Sugal & Damani Reaffirms International Expansion Plans

Sugal & Damani, the leading operator of lotteries in India, today
reaffirmed its plans for continued international expansion despite
being declared the reserved bidder for the third license for UK
National Lottery. The National Lottery Commission recognised Sugal &
Damani's bid as "strong" and that the company had met all seven
demanding Required Standards identified in the bid process.

The company, which was the only challenging bidder to emerge
against the incumbent operator, Camelot Group plc, said it was
continuing to pursue lottery bids in various parts of the world
including Africa and south Asia. Sugal & Damani intends to grow its
presence in the UK in the gaming sector and it is likely to bid again
for the National Lottery License after the next 10-year period.

Kamlesh Vijay, chief executive officer said: "Our bid for the UK
National Lottery license is proof of the scale of our international
ambitions. We will continue to look for opportunities outside India
while at the same time developing our businesses in our home market of
1 billion people. We have learned a lot from our experience of bidding
in the UK."

Sugal & Damani put forward ambitious plans for the lottery license
including an increase in ticket sales over the 10-year period to GBP
63.9 billion, generating GBP 17.9 billion for good causes and a
commitment to contribute any profits above 1 per cent. The company
proposed introducing new games, greater facilities and incentives to
retailers to arrest downturn and an expansion of sales through mobile
phones and other electronic media.

The company had proposed establishing a fully UK-based operation
to run the lottery and it would have based its two call centres in the
UK.

Mr Vijay said he had been impressed by the way the National
Lottery Commission had handled the bidding process. "We felt that we
were treated absolutely fairly despite the fact that we were a foreign
bidder going up against the incumbent operator," he commented. "It is
nevertheless difficult to dislodge an established company in any
market place by virtue of its local presence."

Sugal & Damani has been running lotteries in India for the past 37
years. It dominates in a truly competitive marketplace and enjoys more
than 70 per cent market share in some of the states with up to seven
operators. It operates lotteries in all major lottery playing states
and handles more than 5 million transactions a day on over 20,000
point-of-sale terminals.

After reaching a dominant position in the Indian lottery market it
sees further growth opportunities coming from abroad and from similar
ancillary activities. Used to competitive operations, it is still
considering possible expansion in the UK through various gaming and
ancillary services.

Sugal & Damani employs 350 information technology specialists in
India and carries out all of its lottery software design in house. Its
systems employ an "open architecture" approach which means that they
are compatible with a wide range of hardware and access formats
including mobile phones.

Apart from its lottery operations, Sugal & Damani also has
businesses in travel and tourism, jewellery, engineering and leasing
and finance. Group turnover is more than INR 59.7 billion (GBP 695
million) and it employs a total of 700 people. It supports an
extensive philanthropic programme in India embracing medical care and
education.

Sugal & Damani had teamed up with a set of 18 powerful
international & UK based partners, who are leaders in the their own
domain, in its bid to win the lottery licence. Shareholders in the bid
consortium are Sugal & Damani Lottery Agency Pvt Ltd; Deutsche Bank,
which has also committed debt financing; Financial Technologies Ltd,
an operator of commodity exchanges; and Gopsons Papers, a security
printer.