PRESS RELEASE

PVR has announced its second quarter results. Total Revenues for the quarter ended September 2006, were Rs 4,573 lacs, higher by 56% over the corresponding quarter ended September 2005. The growth has been driven by a robust increase in revenues of existing cinemas and from new multiplexes which commenced operations during the year. Revenues are reflected net of Entertainment tax, Sales Tax and Service Tax.

The Company paid an entertainment tax of Rs 823 lacs during the quarter ended September 2006 as compared to Rs.639 lacs during the corresponding quarter ended September 2005. The Company enjoys entertainment tax exemption in its properties – PVR EDM, PVR Mulund, PVR Indore & PVR Lucknow.

As a % of Gross Operating Income, the average tax rate of the Company reduced from 17.8% in quarter ended September 2005 to 15.5% in quarter ended September 2006.

The Company achieved a significant revenue growth in all streams –

• Revenue from Ticket sales for the quarter ended September 2006 were Rs.2,424 lacs (up 33% Y-O-Y). This was achieved through a mix of volume (occupancy) and/or ticket price growth at various cinemas.
  
• Income from revenue sharing for the quarter ended September 2006 were Rs.581 lacs (up 283% Y-O-Y). This was driven by increase in revenue from company’s existing cinema at East Delhi Mall, Ghaziabad which operates under a revenue share arrangement and addition of 3 new multiplexes at Treasure Island Mall – Indore, Sahara Ganj – Lucknow and Nirmal Lifestyle – Mulund, Mumbai under this format. The revenue from ticket sales at these cinemas is accounted for on the basis a revenue share with the developer.
  
• Overall revenue from ticket sales and income from revenue sharing for the quarter ended September 2006 were higher by 52% over the corresponding quarter of previous year.
  
• Revenue from Food & Beverage sales for the quarter ended September 2006 were Rs.885 lacs (up 50% Y-O-Y). This was achieved thru a mix of increase in average spend per patron at existing cinemas and new cinemas opened by the company.
  
• Revenues from Advertising & Promotions for the quarter ended September 2006 were Rs.389 lacs (up 67% Y-OY), driven by a surge in revenue from existing cinemas.
  
• Revenues from Management fee income for the quarter ended September 2006 were Rs.29 lacs (up 52% Y-O-Y). This was on account of superior operating performance at multiplex at SRS Mall, Faridabad being operated on a franchisee basis and addition of new multiplex at Spice World, Noida which was not operational during the corresponding quarter of previous year.

Other Income for the quarter ended September 2006 was Rs.185 lacs (up 983% Y-O-Y). Other income includes rent income from surplus space adjacent to our cinemas that has been leased to third parties, interest received on surplus operating cash flow and interest/ dividend income on investment of IPO proceeds in short term investments, and other miscellaneous income. The break of Other Income is as under:

Cinema-wise Revenue growth

Net Operating Income for the quarter ended September 2006, were Rs.4,350 lacs, higher by 52% over the corresponding quarter ended September 2005. This was driven by a revenue growth of 10% from Existing cinemas and the balance revenue growth on account of new cinemas which were added by the company after the quarter ended September 2005.

The revenues at Naraina were impacted due to it being a standalone old format multiplex & EDM were impacted on account of increase in competition in the immediate vicinity.

The new cinemas which contributed to the revenue growth include Rivoli, Hyderabad, Indore, Lucknow, Juhu, Sahara Gurgaon, Mulund, Aurangabad & Latur.

Average Ticket Price

We achieved an average ticket pricing of Rs.125 across our cinema circuit during the quarter ended September 2006 as compared to Rs.120 achieved during the corresponding quarter of previous year. The average ticket pricing at Company level grew by approximately 4.25% as compared to the corresponding quarter in previous year.

The revenues from existing cinemas registered a growth of 10% driven by increase in average ticket pricing at some of the existing cinemas and increase in occupancy which were done through innovative pricing, promotions and product placement initiatives, to provide an enhanced experience to the customers.

New Properties which commenced operations

During the quarter, we commenced operations at 4 new multiplex projects namely PVR Gurgaon at Sahara Mall – Gurgaon, PVR Aurangabad and PVR Latur adding 8 new screens under our operation taking the screen count from 68 in previous quarter to 76 by the end of the quarter.

In addition to the above, we also commenced operations at single screen cinema at Aligarh on 26th September, 2006 further adding 1 more screen.

We now operate and manage 77 screens across 21 locations spread over Delhi, Gurgaon, Faridabad, Noida, Mumbai, Bangalore, Hyderabad, Indore, Lucknow, Aurangabad, Latur & Aligarh. PVR Hyderabad is presently operational with 3 screens and 926 seats out of total of 5 screens and 1321 seats. PVR Juhu is presently operational with 2 screens with 582 seats out of total of 5 screens and 1260 seats

Update on projects under construction

We have signed MOUs/ agreements with various developers for setting up multiplex projects across the country. These Multiplexes are coming up in good quality developments / malls, which are well located and have potential of becoming prime entertainment, leisure and retail destinations.

About 40 multiplex screens of the Company are presently under various stages of construction and fit-outs.

Co- production foray with Aamir Khan Productions Private Limited

PVR Pictures Limited, a 100% subsidiary of PVR has recently entered into a tie up with Aamir Khan Productions Private Limited for their next two films, presently titled Taare Zameen Par and Jaane Tu Ya Jaane Na.

Both the movies are likely to be released in financial year 2007-08. Aamir Khan Productions Private Limited, headed by Aamir Khan, is a premier film production house in the Hindi film industry, which produced Lagaan.

Khan has acted films, which include Lagaan, Dil Chahta Hai, Rang De Basanti, Fanaa, Mangal Pandey amongst others.

He will be a lead actor in one of the two films. PVR Pictures will be the co-producer for both films and shall be the film distributor on a pan India basis.

PVR Pictures will make investment in the two films on a fixed budget basis and will earn distributors commission on the collections, besides earning an interest on the investment and a share in the profits of the films through exploitation of all theatrical and non theatrical rights over a long period of time.