We have grown stronger, better equipped and more confident to help
 shape the future of the Media and Entertainment industry nationally and
 internationally. This has happened, because we moved forward with a
 conviction in inspired leadership.
 
 Leadership is often misunderstood as being ahead of others. To me, it
 is first about being ahead of ourselves, fighting the odds, challenging
 conventions and doing things that we did not think were possible.
 Leadership is not a static process, but involves dynamic thinking and
 decisive action. The transformation, however, needs to surpass the
 speed of change in the external environment. Only then can leadership
 be sustained. This is what we consider our biggest challenge as well as
 our biggest success.
 
 We believe inspired leadership is a transition from insight to
 innovation, fulfilling viewer expectations and also exceeding it, and
 above all setting trends for other industry players to follow.  In a
 constantly evolving Media and Entertainment industry we continually
 need to align our business with technology breakthroughs, leverage the
 emerging market niches that are opening up as a result and respond to
 the aspirations of a new family of viewers with speed and efficacy.
 
 The outlook on the world economy is looking up as most economies are on
 the way to recovery while India continues to be the focal point for
 innovation and investments in the Media & Entertainment sector.
 
 The domestic Media & Entertainment industry has done exceedingly well,
 growing by over 11% from Rs. 587 billion in 2009 to Rs. 652 billion in
 2010. While the Indian economy looks set to reach double digit growth
 rates ahead, the Media & Entertainment sector is projected to grow at a
 CAGR of 14% to reach Rs. 1,275 billion by 2015. The Television industry
 has witnessed aggressive growth as this medium overshadowed all the
 other available media platforms. India is today the worlds third
 largest TV market with close to 138 million TV households.  The digital
 drive led by the exponential growth of dTh has been an outstanding
 feature over the last few years making it possible for C&s to reach 80%
 of TV households in India. With the focus shifting towards addressable
 infrastructure there will be a speeding up of digitization in India
 going forward.
 
 The industry has taken giant strides in technological developments
 which will benefit the convergence of media.  Increase in internet
 penetration levels and growth of m-commerce in India are trends that
 will take shape in the future. The launch of 3G technology in the
 country along with multiple smart phone applications will considerably
 expand the market for digital media. Broadcasters will have to adapt
 their strategies and preparedness to exploit the potential presented by
 these changes in the business environment.
 
 Another trend that can have far reaching implications for Broadcasters
 is the rapid change in consumer preferences as they search for content
 of their choice and relevance. Likewise with the increase in purchasing
 power across tier I and II cities regional and niche programming will
 gain prominence.
 
 The advertising spends across media was Rs. 266 billion in 2010,
 contributing 41% to the overall industry revenues. With the addition of
 new channels and media platforms, advertising is expected to grow
 further which augurs well for broadcasters.
 
 The Indian Media & Entertainment industry projections look positive. To
 sustain our leadership we have to be responsible and responsive to the
 constantly changing viewer preference.  Your Company entertains over
 500 million viewers across 167 countries of the world. It is one of the
 largest producers and aggregators of hindi programming in the world,
 with an extensive library housing over 1,00,000 hours of television
 content. We have to continually innovate to cater to this vast family
 of viewers, and create sustainable value for our shareholders.
 
 We are also focusing on building scale across the media value chain and
 exploring cross-media synergies. Collaborations and partnerships are
 also on the radar as we strive harder to explore other frontiers. Your
 Company is also committed to enhance operational excellence through
 greater concentration on cost optimization. Although the global market
 has improved substantially, fiscal prudence has been one of the biggest
 lessons we have learnt from the recession.
 
 The thrust on transparency in corporate governance and empowerment of
 people at all levels will remain a constant endeavor at ZEE. I would
 like to take this opportunity to thank all members of the ZEE family
 for their continuous encouragement and support. We will do everything
 possible to live up to your expectations.
 
 Subhash Chandra
 
 Chairman