Mid Day Multimedia

Dear Shareholders,
 
 Experts say that the existing downturn is once in a lifetime for many
 of us. Indian companies must have never ever experienced a downturn of
 such a magnitude in their life span. Indian and world economies started
 the financial year 2008-09 with lot of optimism and upright confidence
 to achieve newer heights. The financial crisis, which originated from
 the West, started concerning the world with the initial vibes of
 economic slackness since the middle of last year.
 
 As far as India is concerned, the first half of the year was impressive
 and flourishing. The global crisis started to worsen in September 2008
 with the collapse of several financial institutions, investment banks,
 mortgage lenders and insurance companies. The impact of the financial
 crisis was harsh on the developing countries as there were not enough
 signals to expect a crisis of such a scale.The Indian economy faced the
 full brunt during the later part of the year and mere survival emerged
 as an ultimate mission for many industries. Most of the Indian
 industries experienced deteriorating performance quarter on quarter
 since then.
 
 The Indian Media Industry also felt the severe impact of the economic
 slowdown like others. It resulted into revisiting the operating plan
 for most of the growing players.The industry witnessed the sudden brake
 on the plans of vertical and horizontal expansion.
 
 With respect to Indian print industry there was an ever-increasing
 concern over unsustainable increase in Newsprint prices during last
 year in the depressed market with reduced advertisement revenues. We
 are thankful to the Government for offering some relief by implementing
 custom duty cut on the newsprint import during last year. The position
 for radio business was equally challenging, the depressed sentiments in
 the market resulted in slowing down of advertisement revenue towards
 end of the year. Overall, the slowdown impact nullified most efforts to
 protect growth momentum and profitability.
 
 During the year
 
 As mentioned earlier, the immediate impact of the global slowdown on
 our businesses was inevitable. We reworked our operating plan to bring
 in a balance between long-term objectives and short-term concerns. We
 launched a print edition in Pune during August 2008 and also started
 radio stations in the 2 new cities viz. Pune and Kolkatta.
 
 I am pleased to announce that Mid-day now has presence in 4 metro
 cities and Radio One is being played in 7 key cities of the country.
 This is as an outcome of all the efforts put in by the management &
 operating teams in establishing Mid-day group as a national media house
 from a single city operation in 2005.
 
 We have been recognized as a Number 2 English newspaper in Maharashtra
 (IRS -1 2009 Total Readership Survey).The launch of Pune Edition is
 well appreciated by the readers, local and national advertisers. Radio
 One continues to be the countys fastest growing radio station in
 revenue terms. Combined operating teams in select cities have helped to
 increase the list of national as well as the local clients.
 
 Financial Performance
 
 Both the businesses registered encouraging growth in line with the
 expectations during H1 of FY09. Newsprint prices went up by 50-60% from
 their normal price range during last year, which had significant impact
 on financial performance. Profitability plunged further in the wake of
 economic slowdown towards the later part of the year. Our radio
 business also experienced slowdown during Q4 of the last year.The
 Management team has revisited the cost structure and the operating
 plans to ensure sustainable improvement in profit.
 
 Newsmedia Division
 
 The Newsmedia Division has been transferred to its wholly owned
 subsidiary company called Midday Infomedia Limited.This was done to
 ensure fund raising opportunities. We are sure that we will be able to
 arrange the required financial resources to ensure the growth and
 expansion of this division.
 
 Financial Review
 
 The revenues from this division have registered a small decline from Rs
 10,558 lacs in FY08 to Rs 10,196 lacs in FY09. This is mainly due to
 effect of the economic downturn on advertising revenue. Newsprint cost
 increased significantly from Rs 3,507 lacs to Rs 4,384 lacs over last
 year. As an outcome, the loss before interest and tax for the year is
 at Rs 1,418 lacs against profit of Rs 77 lacs in FY08.
 
 Radio
 
 As mentioned earlier, the Company has launched a radio station in Pune
 and Kolkatta and has received an encouraging response from these
 markets. In this segment, we are growing well above industry growth.
 
 Financial Review
 
 We are pleased to announce that annual revenues have registered a
 growth of 48% from Rs 1,896 lacs to Rs 2,803 lacs in the current year.
 Annual loss before interest and tax for the year is at Rs 1,623 lacs
 against Rs 1,903 lacs in FY08.
 
 Current Scenario
 
 In these difficult times, where most of the worlds leading economies
 are struggling, the indicative GDP growth of 6.7% in FY 2008-09 is an
 excellent indication and this makes India one of the fastest growing
 economies.The political stability and the measures adopted by the RBI
 and Government have started to positively impact the investors
 sentiments.The prediction of experts that the Indian economy would
 recover faster seems to be correct, as the Sensex has gained almost
 100% from its last year low.
 
 Going Forward
 
 As far as the Media and Entertainment Industry is concerned, the
 long-term outlook remains buoyant inspite of the immediate slowdown.
 The Management is taking all the possible strategic and operational
 steps to achieve expected revenue growth by rationalizing cost
 structure. We are confident that our Newsmedia business will hit the
 profit path from next year in line with earlier performances.
 Newsprint prices have also returned to its normal price band, which is
 an encouraging development. There will be continuing focus on revenue
 growth for the radio business, as that is the only way to make it
 profitable and create long-term enterprise value.The advertising
 industry is expected to continue at a CAGR of 12.4% as per a recent
 FICCI report, which clearly shows the growth potential of the industry.
 
 Acknowledgement
 
 I would like to acknowledge the patience and understanding of
 shareholders during this growth phase of the Company. I would also like
 to thank on behalf of our Board to our Bankers and Financial
 institutions, various Government Agencies, suppliers and vendors for
 their support and backing.
 
 Last but not the least, I would like to express gratitude to our
 readers, listeners and advertisers for supporting and encouraging us
 throughout our journey.
 
                                                   Thank you,
                                            Khalid A.H.Ansari
                                                     Chairman
 Place: Mumbai
 Date : May 19,2009