ISSUE CLOSES ON APPLICATION FORMS [ ] [ ] [ ]

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1 Draft Letter of Offer December 17, 2010 For Equity Shareholders of our Company only SPLASH MEDIA & INFRA LIMITED (The name of the Company on records of Bombay Stock Exchange Limited appears as Splash Mediaworks Ltd. Please refer History and Corporate Matters on Page No. 76 of this Draft Letter of Offer) Our Company was originally incorporated on July 7, 1981 in the name of Indus Commercial Limited as a public limited company under the Companies Act, 1956 with Registration No with Registrar of Companies, West Bengal and obtained certificate for commencement of business on July 18, Subsequently the Registered Office of the Company was shifted to Maharashtra, Bombay and Registration of C.L.B. Order was done on July 17, The name of our Company was changed to Hindustan Stockland Limited and further changed to Splash Mediaworks Limited. Subsequently, again the name was changed to Splash Media & Infra Limited vide a fresh certificate of incorporation consequent to name change dated November 9, (For further details on change of address of registered office and change of name of the Company please refer to the chapter titled History and Corporate Matters on page 76 of this Draft Letter of Offer). Registered Office: Payarelal Building, Near Infant Jesus School, Chincholi Bunder Road, Malad (W), Mumbai , India Tel: / ; Fax: Contact Person & Compliance Officer: Mr. Chhotulal Rawa Bhagwat info@splashmediainfra.com;Website: PROMOTER OF THE COMPANY: M/S. BHROSEMAND COMMODITIES PRIVATE LIMITED FOR PRIVATE CIRCULATION TO THE EQUITY SHAREHOLDERS OF OUR COMPANY ONLY ISSUE OF 9,37,20,000 EQUITY SHARES WITH A FACE VALUE OF RE. 1/- EACH ( EQUITY SHARES ) FOR CASH AT A PRICE OF RS. [ ] INCLUDING A PREMIUM OF RS. [ ] AGGREGATING UPTO RS [ ] LAKHS TO THE EXISTING EQUITY SHAREHOLDERS OF OUR COMPANY ON RIGHTS BASIS IN THE RATIO OF ONE ( 1 ) EQUITY SHARE FOR EVERY ONE ( 1 ) EQUITY SHARE HELD BY THE EXISTING EQUITY SHAREHOLDERS ON THE RECORD DATE I.E. [ ] ( ISSUE ). THE ISSUE PRICE FOR THE EQUITY SHARES IS [ ] TIMES THE FACE VALUE OF THE EQUITY SHARES. GENERAL RISKS Investments in equity and equity related securities involve a degree of risk and Investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, Investors must rely on their own examination of the Issuer and the Issue including the risks involved. The securities have not been recommended or approved by the Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the accuracy or adequacy of this document. Investors are advised to refer to the section titled Risk Factors beginning on page 10 of this Draft Letter of Offer before making an investment in this Issue. ISSUER S ABSOLUTE RESPONSIBILITY The Issuer, having made all reasonable inquiries, accepts responsibility for and confirms that this Draft Letter of Offer contains all information with regard to the Issuer and the Issue, which is material in the context of this Issue, that the information contained in this Draft Letter of Offer is true and correct in all material respects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which makes this Draft Letter of Offer as a whole or any such information or the expression of any such opinions or intentions misleading in any material respect. LISTING The existing Equity Shares of our Company are listed on the Bombay Stock Exchange Limited ( BSE ) and the Vadodara Stock Exchange Limited ( VSE ). The Equity Shares offered through this Draft Letter of Offer are proposed to be listed on the BSE & VSE. Our Company has received an in-principle approval from BSE for listing the Equity Shares arising from this Issue vide letter No. [ ] dated [ ]. BSE is the Designated Stock Exchange for this Issue. LEAD MANAGER TO THE ISSUE REGISTRAR TO THE ISSUE KHANDWALA SECURITIES LIMITED Ground Floor, White House Annexe, White House, 91 Walkeshwar Road, Walkeshwar, Mumbai Tel. No: ; Fax No: Website:- splash.rights@kslindia.com Contact person: Mr. Rajesh Katare / Ms. Sunita Patel SEBI Registration: No. INM ADROIT CORPORATE SERVICES PRIVATE LIMITED 19, Jafer Bhay Industrial Estate, 1st floor, Makwana Road, Marol Naka, Andheri (E), Mumbai Tel: / ; Fax: Website: surendrag@adroitcorporate.com Contact person: Mr. Surendra V Gawade SEBI Registration No: INR ISSUE PROGRAMME ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT ISSUE CLOSES ON APPLICATION FORMS [ ] [ ] [ ]

2 TABLE OF CONTENTS PAGE NO DEFINITIONS AND ABBREVIATIONS 2 OVERSEAS SHAREHOLDERS 7 CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL AND USE OF MARKET DATA 8 FORWARD-LOOKING STATEMENTS 9 RISK FACTORS 10 SUMMARY OF INDUSTRY 20 SUMMARY OF OUR BUSINESS 21 THE ISSUE 22 SUMMARY OF FINANCIAL INFORMATION 23 GENERAL INFORMATION 26 CAPITAL STRUCTURE 30 OBJECTS OF THE ISSUE 40 BASIS FOR ISSUE PRICE 46 STATEMENT OF TAX BENEFITS 48 INDUSTRY OVERVIEW 58 OUR BUSINESS 66 KEY INDUSTRY REGULATIONS AND POLICIES 73 HISTORY AND CORPORATE MATTERS 76 OUR MANAGEMENT 81 OUR PROMOTERS 91 OUR PROMOTER GROUP ENTITIES 93 CURRENCY OF PRESENTATION 96 DIVIDEND POLICY 97 RELATED PARTY TRANSACTION 98 FINANCIAL STATEMENT 100 MANAGEMENT S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 119 RESULTS OF OPERATIONS OUTSTANDING LITIGATIONS 125 MATERIAL DEVELOPMENTS 127 GOVERNMENT AND OTHER LICENSES / APPROVALS 128 OTHER REGULATORY AND STATUTORY DISCLOSURES 130 TERMS AND PROCEDURE OF THE ISSUE 141 RESTRICTION ON FOREIGN OWNERSHIP OF INDIAN SECURITIES 167 MAIN PROVISIONS OF THE ARTICLES OF ASSOCIATION 168 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION 208 DECLARATION 210 1

3 DEFINITIONS AND ABBREVIATIONS In this Draft Letter of Offer, unless the context otherwise requires, all references to the word Lakhs or Lakh, means One hundred thousand and the word million means Ten Lakhs and the word Crore means ten million and the word and billion means One thousand million. In this Draft Letter of Offer, any discrepancies in any table between total and the sum of the amounts listed are due to rounding- off. Throughout this Draft Letter of Offer, all the figures have been expressed in Lakhs of Rupees, except when stated otherwise. All references to Rupees and Rs. in this Draft Letter of Offer are to the legal currency of India. COMPANY RELATED TERMS Term Act/ Companies Act AOA/ Articles / Articles of Association Auditors Board / Board of Directors Company Secretary & Compliance Officer Director(s) MOA / Memorandum / Memorandum of Association Our Company / the Company / Issuer / SMIL / We / Us / Our Promoter Promoter Group Promoter Group Entity(ies) / Group Entity (ies) Registered Office ROC / RoC Description The Companies Act, 1956 as amended from time to time. Articles of Association of our Company. M/s. Ramanand & Associates, the statutory auditors of our Company. The Board of Directors of our Company or a committee authorized to act on their behalf. Mr. Chhotulal Rawa Bhagwat A director on the Board of our Company Memorandum of Association of our Company. Except as stated otherwise, refers to Splash Media & Infra Limited, a Company incorporated under the Companies Act, 1956 having its Registered Office at Payarelal Building, Near Infant Jesus School, Chincholi Bunder Road, Malad (West), Mumbai , India Promoter of our Company i.e. M/s. Bhrosemand Commodities Private Limited Promoter Group shall include the person/company who hold Equity Shares of our Company as mentioned in the Chapter titled Our Promoter Group Entities Entities as mentioned in the Chapter titled Our Promoter Group Entities Payarelal Building, Near Infant Jesus School, Chincholi Bunder Road, Malad (West), Mumbai , India ROC-Mumbai, Everest, 100, Marine Drive, Mumbai, Maharashtra , India. 2

4 ISSUE RELATED TERMS Term Abridged Letter of Offer Allotment Allottee Application Application Supported by Blocked Amount/ ASBA ASBA Investor Bankers to the Issue Business Day Composite Application Form / CAF Collection Centre Controlling Branches Depositories Depositories Act Depositories Regulations Designated Branches Designated Stock Exchange Draft Letter of Offer Eligible Equity Shareholders Equity Shares Equity Shareholders Investors Issue Issue Closing Date Issue Opening Date Issue Price Issue Proceeds Lead Manager/LM Letter of Offer Record Date Registrar to the Issue Description The abridged letter of offer to be sent to Eligible Equity Shareholders of our Company with respect to this Issue in accordance with SEBI (ICDR) Regulations, 2009 Unless the context otherwise requires, the allotment of Rights Equity Shares pursuant to the Issue. An Investor to whom Rights Equity Shares are allotted. Unless the context otherwise requires, refers to an application for Allotment of the Rights Equity Shares in the Issue. The application (whether physical or electronic) used by the Investors to make a Bid authorizing the SCSB to block the Bid Amount in their specified bank account maintained with the SCSB An applicant who: (a) holds the Equity Shares of our Company in dematerialized form as on the record date and has applied for Entitlements and / or additional shares in dematerialized form; (b) has not renounced his / her Entitlements in full or in part; (c) is not a Renouncee; (d) is applying through a bank account maintained with SCSBs. [ ] Any day on which commercial banks in Mumbai are open for business. The form used by an Investor to make an application for allotment of the Rights Equity Shares in the Issue. As defined in SEBI (ICDR) Regulations, 2009 and mentioned in the CAF. Such Branches of SCSB which co-ordinates applications under the Issue by the ASBA Investor with the Registrar to the Issue and the Stock Exchanges and the list of which is available at NSDL and CDSL The Depositories Act, 1996, as amended from time to time The SEBI (Depository and Participant) Regulations, 1996, as amended from time to time Such branches of the SCSBs which shall collect CAF from ASBA investor and a list of which is available on The Bombay Stock Exchange Limited (BSE) The draft letter of offer dated December 17, 2010 filed with the SEBI, BSE and VSE. The Equity Shareholders of our Company as on the Record Date. Equity Shares of our Company having a face value of Re. 1/- each. The Equity Shareholders of our Company. The Eligible Equity Shareholders of our Company as on the Record Date and the Renouncee. Issue of 9,37,20,000 Equity Shares of face value Re. 1/- each at a premium of [ ] aggregating upto [ ] to the Eligible Equity Shareholders of our Company on rights basis in the ratio of 1 (One) Equity Share for every 1 (One) Equity Share held on the Record Date [ ]. [ ] [ ] Rs. [ ] Per Equity Share. The proceeds of this Issue available to our Company. Being the Lead Manager appointed for the Issue. In this case being Khandwala Securities Limited The Letter of Offer dated [ ] as filed with Stock Exchange and SEBI. [ ] Adroit Corporate Services Private Limited 3

5 Renouncee(s) Rights Entitlement Rights Equity Shares SAF Stock Exchange(s) SCSB SEBI (ICDR) Regulations,2009 / SEBI Regulations Takeover Code Any person(s) who has / have acquired Rights Entitlements from the Eligible Equity Shareholders. The number of Equity Shares that an Eligible Equity Shareholder is entitled to in proportion to his / her shareholding in our Company as on the Record Date. The Equity Shares being offered to the Eligible Equity Shareholders of our Company in this Issue. Split Application Form The BSE and the VSE where the Equity Shares of our Company are listed and where the Equity Shares are proposed to be listed. The banks which are registered with SEBI under the SEBI (Bankers to an Issue) Regulations, 1994 and offers services of ASBA, including blocking of bank account and a list of which is available on Securities and Exchange Board of India (Issue of Capital & Disclosure Requirements) Regulations, 2009 as amended from time to time Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 read with amendments issued subsequent to that date. BUSINESS AND INDUSTRY RELATED TERMS Term ECS GOI/ GoI MICR NAV NBFC NPA NRO Account NOF OOH P/E Ratio ROI RONW SMIL STPI Description Electronic Clearing Services Government of India Magnetic Ink Character Reader Net Asset Value Non-Banking Financial Company as defined under Section 45-IA of the RBI Act Non Performing Asset Non Resident Ordinary Account Net Owned Funds Out-of-Home Price Earnings Ratio Return on Investment Return on Net Worth Splash Media & Infra Limited Software Technology Parks of India 4

6 CONVENTIONAL AND GENERAL TERMS/ ABBREVIATIONS Term Description AGM Annual General Meeting AS Accounting Standards as issued by The Institute of Chartered Accountants of India BSE The Bombay Stock Exchange Limited CAF Composite Application Forms CAGR Compounded Annual Growth Rate CBD Central Business District CDSL Central Depository Services (India) Limited CIA Central Intelligence Agency CLB/C.L.B Company Law Board DDT Distributed Profits of Domestic Companies DIN Director Identification Number DIPP Department of Industrial Policy & Promotion DP Depository Participant. DP ID Depository Participant s Identity DTAA Double Taxation Avoidance Agreement ECS Electronic Clearing Services EGM / EOGM Extra-Ordinary General Meeting. EPS Earnings Per Share. ESPS Employee Stock Purchase Scheme ESOS Employee Stock Option Scheme FCNR Foreign Currency (Non-Resident) Account Scheme FDI Foreign Direct Investment FEMA Foreign Exchange Management Act, 1999, and the subsequent amendments thereto FICCI Federation of Indian Chambers of Commerce & Industry FII Foreign Institutional Investor as defined Under SEBI (Foreign Institutional Investors) Regulations, 1995 registered with SEBI and as defined under FEMA (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 and under other applicable laws in India FIPB Foreign Investment Promotion Board FY/ Fiscal Year ended March 31 FSI Floor Space Index GDP Gross Domestic Product GIR General Index Reference Number. HUF Hindu Undivided Family IBEF India Brand Equity Foundation ICAI Institute of Chartered Accountant of India IFSC Indian Financial System Code IFRS International Financial Reporting Standards Indian GAAP Generally Accepted Accounting Principles in India INR/ Rs. Indian Rupees IPO Initial Public Offering ISIN International Securities Identification Number allotted by the Depository IT Information Technology ITeS Information Technology Enabled Services M & E Media & Entertainment MICR Magnetic Ink Character Reader MMR Mumbai Metropolitan Region MoUs Memorandum of Understanding(s) N. A. Not applicable 5

7 NBFC Non-Banking Financial Company as defined under Section 45-IA of the RBI Act NEFT National Electronic Fund Transfer NOC No Objection Certificate NRE Non- Resident (External) Rupee Account Scheme NRI Non-Resident Indian NRO Non-Resident Ordinary Rupee Account Scheme NSDL National Securities Depository Limited NSE National Stock Exchange Limited OCB(s) Overseas Corporate Body (ies) PAN Permanent Account Number PCBs Pollution Control Boards RBI Reserve Bank of India RBI Act Reserve Bank of India Act, 1934 ROC / RoC Registrar of Companies RTGS Real Time Gross Settlement SATIS Station Area Traffic Improvement Scheme SEBI Securities and Exchange Board of India SEZ Special Economic Zone SRA/SRS Slum Rehabilitation Authority/ Slum Rehabilitation Scheme TAN Tax deduction Account Number TDRs Transferable Development Rights TIN Tax payer Identification Number UPSI Un Published Price Sensitive Information UK/U.K. United Kingdom USA/US United States of America USD/ US$ US Dollar US GAAP Generally Accepted Accounting Principles in the United States VAT Value Added Tax VSE Vadodara Stock Exchange Limited w.e.f With effect from 6

8 OVERSEAS SHAREHOLDERS NO OFFER IN UNITED STATES The Rights Equity Shares and the Rights Entitlement of the Company have not been and will not be registered under the United States Securities Act of 1933, as amended ( Securities Act ) or any U.S. state securities laws and may not be offered, sold, resold or otherwise transferred within the United States of America or the territories or possessions thereof (the United States ). The Rights Entitlement and Rights Equity Shares referred to in this Draft Letter of Offer are being offered in India but not in the United States of America. The offering to which this Draft Letter of Offer relates is not, and under no circumstances is to be construed as, an offering of any securities or rights for sale in the United States of America, or as a solicitation therein of an offer to buy any of the Rights Equity Shares and / or Rights Entitlement. Accordingly, this Draft Letter of Offer should not be forwarded to or transmitted in or into the United States of America at any time. The Company, or any person acting on behalf of the Company, will not accept subscriptions from any person, or his agent, who appears to be, or who the Company, or any person acting on behalf of the Company, has reason to believe is, a resident of the United States of America and to whom an offer, if made, would result in requiring registration of this Draft Letter of Offer with the United States Securities and Exchange Commission. The Company is making this Issue on a rights basis to its Eligible Equity Shareholders and the Draft Letter of Offer / Abridged Letter of Offer will be dispatched to the Eligible Equity Shareholders who have an Indian address. Any person who acquires Rights Entitlements and Rights Equity Shares will be deemed to have declared, represented, warranted and agreed (i) that it is not and that at the time of subscribing for the Rights Equity Shares, it will not be, in the United States when the buy order is made, (ii) it is not a U.S. person (as defined in Regulation S), and does not have a registered address (and is not otherwise located) in the United States, and (iii) is authorized to acquire the Rights Entitlements and the Rights Equity Shares in compliance with all applicable laws and regulations. 7

9 CERTAIN CONVENTIONS, PRESENTATION OF FINANCIAL AND MARKET DATA Unless stated otherwise, the financial information and data in this Draft Letter of Offer is derived from the Company s financial statements which are included in this Draft Letter of Offer and set out in the section Financial Statement on page 100. The Company s fiscal year commences on April 1 and ends on March 31 of the following calendar year. In this Draft Letter of Offer, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off, and unless otherwise specified, all financial numbers in parenthesis represent negative figures. The Company is an Indian listed company and prepares its financial statements in accordance with Indian GAAP and in accordance with the Companies Act. Neither the information set forth in the financial statements nor the format in which it is presented should be viewed as comparable to information prepared in accordance with US GAAP, IFRS or any accounting principles other than principles specified in the Indian Accounting Standards. Indian GAAP differs significantly in certain respects from IFRS and US GAAP. The Company urges you to consult your own advisors regarding such differences and their impact on the financial data. The degree to which the financial statements included in this Draft Letter of Offer will provide meaningful financial information is entirely dependent on the reader s familiarity with these accounting practices. Any reliance by persons not familiar with these accounting practices on the financial disclosures presented in this Draft Letter of Offer should accordingly be limited. All references to India contained in this Draft Letter of Offer are to the Republic of India, all references to the US or the U.S. or the USA, or the United States are to the United States of America, its territories and possessions, and all references to UK or the U.K. are to the United Kingdom of Great Britain and Northern Ireland, together with its territories and possessions. Unless stated otherwise, industry, demographic and market data used throughout this Draft Letter of Offer has been obtained from industry publications, data on websites maintained by private and public entities, data appearing in reports by market research firms and other publicly available information and also as per Company estimates. These resources generally state that the information contained therein has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Neither we nor the Lead Managers have independently verified this data and neither we nor the Lead Managers make any representation regarding the accuracy of such data. Accordingly, Investors should not Place undue reliance on this information 8

10 FORWARD LOOKING STATEMENTS We have included statements in this Draft Letter of Offer which contain words or phrases such as will, aim, is likely to result, believe, expect, will continue, anticipate, estimate, intend, plan, seek to, future, objective, goal, project, should and similar expressions or variations of such expressions, that are forward looking statements. All forward looking statements are subject to risks, uncertainties and assumptions about us that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Important factors that could cause actual results to differ materially from our expectations include but are not limited to: General economic and business conditions in the markets in which we operate and in the local, regional and national economies; Increasing competition in or other factors affecting the industry segments in which our Company operates; Changes in laws and regulations relating to the industries in which we operate; Our ability to successfully implement our growth strategy and expansion plans, and to successfully launch and implement various projects and business plans; Our ability to attract and retain qualified personnel; Changes in technology in future; Changes in political and social conditions in India or in countries that we may enter, the monetary policies of India and other countries, inflation, deflation, unanticipated turbulence in interest rates, equity prices or other rates or prices; Variations in exchange rates; The performance of the financial markets in India and globally; Difficulty in managing future growth and profitability as a result of the diversified business; For a further discussion of factors that could cause our actual results to differ, please refer to the sections/chapter titled Risk Factors, Our Business and Management s Discussion and Analysis of Financial Condition and Results of Operations on page 10, 66 and 119 respectively of this Draft Letter of Offer. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual future gains or losses could materially differ from those that have been estimated. Neither our Company nor the Lead Manager nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. In accordance with SEBI / Stock Exchanges requirements, our Company and Lead Manager will ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchanges. 9

11 RISK FACTORS An investment in equity and equity related securities involves a high degree of risk and so you should carefully consider all of the information in this Draft Letter of Offer including the risks and uncertainties described below before you make an investment decision. The risks and uncertainties described in this section are not the only risks that we currently face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also have an adverse effect on our business, results of operations, financial condition and the trading price of the Securities could decline and you may lose all or part of your investment. The numbering of risk factors has been done to facilitate ease of reading and reference and does not in any manner indicate importance of one risk factor over another. This Draft Letter of Offer contains forward-looking statements that involve risks and uncertainties. Our Company s actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the considerations described below and elsewhere in this Draft Letter of Offer. You are advised to read the following risk factors carefully before making an investment in the Securities offered in this Issue. You must rely on your own examination of the Company and this Issue, including the risks and uncertainties involved. The Equity Shares have not been recommended or approved by SEBI nor does SEBI guarantee the accuracy or adequacy of this Draft Letter of Offer. A- INTERNAL RISK FACTORS 1. Our Company has limited operating history in the business of Real Estate Development and therefore investors may not be able to assess our company s prospects based on past results. Our Company was incorporated as Indus Commercial Limited in 1981 to carry on the trade in goods and commercial activities which has been completely discontinued. There has been series of change in the business and management of our company i.e. from Commercial to Non Banking Finance Business, Non Banking Finance Business to Media business, from Media to Media and Infra business. For details please refer to Section- History and Other Corporate Matters and Material Contracts and Documents for Inspection on page 76 and page 208 respectively. We diversified in business of construction and development of real estate in March 2010, since we have limited operating history in this business. We have not completed any projects and consequently, there will be only limited information with which to evaluate the quality of our projects and our current or future prospects on which to base the investment decision. Due to our limited operating history, our historical financial results may not accurately predict our future performance. 2. The implementation of the project for which proposed issue is planned is at a very preliminary stage. Any delay in implementation of the same may result in incremental cost and time overruns of the Project and in turn could adversely affect our business operations and profitability. We have a pipeline of 1 (one) Ongoing and 1 (one) planned project in Mumbai and provide custom built solutions at Indore. Our plans in relation to some of these projects have yet to be finalized and approved. To successfully execute each of these projects, we are required to obtain statutory and regulatory approvals and permits and applications need to be made at appropriate stages of the projects. For example, we are required to obtain the approval of building plans, layout plans, environmental consents and fire safety clearances. We have not obtained these certificates/approvals. For further details see section titled Our Business and Government and Other Licenses / Approvals on page 66 and page 128 respectively. 10

12 3. The Company has not obtained certain approvals for the proposed Projects which may lead to the non execution of the Projects. The Company requires approval from local authorities for constructing the residential and commercial projects. The Company has obtained initial approvals and has applied for further permissions for executing constructions at sites. In the normal course of business such approvals can be obtained at appropriate stage of construction. While, the Company believes that it will be able to obtain such approvals in the requisite time frame, however, there may be some delays on account of obtaining such permissions. 4. We require substantial capital for our business operations, and the failure to obtain additional financing in the form of debt or equity may adversely affect our ability to grow and our future profitability. Our business is highly capital intensive, requiring substantial capital to develop and market our projects. The actual amount and timing of our future capital requirements may also differ from estimates as a result of, among other things, unforeseen delays or cost overruns in developing our projects, change in business plans due to prevailing economic conditions, unanticipated expenses, regulatory changes, and engineering design changes. To the extent our planned expenditure requirements exceed our available resources; we will be required to seek additional debt or equity financing. Additional financing could increase our cost, in case of debt increase in interest cost and additional restrictive covenants and in case of equity dilution of our earnings per share. We cannot assure that in future, we will be able to raise additional financing on acceptable terms in a timely manner or at all. 5. We may not be able to identify and acquire suitable sites at reasonable cost which may adversely affect our business and prospects. Our future performance is dependant on our ability to identify and acquire suitable sites at reasonable prices. Our ability to identify and acquire suitable sites is dependent on a number of factors that are beyond our control. These factors include the availability of suitable land, the willingness of landowners to sell land and/or assign development rights on terms attractive to us, the ability to obtain an agreement to sell from a number of land owners where land has multiple owners, the availability and cost of financing, encumbrances on targeted land, government directives on land use and the obtaining of permits and approvals for land acquisition and development. The failure to acquire or obtain development rights over targeted or purchased land may cause us to modify, delay or abandon projects, which could adversely affect our business. In addition, land acquisition in India has historically been subject to regulatory restrictions. For further details, see Key Industry Regulations and Policies beginning on page 73. If we are unable to compete effectively for the acquisition of suitable land, our business and prospects will be adversely affected. 6. The Registered office of our Company is not owned by us. The Registered office of our Company belongs to our promoter Mr. Kailash Chandra Sharma and he has permitted us to use the premises as our Registered Office without any rent vide the rent free certificate dated March 16, We have experienced negative cash flows in prior periods. We have reported negative operating cash flows from operations to the tune of Rs lakhs for six months ended September 30, 2010 and Rs lakhs for FY Any negative cash flow in future could adversely affect our results of operations and financial condition. The detailed break up of cash flows is summarized in below mentioned table: 11

13 (Rs in Lakhs) Particulars Net Cash Flow from Operating Activities (A) (379.72) (330.30) (12.36) (16.08) Net Cash Flow from Investing Activities (B) (33.21) (238.60) Net Cash Flow from Financing Activities (C) (10.00) Net Increase / (Decrease) in Cash & Cash Equivalents (352.15) (1.95) (4.72) 8. Our funding requirements are based on management estimates and have not been appraised by any bank or financial institution. Our funding requirements are based on assessment of the project and estimate of cash flows by the management and have not been independently appraised by any bank/ financial institution. Our assessment and estimation are based on certain assumptions and are subject to changes in the course of implementation of the project or thereafter. For further details of the project please refer to the section titled Objects of the Issue on page no. 40 of this Draft Letter of Offer. 9. The deployment of the issue proceeds is entirely at the discretion of the Management / Company and no independent agency has been appointed to monitor its deployment As per SEBI (ICDR) Regulations, appointment of monitoring agency is required only for Issue size above Rs. 5,000 million. We have not appointed a monitoring agency as our issue size is below Rs. 5,000 million. Further, we cannot assure that the actual costs or schedule of implementation will not vary from the estimated costs or schedule of implementation, and such variance may be on account of one or more factors, some of which may be beyond our control. However, our Company shall inform about material deviations if any, in the utilization of issue proceeds to the stock exchange. Our Company shall provide details in the Quarterly Results and Annual Report about utilization of issue proceeds. 10. Most of our operations are concentrated in and around Mumbai and as a result we are heavily dependent on the performance of, and the conditions affecting the real estate market in Mumbai. Currently, a significant portion of our Ongoing and Forthcoming Projects are concentrated in and around Mumbai. We have 1 (one) ongoing and 1 (one) planned project in Mumbai; these projects have an aggregate land area of 9,427 Sq Mtr (including a Joint Venture of Krishna Marvel in which we hold 50%). The event of a regional slowdown in construction activity in Mumbai or the surrounding areas, or any developments that make projects in and around Mumbai less economical, this may result in adverse effects on our financial condition and results of operations. There can be no assurance that the demand for our properties in and around Mumbai will grow, or will not decrease, in the future. 11. The business and future results of operations of Our Company may be adversely affected if we incur any time or cost overruns. Our Company s business plans are subject to various risks including time and cost overruns and delays in obtaining regulatory approvals. The length of time required to complete a project usually ranges from 24 to 48 months, within which there can be changes in the economic environment, 12

14 local real estate market, prospective customer s perception, price escalation, etc. If the changes take Place during the duration of the project, then our projections regarding the costs, revenues, return on the project, profitability as well as our operations will be adversely affected. There could also be unexpected delays and cost overrun in relation to our projected / future projects and thus, no assurance can be given to complete them on scheduled time and within the expected budget. 12. Our Company may enter into MoUs, Agreements to sell and similar agreements with third parties to acquire land or land development rights, which entails certain risks. Our Company may enter into and proposes to enter into in future MoUs, agreements to sell and similar agreements with third parties to acquire title or land development rights with respect to certain land. Since we do not acquire ownership or land development rights with respect to such land upon the execution of such MoUs, a formal transfer of title or land development rights with respect to such land is completed after we have conducted satisfactory due diligence and/or requisite governmental consents and approvals have been obtained and/or we have paid all of the consideration for such land. As a result, Our Company is subject to the risk that pending such consents and approvals sellers may transfer the land to other purchasers or that Our Company may never acquire registration of title or land development rights with respect to such land. Our Company may also be required to make partial payments to third parties to acquire certain land or land development rights which Our Company may be unable to recover under certain circumstances. Our Company s inability to acquire such land or land development rights, or if Our Company fails to recover the partial payment made by it with respect to such land, may adversely affect Our Company s business, financial condition and results of operation. 13. We have been promoted by first generation entrepreneurs. Our Promoter is a first generation entrepreneur. His experience in managing and being instrumental in the growth of our company is limited to the extent of his individual knowledge, experience and expertise and we cannot assure that this will not affect our business growth. 14. Our success depends upon our management team and skilled personnel and our ability to attract and retain such persons. Currently, we depend on senior executives and other key management members to implement our projects and our business strategy. If any of these individuals resign or discontinues his or her service and is not adequately re-placed, our business operations and our ability to successfully implement our projects and business strategies could be materially and adversely affected. 15. We do not have any insurance coverage for protecting us against any material hazards. At present, we do not have any insurance policy for protecting us against any material hazards. Any damage suffered by us in respect of any events would not be covered under any insurance and we would bear the effect of such losses. 16. Our Company s joint development / venture partners may not perform their obligations satisfactorily. Our Company has entered in to and may in the future undertake development of certain projects through joint development / ventures with third parties. The success of these joint development / ventures depends significantly on the satisfactory performance by the joint development/ venture partners and the fulfillment of their obligations. If either of the party fails to perform its obligations satisfactorily, the joint development/ venture may be unable to perform adequately or deliver its contracted services. In such a case, our Company may be required to make additional investments in the joint development/ venture or become liable for its obligations, which could 13

15 result in reduced profits or in some cases, significant losses and delays in completion of development projects. The inability of a joint development / venture partner to continue with a project due to financial or legal difficulties may put our Company in financial and legal difficulties to the extent of the share which may have impact on the results of operations. 17. We have not entered into any definitive agreements to use portion of the proceeds of the Issue. As described in the section entitled Objects of the Issue on page 40, we intend to use Rs.1500 lakhs out of the proceeds from the Issue for the acquisition of land and land development rights by the end of FY 2013, Our use of the proceeds of the Issue is at the discretion of the management of our Company. However, at present we have not entered into any definitive agreement with any party for acquisition of any particular identified land or land development rights thereon nor have we made any advance payments for the same. We may not be able to conclude such agreements or commitments on terms anticipated by us, or at all. As a result, our planned use of the proceeds of the Issue may change. 18. We depend on various sub-contractors or specialist agencies to construct and develop our projects. We primarily rely on third parties for the implementation of our projects and generally enter into several arrangements with third parties. Accordingly, the timing and quality of construction of our properties depends on the availability and skill of those sub-contractors. Although we believe that our relationships with third party subcontractors are cordial, we cannot assure you that skilled subcontractors will continue to be available at reasonable rates and in the areas in which we conduct our operations. 19. Our results of operations could be adversely affected by strikes, work stoppages or increased wage demands by employees / workers or any other kind of disputes with employees / workers. We operate in a labour intensive industry. We enter into contracts with independent contractors to complete specified assignments and these contractors are required to source the labour necessary to complete such assignments. There can be no assurance that we will not experience disruptions to our operations due to disputes or other problems with our work force to carry out the construction on our project sites, which may adversely affect our business and results of operations. 20. The Company does not yet own intellectual property rights over its logo and trademark Splash Our logo and trademark Splash is unregistered. As on the date of filing this Draft Letter of Offer, we have not entered into any written agreement with anyone for use of logo and Splash trademark in their business. Our both business media and infra depends on the logo and Splash trademark as we market all our media marketing and real estate projects under the trademark Splash and logo. The right to use the said trademark is a crucial factor as it is not registered under The Trademark Act, Our Company faces the risk of using our trademark either in the same form or with some modification by any other person. This would in turn affect the operations of our business. If used by third party could damage our reputation in the market. 21. We have not identified any alternate source of financing the Objects of the Issue. If we fail to mobilize resources as per our plans, our growth plans may be affected. We have not identified any alternate source of funding and hence any failure or delay on our part to raise money from the Issue or any shortfall/delay in the Issue Proceeds may delay the implementation schedule of our projects and could adversely affect our growth plans. For further details please refer to the chapter titled Objects of the Issue beginning on page 40 of the Draft Letter of Offer. 14

16 22. Our Company s operations and its work force are exposed to various hazards and Our Company is exposed to risks arising from construction related activities that could result in material liabilities, increased expenses and diminished revenues. There are certain unanticipated or unforeseen risks that may arise in the course of property development due to adverse weather and geological conditions such as such as storm, hurricane, lightning, flood, landslide and earthquake. Additionally, Our Company s operations are subject to hazards inherent in providing architectural and construction services, such as risk of equipment failure, impact from falling objects, collision, work accidents, fire or explosion, including hazards that may cause injury and loss of life, severe damage to and destruction of property and equipment, and environmental damage. 23. Our revenues and profits are difficult to predict and can vary significantly from period to period, which may impact our ability to pay dividend and which could cause the price of our Equity Shares to fluctuate. We derive income from media and construction activities and our income from these activities may fluctuate significantly due to a variety of factors. Moreover, due to occasional lags in development timetables caused by unforeseen circumstances, we cannot predict with certainty when our real estate developments will be completed. Our results of operations may also fluctuate from period to period due to a combination of other factors beyond our control, including volatility in expenses such as costs to acquire land or development rights, construction costs and other costs. Depending on our operating results in one or more periods, we may experience cash flow problems and difficulties in covering our operating costs, which may adversely affect our business, financial condition and results of operations. Such fluctuations may also adversely affect our ability to fund future projects. As a result of one or more of these factors, we may record significant turnover or profits during one accounting period and significantly lower turnover or profits during prior or subsequent accounting periods. Therefore, we believe that period to period comparisons of our results of operations should not be relied upon as indicative of our future performance. 24. Frequent Change in Control and management of the Company and change in the operation in the past. We may not assure of any change in control and management in future which may affect the stability of our Company. Our Company has witnessed frequent changes in the control and management of Company. For details in change of control and management, refer to History And Corporate Matters. Such frequent changes in the management and control in future may affect the stability of our business in future. Also there has been change in business of our Company thrice since the date of incorporation. Such changes in control and business make the future of our Company insecure. 25. Due to a very small stake held by the promoter any competitor may acquire majority stake in our Company. Our promoter M/s Bhrosemand Commodities Pvt. Ltd. holds 4.91% of the total equity shares of our Company. Due to a very small stake held by the promoter any competitor may acquire majority stake in the Company through open market and acquire the control and management of our Company. 26. Our Company does not have any formal long-term arrangements with the suppliers. Any significant variation in the supply & demand may adversely affect the operations and profitability of our Company. We do not have any formal long-term arrangements with our suppliers, which obliges them to maintain their business with us. Our ability to maintain close and satisfactory relationships with our suppliers and to consistently provide quality solutions that meets customer s requirements is important to our business. There is no assurance that these suppliers will continue to supply 15

17 materials to us or that they will not scale down their transactions with us. This could impact the financial performance of our company. B- EXTERNAL RISKS 27. We depend on the adequate and timely supply of raw materials at reasonable prices. Any delay in procuring requisite raw materials at suitable prices could affect our business operations. Our business is significantly affected by the availability, cost and quality of the materials which we need during construction. The prices and supply of materials depend on factors not under our control, including domestic and international general economic conditions, competition, and availability of quality suppliers and transportation costs. If, for any reason, our primary suppliers of raw materials should curtail or discontinue the delivery of such materials to us in the quantities we need or provide us with materials that do not meet our specifications or at prices that are not competitive for us, this could impair our ability to meet our material requirements for our projects, and our results of operations and business could suffer. 28. The limited supply of land, increasing competition and applicable regulations may result in an increase in the price of land and shortages of land available for development. Our operations are presently focused in the Mumbai Metropolitan Region. The supply of land in Mumbai is limited and acquisition of new land in these and other parts of Mumbai poses substantial challenges and is highly competitive. In addition, due to the limited supply of land, the acquisition of land in Mumbai is costly. We have acquired land in Mumbai in the past through acquisition of land and land development rights from other parties. There is no assurance that we will be able to continue to acquire land through such or other means. Due to the increased demand for land in connection with the development of residential, commercial and retail properties, we are experiencing and may continue to experience increased competition in our attempt to acquire land in the geographical areas in which we operate and the areas in which we anticipate operating in the future. This increased competition may result in a shortage of suitable land that can be used for development and can increase the price of land. We may not be able to or decide not to acquire parcels of land due various factors including price of land. Further, we may not be able to shift our costs of acquisition to the customers of our real estate projects. Any such increase in the price of land that can be used for development could materially and adversely affect our business, prospects, financial condition and results of operations. In addition, the availability of land, as well as its use and development, is subject to regulations by various local authorities. Such restrictions could lead to further shortage of developable land. 29. The operations and success of Our Company are subject to fluctuations in the market value of the real estate market and economic conditions generally. The real estate business is significantly affected by changes in government policies, economic conditions, such as economic slowdown or recession, rising interest rates, demographic trends, employment levels, availability of financing or declining demand for real estate, relatively illiquid market for both the land and developed properties or the public perception that any of these events may occur. These factors can negatively affect the demand for and pricing of the developed and undeveloped land and constructed inventories at the expected rental or sale price and as a result, could materially and adversely affect the return on investments of Our Company. 30. Our Company s business and growth plan could be adversely affected by the incidence and rate of property taxes, service taxes and stamp duties. As a property owning and development company, Our Company is subject to the property tax regime in the states where its properties are located. These taxes could increase in the future, and new categories of property taxes may be established which would increase Our Company s overall development and other costs. Our Company may also buy and sell properties and property conveyances are generally subject to stamp duty. If these duties increase, the cost of acquiring properties will rise and sale values could also be affected. Additionally, if stamp duties were to be 16

18 levied on instruments evidencing transactions which the Company believes are currently not subject to such duties, such as the grant or TDRs, the Company s acquisition costs and sale values would be adversely affected, resulting in a reduction of profitability. Any such changes in the incidence or rates of property taxes or stamp duties could have an adverse effect on the Company s financial condition and results of operations. 31. Changes in interest rate will have a significant impact on Our Company and also on the demand for residential real estate projects. Our Company may opt to avail long term or short term debt, if required in order to meet its financial requirements in future. Interest rates in our economy are sensitive to factors which are usually beyond the control of Our Company. Thus, any change in the interest rates will impact our cost of borrowing and profitability. Customers may borrow funds to acquire the property. Thus, one of the factors on which the markets for residential and commercial developments are dependent is the affordability of such properties which in turn is dependent on the availability of credit to the prospective customers. Increase in interest rate will affect the customer s ability to avail finance resulting in decline in the demand for residential or other real estate projects. This in turn will adversely affect Our Company s business, financial condition and results of operation. 32. A slowdown in economic growth in India could cause the Company s business to suffer. All the Company s operations are located in India and its business operations and performance are dependent on the overall macro economic conditions, the gross domestic product ( GDP ) growth rate and the economic cycle in India. As the Company s products are reflections of the general market conditions in India and its business is therefore significantly dependent on the performance of the general market conditions in India. The Indian economy could be adversely affected by a number of factors. Any slowdown in the Indian economy or volatility in global market conditions, could adversely affect the Indian economy. The Indian economy could also be adversely affected by a general rise in interest rates and unfavorable weather conditions adversely affecting agriculture. A slowdown in the Indian economy could adversely affect the Company s business and results of operations. 33. Political instability and significant changes in the Government s policy on liberalisation of the Indian economy could impact the Company s financial results and prospects. The role of the Indian central and state governments in the Indian economy and their effect on producers, consumers and regulators has remained significant over the years. Since 1991, successive governments of India have pursued policies of economic liberalisation, including relaxing restrictions on the private sector. However, there is no assurance that these liberalisation policies and the political stability will continue in the future. The rate of economic liberalisation could change, and laws and policies affecting the foreign investment and other matters affecting investment in the Company s securities could change as well. Any significant change in liberalisation and deregulation policies could adversely affect business and economic conditions in India generally and the Company s business and results of operations and the market for the Equity Shares in particular. 34. Hostilities, terrorist attacks, civil unrest and other acts of violence could adversely affect the financial markets and the Company s business. India has witnessed localised civil disturbances in recent years and any future civil unrest or other acts of violence or war may adversely affect the global equity markets and economic growth. These acts may result in a loss of business confidence, make travel, transport, communications and other services more difficult and have other consequences that may have an adverse effect on the Company s business, results of operations and financial condition. Any deterioration in international relations may result in investor concern regarding regional stability, which could adversely affect the market for the Equity Shares. 17

19 35. Natural calamities may have a negative impact on the Indian economy and harm the Company s business. India has experienced natural calamities in recent years, including earthquakes, floods, drought and a tsunami. The severity and duration of these natural disasters or abnormal weather conditions determines their impact on the Indian economy. Such natural calamities may have an adverse impact on the Indian economy, which could in turn adversely affect the Company s business and the market for the Equity Shares. 36. Our operations are sensitive to weather conditions. We have business activities that could be materially and adversely affected by severe weather. The Construction Operation of our business is subject to good weather condition. We may require postponing the operation during the season not suitable to our business. The construction business normally freezes during the period from June to September. Our operations are also adversely affected by difficult working conditions and extremely high temperatures during summer which restrict our ability to carry on construction activities and fully utilize our resources. During periods of curtailed activity due to adverse weather conditions, we may continue to incur operating expenses, but our revenues from operations may be delayed or reduced. 37. Conditions in the Indian securities market may affect the price or liquidity of the Equity Shares. The Indian securities markets are smaller than securities markets in more developed economies. Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. These exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Indian stock exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If similar problems occur in the future, the market price and liquidity of the Equity Shares could be adversely affected. 38. There is no guarantee that the Shares issued pursuant to the Issue will be listed on the BSE in a timely manner or at all. In accordance with Indian law and practice, permission for listing and trading of the Shares issued pursuant to the Issue will not be granted until after those Shares have been issued and allotted. Approval will require all other relevant documents authorising the issuing of Shares to be submitted.. There could be a failure or delay in listing the Shares on the BSE. Any failure or delay in obtaining the approval would restrict your ability to dispose of your Shares. Further, historical trading prices, therefore, may not be indicative of the prices at which the Shares will trade in the future. 39. You will not be able to sell immediately on any Stock Exchanges any of the Equity Shares you purchase in the Issue. Under the SEBI (ICDR) Regulations, 2009 we are permitted to allot equity shares within 15 days of the closure of the Issue. Consequently, the Equity Shares you purchase in this Issue may not be credited to your demat account, with the Depository Participants until approximately 15 days after the Application/ Issue Closing Date. You can start trading in the Equity Shares only after they have been credited to your demat account and final listing and trading approvals are received from the Stock Exchanges. Further, there can be no assurance that the Equity Shares allocated to you will be credited to your demat account, or that trading in the Equity Shares will commence, within the specified time periods. 18

20 Prominent Notes: 1. This is an Issue of 9,37,20,000 Equity Shares of face value of Re.1/- each at a premium of [ ] per Equity Share for an amount aggregating to Rs. [ ] on Rights basis to the existing shareholders of the Company in the ratio of One Equity Share for every One Equity Share held by the existing shareholders on the Record Date, i.e. [ ]. 2. The net worth of the Company as on March 31, 2010 is Rs Lakhs and for the six months period ended September 30, 2010 is Rs Lakhs. For further details please refer to the section titled Summary of Financial Information beginning on page 23 of this Draft Letter of Offer. 3. The average cost of acquisition of shares by the promoter M/s Bhrosemand Commodities Pvt. Ltd., after adjustment of bonus shares is Rs (Face Value of Re.1/- each) 4. For details of transactions by the Company with group companies, see Related Party Transaction beginning on page 98 of this Draft Letter of Offer. 5. For details of transaction in the securities of our company by our Promoter and Promoter Group in the last six month, refer to point no. 28 Capital Build up of our Promoter under title Capital Structure on page 30 of this Draft Letter of Offer. 6. There is no financing arrangement whereby the Promoter Group, the directors of the Promoters, the Directors and their relatives have financed the purchase by any other person of securities of the Issuer other than in the normal course of business of the financing entity during the period of six months immediately preceding the date of filing this Draft Letter of Offer with SEBI. 7. All information shall be made available by the Lead Managers and the Company to the existing shareholders of the Company and no selective or additional information would be available only to a section of the investors in any manner whatsoever. 8. Investors may contact Compliance Officer or the Lead Manager(s) for any matter / complaints pertaining to the Issue. 9. The Lead Manager and the Company shall update this Draft Letter of Offer and keep the shareholders/public informed of any material changes till the listing and trading commencement. 10. The name of the Company was changed from Splash Media works Limited to Splash Media & Infra Limited on November 9, The Company has not issued any shares for consideration other than cash except bonus issue. 12. Please refer to the section Basis of Allotment on page 158 for details on basis of allotment. 13. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue, with a copy to the relevant SCSB, along with complete details of the application in the Issue such as name, address of the applicant, Rights Entitlement, number of Equity Shares applied for, ASBA Account number and the Designated Branch of the SCSB where the application was submitted by the ASBA Investor. 14. There are no relationships with statutory auditors to the Company other than auditing and certification of financial statements. 19