Except as disclosed below, there are no outstanding litigation, suits or criminal or civil rosecutions, proceedings or tax liabilities against our Company, our Directors, our Promoters or

Promoter group companies, that would have a material adverse effect on our business and there

are no defaults, non-payment or overdue of statutory dues, institutional/bank dues and dues

payable to holders of any debentures, bonds and fixed deposits that would have a material adverse

effect on our business other than unclaimed liabilities against our Company or Directors or

Promoters or Promoter group companies or subsidiaries and joint ventures.

Guarantees given by banks on behalf of

the Company

81.72

Export obligations in respect of capital

goods under the export promotion

capital goods scheme

81.68

Estimated amounts of contracts

remaining to be executed on capital

account (net of advances)

10.96

1. Our Company has received a showcause notice dated July 5, 2006 from the MIB, in

relation to certain advertisements telecast by our Company, which appeared to be

indirectly promoting sale or consumption of alcohol, in violation of the Cable Television

Networks (Regulation) Act, 1995. The notice sought cause as to why action as per the

provisions of the Cable Television Networks (Regulation) Act, 1995 should not be taken

against our Company, and also as to why uplinking permission granted to us should not

be revoked. Pending decision on this notice, our Company has been directed to suspend

telecast of the said advertisements until further notice. We have through a letter dated July

25, 2006 clarified that the advertisement under consideration has no relation to any

alcoholic beverages as alleged and in this context requested that the notice be withdrawn.

We have received 14 legal notices in relation to the news items broadcast on our channel

CNN-IBN or published on ibnlive.com. The details of these legal notices are as follows:

1. Our Company has received legal notice dated January 4, 2006 from NAFED in relation to

news reports about misuse of Rs. 36,000 million by the said organisation. The notice

alleges that our Company has contravened the ‘programme code’ by telecasting

defamatory imputations, suggestive innuendos and half truths. Our Company has through

a letter dated January 17, 2006 denied all allegations raised in the legal notice. NAFED

has through a letter dated January 25, 2006 claimed an amount of Rs. 5,000 million on

account of damages and has threatened to initiate legal proceedings against our Company.

Our Company has also received legal notice dated January 4, 2006 from Mr. Homi

Rajvansh, Additional Managing Director, NAFED in relation to the same matter. Our

Company has through a letter dated January 17, 2006 denied all allegations raised in the

legal notice.

150

2. Our Company has received legal notice dated February 28, 2006 from Mr. Abhishek

Verma in relation to an allegedly defamatory news item broadcast by our Company

requiring our Company to immediately cease and desist from authoring/writing, editing,

publishing, printing and/or disseminating through the internet or otherwise the said news

item, tender and publish unconditional apology and Rs. 2.5 million as damages. Our

Company has through a letter dated March 6, 2006 denied all allegations raised in the

legal notice.

3. Our Company has received legal notice dated March 6, 2006 from the Ms. Mayawati in

relation to an allegedly defamatory news item broadcast by our Company. The

complainant has claimed an amount of Rs. 100 million as damages and has sought

information from our Company relating to ownership and shareholding of our Company

and properties/ assets owned by such persons. Our Company has denied the allegations

through letters dated March 17, 2006.

4. Our Company has received legal notice dated March 29, 2006 from Mrs. Ajanta

Mohapatra who has sought Rs. 0.5 million as damages in relation to an allegedly

defamatory news item broadcast by our Company. Our Company has denied all

allegations through a letter dated May 28, 2006.

5. Our Company has received legal notice dated April 6, 2006 from Mr. Hari Lal Sharma in

relation to a news item on trading of certain fake paintings broadcast by our Company.

The complainant has sought an unconditional apology in relation to the same. Our

Company is in the process of replying to the notice.

6. Our Company has received legal notice dated April 8, 2006 from the Maharashtra unit of

the Bahujan Samaj Party through its state president Mr. Vilas Garud in relation to an

allegedly defamatory news item broadcast by our Company. The complaint has claimed

an amount of Rs. 2,000 million as damages and has sought information from our

Company relating to ownership and shareholding of our Company and properties/ assets

owned by such persons. Our Company has denied the allegations through letter dated

June 5, 2006.

7. Our Company has received legal notice dated April 15, 2006 from Ushodaya Enterprises

Limited and Newstoday Private Limited in relation to the alleged infringement of the

copyright of the complainant due to the non-acknowledgement of the complainants with

respect to a news item broadcast by our Company. The complainants have claimed an

amount of Rs. 0.5 million as damages in relation to the same and have demanded that our

Company cease and desist from communicating or causing to communicate to public in

any manner any news clippings or any other programmes telecast by the complainants.

Our Company is considering its options to take further suitable actions.

8. Our Company has received legal notice dated April 21, 2006 from Reliance Energy

Limited in relation to an allegedly defamatory news item broadcast by our Company. The

complainant has sought a clarification/apology within one day of receipt of the notice.

Our Company has denied all allegations through a letter dated May 28, 2006.

9. Our Company has received a legal notice dated June 23, 2006 from Children’s House

International, an international adoption agency, in relation to an allegedly defamatory

news item, with regard to illegal adoptions of children, broadcast by our Company. The

complainant has sought a retraction of the said defamatory statements. Our Company is

yet to submit a reply to the legal notice.

10. Our Company has received a legal notice dated June 26, 2006, from Preet Mandir,

Balwant Kartar Anand Foundation, through its managing trustee, Mr. J.S. Bhasin, in

relation to an allegedly defamatory news item, with regard to the complainant’s alleged

151

involvement in child trafficking, broadcast by our Company. The complainant has sought

a retraction of the said news item, as well as for an unconditional apology to be broadcast

by our Company. Our Company is yet to submit a reply to the legal notice.

11. Our Company has received a legal notice dated June 28, 2006 from HDFC Bank Limited

in relation to an allegedly defamatory news item, about an alleged bank fraud, broadcast

by our Company. The complainant has sought a retraction of the said defamatory

statements, as well as an unconditional written apology from our Company. Our

Company is yet to submit a reply to the legal notice.

12. Our Company has received a legal notice dated July 30, 2006 from Dr. Suresh Bhola in

relation to a news story about doctors accepting money to amputate beggars and drug

addicts broadcast by our channel. It is alleged that the news story is highly defamatory

and malicious and is not based on correct facts. The legal notice requires our Company to

stop all further telecast of the relevant story failing which legal action may be taken. Our

Company is in process of preparing a reply.

13. Our Company has received a legal notice dated August 2, 2006 from Dr. P K Bansal in

relation to a news story titled ‘Shaitan Doctor’ broadcast by our channel. It is alleged that

the news story is highly defamatory and malicious and is not based on correct facts. The

legal notice requires our Company to provide Dr. PK Bansal with the unedited copy of

the recordings on which the story has been based failing which legal action may be taken.

Our Company is in process of preparing a reply.

14. Our Company has received a legal notice dated August 4, 2006 from Dr. Arvind Kumar

Aggarwal in relation to a news item broadcast on our channel, CNN IBN and alleged that

the allegations made in the news item are false, frivolous and concocted. The

broadcasting of the news item has lowered the reputation and has caused mental and

financial stain. The noticee has demanded an unconditional public apology within 15 days

and claimed damages of Rs. 10 million. Our Company is in process of preparing a reply.

Except for the 3 income tax cases pending against Mr. Raghav Bahl, there is no litigation

pending against any of the Directors of our Company. For details see section titled

“Outstanding Lititgation – Litigation against our Promoter and Promoter Group

Companies” beginning on page 151 of this Draft Red Herring Prospectus.

Our Promoter, TV 18 has received a notice dated March 9, 2006 from the Department of

Telecommunications, Ministry of Communications and Information Technology,

following:

(a) whether permission had been granted by the MIB for up linking of channel

‘Broadcast News’ from the teleport of TV 18;

(b) clarification relating to the licensed teleport through which the television channel

Awaaz is being up linked;

(c) clarification relating to whether both the teleports of TV 18 at New Delhi and

Noida were operating during the period December 17, 2005 and January 24, 2006

and whether up linking of television channel South Asia World had been shifted

152

prior to the grant of MIB approval in this regard; and

(d) other information in relation to the teleports of TV 18 located at Noida and New

Delhi including the sources and details of equipments used for the teleports,

endorsement by TV 18 of any television channel in their wireless teleport license

at Noida and details of all television channels being up linked from the Noida

teleport.

TV 18 has through a letter dated May 3, 2006 replied to the abovementioned notice and

has received no further communications from the MIB in this regard.

There are four income tax cases pending against our Promoter, TV 18, the details of these

are as follows:

The Income Tax department has passed an assessment order dated March 20,

2006 under Section 143(3) of the IT Act on the ground that the transfer pricing

officer while determining ‘arms length’ price under Section 92 CA (3) of the IT

Act has concluded that the assessee company had erroneously excluded a sum of

Rs. 8,250,000 while computing the operating profits. The assessment order states

that interest shall be charged under Section 234B of the IT Act and that

proceedings shall be initiated separately for furnishing inaccurate particulars of

income. TV 18 has filed an appeal dated April 20, 2006 before the CIT (Appeals)

challenging the assessment order and the order of the transfer pricing officer. The

matter is pending adjudication before CIT (Appeals).

The Income Tax department has passed an assessment order dated March 21,

2005 under Section 143(3) of the IT Act, 1961 enhancing the total income of the

assessee company by Rs. 5,400,469 as the transfer pricing officer while

determining ‘arms length’ price under Section 92 CA (3) of the IT Act has

determined the arms length price of international transactions of the assessee

company to be Rs. 13,474,254. Further, notice under Section 156 of IT Act has

also been issued to the assessee company seeking explanation as to why penalty

should not be imposed under Section 271 of the IT Act. TV 18 has filed an appeal

dated April 18, 2005 before the CIT (Appeals) challenging the assessment order

and the order of the transfer pricing officer. The matter is pending adjudication

before CIT (Appeals).

The Income Tax department has passed an assessment order dated March 3, 2003

under Section 143(3)(ii) of the IT Act, 1961. As per the assessment total income

of the assessee company is Rs. 26,170,460 whereas the total income as per the

income tax return filed is Rs. 21,088,060. The CIT (Appeals) has through its

order dated November 28, 2003 partly allowed the appeal. The Income Tax

department has in its order dated March 30, 2005 concluded that a penalty of Rs.

532,170 be imposed on the assessee company. An appeal against the penalty

order was filed before the CIT (Appeals), which has through its order dated

February 10, 2005 upheld the penalty order. The assessee company has on March

19, 2006 filed an appeal before the ITAT and matter is pending adjudication.

153

The Income Tax department has passed an assessment order dated March 28,

2002 under Section 143(3) of the IT Act, 1961. As per the assessment order the

total taxable income is Rs. 24,511,580. The assessee company filed an appeal

before the CIT (Appeals), which has through its order dated September 2, 2002

partly, allowed the appeal. The assessee company has filed an appeal dated

December 18, 2002 before the ITAT. The Income Tax department has also filed

an appeal before the ITAT challenging the deletion of certain additions as set out

in the assessment order. The matter is pending adjudication before ITAT.

Jermyn Capital Partners PLC and Mr. Dharmesh Doshi have filed a suit against our

Promoter, TV 18 in the High Court of Justice, London, Queen’s Bench Division (Claim

No. HQ05X03713) claiming damages in excess of £ 300,000 for libel and an injunction in

connection with allegedly defamatory comments published on a website. The claimants

have claimed that in their natural and ordinary meaning and/or by innuendo, the words

published on the web site implied that the claimants have been knowingly assisting Mr.

Ketan Parekh to evade an order banning him from trading on the Indian stock market

imposed by SEBI by secretly transacting business on his behalf and that the claimants had

been reported to the UK regulatory authorities by SEBI for appropriate action.

In this connection TV 18 was served a notice on January 12, 2006, from the claimants and

an apology was published, the format and content of which was not satisfactory to the

claimants. The matter is pending and the next date of hearing has not been fixed.

(a) Mr. Subhash Kumar Gupta has filed a case before the Third Labour Court,

Mumbai contending that his services have been terminated illegally and that no

termination notice or any wage in lieu thereof were paid to him. Mr. Gupta has

demanded reinstatement of services with full back wages. The matter is pending

adjudication before the Third Labour Court, Mumbai.

(b) Mr. Harkesh Chauhan has filed a case before the Labour Court, Karkardooma,

New Delhi contending that his services have been terminated illegally. Mr.

Chauhan has demanded reinstatement of services with full back wages. The

matter is pending adjudication before the Labour Court, Karkardooma, New

Delhi.

The income tax department has through an assessment order dated October 31, 2005 held

that tax is due on income of Rs. 17,998,635. The asseseee has filed an appeal before the

ITAT on August 7, 2006. Separately, the income tax department has levied a penalty of

Rs. 10,730,838 under Section 158BFA(2) of the IT Act. The notice of demand under

Section 156 of the IT Act for the aforesaid amount has been issued by the income tax

department. The assessee has filed an appeal before the CIT (A) and the matter is pending

adjudication.

154

The income tax department has passed an order dated June 30, 2006 under Section 271(c)

of the IT Act held that the assessee is liable to pay tax on income amounting to Rs.

6,810,740 and has imposed a penalty of Rs. 1,181,855. Pursuant thereto a demand notice

dated June 30, 2006 under Section 156 of the Income Tax Act, 1961 has been issued by

the income tax department. The assessee has filed an appeal before the CIT (A) and the

matter is pending adjudication.

The income tax department has through an assessment order dated July 22, 2006

concluded that the assessee is liable to pay tax and pursuant thereto a notice of demand

under section 156 for Rs. 1,667,176 and notice in relation to penalty proceedings Section

274 read with Section 271 of the IT Act have been issued. The assessee has filed an

appeal before the CIT (A) and the matter is pending adjudication.

In the opinion of our Board, there have not arisen, since the date of the last financial

statements disclosed in this Draft Red Herring Prospectus, any circumstances that

materially or adversely affect or are likely to affect our profitability taken as a whole or

the value of our consolidated assets or our ability to pay our material liabilities within the

next 12 months.