HT Media

Dear Shareholders,
 
 THE FY 09 marked a paradigm shift in global economy and its financial
 markets. The year witnessed unprecedented volatility in inflation,
 liquidity and prices of commodity & crude oil. While all major advanced
 economies confronted the worst recession since the great depression of
 1929, emerging economies too contracted severely with a serious
 slowdown of their robust growth momentum of the recent past.
 
 A sharp demand reversal in United States, the bailouts sought by
 Fortune 100 companies, the knock-on effects of these developments in
 the US across other economies, various government stimuli and monetary
 policy changes across major economies; all this happened at such a
 rapid pace that the previous year was truly a turbulent and eventful
 year.
 
 The repercussions were severe on emerging economies including India.
 Revised estimates of Central Statistical Organisation suggest that
 Indias GDP growth has contracted to 6.7%. While we can observe this
 sharp decline in the growth curve of our economy, I believe India did
 well in arresting the impact of global crisis thanks to its domestic
 demand-led economy and regulated economic framework. With a stable
 government at centre, we now look forward to stepping into a new era.
 The government shall, we sincerely hope, accelerate reforms and
 infrastructure development to step up growth and check the fiscal
 deficit. This should also enable the country to recover faster when the
 economic situation starts improving globally.
 
 Media Sector: Switching to Consolidation
 
 The year gone by was an equally challenging year for the media sector
 globally. Estimates suggest that one out of every 11 newspaper jobs,
 one out of 14 radio jobs and one out of 33 TV jobs disappeared in last
 year in the US itself.  The year witnessed biggest write-downs and poor
 results across leading media companies of the US.
 
 The Indian media countered an equally testing year in FY 09. Expansion
 plans across TV, internet, Out-of-Home (OOH) media were put on hold or
 shelved by leading media conglomerates as revenues dipped sharply from
 all advertising sectors during the second half of the year. The
 industry confronted the challenges of sustaining revenues and
 profitability. According to 2009 edition of Indian Media &
 Entertainment Industry report of FICCI and KPMG, print media growth
 slowed down to 7.6%, while radio and television recorded a double-digit
 growth in 2008.
 
 The slowdown in the print media was largely impacted by advertisers
 cutting down their advertising expenditures significantly. Another blow
 to print media came from spiralling newsprint cost and the depreciating
 Rupee. But for a timely rate hike made by Government on Directorate of
 Advertising and Visual Publicity (DAVP) rates, the industry could have
 seen even more tough times in FY 09.
 
 HT Media: Consolidating & Expanding
 
 Despite being print-led, your company is amongst few media companies
 that managed to achieve a double-digit growth in revenues in such a
 turbulent FY 09.  Taking the challenges by strides, your company
 consolidated its position across all its three dailies - Hindustan
 Times, Hindustan and Mint. Our flagship brand - Hindustan Times - made
 an impressive average issue readership gain of 2.17 Lac readers as per
 Indian Readership Survey (IRS) Round-1 2009 data over IRS Round-1
 figures of 2008. In the fourth year since entering Mumbai readership of
 Mumbai edition of Hindustan Times surged substantially by 55% during
 the past year, recording the highest growth among all English
 newspapers in the city.
 
 Hindustan also showed a strong growth of 32% to further strengthen its
 position as the third largest read Hindi daily. Hindustan has expanded
 its reach in eight northern states now. Three more printing presses
 were commissioned in Uttar Pradesh and Uttarakhand in FY 09, thereby
 giving a boost to UP and Uttarakhand presence of Hindustan. The company
 continued to expand and entrench its reach in Tier II towns.  This is
 good news since according to the latest industry studies, the future
 growth for print media is likely to come from Tier II towns in a robust
 manner.
 
 Our trendsetting business daily Mint completed two years in February
 2009 and is an established No. 2 among all business dailies. Your
 company has launched Mint in Kolkata in May 2009 and is all set for its
 launch in Chennai.
 
 Our radio venture Fever 104 participated in our march forward by
 making rapid progress in FY 09. It became the No. 1 radio station in
 Mumbai and No. 2 station in Delhi and Bangaluru; as per week 19 (3rd -
 9th May 2009) data of RAM, during the year. I am glad to share with you
 the fact that our radio business is likely to break even in FY 10.
 
 Among our online initiatives, Shine.com crossed 2 million registered
 users in the very first year of its operations. During FY 09, we
 partnered with an international agency to facilitate real-time
 recruitment for the first time.
 
 Measured and timely actions
 
 Amidst the turbulence and uncertainty posed by FY 09, we revisited our
 strategies from time to time, and took a series of steps to check the
 impact on our profit margins. Your company maximized in the dipping
 advertising environment by innovating new sales mediums like its Events
 & Marketing solutions, and the Printworks expo. In order to reduce the
 impact of rising input cost, we reduced the pagination across all
 publications and maintained a profitable ad-edit ratio. We optimised
 the credit from suppliers. Some of our brand promotion investments were
 maturing, which allowed us to lower spending on them without
 compromising on the benefits reaped. Measures were taken to tighten our
 overhead costs and rationalize a part of our workforce.
 
 However, your company has continued investing in important projects,
 brands and markets and is on its way to expand printing facilities and
 edition rollouts.  Also, our joint venture with Burda, for outsourced
 publishing would start operations in FY 10. This is likely to break
 even in the first full year of its operations.
 
 Setting Content Benchmarks
 
 HT Media continues to publish series of news reports, campaign pieces
 and articles, which highlight the concerns of local citizens from
 different parts of country. Hindustan Times carried out Gurgaon
 Collapsing, a series on the poor conditions of civic amenities in the
 NCR area, bringing to light the manner in which local bodies had
 ignored basic amenities to its citizens. This campaign won the
 International Press Award in May this year.
 
 Moving Ahead
 
 Our mainstream businesses have played an active role to cater to urban,
 neo- urban, and semi-urban citizens. But we are also keeping our eyes
 open to new opportunities coming our way in internet, radio
 broadcasting and event & marketing solutions. Our objective is to gain
 more mileage by highlighting facts, that may otherwise miss the general
 citizens eye. We believe that such an objective would help us in the
 long term to sustain our leadership in the print media sector. This
 would slowly convert our loyalty among mass readers and will create
 better business opportunities for us in the long run. It may take a
 while before the media sector starts emerging out of the challenging
 times it faced in FY 09. But we are hopeful of seizing the
 opportunities provided as soon as the Indian economy starts re-emerging
 out of a slowdown in the times ahead.
 
 I extend my sincere appreciation to investors for their continued
 trust; acknowledge the contributions made by all HT employees and thank
 our readers and customers for their support.
 
                                                SHOBHANA BHARTIA
                                Chairperson & Editorial Director