Dear Shareholders,

One year ago it would have been difficult, if not impossible, to imagine or predict the systemic dislocation that rocked the global economy during the latter half of 2008. The precipitous decline in global manufacturing; the restructuring of the financial services industry; the reshaping of the global regulatory framework and markets with its unprecedented nature of volatility make it difficult to predict what residual 2009 holds in store.

At Hinduja Ventures, we are happy to have provided cautious governance to protect our shareholders from the economic crisis, market collapses, downturn etc. At all times, but particularly in challenging and uncharted times, your Directors and the management have anticipated what lay round the corner to safeguard shareholder interest. I am happy to report that we have fulfilled this duty well as you can see from the results. I am happy to present the annual report and accounts for the year 2008-09.

We look forward to continuing our collaborative efforts on behalf of our shareholders in the years to come. There is much to accomplish after the successful general elections and the Indian economy is poised to regain its growth trajectory. We stand ready to do our part.

Media Sector Outlook

The outlook for the media sector continues to be very positive. Media and Entertainment Industry in India stands today at INR 584 Billion and is projected to reach a size of INR 1,052 Billion in 2013 at a CAGR of 12.5%. Cable households today stand at around 83 Million with a penetration of cable to TV household at 64%. A KPMG-FICCI report estimates about 35 Million digital cable households by 2013.

By comparison, the DTH operators are struggling to gather market share in this small segment suffering huge losses. The management of your company is following technological development like IPTV/VOIP/HITS to ensure that head start enjoyed by our company remains with us on a sustainable basis.

The digitization of cable space is likely to pick up pace as recommendation of sector regulator, Telecom Regulatory Authority of India (TRAI), for implementation of CAS in 55 big cities is already in place. This, along with improved picture and sound quality for the consumers, will promote digitization independent of above recommendation.

There is a clear growth visible in the number of pay channels. In 2003, out of 125 channels, 41 were pay channels. Today, out of 436 channels, around 150 are pay channels. Due to increased viewership and cable penetration, number of pay channels are on the rise and this trend may continue.

IMCL performance

IMCL has now reached approximately 6.5 Million homes in 24 cities, out of which 15 cities are major Television Rating Point (‘TRP’) cities. IMCL provides more than 250 channels in its Digital Cable networks, which is currently the maximum number of channels provided in any distribution platform in India.

The industry has been undergoing rapid changes with more competition from existing and new players, consolidation and regulatory recommendations for an orderly and transparent system. All these industry dynamics are expected to benefit IMCL in the long run. And the benign effect on the Financials may flow from proposed initiative including Capex.

IMCL has around 6300 km of hybrid fiber network including 1000 km of underground fiber which is a key differentiator and our unique competitive advantage. “Quad Play” proposition makes IMCL best positioned to capitalize on huge Cable & Satellite (C&S) opportunity delivering video, internet, voice and e-commerce through a single pipe. IMCL being a valuable asset, the Company is incubating IMCL and will strive to create wealth for its shareholders by listing IMCL at an appropriate time.

Finally, your Company will continue to look for new opportunities to incubate new businesses with a cautious approach and will venture only when all the risk factors are taken into consideration and mitigated to appropriate levels. We will be able to announce plans for such new initiatives in the near future. We will ensure that no good opportunity will be missed and we will continue to maximize returns to our shareholders.