Special Dividend
Hinduja TMT Limited (“HTMT”), at its Board Meeting held yesterday, announced a special dividend of Rs 20/- per share (200%) to the shareholders out of the proceeds of the Hutchison Essar stake sale which took place recently. This dividend is in addition to the final dividend of Rs 7.50 per share (75%) recommended in July for approval by the shareholders at the Annual General Meeting to be held on 25th September, 2006.

Demerger of IT/ITES business undertaking
The Board, after discussing the recommendations of the Committee of Directors, approved the demerger of its IT/ITES undertaking, pursuant to a scheme of arrangement u/s 391 to 394 of the Companies Act, 1956. The new IT/ITES entity would be called HTMT Technologies Limited (“HTMT Tech”), and is expected to list in the fourth quarter of 2006-07. The appointed date of the demerger would be 1st October 2006.

Post restructuring of share capital, pursuant to the demerger, a shareholder of HTMT holding two equity shares of Rs. 10/- each prior to the demerger would receive one equity share of Rs. 10/- in HTMT Tech and one equity share of Rs. 10/- in HTMT post the demerger. The share entitlement ratio has been confirmed by two leading firms of Chartered Accountants.

Restructuring of Media Entities
The board has also taken on record a scheme of arrangement, approved by its media subsidiaries, of merging In2Cable, its broadband subsidiary and InNetwork Entertainment its content subsidiary into Indusind Media & Communications (“IMCL”). With this, the various media subsidiaries would be consolidated, with HTMT (an existing listed entity) holding 60.5% equity of the merged Media & Entertainment entity. The merger of Media & Entertainment is being done to converge video, voice and data services under one entity as a premier triple play provider. The merger, will bring in operational efficiencies, provide sharper focus on the core business of media & entertainment, telecom and content distribution and ensure smooth implementation of Conditional Access System across Indian cities, packaged with value added services.

As a result of the above, there would be two distinct listed entities namely, namely “HTMT Technologies Limited” which will focus on IT/ITES businesses, and “Hinduja TMT Limited” which will undertake new business initiatives, acquisitions and hold the combined and unified media and entertainment entity IndusInd Media Communications Limited.

The demerger of the IT/ITES business as well as the restructuring of the Media and entertainment entities is subject to requisite statutory approvals and sanction of the High Court of Judicature of Mumbai.

New ITES acquisition opportunities
The Board also evaluated some major acquisition opportunities for HTMT Technologies Ltd in the ITES sector in the USA. These opportunities are being pursued by the company to add to its geographical reach and domain competencies.

The IT/ITES business has a strong presence in Healthcare, Telecom, Consumer Electronics and BFSI segment. It is present in 5 different countries and has a successful track record in acquiring and integrating overseas ITES-BPO companies in the past two years. It is now looking for more such acquisitions in the USA-UK–Latin American markets to consolidate its position and expand inorganically as a leading global player in this industry.

A substantial portion of the funds received from the sale of Hutch stake will be utilized to fund these acquisitions before the end of the current financial year.

New businesses
The Board, inter alia, also discussed to evaluate further business opportunities in Hinduja TMT Limited, which will continue to enhance shareholder value in the future.