Adlabs

International Marketing

Agenda

1.Adlabs 2.Highlights 3.Key Players4.Established Leader5.International Portfolio6.Footprints in international marketing7.Business

a. Production & Distributionb. Televisionc. Filmsd. Big FM Radio

8.SWOT Analysis9.Future Plans

Founder

• Manmohan Shetty founded Adlabs in 1975

Adlabs Films Limited, a member of the Reliance Anil Dhirubhai Ambani Group, is India’s fastest growing film and entertainment services company

Adlabs has a dominant and comprehensive presence in Film Services: Motion Picture Processing and DI, Film Restoration, Digital Mastering, Studios and Equipment rentals

Adlabs Films also operates India's largest cinema chain with about 400 screens spread across India, US and Malaysia. It has a significant presence in the film distribution space with a nationwide presence across India as well as offices in London, New York, Los Angeles and Malaysia

Adlabs’ television venture, Synergy Adlabs, is among the top players in the television programming industry

About Adlabs

Adlabs Cinemas will be recipient of ‘International Exhibitor of the Year 2008’ by CineAsia 2008 at Macau in December 2008

Only Lab accorded Kodak Image Care certificate for the 4th consecutive year

1st in Asia : Adlabs facilities comprising Entire Lab, DI Lab and Digital cinema mastering facility accredited by Federation Against Copyright Theft (FACT), UK.

Adlab’s financial rating continues to be highest grade at A1+ by ICRA, the only company in the media and entertainment space

FM radio business to be de merged effective April 1, 2008 consequent to the Board decision

Highlights

Contd….

Period Jul Sep 08 Jul Sep 07 Apr Jun 08 * YOY QOQ

Revenue From Operations 216.59 144.99

178.08 49% 22%

EBIDTA from operations 38.07 13.76 29.38 177% 30%

Financials

Rs. In Crores

Key PlayersDomestic

• PVR cinemas

• Inox

• E-cinemas

• Shringar cinemas

• Wave cinemas

Established leadership in Cinemas

400+ screens as of date : 186 screens in India;. 200+ screen in US, 36 screens in Malaysia & 6 screens in Mauritius

Adlabs Cinemas contribution to Box office of large films

India : 10% to 14%

US : 25 to 40%

Adlabs is India’s first cinema chain to show both 3D & 6D format; premiered 3D Hollywood blockbuster Journey to the centre of the Earth in BIG Digital 3D for the first time at Adlabs cinemas, Vashi, Navi Mumbai

In line with the Reliance ADA Group’s philosophy for a single monolithic consumer entertainment brand “BIG”, all Adlabs cinemas will be re-branded BIG cinemas from October 28, 2008

Contd…

Taking existing cinema destinations, remodeling them and transforming customer experience through contemporary ambience complemented with service

Projection, sound & experience standards are consistent all across the country

Over 35 projects completed

Has seen over 100% increase in occupancy, ticket prices, footfalls along with more efficient programming

Contd…

Moreshwar, Pen (Maharashtra)

Priya, Tenali (Andhra Pradesh)

The change Adlabs brings

Natraj, Kota ( Rajasthan)

Gemini, Warangal (Andhra Pradesh)

Contd…

World-wide clusters of South Asians (Persons of Indian Origin), with strong affinity to Indian entertainment offers an opportunity to Adlabs

Over 200 screens in US, coast to coast

Over 51 screens in Malaysia

6 screen in Mauritius and signed up an upcoming mall

Will soon be the only multiplex present in Kathmandu, Nepal

Adlabs international exhibition portfolio

Movie Theatre Penetration

PIO

Pre

sen

ce

High Low

High

Low

Myanmar (Burma)United

Kingdom

UnitedStates

Medium

Malaysia

CanadaSouth Africa

Kenya

Greece

Guyana

Spain

Adlabs has a footprint in the markets of US and Malaysia

CINEMA

DISTRIBUTION

TELEVISION

SERVICES

PRODUCTION

Business

Production & Distribution

Co-produced “Singh is King” with Vipul Shah, which has been declared a huge success

Successfully distributed BIG Pictures’ Rock On across in India and Overseas

Other features presented include : Love Story 2050 ; Punjabi Film “Mera Pind” in India in select territories and Overseas

P&D

Television

Produces original format, studio based, interactive and fiction shows (a leader in non fiction)

Licensee in international formats: (Who Wants to be a Millionaire, Dancing with the Stars, America’s got Talent and Are you smarter than a fifth grader)

Fiction, Regional content, Talent Hunt and Lifestyle programming will be the additional drivers for the immediate future along with our established share of new big ticket non fiction channel drivers

Over 15 shows lined up across 8 channels with approx. 800 Hrs of programming in FY 09/10.

Synergy Adlabs is a key content player

Film Services

Adlabs has built competencies in handling film : being leveraged to cover a range of services

Film to any device : Building presence across the value chain

TV/

DTH/ IPTV

Mobile

Lab and Digital Intermediate

Processing Lab

Largest facility in India with 150 clients and 73% share of the Hindi film market

Presence in Mumbai, Chennai and Kolkotta

Mumbai has won 8 national awards including last 3 awards in a row

Certified by Kodak Image Care 4 years in a row

Contd…

DI Lab

DI facility is the first 4K facility with real time grading facilities

Integrated offerings to clients include Telecine, Digital Optics, Promo packaging, Complete DI & deliverables (Conversion, Scanning, HD Recording & Sub titling)

1st in Asia : Adlabs facility comprising Lab, DI Lab and digital cinema mastering facility accredited by Federation Against Copyright Theft (FACT), UK

Studios

Over 200,000 sq ft with 6 sound stages being developed at Film City in Mumbai

International firm of architects from LA engaged to build the facility

Will support a mix of film and TV content and will be operational by December 2009

Mechanical effects : Studios and equipment

Contd…

Equipment Rentals & Services : Lights, Cameras, Grips

Presence in TV broadcasting over the last 1 year as a premium service provider

Shows include Dus ka Dum, ET Corporate Awards, Jhalak Dikhla Ja & Nach Baliye 4

Charge a premium compared to others due to value add in terms of technical solutions

Expanding the operations to cover film cameras as an integrated service offering

Adlabs operates the 1st and only DCI grade digital cinema operation in India

Mastering facility at Filmcity fully operational

10000 show milestone achieved

Successfully transmitted and played several shows on the back of Reliance Communications’ fiber optic network with over 2000 shows : A 1st in the world

Preferred service provider for all digital mastering in 2K

Over 30 Hindi Films done

International work includes trailors for Warner Brothers “Chandni Chowk to China” & Sony’s James Bond release “Quantum of solace”

Digital Cinema mastering and projection

FM Radio

FM Radio Industry has seen 25 % growth over the previous year BIG 92.7 FM is No. 1 station with highest share in MUMBAI & BANGALORE

(12+, All) (Source : RAM)

No.1 station among affluent young adults (20-34,AB) in KOLKATA (Source :

RAM)

No.1 station in Surat, Chandigarh & Guwahati ( Source : Indica Research)

Won the Lintas Media Group award

HIGHEST AUDIENCE GROWTH IN ONE YEAR for any media brand

Comprehensive solutions to clients covering on-air, on-ground events and activations and digital web and mobile solutions

BIG 92.7 FM is India’s No 1 operator with 44 operational stations

Additional channels in the same city to existing players

At least three players excluding AIR in any district Maximum number of channels to a radio operator not more than 50% of total

channels in the district

News and Current affairs on FM Radio may be permitted

FDI / FII limit from present 20% to 26% for news radio channels and 49% for non-news radio channels

Networking of FM radio programs across the radio network

Auto Renewal of the radio license

Recent TRAI Recommendations for Phase III are positive

The Board of Directors at its meeting held on October 25, 2008 has approved a scheme of arrangement envisaging the de-merger of the radio business into Reliance Unicom Limited

This scheme is subject to requisite permissions and approvals

Pursuant to the scheme, 1 equity share of Reliance Unicom Limited shall be issued in respect of every one equity share held by the shareholders in Adlabs Films Limited

The entire process is expected to take 4 to 6 months

Adlabs proposes to de-merge the FM Radio business

SWOT Analysis

SWOT ANALYSIS

Strengths

The company is focused in increasing multiplexes across the country with close to 100 screens in the next couple of years from the current 33 screens. This will increase the seat size by 3 times

The biggest strong point for the company is the current location of its theatres. They are mostly centrally located. Also, unlike its competitors, they have 8 properties with 7 in Mumbai giving free rental cost (only opportunity cost involved)

The company has a strong experience in building and construction. They have a premium theatre too. The utilization of this could probably indicate the pricing power for the company

Contd…

Weakness

High dependence on distributor for showing films in every theatre and for every film. This gives a very unstable business model when one compares with Adlabs which are in the other end of the value chain

The biggest weakness for any investor, which is mentioned rightly in the risk factors is the capital structure. It is so unfair for the retail investor. The bonus issue last year has diluted the earnings in a very big game. Further, there is also an issue of a preference share issue at no cost. This has diluted the earnings even further

Contd…

The promoters have been investing in multiple business' streams. The promoters' are willing to enter into many areas with a motive of profit. The promoters have more than 25 different companies, partnerships etc and only 4 are operational

Opportunity

There is a big demand for theatres across the country given the poor quality currently in existence across places. Also, most theatres are willing to open in Sec B and C cities and move into small towns too

They are willing to work on different model for pricing tickets depending on time/day

The contribution of Multiplexes has been increasing constantly and is close to 20%

Contd…

Threat

Success of theatres are movie specific and this can tilt towards failure with poor movie scripts

Alternate sources of entertainment such as DTH, DVD can lead to lower sales

Removal of entertainment tax benefits can risk profitability if lower pricing power is not passed to the customer

Future Plans

Majority stake in Malaysian Lotus Five Star Cinemas

200 cinema halls in 28 North American cities –New York Detroit and Washington

In talks with Dream Works ( Joint venture)

Never a dull moment !