keynote
StrictlyPrivote & Confidentiol
KEYNOTE Date:June 25th,2OL3
Limited Enterprises ZeeEntertainment L35, Building, Continental Dr.AnnieBesantRoad,Worli, Mumbai- 400018,India Opinionfor the proposedSchemeof ArrangementbetweenZee Entertainment Subject:Fairness Limitedand its EquityShareholders Enterprises DearSirs, with KeynoteCorporateServicesLimited("Keynote"or Thishas a referenceto your discussions of Scheme for the proposed Report") OpinionReport("Fairness the Fairness "we" or "us")regarding its and ("ZEEL" Company") "the or Limited Enterprises ArrangementbetweenZee Entertainment The proposedSchemeof Arrangementis between ZEELand its equity Equity Shareholders. Sharesby way Preference Non-Convertible Redeemable of 6%Cumulative for issuance shareholders ("Proposed Transaction") of Bonusto itsequityshareholders 1) Background Limited Enterorises ZeeEntertainment ZEELis in the media and entertainmentbusinessinter alia of procurement,development, of entertainmenttelevisionsoftware broadcast/ re-broadcast distributionand dissemination, TalentsHunt/ Realityshowsthrough serials, films, feature programmes, includingCinematograph (DTH),InternetProtocolbased Home to Direct or through terrestrialor cablechannels satellite, platforms. anddistribution technologies, andemerging usingexisting deliveries
Patternas on 31-March'20L3 Shareholding Category
of EquityShares Shareholding (%l
Promoter
43.36%
P ublic
s6.64% 50.40%
lnstitutions Fll Dil
47.69% 8.71% 6.24%
Non-lnstitutions SummaryFinancials (Rs,mn.) Financials TotalIncome TotalExpenditure ProfitBeforeTax ProfitAfterTax
FY11 22,310 14,055 8,442 5,764
tYt2
FY13
23,329 15,991 7,338
26,848
4,897
6,407
t7,329 9,519
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Keynote Corporate ServicesLimited
The Ruby, gth Floor, SenapatiBapat Marg, Dadar (West),Mumbai - 400028 Tel.:9L 2230266000. Fax:91 2230266088. Email: [email protected]' Website:www.keynoteindia.net
Strictly Privote & Confidentiol
KEYNOTE 2l Schemeof Arrangement We understandthat the Companyhas been consistently makingprofits and has over the years accumulated significant balancein its Reserves Account(s). TheCompanyexpectsthat its business growth operations will continueon a high trajectoryin comingyearsandgenerateincremental cash flow over the next few years.Thusthe Companyhas concluded that it can optimallyutilizeits surplusreservesby rewardingits EquityShareholders by issuingBonusPreferenceSharesto its equity shareholders, on the occasionof completionof 2Q yearsof its televisionbroadcasting business. Accordingly, the Companyhas decidedto proposethis Schemeof Arrangementbetweenthe Company andits equityshareholders underSection 391readwith Sections 16,94 andotherrelevant provisions of the Act.
3) Scopeof Engagement For the aforesaidpurpose,ZEELhas appointedus to issuea fairnessopinionfor the Proposed Scheme of Arrangement asperthe requirement of SEBI. Thisreportis intendedonlyfor the soleuse and informationof ZEELand only in connection with the Schemeincludingfor the purposeof judicialandregulatory obtaining approvals asmaybe required.
4l Sources of Information We havereliedon the followinginformation in issuing thisfairness opinionreport: 1. Scheme of Arrangement betweenZEEL andits EquityShareholders; 2, AuditedFinancial summaryof ZEEL for the year2010-tt,20Lt-12,2Qt2-!3; 3. Such other information,documents,data, reports,discussionand verbal & written explanations from ZEELas well as advisorsto ZEEL,public domain websites,as were considered relevantfor the purposeof the Fairness Opinion.
5) Our Recommendation As per the Schemeof Arrangement, the Company shallissueand allot by way of bonus,to each equityshareholder whosenameis recorded in the Registrar of Membersof the Company and/orthe recordsof the depository(ies) as equityshareholder of the Company on the RecordDateas maybe decidedby the Boardof Directors of the Company, in the ratioof 21 (TwentyOne)BonusPreference Shares of the facevalueof Re.1/-(One)eachfullypaidup in the Company for everyequityshareof R e .1 ( O n ee) a c hf u l l yp a i du p h e l db y s u c he q u i t ys h a r e h o l d e r . Basedon the factsdiscussed and exclusions & limitationsmentionedhereinbelow,we statethat in our opinionthe Schemeof Arrangement asapprovedby the Boardon Junet4,2OL3for issuance of Preference Sharesto the shareholders of the Companyby ZEEL by way of Bonusis fair.
Page2 of 4
Keynote Corporate ServicesLimited The Ruby, 9th Floor, Senapati Bapat M*& Dadar (West), Mumbai - 400028 Tel.:91,2230266000' Fax:9L 2230266088. Email: [email protected]. Website:www.keynoteindia.net
Strictly Privote & Confidential
KEYNOTE
6) Exclusions and Limitations We have assumedand relied upon, without independentverification,the accuracyand completeness of all information that waspubliclyavailable or providedor otherwisemadeavailable to us by ZEEL for the purposeof thisopinion.Ourworkdoesnot constitute an auditor certification or due diligenceof the workingresults,financialstatements,financialestimatesor estimatesof valueto be realizedfor the assetsof ZEEL. We havesolelyrelieduponthe informationprovidedto us by ZEEL. We havenot reviewedany booksor recordsof ZEEL(otherthan thoseprovidedor made availableto us). We have not assumedany obligationto conduct,nor have we conductedany physicalinspection or title verification of the propertiesor facilitiesof ZEELand neitherexpressany opinionwith respectthereto nor acceptany responsibility therefore.We have not made any independent valuationor appraisalof the assetsor liabilitiesof ZEEL. We havenot reviewedany reports,and, instead,with your internalmanagement informationstatements or any non-public or providedor otherwise consentwe havereliedupon informationwhichwas publiclyavailable madeavailable of to us by ZEEL for the purposeof thisopinion.We arenot expertsin the evaluation litigationor otheractualor threatenedclaimsand hencehavenot commentedon the effectof such litigationor claimson the valuationor on opinion.We are not legal,tax, regulatoryor actuarial We arefinancial verification, advisors. advisors the onlyandhavereliedupon,withoutindependent assessment of ZEEL with respectto thesematters.In addition,we haveassumed that the Schemeof Arrangement will be approvedby the shareholders and the regulatoryauthoritiesand that the proposedtransactionwill be consummated in accordance with the terms set forth in substantially the Scheme of Arrangement. We understand that the management with them wouldhavedrawn of ZEEL duringour discussions our attentionto all suchinformationand matterswhichmay havean impacton our analysis and opinion.We haveassumedthat in the courseof obtainingnecessary regulatoryor otherconsentsor approvals for the Schemeof Arrangement, no restrictions will be imposedthat will havea material adverseeffecton the benefitsof the Proposed Transaction Our that ZEELmay havecontemplated. opinionis necessarily basedon financial, marketand otherconditions economic, as they currently existandon the information madeavailable to usasof the datehereof.lt shouldbe understood that althoughsubsequent developments may affectthis opinion,we do not have any obligationto update,reviseor reaffirmthis opinion.In arrivingat our opinion,we are not authorized to solicit, and did not solicit,interestsfor any partywith respectto the acquisition, business combinationor other extra-ordinary transactioninvolvingZEEL or any of its assets,nor did we negotiatewith any otherpartyin thisregard. We haveactedas a financialadvisorto ZEELfor providinga fairnessopinionon the Schemeof Arrangement and will receivea fee for our services. In the past,Keynoteand its affiliateshavenot providedany financialadvisoryand financingservices to ZEELand their affiliatesand have not received feesfor renderingof the services. In the ordinarycourseof business,Keynoteis a SEBIRegistered CategoryI MerchantBanker, engagedin securitiestrading,securitiesbrokerageand investmentactivities,as well as providing investmentbankingand investmentadvisoryservices.In the ordinary course of its trading, brokerageand financingactivities,any memberof Keynotemay at any time hold long or short positions,and may trade or otherwiseeffecttransactions, for its own accountor the accountsof customers, in debt or equitysecurities or seniorloansof anycompanythat may be involvedin the Proposed Transaction. It is understoodthat this reportis solelyfor the benefitof and useby ZEELfor the purposeof the Proposed Transaction and may not be reliedupon by any other personand may not be usedor Page3 of 4
Keynote Corporate SenricesLimited The Ruby, 9th Floor, Senapati Bapat Mat& Dadar (West), Mumbai - 400028 Tel.:91 2230266000 ' Fax:91 2230266088 . Email: [email protected]. Website:www.keynoteindia.net
Strictly Privote & Confidential
KEYNOTE disclosed for any other purposewithout our prior written consent.The opinionis not meantfor meetinganyotherregulatory or disclosure requirements, saveandexceptasspecified above,under anyIndianor foreignlaw,Statute,Act,guideline or similarinstruction. Theletteris onlyintendedfor the aforementioned specificpurposeand if it is usedfor anyotherpurpose;we will not be liablefor anyconsequences thereof. We expressno opinionwhateverand make no recommendation at all as to ZEEL'sunderlying decisionto effectto the ProposedTransaction or as to how the holdersof equitysharesof ZEEL shouldvote at their respective meetingsheld in connection with the Proposed Transaction. We do not expressand shouldnot be deemedto haveexpressed any viewson any other terms of the Proposed Transaction. We alsoexpressno opinionand accordingly acceptno responsibility for or as prices to the at which the equitysharesof ZEELwill trade followingthe announcement of the Proposed Transaction or asto the financialperformance of ZEELfollowing the consummation of the Proposed Transaction. In no circumstances however,will KeynoteCorporate Services Limitedor its associates, directorsor employees acceptanyresponsibility party or liabilityto anythird andin the unforeseen eventof any suchresponsibility or liabilitybeingimposedon KeynoteCorporate Services Limitedor its associates, directors or employees by anythirdparty,ZEEL andtheiraffiliates shallindemnify them.
Thanks& BestRegards, ForKEYNOTE CORPORATE SERVICES LTD.
Executive VicePresident SEBIRegistrationNo. 1NM000003606 (MerchantBanker)
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Keynote Corporate SenricesLimited The Ruby,9th Floor, SenapatiBapat M*& Dadar (West),Mumbai - 400028 Tel.:9L 2230266000 ' Fax:91 2230256088 . Email: [email protected]. Website:www.keynoteindia.net
KEYNOTE Date:June 25th,2OL3
Limited Enterprises ZeeEntertainment L35, Building, Continental Dr.AnnieBesantRoad,Worli, Mumbai- 400018,India Opinionfor the proposedSchemeof ArrangementbetweenZee Entertainment Subject:Fairness Limitedand its EquityShareholders Enterprises DearSirs, with KeynoteCorporateServicesLimited("Keynote"or Thishas a referenceto your discussions of Scheme for the proposed Report") OpinionReport("Fairness the Fairness "we" or "us")regarding its and ("ZEEL" Company") "the or Limited Enterprises ArrangementbetweenZee Entertainment The proposedSchemeof Arrangementis between ZEELand its equity Equity Shareholders. Sharesby way Preference Non-Convertible Redeemable of 6%Cumulative for issuance shareholders ("Proposed Transaction") of Bonusto itsequityshareholders 1) Background Limited Enterorises ZeeEntertainment ZEELis in the media and entertainmentbusinessinter alia of procurement,development, of entertainmenttelevisionsoftware broadcast/ re-broadcast distributionand dissemination, TalentsHunt/ Realityshowsthrough serials, films, feature programmes, includingCinematograph (DTH),InternetProtocolbased Home to Direct or through terrestrialor cablechannels satellite, platforms. anddistribution technologies, andemerging usingexisting deliveries
Patternas on 31-March'20L3 Shareholding Category
of EquityShares Shareholding (%l
Promoter
43.36%
P ublic
s6.64% 50.40%
lnstitutions Fll Dil
47.69% 8.71% 6.24%
Non-lnstitutions SummaryFinancials (Rs,mn.) Financials TotalIncome TotalExpenditure ProfitBeforeTax ProfitAfterTax
FY11 22,310 14,055 8,442 5,764
tYt2
FY13
23,329 15,991 7,338
26,848
4,897
6,407
t7,329 9,519
Page1 of 4
Keynote Corporate ServicesLimited
The Ruby, gth Floor, SenapatiBapat Marg, Dadar (West),Mumbai - 400028 Tel.:9L 2230266000. Fax:91 2230266088. Email: [email protected]' Website:www.keynoteindia.net
Strictly Privote & Confidentiol
KEYNOTE 2l Schemeof Arrangement We understandthat the Companyhas been consistently makingprofits and has over the years accumulated significant balancein its Reserves Account(s). TheCompanyexpectsthat its business growth operations will continueon a high trajectoryin comingyearsandgenerateincremental cash flow over the next few years.Thusthe Companyhas concluded that it can optimallyutilizeits surplusreservesby rewardingits EquityShareholders by issuingBonusPreferenceSharesto its equity shareholders, on the occasionof completionof 2Q yearsof its televisionbroadcasting business. Accordingly, the Companyhas decidedto proposethis Schemeof Arrangementbetweenthe Company andits equityshareholders underSection 391readwith Sections 16,94 andotherrelevant provisions of the Act.
3) Scopeof Engagement For the aforesaidpurpose,ZEELhas appointedus to issuea fairnessopinionfor the Proposed Scheme of Arrangement asperthe requirement of SEBI. Thisreportis intendedonlyfor the soleuse and informationof ZEELand only in connection with the Schemeincludingfor the purposeof judicialandregulatory obtaining approvals asmaybe required.
4l Sources of Information We havereliedon the followinginformation in issuing thisfairness opinionreport: 1. Scheme of Arrangement betweenZEEL andits EquityShareholders; 2, AuditedFinancial summaryof ZEEL for the year2010-tt,20Lt-12,2Qt2-!3; 3. Such other information,documents,data, reports,discussionand verbal & written explanations from ZEELas well as advisorsto ZEEL,public domain websites,as were considered relevantfor the purposeof the Fairness Opinion.
5) Our Recommendation As per the Schemeof Arrangement, the Company shallissueand allot by way of bonus,to each equityshareholder whosenameis recorded in the Registrar of Membersof the Company and/orthe recordsof the depository(ies) as equityshareholder of the Company on the RecordDateas maybe decidedby the Boardof Directors of the Company, in the ratioof 21 (TwentyOne)BonusPreference Shares of the facevalueof Re.1/-(One)eachfullypaidup in the Company for everyequityshareof R e .1 ( O n ee) a c hf u l l yp a i du p h e l db y s u c he q u i t ys h a r e h o l d e r . Basedon the factsdiscussed and exclusions & limitationsmentionedhereinbelow,we statethat in our opinionthe Schemeof Arrangement asapprovedby the Boardon Junet4,2OL3for issuance of Preference Sharesto the shareholders of the Companyby ZEEL by way of Bonusis fair.
Page2 of 4
Keynote Corporate ServicesLimited The Ruby, 9th Floor, Senapati Bapat M*& Dadar (West), Mumbai - 400028 Tel.:91,2230266000' Fax:9L 2230266088. Email: [email protected]. Website:www.keynoteindia.net
Strictly Privote & Confidential
KEYNOTE
6) Exclusions and Limitations We have assumedand relied upon, without independentverification,the accuracyand completeness of all information that waspubliclyavailable or providedor otherwisemadeavailable to us by ZEEL for the purposeof thisopinion.Ourworkdoesnot constitute an auditor certification or due diligenceof the workingresults,financialstatements,financialestimatesor estimatesof valueto be realizedfor the assetsof ZEEL. We havesolelyrelieduponthe informationprovidedto us by ZEEL. We havenot reviewedany booksor recordsof ZEEL(otherthan thoseprovidedor made availableto us). We have not assumedany obligationto conduct,nor have we conductedany physicalinspection or title verification of the propertiesor facilitiesof ZEELand neitherexpressany opinionwith respectthereto nor acceptany responsibility therefore.We have not made any independent valuationor appraisalof the assetsor liabilitiesof ZEEL. We havenot reviewedany reports,and, instead,with your internalmanagement informationstatements or any non-public or providedor otherwise consentwe havereliedupon informationwhichwas publiclyavailable madeavailable of to us by ZEEL for the purposeof thisopinion.We arenot expertsin the evaluation litigationor otheractualor threatenedclaimsand hencehavenot commentedon the effectof such litigationor claimson the valuationor on opinion.We are not legal,tax, regulatoryor actuarial We arefinancial verification, advisors. advisors the onlyandhavereliedupon,withoutindependent assessment of ZEEL with respectto thesematters.In addition,we haveassumed that the Schemeof Arrangement will be approvedby the shareholders and the regulatoryauthoritiesand that the proposedtransactionwill be consummated in accordance with the terms set forth in substantially the Scheme of Arrangement. We understand that the management with them wouldhavedrawn of ZEEL duringour discussions our attentionto all suchinformationand matterswhichmay havean impacton our analysis and opinion.We haveassumedthat in the courseof obtainingnecessary regulatoryor otherconsentsor approvals for the Schemeof Arrangement, no restrictions will be imposedthat will havea material adverseeffecton the benefitsof the Proposed Transaction Our that ZEELmay havecontemplated. opinionis necessarily basedon financial, marketand otherconditions economic, as they currently existandon the information madeavailable to usasof the datehereof.lt shouldbe understood that althoughsubsequent developments may affectthis opinion,we do not have any obligationto update,reviseor reaffirmthis opinion.In arrivingat our opinion,we are not authorized to solicit, and did not solicit,interestsfor any partywith respectto the acquisition, business combinationor other extra-ordinary transactioninvolvingZEEL or any of its assets,nor did we negotiatewith any otherpartyin thisregard. We haveactedas a financialadvisorto ZEELfor providinga fairnessopinionon the Schemeof Arrangement and will receivea fee for our services. In the past,Keynoteand its affiliateshavenot providedany financialadvisoryand financingservices to ZEELand their affiliatesand have not received feesfor renderingof the services. In the ordinarycourseof business,Keynoteis a SEBIRegistered CategoryI MerchantBanker, engagedin securitiestrading,securitiesbrokerageand investmentactivities,as well as providing investmentbankingand investmentadvisoryservices.In the ordinary course of its trading, brokerageand financingactivities,any memberof Keynotemay at any time hold long or short positions,and may trade or otherwiseeffecttransactions, for its own accountor the accountsof customers, in debt or equitysecurities or seniorloansof anycompanythat may be involvedin the Proposed Transaction. It is understoodthat this reportis solelyfor the benefitof and useby ZEELfor the purposeof the Proposed Transaction and may not be reliedupon by any other personand may not be usedor Page3 of 4
Keynote Corporate SenricesLimited The Ruby, 9th Floor, Senapati Bapat Mat& Dadar (West), Mumbai - 400028 Tel.:91 2230266000 ' Fax:91 2230266088 . Email: [email protected]. Website:www.keynoteindia.net
Strictly Privote & Confidential
KEYNOTE disclosed for any other purposewithout our prior written consent.The opinionis not meantfor meetinganyotherregulatory or disclosure requirements, saveandexceptasspecified above,under anyIndianor foreignlaw,Statute,Act,guideline or similarinstruction. Theletteris onlyintendedfor the aforementioned specificpurposeand if it is usedfor anyotherpurpose;we will not be liablefor anyconsequences thereof. We expressno opinionwhateverand make no recommendation at all as to ZEEL'sunderlying decisionto effectto the ProposedTransaction or as to how the holdersof equitysharesof ZEEL shouldvote at their respective meetingsheld in connection with the Proposed Transaction. We do not expressand shouldnot be deemedto haveexpressed any viewson any other terms of the Proposed Transaction. We alsoexpressno opinionand accordingly acceptno responsibility for or as prices to the at which the equitysharesof ZEELwill trade followingthe announcement of the Proposed Transaction or asto the financialperformance of ZEELfollowing the consummation of the Proposed Transaction. In no circumstances however,will KeynoteCorporate Services Limitedor its associates, directorsor employees acceptanyresponsibility party or liabilityto anythird andin the unforeseen eventof any suchresponsibility or liabilitybeingimposedon KeynoteCorporate Services Limitedor its associates, directors or employees by anythirdparty,ZEEL andtheiraffiliates shallindemnify them.
Thanks& BestRegards, ForKEYNOTE CORPORATE SERVICES LTD.
Executive VicePresident SEBIRegistrationNo. 1NM000003606 (MerchantBanker)
Page4 of 4
Keynote Corporate SenricesLimited The Ruby,9th Floor, SenapatiBapat M*& Dadar (West),Mumbai - 400028 Tel.:9L 2230266000 ' Fax:91 2230256088 . Email: [email protected]. Website:www.keynoteindia.net
