MIRA INFORM REPORT

Report Date :

08.08.2007

IDENTIFICATION DETAILS

Name :	HT MEDIA LIMITED
Registered Office :	Hindustan Times House, 18-20 Kasturba Gandhi Marg, New Delhi - 110001
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	03.12.2002
Com. Reg. No.:	55-117874
CIN No.: [Company Identification No.]	L22121DL2002PLC117874
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the stock exchange.
Line of Business :	The company is engaged in Media business

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 31353600
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company and the publisher of the newspaper Hindustan Times. Available information indicates high financial responsibility of the company. Trade relations are fair. Business is active. Payments are reported as usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Hindustan Times House, 18-20 Kasturba Gandhi Marg, New Delhi - 110001, New Delh
Tel. No.:	91-11-66561234
Fax No.:	91-11-23738887/23704600
E-Mail :	pace@hindustantimes.com
Website :	http://www.hindustantimes.com
Branches:	C - 164 & 165, Phase VIII – B Industrial Focal Point, Mohali Chandigarh, (Punjab)
Tel. No.:	5050600 /617/647
Fax No.:	5050606
Branches:	Jaipur Inn B - 17 (12), Shiv Marg, Shiv Circle, Bani Park Jaipur - 302016
Tel. No.:	2207402 - 06
Fax No.:	2207411 / 410
Branches:	Akansha Building,2nd Floor, 123 Press Complex,M.P. Nagar, Zone I, Bhopal - 462003
Tel. No.:	5223123 / 118
Fax No.:	5223110
Branches :	Ashok Marg, Lucknow - 226001
Tel. No.:	2205722 /2205717(Dir.) 2205702/703,202(Extn.)
Fax No.:	2205716

DIRECTORS

Name :	Mr. K. K. Birla
Designation :	Chairman
Name :	Ms. Shobhana Bhartia
Designation :	Vice Chairperson and Editorial Director
Name :	Mr. Y. C. Deveshwar
Designation :	Director
Name :	Mr. K. N. Memani
Designation :	Director
Name :	Mr. Roger Greville
Designation :	Director
Name :	Mr. N. K. Singh
Designation :	Director
Name :	Mr. Ajay Relan
Designation :	Director
Name :	Mr. Priyavrat Bhartia
Designation :	Whole Time Director
Name :	Mr. Shamit Bhartia
Designation :	Whole Time Director

KEY EXECUTIVES

Name :	Mr. Rajiv Verma
Designation :	Chief Executive Officer
Name :	V. K Charoria
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	32197052	68.73
Banks/Financial Institutions and Insurance Companies	1086188	2.32
Foreign Institutional Investors (FIIs)	10240122	21.86
Mutual Funds	325200	0.70
NRIs/ OCBs	6706	0.01
Private Bodies Corporate	454827	0.97
Public	2535746	5.41
TOTAL	46845841	100.00

BUSINESS DETAILS

Line of Business :

The company is engaged in Media business

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Pages	Millions	--	26381.695
Copies	Millions	--	888.409
Newsline 45 Offset Rotary Press	No. of Machines - 6	270000	--
Coroset offset Rotary Press	No. of Machines - 2	80000	--
Newsline 30 Rotary Press	No. of Machines - 8	240000	--
Citiline Express Machine	No. of Machines - 7	210000	--
Wifag offset Rotary	No. of Machines - 3	180000	--
Heatset Web offset	No. of Machines - 1	40000	--
Starline 30 rotary Press	No. of Machines - 2	30000	--
Manroland Colorman	No. of Machines - 3	255000	--

GENERAL INFORMATION

No. of Employees :

3143

Bankers :

State Bank of India, New Delhi.

Facilities :

Secured Loans	31.03.2006
Rupee Term Loan from Punjab National Bank	750.000
Secured by way of hypothecation of entire block of assets which are lying at all work place/office of the Company, consisting of plant & machinery, computers, furniture, fixtures fittings & furnishers, vehicles, (present & future) which now or hereafter from time to time during the continuance of this security, belonging to the Company wherever situated including in-transit. All the above charges are ranking pari-passu with the existing and proposed lenders. It is further secured by way of equitable mortgage by deposit of title deeds of immovable property belonging to the Company situated at Noida and Greater Noida(Repayable within a year Rs.Nil, previous year Rs. Nil).
Rupee Term Loan from State Bank of India	900.000
To be secured by way of hypothecation of all present and future goods, book debts and all other movable assets, including documents of the title to the goods, outstanding moneys, receivables including receivables by way of cash assistance and/or cash incentive under the Cash Incentive Scheme or any other scheme, Claims including claims byway of refund of customs/excise duties under the Duty Drawback Credit Scheme or any other scheme, bills, invoices, documents, contracts, insurance policies, guarantees, engagements, securities, investments and rights and present and future machinery, by way of a pari passu charge. Charge is yet to be filed with the Registrar of Companies(Repayable within a year Rs. Nil)
Cash Credit Facility from Banks	45.726
Secured by way of hypothecation of goods stored in godowns including any such goods in course of transit or delivery and book debts including present and future debts, outstanding money, receivables and claims of the Company.

Banking Relations :	Good
Auditors :
Name :	M/s S. R. Batiboi and Company Chartered Accountant
Associates/Subsidiaries :	Hindustan Times Group Companies

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
52500000	Equity Shares	Rs. 10/- Each	Rs. 525.000 Millions
2000000	Preference Shares	Rs. 100/- Each	Rs. 200.000 Millions
	Total		Rs. 725.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
46845841	Equity Shares	Rs. 10/- Each	Rs. 468.458 Millions
2000000	Preference Shares	Rs. 100/- Each	Rs. 200.000 Millions
	Total		Rs. 668.458 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		468.500	668.500	617.500
2] Reserves & Surplus		7369.900	6263.900	3452.000
NETWORTH		7838.400	6932.400	4069.500
LOAN FUNDS
1] Secured Loans		1650.000	1695.700	1716.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		1650.000	1695.700	1716.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		9488.400	8628.100	5785.500
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3897.400	3879.800	3864.700
Capital work-in-progress		190.200	39.000	116.300
Intangible Assets
INVESTMENT		3729.800	644.000	1009.200
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1019.000	1084.500	775.600
	Sundry Debtors	1464.700	1212.200	935.000
	Cash & Bank Balances	1062.300	2677.500	488.600
	Loans & Advances	562.900	1261.400	231.500
Total Current Assets		4108.900	6235.600	2430.700
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2231.700	2016.600	1550.900
	Provisions	206.200	153.700	84.500
Total Current Liabilities		2437.900	2170.300	1635.400
Net Current Assets		1671.000	4065.300	795.300
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		9488.400	8628.100	5785.500

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		10392.900	8237.300	6279.300
Other Income		405.500	174.100	90.600
Total Income		10798.400	8411.400	6369.900
Profit/(Loss) Before Tax		1764.900	611.600	438.100
Provision for Taxation		614.210	238.900	164.700
Profit/(Loss) After Tax		1150.690	372.700	273.400
Earnings in Foreign Currency :
Total Earnings		84.481	0.000	0.000
Imports :
Total Imports		2946.847	0.000	0.000
Expenditures :
	Raw materials	4320.100	3413.700	2868.300
	Excise duty	0.000	0.000	0.000
	Power and fuel cost	144.800	128.000	81.900
	Other manufacturing expenses	882.200	807.300	683.000
	Employee cost	1456.100	1185.100	787.800
	Selling and administration expenses	1415.300	1296.300	859.100
	Miscellaneous expenses	269.300	441.000	353.100
	Interest	148.600	143.000	72.000
	Dpreciation	397.100	385.400	226.600
Total Expenditure		9033.500	7799.800	5931.800

SUMMARISED RESULTS

PARTICULARS	30.06.2007
Type	1st Qtr
Sales Turnover	2733.400
Other Income	103.200
Total Income	2836.600
Total Expenditure	2177.700
Operating Profit	658.900
Interest	41.800
Gross Profit	617.100
Depreciation	106.400
Tax	169.100
Reported PAT	341.600

200706 Quarter 1 --------------- Notes Other Income Includes Interest / Income from Investment Rs 73.20 million Other Income Rs 30.00 million Expenditure Includes (Increase)/Decrease in stock in Trade Rs (0.90) million Consumption of Raw Materials Rs 1086.80 million Staff Cost Rs 402.20 million Advertising & Sales Promotion Rs 144.60 million Other Expenditure Rs 545.00 million Tax Includes Provision for Taxation Rs 161.30 million Fringe Benefit Tax Rs 7.80 million EPS is Basic & Diluted 1. The above results have been subjected to 'Limited Review' by the Statutory Auditors in terms or Clause 41 of the Listing Agreement. 2. The above result as reviewed by the Audit Committee have been approved by the Board of Directors at its meeting held on July 31, 2007. 3. The Company is engaged in the business of Printing and Publication of Newspapers and Periodicals and there are no other reportable segments as per Accounting Standard 17 on Segment Reporting. 4. Provision for Taxation comprises Current Tax Expense and Deferred Tax Charge. 5. Consequent to the adoption of revised Accounting Standard 15 on Employee Benefits by the Company, with effect from April 01, 2007 the differential liability towards leaves for the current quarter amounting to Rs 2 million has been accounted under Employee Cost and additional liability for past period amounting to Rs 20.50 million (net of tax of Rs 10.50 million) has been adjusted against the opening balance of Revenue Reserve, as per the transitional provisions. 6. During the quarter, in view of notification issued by the Ministry of Corporate Affairs dated December 07, 2006 prescribing the Companies (Accounting Standards) Rules 2006, the Company has Changed the accounting policy related to recognition of foreign exchange fluctuation on fixed assets. The foreign exchange fluctuation, if any, is now being charged/credited to the profit and loss account, which till previous year was adjusted to the carrying value of respective assets. During the current quarter there are no foreign exchange fluctuation on fixed assets. 7 During that quarter, the Company has formed a wholly owned subsidiary company namely, Medialab Web Solutions Ltd with an initial equity Capital Investment of Rs 5.00 million. The Company has also made an additional investment of Rs 125.00 million in Preference Shares of its subsidiary company namely, HT Music and Entertainment Company Ltd. 8. The Board of Directors of the Company have accorded in-principle approval for the sale/transfer of Hindi Business of the Company as a separate undertaking to subsidiary company. 9. Previous period/year figures have been regrouped, wherever considered necessary.

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt equity ratio	0.23	0.31	0.52
Lon term debt – equity ratio	0.22	0.30	0.48
Current ratio	2.22	2.22	1.57
TURNOVER RATIOS
Fixed assets	2.15	1.87	2.11
Inventory	9.88	8.86	9.39
Debtors	7.76	7.67	6.37
Interest cover ratio	12.88	6.75	8.49
Opeerating profit margin (%)	22.23	16.39	13.35
Profit before interest and tax margin (%)	18.41	11.71	9.74
Cash profit margin (%)	14.89	10.91	8.97
Adjusted net profit margin (%)	11.07	6.23	5.36
Reuturn on capital employed (%)	21.12	13.39	11.63
Return on net worth (%)	15.79	9.65	10.11

STOCK PRICES

Face Value	Rs.10/-
High	Rs.222.20/-
Low	Rs.221.95/-

LOCAL AGENCY FURTHER INFORMATION

History

HT Media Limited, promoted by Hindustan Times Limited (a leading Newspaper publishing company) was incorporated on December 3, 2002. At present Hindustan Times Limited (HTL) holds 68.73% of shares of HT Media Limited and with this the company is the subsidiary of the Hindustan Times Limited. 

HT Media Limited acquired the media business of HTL, through a slump sale on a going concern basis. Pursuant to two business purchase agreements, both dated August 15, 2003, the media business comprising of the entire printing and publishing undertakings of HTL in all locations except at New Delhi, and the publishing undertaking of HTL at New Delhi, respectively, were acquired by HT Media at a consideration comprising cash and issuance of Equity Shares.

The printing undertaking of HTL at New Delhi was subsequently acquired by the company through a separate agreement dated October 1, 2004 at a cash consideration. 

During the year under review, the Company entered the capital market with an Initial Public Offering (IPO) (through book building route) of a fresh issue of 46,40,000 Equity Shares of Rs.10/- each and an Offer for Sale of 23,55,000 Equity Shares of Rs.10/- each by HPC (Mauritius) Limited, for cash at a price of Rs.530/- per Equity Share, aggregating to Rs. 3707.350 Millions. 

The Times of India Group & HT Media Limited have signed a memorandum of understanding (MoU) (Subject to Board approval) October 03, 2006 to establish a 50:50 Joint venture. The joint venture will function as a standalone business and has been established to publish a new and vibrant newspaper in Delhi, reflecting the changing needs of the reader and the emergence of Delhi as an International city. bb

Director’s Report

Stock Split: 

During the year under review, the members of the Company had, by way of Postal Ballot, approved with overwhelming majority, sub-division of the face value of Equity Shares from Rs.10/- per share to Rs.2/- per share. Accordingly, the total number of issued Equity Shares of the Company has risen from 4,68,45,841 Equity Shares of Rs.10/- each to 23,42,29,205 Equity Shares of Rs.2/- each w.e.f. 5th January, 2007, being the 'Record Date' fixed for the said purpose.  

The stock split has improved the availability of float and liquidity of the Company's Equity Shares. 

Scheme of Arrangement and Demerger: 

Pursuant to an Order dated 19th February, 2007 of the Hon'ble High Court of Delhi at New Delhi, the equity shareholders and unsecured creditors of the Company at their meeting held on 26th March, 2007 have approved a Scheme of Arrangement and Demerger under Section 391-394 of the Companies Act, 1956 between the Company and go4i.com (India) Private Limited and the shareholders and creditors of the respective companies. The Scheme is awaiting sanction of the Hon'ble Court. 

Company Performance and Future Outlook: 

A detailed analysis and insight into the financial performance, operations and outlook of the Company for the year under review, is appearing in the Management Discussion and Analysis, which is annexed to this Report as Annexure 'A'.  

IFRA honours of : 

* Gold Award for the Best in Print among publications with a weekday circulation of over 2,00,000 copies 

* Gold Award for general news photography 

* Silver Award for spot news photography 

* Silver Award for newspaper design to Hindustan Times-Mumbai's 'Budget 2006' edition 

* Bronze Award for best newspaper photographer 

* Judges' Special Recognition Award for general news photography  

Awards by World Association of Newspaper, France : 

* World Young Reader Prize in the Special Mention Category for the year 2006 

* World Young Reader Prize in the Public Service Category - Jury Commendation for the year 2007

The Indian economy: 

India continued to hold its position as one of the fastest growing economies in the world having growth peers such as China, Brazil, Russia, Singapore and Indonesia. Strong growth in the manufacturing and service sectors should enable the economy maintain its GDP momentum in the future. The outlook going forward remains optimistic although the growth rate may be moderated given the higher base from the previous year, a firm interest rate environment, sustained inflation and a generally unpredictable global economic situation. 

Achieved high GDP growth rate of 9.2% as per Economic Survey 2006-07 

With the manufacturing and services sector delivering strong growth, the outlook for the economy going forward, continues to remain positive. 

Economic position stronger: 

Foreign Direct Investment has increased to USD 16 billion and exports have risen 36% to USD 89.5 billion from April 2006 to December 2006. Foreign exchange reserves have improved to over USD 200 billion. With India's per capita disposable income currently at USD 556 p.a. and expected to rise to USD 1,150 p.a. by the end of 2015, the Indian economy is set to maintain its momentum in the future. 

Media Industry: 

All the earlier mentioned macro-economic indicators bode well for the media industry. However, while the outlook on the whole is encouraging, the operating landscape is highly competitive with national and regional players aggressively targetting better market shares. Like in any competitive environment, players with a networked national presence, having a portfolio of offerings that span multiple media segments, deep resources and a superior product are likely to do well in the future. This, over time will lead to a situation where the bigger get stronger, resulting in a consolidation within the sector, while weaker players find limited headroom to operate. 

Advertising revenues show continued growth: 

Advertising revenues which are a key profit driver for the Indian media industry have surpassed projected growth of 15%. The size of India's advertising industry is estimated to be around Rs.16,0000.000 millions. Moreover in India, the spend on advertising as a percentage of GDP is 0.34%, merely a third of what it is in an average developed economy and hence, the potential for growth here is immense. 

Media spends register a high growth rate: 

Print media spends have increased by 23% to Rs. 78000.000 millions, while radio and internet, though on a smaller base, have grown at an impressive 56% and 60% respectively. Both general interest dailies as well as business dailies have grown significantly in terms of volume and yield. Business daily revenues have crossed the Rs. 5000.000 millions mark during the year. While the online route is gaining increasing visibility globally, print media continues to be promising in India. 

New categories emerge as big advertisers: 

High growth industries such as real estate, automobiles, financial services and retail chains are becoming increasingly dependant on print media to reach their target audience due to its cost effectiveness, longer retention and broad base. Amongst the business dailies, the largest growth has come not from the financial sector, but from the real estate (82% growth), events (48% growth), automobile and travel (50% growth) categories. 

Huge potential for growth in the print industry: 

The print industry is expected to grow at a CAGR of 14% till the year 2010. It also appears to be the favouriteindustry for global investors with maximum foreign investment in this segment. 

HT MEDIA'S OPERATING PERFORMANCE OVERVIEW: 

The year under review (FY2007) was a very busy year for HT Media, where the Company implemented multiple corporate initiatives to further strengthen its product offering, market position and growth rate. The new initiatives have measured well to their estimated success and should help the Company emerge as a strong national and cross segmental player in the country. 

Entered into the business news genre with the launch of 'Mint': 

The Company entered the business news genre with the launch of the business newspaper 'Mint' in Delhi and Mumbai in February 2007; in association with The Wall Street Journal. 'Mint' is the first compact format paper in the country; and unlike most other business publications, is printed on white paper. Its size also makes it very convenient and easy to handle. While the newspaper is still in a nascent stage and they are absorbing feedback, it has already achieved the No. 2 position in the combined markets of Delhi and Mumbai. Along with the business paper, the Company also launched a website, viz., 'livemint.com', which has the potential of becoming a fully integrated finance portal offering business news, stock quotes, alerts, share trading platforms, etc. 

Rapid expansion in the Hindi segment- strengthens position as the third largest read Indian daily: 

The Company expanded it's Hindi footprint with the launch of new editions of 'Hindustan' in Agra and Kanpur which reported strong performance in a short period of time. Leveraging the well-accepted content and design formula from Delhi and Meerut, the launches met with great success in both these locations and this is likely to give 'Hindustan' a significant presence in the largest state of the country. 

'Hindustan' also became the third largest read Indian daily (as per Round 2 of IRS 2006) and emerged as the only daily amongst the Top 5 Indian dailies to register a growth in readership over the previous year. 

A strong presence in Bihar and Jharkhand, a rejuvenated product in Delhi and their recent expansions across U.P. will make 'Hindustan' a very prominent Hindi player. 

'Hindustan Times' - New Editions and improved product offerings: 

The 'Hindustan Times'-Mumbai edition was restaged in January 2007 with the introduction of new supplements like Cafe, HT Lives, Splurge and Yellow Pages. Mumbai edition continues to gain momentum and has delivered excellent performance. 

Responding to the healthy growth of the Punjab market, HT launched its Jallandhar edition along with a classified tabloid. It complemented the Chandigarh edition with the launch of specific segment based classified tabloids, viz., HT Estates, HT Style and HT Career Guide. HT Saturday Classifieds, which is available for readers of Chandigarh, Panchkula and Mohali was also revamped. 

Entry into the Radio segment: 

HT Media also entered the Radio segment with the channel 'Fever 104' FM in association with Virgin Radio, UK. The FM radio channel was launched through one of the subsidiary companies in Delhi (November 2006), Mumbai (January 2007) and Bangalore (March 2007). Fever is the first format radio station with a unique positioning and defined target audience - 20-35 year-olds - and plays Hindi and English music only. Virgin's vast radio experience will help them accelerate their growth in this segment. 

Introduction of 'Metro Now ' in Delhi: 

In February 2007, HT Media entered into an equal partner joint venture with Bennett Coleman & Co. Limited to launch a daily tabloid called 'Metro Now', targetted towards the youth in the city of Delhi. This joint venture allows it to grow in an exciting market, reflecting the changing needs of the reader. 

Consumer connect activities: 

During the year under review, the Company also commenced several long duration consumer connect activities that have contributed towards helping HT Media engage with the consumers and garner mind-share. The Hindustan Times 'I Love Delhi' festival in Delhi & NCR and the Hindustan Times 'Salaam Mumbai' and 'I Love Mumbai' festivals in the Mumbai market were some of these initiatives. 

The fourth edition of the 'Hindustan Times Leadership Summit' was held in November 2006. This well renowned forum considerably reinforces HT's position as a thought leader in the country. HT also organized the second 'Hindustan Times Luxury Conference' in association with 'Mint' during March 2007. The conference saw the participation of senior executives of some of the best global luxury brands and is set to become one of the most important conferences in the country. 

THEIR BUSINESS STRATEGY: 

They are committed to further strengthen their position as a growing diversified media house and enhance shareholder value by investing into new segments and by expanding their geographical footprint. They will continue to invest behind their product in order to enhance consumer experience. 

Improving their leadership position across markets: 

They continue to maintain their strong position in Delhi, Chandigarh, Bihar and Jharkhand due to their strong content based and well designed product. They plan to expand their geographical presence to attract high quality advertisers. In newer markets like Mumbai, Uttar Pradesh and Punjab, they plan to increase their market share through introduction of innovative supplements that provide relevant reading material which will lead to high revenue growth. 

Expanding and leveraging their national footprint: 

Being a national newspaper is a significant advantage that they consistently seek to leverage. A wider presence enables them to offer advertisers enhanced visibility at far more competitive prices. A key focus area for them is hence to widen their geographic footprint in all their areas of operations. 

Improving their customer focus: 

Based on their extensive research and understanding of reader preferences, they endeavour to constantly upgrade their product offerings and develop a long-term relationship with their readers. 

Their competitive strengths: 

Their expanding footprint, cross media presence, nationally recognized brand, large and modern operations, decades of experience in the industry, editorial capabilities, deep customer relationships and a strong market position in both the English and Hindi segments, combined with a professional management team, provide them with a significant advantage over other players in an industry that is highly fragmented and intensely competitive. 

Strong Brand Equity: 

Both 'Hindustan Times' and 'Hindustan' are well established and widely recognized brands. Their brands are associated with high credibility and standing which helps them build a strong consumer base. Their brand loyalty has enabled them enter new segments and gain a relative market share in a short time span. 'Mint', 'Fever 104' and 'Metro Now' were launched during the year and already have loyal consumer bases. 

 They have continuously strengthened their position as the second largest print media company by revenues. 'Hindustan Times' is a market leader in Delhi with a significant presence in Mumbai, whereas 'Hindustan' has a presence in many Hindi language markets; noticeably in Bihar, Jharkhand, Delhi and Uttar Pradesh. 'Hindustan' was the first and only Hindi newspaper to go all colour in Delhi and other markets. With their strong presence in Delhi and increasing presence in Mumbai, they are well positioned to leverage national advertisement opportunity. 

Large scale operations: 

Their strong pan-India presence enables them cater to their customers and advertisers and source news on a national basis. 

Modern technology-led infrastructure and large printing capacity: 

They continue to invest in new technology and modern printing infrastructure. Presently, they have printing facilities

in 15 locations including a state-of-the-art printing facility at Greater Noida. 

During the year, they successfully tested the implementation of 'EIDOS' in 'Mint' - a comprehensive editorial software that integrates seamlessly with Print, Web, TV and Mobile platforms. 

They also invested in revitalizing SAP to bring efficiency and process focus in all areas of operation. 

Other perspectives:

Supply chain: 

As discussed earlier, newsprint rates continued to firm up at the beginning of the year. Production costs also remained strained on account of high power costs, overheads and oil prices. However, a strengthening of US dollar contributed to a softening of rates during the second half of the year. 

The declining consumption in US made some of the North American producers cut down their capacity quite significantly. HT Media was the first in the country to develop a new source in Asia. This strategic shift in sourcing newsprint from South East Asia (including China) helped them negotiate better deals and to soften the impact of a sustained fourteen quarter price increase trend. 

They have also rationalized their procurement plans to optimize inventory levels and look to leverage. They look to leverage their scale and large volume requirements to drive down their input and raw material costs. 

Production:

Efficiencies and productivities across all facilities showed healthy improvement. Machine efficiencies clocked highest ever figures and their production infrastructure was profitably leveraged to do outside printing work. Raw material wastage figures continued to decline for the third successive year. 

Small group activities in plants enhanced employee involvement. A major thrust was given to Quality. Innovative systems were rolled out to all production locations across the country, which helped standardize best practices and develop a quality-focused work culture. Not surprisingly therefore, HT Media was awarded the SNAP certification by the Newspaper Association of America confirming the organization's high capability to reproduce advertisements. 

Internet division: 

Their internet operations have expanded significantly with the re-launch of 'hindustantimes.com', well positioned to become the best-in-class news website along with the launch of 'livemint.com'. Capitalizing on their strengths of being a large newspaper player in the matrimonial, real estate and recruitment segments, they plan on creating verticals in the internet space. Internet is still at an ascent stage in India and they believe that it has a high potential for growth. 

REVIEW OF FINANCIAL PERFORMANCE: 

HT Media's financial performance for the year under review has been extremely encouraging and demonstrates the success of the Company's strategy and its implementation. 

Their revenues for the year increased by 28% to Rs.10800.000 millions, driven by better advertising and circulation revenues. This was primarily due to the contribution of their Mumbai edition to the overall performance and contribution to the earnings from their Chandigarh operation, where HT Media is now the No.1 player. 

Advertising revenues registered a 33% increase from Rs. 6580.000 millions in FY2006 to Rs.8770.000 millions in FY2007, led by continued growth in print ad spends by advertisers, improved market share of their editions, contribution from the Mumbai edition's ad-revenues and increased sourcing of ad revenue from Mumbai for other editions. This contributed to the strong growth in their overall revenues. 

Their revenues from the sale of publications was flat at Rs.1360.000 millions in FY2007. The increase in revenue through increase in circulation of copies was offset by lower realization at Mumbai. 

Their total expenditure during FY2007 increased by 20% to Rs.8490.000 millions, although as a percentage of sales, total expenditure was lower at 79% of total sales, compared to 84% last year. 

Raw material costs increased by 27% to Rs.4320.000 millions in FY2007 as newsprint prices remained firm during the year. They have been able to leverage their better purchasing power enabled by their large size of operations and long term relationships with leading international newsprint manufacturers to secure raw material at lower than market prices, thus limiting the impact of newsprint prices that are currently at levels close to the highest in several years. They also employ a judicious mix of domestic and imported newsprint to optimize costs. 

Employee costs increased by 25%, reflecting additional editorial, marketing and support staff for new initiatives added during FY2007. 

Their profits before depreciation/amortization, interest, exceptional items and tax (EBITDA) for the year was higher by 69% at Rs.2310.000 millions due to healthy growth in top-line and improving returns from past investments in business. Profits before Taxes and Extra-ordinary Items increased substantially to Rs.1770.000 millions from Rs. 840.000 millions. 

Profit after Tax (before Extra-ordinary Items) has increased by 121% to Rs.1150.000 millions. Earnings per share has also increased by 198% to Rs.4.91 per share. 

Their operating results for FY2007 clearly signify a progress in the direction of their business, which aims for a long term sustainable growth in performance. 

OUTLOOK:

The economy is expected to continue showing strong GDP growth that may in turn result in an attractive growth opportunity for the advertising industry and in particular the print business. Increasing urbanization, literacy rates and an English speaking population should keep the readership levels and ad revenues from the newsprint business strong. 

With the launch of new editions and healthy growth in the existing ones, they foresee 'Hindustan' being a preferred choice for local and national advertisers. 

Deriving synergies from their existing operations, they plan to expand their presence in other regions across the country both through 'Hindustan Times' and 'Hindustan'. 

In a fast expanding economy, business dailies are becoming a necessary advertising medium. A premium newspaper like 'Mint' attracts a quality audience of influential decision makers. 

Radio contribution to the ad revenue pie is currently around 3%. It is expected to increase by a significant extent due to entry of new players, penetration from young audiences and a loyal listener base. It is planned to launch a 'Fever 104' FM station in Kolkata during the next year. 

With the internet swiftly gaining credibility and importance as a communication medium, the Company has already relaunched its website 'www.hindustantimes.com', besides launching 'livemint.com' on the EIDOS /Microsoft platform. 

The outlook for the next year remains promising. New initiatives that have been implemented in the recent past should gain operational maturity and enable the Company maintain its pace of growth in the year going forward. 

RISKS AND CONCERNS: 

Factors like escalating lending rates, high inflation and increasing regulatory controls may slow down the economy from its existing growth rate of 9% and therefore, may reflect an adverse impact on the industry as well as the Company's performance. Efforts are taken to mitigate this through new product offerings and adopting an integrated selling approach. 

The risks applicable to the newspaper industry in general apply to the Company as well. Increase in the global oil prices, entry of new players and escalation of newsprint cost can impact the profitability of the Company. Any additional revenue generating opportunity created outside the main business segments would mean additional consumption of newsprint. 

Also new business ventures may fail to deliver and see declining returns if they do not generate interest or have heavy cost structures.

AS PER WEBSITE

PACE - Partnerships for Action in Education, the Hindustan Times Newspaper in Education Programme was launched in 1998 at which point in time the print media was faced with growing challenges namely an ageing readership profile, threat from the electronic media and a significant decrease in reading habits among the youth.

Today, a front-runner of all NIE initiatives in India, PACE has succeeded in making the newspaper an integral part of a child’s curriculum seriously addressing the student community whilst bringing about significant value-addition in and around the editorial product thus succeeding in literally bringing the world into the classroom

Successfully established in over fifteen hundred schools in five cities across India, PACE has grown from a small beginning of a hundred students to a countrywide network of over three hundred thousand Students, Teachers, Principals, Parents, Govt. organisations, UN agencies, NGOs, Corporates and Resource Persons.

The critical element common across all sub-initiatives of PACE is that the ownership of the programmer belonged to ‘them’- the students and their educators with the newspaper being the facilitator.

Associated with schools for over five years, today PACE has become a trusted partner of schools in their endeavour to add value to education and a new dimension to classroom teaching, the key objectives being:

To provide a platform for schools to interact with each other and with the communities they function in.

v To maintain standards of world-class excellence in NIE

v To sensitize students to global issues of peace, tolerance, gender bias, literacy and environmental concerns thus helping build responsible and insightful future citizens.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.40.40
UK Pound	1	Rs.82.32
Euro	1	Rs.55.77

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		64

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, they have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions