Board has considered and approved the following: 1. Demerger of the News Business Undertaking of the Company into Zee News Ltd ("ZNL"); and Such de-merger(s) shall qualify as a de-merger within the meaning of Section 2(19AA) of the Income Tax Act, 1961 and shall be carried out under the provisions of Section 391 to 394 of the Companies Act, 1956. The Board has approved the Scheme of Arrangement and fixed March 31, 2006 as 'Appointed Date' for the Scheme. The share swap ratios envisaged under the Scheme are as follows - 1. ZNL shall allot 137 fully paid up equity shares of Re 1 each for every 100 equity shares of Re 1 each held in the Company. If on the record date, FIIs hold more than 32% shares of the Company, then such class of FIIs, holding more than 0.5% shares of the Company, would be allotted preference shares for such excess holding as follows: - 1781 fully paid up preference share of Rs 1 each for every 100 equity shares held in the Company. The above mentioned share exchange ratios have been determined based on the recommendation of independent valuer viz., M/s Deloitte Haskins & Sells, Chartered Accountants. The Scheme is subject to requisite consent, approval of the requisite majority of the shareholders, lenders and creditors of the companies, the Hon'ble High Court of Judicature at Bombay, the permission or approval of any other statutory or regulatory authorities, which by law may be necessary for the implementation of the Scheme. In addition to the foregoing, at its meeting held on March 29, 2006, Board of Directors of the Company has also A. Granted in-principle approval for: - Evaluating and analysing the implications of restructuring the Direct Consumer Services Business; and - Appointment of M/s Deloitte Haskins & Sells, Chartered Accountants, as valuers for the purpose of restructuring of the Direct Consumer Services Business. The company has informed that the Board of Directors of the Company at its meeting held on March 29, 2006, has approved the restructuring of the various businesses of the Company. The following share swap ratio was announced, in relation to the demerger of the News division: - ZNL shall allot 137 fully paid up equity shares of Re 1 each for every 100 equity shares of Re 1 each held in the Company. - If on the record date, FIIs hold more than 32% shares of the Company, then such class of FIIs, holding more than 0.5% shares of the Company, would be allotted preference shares for such excess holding as follows:- - 1,781 fully paid up preference share of Rs 1 each for every 100 equity shares held in the Company. It is clarified that, if by proportionate allotment of preference shares to FIIs holding more than 0.5% of the equity capital of the Company the FII holding in the Company exceeds 26%, then the Board of Directors of the Company, pursuant to the authority vested under the Scheme of Arrangement, shall decide on such class of FIIs who holds even less than 0.5% in the Company for such proportionate allotment preference shares. (As per BSE Bulletin dated on 30/03/2006) Zee Telefilms Ltd has informed BSE that the members at the two Court Convened General Meeting Meetings & one Extra Ordinary General Meeting of the Company held on July 25, 2006, have approved the following: 1. Scheme of Arrangement between Zee Teleflims Ltd, Zee News Ltd, shareholders made under the provisions of Sections 391 to 394 read with Sections 78, 100 to 103 and other applicable provisions of the Companies Act, 1956 for the proposed De-merger of News Business undertaking of the Company in favor of Zee News Ltd the wholly owned subsidiary of the company, in favor of Wire and Wireless (India) Ltd; (As per BSE Bulletin dated on 25/06/2006) With reference to the earlier announcement dated November 17, 2006 regarding the approval of the Hon'ble High Court of Bombay for the Scheme of Arrangement between the Company, Zee News Ltd, Siti Cable Network Ltd, Wire and Wireless (India) Ltd and their respective shareholders, Zee Telefilms Ltd has informed BSE that upon filing the certified copy of the said Order of High Court of Bombay dated November 17, 2006, with the Registrar of Companies,. Maharashtra, Mumbai, the aforesaid Scheme of Arrangement has become effective from November 22, 2006. (As Per BSE Announcement Website Dated On 23/11/2006) Zee Telefilms Ltd has informed BSE about the salient features of Scheme of Arrangement between the Company, Zee News Ltd, Siti Cable Network Ltd, Wire and Wireless (India) Ltd and their respective shareholders, for De-merger of News Business undertaking of the Company in favour of Zee News Ltd and Cable Business undertakings of the Company and Siti Cable Network Ltd, a wholly owned subsidiary of the company, in favour of Wire and Wireless (India) Ltd. Aforesaid scheme was approved by the Hon'ble High Court of Bombay on November 17, 2006 and became effective from November 22, 2006. Below mentioned are salient features of the Scheme - Appointed Date : March 31, 2006 - Effective Date : November 22, 2006 A. De-merger of News Business Undertaking of the Company in favour of Zee News Ltd (ZNL):- - Upon the Scheme becoming effective and with effect from the Appointed Date, the entire News Business Undertaking of the Company shall, without any further act, instrument or deed, be transferred to and vest in or be deemed to be transferred to and vested in ZNL, as a going concern, so as to vest in ZNL all the rights, title and interest of the Company (relating to News Business Undertaking), subject to subsisting charges and pledges, if any. - The investments in the equity capital of ZNL as appearing in the books of accounts of the Company shall stand cancelled. - Upon the Scheme being effective and on the record date, the shareholders of the Company shall be entitled for 137 fully paid up equity shares of Re 1 each of ZNL for every 100 equity shares of Re 1 each held in the Company. - If on the Record Date the Foreign Institutional Investors (FIIs) hold more than 32% equity share capital in the Company, than such class of FIIs holding more than 0.5% shareholding in the Company or such other class of FIIs as the Board of the Company deem fit, would be proportionately allotted 1,781 fully paid up preference shares of Re 1 each of ZNL for every 100 equity shares of Re 1 each held in the Company by the respective FIIs, for such excess holding. - The fully paid-up equity share capital of ZNL after giving effect to the entitlement of shares shall be reduced by canceling 67 equity shares of Re 1 each fully paid-up for every 100 equity shares of Re 1 each fully paid-up held in ZNL. - As a net effect, after giving effect to entitlement of shares and followed by reduction of capital. ZNL shall issue and allot 45.2 fully paid equity share of Re 1 each for every 100 equity share of Re 1 each held in the Company to the members of the Company holding fully paid-up equity shares in the Company and whose name appear in the register of members of the Company as on the Record Date. General features applicable to both Demergers:- No coupons shall be issued in respect of fractional entitlements, if any, by ZNL and WWIL, to the members of the Company at the time of issue and allotment of Equity and Preference Shares. The Board of Directors of ZNL and WWIL shall consolidate all fractional entitlements, if any, arising due to the demerger of the News and Cable Business Undertaking and allot Equity and Preference Shares in lieu thereof to a director or such other authorised representative(s) as the Board of Directors of ZNL and WWIL shall appoint in this behalf, who shall hold the Equity and Preference Shares issued in ZNL and WWIL, in trust on behalf of the members entitled to fractional entitlements with the express undertaking that such director(s) or other authorised representative(s) shall sell the same in the market at such time or times and at such price or prices and to such person or persons, as it/he/they may deem fit and pay to ZNL and WWIL, the net sale proceeds thereof, whereupon ZNL and WWIL, shall distribute net sale proceeds, subject to taxes, if any, to the members in proportion to their respective fractional entitlements. The Board of Directors of ZNL and WWIL, if it deems necessary, in the interest of allottees, approve such other method in this behalf as it may, in its absolute discretion, deem fit. The Shares to be allotted by ZNL and WWIL shall be listed on the below mentioned stock exchanges on which the shares of the Company are listed on the Effective Date: i. The Bombay Stock Exchange Ltd, Mumbai (BSE) ii. The National Stock Exchange of India Ltd., Mumbai (NSE) iii. The Calcutta Stock Exchange Association Ltd, Kolkata (CSE) (As per BSE Announcement website dated on 24/11/2006) SUB. :- Scheme of Arrangement of Zee Telefilms Ltd. (Scrip Code 505537) Trading members of the Exchange are hereby informed that, Zee Telefilms Ltd. has fixed the Book Closure for the Scheme of Arrangement of the company for the purpose of determining entitlement to the shareholders of the company and payment of Dividend. BOOK CLOSURE 24/12/2006 To 28/12/2006 EX-ENTITLEMENT DATE 18/12/2006 DR-184/2006- 2007 PURPOSE A) Scheme of Arrangement and Demerger:- (1) De-merger of News Business undertaking of the Company in favour of Zee News Ltd.:- Upon the scheme becoming effective, the entire News Business Undertaking shall be transferred to and vested in Zee News Ltd. (ZNL). In consideration for the transfer of the News Business Undertaking in ZNL, the shareholders of the Company shall be entitled to 137 fully paid up equity shares of Re.1/- each of ZNL for every 100 equity shares of Re.1/- each held in the Company. - If on the Record Date the Foreign Institutional Investors (FIIs) hold more than 32% equity share capital in the Company, than such class of FIIs holding more than 0.5% shareholding in the Company or such other class of FIIs as the Board of the Company deem fit, would be proportionately allotted 1,781 fully paid up Preference Shares of Re.1/- each of ZNL for every 100 equity shares of Re.1/- each held in the Company by the respective FIIs, for such excess holding in lieu of their entitlement for equity shares. On the Scheme becoming effective, the investments in the equity share capital of ZNL as appearing in the books of accounts of ZTL shall and cancelled. Consequently, the fully paid-up equity share capital of ZNL after giving effect to the aforesaid cancellation shall be reduced by canceling 67 equity shares of Re.1/- each fully paid-up for every 100 equity shares of Re.1/- each fully paid-up held in ZNL. - As a net effect, after giving effect to entitlement of shares and followed by reduction of capital, ZNL shall issue and allot 45.21 fully paid equity shares of Re.1/- each for every 100 equity shares of Re.1/- each held in the Company. B) Payment of dividend for financial year 2005-2006:- Payment of 100% Equity Dividend i.e. Re.1/- per equity share for the Financial Year 2005-06. The scrip will be No Delivery from 18/12/2006 (DR-184/2006-2007) to 22/12/2006 (DR-188/2006-2007). (As per BSE Notice dated on 01/12/2006) Zee Telefilms Ltd (ZTL) has announced that the Company, on December 12, 2006, has clarified the modalities of the restructuring of its news business and cable business for the benefit of its shareholders. Mr. Subhash Chandra, Chairman, stated, "In keeping with its philosophy of building long term shareholder value, the Board of Zee had decided to restructure the various businesses. This would strengthen long term business prospects of each individual business, by providing focused management attention. From December 18, the Company would start trading as the demerged entity (to be renamed Zee Entertainment Enterprises Ltd) and two new companies would start their journey as independently listed entities. Though the business of both Wire & Wireless India Ltd (WWIL) and Zee News Ltd (ZNL) was earlier part of the Company, they would be able to unlock greater shareholder value as independent companies." Recap of Scheme of Demerger The Scheme of Arrangement had proposed to demerge assets and liabilities of the following under-takings of the Company: 1. Cable distribution undertaking 2. News and regional broadcasting undertaking 3. Direct Consumer business undertaking The appointed date for the demerger is March 31, 2006 for the cable undertaking and the news and regional undertaking, while for the direct consumer business, the appointed date is April 01, 2006. The Company has already received approval of its demerger scheme by the Hon'ble High Court of Judicature of Bombay for the demerger of cable undertaking and news and regional undertaking. The process of getting approval for the demerger of direct consumer undertaking is underway and is expected soon. Pursuant to the Scheme, shareholders of Zee as on the relevant record date would get shares in four separate companies, which would be independently listed on stock exchanges. They are: 1. Zee Telefilms Ltd (to be renamed Zee Entertainment Enterprises Ltd (ZEEL) 1.1. ZEEL includes the global broadcasting business of the Company, excluding the news and regional language channels. 1.2. The channels in ZEEL include Zee TV, Zee Cinema, Zee Sports, Zee Music, Zee Smile, Zee Jagran, Zee Premiere, Zee Classic, Zee Action, Zee Studio, Zee Cafe and Zee Trendz. 1.3. ZEEL includes the international broadcasting business of Zee in USA, Europe, Africa, Middle East and in Asia Pacific. 1.4. It includes investments in Zee Turner India Ltd, ETC Networks Ltd and Ten Sports channel. 1.5. ZEEL has more than 900 employees. 1.5. ZEEL had revenues of Rs 10.5 billion in FY2006. 2. Zee News Ltd (ZNL) 2.1. ZNL includes the broadcasting business of the Company, pertaining to the news and regional language channels. 2.2 The channels in ZNL include Zee News, Zee Business, Zee Marathi, Zee Bangla, Zee Punjabi, Zee Gujarati, Zee Telugu, Zee Kannada and 24 Ghante. 2.3. It also supplies content to the international broadcasting business of Zee in USA, Europe, Africa, Middle East and in Asia Pacific. 2.4. ZNL has more than 900 employees. 2.5. ZNL had revenues of Rs 2.0 billion in FY 2006. 3. Wire and Wireless India Ltd (WWIL) 3.1. WWIL includes the cable distribution business of the Company, which was earlier under Siticable Network Ltd. WWIL is the largest multi system operator (MSO) in the country and has a connectivity of 6.7 million homes. 3.2. WWIL operates 52 headends in 35 cities across the country. It has seven regional offices and over 500 employees. 3.3. WWIL is embarking on a project of converting the analogue cable homes in India to digital cable. It plans to expand from current 35 cities to 66 cities in the next two years. 3.4. WWIL had revenues of Rs 1.5 billion in FY 2006. Revenues of WWIL are expected to grow very rapidly in the coming years due to digitization of cable and acquisition of last mile control. 4. ASC Enterprises Ltd [to be renamed Dish TV India Ltd (Dish)] 4.1. Dish includes the direct to home satellite broadcasting business. It is the first DTH operator in India and currently the largest with 1.6 million subscribers. 4.2. Dish has revolutionized television viewing in India through its high quality digital service delivered directly to consumers home. Not only it provides 160 digital channels, it also offers many value added services to its consumers like electronic programme guide, parental lock facility, ability to record programmes, gaming channels, movies on demand etc. 4.3. Dish is adding 30,000 subscribers every week and is targeting to reach 2.3 million subscribers by March 2007. 4.4. Dish had revenues of Rs 0.8 billion in FY 2006 and has over 800 employees. Shareholding in Demerged Entities. Taking an example of a shareholder having 100 shares in the Company, the following illustrates how the new shares would be allotted: a. ZEEL: 100 shares held in the Company would continue as 100 shares in demerged ZTL (ZEEL), in addition to entitlement for new shares as illustrated below. b. ZNL: 100 shares held in the Company would entitle shareholders for 137 shares in demerged ZNL. Subsequently, ZNL would reduce its share capital by 67% and therefore, 100 shares in the Company would translate into net 45 shares in ZNL, implying effective shareholding of 80%. c. WWIL.: 100 shares held in the Company would entitle shareholders for 50 shares in demerged WWIL, implying effective shareholding of 100%. d. Dish: 100 shares held in the Company would entitle shareholders for 230 shares in demerged ASC Enterprises Ltd (Dish). Subsequently, Dish would reduce its share capital by 75% and therefore, 100 shares in the Company would translate into net 57 shares in Dish, implying effective shareholding of 57%. Benefits to Shareholders. The shareholders of the Company would continue to participate in the growth and progress of the Company, which is one of the largest media companies in South Asia, with a global presence. They would continue to hold the same number of shares as they currently hold in the Company. In addition to that, they would receive separate shares in three demerged entities, which will allow them to participate individually as well as collectively in the growth area of Cable Distribution, Direct to Home broadcasting, and News and Regional channels. The shares of the resulting companies would be listed on the Stock Exchanges in India, where the Company shares are currently listed, thus providing liquidity to all shareholders. This will unlock value for all shareholders as they can participate directly in all the businesses that the Company has nurtured and brought to their current stature. Highlights: - As per the scheme of demerger approved by the Hon'ble High Court of Judicature or Bombay, the Company (ZTL) has demerged its cable undertaking into Wire & Wireless India Ltd (WWIL) and the regional and news broadcasting undertaking into Zee News Ltd (ZNL). - The appointed date for the demerger is March 31, 2006 and the scheme has become effective on November 22, 2006. - The Company had earlier announced the book closure date (from December 24 to 28, 2006) for determining eligibility for issuance of equity shares (consequent to the scheme of arrangement) by ZNL and WWIL. - Shareholders of the Company would receive 45 shares of ZNL and 50 shares of WWIL for every 100 shares held in the Company. Both companies would be listed independently, after relevant approvals from the Stock Exchange. Listing is likely in January 2007. - Demerged ZTL (including the Direct Consumer business undertaking) would continue to trade on the stock exchanges. A separate record date would be announced for the demerger of Direct Consumer Business of ZTL into ASC Enterprises Ltd, to be renamed Dish TV India Ltd (Dish). (As Per BSE Announcement Website Dated on 13/12/2006) Zee Telefilms Ltd has informed BSE that, upon the Scheme of Arrangement for Demerger of News Business Undertaking and Cable Business Undertaking of the Company in favor of Zee News Ltd (ZNL) and Wire and Wireless India Ltd (WWIL), respectively, becoming effective from November 22, 2006, the shareholders of the Company whose name appear in the Register of members at the conclusion of Book Closure period shall be entitled to receive: 1. 45.21 fully paid up equity shares of Re 1/- each of ZNL for every 100 equity shares of Re 1/- each: and 2. 1 fully paid equity share of Re 1/- each of WWIL for every 2 equity shares of Re 1/- each; held by them in the Company. For this purpose, the Company has fixed the Book Closure Period commencing from December 24, 2006 to December 28, 2006 (both days incluive). (As Per BSE Announcement Website Dated on 27/12/2006) Zee Telefilms Ltd has informed BSE that the Hon'ble High Court of Bombay on January 12, 2007 has approved the Scheme of Arrangement between the Company, Siti Cable Network Ltd, New Era Entertainment Network Ltd, ASC Enterprises Ltd and their respective shareholders, for the De-merger of Direct Consumer Services Business Undertaking of the Company in favor of ASC Enterprises Ltd and merger of Siti Cable Network Ltd and New Era Entertainment Network Ltd, wholly owned subsidiaries of the Company, with ASC Enterprises Ltd. The said Scheme of Arrangement was earlier approved by the Hon'ble High Court of Delhi on December 18, 2006. The Scheme will become effective upon filing of certified copies of order of Hon'ble High Courts with respective Registrar of Companies. (As Per BSE Announcement dated on 11/01/2007)