Draft For Purposes Discussion India/Sony Project Rain… · Project Rainbow Value Summary Valuation as of March 31, 2012 (currency in millions) DRAFT - For Discussion Purposes Only

Sony Pictures Entertainment Inc. Exhibit 1Project RainbowValue SummaryValuation as of March 31, 2012(currency in millions) DRAFT - For Discussion Purposes Only

FAIR MARKET VALUE ANALYSIS (a) INVESTMENT VALUE ANALYSIS (b)

Fair Market Value of 100.0% Equity Interest Investment Value of 100.0% Equity Interest

Valuation Method Exhibit Low High Low High Valuation Method Exhibit Low High Low HighDiscounted Cash Flow - Base Case 4 6,258 ～ 7,862 120.2 ～ 150.9 Discounted Cash Flow - Synergy Case 5 10,131 ～ 12,638 194.5 ～ 242.7 Comparable Company - EV/Revenue 7 7,255 ～ 9,423 139.3 ～ 180.9 Comparable Company - EV/EBITDA 7 4,605 ～ 8,791 88.4 ～ 168.8 Comparable Company - EV/EBIT 7 4,499 ～ 8,018 86.4 ～ 153.9 Comparable Company - Price/Earnings 7 4,359 ～ 6,918 83.7 ～ 132.8 Comparable Transaction - EV/Revenue 9 8,149 ～ 9,872 156.5 ～ 189.5 Comparable Transaction - EV/EBITDA 9 6,068 ～ 7,072 116.5 ～ 135.8

Notes:(a) Fair market value refers to the value of an entity on a standalone basis to a hypothetical buyer (versus a specific buyer).(b) Investment value is the value to a particular investor based on individual investment requirements and expectations. Investment value considers buyer-specific synergies.(c) Converted at the USD/INR exchange rate of 52x as of the Valuation Date.(d) Our understanding is that the price proposed was principally determined based on the Asianet - Star transaction in January 2009, which transacted at a 21.0x EBITDA multiple.

See Exhibit 9.

(INR millions) (USD millions) (c) (INR millions) (USD millions) (c)

$75 $100 $125 $150 $175 $200 $225 $250

Comparable Transaction -EV/EBITDA

Comparable Transaction -EV/Revenue

Comparable Company -Price/Earnings

Comparable Company -EV/EBIT

Comparable Company -EV/EBITDA

Comparable Company -EV/Revenue

Discounted Cash Flow -Base Case

(USD millions)

Fair Market Value of 100.0% Equity Proposed Price$227 Million (d)

$75 $100 $125 $150 $175 $200 $225 $250

Discounted Cash Flow -Synergy Case

(USD millions)

Investment Value of 100.0% Equity Proposed Price$227 Million (d)

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These draft schedules are tentative and preliminary and are provided to Sony Pictures Entertainment Inc. for discussion purposes only. They are to be returned to Deloitte Financial Advisory Services LLP, and are not to be reproduced without its permission.

Sony Pictures Entertainment Inc. Exhibit 2Project RainbowHistorical Balance SheetsValuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

As of March 31, (a) Common Size

Balance Sheets 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012AssetsGross Fixed Assets 221 309 329 429 483 23.4% 30.8% 28.3% 30.9% 27.5%Accumulated Depreciation (76) (104) (154) (197) (243) -8.0% -10.4% -13.3% -14.1% -13.8%Net Fixed Assets 145 205 175 233 241 15.3% 20.4% 15.1% 16.7% 13.7%CWIP 51 3 1 1 - 5.3% 0.3% 0.1% 0.0% 0.0%Investments 4 1 1 0.5% 0.0% 0.0% 0.0% 0.0%Deferred Tax 26 8 2 2 9 2.8% 0.8% 0.2% 0.1% 0.5%

Inventories 465 449 523 701 1,010 49.1% 44.7% 45.0% 50.4% 57.4%Debtors 206 256 257 280 401 21.7% 25.5% 22.1% 20.1% 22.8%Cash / Bank 2 61 187 27 35 0.2% 6.1% 16.1% 2.0% 2.0%Loans and Advances 167 136 136 252 165 17.7% 13.6% 11.7% 18.1% 9.4%Other Current Assets - - - 34 27 0.0% 0.0% 0.0% 2.4% 1.5%Current Assets 840 903 1,103 1,294 1,638 88.8% 90.0% 94.9% 93.1% 93.2%

Current Liabilities 119 112 96 120 105 12.5% 11.2% 8.3% 8.6% 6.0%Provisions 2 3 23 19 24 0.2% 0.3% 2.0% 1.3% 1.4%Current Liabilities 120 116 119 139 130 12.7% 11.5% 10.3% 10.0% 7.4%Net Current Assets 720 788 984 1,156 1,509 76.1% 78.4% 84.7% 83.1% 85.8%

Total Assets 946 1,004 1,162 1,391 1,759 100.0% 100.0% 100.0% 100.0% 100.0%Equity and LiabilitiesShare Capital 578 589 593 593 593 61.1% 58.7% 51.0% 42.6% 33.7%Reserves and surplus 128 159 274 416 668 13.5% 15.8% 23.6% 29.9% 38.0%Total Capital 706 748 867 1,009 1,261 74.6% 74.5% 74.6% 72.6% 71.7%Short Term Loan 240 256 295 272 424 25.4% 25.5% 25.4% 19.5% 24.1%Long Term Loan 110 74 0.0% 0.0% 0.0% 7.9% 4.2%Loan Funds 240 256 295 381 498 25.4% 25.5% 25.4% 27.4% 28.3%Deferred Tax - - - - - 0.0% 0.0% 0.0% 0.0% 0.0%Total Liabilities 946 1,004 1,162 1,391 1,759 100.0% 100.0% 100.0% 100.0% 100.0%

Notes:(a) Source: Sony Management.

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Sony Pictures Entertainment Inc. Exhibit 3Project RainbowHistorical Income StatementsValuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

Fiscal Years March 31, (a)Actual Common Size

Income Statements 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012Gross Revenue 598 872 1,123 1,362 1,895 112.0% 111.6% 110.1% 110.2% 110.0%Service Tax (64) (91) (103) (126) (173) -12.0% -11.6% -10.1% -10.2% -10.0%Net Revenue 533 781 1,021 1,235 1,722 100.0% 100.0% 100.0% 100.0% 100.0%% Growth n/a 46.5% 30.6% 21.1% 39.4%

Other Income 4 6 12 7 6 0.8% 0.7% 1.2% 0.5% 0.4%Adjustments (2) (5) (4) (3) (3) -0.4% -0.6% -0.4% -0.3% -0.2%Adjusted Total Revenue 535 782 1,029 1,239 1,726 100.4% 100.1% 100.8% 100.3% 100.2%

Programming Amortization Expense 295 370 475 608 753 55.3% 47.4% 46.5% 49.2% 43.7%Tapes & Telecast & Channel Carrying Fee 27 46 49 65 108 5.0% 5.9% 4.8% 5.3% 6.3%Total Operating Costs 322 417 524 673 861 60.4% 53.3% 51.4% 54.5% 50.0%Employee Benefit Expense 72 129 129 158 214 13.5% 16.6% 12.7% 12.8% 12.4%Administrative and Selling Expenses 80 117 126 107 148 15.1% 15.0% 12.4% 8.6% 8.6%Adjustment - (9) (117) - - 0.0% -1.2% -11.5% 0.0% 0.0%Total Expenses 474 654 663 937 1,223 88.9% 83.8% 64.9% 75.9% 71.0%

EBITDA 61 128 366 302 502 11.4% 16.4% 35.9% 24.4% 29.2%Depreciation / Amortization 24 29 51 44 62 4.6% 3.7% 5.0% 3.6% 3.6%EBIT 37 99 315 258 440 6.9% 12.7% 30.9% 20.8% 25.6%Interest 22 42 26 29 53 4.0% 5.3% 2.6% 2.3% 3.1%Profit Before Tax 15 58 289 229 387 2.8% 7.4% 28.3% 18.5% 22.5%Current Tax 55 77 129 0.0% 0.0% 5.4% 6.2% 7.5%Deferred Tax 8 25 6 - - 1.5% 3.2% 0.6% 0.0% 0.0%Adjustment (1) 2 39 (1) (1) -0.2% 0.3% 3.9% -0.1% -0.1%Profit After Tax 8 31 189 153 259 1.5% 3.9% 18.5% 12.4% 15.1%

Supplemental Information

Programming Purchases 337 355 463 786 1,062 63.2% 45.4% 45.4% 63.7% 61.7%

Notes:(a) Source: Sony Management.

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Sony Pictures Entertainment Inc. Exhibit 4, Page 1 of 2Project RainbowIncome Approach - Discounted Cash Flow Method (Fair Market Value - Base Case)Valuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

Fiscal Years Ending March 31, (a)2013 2014 2015 2016 2017 2018 Terminal

Gross Revenue 2,409 2,814 3,251 3,719 4,197 4,574 Service Tax (262) (306) (353) (404) (456) (497) Net Revenue 2,147 2,509 2,898 3,315 3,741 4,077 % Growth n/a 16.8% 15.5% 14.4% 12.8% 9.0%

Other Income 4 4 5 5 6 6 Adjustments - - - - - - Adjusted Total Revenue 2,151 2,513 2,903 3,320 3,747 4,084

Programming Amortization Expense 968 1,097 1,269 1,454 1,657 1,807 Tapes & Telecast & Channel Carrying Fee 169 187 207 204 210 229 Total Operating Costs 1,136 1,285 1,476 1,658 1,868 2,036 Employee Benefit Expense 264 313 371 425 483 526 Administrative and Selling Expenses 220 247 279 312 348 379 Adjustment - - - - - - Total Expenses 1,619 1,845 2,127 2,394 2,698 2,941

EBITDA 532 668 776 926 1,048 1,143 Depreciation / Amortization 55 62 69 75 75 82 EBIT 477 606 707 851 973 1,061 Interest 89 116 121 101 53 58 Profit Before Tax 388 490 586 750 920 1,003 Current Tax 128 162 193 248 304 325 Deferred Tax - - - - - - Adjustment - - - - - - Profit After Tax 260 328 393 503 616 677 725

Plus: Depreciation Expense 55 62 69 75 75 82 87 Less: Capital Expenditures (93) (157) (136) (70) (70) (82) (87) Plus: Programming Amortization Expense 968 1,097 1,269 1,454 1,657 1,807 1,933 Less: Programming Purchases (1,251) (1,377) (1,519) (1,670) (1,836) (2,006) (1,933) Plus: Interest(net of tax) 60 78 82 68 36 39 42 Plus: Change in Working Capital (Use)/Surplus (124) (20) 1 (89) (36) (66) (56) Debt-Free Net Cash Flow (125) 11 158 271 442 451 711

Timing factor 0.50 1.50 2.50 3.50 4.50 5.50 5.50 PV Factor 0.94 0.84 0.74 0.66 0.59 0.52 0.52 Present Value of Debt-Free Net Cash Flow (118) 10 118 180 260 236 372

Discrete Period (FY12-FY18) 685 (b) WACC 12.5%Terminal Value 6,763 TV g 7.0%Total Enterprise Value 7,448 Tax Rate 32.4%

(c) Less: Total Debt (498) (c) Add: Cash and Equivalents 35

Fair Market Value of Equity (Controlling, Fully Marketable) 6,986

WACC6,986 10.0% 11.0% 12.0% 12.5% 13.0% 14.0%5.00% 8,739 6,959 5,696 5,194 4,756 4,0316.00% 10,837 8,288 6,598 5,952 5,400 4,5087.00% 14,332 10,281 7,862 6,986 6,258 5,1208.00% 21,323 13,603 9,757 8,479 7,460 5,9379.00% 42,295 20,246 12,915 10,826 9,263 7,081

Implied WACC of Propsed Price (rounded) 10.6% ～ 10.8%

Notes:(a) Source: Sony Management. See Exhibit 3.(b) For reference purposes only, Deloitte FAS utilized a 13.0% WACC in Project Taro, and E&Y calculated a 13.0% WACC and applied a -3.0% risk premium to reconcile the perceived

transaction IRR in its original draft of the preliminary purchase price allocation, which was subsequently revised to 12.0% in the updated draft.For WACC calculation details see Exhibit 6.

(c) See Exhibit 2.

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Sony Pictures Entertainment Inc. Exhibit 4, Page 2 of 2Project RainbowIncome Approach - Discounted Cash Flow Method (Fair Market Value - Base Case)Valuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

Common Size2013 2014 2015 2016 2017 2018 Terminal

Gross Revenue 112.2% 112.2% 112.2% 112.2% 112.2% 112.2% n/aService Tax -12.2% -12.2% -12.2% -12.2% -12.2% -12.2% n/aNet Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% n/a

Other Income 0.2% 0.2% 0.2% 0.2% 0.2% 0.2% n/aAdjustments 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% n/aAdjusted Total Revenue 100.2% 100.2% 100.2% 100.2% 100.2% 100.2% n/a

Programming Amortization Expense 45.1% 43.7% 43.8% 43.9% 44.3% 44.3% n/aTapes & Telecast & Channel Carrying Fee 7.9% 7.5% 7.2% 6.1% 5.6% 5.6% n/aTotal Operating Costs 52.9% 51.2% 51.0% 50.0% 49.9% 49.9% n/aEmployee Benefit Expense 12.3% 12.5% 12.8% 12.8% 12.9% 12.9% n/aAdministrative and Selling Expenses 10.2% 9.9% 9.6% 9.4% 9.3% 9.3% n/aAdjustment 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% n/aTotal Expenses 75.4% 73.5% 73.4% 72.2% 72.1% 72.1% n/a

EBITDA 24.8% 26.6% 26.8% 27.9% 28.0% 28.0% n/aDepreciation / Amortization 2.5% 2.5% 2.4% 2.3% 2.0% 2.0% n/aEBIT 22.2% 24.1% 24.4% 25.7% 26.0% 26.0% n/aInterest 4.2% 4.6% 4.2% 3.0% 1.4% 1.4% n/aProfit Before Tax 18.1% 19.5% 20.2% 22.6% 24.6% 24.6% n/aCurrent Tax 6.0% 6.4% 6.7% 7.5% 8.1% 8.0% n/aDeferred Tax 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% n/aAdjustment 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% n/aProfit After Tax 12.1% 13.1% 13.6% 15.2% 16.5% 16.6% n/a

Plus: Depreciation Expense 2.5% 2.5% 2.4% 2.3% 2.0% 2.0% n/aLess: Capital Expenditures -4.3% -6.3% -4.7% -2.1% -1.9% -2.0% n/aPlus: Programming Amortization Expense 45.1% 43.7% 43.8% 43.9% 44.3% 44.3% n/aLess: Programming Purchases -58.2% -54.9% -52.4% -50.4% -49.1% -49.2% n/aPlus: Interest(net of tax) 2.8% 3.1% 2.8% 2.1% 1.0% 1.0% n/aPlus: Change in Working Capital (Use)/Surplus -5.8% -0.8% 0.0% -2.7% -1.0% -1.6% n/aDebt-Free Net Cash Flow -5.8% 0.5% 5.5% 8.2% 11.8% 11.1% n/a

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Sony Pictures Entertainment Inc. Exhibit 5, Page 1 of 2Project RainbowIncome Approach - Discounted Cash Flow Method (Investment Value - Synergy Case)Valuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

Fiscal Years Ending March 31, (a)2013 2014 2015 2016 2017 2018 Terminal

Gross Revenue 2,409 2,852 3,391 4,066 4,936 5,381 Service Tax (262) (310) (368) (442) (536) (584) Net Revenue 2,147 2,542 3,023 3,625 4,400 4,796 % Growth n/a 18.4% 18.9% 19.9% 21.4% 9.0%

Other Income 4 4 5 5 6 6 Adjustments - - - - - - Adjusted Total Revenue 2,151 2,546 3,028 3,630 4,406 4,803

Programming Amortization Expense 968 1,097 1,269 1,454 1,657 1,807 Tapes & Telecast & Channel Carrying Fee 169 187 207 204 210 229 Total Operating Costs 1,136 1,285 1,476 1,658 1,868 2,036 Employee Benefit Expense 264 318 391 473 585 638 Administrative and Selling Expenses 220 250 287 330 385 419 Adjustment - - - - - - Total Expenses 1,619 1,853 2,155 2,461 2,838 3,093

EBITDA 532 694 873 1,169 1,568 1,710 Depreciation / Amortization 55 62 69 75 75 82 EBIT 477 631 804 1,094 1,493 1,628 Interest 89 116 121 101 53 58 Profit Before Tax 388 515 683 993 1,440 1,570 Current Tax 128 170 225 328 475 509 Deferred Tax - - - - - - Adjustment - - - - - - Profit After Tax 260 345 458 665 965 1,060 1,135

Plus: Depreciation Expense 55 62 69 75 75 82 87 Less: Capital Expenditures (93) (157) (136) (70) (70) (82) (87) Plus: Programming Amortization Expense 968 1,097 1,269 1,454 1,657 1,807 1,933 Less: Programming Purchases (1,251) (1,377) (1,519) (1,670) (1,836) (2,006) (1,933) Plus: Interest(net of tax) 60 78 82 68 36 39 42 Plus: Change in Working Capital (Use)/Surplus (124) (23) (15) (129) (114) (78) (66) Debt-Free Net Cash Flow (125) 26 207 393 713 822 1,110

Timing factor 0.50 1.50 2.50 3.50 4.50 5.50 5.50 PV Factor 0.94 0.84 0.74 0.66 0.59 0.52 0.52 Present Value of Debt-Free Net Cash Flow (118) 22 154 260 420 430 581

Discrete Period (FY12-FY18) 1,169 (b) WACC 12.5%Terminal Value 10,563 TV g 7.0%Total Enterprise Value 11,731 Tax Rate 32.4%

(c) Less: Total Debt (498) (c) Add: Cash and Equivalents 35

Investment Value of Equity (Controlling, Fully Marketable) 11,269

WACC11,269 10.0% 11.0% 12.0% 12.5% 13.0% 14.0%

5.00% 13,734 11,008 9,074 8,304 7,634 6,5226.00% 17,115 13,173 10,559 9,559 8,704 7,3237.00% 22,750 16,419 12,638 11,269 10,131 8,3528.00% 34,020 21,831 15,757 13,740 12,129 9,7249.00% 67,831 32,653 20,956 17,622 15,127 11,644

Implied WACC of Propsed Price (rounded) 12.3% ～ 12.6%

Notes:(a) Key drivers of synergy case include: increase in ad rates, higher subscription revenue through improved bargaining position with multi-system operators (MSOs),

and increase in digital, new media, and international revenue through MSM's network.Source: Sony Management.

(b) For reference purposes only, Deloitte FAS utilized a 13.0% WACC in Project Taro, and E&Y calculated a 13.0% WACC and applied a -3.0% risk premium to reconcile the perceived transaction IRR in its original draft of the preliminary purchase price allocation, which was subsequently revised to 12.0% in the updated draft.For WACC calculation details see Exhibit 6.

(c) See Exhibit 2.

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Sony Pictures Entertainment Inc. Exhibit 5, Page 2 of 2Project RainbowIncome Approach - Discounted Cash Flow Method (Investment Value - Synergy Case)Valuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

Common Size2013 2014 2015 2016 2017 2018 Terminal

Gross Revenue 112.2% 112.2% 112.2% 112.2% 112.2% 112.2% n/aService Tax -12.2% -12.2% -12.2% -12.2% -12.2% -12.2% n/aNet Revenue 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% n/a

Other Income 0.2% 0.2% 0.2% 0.1% 0.1% 0.1% n/aAdjustments 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% n/aAdjusted Total Revenue 100.2% 100.2% 100.2% 100.1% 100.1% 100.1% n/a

Programming Amortization Expense 45.1% 43.2% 42.0% 40.1% 37.7% 37.7% n/aTapes & Telecast & Channel Carrying Fee 7.9% 7.4% 6.9% 5.6% 4.8% 4.8% n/aTotal Operating Costs 52.9% 50.5% 48.8% 45.7% 42.4% 42.4% n/aEmployee Benefit Expense 12.3% 12.5% 12.9% 13.1% 13.3% 13.3% n/aAdministrative and Selling Expenses 10.2% 9.8% 9.5% 9.1% 8.7% 8.7% n/aAdjustment 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% n/aTotal Expenses 75.4% 72.9% 71.3% 67.9% 64.5% 64.5% n/a

EBITDA 24.8% 27.3% 28.9% 32.2% 35.6% 35.6% n/aDepreciation / Amortization 2.5% 2.5% 2.3% 2.1% 1.7% 1.7% n/aEBIT 22.2% 24.8% 26.6% 30.2% 33.9% 33.9% n/aInterest 4.2% 4.6% 4.0% 2.8% 1.2% 1.2% n/aProfit Before Tax 18.1% 20.3% 22.6% 27.4% 32.7% 32.7% n/aCurrent Tax 6.0% 6.7% 7.5% 9.0% 10.8% 10.6% n/aDeferred Tax 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% n/aAdjustment 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% n/aProfit After Tax 12.1% 13.6% 15.1% 18.4% 21.9% 22.1% n/a

Plus: Depreciation Expense 2.5% 2.5% 2.3% 2.1% 1.7% 1.7% n/aLess: Capital Expenditures -4.3% -6.2% -4.5% -1.9% -1.6% -1.7% n/aPlus: Programming Amortization Expense 45.1% 43.2% 42.0% 40.1% 37.7% 37.7% n/aLess: Programming Purchases -58.2% -54.2% -50.2% -46.1% -41.7% -41.8% n/aPlus: Interest(net of tax) 2.8% 3.1% 2.7% 1.9% 0.8% 0.8% n/aPlus: Change in Working Capital (Use)/Surplus -5.8% -0.9% -0.5% -3.6% -2.6% -1.6% n/aDebt-Free Net Cash Flow -5.8% 1.0% 6.8% 10.9% 16.2% 17.1% n/a

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Sony Pictures Entertainment Inc. Exhibit 6Project RainbowWeighted Average Cost of CapitalValuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

Comparable Company Information (a)

Company Debt Equity D/(D+E) Beta M-Cap Product Wtg Beta

Book Weights

Market Weights

D/(D+E) - MW

Zee Entertainment 286 34,308 0.8% 0.60 120,289 71,752 0.59 0.60 0.2%Sun TV Network 934 25,120 3.6% 0.71 121,770 86,493 0.69 0.71 0.8%

Total 1,220 59,428 2.0% 242,058 158,245 0.65 Average 610 29,714 2.2% 0.65 0.64 0.65 0.5%Median 610 29,714 2.2% 0.65 0.64 0.65 0.5%

Levered Beta Low Mid HighDebt % 20.0% 20.0% 20.0% Based on average capital structure for entire Indian entertainment and programming industry.Equity % 80.0% 80.0% 80.0%Tax rate 32.4% 32.4% 32.4% Estimated effective tax rate.Unlevered beta 0.60 0.62 0.64 Levered beta 0.70 0.73 0.75

Cost of EquityRisk free 8.6% 8.6% 8.6% YTM of 10-year Indian Government Securities. Source: Bloomberg.Market Risk Premium 6.0% 6.5% 7.0% Market premium based on overall market returns. Source: Deloitte India Research.Levered Beta for equity 0.70 0.73 0.75 Relevered beta based on selection and market capital structure.Cost of Equity 12.8% 13.3% 13.8%Specific Company Risk 0.0% 0.0% 0.0%Total Cost of Equity 12.8% 13.3% 13.8%

Cost of DebtCost of Debt (pre-tax) 13.5% 13.5% 13.5% Cost of Debt provided by Sony Management.Tax Rate 32.4% 32% 32.4% Estimated effective tax rate.Cost of Debt (post-tax) 9.1% 9.1% 9.1%

WACC ConclusionWACC 12.0% 12.4% 12.9%WACC (Rounded) 12.0% 12.5% 13.0%

Notes:(a) Market information based on data from Capitaline and Indian Stock Exchanges.

Unlevered Beta

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Sony Pictures Entertainment Inc. Exhibit 7Project RainbowMarket Approach - Comparable Company Method (Fair Market Value - Base Case)Valuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

EV / Revenue

EV / EBITDA

EV / EBIT

Price / Earnings

LTM LTM LTM LTM

Zee Entertainment Enterprises Ltd. 3.6x 14.9x 15.5x 20.5xSun TV Network Ltd 4.6x 8.1x 9.1x 12.9x

Average 4.1x 11.5x 12.3x 16.7x

EV / Revenue Low Mid High(a) FY 12 Revenue 1,722 1,722 1,722

EV / Revenue multiple 3.6x 4.1x 4.6xEnterprise Value (minority, marketable) 6,224 7,098 7,972Less: Market Participant Level of Debt 20.0% (1,245) (1,420) (1,594) Equity Value (minority, marketable) 4,979 5,678 6,378Control Premium 30.0% 1,494 1,704 1,913 Equity Value (controlling, marketable) 6,473 7,382 8,291Plus: Market Participant Level of Debt 1,245 1,420 1,594 Enterprise Value (controlling, marketable) 7,717 8,801 9,886

(b) Less: Total Debt (498) (498) (498) (b) Plus: Cash and Equivalents 35 35 35

Equity Value - (controlling, marketable) 7,255 8,339 9,423

EV / EBITDA Low Mid High(a) FY 12 EBITDA 502 502 502

EV / EBITDA multiple 8.1x 11.5x 14.9xEnterprise Value (minority, marketable) 4,087 5,775 7,463Less: Market Participant Level of Debt 20.0% (817) (1,155) (1,493) Equity Value (minority, marketable) 3,269 4,620 5,970Control Premium 30.0% 981 1,386 1,791 Equity Value (controlling, marketable) 4,250 6,006 7,761Plus: Market Participant Level of Debt 817 1,155 1,493 Enterprise Value (controlling, marketable) 5,067 7,160 9,254



EV / EBIT Low Mid High(a) FY 12 EBIT 440 440 440

EV / EBIT multiple 9.1x 12.3x 15.5xEnterprise Value (minority, marketable) 4,001 5,420 6,839Less: Market Participant Level of Debt 20.0% (800) (1,084) (1,368) Equity Value (minority, marketable) 3,201 4,336 5,471Control Premium 30.0% 960 1,301 1,641 Equity Value (controlling, marketable) 4,161 5,637 7,112Plus: Market Participant Level of Debt 800 1,084 1,368 Enterprise Value (controlling, marketable) 4,961 6,721 8,480



Price/Earnings Low Mid High(a) Profit After Tax 259 259 259

PE multiple 12.9x 16.7x 20.5xPreliminary Equity Value (minority, marketable) 3,353 4,337 5,321Control Premium 30.0% 1,006 1,301 1,596 Equity Value - (controlling, marketable) 4,359 5,638 6,918

Notes:(a) Source: Sony Management. See Exhibit 3.(b) See Exhibit 2.

Comparable Companies

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Sony Pictures Entertainment Inc. Exhibit 8Project RainbowTarget - Comparable Companies ComparisonValuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

QUALITATIVE PARAMETERS

No. ChannelsGenres

Languages

Market Position

Reach

FINANCIAL METRICS (a)

For Fiscal Years For Fiscal Years2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014

Revenue % GrowthSun TV 10,394 14,528 20,135 18,814 21,077 24,125 n/a 40% 39% -7% 12% 14%Zee TV 21,773 21,998 30,136 30,406 33,391 37,547 n/a 1% 37% 1% 10% 12%Average 16,083 18,263 25,135 24,610 27,234 30,836 n/a 20% 38% -3% 11% 13%Target 781 1,021 1,235 1,722 2,147 2,509 n/a 31% 21% 39% 25% 17%

EBITDA % RevenueSun TV 6,216 8,857 12,212 11,241 12,599 14,492 60% 61% 61% 60% 60% 60%Zee TV 5,599 6,386 8,469 7,396 9,098 10,883 26% 29% 28% 24% 27% 29%Average 5,907 7,621 10,340 9,318 10,849 12,688 43% 45% 44% 42% 44% 45%Target 128 366 302 502 532 668 16% 36% 24% 29% 25% 27%

Profit After Tax % RevenueSun TV 3,586 5,197 7,716 7,189 8,211 9,567 35% 36% 38% 38% 39% 40%Zee TV 4,975 6,446 6,285 5,892 6,785 8,031 23% 29% 21% 19% 20% 21%Average 4,281 5,821 7,000 6,540 7,498 8,799 29% 33% 30% 29% 30% 31%Target 31 189 153 259 260 328 4% 18% 12% 15% 12% 13%

Content Inventory % Revenue (excluding subscription revenue)Sun TV 1,922 2,587 2,842 n/a n/a n/a 23% 23% 19% n/a n/a n/aZee TV 4,576 4,713 5,396 7,339 n/a n/a 36% 39% 29% 43% n/a n/aAverage 3,249 3,650 4,119 7,339 n/a n/a 30% 31% 24% 43% n/a n/aTarget 449 523 701 1,010 1,293 1,573 58% 51% 57% 59% 60% 63%

Notes:(a) Financial information based on data from Capitaline.

Sun TV

32

Target

4General Entertainment, Music, Movies

Telugu speaking market only (primarily Andhra Pradesh)

#2 in Andhra Pradesh (following Sun TV’s – Gemini TV)Relatively a new company compared to Zee and Sun

Zee TV

23Sports, Music, Movies, Cooking

Hindi, English and all key regional languages (targeting both North and South India)

One of the oldest TV broadcasters in India. Dominant position in the overall India market.

General Entertainment, Music, Movies, and others

Regional languages only (South India) – Tamil (State - Tamil Nadu), Telugu (Andhra Pradesh), Kannada (Karnataka), Malayalam (Kerala)

Dominant position in regional market (South India/Andhra Pradesh). Most of its channels are #1 based on TV ratings in all the 4 regions it operates in.

Over 500 million viewers across 167 countries

95 million households in India. Broadcasted across 27 countries.

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Sony Pictures Entertainment Inc. Exhibit 9Project RainbowMarket Approach - Comparable Transaction Method (Fair Market Value - Base Case)Valuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

Transaction Data (INR millions)

Implied FY10 FY10Date of Transaction Parties % Stake 100% EV Revenue EBITDA EV/Revenue (a) EV/EBITDA (a)

January 2009 Asianet - Star 51% 21,635 2,377 1,038 9.1x 20.8x

Multiples Trend Analysis (b)

Average Multiples - Sun TV & Zee TV Mar. 2008 Mar. 2012 % Decline (c)

Adj. CTM Multiple (d)

EV / Revenue 9.4x 5.1x 53.8% 4.9xEV / EBITDA 20.4x 12.8x 62.5% 13.0x

EV / Revenue Low Mid High(d) Revenue 1,722 1,722 1,722

EV / Revenue multiple 5.0x 5.5x 6.0xEnterprise Value (controlling, marketable) 8,611 9,473 10,334

(e) Less: Total Debt (498) (498) (498) (e) Plus: Cash and Equivalents 35 35 35


EV / EBITDA Low Mid High(d) EBITDA 502 502 502

EV / EBITDA multiple 13.0x 14.0x 15.0xEnterprise Value (controlling, marketable) 6,530 7,032 7,535

(e) Less: Total Debt (498) (498) (498)(e) Plus: Cash and Equivalents 35 35 35


Notes:(a) Reflects implied multiples of the Asianet - Star transaction.(b) See Exhibit 10 for multiple trend analysis of Sun TV and Zee TV average multiples.(c) Represents the decline factor in average Sun TV and Zee TV multiples from 2008 to 2012.(d) (d) = (a) x (c)(d) Source: Sony Management. See Exhibit 3.(e) See Exhibit 2.

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Sony Pictures Entertainment Inc. Exhibit 10Project RainbowMarket Approach - Rolling Multiples AnalysisValuation as of March 31, 2012(INR millions) DRAFT - For Discussion Purposes Only

Notes:(a) Reflects the average of Sun TV and Zee TV monthly EV/EBITDA multiples over the period spanning from January 2008 to May 2012.

0.00x

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10.00x

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30.00x

20122011201020092008

EV/E

BIT

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EV/EBITDA Multiple Over 2008 - 2012 Period (a)

Sun Zee Average

March 2008Average = 20.4x

March 2012Average = 12.8x

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Draft For Purposes Discussion India/Sony Project Rain… · Project Rainbow Value Summary Valuation as of March 31, 2012 (currency in millions) DRAFT - For Discussion Purposes Only