Dear Members,

It gives me immense pleasure to communicate with our esteemed shareholder family about the performance of the Company for the year and our journey going forward. The fiscal year 2015-16 has been a year of consolidation for the Indian economy. The economy has had its share of hiccups with a weak monsoon, rising Non-Performing Assets (NPAs) of banks and other short term factors. Despite these short term problems, the inherent strength in the economy will ensure that in the long term there is a huge sustainable growth potential. As per estimates by the Asian Development Bank (ADB), growth is expected to pick up a bit to 7.80% in financial year 2016-17, helped by the Government's strengthening of public sector bank's capital and operations, private investment benefiting from corporate deleveraging, the financing of stalled projects, and an uptick in bank credit.

The confidence in the growth potential of the Indian economy is very strong and it is this factor which influences our decision on investment in the various sectors your Company is engaged in.

Digital India Programme was launched by the Prime Minister of India, Shri Narendra Modi on 2nd July 2015 with an objective of connecting rural areas with high-speed Internet networks and improving digital literacy. The vision of Digital India Programme is inclusive growth in areas of electronic services, products, manufacturing and job opportunities etc. and it is centered on three key areas – Digital Infrastructure as a Utility to Every Citizen, Governance and Services on Demand and Digital Empowerment of Citizens.

On a Standalone basis, the total income of the Company for the financial year 2015-16 at Rs. 332.48 Crores was higher by 201% over last year (Rs. 110.45 Crores in 2014-15). On a Consolidated basis, total income for the financial year 2015-16 at Rs. 679.98 Crores was lower by 13.50% over last year (Rs. 786.11 Crores in 2014-15).

Media

Technology disruption is a factor which will influence the media sector significantly in the next decade. Nimble organizations which keep themselves abreast to newer technologies and adapt to newer technologies are more likely to grow exponentially in the coming years. Media and Entertainment Industry in India is estimated at Rs. 1.15 Lakhs Crores, which will grow to Rs. 2.26 Lakhs Crores by 2020, growing at a rate of 14.30% Compound Annual Growth Rate (CAGR). Television continues to remain the largest component of the size of the media industry, constituting almost 50% of the size. It is expected to continue maintaining this proportion, growing at a CAGR of 15.10% by 2020. Your Company, through its subsidiaries IndusInd Media & Communications Limited addressing the Cable TV business and Grant Investrade Limited addressing the distribution of TV signals through the Headend-in-the-Sky (HITS) platform addresses directly the growing TV industry and is therefore positioned rightly to participate in this growth.

IndusInd Media & Communications Limited (IMCL)

During the year, IMCL focused on continued strengthening of its backend processes, improving consumer viewership experience and simultaneously expanding in the Phase III digitalization programme of the Government of India. The consolidation process has significantly improved the technology backbone for delivery of signals through the cable network, the subscriber management system and the collection processes. With respect to Phase III expansion while the initial push resulted in Set Top Boxes being seeded in the market as per plan, the multiple court cases filed by different cable operators seeking a stay in Phase III digitalization have delayed the expansion process. The Supreme Court has transferred all pending cases to Delhi High Court. With hearings scheduled in September 2016, an early solution to the roadblocks is possible. The benefits of this expansion are therefore expected to accrue over a longer period as compared to what was earlier anticipated.

Grant Investrade Limited (GIL)

The Headend-in-the-Sky (HITS) project of Grant Investrade Limited (GIL), a wholly owned subsidiary of the Company under the brand name "NXT Digital" was formally launched by Shri Arun Jaitely, Minister of Information and Broadcasting, Government of India in September 2015. At the launch Shri Arun Jaitely said "multiple carriage technologies will provide customers a choice".

All the application development for the NXT Digital platform has been designed and built fully in India.

GIL successfully set up the Earth Station and other infrastructure required for launch of the HITS operations ensuring that world class quality of service is ensured for the consumers. The Economic Survey report for 2016 has stated that HITS has a major role to play in ensuring hundred percent digitalization in the country.

HITS is a satellite multiplex service that provides cable channels to cable television operations. The HITS service effectively replaces the more complex traditional Headend. HITS as a concept was developed to deliver signals to small cable headends that did not find it viable to install their own Conditional Access Systems (CAS) and centralized services like Subscriber Management System (SMS) and billing.

While Grant was on schedule to launch the HITS platform as per the timelines prescribed by the Government of India for Phase III of the digitalization programme, multiple court cases filed by cable operators has somewhat delayed the whole process of digitalization. This has a direct bearing on the GIL's operations since the success of the HITS platform depends entirely on a successful implementation of digitalization by the Government of India.

Hinduja Energy (India) Limited (HEIL)

Your Company remains invested in the power sector through its stake of 15.57% for Rs. 187.10 Crores in HEIL - holding company of Power Assets of Hinduja Group. This translates in to 8.59% effective holding in the SPV- Hinduja National Power Corporation Limited.

Hinduja National Power Corporation Limited (HNPCL), a subsidiary of HEIL recently commissioned a 1,040 MW Greenfield Power Project at Palavalasa village in Visakhapatnam district of Andhra Pradesh. The project has 2 x 520 MW coal-based thermal power generation units with technology offered by EPC contractor Bharat Heavy Electricals Limited (BHEL). HNPCL has recently commenced commercial operations thereby fully mitigating the construction risks. The operating risks have been mitigated by entering into an O & M Agreement with Steag O & M Company Limited, a subsidiary of a German power major, Steag Energy Services GmbH. HNPCL has entered into a long term power purchase agreement with AP Discoms for sale of 100% of energy generated by the power station with an assured return on cost plus basis in accordance with the guidelines issued by the Andhra Pradesh state regulator. HNPCL also has the benefit of pass through of fuel cost. This will enhance the value of your Company's stake significantly.

Primary Health Care Centers

Your Company is continuously associated with Hinduja Foundation for providing access to basic healthcare facilities to poor and underprivileged people. In order to achieve this objective, your Company has been generously funding Hinduja Foundation for its Primary Healthcare Project which commenced in June, 2015 for Up-gradation of Primary Health Centers and Sub-Centers in Jawahar Taluka, Palghar District, Maharashtra. This envisages the Company's continuous efforts to serve the society especially the underprivileged sections of the society.

Way forward

Your Company's subsidiaries in the media sector believe that going forward, the challenges of digitalization can best be addressed by consolidating delivery platform catering to both the end consumers and more importantly the cable operators. This will lead to content consolidation, offering of value added services over a wider base of customers and take advantage of economies of scale.

In line with this thought, the Boards of both IMCL and GIL have debated and evaluated in detail the benefits of both the Community Antenna Television (CATV) business of IMCL and the HITS business of GIL operating as a single entity. Considering the long term benefits like rationalization of costs, improving revenue per subscriber and achieving operational efficiencies thereby enhancing shareholder value, the Boards of respective subsidiaries have recommended that, subject to the regulatory and other approvals, the HITS business of GIL be demerged into IMCL. The demerger will create a unique, one of a kind Digital Distribution Platform that will provide digital TV on multiple devices - home TV set, tablets, desktops, and hand phones. I believe that this is a step in the right direction and will help in more efficient of resources, improve productivity and synergize the strength of both the platforms (digital television distribution and cable).

Your Company through IMCL expects to help the cable digitization required to cover Phase III and Phase IV markets of over 7,000 towns and another over 6,00,000 villages. As a single integrated company, IMCL is expected to be in a position to fulfill the needs of local cable operators (as B2B) and provide high quality digital services (B2C) to end customers. It will be after mergers are in place uniquely in a position to offer digital services through satellite and conventional headends. As per estimates the total homes to be digitized across the country is around 160 million. Phase I and II of the digitization is almost complete and IMCL caters to around 3 million digital subscribers in these areas. In addition, IMCL has analogue subscribers in the Phase III and IV markets. With digitazion program having been announced for these markets, IMCL is expected to cover minimum 7 million digital subscribers out of an estimated market size of 120 million homes.

Following the arrangement of demerger of HITS business undertaking of GIL in to IMCL, your Company looks forward to a higher valuation for the Company consequent on expedited breakeven and better financial performance of the media subsidiary.

Also, your Company will keep evaluating various business opportunities towards increasing stakeholder's value.

I would like to place on record my sincere appreciation of your unstinted support to the Company. I would also like to thank the Directors, Management, Employees and all other Stakeholders for their help and guidance during the year to maintain the highest standards of corporate governance, a top priority for the group.