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History of Spice Communications Ltd.

The Comp. was originally incorporated as a private limited Comp. on March 28, 1995 under the name of Modicom Network Private Limited. The Company subsequently became a deemed public Comp. under section 43[1As] of Companies Act, 1956 w.e.f. April 1, 1999 & the name of the Comp. was changed to Modicom Network Limited. The name of the Company was further changed to Spice Communications Limited vide fresh Certificate of Incorporation dated December 3, 1999. With addition of the word `Private' in the name of Comp. under Section 43A [2As] of the Companies Amendment Act, 2000, the name was again changed to Spice Communications Private Limited w.e.f. October 28, 2003. On December 28, 2006 the Comp. was converted into a Public Comp. & the name changed to Spice Communications Limited. The Registered office of the Company was changed from 13th Floor Hemkunt Tower, 98, Nehru Place, New Delhi 110019 to 60-D Sainik Farms, New Delhi 110062 w.e.f. April 13, 2004.

The Comp. bid for six circles in year 1995-96, out of which it got H-1 position in three circles, i.e. it was the highest bidder for getting the license in Karnataka, Punjab & Rajasthan telecom circles. The Comp. opted for only two telecom circles of Karnataka & Punjab.

Accordingly the Comp. entered into license agreement with Department of Telecommunication [DoTs] for operation of Cellular Mobile Telephone Services in the aforesaid telecom circles in the year 1996.

In the year 1996, Modi Wellvest Private Limited [MWPLs], a group company incorporated in India held 51% equity in the Comp. & Motorola Inc., Chicago, U.S.A. & Distacom Communications Limited, Hongkong, a Hong Kong based telecom service provider held 10% of equity & 39% of the equity through their wholly owned subsidiaries in Republic of Mauritius in the names of MINL, Mauritius & DCIL respectively. MINL exited as shareholder of Spice in September 1999 & DCIL, purchased the 10% equity held by MINL & thus became a shareholder with 49% of the equity.

In November 1999, a Shareholders Agreement known as the Spice.com Agreement' was entered into between our Company, Modinet Private Limited, MWPL, Super Infosys Private Limited, Distacom India Holdings Limited, Distacom Communications [Indias] Limited, Asian Infrastructure [Mauritiuss] Inc., PAII [Mauritiuss] Comp. Limited & Lazard Asia Investments B.V. to regulate [is] in the case of MWPL & DCIL, the shareholding arrangement in respect of our Company, & [iis] in the case of all parties, the appointment of directors, the management of our Comp. & the conduct of our Company business.

In March 2006, TM through its wholly owned subsidiary TMI Mauritius purchased the entire share capital of DCIL, Subsequently the name of DCIL was changed to TMI India. TM is a listed Comp. listed on Bursa Malaysia Stock Exchanges. TM is a leading regional information and communications group, which offers a comprehensive range of communication services & solutions in fixed line, mobile, data and broad band. TM currently has interests in eleven other countries including Malaysia, Sri Lanka, Bangladesh, Indonesia, Cambodia, Thailand, Malawi, Singapore with cellular service serving as the cornerstone of its investments.

Consequently a new shareholders agreement was executed on March 10, 2006 to record the respective rights & obligations of TM International & other parties in relation to shareholding and management of Spice.

For details of Shareholders agreement please refer to page 98 of this DRHP.

During fiscal 1996-97, the Comp. had obtained an equipment finance facility from Motorola Inc., a supplier of telecommunications equipment, & Standard Chartered Bank [Rupee portion guaranteed by Motorola India Limiteds] for equipment financing & related customs duty payments amounting to US$39 million & Rs. 900 million, respectively. The Comp. defaulted on the loan facilities when they became due & thereafter Motorola Inc. filed litigation against the Company in the High Court of Justice, United Kingdom & Delhi High Court.

In fiscal 2006, the Comp. entered into an out of court settlement with Motorola Inc. whereby the Comp. paid US$50 million, as settlement of all outstanding dues.

During fiscal 1996-97 we had also entered into an equipment finance facility of US$28.3 million from Chase Manhatten Bank [which was subsequently paid & replaced by INR facility of Rs. 1130 million from Bank of America, New Delhi in the year 2000s] & Rs.1500 million from Bank of America, New Delhi [which later increased to Rs.1725 millions]. These facilities were guaranteed by Siemens AG to Bayerische Landesbank Girozentrale which in turn issued guarantees to Bank of America, New Delhi. We defaulted on the loan facilities when they became due and thereafter Siemens AG initiated legal proceedings against us for recovery of outstanding balances on the loans plus accrued interest in the High Court of Justice, United Kingdom & Delhi High Court.

In fiscal 2006, the Comp. entered into an out of court settlement with Siemens AG whereby the Comp. paid US$50 million, as settlement of all outstanding dues.

Milestones achieved by Company

Year Milestones

1995 Incorporated as Private Limited Comp. under the name Modicom Network Private Limited for providing telecommunication services.

1995 Comp. filed bids for providing telecommunication services in six circles, out of which it got H-1 position in three circles, i.e. it was the highest bidder for getting the license in Karnataka, Punjab & Rajasthan telecom circles. The Company opted for two telecom circles of Karnataka & Punjab

1996 Comp. signed License Agreements with DoT for operation of Cellular Mobile Telephone Services in Punjab & Karnataka.

1996 MWPL, DCIL & MINL were issued 51%, 39% & 10% equity of the Company.

1997 Commencement of commercial operations in May 1997 in Karnataka Circle & June 1997 in Punjab Circle.

1999 DCIL acquired the 10% equity in the Comp. held by MINL and became a 49% equity shareholder of Company.

1999 Achieved 0.1 million subscriber base.

1999 Change of status by conversion into Deemed Public Limited Comp. & change of name to Modicom Network Limited.

1999 Change of name of Comp. to Spice Communications Limited.

2000 The Comp. became entitled to Revenue sharing regime of licensing instead of Fixed license fee regime.

2002 Obtained ISP license.

2003 Change of name of Comp. to Spice Communications Private Limited.

2003 Achieved 1 million subscriber base.

2004 Migrated to Unified Access Services.

2006 Achieved 2 million subscriber base.

2006 TM International purchased the entire share capital of DCIL.

2006 The Comp. applied for obtaining ILD & NLD Licenses.

2006 The Comp. applied for Cellular Licence in 20 Circles

2006 Name of Comp. changed to Spice Communications Limited

2007

-Spice Communications Ltd has appointed Dr. Bhupendra Kumar Modi as the Additional Director of Company. Dr. B K Modi has also been appointed as the Chairman of Comp. in place of Mr. Dilip Modi, who shall continue to run the Comp. in his present position as the Managing Director of Company.

2008

- Spice Communications Ltd has informed that Mr. M R Prasanna & Mr. Ashish Dwivedi have been appointed as Additional Directors of Comp. w.e.f. August 08, 2008.