Dear Shareholders,

I am pleased to report that your company has completed one more successful year of operations. The Treasury and Media segments of your Company have registered healthy growth. Before getting into the specifics of your company's performance, let mesay a few words about the current economic scene and business environment.

Although, the Indian economy continued to grow, and business outlook remained by and large buoyant, the rise in inflation has thrown challenges. The Reserve Bank of India, in an effort to contain the inflationary pressure had instituted several rounds of interest rate hikes as well as raising the Reserve Ratios of banks in a number of tranches. The Reserve Bank of India had as a policy measure cautioned that containing inflation is a priority over growth in the short term. Based on monetary measures taken by RBI cost of funds rose significantly during the year. Input costs have increased, both in services as well as in the manufacturing sectors. There is a possibility of a slow-down in the core sector in the coming months, if this trend persists. Inspite of this, the overall outlook for economic growth remains positive and GDP growth should not fall below 8% level during this year.

Investments - Your company stayed on course in its core strategy of identifying and incubating new businesses for the benefit of our shareholders. During the year your company invested at par 8.9% of the equity of the newly formed Hinduja Leyland Finance Limited (HLFL), a start-up company engaged in leasing & hire purchase for Automotive and Capital goods sectors. HLFL has grown very fast during its first year of operation, posting a turnover of 101.32 crores and profit after tax of 27.27 crores. HLFL is expected to grow rapidly and your company should reap rich dividends in the years ahead.

Similarly, the company has taken a decision to invest in the power generation sector, which is poised for medium and long term growth. The Board has approved an investment of upto 10% in the equity of Hinduja Energy India Limited (HEIL) the holding company of the Hinduja Group's energy business. HEIL plans to create a portfolio of 10,000 MW of generation capacity in the next 5 - 7 years. It also has plans for developing renewable energy assets such as Wind, Solar and Biomass. One thermal project of HEIL of 1040 MW is being developed through its subsidiary Hinduja National Power Corporation Limited (HNPCL) at Vishakhapatnam, in Andhra Pradesh. Construction is in full swing and ahead of schedule. The project comprises of two units of 520 MW each and is expected to commissioned in the year 2013 with the first unit of 520 MW expected to be commissioned in June 2013. India is chronically short of electric power. Given the expected rate of growth in the Indian economy and the demand for electricity in the next 10 - 15 years, investment in this sector will provide handsome returns to your company in the near future.

Media -The media & entertainment sector continues to grow at around 13%. Your company's principal subsidiary, IndusInd Media & Communications Limited, (IMCL) continued to report strong performance during the year. Itsconsolidated revenues crossed 400 crores, registering a growth of 24% over last year. Its EBIDTA margin went up from 69 crores to 121 crores, an increase of 75%. Profit After Tax increased from 34 crores to 67 crores, representing an increase of 97%.

During the year, IMCL continued with its consolidation strategy by acquiring several small networks and entering into Joint Ventures with medium sized networks. It's present footprint extends to 28 cities. IMCL remains among the top 3 MSOs in the country with the distinction of having the highest profitability in the Indian cable TV industry. For IMCL, this year marks an unbroken profit record extending over last 5 years. IMCL also strengthened its senior management team by inducting experienced executives in Operations, HR, Admin and Technical departments. During this year, IMCL will need to raise more capital to invest in digitization, network up-gradation, acquisition of subscribers & last mile operators and to launch a new initiative for improving its Broadband delivery. Customer service and the front-end of the business also need to be strengthened. The senior team of IMCL has been involved in leading the MSO Alliance and has been engaged in dialogue with the Regulatory Authorities for framing future regulations for the industry as it continues to evolve. There is a strong possibility that IMCL's recommendation of increasing the FDI investment limits in the Cable TV sector to 74% will be accepted during this year. This will enable IMCL to attract private equity and strategic investors to come into the sector with growth capital and technology urgently needed in the industry. The Company is considering listing IMCL this year.

The content side of the media sector is being driven by IN Entertainment (India) Limited (IEIL) which acquired the content business of IMCL last year in business restructuring. The work done during the last year and plans and investments made for the current year for creating TV and movie content, should fructify into significant profits during the next 2 - 3 years and position this media company as a content producer in the Indian entertainment market.

Real Estate – IDL Speciality Chemicals Limited (IDL) had acquired 4.75 acres of land at Kukatpally, in Hyderabad for 25.17 crores. The value of this land appreciated since its acquisition and now plans are being drawn up to monetize this asset by developing the property. The plans for developing the 47 acres property in the BIAPPA zone near the Bengaluru Airport High-way are underway and would be taken up along with the Joint Developer once all the clearances are in place.

I would like to conclude by thanking all of you for your unstinted support during the past year. My thanks to the Directors, Management & Staff, for the good performance registered. Also my thanks to our Bankers, Auditors, Advisors for their help and guidance during the year to maintain the highest standards of the corporate governance which is of the highest priority for the Group.