PERFORMANCE OF THE COMPANY 62
XIII. MANAGEMENT DISCUSSION AND ANALYSIS 90
XIV. STOCK MARKET DATA 96

XV. BASIS FOR ISSUE PRICE 97
XVI. PROMISE VERSUS PERFORMANCE 98
XVII. OUTSTANDING LITIGATION AND DEFAULTS 100

XVII I. INVESTOR GRIEVANCES AND REDRESSAL SYSTEM 128
XIX. MATERIAL DEVELOPMENTS 128
XX. ISSUE EXPENSES 129

XXI. EXPERT OPINION 129
XXII OPTION TO SUBSCRIBE 129
XXIII. MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS 129

XXIV. DECLARATION 130
GLOSSARY OF TERMS/ ABBREVIATIONS
Act The Companies Act, 1956 and amendments thereto
AGM Annual General Meeting
Articles Articles of Association of the Company
AS Accounting Standards as issued by the Institute of Chartered Accountants of
India
Board Board of Directors of Saregama India Limited
BSE The Stock Exchange, Mumbai
CAF Composite Application Form
CAGR Compounded Annual Growth Rate
CD Compact Disc
CDSL Central Depository Services (India) Limited
Committee of Committee of the Board of Directors of Saregama India Limited authorised to
Directors take decisions on matters related to / incidental to this Issue
Company/ Saregama / Saregama India Limited
Issuer
CSE The Calcutta Stock Exchange Association Limited
CY Calendar Year ending on December 31
Depositories NSDL and CDSL
Designated Stock National Stock Exchange of India Limited (NSE)
Exchange
Directors Directors on the Board of the Company
DP Depository Participant
GM General Meeting
EPS Earnings per share
Equity Shareholders Equity shareholders of the Company whose names appear as
• Beneficial owners as per the list to be furnished by the depositories in
respect of the Equity Shares held in the electronic form and
• On the Register of Members of the Company in respect of the Equity Shares
held in physical form
Equity Shares The Equity Shares of the Company of Rs10 each
FCNR Account Foreign Currency Non Resident Account
FEMA Foreign Exchange Management Act, 1999 read with rules and regulations there
under and amendments thereto
FII(s) Foreign Institutional Investors registered with SEBI under applicable laws
FIPB Foreign Investment Promotion Board, Department of Economic Affairs, Ministry
of Finance, Government of India
FY Financial Year ending on March 31
GDP Gross Domestic Product
GIR Number General Index Registry Number
GoI Government of India
HUF Hindu Undivided Family
Issue / Rights Issue Present issue of 53,38,628 Equity Shares of Rs10 each for cash at a premium of
Rs35 (Issue Price of Rs45) per Equity Share on rights basis to the existing Equity
Shareholders of the Company in the ratio of 4 (Four) Equity Shares for every 7
(Seven) Equity Shares held on Record Date [•] aggregating Rs24,02,38,260
Issue Price Rs45 per Equity Share
I-Sec ICICI Securities Limited
IT Act The Income Tax Act, 1961 and amendments thereto
Kolkata High Court High Court of Judicature at Calcutta
Lead Managers ICICI Securities Limited
Letter of Offer/ LOF/ This Letter of Offer circulated to the Equity Shareholders
Offer Document
MC Music Cassette
Memorandum Memorandum of Association of the Company
Mumbai High Court High Court of Judicature at Mumbai
NA Not applicable
NAV Net Asset Value
NSE The National Stock Exchange of India Limited
NR Non Resident
NRI (s) Non Resident Indians
NRE Account Non Resident External Account
NRO Account Non Resident Ordinary Account
NSDL National Securities Depository Limited
P/E Ratio Price/Earnings Ratio
PAN Permanent Account Number
Promoter(s) Promoters shall have the same meaning as ascribed to it under the SEBI
Guidelines and which has been more particularly detailed in the disclosures in
this Letter of Offer
RBI The Reserve Bank of India
Record Date [•]
Registrar to the Issue/ MCS Limited
Registrar
Rights Entitlement The number of Equity Shares that an Equity Shareholder is entitled to under this
Letter of Offer in proportion to his/ her/ its existing shareholding in the Company
as on the Record Date
SEBI Securities and Exchange Board of India
SEBI Guidelines SEBI (Disclosure & Investor Protection) Guidelines, 2000 read with amendments
thereto
Security/ ies Equity Share/s
Security Certificates Equity Share certificates
Supreme Court Hon’ble Supreme Court of India
VCD Video Compact Disc
In this Letter of Offer, any discrepancies in any table between total and the sums of the amount listed are due
to rounding off. All references to “Rs” refer to Rupees, the lawful currency of India, “USD” refers to US
Dollar. References to the singular also refer to the plural and one gender also refers to any other gender
wherever applicable.
I. RISK FACTORS AND MANAGEMENT PERCEPTION THEROF
The investors should consider the following Risk Factors together with all other information included in this
Letter of Offer carefully, in evaluating the Company and its business before making any investment decision.
Any projections, forecasts and estimates contained herein are forward looking statements that involve risks
and uncertainties. Such statements use forward looking terminology like “may”, “believes”, “will”, “expect”,
“anticipate”, “estimate”, “plan” or other similar words. The Company’s actual results could differ from those
anticipated in these forward-looking statements as a result of certain factors including those, which are set
forth in the Risk Factors below.
The Letter of Offer also includes statistical data regarding the entertainment industry. This data has been
obtained from industry publications, reports and other sources that the Company and the Lead Managers
believe to be reliable. Neither the Company nor the Lead Managers have independently verified such data.
Internal Risk Factors and Management Perception Thereof
1) Losses made by Saregama India Limited

The Company made losses aggregating Rs2,639 lakhs, Rs4,746 lakhs and Rs2,110 lakhs in FY2002,
FY2003 and FY2004 respectively. These losses were primarily on account of failure of many new Hindi
Film Music which had been acquired and promoted by the Company at exhorbitant costs. Alongside,
the Company together with the entire industry also witnessed contraction of market size due to factors
like high tech piracy, shift of consumers to cheap VCDs and alternative music delivery mediums like
radio and TV gaining popularity. The Company subsequently turned around and has started making
profits from April 2004. The profits for the six months period for FY2005 (April – September 2004)
were Rs192 lakhs. The turnaround was possible after Saregama initiated a conscious strategy to derisk
its entire business model. New acquisitions of film music were done selectively either at small cost or
on revenue sharing basis. New initiatives were implemented for exploitation of the Company’s valuable
catalogue through introductions of premium products. Growing business of Home Video was brought
under focus through tie-ups with new overseas studios. All round efforts were launched to slash costs on
advertisement/publicity, manpower, traveling etc. As on September 30, 2004, the Company has a debit
balance in the Profit & Loss Account of Rs1,918 lakhs
2) Loss making group companies

The Company is part of the group of companies forming the RPG Enterprises. Out of the top five listed
and top five unlisted companies, the following companies made losses during one or more of the last
three financial years (as per the latest available audited results) (Rs lakhs)
Particulars 2001-02 2002-03 2003-04

CESC Limited (13,189) 2,774 11,790
KEC International Limited (6,434) (954) 2,528
Ceat Holdings Limited (65) 192 (383)
Jubilee Investments & Industries Limited 203 (1,129) (0.65)
Universal Industrial Fund Limited 54 (15) (30)
Hilltop Holdings India Limited (1,713) (1,796) (209)
Brabourne Investments Limited (489) (52) (187)
3) Shortfall in promised performance of companies in the promoter group companies

There has been a shortfall in the performance of the group companies (top five companies based on
market capitalisation) vis-à-vis profitability projections made in the respective offer documents. The
details are as under:
Ceat Limited
Ceat Limited (“Ceat”) came out with a rights offer of 71,12,902, 15% Secured Redeemable Partly
Convertible Debentures of Rs155 each for cash at par aggregating Rs11,024.99 lakhs. The issue opened
on September 9, 1992 and closed on October 14, 1992. The object of the issue was to part finance the
cost escalation of various projects under implementation, to augment the long term working capital
resources and to strengthen the equity base of the Company. The projects were nylon tyre cord project,
i
modernisation cum expansion of tyre units at Bombay and Nasik, expansion of tyre capacity, expansion
of glass fibre unit, plain paper copier unit, etc. The estimated cost of the project was Rs58,518 lakhs.
The expected and actual dates of completion of the new projects were as under:
Expected date of Actual date of

completion completion
Increase in tyre capacity at Bombay/Nasik June 92 – June 93 June 1995
New tyre unit at Aurangabad June 1993 September 1994
Manufacture of plain paper copier December 92 December 1992
As mentioned above, the object of the issue was to part finance the cost escalation of various projects.
There was a cost over-run of Rs5,535 lakhs on the projects under implementation. The funds of
Rs11,025 lakhs raised from the debenture issue was utilised towards the cost over-run of Rs5,535 lakhs
and the balance was utilised for augmenting the long term working capital resources.
The promise-v/s-performance (Rs lakhs) in respect of the rights issue was as under:
1992-93 1993-94 1994-95

Proj Actual Proj Actual * Proj Actual *
Gross sales 903.50 756.53 1,032.00 1,118.96 1,128.60 1,639.73
PBT 21.90 19.69 28.80 26.67 38.20 17.53
PAT 21.90 19.69 28.80 26.45 38.20 17.72
* - Actual performance for 1993-94 relates to 15 months period which ended on 30th September 1994
and for 1994-96 relates to 18 months period which ended on 31st March 1996
Phillips Carbon Black Limited

Phillips Carbon Black Limited (“PCBL”) came out with a rights offer of 83,82,875 equity shares of
Rs10 each for cash at a premium of Rs30 per share aggregating Rs3,353.15 lakhs. The issue opened on
February 16, 1994 and closed on March 17, 1994. The object of the issue was to finance the expansion
of capacity for manufacture of various grades of carbon black from 50,000mtpa to 78,000mtpa,
modernise existing manufacturing capabilities and augment long term working capital resources. The
estimated cost of the project was Rs5,000 lakhs. The commercial production under the proposed
expansion-cum-modernisation scheme was expected to commence in March 1995.
The completion of the expansion and modernisation was achieved in January 1995 which was two
months earlier than the schedule and there was no cost overrun.
1992-93 1993-94 1994-95 1995-96

Proj Actual Proj Actual Proj Actual Proj Actual
Net sales 13,049 15,197 16,225 16,252 19,175 18,290 22,125 25,300
PBDIT 1,642 1,583 2,365 2,067 3,134 3,015 3,554 4,746
PBT 460 457 935 625 1,428 1,050 1,479 2,610
PAT 460 457 848 579 1,079 991 1,287 2,170
Zensar Technologies Limited

Zensar Technologies Limited (“ZTL”) came out with a rights offer of 50,35,505 equity shares of Rs10
each for cash at a premium of Rs6 per share aggregating Rs805.68 lakhs. The issue opened on
November 16, 1993 and closed on December 15, 1993. The object of the issue was to raise funds for
normal capital expenditure and for augmenting long tem resources for working capital. Thus, the
objects of the issue were not to finance any project. ZTL has confirmed that the funds were utilised for
the objects as stated above.
1993-94 1994-95 1995-96

Proj Actual Proj Actual Proj Actual
Revenue 13,508 14,048 18,222 16,016 21,574 13,154
ii
PBT 155 102 420 (318) 600 (2,288)
PAT 155 102 368 (318) 546 (2,288)
For further details, please refer to the chapter titled “Promise vs. Performance” in the Letter of Offer.
4) Contingent Liabilities
The Company had the following contingent liabilities (Rs lakhs) as on September 30, 2004
Counter guarantee given to bankers 20.68
Claims against the Company not acknowledged as debts in respect of -

Sales/Turnover/Purchase tax matters under dispute 1079.41
Income-tax matters under dispute (excluding issues which have been decided
in favour of the Company at appellate level in certain years) 105.00
Excise duty on account of non-admissibility of MODVAT credit claim for
differential duty on block board etc. 9.42
5) Outstanding Litigation & Disputes
Pending Litigations against the Company
1. Criminal Cases
There is a criminal case pending against the Company and its Directors, as follows:
Sl Case No./ In the Court Filed by/ against Particulars Status

Date of
Criminal
2 Cr. Comp ACJM, Super Cassette Alleged defamation against Proceedings
447 of 1996 Gautam Budh Inds & another – Super Cassettes. adjourned
(new Nagar, vs- Sri S. Goenka, In view of pendency of matters
No.2809 of Ghaziabad Sri R P Goenka, before Allahabad High Court, the
1999) other Directors & Trial Court proceedings are
GCIL adjourned.
2. Cases f i l e d against the Company relating to Copyright issues
Rights in Agreements
1 CS. 925 of Chennai High Nemichand Injunct GCIL for alleged Injunction
1994 Court Jhabak –vs- Infringement of his rights. on
GCIL
2 3740 of Mumbai High Mahal Pictures – Seeking Court’s declaration of Hearing on
2000 Court vs- East is East, Saregama’s rights in
Star Agreement re: Film “Pakeezah”
Entertainment,
Saregama India
Ltd.
3 OS 28 of Dist. Court, G. Devarajan – Alleged Copyright violation Pending
2001 Ernakulam vs- Saregama
India Ltd &
Johnny Sagarika
4 OS 4 of Dist. Court, G. Devarajan – Alleged Copyright violation Framing of
2002 Ernakulam vs- Saregama issues
India Ltd &
another audio
Co.
5 CS 107 of Calcutta High Sterling Seeking Court’s declaration of Settlement
iii
2003 Court Investment Corp Saregama’s rights in arrived at –
P Ltd –vs- Agreement re: Film “Mughal -e case being
Saregama India – Azam” withdrawn
Ltd & Saregama
Plc
6 CS. 1830 of Chennai High Meta Audio –vs- Injunction apprehending Main suit
2003 Court Saregama India interference in Meta's business on- SIL’s
Ltd & IMI – their injunction vacated reply filed
7 CS.139 of Calcutta High Hamin Ahmed & Unauthorised usage of their Hearing on
2004 Court others –vs- SIL, musical work "Phireya Dao
Anu Malik, Amar Prem" in song 'Jana Jane
Mukesh and Jana' of Film 'Murder'
Mahesh Bhatt,
A. Jamal, RPG
Global,
Saregama plc
8 WP.1933 of Mumbai High Mitul Adequacy of royalty paid to Hearing on
2004 Court Ramachandra "Disabled Army Personnel
Pradeep –vs- Widows & Orphans Fund" on
Union of India & sales of "Aye Mere Watan Ke
SIL Logon"
9 CS(OS) Delhi High BMG Music Payment of additional Party asked
1300 of Court Publishing publishing royalties to them by to prove
2004 International SIL, arising out of Zomba their rights
Ltd. & Deep Records Ltd.’s license to SIL to to claim this
Emotions sell Zomba repertoire in India.
Publishing Pvt. SIL already remitted due record
Ltd. –vs- SIL royalties to Zomba at rates
approved by RBI.
Version Recordings
10 TS 640 of City Civil Asha Audio –vs- GCIL permitted Asha to make Main suit
1996 Court, Calcutta GCIL versions of some Bengali pending
songs, but withdrew permission
as Asha did not comply with
norms. Asha filed suit for non-
interference in their business.
Asha’s Injunction application
dismissed
11 OS City Court, Mars Recording Version recording made All pending
6668/1998, Bangalore P Ltd –vs- GCIL without GCIL’s consent –
OS (3 cases) & IMI fearing threat of legal action
8181/1998, from SIL/ seizure by/ through
OS IMI case filed – injunction
4255/2000 sought and granted
12 OS City Court, Music Media P Version recording made Framing of
5316/1999 Bangalore Ltd –vs- GCIL without GCIL’s consent – issues
& IMI fearing threat of legal action
from SIL/ seizure by/ through
IMI they filed – injunction
sought and granted
13 RFA 534/ Bangalore High Mars Recording Mars’ Appeal against To be heard
2004 Court P Ltd –vs- GCIL Bangalore City Court order of
& IMI 2004 dismissing Mars’ case
4792/ 1998 and decreeing
GCIL’s case CS 265/ 1998 in
GCIL’s favour.
iv
Gramco Music Publishing Ltd.
14 R.S. 152 Civil Judge Muzzaffar Ali – Proposed Film: “Daaman” to Hearings on
of 2000 (Senior Division), vs- Gramco be produced/ released by
Lucknow Music Pub. Ltd, Gramco was shelved due to
Mrs. M Goenka, differences with Director Mr.
IMPPA Ali. Aggrieved by this, he filed
case
Version Recordings
15 124 of Calcutta High Hindusthan HMP entered into License Agts Main Suit
1996 Court Musical dt. 24.03.94 & 07.02.95 for pending.
Products –vs- GCIL to manufacture and sell
GCIL HMP repertoire. HMP filed suit
on various grounds - repertoire
not utilised, royalty not paid. In
1998 HMP's I.A. dismissed.
Factory Suppliers
16 232 of Calcutta High Antartica Antartica filed Winding up on Pending
1996 Court Graphics Ltd. - GCIL for non-payment of
& vs- GCIL Rs19.47 lakhs. Court dismissed
647 of and directed to file money suit.
1999 So Antartica filed money suit
647 of 1999 Suit for Rs38.28
lakhs + interest.
Property related
17 RCOP Chennai High South Indian Fair rent in respect of the Pending for
no. 1151/ Court Film Chamber – premises 604, 605 Anna Salai; disposal
94, RC vs- GCIL premises vacated on 14 January
938/ 97, 2003 (Rs84.30 lakhs)
RCA
339/ 98
Others
18 Agst 196 Civil Court, Sethi Radios and For rendition of ledger account Pending
of 2001 Amritsar anthr Vs of parties in Saregama’s books
Saregama India
Limited
3. Other Civil Cases against the Company
Income Tax Matters
Amount of
Demand/(Refund) Amount of
by the Department Brief Description of the Demand
Assessment Concerned (Rs case/order against which the deposited (Rs
Sl. No. Year lakhs) case is pending lakhs) Present Status
1 1997-98[Order N.A. (See Note # 1) Appeal filed u/s. 260A by the N.A. (See Note Matter presently
dated 29.11.02 Company before theCalcutta # 1) pending before
passed by the High Court against the said the Calcutta
ITAT, Kolkata order passed by the ITAT, High Court
in ITA No. Kolkata on the issue of
v
655/C/99] allowability of credit with
respect to tax deducted at
source in UK.
2 2001-02 [Order (See Note # 2) Disallowances/ additions have (See Note # 2) The Company is
dated 29.3.04 been made by the Assessing in the process of
passed u/s. Officer on various issues. The filingan appeal
143(3)] major issuerelate to the before the CIT
disallowance of expenditure of (Appeals) against
Rs1.48 crores incurred on all the
account of website disallowances/
development on the ground additions made
that the same is in the nature in the
of capital expenditure. assessment.
Notes
#1 No financial impact since the credit has not been allowed to the Company. In case the issue is
ultimately decided in favour of the Company, such tax deducted at source in UK amounting to GBP
2528.25 (equivalent to Rs1.48 lakhs) will become refundable to the Company.
#2 Demand of Rs79.23 lakhs raised has been fully adjusted with amount refundable for the A.Y. 2003-
04.
Sales Tax Disputes
Assessment Amount of Brief Description of the Demand Present Status

Year Demand/Refund case/order against which the deposited
(Rs lakhs) case is pending (Rs lakhs)
West Region
MAHARASHTRA
1999-2000 MST 18.48 Disallow of Set off & Credit note. Nil Appeal in process
CST 69.75 Mainly F Form pending, 1.36 Necessary details

considered as Sale. Appeal submitted order to be
pending with Commissioner of passed
Appeals.
North Region
DELHI
1987-88 DST 2.54 F-Form/ C-Form not submitted 0.40 Appeal pending with
CST 1.36 0.20 DC
1988-89 DST 3.22 F-Form/ C-Form not submitted Nil Appeal pending with
CST 0.34 Nil DC
1989-90 CST 0.65 C-Form not submitted Nil Appeal pending with
DC
1990-91 CST 0.66 C-Form not submitted 0.12 Appeal pending with
DC
1991-92 DST 2.60 F-Form/ C-Form not submitted 1.05 Appeal pending with
DC
DC
2000-01 CST 3.32 C-Form not submitted 0.05 Appeal admitted case
remanded back
DC
2002-03 CST 24.37 C-Form not submitted Nil Appeal filed
vi
U.P
1996-97 UPTT 0.61 F-Form/ C-Form not submitted 0.39 Appeal pending in High
Court, Lucknow
Court, Lucknow
2001-02 UPTT 0.65 F-Form/ C-Form not submitted 0.32 Appeal pending before
J.C.(appeal)
2002-03 UPTT 1.73 F-Form/ C-Form not submitted 0.69 Appeal filed Trade tax
tribunal
RAJASTHAN
1998-99 RST 13.16 F-Form/ C-Form not submitted 2.21 Appeal filed D.C
Appeals-11
1999-00 CST 8.17 F-Form/ C-Form not submitted 4.13 Appeal filed D.C
Appeals-11
TAMIL NADU
1986 -1992 TNGST 6.75 Dispute on Rate of Taxes of LP Nil Pending before the
Records Tamil Nadu Taxation
Special Tribunal.
A.P.
2000-2001 APGST 33.65 Dispute on Rate of Taxes of 17.50 Pending before the
Cassettes & CDs Tribunal. Also have
filed in High Court
against the order
dismissed by Addl.
Commr. Comm. Taxes
KERALA
1997-1998 KGST 19.09 Dispute on Rate of Taxes of CDs 15.86 Pending before the
Appellate Dy. Commr,
Commercial Taxes
1999-2000 KGST 1.24 Dispute on Rate of Taxes of CDs Nil Appeal pending before
Sales Appellate
Tribunal, Addl. Bench.
BIHAR
1981-82 BST 0.13 Excess assessed Nil Appeal filed before
JCCT
2002-03 BST 20.03 Sales return amount disallowed, 19.20 Appeal Filed hearing
considered as sales awaited
WEST BENGAL
Pending Registered Dealer Forms, Appeal filed before
1989-90 WBST 101.01 51.10
Purchase Tax DCCT
Pending Registered Dealer Forms, Appeal filed before
1994-95 WBST 135.66 101.50
Purchase Tax DCCT
Appeal filed before
1998-99 CST 1.82 F-Forms pending 1.27
DCCT
Appeal filed before
2000-01 CST 24.05 F-Forms pending 22.12
DCCT
Appeal filed before
-do- WBST 977.99 Pending Registered Dealer Forms 231.00
DCCT
2001-02 CST 31.56 Shortfall on assessment 31.38 Appeal filed
-do- WBST 208.20 Pending Registered Dealer Forms 148.02 Appeal filed
4. Cases related to labour / employee issues

The table below summarises the labour related cases. Monetary claim against the Company in
these cases cannot be crystallised but in no case it is expected to be more than Rs5 lakhs.
Sl. No. Case No. Matter Case Detail In the Court of
vii
1 W.P.No.5611(W) Gramophone Co. of India Ltd. Memorandum of Calcutta High Court
of 2004 Shramik Union Vs. State of Settlement
W.B. & Saregama India Ltd. dt.23.12.00
2 Sp. Writ Petition ESI Corpn. Vs. Different ESI Contribution Supreme Court of
against Calcutta Emp.Orgn. incl. Gramophone India
High Court Order Workers' Welfare Union
Dt.16.3.04 Re: ESI
Contribution
3 a) Case No.153/99 Sri Vipin Awasthi Vs Saregama Reinstatement of Labour Court (II)
India Ltd Employment Kanpur, UP
b) Case No.162/99 Sri S N Sharma Vs Saregama

India Ltd
.
c) Case No.163/99 Sri Sitaram Bari Vs Saregama
India Ltd
4 Conciliation Ms. Smita Baidya Vs Saregama Termination Office of Labour

Proceedings India Ltd Commissioner, Govt.
of W.B.
5. Excise related issues
Amount
involved Pending Before
Brief details of the litigation Rs lakhs Authority Present Status
Excise Dept. has issued show 56.54 The Commissioner of Case heard, order awaited.
cause cum demand notice not Central Excise No impact on P&L as
accepting the deduction of (Adjudication), Kolkata required provision has
discount to customers from III Commissionerate already been made in the
assessable value for the sale of Accounts.
audio cassettes during March 97
to May 98.
Excise Dept. has issued two 375.49 The Commissioner of The case is under hearing,
show- cause cum demand notices Central Excise order not yet passed.
primarily on Sagarika (Adjudication), Belapur
Acoustronics Pvt. Ltd. (SIL's Commissionerate, Navi
replicator) for not including cost Mumbai
of royalty in the assessable value
for the period Aug 98 to Mar 03
and Apr 03 to Jan 04 respectively.
The authorities have also made
SIL a party to this litigation
alleging SIL's collusion with
Sagarika A. P. Ltd. in alleged
excise evasion.
Excise duty on account of non- 9.42 The Asst. Commissioner The case is under hearing.
admissibility of Modvat Credit, of Central Excise,
claim for differential duty on Kolkata
block board, etc
viii
6) Litigations involving the Directors / Promoters / Promoter Group Companies
The details of the litigation etc against the Directors / Promoters / Promoter Group Companies are given
in the chapter titled “Outstanding Litigation, Defaults and Material Developments”. Kindly refer page
100.
7) Equity offering by the Company

The Equity shareholders may experience a dilution in their shareholdings in the Company in the event the
Company makes future offerings of securities or issues of Equity shares or stock options under an
Employee Stock Option Scheme.
8) Operational Risks
a) Music Cassette (MC) going out of utility

With fall in prices of CD/VCD players, consumers increasingly prefer CD/VCD format over MC
format. Sales of music cassettes still constitutes over 65% of the revenues of domestic music
companies and is unlikely to be phased out completely in the near future. Saregama owns MC
manufacturing facility for last many decades where the cost of machineries have been largely
charged off in the accounts and the same do not cause any additional financial burden even though
production requirement has fallen substantially. The reduction in revenue, due to a fall in sale of
music cassettes, is partially getting compensated by way of additional revenue from the higher CD
sales and sale of music in non-physical form through strategic licensing to radio, television,
mobile operators and other music companies.
b) Falling realisations
The realisation of music cassettes and CDs have seen decline in past on account of competition
from version recordings in VCD format and pirated products. However, Saregama has not seen
any major impact due to fall in the realisations as large Indian repertoire owned by the Company
does not require fresh investment. In fact, drop in prices of CDs / music cassettes has indirectly
helped music companies as consumers increasingly prefer the legitimate music on MCs and CDs
as the gap between the prices of pirated products and legitimate products has substantially
narrowed down.
c) Competitions from other segments of entertainment sector

In recent years, distribution of music has been somewhat crowded out of consumer spending by
other entertainment options like FM radio, television music channels, games and mobile devices.
The Company has focussed its efforts to offer music in ready packages to suit these new
distribution formats. Alongwith other music companies, Saregama is developing strategic links
with other players of entertainment sector, particularly radio, television and mobile sectors.
d) Piracy
Pirated music represents more than half of industry off-take since it is the cheaper alternative to
the Company’s original products. This phenomenon is hurting music industry not only in India but
worldwide. Indian Music Industry Association (IMI) is working closely with local law
enforcement agencies and has been successful in organising many raids and seizures. The
Government Authorities are also increasingly becoming conscious about this menace. Recently,
the State Government of Tamil Nadu has covered the piracy under the Goonda Act, acting as
effective deterrent to the pirated products. It is expected that other state governments will follow
suit and provide much needed relief to the music industry. Notwithstanding this, in view of
sizeable reduction in the selling prices made by music companies, consumers now increasingly
prefer legitimate products as the gap between legitimate products and pirated products has
substantially narrowed down.
9) Loss Making Subsidiaries

The Company has three subsidiaries viz. Saregama Plc. (SPLC), RPG Global Music Limited (RPGG)
and Saregama Films Limited (SFL). As on September 30, 2004, SPLC has accumulated losses of
Rs683.02 lakhs though it has net worth of Rs1,053 lakhs. This company has reduced its losses
substantially and is in the process of turnaround. It has posted losses of Rs30.82 lakhs for the period
ended September 30, 2004 as against losses of Rs199.31 lakhs for the nine month period ending March
31, 2004.
ix
RPGG has an accumulated loss of Rs878.41 lakhs and a negative networth of Rs49.33 lakhs. The losses
are largely on account of high level of non-cash charges in the form of amortisations, provisions &
depreciation. During the period April – September 2004, RPGG made a cash profit of Rs5.53 lakhs
excluding non-cash charges of Rs74.68 lakhs.
SFL is a 100% subsidiary carrying out businesses of TV Software and Films. SFL has accumulated
losses of Rs267.04 lakhs against net worth of Rs661.97 lakhs as on September 30, 2004.
External Risk Factors
1) Change in copyright law, licensing norms and regulations.

Introduction / Amendment of Excise & Customs tariffs, Sales tax & VAT on intermediary as well as
final products of the Company may prove detrimental to the business made by the Company. Any
changes in copyright regulatory act and imposition of direct taxes on copyright income as well as
royalties could adversely affect the profitability of the Company.
2) Political, economic and social developments in India and acts of violence or war could adversely
affect the business of the Company
Since 1991, the Government of India has pursued policies of economic liberalisation, including
significantly relaxing restrictions on the private sector. The new Government that has been formed as a
result of the 2004 general elections in India consists of a coalition of political parties. Any changes in the
economic policies by the new Government could change specific laws and policies affecting
entertainment companies, foreign investment, currency exchange rates and other matters which could
adversely affect the investment in the equity shares of the Company. Acts of violence, terrorist activity or
war could affect the industrial and commercial operations in the country which could have an adverse
effect on the entertainment industry.
3) Changes in Technology
The distribution / delivery of music to consumers have changed over time due to rapid developments in
technology – as music cassettes have replaced gramophone records. In the last few years, digital
revolution has led the CDs / DVDs replacing the music cassettes. Technological innovation, in future,
can threaten the continuity / longevity of the existing distribution format. The Company’s failure or
inability to align itself to future changes in technology might place its competitors at an advantage in
terms of cost, efficiency and timely delivery of the final products.
4) Natural Disasters and Technical Failures

The operations of the plant can be affected by natural disasters and technical failures which could
adversely impact the financial performance.
5) Risk of Volatility in Share Price

The market price of the Shares could be subject to significant fluctuations due to a change in sentiment in
the market regarding the Shares or in response to various facts and events, including any regulatory
changes affecting its operations, variations in the Company’s operating results and business
developments of its competitors. Stock markets have from time to time experienced significant price and
volume fluctuations that have affected the market prices for securities and which may be unrelated to the
Company’s operating performance or prospects. Furthermore, the Company’s operating results and
prospects from time to time may be below the expectations of market analysts and investors. Any of
these events could result in a decline in the market price of the Company’s Shares.
6) Risk of Economic Slowdown

The Company currently sells a majority of its products to customers in India. Any downturn in the rate of
economic growth in India, whether due to political instability or regional conflicts, economic slowdown
elsewhere in the world, or otherwise, may have a material adverse effect on demand for the products the
Company manufactures and markets.
NOTES TO RISK FACTORS
x
1) Investors are advised to refer to “Basis For Issue Price” section on page 97 before investing in this Issue.
2) Net worth prior to the Issue (as on September 30, 2004) as per the adjusted accounts is Rs4,349.23 lakhs.
3) The Issue size is Rs2,402.38 lakhs
4) The Cost per share of shareholdings of the promoters as on date

i) Mr. R. P. Goenka – Nil
ii) Mr. Sanjiv Goenka – Nil
5) The book value of the equity shares of the Company as on September 30, 2004 is Rs46.55 per share
6) During the last six months, there have been transactions for the sale of 73,000 Equity shares of the
Company in the stock exchanges by the Promoter Group Companies.
On December 15, 2004, Hilltop Holdings India Limited, one of the promoter group companies, sold
73,000 Equity shares of the Company on the stock exchanges at an average sale price of Rs119.03. The
highs and the lows as on that date were Rs126.50 and Rs109.50.
7) The Company has entered into certain related party transactions. The related party transactions cover
financial transactions carried out in the ordinary course of business and/or in discharge of contractual
obligations. The details of the transactions are given below. Please note that the above list of the related
parties in this section has been prepared in accordance with Accounting Standard 18 of the Institute of
Chartered Accountants of India.
(a) The following is a list of related parties with whom the Company has entered into transactions:
Names of related Parties Nature of Relationship
Mr. D. R. Mehta Key Management Personnel from 3rd September 2003*
Saregama Plc Subsidiary Company
RPG Global Music Ltd Wholly owned subsidiary company
Saregama Films Ltd. Wholly owned subsidiary company
(b) Disclosure of transactions between the Company and related parties and status of outstanding
balance
Related Party Disclosures in keeping with Accounting Standard 18 issued by the Institute of
Chartered Accountants of India (ICAI).
Enterprise having
Key common Key
Subsidiary Associate Management Management
Companies Company Personnel Person
Rupees in Rupees in Rupees in
lakhs lakhs lakhs
Sale of Goods Current Period 43.66 - - -

Previous Period 65.39 - -
License Fees Current Period 86.95 - - -

Previous Period 162.76 - - -
Purchase of
Goods Current Period - - - -
Previous Period - - -
Purchase of
Fixed Assets Current Period - - - -
xi
Reimbursemen
t of Expenses Current Period - - - -
Recovery of
Expenses Current Period - - - -
Repayment of Current Period - - -

Inter Corporate
Deposits and
interest thereon
Rent to
Managing
Director Current Period - - 4.80 -
Previous Period - - 5.60 -
Remuneration
to Managing
Director(s) Current Period - - 21.50 -
Previous Period - - 31.61 -
Balance
outstanding at
period-end :
Unsecured
Loan Current Period - - -
Previous Period - - - 2.73
Current
Liabilities Current Period - - -
Previous Period - - - 2.46
Investments Current Period 1806.61 - - -

Previous Period 1806.61 ** - -
Loans and
Advances Current Period 828.97 - -
Previous Period 752.70 ** 8.00 -
Sundry
Debtors Current Period 272.84 - - -
Previous Period 303.16 ** - -
* Pursuant to a scheme of Arrangement, assets and liabilities as on 30th June, 2003 of erstwhile
Television Software Division of the Company were transferred to Saregama Films Limited at their
respective book values in which they appeared in the books of accounts.
xii
** Ceased to be an Associate Company with effect from 27th June,2003; accordingly, the
aforesaid previous period information pertains to the period upto the existence of related party
relationship.
The above transactions are not significant in terms of their impact on the financial performance of
the Company.
There are no common pursuits among the Saregama group companies (Saregama and its
subsidiaries) and other group companies since no other entity is engaged in the entertainment industry.
xiii
Dear Shareholder(s),
Pursuant to the resolutions passed by the Board of Directors of the Company at its meeting held on December
23, 2004, it has been decided to make the following offer to the Equity Shareholders of the Company:
Issue of up to 53,38,628 Equity Shares of Rs10 each for cash at a premium of Rs35 (Issue Price of Rs45)
per Equity Share on rights basis to the existing Equity Shareholders of the Company in the ratio of 4
(Four) Equity Share for every 7 (Seven) Equity Shares held on Record Date [••] aggregating
Rs24,02,38,260
II. GENERAL INFORMATION
Registered Office address of the Company

33, Jessore Road
Dum Dum
Kolkata – 700 028
West Bengal, INDIA
Tel: +91 33 2551 2984
Fax: +91 33 2551 2461
E-mail: co.sec@saregama.co.in
Important
1. This Issue is pursuant to the resolution passed by the Board of Directors at its meeting held on December
23, 2004.
2. This Issue is applicable to such Equity Shareholders whose names appear as beneficial owners as per the
list to be furnished by the depositories in respect of the Equity Shares held in the electronic form and on
the Register of Members of the Company at the close of business hours on the Record Date [•]
3. Your attention is drawn to the section on “Risk Factors” appearing on Page i of this Letter of Offer.
4. Please ensure that you have received the CAF with this Letter of Offer.
5. Please read the Letter of Offer and the instructions contained herein and in the CAF carefully before
filling in the CAFs. The instructions contained in the CAF are an integral part of this Letter of Offer and
must be carefully followed. An application is liable to be rejected for any non-compliance of the Letter of
Offer or the CAF.
6. All enquiries in connection with this Letter of Offer or CAFs should be addressed to the Registrar to the
Issue, quoting the Registered Folio number/ DP and Client ID number and the CAF numbers as
mentioned in the CAFs.
7. The Lead Managers and the Company shall make all information available to the Equity Shareholders
and no selective or additional information would be available for a section of the Equity Shareholders in
any manner whatsoever including at presentations, in research or sales reports etc. after filing of the draft
Letter of Offer with SEBI.
8. The Lead Managers and the Company shall update the Letter of Offer and keep the public informed of
any material changes till the listing and trading commences.
9. All the legal requirements as applicable till the filing of the Letter of Offer with the stock exchanges have
been complied with.
Issue Schedule
Issue Opening Date: [•]

Last date for receiving requests for split forms: [•]
Issue Closing Date: [•]
1
Issue Management Team
Lead Managers to the Issue Registrar to the Issue
ICICI Securities Limited MCS Limited

ICICI Centre 77/2A, Hazra Road
H.T.Parekh Marg, Churchgate Ground Floor
Mumbai – 400 020 Kolkata – 700 029
Tel: +91 22 2288 2460 Tel: +91 33 2476 7350 / 54
Fax: +91 22 2282 6580 Fax: +91 33 2454 1961 / 2464 7674
E-mail: saregamarights@isecltd.com E-mail: mcscal@cal2.vsnl.net.in
Auditors of the Company Legal Advisor
Price Waterhouse Khaitan & Co.

Chartered Accountants Emerald House
Plot No. Y–14, Block EP, Sector V 1–B, Old Post Office Street
Salt Lake Electronic Complex Kolkata – 700 001
Bidhan Nagar, Kolkata – 700 091 Tel: +91 33 2248 7000
Tel: +91 33 2357 9260 / 2357 7600 Fax: +91 33 2221 3838
Fax: +91 33 2357 7496
Bankers to the Issue Company Secretary & Compliance Officer
ICICI Bank Limited T. K. Banerjee

Capital Markets Branch Saregama India Limited
Mumbai Samachar Marg Duncan House
Mumbai – 400 021 31, Netaji Subhas Road
Tel: +91 22 2265 5285 Kolkata – 700 001
Fax: +91 22 2261 1138 Tel: +91 33 2221 3568 – 70
Fax: +91 33 2220 4517
HDFC Bank Limited Email: co.sec@saregama.co.in
Senapati Bapat Marg
Lower Parel
Mumbai – 400 013
Tel: +91 22 2498 8972
Fax: +91 22 2496 3871
Bankers to the Company
United Bank of India

College Street Branch
90/7A, Mahatma Gandhi Road
Kolkata – 700 072
Tel: +91 33 2241 1747 State Bank of India
Fax: +91 33 2241 3731 Commercial Branch
8, Netaji Subhas Road
Canara Bank Kolkata – 700 001
Canning Street Branch Tel: +91 33 2242 8348 / 49
27, Brabourne Road Fax: +91 33 2242 0452
Kolkata – 700 001
Tel: +91 33 2242 0346
Fax: +91 33 2242 1616
2
Note: The investors are advised to contact the Registrar to the Issue/ Company in case of any Pre-Issue/ Post-
Issue related problems such as non-receipt of Letter of Offer/ Letter of Allotment/ share certificates/ refund
orders/ etc.
Eligibility for the Issue

Saregama India Limited is an existing Company under the Act, whose equity shares are listed on BSE, NSE
and CSE. It is eligible to offer this Rights Issue in terms of Clause 2.4.1 (iv) of the SEBI Guidelines. The
Company, its Promoters, its Directors or any of the Company’s associates or group companies and companies
with which the Directors of the Company are associated as Directors or Promoters, or Directors or Promoters
in control of, of the promoting Company, are currently not prohibited from accessing the capital market under
any order or direction passed by SEBI. Further the Promoters, their relatives (as per Act), the Company,
group companies, associate companies are not detained as wilful defaulters by RBI / Government authorities.
Government Approvals/Consents
No consent of the Government of India is required by the Company for this Issue.
The Company has all the necessary approvals from the Government authorities as required to carry on the
present business. The Company has complied with all the applicable guidelines / directions issued by RBI
from time to time. The Company does not propose to enter new activities through this Rights Issue of Equity
Shares for which any further approvals are required to be obtained.
The major Government and other approvals pertaining to the Company’s business and major agreements
entered into by the Company are given below.
Approvals and Registration
Sales Tax
The Company is registered under the Central Sales Tax Act with registration no. 1351AW(C) dated
01/05/95 and under the West Bengal Sales Tax Act with registration no. AW/1351 dated 01/05/95
Factory License and Environmental Clearance

Factory is at 33, Jessore Road, Dum Dum, Kolkata – 700 028
S. N. Description Reference Issue Date Expiry Date
1 Factory License License No. 660 1916 December 31, 2005
2 Environmental Clearance Consent Letter No. 13902

from West Bengal State Memo No. 2117/2A/2-II/0/02-95/96 March 3, 2003 December 31, 2005
Pollution Control Board
Disclaimer Clause
AS REQUIRED, A COPY OF THIS LETTER OF OFFER HAS BEEN SUBMITTED TO THE

SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI). IT IS TO BE DISTINCTLY
UNDERSTOOD THAT THE SUBMISSION OF DRAFT LETTER OF OFFER TO SEBI SHOULD
NOT, IN ANY WAY BE DEEMED/ CONSTRUED THAT THE SAME HAS BEEN CLEARED OR
APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPOSIBILITY 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 LETTER OF OFFER. THE LEAD MANAGERS ICICI
SECURITIES LIMITED HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE LETTER
OF OFFER ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI
GUIDELINES FOR DISCLOSURE AND INVESTOR PROTECTION IN FORCE FOR THE TIME
BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED
3
DECISION FOR MAKING INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE
CLEARLY UNDERSTOOD THAT WHILE THE ISSUER COMPANY IS PRIMARILY
RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL
RELEVANT INFORMATION IN THE OFFER DOCUMENT, THE LEAD MANAGERS ARE
EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY
DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS
PURPOSE THE LEAD MANAGERS ICICI SECURITIES LIMITED HAVE FURNISHED TO SEBI
A DUE DILIGENCE CERTIFICATE DATED January 17, 2005 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 MORE PARTICULARLY
REFERRED TO IN THE ANNEXURE HERETO IN CONNECTION WITH THE
FINALISATION OF THE DRAFT LETTER OF OFFER 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, 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 LETTER OF OFFER 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;
c. THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR AND
ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED DECISION
AS TO INVESTMENT IN THE PROPOSED ISSUE;
3 WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN

THE DRAFT LETTER OF OFFER ARE REGISTERED WITH SEBI AND TILL DATE SUCH
REGISTRATION IS VALID; AND
4 IF UNDERWRITTEN, WE SHALL SATISFY OURSELVES ABOUT THE WORTH OF THE

UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS
THE FILING OF THE LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE THE COMPANY
FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE COMPANIES ACT,
1956 OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY OR OTHER
CLEARANCE AS MAY BE REQUIRED FOR THE PURPOSE OF THE PROPOSED ISSUE. SEBI
FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT OF TIME, WITH THE LEAD
MANAGER(S) (MERCHANT BANKERS) ANY IRREGULARITIES OR LAPSES IN THE LETTER
OF OFFER.
4
Caution
The Company accepts no responsibility for statements made otherwise than in this Letter of Offer or in any
advertisement or other material issued by the Company or by any other persons at the instance of the
Company and anyone placing reliance on any other source of information would be doing so at his own risk.
The Lead Managers and the Company shall make all information available to the Equity Shareholders and no
selective or additional information would be available for a section of the Equity Shareholders in any manner
whatsoever including at presentations, in research or sales reports etc. after filing of the draft Letter of Offer
with SEBI. The Lead Managers and the Company shall update the Letter of Offer and keep the public
informed of any material changes till the listing and trading commences.
Disclaimer with respect to Jurisdiction

This Letter of Offer has been prepared under the provisions of Indian Laws and the applicable rules and
regulations hereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the
appropriate court(s) in Kolkata, India only.
The draft Letter of Offer was filed with SEBI, Mittal Court, Nariman Point, Mumbai 400 021. The final
Letter of Offer has been filed with the stock exchanges and SEBI.
Disclaimer Clause of the Stock Exchange
Disclaimer Clause of BSE

The Stock Exchange, Mumbai (“the Exchange”) has given vide its letter dated ____, permission to the
Company to use the Exchange’s name in this draft Letter of Offer as one of the stock exchanges on which this
Company’s securities are proposed to be listed. The Exchange has scrutinised this draft Letter of Offer for its
limited internal purpose of deciding on the matter of granting the aforesaid permission to this Company. The
Exchange does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of
the contents of this draft Letter of Offer; or (ii) warrant that this Company’s securities will be listed or will
continue to be listed on the Exchange; or (iii) take any responsibility for the financial or other soundness of
this Company, its promoters, its management or any scheme or project of this Company; and its should not
for any reason be deemed or construed that this draft Letter of Offer has been cleared or approved by the
Exchange. “Every person who desires to apply for or otherwise acquires any securities of this Company may
do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in
connection with such subscription/acquisition whether by reason of anything stated or omitted to be stated
herein or for any other reason whatsoever.”
Disclaimer Clause of NSE

As required, a copy of this letter of offer has been submitted to National Stock Exchange of India Limited
(hereinafter referred to as NSE). NSE has given vide its letter dated ____, permission to the Issuer to use the
Exchange’s name in this draft Letter of Offer as one of the stock exchanges on which this Company’s
securities are proposed to be listed. The Exchange has scrutinised this draft Letter of Offer for its limited
internal purpose of deciding on the matter of granting the aforesaid permission to this Issuer. It is to be
distinctly understood that the aforesaid permission, given by NSE, should not in any way be deemed or
construed that the draft Letter of Offer has been cleared or approved by NSE; nor does it in any manner
warrant, certify or endorse the correctness or completeness of any of the contents of this draft Letter of Offer
nor does it warrant that the Issuer’s securities will be listed or will continue to be listed on the Exchange nor
does it take any responsibility for the financial or other soundness of this Company, its promoters, its
management or any scheme or project of this Issuer.
Disclaimer Clause of CSE

The Calcutta Stock Exchange (the Exchange), has given its permission to the Company to use the name of the
Exchange in the offer document as one of the stock Exchanges on which the Company’s securities are
proposed to be listed. The Exchange has scrutinised this offer document for its limited internal purpose of
deciding on the matter of granting the aforesaid permission to this Company.
This Exchange does not in any manner –
5
(1) Warrant, certify or endorse the correctness or completeness of any of the contents of this Offer
Documents, or
(2) Warrant that the Company’s securities will be listed or will continue to be listed on this Exchange, or
(3) Take any responsibility for the financial or other soundness of this Company, its promoters,
management or any scheme or project of this Company:
And it should for any reason be deemed or construed that this Offer apply for or otherwise acquires any
securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not
have any claim against this Exchange whatsoever by reason of any loss which may be suffered by such
person consequent to or in connection with such subscription / acquisition whether by reason of anything
stated or omitted to be stated herein or for any other reason whatsoever.
Impersonation
As a matter of abundant caution, attention of the applicants is specifically drawn to the provisions of
subsection (1) of Section 68A of the Companies Act, 1956 which is reproduced below:
“Any person who-

(a) makes in a fictitious name an application to a Company for acquiring, or subscribing for, any
Equity Shares therein, or
(b) otherwise induces a Company to allot, or register any transfer of Equity 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”
Minimum Subscription
If the Company does not receive the minimum subscription of 90% of the Issue (excluding the amounts on
the rights entitlement on the Equity Shares held in abeyance as explained in the notes to the “Capital
Structure”), the entire subscription shall be refunded to the applicants within forty-two days from the date of
closure of the Issue. If there is a delay in the refund of subscription by more than 8 days after the Company
becomes liable to repay the subscription amount, (i.e. forty two days after closure of the Issue), the Company
will pay interest for the delayed period, at prescribed rates in sub-section (2) and (2A) of Section 73 of the
Act.
The Issue will become undersubscribed after considering the number of Equity Shares applied as per
entitlement plus additional Equity Shares. The undersubscribed portion shall be applied for only after the
close of the Issue. The Promoters shall subscribe to such undersubscribed portion as per the relevant
provisions of the law. If any person presently in control of the Company desires to subscribe to such
undersubscribed portion and if disclosure is made pursuant to SEBI (Substantial Acquisition of Shares and
Takeover) Regulations, 1997, such allotment of the undersubscribed portion will be governed by the
provisions of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. Allotment to
promoters of any unsubscribed portion, over and above their entitlement shall be done in compliance with
Clause 40A of the Listing Agreement.
The above is subject to the terms mentioned under the “Basis of Allotment”.
Utilisation of Issue Proceeds

The Board of Directors declares that:
1. The funds received against this Issue will be transferred to a separate bank account other than the bank
account referred to sub-section (3) of Section 73 of the Act.
2. Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head in the
balance sheet of the Company indicating the purpose for which such moneys has been utilised.
3. Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate
separate head in the balance sheet of the Company indicating the form in which such unutilised moneys
have been invested.
The funds received against this Rights Issue will be kept in a separate bank account and the Company will not
have any access to such funds unless it satisfies the Designated Stock Exchange with suitable documentary
evidence that the minimum subscription of 90% of the Issue has been received by the Company.
6
Undertaking by the Company
• The complaints received in respect of the captioned Rights Issue shall be attended to by the Company
expeditiously and satisfactorily.
• All steps for completion of the necessary formalities for listing and commencement of trading at all stock
exchanges where the securities are to be listed will be taken within 7 working days of finalisation of basis
of allotment.
• The funds required for dispatch of refund orders/ allotment letters/ certificates by registered post shall be
made available to the Registrar to the Issue.
• The Security Certificates / refund orders to the non-resident Indians shall be dispatched within the
specified time.
• No further issue of securities affecting equity capital of the Company shall be made till the securities
issued/ offered through the captioned Rights Issue are listed or till the application moneys are refunded
on account of non-listing, under-subscription etc.
Consents
No consents of any of the lenders are required for the current Rights Issue.
Filing
The draft Letter of Offer was filed with SEBI, Mittal Court, Nariman Point, Mumbai 400 021. The final
Letter of Offer has been filed with the stock exchanges and SEBI. All the legal requirements applicable till
the date of filing the Letter of Offer with the stock exchanges and SEBI has been complied with.
Allotment Letters / Refund Orders

The Company will issue and dispatch letters of allotment/ Security Certificates and/ or letters of regret along
with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period
of six weeks from the date of closure of the Issue. If such money is not repaid within 8 days from the day the
Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under
Section 73 of the Act.
Letters of allotment/ Security Certificates / refund orders above the value of Rs1,500 will be dispatched by
Registered Post/ Speed Post to the sole/ first applicant’s registered address. However, refund orders for value
not exceeding Rs1,500 shall be sent to the applicants under Postal Certificate. Such cheques or pay orders
will be payable at par at all the centres where the applications were originally accepted and will be marked
“A/c Payee” and would be drawn in the name of the sole/ first applicant. Adequate funds would be made
available to the Registrar to the Issue for dispatch of the Letters of allotment/ Security Certificates / refund
orders.
In case the Company issues Letters of Allotment, the corresponding Security Certificates will be kept ready
within three months from the date of allotment thereof or such extended time as may be approved by the
Company Law Board under Section 113 of the Act or other applicable provisions, if any. Allottees are
requested to preserve such Letters of Allotment, which would be exchanged later for the Security Certificates.
Listing
The existing Equity Shares are listed on NSE, BSE and CSE. The Company has made applications to NSE,
BSE and CSE for permission to deal in and for an official quotation in respect of the securities being offered
in terms of this Letter of Offer. The Company has received in-principle approval from NSE, BSE and CSE
vide letters dated ____, ____ and ____ respectively.
If the permission to deal in and for an official quotation of the securities is not granted by any of the Stock
Exchanges mentioned above, within six weeks from the Issue Closing Date, the Company shall forthwith
repay, without interest, all monies received from applicants in pursuance of this Letter of Offer. If such
money is not paid within eight days after the Company becomes liable to repay it, then the Company and
every Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly
and severally liable to repay the money with interest as prescribed under the Section 73 of the Act.
Credit Rating
This being an Issue of Equity Shares, no credit rating is required.
7
III. CAPITAL STRUCTURE (As on January 17, 2005)
Nominal
Amount (Rs)
Authorised share capital
2,50,00,000 Equity Shares of Rs10 each 25,00,00,000
Issued and Subscribed share capital

93,42,600 Equity Shares of Rs10 each 9,34,26,000
Paid-up share capital

93,42,600 Equity Shares of Rs10 each 9,34,26,000
Of this, 13,73,370 Equity Shares of Rs10 each fully paid up pursuant to
the Scheme of Amalgamation without payment being received in cash
Present Issue being offered to the Equity Shareholders through this Nominal
Premium (Rs)
Letter of Offer Amount (Rs)
53,38,628 Equity Shares of Rs10 each at a premium of Rs35 each 5,33,86,280 18,68,51,980
Paid up capital after the Issue Nominal

(assuming Equity Shareholders subscribe to all the Equity Shares offered) Amount (Rs)
1,46,81,228 Equity Shares of Rs10/- each 14,68,12,280
Share premium Account Premium (Rs)

Existing share premium account 46,90,77,000
Share premium account after the Issue assuming allotment of all Equity 65,59,28,980
Shares offered
Notes to the Capital Structure

1) The Equity shareholders do not hold any warrant, option or convertible loan or any debenture, which
would entitle them to acquire further Equity share.
2) In March 2000, the Company made a private placement of 70,000 equity shares of Rs10 each, at a
premium of Rs1,775 per share with institutional shareholders including FIIs, OCBs, FIs and MFs with
necessary approval from the shareholders.
Build up of Equity Capital

Details of Capital structure of the Company since inception is as follows:
Date of No. of Face Value Issue Consideration Remarks

Allotment Shares (Rs) Price (Rs)
Position as on 3,500 10 10 Cash Allotted to subscribers
30.6.1963 (including 2 initial subsribers
allotted on 12.8.1946)
Position as on 4,46,500 10 10 Other than Allotted as fully paid up
30.6.1968 cash pursuant to a contract without
payments being received in
cash. All the 4,50,000 Shares
held by the Gramophone Co.
Ltd., U.K., the holding
Company and their nominees
Position as on 1,50,000 10 15 Cash Allotted to employees, friends
30.6.1969 of the then Directors of the
Company (formerly known as
The Gramophone Co. of India
Ltd.) and Public (The Company
converted into public limited
company w.e.f. October 28,
8
1968)
Position as on 1,50,000 10 18 Cash Allotted to shareholders,
30.6.1972 employees, artistes of the
Company and Public
29.12.1976 4,50,000 10 10 Cash Allotted as Bonus Shares in the
ratio of 3:5 to the shareholders
of the Company
1.4.1977 3,68,520 10 18 Cash Allotted to Directors, their
associates, Employees of the
Company, Artistes/Film
Producers, Dealers and Public
7.4.1977 2,38,580 10 18 Cash Rights Issue
8.12.1986,1.7. 17,54,141 10 10 Cash Rights Issue (Equity Linked
1987 and Debenture Issue-1986).
18.9.1987 Allotted to Indian Promoters,
Resident, individuals/
companies, FIs and NRIs
14.4.1987 8,13,195 10 10 Cash Conversion of debentures.
Allotted to EMI Records Ltd,
UTI, FIs and individuals
10.3.1988, 18,996 10 10 Cash Rights Issue (Equity Linked
18.8.1888, Debenture Issue-1986).
25.11.1988 and Allotted to NRIs
2.1.1989
5.4.1989 400 10 10 Cash Rights Issue (Equity Linked
Debenture Issue-1986).
Allotted to NRIs
30.7.1990 and 1,240 10 10 Cash Rights Issue (Equity Linked
7.1.1991 Debenture Issue-1986).
Allotted to NRIs
23.9.1991 68 10 10 Cash Rights Issue (Equity Linked
Allotted to Resident individual
5.3.1993 1,580 10 10 Cash Rights Issue (Equity Linked
Allotted to NRIs
21.3.1994 1,04,79,282 10 10 Cash Conversion of Debentures,
Loans etc. pursuant to the
Order dated 11.11.1993 of the
Board for Industrial &
Financial Reconstruction.
Allotted to Indian Promoters
and EMI Records Ltd
27.3.1994 12,97,072 10 10 Cash Conversion of Debentures,
Allotted to FIs
1.7.1994 20,00,000 10 10 Cash Conversion of Debentures,
Allotted to Indian Promoters
27.12.1996 (1,09,03,844) N.A. N.A. N.A. Reduction of share capital as at
31.3.1996 by 60% from
Rs181730740 (divided into
9
18173074 Equity shares of
Rs10/- each) to Rs72692300
(divided into 18173075 Equity
shares of Rs4 each) pursuant to
the Order of Hon'ble Calcutta
High Court dated 24.7.1996.
7269230 new Equity shares of
Rs10 each allotted to the
Members in cancellation of
18173074 equity shares
2.3.2000 7,00,000 10 1,785 Cash Private placement. Allotted to
FIIs, OCBs, FIs and MFs
10.7.2000 13,73,370 10 10 Other than Merger of Company's
cash subsidiaries RPG Music
International Ltd. and Gramco
Music Publishing Ltd. with the
Company pursuant to the Order
of the Hon'ble Calcutta High
Court dated 12.6.2000. Allotted
to Indian Promoters
Total 93,42,600
Current shareholding pattern of the Company

Shareholding pattern of the Company including details of holdings of Promoter Group and the subscription
by the Promoters is as follows:
Shareholding pattern (Pre and Post Issue)
No. of Equity New Equity No. of shares

Category shares Percentage shares proposed (post Percentage
currently held to be allotted allotment)
Promoters and Promoter Group 4,629,234 49.55 2,645,276 7,274,510 49.55
Non-promoter holding
Mutual funds and UTI 238,627 2.55 136,358 374,985 2.55
Banks, financial institutions,
insurance companies, Central/State
Government 336,321 3.60 192,183 528,504 3.60
Foreign Institutional Investors
(Flls) 902,400 9.66 515,657 1,418,057 9.66
Private Corporate Bodies 826,615 8.85 472351 1,298,966 8.85
Indian Public 1,665,208 17.82 951,547 2,616,755 17.82
Non Resident Indians (NRIs) and
OCBs 24,195 0.26 13,826 38,021 0.26
Others (EMI Records Ltd, UK) 720,000 7.71 411,429 1,131,429 7.71
Sub-total 4,713,366 50.45 2,693,351 7,406,717 50.45
Grand Total 9,342,600 100.00 5,338,628 14,681,228 100.00
Note: Post Issue Promoter shareholding is based on the assumption that all shareholders (including
Promoters) will subscribe to their entire rights entitlement.
The details of the Promoter and Promoter Group shareholding as on Januar y 10, 2005 are as follows:
Shareholder No.of shares Percentage Holding

Promoters
10
Rama Prasad Goenka Nil -
Sanjiv Goenka Nil -
Promoter Group
Sushila Goenka Nil -
Adapt Investments Limited 3,157 0.03%
Adorn Invesments Limited 68,940 0.74%
Blue Niles Holdings Ltd 500,000 5.35%
B.N.Elias & Company Limited 100 0.00%
Brabourne Investments Ltd 200 0.00%
Brentwood Investments Ltd 100 0.00%
Canal Investments & Industries Ltd 172,586 1.85%
Ceat Holdings Limited 100 0.00%
Ceat Limited 252,500 2.70%
Ceat Ventures Limited 260 0.00%
Chattarpati Investments Ltd 100 0.00%
Eastern Aviation & Industries Limited 100 0.00%
Fujitsu ICIM Limited 100 0.00%
Harrisons Malayalam Financial Services Ltd 100 0.00%
Hilltop Holdings India Limited 1,211,498 12.97%
Instant Trading and Investment Co Ltd 249,000 2.67%
Jubilee Investments & Industries 868,327 9.29%
KEC International Ltd 100 0.00%
Meteoric Industrial Finance Co Ltd 228 0.00%
Music World Entertainment Ltd 857,142 9.17%
Off Shore India Limited 1,470 0.02%
Organised Investments Ltd 100 0.00%
PCBL Industrial Finance Ltd 33,914 0.36%
RPG Life Science Limited 31,100 0.33%
RPG Transmission Limited 100 0.00%
Spencer and Co. Ltd. 100 0.00%
Spentex Industries Ltd 100 0.00%
Trade Apartments Limited 100 0.00%
Yield Investments Ltd 100 0.00%
Universal Industrial Fund Limited 377,512 4.04%
4,629,234 49.55%
Top Ten Shareholders
1. Top 10 shareholders as on Janua r y 10, 2 00 5 ( T o be up dated at t he ti me of s t oc k

exch an ge f il in g)
S.No. Name No. of shares Shareholding (%)

1 Hilltop holdings India Ltd. 12,11,498 12.97
2 Jubilee Investments & Industries Ltd. 8,68,327 9.29
3 Music World Entertainment Ltd. 8,57,142 9.17
4 EMI Records Ltd. 7,20,000 7.71
5 Blue Niles Holdings Ltd. 5,00,000 5.35
6 Universal Industrial Fund Ltd. 3,77,512 4.04
7 Arisaig Partners (Asia) Pte Ltd. A/c Arisaig Asian Small 3,73,000 3.99
Companies Fund
11
8 Arisaig partners (Asia) Pte Ltd. A/c Arisaig India Fund 3,00,000 3.21
Ltd.
9 Ceat Ltd 2,52,500 2.70
10 Instant Trading & Investment Co Ltd. 2,49,000 2.67
2. Top 10 shareholders as on December 31, 2004 ( T o be u p date d at t he ti me of st oc k


2 Jubilee Investments & Industries Ltd. 8,68,327 9.29
3 Music World Entertainment Ltd. 8,57,142 9.17
4 EMI Records Ltd. 7,20,000 7.71
5 Blue Niles Holdings Ltd. 5,00,000 5.35
6 Universal Industrial Fund Ltd. 3,77,512 4.04
7 Arisaig Partners (Asia) Pte Ltd. A/c Arisaig Asian Small 3,73,000 3.99
CompaniesFund
8 Arisaig partners (Asia) Pte Ltd. A/c Arisaig India Fund 3,00,000 3.21
Ltd.
9 Ceat Ltd 2,52,500 2.70
10 Instant Trading & Investment Co Ltd. 2,49,000 2.67
3. Top 10 shareholders as on December 31, 2002 ( T o be u p date d at t he ti me of st oc k


2 Music World Entertainment Ltd. 857,142 9.17
3 EMI Records Ltd. 720,000 7.71
4 Blue Niles Holdings Ltd. 641,582 6.87
5 Jubilee Investments & Industries Ltd 563,512 6.03
6 UTI 503,909 5.39
7 Arisaig Partners (Asia) Pte Ltd. A/c 500,000 5.35
Arisaig Asian Small Companies Fund
8 Transmission Holdings Ltd 331,412 3.55
9 Arisaig partners (Asia) Pte Ltd. A/c Arisaig India Fund 300,000 3.21
Ltd.
10 LIC 273,725 2.93
The total number of Equity Shareholders as on December 23, 2004 is 17,524
1. The present Issue being a Rights Issue, as per clause 4.10.1(c) of extant SEBI guidelines, the
requirement of promoters’ contribution is not applicable
2. The Company has not availed of any Bridge Loans to be repaid from the proceeds of the Issue
3. The Company, Promoters, Directors and Lead Managers to the Issue have not entered into any
buy-back, standby or similar arrangements for any of the securities being issued through this
Letter of Offer
4. The terms of Issue to Non-Resident Equity Shareholders/ Applicants have been presented under the
“Terms of the Issue” Section of this Letter of Offer
5. At any given time, there shall be only one denomination of the Equity Shares. The Company shall
comply with such disclosure and accounting norms as may be specified by SEBI from time to time
12
6. There has been no issue of shares for consideration other than cash except issue of 13,73,370 equity
shares of Rs10 each fully paid-up issued on July 10, 2000, pursuant to the scheme of
amalgamation. For further details kindly refer to the History Section of the Letter of Offer
7. During the last six months, 73,000 Equit y Shares ha ve been sol d on the stock exchanges b y
the promoter group companies On December 15, 2004, Hilltop Holdings India Limited, one of the
promoter group companies, sold 73,000 Equity shares of the Company on the stock exchanges at an
average sale price of Rs119.03. The highs and the lows as on that date were Rs126.50 and Rs109.50.
8. No further issue of capital by way of issue of bonus Equity Shares, preferential allotment, rights
issue or public issue or in any other manner which will affect the capital of the Company, shall be
made during the period commencing from the filing of the Letter of Offer with the SEBI till the
Equity Shares issued under this Letter of Offer have been listed or application moneys are refunded
on account of the failure of the Issue
9. Further, presently the Company does not have any proposal, intention, negotiation or consideration to
alter the capital structure by way of split/ consolidation of the denomination of the shares/ issue of
shares on a preferential basis or issue of bonus or rights or public Issue of Equity Shares or any
other securities within a period of six months from the date of opening of the present Issue.
However, if business needs of the Company so require, the Company may alter the capital
structure by way of split/ consolidation of the denomination of the shares/ issue of shares on a
preferential basis or issue of bonus or rights or public issue of shares or any other securities during
the period of six months from the date of listing of the Equity Shares issued under this LoF or
from the date the application moneys are refunded on account of failure of the Issue, after seeking
and obtaining all the approvals which may be required for such alteration.
10. The Promoters have confirmed that they intend to subscribe to the full extent of their entitlement in
the Issue. The Promoters intend to apply for additional Equity Shares in the Issue such that at least
90% of the Issue Size is subscribed. As a result of this subscription and consequent allotment, the
Promoters may acquire Equity Shares over and above their entitlement in the Issue, which may
result in their shareholding in the Company being above their current shareholding.
This subscription and acquisition of additional Equity Shares by the Promoters, if any, will not
result in change of control of the management of the Company and shall be exempt in terms of
provision to Regulation 3(1)(b)(ii) of the SEBI (Substantial Acquisition of Shares and Takeover)
Regulations, 1997. As such, other than meeting the requirements indicated in Objects of the
Issue (refer “Particulars of the Issue”), there is no other intention/purpose for this Issue, including
any intention to delist the Company, even if, as a result of allotments to the Promoters through this
Issue, the Promoter shareholding in the Company exceeds their current shareholding. However, the
Promoters have confirmed that in case the Rights Issue of the Company is completed with their
subscribing to Equity Shares over and above their entitlement and as a result, if the public
shareholding in the Company after the Rights Issue falls below the “permissible minimum level” on
the basis of which the securities of the Company continue to be listed they will either individually
or jointly with other Promoters make an offer for sale of their holdings so that the public shareholding
is raised to the “permissible minimum level” within a period of 3 months from the date of allotment in
the proposed Issue, as per the requirements of sub-clause 17.1 and 17.2 of SEBI (Delisting of
Securities) Guidelines, 2003 or as per any amendment thereto or any other period as may be directed
by SEBI or any appropriate authority. In this context, the promoters of Saregama India Limited have
provided following undertaking:
“We hereby undertake that, in case the Rights Issue of Sar e ga ma I n dia Limited is completed
with the promoters subscribing to equity shares over and above their entitlement and as a result, if
the public shareholding in the Company after the Rights Issue falls below the “permissible
minimum level” as specified in the listing condition or listing agreement, we will either
individually or jointly with other promoters make an offer for sale of our holdings so that the public
shareholding is raised to the “permissible minimum level” within a period of 3 months from the
date of allotment in the proposed Issue, as per the requirements of sub-clause 17.1 and 17.2 of
SEBI (Delisting of Securities) Guidelines, 2003 or as per any amendment thereto or any other
period as may be directed by SEBI or any appropriate authority.”
13
IV. TERMS OF THE ISSUE
The Equity Shares, now being issued, are subject to the terms and conditions of this Letter of Offer, the
enclosed Composite Application Form (“CAF”), the Memorandum & Articles of Association of the
Company, the approvals from the GoI, FIPB and RBI, if applicable, the provisions of the Companies Act,
1956, guidelines issued by SEBI, guidelines, notifications and regulations for issue of capital and for listing
of securities issued by Government of India and/ or other statutory authorities and bodies from time to time,
terms and conditions as stipulated in the allotment advice or letter of allotment or Security Certificate and
rules as may be applicable and introduced from time to time.
Authority to the Issue

The Issue is being made pursuant to the resolution passed by the Board of Directors of the Company at its
meeting held on December 23, 2004.
Basis of the Issue

The Equity Shares are being offered for subscription for cash to those existing Equity Shareholders whose
names appear as beneficial owners as per the list to be furnished by the depositories in respect of the Equity
Shares held in the electronic form and on the Register of Members of the Company in respect of Equity
Shares held in the physical form at the close of business hours on the Record Date i.e. [•] fixed in
consultation with the NSE (the Designated Stock Exchange).
The Equity Shares are being offered for subscription in the ratio of 4 (Four) Equity Shares for every 7 (Seven)
Equity Shares held by the Equity Shareholders.
Rights Entitlement
As you were an Equity Shareholder on the Record Date, you are being made this Offer as shown in part A of
the enclosed Composite Application Form.
Fractional entitlement
If the shareholding of any of the Equity Shareholders is not in multiple of 7, then the fractional entitlement of
such holders shall be ignored. Shareholders holding less than eight shares will be offered one new Equity
Share out of those new Equity Shares not subscribed by the existing shareholders or available after
consolidation of the fractional entitlements. Shareholders whose fractional entitlements are being ignored
would be given preferential allotment of one additional share each if they apply for additional shares.
Nomination facility
In terms of Section 109A of the Act, nomination facility is available in case of Equity Shares. The applicant
can nominate any person by filling the relevant details in the CAF in the space provided for this purpose.
Offer to Non-Resident Equity Shareholders/Applicants

Applications received from NRIs and other NR shareholders for allotment of Equity Shares shall be, inter
alia, subject to the conditions imposed from time to time by the RBI under the Foreign Exchange
Management Act, 1999 (FEMA) in the matter of refund of application moneys, allotment of Equity Shares,
issue of Letter of Allotment / share certificates, payment of interest, dividends, etc. General permission has
been granted to any person resident outside India to apply shares offered on rights basis by an Indian
Company in terms of FEMA and the rules and regulations thereunder.
The Equity Shares issued under the Rights Issue and purchased by NR shall be subject to the same conditions
including restrictions in regard to the repatriability as are applicable to the previously held Equity Shares
against which Equity Shares under the Rights Issue are issued. The Company has by its letter dated January 7,
2005 applied to RBI for its approval for renunciation of shares and application of additional shares by non-
resident investors. RBI has by its letter ref ____ dated ____ given its permission for issue of shares to non-
residents subject to ____.
The Board of Directors may at its absolute discretion, agree to such terms and conditions as may be stipulated
by RBI while approving the allotment of Equity Shares, payment of dividend etc. to the Equity Shareholders
who are NR.
14
Principal Terms and Conditions of the Issue
Face value
Each Equity Share shall have the face value of Rs10
Issue Price
Each Equity Share is being offered at a price of Rs45 each (including a premium of Rs35 per share)
Entitlement Ratio
The Equity Shares are being offered on rights basis to the existing Equity Shareholders of the Company in the
ratio of 4 (Four) Equity Shares for every 7 (Seven) Equity Shares held as on the Record Date.
Market lot
The market lot for the Equity Shares in dematerialised mode is one. In case of physical certificates, the
Company would issue one certificate for the Equity Shares allotted to one folio (“Consolidated Certificate”).
In respect of the consolidated certificate, the Company will be returning the share certificates issued for the
entire holding, duly split as desired by the shareholders within a week’s time, as and when such requests are
received from the shareholders without charging anything to the shareholder.
Terms of payment
100% of the issue price per Equity Share shall be payable on application.
Ranking of the Equity Shares

The Equity Shares shall be subject to the Memorandum and Articles of Association of the Company and shall
rank pari passu in all respects including dividends with the existing Equity Shares of the Company.
Option available to the Equity Shareholders

The Composite Application Form clearly indicates the number of Equity Shares that the Equity Shareholder
is entitled to.
If the Equity Shareholder applies for an investment in Equity Shares, then he can:
• Apply for his entitlement in part
• Apply for his entitlement in part and renounce the other part
• Apply for his entitlement in full
• Apply for his entitlement in full and also apply for additional Equity Shares
Renouncees for Equity Shares can apply for the Equity Shares renounced to them and also apply for
additional Equity Shares.
How to Apply
Resident Equity Shareholders

Application should be made only on the enclosed CAF provided by the Company. The enclosed CAF should
be completed in all respects, as explained in the instructions indicated in the CAF. Applications will not be
accepted by the Lead Managers or by the Registrar to the Issue or by the Company at any offices except in
the case of postal applications as per instructions given in the Letter of Offer.
Non-resident Equity Shareholders

Applications received from the Non-Resident Equity Shareholders for the allotment of Equity Shares shall,
interalia, be subject to the conditions as may be imposed from time to time by the Reserve Bank of India, in
the matter of Refund of application moneys, allotment of Equity Shares, issue of Letters of Allotment/
certificates/ payment of dividends etc.
The CAF consists of four parts:

Part A: Form for accepting the Equity Shares offered and for applying for additional Equity Shares
Part B: Form for renunciation
15
Part C: Form for application for renouncees
Part D: Form for request for split application forms
Acceptance of the Rights Issue

You may accept the Offer and apply for Equity Shares offered, either in full or in part by filling Block III of
Part “A” of the enclosed CAF and submit the same along with the application money payable to the “Bankers
to the Issue” or any of the branches as mentioned on the reverse of the CAF before the close of the banking
hours on or before the Issue Closing Date or such extended time as may be specified by the Board thereof in
this regard. Applicants at centers not covered by the branches of collecting banks can send their CAF together
with the cheque drawn on a local bank at Mumbai /demand draft payable at Mumbai (net of demand draft
charges and postal charges) to the Registrar to the Issue by registered post.
Renunciation
As an Equity Shareholder, you have the right to renounce your entitlement for the Equity Shares in full or in
part in favour of one or more person(s). Your attention is drawn to the fact that the Company shall not allot
and/or register any Equity Shares in favour of:
• More than three persons including joint holders
• Partnership firm(s) or their nominee(s)
• Minors
• Hindu Undivided Family
• Any Trust or Society (unless the same is registered under the Societies Registration Act, 1860 or any
other applicable Trust laws and is authorised under its Constitutions to hold Equity Shares of a
Company)
The right of renunciation is subject to the express condition that the Board/ Committee of Directors shall be
entitled in its absolute discretion to reject the request for allotment to renouncee(s) without assigning any
reason thereof.
Procedure for renunciation

To renounce the whole offer in favour of one renouncee
If you wish to renounce the offer indicated in Part A in whole, please complete Part B of the CAF. In case of
joint holding, all joint holders must sign Part B of the CAF. The person in whose favour renunciation has
been made should complete and sign Part C of the CAF. In case of joint renouncees, all joint renouncees must
sign this part of the CAF.
To renounce in part/or renounce the whole to more than one person(s)

If you wish to either accept this offer in part and renounce the balance or renounce the entire offer in favour
of two or more renouncees, the CAF must be first split into requisite number of forms.
Please indicate your requirement of split forms in the space provided for this purpose in Part D of the CAF
and return the entire CAF to the Registrar to the Issue so as to reach them latest by the close of business hours
on the last date of receiving requests for split forms. On receipt of the required number of split forms from the
Registrar, the procedure as mentioned in paragraph above shall have to be followed.
In case the signature of the Equity Shareholder(s), who has renounced the Equity Shares, does not agree with
the specimen registered with the Company, the application is liable to be rejected.
Renouncee(s)
The person(s) in whose favour the Equity Shares are renounced should fill in and sign Part C of the
Application Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue
Closing Date along with the application money.
Change and/ or introduction of additional holders

If you wish to apply for Equity Shares jointly with any other person or persons, not more than three, who
is/are not already joint holder with you, it shall amount to renunciation and the procedure as stated above for
renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall
amount to renunciation and the procedure, as stated above shall have to be followed.
16
However, this right of renunciation is subject to the express condition that the Board of Directors of the
Company shall be entitled in its absolute discretion to reject the request for allotment from the renouncee(s)
without assigning any reason thereof.
Please note that:

(a) Part A of the CAF must not be used by any person(s) other than those in whose favour this offer has been
made. If used, this will render the application invalid.
(b) Request for split form should be made for a minimum of 100 Equity Shares or in multiples thereof and
one Split Application Form for the balance Equity Shares, if any.
(c) Only the person to whom this Letter of Offer has been addressed to and not the renouncee(s) shall be
entitled to renounce and to apply for Split Application Forms. Forms once split cannot be split again.
(d) Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.
Additional Equity Shares

You are eligible to apply for additional Equity Shares over and above the number of Equity Shares you are
entitled to, provided that you have applied for all the Equity Shares offered without renouncing them in whole
or in part in favour of any other person(s). Applications for additional Equity Shares shall be considered and
allotment shall be made in the manner prescribed elsewhere in the Letter of Offer under the section “Basis of
Allotment”. The renouncees applying for all the Equity Shares renounced in their favour may also apply for
additional Equity Shares.
In case of application for additional Equity Shares by non-resident Equity Shareholders, the allotment of
additional securities will be subject to the permission of the Reserve Bank of India.
Where the number of additional Equity Shares applied for exceeds the number available for allotment, the
allotment would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.
The summary of options available to the Equity Shareholder is presented below. You may exercise any of the
following options with regard to the Equity Shares offered, using the enclosed CAF:
Option Available Action Required

1. Accept whole or part of your entitlement Fill in and sign Part A
without renouncing the balance. (All joint holders must sign)
2. Accept your entitlement in full and apply Fill in and sign Part A including Block III relating to
for additional Equity Shares the acceptance of entitlement and Block IV relating to
additional Equity Shares
(All joint holders must sign)
3. Renounce your entitlement in full to one Fill in and sign Part B (all joint holders must sign)
person indicating the number of Equity Shares renounced and
(Joint renouncees are considered as one). hand it over to the renouncee. The renouncees must fill
in and sign Part C
(All joint renouncees must sign)
4. Accept a part of your entitlement and Fill in and sign Part D (all joint holders must sign)
renounce the balance to one or more requesting for Split Application Forms. Send the CAF
renouncee(s) to the Registrar to the Issue so as to reach them on or
before the last date for receiving requests for Split
OR Forms. Splitting will be permitted only once.
On receipt of the Split Form take action as indicated
Renounce your entitlement to all the Equity below.
Shares offered to you to more than one • For the Equity Shares you wish to accept,
renouncee if any, fill in and sign Part A.
• For the Equity Shares you wish to
renounce, fill in and sign Part B
indicating the number of Equity Shares
renounced and hand it over to the
renouncees. Each of the renouncees
should fill in and sign Part C for the
17
Equity Shares accepted by them.
5. Introduce a joint holder or change the This will be treated as a renunciation. Fill in and sign
sequence of joint holders Part B and the renouncees must fill in and sign Part C.
Availability of duplicate CAF

In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will issue
a duplicate CAF on the request of the applicant who should furnish the registered folio number/ DP and
Client ID no. and his / her full name and address to the Registrar to the Issue. Please note that those who are
making the application in the duplicate form should not utilise the original CAF for any purpose including
renunciation, even if it is received/ found subsequently. If the applicant violates any of these requirements,
he/ she shall face the risk of rejection of both the applications as well as forfeiture of amounts remitted along
with the applications.
Application on Plain Paper

An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the duplicate
CAF may make an application to subscribe to the Rights Issue on plain paper, along with an Account Payee
Cheque drawn on a local bank at Mumbai/ Demand Draft payable at Mumbai which should be drawn in
favour of the Company and send the same by registered post directly to the Registrar to the Issue.
The application on plain paper, duly signed by the applicants including joint holders, in the same order as per
specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Date of
Closure of the Issue and should contain the following particulars:
• Name of Issuer
• Name and address of the Equity Shareholder including joint holders
• Registered Folio Number/ DP and Client ID no.
• Number of Equity Shares held as on Record Date
• Number of Rights Equity Shares entitled
• Number of Rights Equity Shares applied for
• Number of additional Equity Shares applied for, if any
• Total number of Equity Shares applied for
• Total amount paid @ Rs45 per Equity Share
• Particulars of Cheque/ Draft
• Savings/Current Account Number and name and address of the bank where the Equity Shareholder will
be depositing the refund order
• PAN/GIR number and Income Tax Circle/Ward/District where the application is for Equity Shares of a
total value of Rs50,000 or more for the applicant and for each applicant in case of joint names, and
• Signature of Equity Shareholders to appear in the same sequence and order as they appear in the records
of the Company
Payments in such cases, should be through a cheque/ demand draft payable at Mumbai be drawn in favour of
the Bankers to the Issue marked “A/c Payee” and marked “Name of the Bank – Saregama Rights Issue”.
Please note that those who are making the application otherwise than on original CAF shall not be entitled to
renounce their Rights and should not utilise the original CAF for any purpose including renunciation even if it
is received subsequently. If the applicant violates any of these requirements, he/she shall face the risk of
rejection of both the applications as well as forfeiture of amounts remitted along with the applications.
Last date of Application

The last date for submission of CAF is [•]. The Board/Committee of Directors will have the right to extend
the said date for such period as it may determine from time to time but not exceeding sixty days from the date
the Issue opens.
18
If the CAF together with the amount payable is not received by the Bankers to the Issue/ Registrar on or
before the close of banking hours on the aforesaid last date or such date as may be extended by the Board/
Committee of Directors, the offer contained in this Letter of Offer shall be deemed to have been declined and
the Board/ Committee of Directors shall be at liberty to dispose off the Equity Shares hereby offered, as
provided under the heading “Basis of Allotment”.
INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE
TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALISED FORM.
Basis of Allotment
1. Subject to provisions contained in this Letter of Offer, the Articles of Association and approval of the
Designated Stock Exchange, the Board will proceed to allot the Equity Shares in the following order of
priority:
(a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in full or
in part and also to the renouncee(s) who has/ have applied for Equity Shares renounced in their favour, in
full or in part.
(b) Allotment to the Equity Shareholders who having applied for all the Equity Shares offered to them as
rights and have also applied for additional Equity Shares. The allotment of such additional Equity Shares
will be made as far as possible on an equitable basis having due regard to the number of Equity Shares
held by them on the Record Date, provided there is an under-subscribed portion after making full
allotment in (a) above. The allotment of such Equity Shares will be at the sole discretion of the
Board/Committee of Directors in consultation with the Designated Stock Exchange, as a part of the rights
Issue and not preferential allotment.
(c) Allotment to the renouncees who having applied for the Equity Shares renounced in their favour have
also applied for additional Equity Shares, provided there is an under-subscribed portion after making full
allotment in (a) and (b) above. The allotment of such additional Equity Shares will be made on a
proportionate basis at the sole discretion of the Board/ Committee of Directors but in consultation with
the Designated Stock Exchange, as a part of the rights Issue and not preferential allotment.
2. The Company shall not retain the over subscription.
3. The Issue will become undersubscribed after considering the number of Equity Shares applied as per
entitlement plus additional Equity Shares. The undersubscribed portion shall be applied for only after the
close of the issue. The promoters or any other person shall subscribe to such undersubscribed portion as
per the relevant provisions of the law. If any person presently in control of the Company desires to
subscribe to such undersubscribed portion and if disclosure is made pursuant to SEBI (Substantial
Acquisition of Shares and Takeover) Regulations, 1997, such allotment of the undersubscribed portion
will be governed by the provisions of the SEBI (Substantial Acquisition of Shares and Takeover)
Regulations, 1997.
4. After taking into account the allotments made under 1(a), 1(b) and 1(c) above, if there is still any under
subscription, the unsubscribed portion shall be disposed off by the Board or Committee of Directors
authorised in this behalf by the Board upon such terms and conditions, through such securities (Equity
Shares) and to such person/persons and in such manner as the Board / Committee of Directors may in its
absolute discretion deem fit, as part of the rights issue and not preferential allotment.
Allotment to the Promoters of any unsubscribed portion, over and above their entitlement shall be done in
compliance with Clause 40A of the Listing Agreement.
Underwriting
The present Issue is not underwritten.
Allotment / Refund
The Company will issue and dispatch letters of allotment/ securities certificates and/ or letters of regret along
with refund order or credit the allotted securities to the respective beneficiary accounts, if any within a period
19
of six weeks from the Date of Closure of the Issue. If such money is not repaid within 8 days from the day
the Company becomes liable to pay it, the Company shall pay that money with interest as stipulated under
Section 73 of the Act.
Letters of allotment/ securities certificates/ refund orders above the value of Rs1,500 will be dispatched by
Registered Post/ Speed Post to the sole/ first applicant’s registered address. However, refund orders for value
not exceeding Rs1,500 shall be sent to the applicants under Postal Certificate. Such cheques or pay orders
will be payable at par at all the centres where the applications were originally accepted and will be marked
“A/c Payee” and would be drawn in the name of the sole/ first applicant. Adequate funds would be made
available to the Registrar to the Issue for the dispatch of Letters of allotment/ securities certificates and refund
orders.
In case the Company issues Letters of Allotment, the corresponding Security Certificates will be kept ready
within three months from the date of allotment thereof or such extended time as may be approved by the
Company Law Board under Section 113 of the Companies Act, 1956 or other applicable provisions, if any.
Allottees are requested to preserve such Letters of Allotment, which would be exchanged later for the
Security Certificates.
As regards allotment/ refund to Non-Residents, the following further conditions shall apply
In case of Non-Residents, who remit their application monies from funds held in NRE/ FCNR accounts,
refunds and/ or payment of interest/ dividend and other disbursement, if any, shall be credited to such
accounts, details of which should be furnished in the CAF. Subject to the approval of the RBI, in case of non-
residents, who remit their application monies through Indian Rupee draft purchased from abroad, refund and/
or payment of dividend/ interest and any other disbursement, shall be credited to such accounts (details of
which should be furnished in the CAF) and will be made net of bank charges/ commission in US Dollars, at
the rate of exchange prevailing at such time. The Company will not be responsible for any loss on account of
exchange fluctuations for converting the Indian Rupee amount into US Dollars. The Equity Share
certificate(s) will be sent by registered post at the Indian address of the non-resident applicant.
Letters of Allotment / Equity Share certificates

Letter(s) of Allotment/ Equity Share certificates or Letters of Regret will be dispatched to the registered
address of the first named applicant or respective beneficiary accounts will be credited within six weeks, from
the date of closure of the subscription list. In case the Company issues Letters of Allotment, the relative
Equity Share certificates will be dispatched within three months from the date of allotment. Allottees are
requested to preserve such Letters of allotment (if any) to be exchanged later for Equity Share certificates.
Export of Letters of Allotment (if any)/ Equity Share certificates to non-resident allottees will be subject to
the approval of RBI.
Arrangement for odd lot Equity Shares

The Company has not made any arrangements for the disposal of odd lot Equity Shares arising out of this
Issue. The Company will issue certificates of denomination equal to the number of Equity Shares being
allotted to the Equity Shareholder.
Equity Shares in Dematerialised Form

Applicants to the Equity Shares of the Company issued through this Rights Issue shall be allotted the
securities in dematerialised (electronic) form at the option of the applicant. The Company and MCS Limited,
the Registrar to the Company, have signed a tripartite agreement with CDSL on April 18, 2000 and with
NSDL on January 5, 2000, which enables the investors to hold and trade in securities in a dematerialised
form, instead of holding the securities in the form of physical certificates.
In this Rights Issue, the allottees who have opted for Equity Shares in dematerialised form will receive their
Equity Shares in the form of an electronic credit to their beneficiary account with a depository participant.
Investor will have to give the relevant particulars for this purpose in the appropriate place in the CAF.
Applications, which do not accurately contain this information, will be given the securities in physical form.
No separate applications for securities in physical and dematerialised form should be made. If such
applications are made, the application for physical securities will be treated as multiple applications and is
liable to be rejected. In case of partial allotment, allotment will be done in demat option for the shares sought
in demat and balance, if any, will be allotted in physical shares.
20
Procedure for availing this facility for allotment of Equity Shares in this Issue in the electronic form is as
under:
1. Open a Beneficiary Account with any Depository Participant (care should be taken that the Beneficiary
Account should carry the name of the holder in the same manner as is exhibited in the records of the
Company. In case of joint holding, the Beneficiary Account should be opened carrying the names of the
holders in the same order as with the Company). In case of Investors having various folios in the
Company with different joint holders, the investors will have to open separate accounts for such
holdings. Those Equity Shareholders who have already opened such Beneficiary Account (s) need not
adhere to this step.
2. For Equity Shareholders already holding Equity Shares of the Company in dematerialised form as on
Record Date, the beneficial account number shall be printed on the CAF. For those who open accounts
later or those who change their accounts and wish to receive their Rights Equity Shares by way of credit
to such account, the necessary details of their beneficiary account should be filled in the space provided
in the CAF. It may be noted that the allotment of securities arising out of this Issue may be made in
dematerialised form even if the original equity shares of the Company are not dematerialised.
Nonetheless, it should be ensured that the Depository Account is in the name(s) of the Equity
Shareholders and the names are in the same order as in the records of the Company.
3. Responsibility for correctness of applicant’s age and other details given in the CAF vis-à-vis those with
the applicant’s Depository Participant would rest with the applicant. Applicants should ensure that the
names of the applicants and the order in which they appear in CAF should be same as registered with the
applicant’s Depository Participant.
4. If incomplete / incorrect Beneficiary Account details are given in the CAF the applicant will get Equity
Shares in physical form.
5. The Rights Equity Shares allotted to investors opting for dematerialised form, would be directly credited
to the Beneficiary Account as given in the CAF after verification. Allotment advice, Refund Order (if
any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s Depository
Participant will provide to him the confirmation of the credit of the Rights Equity Shares to the
applicant’s Depository Account.
6. Renouncees will also have to provide the necessary details about their Beneficiary Account for allotment
of securities in this Issue. In case these details are incomplete or incorrect, the application is liable to be
rejected.
INVESTORS MAY PLEASE NOTE THAT THE EQUITY SHARES OF THE COMPANY CAN BE
TRADED ON THE STOCK EXCHANGES ONLY IN DEMATERIALISED FORM.
Utilisation of Proceeds
Subscription received against this Issue will be kept in a separate bank account(s) and the Company would
not have access to such funds unless it has received minimum subscription of 90%, of the Issue and the
necessary approvals of the Designated Stock Exchange, to use the amount of subscription.
General instructions for applicants
(a) Please read the instructions printed on the enclosed CAF carefully.
(b) Application should be made on the printed CAF, provided by the Company and should be completed in
all respects. The CAF found incomplete with regard to any of the particulars required to be given therein,
and/ or which are not completed in conformity with the terms of this Letter of Offer are liable to be
rejected and the money paid, if any, in respect thereof will be refunded without interest and after
deduction of bank commission and other charges, if any. The CAF must be filled in English and the
names of all the applicants, details of occupation, address, father’s / husband’s name must be filled in
block letters.
21
(c) The CAF together with cheque / demand draft should be sent to the Bankers to the Issue / Collecting
Bank or to the Registrar and not to the Company or Lead Managers to the Issue. Applicants residing at
places other than cities where the branches of the Bankers to the Issue have been authorised by the
Company for collecting applications, will have to make payment by Demand Draft payable at Mumbai
(net of demand draft charges and postal charges) and send their application forms to the Registrar to the
Issue by REGISTERED POST. If any portion of the CAF is / are detached or separated, such application
is liable to be rejected.
(d) Applications for a total value of Rs50,000 or more, i.e. where the total number of securities applied for
multiplied by the Issue price, is Rs50,000 or more the applicant or in the case of application in joint
names, each of the applicants, should mention his/ her permanent account number allotted under the
Income-Tax Act, 1961 or where the same has not been allotted, the GIR number and the Income-Tax
Circle / Ward / District. In case where neither the permanent account number nor the GIR number has
been allotted, the fact of non-allotment should be mentioned in the CAFs. Forms without this information
will be considered incomplete and are liable to be rejected.
(e) Applicants are advised to provide information as to their savings/current account number and the name of
the Bank with whom such account is held in the CAF to enable the Registrar to print the said details in
the Refund Orders, if any, after the names of the payees. Application not containing such details is liable
to be rejected.
(f) The payment against the application should not be effected in cash if the amount to be paid is Rs20,000
or more. In case payment is effected in contravention of this, the application may be deemed invalid and
the application money will be refunded and no interest will be paid thereon. Payment against the
application if made in cash, subject to conditions as mentioned above, should be made only to the
Bankers to the Issue.
(g) Signatures should be either in English or Hindi or in any other language specified in the 8th Schedule of
the Constitution of India. Signatures other than in English or Hindi and thumb impression must be
attested by a Notary Public or a Special Executive Magistrate under his/ her official seal. The Equity
Shareholders must sign the CAF as per the specimen signature recorded with the Company.
(h) In case of an application under Power of Attorney or by a body corporate or by a society, a certified true
copy of the relevant Power of Attorney or relevant resolution or authority to make investment and sign
the application along with a copy of the Memorandum & Articles of Association and / or bye laws must
be lodged with the Registrar to the Issue giving reference of the serial number of the CAF. In case these
papers are sent to any other entity besides the Registrar to the Issue or are sent after the Issue Closure
Date, then the application is liable to be rejected.
(i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and as
per the specimen signature(s) recorded with the Company. Further, in case of joint applicants who are
renouncees, the number of applicants should not exceed three. In case of joint applicants, reference, if
any, will be made in the first applicant’s name and all communication will be addressed to the first
applicant.
(j) Application(s) received from Non-Residents / NRIs, or persons of Indian origin residing abroad for
allotment of Equity Shares shall, interalia, be subject to conditions, as may be imposed from time to time
by the RBI under FEMA in the matter of refund of application money, allotment of Equity Shares,
subsequent issue and allotment of Equity Shares, interest, export of Equity Share certificates, etc. In case
a Non-Resident or NRI Equity Shareholder has specific approval from the RBI, in connection with his
shareholding, he should enclose a copy of such approval with the CAF.
(k) All communication in connection with application for the Equity Shares, including any change in address
of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of allotment
in this Issue quoting the name of the first / sole applicant Equity Shareholder, folio numbers and CAF
number. Please note that any intimation for change of address of Equity Shareholders, after the date of
allotment, should be sent to the Registrar and Transfer Agents of the Company (i.e. Sharepro Services) in
22
the case of equity shares held in physical form and to the respective DP, in case of equity shares held in
dematerialised form.
(l) Split forms cannot be re-split.
(m) Only the person or persons to whom Equity Shares have been offered and not renouncee(s) shall be
entitled to obtain split forms.
(n) Applicants must write their CAF number at the back of the cheque / demand draft.
(o) Only one mode of payment per application should be used. The payment must be either in cash or by
cheque / demand draft drawn on any of the banks, including a co-operative bank, which is situated at and
is a member or a sub member of the Bankers Clearing House located at the centre indicated on the
reverse of the CAF where the application is to be submitted.
(p) A separate cheque / draft must accompany each CAF. Outstation cheques / demand drafts or post-dated
cheques and postal / money orders will not be accepted and applications accompanied by such cheques /
demand drafts / money orders or postal orders will be rejected. The Registrar will not accept payment
against application if made in cash. (For payment against application in cash please refer point (f) above)
(q) No receipt will be issued for application money received. The Bankers to the Issue / Collecting Bank/
Registrar will acknowledge receipt of the same by stamping and returning the acknowledgement slip at
the bottom of the CAF.
(r) An applicant which is a mutual fund can make a separate application in respect of each scheme of the
fund and such applications shall not be treated as multiple applications. The application made by the
asset management company or custodians of a mutual fund shall clearly indicate the name of the
concerned scheme for which application is being made.
(s) Mode of payment for Resident Equity Shareholders/ Applicants

All cheques / drafts accompanying the CAF should be drawn in favour of the Collecting Bank (specified
on the reverse of the CAF), crossed “A/c Payee only” and marked “Name of the Bank – Saregama
Rights Issue”. Applicants residing at places other than places where the bank collection centres have
been opened by the Company for collecting applications, are requested to send their applications together
with Demand Draft for the full application amount favouring the Bankers to the Issue, crossed “A/c
Payee only” and marked “Name of the Bank – Saregama Rights Issue” payable at Kolkata directly to
the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date. The
Company or the Registrar will not be responsible for postal delays or loss of applications in transit, if
any.
(t) Mode of payment for Non-Resident Equity Shareholders/ Applicants

As regards the application by non-resident Equity Shareholders, the following further conditions shall
apply:
Payment by Non-Residents must be made by demand draft / cheque payable at Mumbai (net of demand
draft charges and postal charges) or funds remitted from abroad in any of the following ways:
1. Application with repatriation benefits

(a) By Indian Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from
abroad (submitted along with Foreign Inward Remittance Certificate); or
(b) By cheque / draft on a Non-Resident External Account (NRE) or FCNR Account maintained in
Mumbai; or
(c) By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and
payable at Mumbai; or
(d) FIIs registered with SEBI must remit funds from special non-resident rupee deposit account.
23
2. Application without repatriation benefits
As far as non-residents holding shares on non-repatriation basis is concerned, in addition to the modes
specified above, payment may also be made by way of cheque drawn on Non-Resident (Ordinary)
Account maintained in Kolkata or Rupee Draft purchased out of NRO Account maintained elsewhere in
India but payable at Kolkata. In such cases, the allotment of Equity Shares will be on non-repatriation
basis.
All cheques/drafts submitted by non-residents should be drawn in favour of the Bankers to the Issue and
marked “Name of the Bank – Saregama Rights Issue – NR” payable at Kolkata and must be crossed
“A/c Payee only” for the amount payable. The CAF duty completed together with the amount payable on
application must be deposited with the Collecting Bank indicated on the reverse of the CAF before the
close of banking hours on the Issue Closing Date. A separate cheque or bank draft must accompany each
CAF.
Applicants may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts
as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft
has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise
the application shall be considered incomplete and is liable to be rejected.
Note:
In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the
investment in Equity Shares can be remitted outside India, subject to tax, as applicable according to
Income Tax Act, 1961.
In case Equity Shares are allotted on non-repatriation basis, the dividend and sale proceeds of the Equity
Shares cannot be remitted outside India.
The CAF duly completed together with the amount payable on application must be deposited with the
Collecting Bank indicated on the reverse of the CAF before the close of banking hours on the aforesaid
Issue Closing Date. A separate cheque or bank draft must accompany each CAF.
In case application received from Non-Residents, allotment, refunds and other distribution, if any, will be
made in accordance with the guidelines/ rules prescribed by RBI as applicable at the time of making such
allotment, remittance and subject to necessary approvals.
Disposal of application and application money

No acknowledgment will be issued for the application moneys received by the Company. However, the
Bankers to the Issue / Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping and
returning the acknowledgment slip at the bottom of each CAF.
In case an application is rejected in full, the whole of the application money received will be refunded.
Wherever an application is rejected in part, the balance of application money, if any, after adjusting any
money due on Equity Shares allotted, will be refunded to the applicant within six weeks from the close of the
Issue.
For further instruction, please read the Composite Application Form carefully.
Important
1. Please read this Letter of Offer carefully before taking any action. The instructions contained in the
accompanying Composite Application Form (CAF) are an integral part of the conditions of this Letter of
Offer and must be carefully followed; otherwise the application is liable to be rejected.
2. All inquiries in connection with this Letter of Offer or accompanying Composite Application Form and
requests for Split Application Forms must be addressed (quoting the Registered Folio Number/ DP and
Client ID no., the CAF number and the name of the first Equity Shareholder as mentioned on the CAF
24
and superscribed “Saregama – Rights Issue” on the envelope) to the Registrar to the Issue at the
following address:
MCS Limited
77/2A, Hazra Road
Ground Floor
Kolkata – 700 029
Tel: +91 33 2476 7350 – 54
Fax: +91 33 2454 1961, 2474 7674
E-mail: mcscal@cal2.vsnl.net.in
3. It is to be specifically noted that this Issue of Equity Shares is subject to Risk Factors appearing on Page i
of this Letter of Offer.
4. The Rights Issue will not be kept open for more than 30 days unless extended, in which case it will be
kept open for a maximum 60 days.
V. TAX BENEFITS
The Company has been advised by M/s. PricewaterhouseCoopers Pvt. Ltd., Tax Consultants of the Company,
vide their letter dated December 30, 2004 that under the current direct tax laws, the follwing tax benefits
inter-alia will be available to the Company and the shareholders of the Company. A shareholder is advised to
consider in his own case the tax implications of an investment in the shares.
The tax benefits vested below are the possible benefits available under the current tax laws in India. Several
of these benefits are dependant on the Company or its shareholders fulfilling the conditions prescribed under
the relevant tax laws. Hence, the ability of the Company or its shareholders to drive of the tax benefits is
dependant upon fulfilling such conditions which based on business imperatives it faces in the future, it may
not choose to fulfil.
The following tax benefits shall be available to the Company and the prospective shareholders under Direct
Tax.
1. To the Company
• The Company would be entitled to deduction in respect of expenditure laid out or expended on
scientific research relating to its business of manufacturing and selling of CDs, audio-cassettes etc in
accordance with and subject to the provision of section 35 of the Income-tax Act, 1961 (the ‘Act’).
• Income earned by way of dividend from another domestic company referred to in section 115O of
the Act is exempt from tax at the hands of the Company in accordance with section 10(34) of the
Act.
2. To the Members of the Company
(i) Under the Income-tax Act, 1961

• Resident Members
o Under section 10(34) of the Act income earned by way of dividend income from domestic
company referred to in section 115O of the Act is exempt from income-tax in the hands of
the shareholders
o Long term capital gain [under section 10(38) of the Act] arising to the shareholder from
transfer of a long term capital asset being equity shares (held for the period of twelve
months or more) which is chargeable to Securities Transaction Tax shall be exempt from
income-tax
o In accordance with section 10(23D) of the Act, all mutual funds set up by public sector
banks or public financial institutions or mutual funds registered under the Securities and
25
Exchange Board of India (SEBI) or authorised by the Reserve Bank of India subject to the
conditions specified therein are eligible for exemption from income-tax on their entire
income, including income from investment in the shares of the Company
o Under section 54EC of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [not covered under section 10(38) of the Act] arising on the
transfer of shares of the Company will be exempt from capital gains tax if the capital gain
are invested within a period of 6 months from the date of transfer in the bonds issued by
! National Bank for Agriculture and Rural Development established under Section 3 of
the National Bank for Agriculture and Rural Development Act 1981;
! National Highways Authority of India constituted under section 3 of National Highway
Authority of India Act, 1988;
! Rural Electrification Corporation Limited, a Company formed and registered under the
Companies Act, 1956;
! National Housing Bank established under section 3(1) of the National Housing Bank
Act, 1987;
! Small Industries Development Bank of India Act, 1989
o If only part of the capital gain is so reinvested, the exemption shall be proportionately
reduced. The amount so exempted shall be chargeable to tax subsequently, if the specified
assets are transferred or converted within three years from the date of their acquisition.
o Under Section 54ED of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [not covered under Section 10(38) of the Act] arising on the
transfer of shares of the Company, will be exempt from capital gains tax if the capital gain
is invested in equity shares of Indian Public Company forming part of an eligible public
issue within a period of 6 months after the date of such transfer. If only part of the capital
gain is so reinvested, the exemption shall be proportionately reduced. The amount so
exempted shall be chargeable to tax subsequently, if the specified assets are transferred or
converted within one year from the date of their acquisition.
o Under Section 54F of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [in cases not covered under section 10(38) of the Act]
arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the
Company will be exempt from capital gains tax subject to other conditions, if the net sales
consideration from such shares are used for purchase of residential house property within a
period of one year before and two year after the date on which the transfer took place or for
construction of residential house property within a period of three years after the date of
transfer.
o Under section 111A of the Act, capital gains arising to a shareholder from transfer of short
terms capital assets, being equity shares (held for not more than twelve months), will be
subject to tax at the rate of 10% (plus applicable surcharge and education cess) provided
such transaction is chargeable to securities transaction tax.
o Under Section 112 of the Act and other relevant provisions of the Act, long term capital
gains [not covered under section 10(38) of the Act] arising to a shareholder on transfer of
shares in the Company, if shares are held for a period exceeding 12 months shall be taxed at
a rate of 20% (plus applicable surcharge and education cess) after indexation as provided in
the second proviso to Section 48 or at 10% (plus applicable surcharge and education cess)
(without indexation), at the option of the Shareholders.
o Gift of the share by the shareholder shall not be chargeable to Income-tax at the hands of
the transferee.
• Non Resident Indians/ Members other than FIIs and Foreign Venture Capital Investors
26
o By virtue of Section 10(34) of the Act, income earned by way of dividend income from
another domestic company referred to in section 115O of the Act, is exempt from tax in the
hands of the recipients.
o Tax on income from investment and Long Term Capital Gains:
! A non-resident Indian (i.e. an individual being a citizen of India or person of Indian

Origin) has an option to be governed by the provisions of Chapter XIIA of the Act viz.
“Special Provisions Relating to certain Incomes of Non-Residents”.
! Under section 115E of the Act, where shares in the Company are subscribed for in
convertible Foreign Exchange by a non-resident Indian, capital gains arising to the non
resident on transfer of shares held for a period exceeding 12 months shall [in cases not
covered under section 10(38) of the Act] be concessionally taxed at the flat rate of 10%
(plus applicable surcharge and education cess) without indexation benefit but with
protection against foreign exchange fluctuation under the first proviso to section 48 of
the Act.
o Capital gain or transfer of Foreign Exchange Assets, not to be charged in certain cases
! Under provisions of section 115F of the Act, long term capital gains [not covered under
section 10(38) of the Act] arising to a non-resident Indian from the transfer of shares of
the Company subscribed to in convertible Foreign Exchange shall be exempt from
income tax if the net consideration is reinvested in specified assets within six months
of the date of transfer, if only part of the net consideration is so reinvested, the
exemption shall be proportionately reduced. The amount so exempted shall be
chargeable to tax subsequently, if the specified assets are transferred or converted
within three years from the date of their acquisition.
o Return of Income not to be filed in certain cases
! Under provisions of section 115-G of the Act, it shall not be necessary for a non-
resident Indian to furnish his return of income if his only source of income is
investment income or long term capital gains or both arising out of assets acquired,
purchased or subscribed in convertible foreign exchange and tax deductible at source
has been deducted therefrom.
o Other Provisions
! Under section 115-I of the Act, a non resident Indian may elect not to be governed by
the provisions of Chapter XII-A for any assessment year by furnishing his return of
income under section 139 of the Act declaring therein that the provisions of the
Chapter shall not apply to him for that assessment year and if he does so the provisions
of this Chapter shall not apply to him instead the other provisions of the Act shall
apply.
! Under the first proviso to section 48 of the Act, in case of a non resident, in computing
the capital gains arising from transfer of shares of the Company acquired in convertible
foreign exchange (as per exchange control regulations) protection is provided from
fluctuations in the value of rupee in terms of foreign currency in which the original
investment was made. Cost indexation benefits will not be available in such a case.
! Under section 54EC of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [not covered under section 10(38) of the Act] arising on
the transfer of shares of the Company will be exempt from capital gains tax if the
capital gains are invested within a period of 6 months from the date of transfer in the
bonds issued by –
27
• National Bank for Agriculture and Rural Development established under Section
3 of the National Bank for Agriculture and Rural Development Act, 1981;
• National Highways Authority of India constituted under section 3 of National
Highway Authority of India Act, 1988;
• Rural Electrification Corporation Limited, a company formed and registered under
the Companies Act, 1956;
• National Housing Bank established under section 3(1) of the National Housing
Bank Act, 1987;
• Small Industries Development Bank of India Act, 1989.
If only part of the capital gain is so reinvested, the exemption shall be proportionately
reduced. The amount so exempted shall be chargeable to tax subsequently, if the
specified assets are transferred or converted within three years from the date of their
acquisition.
! Under section 54ED of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [not covered under section 10(38) of the Act] arising on
the transfer of shares of the Company, will be exempt from capital gains tax if the
capital gain is invested in equity shares of Indian Public Company forming part of an
eligible public issue, within a period of 6 months after the date of such transfer. If only
part of the capital gain is so reinvested, the exemption shall be proportionately reduced.
The amount so exempted shall be chargeable to tax subsequently, if the specified assets
are transferred or converted within one year from the date of their acquisition.
! Under section 54F of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [in cases not covered under section 10(38) of the Act]
arising to an individual or Hindu Undivided Family (HUF) on transfer of shares of the
Company will be exempt from capital gains tax subject to other conditions, if the sale
proceeds from such shares are used for purchase of residential house property within a
period of one year before and two year after the date on which the transfer took place
or for construction of residential house property within a period of three years after the
date of transfer.
! Under section 112 of the Act and other relevant provisions of the Act long term capital
gains [not covered under section 10(38) of the Act] arising on transfer of shares in the
Company, if shares are held for a period exceeding 12 months shall be taxed at a rate of
20% (plus applicable surcharge and education cess) after indexation as provided in the
second proviso to section 48; indexation not available if investments made in foreign
currency as per the first proviso to section 48 stated above) or at 10% (plus applicable
surcharge and education cess) (without indexation), at the option of assessee.
! Under section 111A of the Act, capital gains arising to a shareholder from transfer of
short terms capital assets, being equity shares (held for not more than twelve months),
will be subject to tax at the rate of 10% (plus applicable surcharge and education cess)
provided such transaction is chargeable to securities transaction tax.
• Foreign Institutional Investors (FIIs)
o By virtue of section 10(34) of the Act, income earned by way of dividend income from
another domestic company referred to in section 115O of the Act, are exempt from tax in
the hands of the institutional investor.
o The income realised by FIIs on sale of shares in the Company by way of short term capital
gains referred to in the proposed section 111A of the Act would be taxed at the rate of 10%
(plus applicable surcharge and education cess) as per section 115AD of the Act.
o The income by way of short term capital gains (not referred to in section 111A) or long
term capital gains [not covered under section 10(38) of the Act] realised by FIIs on sale of
28
shares in the Company would be taxed at the following rates as per section 115AD of the
Act.
! Short term capital gains – 30% (In case of short term capital gains referred to in section
111A – 10%) (plus applicable surcharge and education cess)
! Long term capital gains – 10% (without cost indexation plus applicable surcharge and
education cess)
(shares held in a company would be considered as a long term capital asset provided
they are held for a period exceeding 12 months).
o Under section 54EC of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [not covered under section 10(38) of the Act] arising on the
transfer of shares of the Company will be exempt from capital gains tax if the capital gains
are invested within a period of 6 months after the date of such transfer for a period of 3
years in the bonds issued by –
! National Bank for Agriculture and Rural Development established under Section 3
National Bank for Agriculture and Rural Development Act, 1981;
! National Highways Authority of India constituted under section 3 of National Highway

Authority of India Act, 1988;
! Rural Electrification Corporation Limited, registered under the Companies Act, 1956;
! National Housing Bank established under section 3(1) of the National Housing Bank
Act, 1987;
! Small Industries Development Bank of India Act, 1980
o Under section 54ED of the Act and subject to the conditions and to the extent specified
therein, long term capital gains [not covered under section 10(38) of the Act] on the transfer
of shares of the Company, will be exempt from capital gains tax if the capital gains are
invested in shares of an Indian company forming part of an eligible public issue, within a
period of 6 months after the date of such transfer for one year.
• Venture Capital Companies / Funds
o In terms of section 10(23FB) of the Act and subject to the conditions specified therein, all
Venture Capital undertakings referred to Securities and Exchange Board of India (Venture
Capital Funds) Regulations, 1996 made under the Securities and Exchange Board of India
Act, 1992 and notified as such in the Official Gazette, are eligible for exemption from
income tax on all their income, including income from dividend.
• Infrastructure Capital Companies / Funds or Co-operative Bank
o In accordance with and subject to the conditions specified in section 10(23G) of the Act
income from specified investments made to a power sector company by an Infrastructure
Capital Fund or Infrastructure Capital Company or Cooperative Bank on or after first day of
June, 1998 is exempt from levy of Income-Tax.
(ii) Under the Wealth-tax Act, 1957

• Shares of the Company held by the shareholder will not be treated as an asset within the
meaning of section 2(ea) of Wealth-tax Act, 1957, hence Wealth-tax Act will not be applicable.
(iii) Under the Gift-tax Act, 1957

• Gift of shares of the Company made on or after October 1, 1998 are not liable to tax.
29
Notes
• All the above benefits are as per the current tax law as amended by the Finance (No. 2) Act, 2004 and
will be available only to the sole/ first named holder in case the shares are held by joint holders
• In respect of non-residents, taxability of capital gains mentioned above shall be further subject to any
benefits available under the Double Taxation Avoidance Agreement, if any between India and the
country in which the non-resident has fiscal domicile
• In view of the individual nature of tax consequence, each investor is advised to consult his/ her own tax
adviser with respect to specific tax consequences of his/ her participation in the scheme
30
VI. PARTICULARS OF THE ISSUE
Objects of the Issue

The objectives of the issue are as follows:
1. To meet the expenses of the Issue
2. To retire borrowings of the Company
3. To create new content
1. To meet the expenses of the Issue: The expenses of Rights Issue payable by the Company are
estimated to be around Rs30 lakhs (1.25% of Issue Size) and including issue management costs covering
Lead Manager’s fees, Registrar’s fee and expenses, printing and distribution, advertisement cost and
other expenses and contingencies. The total expenses for the Issue will be borne out of the issue
proceeds.
2. To retire borrowings of the Company: The Company’s borrowing as on September 30, 2004
aggregates Rs2,838 lakhs, comprising unsecured loans of Rs1,581 lakhs and secured loans of Rs1,257
lakhs. With an objective to improve debt equity ratio of the Company and consequentially reduce the
interest costs, part of the proceeds will be utilised to retire debts of the Company.
3. To acquire / create new content: Saregama has presence across four business segments viz. music,
home video, (and through its wholly owned subsidiary into) TV software and films. It will be essential to
acquire / create new content primarily of films, along with music and TV software (Please refer to the
Three Pronged Strategy currently being pursued by the Company elaborated under Chapter VII on
History and Business of the Company). The Company plans to utilise a part of the proceeds to invest in
acquisition / creation of new contents.
The Main Objects clause of the Memorandum of Association of the Company enables the Company to
undertake the activities which the Company has been carrying out till date
Requirement and Sources of Funds

The requirement of funds and its means of finance is as under:
Funds Requirement
S. No. Objects Amount (Rs lakhs)

1. To meet expenses of Issue 30
2. To retire borrowing of the Company 1,572
3. To create new content 800
Total 2,402
Sources of Funds
S. No. Sources Amount (Rs lakhs)
1. Present Rights Issue 2,402
Total 2,402
31
VII. MAIN OBJECTS UNDER THE MEMORANDUM OF ASSOCIATION
The Object Clause of the Memorandum of Association (MoA) of the Company enables it to undertake the
activities for which the funds are being raised in the present Issue. Furthermore, the activities the Company
has been carrying out until now is in accordance with the objects of the MoA. The main objects of the
Company inter-alia are:
1. To carry on the businesses of producers, manufacturers, distributors, exporters, importers, lessors,

licensors, exploiters, wholesalers, retailers of an dealers in all types of sound recordings of every
description, in particular, records, audio cassettes, compact discs, laser discs or in any other format, now
or hereinafter known or in existence and in any audio visual media, video tapes, motion pictures, films,
animation software, web casting, simulcasting, broadbanding, acquisition/setting up of portals or vortals
or any other such net related content operations, photographs, holograms etc., transmission of music
through cable, internet and all other web related areas or any other media now or hereinafter known
and/or deal in or otherwise use the copyright therein and/or any other performing rights therein in all
parts of the world, in any and every form and manner and by any and every method and means, now or
hereafter known or in existence and all rights and interests therein and thereto
2. To copyright, print, reprint, publish, manufacture, copy, distribute, exploit, vend, purchase, obtain or
license or otherwise acquire, sell, offer for sale, transfer, grant, license and dispose of, translate, make
versions of, dramatise, arrange, adapt, transpose, transcribe, perform, represent, record, produce,
reproduce, make or procure the making of any transcription or record, deal in or otherwise use music,
musical compositions, numbers and works and literary and dramatic works/property and materials,
pictures, photographs, sketchings, drawings or the reproduction of any of them and the copyrights
thereon in any and every form and manner and by any and every method and means, now or hereafter
known or in existence and any and all rights and interests therein and thereto, of every nature and
description, anywhere in the world
3. To carry on the business of general music and book publishers and printers and of recording and video
company and of compilers, publishers and binders of books, sheet, music, scores, librettes etc. and to
engage, provide and employ to act as agents in the engaging, providing and employing of authors and
composers of musical dramatic compositions of all kinds
Changes in the Memorandum of Association
Change of Name
The Company was incorporated on August 13, 1946 with the name of “The Gramophone Co. (India)
Limited”. The name of the Company was subsequently changed to “The Gramophone Co. of India Limited”
and with effect from April 1, 1956, the word “Private” was added to its name. The Company was converted
into a public Company on October 28, 1968 and consequently the name of the Company was changed to “The
Gramophone Company of India Limited”. Effective November 3, 2000, the name of the Company was
changed from “The Gramophone Company of India Limited” to “Saregama India Limited” vide a fresh
Certificate of incorporation issued by the Registrar of Companies, West Bengal.
Change in the Share Capital

1. By an Ordinary Resolution passed at a General Meeting of the Company held on August 10, 1976, share
capital was increased with effect from the same date to Rs2,50,00,000 divided into 25,00,000 Equity
shares of Rs10 each
2. By an Ordinary Resolution passed at a General Meeting of the Company held on August 23, 1984, share
capital was increased with effect from the same date to Rs5,00,00,000 divided into 50,00,000 Equity
shares of Rs10 each
3. By an Ordinary Resolution passed at a General Meeting of the Company held on March 17, 1986, share
capital was increased with effect from the same date to Rs10,00,00,000 divided into 1,00,00,000 Equity
shares of Rs10 each
4. By an Ordinary Resolution passed at a General Meeting of the Company held on March 21, 1994, share
capital was increased with effect from the same date to Rs25,00,00,000 divided into 2,50,00,000 Equity
shares of Rs10 each
32
VIII. HISTORY AND BUSINESS OF THE COMPANY
The Company was originally a wholly owned subsidiary of the UK based Company EMI Records Limited.
The Company was incorporated in the State of West Bengal on August 13, 1946 with the name of “The
Gramophone Co. (India) Limited” under the provisions of the Companies Act, 1913. With effect from April 1,
1956, the word “Private” was added to its name. The Company was later converted into a public company on
October 28, 1968 and consequently the name of the Company was changed to “The Gramophone Company of
India Limited”. The name of the Company was again changed on November 3, 2000 from “The Gramophone
Company of India Limited” to “Saregama India Limited”.
In November 1968, the Company came out with its first public issue, wherein it issued 1,50,000 Equity shares
of Rs10 each to the Indian public. In 1982-83, the Company’s financial position worsened and it became a
BIFR Company. There was a change in management when RPG Group took over the management of the
Company in 1986. The Company turned around in 1995-96. The reduction in capital was made in November
1996 through a High Court order when the paid-up Capital of the Company was reduced from 1,81,73,074
shares of Rs10 each to 72,69,230 equity shares of Rs10 each. Subsequently, the Company came out with a
private placement in February 2000 wherein it issued 7,00,000 equity shares of Rs10 each at a premium of
Rs1,775. Thereafter, the Company merged its two subsidiaries RPG Music International Limited and Gramco
Music Publishing Limited with effect from March 1, 2000.
BUSINESS OF THE COMPANY

The main business of the Company has been acquiring, marketing and selling of music in both physical and
non-physical formats. However, over the last few years, the Company has broadbased its business model by
entering into other segments of entertainment industry. This was done with twin objectives of de-risking the
business model on one hand and to maximise the returns by encashing on synergies between various segments
of entertainment industry on the other. Through its wholly owned subsidiary, Saregama is present in the
business of TV software and film making. Utilising its strong distribution network, the Company has made
strong strides into home video business.
Manufacturing
The Company has a factory for manufacturing of music cassettes at Kolkata with a capacity of producing up to
60mn cassettes per annum. The Company sources magnetic tape, general-purpose polystyrene, plastic
components for the manufacture of music cassettes from domestic suppliers. The Company outsources not
only purchase of blank CDs but also its replication from leading CD suppliers like Sony, Moser Baer, etc. The
factory is ISO 9001: 2000 accredited.
Distribution
The Company’s distribution network comprises two major mother warehouses located at Kolkata and Mumbai
and ten regional godowns located all over India in different cities. In view of multiple SKUs, supply chain and
logistic network is critical to ensure availability of catalogue products and effective servicing to dealers. The
Company has comprehensive replenishing model for its extensive catalogue facilitating supply from the ready
stock available at mother warehouses. IT-based logistic performance system is also in place to track servicing
of order by the factory and mother warehouses. Conventionally, wholesalers and distributors are the major
customers of the products of Saregama. These wholesalers and distributors thereafter distribute them to the
sub-wholesalers, sub-distributors and retailers. In recent past, specialised mega music retail stores like Music
World, Planet M, and Rhythm House have emerged due to availability of wide repertoire and enjoyable
personal shopping experience. As these large retailers buy music directly from the Company, Saregama can
bypass the intermediaries thereby saving on the operation & distribution costs and enabling retail stores to
procure music products at attractive rates. With the acceleration of retail revolution, the share of sales to retail
stores is progressively increasing. Presently, over 15% of total turnover is derived from the retail marketing.
Further, this distribution wherewithal has attracted large overseas movie studios to tie up with Saregama to
distribute their home video products.
Analysis of Business Segments

This section analyses the various business segments the Company is currently in
33
A. Music Segment
Repertoire Analysis
It was 103 years back in November, 1902 when the first Indian gramophone record was played when Gauhar
Jaan, a noted classical singer of her times, recorded the first ever disc for HMV in Kolkata. Since then,
Saregama India Limited has carried the mantle of marketing music throughout the country. It was only in last
decade of last century that the industry saw a few entrants like Tips Industries, Venus, Sony, Universal, etc.
competing against the Company.
The vast repertoire of Saregama India Limited can be broadly classified under the following categories:
1. New Hindi Film (NHF):

New Hindi Film segment dominates the Indian music industry accounting for almost half of the industry’s
sales. However, this segment also continued to be one of the most risky segments. In recent past, the
acquisition cost for music rights for films have shown substantial decline and some of the producers are
now willing to sign up revenue sharing arrangements. In past, all companies including Saregama incurred
major losses in this segment. Due to unfavourable cost-benefit equation, Saregama consciously has now
reduced NHF acquisition on minimum guarantee basis and increasingly prefer to the revenue sharing
arrangement.
2. Old Hindi Film (OHF):

Saregama’s catalogue strength has contributed to its leadership in this segment. In April-September, 2004,
catalogue sales accounted over 40% of music revenue. The Company has been exploiting its OHF
catalogue in different ways describing them as ‘themes’, ‘moods’ and ‘eras’. The Catalogue sales have
been providing steady cash flow for the Company for funding the acquisition of fresh music rights. The
Company has launched a new packaging strategy to strengthen off-take through trendy inlay cards and
launched new look videos to popularise old melodies. The Company has been actively licensing these
tracks to other music companies which on the one hand generates the licensing income and on the other
hand popularise OHF music further.
3. Classical & Ghazals:

Classical repertoire representing the ageless traditional music of India has conventionally been a profitable
niche. Similarly, Ghazals segment enjoys the patronage of a select band of loyal customers.
4. Regional:
The regional repertoire highlights the multifaceted, rich cultural heritage of India. Saregama has been a
dominant player in the regional repertoire, particularly in the Tamil and Bengali markets.
5. Devotional & Others:

Devotional segment represents an integral part of Indian culture. Saregama’s Devotional segment is
segregated into national and mass devotional. Saregama’s presence in this genre is smaller as compared to
the competitors. Saregama is presently in other genres also like Indipop representing all form of non-film
and non-classical Indian music.
Selling Channels
The various channels through which Saregama sells its music products are as below:
1. Selling in Physical Format

As discussed in the Industry section, the legit Indian music industry is worth Rs6.2bn (Source: Indian
Entertainment Industry, FICCI, 2002). In terms of units sold, it is one of the largest markets in the world.
However, the sale value is low primarily because the low margin music cassettes (MCs) dominate the off-
take. In the last decade, film music contributed 95% of total size of the industry. However, over the last
few years, non-film genres like Indipop, Ghazals, Classical and Regional music have grown in popularity,
causing the film music segment to decline to around 60% of the total industry.
Saregama India Limited has been in existence for almost a century. The Company owns over 3,00,000
tracks, one of the largest musical archives owned by any company in the world. This archive covers 13
languages across eight musical categories. Saregama records and markets music in the form of music
cassettes (MCs) and Compact Discs (CDs) within India, and internationally through its subsidiaries
34
Saregama Plc., U.K. and RPG Global Music Limited, Mauritius.
2. Pioneer in Electronic Distribution Format

Saregama India Limited is the first Indian company to have moved into the area of digital download
through broadband connectivity. The Company foresaw the opportunity early and started digitising its
huge catalog. The Company entered into agreements in 2003-04 with some major digital music
aggregators like The Orchard, Divine Arts, Inc., Loudeye Inc., Soundbuzz, etc. who in turn have uploaded
Saregama’s music content with many renowned music providers like Rhapsody, Real, iTunes, Napster,
MSN Music, Sony Connect, etc. for distribution of its catalog in digital format over the internet. The
digitised part of the content has been made available to these aggregators and major Internet music sites in
USA are now selling the Company’s content.
The Company foresees that with the widespread availability of affordable broadband in India, the natural
progression to increased Internet usage and subsequent increase in e-commerce will also become a reality
in the next two years. With no manufacturing costs, no stocks or receivables, the Company expects the
returns from this model will be robust with lower risk profile.
3. Publishing Segment
Besides physical production, marketing and distribution of music, Saregama also sells music in non-
physical form. For usage of music content owned by Saregama, third parties pay licensing fees to the
Company. Similarly, collection societies like IPRS & PPL in India and MCS, PRS & BMG overseas
receives publishing income from radio stations, TV channels, restaurants, etc. which they distribute to the
music companies based on the usage of content owned by respective companies. Being large repertoire
owner, publishing income is one of the major sources of revenue for Saregama.
B. Home Video Business

The Home Video Market, at Rs10bn in 2004, is currently the fastest growing segment in the entertainment
industry growing at over 25%-30% (Source: Businessworld dated January 10, 2005). The Company entered
into English Home Video business in the year 2002-03 establishing a tie up with Warner Home Video
Products (a division of Warner Brothers). In this business, the Company markets and distributes films of
overseas studios on VCDs and DVDs and pay royalty to the studios on the actual sales. The Company’s strong
distribution network has attracted overseas studios to enter into distribution agreements with Sargeama vis-à-
vis other local music companies. Other renowned overseas studios like Universal, BBC, Miramax, New Line
and recently Paramount has appointed Saregama as their exclusive licensee in India. The Company has also
signed up a licensing agreement for a period of two years with renowned overseas studio MGM. This
agreement (with MGM) will become effective from March 1, 2005 after the parties comply with the terms and
conditions under the agreement. The Company has made English movies popular with masses by introducing
dubbed versions of many hit English movies into Hindi, Tamil & Telegu.
Due to declining hardware prices (VCD/DVD players), this business has shown a substantial growth during
2004. For the six month period ending September 30, 2004, the Home Video Business contributed over 15% to
the Company’s turnover. Further, the segment also enjoys high margins as the arrangement works on revenue
sharing over an above a nominal minimum guarantee amount.
C. Films Segment
The Company diversified into film making business, through its wholly owned subsidiary, Saregama Films
India, with their first Hindi film release, ‘Tumsa Nahin Dekha’ to derisk the business model which was over
dependent on the music business. Given the strong synergies of film making business with the existing
business, the Company developed and implemented a conscious strategy to broadbase its business model to tap
various revenue streams generated by the film making business, some of them are given below:
1. Domestic Theatrical Release: Distribution and screening of new movies in domestic theatres
2. Overseas Theatrical Release: Distribution and screening of new movies in foreign theatres
3. Music: Producing the movies provides the Company with full ownership rights of the music content
4. Satellite TV and Doordarshan
5. Home Video: Declining hardware prices has resulted in increase in demand for home videos both
domestically and internationally
6. Song VCDs: This is a new segment of music which has caught fancy due to distribution through large
retailers
7. Internet Streaming & Downloads
35
Successful Turnaround
The performance of the Company during FY02, FY03 and FY04 was not very encouraging as it incurred
heavy losses due to following reasons
• Lacklustre performance of the film industry: Indian film industry, on which music industry is heavily
dependent, had been going through tough times in the last few years
• High cost of acquisition of music rights and equally expensive promotion
• Increased piracy
During late 2003 and early 2004, the Company worked on a conscious three pronged strategy to implement a
turnaround plan. It identified the following action points:
i) Strengthening the core Music Business

The Company took the following steps to strengthen its core music business:
a) De-risking
The Company pulled out of the high risk business of acquiring new film music content. The impact of
Company pulling out of the new film music content market had the impact and a string of
unsuccessful movies helped the music industry to get on an even footing with film producers.
Recently, the Company has been able to negotiate for a revenue sharing arrangement with film
producers without huge minimum guarantee upfront which were hitherto become the norm. The year
2004 saw huge hits like ‘Murder’, ‘Dhoom’, and ‘Hum Tum’ impacting the Company’s bottomlines
favourably.
b) Exploitation of Rich Catalogue

The Company focused on introduction of many new premium products showcasing its rich catalogue
by innovative compilations. Further, the Company’s catalogue has become a strong resource for new
age music like remixes
c) Improving Efficiency
The Company focused on optimisation of major costs like royalties, advertisement & promotion. The
Company effected savings to the tune of over 40% in marketing overheads alone. Further, the
Company achieved savings in operating expenditure through rationalisation of manpower and
observing austerity while incurring expenditure like traveling, communication, etc.
ii) Focus on Growth Areas
a) Home Video
Realising the potential in home video segment due to declining hardware prices, the Company
intensified its efforts in entering into licensing agreements with overseas studios to market overseas
movies in India. The overseas studios have preferred partnering with Saregama because of its vast
distribution network with its 175 wholesalers distributing to over 30,000 retailers – unmatched in the
industry (Source: Businessworld dated January 10, 2005). The Company is progressively expanding
this business segment by signing up with more and more overseas studios. Till 2003-04, the studios
with Saregama were Warner, Universal, BBC, Miramax & Newline. In addition to these, the
Company signed a license agreement with Paramount Studio in September 2004.
b) TV Content
The Company has entered the business of creating television software through its subsidiary
Saregama Films Ltd and is currently one of the leading television content producers in South India
under Sun TV network.
c) Films
The Company diversified into film making business, through its wholly owned subsidiary, Saregama
Films India, with their first Hindi film release, ‘Tumsa Nahin Dekha’ to derisk the business model
which was over dependent on the music business. Given the strong synergies of film making business
with the existing business, the Company developed and implemented a conscious strategy to
broadbase its business model.
d) Publishing Business
Besides physical production, marketing and distribution of music, Saregama has laid extra focus on
36
selling music in non-physical form. For usage of music content owned by Saregama, third parties pay
licensing fees to the Company. Similarly, collection societies like IPRS & PPL in India and MCS,
PRS & BMG overseas receives publishing income from radio stations, TV channels, restaurants, etc.
which they distribute to the music companies based on the usage of content owned by respective
companies.
iii) New Initiatives – Pioneering Efforts in Distribution through Electronic Format

As discussed above, the Company focussed its efforts towards futuristic digital download format of
distribution and digitised a large part of its huge catalog. It entered into agreements with major digital
music aggregators like The Orchard, Divine Arts, Inc., Loudeye Inc., Soundbuzz, etc. to upload its music
content with renowned music providers like Rhapsody, Real, iTunes, Napster, MSN Music, Sony
Connect, etc. for distribution in digital format over the Internet.
Impact of Turnaround Strategy

The above initiatives resulted in the Company coming out of red and posting a nominal PAT of Rs192 lakhs
for the six month period ending September 30, 2004.
Subsidiaries of Saregama India Limited

The Company has the following three subsidiaries:
1. Saregama Films Limited (SFL)
SFL was incorporated on March 27, 2003 as a wholly owned subsidiary of Saregama India Limited. The
company has entered into the arena of films and TV software. The board of directors comprises of Mr. D. R.
Mehta, Mr. G. B. Aayeer and Mr. Harish Dayani
The financial performance of SFL (Rs lakhs) based on latest available audited accounts is given below:
Since incorporation 2004-05

Particulars 31.03.04 6 months
Sales & Other Income 227.87 745.21
PAT /(Loss) (199.11) (67.92)
Equity Share Capital 929.01 929.01
Reserves (after adjusting for debit balance in P&L a/c (199.11) (267.04)
Book Value (Rs) 7.80 7.13
EPS (Rs) NA NA
2. Saregama Plc (SPLC)
SPLC was incorporated in England & Wales as RMI Global Plc on March 16, 1999. Subsequently, the name
was changed to SPLC on July 13, 1999. The principal activities of the company are marketing of music
cassettes, compact discs, video compact discs and digital video discs. The board of directors comprises of:
P. F. Simms D. R. Mehta G.B.Aayeer

P.K.Mohapatra
The shareholding pattern of SPLC is given below:
Shareholders Shares held % of share capital

Saregama India Ltd 70,12,222 70.23
BTS Investment Fund 6,16,850 6.18
Goldman Sachs Securities (Nominees) Ltd. 6,90,140 6.91
Others (individual holding not exceeding 3% ) 16,65,788 16.68
Total 99,85,000 100.00
The financial performance of SPLC (GBP £’000) based on latest available audited accounts is given below:
37
2004-05
Particulars 2001-02 2002-03 2003-04 6 months
Sales & Other Income 1,293 1,742 1,386 476
PAT /(Loss) (758) (287) (301) (25)
Equity Share Capital 99.85 99.85 99.85 99.85
Reserves (after adjusting for debit balance in
P&L a/c) 1,846 1,560 1,258 1,233
Book Value (£) 0.19 0.17 0.14 0.12
EPS NA NA NA NA
(1 £ = Rs80.19 as per The Economic Times as on January 19, 2005)
3. RPG Global Music Ltd (RPGG)
RPGG was incorporated in the Republic of Mauritius as an International Company on January 7, 2000. The
company is a wholly owned subsidiary of Saregama India Limited. The principal activities of the company are
marketing of music cassettes, compact discs, video compact discs and digital video discs. The board of
directors comprises of Mr. G. B. Aayeer and Mr. B. L. Chandak
The financial performance of RPGG (Rs lakhs) based on latest available audited accounts is given below:
2004-05
Particulars 2001-02 2002-03 2003-04 6 months
Sales & Other Income 443.01 326.01 158.48 79.84
PAT /(Loss) (177.01) (338.45) (153.62) (69.40)
Equity Share Capital 829.08 829.08 829.08 829.08
Reserves (after adjusting for debit balance in
P&L a/c) (317.19) (655.65) (809.26) (878.41)
Book Value 27.46 9.30 1.06 (2.65)
EPS NA NA NA NA
38
SWOT Analysis of Saregama
Strengths
1. Large catalogue comprising music of all genres viz. old hindi films, regional, classical etc.
2. Oldest music company in India, with strong industry standing and relationship with artistes
3. Member of RPG Group, one of the large Indian industrial groups
4. Strong distribution network, better than any other music company
5. Saregama and its three subsidiaries provides broad base business model having interest in various business
segments of entertainment industry viz. music, home video distribution, TV software and films
6. International presence through two subsidiaries Saregama Plc., U.K. and RPG Global Music Ltd.,
Mauritius
7. Strong human resources, experienced employees with vast experience in the entertainment industry
Weaknesses
1. Shrinking market size both in volume and value for physical sale of music
2. Piracy which has become high tech after introduction of MP3 format
3. High level of expenditure involved in creation/acquisition of content and development of new artistes
4. Low capacity utilisation of MC manufacturing plant
5. Limited presence in new age music like Pop, Spiritual, etc.
Opportunities
1. Exploitation of old Hindi film catalogue through re-launch of re-mixes and version recordings
2. Scope for increase in publishing income locally and internationally through pro-active partnership with
radio, TV, mobile companies, etc.
3. Home Video segment becoming more profitable with increasing shift from VCDs to DVDs
4. Growth of large format retail stores generating additional sales for the Company
5. Sale of music through internet in the form of digital downloads through tie up with more music providers
Threats
1. Further drop in sales volume due to spread of radio, cheap VCDs and MP3 pirated discs
2. Only promoted products will attract consumers share of wallet which could be a threat for traded
catalogue
3. International business weakening further due to piracy and parallel import
39
IX. PROMOTER AND PROMOTER GROUP
Background of Promoters
The Company is part of the group of companies within the RPG Enterprises conglomerate which comprises
various entities under the leadership of the Goenka family. The RPG Enterprises has interests in utilities,
information technology, rubber, chemicals and related products, retail and other speciality businesses.
The RPG Enterprises is controlled by Mr. R. P. Goenka along with his sons. Mr. R. P. Goenka is the Chairman
of the Company and Mr. Sanjiv Goenka is the Vice-Chairman. The details of the Promoters are given below:
1. Mr. R. P. Goenka (74) is the Chairman of the Board of Directors of Saregama

India Limited. He is the founder and head of RPG Enterprises and is a leading
industrialist of India. Mr. Goenka was the Chairman of the Board of Governors of
the Indian Institute of Technology, Kharagpur and was also a Director of the
Industrial Development Bank of India.
Educational Qualification: M.A.

Driving Licence No.: N.A.
Voter ID No.: RJ/04/027/156397
Passport No.: D 112011
2. Mr. Sanjiv Goenka (43) is the Vice-Chairman of the Board of Directors of

Saregama India Limited. Mr. Goenka is the Chairman / Director of a large number
of companies and is a member of a number of trade and industry committees and
representative bodies. He is the past President of the Confederation of Indian
Industry and is the current Chairman of the Board of Governors of the Indian
Institute of Technology, Kharagpur
Educational Qualification: B.Com

Driving Licence No.: WB-01-145284
Voter ID No.: N.A.
Passport No.: Z-021335
The Permanent Account Number, bank account number and passport number of the promoters has been
submitted to the stock exchanges on which securities are proposed to be listed at the time of filing the draft
Letter of Offer with them.
The details of the litigation, disputes towards tax liabilities or criminal/civil prosecution/complaint against the
above-mentioned promoters have been disclosed in the chapter “Outstanding Litigation, Defaults and Material
Developments”.
40
Details of the five largest listed companies within the promoter group companies (chosen on the basis of
market capitalisation as on date)
1. CESC Limited
CESC Limited (CESC) was incorporated in Calcutta on March 30, 1978. The company is engaged in the
generation and distribution of electric power in the cities of Calcutta and Howrah and adjoining areas.
CESC is currently the sole distributor of electricity within an area of 567 square kilometers. Sales of
electricity are made by the Company directly to over 19.49 lakhs end-users including domestic consumers
as well as commercial and industrial entities.
CESC’s registered office is situated at CESC House, Chowringhee Square, Kolkata – 700 001. CESC is
listed on the CSE, BSE, NSE and London Stock Exchange.
The Shareholding pattern of the company (as on March 31, 2004) is as follows:
Sr. Category No. of shares held % of voting

No of Rs10 each strength
1 Indian Promoter 27,283,020 41.26
2 Mutual Funds and UTI 1,171,160 1.77
3 Banks, Financial Institutions, Insurance Companies 8,990,335 13.60
and State Government*
4 Foreign Institutional Investors (FIIs) 9,065,821 13.71
5 Private Corporate Bodies 6,706,516 10.14
6 Indian Public 9,287,403 14.05
7 Non Resident Indians (NRIs) and OCBs 2,926,422 4.43
8 Others 690,946 1.04
Grand Total 66,121,623 100.00
The financial performance of CESC for the last 3 years is as follows (Rs lakhs)
Particulars 2001-02 2002-03 2003-04

Sales 207,976 218,525 234,843
Other Income 6,327 5,806 6,806
PAT/(Loss) (13,189) 2,774 11,790
Equity Share Capital 6,173 6,173 6,670
Reserves 80,125 84,531 99,993
Book Value (Rs) 65 76 167
EPS (Rs) NA 3 17
Source: Annual Accounts
Quotes for last six months at BSE

BSE
Month High (Rs) Low (Rs)
July 2004 112.75 88.35
August 2004 109.95 100.50
September 2004 118.40 106.50
October 2004 132.00 110.90
November 2004 148.25 120.05
December 2004 175.80 131.00
Stock Market Data

High/ Low price in the last 6 months (Rs) 175.80/83.34
Market price on date of filing with stock exchange (Rs) 152.15
Market capitalisation on date of filing (Rs lakhs) 113,235
Board of Directors
R P Goenka Sanjiv Goenka Pradip Khaitan
Brij Mohan Khaitan Bhagwati Prasad Bajoria Sudhin Roy Chowdhury
41
Pradip Roy K M Jaya Rao Tarun Kumar Ray
Priya Brata Ghosh Birenjit Kumar Paul Sumantra Banerjee
2. Ceat Limited
Ceat Limited (Ceat) was incorporated on March 10, 1958. The company is in the business of
manufacturing tyres with a large product range for a variety of vehicles such as trucks, buses, light
commercial vehicles, passenger cars, two wheelers etc.
Ceat’s registered office is situated at 463, Dr. Annie Besant Road, Worli, Mumbai – 400 025. Ceat is
listed on the BSE and NSE.
The shareholding pattern of the company (as on March 31, 2004) is as follows:

No. of Rs10 each strength
1. Indian Promoters 1,21,20,141 34.42
2. Foreign Promoters 23,76,465 6.75
3. Banks, Financial Institutions, Insurance Companies 66,51,431 18.89
4. Mutual Funds & UTI 19,94,136 5.66
5. Foreign Institutional Investors 2,35,396 0.67
6. Private Corporate Bodies 25,45,278 7.23
7. Indian Public 86,78,817 24.65
8. NRIs / OCBs 5,38,001 1.53
9. Others 73,655 0.21
Total : 3,52,13,320 100.00
The financial performance of Ceat for the last 3 years is as follows (Rs lakhs):
Particulars 2001-02 2002-03 2003-04

Sales 1,36,137 1,48,827 1,40,083
Other Income 2,340 2,754 12,222
PAT /(Loss) 240 1,841 1,406
Reserves 27,481 28,926 29,934
Book Value (Rs) 78.04 82.15 94.97
EPS (Rs) 0.68 5.24 3.99

BSE
July 2004 39.70 31.00
August 2004 41.40 33.20
September 2004 45.40 39.65
October 2004 46.70 37.50
November 2004 59.00 35.20
December 2004 61.65 50.90
Stock Market Data

High/ Low price in the last 6 months (Rs) 67.9/31.00
42
Board of Directors
R P Goenka H V Goenka P K Chowdhary
G Accornero (Dr.) M A Bakre A C Choksey
S Doreswamy J N Guzder H Khaitan
B S Mehta H L Mundra K R Podar
N Srinivasan M S Gupta
3. KEC International Limited

KEC International Limited (KEC) was incorporated on May 7, 1945 as a private limited company for
manufacturing and erection of transmission towers. The company was earlier controlled by the Kamani
Engineering Corporation Limited and subsequently acquired by RP Goenka Group.
KEC’s registered office is situated at 3rd floor, Transasia House, Chandivali Studio Road, Chandivali,
Mumbai – 400 072. KEC is listed on the BSE, NSE and the CSE.
The shareholding pattern of the company is as follows:

No. strength
1. Indian Promoters 1,46,79,934 40.91
2. Mutual Funds and UTI 19,00,918 5.29
4. FIIs 23,52,621 6.56
6. Indian Public 92,36,953 25.74
7. NRIs / OCBs 2,40,041 0.67
8. - Directors & Relatives 29,326 0.08
9. - Clearing Member 2,31,810 0.65
Total 3,58,85,854 100.00
Source: BSE
The financial performance of KEC for the last 3 years is as follows (Rs lakhs):
Particulars 2001-02 2002-03 2003-04

Sales & Other Income 54,998 74,767 82,694
PAT / (Loss) (6,434) (954) 2,528
Share Capital 3,326 3,326 3,326
Reserves (excl. Reval. Reserve) 16,248 13,333 12,076
EPS (Rs) (19.82) (3.07) 760
Book Value (Rs) 46.31 49.94 51.91

BSE
July 2004 90.80 60.50
August 2004 96.85 76.45
September 2004 118.70 91.25
October 2004 129.40 114.00
November 2004 129.20 110.15
December 2004 138.40 114.75
Stock Market Data

High/ Low price in the last 6 months (Rs) 144.00 / 66.10
43
Board of Directors
Harsh Goenka R D Chandak A S Gupta
S M Kulkarni G L Mirchandani A T Vaswani
J M Kothary M Ramachandran S S Thakur
Neeta Mukherjee
4. Zensar Technologies Limited

Zensar Technologies Limited (ZTL) (earlier known as International Computers Indian Manufacture
Limited) was incorporated as International Computers and Tabulators Indian Manufacturing Company
Limited on March 29, 1963 to carry on the business of manufacturing and dealing in computers and
tabulators of all kind.
ZTL’s registered office is situated at Mile Post No. 4, Pune Nagar Road, Pune. ZTL is listed on the BSE,
NSE and the Pune Stock Exchange.
The shareholding pattern of the company, as on March 31, 2004 is as follows:

1. Indian Promoters 69,14,091 29.69
2. Foreign Promoters 69,14,091 29.69
4. Mutual Funds & UTI 1,150 0.00
5. FII 1,900 0.01
7. Indian Public 33,57,341 14.42
8. NRIs / OCBs 25,160 0.11
9. Other foreign bodies 51,50,647 22.12
Total 2,32,88,064 100.00
The financial performance of ZTL for the last 3 years is as follows (Rs lakhs):
Particulars 2001-02 2002-03 2003-04

Sales 7,029 9,665 12,675
Other Income 1,463 342 701
PAT 1,122 816 1,400
Equity Capital 2,329 2,329 2,329
Capital Reserves 10 10 10
EPS
- Basic 4.82 3.50 6.01
- Diluted 4.80 3.49 5.99
Book Value 32.69 34.39 38.95

BSE
July 2004 116.50 75.00
August 2004 133.50 111.55
September 2004 136.85 111.00
October 2004 143.50 125.65
November 2004 173.90 126.00
December 2004 172.15 145.25
Stock Market Data

44
Board of Directors
Harsh Goenka Tim Esculder Ganesh Natarajan
Arvind N. Agarwal P. K. Choksey Nirmalya Kumar
John Levack P. K. Mohapatra A.T. Vaswani
Anthony Pipe
5. Phillips Carbon Black Limited

Phillips Carbon Black Limited (PCBL) was incorporated on March 31, 1960. The company is in the business
of producing carbon black.
PCBL’s registered office is situated at Kolkata. PCBL is listed on the BSE, NSE and CSE.
The shareholding pattern of the company as on March 31, 2004 is as follows:

1. Promoters 93,48,602 52.66
3. Mutual Funds & UTI 10,00,035 5.63
5. Indian Public 36,04,382 20.30
6. NRIs / OCBs 1,15,716 0.65
Total : 1,77,53,196 100.00
The financial performance of PCBL for the last 3 years is as follows (Rs lakhs):
Particulars 2001-02 2002-03 2003-04

Sales and other income 49,338 49,633 54,519
PAT /(Loss) 432 540 1,860
Reserves 15,866 7,069 8,117
Book Value (Rs) 61 64 73
EPS (Rs) 2 3 10

BSE
July 2004 52.00 41.00
August 2004 66.80 46.60
September 2004 76.40 61.00
October 2004 69.90 56.00
November 2004 80.40 56.00
December 2004 102.85 63.60
Stock Market Data

Board of Directors
R P Goenka Sanjiv Goenka Sudhir Sahgal
B M Khaitan Amiya Gooptu C R Paul
Ram Tarneja (Dr.) K S B Sanyal Paras K Chowdhary
S K Bajoria O P Malhotra
45
Details of the five largest unlisted companies within the promoter group companies (chosen on the basis
of total income as on date)
1. Ceat Holdings Limited (CHL)

CHL was incorporated as Murphy Investments Limited on July 12, 1979. Its name was subsequently
changed to Ceat Securities Limited and then to Ceat Holdings Limited on January 13, 1995. The
Company is a wholly owned subsidiary of Ceat Limited and is an investment company. Its Board of
Directors consists of the following persons:
T. M. Elavia Prem Kapil V. Sridhar

U. Banerjee S. K. Tamhane A. J. Menon
I. I. Khan P. Banerjee
The financial performance of CHL (Rs lakhs) based on latest available audited accounts is given below:
2002-03
Jan 2002 to
Particulars 2001 March 2003 2003-04
Sales & Other Income 1,132 880 284
PAT /(Loss) (65) 192 (383)
Reserves (after adjusting for Debit balance in P&L
account) (64) 173 (210)
Book Value (Rs) 9.84 10.43 9.48
EPS (Rs) NA 0.5 NA
2. Jubilee Investments & Industries Limited (JIIL)

JIIL was incorporated on February 22, 1995 as RPG Mobile Limited. Subsequently, the name was
changed to JIIL on July 12, 2002. The company is an investment company and it is a subsidiary of RPG
Communication Holdings Ltd with the following persons on its Board:
R. P. Goenka D. R. Mehta S. Banerjee

P. K. Chaudhary Capt. S. Vasudeva A. K. Dhawan
R. S. Baid
The shareholding pattern of JIIL is given below:
Shareholders Shares held % of voting strength

Adapt Investments Ltd. 10,346 0.01
Adorn Investments Ltd. 9,906 0.01
B N Elias Ltd. 8,466 0.01
Brabourne Investments Ltd. 518,648 0.70
Brentwood Investments Limited 12,143 0.02
Canal Inv & Inds. Ltd. 35,131 0.05
Carniwal Investments Ltd. 19,527 0.03
Ceat Holdings Ltd. 44,691 0.06
Chattarpati Investments Ltd. 537,427 0.73
Duncan Bros. & Co. Ltd. 83,317 0.11
Eastern Aviation & Inds. Ltd. 17,225 0.02
Individuals 1,658,209 2.25
Hilltop Holdings India Ltd. 19,308,982 26.20
Harrisons Malayalam Ltd. 735,312 1.00
KTL Inds Fin. Co. Ltd. 495,044 0.67
46
Off-Shore India Ltd. 173,872 0.24
Organised Investments Ltd. 3,060 0.00
RPG Comm Holdings Ltd. 50,000,000 67.84
South Asia Elcc Holdings Ltd. 27,191 0.04
Total 73,698,497 100.00
The financial performance of JIIL (Rs lakhs) based on latest available audited accounts is given below:
Particulars 2001-02 2002-03 2003-04

PAT /(Loss) 203 (1,129) (0.65)
Reserves (after adjusting for debit balance in P&L a/c 7,172 6,043 6,043
Book Value (Rs) 19.72 18.19 18.19
EPS (Rs) 0.28 NA NA
3. Universal Industrial Fund Limited (UIF)

UIF was incorporated on September 7, 1988 as an investment company. The company became a public
limited company on December 23, 1992. The company is a wholly owned subsidiary of Jubilee
Investments & Industries Limited. The Board of Directors of the company consists of Mr. S. Chakrabarti,
Mr. S. Bhandari and Mr. A. K. Sanganeria.
The financial performance of UIF (Rs lakhs) based on latest available audited accounts is given below:
Particulars 2001-02 2002-03 2003-04

Sales & Other Income 1,211 952 1,327
PAT/(Loss) 54 (15) (30)
Reserves (after adjusting debit balance in P&L
account) (1,037) (1,053) (1,083)
Book Value (Rs) 1.19 1.07 0.82
EPS (Rs) 0.46 NA NA
4. Hilltop Holdings India Limited (HHIL)

HHIL was incorporated on December 28, 1984 as private limited company. It subsequently became a
public limited company on October 12, 1993. The company is an investment company with the following
persons on its Board:
R. P. Goenka B. C. Malu S. Banerjee

R. S. Baid S. M. Kulkarni S. Samuel
D. H. Pai Panandiker
The shareholding pattern of HHIL is given below:

Canal Inv & Inds Ltd. 995,000 7.57
Ceat Ltd. 354,654 2.70
Chattarpati Investments Ltd. 2,779,654 21.16
H C Mathur 2 0.00
Harrisons Malayalam Ltd. 1,901,754 14.48
Jubilee Inv & Inds Ltd. 1,690,000 12.86
Off-Shore India Ltd. 5,415,550 41.22
Total 13,136,614 100.00
The financial performance of HHIL (Rs lakhs) based on latest available audited accounts is given below:
47
Particulars 2001-02 2002-03 2003-04
PAT /(Loss) (1,713) (1,796) (209)
Reserves (after adjusting for debit balance in P&L a/c) 285 (1,511) (1,720)
Book Value (Rs) 12.17 (1.50) (3.09)
EPS (Rs) NA NA NA
5. Brabourne Investments Limited (BIL)

BIL was incorporated on June 27, 1979 and is an investment company. Its Board of Directors consists of
Mr. A. K. Sanganeria, Mr. S. N. Kapoor and Mr. Manab Chaudhuri.
The shareholding pattern of BIL is given below:

B N Elias & Co. Ltd 520,640 20.79
Brentwood Investments Ltd. 226,950 9.06
Ceat Ventures Ltd. 152,000 6.07
Canal Inv & Inds Ltd. 2,100 0.08
Hilltop Holdings India Ltd. 31,000 1.24
Jubilee Inv & Inds Ltd. 121,110 4.84
KTL Inds Finance Co. Ltd. 61,200 2.44
Spencer & Co. Ltd. 750,000 29.95
Yield Investments Pvt Ltd. 639,174 25.52
Total 2,504,174 100.00
The financial performance of BIL (Rs lakhs) based on latest available audited accounts is given below:
Particulars 2001-02 2002-03 2003-04

PAT /(Loss) (489) (52) (187)
Reserves (after adjusting for debit balance in P&L a/c) (2,380) (2,432) (2,619)
Book Value (Rs) 4.97 2.87 (0.44)
EPS (Rs) NA NA NA
48
X. MANAGEMENT OF THE COMPANY
The Company is managed by the Board of Directors under the Chairmanship of Mr R P Goenka. Mr Sanjiv
Goenka is the Vice-Chairman of the Company and Mr Dilip R. Mehta is the Managing Director. The Board
consists of eleven directors (including the Managing Director). The Board is represented by one nominee of
financial institution namely UTI and one nominee from EMI, UK.
Board of Directors
Composition of the Board:

The Board meets with the requirements of corporate governance and it consists of a majority of independent
directors.
S. No. Name, Age, Designation, Particulars of other Directorship

Qualification, Address and
Occupation
1. Rama Prasad Goenka, 74 CESC Limited
Chairman Ceat Limited
Hilltop Holdings India Limited
M.A. Jubilee Investments & Industries Limited
International Management Institute – Chairman
19, Belvedere Road
Kolkata - 700 027 Executive Trustee
Indira Gandhi Memorial Trust
Industrialist Rajiv Gandhi Foundation
2. Sanjiv Goenka, 43 Phillips Carbon Black Limited

Vice Chairman Harrisons Malayalam Limited
Spencer & Co. Limited
B. Com. RPG Enterprises Limited
CESC Limited
19, Belvedere Road Graphite India Limited
Kolkata – 700 027 Noida Power Company Limited
RPG Guardian Pvt. Limited
Industrialist Foodworld Supermarkets Limited
Spencer International Hotels Limited
Great Wholesale Club Limited
Spencer Travel Services Limited
Committee Member
The Indian Chamber of Commerce
Confederation of Indian Industry (New Delhi)
ICC India
Confederation of Indian Industry (Eastern Region)
Member
Indian Institute of Technology, Kharagpur - Chairman
Woodlands Medical Centre Ltd. – Chairman – Board of
Governors
International Management Institute, New Delhi
Chairman – Board of Governors
3. Sushila Goenka, 68
Director
Home educated
19, Belvedere Road

Kolkata – 700 027
49
Housewife & Investor
4 Sumantra Banerjee, 55 Spencer International Hotels Limited

Director G.F.Kellner & Co. Limited
B.Tech, MS-USA, MBA-USA Dakshin Bharat Petrochem Limited
CESC Limited
‘The Heritage’, 2C, Alipore Avenue Ghaziabad Power Company Limited
Kolkata – 700 027 Alpha Carbon Limited
Carniwal Investment Limited
Company Executive Noida Power Company Limited
Jubilee Investments & Industries Limited
5 C. Ancliff, 39 EMI Music International Services Limited

Director EMI Records Limited
Virgin Records Limited
Solicitor EMI Group Holdings (UK) Limited
EMI Group International Holdings Limited
121, Chestnut Grove, EMI Group Nominees Limited
London SW12 8JH, UK EMI (IP) Limited
VRL 1 Limited
Lawyer
6 P. K. Mohapatra, 54 Spencer International Hotels Limited

Director Foodworld Supermarkets Limited
Music World Limited
B.Sc. (Eng.), AMP Zensar Technologies Limited
RPG Telephone Limited
15 Arch Bishop Mathias Avenue Basic Tele Services Limited
Chennai – 600 028 RPG Satellite Communication Limited
Saregama Plc, UK
Company Executive Zensar Technologies Inc., USA
Zensar Technologies (UK) Limited
HanZen Technologies Consulting (Zhuhai) Limited
RPG Guardian Private Limited
Zensar Technologies Gmbh, Germany
Tamil Nadu Industrial Guidance & Export Promotion
Bureau
7 Harsh Neotia, 43 Gujarat Ambuja Cements Limited

Director Ambuja Cement Eastern Limited
Ganapati Parks Limited
B.Com.(Hons), GGL Hotel & Resort Company Limited
OPM, Harvard Business School, USA, Bengal Ambuja Housing Development Limited
Bengal Ambuja Metro Development Limited
7/2 Queen’s Park, Ambuja Cement India Limited
Kolkata – 700 019 Energy Development Company Limited
Choicest Enterprises Limited
Industrialist Park Hospitals
8 J. N. Sapru, 71 DIC India Limited

Director BOC India Limited
Bay-Forge India Limited
M.A.(Economics) Nicco Parks & Resorts Limited
Philips India Limited
2A Sunflower Court Krishvidur Srvices Limited
7, Lovelock Place Rakshvidur Services Limited
Kolkata – 700 019 Urpas Investments Private Limited
Royal Calcutta Turf Club – Steward
50
Company Director & Consultant
9 T. K. Maji, 45
Director (UTI Nominee)
B.Com (Hons.), BA (Special), N.C.F.M.
Mangalam Park, Flat No.A-V-403

14 Ho Chi Minh Sarani
Kolkata – 700 034
Service
10 D. Basu, 69 Securities Trading Corp of India

Director Rain Calcining Limited
Chambal Fertilizers & Chemicals Limited
M.A.(Economics) Peerless General Finance & Investment Co. Limited
iGate Global Solutions Limited
602 Glen Eagle Asian Paints (India) Limited
G D Ambekar Marg, Parel Deepak Fertilizers & Petrochemicals Corp Limited
Mumbai – 400 012 Sun F & C Asset Management (India) Private Limited
SBI Cards & Payment Services Private Limited
Company Director
11 D. R. Mehta, 61 Spencer & Company Limited

Managing Director Jubilee Investments & Industries Limited
RPG Telephone Limited
B.Sc., LLB, MBA-IIM(Ahm), AEP, Music World Limited
Kellog’s School of Management, NW Music World Entertainment Limited
University, USA Spencer International Hotels Limited
Great Wholesale Club Limited
7/6 Burdwan Road, Alipore Saregama Films Limited
Kolkata 700 027 Saregama Plc, UK
Phonographic Performance Limited
Service
Mr. Sanjiv Goenka is the son of Mr. R. P. Goenka. Mrs. Sushila Goenka is the wife of Mr. R. P. Goenka. No
other director or key managerial personnel have any family relationship.
Changes in the Directors in the last five years:
Date of Change Name of Director Reason

28.01.2000 K. Krishnan Appointed as Director in the capacity of Managing Director
10.07.2000 F. Giaccardo Resigned from the Board
10.07.2000 C. Dimont Resigned from the Board
10.07.2000 C. Ancliff Appointed as director
29.07.2000 B. Sen (Dr.) Withdrawn by UTI as its nominee
29.07.2000 B. S. Pandit Nominated by UTI
24.04.2001 J. N. Sapru Appointed as director
24.04.2001 D. Basu Appointed as director
12.12.2000 K. Krishnan Resigned from the Board
12.12.2000 A. Mitra Appointed as Director in the capacity of Managing Director
07.03.2003 V. B. Menon Resigned from the Board
03.09.2003 A. Mitra Resigned from the Board
03.09.2003 D. R. Mehta Appointed as Director in the capacity of Managing Director
03.12.2003 B. S. Pandit Withdrawn by UTI as its nominee
03.12.2003 T. K. Maji Nominated by UTI
51
Shareholding of Directors
The directors do not hold any Equity Shares as on September 30, 2004.
Date of expiration of the current term of wholetime Directors in the Company
Name of Director Date of appointment / Date of expiration of current

reappointment term
Dilip R. Mehta, Managing Director September 3, 2003 July 31, 2008 (Non-retiring)
All other directors save and except UTI nominee, Mr. T.K.Maji are liable to retire by rotation in terms of
Section 255 of the Companies Act, 1956.
Compensation and benefits in kind granted to the Directors
The terms and conditions governing the appointment of Mr. D. R. Mehta are contained in an Agreement
entered into by the Company with Mr. D. R.Mehta. The principal terms and conditions set out in the drafts of
the aforesaid Agreement are as follows:
1. Period of reappointment : Five years from September 3, 2003
2. Salary : Mr. D. R. Mehta shall be entitled to a salary of Rs200,000 per

month, initially for a period not exceeding three years i.e. from
September 3, 2003 to September 2, 2006 in accordance with the
Agreement executed by the Company with Mr. D. R. Mehta on
November 27, 2003 and approved by the members at the AGM
held on March 24, 2003.
3. Perquisites : The perquisites of Mr. D.R.Mehta shall be restricted to an

amount equal to his annual salary to be reckoned on the basis of
actual expenditure or liability incurred by the Company.
The perquisites / benefits referred to above are residential

accommodation or house rent allowance in lieu thereof, gas,
electricity, water and furnishings; medical expenses
reimbursement; leave travel concession for self and family; club
fees; personal accident insurance and provision of furniture and
equipment at the residence in accordance with the rules of the
Company.
For the purpose of computation of the aforesaid ceiling (a) the

above perquisites shall be evaluated as per Income Tax Rules,
wherever applicable, and in the absence of any such Rule, the
perquisites shall be evaluated at actual costs, (b) the following
perquisites / benefits will not be included – (i) the provision of
car for use on the Company’s business and telephone at
residence, (ii) the Company’s contribution to Provident Fund and
Superannuation Fund and (iii) encashment of leave at the end of
the tenure and payment of gratuity at a rate not exceeding half a
month’s salary for each completed year of service.
In case of absence or inadequacy of profits, Mr. D. R. Mehta

shall be entitled to receive minimum remuneration as per the
provisions of Part II Section II (B) of Schedule XIII of the
Companies Act, 1956.
4. Leave : Mr. D. R. Mehta shall be entitled to leave on full pay and

allowances as per Rules of the Company, but not exceeding one
month’s leave for every eleven months of service.
52
5. Other Managing Directorship Mr. D. R. Mehta shall continue to act as Managing Director of
Spencer & Company without any remuneration.
The current term of office of Mr. D.R.Mehta, Managing Director, the only wholetime Director of the
Company will expire on September 2, 2008. Mr. D.R.Mehta will be reimbursed by the Company of all
entertainment and other expenses actually incurred for the business of the Company subject to such limits as
may be fixed by the Board from time to time.
The breakup of remuneration (Rs lakhs) paid to Wholetime Directors during the financial year 2003-2004 is as
follows:
Name of Directors Designation Salary Contribution to pension, Other
provident fund and Gratuity benefits
D. R. Mehta Managing Director 13.87 4.41 1.24
Non-Whole time directors:

Non-executive Directors are currently paid sitting fees of Rs5,000 for attending each meeting of the Board or
Committee thereof. Non-executive Directors were paid the following sitting fees for attending
Board/Committee Meetings during 2003-04.
Sitting Fees (Rs)

R. P. Goenka Nil
Sanjiv Goenka 25,000
Sushila Goenka Nil
S. Banerjee 55,000
P. K. Mohapatra Nil
T. K. Maji* 5,000
H. Neotia 20,000
J. N. Sapru 20,000
D. Basu 10,000
C. Ancliff Nil
Total 135,000
* Payable to UTI
Qualification Shares required to be held by Directors

As per the Articles of Association of the Company, no qualification share is prescribed for being a director.
Key Managerial Personnel

The day to day management of the Company is looked after by a group of senior executives who report
to the Managing Director. Profile of the key managerial personnel is given below:
53
Name & Age Nature of Remunera- Previous No. of Yrs. Date of Last
Qualification (Years) Duties -tion (Rs) Experience in present commencement employment/
Designation (Years) employment of employment Designation
Dilip R Mehta Managing 19,52,292 35 1 03.09.2003 RPG Cellular

B.Sc., L.L.B., 61 Director Services Ltd.
MBA
Managing
Director
Harish Dayani 50 Chief Executive- 22,09,144 19 9 18.01.1996 Hindustan

B.Sc. (Hons.) Film Business Lever Ltd.
Business
Manager -
ML Exports
G B Aayeer 45 Vice President- 6,09,663 21 1 17.11.2003 CEAT Ltd.

B.Com., ACA Finance General
Manager -
Accounts
Kulmeet Makkar 45 Vice President - 16,86,496 7 16 14.02.1989 Daniel Philips

B.Com Sales & & Co. (P) Ltd.
Marketing Asst. Sales
Manager
The persons whose names appear as key management personnel are on the rolls of the Company as
permanent employees and employees of group companies/subsidiaries/ holding companies are not
included in key managerial personnel. The number of permanent employees currently on the payroll of the
Company is 868.
Shareholding of key managerial personnel as on March 31, 2004

Nil
Loans to Key Managerial Personnel
Loans to key managerial personnel as on March 31, 2004

Executive Designation Loan Amount
D. R. Mehta Managing Director 3,00,000
Harish Dayani Chief Executive- Film Business 8,00,000
Kulmeet Makkar Vice President - Sales & Marketing 10,00,000
Changes in the key managerial personnel in the last three years
Key Personnel From To Designation

K Krishnan Mar 1,1998 Dec 12,2000 Managing Director
Abhik Mitra Dec 12, 2000 Sept 3, 2003 Managing Director
Dilip R Mehta Sept 3, 2003 Managing Director
Employee Share Reward Plan / Long Term Incentive Plan

The Company has instituted an Employee Stock Option Plan in accordance with Employees Stock Option
Scheme, 2001. None of the employees has exercised the vested stock options till date.
Changes in the auditors in the last three years
54
There have been no changes in the statutory auditors in the last three years.
Interest of Promoters / Directors

The promoters and directors of the Company have no interest in the Company except to the extent of
remuneration (received by them in their respective capacities) and reimbursement of expenses and to the
extent any equity shares of the Company held by them. There are no interests of Promoters or payment or
benefit to Promoters/ Directors except as mentioned elsewhere in the document.
There are no common pursuits amongst Saregama India Limited and other group companies since no other
entity is engaged in the production and distribution of audio cassettes, audio and video compact discs and
films.
55
Corporate Governance
Saregama India Limited considers that Corporate Governance is an integral part of the management system.
Such a system has been in operation in the Company and is constantly being strengthened to bring it in tune
with the corporate objectives. Accordingly, the Company takes initiatives on an ongoing basis for constant
upgradation of its corporate goal and introduction of measures to ensure transparency in its operations. At the
same time, the Company’s endeavour to be a profitable consumer-friendly entertainment company continues.
The Company has seven independent directors viz. Mr. S. Banerjee, Mr. P. K. Mohapatra, Mr. H. Neotia, Mr.
J. N. Sapru, Mr. D. Basu, Mr. T. Maji (nominee of UTI) and Mr. C. Ancliff.
Board Committees
• Audit Committee
Mr. J. N. Sapru, Mr. H. Neotia and Mr. S. Banerjee are members of the Audit Committee with Mr. J. N.
Sapru as the Chairman.
The broad terms of reference are:

a) Reviewing with the management the internal control systems, observations of the auditors, quarterly
and annual financial statements before submission to the Board
b) Recommendation of matters relating to financial management and audit reports
c) The Committee is authorised to investigate into matters referred /delegated to it by the Board and, for
this purpose, has full access to information / records of the Company including seeking external
professional support, if necessary
• Investors’ Grievance Committee

Mr. S. Goenka, Mr. P. K. Mohapatra and Mr. S. Banerjee comprise this Committee with Mr. S. Goenka as
the Chairman.
The Committee oversees redressal of complaints of shareholders / investors and other important investor
related matters. In order to expedite the process of investor service, the Company Secretary, who is also
the Compliance Officer, has been delegated by the Board the power to approve share transfers and deal
with matters, connected therewith.
• Remuneration Committee
The Remuneration Committee consists of Mr. J. N. Sapru, Mr. P. K. Mohapatra and Mr. S. Banerjee with
Mr. J. N. Sapru as the Chairman.
The Company has complied with SEBI guidelines in respect of corporate governance with respect to the
broad-basing of the Board and constituting the committees on the Board viz. Audit Committee,
Remuneration Committee and Shareholders/Investors Grievances Committee
56
XI. THE INDIAN ENTERTAINMENT INDUSTRY
(Source: FICCI Report on Entertainment Industry, 2002)
The last few years have been the important years for the development of the Indian entertainment industry.
From the inconsistent performance of the film industry to the landmark Conditional Access System (CAS) bill
in the television sector, the industry went through a series of significant events over the last few years. While
the initial downturn in the film and music industries was seen as a transient phenomenon or an inevitable
rationalisation, emerging trends like film corporatisation, direct connectivity for the television subscriber and
the growth of FM radio are believed to have contributed in creating an entertainment economy that is mature,
transparent and comparable to global standards.
India is one of the least tapped entertainment markets in the world. With an estimated middle class population
of 300mn, larger than the entire population of the United States, the total size of the Indian entertainment
industry, at Rs166bn (2002) is around one-tenth of the size of the industry in US. In addition, there are over
20mn Indians living abroad who are increasingly opting for India oriented entertainment such as Indian
movies, music and television soap operas.
Entertainment – Unlocking Value

The industry is expected to grow at a compounded annual growth rate (CAGR) of 20 per cent from the size of
Rs166bn in 2002 to Rs419bn by 2007. A segment wise analysis of the key components of the sector showcases
the key trends that are taking shape today:
The Films Segment

The film industry was adversely affected in 2002 and recorded a loss of Rs3bn on gross revenues of Rs39bn. A
string of unsuccessful films characterised by low creativity, high overruns in time and costs and increased
piracy were responsible for the down cycle. However, industry experts believe that this rationalisation was
long overdue.
The film industry is at cross roads: Industry players have now come to recognise the need for change in order
to unlock the significant growth potential. The process is irreversible and the industry is expected to grow at
approx. 19% annually to reach Rs93bn by 2007. Many factors are expected to propel this growth:
• Corporatisation: This is expected to have a far reaching impact on the entire value chain. It will bring
higher transparency, better accounting policies, risk mitigants like insurance and guarantees, effective
planning and improved corporate governance mechanism
• Cost Management: A 15% reduction in the overall cost of production will yield a profit of Rs4bn that has
the potential to turn around the industry. With a greater emphasis on planning, budgeting and time
management, this scale of reduction is achievable.
• Cross Over Content: Cross over films like Monsoon Wedding, Bend it Like Becham, East is East have
each generated profits in excess of USD20mn, thereby indicating the hidden potential of India oriented
content that can be marketed effectively to a non-Indian population. Ideally, the next step is co-production
with international studios.
• Domestic Distribution and Exhibition: The traditional distribution model is likely to undergo a radical
change with the emergence of large chains that control and manage domestic theatres. The exhibitors will
seek increasingly to right size and upgrade the current infrastructure in order to enhance the capacity
utilisation and cash flow from both ticket and non-ticket sales. Going forward, exhibition is likely to move
away from the traditional stand alone, poorly maintained theatres to high quality, multi-screen theatres,
concentrating on offering an enhanced cinema viewing experience, thus providing a competitive edge over
other formats and increasing foot falls in theatres. Consumer’s willingness to pay more to such an
experience further helps in increasing revenue. The government has come forward with various tax rebates
to provide incentives for growth but with as many as 200 multiplex screens planned in the near future and
short term over capacity is expected that might lead to consolidation.
57
The Television Segment
With over 82mn households (comprising 40 per cent of India’s population) having access to television, the
television segment is expected to grow significantly, going forward. With total revenues of Rs111bn (2002),
television now accounts for over 60 per cent of the entertainment industry’s revenues. The sector is expected to
continue its rapid growth at a CAGR of 21 per cent and achieve annual revenue of Rs292bn by 2007. This will
be made possible as a result of many factors:
• Pay revenues will be the primary growth driver. The rise in pay revenues will come from growth in the
number of cable and satellite (C&S) households increasing from 41mn in 2002 to 57mn by 2007 and an
increase in the average realisation per subscriber from Rs125 to Rs250 per month. By 2007, revenue from
subscribers will account for 69 per cent of the revenues for the television segment and the broadcasters’
dependence on advertisements is likely to be reduced gradually
• The CAS will have a significant impact on the television distribution in India. There is likely to be an
increased pay out for consumers in the short run due to an increase in the number of pay channels as well
as even sharing of subscriber revenues between broadcasters, multi-system operators (MSOs) and local
cable operators (LCOs). This will be accompanied by the opening up of a vibrant Rs50bn plus local
industry for the manufacture of set-top boxes (STBs). Once issues with respect to CAS such as the time
frame for the roll out, pricing of channels, subsidising and financing of STBs are resolved, market forces
will drive growth
• Advertising revenues are expected to increase from Rs39bn in 2002 to Rs65bn by 2007. Due to the
fragmentation of the industry, there is likely to be intense competition for a share of the advertising pie.
This may result in a shakeout followed by consolidation with some of the weaker or stand-alone channels
being acquired by the larger ones.
• The bouquet strategy will gain further ground and consumer viewing will no longer be concentrated on
mainstream channels as niche channels will gain popularity.
The Music Segment

The Indian music, whose fortunes are closely interlinked with the film industry, has been suffering heavy
losses in the last few years. Though total revenue stood at Rs10.4bn in 2002 (declining by 20% y-o-y), the
piracy continued to plague the industry whereby the legitimate revenues of music companies stood at only
Rs6.2bn or 60 per cent of total revenues.
Music companies that had acquired rights for big banner films at astronomical costs in earlier years are under
enormous pressure and the film music business is currently going through a rationalisation.
In line with the general outlook for the global music industry and as a result of increasing digital piracy that is
difficult to police, no dramatic turnarounds are expected in the short term. However, certain key shifts are
taking place and their positive impact will be left in the medium term. The industry is likely to grow to
approximately Rs16.4bn by 2007. Some of the key changes include
• emergence of a more participative model where the film producer and the music company share the risks
and rewards proportionately;
• higher investment by film and music segments in encrypting technology, digital distribution and towards
control of physical piracy accompanied with increased cooperation from the government and concerned
authorities;
• greater thrust on developing the non-film music segment by nurturing new talent and marketing regional
and folk music to larger markets including global markets; and
• increased organised retailing of music through large format retail outlets, which will increase the sale of
legitimate music through higher impulse buying and better targeting of consumer segments, reduce
distribution costs and improve margins
58
The Radio Segment
Radio reaches out to 99 per cent of India’s population and is the most cost-effective mass medium. The sector
has been privatised recently and private FM radio channels have started rolling out in metros. The results are
already visible – the long stagnant advertisement revenue pie has doubled. The market size of Rs1.6bn in 2002
is expected to grow rapidly to Rs6.2bn by 2007. This growth will depend on:
• Acceleration in the pace of privatisation that is currently hampered by high license fees, thereby deterring
potential bidders. Licensing would eventually move towards a revenue sharing model, akin to the
developments in the telecom sector, which will provide a further incentive to existing players to expand
the scale of their operations
• Increase in radio listener time as a result of an overall improvement in content
• Enhanced attractiveness of radio for advertisers through measures like increase in the number of FM radio
stations and creation of nationwide bouquets as well as niche and regional channels as radio has the ability
to offer advertisers a more focussed and cost-effective reach as compared to print and television
• Mass availability of inexpensive FM radio sets and penetration of private operators beyond metro cities.
This should be similar to the rapid penetration of C&S in households, which in turn fuelled the growth of
multi-channel colour television sets in non-metros and non-urban areas
Industry Outlook
The transforming landscape of the Indian entertainment industry is firmly making its presence felt on the
global stage. The seven industry value drivers that are expected to propel the industry are
1. Creativity
Content continues to be of critical importance and there is a need across various sectors of the industry to
focus on making content more appealing to customers while striking the right balance with commercial
potential. In the future, the success or failure of an entertainment product will depend increasingly on the
efficient management of content and talent on the one hand and operations and product marketing on the
other.
2. Corporatisation
A change in mindset in structuring and conducting business is gradually becoming evident in the film,
business and cable television industry. As a result, the Indian film industry will be radically transformed.
The transformation will not be a mere structural change from individual to corporate entities but will
encompass incorporation of best practices across the whole gamut of processes such as talent
management, pre and post production of content, retail marketing of films, music, radio and television and
organisation of mega events.
3. Crossover Content
In today’s scenario, content is transcending geographic boundaries and increasing its reach to Indians and
non-Indians residing in foreign countries. Indigenous production of content is therefore likely to open up a
sizeable global market.
4. New Revenue Streams

Barriers to entry are diminishing. Industry players, with the ability to capture the upsides offered by
technology and a deeper insight into the consumer phsyche, will be better placed. Emerging digital
platform for distribution of film, television and music will enable technology savvy and integrated
companies to unlock new revenue streams.
5. Bundling
At present, the entertainment industry is extremely fragmented with a large number of industry players,
providing various services across the value chain. In the long run, players who can bundle their services
efficiently and form strategic alliances with cross-media players with complementary skill sets will
connect better with the consumer and therefore lead the market.
6. Vertical Integration
59
In order to achieve the economies of scale and scope of larger operations and manage costs effectively,
consolidation (as a result of a shakeout among industry players) appears inevitable in both the distribution
and content segments. This consolidation is likely to weed out the weaker players and result in the
formation of large media conglomerates as has been the trend globally.
7. Foreign Collaboration
The future is likely to see many more multinational players entering across industry segments bringing in
professional management and global best practices which will further boost the revenue potential.
Relaxation in current restrictions on foreign investment in sectors like broadcasting, cable and radio will
go a long way in expediting the pace of globalisation.
The Indian Music Industry

The Indian music industry, over 100 years old, is dominated by Hindi film music (comprising over 60 per cent
of total revenue), stood at Rs6.2bn vis-à-vis Rs8.1bn in the previous year. Key reasons for this decline include
• lacklustre performance of the film industry;
• high cost of acquisition of rights; and
• increased piracy levels
According to the Indian Music Industry Association (IMI) estimates, the market, comprising both organised
and unorganised sectors, has reduced by around 38 per cent in value to Rs10.4bn and 27 per cent to 241mn
units, over the last two years with CDs accounting for 5 per cent of the total units sold. However, the cassettes
and CD sales mix is expected to change in the future as prices of CDs and CD players are expected to decrease
further.
Presently, pirated music sales comprise around 40 per cent of the Indian music market with MP3 piracy and
home piracy (free downloading and file sharing) rising steadily. To counter the continued increase in piracy,
the music companies have significantly reduced prices of CDs and cassettes but this has not been compensated
by a commensurate increase in volume thereby putting pressure on margins. The stringent measures that are
being initiated by the music companies through IMI and the law enforcement agencies are expected to reduce
piracy.
Currently, unorganised or unbranded music stores contribute a majority share of the music sales. Looking
forward, music retailing is expected to become a powerful medium for distribution in India, as organised music
stores and large format retail stores gain popularity.
Online music sales, which globally stand at marginally over USD1bn, are yet to make a significant impact in
India. However, with increased personal computer and internet penetration, online music sales or e-tailing,
could take off in the long term.
The combined increase in retailing and e-tailing is likely to bring down the distribution costs and lead to better
management of inventory.
Also, the cost of acquisition of film music has come down significantly and there could be a paradigm shift
towards revenue sharing. These are expected to have a positive impact on the sector.
Industry Overview
A Unique Industry Structure

The music industry in India has a unique structure unlike most other global markets. Till 1990, the music
market was almost completely dominated by film and devotional music. With the advent of satellite television
in the early 1990s and increased consumer exposure to non-film music channels, non-film albums and music
videos gained popularity and market share by the end of 1990s.
However, the film industry was quick to enter into agreements with popular artists for their productions with
similar kind of music to capitalise on this opportunity now made available on film soundtracks and the added
advantage of visual effects, the popularity of the non-film popular music genre did not continue to grow in the
60
same manner. As a result, film music continues to account for approximately over 60 per cent of the total
market.
Among the non-film category, devotional music produced by local and smaller music companies is the most
popular. Some key players in this space, few being late entrants, have stayed away from film music and have
instead focused on niche, high-end classical and devotional segments.
Market Size
According to IMI, the music industry in India currently stands at Rs10.4bn (2002) of which only Rs6.2bn is
legitimate sales, the balance being accounted for by piracy. In the long run, the organised market is likely to
remain oligopolistic, with the top three or four players together retaining their aggregate market shares. There
could be some consolidation but it is unlikely that any new major player will enter the national market in the
near future. Any new entrant would face the hurdle of the absence of archival property, making it more
vulnerable to the vagaries of the film industry. Over the past few years, music companies have reduced prices
of cassettes and CDs to counter piracy and the latter has become more affordable.
Controlling Music Piracy

According to the IFPI, the global music industry loses around USD5bn annually on illegal CD and cassette
sales. The problem of piracy is higher in the Asian countries, reaching up to 90 per cent in China. In India,
piracy currently accounts for around 40 per cent of the total market. Till around 2001, piracy mainly assumed
the form of physical piracy of music cassettes, i.e. unauthorised copying and selling music on cassettes alone.
With the new technologies making free downloading a common phenomenon, digital piracy has increased
alarmingly. However, the government authorities are also increasingly becoming conscious about this menace.
Recently the State Government of Tamil Nadu has covered the piracy under the Goonda Act, acting as
effective deterrent to the pirated products. It is expected that other state governments will follow suit and
provide much needed relief to the music industry. Notwithstanding this, in view of sizeable reduction in the
selling prices made by music companies, consumers now increasingly prefer legitimate products as the gap
between legitimate products and pirated products has substantially narrowed down.
Emergence of New Distribution Format in Digital Downloads

The increased availability of PCs and higher bandwidth has broadened the base of Internet usage all over the
world. In countries like USA, South Korea, Japan, a large part of the European continent and Australia,
Internet usage is increasing very rapidly. In India, the availability of Internet is to a certain extent restricted by
non-availability of broadband. The scene is gradually changing with many major Indian telecom operators
investing in implementing broadband network. Secure on-line payment gateways have increased the
confidence of the average Internet user to buy on-line. One of the largest growing sectors in e-commerce is the
entertainment sector under which music plays a big role. All the international music majors have actively
started investing in digital delivery of music through Internet (SonyConnect from Sony is an example). Other
technology giants like Apple Computers (iTunes), Microsoft (MSN Music) are operating digital music shops
on the Internet. Other major players in the area of digital music include Napster, MusicMatch, eMusic,
MusicNet to name a few.
61
XII. FINANCIAL PERFORMANCE OF THE COMPANY
The Board of Directors

33, Jessore Road
Dum Dum
Kolkata – 700 028
Dear Sirs
1. We have examined the financial information of Saregama India Limited (Saregama / the Company), (as
set out in Annexures 1 to 9 attached to this report), stamped and initialed by us for identification, which
has been prepared in line with Part II of Schedule II of ‘the Companies Act , 1956’ of India (the ‘Act’) and
the Securities and Exchange Board of India (Disclosure and Investor Protection) Guidelines 2000
(hereinafter referred to as ‘the SEBI Guidelines’) issued by the Securities and Exchange Board of India
(SEBI) and in accordance with our engagement letter dated 30th December, 2004, setting out inter alia the
scope of work relating to the Letter of Offer being issued by the Company in connection with its proposed
Rights Issue (hereinafter referred to as ‘the Rights Issue’).
2. Financial Information as per the audited financial statements
2.1 We have examined the attached restated Statement of Assets and Liabilities of the Company as at 30th
September, 2004 and the Company’s last five financial year-end dates i.e. 31st March, 2004, 30th June,
2003, 31st March, 2002, 31st March, 2001 and 31st March, 2000 (Annexure 2) and the related restated
Statement of Profit and Loss for the six months to 30th September, 2004 and for five financial years of the
Company i.e. nine months to 31st March, 2004, fifteen months to 30th June, 2003, twelve months to 31st
March, 2002, 31st March, 2001 and 31st March, 2000 ( Annexure 1) collectively hereinafter referred to as
‘Summary Statements’ together with Notes to the Summary Statements and Significant Accounting
Policies set out in Annexures 3 and 4 respectively.
These Summary Statements have been extracted from the financial statements of Saregama for the
respective periods all of which have been audited (including audit of accounts of the Company for the six
months to 30th September, 2004 for the purpose of the aforesaid Rights Issue) by us, approved by the
Board of Directors and adopted by the members of Saregama, other than the accounts for the six months
to 30th September, 2004 which have not been prepared for presentation to shareholders in a general
meeting, and have been approved by the Committee of Directors.
2.2 Based on our examination of the aforesaid Summary Statements, we confirm that :
2.2.1 except for accounting of deferred tax pertaining to the financial years 1999-2000 and 2000-2001 for
reasons indicated in Note 13.3 on Annexure 3, there are no restatements which are required to be
made in the Summary Statements with retrospective effect to reflect the significant accounting
policies (Annexure 4) as adopted by the Company;
2.2.2 except for the subject matter of qualification in the Audit Report on the accounts for the six months
to 30th September, 2004, the impact of which is not ascertainable, as dealt with in paragraph 2.4
below, there are no qualifications in the Auditors’ Reports which requires adjustment to the
Summary Statements;
2.2.3 except for the subject matter of qualification in the Audit Report on the accounts for the six months
to 30th September, 2004, the impact of which is not ascertainable, as dealt with in paragraph 2.4
below, the regroupings/ adjustments as considered necessary by us, have been made in the
Summary Statements.
2.3 In accordance with the aforesaid SEBI Guidelines, also attached are -
(i) Principal terms of loans and assets charged as securities (Annexure 5)

(ii) Statement of Accounting Ratios (Annexure 6)
62
(iii) Capitalisation Statement (Annexure 7)
(iv) Statement of Dividend (Annexure 8)
2.4 As indicated in Note 17 on Annexure 3, a provision of Rs. 600.00 lakhs is held towards eventual shortfall,
as there may be, with regard to intercorporate deposit including interest accrued thereon (book balance as
on 30th September, 2004 - Rs. 1025.10 lakhs) and diminution in respect of certain unquoted investments
(carrying value as on 30th September, 2004 - Rs. 2529.08 lakhs). From the available information, we are
unable to comment on the extent of further provision, if any, required to be made to cover the eventual
shortfall/diminution (other than temporary) in this regard with its corresponding adverse impact on the
profit for the six months to 30th September, 2004 and net worth as on that date.
3. We have issued a report of even date on our examination of the restated Consolidated Statement of Assets
and Liabilities of Saregama and its subsidiaries as at 30th September, 2004, 31st March, 2004, 30th June,
2003 and 31st March, 2002 and related Statement of Consolidated Statement of Profits and Losses for six
months to 30th September, 2004, nine months to 31st March, 2004, fifteen months to 30th June, 2003 and
twelve months to 31st March, 2002 together with the notes thereon and attached thereto including the
significant accounting policies.
4. In our opinion, the financial information of the Company, as attached to this report, as mentioned in
paragraph 2 above, after making groupings / adjustments and subject to our remarks in paragraphs 2.2 and
2.4 above, have been prepared in line with Part II of Schedule II of the Act and the SEBI Guidelines.
5. This report is intended solely for your information and inclusion in the Letter of Offer in connection with
the proposed Rights Issue of the Company and is not to be used, referred to or distributed for any other
purpose without our prior written consent.
S. K. Deb
Partner
For and on behalf of
Price Waterhouse
Chartered Accountants
Kolkata, 10th January, 2005
63
Annexure 1: Statement of Profits & Losses (As restated)
The profits/(losses) of the Company for the six months to 30th September, 2004 and for five financial years of
the Company i.e. nine months to 31st March, 2004, fifteen months to 30th June, 2003, twelve months to 31st
March, 2002, 31st March, 2001 and 31st March, 2000 read with Notes to the Summary Statements (set out in
Annexure 3) and significant Accounting Policies (set out in Annexure 4), after regrouping – adjustments are
set out below (Rs lakhs):-
6 Months 9 Months 15 Months 12 Months 12 Months 12 Months

to to to to to to
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Income
Sales and Licence

Fees -
Music 4,319.61 6,404.52 10,220.54 10,148.21 15,534.05 12,726.40
Film Rights (refer
Note 20.1 on
Annexure 3) - - - 21.00 150.00 75.00
Free Commercial
Time (Television)
(refer Note 20.2 on
Annexure 3) - - 518.80 252.83 - -
License Fees 532.49 513.06 734.92 811.32 836.67 1,250.85
Total 4,852.10 6,917.58 11,474.26 11,233.36 16,520.72 14,052.25
Other Income (refer

Note 8 on Annexure 3) 113.90 186.69 759.53 993.17 1,239.41 556.30
Increase/ (Decrease) in
stock in trade (107.67) (220.28) (98.52) (533.16) 532.86 63.56
Total Income 4,858.33 6,883.99 12,135.27 11,693.37 18,292.99 14,672.11
Expenditure
Material consumption 1,345.60 2,279.58 4,241.23 3,891.36 5,679.03 5,063.75

Cost of production - - 416.23 171.69 432.33 -
[(telefilms/ serials
(including telecast
rights)] (refer Note
20.2 on Annexure 3)
Staff Cost 580.38 949.72 1,837.66 1,580.39 1,536.29 1,469.32
Advertisement and
Sales Promotion 391.47 1,309.68 1,668.61 1,722.07 2,060.53 1,365.69
Royalty 1,040.45 1,505.15 4,663.86 3,130.21 2,835.12 2,795.10
Other Expenditure 1,011.27 1,923.92 3,227.05 3,245.80 3,646.02 2,891.27
Interest 137.94 217.66 416.56 217.42 101.19 573.38
Depreciation (net of
transfer from
Revaluation Reserve) 139.30 210.67 580.75 432.13 322.19 220.19
Total Expenditure 4,646.41 8,396.38 17,051.95 14,391.07 16,612.70 14,378.70
Profit/(Loss) before
tax and non-
recurring items 211.92 (1,512.39) (4,916.68) (2,697.70) 1,680.29 293.41
64
Non-recurring items
(refer Note 15 on
Annexure 3) - (597.69) 170.75 (37.15) (1,025.77) 361.96
Profit/(Loss) before
tax 211.92 (2,110.08) (4,745.93) (2,734.85) 654.52 655.37
Current Taxation
(refer Note 13.1 on
Annexure 3) 20.00 - - - 150.00 55.00
Deferred Taxation
(refer Notes 13.2 and
13.3 on Annexure 3) - - 63.32 (158.69)
Profit/(Loss) after
tax 191.92 (2,110.08) (4,809.25) (2,576.16) 504.52 600.37
Annexure 2: Statement of Assets and Liabilities (As restated)

Assets and liabilities of the Company as at 30th September, 2004 and the Company's last five financial year-
end dates i.e. 31st March, 2004, 30th June, 2003, 31st March, 2002, 31st March, 2001 and 31st March, 2000
read with Notes to the Summary Statements (set out in Annexure 3) and Significant Accounting Policies (set
out in Annexure 4) after regroupings – adjustments are set out below (Rs lakhs):-
As at As at As at As at As at As at
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
A Fixed Assets
Gross Block 6,151.67 6,557.50 6,572.38 5,791.77 5,041.25 3,719.56
Less :
Depreciation (2,064.49) (2,305.70) (2,128.65) (2,345.37) (1,922.27) (1,596.56)
Net Block 4,087.18 4,251.80 4,443.73 3,446.40 3,118.98 2,123.00
Less : Revaluation
Reserve (407.97) (425.33) (437.13) (482.44) (500.22) (518.53)
Capital Work In
Progress 5.00 8.37 - - 28.94 16.94
Net Block after
adjustment for
Revaluation
Reserve 3,684.21 3,834.84 4,006.60 2,963.96 2,647.70 1,621.41
B Investments
(refer Note 6 and
17 on Annexure
3) 5,757.31 5,757.31 5,339.31 8,128.30 8,128.30 12,086.39
C Deferred Tax - - - 63.32 - -

Asset (net) (refer
Notes 13.2 and
13.3 on Annexure
3)
D Current Assets,
Loans and
Advances
Inventories 939.60 989.82 1,294.60 1,382.91 2,094.62 1,676.86
Sundry Debtors 2,843.78 2,713.41 2,789.00 3,500.94 3,518.72 3,165.90
(refer Note 18.1
65
on Annexure 3)
Cash and Bank 781.45 581.97 233.55 1,145.05 4,028.47 1,824.53
Balances
Accrued Income 62.24 45.50 51.15 96.26 227.13 113.15
on Deposits /
Investments (refer
Note 16 on
Annexure 3)
Loans and 3,865.95 3,510.95 4,596.17 11,413.27 8,601.85 9,080.16
Advances (refer
Notes 16, 17, 18.1
and 18.2 on
Annexure 3)
Total 8,493.02 7,841.65 8,964.47 17,538.43 18,470.79 15,860.60
E Liabilities and
Provisions
Secured Loans 1,256.88 1,387.13 1,543.63 1,482.78 567.82 1,371.64
Unsecured Loans 1,581.31 1,338.90 1,031.13 818.14 231.92 349.36
Current Liabilities
(refer Note 19 on
Annexure 3) 9,403.51 9,245.31 8,763.08 7,583.74 6,880.78 6,949.61
Provisions 1,343.61 1,305.15 705.15 705.15 920.43 413.22
Total 13,585.31 13,276.49 12,042.99 10,589.81 8,600.95 9,083.83
Net worth 4,349.23 4,157.31 6,267.39 18,104.20 20,645.84 20,484.57

(A+B+C+D-E)
Represented by :
A Share Capital 934.26 934.26 934.26 934.26 934.26 934.26

B Reserves and 5,741.10 5,758.46 5,770.26 20,202.50 20,338.61 20,177.85
Surplus (refer
Note 7 on
Annexure 3)
Revaluation (407.97) (425.33) (437.13) (482.44) (500.22) (518.53)
Reserve
Reserves (net of 5,333.13 5,333.13 5,333.13 19,720.06 19,838.39 19,659.32
Revaluation
Reserve)
Miscellaneous - - - (126.81) (109.01)
Expenditure (to
the extent not
written off or
adjusted) (refer
Note 14 on
Annexure 3)
Profit and Loss (1,918.16) (2,110.08) (refer Note (2,550.12) - -
Account Debit 4.4 on
Balance Annexure
3)
3,414.97 3,223.05 5,333.13 17,169.94 19,711.58 19,550.31
Net worth 4,349.23 4,157.31 6,267.39 18,104.20 20,645.84 20,484.57
66
Annexure 3: Notes to the Summary Statements
1. The name of the Company has been changed to Saregama India Limited from The Gramophone Company
of India Limited effective 3rd November, 2000.
2. The Company's financial year is twelve months to 31st March other than the financial year 2002-03 (for
fifteen months) when year-end date was extended by three months to 30th June, 2003 and the financial
year 2003-04 (for nine months) when year-end date was realigned to 31st March.
3. Amalgamation of RPG Music International Limited (RMIL) (Transferor Company) and Gramco Music
Publishing Limited (GMPL) (Transferor Company) with The Gramophone Company of India Limited
(GCIL) (Transferee Company / the Company) in 1999-2000
3.1 Pursuant to a Scheme of Amalgamation sanctioned by the Calcutta High Court vide Order dated 12th
June, 2000 (the Scheme), the assets (except as indicated in Note 3.4 below) and liabilities of RMIL and
GMPL were transferred to and vested in the Company with effect from 1st March, 2000 (Appointed
Date). The Scheme was given effect in the accounts for the financial year ended 31st March, 2000.
3.2 RMIL was engaged in the business of sale of pre-recorded cassettes and compact discs and delivery of
music through any other medium outside India out of copy rights licensed by the Transferee Company.
GMPL was engaged in the business of publication of music production, distribution and marketing of
films and television serials including music rights.
3.3 In accordance with the Scheme, 13,73,370 Equity Shares of Rs10 each, fully paid, were issued by the
Company to the Shareholders of RMIL (13,71,428 equity shares) and GMPL (1942 equity shares)
respectively. Pending allotment of shares as on 31st March, 2000, the amount was included under Share
Capital Suspense in the accounts for the financial year ended 31st March, 2000 (shown under Share
Capital in Annexure 2).
3.4 In keeping with the accounting policy consistently followed by the Company, net book value of
copyrights (music) of GMPL Rs389.28 lakhs as on 1st March, 2000 transferred and vested in the
Company pursuant to the Scheme was deducted from the Company's General Reserve (refer Note 7B
below) as these copyrights were originally owned by the Company (related costs being expensed in earlier
years as per usual practice) and were assigned to GMPL in an earlier year.
3.5 The Scheme was in the nature of pooling of interest and, accordingly, the balances in Share Premium and
General Reserve of Rs6960.00 lakhs and Rs48.35 lakhs respectively of RMIL as on 1st March, 2000 were
added to the balances in Share Premium (refer Note 7A below) and General Reserve of the Company.
3.6 Pursuant to the Scheme, an amount of Rs238.66 lakhs, being the difference between the Share Capitals
(Rs940.00 lakhs) of RMIL and GMPL and the aggregate face value of the further shares (refer Note 3.3
above) after cancellation of book values (Rs564.00 lakhs) of its investments in equity shares of RMIL and
GMPL together with General Reserve of RMIL Rs48.35 lakhs (refer Note 3.5 above) aggregating to
Rs287.01 lakhs were added to the Company's General Reserve (referred to in Note 7B below).
3.7 Pending completion of the relevant formalities of transfer of certain assets and liabilities acquired pursuant
to the Scheme as mentioned in paragraph 3.1 above, such assets and liabilities remain included in the
books of the Company under the name of the transferor companies.
3.8 In accordance with legal opinion obtained by the Company, interim dividend declared for the year 1999-
2000 was worked out on the basis of paid up equity share capital being Rs796.92 lakhs which excludes
share capital suspense of Rs137.34 lakhs and proposed final dividend for 1999-2000 was worked out on
the basis of paid up equity share capital and share capital suspense aggregating to Rs934.26 lakhs as on
31st March, 2000 pursuant to the aforesaid Scheme of Amalgamation.
4. Transfer of Television Software Division (the Division) of Saregama India Limited (the Company) to
Saregama Films Limited (Transferee Company)
67
4.1 Pursuant to a Scheme of Arrangement approved by the shareholders and sanctioned by the High Court at
Calcutta (the Scheme) under the provisions of the Companies Act, 1956, the Division was transferred to
the Transferee Company with effect from 30th June, 2003 (Appointed Date).
4.2 The Division of the Company was engaged in production, development and/or marketing of television
serials and programmes.
4.3 In accordance with the Scheme, assets and liabilities of the Division as on the Appointed Date (net book
value Rs423.00 lakhs) were transferred to the Transferee Company at their respective values in which they
appeared in the books of account of the company in consideration of 42,30,000 Equity Shares of Rs10
each in the Transferee Company. Pending allotment of such shares up to the financial year end (i.e. 30th
June, 2003), Rs423.00 lakhs was included under advance to subsidiary companies in the accounts for the
financial year ended 30th June, 2003.
4.4 Further, pursuant to the Scheme, certain assets of the Company as on 30th June, 2003, were restated
and/or revised as determined by the Board of Directors of the Company resulting in upward revision of net
book value of fixed assets comprising land and buildings by Rs2,374.11 lakhs (refer Note 5.2 below) and
downward restatement of outright acquisition of Copyright, long-term unquoted trade investments and
loans and advances by Rs1,045.82 lakhs (refer Note 5.3 below), Rs3,295.00 lakhs (referred to in Note 6
below) and Rs5,060.85 lakhs respectively and the net effect of the aforesaid upward/ downward
revision/restatement being net shortfall/diminution aggregating Rs7,027.56 lakhs together with the Profit
and Loss Account debit balance of Rs7,359.37 lakhs as on 30th June, 2003 were adjusted against the
Share Premium Account (refer Note 7A below) of the Company.
4.5 Necessary steps are being taken for completion of related formalities in connection with transfer of
ownership, etc. in respect of assets transferred pursuant to the Scheme.
5.1 Based on valuation reports of valuers, appointed for the purpose, the fixed assets (other than furniture,
fittings and equipment, vehicles, a building on leasehold land and certain items of plant and machinery)
were revalued on 31st March, 1984 and again (except for those relating to record making machinery items
and leasehold land and buildings at Dombivili factory) on 30th September, 1987 after considering the then
(a) current market value/ derived rates attributable to land (b) current replacement cost after depreciation,
etc. and Rs587.31 lakhs and Rs628.19 lakhs were added to the book value of the related assets (with
corresponding credit to Fixed Asset Revaluation Reserve) on 31st March, 1984 and 30th September, 1987
respectively.
5.2 Certain assets of the Company, viz. land and buildings were revalued on 30th June, 2003 by a firm of
registered valuers, at the lower of current replacement cost and realisable value. Resultant incremental
value amounting to Rs2,374.11 lakhs (Land - Rs1,868.97 lakhs, Buildings - Rs505.14 lakhs) was added to
the book value of the related assets with utilisation of the corresponding credit amount in the manner
indicated in Note 4.4 above, pursuant to the sanctioned Scheme of Arrangement referred to therein.
5.3 As on 30th June, 2003, based on commercial and technical evaluation of outright acquisition of copyrights
carried out by the management, Rs1,045.82 lakhs was reduced from the net book value of such assets with
corresponding adjustment in the manner indicated in Note 4.4 above pursuant to the Scheme of
Arrangement referred to therein.
6. Details of investments (Annexure 2) (Rs lakhs):-
Long term investments As on As on As on As on As on As on

30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Book value of quoted
investments in fully paid equity
shares
Subsidiary company # 48.52 48.52 48.52 48.52 48.52 48.52

Others 0.58 0.58 0.58 0.58 0.58 0.59
Total (A) 49.10 49.10 49.10 49.10 49.10 49.11
68
(based on OFEX trading facility
in London)
Market Value of quoted

investments 205.17 537.16 510.65 1,051.26 3,718.52 28,651.45
Book value of un quoted

investments
Trade investments in fully paid 3,950.00 3,950.00 3,955.00* 7,250.00 7,250.00 7,250.00
equity shares
Fully paid equity shares in 1,758.09 1,758.09 1,335.09 829.08 829.08 436.28
subsidiary companies
Units in Mutual Funds - - - - 4,350.88**
-
Fully paid Debentures 0.12 0.12 0.12 0.12 0.12 0.12
Total (B) 5,708.21 5,708.21 5,290.21 8,079.20 8,079.20 12,037.28
Grand Total (A+B) 5,757.31 5,757.31 5,339.31 8,128.30 8,128.30 1,2086.39
* after adjustment of Rs3,295.00 lakhs in book value of certain unquoted trade investments pursuant to the
Scheme of Arrangement referred to in Note 4.4 above
** corresponding published net asset value - Rs4,067.89 lakhs
7. Movement in balances in Share Premium and General Reserve forming part of 'Reserves and Surplus'
(Annexure 2) (Rs lakhs):-
As on As on As on As on As on As on
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
A Share Premium
Opening balance 4,690.77 4,690.77 19,077.70 19,077.70 19,091.20 -
Add : On - - - - - 6,960.00
Amalgamation (refer
Note 3.5 above)
Add : On issue of - - - - - 12,425.00
700,000 equity shares
of Rs10 each issued at
a premium of Rs1,775
each by way of
private placement
Less : Share issue - - - - (13.50) (293.80)
expense
Less : Adjustments - - - - (13.50) (293.80)
pursuant to the
Scheme of
Arrangement (refer
Note 4.4 above)
Less : Net effect of - - (7,027.56) - - -
restatement / revision
(refer Note 4.4 above)
Less : Debit balance - - - - -
in Profit and Loss (7,359.37)
Account
4,690.77 4,690.77 4,690.77 19,077.70 19,077.70 19,091.20
69
B General Reserve
Opening balance 642.36 642.36 642.36 737.73 537.73 490.00
Add : On - - - - - 287.01
Amalgamation (refer
Note 3.6 above)
Less : On - - - - - (389.28)
Amalgamation (refer
Note 3.4 above)
Less : Adjustment for - - - -
net Deferred Tax (95.37) -
Liability (refer Note
13.2 below)
Add : Transfer from - - - - 200.00 150.00
Profit and Loss
Account
642.36 642.36 642.36 642.36 737.73 537.73
8. Details of 'Other Income' (Annexure 1) (Rs lakhs):-
6 9 15 12 12 12
Months Months Months Months Months Months
to to to to to to
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Recurring items arising
in course of normal
business activities
Interest from deposits
etc. 21.54 39.71 493.62 723.68 780.85 79.60
Dividend - - - 7.37 160.07 256.32
Rent 48.88 75.26 119.49 126.32 166.59 171.74
Scrap sales 14.39 24.82 56.60 61.15 86.41 4.67
Profit on sale of fixed
assets (net) - - - 3.34 - -
Gain on foreign
exchange fluctuation
(net) 16.66 21.65 40.20 33.49 7.26 -
Miscellaneous 12.43 25.25 49.62 37.82 38.23 43.97
Total 113.90 186.69 759.53 993.17 1,239.41 556.30
9. Estimated amount of capital commitments (net of advances) not provided for at the respective period ends
(Rs lakhs):-
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Capital commitment
(Gross) 10.02 - 8.79 344.99 957.71 69.38
Less : Advance 5.00 - 7.50 301.00 748.00 61.13
5.02 - 1.29 43.99 209.71 8.25
10. Details of contingent liabilities in respect of (Rs lakhs):
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
70
Counter guarantee given
to bankers 20.68 23.79 15.93 15.74 46.09 179.86
Claims against the

Company not
acknowledged as debts
in respect of -
Sales/Turnover/Purchase
tax matters under
dispute 1079.41 994.00 1134.12 173.75 404.89 797.80
Income-tax matters
under dispute
(excluding issues which
have been decided in
favour of the Company
at appellate level in
certain years) 105.00 90.00 118.16 118.16 103.70 167.10
Excise duty on account
of non-admissibility of
MODVAT credit claim
for differential duty on
block board etc.
9.42 9.42 44.85 66.39 37.53 41.59
11. The Company has been advised that based on legal proceedings initiated by the Employees' Union/
Association, the Calcutta High Court, vide its interim Order dated April 24, 1997 has restrained the
Company from making any contribution/deduction towards Employees' State Insurance contribution with
effect from April, 1997 in respect of the appellant employees and accordingly no such contributions (with
appropriate provision in books)/deductions have been made and deposited with the appropriate authorities
in India.
12. Pursuant to an approved scheme, the Company granted Stock Options to eligible employees and
Managing Director (up to 2nd September, 2003) effective from 1st February, 2002; the related options
have the following vesting schedule:
After 1 year from the date of grant: 25% of options

After 2 years from the date of grant: 25% of options
According to management, options vested have not been exercised up to 10th January, 2005
13.1 Provision for current taxation for the financial years ended 31st March, 2000 and 31st March, 2001 was
made after setting off Minimum Alternate Tax (MAT) of Rs83.07 lakhs and Rs65.73 lakhs respectively
(being tax liability provided in earlier years and available for set off) against normal income tax liability as
per related provisions of the Income-tax Act, 1961.
13.2 The Company adopted Accounting Standard 22 on 'Accounting for Taxes on Income' issued by the
Institute of Chartered Accountants of India, mandatory with effect from accounting period commencing
from 1st April, 2001 and accumulated net Deferred Tax Liability of Rs95.37 lakhs as on 1st April, 2001
had been ascertained and adjusted against General Reserve (refer Note 7B above) in the audited financial
statements for the year ended 31st March, 2002. On a prudent basis, deferred tax asset (net) as on 30th
June, 2003 and periods subsequent thereto have not been recognised. Deferred tax asset (net) to the extent
of Rs63.32 lakhs recognised in the audited financial statements for the financial year ended 31st March,
2002 was reversed in financial year 2002-03.
13.3 Deferred tax for the financial years 1999-2000 and 2000-01 could not be considered in Annexure 1 & 2 in
absence of ready availability of the related information pertaining to those years.
71
14. Details of Miscellaneous Expenditure (to the extent not written off / adjusted) (Rs lakhs):-
As on As on
31.03.01 31.03.00
Reassignation of copyrights - 19.06
Expenses on sub leasing arrangements - 5.80
Payments under voluntary retirement scheme 14.87 84.15
Website development (including advertisement) costs 111.94 -
126.81 109.01
Reassignation of copyrights and expenses on sub-leasing arrangements were amortised over a period of 10
years from 1991-92, payment under voluntary retirement scheme was amortised over a period of three
years from the respective years of disbursements and website development (including advertisement) cost
was amortised over two years.
15. Non recurring items [credit /(debit)] comprise the following (Rs lakhs):
6 Months 9 Months 15 12 12 Months 12 Months

to to Months to Months to to to
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Provision for
Contingency (refer
Note 17 below) - (600.00) - - - -
Payments under
Voluntary Retirement
Scheme - - - (14.87) (961.55) (71.64)
Website development
expense - - - (111.94) (111.94) -
Liability relating to
royalty written back,
which according to
the management was
no longer required
- - - - 47.72 433.60
Profit on sale of
- land and building
at Dombivili Factory - - 35.58 - - -
- Flat at Mumbai - - 97.17 - - -
Insurance claim - 2.31 38.00 35.66 - -
Consideration
received on
relinquishment of
tenancy right - - 54.00 - -
- (597.69) 170.75 (37.15) (1,025.77) 361.96
16. 'Loans and Advances' and 'Accrued Income on Deposits/Investments' as on 30th September, 2004
(Annexure 2) include Rs1,004.75 lakhs (original loan amount Rs1,504.75 lakhs) and Rs20.35 lakhs
respectively recoverable from a body corporate. The Company has been intimated in January, 2005 about
the Corporate Debt Restructuring Package (CDR) of the said body corporate and as per the CDR, the
amount is scheduled for repayment in instalments over a period of five years commencing 2004-05;
amount due for repayment in 2004-05 being Rs200.95 lakhs.
72
17. As a measure of prudence, the Company had set up a provision for contingency of Rs600.00 lakhs in the
financial year 2003-04 towards eventual shortfall, as there may be, with regard to intercorporate deposit,
(included under ‘Loans and Advances’ in Annexure 2) including interest accrued thereon (book balance
Rs1,025.10 lakhs as on 30.09.04 and 31.03.04 dealt with in Note 16 above) and diminution (other than
temporary) in respect of certain strategic long term unquoted investments (carrying value Rs2,529.08
lakhs as on 30.09.04 and 31.03.04), if any, the extent of which is currently not ascertainable.
18.1 Balances of ‘Sundry Debtors’ (Annexure 2) and ‘Loans and Advances’ (Annexure 2) are net of provisions
as set out below (Rs lakhs):-
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Provision for doubtful
- Sundry Debtors 674.96 534.53 499.45 308.57 177.44 249.76
- Loans and Advances 328.38 327.28 178.26 47.23 46.88 24.24
18.2 ‘Loans and Advances’ (Annexure 2) as on 30th September, 2004 include Rs210.00 lakhs being capital
advance for acquisition of copyright in certain songs/sound recordings together with the literary and
musical works
19.1 ‘Current Liabilities’ (Annexure 2) as on 30th September, 2004 include Rs306.49 lakhs (31.03.04 -
Rs321.18 lakhs, 30.06.03 - Rs5.95 lakhs, 31.03.02 - Rs34.80 lakhs, 31.03.01 - Rs68.25 lakhs, 31.03.00 -
Rs124.65 lakhs) being advance from sub-lessees adjustable over the sub-lease period.
19.2 ‘Current Liabilities’ (Annexure 2) as on 30th September, 2004 include advance of Rs25.00 lakhs from a
party against proposed sale of fixed assets.
20.1 Revenue from Film Rights represent sale of rights relating to released films acquired from Gramco Music
Publishing Limited, an erstwhile subsidiary pursuant to the Scheme of Amalgamation referred to in Note
3.1 above.
20.2 Company's business activities relating to production, development and/or marketing of television serials
and programmes have been transferred to Saregama Films Limited (wholly owned subsidiary) pursuant to
the Scheme of Arrangement referred to in Note 4 above.
Annexure 4: Significant Accounting Policies
(a) Fixed Assets

Revalued items are stated at valuation less depreciation.
Other items are stated at their original cost less depreciation.
(b) Capital Work-in-Progress

These are stated at cost.
(c) Depreciation
Copyrights (outright acquisition) are depreciated under the straight line method over 10 years.
Depreciation on original cost of other fixed assets is provided on straight line method at rates
prescribed in Schedule XIV to the Companies Act, 1956 of India.
Depreciation on the incremental amount added on revaluation in respect of revalued items is
calculated on straight line method at rates considered applicable by valuers. Such additional
depreciation is adjusted against the available balance in Revaluation Reserve Account in respect of
related items.
(d) Investments
Investments in shares and securities are stated at cost/ cost less write down in respect of diminution
other than temporary in the carrying amount as determined by the Board of Directors based on
periodical review.
73
(e) Inventories
Inventory items are valued at lower of cost (inclusive of material cost on weighted average method
and conversion costs, where appropriate) and net realisable value.
(f) Retirement Benefits
(i) Gratuity
Liability on account of gratuity is provided on the basis of actuarial valuation is funded with an
approved fund.
(ii) Superannuation
Contribution payable to an approved fund in accordance with the Company's scheme is recognised
as a charge.
(iii) Leave Encashment Benefits

Accrued liability towards leave encashment benefits payable to employees evaluated on the basis of
actuarial valuation is recognised as a charge.
(g) Sales and Licence Fees

Sales represent invoiced value of products and are net of trade discounts. Licence Fees represent
income from music rights. Revenue relating to tele film/ serial (including telecast rights) is recognised
on telecast
(h) Royalty
Minimum guarantee advances are adjustable within 10 years.
Advances towards licences to use rights for fixed period are adjusted within the licence period.
Other royalty payments are charged at agreed rates on related sales.
(i) Foreign Currency Transactions

Foreign currency transactions are translated at the applicable exchange rate prevailing on the date of
transaction. Current assets and liabilities are converted at period-end rate.
The resultant exchange differences (other than those relating to fixed assets, which are adjusted with
fixed assets) are dealt with in the Profit and Loss Account.
(j) Recognition of Income and Expenditure

Items of income and expenditure are recognised on accrual (except where there are significant
uncertainties) and prudent basis.
(k) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period
based on applicable tax rate and laws.
Effective financial year 2001-02 (related Accounting Standard 22 issued by the Institute of Chartered
Accountants of India being applicable and adopted by the Company. Deferred tax is recognised,
subject to consideration of prudence in respect of deferred tax asset, on timing differences, being the
difference between taxable income and accounting income that originates in one period and are
capable of reversal in one or more subsequent periods and is measured using tax rate and laws that
have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are
periodically reviewed to reassess realisation thereof.
Annexure 5: Principal terms of loan and assets charged as security
Description As at 30.09.04 Remarks

(Rs lakhs)
Secured Loans
Bank Borrowings for Working Capital :
Demand Loan 1,200.00 Rate of interest is between 12.25% to 14.25%
74
Secured by hypothecation of all stocks of raw
materials and stores, work-in-progress,
finished stocks, book debts and bills
receivables.
Cash Credit 48.48
Interest accrued and due on above 8.40
1,256.88
Unsecured Loans
Deposit from Directors 55.00 Rate of interest - 11.75% p.a. Deposit for a
term of two years repayable on maturity
Dealers' Security Deposit 491.90 Rate of interest is between 4% p.a. and 15%
p.a.
Interest accrued and due on the above 46.52
Inter Corporate Deposit 978.60 Includes interest free interest corporate
deposit Rs.895.00 lakhs
For others, rate of interest is between 12% p.a.
to 16% p.a.
Terms of repayment is between six months
and one year
Interest accrued and due on the above 9.29
1,581.31
Total 2,838.19
Annexure 6: Accounting Ratios
S. 6 Months 9 Months 15 Months 12 Months 12 Months 12 Months

No. to to to to to to
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Earnings/(Loss)
Per Share (Basic
1 and Diluted) (Rs) 2.05 (22.59) (51.48) (27.57) 5.40 6.90
Net Asset Value

2 Per Share (Rs) 46.55 44.50 67.08 193.78 220.99 219.26
Return on Net
3 Worth (%) 4.41 (50.76) (76.73) (14.23) 2.44 2.93
Notes:
1. Earnings Per Share is calculated by dividing the profit/(loss) after tax (as set out in Annexure 1) by the
weighted average number of equity shares outstanding during the year as set out below:-
6 Months 9 Months 15 Months 12 Months 12 Months 12 Months

to to to to to to
30.09.04 31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Number of equity shares

at the beginning of the
period 93,42,600 93,42,600 93,42,600 93,42,600 93,42,600 86,42,600
75
issued by way of private
placement on 2nd
March, 2000 7,00,000

at the end of the period 93,42,600 93,42,600 93,42,600 93,42,600 93,42,600 93,42,600
Weighted average
number of equity shares
outstanding during the
period 93,42,600 93,42,600 93,42,600 93,42,600 93,42,600 86,99,977
Nominal value of each

equity share (Rs) 10 10 10 10 10 10
Profit/(Loss) after tax

available for equity
shareholders
(Rs lakhs) 191.92 (2,110.08) (4809.25) (2576.16) 504.52 600.37
Basic and Diluted

Earnings/(Loss) per
share (Rs) 2.05 (22.59) (51.48) (27.57) 5.40 6.90
* including 1373370 equity shares of Rs10 each included under Share Capital Suspense as on 31st March,
2000 (allotted in 2000-01) as fully paid up pursuant to a Scheme of Amalgamation (referred to in Note 3.3 on
Annexure 3) without payment being received in cash
2. Net Asset Value Per Share is arrived at by dividing Net Worth (as set out in Annexure 2) by the number
equity shares at the respective period ends
3. Return on Net Worth is arrived at by dividing the profit/(loss) after tax (as set out in Annexure 1) by the
Net Worth (as set out in Annexure 2)
Annexure 7: Capitalisation Statement (Rs lakhs)
Details Pre-issue Post -issue

As at 30.09.04 (Note - 3)
Debt
Short Term Debt (Note 1) 2,291.29 2,291.29
Long Term Debt (Note 2) 546.90 546.90
Total Debt 2,838.19 2,838.19
Shareholders' Fund
Share Capital 934.26 1,468.12
Reserves 5,741.10 7,609.62
Less : Revaluation Reserve (407.97) (407.97)
Less : Profit and Loss Account Debit Balance (1,918.16) (1,918.16)
Total Shareholders' Fund 4,349.23 6,751.61
Long term debt/equity 0.13 0.08
Notes: -
1. Includes interest accrued and due
2. Includes Dealers' Security Deposits of Rs491.90 lakhs
3. Adjusted only for changes in Share Capital and Premium
76
Annexure 8: Statement of Dividend
Particulars 9 Months to 15 Months to 12 Months to 12 Months to 12 Months to

31.03.04 30.06.03 31.03.02 31.03.01 31.03.00
Number of Equity Shares 93,42,600 93,42,600 93,42,600 93,42,600 93,42,600

outstanding at the period-end
(Note 1)
Share Capital (Rs lakhs) 934.26 934.26 934.26 934.26 934.26
Rate of Dividend :
- Interim Dividend Nil Nil Nil Nil 20%
- Final Dividend Nil Nil Nil 30% 10%
Amount of Dividend (Rs lakhs) - - - 280.28 252.82

(Note 2)
Tax on Dividend (Rs lakhs) - - - 28.59 38.08
(Note 3)
Notes
1. Number of equity shares as on 31st March, 2000 is including 13,73,370 Equity Shares of Rs10 each
included under Share Capital Suspense (refer Note 3.3 on Annexure 3)
2. In accordance with legal opinion obtained by the Company, Interim Dividend declared for the financial
year 1999-2000 was worked out on the basis of paid-up Equity Share Capital being Rs796.92 lakhs which
excluded the Share Capital Suspense of Rs137.34 lakhs and Proposed Final Dividend @10% was worked
out on the basis of paid-up Equity Share Capital and Share Capital Suspense aggregating to Rs934.26
lakhs as on 31st March 2000.
3. Tax on dividend Rs28.59 lakhs is net of Rs3.08 lakhs being release of excess provision in the audited
financial statements for the financial year 2001-02.
The tax consultants of the Company, Pricewaterhouse Coopers Private Ltd has provided the following
statement on tax shelter:
Tax Shelter Statement (Rs lakhs)
For the year ended For the year ended For the year ended For the year ended For the year ended
31/03/2004 31/03/2003 31/03/2002 31/03/2001 31/03/2000
Profit/(Loss) as
per Profit & Loss
Account (3,215.93) (3,640.09) (2,734.84) 654.52 655.37
Tax at Notional
Rate - - - 258.86 252.32
Add : Difference
between tax
depreciation and
book depreciation (95.11) (116.30) (273.85) (209.26) (55.55)
Add : Difference
between tax
royalty and
book royalty (270.59) (112.09) (84.64) (194.82) (214.75)
77
Add : VRS claim
u/s 35DD (181.39) (181.39) (166.52) 783.13 34.12
Add :
Disallowances u/s
43B (net) 48.66 166.48 247.30 1.78 1.30
Add : Others
(net) 742.33 243.90 254.91 11.61 277.47 (0.24) (3.08) 377.75 (185.38) (420.26)
Net
Addition/(benefit) 243.90 11.61 (0.24) 377.75 (420.26)
Tax Savings 87.50 4.27 (0.09) 149.40 (161.80)
Business
profit/(loss) for
tax purposes (2,972.03) (3,628.48) (2,735.08) 1,032.27 235.11
Carry forward
loss as per return/
set off (6,363.56) (2,735.08) - (290.16) (525.27)
Cummulative
carry forward
business loss &
depn. (9,335.59) (6,363.56) (2,735.08) 742.11 (290.16)
Capital Loss
carried forward (9.51) (8.51) (156.40)
78
The Board of Directors
33, Jessore Road
Dum Dum
Kolkata – 700 028
Dear Sirs,
1. We have examined the attached restated Consolidated Statement of Assets and Liabilities of Saregama
India Limited (Saregama / the Company) and its subsidiaries as set out in Note 1.1 on Annexure 3 (the
Group), as at 30th September, 2004, 31st March, 2004, 30th June, 2003 and 31st March, 2002 (Annexure 2)
and the related Consolidated Statement of Profit and Loss for six months to 30th September, 2004, nine
months to 31st March, 2004, fifteen months to 30th June, 2003 and twelve months to 31st March, 2002
(Annexure 1) collectively hereinafter referred to as the ‘Consolidated Summary Statements’ together with
the Notes to the Consolidated Summary Statements and Significant Accounting Policies set out in
Annexures 3 and 4 respectively, stamped and initialed by us for the purpose of identification. These
Consolidated Summary Statements are the responsibility of the Company’s management.
2.1 The Consolidated Summary Statements have been prepared from the Restated Summarised Financial
Statements [RSFS] for the periods, set out in Paragraph 1 above, of Saregama and its subsidiaries on the
basis set out in Note 1.2 on Annexure 3. RSFS for all the subsidiaries, indicated in Note 1.1 on Annexure
3, have been examined by their respective auditors and the related reports on examination by the other
auditors have been furnished to us. As set out in the reports on examination of RSFS, issued by the
respective auditors of the aforesaid subsidiaries are based on the related audited financial statements of the
subsidiaries for the purpose of consolidated financial statements of Saregama for the respective periods
set out in Paragraph 1 above.
2.2 We did not audit the financial statements (used for the consolidated financial statements of Saregama for
the respective periods set out in Paragraph 1 above) of subsidiaries other than for nine months to 31st
March, 2004, fifteen months to 30th June, 2003 and twelve months to 31st March, 2002 in respect of the
subsidiary, RPG Global Music Limited.
Accordingly, the RSFS of the subsidiary companies not covered by our audit reflect total assets of
Rs3628.27 lakhs (including GBP 20.15 lakhs), Rs2934.53 lakhs (including GBP 21.11 lakhs), Rs2810.50
lakhs (including GBP 23.60 lakhs), and Rs1910.08 lakhs (GBP 27.45 lakhs) as on 30th September, 2004,
31st March, 2004, 30th June, 2003 and 31st March, 2002 respectively and total revenue of Rs1218.23 lakhs
(including GBP 4.76 lakhs), Rs877.07 lakhs (including GBP 8.28 lakhs), Rs1496.60 lakhs (including GBP
19.54 lakhs), and Rs797.17 lakhs (GBP 11.66 lakhs) for the six months to 30th September, 2004, nine
months to 31st March, 2004, fifteen months to 30th June, 2003 and twelve months to 31st March, 2002
respectively.
2.3 As indicated in Note 16 on Annexure 3, a provision of Rs600.00 lakhs is held towards eventual shortfall,
as there may be, with regard to an intercorporate deposit including interest accrued thereon (book balance
as on 30th September, 2004 – Rs1025.10 lakhs) and diminution in respect of certain unquoted investments
(carrying value as on 30th September, 2004 – Rs1700.00 lakhs). From the available information, we are
unable to comment on the extent of further provision, if any, required to be made to cover the eventual
shortfall/ diminution (other than temporary) in this regard with its corresponding adverse impact on the
consolidated profit for the six months to 30th September, 2004 and consolidated net worth as on that date.
3. We report that that the Consolidated Summary Statements have been prepared by the Company’s
management in accordance with the principles set out in Accounting Standard (AS) 21 ‘Consolidated
Financial Statements’ issued by the Institute of Chartered Accountants of India.
4. In our opinion, the Consolidated Summary Statements as attached to this report, subject to our remark in
paragraph 2.3 above, have been prepared in line with Part II of Schedule II of the Companies Act, 1956 of
India and Securities and Exchange Board of India (Disclosure and Investor Protection) guidelines 2000.
79
5. This report is solely for your information and for inclusion in the Letter of Offer in connection with the
proposed Rights Issue of Saregama and is not to be used, referred to or distributed for any other purpose
without our prior written consent.
Yours faithfully,
S. K. Deb
Partner
For and on behalf of
Price Waterhouse
Chartered Accountants
Kolkata, 10th January, 2005
80
Annexure 1: Consolidated Statement of Profits and Losses (As Restated)
The profits/(losses) for the six months to 30th September, 2004 and for three financial years i.e. nine months to
31st March, 2004, fifteen months to 30th June, 2003 and twelve months to 31st March, 2002 read with Notes
to the Consolidated Summary Statements (set out in Annexure 3) and significant Accounting Policies (set out
in Annexure 4), after regroupings/adjustments are set out below (Rs lakhs):-
6 Months to 9 Months to 15 Months to 12 Months to

30.09.04 31.03.04 30.06.03 31.03.02
Income
Sales and Licence Fees -
Music 4,588.87 6,890.37 11,420.43 10,924.46
Film/ Distribution Rights (refer Note 21
on Annexure 3) 354.18 - - 21.00
Free Commercial Time (Television) 312.69 223.00 518.80 252.83
Licence Fees 584.57 599.44 852.49 1,032.96
Total 5,840.31 7,712.81 12,791.72 12,231.25
Other Income (refer Note 7 on Annexure
3) 126.22 165.06 747.80 1,013.26
Increase/ (Decrease) in stock in trade (126.34) (320.12) (209.21) (646.24)
Total Income 5,840.19 7,557.75 13,330.31 12,598.27
Expenditure
Material consumption 1,374.51 2,319.44 4,306.34 4,124.78

Cost of production [films/telefilms/serials
(including telecast rights)] 624.32 253.43 460.41 171.69
Staff Cost 677.90 1,081.40 2,162.19 1,835.23
Advertisement and Sales Promotion 517.91 1,365.80 1,816.20 1,827.88
Royalty 1,023.57 1,607.83 4,787.28 3,244.14
Other Expenditure 1,247.57 2,437.42 4,121.68 4,028.53
Interest 146.22 231.51 430.54 220.31
Depreciation (net of transfer from
Revaluation Reserve) 162.37 245.09 625.06 464.45
Total Expenditure 5,774.37 9,541.92 18,709.70 15,917.01
Profit/(Loss) before tax and non-

recurring items 65.82 (1,984.17) (5,379.39) (3,318.74)
Non-recurring items (refer Note 14 on

Annexure 3) - (622.90) 170.75 (37.15)
Profit/(Loss) before tax 65.82 (2,607.07) (5,208.64) (3,355.89)
Current Taxation (refer Note 12.1 on

Annexure 3) 20.00 - 13.35 (31.39)
Deferred Taxation (refer Note 12.2 on
Annexure 3) - - 63.32 (170.87)
Profit/(Loss) after tax and before
Minority Interest 45.82 (2,607.07) (5,285.31) (3,153.63)
Minority Interest 1.83 (39.16) (45.15) (115.69)
Profit/(Loss) after tax and Minority

Interest 43.99 (2,567.91) (5,240.16) (3,037.94)
81
Annexure 2: Consolidated Statement of Assets and Liabilities (As Restated)
Assets and liabilities as at 30th September, 2004, 31st March, 2004, 30th June, 2003 and 31st March, 2002
read with Notes to the Consolidated Summary Statements (set out in Annexure 3) and Significant Accounting
Policies (set out in Annexure 4) after regroupings/adjustments are set out below (Rs lakhs):-
As at As at As at As at
30.09.04 31.03.04 30.06.03 31.03.02
A Fixed Assets
Gross Block 6,594.61 7,000.44 7,015.07 6,122.77
Less : Depreciation (2,216.95) (2,435.09) (2,223.62) (2,396.27)
Net Block 4,377.66 4,565.35 4,791.45 3,726.50
Less : Revaluation Reserve (407.97) (425.33) (437.13) (482.44)
Capital Work In Progress 5.00 8.37 - -
Net Block after adjustment for 3,974.69 4,148.39 4,354.32 3,244.06
Revaluation Reserve
B Investments (refer Notes 5 and 16 3,950.70 3,950.70 3,955.70 7,250.70

on Annexure 3)
C Deferred Tax Asset (net) (refer - - - 63.32

Note 12.2 on Annexure 3)
D Current Assets, Loans and

Advances
Inventories 1,014.54 1,083.43 1,488.05 1,687.05
Sundry Debtors (refer Note 19 on 3,049.87 2,842.74 3,068.13 3,700.42
Annexure 3)
Cash and Bank Balances 1,047.30 700.20 324.65 1,306.32
Accrued income on Deposits / 62.24 45.50 71.19 96.26
Investments
Loans and Advances (refer Notes 4,129.31 3,958.25 5,000.00 11,714.34
15,16,17,18 and
19 on Annexure 3)
Total 9,303.26 8,630.12 9,952.02 18,504.39
E Minority Interest 342.41 340.58 379.74 424.89
F Liabilities and Provisions

Secured Loans 1,414.93 1,603.54 1,796.00 1,674.53
Unsecured Loans 1,581.31 1,339.26 1,031.45 818.14
Current Liabilities (refer Notes 20.1 9,833.49 9,463.35 9,105.98 7,928.97
and 20.2 on
Annexure 3)
Provisions 1,348.75 1,319.32 719.02 712.25
Total 14,178.48 13,725.47 12,652.45 11,133.89
Net worth (A+B+C+D-E-F) 2,707.76 2,663.16 5,229.85 17,503.69
Represented by :
1 Share Capital 934.26 934.26 934.26 934.26

2 Reserves (refer Note 6 on 6,911.40 6,928.76 6,940.56 21,372.80
82
Annexure 3)
Revaluation Reserve (407.97) (425.33) (437.13) (482.44)
Reserves (net of Revaluation 6,503.43 6,503.43 6,503.43 20,890.36
Reserve)
Miscellaneous Expenditure (to the (4.29) (4.90) (6.12) -
extent not written off or adjusted)
(refer Note 13 on Annexure 3)
Profit and Loss Account Debit (4,725.64) (4,769.63) (2,201.72) (4,320.93)
Balance
(refer Note 22 on Annexure 3)
1,773.50 1,728.90 4,295.59 16,569.43
Net worth (1+2) 2,707.76 2,663.16 5,229.85 17,503.69
Annexure 3: Notes to the Consolidated Summary Statements
1.1 The subsidiaries [which along with Saregama India Limited (parent company) constitute the Group]
considered for these Consolidated Summary Statements are:
Name Country of Proportion of ownership interest as

Incorporation at 30th September, 2004
Saregama Plc. United Kingdom 70.23%
RPG Global Music Limited Mauritius 100.00%
Saregama Films Limited* India 100.00%
* incorporated on 27th March, 2003
1.2 The Consolidated Summary Statements have been prepared from the financial statements of the parent
company and its subsidiaries which have been restated in accordance with the requirements of Part II of
Schedule II of the Companies Act, 1956 read with the Securities and Exchange Board of India (Disclosure
and Investor Protection) Guidelines 2000.
1.3 For the purpose of these Consolidated Summary Statements, uniform accounting policies for like
transactions and other events in similar circumstances have been adopted and presented to the extent
possible, in the same manner as the parent company's separate summary statements.
1.4 Minority Interests in the net profit/loss of a consolidated subsidiary for the reporting period has been
identified and adjusted with profit/loss of the Group.
2. The parent company's financial year is twelve months to 31st March other than the financial year 2002-03
(for fifteen months) when year-end date was extended by three months to 30th June, 2003 and the
financial year 2003-04 (for nine months) when year-end date was realigned to 31st March. Subsidiaries'
financial statements have also been prepared and restated accordingly.
3. Pursuant to a Scheme of Arrangement, approved by the shareholders and sanctioned by the High Court at
Calcutta (the Scheme) under the provisions of the Companies Act, 1956 of India, the Television Software
Division of the parent company was transferred to Saregama Films Limited (wholly owned subsidiary)
with effect from 30th June, 2003 (Appointed Date). Further, in accordance with the said Scheme certain
assets of the parent company as on 30th June, 2003, were restated and/or revised as determined by the
Board of Directors of the parent company resulting in upward revision of net book value of fixed assets of
the parent company comprising land and buildings by Rs2374.11 lakhs (refer Note 4.2 below) and
downward restatement of outright acquisition of Copyright, long-term unquoted trade investments and
loans and advances by Rs1045.82 lakhs (refer Note 4.3 below), Rs3295.00 lakhs (referred to in Note 5
below) and Rs5060.85 lakhs respectively and the net effect of the aforesaid upward/ downward
revision/restatement being net shortfall/diminution aggregating Rs7027.56 lakhs together with the Profit
and Loss Account debit balance of the parent company of Rs7359.37 lakhs as on 30th June, 2003 were
adjusted against the Share Premium Account (refer Note 6A below) of the parent company.
83
4.1 Based on valuation reports of valuers, appointed for the purpose, the fixed assets of the parent company
(other than furniture, fittings and equipment, vehicles, a building on leasehold land and certain items of
plant and machinery) were revalued on 31st March, 1984 and again (except for those relating to record
making machinery items and leasehold land and buildings at Dombivili factory) on 30th September, 1987
after considering the then (a) current market value/ derived rates attributable to land (b) current
replacement cost after depreciation etc. and Rs587.31 lakhs and Rs628.19 lakhs were added to the book
value of the related assets (with corresponding credit to Fixed Asset Revaluation Reserve) on 31st March,
1984 and 30th September, 1987 respectively.
4.2 Certain assets of the parent company viz. land and buildings were revalued on 30th June, 2003 by a firm
of registered valuers, at the lower of current replacement cost and realisable value. Resultant incremental
value amounting to Rs2374.11 lakhs (Land - Rs1868.97 lakhs, Buildings - Rs505.14 lakhs) was added to
the book value of the related assets with utilisation of the corresponding credit amount in the manner
indicated in Note 3 above, pursuant to the sanctioned Scheme of Arrangement referred to therein.
4.3 As on 30th June, 2003, based on commercial and technical evaluation of outright acquisition of copyrights
carried out by the management of the parent company, Rs1045.82 lakhs was reduced from the net book
value of such assets with corresponding adjustment in the manner indicated in Note 3 above pursuant to
the Scheme of Arrangement referred to therein.
5. Details of long term investments (Rs lakhs):-
As on As on As on As on
30.09.04 31.03.04 30.06.03 31.03.02
Book value of quoted investments in fully paid 0.58 0.58 0.58 0.58
equity shares
Market Value of quoted investments 0.61 0.37 0.23 0.13
Book value of un quoted investments
- Trade investments in fully paid equity shares 3950.00 3950.00 3955.00 7250.00
- Fully paid Debentures 0.12 0.12 0.12 0.12
3950.12 3950.12 3955.12 7250.12
* after adjustment of Rs3295.00 lakhs in book value of certain unquoted trade investments pursuant to the
Scheme of Arrangement referred to in Note 3 above
6. Movement in balances (Rs lakhs) of Share Premium and General Reserve forming part of Reserves
(Annexure 2):-
30.09.04 31.03.04 30.06.03 31.03.02
A Share Premium
Opening balance 5861.07 5861.07 20248.00 20248.00
Less : Adjustments pursuant to the

Scheme of Arrangement (refer Note 3
above)
- Net effect of restatement/revision in - - (7,027.56) -
value of assets
- Debit balance in Profit and Loss - - (7,359.37) -
Account
5861.07 5861.07 5861.07 20248.00
B General Reserve
Opening balance 642.36 642.36 642.36 737.73
84
Less : Adjustment for net Deferred Tax - - -
Liability (refer Note 12.2 below) (95.37)
642.36 642.36 642.36 642.36
7. Details of 'Other Income' (Rs lakhs):-
6 Months 9 Months 15 Months 12 Months

to 30.09.04 to 31.03.04 to 30.06.03 to 31.03.02
Recurring items arising in course of normal
business activities
Interest from deposits etc. 21.56 39.73 522.09 724.02
Rent 48.88 75.26 119.49 126.32
Scrap sales 14.39 24.82 56.60 61.15
Profit on sale of fixed assets (net) - - - 3.34
Gain on foreign exchange fluctuation (net) 18.47 - - 60.61
Miscellaneous 22.92 25.25 49.62 37.82
Total 126.22 165.06 747.80 1013.26
8. Estimated amount of capital commitments (net of advances) not provided for at the respective period ends
(Rs lakhs):-
30.09.04 31.03.04 30.06.03 31.03.02
Capital commitment (Gross) 10.02 - 8.79 344.99
Less : Advance 5.00 - 7.50 301.00
5.02 - 1.29 43.99
9. Details of contingent liabilities in respect of (Rs lakhs):
30.09.04 31.03.04 30.06.03 31.03.02
Counter guarantee given to bankers 20.68 23.79 15.93 15.74
Claims against the Company not acknowledged
as debts in respect of -
Sales/Turnover/Purchase tax matters under 1079.41 994.00 1134.12 173.75
dispute
Income-tax matters under dispute (excluding 105.00 90.00 118.16 118.16
issues which have been decided in favour of the
parent company at appellate level in certain
years)
Excise duty on account of non-admissibility of 9.42 9.42 44.85 66.39
MODVAT credit claim for differential duty on
block board etc.
10. The parent company has been advised that based on legal proceedings initiated by the Employees' Union/
Association, the Calcutta High Court, vide its interim Order dated April 24, 1997 has restrained the parent
company from making any contribution/deduction towards Employees' State Insurance contribution with
effect from April, 1997 in respect of the appellant employees and accordingly no such contributions (with
appropriate provision in books)/deductions have been made and deposited with the appropriate authorities
in India.
11. Pursuant to an approved scheme, the Company granted Stock Options to eligible employees and
Managing Director (up to 2nd September, 2003) effective from 1st February, 2002; the related options
have the following vesting schedule:
85
After 1 year from the date of grant: 25% of options
According to management, options vested have not been exercised up to January 10, 2005
12.1 In the financial year 2001-02, current taxation credit pertains to Saregama Plc (subsidiary company) as per
applicable laws of United Kingdom.
12.2 In accordance with Accounting Standard 22 on 'Accounting for Taxes on Income' issued by the Institute of
Chartered Accountants of India, accumulated net Deferred Tax Liability of Rs95.37 lakhs as on 1st April,
2001 of the parent company had been adjusted against General Reserve (refer Note 6B above) in the
audited financial statements of the parent company for the financial year 2001-02. On a prudent basis,
deferred tax asset (net) as on 30th June, 2003 and periods subsequent thereto have not been considered.
13. Miscellaneous Expenditure (to the extent not written off / adjusted) represents preliminary expenses
pertaining to Saregama Films Limited.
14. Non recurring items [credit /(debit)] comprise the following (Rs lakhs):
6 Months 9 Months 15 Months 12 Months

to 30.09.04 to 31.03.04 to 30.06.03 to 31.03.02
Provision for Contingency (refer Note 16 (600.00) - -
below) -
Payments under Voluntary Retirement

Scheme - - - (14.87)
Website development expense - - - (111.94)
Profit on sale of
- land and building at Dombivili Factory - - 35.58 -
- Flat at Mumbai - - 97.17 -
Insurance claim - 2.31 38.00 35.66
Reversal of interest income - (25.21) - -
Consideration received on relinquishment

of tenancy right
- - - 54.00
- (622.90) 170.75 (37.15)
15. 'Loans and Advances' and 'Accrued Income on Deposits/Investments' as on 30th September, 2004
(Annexure 2) of the parent company include Rs1004.75 lakhs (original loan amount Rs1504.75 lakhs) and
Rs20.35 lakhs respectively recoverable from a body corporate. The parent company has been intimated in
January, 2005 about the Corporate Debt Restructuring Package (CDR) of the said body corporate and as
per the CDR, the amount is scheduled for repayment in installments over a period of five years
commencing 2004-05; amount due for repayment in 2004-05 being Rs200.95 lakhs.
16. As a measure of prudence, the parent company had set up a provision for contingency of Rs600.00 lakhs
in the financial year 2003-04 towards eventual shortfall, as there may be, with regard to intercorporate
deposit (included under 'Loans and Advances' in Annexure 2) including interest accrued there on (book
balance Rs1025.10 lakhs as on 30.09.04 and 31.03.04, dealt with in Note 15 above) and diminution (other
than temporary) in respect of certain strategic long term unquoted investments [carrying value Rs1700.00
86
lakhs (other than subsidiary) as on 30.09.04 and 31.03.04), if any, the extent of which is currently not
ascertainable.
17. Loans and Advances' (Annexure 2) as on 30th September, 2004 include Rs100 lakhs (31.03.04- Rs100.00
lakhs) originally given to a party as advance against equity under a proposed joint venture, converted into
interest free unsecured loan in 2003-04.
18. 'Loans and Advances' (Annexure 2) as on 30th September, 2004 include Rs210.00 lakhs being capital
advance for acquisition of copyright in certain songs/sound recordings together with the literary and
musical works.
19. Balances of 'Sundry Debtors' (Annexure 2) and 'Loans and Advances' (Annexure 2) are net of provisions
as set out below (Rs lakhs):-
30.09.04 31.03.04 30.06.03 31.03.02
Provision for doubtful
- Sundry Debtors 983.99 827.43 700.23 320.58
- Loans and Advances 328.39 327.28 178.26 47.23
20.1 'Current Liabilities' (Annexure 2) as on 30th September, 2004 include Rs306.49 lakhs (31.03.04 -
Rs321.18 lakhs, 30.06.03 - Rs5.95 lakhs, 31.03.02 - Rs34.80 lakhs) being advance from sub-lessees
adjustable over the sub-lease period.
20.2 Current Liabilities' (Annexure 2) as on 30th September, 2004 include advance of Rs25.00 lakhs from a
party against proposed sale of fixed assets.
21. Revenue from Film Rights for 2001-02 represent sale of rights relating to released films acquired from
Gramco Music Publishing Limited, an erstwhile subsidiary of the parent company pursuant to a Scheme
of Amalgamation of the said company with the parent company in 1999-00.
22. RPG Music International Ltd. (RMIL), an erstwhile subsidiary of the parent company, had given certain
rights pertaining to their catalogue of music titles worth GBP 20,20,000 (onetime fee) to its subsidiary
company Saregama Plc payable over a period of three financial years, i.e., years ended 31st March, 1999,
2000 and 2001. The said amount (Licence fee) for such rights was capitalised in the books of Saregama
Plc. RMIL had booked the related income due on 31st March, 1999 and 1st April, 1999. Subsequently
with effect from 1st March, 2000, RMIL was merged with the parent company. Accordingly, the amount
due on 1st April, 2000 was booked as income in the books of the parent company.
For the purpose of the Consolidated Summary Statements, the inter-company sales and purchases have
been eliminated and the profit recognised by parent company (including RMIL) has been reversed. Also,
the amortisation of Licence fee provided on the same has been reversed. The resulting amount of
Rs1230.30 lakhs is included under debit balance of Profit and Loss Account.
87
Annexure 4: Significant Accounting Policies
(a) Fixed Assets

Revalued items are stated at valuation less depreciation.
Other items are stated at their original cost less depreciation.
(b) Capital Work-in-Progress

These are stated at cost.
(c) Depreciation
Copyrights (outright acquisition) are depreciated under the straight line method over 10 years.
Depreciation on original cost of other fixed assets is provided on straight line method at rates
prescribed in Schedule XIV to the Companies Act, 1956 of India.
Depreciation on the incremental amount added on revaluation in respect of revalued items is
calculated on straight line method at rates considered applicable by valuers. Such additional
depreciation is adjusted against the available balance in Revaluation Reserve Account in respect of
related items.
(d) Investments
Investments in shares and securities are stated at cost/ cost less write down in respect of diminution
other than temporary in the carrying amount as determined by the Board of Directors based on
periodical review.
(e) Inventories
Inventory items are valued at lower of cost (inclusive of material cost on weighted average method
and conversion costs, where appropriate) and net realisable value.
(f) Retirement Benefits
(i) Gratuity
Liability on account of gratuity is provided on the basis of actuarial valuation is funded with an
approved fund.
(ii) Superannuation
Contribution payable to an approved fund in accordance with related scheme is recognised as a charge.
(iii) Leave Encashment Benefits

Accrued liability towards leave encashment benefits payable to employees evaluated on the basis of
actuarial valuation is recognised as a charge.
(iv) With regard to overseas subsidiaries, retirement benefit schemes are accounted for as per rules and
regulations applicable in respective countries.
(g) Sales and Licence Fees

Sales represent invoiced value of products and are net of trade discounts. Licence Fees represent
income from music rights. Revenue relating to Telefilms/ Serials (including telecast rights) is
recognised on telecast. Revenue from film is recognised on assignment of distribution rights.
(h) Royalty
Minimum guarantee advances are adjustable within 10 years.
Advances towards licences to use rights for fixed period are adjusted within the licence period.
Other royalty payments are charged at agreed rates on related sales.
(i) Foreign Currency Transactions
88
Foreign currency transactions are translated at the applicable exchange rate prevailing on the date of
transaction. Current assets and liabilities are converted at period-end rate.
The resultant exchange differences (other than those relating to fixed assets, which are adjusted with
fixed assets) are dealt with in the Profit and Loss Account.
With regard to operations in functional currencies of overseas subsidiaries
-issued capital and Fixed Assets are translated at historical rates.
-revenue and expense items are translated at average of daily exchange rates for the period.
-monetary items are converted at period-end rates.
-exchange differences arising on restatement are taken to the Profit and Loss Account.
(j) Preliminary Expenses

Preliminary Expenses is being written off over a period of five years.
(k) Recognition of Income and Expenditure

Items of income and expenditure are recognised on accrual (except where there are significant
uncertainties) and prudent basis.
(l) Taxes on Income

Current tax is determined as the amount of tax payable in respect of taxable income for the period
based on applicable tax rate and laws.
Deferred tax is recognised, subject to consideration of prudence in respect of deferred tax asset, on
timing differences, being the difference between taxable income and accounting income that originates
in one period and are capable of reversal in one or more subsequent periods and is measured using tax
rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax
assets are periodically reviewed to reassess realisation thereof.
89
XIII. MANAGEMENT DISCUSSION AND ANALYSIS
A. Analysis of Financial performance
6 Months to 9 Months to 15 Months to 12 Months to

30.09.04 31.03.04 30.06.03 31.03.02
Income
Sales and Licence Fees -

Music 4,319.61 6,404.52 10,220.54 10,148.21
Film Rights - - - 21.00
Free Commercial Time (Television) - - 518.80 252.83
License Fees 532.49 513.06 734.92 811.32
Total 4,852.10 6,917.58 11,474.26 11,233.36
Other Income 113.90 186.69 759.53 993.17
Increase/ (Decrease) in stock in trade (107.67) (220.28) (98.52) (533.16)

Interest from deposits etc. 21.16 39.71 493.62 723.68
Dividend - - - 7.37
Rent 48.88 75.26 119.49 126.32
Miscellaneous 27.73 74.03 264.14 237.46
Total 97.77 189.00 877.25 1,094.83
Total Income 4,858.33 6,883.99 12,135.27 11,693.37
Expenditure
Material consumption 1,345.60 2,279.58 4,241.23 3,891.36

Cost of production - - 416.23 171.69
Staff Cost 580.38 949.72 1,837.66 1,580.39
Advertisement and Sales Promotion 391.47 1,309.68 1,668.61 1,722.07
Royalty 1,040.45 1,505.15 4,663.86 3,130.21
Other Expenditure 1,011.27 1,923.92 3,227.05 3,245.80
Interest 137.94 217.66 416.56 217.42
Depreciation 139.30 210.67 580.75 432.13
Total Expenditure 4,646.41 8,396.38 17,051.95 14,391.07
Profit/(Loss) before tax and non-recurring

items 211.92 (1,512.39) (4,916.68) (2,697.70)
Non-recurring items - (597.69) 170.75 (37.15)
Profit/(Loss) before tax 211.92 (2,110.08) (4,745.93) (2,734.85)
Current Taxation 20.00 - - -

Deferred Taxation - - - (158.69)
Profit/(Loss) after tax 191.92 (2,110.08) (4,745.93) (2,576.16)
90
April – September 2004 to July – March 2004
Revenue
Income from sales of MCs and CDs during April – September 2004 was Rs4,319.61 lakhs as compared to
Rs6,404.52 lakhs in the period July – March 2004. The total volume of music cassettes was 84.69 lakhs during
April – September 2004 as compared to 143.57 lakhs in the period July – March 2004 representing annualised
drop of 12 %. The total volume of CD was 17.56 lakhs during April – September 2004 as compared to 28.29
lakhs in the period July – March 2004 representing annualised drop of 7%. Home video volume was 5.48 lakhs
during April – September 2004 as compared to 6.88 lakhs in the period July – March 2004 representing
annualised growth of 20%.
Drop in the sale of music cassettes was on account of consumers’ preference progressively shifting to audio
CDs and VCDs. CD volumes have remained constant in comparison to the preceeding 9 months. Growth in
sale of home video was on account of the Company giving thrust to this business segment signing up licensing
agreements with additional overseas studios.
Licensing and publishing income was Rs532.49 lakhs during April – September 2004 as compared to
Rs513.06 lakhs in the period July – March 2004 representing annualised growth of 56%. This growth has been
achieved through a combination of factors like focused and pro-active efforts of the Collection Societies to
increase collection of mechanical royalties and publishing income from public performance. Additionally, the
Company’s efforts to license out its music content to the interested music companies, ad agencies, etc. is also
boosting collections. Focused anti-piracy drives are also yielding results. Other income was Rs113.90 lakhs
during April – September 2004 as compared to Rs186.69 lakhs in the period July – March 2004 representing
an annualised drop of 8.5%. Drop in the income was on account of the drop in interest earnings from Inter
Corporate Deposits.
Expenditure
Total expenditure comprising material costs (net of increase / decrease in stock in trade), royalties and
advertisement / promotion costs was Rs2,885.19 lakhs during April – September 2004 as compared to
Rs5,314.69 lakhs in the period July – March 2004 representing annualised reduction of 18.6%. Material costs
dropped 12.8% annualised during April – September 2004. The increase in cost of plastic as a consequence of
a rise in petroleum prices has neutralised the advantage of lower material costs due to lower volumes of MC
production. Royalty cost for the April – September, 2004 was Rs1,040.45 lakhs as compared to Rs1,505.15
lakhs in the period July – March 2004. The marginal increase in royalty in annualised terms is due to the
payouts made to the foreign studio on account of the rapidly growing Home Video segment which has
contributed to nearly 16% of the total turnover. Advertisement / Promotion costs for the period April –
September 2004 was Rs391.47 lakhs as against Rs1,309.68 lakhs in the period July – March 2004,
representing an annualised drop by 55%. Reduction in Advertisement / Promotion costs has been achieved
through slashing of unproductive publicity and through various sponsorship deals with TV channels and co-
branding with corporate houses.
Total operating expenses were Rs1,591.65 lakhs during April – September 2004 as against Rs2,873.64 lakhs in
the period July – March 2004 representing drop of 16.9% (annualised). Reduction in Opex has been achieved
through rationalisation of manpower and various austerity measures mainly in communication, traveling costs.
Profit before Interest, Depreciation and Taxation (PBDIT)

Profit before Interest, Depreciation and Taxation (PBDIT) was Rs489.16 lakhs for the period April –
September 2004 as against a loss of Rs1,084.06 lakhs in the previous 9 months.
Depreciation
Depreciation reduced to Rs139.30 lakhs in April – September 2004 as compared to Rs210.67 lakhs in the
period July – March 2004. This was mainly due to write-off of non-productive plant & machinery.
Interest
Interest costs reduced t o Rs137.94 lakhs in April – September 2004 a s c o m p a r e d t o R s 2 1 7 . 6 6 l a k h s
i n t h e period July – March 2004. The reduction in the interest rates by the banks and re-negotiation of
interest on unsecured loan and better working capital management helped the Company to reduce the interest
cost.
Net Profit
91
Net profit for April – September 2004 is Rs191.92 lakhs as against the loss of Rs2,110.08 lakhs in the period
July – March 2004. The significant improvement is mainly attributable to:
1. The Company exercised economy in acquisition of new Hindi music and pursued some of the producers to
sign up on revenue sharing basis resulting into sizeable savings in royalty costs
2. Substantial savings achieved in advertising and publicity, establishing strong co-relation between quantum
of advertisement with success of music
3. All around reduction in various items of operating expenditure achieved through various austerity
measures
4. Substantial savings in interest by re-negotiation of interest rate and containing the level of borrowing
through better working capital management
Nine months ended March 2004 Vs Fif t een mont hs ended June2 003
Revenue
Income from sales of MCs and CDs during July – March 2004 was Rs6,404.52 lakhs as compared to
Rs10,220.54 lakhs in the fifteen months ending June 2003 representing annualised increase of 4 %. The total
volume of music cassettes was 143.59 lakhs during July – March 2004 as compared to 289.29 lakhs in the
fifteen months ending June 2003 representing annualised drop of 17%. The total volume of CD was 28.29
lakhs during July – March 2004 as compared to 37.94 lakhs in the fifteen months ending June 2003
representing annualised growth of 24%. Home video volume was 6.88 lakhs during July – March 2004 as
compared to 4.09 lakhs in the fifteen months ending June 2003 representing annualised growth of 180%.
CDs. This was also borne out by the fact that the increase in the sale of audio CDs was to the tune of 24%.
Growth in sale of home video showed an abnormal jump since the segment started during the course of the last
15 months and was steadily growing with the Company focusing on this segment by signing up with new
overseas studios.
Licensing and publishing income was Rs513.06 lakhs during July – March 2004 as compared to Rs734.92
lakhs in the fifteen months ending June 2003 representing an annualised growth of 16%. This growth has been
achieved because of a combination of focused activities like registration with more collection societies, anti-
piracy activities, marketing of content for licensing. Other income was Rs186.69 lakhs during July – March
2004 as compared to Rs759.53 lakhs in the fifteen months ending June 2003 representing drop of 60%. Drop
in the income was on account of the drop in interest earnings from ICDs.
Expenditure
Total expenditure comprising of material costs (net of increase / decrease in stock in trade), royalties and
advertisement / promotion costs was Rs5,314.69 lakhs during July – March 2004 as compared to Rs11,088.45
lakhs in the fifteen months ending June 2003 representing annualised reduction of 20.1%. Material costs has
fallen by 4% annualised during July – March 2004 due to fall in the production volume of MC. Royalty cost
for the July – March 2004 was Rs1,505.15 lakhs as compared to Rs4,663.86 lakhs in the fifteen months ending
June 2003, representing an annualised drop in royalty cost to the tune of 46%. This reduction was on account
of better negotiation of royalty rates for new Hindi films and full recoupment of minimum guarantee amounts
paid while acquiring new music. Advertisement / Promotion costs for the period July – March 2004 was
Rs1,309.68 lakhs as against Rs1,66.61 lakhs in the fifteen months ending June 2003, representing an
annualised increase to the tune of 30.8%. Increase in Advertisement / Promotion costs was because of an
increase in TV advertising for newly released Hindi films acquired during this period.
Total operating expenses was Rs2,873.64 lakhs during July – March 2004 as against Rs5,064.71 lakhs in the
fifteen months ending June 2003 representing drop of 5.4% (annualised). Reduction in Opex has been
achieved through various austerity measures mainly on communication, traveling costs and other overheads.
P r o f i t before Interest, Depreciation and Taxation (PBDIT)

L o s s before Interest, Depreciation and Taxation (PBDIT) was Rs1,084.06 lakhs for the period July –
March 2004 as against loss of Rs3,919.37 lakhs in the previous 15 months..
92
Depreciation
Depreciation reduced from Rs210.67 lakhs in July – March 2004 as compared to Rs580.75 lakhs in the
fifteen months ending June 2003.
Interest
Interest costs reduced t o Rs217.66 lakhs in July – March 2004 a s c o m p a r e d t o R s 4 1 6 . 5 6 l a k h s i n
t h e fifteen months ending June 2003. The reduction in the interest rate by the banks and re-negotiation of
interest on unsecured loan helped the Company to reduce the interest costs.
Net Profit
Net loss for July – March 2004 is Rs2,110.08 lakhs as against the loss of Rs4,745.93 lakhs in the previous 15
months. The significant improvement is mainly attributable to
1. The Company exercised economy in acquisition of new Hindi music and pursued some of the producers to
sign up on revenue sharing basis resulting into sizeable savings in royalty costs
2. Substantial savings achieved in advertising and publicity, establishing strong co-relation between quantum
of advertisement with success of music
3. All around reduction in various items of operating expenditure achieved through various austerity
measures
4. Substantial savings in interest by re-negotiation of interest rate and containing the level of borrowing
through better working capital management
Fif teen mont hs ended June 200 3 Vs. FY200 2
Revenue
Income from sales of MCs and CDs during 15 months ended June 2003 was Rs10,220.54 lakhs as compared to
Rs10,148.21 lakhs in the FY2002 representing annualised drop of 19%. The total volume of music cassettes
was 289.29 lakh during 15 months ended June, 2003 as compared to 335.04 lakhs in the FY2002 representing
annualised drop of 31%. The total volume of CD was 37.94 lakhs during 15 months ended June 2003 as
compared to 11.95 lakhs in the FY2002 representing annualised increase of 154%. Home video volume was
4.09 lakhs during 15 months ended June 2003. Home Video operations commenced during this period.
CDs. The increase in the sale of audio CDs is due to the change in consumption pattern moving from cassettes
to CDs. The Company envisaged this change in consumer taste and in order to take the first mover advantage,
the Company reduced the prices of CDs resulting in large volumes. Home video was a new segment which the
Company started during the 15 months ended June 2003.
Licensing and publishing income was Rs734.92 lakhs during 15 months ended June 2003 as compared to
Rs811.32 lakhs in the FY2002 representing a drop of 27%. This drop is attributed to the fact that there has
been a lack of focus in the area of registrations with collection societies, which need immediate attention.
Other income was Rs759.53 lakhs during 15 months ended June 2003 as compared to Rs993.17 lakhs in the
FY2002 representing drop of 39 %.
Expenditure
Total expenditure comprising of material costs (net of increase / decrease in stock in trade), royalties and
advertisement / promotion costs was Rs11,088.45 lakhs during 15 months ended June 2003 as compared to
Rs9,448.49 lakhs in the FY2002 representing annualised reduction of 6.1%. Material costs dropped by 21.5%
annualised during 15 months ended June 2003. Royalty cost for the 15 months ended June 2003 was
Rs4,663.86 lakhs as compared to Rs3,130.21 lakhs in the FY2002, representing an annualised increase of
19.2%. This was due to major acquisitions in Hindi films, the cost of which rose on account of overall price
increase in the Hindi film music market. Advertisement / Promotion costs for the period 15 months ended June
2003 was Rs1,668.61 lakhs as against Rs1,722.07 lakhs in the FY2002, representing an annualised drop of
22.5%.
Total operating expenses was Rs5,064.71 lakhs during 15 months ended June 2003 as against Rs4,826.19
lakhs in the FY2002 representing drop of 16% (annualised). Reduction in Opex has been achieved through
various austerity measures mainly on communication, traveling costs and other overheads.
93
P r o f i t before Interest, Depreciation and Taxation (PBDIT)
L o s s before Interest, Depreciation and Taxation was Rs3,919.37 lakhs for the period 15 months ended June
2003 as against loss of Rs2,048.15 lakhs in the FY2002.
Depreciation
Depreciation increased to Rs580.75 lakhs in 15 months ended June 2003 from Rs432.13 lakhs in the FY
2002 due to increase in copyright cost of films which were acquired outright.
Interest
Interest costs i n c r e a s e d t o Rs416.56 lakhs in 15 months ended June 2003 from R s 2 1 7 . 4 2 l a k h s i n
t h e FY2002. This was due to ICDs taken at high interest rates from the market to bridge short-term working
capital requirements.
Net Profit
Net loss for 15 months ended June 2003 is Rs4,745.93 lakhs as against the loss of Rs2,639.48 lakhs in the
FY2002. The significant downward trend is mainly attributable to-
1. The Company made costly acquisitions giving rise to increased royalty costs.
2. Fall in revenue from sale of music cassettes.
Factors affecting the financial performance
a. Company specific risks

While the Company has de-risked its music acquisition by pursuing film producers to accept revenue
sharing basis, the same is still not widely accepted, compelling the Company to buy albeit on selective
basis new Hindi music on minimum guarantee where the Company is running a risk of suffering loss due
to failure of music or film or both.
Piracy has been single most damaging factor responsible for decrease in the sale of legitimate music for
the Company like Saregama having the largest catalogue.
b. Significant economic changes

Various segment of entertainment industry are competing for obtaining higher share of purchases of
consumers. Due to availability of alternative entertainment means like TV, films, multiplex shopping
malls etc. consumers are dedicating less time for hearing audio music.
In terms of consumers’ spending on purchase of music and home video VCDs, the same will get reduced
if the level of per capita disposable income goes down due to economic slow down.
c. Known trends and uncertainties

The shelf life of music is increasingly becoming shorter where the pay back of new music is expected
within two to three months. In order to catch attention of the consumers, the Company needs to embark
upon expensive promotion campaign, which increase the amount of investment and escalate the risk
factors on other hand.
The sale of music in physical format has been falling in volumes month after month. This is likely to be
replaced in future by music available through the Internet. However, the time period for Internet initiative
to mature and the pricing for sale of music through Internet to stabilise presently remain uncertain.
d. Future changes in relationship between costs and revenues

For the music company the single largest item of expenditure is cost of content. In the cases where the
music has to be acquired by paying upfront minimum guarantee or created by making initial investment,
the Company runs the risk of getting into a situation where the level of revenues may not be sufficient to
recover the costs.
For the sale of music in music cassettes, cost of plastic remains cause of worry in view of rise in crude
prices. It is uncertain whether the consumers will accept the alternative packages like cardboard.
e. Seasonality of the business
94
The sale of music is higher in the festive season like Diwali or Id and it remains lackluster around the
period of school/college examination.
f. Competitive conditions
Following the losses suffered by music industry, many small companies closed down their operations.
Major music companies have to downsize their operations. In the genres like Devotional, the competitive
pressures from other music players are compelling the Company to offer very low price to get a higher
market share.
g. Dependence of revenues on sales volume, new products and prices

Consumers are continuously on look out for newer music content and are willing to pay higher prices for
the same. This keeps the Company always on its toe for acquiring new music and introducing new
products. In the Mass Music segment like Devotional, higher share of consumers demand can be captured
only through offering low price products. The profitability of the Company is dependent on quality of
products rather than sales volume.
h. Turnover of each major industry segment in which the Company operates

The Company is operating in two business segments viz. music and home video. Presently around 15% of
revenue is generated out of home video and rest of the revenue comes from music business.
i. Status of publicly announced new products or business segments

None
j. Significant dependence on a single or few suppliers or customers

The Company sources its requirements of raw materials from multiple suppliers. Similarly music under
various categories is created or acquired from multiple artistes. The customers for purchasing of music
and home video are spread out all over India and internationally. Thus, there is no significant dependence
on a single or few suppliers or customers.
Auditors’ qualifications for which adjustment could not be carried out in the audited financial
statement and response of the Company on the same
Auditors’ Comments
The Report of the Auditors on the Financial Information mentions that as indicated in Note 17 on Annexure 3,
a provision of Rs600.00 lakhs is held towards eventual shortfall, as there may be, with regard to intercorporate
deposit including interest accrued thereon (book balance as on 30th September, 2004 – Rs1,025.10 lakhs) and
diminution in respect of certain unquoted investments (carrying value as on 30th September, 2004 –
Rs2,529.08 lakhs). From the available information, the auditors are unable to comment on the extent of further
provision, if any, required to be made to cover the eventual shortfall/diminution (other than temporary) in this
regard with its corresponding adverse impact on the profit for the six months to 30th September, 2004 and net
worth as on that date.
Response of the Company

Inter corporate deposits (Book Balance as on September 30, 2004 – Rs1,025.10 lakhs) is to a body corporate
which has informed the Company recently vide their letter dated January 5, 2005 about their plan to repay the
inter-corporate deposit in instalments as per the package sanctioned to them under CDR mechanism. The
Company, therefore, is of the opinion that this advance would be good of recovery. The Company, however,
on the principle of conservatism, has made provision in the accounts for the year ending March 31, 2004 to the
tune of Rs600 lakhs towards shortfall in the recovery, if any in future.
The unquoted investments of Rs2,529.08 lakhs comprise of investments in a body corporate (Balance as on
September 30, 2004: Rs1,700 lakhs) made in the FY2000 and investments in a wholly owned subsidiary of the
Company (Balance as on September 30, 2004: Rs829.08 lakhs) made in FY2001. These are strategic
investments. Notwithstanding the dimunition in break-up value of these investments, the investee companies
are the operating companies carrying out their businesses in regular course and are taking necessary initiatives
to turnaround their operations. The Company, at this juncture, therefore, does not view the dimunition in
breakup value of investments permanent in nature and therefore does not envisage any need for creating any
provision in the books for the dimunition, if any, in the value of the investments.
95
XIV. STOCK MARKET DATA
The Company’s shares are listed on NSE, BSE and CSE. As the shares are actively traded on National Stock
Exchange and the Stock Exchange, Mumbai, the Company’s stock market data has been given for NSE and
BSE. The Company’s shares are not actively traded on CSE. The high and low closing prices recorded on NSE
and BSE for the preceding three years and the number of shares traded on the days the high and low prices
were recorded are stated below:
NSE
Year ending High Date of Vol. on Low Date of Vol. on Average

31 March (Rs) High date of (Rs) low date of price for
High low the year
(Rs)
2004 118.25 19-12-2003 4,63,149 41.20 1-4-2003 1,572 64.95
2003 234.80 8-4-2002 3,37,609 42.10 31-3-2003 6,590 56.22
2002 264.00 24-5-2001 3,327 83.00 17-9-2001 987 120.81
BSE
Year ending High Date of Vol. on Low Date of Vol. on Average

31 March (Rs) High date of (Rs) low date of price for
High low the year
(Rs)
2004 117.70 19-12-2003 137,075 42.15 1-4-2003 547 65.82
2003 235.00 8-4-2002 155,549 41.55 31-3-2003 1,670 56.12
2002 261.95 23-5-2001 4,498 82.00 21-9-2001 1,981 120.80
Market price was Rs142.40 (closing price) on December 23, 2004, the trading day immediately following the
day on which Board Meeting was held (December 22, 2004) to finalise the offer price for Rights Issue.
Monthly high and low prices for the preceding six months and volume of transactions on the respective
dates of high and low:
NSE
Month High Date of Vol. on Low Date of low Vol. on Total

(Rs) High date of (Rs) date of volume for
High low the month
July 2004 68.00 22.07.2004 2,12,216 47.00 09.07.2004 4,675 6,67,940
August 2004 70.45 26.08.2004 1,95,152 53.75 02.08.2004 85,958 13,56,773
September 2004 77.00 17.09.2004 4,48,565 61.00 15.09.2004 12,197 21,13,642
October 2004 81.30 28.10.2004 4,40,455 63.40 25.10.2004 17,228 15,04,561
November 2004 86.25 29.11.2004 68,560 65.10 05.11.2004 17,998 10,43,466
December 2004 158.00 24.12.2004 9,57,464 74.50 06.12.2004 19,303 103,94,521
BSE
Month High Date of Vol. on Low Date of low Vol. on Total

(Rs) High date of (Rs) date of volume for
High low the month
July 2004 65.65 22.07.2004 73,299 47.30 12.07.2004 100 2,39,962
August 2004 70.50 26.08.2004 60,445 53.50 02.08.2004 31,793 4,05,219
September 2004 76.40 17.09.2004 137,504 60.50 02.09.2004 19,463 8,50,488
October 2004 81.00 28.10.2004 120,379 64.00 25.10.2004 3,774 4,42,129
November 2004 85.90 25.11.2004 167,550 67.10 08.11.2004 6,333 4,51,492
December 2004 159.70 24.12.2004 223,666 76.10 06.12.2004 9,991 40,34,997
96
XV. BASIS FOR ISSUE PRICE
1. Adjusted Earnings Per Share
EPS (Rs) Weight

(a) 2001-2002 (27.57) 1
(b) 2002-2003 (51.48) 2
(c) 2003-2004 (22.59) 3
Weighted Average EPS (33.05)
2. Price/Earnings Ratio (P/E) in relation to Issue price of Rs45 per share
Particulars
(a) Based on 2003-2004 EPS N. A.
(b) Based on 2004-2005 EPS (Based on the EPS of six months ended September 19.57
30, 2004) – Annualised
The Price Earning Ratio based on weighted EPS cannot be computed since the weighted earnings are
negative.
Comparison of key ratios with the Company of comparable size in the same Industry Group.
No data regarding industry P/E could be provided as most of other players in the Indian music Industry are
non listed entities and the Company being the largest listed music company, data of the smaller listed
companies are not comparable with that of the Company.
3. Return on Net Worth
RONW (%) Weight

(a) 2001-2002 -14.23% 1
(b) 2002-2003 -76.73% 2
(c) 2003-2004 -50.76% 3
4. Minimum Return on Total Net Worth needed after the issue to maintain EPS: NA
5. Net Asset Value (NAV)
(a) As at March 31, 2004 46.79

(b) After Issue 45.93
(c) Issue Price 45.00
Qualitative Factors
• Large catalogue comprising music of all genres viz. old Hindi films, regional, classical etc.
• Oldest music company in India, with strong industry standing and relationship with artistes
• Member of RPG Group, one of the large Indian industrial groups
• Strong distribution network, better than any other music company
• Saregama and its three subsidiaries provides broad base business model having interest in various
business segments of entertainment industry viz. music, home video distribution, TV software and
films
• International presence through two subsidiaries Saregama Plc., U.K. and RPG Global Music Ltd.,
Mauritius
• Strong human resources, experienced employees with vast experience in the entertainment industry
In view of the reasons mentioned above, the Company and the Lead Managers to the Issue are of the
opinion that the premium and issue price are reasonable and justified.
6. The face value of the equity shares is Rs10. The issue price of Rs45 is 4.5 times the face value.
97
XVI. PROMISE VERSUS PERFORMANCE
The details of the Promise vs. Performance for Saregama and the top five Listed Promoter Group Companies
are given below:
Details of the issues made by Saregama India Limited is given below:
In March 2000, the Company made a private placement of 70,000 equity shares of Rs10 each, at a premium of
Rs1,775 per share with institutional shareholders including FIIs, OCBs, FIs and MFs with necessary approval
from the shareholders. The issue was a private placement and it did not contain any promised future
performance of the Company.
The Company made a rights offer of 22,40,000 Equity shares of Rs10 each and 5,76,000 15% secured
redeemable non-convertible debentures of Rs100 each both for cash at par to the existing Equity shareholders
on June 2, 1986 to meet the additional requirement of working capital, to meet capital expenditure for
modernisation and balancing the existing manufacturing units of the Company. The Offering Prospectus did
not contain the promised future performance of the Company.
The Company made a rights offer of 2,71,065 secured convertible debentures of Rs100 each for cash at par to
the existing Equity shareholders on October 13, 1984 to meet the additional requirement of working capital
and to meet partly the cost of increasing the cassette manufacturing capacity of the Company. The Offering
Prospectus did not contain the promised future performance of the Company.
Details of the last one issue made by Promoter Group Companies are given below:
CESC Limited
The Company made a rights issue of 82,65,203 equity shares for cash at an issue price of Rs60 per share
(including premium of Rs50 per share) aggregating Rs4,959 lakhs. The net proceeds of the issue were to be
utilised to meet part of the working capital requirements of the Company. The Company has confirmed that
the proceeds of the issue were utilised as stated in the Letter of Offer. The Letter of Offer did not contain the
promised future performance of the Company.
Ceat Limited
Ceat Limited (“Ceat”) came out with a rights issue of 71,12,902, 15% Secured Redeemable Partly Convertible
Debentures of Rs155 each for cash at par aggregating Rs11,024.99 lakhs. The issue opened on September 9,
1992 and closed on October 14, 1992. The object of the issue was to part finance the cost escalation of various
projects under implementation, to augment the long term working capital resources and to strengthen the
equity base of the company. The projects were nylon tyre cord project, modernisation cum expansion of tyre
units at Bombay and Nasik, expansion of tyre capacity, expansion of glass fibre unit, plain paper copier unit,
etc. The estimated cost of the project was Rs58,518 lakhs. The expected and actual dates of completion of the
new projects were as under:
Expected date of completion Actual date of completion

Increase in tyre capacity at Bombay/Nasik June 92 – June 93 June 1995
New tyre unit at Aurangabad June 1993 September 1994
Manufacture of plain paper copier December 92 December 1992
As mentioned above, the object of the issue was to part finance the cost escalation of various projects. There
was a cost over-run of Rs5,535 lakhs on the projects under implementation. The funds of Rs11,025 lakhs
raised from the debenture issue was utilised towards the cost over-run of Rs5,535 lakhs and the balance was
utilised for augmenting the long term working capital resources.
1992-93 1993-94 1994-95

Proj Actual Proj Actual * Proj Actual *
Gross sales 903.50 756.53 1,032.00 1,118.96 1,128.60 1,639.73
PBT 21.90 19.69 28.80 26.67 38.20 17.53
PAT 21.90 19.69 28.80 26.45 38.20 17.72
98
* - Actual performance for 1993-94 relates to 15 months period which ended on 30th September
1994 and for 1994-96 relates to 18 months period which ended on 31st March 1996

Phillips Carbon Black Limited (“PCBL”) came out with a rights offer of 83,82,875 equity shares of Rs10 each
for cash at a premium of Rs30 per share aggregating Rs3,353.15 lakhs. The issue opened on February 16, 1994
and closed on March 17, 1994. The object of the issue was to finance the expansion of capacity for
manufacture of various grades of carbon black from 50,000mtpa to 78,000mtpa, modernise existing
manufacturing capabilities and augment long term working capital resources. The estimated cost of the project
was Rs5,000 lakhs. The commercial production under the proposed expansion-cum-modernisation scheme was
expected to commence in March 1995.
The completion of the expansion and modernisation was achieved in January 1995 which was two months
earlier than the schedule and there was no cost overrun.
1992-93 1993-94 1994-95 1995-96

Proj Actual Proj Actual Proj Actual Proj Actual
Net sales 13,049 15,197 16,225 16,252 19,175 18,290 22,125 25,300
PBDIT 1,642 1,583 2,365 2,067 3,134 3,015 3,554 4,746
PBT 460 457 935 625 1,428 1,050 1,479 2,610
PAT 460 457 848 579 1,079 991 1,287 2,170
KEC International Limited

KEC International Limited (“KEC”) came out with a rights offer of 57,16,671 equity shares of Rs10 each for
cash at a premium of Rs30 per share aggregating Rs2,286.66 lakhs. The issue opened on August 28, 1992 and
closed on September 26, 1992. The object of the issue was to raise long term funds for working capital, normal
capital expenditure and strengthen the equity base. Thus the objects of the issue were not to finance any
project. KEC has confirmed that the funds were utilised for the objects as stated above.
1992-93 1993-94 1994-95

Total Income 17,000 18,126 19,000 26,688 21,000 41,760
Cash Profit 925 1,299 1,050 2,788 1,225 4,215
Net Profit 500 847 600 1,670 750 3,007

Zensar Technologies Limited (“ZTL”) came out with a rights offer of 50,35,505 equity shares of Rs10 each for
cash at a premium of Rs6 per share aggregating Rs805.68 lakhs. The issue opened on November 16, 1993 and
closed on December 15, 1993. The object of the issue was to raise funds for normal capital expenditure and for
augmenting long tem resources for working capital. Thus the objects of the issue were not to finance any
project. ZTL has confirmed that the funds were utilised for the objects as stated above.
1993-94 1994-95 1995-96

Revenue 13,508 14,048 18,222 16,016 21,574 13,154
PBT 155 102 420 (318) 600 (2,288)
PAT 155 102 368 (318) 546 (2,288)
99
XVII. OUTSTANDING LITIGATION, DEFAULTS AND MATERIAL DEVELOPMENTS
There are no outstanding litigation, dispute, non-payment of statutory dues, overdues to banks / financial
institutions, defaults against banks / financial institutions, defaults in dues towards instrument holders like
debenture holders, fixed deposits, and arrears on cumulative preference shares issued, defaults in creation of
full security as per terms of issue, other liabilities, proceedings initiated for economic / civil / any other
offences (including past cases where penalties may or may not have been awarded and irrespective of whether
they are specified under paragraph (i) of Part I of Schedule XIII of the Companies Act, 1956) against the
Company, except the following:
Claims against the Company not acknowledged as Debt
As on 30.09.04
Rs lakhs
Counter guarantee given to bankers 20.68
Claims against the Company not acknowledged as debts in respect of -

Sales/Turnover/Purchase tax matters under dispute 1,079.41
Income-tax matters under dispute (excluding issues which have been decided in favour of
the Company at appellate level in certain years) 90.00
Excise duty on account of non-admissibility of MODVAT credit claim for differential
duty on block board etc. 9.42
1. Pending Litigations against the Company
1.1 Criminal Cases

There is a criminal case pending against the Company and its Directors, as follows:
Sl Case No./ In the Court Filed by/ against Particulars Status

Date of
Criminal
1 Cr. Comp ACJM, Super Cassette Alleged defamation against Proceedings
447 of 1996 Gautam Budh Inds & another – Super Cassettes. adjourned
(new Nagar, vs- Sri S. Goenka, In view of pendency of matters
No.2809 of Ghaziabad Sri R P Goenka, before Allahabad High Court, the
1999) other Directors & Trial Court proceedings are
GCIL adjourned.
1.2 Cases f i l e d against the Company relating to Copyright issues
Rights in Agreements
1 CS. 925 of Chennai High Nemichand Injunct GCIL for alleged Injunction is
1994 Court Jhabak –vs- Infringement of his rights. currently on
GCIL
2 3740 of Mumbai High Mahal Pictures – Seeking Court’s declaration of Hearing is
2000 Court vs- East is East, Saregama’s rights in currently on
Star Agreement re: Film “Pakeezah”
Entertainment,
Saregama India
Ltd.
3 OS 28 of Dist. Court, G. Devarajan – Alleged Copyright violation Pending
2001 Ernakulam vs- Saregama
India Ltd &
Johnny Sagarika
100
4 OS 4 of Dist. Court, G. Devarajan – Alleged Copyright violation Framing of
2002 Ernakulam vs- Saregama issues
India Ltd &
another audio
Co.
5 CS 107 of Calcutta High Sterling Seeking Court’s declaration of Settlement
2003 Court Investment Corp Saregama’s rights in arrived at –
P Ltd –vs- Agreement re: Film “Mughal -e case being
Saregama India – Azam” withdrawn
Ltd & Saregama
Plc
6 CS. 1830 of Chennai High Meta Audio –vs- Injunction apprehending Main suit
2003 Court Saregama India interference in Meta's business on- SIL’s
Ltd & IMI – their injunction vacated reply filed
7 CS.139 of Calcutta High Hamin Ahmed & Unauthorised usage of their Hearing is
2004 Court others –vs- SIL, musical work "Phireya Dao currently on
Anu Malik, Amar Prem" in song 'Jana Jane
Mukesh and Jana' of Film 'Murder'
Mahesh Bhatt,
A. Jamal, RPG
Global,
Saregama plc
8 WP.1933 of Mumbai High Mitul Adequacy of royalty paid to Hearing is
2004 Court Ramachandra "Disabled Army Personnel currently on
Pradeep –vs- Widows & Orphans Fund" on
Union of India & sales of "Aye Mere Watan Ke
SIL Logon"
9 CS(OS) Delhi High BMG Music Payment of additional Party asked
1300 of Court Publishing publishing royalties to them by to prove
2004 International SIL, arising out of Zomba their rights
Ltd. & Deep Records Ltd.’s license to SIL to to claim this
Emotions sell Zomba repertoire in India.
Publishing Pvt. SIL already remitted due record
Ltd. –vs- SIL royalties to Zomba at rates
approved by RBI.
Version Recordings
10 TS 640 of City Civil Asha Audio –vs- GCIL permitted Asha to make Main suit
1996 Court, Calcutta GCIL versions of some Bengali pending
songs, but withdrew permission
as Asha did not comply with
norms. Asha filed suit for non-
interference in their business.
Asha’s Injunction application
dismissed
11 OS City Court, Mars Recording Version recording made All pending
6668/1998, Bangalore P Ltd –vs- GCIL without GCIL’s consent –
OS (3 cases) & IMI fearing threat of legal action
8181/1998, from SIL/ seizure by/ through
OS IMI case filed – injunction
4255/2000 sought and granted
12 OS City Court, Music Media P Version recording made Framing of
5316/1999 Bangalore Ltd –vs- GCIL without GCIL’s consent – issues
& IMI fearing threat of legal action
from SIL/ seizure by/ through
IMI they filed – injunction
sought and granted
13 RFA 534/ Bangalore High Mars Recording Mars’ Appeal against To be heard
2004 Court P Ltd –vs- GCIL Bangalore City Court order of
& IMI 2004 dismissing Mars’ case
101
4792/ 1998 and decreeing
GCIL’s case CS 265/ 1998 in
GCIL’s favour.
Gramco Music Publishing Ltd.

14 R.S. 152 Civil Judge Muzzaffar Ali – Proposed Film: “Daaman” to Hearings on
of 2000 (Senior Division), vs- Gramco be produced/ released by
Lucknow Music Pub. Ltd, Gramco was shelved due to
Mrs. M Goenka, differences with Director Mr.
IMPPA Ali. Aggrieved by this, he filed
case
Version Recordings
15 124 of Calcutta High Hindusthan HMP entered into License Agts Main Suit
1996 Court Musical dt. 24.03.94 & 07.02.95 for pending.
Products –vs- GCIL to manufacture and sell
GCIL HMP repertoire. HMP filed suit
on various grounds - repertoire
not utilised, royalty not paid. In
1998 HMP's I.A. dismissed.
Factory Suppliers
16 232 of Calcutta High Antartica Antartica filed Winding up on Pending
1996 Court Graphics Ltd. - GCIL for non-payment of
& vs- GCIL Rs19.47 lakhs. Court dismissed
647 of and directed to file money suit.
1999 So Antartica filed money suit
647 of 1999 Suit for 38.28
lakhs + interest.
Property related
17 RCOP Chennai High South Indian Fair rent in respect of the Pending for
no. 1151/ Court Film Chamber – premises 604, 605 Anna Salai; disposal
94, RC vs- GCIL premises vacated on 14 January
938/ 97, 2003 (Rs84.30 lakhs)
RCA
339/ 98
Others
18 Agst 196 Civil Court, Sethi Radios and For rendition of ledger account Pending
of 2001 Amritsar anthr Vs of parties in Saregama’s books
Saregama India
Limited
102
1.3 Other Civil Cases against the Company
Income Tax Matters
Amount of
Demand/(Refund) Amount of
by the Department Brief Description of the Demand
Assessment Concerned (Rs case/order against which the deposited (Rs
Sl. No. Year lakhs) case is pending lakhs) Present Status
1 1997-98[Order N.A. (See Note # 1) Appeal filed u/s. 260A by the N.A. (See Note Matter presently
dated 29.11.02 Company before theCalcutta # 1) pending before
passed by the High Court against the said the Calcutta
ITAT, Kolkata order passed by the ITAT, High Court
in ITA No. Kolkata on the issue of
655/C/99] allowability of credit with
respect to tax deducted at
source in UK.
2 2001-02 [Order (See Note # 2) Disallowances/ additions have (See Note # 2) The Company is
dated 29.3.04 been made by the Assessing in the process of
passed u/s. Officer on various issues. The filingan appeal
143(3)] major issuerelate to the before the CIT
disallowance of expenditure of (Appeals) against
Rs1.48 crores incurred on all the
account of website disallowances/
development on the ground additions made
that the same is in the nature in the
of capital expenditure. assessment.
Notes
#1 No financial impact since the credit has not been allowed to the Company. In case the issue is
ultimately decided in favour of the Company, such tax deducted at source in UK amounting to GBP
2528.25 (equivalent to Rs1.48 lakhs) will become refundable to the Company.
#2 Demand of Rs79.23 lakhs raised has been fully adjusted with amount refundable for the A.Y. 2003-
04.
Sales Tax Disputes
Assessment Amount of Brief Description of the case/order Demand PRESENT STATUS

Year and Demand/Refund against which the case is pending deposited
order date (Rs lakhs) (Rs lakhs)
West Region
MAHARASHTRA
1999-2000 MST 18.48 Disallow of Set off & Credit note. Nil Appeal in process
CST 69.75 Mainly F Form pending, considered 1.36 Necessary details

as Sale. Appeal pending with submitted order to be
Commissioner of Appeals. passed
North Region
DELHI
1987-88 DST 2.54 F-Form/ C-Form not submitted 0.40 Appeal pending with DC
CST 1.36 0.20
103
1988-89 DST 3.22 F-Form/ C-Form not submitted Nil Appeal pending with DC
CST 0.34 Nil
1989-90 CST 0.65 C-Form not submitted Nil Appeal pending with DC
1990-91 CST 0.66 C-Form not submitted 0.12 Appeal pending with DC
1991-92 DST 2.60 F-Form/ C-Form not submitted 1.05 Appeal pending with DC
2000-01 CST 3.32 C-Form not submitted 0.05 Appeal admitted case
remanded back
2002-03 CST 24.37 C-Form not submitted Nil Appeal filed
U.P.
Court, Lucknow
Court, Lucknow
2001-02 UPTT 0.65 F-Form/ C-Form not submitted 0.32 Appeal pending before
J.C.(appeal)
2002-03 UPTT 1.73 F-Form/ C-Form not submitted 0.69 Appeal filed Trade tax
tribunal
RAJASTHAN
1998-99 RST 13.16 F-Form/ C-Form not submitted 2.21 Appeal filed D.C Appeals-
11
1999-00 CST 8.17 F-Form/ C-Form not submitted 4.13 Appeal filed D.C Appeals-
11
TAMIL NADU
1986 -1992 TNGST 6.75 Dispute on Rate of Taxes of LP Nil Pending before the Tamil
Records Nadu Taxation Special
Tribunal.
A.P.
2000-2001 APGST 33.65 Dispute on Rate of Taxes of 17.50 Pending before the
Cassettes & CDs Tribunal. Also have filed in
High Court against the
order dismissed by Addl.
Commr. Comm. Taxes
KERALA
1997-1998 KGST 19.09 Dispute on Rate of Taxes of CDs 15.86 Pending before the
Appellate Dy. Commr,
Commercial Taxes
1999-2000 KGST 1.24 Dispute on Rate of Taxes of CDs Nil Appeal pending before
Sales Appellate Tribunal,
Addl. Bench.
BIHAR
1981-82 BST 0.13 Excess assessed Nil Appeal filed before JCCT
2002-03 BST 20.03 Sales return amount disallowed, 19.20 Appeal Filed hearing
considered as sales awaited
WEST BENGAL
Pending Registered Dealer Forms,
1989-90 WBST 101.01 51.10 Appeal filed before DCCT
Purchase Tax
Pending Registered Dealer Forms,
1994-95 WBST 135.66 101.50 Appeal filed before DCCT
Purchase Tax
1998-99 CST 1.82 F-Forms pending 1.27 Appeal filed before DCCT
2000-01 CST 24.05 F-Forms pending 22.12 Appeal filed before DCCT
-do- WBST 977.99 Pending Registered Dealer Forms 231.00 Appeal filed before DCCT
2001-02 CST 31.56 Shortfall on assessment 31.38 Appeal filed
-do- WBST 208.20 Pending Registered Dealer Forms 148.02 Appeal filed
104
1.4 Cases related to labour / employee issues
The table below summarises the labour related cases. Monetary claim against the Company in
these cases cannot be crystallised but in no case it is expected to be more than Rs5 lakhs.
Sl. No. Case No. Matter Case Detail In the Court of

1 W.P.No.5611(W) Gramophone Co. of India Ltd. Memorandum of Calcutta High Court
of 2004 Shramik Union Vs. State of Settlement dt.23.12.00
W.B. & Saregama India Ltd.
2 Sp. Writ Petition ESI Corpn. Vs. Different ESI Contribution Supreme Court of
against Calcutta Emp.Orgn. incl. Gramophone India
High Court Order Workers' Welfare Union
Dt.16.3.04 Re: ESI
Contribution
3 a) Case No.153/99 Sri Vipin Awasthi Vs Reinstatement of Labour Court (II)

Saregama India Ltd Employment Kanpur, UP
b) Case No.162/99 Sri S N Sharma Vs Saregama

India Ltd
c) Case No.163/99 Sri Sitaram Bari Vs Saregama

India Ltd
4 Conciliation Ms. Smita Baidya Vs Termination Office of Labour

Proceedings Saregama India Ltd. Commissioner, Govt.
of W.B.
1.5 Excise related issues
Amount
involved Pending Before
Brief details of the litigation Rs lakhs Authority Present Status
Excise Dept. has issued show 56.54 The Commissioner of Case heard, order awaited.
cause cum demand notice not Central Excise No impact on P&L as
accepting the deduction of (Adjudication), Kolkata required provision has
discount to customers from III Commissionerate already been made in the
assessable value for the sale of Accounts.
audio cassettes during March 97
to May 98.
Excise Dept. has issued two 375.49 The Commissioner of The case is under hearing,
show- cause cum demand notices Central Excise order not yet passed.
primarily on Sagarika (Adjudication), Belapur
Acoustronics Pvt. Ltd. (SIL's Commissionerate, Navi
replicator) for not including cost Mumbai
of royalty in the assessable value
for the period Aug 98 to Mar 03
and Apr 03 to Jan 04 respectively.
The authorities have also made
SIL a party to this litigation
alleging SIL's collusion with
Sagarika A. P. Ltd. in alleged
excise evasion.
Excise duty on account of non- 9.42 The Asst. Commissioner The case is under hearing.
105
admissibility of Modvat Credit, of Central Excise,
claim for differential duty on Kolkata
block board, etc
Litigation against the Promoter Group Companies

There are no outstanding litigation, disputes, non-payment of statutory dues, overdues to banks / financial
they are specified under paragraph (i) of Part I of Schedule XIII of the Companies Act, 1956) against the top
five listed (based on market capitalisation) and top 5 (based on total income) unlisted promoter group
companies, except the following:
CESC Limited
1. Criminal Cases
There are two criminal cases pending against the Company and its Directors details of which are given below:
• Complaint No. 4979 of 2000 filed by Mr. Suresh Agarwal on behalf of Continental Steel Star before the
7th Metropolitan Magistrate, Calcutta.
• Complaint No. 264 of 2000 filed by Mr. Suresh Agarwal on behalf of Bengal Ispat Udyog before the
Additional Chief Judicial Magistrate at Alipore.
Grounds
Both the above complaints have been filed alleging criminal breach of trust, cheating, forgery, forgery for
cheating and criminal conspiracy on the grounds of not depositing electricity duty to state government, forging
of the Balance Sheet, not showing correct liability for obtaining loan from financial institutions and diverting
large sums of money dishonestly.
Status of the cases

The Magistrates had commenced proceedings under various sections of the Indian Penal Code. CESC
challenged the above proceedings before the High Court, Calcutta by filing criminal revision petitions. The
High Court has passed orders staying all proceedings pending before the Magistrates. The stay orders are
continuing and matters are pending.
2. Cases against the Company filed by High Tension Consumers
There are 14 cases against the Company filed by High Tension Consumers at the High Court with monetary
claims/disputed amounts aggregating Rs1,305 lakhs. The table below provides details of the nine cases where
the monetary claim/disputed amounts exceeds Rs25 lakhs
S. No. Party Name and Case Details Amount Details

(Rs lakhs)
1. M/s. Hindustan Heavy 456.21 Payment outstanding for November ’02 to
Chemicals Ltd. +49.28 December ’03, Delayed Payment Surcharge from
G.A. No.1604/04 505.49 Nov ’02 to Dec ’03.
APOT No.227/04 Supplies disconnected on 23.12.2003.
Notice under Recovery of Dues Act 2000 has
2. W.P. No.780/03 & been served on 7.05.04.
C.S. No.285/03 Further notice will be served after the calculation
of dues as per Tariff Order dated 24.05.2004 in
August 2004.
3. M/s. Vijay Shree Ltd. 252.81 Concessional Tariff was accorded to the
Consumer on the basis of the Circular dated
15.08.97 issued by the Power Department, Govt.
W.P. No.1536/01 of West Bengal.
106
W.P. No.1754/01 The Consumer was provisionally allowed
W.P. No.2232/01 Concessional Tariff which was discontinued in
W.P. No.2408/01 view of coming into effect of the Electricity
Regulatory Commission Act, 1998.
Writ applications filed by the consumer were
disposed of by the Hon’ble High Court on July
14, 2003 holding, inter alia, that Concessional
Tariff is applicable in case of the consumer. An
appeal was filed by CESC from such Order.
Paper book has been filed in terms of the Order of
the Appeal Court dated 10.11.2003. The appeal is
pending.
4. M/s. Anglo India Jute Mills 149.54 By an Order dated 17.8.2001, the State
Co.Ltd. Government, directed to refund of a sum of
G.A. No.1960/03 Rs1,64,81,402 on account of Electricity Duty.
APOT No.341/03 CESC adjusted the said sum against the dues
W.P. No.126/02 payable by the consumer on account of Delayed
Payment Surcharge so long frozen by BIFR and
Additional Security Deposit (part). Consumer
moved a writ petition challenging such
adjustment. By an Order dated 6.5.03 the Court
disposed of the writ petition by directing CESC to
refund a sum of Rs96,57,687.50 by cheque within
a month and adjust the balance amount from
future electric bills on and from May ’03. An
appeal was preferred by CESC and the Hon’ble
Division Bench by an Order dated 25.06.2003
stayed the operation of the Order of Ld. Single
Judge by directing CESC to deposit
Rs96,57,000/- in a fixed deposit. The order has
been complied with. The matter is pending.
5. M/s. Budge Budge Co. Ltd. 26.0 Concessional Tariff was accorded to the
APOT 586/03 consumer on the basis of the circular dated
G.A. No.3614/03 15.8.97 issued by the Power Department,
C.S. No.494/02 Government of West Bengal. Concessional Tariff
was initially granted for 3 years commencing
from March 2000 to February 2003. Concessional
Tariff was withdrawn due to non-payment of bill
for March, July and August 2002 within due
dates as per condition of the circular. By an order
dated 17.9.03 the Court directed the consumer to
pay the bills received from CESC on the
undertaking that amount would be refundable by
CESC, if writ is allowed by the Court. Consumer
preferred an Appeal and the Appeal Court
directed the consumer to keep the amount of 26
lakhs deposited with the Court. Paper books have
been filed. Appeal is pending.
7. M/s. Kamarhatty Co. Ltd. 37.06 Concessional Tariff was accorded to the
01009007004 consumer on the basis of the Circular dated
APOT 568/02 15.8.97 issued by the Power Department, Govt.
W.P. No.75/02 of West Bengal. The appellate tribunal directed
W.P. No.2232/01 continuation of the Concessional Tariff against
which CESC moved a writ application. The
consumer also moved one writ application. Both
the writ applications were disposed of by Hon’ble
High Court on 14.7.2003 holding inter alia, that
Concessional Tariff is applicable in case of the
consumer. The disputed amount of Concessional
Tariff stands deposited by the consumer with the
107
Advocate-on-record M/s. Khaitan & Company.
CESC flied appral from that order and on
10.11.2003 rthe Division Bench directed to file
Paper Book which has been complied with. The
appeal is pending.
8. The Titagarh Paper Mills Co. 153.99 The consumer disputed Arrear Fuel Surcharge,
Ltd. Delayed Payment Surcharge and Government
W.P. 1662/98 Duty for the bills for the month of September ’85
W.P. No.1663/98 to May ’92, October ’95, November ’96,
W.P. No.1664/98 February ’97 to February 2000. Matters are
pending before the Hon’ble High Court.
9. Nabin Agarwal & Ors. 67.33 The writ petition filed by M/s. East India
A/c. East India Industries Industries was dismissed but outstanding amount
G.A. No.3829/03 has not been realised till date. It appears that
APOT No.589/03 registered consumer is no longer in existence.
W.P. No.2563/03 One of the occupiers M/s. Navin Agarwal
(occupying the shed of Maa Kali Trading) filed a
separate writ petition No.2563/03 for separate
supply. The Hon’ble Court appointed Special
Officer to determine the liability of Navin
Agarwal and others. The Special Officer
ascertained the liability as 47,81,245/-.
Accordingly writ was disposed of on 30.9.03 with
a direction to give supply to Navin Agarwal upon
payment of proportionate outstanding dues of
Rs1.66 lakhs. Company preferred an Appeal as
the claim figure against Navin Agarwal was
higher. Appeal was heard and stay petition
disposed of on 12.3.2004 by Hon’ble Chief
Justice, directing supply to be given to writ
petitioner i.e. Navin Agarwal upon payment of
Rs3 lakhs towards proportionate share of
outstanding (as settled by the parties mutually).
Operation of the Single Judges’ Order has been
stayed. Appeal is pending.
There are five more cases filed by High Tension Consumers where the individual case amount does not exceed
Rs25 lakhs
3. Other Civil Cases against the Company
There are 1,378 cases filed against the Company by Low Tension Consumers with monetary claims / disputed
amounts aggregating to Rs714 lakhs. There is no monetary claims/disputed amounts exceeding Rs25 lakhs in
each of the individual cases.
There are 608 cases filed against the Company for non installation of new supply (where supply has been held
up due to non-realisation of outstanding dues at the premises) with monetary claims / disputed amounts
aggregating to Rs404 lakhs. There is no monetary claims/disputed amounts exceeding Rs25 lakhs in each of
the individual cases.
There are 2138 cases filed against the Company relating to unmetered consumption charges for unauthorised
use of Electricity/theft of electricity with monetary claims/disputed amounts aggregating Rs3099 lakhs
There are 2193 cases relating to installation of new supply held up due to private dispute among parties,
Landlord/tenants, issues such as AC/DC supply and installation of Transformers, Block Meters etc. These
cases have no financial implications.
There are other following six matters pending against the Company as detailed hereunder. There are no
financial implications of these cases on CESC
108
Sl. No. Case Details Particulars
1. AST No.4019/1999 Dispute regarding installation of transformer in front of the
Asit Ghosh petitioner’s premises No.18, Bose Pukur Road, Kolkata-78. The
petitioner has been objecting to installation of a pole-mounted
transformer in front of his premises on Municipal Land. Affidavits
have been filed. Matter pending.
2. W.P.No.8640(w)/01 The writ petitioners objected to installation of supply at 12, Linton

Amit Chatterjee & Anr. Street Kolkata in the names of Aswini Kr. Biswas & Others on the
ground that the building structure was in dangerous condition and
without valid sanctioned plan. It was also alleged that the applicants
were carrying on business of Chemicals at the premises thereby
causing pollution. Affidavits exchanged. Matter pending.
3. W.P. No. /2001 A public interest litigation filed by Sri Tapan Kumar Burman
Tapan Kr. Burman alleging sound pollution and other illegal activities committed by
members of a local Club. Allegation was also made regarding
unauthorised use of electricity and prayer for disconnection of the
supply to the Club. Matter is part heard and yet to be disposed of.
4. W.P. No. /2000 Litigation filed by the petitioner against Puja Organisers of
Soumendra Mohan Sett Panihati, Pathagar Road, alleging violation of pollution norms and
unauthorised drawal of electricity. Matter part heard and pending
disposal.
5. W.P. No.17341(w)/1999 The petitioner filed the writ application challenging the
Sri Swapan Kr. Purkait rehabilitation package in connection with acquisition of land for
Budge Budge Generating Station. The grievance of the petitioner
appears to have been redressed and the writ application is likely to
be disposed of shortly.
6. W.P.No. (w)/2002 This writ application was filed by the petitioner due to the death of
Md. Abdul Mallik his (six) year old son due to electrocution at Foreshore Road,
Howrah on 21.2.2001. On enquiry it was revealed that the accident
occurred due to pilferage from the pillar box, which was left,
exposed by the miscreants. Matter has been heard by the Court in
part. No case of negligence on the part of the company made out.
Matter is awaiting disposal.
4. Cases related to labour / employee issues

The table below summarises the labour related cases. Monetary claim against the Company in these cases
cannot be crystallised but in no case it is expected to be more than Rs5 lakhs.
Sl. Case No. Matter Case Detail In the

No. Court of
1. 3045-IR Ashoke Chatterjee Vs Dismissal on Probation 2nd Industrial
IR-IOL-11/96 dated The Company due to false Tribunal
29/11/1999 Declaration
2. 296-IR Nagina Rai Vs Loss of Two Annual 8th Industrial
IR-IOL-11/96 dated The Company Increments Tribunal
05/03/2003
3. 297-IR Ram Jatan Rai Vs Stoppage of One 8th Industrial
IR-IOL-11/95 dated The Company Annual Increment Tribunal
05/03/2003
4. Company Case No 13 Sukar Singh VS Retrenchment Benefit 1st Labour Court
of 2002 The Company from Principal Employer
5. 18/88/33(2)(b), G.D. Sudhangshu Sekhar Dismissal on charges of 2nd Industrial
No.4641-IR dated Biswas Vs Molestation Tribunal
25/10/1978 The Company
6. VIII 44/2003 and Ashok Adhikary Vs Dismissal on charges of 7th Industrial
Govt. order Ref. 08/IR The Company Tampering of Electricity Tribunal
dated 02/01/2003 Meter at his residence
7. WP No 1274 of 2004 Ranadhir Kr Sarkar Vs Refusal to do Night Shift High Court
109
The Company
8. WP No 97 of 2001 Chandan Sengupta Vs Dismissal on charges of High Court
The Company refusal to act in higher
category causing
Administrative
Inconvenience
9. WP No 1307 of Ujjal Kumar Ghosh Vs Dismissal on charges of High Court
2000 The Company refusal to carry out the
said lawful order of a
superior
10. WP No 6957 of (W) Parbati Majumder Vs Case of Electrocution of High Court
1998 The Company her husband (not an
employee), claim for
service in CESC Ltd.
5th
11. VII-110/04 and Gov. B.N.Manna Vs The Stoppage of two annual Industrial
Order reference 1425- Company increments. Tribunal
IR dt 09/10-1204
5. Tariff related issues
The Company filed an appeal in the Calcutta High Court against the tariff order dated 9/11/01of the WBERC
for the financial year 2000-01 and 2001-02, which was allowed by the High Court. Certain consumer
associations and WBERC moved the Supreme Court. The Supreme Court remanded the matter back to the
WBERC for re-determination of tariff.
The WBERC re-determined the tariff where differential structure was abolished altogether. The State
Government preferred an appeal before the Calcutta High Court which was allowed and the matter was
remanded back again to WBERC for redetermining the tariff strucutre. Further two Special Leave Petitions
(SLPs) were filed in the Supreme Court by Bharat Chamber of Commerce and West Bengal Rolling Mills
Association appealing against the High Court order. The matter after hearing was referred to a larger Bench.
The WBERC re-determined the tariff on May 24, 2004 allowing differentiation to some extent.
Further there are certain appeals pending in the High Court and certain other consumer associations, all filed
by the West Bengal Rolling Mills Association on different tariff related issues.
6. Income tax
In respect of Assessment Year 1988-89 a demand of Rs186.99 lakhs was raised by the Assessing Officer. The
issue has been determined in favour of the Company by the Income Tax appellate Tribunal. However the
department may prefer an appeal before the Calcutta High Court in this regard. Moreover, the demand of the
department in this regard has already been provided earlier in the Accounts.
In respect of other years no outstanding demand is lying against the Company but issues relating to certain
routine allowance/disallowance are pending before the Calcutta High Court. In the event of adverse decisions
reaching finality in respect thereof it may lead to some reduction in the Company’s brought forward losses
which currently stand at Rs1,275 croress (at the end of A.Y. 2004-05) under the provisions of Income Tax Act
1961.
Ceat Limited
1. Disputed Demands of Income Tax

Company’s Appeal pending before Income Tax Appellate Tribunal 102.62
Department’s Appeal pending before Income Tax Appellate Tribunal 150.86
Departmental Appeal files in Bombay High Court 42.29
295.77
2. Disputed Demands of Wealth Tax Nil
3. Disputed Demands of Excise and Customs Duty
110
Show Cause demand at adjudication level 15,558.26
Cases pending with Commissioner (Appeals) 30.40
Cases pending at Tribunal 3,292.62
Cases pending at High Court 224.07
Cases pending at Supreme Court 3,094.83
22,200.18
4. Disputed Demands of Sales Tax
Cases pending at High Court 20.06
Cases pending at Tribunal 44.60
Cases pending at DC/AC/STO level 335.09
399.75
5. Disputed Demands of Octroi
Cases pending in High Court 1,511.00
Civil and labour cases
Sr. Title / Date of commencement Value (Rs Details

No of case lakhs)
1 Directorate of Enforcement, New 315 FERA violation case filed against CEAT.
Delhi, 2004 Appeal pending.
2 DGFT, 2004 67 Case filed against CEAT for non-fulfillment
export obligation. Write petition filed in
Bombay High Court stay obtained.
3 Labour case – ex-MIL employees 472 Compensation action filed by Ex-employees of
MIL – Thane – 2003 – before Supreme Court
4 Labour case – ex-MIL employees 0.45 Arrears claim by ex-MIL employees 2001 –
before High Court, Mumbai.
5 Labour case – ex-MIL employees 8.34 Compensation claim by ex-MIL employees,
Bandra – 1996 – Labour Court Thane
6 Labour case – ex-MIL employees 1.10 Compensation claim by ex-MIL employees,
Bandra – 1996 – Labour Court Bandra
7 Sardar Enterprises, Lahore, 2003 12.00 Non-fulfillment of contractual obligations.
8 Lakhanpals, Mumbai 1987 1.50 2 Recovery suits filed against the Company
9 Golf Link 3 Premises, New Delhi 0.81 Claim against the Company for compensation
1992 for occupation of premises.
KEC International Limited
The following is the list of litigation against KEC
Sr. Citation & Parties Amount of claim (Rs Current position

No. lakhs)
1 Bombay HC 420 of 1974 77.14 Pending
KEC vs Asian Transformers
Counter claim by KEC
5.50
2 Bombay HC 1409 of 1981 Ashoka 51.54 Matter pending in the
Company Ltd. Vs. KEC Long Causes. W. S. being
filed
3 Bombay HC Suit No. 1593 of 1977 1.84 Pending hearing
Arun Corporation Vs. KEC
4 Calcutta HC 710 of 1988 31.95 Pending hearing
SKPL Vs. KEC
Counter claim by KEC
22.13
5 Bombay HC 804 of 1981 10.45 W.S. filed
Thakur Shopping Vs. KEC
6 Civil Court 7.00 Pending Arguments
111
Vijaywada Coastal Coonstruction Co. Vs.
KEC
7 Dist. Court Tezpur 0.68 W.S. being filed
Green Valley Industries Vs. KEC (Out of Court settlement
expected)
8 Civil Judge, Meerut 0.76 Pending
Mr. M. S. Shimber Vs. KEC
9 Civil Judge Malihabad, Lucknow 336 and 11.03 Pending
337of 1984 Pioneer Construction Company (Out of Court settlement)
Vs. KEC
10 Appeal No.131 of 1993 in Suit No. 64586 0.14 Pending
U. K. Singhal Vs. KEC
11 Dist Court Kathua 1990 0.24 Pending
Kulbhushan Magoo Vs. KEC
Sales Tax Cases Pending Before Appellate Authorities
Demand
Assessment Order BST/CST Demand Deposited
year dated / WCT (Rs lakhs) Brief description of the Order (Rs lakhs) Present status
1996-97 17.02.2000 BST 0 (a) AC has not allowed deferal 0 The case is
correctly and the matter is pending for
pending before DC (A), Nagpur hearing
WCT 34.63 (a) AC has not full credit of TDS 7.00 Pending before
amount M S Tribunal,
Mumbai
(b) AC has levied penalty and
interest.
Central Excise Cases
Total
Amount
Srl No. Ref. Issue involved (Rs lakhs) Present status
1 2049/90 Writ : Excise duty on Zinc scrap 5.76 Pending for disposal in Mumbai
High Court
2 2823/91 Writ : Excise duty on Zinc scrap 2.16 Pending for disposal in Mumbai
High Court
3 10315/89 SCN : Valuation- Wastage in 6.65 Pending for disposal before
conversion Commissioner (Appeals)
4 Appeal : Interest on advances 6.57 Pending for disposal before
Commissioner (Appeals)
5 SCN Appeal :Differential duty on Zinc 10.37 Pending for disposal before Addl.
186/99 Ash/Scrap Commissioner (Appeals)
6 SCN Appeal : Availment of deemed credit 42.96 Finally heard by Commissioner of
192/02 of 12% on the inputs which were later C.E. (A) Order is reserved.
25.07.200 cleared for export on payment of 15%
2 ad-valorem on additional value and
later claimed the refund.
7 Civil Levy of Central Excise on supply of
appeal No. Cantilever - Rly. Eelectrification
4059 of project Ambala.
2003.
108.2 An appeal filed before CEGAT,
New Delhi against the order of the
Commissioner. Matter finally
decided in the company’s favour.
112
Rs5.00 deposited in the appeal also
refunded.However now Excise
Department has filed Civil appeal in
the Supreme Court against the order
of the CEAGAT. Appeal is admitted
& pending for disposal.
S. No. Fin Year Asst. Year Disputed Issue Remarks

1a 1999-00 2000-01 Depreciation Rs410 lakhs, Interest on Filed with ITAT on
(Company borrowings Rs669 lakhs, Provision for 11/06/04
Appeal) Doubtful Debts Rs142 lakhs, License fees
Rs700 lakhs, Legal expenses Rs24 lakhs &
Sec80HHC
2a 1997-98 1998-99 Interest on borrowings Rs1,046.06 lakhs, Filed with ITAT on

(Company Notional Interest on Advance to Bespoke 29/03/04
Appeal) Rs65 lakhs, License fees Rs350 lakhs, Prof
fees Rs315.26 lakhs, Depreciation Rs2287
lakhs , Provision for Doubtful Debts
Rs82.62 lakhs
3a 1997-98 1998-99 Notional Interest on Advance to Bespoke Filed with ITAT on

(Company Rs84.59 lakhs, loss on sale of film rights 24/07/01 Appeal No
Appeal) Rs54.57 lakhs, legal & medical exp 4862/M/2001
Rs23.21 lakhs, RPG Logo fees 350 lakhs &
80 HHC
3b 1997-98 1998-99 Notional Interest on Investment Rs933.06 Filed with ITAT on

(Dept lakhs, 80 HHC, Deferred revenue expenses31/07/01 Appeal No 5019/
Appeal) (Project Exp) Rs40.71 lakhs, VRS M /2001
expenses Rs3568.23 lakhs
4a 1996-97 1997-98 80 HHC & 80 I working Filed with ITAT on

(Company 17/08/2000 Appeal No
Appeal) 4054/M/2000
4b 1996-97 1997-98 Diminution in value of assets of Iran Filed with ITAT on

(Dept Branch Rs1440 lakhs, Provision for 24/08/2000 Appeal No
Appeal) Doubtful Debt Rs22.48 lakhs, Sec 80 I & 4148/ M /2000
80 O Deduction & 80 HHC deduction
5a 1995-96 1996-97 Deduction u/s 80 HHC (Scrap Sale S. Tax Filed with ITAT on
(Company & Excise) 3/08/2000 Appeal No
Appeal) 3858/M/2000
5b 1995-96 1996-97 Provision for Doubtful Debts Rs11.54 Filed with ITAT on
(Dept lakhs, Iran Income Rs46.19 lakhs 10/08/2000 Appeal No
Appeal) 3971/M 2000
6a 1994-95 1995-96 Deduction u/s 80 HHC (Scrap Sale Stax & Filed with ITAT on
(Company Excise) 03/08/2000 Appeal No
Appeal) 3857/M/2000
6b 1994-95 1995-96 Provision for Doubtful Debts Rs38.24 Filed with ITAT on
(Dept lakhs, Iran Income Rs88.36 lakhs 10/08/2000 Appeal No
Appeal) 3970/M 2000
113
6c 1994-95 1995-96 Deduction u/s 80 HHC Filed with ITAT on
(Company 24/05/2003
Appeal)
6d 1994-95 1995-96 Claim for adjustment of excess TDS Filed with ITAT on
(Dept deposited Rs2.59lakhs – Birla Sunlife 23/03/1998 Appeal No
Appeal) 1990/M/1998
7a 1993-94 1994-95 Deduction u/s 80 HHC (Scrape Sale S Tax Filed with ITAT on
& Excise) 28/9/2003 Appeal No
5783/M/1998
7a 1993-94 1994-95 Deduction u/s 80 HHC (Depreciation) Filed with ITAT on
(Company 28/9/2003 Appeal No
Appeal) 5410/M/2001
7b 1993-94 1994-95 Provision for Doubtful Debts Rs2.16 lakhs, Filed with ITAT on
(Dept Iran Income Rs83.49 lakhs & 80 HHB 03/12/1998 Appeal No
Appeal) deduction without depreciation Rs46.14 6851/M/1998
lakhs
8a 1992-93 1993-94 Deduction u/s 80 HHC (Scrape Sale S Tax Filed with ITAT on
(Company & Excise) & Int. on interest on free 29/09/1998 Appeal No
Appeal) advance Rs15.68 lakhs 5782/M/1998
8b 1992-93 1993-94 Provision for Doubtful Debts Rs4.56 lakhs, Filed with ITAT on
(Dept Iran Income Rs52.85 lakhs 03/12/1998 Appeal No
Appeal) 6850/M/1998
9a 1991-92 1992-93 Disallowance Under rule 6B Rs2.26 lakhs, Filed with ITAT on
(Company Sundry Credit Balance written Back 10/07/1996 Appeal No
Appeal) Rs0.68 lakhs, Provision for Doubtful Debt 4720/M/1996
Rs62.09 lakhs & Disallowance of Foreign
Tax Rs41.72 lakhs
9b 1991-92 1992-93 Retention Money Rs78.53 lakhs, Rule 6D Filed with ITAT on
(Dept Rs0.78 lakhs, Guest House Expenses 05/08/1996 Appeal No
Appeal) Rs0.94 lakhs, Interest Income on Blocked 5045/M/1996
Funds in Iran Rs14.46 lakhs
10a 1990-1991 1991-1992 Disallowance Under rule 6B Rs1.69 lakhs, Filed with ITAT on
(Company Sundry Credit Balance written Back 10/07/1996 Appeal No
Appeal) Rs3.38 lakhs Provision for Doubtful Debt 4719/M/1996
Rs14.64 lakhs & Disallowance of Foreign
Tax Rs71.74 lakhs
10b 1990-1991 1991-1992 Retention Money Rs11.16 lakhs, Rule 6D Filed with ITAT on
(Dept Rs0.42 lakhs, Guest House Expenses 05/08/1996 Appeal No
Appeal) Rs0.63 lakhs 5044/M/1996
114
11a 1989-1990 1990-1991 Profit on sale of Mini Steel Plant at Filed with ITAT on
(Company Bhavnagar as a going concern as deemed 19/05/1994 Appeal No
Appeal) Short term capital Gain Rs122.47 lakhs, 3141/B/94 Partly heard
reduction in claim for depreciation in
respect of sale of Mini Steel Plant Rs40.60
lakhs, Exclusion of items from eligible
profits for the purpose of computing
deduction u/s 32AB Rs25.93 lakhs,
disallowance of sales-tax penalties
Rs1.27lakhs, Retention Money Rs30.17
lakhs, Refund of Foreign Tax 0.67 lakhs &
Interest u/s 234B Rs10.40 lakhs
11b 1989-1990 1990-1991 Re-opening of assessment was legally not Filed with ITAT on
(Dept valid 10/09/1998 Appeal No
Appeal) 5382/M/98
12a 1988-1989 1989-1990 Assessing Officer was not within his power Filed with ITAT on
(Dept to re-open the Assessment u/s 147 10/09/1998 Appeal No
Appeal) 5381/M/98
13a 1985-1986 1986-1987 Exchange Gain on Translation of balance Filed with ITAT on
(Company in foreign currency Rs197.47 lakhs, 20/02/1990 Appeal No
Appeal) Interest on blocked funds in Iran Rs147.10 1587/B/90
lakhs, Disallowance of Foreign Tax
liability Rs44.27lakhs, Disallowances of
entertainment expenses Rs1.44 lakhs, Non
Taxability of Cash compensatory support
Rs106.32 lakhs, Disallowance of Sales Tax
liability u/s 43B Rs7.04 lakhs
13b 1985-1986 1986-1987 Retention Money Rs301.27 lakh, Sales Filed with ITAT on
(Dept Promotion Expenses Rs1.44 lakhs 16/03/1990 Appeal No
Appeal) 2311/B/90
14a 1979-1980 1981-1982 Granting Refund of Rs53.63lakhs and Filed with ITAT on
Interest u/s 224(1A) on the same 26/06/1993 Appeal No
4585/B/93
Income Tax Cases
Income Tax Cases Pending Before AO & CIT (A)
Asst. Reference No. Department Reference Amount in Tax rates Tax involved (Rs
Year dispute (Rs % lakhs)
lakhs)
1975-76 249/MUM/1997 Department Reference on weighted

(Arising out of deduction u/s 35B on Guarantee
28/B/87) commission paid to ECGC,
Grant in aid is not income 0.60 57.75 0.35
Loss on import entitlement allowed 28.40 57.75 16.40
by Tribunal is rejected by ITAT and
department has filed reference u/s
256(2)
115
1978-79 RA No.118/B/92 Reference against order of the 70.91 57.75 40.95
(Arising out of Tribunal Granting weighted
ITA 1988/B/82) deduction u/s.35B on Guarantee
Commission paid to Banks,
Expenses incurred abroad while
executing contracts, premium paid
to ECGC, Export Inspection Agency
charges and interest paid on Packing
Credit Loan.
Retention Money had not accrued in 191.66 57.75 110.68
this year, hence deductible from the
total income.
1979-80 RA No.225 and Reference against order of the 78.33 57.75 45.23
226/B/94(Arising Tribunal Granting weighted
out of ITA 2370 & deduction u/s.35B on Guarantee
2545) Commission paid to Banks,
Guarantee Commission paid to
ECGC, Export Inspection Agency
charges and interest paid on Packing
Credit Loan & expenses incurred
while executing contract abroad.

total income.
1980-81 RA Reference against order of the 3.81 59.13 2.25

No.889(Arising Tribunal granting weighted
out of ITA deduction u/s.35B(1)(b)(vii) on
2939/B/85) Interest on Packing Credit,
Insurance Freight, Inspection
Agency charges and interest paid on
Packing Credit Loan & expenses
incurred while executing contract
abroad
1980-81 RA No.792- Reference against order of the 10.85 59.13 6.41

A/B/86(Arising Tribunal Granting weighted
out of ITA deduction u/s.35B on Guarantee
2939/B/85) Commission paid to Banks on
Advance payment guarantee,
Payment for Overdraft facility,
Retention money guarantee &
extension of forward contract
total income.
1981-82 RA Retention Money had not accrued in 308.19 56.38 173.74

No.721/M/98(Aris this year, hence deductible from the
ing out of) total income.The Tribunal has
allowed IAC has no jurisdiction u/s
144B to direct disallowance of an
item or addition of income, which is
not the subject matter of the draft
assessment order.
116
No.1267/M/98(Ari this year, hence deductible from the
sing out of ITA total income.The Tribunal has
3438/B/87) rejected all other questions referred
to it.i.e. price escalation, weighted
deduction u/s 35B on
1983-84 I tax appeal no Questions referred on -

711 of 2000 Unrealised rent 4.00 56.38 2.25
Entertainment exps 3.31 56.38 1.87
Exchange Gain & Block Fund in 16.53 56.38 9.32
Iran
Weighted deduction u/s 35B 8.17 56.38 4.61
80HHB – only net profit of foreign 33.75 56.38 19.03
branch
Escalation bills (134.26) 56.38 (75.69)
1984-85 RA No. Retention Money had not accrued in 230.64 57.75 133.19
1267/M/98 this year, hence deductible from the
(Arising out of ) total income.

No.298/B/95(Arisi this year, hence deductible from the
ng out of ITA total income.
1216/B/90)
Income Tax Cases Pending Before AO & CIT (A)
S. No. Asst. Returned Refund/Disputed Issue Remarks Status

Year Income Demand
(Rs lakhs) (Rs
lakhs)
1 2002- Nil 604.37Nil Carried Forward Dep 1) Order u/s 143(1)
2003 Rs1606.05 & Rs5303.05 received on 24/6/03
as c/f Business Loss. granting refund of Rs650
TDS certificate of lakhs which was added
Rs202.99 lakhs have onlyagainst demand of
received. So far Notice AY00-01
u/s 143(2) is not received
I.e. for scrutiny Asst. for 2) Assessment order
which last date is received on 16.08.2004.
31/10/2003 Assessed loss is Rs6,006
lakhs as against returned
loss of Rs7,385 lakhs.
Appeal filed before CIT
(A) on 13.09.04.
2 2001- Nil 750.58Nil Carried Forward Dep DCIT order dated
2002 Rs2052.27 & Rs3010.98 25/03/04 received on
as c/f Business Loss . 26/03/04.The company is
TDS certificate of preparing an appeal to
Rs165.35 lakhs have onlyCIT(A) for additions
received which is also made by him & the same
adjusted against demand will be filed before due
of AY 1994-95 & 98-99 date.Order under section
on 8/2/2002. Notice u/s 143(3) received.The
143(2) is received I.e. for Returned loss of Rs50.63
scrutiny Asst., on lakhs has been reduced to
22/10/2002 Rs31.47 lakhs.
117
3 2000- MAT Tax Depreciation Rs409.46 Returned income NIL At the Hearing fixed on
2001 income Rs597.7 lakhs, Disallowance of after claiming 80 HHC & 30/1/04, CIT(A) called
Rs136.11 8 lakhs notional Interest on 80 G deduction. TDS for written submission,
lakhs & investment Rs668.54 refund claimed Rs793.47 next hearing fixed on
Rs214.9 lakhs, Disallowance of lakhs, out of which the 12/02/04.Hearing took
9 Interest notional Interest on company has given TDS place on 12/02/04 &
u/s 234 advance to Bespoke certificate of Rs588.38 27/02/04 adjourned to
B up to Rs170.09 lakhs, RPG lakhs which he has 5/03/04 where CIT(A)
31/3/200 logo fees Rs700 lakhs, adjusted against demand has asked for written
3 as per Provision for Bad debts he raised in assessement. submission.Hearing took
AO Rs184.91 lakhs Pending certificate to be place on 5/3/04,18/3/04
Order (141.63+43.28) & bad received Rs193.14 lakhs. & 24/3/04 before
debts written off Appeal filed on CIT(A).Written
Rs314.16 lakhs, VRS 29/4/2003. As AO has submission filed .CIT(A)
(pension) payment assessed Rs2693.31 lakhs order is awaited.CIT(A)
Rs37.54 lakhs, against company’s Nil order received .Decided
Amalgamation Exp Income, the company has certain issues in the
Rs23.53 lakhs, Sec80 applied for rectification company’s favour for
HHC Rs775.45 lakhs, u/s 154 for giving DIT which effect is yet to be
Sec80 HHB Rs440 Relief, MAT credit given.For issues not
lakhs & increase in etc.on 30/4/2003 allowed, the company is
House property Income preferring appeal to
Rs5.05 lakhs, cash loan ITAT.
in SIRYA Rs73 lakhs
& working method of
115 JA.
4 1999- MAT Tax Depreciation allowed Returned Income NIL. 1) Order passed by
2000 income Rs597.7 however the company Refund claimed CIT(A) dated 31/12/03
Rs375.24 8 lakhs has not claimed Rs659.14 lakhs out of received on
lakhs & Rs2287.50 lakhs, which Dep't granted 30/01/2004.Appeal is
Rs214.9 Disallowance of refund of Rs607.85 partly allowed. Copy
9 Interest notional Interest on lakhs. Assessed under send to Consultant has
u/s 234 investment Rs1046.06 MAT for Rs1,193.44 adviced to file the appeal.
B up to lakhs, Disallowance of lakhs as the company had The company has filed
31/3/200 notional Interest on C/F Losses/ the appeal on 29/03/04
3 as per advance to Bespoke Depreciation of earlier before ITAT
AO Rs65.45 lakhs, RPG years. Hearing with
Order logo fees Rs350 lakhs, CIT(A) is over. TDS 2) Rectification order
Provision for Bad debts Certificate of Rs51.29 passed by AO u/s 154 in
Rs86.03 lakhs & bad lakhs is to be received which refund of Rs695
debts written off from party lakhs has been granted &
Rs15.45 lakhs, deferred the same is received
revenue expenses
Rs642.74 lakhs
(pension payment &
payment to Mekincy &
project expenses, 80
HHC Rs1549.28 lakhs
& working method of
115 JA
5 1997- Computation of income Appeal Filed on 12-02- Hearing completed on
98 u/s 115 JA Rs1757 2002 16/12/03, order awaited.
lakhs CIT(A) order received.
Effect is yet to be given.
6 1995- Computation of Appeal Filed on 23-04- Order dated 13/11/03
96 deduction u/s 80 I 2002 recd on 15/12/03, appeal
Rs1384294 (Interest & dismissed.
dividend Income)
118
Sales Tax Liability
Year Nature Amount (Rs lakhs)

1999-2000 Appeal Pending Under W.B Revisional Board on Account of 98
Discount On Sale
2000-2001 Appeal Pending Under Deputy Commissioner On Account of 120
Discount on Sale
Total 218
Excise Matters
Year Nature Amount (Rs lakhs)

Existing Since Show Cause Notice of Rs20 lakhs issued by Exercise 20
1987-1988 Authorities not acknowledged as debt by the Company
Income Tax
Appeal before tax authorities regarding income assessed – Rs174 lakhs
Cases filed by Customers / Dealers
Sr. Name of the Party Forum Claim Amount Likely impact on

No. Rs lakhs financial
performance
Rs lakhs
1. Woodcraft Products Ltd. State Consumer Redressal 4.27 Nil
Forum at Calcutta
2. Assam Co. Ltd. High Court at Calcutta 32.44 Nil
Cases filed by Creditors/Suppliers
3. Fairgrowth Financial Debt Recovery Tribunal, 16.66 Nil

Services Ltd. Bangalore
4. Apcom Computers Ltd. Madras High Court 32.05 Nil
5. Excel Engineers, Civil Judge, Senior 1.63 Nil

Division, Pune
6. Asia Pacific Investment Debt Recovery Tribunal, 59.97 Nil
Trust Ltd. Hyderabad
7. IDBI v/s Lloyds Finance Debt Recovery Tribunal, 27.68 Nil
& Others. Mumbai
Property cases
8. The Oriental Insurance Estate Officer, The Oriental 184.72 92.36

Co. Ltd. Mumbai Insurance Co. Ltd. Provision made in the
Books of Accounts.
9. Transmarine Corporation Small Causes court, 1.22 Nil
and Others Mumbai Mumbai
10. M/s Tulshidas Khimji, Small Cause Court, Mumbai 14.74 Nil
Mumbai
11. Pune Municipal Pune Municipal Corporation 9 9.25
119
Corporation (Claim made by Pune Provision made in the
Municipal Corporation and Books of Accounts.
not admitted by the
Company)
Cases pertaining to ESI
12. Employees State Employees State Insurance 11.22 5.00

Insurance Corporation Courts, Pune Provision made in the
Corporation Pune Books of Accounts
Employees related cases
13. Mr. Govind Vichare Labour Court, Bandra, Reinstatement Nil

Mumbai
14. Mr. S. B. Patole and Bombay High Court Reinstatement Nil
others &
29
15. Mr. B. N. Thakur Labour Court, Delhi Reinstatement Nil
16. Mr. Mahajan & Mr. Labour Court, Pune 1.44 0.96
Dharwade Provision made in the
Books of Accounts
17. Mr. Khadagale Labour Court, Pune Reinstatement 0.48
Provision made in the
Books of Accounts
Cases pertaining to Customs and Excise
18. Commissioner of Central Central Excise and Service 10.6 Nil

Excise Tax Appellate Tribunal,
Pondicherry Chennai
19. Commissioner of Central Central Excise and Service 3.49 Nil
Excise Tax Appellate Tribunal,
Pondy Chennai
20. Dy. Commissioner of Dy. Commissioner of 124 Nil
Customs, Ballard Pier, Customs, Mumbai
Mumbai
21. Dy. Commissioner of Dy. Commissioner of Bond of 77.7 Nil
Customs, Mumbai Customs, Mumbai BG of 38.35
22. Dy. Commissioner of Dy. Commissioner of Bond of 17.3 Nil
Customs, Mumbai Customs, Mumbai BG of 8.65
Income Tax
Claims Amount Likely impact on

(Rs lakhs) Financial performance
S. No. Name of the Party Forum Dept.in Company (Rs lakhs)
appeal in appeal
1. 1980-81 to 1984-85 and 1986- High Court 132.91 6.49 Nil
87 to 1988-89
2. 1985-86 to 1987-88 Tribunal 428.75 170.04 119.34
1991-92 to 1993-94 Provision made in
books of account
3. 2000-01 Comm of Income - 71.00 24.00
Tax (Appeals) Provision made in
books of account
120
Sales Tax
4. 1991-92 Kerala High Court 1.11 Nil
5. 1987-88 to 1989-90 U.P High Court 4.54 Nil

6. 1992-93 Maharashtra 2.40 Nil
Tribunal
7. 1981-82 West Bengal 5.67 Nil
Tribunal
8. 1996-97 to 1997-98 Andhra Pradesh 1.96 Nil
Tribunal
9. 1995-96 to 1997-98 Karnataka Asst. 1.41 Nil
Comm. (Audit)
10. 1993-94 Bihar Appellate 2.58 Nil
Asst. Comm
11. 1993-94 to 1994-95 West Bengal Asst. 3.00 Nil
Appellate Comm.
12. 1994-95 , 1996-97 & 1998-99 Tamil Nadu 64.66 50.09
Appellate Asst. Provision made in
Comm books of account
13. 1992-93 Tamil Nadu - Re- 14.37 14.37
Assessment Stage Provision made in
books of account
Ceat Holdings Limited

Litigation pending before appealate authorities relating to Income Tax matters – Rs33.58 lakhs
Jubilee Investments & Industries Limited

Litigation pending before appealate authorities and Hon’ble High Court relating to Income Tax matters –
Rs621.70 lakhs

Rs8.68 lakhs
Brabourne Investments Limited

Rs120.68 lakhs
Universal Industrial Fund Limited

Rs126.59 lakhs
Litigations against the Promoter / Directors

There are no outstanding litigations, disputes, non-payment of statutory dues, overdues to banks / financial
they are specified under paragraph (i) of Part I of Schedule XIII of the Companies Act, 1956) against the
promoters and director of the Company, except the following:
121
S. No. Particulars Court Status
R. P. Goenka
1. CPAN No. 619 of 2004 W.P.No. Cal High Court Contempt matters arising out of
8377 (W) of 2000 alleged violation of the orders
Abdus Salim -V- R.P. Goenka & passed on consumers' writ petition.
Ors.
2. Super Cassettes Industries Ltd Shri AK Singh In view of the pendency of the
-V- Chief Judicial matters before the Allahabad High
Shri Sanjiv Goenka & Others Magistrate Court, the Trial Court proceedings
District Court at are being adjourned.
[Shri R.P. Goenka has been Janpad Nyayalaya
arrayed as Accused No. 2] Gautam Budh Nagar
Uttar Pradesh
CC No. 2809/1999
3. OS-18,19 & 20 – Saregama India Before the High Mr Sanjiv Goenka and Mr R.P.
Ltd – Sanjiv Goenka, R.P. Court of Judicature at Goenka have filed Revision
Goenka, P.K. Mahapatra Allahabad petition in a Criminal Defamation
-V- Suit against the orders of
State of U.P. & Anr Crl.Misc. Ghaziabad District Court
appeal No. 1910, 960 & 97 of
1997
4. C.R. No. 11649(W) of 1991 High Court at The writ petition was moved
Rama Prasad Goenka Calcutta before the Hon'ble Justice S
(with Sushila Goenka and Sanjiv Ahmed and interim order was
Goenka) passed in the said petition by His
Vs. Lordship on 20th September 1991
State of West Bengal & Ors. inter alia directing the respondents
not to take further steps on the
basis of final statement allegedly
prepared by them until further
order.
Sanjiv Goenka
1. C.C. No. 66 of 2003 Cal High Court Contempt matters arising out of
National Rubber Works -V- alleged violation of the orders
Sanjiv Goenka & Ors. passed on consumers' writ petition.
2. CPAN No. 335 of 2004 Cal High Court Contempt matters arising out of
W.P. No. 1893 (W) of 2002 alleged violation of the orders
Samar Patra -V- Sanjiv Goenka & passed on consumers' writ petition.
Ors.
3. Case No.C/524/1992 (Shri Binod Court of 5th The Chief Metropolitan
Kumar, Assistant Commissioner Metropolitan Magistrate, Calcutta had taken
of Income Tax, Central Circle- Magistrate, Calcutta cognisance of the case on
XIX,Calcutta-1 31.3.1992 and has transferred the
-V- Dunlop India Ltd. & Ors.). same to the Court of 5th
(Mr. Sanjiv Goenka in his Metropolitan Magistrate, Calcutta.
capacity as Deputy Managing The said case is still pending.
Director)
4. Crl. Rev.1920/1992 (Sanjiv Calcutta High Court Matter dismissed for non-
Goenka -V- Binod Kumar) appearance. Restoration
Application was filed and the same
is still pending.
5. Super Cassettes Industries Ltd Shri AK Singh In view of the pendency of the
-V- Chief Judicial matters before the Allahabad High
Shri Sanjiv Goenka & Others Magistrate Court, the Trial Court proceedings
122
District Court at are being adjourned.
[Shri R.P. Goenka has been Janpad Nyayalaya
arrayed as Accused No. 2] Gautam Budh Nagar
Uttar Pradesh
CC No. 2809/1999
6. OS-72 Saregama India Ltd – Civil Judge, The plaintiff has filed an
Muzaffar Ali (SeniorDivision), application for impleading Mr
-V- Lucknow. Sanjiv Goenka as party which the
Gramco Music Publishing Ltd & company is opposing and the same
Ors – R.S. No. 152/2000 has not been allowed till date
7. OS-18,19 & 20 – Saregama India Before the High Mr Sanjiv Goenka and Mr R.P.
Ltd – Sanjiv Goenka, R.P. Court of Judicature at Goenka have filed Revision
Goenka, P.K. Mahapatra Allahabad petition in a Criminal Defamation
-V- Suit against the orders of
State of U.P. & Anr Crl.Misc. Ghaziabad District Court
appeal No. 1910, 960 & 97 of
1997
8. Complaint Case filed by ICICI Matter pending The case was instituted after Mr S
Ltd. and Global Trust Bank under before Chennai High Goenka resigned from the Board of
Section 138 of the Negotiable Court. Interim stay the Company on 25 August 1999.
Instruments Act, 1872 of S&S granted. His resignation was noted by the
Power Switcgear Ltd.against S & Board of the said Company on 25
S Power Switchgear Ltd. and its October 1999 and requisite return
directors. was filed with ROC, Tamil Nadu
on 4 November 1999.
Sushila Goenka
1. C.R. No. 11649(W) of 1991 High Court at The writ petition was moved
Rama Prasad Goenka Calcutta before the Hon'ble Justice S
(with Sushila Goenka and Sanjiv Ahmed and interim order was
Goenka) passed in the said petition by His
Vs. Lordship on 20th September 1991
State of West Bengal & Ors. inter alia directing the respondents
not to take further steps on the
basis of final statement allegedly
prepared by them until further
order.
Sumantra Banerjee
S. No. Nature of Litigation/ Dispute/ Quantum of claims/ Status/ Outcome of litigation,

Default/ Non-payment/ demands (Rs lakhs) dispute
Insolvency
1. Case No. 793/P/2003 was 19.20 The matter along with all
instituted against the directors of connected applications are pending
Saregama India Ltd. In view of before ACMM, Mumbai. The
FIR dated 5.5.98 of one Kamal directors of the company, under
Khayarati Mehera alleging orders of Mumbai High Court are
infringement of copyrights and exempted from personal
manufacture of records of two appearance
Hindi Films
2. Case No. 447/1996 by Super Not quantifiable Allahabad High Court has stayed
Cassette Industries Ltd. Before the proceedings and the matter is
ACJM for alleged defamation pending since 1997
C. Ancliff
123
1. No cases
P. K. Mohapatra
1. Basic Tele Services Limited

(a) Suit pending before Delhi High 5,000 Hon’ble Court has granted
Court for invocation of bid bond permanent injunction against
by DOT invocation of the bid bond.
(b) Bank Guarantee charges not paid 9 -
to Deutsche Bank on above bid (upto 31.12.2004)
bond since October 2003
2. RPG Telephone Limited
(a) Civil Suit pending fore Delhi 47.51 Matter remains sub-judice.
High Court instituted by Telstra
V-Com for recovery of dues
against Corporate guarantee
(b) Civil suit filed by Company in 47.51 Matter remains sub-judice.
Delhi High Court for declaration
that the above Corporate
guarantee is null & void and
hence not enforceable.
3. RPG Satellite Communications Limited
(a) Demand from Central Bank of 1,521 DRT, New Delhi has decreed
India with further interest Rs1,083 lakhs plus interest @ 12%
w.e.f. 01.06.2004 p.a. with quarterly rests with cost.
(b) Demand from Vijaya Bank 197 DRT, New Delhi has decreed
with further interest Rs127 lakhs plus interest.
w.e.f. 01.07.2004
(c) Civil Suit by GATI Ltd., - Continuation of - Interim injunction continues till
Secunderabad services for ever 18.01.2005
- Suitable damages - OA & IA listed for hearing on
the above date.
(d) Non payment of dues to Dept. of - License fee: 21.91 - Bank Guarantees of Rs75 lakhs
Telecommunication under - Transponder space invoked by DOT in December
License Agreement dues Rs48.53 2004.
lakhs
- WPC/Royaltee fee
– 8.35
- + Interest on the
above
outstandings as on
November 30,
2004.
Harsh Neotia
1. No cases
J. N. Sapru
1. No cases
T. K. Maji
1. No cases
D. Basu
1. A writ petition (criminal) has been filed by one Shri S. N. Sharma of New Delhi against
124
Commissioner of Police, Delhi; Airport Authority of India, New Delhi, Jet Airways (India)
Private Limited and the latter’s directors (including a few past directors) praying for issue of an
order directing the Delhi Police to register a case of criminal negligence against Jet Airways and
its directors (including some past directors). The petitioner’s allegation is that a Delhi-Mumbai
flight of Jet Airways took off from Delhi Airport on December 20, 2001 after some delay in
adverse weather conditions thereby endangering the safety of passengers on board. Delhi High
Court has admitted the petition for hearing on February 2, 2005.
D. R. Mehta
S. No. Nature of Litigation/ Dispute/ Quantum of claims/ Status/ Outcome of litigation,

Default/ Non-payment/ demands (Rs lakhs) dispute
Insolvency
1. Spencer and Company Limited
(a) Sudarsan Trading Company – 7.13 As against the Suit Claim of
filed a suit in the High Court of Rs7.13lakhs, the suit was allowed
Madras, wherein they have made in part on 7.8.98 for an amount of
a claim for a sum of Rs28,464 only with interest @
Rs7,13,537.90. In this suit they 24% from 13.2.88 rejecting the
have made a claim for balance claim. The company had
Rs4,29,383.19 being the value of paid the principal amount of
the stock on 13.2.1981 and were Rs28,464 and has preferred an
destroyed and the balance by appeal. AS 225/2000 High Court,
way of interest and future interest Madras in respect of the quantum
at 24% of interest.
(b) Hind Matches filed a Suit against 1.31 An Order was passed on 5.11.2003
the company wherein they made a holding 1st and 2nd defendants
claim for a sum of Rs1.31 lakhs jointly liable to pay Rs1.31 lakhs
together with interest for the to the plaintiff and pay interest at
goods supplied by them to the 12% per annum on the Original
company. They included 3 others Suit amount of Rs1.15 lakhs
as defendants. Appeal No. 205/2004 was made
against the order on the following
grounds.
1) The Learned Judge erred in

taking draft agreement which does
not have any legal binding.
2) The Learned Judge having

accepted the agreement as a valid
one between the Plaintiff and the
2nd, 3rd & 4th defendants is not
justified in directing Spencers to
pay and on two other grounds
(c) M/s Nirulas Corner House 6.00 Trial – In progress
Pvt.Ltd., New Delhi filed a Suit
in the High Court of Delhi against
the company for Rs6 lakhs for the
alleged loss of business and other
expenses incurred by them for
starting their business at
Kashmere Gate premises, New
Delhi, the company has filed
written statement on 4.12.82
denying their claim. The Plaintiff
filed a replication against the
125
written statement filed by us.
Documents were also filed by the
plaintiff and the defendants.
(d) One Mrs. V.Kamalammal filed a 0.10 The High Court partly allowed the
case against the company wherein appeal and enhanced comp
she had claimed a sum of payable from Rs30,000 to
Rs70,000 as compensation under Rs40,000. The amount of
Motor Vehicle Accident claim for Rs10,000 is due and payable on
death of her son. The Tribunal receipt of the demand.
awarded a sum of Rs30,000 as
compensation. Aggreived an
appeal was filed in the High
Court.
(e) Madhya Pradesh Electricity 0.05 No claim made so far
Board, Rampur, Jabalpur, filed a
suit against the company. Expo
Machinery & Bombay Garage for
Rs4554/- being the value of the
Refrigerators supplied which was
found defective.
(f) Sri Kamakshi Food Products (P) 1.48 Dismissed for default of the
Ltd., has filed a Suit in the High Petitioner – Copy of the order
Court of Madras, wherein they awaited.
have made a claim for a sum of
Rs1,48,756 being the balance due
to them for the supply of goods.
(g) Mr M.Srinivasan, Excise 0.15 Labour Court passed an award
Consultant filed a petition in the holding that Srinivasan is entitled
Labour Court claiming certain for wages for unavailed leave and
monetary benefits from the national and festival holidays
company alleging that he was an amount to Rs15,446 while
employee. rejecting the other claims.
However, as the company had
succeeded in a claim filed by
Srinivasan under the payment of
Gratuity Act wherein the Court
held he was not an employee
Srinivasan has since expired. No
further progress.
(h) East Coast Breweries, 26.92 Listed for hearing in the Court of
Bhubaneswar Vs. Spencer and Civil Judge
Company Ltd., pertaining to
Alcoholic drinks from them
(i) Claim regarding retirement 10.00 – 15.00 The Labour Commissioner acting
benefits by ex-employees of on behalf of the Government of
Aerated Water factory being Tamil Nadu is trying to reopen this
reviewed by the labour matter and fix liability on Spencer
commissioner. and Company.
(j) Bank of India Vs. Karthik 10.73 Matter pertaining to Bank finance
Pharmaceuticals Ltd. availed by Karthik
Pharmaceuticals Ltd. an erstwhile
subsidiary of the Company.
(k) Sales tax demands for FY1989-90, 1999-00, 2000-01 and 2001-02 amounting to Rs6.75 lakhs is
under appeal with Appellate Asst. Commissioner, Commercial Taxes Dept., Kurlajam, Chennai.
2. Music World Entertainment Limited

(a) New Indian Assurance Co. Vz. Nil Suit has been filed.
Music World Entertainment Ltd
for specific performance of the
contract relating to lease of
126
certain premises in Chennai.
(b) Punjab & Sind Bank Vs. Music Nil Suit has been filed.
World Entertainment Ltd. Ltd for
specific performance of the
contract relating to lease of
certain premises in Chennai
3. Great Wholesale Club Limited

(a) Case filed by DFI Mauritius Ltd. 30 – 40 for DFI Mauritius is claiming prior
to restrain GWCL from using rebranding rights on GIANT trademark and
trade name GIANT in the Delhi have filed for cease and desist
High Court. against GWCL.
(b) Sales Tax demand for FY2001-02 amounting to Rs11.56 lakhs, the company paid Rs1.45 lakhs
for filing appeal. The appeal is with Appellate Deputy Commissioner, Commercial Taxes Dept.,
Namapally, Hyderabad
4 Saregama Plc
(a) Unauthorised usage of their Hearing is currently on
musical work “Phireya Dao Amar
Prem” in song ‘Jana Jana Jana’ of
Film ‘Murder’
(b) Seeking Court’s declaration of Settlement arrived at – case being
Saregama’s rights in Agreement withdrawn.
re: Film ‘Mughal-e-Azam’
127
XVIII. INVESTOR GRIEVANCES AND REDRESSAL SYSTEM
Redressal of investors’ grievances is given top priority by the Company. On April 30, 2001, the Shareholders’
Grievance Committee of the Board was formed with Mr. S. Goenka, Mr. P. K. Mohapatra and Mr. S. Banerjee
as its members, Mr. S. Goenka being the Chairman. The Committee oversees redressal of complaints of
shareholders/investors and other important investor related matters. In order to expedite the process of investor
service, the Company Secretary, who is also the Compliance Officer, has been delegated by the Board to take
all necessary steps for effecting proper shareholder servicing and report to the Shareholders Grievance
Committee regarding the investors/shareholders grievance and its redressal. The Board has formed the Share
Transfer Sub-Committee and delegated powers to approve shares transfers and deal with matters connected
therewith. Presently, the Share transfer Sub-Committee comprised of the Managing Director, Vice President –
Finance and the Company Secretary. The Company has adequate arrangements for redressal of investor
complaints as follows:
a) Computerised record of correspondence

b) Share transfer/dematerialisation/rematerialisation are handled by well equipped professionally managed
Registrar and Transfer Agent, appointed by the Company in terms of SEBI’s direction for appointment of
Common Agency for physical as well as demat shares. The Registrars are constantly monitored and
supported by qualified and experienced personnel of the Company.
During the year 2003-04, out of 45 investor complaints that were received, 43 complaints have been
resolved/redressed. Two complaints were pending as on March 31, 2004 which have been subsequently
attended to by the Company. The attention given by the Company towards investor servicing is reflected by
the small number of complaints received by the Company against the large number of its shareholders.
Redressal norm for response time for all correspondence including shareholders complaints is 7 days.
However, the Company endeavours to redress all the complaints within two weeks of the receipt of complaint.
STATUS OF COMPLAINTS
No. of shareholders complaints pending as of date: 1
Total number of complaints received during last financial year (2003-04): 45
Total number of complaints received during April 1, 2004 to September 30, 2004: 33
Time normally taken by it for disposal of various types of investor grievances: Most of the investor grievances
have been attended to within 14 days.
The status of investor grievance in respect of the top five listed companies on the basis of market capitalisation
forming part of the promoting group is given in the table below:
Name of the Company Pending grievances as on September 30, 2004

CESC Limited Nil
Ceat Limited 1
KEC International Limited Nil
Zensar Technologies Limited Nil
Phillips Carbon Black Limited Nil
XIX. MATERIAL DEVELOPMENTS
In the opinion of the Board of Directors of the Company, there have not arisen, since the date of the last
financial statements disclosed in the Letter of Offer, any circumstances that materially and adversely affect or
are likely to affect the trading or profitability of the Company or the value of its assets or its ability to pay its
liabilities within the next twelve months (as per Accounting Standard 4 of the ICAI).
In addition to the Lead Manager, the Issuer is also obliged to update the offer document and keep the public
128
informed of any material changes till the listing and trading commencement.
XX. ISSUE EXPENSES

The expenses of the Rights Issue payable by the Company are estimated to be around Rs30 lakhs (1.25% of the
issue size) and include issue management costs covering Lead Manager’s fees, Registrar’s fee and expenses,
printing and distribution, advertisement cost and other expenses and contingencies. The total expenses for the
issue will be borne out of the issue proceeds.
XXI. EXPERT OPINION

Save and otherwise stated in the Letter of Offer, the Company has not obtained any expert opinions.
XXII. OPTION TO SUBSCRIBE

The Equity Shareholders are given the option to receive the security certificates or hold securities in
dematerialised form with a depository (Refer the “Terms of Issue” for details).
XXIII. MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS

The following contracts (not being contracts entered into in the ordinary course of business carried on by the
Company), which are or may be deemed material have been entered or are to be entered into by the Company.
Copies of these contracts and also the documents for inspection referred to hereunder, will be delivered to
National Stock Exchange of India Limited, Mumbai (Designated Stock Exchange). These documents may be
inspected at the Registered Office or at the Secretarial Department of the Company at 31, Netaji Subhas Road,
Kolkata – 7000 001 from 11:00 am to 2:00 pm on all working days, from the date of this Letter of Offer until
the date of closure of the Subscription List.
Material contracts
1. Memorandum of Understanding entered into between the Company and ICICI Securities Limited, Lead
Manager to the Issue, dated January 7, 2005
2. Memorandum Understanding entered into between the Company and MCS Limited, Registrar to the
Issue dated ____, 2005
3. Tripartite agreement entered between the Company, Central Depository Services (India) Limited and
MCS Limited dated April 18, 2000
4. Tripartite agreement entered between the Company, National Security Depository Limited and MCS
Limited dated January 5, 2000
Documents
1. Memorandum and Articles of Association of the Company
2. Listing agreements or letters in lieu thereof with NSE, BSE and CSE
3. Resolution passed by the Board of Directors in its meeting held on December 23, 2004 authorising the
Issue
4. Consents from Directors, Auditors, Bankers to the Issue, Lead Manager to the Issue, Legal Advisor for
the Issue and the Registrar to the Issue
5. Letter No. ____ dated ____ 2005 issued by the Securities and Exchange Board of India
6. The Order of Hon'ble Calcutta High Court dated July 24, 1996 relating to reduction of capital.
7. Annul reports of the Company for the last five years
8. Auditors’ Report of the Company dated January 10, 2005 giving the financial information given in the
Letter of Offer.
9. Tax consultant’s certificate dated December 30, 2004 regarding tax benefits
10. Letters of intent for the subscription to rights entitlement and unsubscribed portion, received from the
promoters
11. Application made to the stock exchanges at time of filing of the draft Letter of Offer
12. In-principle approvals dated ____ 2005, ____, 2005 and ____ 2005 from NSE, BSE and CSE for listing
the securities offered in this issue.
129
XXIV. DECLARATION
All the relevant provisions of the Companies Act, 1956, and the guidelines issued by the Government or the
guidelines issued by the Securities and Exchange Board of India established under the Securities an Exchange
Board of India Act, 1992, as the case may be, have been complied with and no statement made in the Letter of
Offer is contrary to the provisions of the Companies Act, 1956, or the Securities and Exchange Board of India
Act, 1992 or rules made thereunder or guidelines issued (including the SEBI (Disclosure and Investor
Protection) Guidelines, 2000), as the case may be.
Yours faithfully,
For Saregama India Limited
Signed by Directors
Rama Prasad Goenka*

Sanjiv Goenka*
Sushila Goenka*
Sumantra Banerjee*
Pradipta Kumar Mohapatra*
Harshavardhan Neotia*
Jagdish Narain Sapru*
Dipankar Basu*
Christopher John Ancliff*
Tapas Kumar Maji*
Dilip R. Mehta*
*Through the Power of Attorney in favour of Mr. T. K. Banerjee, Company Secretary.
Signed by the Managing Director
Mr. Dilip R. Mehta*, Managing Director

*Through the Power of Attorney in favour of Mr. T. K. Banerjee, Company Secretary.
Signed by the Vice President – Finance
Mr. Ghanshyam B. Aayeer, Vice President – Finance
Place: Kolkata
Date: January 19, 2005
130

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DRAFT LETTER OF OFFER

(Private and Confidential)

Saregama India Limited

LEAD MANAGERS TO THE ISSUE REGISTRAR TO THE ISSUE

I. RISK FACTORS AND MANAGEMENT PERCEPTION THEROF i

II. GENERAL INFORMATION 1

IV. TERMS OF THE ISSUE 14

VII. MAIN OBJECTS UNDER THE MEMORANDUM OF ASSOCIATION 32

VIII. HISTORY AND BUSINESS OF THE COMPANY 33

X. MANAGEMENT OF THE COMPANY 49

XI. THE INDIAN ENTERTAINMENT INDUSTRY 57

XIII. MANAGEMENT DISCUSSION AND ANALYSIS 90

XIV. STOCK MARKET DATA 96

XVI. PROMISE VERSUS PERFORMANCE 98

XVII. OUTSTANDING LITIGATION AND DEFAULTS 100

XIX. MATERIAL DEVELOPMENTS 128

XX. ISSUE EXPENSES 129

XXII OPTION TO SUBSCRIBE 129

XXIII. MATERIAL CONTRACTS AND INSPECTION OF DOCUMENTS 129

Internal Risk Factors and Management Perception Thereof

1) Losses made by Saregama India Limited

2) Loss making group companies

Particulars 2001-02 2002-03 2003-04

3) Shortfall in promised performance of companies in the promoter group companies

Expected date of Actual date of

1992-93 1993-94 1994-95

Phillips Carbon Black Limited

1992-93 1993-94 1994-95 1995-96

Zensar Technologies Limited

1993-94 1994-95 1995-96

Counter guarantee given to bankers 20.68

Claims against the Company not acknowledged as debts in respect of -

5) Outstanding Litigation & Disputes

Pending Litigations against the Company

Sl Case No./ In the Court Filed by/ against Particulars Status

2. Cases f i l e d against the Company relating to Copyright issues

3. Other Civil Cases against the Company

Income Tax Matters

Sales Tax Disputes

Assessment Amount of Brief Description of the Demand Present Status

CST 69.75 Mainly F Form pending, 1.36 Necessary details

4. Cases related to labour / employee issues

Sl. No. Case No. Matter Case Detail In the Court of

b) Case No.162/99 Sri S N Sharma Vs Saregama

4 Conciliation Ms. Smita Baidya Vs Saregama Termination Office of Labour

5. Excise related issues

7) Equity offering by the Company

a) Music Cassette (MC) going out of utility

c) Competitions from other segments of entertainment sector

9) Loss Making Subsidiaries

External Risk Factors

1) Change in copyright law, licensing norms and regulations.

4) Natural Disasters and Technical Failures

5) Risk of Volatility in Share Price

6) Risk of Economic Slowdown

NOTES TO RISK FACTORS

3) The Issue size is Rs2,402.38 lakhs

4) The Cost per share of shareholdings of the promoters as on date

Sale of Goods Current Period 43.66 - - -

License Fees Current Period 86.95 - - -

Repayment of Current Period - - -

Investments Current Period 1806.61 - - -