MIRA INFORM REPORT

Report Date :

6^th May, 2006.

IDENTIFICATION DETAILS

Name :	ADLABS FILMS LIMITED
Registered Office :	Film City Complex, Goregaon (East), Mumbai – 400 065, Maharashtra, India
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	30.11.1987
CIN No.:	U29299MH1987PTC045446
Com. Reg. No.:	11-45446
TAN No.: (Tax Deduction & Collection Account No.)	MUMA20296D
PAN No.: (Permanent Account No.)	AAACA42524
Legal Form :	A Public Limited Liability Company The company’s Shares are listed on the stock exchanges.
Line of Business :	Manufacturing, Processing and Printing of Cinematographic Films.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 4500000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company in Indian Film Industry. The company is doing very good business. Trade relations are fair. Business is active. Payments are usually correct and as per commitments. The company can be considered good for normal business at usual trade terms and conditions.

LOCATIONS

Registered Office :	Film City Complex, Goregaon (East), Mumbai – 400 065, Maharashtra, India
Tel. No.:	91-22-28423333/ 4488
Fax No.:	91-22-28422211
E-Mail :	adlabs@bom3.vsnl.net.in
Website :	www.adlabsfilms.com
Factory :	FILM PROCESSING LABORATORY: Adlabs Films Limited, Film City Complex, Goregaon (East), Mumbai- 400065. MULTIPLEX DIVISION : IMAX ADLABS I max Adlabs, Near Bhakti Park, Anik Wadala Link Road, Wadala, Mumbai- 400037. DIVYAADLABS Divya Shakti Marketing Pvt. Ltd. Purab Paschim Plaza. Trimurti chowk, Opposite Trimurti post office, Cidco, Nashik - 422008. HUMAADLABS Huma Adlabs Multiplex, Huma mall, Next to Tata house, L.B.S. Marg, Kanjurmarg (W), Mumbai - 400078. GOLDADLABS Mariplex Mall, Marigold complex, Kalayani nagar, Pune- 411014. FAMEADLABS Plot No. 621, Oshiwara, Andheri Link Road, Andheri (West), Mumbai- 400053. R-ADLABS Runwal Multiplex, R Mall, 3rd floor, L.B.S. Marg, Mulund (West), Mumbai-400070.

DIRECTORS

Name :	Mr. Manmohan Shetty
Designation :	Chairman & Managing Director
Name :	Mr. Vasanji Mamania
Designation :	Wholetime Director
Name :	Ms. Pooja Shetty
Designation :	Wholetime Director
Name :	Mr. Berjis Desai
Designation :	Director
Name :	Mr. Shyam Shroff (upto 28.10.2004)
Designation :	Director
Name :	Mr. Pradeep Guha
Designation :	Director
Name :	Mr. Chandir Gldwani
Designation :	Director

KEY EXECUTIVES

Name :	Ms. Klrti Desai
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Indian Promoters	13550000
Directors & Relatives	600
Financial Institutions & Banks	131654
Mutual Funds & UTI	1318893
Flls	851922
NRIs/OCBs	44267
Private Corporate Bodies	1947795
Public	3588776
Clearing Members (Transit Position)	66843
TOTAL:	21500750

BUSINESS DETAILS

Line of Business :

Manufacturing, Processing and Printing of Cinematographic Films.

GENERAL INFORMATION

No. of Employees :

Bankers :

Bank of Baroda, Chakala Branch, Mumbai

Facilities :

Secured Loan	Amount (in Millions)
From Banks	241.461

Banking Relations :	Satisfactory
Auditors :	H. O Agarwal & Company, Mumbai
Qualification:	Charted Accountant
Subsidiaries:	v Entertainment One India Limited v Gemini Exhibitors Limited v Runwal Multiplex Private Limited
Associates:	Swanston Multiplex Cinemas Private Limited
Other Related Parties where common control exists:	v Adlabs Finance Limited v Adlabs Shringar Multiplex Cinemas Private Limited v Mamania Films Private Limited v Adlabs
Other Related Parties:	(a) Joint Ventures: v Cineplex Private Limited v Divyashakti Marketing Private Limited (b) Business conduct and management agreement for multiplexes: v Huma Adlabs v Metro Adlabs v Rap Adlabs (c) Others: v Bergis Desai J. Sagar Associates v Business Match Services India Limited v Centrum Finance Limited v Mukta Arts Limited v Adlabs Banglore v Adlabs Photoshop v Adwear Fashion v Neo Films v Premier Pressing Works v P. Bhushan & Co. v Rap Media Limited v Shringar Cinemas Private Limited v Shringar Films Private Limited v Whistling Woods International Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
24,000,000	Equity Shares	Rs. 5/- each	Rs. 120.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
21,500,750	Equity Shares	Rs. 5/- each	Rs. 107.503 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		107.503	107.503
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		1065.528	940.934
4] (Accumulated Losses)		0.000	0.000
NETWORTH		1173.031	1048.437
LOAN FUNDS
1] Secured Loans		241.461	143.049
2] Unsecured Loans		0.000	0.000
TOTAL BORROWING		241.461	143.049
DEFERRED TAX LIABILITIES		78.281	68.570
TOTAL		1492.773	1260.056
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		639.034	634.310
Capital work-in-progress		61.807	11.329
INVESTMENT		130.218	54.618
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	9.354	6.119
	Sundry Debtors	362.583	320.417
	Cash & Bank Balances	21.894	27.039
	Other Current Assets	0.000	0.000
	Loans & Advances	809.630	615.876
Total Current Assets		1203.461	969.451
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	188.441	156.409
	Provisions	353.899	264.776
Total Current Liabilities		542.340	421.185
Net Current Assets		661.121	548.266
MISCELLANEOUS EXPENSES		0.593	11.533
TOTAL		1492.773	1260.056

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2005	31.03.2004
Sales Turnover [including other income]		875.552	789.055
Profit/(Loss) Before Tax		322.858	278.084
Provision for Taxation		116.165	101.661
Profit/(Loss) After Tax		206.693	176.423
Total Expenditure		552.693	510.971

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2005 (1^stQuarter)	30.09.2005 (2^ndQuarter)	31.12.2005 (3^rdQuarter)	31.03.2006 (4^thQuarter)
Sales Turnover	20.32	23.32	26.16	34.33
Other Income	1.11	1.36	2.31	4.29
Total Income	21.43	24.68	28.47	38.62
Total Expenditure	12.02	13.68	15.27	26.01
Operating Profit	9.41	11.00	13.20	12.61
Interest	0.43	0.28	0.15	0.03
Gross Profit	8.98	10.72	13.05	12.58
Depreciation	1.37	1.39	1.64	1.61
Tax	2.02	2.87	4.58	3.65
Reported PAT	5.46	6.29	7.17	8.07

200506 Quarter 1 -

Notes: Net sales includes Income from film Processing operations Rs 99.370 million Income from Imax/ Multiplex Theatre Operations Rs 54.651 million Traded goods Rs 49.153 million Expenditure Includes (Increase)/Decrease in Stock in Trade Rs (0.468) million Consumption of Raw Materials Rs 7.291 million Purchase of Traded goods Rs 35.264 million Imax / Multiplex Theatre Expenses Rs 37.618 million Staff Cost Rs 13.994 million Other Expenditure Rs 26.568 million Tax Includes Provision for Current Tax Rs 20.00 million Deferred Tax Rs 1.30 million Fringe Benefit Tax Rs 0.22 million 1. Previous period /years figures have been regrouped / rearranged wherever necessary. 2. The above financial results for the three months period ended June 30, 2005, subject to limited review by statutory auditors was taken on record at the Board Meeting held on July 29, 2005. 3. All the 30-investor queries have been responded during the quarter ended June 30, 2005. 4. At its EGM held on May 14, 2005 the Company’s share holders have approved the preferential issue and allotment of 35,00,000 equity shares FIIs at Rs 150/- per share & the increase in the Authorised Share Capital of the Company from Rs 120 million to Rs 150 million. The Company has also received the listing permission from the Stock Exchange, Mumbai & National Stock Exchange in respect of the above shares. 5.a) Reliance Land Pvt Ltd has acquired 58,00,000 equity shares from promoters and person acting in Concert of Adlabs Films Ltd and further made an open offer to the shareholders of the Company under Regulation 10,12 and other applicable provisions of the SEBI (Substantial Acquisition of shares and takeover) Regulation,1997. b) Reliance Land Pvt Ltd has offered to purchase 1,10,000 equity shares and 38,00,000 warrants at a price of Rs 175.20 per share on preferential allotment basis which has been approved by the shareholders of Adlabs Films Ltd at it EGM held on July 26, 2005. c) The increase in Authorised Share Capital from Rs 150 million to Rs 250 million was also approved by the Company’s shareholders at its EGM held on July 26, 2005.

200509 Quarter 2 –

Net sales includes Income from film Processing operations Rs 105.019 million Income from Imax/ Multiplex Theatre Operations Rs 60.963 million Traded goods Rs 57.205 million Income from Sale of film rights Rs 9.967 million Expenditure Includes (Increase)/Decrease in Stock in Trade Rs 2.503 million Consumption of Raw Materials Rs 8.671 million Purchase of Traded goods Rs 48.077 million Imax / Multiplex Theatre Expenses Rs 43.888 million Staff Cost Rs 11.121 million Other Expenditure Rs 22.525 million Tax Includes Provision for Current Tax Rs 28.500 million Deferred Tax Rs 1.700 million Fringe Benefit Tax Rs 0.275 million EPS is Basic 1. Previous period /years figures have been regrouped / rearranged wherever necessary. 2. The above financial results for the period ended September 30, 2005, subject to limited review by statutory auditors was taken on record at the Board Meeting held on October 27, 2005. 3. All the 29 investor queries have been responded during the quarter ended September 30, 2005. 4. The Company has on August 08, 2005 allotted on preferential basis 1,10,00,000 equity shares and 38,00,000 warrants to Reliance Land Pvt Ltd pursuant to shareholders approval at its EGM of July 26, 2005. 5. Consequent to the above, Reliance Land Pvt Ltd along with Reliance Capital Ltd are having majority share holding of the Company. 6. The proceeds from the preferential issue are mainly being used for expansion of projects that are in various stages of implementation and are yet to contribute to the earning. 7. Runwal Multiplex Pvt Ltd a subsidiary of the Company and Swanston Multiplex Cinemas Pvt Ltd a Associate Company in which Adlabs Films Ltd had a share holding of 49.99 % have become Joint Venture w.e.f. September 01, 2005, the impact of which shall be reflected in the consolidated accounts accordingly.

200512 Quarter 3 –

Notes Net sales Includes Income from film Processing operations Rs 102.639 million Income from Imax/ Multiplex Theatre Operations Rs 75.420 million Traded goods Rs 72.053 million Income from film Prodn/rights Rs 11.494 million Expenditure Includes (Increase)/Decrease in Stock Rs (0.679) million Consumption of Raw Material (Film Processing) Rs 9.841 million Purchase of Traded goods Rs 64.975 million Imax / Multiplex Theatre Expenses Rs 48.562 million Staff Cost Rs 14.656 million Other Expenditure Rs 15.381 million Tax Includes Provision for Current Tax Rs 45.500 million Deferred Tax Rs (3.411) million Fringe Benefit Tax Rs 0.250 million EPS is Basic 1. Previous period /year's figures have been regrouped / rearranged wherever necessary. 2. The above financial results for the period ended December 31, 2005, subject to Limited Review by statutory auditors, was taken on record at the Board Meeting held on January 20, 2006. 3. The Company's Board has in its meeting held on December 08, 2005 approved the raising of long term resources by issue of foreign currency convertible bonds upto Euro 85 million equivalent to US 100 million dollars. Subsequently, shares holders have approved the issue by voting by postal ballot on January 12, 2006. 4. The Company has won bids for establishing and operating 26 FM Radio channels as part of the recent FM phase II bidding process.

200603 Quarter 4 -

Notes Net sales Includes Income from film Processing trading Rs 150.704 million Income from Theatrical exhibition Rs 61.761 million Income from film production & distribution Rs 130.868 million Expenditure Includes (Increase)/Decrease in Stock Rs 0.792 million Consumption of Raw Material (Film Processing) Rs 54.269 million Exhibition Expenses Rs 64.521 million Staff Cost Rs 23.659 million Expenses for production & distribution Rs 53.275 million Other Expenditure Rs 63.643 million Tax Includes Provision for Current Tax Rs 36.000 million Deferred Tax Rs (7.462) million Fringe Benefit Tax Rs 0.426 million Status of Investor Complaints for the quarter ended March 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 23 Complaints disposed off during the quarter 23 Complaints unresolved at the end of the quarter Nil EPS is Basic 1. On January 25, 2006, Company issued and allotted ' 84,000,000 zero Coupon Convertible Bonds due 2011 which are listed on the Singapore Exchange Securities Trading Ltd. The Conversion price of each Bond is Rs 543.42 per share with a fixed rate of exchange on conversion of Rs 54.26 =' 1.00. 2. The Company has on March 31, 2006 allotted 38,00,000 equity shares of Face Value Rs 5/- each for cash at a price of Rs 175.20 per share to the promoters against the outstanding warrants issued on August 08, 2005. As a result the paid up equity share capital of the Company stands increased to 3,98,00,750 equity shares of Rs 5/- each. 3. The figures with respect to various businesses of the Company have been regrouped wherever necessary and may not be strictly comparable with that of the previous year. 4. Due to change in basis of capitalisation, project expenditure of Rs 6.833 million relating to prior quarters has been accounted for in the respective quarters. 5. The Company has won bids for establishing FM radio channels at 45 stations as part of the recent FM Phase II bidding process. 6. The Company has adjusted the share issue expenses incurred during the year against the Securities Premium Account. Had these been charged to Profit and Loss account as per the policy followed until March 31, 2005, the profit for the year would have been lower by Rs 15.613 million. 7. The subsidiary company has changed its accounting policy relating to recognition of carrying value of film rights as per individual film forecast method based on best management estimates. 8. The Board has recommended a dividend of Rs 2.25 per share i.e. 45% (Previous year 40%) subject to approval of shareholders at the ensuing Annual General Meeting. 9. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors at their meeting held on April 22, 2006.

KEY RATIOS

YEARS	31.03.2005	31.03.2004	31.03.2003
Debt-Equity Ratio	0.17	0.13	0.15
Long Term Debt-Equity Ratio	0.17	0.13	0.15
Current Ratio	1.96	1.96	1.85
TURNOVER RATIOS
Fixed Assets	0.99	0.99	1.04
Inventory	105.92	113.29	118.51
Debtors	2.40	2.49	2.85
Interest Cover Ratio	19.88	19.42	23.57
Operating Profit Margin(%)	48.06	44.86	43.61
Profit Before Interest And Tax Margin(%)	41.41	38.92	37.87
Cash Profit Margin(%)	31.83	29.36	28.22
Adjusted Net Profit Margin(%)	25.18	23.41	22.48
Return On Capital Employed(%)	26.21	26.57	28.62
Return On Net Worth(%)	18.61	17.81	19.05

LOCAL AGENCY FURTHER INFORMATION

REVIEW OF OPERATIONS

The overall turnover of the Company registered a 10.96% while Net Profit rose by 1716%.

During the year the thrust was on the expansion of Company's Multiplex business, the details of which are mentioned elsewhere in this Report.

BUSINESS OUTLOOK 2005-2006

Overall: The rise in the number of multiplexes and growth in digital cinemas are the two main criteria expected to drive the market in the coming years. Home video market comprising of DVDs/VCDs sell through and other future formats is expected to considerably revolutionise the market.

The rising number of Indian overseas population will continue to boost the demand for overseas prints and collection for the Indian producers. The advent of digital delivery, though reflecting a modest growth will be the answer to piracy in the country. In light of takeover by the Reliance group, the Company is repositioning itself for growth in its thrust areas of multiplexes and has further plans to launch new business activities like film distribution in domestic and overseas market, television software and animation films and contents at international levels. The scenario on the existing business is expected to be as follows:

Film Processing: The Company's existing lab operations comply with international quality standards.

The Company's front end processing lab at Chennai in association with Vijaya Labs, Chennai has commenced functioning since April 2005 and the Kolkatta lab is expected to start in December 2005.

The Company shall make all efforts to retain market leadership in this field of business through ongoing technological improvement and upgradation.

Film Exhibition Business: The Multiplex business at Wadala during the year has shown a steady performance.

This year saw the release of two IMAX DMR films namely "Robots" and Batman Begins" . They intend to release two more DMR films towards the end of 2005 viz., 'Charlie and the Chocolate Factory" and "Harry Potter-The Goblet of Fire" distributed by Warner brothers. IMAX DMR films have had successful runs at their theatre and they expect the above mentioned films to be box office successes.

Last year the Company launched an extensive school programme to reach out to various schools in Mumbai in order to create awareness about the IMAX format and its educational content. This programme was successful and during this year, the programme will be continued and they expect to see higher attendance numbers.

The Company is also currently negotiating to manage an IMAX flat screen cinema in the North.

Due to the release of a string of good films, this quarter ending June 2005 has seen good results. Efforts are being made to increase footfalls in all their theatres by effective marketing and promotions, online contesting and effective programming. They are focusing on increasing food and beverage revenues and advertising income. There has been an increase in ticket rates across their properties, and they use the variable pricing option to maximize revenues. They are aggressively working towards bringing down cost of operations. They are also investing in training manpower to ensure delivery of quality service across all their properties.

The Imax Multiplex having entered its fourth year of operation is now attracting a benefit of 75% exemption from entertainment tax.

The Company has plans to open 22 more screens during the year across India viz. MetroAdlabs (5 screens-Mumbai), Cineplex Adlabs (3 screens-Mangalore), Adlabs (4 screens-lndore), Adlabs (3 screens+1 IMAX flat screen -Ghaziabad), Adlabs (3 screens-Ghaziabad), RDB Adlabs (3 screens-Kolkatta).

Film Production: The year 2004-05 saw the release of "DEV" by the Company's wholly owned

subsidiary viz. Entertainment One (India) Limited, which won three awards viz. Filmfare Critics

Award-2004,Award for Best Film and also for Best Actress.The films under production are : Oil jo BhiKahey, Apaharan, Marigold (International banner),Bluff Master and Darwaza Band Rakho. The details on these projects are given in the Directors' Report of Entertainment One (India) Limited.

Digital Exhibition: Continuous efforts are on to improve technology for effective delivery.

The post production services are carried on at the Company's premises at Filmcity, Goregaon in association with Prime Focus Limited.

AWARDS AND ACHIEVEMENTS

During 2004-05, the Company has bagged the National Film Award for best film processing for the 6th time for the films "SWADES" and "GIRNI".

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of provisions of Section 217(2AA) of the Companies Act, 1956,the Directors hereby state :

a) That in the preparation of the annual accounts, the applicable accounting standards have been

Followed and that no material departures have been made for the same;

b) That they have selected such accounting policies and applied them consistently and made

judgements and estimates that are reasonable and prudent so as to give a true and fair view of

The state of affairs of the Company at the end of the financial year ended 31st March, 2004 and of the profit of the Company for that year.

c) That they have taken proper and sufficient care for the maintenance of adequate accounting

in accordance with the provisions of the Companies Act, 1956, for safeguarding the

Assets of the Company and for preventing and detecting fraud and other irregularities;

d) That they have prepared the annual accounts on a going concern basis.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE

The Indian film industry considered to be the largest in the world, in terms of number of films

produced and released continues to make its mark in terms of consolidation, realignment and

growth. Over 800 films are released every year and the cumulative consumer spending on filmed entertainment in India averages at approximately Rs.60 billion per annum. The Hindi films segmentattracts 40-50% of the total consumer spending in India. Though this segment is primarily unorganized, several developments in terms of corporatisation and improved corporate governance has changed the face of the industry.

The Indian film industry during the year was largely impacted by growing number of multiplexes thus enabling movie goers in urban India experience a new way of enjoying movies and providing an incentive for low budget niche films and experimental cinema. The effect was also seen in terms of decrease in average release time in theatres, providing direct growth opportunity to home video business and growing revenues from satellite and cable rights. The year also saw the digitalisation of cinema which along with steps taken by some major producers to make their own distribution arrangements has helped in checking piracy. Besides, the ever increasing NRI population provided a steady platform not only to Indian film producers who successfully tapped this home-starved population by making films with cross-over themes but have also invested in Indian movies as producers.

Overall the year witnessed a steady growth and the industry is expected to benefit further in the years to come on the back of a fast growing economy and increasing disposable income

COMPANY'S PERFORMANCE

During 2004-05, Adlabs Films Limited aggressively established its presence across a wide and well diversified range of business activities.

The financial performance during the year is as stated below:

(Rs in Lacs)

Income Stream	Film processing activity	Theatre operations	Sale of unexposed negative films
Other income	Recovery of Bad Debts	Total income	2002-03
3412.53	1744.82	2249.81	398.20
—	7805.36	2003-04	3729.45
1814.49	1990.31	356.30	—
7890.55	2004-05	3921.78	1950.99
2336.36	519.96	26.43	8755.52

Segmentwise Analysis:

1. Film Processing:

The Company's film processing business has been built around a strong working relation with

almost all big and small production houses in India. As most of the large film banners are located in Western India, the Company enjoys a sustained locational advantage. Keeping in mind the dominance of regional-films in the Indian filmed entertainment market, Adlabs has set up front end film processing laboratories in Chennai and Kolkatta, the effect of which shall be visible in the Company's performance of 2005-06.

2. IMAX Dome and Multiplex Theatre Operations:

The forward integration into exhibition business has seen the Company consolidate this business by setting up further multiplexes in Mumbai (HumaAdlabs) and Pune (GoldAdlabs). The Company is currently operating 24 screens in Mumbai, Nasik and Pune. As mentioned in the Directors' Report to the Members, the Company plans to open 22 more screens by March 2006.

The Company intends to use the lease model for all future multiplex acquisitions. Multiplexes shall be located in malls rather than standalone properties and they plan to acquire dominant market share in each of the cities they plan to enter similar to Mumbai.

The year 2004-05 saw the successful release of DMR films like "Harry Potter and the Prisoner of Azkaban",Spiderman 2" and Polar Express at the Dome. Based on these successful releases the Company subsequently released "ROBOTS" AND "BATMAN BEGINS" in the Dome theatre in DMR Format. "Charlie and the Chocolate Factory" and "Harry Potter-The Goblet of Fire" are scheduled to release by the end of 2005.

The extensive launch of school programmes to reach out to children and create awareness of IMAX Dome concept by exhibiting edutainment films is an ongoing process. Coupled with cost control measures and contribution from other streams of income the Theatre segment is expected to post a steady performance.

BUSINESS OUTLOOK 2005 - 2006

A detailed discussion on the business outlook is included in the Directors' Report to the Members.

OPPORTUNITIES & THREATS

Opportunities: While co-production treaties, rising demand for number of prints in overseas market, rising share of regional films in .the Indian film market and the increase in number of international films dubbed in Indian languages can provide an opportunity to grow for the production and the processing and allied services business; the organised retail boom, demand for quality theatre complexes, better occupancy due to multiple screens, flexibility to decide on screening schedule and finally effective cost management is expected to be the growth driver for multiplex business. Besides the association with other business groups for its processing and multiplex business shall enable the company to derive infrastructure support while providing technical expertise and support to the group projects.

Threats: It is felt that there is possibility of saturation of film processing revenues or the growth could be at a steady pace at current levels. Anticipating this the Company has set front end labs at Chennai and Kolkatta keeping in mind the dominance of regional films and tremendous business opportunity. The rising number of entrants in multiplex business may affect the established players. However the diversity of Company's services substantially offsets any potential adverse impact on the Company's business. Besides the pressure on margins due to the levy of entertainment tax after expiry of the initial holiday period is expected to be countered with increase in ticket prices and adding other revenue streams to multiplex business. The risk of changes in Government regulations and tax policies across states could affect the industry. Finally as the Company is entertainment dependent, any downslides in the industry could directly impact the Company's performance.

RISK MANAGEMENT

Obsolescence risk: The Company makes investment in new premises, technology in line with expected growth of its business. If this investment becomes obsolete or the growth does not fructify, due to ever changing technology, Company's investment could become obsolete. This risk is mitigated by effective planning, continuous assessment of process and business requirement and cross deployment of resources.

Competition risk: With entry of new aggressive players in Company's multiplex business, competition will intensify. To mitigate this risk, Company scans diligently for locations before finalising any project for present and potential competitors and tracking their strengths, weaknesses and strategies.

Operation risk: This mainly implies risk from non performance of resources such as men, machines or systems or effect of any external event. This is endemic to every business. The Company has procedures in place to identify, control and measure any adversities resulting from such risks based on management perception. Risk due to manmade/natural disaster The physical facilities and infrastructure are insured to cover

only loss that may arise on account of insurable risks which as per management perception is

generally covered by insurance companies and assets of the Company are exposed to risks to that extent.

FIXED ASSETS:

Leasehold Land, Building, Air conditioner Plant, Electrical installation, Plant & Machinery, Theatres & equipment, Furniture & Fixture, Vehicle etc.

AS PER WEBSITE:

Adlabs Films Ltd was founded by Mr. Manmohan Shetty and Mr. Vasanji Mamania in 1978 to set up a motion picture processing laboratory in Mumbai. The company initially catered to the ad film market (hence the name "Adlabs"). The company has since evolved into processing full-length feature films controlling 70% of the Western India market.

Adlabs, today is a market leader in the Entertainment Industry. It has an integrated business model covering the entire value chain from Film Production & Processing to Distribution, Exhibition & FM Radio.

Adlabs entered the Film Exhibition Business in the year 2000, with the setting up of a 518 seat IMAX® Dome theatre, (The largest Dome Theatre in the world) along with Mumbai's first multiplex (4 screens and 1314 seats). In 2000, the company also floated an IPO of 4.4 million equity shares at Rs.120/- per share aggregating to Rs. 528 million. It was one of the first Film Companies to go public. The trust in the company and its promoters was evident from the public's response to the issue.

In 2005, The Reliance Anil Dhirubhai Ambani Group (Reliance - ADA Group) acquired a 50.16% stake in Adlabs Films Limited for a price of Rs.3.6 billion, signifying the entry of this diversified and professional conglomerate in the Media & Entertainment Industry. In addition to Films (Exhibition, Production, Processing & Distribution), the ADA Group has plans to expand its presence across the Entertainment Value Chain ranging from Television to Radio and DTH.

Combining their synergies, Adlabs along with the Reliance- ADA Group, are looking at rapidly expanding their presence across all relevant segments of the Entertainment Space and have started taking steps in the direction of Film Production, Production Services, Processing, Film Exhibition, Overseas Distribution and FM Radio.

In keeping with this vision, in January 2006, the Reliance backed Adlabs, bagged 45 FM Radio licenses in all, making it one of the largest players in terms of number of licenses owned including stations of existing players.

BOARD OF DIRECTORS

A Board of Directors comprising of senior professional Members and industry stalwarts governs the company. Further, each division of the company is headed by a CEO to handle day-to-day operations, strategic growth and business development.

Mr. Manmohan Shetty is a highly respected figure in the Indian Film Industry and is known for his astute business sense. He is one of the original founders of Adlabs Films Limited. An arts graduate by qualification, he has more than 27 years of experience in film processing and Printing. He currently looks after strategic business planning, finance, business development and client interface in the company and is the Chairman and Managing Director.

Over the years Mr. Shetty has developed strong business relationships with many large film production houses. He is currently also The Chairman of the National Film Development Corporation (NFDC). He is also a member of the N K Singh commitee for facilitating venture funding for the entertainment industry, a member of the screening committee - IDBI Institutional film financing and member of the FICCI committee on entertainment industry.

Ms. Pooja Shetty is a Whole time director on the Board of Adlabs Films Limited, a market leader in the Film Processing business. She has created a niche for herself in the industry by spearheading the company’s successful foray into Film Exhibition. Pooja has been responsible for setting up the world’s largest IMAX dome theatre and 4-screen multiplex at Wadala, Mumbai. Today, besides handling Strategic Planning and Operations of the divisions' multiplexes, Pooja oversees New Business Development for the Exhibition division and New Business Ventures of the group.

Ms.Pooja is also a member of the Uttar Pradesh Development Council – Entertainment Committee and a member of the CII Committee on the Entertainment Industry.

Mr. Berjis Desai is a graduate in Arts and holds a Master's degree in Law from the University of Cambridge, England. He is a Solicitor and Advocate by profession and is currently the Managing Partner in J.Sagar Associates, Advocates and Solicitors. Mr. Desai specializes in Mergers and Acquisitions, Derivatives, Financial Laws, International Business Law and International Commercial Arbitration. Mr. Desai holds directorship in various companies like Centrum Finance Limited, BPL Mobile Communications Limited, Business Asia Consulting Pvt. Ltd. - Seafreight Private Limited to name a few.

Mr. Karan Johar is amongst a young group of Indian filmmakers who have brought about a fresh and modem outlook to Hindi commercial cinema. His directorial debut, at age 25, was 'Kuch Kuch Hota Hai', a landmark movie that was appreciated both critically and commercially in India and the world over. Karan Johar began his involvement in films by being involved in the scripting of Aditya Chopra's 'Dilwale Dulhaniya Le Jayenge'. The huge appeal of this movie to mass audiences everywhere caused Karan Johar to then write his own script, 'Kuch Kuch Hota Hai', which became his directorial debut. This period also saw Karan Johar assist his father, Yash Johar, in the production of his ongoing film 'Duplicate', as well as contribute to Yash Chopra's making of "Dil To Pagal Hai'. Karan Johar followed up this success with his second film, the multi starrer 'Kabhi Khushi Kabhie Gham', which broke box office records all over the world with its release in 2001. And then in 2004, Dharma Productions released another successful movie 'Kal Ho Na Ho', which was written by Karan Johar. With such blockbuster releases, Dharma Productions has achieved an enviable position in its fraternity, and a unique expectancy from its adulating fans across the world.

Mr. Gautam Doshi is currently Group President, Reliance - Anil Dhirubhai Ambani Group, Director, Reliance Infocomm Limited as well as Director of a number of Public Limited Companies. He started out as a part-time lecturer in Accountancy and Auditing at the S.I.E.S. Institute of management and at the Narsee Monjee College of Commerce and Economics between 1978 and 1991. He then went on to become the Chairman of the Indirect Taxation Committee of the Indian Merchant Chambers for the years 1999-2000 and 2000-2001. Mr. Gautam Doshi has also represented India and presented a paper on "Value Added Tax" at the 5th SAFA Conference on Fiscal and Corporate Innovations in SAARC Countries held in Lahore.

Mr. Shripal Morakhia, after obtaining his Masters Degree in Administration, during 1979-1980, worked with the President of New York Stock Exchange as Executive Assistant. He has also been on the Board of the Mumbai Stock Exchange, as Director from 1988-89. Mr. Morakhia was chosen by Business India under the aegis of a survey amongst "Stars 2000: A who's who of business leaders for the next century''. Mr. Morakhia is also Chairman of iDream Production Pvt. Ltd., which is actively involved in media activities in India and overseas, with a focus on film production and distribution. Over the last 4 years, iDream Production is proud to be associated with the successful distribution & productions of international movies like "Monsoon Wedding", "Bend It Like Beckham", "Bollywood Hollywood" & many more such blockbuster films.

SENIOR MANAGEMENT PERSONNEL

Mr. Brij Mohan Sharma (CFO) is a Commerce Graduate from Calcutta University. He is a qualified Cost Accountant and Company Secretary. Mr. Brij Mohan Sharma holds 30 years of experience in Corporate Management, New Projects, Strategic Planning and Control, Finance, Accounts and Operations Review. Mr.Sharma has worked with various enterprises in India and abroad in positions of responsibility in Finance - also provided management advisory services regarding new projects, business opportunities and reconstruction of financial models.

Mr. Suresh Bharadwaj - CEO - Exhibitions, a graduate in science, started his career at a very young age with the Mafatlal Group and today has more than 44 years of experience to his credit. He was handling Project Management, Project Execution and Implementation for nearly 26 years at the Mafatlal Group. He was also engaged in a business of his own relating to manufacturing of equipments for petrochemical plants, refineries, fertilizer companies and various other related industries. Mr. Bharadwaj joined Adlabs in 2000 and successfully executed the setting up of The IMAX - Adlabs project. Mr. Bharadwaj takes care of Business development, new property development, liasoning and overall operations at Adlabs Multiplexes.

Mr. Mayur Khandeparkar, is a Commerce Graduate from Sydenham College. A LLB and a qualified Chartered Accountant. Mr. Khandeparkar specializes in various key areas of Finance like; Funds and cash flow analysis, forecasting, Competitive analysis, Capital Evaluations, Budgeting and analysis of Balance sheets. Mr. Khandeparkar has over 16 years of professional experience. He has very diverse work experience ranging from the Banking sector to Media and Communications to the Petroleum and Telecom sector in India and abroad. He has worked with various professionally managed companies like Bank of Bahrain and Kuwait BSC - Centurion Bank, Sahara India Media Communications Ltd., National Petroleum U.S.A.

Mr. Praveen Nischol, an independent Producer-Director in his own right has produced and directed T.V Serials, Films for T.V. and Cinema. His television serial Shrikant was the first Asian serial to be shown on B.B.C. and was very well received in India and abroad. Currently he is the CEO of Entertainment One India Ltd, which is the Production arm of Adlabs. Entertainment One is a Professional Production Company, which has worked with some of the best talents in the Indian Film Industry producing high quality Cinema.

Mr. Tushar Dhingra (Chief Operating Officer - Adlabs Cinemas)

A Postgraduate from IMT Ghaziabad and a Diploma in Hotel Management from IHM Lucknow, Tushar has over 10 years of experience ranging from the Hotel Industry to Entertainment and Cinemas. This includes experience with Hotel Maurya Sheraton Delhi, The Taj Group of Hotels - New Delhi, Warner Brothers as a Branch Manager in New Delhi and PVR cinemas as Vice President – Sales and Marketing. As a Vice President at PVR, Tushar was responsible for Cinema chain profitability, market share and volume growth.

His focus at ADLABS is to direct the growth program of the organization in terms of revenues, best practices, operational stability & perfection, operating procedures and all other related activities.

Mr. Kapil Bagla (Head – Corporate Strategy and Acquisitions)

An Engineer graduate with a post graduate degree in financial management from Welingkar Institute, Mumbai, Mr. Kapil Bagla has over 13 years of experience in the field of Investments, Corporate finance and Advisory.

Even before joining Adlabs he was working closely with the company since the year 2000 as part of Investment banking team, which took the company public. Subsequently he has assisted the company through Fund raising, Expansion programmes, feasibility studies and business development.

Presently at Adlabs Kapil is responsible for business development, planning and corporate strategy, feasibility studies and acquisition of new businesses.

BUSINESS DIVISIONS

Film Processing: The Film Processing business has a fairly straightforward model wherein the commercial risk is low but relationships with movie studio/ producers as well as integrity of the processing laboratory count immensely, in view of piracy and IPR related risks. The film processing business has grown at an average of 19% over the last 5 years.

To keep up with the times and, - to offer a one-stop stop solution to its clients, Adlabs picked up a minority 6% stake in Prime Focus (an animation and special effects studio) at a cost of Rs. 46.6 million.

As Adlabs has established itself as the preferred provider of services and adopts a unique working capital cycle dovetailed with the nuances of film production, the incidence of bad debts have been few and far between. Adlabs laboratories, located in Film City, Mumbai, have a total film processing capacity of 20,000 feet per year. The company currently has an 80% captive market share in the Film Processing business in Western India and has acquired Vijaya Labs in Chennai, to increase its footprint in South India. Plans to invest in a similar front end-processing laboratory in Kolkotta are also under way.

For further information please contact Mr. Krishna Shetty at kshetty@adlabsfilms.com or call on 022-28423333

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Film Exhibition: Adlabs Cinemas started in the year 2000 with the opening of the world's largest IMAX® dome theatre and a 4 screen Multiplex in Wadala, Mumbai. More than 1.2 million people visit the complex every year. The property has the unique distinction of being a complete family entertainment destination, all under one roof. In 2003, Adlabs opened its 2nd multiplex in Mulund, R-Adlabs, with 4 screens and a seating capacity of 1353. With the opening of Huma Adlabs, Powai, and Rap Adlabs, Ghaziabad, Adlabs Cinemas have a total of 6 properties under operation.

The chart below lists the status of the Multiplexes currently in operation

Existing Multiplexes
Name	Location	City	Screens	Seats
Imax Adlabs	Wadala	Mumbai	5	1,832
R-Adlabs	Mulund	Mumbai	4	1,353
Divya Adlabs	CIDCO	Nashik	3	1,200
Gold Adlabs	Kalyani Nagar	Pune	3	1,109
Huma Adlabs	Kanjurmarg	Mumbai	4	1,263
Aerens R Imax at Rap Adlabs	Sahibabad Industrial Estate	Ghaziabad	4	1,313
Fame Adlabs	Andheri	Mumbai	5	1,282
			28	9,352

The chart below lists the forthcoming projects

Upcoming Multiplexes
Name	City	Screens	Seats	Expected Date
Cineplex Adlabs	Mangalore	3	1076	March-06
Ansal Vaishali Plaza	Ghaziabad	3	1003	March-06
Metro Adlabs	Mumbai	6	1491	April-06
Mangal Adlabs	Indore	4	1102	May-06
Goldspot Adlabs	Hyderabad	4	1362	May-06
Adlabs Palm Beach	New Mumbai	4	1,008	October-06
Himalaya Adlabs	Ahmedabad	5	1,200	October-06
RDB Boulevard	Kolkata	3	1050	December-06
IMAX, Mani Square	Kolkatta	4	1350	December-06
Ansal Mall	Greater Noida	4	1,200	January-07
Gopalan Legacy Adlabs	Bangalore	4	1,100	December-07
Dattani Mall	Thane	4	1100	January-08
Sangam Adlabs	Mumbai	4	1250
R Town	Mumbai	8 to 10	2200
Fortune City Mall	Bangalore	8 to 10	2,200
Ansal Plaza	Gurgaon	3	1,000
Maheshwari - Parmeshwari Adlabs	Hyderabad	5 to 6	1600
RAP, Borivali	Mumbai	4	1250
Rap Mirage	Agra	3	1004
RAP Media Ltd	Amritsar	6	1,700
RAP Media Ltd	Jalandhar	5	1,500
RAP Media Ltd	Ludhiana	7	2,000
RAP Media Ltd	Mohali (Chandigarh)	5	1,500
RAP Metropolitan	Moradabad	3	1016
RAP Media Ltd	Patiala	5	1,450
Little world Mall	Kharghar	4 to 5	1,200
Paras Downtown	Zirakhpur	4	1300
	Total upcoming	122 - 128	36,212

For further information please visit; www.adlabscinemas.com or contact Mr. Mayur Khandeparker at mayurparkar@adlabscinemas.com or call on 022-24036606

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Digital Cinema: Digital Cinema encompasses the production, delivery and projection of full-length motion pictures, trailers, advertisements, and other audiovisuals into "Cinema Quality" programmes to theatres using digital technology. The digital cinema system uses a "store-and-forward" concept to distribute motion pictures which have been digitized, compressed, encrypted and delivered to theatres using either physical media distribution (such as DVD-ROMS) or through other electronic transmission methods (such as satellite).

Most movies in India are released only in the top 45 odd towns (called "A" centers in movie parlance). The upcountry markets must wait their turn as prints are "returned" from these "A" centers a few weeks after the release. However, in the interim, the digital videodisc, (pirated or otherwise) shows cash in on the audience in smaller towns. Adlabs in a 50-50 JV with Mukta Arts (A listed movie production company) named Mukta Adlabs Digital Exhibition Limited (MADEL) has introduced the digital distribution concept since 2003. MADEL has till date covered 52 theatres and is seeking to expand its footprint into several more Indian towns.

For further information please contact Mr. Raj Tilak at rajtilak@vsnl.com or call on 022-28423333

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Film Production: Entertainment One (India) Ltd, is a fully owned subsidiary of Adlabs Films Ltd with its main business centered around Film production. The company "Presents" Feature Films and invests in them and also markets them for distribution all over the world. In some projects it has allied with investing partners to fund the projects.

Following are the projects undertaken by the company so far:

Domestic - Released Films

No	FILM	Banner / Director	Starring	Release Date
1	Gangaajal	Prakash Jha Productions / Prakash Jha	Ajay Devgan, Gracy Singh, Mukesh Tiwari	29-Aug-03
2	Main Madhuri Dixit Banna Chahati Hoon	Varma Corp / Chandan Arora	Antara Mail, Rajpal Yadav	10-Oct-03
3	Inteha	Vishesh Films / Mukesh Bhatt	Ashmit Patel, Vidya Malwade, Nauheed Cyrusi	24-Oct-03
4	Munnabhai MBBS	Vidhu Vinod Chopra Production / Raju Hirani	Sanjay Dutt, Gracy Singh, Lt. Sunil Dutt, Arshad Warsi	19-Dec-03
5	DEV	Udbhav Dreamzone / Govind Nihalani	Amitabh Bachchan, Om Puri, Kareena Kapoor, Fardeen Khan	11-Jun-04
6	WAQT - The Race Against Time	Blockbuster Movie Entertainers / Vipul Shah	Amitabh Bachchan, Akshay Kumar, Priyanka Chopra	22-Apr-05
7	Dil Jo Bhi Kahey	Romesh Films / Romesh Sharma	Amitabh Bachchan, Karan Sharma, Annabelle Wallis	23-Sep-05
8	Apaharan	Prakash Jha Productions / Prakash Jha	Ajay Devgan, Nana Patekar, Bipasha Basu	2-Dec-05
9	Bluff Master	R.S.Entertainment / Rohan Sippy	Abhishek Bachchan, Priyanka Chopra, Ritesh Deshmukh	16-Dec-05
10	TAXI 9 2 11	R.S.Entertainment	Nana Patekar, John Abraham, Sameera Reddy	16-Dec-05
11	Kalyug	Vishesh Entertainment Ltd. / Mohit Suri	Kunal Khemu, Emraan Hashmi	9-Dec-05
12	Shikhar	Cinematt Pictures Pvt. Ltd. / John M Matthan	Ajay Devgan, Bipasha Basu, Sahid Kapoor	30-Dec-05
13	Jawani Diwani	V R Entertainment / Manish Sharma	Emraan Hashmi, Celina Jaitely, Hrishitta Bhatt	6-Jan-06
14	15 Park Avenue	SPS Arts & Entertainement / Aparna Sen	Konkana Sen, Rahul Bose, Shabana Azmi, Waheeda Rehman	6-Jan-06
15	Family	DMS Films & AB Corp / Raj Kumar Santoshi	Amitabh Bachchan, Akshay Kumar, Bhomikha Chawla	13-Jan-06
16	Mixed Doubles	Handmade Films / Rajat Kapoor	Rajat Kapoor, Ranvir Shorey, Konkana Sen	10-Feb-06
17	Humko Tumse Pyaar Hai	Cineyug Films Pvt. Ltd. / Bunty Soorma	Bobby Deol, Amisha Patel, Arjun Rampal	24-Feb-06
18	Teesri Aankh	Baweja Movies Pvt. Ltd / Harry Baweja	Sunny Deol, Amisha Patel, Neha Dhupia	3-Mar-06

Domestic - Films Under Production:

ADLABS Films Ltd. (Export Division)
Sr. No	Name	Producer	Banner	Star Cast	Director	Release Date
1	Gangster	Mukesh Bhatt	Vishesh Films Pvt. Ltd.	Emraan Hashmi, Shaini Ahuja, Kangna, etc	Anurag Bose	Apr-06
2	Janemaan	Sajid Nadiadwala	Nadiadwala Grandson Entertainment P. Ltd.	Salman Khan, Akshay Kumar, Priety Zinta, etc	Shrish Kunder	May-06
3	Killer	Mukesh Bhatt	Vishesh Entertainment Ltd.	Emraan Hashmi, Irfaan Khan, Meera, etc	Hasnain	Jun-06
4	Krrish	Rakesh Roshan	FilmKraft Productions (I) Pvt. Ltd.	Hrithik Roshan, Priyanka Chopra, etc	Rakesh Roshan	Jun-06
5	Showbiz	Mukesh Bhatt	Vishesh Films Pvt. Ltd.	Tushar Jalota, Nisha Rawat	Showbiz	Jul-06
6	Babul	Ravi Chopra	B.R. Films India Pvt. Ltd.	Amitabh Bachchan, Salman Khan, Rani Mukerjee, Hema Malini	Ravi Chopra	Aug-06

Domestic - Films Under Production
No	FILM	Banner / Director	Starring	Tentative Release Date
1	Darwaza Band Rakho	Ramgopal Verma		Apr-06
2	Rooh	Ramesh Sippy		Apr-06
3	Shiva	Ramgopal Verma		Jun-06
4	Shabri	Ramgopal Verma		Jun-06
5	AA Ammai	Ramgopal Verma		Jul-06

International - Films Under Production
No	FILM	Banner / Director	Starring	Tentative Release Date
1	Marigold	Marigold Production Pvt Ltd	Salman Khan, Ali Larter	Aug-06

For further information please visit; www.eoneindia.com or contact Mr. Praveen Nischol at

Division - Processing

Mr. Krishna Shetty

Film City Complex,
Goregaon (E),
Mumbai 400 065

Tel No: 022 - 28423333
Email: krishnas@adlabsfilms.com

Division - Exhibition

Mr. Tushar Dhingra

Imax Adlabs, Bhakti Park,
Anik Wadala Link Road,
Mumbai - 400 037

Tel No: 022 - 24036606
Email: tushar.dhingra@adlabscinemas.com

Division - Radio

Mr. Tarun Katial

Nimbus, 1st Floor, Oberoi Complex,
Opp. Laxmi Plaza, Laxmi Industrial Estate,
Andheri (W), Mumbai 400 053

Tel No: 022 - 26392063
Email: tarun.katial@adlabsradio.com

Division - Overseas Film Distribution

Mr. Sunir Kheterpal / Mr. Madhu Mathena

Film City Complex,
Goregaon (E),
Mumbai 400 065

Tel No: 022 - 28423333
Email: sunir@adlabsfilms.com

Division - Animation

Mr. Sidhartha Jain

Film City Complex,
Goregaon (E),
Mumbai 400 065


Tel No: 022 - 28423333
Email: sid@adlabsfilms.com

Division - Home Entertainment

Ms. Rina Kakkar

782 - 882, 7th and 8th Building
167 Solitaire Corporate Park
167 Harguru Hargovind Road
Chakala Andheri (E), Mumbai - 400093

Tel No: 022 - 28270160
Email: rina.kakkar@adlabscinemas.com

Division - Entertainment One

Mr. Praveen Nischol

Film City Complex,
Goregaon (E),
Mumbai 400 065

Tel No: 022 - 28423333
Email: entertainmentone@rediffmail.com

Shareholding pattern (All Categories)
Distribution of Shareholding as per Clause 35 of the Listing Agreement for the Quarter ended 31/03/2006

	Category	No. of Shares Held	Percentage of Shareholding
A.	Promoter's holding
1.	Promoter's - Indian Promoters (Per Annexure A) - Foreign Promoters	21855000 -	54.91 -
2.	Persons acting in concert	-	-
	Sub – Total	21855000	54.91
B.	Non-Promoters Holding
1.	Institutional Investors:
a.	Mutual Funds and UTI (Per Annexure B)	2064455	5.19
b.	Banks, Financial Institutions, InsuranceCompanies (Central / State Gov.Institutions/Non-government Institutions)	15750	0.04
c.	Foreign Institutional Investors (Per Annexure C)	4446956	11.17
	Sub – Total	6527161	16.40
2.	Others:
a.	Private Corporate Bodies	647242	1.63
b.	Indian Public (Per Annexure D)	10618382	26.68
c.	NRIs / OCBs	64910	0.16
d.	Any other (please specify) Clearing members	88055	0.22
	Sub – Total	11418584	28.69
	GRAND TOTAL	39800750	100.00
	Total Foreign Holding	4511866	11.34

NOTES :
1) Name, number of shares held & percentage of shareholding of entities/persons holding more than 1% of the shares of the Company is as per annexure.

2) Total foreign shareholding is 4511866 equity shares representing 11.34% of the total equity share capital of the Company. The company has not issued any ADR/GDR. At its meeting held on December 8, 2005, the Board of Adlabs Films Limited has approved the issue of Foreign Currency Convertible Bonds (FCCBs) in the international markets upto USD 100 million or equivalent there of subject to all necessary permission, sanctions and approvals.

3) On 31st March 2006 Company allotted 38,00,000 equity shares against conversion of 38,00,000 warrants @ Rs.175.20 per share (Face value Rs. 5/- each) to Reliance Land Private Limited, who are the Indian Promoters.

NET WORTH TO RISE OVER  Rs $.900 CRORES ON FULL CONVERSION OF OUTSTANDING CONVERTIBLE SECURITIES

Mumbai, 8th December 2005: Adlabs Films Ltd. has today successfully concluded an accelerated offering of Foreign Currency Convertible Bonds in the international markets, subject to necessary shareholder and other approvals.

The major highlights of the offering that was heavily over-subscribed by leading institutional investors from across Asia, Europe, and the U.S are:

• Size of approx. EUR 85 million equivalent to approx. US$ 100 million –the largest ever FCCB by any media company, engaged in the production , processing, distribution and exhibition of films in India.

• Maturity period of 5 years.

• No payment of interest for 5 years –zero coupon.

• Conversion price at nearly Rs.550 per share, which represents a premium of over 50 % to the average closing price of the three trading days prior to the offering.

On full conversion of outstanding equity warrants and the FCCBs, the networth of the company would rise to over Rs.900 crores.

The proceeds will be utilized for growth of Adlabs’ various businesses, including production, processing, distribution and exhibition of films, and will further strengthen Adlabs position as the country’s leading integrated media and entertainment company.

Adlabs Films is majority owned by the Relaince Capital group, part of the Anil Dhirubhai Ambani Enterprises. Shri Manmohan Shetty is the Chairman and Managing Director of the company.

Total Income growth of 22%
PAT growth of 43%

1. Adlabs Films Ltd has posted an impressive performance for the quarter ending December 31st FY 05-06.

2. The total income has grown by 22% on a quarter to quarter basis to Rs. 28.47 crores. Similarly the EBIDTA have gone up by 31% to Rs. 13.2 crores and the PAT has gone up by 43% to Rs. 7.17 crores.

3. For the nine month period ended 31st December 2005, the revenues have grown by 16% to Rs. 74.58 crores and the net profit by 30% to Rs. 18.92 crores.

4. To augment long term resources, the company has successfully launched a Euro 84 mn ( $ 100 mn) FCCB issue. The issue has evinced significant investor interest & the listing formalities are in process.

5. Processing
a. Adlabs has maintained its dominant leadership position has maintained its revenues on a q-o-q basis.
b. In tune with the geographical expansion plans for the processing business, the company has commenced its operations in Chennai & a facility in Kolkata is expected to be operationalised shortly.
c. The Adlabs film processing division has met with the standards of the prestigious Kodak ‘Imagecare Program’ for Negative Processing. This has been a prestigious achievement for the lab.

6. Exhibition/Multiplex business
   a. The Multiplex business has posted excellent growth with revenue growing by 66% on a quarter-to-quarter basis.
   b. The company is presently operating 28 screens in 7 properties. An additional 11 screens & 3 properties expected to be operational by March 2006 : Metro in Mumbai, one in the national capital region and one in Mangalore.
   c. An aggressive exhibition expansion continues to be the focus and it is expected that over 100 screens would be operational by fiscal ’08.

7. Film Production and distribution
   a. Income from Film Production has increased to Rs. 114.94 lacs during the period.

8. New Businesses
   a. An aggressive growth plan is being implemented in the new areas in the entire entertainment chain like exploitation of overseas film rights.
   b. The Company has won bids for establishing and operating FM Radio channels as part of the recent FM phase II bidding process. Out of the first two rounds of bidding in a total of four rounds, the company has bagged licenses for 26 FM stations across the country.

BSMA picks 7.5% stake in Adlabs

Their Bureau

Mumbai , April 19

INTERNATIONAL firm BSMA Ltd has acquired a 7.5-per cent stake in Adlabs Films Ltd for $6 million. The investment was made at Rs 150 per share.

The proceeds of this deal will be used towards expansion plans of the multiplex division of Adlabs. The company is targeting to set up 30 multiplexes amounting to 150 screens across India in next 4-5 years.

It is adding 22 screens by the end of 2005 taking the total operating screen count to 40.

It has recently launched Gold Adlabs, a three-screen multiplex in Pune and would be adding Huma Adlabs, a four-screen multiplex situated at Powai, to its multiplex properties in Mumbai in immediate future.

CMT REPORT [Corruption, Money laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.96
UK Pound	1	Rs.83.42
Euro	1	Rs.57.00

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		63

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

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