The methodology developed for formulating this Report was to first understand the existing practices in Bollywood and Hollywood. In order to examine this, we undertook an extensive review starting in January 2001 of the relevant legal, contractual, economic, business and technical literature relating to Bollywood and Hollywood. Additionally, we engaged in discussions with people familiar with the functioning of the Indian film industry. In our attempt to gain a deeper understanding of the existing practices in Bollywood, we selected a list of key players in Mumbai, India, such as producers, distributors, theater owners and insurance companies with whom we had set up interviews. In the course of our interactions, we also gained an understanding of their expectations concerning the future of Bollywood.

After developing an understanding of Bollywood and the way it functions, we needed to get a grip on the Hollywood-related issues and their answers. In order to do so, we collected data from a number of sources, namely media personnel in London, Los Angeles, New York and San Francisco. We conducted interviews with a number of these key individuals.

We went to London in March of 2001 and met with a number of law firms and a couple of Indian global players, like Shekhar Kapur (of Bandit Queen and Elizabeth fame) Kabir Bedi (of Sandokan and Octopussy fame) and Sam Pitroda. We also met up with The Really Useful Group (an Andrew Lloyd Webber Company) and their lawyers in London. Two weeks later, we visited Los Angeles and had back-to-back meetings for 3 days with the industry players, including studios, completion guarantors, producers, talent agencies, bankers and lawyers. These meetings provided us with a clear picture of the style in which business was conducted in Hollywood. Our meeting with Film Finance, Inc. (completion guarantors) proved to be very enlightening and informative as the concept of financing a film with completion guarantors was completely alien in Bollywood at the time.

The next stop was New York in April of 2001, where again, we met with a few entertainment lawyers (one of whom was Mr. Robert Freedman, author of the popular Mathew Bender Entertainment Law Series), MTV and other media players.

Ashni attended the Cannes Film Festival in May 2001, which, apart from being a learning experience, was also a real eye-opener with regards to the large scale in which the international film industry operates. Apart from watching the rich and famous walk the red carpet, Ashni attended a two-day conference on "International Audiovisual Law: Building a Business Model to Account for New Technologies in cCinema," which provided deeper insight into the future of digital cinema. At the festival, India's Honorable Minister for Information and Broadcasting, Sushma Swaraj, inaugurated the first-ever Indian Pavilion. Filmmakers from Germany, France, U.K. and U.S.A. evidenced substantial interest in Bollywood and indicated their inclination on collaborative efforts with Indian filmmakers.

Apart from meeting up with people, work on the Report continued on the side from our firm's Silicon Valley branch, where we continuously interacted with a variety of media players and observed the ongoing developments in the film industries on both sides of the Pacific.

In June of 2001, we attended the Indo-U.S. Joint Business Council in Washington, D.C., where Ms. Sushma Swaraj, along with a 30-member delegation from the Indian entertainment Industry, were present. Individuals there included Yash Chopra, Yash Johar and Rama Naidu. The purpose of the council was to promote ties between India and U.S. in the entertainment sector.

Ashni along with her team continued to observe and update themselves constantly by attending conferences on legal issues pertaining to the entertainment industry, tracking articles and meeting up with more industry players in Bollywood (Film City, IDBI, Adlabs, special effects/animation firms, producers etc). In Chennai, we interviewed distributors, producers, owners of processing laboratories and others to gain a better understanding on how Sollywood operates and functions. By actively working on film projects, film funds and media related transactions, we gained first-hand experience in the way the film industry operates.

In October of 2001, we went to Los Angeles as legal counsel for the Bollywood film Kaante and also had meetings with foreign law firms on various film-related projects and understanding the legal and accounting aspects of Hollywood. We had further meetings with producers and talent agencies. We also visited the American Film Market (AFM), which was being held during that time and gained insight into how the it functioned.

This Report provides a perspective of our observations and understandings of the two film industries.