Strictly Private Confidential Restructuring for Value Enhancement November

Strictly Private & Confidential Restructuring for Value Enhancement November 2008 Presented By: S. Subramanian Ph. D. Head of Investment Banking, ENAM Securities Pvt. Ltd.

Agenda ENAM About Restructuring Case Study - Value Creation through listing Nicholas Piramal India Ltd Reliance Industries Ltd Bharat Forge Other Cases Case Study – Control & Ownership Sterlite TV 18 India Limited Strictly Private & Confidential 1

Multiple Champion Teams = India’s Leading Investment Bank Highest QIB mobilizer in 2005, 2006, 2007 and 2008 Services all key institutional investors around the world n Ranked #1 Domestic Brokerage by Asset Asian Equities Benchmark Survey (in ’ 04 and ’ 05) n Ranked #1 Domestic Brokerage House by Asia. Money polls n Strong relations with global and domestic institutions n n Award Winning Investment Bank (Asia. Money, Finace. Asia, Outlook. Money) n Trusted advisors to some of India’s most admired business n Ranked No 1 on the Equity Offering League Table for FY 08 (Source: Primedatabase) n M&A and Advisory Team gaining momentum No 1 position in Retail & HNI equity distribution with nearly 26% market share and consistent rank for several years n Unparalleled reach in the domestic primary market over 2, 50, 000 retail investors through 3, 000 active sub brokers, spanning 170 towns/cities in India n Investment Bank Institutional Sales Retail AMC Proprietary Investments Corporate Finance Broking Enam Direct Wealth Management Treasury Advisory Private Equity Outperformed all key indices every year in the last 7 years n Delivered 28. 3% CAGR return sinception (BSE Index 17. 2%) n Only service provider in India to achieve this track record n n M&A Private Equity n Opinion maker across multiple investment approaches (Emerging, Value, Growth, Event-Linked) Distribution Insurance Broking Research “Pioneers of equity research in India” (Business India) Wide global distribution; read by over 700 institutions around the world n Broad coverage (150+ companies, All the key sectors) Publish over 300 reports annually n n Strictly Private & Confidential 2 Source : Prime database, Index of Performance Rankings

Enam : At the Vanguard of India’s Evolution 1980 s Pre-Liberalisation Era of Import. Substitution 1990 s Era of Services Brains & Brands Late 1990 s - Early 2000 s Era of Restructuring and Privatization Mid 2000 s Era of Consumerism, Infrastructure, Realty … Growth Enam is early to spot fundamental trends, anticipate and service client needs and benefit from it Strictly Private & Confidential 3

Agenda ENAM About Restructuring Case Study - Value Creation through listing Nicholas Piramal India Ltd Reliance Industries Ltd Bharat Forge Other Cases Case Study – Control & Ownership Sterlite TV 18 India Limited Strictly Private & Confidential 4

Introduction n Corporate restructuring encompasses two distinct groups of activities; Business Restructuring: n Expansions – including mergers and consolidations, tender offers, joint ventures, and acquisitions; n Contraction – including sell offs, spin offs, equity carve outs, abandonment of assets, and liquidation. Financial Restructuring: n Value Re-engineering - Subsidiarisation, De-subsidiarisation. n Ownership and control – including the market for corporate control, stock repurchases program, exchange offers and going private; Strictly Private & Confidential 5

Does Restructuring create value? The key principle behind corporate restructuring is to create shareholder value over and above that of the sum of the parts. Corporate Restructuring creates value only if: Value of the combined entity as a result of the corporate restructuring is greater than the sum of value of individual companies. C>A+B Value creation C<= A + B Value destruction Strictly Private & Confidential 6

Value Creation through listing of distinct businesses Objective § To list the shares of subsidiary company through allotment of shares of subsidiary company to the shareholders of parent company pursuant to a scheme of arrangement. Single Business Entity Multiple Business Entity Shareholders X Co. (Parent) Listed Unlisted Listed 100% A Co. (Subsidiary) Tea business B Co. (Subsidiary) Steel Business C Co. (Subsidiary) Telecom Business Unlisted Listed Stake held Issue of consideration Strictly Private & Confidential X Co. (Parent) Listed 100% Y Co. (Subsidiary) Shareholders Distribution of shares of A, B, & C Co. to the shareholders of X Co. pursuant to a scheme of arrangement X Co. (Parent) Listed 100% Y Co. (Subsidiary) Shareholders Distribution of shares of Y Co. to the shareholders of X Co. pursuant to a scheme of arrangement 7

Alternative Routes n n n Formation of a special purpose company (SPV) – A 100% subsidiary of parent company Transfer investments (shares of Y Co. ) from parent company to SPV pursuant to a scheme of arrangement and get shares of SPV listed Alternative 1 A - Merge SPV into Y Co. at a later point in time and get Y Co. shares listed or Alternative 1 B – Merge Y Co. into the SPV at a later point in time, to be decided depending on tax and cost efficiency. Alternative 2 –Let only SPV remain listed without any merger. Alternative 1 is preferred purely from an administrative convenience rather than from a shareholder value perspective. Alternative 1 Transfer of Investments to SPV* Alternative 1 A Alternative 1 B Shareholders Parent Co Formation of SPV Listed 100% Issue of Shares in Consideration 100% Listed SPV Unlisted Y Co SPV Listed SPV Y Co Listed Unlisted - Merge SPV into Y Co, and get Y Co. shares listed Y Co - As consideration Y Co issues shares to shareholders of SPV i. e. Parent Co and its shareholders Unlisted *Structure under Alternative 2 shall be similar Strictly Private & Confidential Y Co. to merge into SPV to merge into Y Co. Transfer of investment 8 Listed Issue of Shares in Consideration SPV Y Co Listed - Merge Y Co, into SPV - Investment of SPV in Y Co will get cancelled. No further shares will be issued

Agenda ENAM About Restructuring Case Study - Value Creation through listing Nicholas Piramal India Ltd Reliance Industries Ltd Bharat Forge Other Cases Case Study – Control & Ownership Sterlite TV 18 India Limited Strictly Private & Confidential 9

Case Study - Nicholas Piramal India Ltd n Scheme of Arrangement between Nicholas Piramal India Ltd. (NPIL) and Kojam Fininvest Ltd. (KFL) for transfer of 53. 76% stake of Gujarat Glass Private Ltd. (GGPL) held by NPIL to KFL n Appointed Date – 01 st July 2003, Effective Date – 22 nd December 2003 Prior to Scheme of Arrangement Prior to the Appointed Date Pursuant to a Scheme of Arrangement KFL Merged into GGL in 2007 Shareholders NPIL Listed 53. 76% Listed 100% 0. 5% 0. 28% Unlisted GGPL KFL 53. 76% Unlisted GGL* KFL Listed Issue of Shares in Consideration n KFL was incorporated on 30 th June 2003 with a paid up capital of Rs. 5 Lakhs as a wholly owned subsidiary of NPIL Strictly Private & Confidential n NPIL transferred its stake in GGPL to KFL pursuant to a scheme of arrangement at book value n KFL issued its shares to the shareholders of NPIL in the ratio of 1: 4 as consideration of such transfer and got listed 10 Listed n KFL was merged into GGL in 2007 pursuant to a scheme of Amalgamation n The shares of GGL held by KFL were cancelled pursuant to such amalgamation n GGL issued its shares to the shareholders of KFL in the ratio of 1: 1 n GGL shares were listed in February 2008 *The company was converted into a public ltd. company in March 2007

Case Study - Nicholas Piramal India Ltd Pre-Demerger Post-Demerger Present Market Cap. EQ ( In Crs. ) 38 NICHOLAS PIRAMAL Price-June 03 62 EQ ( In Crs. ) 38 GGL @ 68 Market Cap. 1, 177 Listing Price 130 Total 4, 978 Sensex 3, 793 Nicholas Piramal - Market Cap. 2, 470 Sensex (Nov 4, 2008) 10, 631 Sensex 4, 709 Market Cap ( x ) KFL EQ ( In Crs. ) 10 Listing Price 40 Market Cap. 40 Sensex 4, 709 Total Market Cap. On Demerger 2510 Incremental Market Cap % Wealth Creation Strictly Private & Confidential Nicholas Piramal @ 235 11 1, 333 113. 3% 4, 910 68 4. 2

Agenda ENAM About Restructuring Case Study - Value Creation through listing Nicholas Piramal India Ltd Reliance Industries Ltd Bharat Forge Other Cases Case Study – Control & Ownership Sterlite TV 18 India Limited Strictly Private & Confidential 12

Case Study - Reliance Industries Ltd n As per the Scheme of De-merger, business of RIL was segregated into five undertakings as illustrated below. These undertakings were hived off into four subsidiaries. Each of these subsidiaries issued its shares to the shareholders of RIL in the ratio of 1: 1 n Appointed date – 01 st September 2005, Effective date – 21 st December 2005, Record date – 25 th January 2005 Reliance Industries Ltd Shareholders Reliance Industries Ltd Coal based energy Undertaking ASSETS Building at Goa Shares in Reliance Energy Reliance Power Hirma Power Pvt Ltd Jayamkondam Power Pvt Ltd Rleiance Thermal Energy Pvt Ltd Gas based energy Undertaking ASSETS Building at Bandra (E), Mumbai Shares in Reliance Patalganga Power Ltd Liabilities Related Loans Reliance Energy Ventures Ltd Strictly Private & Confidential Financial Services Undertaking ASSETS Building in New Delhi Shares in Reliance Capital Reliance General Insurance Reliance Life Insurance Liabilities Related Loans Telecom Undertaking ASSETS Building, Plant & Machinery, Vehicles and Equipment located at various locations Receivables for capital leases Shares in Reliance Communication Infrastructure Reliance Telecom Reliance Infocomm World Tel holding Ltd Preference shares of Reliance Telecomm Liabilities Related Loans Reliance Natural Resources Ltd (formerly Global Fuel Management Services Ltd. ) Reliance Capital Ventures Ltd 13 Remaining Undertaking Reliance Communications Ventures Ltd Petrochemicals, Oil & Gas, Textiles and other business

Case Study - Reliance Industries Ltd (Contd) n Scheme of Arrangement between Reliance Industries (RIL) and Reliance Capital Ventures Ltd. (RCVL) for demerger of financial services undertaking to RCVL n Scheme of Arrangement between RCVL and Reliance Capital Ltd (RCL) for amalgamation of RCVL with RCL n Demerger Scheme - Appointed Date – 01 st September 2005, Effective Date – 21 nd December 2005 Prior to Schemes of Arrangement Pursuant to Scheme of De-merger Pursuant to Scheme of Amalgamation Shareholders RIL RIL Listed De-merger of Financial Services Undertaking 42. 70% RCL Listed 42. 70% Listed RCVL Issue of Shares in Consideration Listed RCVL merged into RCL RCVL Listed Issue of Shares in Consideration - RCVL was incorporated on 3 rd September 2004 and the financial services undertaking of RIL was transferred through the scheme of demerger to RCVL - RCVL issued its shares to the shareholders of RIL in the ratio of 1: 1 as consideration of such transfer - RCVL got listed through the scheme of demerger Strictly Private & Confidential 14 - RCVL was merged into RCL in 2006 pursuant to a scheme of Amalgamation - RCVL shareholding in RCL was cancelled pursuant to such amalgamation - RCVL shareholders received shares of RCL in the ratio of 5: 100

Case Study - Reliance Industries Ltd (Contd) • Scheme of Arrangement between Reliance Industries (RIL) and Reliance Natural Resources Ltd. (RNRL) for de-merger of gas based energy undertaking to RNRL • De-merger Scheme - Appointed Date – 01 st September 2005, Effective Date – 21 nd December 2005 Prior to Scheme of Arrangement Pursuant to a Scheme of De-merger Shareholders RIL RIL Listed Post Scheme of De-merger Listed 100% RNRL Unlisted Reliance Patalganga Power Ltd Issue of Shares in Consideration 100% Strictly Private & Confidential Listed RNRL Listed - RNRL was incorporated on 24 th April 2000 with a paid up capital of Rs. 5 Lakhs as a wholly owned subsidiary of RIL RNRL - RNRL issued its shares to the shareholders of RIL in the ratio of 1: 1 as consideration of such transfer - RNRL shares were be listed pursuant to such scheme - RIL Shareholding in RNRL was cancelled pursuant to the scheme 15 Reliance Patalganga Power Ltd

Case Study - Reliance Industries Ltd (Contd) Pre-Demerger Present Market Cap. Post-Demerger RIL RELIANCE Inds. RIL @1455. 20 229, 018 RCOM @250 51, 704 EQ ( In Crs. ) 1, 394. 15 EQ ( In Crs. ) 1394. 2 Price-Jan '06 850 Listing Price 730 RNRL @56 9, 088 Market Cap. 118, 490 Market Cap. 101, 762 RCAP @740 18, 154 Sensex 10, 370 Sensex 10, 735 Total RELIANCE CAPITAL Sensex (Nov 4, 2008) RELIANCE COMMUNICATION EQ ( In Crs. ) 245. 63 EQ ( In Crs. ) 611. 5 Price-Jan '06 450 Listing Price 300 Market Cap. 9, 950 Market Cap. 36, 660 Sensex 10, 370 Sensex 10, 735 RNRL EQ ( In Crs. ) 611. 57 Listing Price 17. 5 Market Cap. 2, 269 Sensex 10, 565 RELIANCE CAPITAL Strictly Private & Confidential Listing Price 500 Market Cap. 10, 436 Sensex 10, 735 Total Market Cap. - Demerger 151, 127 Incremental Market Cap. 22, 687 % Wealth Creation 19. 1% 16 Market Cap ( x ) - Since Jan'06 307, 964 10, 631 2. 6

Agenda ENAM About Restructuring Case Study - Value Creation through listing Nicholas Piramal India Ltd Reliance Industries Ltd Bharat Forge Other Cases Case Study – Control & Ownership Sterlite TV 18 India Limited Strictly Private & Confidential 17

Case Study - Bharat Forge n Bharat Forge – Significant Group Company holdings and non core assets n BF Utilities – All businesses apart from forging business demerged into BF Utilities Post-Demerger Pre-Demerger BHARAT FORGE EQ ( In Crs. ) 18. 83 Price – Aug 01 12 Listing Price Market Cap. 250 Market Cap. Sensex 2, 812 Sensex BHARAT FORGE @ 110 2, 417 10 BF UTILITIES @ 735 2, 770 200 Total 5, 187 Sensex (Nov 4, 2008) 10, 631 3, 279 BF UTILITIES LTD Listing Price 18 Market Cap. 54 Sensex 3, 279 Total Market Cap. - Demerger Incremental Market Cap. % Wealth Creation Strictly Private & Confidential Present Market Cap. 18 254 4 2% Market Cap ( x ) - Since Aug 01 20. 7

Agenda ENAM About Restructuring Case Study - Value Creation through listing Nicholas Piramal India Ltd Reliance Industries Ltd Bharat Forge Other Cases Case Study – Control & Ownership Sterlite TV 18 India Limited Strictly Private & Confidential 19

Some more cases…. ZEE Telefilms Pre-Demerger EQ ( In Crs. ) Price - Dec ' 06 Market Cap. Sensex 43. 35 300 12, 990 14, 090 Post-Demerger ZEE Entertainment EQ ( In Crs. ) Listing Price Market Cap. Sensex WWIL EQ ( In Crs. ) Listing Price Market Cap. Sensex ZEE News EQ ( In Crs. ) Listing Price Market Cap. Sensex DISH TV EQ ( In Crs. ) Listing Price Market Cap. Sensex Total Market Cap. - on Demerger % Wealth Creation Present Market Cap. ZEE Entertainment @ 154 WWIL @13 Zee News @ 40 Dish TV @ 18 Total Sensex (Nov 4, 2008) Market Cap ( x ) - Since Dec. 06 Strictly Private & Confidential 43. 36 275 11, 924 13, 362 21. 72 130 2, 824 13, 362 23. 98 40 959. 2 13, 362 42. 82 110 4710. 2 13, 362 20, 417 57. 2% 6, 684 273 944 1, 682 9, 583 10, 631 0. 7 GE Shipping GTL Pre-Demerger EQ ( In Crs. ) 190. 34 EQ ( In Crs. ) 85. 69 Price June 06 240 Price -July 06 140 Market Cap. 4, 567 Market Cap. 1, 198 Sensex 11, 699 Sensex 10, 744 Post-Demerger GE SHIPPING EQ ( In Crs. ) 152. 27 EQ ( In Crs. ) 85. 3 Listing Price 225 Listing Price 150 GE Shipping - Market Cap. 3424. 5 Market Cap. 1, 280 Sensex 13, 385 Sensex 13, 137 GREAT OFFSHORE GTL Infra. EQ ( In Crs. ) 38. 12 EQ ( In Crs. ) 320 Listing Price 730 Listing Price 25 Market Cap. 2781. 3 Market Cap. 800 Sensex 13, 385 Sensex 13, 137 Total Market Cap. On Demerger 6205. 8 Total Market Cap. On Demerger 2079. 5 Incremental Market Cap Attained 1638. 6 Incremental Market Cap Attained 881. 1 % Wealth Creation 35. 9% % Wealth Creation 73. 5% Present Market Cap. GE Shipping @ 210 3, 212 GTL @ 196 1, 855 Great Offshore @ 337 1, 253 GTL Infra. @ 38 2, 964 Total 4, 464 Total 4, 819 Sensex (Nov 4, 2008) 10, 631 Market Cap ( x ) - Since June ' 06 20 1. 0 Market Cap ( x ) - Since July 06 4. 0

Agenda ENAM About Restructuring Case Study - Value Creation through listing Nicholas Piramal India Ltd Reliance Industries Ltd Bharat Forge Other Cases Case Study – Control & Ownership Sterlite TV 18 India Limited Strictly Private & Confidential 21

Case Study - Sterlite Listing 1993 1997 2000 2002 Aug 2007 Rights cum Public Issue Merger of Sterlite communications with Sterlite Demerger of Sterlite optic from Sterlite Acquisition of HZL from Go. I ADR $2 bn 1993 1996 1997 1998 2000 2001 2002 2003 1996 Sterlite Communications IPO Setup as a subsidiary Strictly Private & Confidential 1998 2001 2003 Indal Hostile takeover bid Acquisition of Balco from Go. I $1 bn Vedanta Listing 22 2007

Three Tier Structure Vedanta Sterlite Balco Hind Zinc Sterlite Energy Copper Mines Strictly Private & Confidential 23 Vedanta Alumina

Creating Value for Promoter Holding Mar-01 Mar-02 Mar-03 Mar-04 Indian Promoters 1. 5% 0. 0% Malco 0. 0% 4. 6% 7. 1% 35. 4% PAC 1. 6% Employee Trust Twinstar Holding Total Market Cap (Rs. Crs) Events Strictly Private & Confidential Mar-05 Mar-06 Mar-07 Mar-08 7. 1% 4. 7% 4. 6% 3. 61% 55. 1% 60. 2% 73. 6% 72. 3% 56. 98% 1. 6% 4. 3% 4. 0% 0. 0% 7. 4% 11. 5% 7. 0% 3. 2% 2. 51% 38. 5% 50. 4% 78. 1% 78. 3% 81. 5% 80. 0% 80. 1% 63. 1% 167 228 210 576 1606 4569 26158 50579 EWT+ Malco+ Buyback Creeping Rights 24 ADR

Agenda ENAM About Restructuring Case Study - Value Creation through listing Nicholas Piramal India Ltd Reliance Industries Ltd Bharat Forge Other Cases Case Study – Control & Ownership Sterlite TV 18 India Limited Strictly Private & Confidential 25

Case Study - TV 18 India Limited n Objective ¨ n Consolidate their media business which creates a Group structure (and reorganize capital its own capital) that is expected to unlock significant shareholder value. Pre Scheme Scenario ¨ “CNBC Awaaz” and the general news English Channel – “CNN IBN” were held in promoter entities & legally not part of the listed entity, due to government restrictions TV 18 India Limited Promoter owned Holding company CNBC TV 18 – English business news channel Awaaz – Hindi Business and Consumer Channel Moneycontrol. com – Financial portal IBN – General News Channel(s)+ Portals Commoditiescontrol. com –Commodity info portal n ¨ August 22, 2003 News Uplinking Guidelines- ¨ Eligibility criteria for an applicant company desirous of uplinking news and current affairs TV channel(s) from India n It is registered / incorporated in India under the Companies Act, 1956; n Foreign direct investment in the applicant company does not exceed 26% of the total paid up capital * n Indian shareholder to hold at least 51% of the total equity (excluding the equity held by Public Sector Banks and Public Financial Institutions as defined in section 4 A of the Companies Act, 1956) in the new entity n TV 18 was non compliant and hence would not have got necessary licenses to operate the business; its current license on CNBC-TV 18 was under threat Reason for proposed restructuring ¨ Compliance with uplinking norms ¨ Forced restructuring allows opportunity to consolidate businesses for TV 18 Shareholders Strictly Private & Confidential 26

Case Study - TV 18 India Limited (cont’d) n Scheme ¨ Demerger of Media Investment Undertaking ¨ Merger of Indian News Business Undertaking of SGA News Limited n ¨ Consolidation of both AWAAZ and CNN IBN Channels Existing shareholder of TV 18 holding 10 shares of face value Rs 10 each would end up with n 12 shares of face value Rs 5 each in Network Ltd 14 shares of face value Rs 5 each in TV 18. Shareholders of SGA News for every 1 equity share of face value of Rs 10 each would get 3. 67 shares of face value of Rs 5 each to n ¨ ¨ n Mr. Raghav Bahl transferred 2, 868, 225 Equity shares of face value Rs. 10/- per share (Prior to the Record date) to Network 18 Media and Investments Limited pursuant to the Scheme Implications ¨ Creation of 2 listed entities n Network 18 would be the holding company for strategic and financial group investments and TV 18 would act as the operating company n No effective dilution for TV 18 Shareholders n 30% Reduction in capital n Funding Options for Growth improve manifold Strictly Private & Confidential 27

Case Study - TV 18 India Limited (cont’d) Pre-Demerger Post-Demerger Present Market Cap. EQ ( In Crs. ) 26. 20 TV 18 @ 85 Price - Sep'06 600 EQ ( In Crs. ) 28. 28 Market Cap. 1, 572 Listing Price 630 Sensex 12, 962 Market Cap. Sensex 1, 610 3, 553 Sensex (Nov 4, 2008) 10, 631 14, 403 Market Cap ( x ) - Since Sep. 06 EQ ( In Crs. ) 25. 43 Listing Price 300 Market Cap. 1, 524 Sensex 14, 403 Total Market Cap. - Demerger 5, 077 Incremental Market Cap. 3, 505 % Wealth Creation 223% 28 610 Total NETWORK 18 Strictly Private & Confidential NW 18 @ 100 1, 000 1. 0

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