“TCS Second Quarter Earnings Conference Call”

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					         Network18 Media & Investments Ltd.
           Q1FY11 Results Conference Call

                                      July 30, 2010


                         MR. HARESH CHAWLA , GROUP CEO

                         MR. R. D. S. BAWA , GROUP CFO

                         MR. SAI KUMAR, GROUP COO

                         MR. SARBVIR S INGH, MD CAPITAL 18

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                                                                                 July 30, 2010

    Moderator       Ladies and gentlemen good evening and welcome to Network18‟s Q1
                    FY11 results conference call hosted by Network18. As a reminder all
                    participants‟ lines will be in the listen-only mode. And there will be an
                    opportunity for you to ask questions at the end of today‟s opening
                    remarks. If you should need any assistance during this conference,
                    please signal an operator by pressing „*‟ and then „0‟ on your
                    touchtone telephone. Please note that this conference is being
                    recorded. From the Network18 Group we have Mr. Raghav Bahl,
                    Group MD, Mr. Haresh Chawla, Group CEO, Mr. Bawa, Group CFO and
                    Mr. Sarbvir Singh, MD Capital 18.

                    I would now like to hand the conference over to Mr. Raghav Bahl for
                    brief overview of the overall group performance and of each of the
                    group companies. Post that we will open the Q&A session for each of
                    the three companies, TV18, IBN18, and Network18. Thank you and
                    over to you sir.

  Raghav Bahl       Well thank you very much and ladies and gentlemen welcome to the
                    call. Thank you for joining us. We did have a conference call after our
                    last quarter‟s results and also spent time with many of you sharing the
                    details of our restructuring plan just three weeks ago. So what may be
                    sensible is to keep the introduction very, very short and then go into
                    the Q&A.

                    We are also assuming that the investor update that we put out with
                    our results would be with you by now. That‟s a fairly detailed
                    document and we are assuming that, that would have been read by

                    The best way to describe the quarter that we have reported today is
                    really if I may be permitted a phrase is the “penultimate WIP quarter”
                    for the group. We believe that we began re-architecting the group
                    about three or four quarters ago and we are probably now in the last
                    quarter, before the results of that re-architecting become visible from
                    the October, November, December quarter. So Q1, the one we

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                    reported, is really the penultimate one - the reason I say that is
                    because we very consciously tried to do two things over the last few
                    quarters which will culminate finally in this quarter. The first thing is
                    clearly the change in the structure of the group itself where we
                    believe we have now made it into a very flexible focused consistent
                    structure - very linear, no crossholding and a very, very consistent
                    business model with just two entities. This is the bare minimum that
                    we can come to. A simpler structure than this would be just collapsing
                    everything into one balance sheet but until regulations change we
                    cannot do so and hence we believe this is the simplest possible
                    corporate structure in given regulatory environment. So we have done
                    the restructuring at the corporate level, but in a sense more
                    important, from the earnings point of view, we have also launched a
                    restructuring of our revenue mix. As many of you are aware, our peer
                    group in the business gets nearly 40% of its telev ision broadcast
                    revenues from distribution - cable and DTH distribution. T his was
                    something that we, for a variety of reasons, largely the fact that we
                    have a very young bouquet of channels just two years old, had not
                    been able to successfully address thus far. We were getting no more
                    than 10 or 12% of our telev ision broadcast revenues from the cable /
                    DTH subscription side, a gap of 30% points compared to our peer.
                    That led to a situation where while our peer group was reporting
                    much better profitability, we were not able to do so. We had however
                    been promising our investor community that we are focused on that
                    and would make a very sure footed, very solid and perhaps even a
                    disruptive move in that space. We believe we have done that by
                    coming together with the Sun Network to create a 33 channel
                    bouquet which is the largest GRP bouquet in the country. We now
                    believe that we have the wherewithal and the equipment to close this
                    30% gap that we suffer vis-à-vis our peers and hope to take our 10%
                    distribution revenues closer to the peer group‟s 40% as quickly as we

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                    So these are the two major restructuring moves that have culminated
                    for us in the past few days, which is why I am saying that the quarter
                    that we have reported on, we believe is the penultimate quarter of
                    our re-architecting and the current quarter will hopefully the last.
                    Starting Q3 FY11, we hope to be in a different architecture both in
                    terms of our structure and our revenue mix. That is about the large
                    picture. Specifically, discussing the details of the financials reported
                    for Q1 FY11, three operations have broken into pretty promising
                    profitability. (i) Our business news operations have come back fairly
                    strongly into profitability. (ii) Viacom 18 has successfully completed its
                    third consecutive profitable quarter which was also the strongest and
                    its most profitable quarter ever, although Q1 has been seasonally the
                    weakest quarter. So in chronological terms it was the strongest
                    quarter but seasonally the weakest - therefore we expect stronger
                    performance going forward. (iii) NewsWire18 also has put its
                    investment phase behind and was profitable at the PAT level. So these
                    three operations, business news, the data terminals business and the
                    entertainment business under Viacom 18 have been very solidly

                    The other businesses which are close to getting out of their
                    investment stage and very near breakeven now are Web18,
                    HomeShop18 and IBN General News operations. These are fairly close
                    to that point and we are looking at possibly the beginning of the
                    second half of this year for these businesses to become profitable.
                    Now with the restructuring in the process of being completed and
                    signed off, we believe that not only will we be profitable at the Group
                    level, we also believe that virtually every indiv idual piece of the
                    business would be profitable - three of them have already done that.
                    That is the background which I think we can go with to the Q&A
                    Session, under the assumption that you would have had a look at the
                    investor update which has far more underlined details on margins and
                    growth performance across different business segments.

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                    Let me just ask Haresh if he would like to add something to this and
                    then we can as usual go into Q&A broken up for each company
                    indiv idually so we would probably spend say a third of our time doing
                    IBN 18, then a third of our time doing TV18 and then finally wrap up
                    with Network18.

  Haresh Chawla     No, Raghav.

  Raghav Bahl       So let‟s go into the Q&A. I think we will answer most questions there.
                    Okay let‟s then go into Q&A for IBN 18 and then like I said once we
                    have done IBN 18 we will follow it up with TV18.

  Moderator         Thank you sir. Ladies and gentlemen we will now begin with the Q&A
                    session. At this time if you would like to ask a question please press
                    “*” and then one on your touchtone telephone. If you decide you
                    want to withdraw your question from the queue please press “*” then
                    two. Our first question comes from the line of Nikhil Vora from IDFC
                    please go ahead.

  Nikhil Vora       Just one clarification on the Indian Film Company and the transaction
                    with Viacom 18 which is routed through IBN 18 - why would Viacom
                    18 want to own Indian Film Company? Two things come to mind - one
                    is, if what has been talked about and what you have also
                    communicated that the value could be in the $80-$100 million range
                    (the existing value of the business is one third that value); so I cannot
                    understand that. Also, the rationale of owning a film library is not
                    clear - how difficult is it to just buy a syndication rights or the movie
                    rights at possibly a fraction of the acquisition cost?

  Raghav Bahl       Haresh, you want to answer that? It is really a Viacom 18 question.

  Haresh Chawla     Yeah, Nikhil I think we will come to the value point first. Films are
                    strategic to our entire entertainment platform and we are building on
                    it. So it is not just a film library that is currently residing in that
                    business but film business itself which is something that we believe
                    should be aligned much more with our entertainment side other than

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                    be a standalone operation. It is a tough business and having a
                    standalone entity, specially in an environment where new genre of
                    movies are working very well and especially where we do have
                    channels that talk to the audiences, is not the most optimum solution.
                    We believe that at both Viacom18 and Network18 level, it makes
                    sense to closely align the films business to one of potentially the
                    largest entertainment television platform that is getting bu ilt in
                    Viacom18. So the leverage that we will get will include movie rights,
                    music rights (which are fueling the rapidly growing music channels)
                    and talent (including that participating in our shows – for e.g. a lot of
                    movie promotion happens alongside rea lity shows – which lets us get
                    a cross pollination of talent and of ideas). Going forward, you will find
                    even more and more new experiments in the film business that are
                    impacting and play ing with the television business. So therefore
                    strategically we believe the alignment is something that makes sense.

  Nikhil Vora       I am just wondering as an IBN18 shareholder how does it make
                    rationale sense for me to be owning India Film Company at a
                    supported value which is at least two to three times that of invested

  Raghav Bahl       Well I think Nikhil, you are making an assumption on the valuation. I
                    do not think Viacom 18 has yet made an offer, so it is impossible to
                    really engage with that question of what valuation they will make an
                    offer at. I just want to add one perspective to what Haresh said about
                    the strategic depth that films will bring to Viacom18 which is emerging
                    as an entertainment media powerhouse company. Do remember that
                    Viacom is a 50% shareholder there and Viacom globally is one of the
                    largest film producers and they have seen how that strategic depth
                    can be used to bolster entertainment media businesses. So this is a
                    decision in which Viacom is an equal participant and this is not a
                    Network18 decision. This is very much a decision of the JV of which as
                    I said one of the largest film producers in the world is a 50% partner.
                    So in their wisdom, which is a joint wisdom of Viacom and Network18
                    at the Viacom18 level, in their wisdom the shareholders will take a

                                       Page 6 of 25
                                                                                   July 30, 2010

                    decision on the value they are willing to offer. At the Network18 level
                    all we are saying is that we believe that if the offer is attractive we will
                    take it because we believe that the film business works much better
                    within a larger entertainment media environment than as a standalone
                    balance sheet. So we will take a call on the synergies that we believe
                    will be available to the film business as and when and if it becomes a
                    part of the Viacom18 business. But I just want to clarify that this is
                    not a Network18 decision this is very much a shareholders decision at
                    Viacom18 and one of the shareholders is the largest film producer in
                    the world.

  Nikhil Vora       Okay, just lastly, Network18 as a company increased the stake in
                    India Film from 17-18% to 77 odd percent in the last six months at a
                    value which again is around $35 to 40 million range I presume. So on
                    one hand we have increased our shareholding in a particular company
                    and on the other, the same transaction will then roll over to another
                    company, right?

  Raghav Bahl       Well, if there is a buyer who is willing to buy and we believe that the
                    sale makes sense for the underlying operation, then we will take that
                    call. As we said already that we will take the call if the value we
                    believe is attractive enough for the shareholders of Network18. Y ou
                    are also aware that assets quote sometimes at disproportionate
                    discount to their underly ing value in the stock market that is not an
                    unusual thing. But do remember that the Network18 shareholders
                    have already taken that equity risk by going out and increasing the
                    stake at a moment where anybody else in the world could have also
                    gone out and bought that asset. But the Network18 shareholder took
                    the equity risk at that point in time and if now he believes that he is
                    getting a value which is good for the underly ing assets then he will
                    book his equity gains. I mean this is the world of equity, Citibank was
                    quoting at under a dollar just six months back as well Nikhil.

  Nikhil Vora       Okay.

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  Raghav Bahl        Now this is the world of equity, right, so values at one point in time
                     cannot be assumed to be completely fair value.

  Nikhil Vora        Okay, good, thanks for this, and sir I will come back after others
                     complete their questions.

  Raghav Bahl        Sure.

  Moderator          Thank you. Our next question comes from the line of Porinju Veliyath
                     from Equity Intelligence, please go ahead.

  Porinju Veliyath   My first question is about Sun18 – who will have own this company
                     from the Group? Will it be held by Network18 or the new TV18?

  Raghav Bahl        Okay, is there any other question or is that the only question?

  Porinju Veliyath   I just had a concern after this. Thought I will ask my second question
                     after the answer to the first question.

  Raghav Bahl        Okay. We are committed to our shareholders that all television
                     broadcast businesses are now in the new TV18.

  Porinju Veliyath   Okay.

  Raghav Bahl        So this distribution company will be owned by the new TV18 entity
                     which is currently the existing listed IBN18.

  Porinju Veliyath   Okay, it will not be in Network18.

  Raghav Bahl        No, it will not be in Network18, because Network18 is a company
                     which is doing all non- television broadcasting businesses besides
                     being the holding company of the television company.

  Porinju Veliyath   Okay, Thanks.

  Moderator          Thank you. Our next question comes from the line of Janaki Raman
                     from Franklin Templeton please go ahead,

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  Janaki Raman      Hi, in terms of subscription revenue for Viacom18 do you have some
                    goals that you have set for yourself for this year, next year. How long
                    do you think will the progression from 10% to 40% going to take?

  Raghav Bahl       Ideally, would like Haresh to come in.

  Janaki Raman      Yeah, yeah

  Raghav Bahl       But I just want to say one quick thing on distribution - in this
                    particular level there will be some turbulence. I think I have
                    something I would like to share with our shareholders and we put that
                    in our update as well. First is that there is a possibility of a short term
                    dislocation that we think will happen in the current quarter, the
                    quarter that we are currently sitting in. The second point of course is
                    that once this turbulence settles down, then the matters are
                    effectively in our hands and we are running the business which will
                    happen very shortly; then we can expect to close the structural gap
                    that we have vis-vise our peers quickly. I think Haresh would be the
                    best person to tell us.

  Haresh Chawla     Yeah, we expect our profits to start gaining traction now that we will
                    approach the market together as a 33 channel bouquet. But clearly
                    we will have a lag as a result of the switchover between distributors
                    (from MSM-Discovery and STAR-DEN to Sun18). We will have more
                    information on this probably after three-four months once we get a
                    sense of exactly how things are panning out on the ground.

  Janaki Raman      Sure, sure, sir, right now is the signal for colors going through your
                    Sun18 package or is it going through your earlier distributor?

  Haresh Chawla     No, right now it is going through Sun18.

  Janaki Raman      Okay, thanks.

  Moderator         Thank you. Our next question comes from the line of Ashish Kacholia
                    from Lucky Securities please go ahead

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  Ashish Kacholia   Yeah, good afternoon to the team. My question pertains to the P&L of
                    our of our news operations, IBN18 Standalone, where we have
                    EBITDA loss of seven crores in this quarter. Is there going to be a
                    positive number on this in the foreseeable future?

  Raghav Bahl       Sai, will take you that?

  Ashish Kacholia   Our revenues have gone down to 52 crores but our EBITDA has gone
                    into a negative for this operation. What is the level at which we will
                    come up with some substantial EBITDA on this one?

  Sai Kumar         Sure, so there are three points here- (i) I think the same quarter last
                    year we had the general news elections, that gave an advertising
                    upside to uniformly to all the three channels which include Lokmat,
                    IBN7 and CNN-IBN, so we had a fairly chunky advertising revenue
                    incidental in the same quarter last year which did not come our way in
                    this quarter. (ii) On the cost side we have started backing IBN 7
                    through additional resources and we have also started seeing some
                    traction for IBN7; it actually moved up to being the number three
                    Hindi news channel on the last four or five weeks. That is a result of
                    investing a bit more in the Hindi news channel. (iii) Besides these, we
                    had salary increments leading to an increase in our cost levels. So to
                    answer your question on when do you see us breaking into positive
                    EBITDA territory, I think all of H1 would be a bit challenging especially
                    as Raghav was mentioning because we expect some increase in our
                    carriage cost and some delay in bringing in our distribution income
                    because of the transition into the Sun18 bouquet. So I think we can
                    safely assume that in October, November, December especially with
                    the strengthening of IBN7 and CNN IBN holding its position right up
                    there as the leading English news channel, we should see us breaking
                    back into positive territory.

  Ashish Kacholia   Sir my worry basically is that the number on the sales front is not that
                    much lower compared to the corresponding quarter last year - its 52

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                    crores versus 57 crores. My concern is if our cost is structurally too
                    high to accommodate our revenues?

  Sai Kumar          The under-current in advertising has been extremely positive - so
                    much so that despite the general elections the gap is not too much.
                    On the cost side when you say that you are supporting the growth of
                    a channel, especially when you want to increase the distribution
                    revenue you have to put so much more in carriage. That is what we
                    have been doing. Further, about 25 to 30% of our cost comes from
                    salaries and we had an increment this year. At the same time, we
                    believe that these are fairly manageable cost levels and in the
                    October, November, December quarter it will stabilize at maybe a
                    level that is materially lower than what we see currently .

  Ashish Kacholia   You mean the cost side?

  Sai Kumar         Definitely.

  Ashish Kacholia   Okay, and on the revenue front, can we annualize it to about 200
                    crores or is it going to be substantially different than that?

  Sai Kumar         Well, if you see in our business, the first six months of the year bring
                    about 42 to 43% of the revenue. So therefore it cannot be annualized
                    to about 210 crores as it is the second half of the year which brings in
                    close to 60%. Second, I think the market is shifting. April onwards,
                    we have seen conversations of advertising go ing up, we have seen
                    advertising clients much more front footed and in the Q1 it is very
                    early days so we are only saying that H2 is going to be far better in
                    bringing revenues then it was in the last two years. Lastly because we
                    are trying to restructure the revenues with the focus on distribution,
                    there should be some upside because of that.

  Ashish Kacholia   Right sir, thank you very much.

  Moderator         Thank you. Our next question comes from the line of Mohan Lal of
                    Elara Capital. Please go ahead

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  Mohan Lal         Hi sir, first question is on the disruption that you have just mentioned.
                    First of all, do we expect the cost to go up this year because of
                    carriage fees on the Viacom18 front on a quarterly basis?

  Raghav Bahl       Haresh, you want to come in?

  Haresh Chawla     No, no, we do not expect any changes in the cost structure. What we
                    are talking about disruption really is a short term shift from where we
                    start getting revenues from Sun18 rather than from the earlier
                    distributors. Its really a cash flow hit more than anything else.

  Mohan Lal         Sir, I was looking to quantify this disruption for the next quarter. Can
                    you help me out with the subscription number on Viacom18 side for
                    the quarter?

  Haresh Chawla     I do not think we have given the splits right now but suffice to say it
                    is closer to almost around 10% or lesser.

  Mohan Lal         10% or less?

  Haresh Chawla     Mostly lesser than that. So in a sense we have not broken that down

  Mohan Lal         Okay, fine.

  Haresh Chawla     It is not a very high number compared to the advertising revenue.

  Mohan Lal         Okay, salaries on the Viacom side for this quarter have declined from
                    190 million to 170 million. YOY is there any reason for that or what
                    should be the trend in that sir?

  Haresh Chawla     I think there is rationalization we have done at MTV.

  Mohan Lal         Okay, thanks. And sir just continuing the last conversation on the
                    news channels - like we have seen a strong turnaround in the
                    business news operations CNBC TV18 and CNBC Awaz, what is the
                    plan going forward on the general news channel category? Does the

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                    management think that there is scope for cost cuts or these can‟t be
                    reduced any further?

  Raghav Bahl       I think there are 2 strategies in the general news space - one is to
                    invest in the Hindi news space and take the channel into a strong
                    number three. We have already made most of those investments and
                    the dividend of that will get paid out over the course of the next half
                    of the year. Second we believe as a news bouquet we will start
                    gathering stronger subscription revenue which would really give a
                    step-up to the whole operation. In the new TV18 operations, they will
                    all be one news bouquet that should start making a big difference to
                    the profitability of the bouquet as a whole.

  Mohan Lal         Sir, lastly on IBN18, can you tell me the cash and debt on the book?

  R. D. S. Bawa     That is there in the investor update

  Mohan Lal         Okay.

  Raghav Bahl       And this number is before the final call money for IBN18 which has
                    now come in. The cash position at IBN18 now is very comfortable.

  Mohan Lal         Thanks a lot.

  Moderator         Thank you. Our next question is a follow up from the line of Janaki
                    Raman from Franklin Templeton. Please go ahead

  Janaki Raman      Raghav, the disruption that you mentioned in case of Viacom 18 for
                    the current quarter - will that be restricted to the subscription revenue

  Raghav Bahl       Well as Haresh just said that he doesn‟t even expect the quantum to
                    come down; the disruption is more probably from a cash flow
                    mismatch perspective. So some payments may get a little bit more
                    stretched out because there is this period of transition as we enter
                    into our own contracts with cable operators. As a channel, as you

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                    have seen, there hasn‟t been even a day of disruption. It has been
                    continuously on, so we don‟t expect revenues at Viacom18 to be hit.

  Haresh Chawla     There will be some changeover costs, the usual costs - set up cost for
                    the new operations and so on

  Raghav Bahl       We may have a little bit more of a cost level impact at the news
                    channel where the carriage fee in this particular quarter may see a
                    slight upward movement but we expect to arrest that very soon.

  Janaki Raman      Okay. Is there a possibility that you may be forced to make some
                    termination payment to your earlier distributor?

  Raghav Bahl       Well, as you know, that is an entirely legal matter right now. So it is
                    for the two parties to either sit down across the table or talk in the
                    court of law. Let us see where that goes.

  Janaki Raman      So the disruption has got nothing to do with?

  Raghav Bahl       No. We were not talking about any legal payments that may arise. We
                    were really talking about operational cost where we are just
                    cautioning our investors that, that may happen. But the way things
                    have panned out, the fact that our contention has been upheld by
                    TDSAT in both the cases, the disruption maybe much less than what
                    we may have anticipated. But we still believe it is a very correct thing
                    for us to caution our shareholders that this particular quarter in the
                    very short term there may be some disruption. As I said, it worked out
                    better than we thought but you know, these are early days and we
                    just need to keep up the efforts.

  Janaki Raman      Okay, and are all the subscription revenues coming from India only or
                    have your subscription revenue flow from the overseas markets also

  Raghav Bahl       Haresh, you want to take that?

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                                                                                 July 30, 2010

  Haresh Chawla     Overseas subscriptions have started from the US and UK markets. We
                    have just launched our signal in the UAE market where we are in a
                    preview period kind of situation, so that should started kicking in
                    within the next quarter. And some other markets are left yet to be
                    opened up which should happen hopefully soon

  Janaki Raman      Okay, so in the first year of the US market what kind of revenues are
                    you are expecting?

  Haresh Chawla     I will not be able to share any details on that. These are competitive
                    and sensitive numbers and since it is very clear who we are dealing it
                    is also subject to confidentiality.

  Janaki Raman      Fair enough, I appreciate that. Thanks.

  Moderator         Thank you. The next question comes from the line of Rohit Dokania
                    from B&K Securities. Please go ahead.

  Rohit Dokania     Sir, the net debt was 420 Crores at the end of FY10 and I think this
                    quarter we have paid on TV18 a consolidated interest cost of 6
                    Crores. So that approximately means a 6% interest rate for the full
                    year. So could you please throw some light on that is to what really is

  R. D. S. Bawa     Since you are talking of net interest here, it could be some difference
                    between the interest cost and the earning of the interest.

  Rohit Dokania     Okay, so can you just tell us how much would be our net interest cost
                    for the whole year?

  R. D. S. Bawa     Net interest cost would be coming down, as the gross interest gets
                    reduced as loans get repaid over the quarters.

  Rohit Dokania     Okay. And is it possible to share the current cash and debt on TV18,

  R. D. S. Bawa     That is there in the update.

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                                                                               July 30, 2010

  Rohit Dokania     Okay, fair enough. I will take a look at it. Thanks.

  Moderator         Thank you. The next question is from the line of Mohan Lal from Elara
                    Capital. Please go ahead.

  Mohan Lal         Hi. I wanted to understand the source of cost savings in our business
                    news operations, given that they are currently down by 12% on a YoY
                    basis. What is the source of that and what could be the trend in the
                    coming quarters?

  Raghav Bahl       Sai, do you want to take that?

  Sai Kumar         Yeah, sure. As you maybe aware we went through a fairly extensive
                    cost cutting exercise on the business news side of the operations in
                    December last. We will be benefiting from the savings progressively
                    over the next few quarters. We have basically taken the cost base
                    down by about 7% to 10%. So that along with an uptick in
                    advertising revenues is leading to the margin expansion.

  Mohan Lal         I actually wanted to get more specific details. I wanted to understand
                    which line item is getting reduced so substantially, because even in
                    the last quarter we saw 7% growth QoQ basis. Which line item,
                    between business promotion, carriage fee and staff expenditure is
                    getting reduced the most?

  Sai Kumar         Well, the staff expenditure to a large extent.

  Mohan Lal         Have you further cut down on staff expenditure in Q1 FY11?

  Sai Kumar         No, the staff expenditure was cut in December. But because of
                    packages that we have to give to employees, a lot of it got into the
                    last quarter of last year. Therefore, you are seeing some of those
                    benefits getting into Q1. Besides, there is a continuous monitoring of
                    operating costs and I think we are deriv ing a lot of efficiency there,
                    which is again a byproduct of staff rationalization.

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  Mohan Lal         Would it be possible to guide us on the level of costs going forward
                    given that we were at 48 Crores in Q1?

  Sai Kumar         Well, I think we should safely be in that range, give or take 4% to 5%
                    on the outside. So you can safely assume that our cost base has
                    almost permanently come down – these are not temporary shifts.

  Mohan Lal         My next question is on Infomedia - when will we see the same kind of
                    turnaround in Infomedia? When I had met you, you had discussed
                    initiatives being taken to reduce the losses. Will those initiatives bear
                    fruit in the next quarter or next year or what could be the trend in
                    losses in Infomedia?

  Sai Kumar         Okay well before Haresh steps in, we were speaking about expanding
                    and focusing on the local search business which is currently in its
                    investment phase. We are building out the multimedia search
                    business based on the inherent strength that we have in Yellow Pages
                    and the brand that we recently acquired called Ask Me. That work
                    started about 3-4 months back. I guess that is the time that we had
                    the conversation, but I am afraid that that business is going to be in
                    its investment phase at least for the next two to three quarters.

  Mohan Lal         Basically we cannot expect anything like the turn around that we saw
                    in the business news channels side from Infomedia, in FY11 at least.
                    Would that be a fair assumption?

  Sai Kumar         We are seeing recovery in the B2C and B2B magazines business which
                    is again to a large extent led by recovery in advertising and uptick in
                    subscription. As far as yellow pages go, it depends on the launch of
                    the directories on a quarter-on-quarter basis. Haresh do you want to
                    add anything further?

  Haresh Chawla     Yeah, I think yellow pages continue to hold steady but really the
                    investment in new media was going to hurt the P&L for a sensible
                    period of time.

                                       Page 17 of 25
                                                                               July 30, 2010

  Mohan Lal         And these costs also include the cost of the printing facility for now,
                    as part of the Infomedia quarterly cost?

  Haresh Chawla     Yes, they do.

  Mohan Lal         Okay and they will go away once we are done with it.

  Haresh Chawla     Yes.

  Mohan Lal         Okay fine, my last set of questions on Web18. If you can share what
                    was the PAT of Web18 for the quarter?

  Sarbvir Singh     Mohan, net PAT is (-5) crores for Web18

  Mohan Lal         The last question on Web18 - the cost has again gone to 21 crores for
                    the quarter from 20 crore last quarter, even though I am really
                    pleased to see 27% top-line growth. Will these cost levels be
                    maintained or is the revenue growth also carry ing some cost items
                    along with it?

  Sai Kumar         I think we can maintain the costs at this level. So if your question is
                    whether the costs are revenue linked then for one set of businesses it
                    is, but our revenue dependence on that business is very marginal. It is
                    about 10%-15%. So Web18, after a long time hit EBITDA positive last
                    quarter and as you can see the revenues are smartly up this quarter
                    and I think again, like in the case with one part of the news channels,
                    October onwards we should again be in EBITDA positive territory.

  Mohan Lal         Thanks a lot, sir.

  Moderator         Thank you, our next question comes from the line of Nikhil Vora from
                    IDFC. Please go ahead.

  Nikhil Vora       Just on the operations part, you mentioned about international
                    operation numbers starting to kick in sometime soon. Will it seriously
                    be of any relevance over the next couple of years at least given that

                                         Page 18 of 25
                                                                                    July 30, 2010

                    the placement cost for the same would offset the subscription revenue
                    that you will get?

  Haresh Chawla     Internationally we have got pretty healthy deals going on with the
                    current operators. But we have restrictions on going out fully in to the
                    market because of exclusiv ity issues some of the operators have due
                    to their carriage of the other Hindi GECs. I can confirm to you that we
                    are making cash from our international operations right now. The
                    quantum will see a significant leap next year when we will be able to
                    access the entire market openly. Currently we are exclusive on DTH in
                    the US, for example, and similar such arrangements kick in other
                    markets as well. US operations have already been around for a period,
                    so when we finish one year in those markets we should see a
                    substantial jump in the revenue.

  Nikhil Vora       Let us assume, for example, if Colors gets 100 crores out of
                    international next year, would there be a significant cost involved to
                    get that?

  Haresh Chawla     Costs are very marginal, not more than between 5% and 10% really
                    on the rights and uplinking fees and all that, very marginal.

  Nikhil Vora       What would be the minimum guarantee which is involved for being on
                    the platform?

  Haresh Chawla     We do not have any carriage fees in those markets as we went to the
                    market once the channel was established as a leading player.

  Nikhil Vora       Okay, thanks, all the best.

  Moderator         Thank you. Our next question comes from the line of Amit Kumar
                    from Kotak Securities. Please go ahead.

  Amit Kumar        Thank you for the opportunity. Sir, I joined a little bit late so please
                    excuse me if the question is repeated. I just wanted to understand the

                                         Page 19 of 25
                                                                                    July 30, 2010

                    rationale for actually leaving the STARDEN and the MSM Discovery

  Raghav Bahl       We had issues with their distributions which is why we had to
                    terminate the alliances and since we cannot be left in a vacuum in a
                    market, we have to distribute them ourselves. Haresh, you want to
                    add to that?

  Haresh Chawla     That is correct, we were not getting our due in a sense of either in
                    terms of placement or the revenue that we were driv ing and therefore
                    we had no choice but to do it ourselves.

  Amit Kumar        Sir, in case of MSM Discovery I can very well understand the
                    argument because there is a clear mismatch so to speak (MSM has
                    Sony and you have Colors), but in case of STARDEN I am very
                    surprised, on multiple counts. As far as the promoters on both sides
                    are concerned there is quite a bit of correlation - I know Mr.
                    Manchanda is a promoter of DEN and I know he is also the joint MD
                    of IBN18. We also have stake in DEN. I am a little bit surprised that
                    despite such close relationships with that company we were not able
                    to get our dues from STARDEN.

  Haresh Chawla     I think these are fairly intricate commercial contracts, I do not think
                    we are going to share any more detail on this.

  Amit Kumar        I am not really asking for details but I just wanted to understand the
                    rationale for leaving STARDEN

  Raghav Bahl       Amit, I think we just need to understand that these are contracts
                    between two entities and not between two people. Entities have their
                    own commercial needs and their own commercial orientation and this
                    is an issue that will be settled. We do not see any problems. So I think
                    other than that, it is difficult for us to say anything more.

  Amit Kumar        So you are looking to settle the dispute with STARDEN

                                       Page 20 of 25
                                                                                July 30, 2010

  Raghav Bahl       Matter will be settled is what we are saying. We are distributing our
                    own channel. We have terminated the contract. These are issues
                    which arise between two commercial entities and these issues will
                    ultimately get concluded.

  Amit Kumar        Okay, good thank you so much.

  Moderator         Thank you. Ladies and gentlemen we will now take questions on
                    Network18. To ask a question please enter * then 1. Our first
                    question comes from the line of Ramu Kandi from INV Search
                    Solutions. Please go ahead.

  Ramu Kandi        This is Ramu Kandi from INV Search Solutions Private Limited. My
                    question is on valuation of Infomedia used for the recent restructuring
                    exercise. How do you justify this? Thank you.

  Raghav Bahl       As we said, in all these schemes of arrangement, the valuation is done
                    by an outside party and in this instance the valuation has been done
                    by Grant Thornton and we have been guided entirely by that
                    valuation. So I think we really have no further play in the matter than
                    to go by the valuations which are being suggested and the scheme
                    has been arrived on that basis.

  Ramu Kandi        No more question.

  Moderator         Our next question comes from the line of Mohan Lal from Elara
                    Capital. Please go ahead.

  Mohan Lal         Yeah, thank you sir. I will ask four questions if you allow me. First is
                    are we planning to liquidate Capital 18‟s current portfolio in the near
                    future, including DENs‟ stake?

  Raghav Bahl       Capital 18 is our private equity business which has built some very
                    fine companies which are growing well. It is a private equity business
                    and therefore going by the canons of that business, we will look for
                    value maximization. Lot of those businesses are gowning fine and we

                                        Page 21 of 25
                                                                                  July 30, 2010

                    have no immediate thought or need to cash out because we believe
                    the value creation is going to be at a much more rapid pace from here
                    on. So as I said, it is a private equity business and it will take the call
                    based on the principles of private equity, which is whenever we
                    believe that the value is maximum, we will look to liquidate. As far as
                    DEN is concerned we have said that often enough that we believe it is
                    a very good investment, it has already given very good returns to our
                    shareholders. The point at which we decide to get that value back for
                    shareholders or to monetize that value will be a decision taken at the
                    right time where we believe that at that time point in time make sense
                    for the value to come to the shareholders. But that value for the
                    shareholder is already crystallized in the market.

  Mohan Lal         Secondly on HomeShop18, I wanted to ask three questions, one is
                    that on a QoQ basis the revenues are lower. Is there a seasonality
                    here? Secondly, if you can share the EBITDA of HomeShop 18 and
                    thirdly what could be the FY11 revenue that we may look at in
                    HomeShop 18 book, sir?

  Raghav Bahl       Haresh will come in, I just want to caveat that while earlier we were
                    the only player in the space, we now have another very serious
                    competitor. So therefore, lot of this information will now get into the
                    realm of commercially very sensitive information. So having caveated
                    that, let me hand it over to Haresh.

  Haresh Chawla     We had seasonality in this quarter at HomeShop 18 and especially
                    because lot of TV viewership had moved to sports this quarter,
                    impacting the business. We cannot disclose any more detail given the
                    confidential nature of information.

  Mohan Lal         EBITDA will not be possible to disclose there?

  Haresh Chawla     No.

  Mohan Lal         Okay, fine. You have commented earlier on the disruption happening
                    for this quarter. I was just wondering what makes you sure that it will

                                       Page 22 of 25
                                                                                 July 30, 2010

                    be limited only to this quarter because the matter is pending in court
                    and the outcome can go either way. So are we hinting towards any
                    out of court settlement within this Q2 or how do we arrive at this one?

  Raghav Bahl       I think this disruption point has been misunderstood. We do not mean
                    legal disruption. The courts of the country are there for that and I do
                    not think any party can have an influence on that. The courts will do
                    what they believe is right. By disruption we have meant a logistical
                    disruption as the baton passes from one distributor to another, so it is
                    a logistical disruption we were talking about, not legal or what is
                    happening in the court. There, as a prudent management, we believe
                    it is important to put out a caution notice for our shareholders. That
                    disruption is something that is happening in this quarter. We as a
                    management will do our best to minimize it but you as a shareholder
                    need to know that there is disruption.

  Mohan Lal         Correct sir, I actually was speaking in that context only because the
                    trade on the distribution side is saying that unless this case is settled
                    between the two parties, there will not be any definitive agreement
                    with either of them with respect to Viacom18 channels. So are we
                    saying the dispute between these parties will be settled in these three
                    months and then there will be a clear ownership of these channels
                    either with Sun18 or with MSM Discovery?

  Raghav Bahl       Haresh will come in here but the legal position is very clear. The
                    TDSAT has restrained both the parties (MSM Discovery and STAR
                    DEN) from distributing our channels so there is no question of there
                    being any ambiguity on the ground.

  Mohan Lal         Are the DTH and the cable operators willing to come to the table and
                    sign agreements as of now with Sun18?

  Haresh Chawla     We are in the process of conversation. It will take time for the
                    thousands of contracts to be signed and settled.

                                       Page 23 of 25
                                                                                July 30, 2010

  Mohan Lal         Okay fine, I was just surprised that we are saying there will be a
                    disruption only for this quarter. So now you are saying that it will be
                    prolonged to further quarters in any way.

  Raghav Bahl       We do not expect that at all. As I would just like to reiterate that the
                    two orders of the tribunal are unambiguous so in fact we believe that
                    the disruption will now be of a shorter order than we had anticipated
                    but it is still prudent for us to tell our shareholders that there is a
                    turbulence that the management is capable of and focused on
                    handling but the shareholders need to know that there is a

  Mohan Lal         Sir if you can just pardon me on this, but could it be possible to share
                    any kind of progress or talks with any operator, at least on the DTH
                    side? Is it possible for you to comment on any progress in this regard?

  Raghav Bahl       As Haresh was saying the process is happening even as we are

  Haresh Chawla     In any case we will not be disclosing specific arrangements like this to
                    the world. I do not think we will ever do that.

  Mohan Lal         I think nobody does that. Even the other broadcasters also do not do

  Raghav Bahl       The process is on even as we speak. After all you will realize that
                    channels are on air. So someone is distributing them.

  Mohan Lal         Some one also distributes free to air channels sir.

  Raghav Bahl       But these are not free to air channels, understand that. They are filed
                    as pay channels.

  Mohan Lal         Sir last question. We know that MakeMyTrip has filed for an IPO, $100
                    million as a target. Now Web18 is part of standalone operations of
                    Network18. Now just on a scenario, if MakeMyTrip were to get a

                                       Page 24 of 25
                                                                                    July 30, 2010

                        valuation of above $1 billion, what will be the thought of management
                        regarding Web18 then?

  Raghav Bahl           Web 18 is a core asset of Network18 in the restructured operations
                        and will continue to be that way. Yatra is the one asset which is non-
                        core, it is more an investment asset and that is the one we may look
                        to monetize at an appropriate time but other than that, all the Web18
                        assets are very core to Network18.

  Mohan Lal             So the success of Make My Trip listing will not influence in any way
                        the thought process of management at least for a year, with respect
                        to Book My Show?

  Raghav Bahl           Book My Show is a core asset of the group, so that is the way it is.

  Mohan Lal             Fine sir, thanks a lot.

  Moderator             Thank you. As there are no further questions I would like to hand the
                        floor back to Mr. Bahl for closing comments.

  Raghav Bahl           Well thank you very much for joining us on this conference call. As we
                        had indicated in the early part, we believe that we have had a long
                        process in which we have tried to re-architect the group. We believe
                        we are close to the end of that process and we do believe that from
                        H2 in the current year we will see a fairly strong uptick on the bottom-
                        line. We as a management are focused on getting the revenue
                        structure optimized, essentially getting the cable distribution revenues
                        up and we hope to report good news on that front to our shareholders
                        as we go forward in the year. Thank you very much of being with us.

  Moderator             Thank you very much. On behalf of Network18 that concludes this
                        conference call. Thank you for joining us and you may now disconnect
                        your lines. Thank you.

  Note: Please note the above transcript is an edited transcript, containing matter related to
  only the on-going business operations of the various Group entities

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