Directors Report of Deccan Chronicle Holdings Ltd.

Sep 30, 2012

Dear Shareholders,

The Directors take pleasure in presenting the 10th Annual Report and the Audited Accounts of your Company for the year ended 30,h September, 2012 together with the Auditors'' Report thereon.

Financial Year

The Company has extended its financial year by six months consequent upon which, the Balance sheet and profit and loss account under consideration is made up from 1st April, 2011 to 30th September, 2012.Thus the financial year 2011 -12 are for Eighteen months. The company has since obtained permission from the Registrar of Companies, Ministry of Corporate Affairs, Andhra Pradesh, to extend the financial year ending 31" March, 2012 till 30lh September, 2012 and also, extension of time for holding the Annual General Meeting by a period of three months i.e till 31!t March, 2013.

Financial Results

Your Company''s summarized financial results for the year under review is as under:

(Amount in Rs)

Particulars 2011 -12 2010-11

Total Revenue 8,43,41,42,713 10,31,70,52,071

Profit/(Loss) before interest, tax and depreciation (3,08,27,39,095) 3,47,47,09,567

Less: Interest and financial charges 7,33,87,72,125 59,01,14,992

Profit/(Loss) before depreciation & tax (10,42,15,11,220) 2,88,45,94,575

Less: Depreciation 81,23,44,856 51,57,35,240

Profit/(Loss)before tax (11,23,38,56,076) 2,36,88,59,335

Tax charge (current and deferred) (82,98,19,351) 74,30,31,452

Net profit/(Loss) for the year (10,40,40,36,725) 1,62,58,27,883

Appropriations & Adjustments: -

Effect of change in treatment of franchise rights/others 51,36,48,000

Transfer to debenture redemption reserve 50,00,00,000

Transfer to general reserve 60,00,00,000

Surplus / (Deficit)for the year (10,40,40,36,725) 1,21,79,883

Balance in Profit & Loss Account 5,27,38,39,980 5,26,16,60,097

Balance carried forward (5,13,01,96,754) 5,27,38,39,980

Dividend

Due to lack of profits, your Directors are unable to propose any payment of dividend for the year under review.

Liquidity Crisis / Restatement of liabilities

During the period under review, your company suffered a reverses and liquidity constraints on account of termination of IPL Franchise agreement by BCCI, mismatch in the cash inflows and out flows of odyssey outlets business and accumulation of receivables. The management with a view to arrest losses and liquidity constraints has reviewed its policies in the interest of the Company and in the process some of the liabilities have been restated.

Management Discussion and Analysis

A detailed Management Discussion and Analysis covering operations review and outlook is provided in the Annual Report.

Buy back of Equity Shares

Pursuant to the Buy Back of shares announced during the previous financial year, your Company has completed the same and bought back the agreed 3,45,00,000 Equity shares of Rs. 21- each . The buyback issue was closed on 3rd January, 2012 consequent upon which, the paid up share capital of the Company as on 30th September,2012 stands reduced toRs. 41,79,44,438/-consisting of 20,89,72,219 equity shares of Rs. 2/- each fully paid-up..

Directors

During the year, Mr. Krishan Premnarayen, Independent director has resigned from the board of directors and he was relieved of his directorship with effect from 30.01.2012. Mr N. Krishnan, Managing Director of the company has also resigned and he was accordingly relieved of his duties with effect from 20.07.2012. Further, Mr. M Sukumar Reddy, Mr.Gurumurthy Kumar and Mr. V Suresh, independent and non executive directors have also tendered their resignations and the some have since been accepted by the board with effect from 08th December 2012. The board of directors placed on records its gratitude and appreciation for the services rendered by the above Directors during their tenure.

On 08''" December 2012, board of directors inducted Dr V Lakshmana Charya, Mr Venkateswarlu Malapaka and Mr Suresh Srinivasan as additional directors, who are independent and non executive and the Company filed relevant forms with Registrar of Companies for the above appointments and resignation of the Directors. In view of the resignation of independent directors and induction of additional directors, the board of directors reconstituted the Audit committee, Investor grievances committee and Remuneration committee in compliance with clause 49 of the listing agreement with stock exchanges.

The aforesaid additional directors, who were appointed by the board are liable for retirement at the ensuing annual general meeting and being eligible for reappointment, are proposed to be appointed as directors liable to retire by rotation in accordance with section 257 of the companies Act, 1956. Notices have been received, proposing the candidature of Dr V Lakshmana Charya, Mr Venkateswarlu Malapaka and Mr Suresh Srinivasan from some of the share holders of the company with relevant deposit amount. Your board of directors recommends their appointment as Independent and non executive directors liable to retire by rotation.

Mr. T. Vinayak Ravi Reddy, Vice Chairman and Director was appointed as Vice chairman and Managing director at the meeting of Board of Directors held on 22.02.2013 for the remaining period of his tenure of office, subject to the approval of the same by the shareholders. The relevant resolution proposing the candidature of Mr.T Vinayak Ravi Reddy as Vice chairman and Managing Director is included in the notice convening this annual general meeting

Commercial papers / Debentures

The company has raised debt through commercial papers and some of them have been repaid on the due dates and the remaining commercial papers valued at Rs. 270 Crores are outstanding and yet to be closed and similarly the debt raised through debentures worth Rs. 481.65 Crores could not be redeemed on due dates due to liquidity problems.

Investor protection fund

The unclaimed dividend amounting to Rs. 25,475/- pertaining to the financial year 2004-05 is due for transfer to the Investor Education and Protection Fund (IEPF) as per the regulations of the Companies Act,1956.

Shares Pledge by the Promoters/Directors

As a result of the Lenders invoking the pledge of shares made by the Promoters of the Company as collateral security for the financial assistance provided to the Company , the promoters share holding as reflected in the depository has come down from 38.40% to 32.66% as at 31 st December 2012. The Promoters have contested the invocation of the pledge and appropriation of the value by the lenders and the matter is pending to be resolved.

Franchise rights of "Deccan Chargers"

Franchise rights of "Deccan Chargers"

Your Company is the owner of the Hyderabad Franchise "Deccan Chargers" of the Indian Premier League (IPL), created by the Board of Control for Cricket in India (BCCI).This is an indefinite right and the Company can operate the franchise as long as the IPL tournaments are conducted by BCCI. The consideration for acquiring the franchise rights of Rs.428.04 Crores is payable to BCCI over a period of 10 years, which is renewable, in equal installments commencing from 2008 (IPL-1 ).The income accrues to the Company on this Franchise by way of share comprising of central revenue from BCCI, ticket sales, sponsorship etc.

During this accounting period, BCCI terminated the IPL Franchise of the Company unilaterally under the pretext of breach of some of the terms of the Franchise Agreement. As per the orders ofthe Hon''ble High Court of Bombay, the parties viz., BCCI and the Company approached an Arbitrator for resolution of the disputes. Company filed claim petition before the Arbitrator against BCCI claiming damages/ compensation for loss suffered by the company on various counts on account of actions of BCCI. Pending outcome of the arbitration, income on this disputed loss of profit has not been recognized for the period under review.

Legal Cases

During the period under review, some creditors filed cases against the Company and its Directors including petitionsfor winding up of the Company, in the High Court of Andhra Pradesh. The management has taken and been taking all diligent steps under legal advice, to defend the company in all the litigation. Since the matters are sub-judice, the exact liability of the Company can''t be ascertained at this point of time.

The Ministry of Corporate Affairs has ordered an Inspection of Books of Accounts and other records under section 209A of the Companies Act, 1956 and your company is taking steps to provide the necessary documents/records to comply with the order.

Listing at Stock Exchanges

The National Stock Exchange of India Limited has suspended the trading of securities of the Company vide email dated 15® January, 2013 with effect from 23.01.2013 due to non compliance of some of the provisions of the listing agreement. Steps have been already initiated to comply with the provisions of listing agreement and in the process, the Company has since applied the Stock Exchange for revocation of the suspension and the same is awaited.

Report on Corporate Governance

As required under Clause 49 of the Listing Agreement with the Stock Exchanges a report on Corporate Governance is given in the Annual Report. Certificate of the Auditor regarding compliance with the conditions of Corporate Governance is also given.

Replies on the comments/ notes to accounts /Observations made by the Statutory Auditors

Your directors noted for future guidance the observations of Statutory Auditors in the Auditors Report.

Reply to Auditors Qualifications/ Notes to Accounts/ Observations

Note No. 27.01 Regarding the Contingent Liabilities: The same will be taken into account when the liabilities get crystallized.

Note No.27;06 Regarding managerial remuneration: Due to no profits/inadequacy of profits, remuneration paid to the executive directors resulted in excess of permissible limit as such, the company will take appropriate steps to obtain necessary approvals from the central government.

Note No.27.10 read with paragraph No.f) iii) of the report of the Auditors regarding Confirmation of Balances: Without reciprocal action from the Debtors and Creditors and in the absence any dispute regarding their amounts, the Company has accounted for the amounts due from the debtors and due to the creditors as per its books of accounts. The Company is in the process of obtaining confirmation from the parties wherever possible. In the absence of any note or information contrary to the Balances shown by the Company in respect of Debtors and Creditors, no adverse inference can be drawn for any negative or variation impact on the profit and loss of the company and consequently, no provision for any uncertain or imaginary adverse variation can be made in the books of accounts of the Company. Some of the lenders have got the properties mortgaged to them transferred in their names and some out of those lenders gave an option to the Company to buy back the properties conveyed to them. So far, these lenders have not confirmed the amounts of loan if any adjusted by the transfer of properties, how the values and consideration have been arrived at, the reschedulement of loan, if any, or refund of excess over the liability etc., and in the absence of the same, recognition of the sale or the profit or loss on sale of assets or adjustment of loan account will not arise.

Note No.27.11 read with paragraph No. 4(f)(ii) of the report of the Auditors regarding restructuring of operations and Reinstatement of Assets and Liabilities: Consequent upon slowdown in the overall economy, downward trend in the industrial growth and additional costs in running the business and industry and failure in performance of the payment obligations by the parties against receivables or discharge of corresponding liabilities by them, the management felt it reasonable and expedient to review the policies with regard to the above and other core sectors of business and reinstate the assets and liabilities in line with the changed scenario. It is in this context, the management decided to reinstate the assets and liabilities as per the arrangement reached between the concerned parties, in the financial statements. As per the arrangement, the Company captured the value of precious intangible asset i.e., the Brands known as Deccan Chronicle and Andhra Bhoomi, for an agreed sum of Rs 2,905.32 Crores as against the value of around Rs.3,700.00 crores as arrived by the Valuation Consultant in his report. By virtue of the aforesaid review of policies and consequential reinstatement of assets and liabilities as per the arrangement, Rs. 2,905.32 Crores representing the value of the Brands has now been shown an intangible asset under development against receivables with corresponding liability to the amount in the form of borrowings from various lenders. The Management after careful consideration feels that capturing of Brands will do well to the Company and enhances the enterprise value of your company. In addition, the Brands have been synonymous with the Company as its main business is associated with the same. In modern environment, Corporate value and earning power are decided and generated by both class of assets, often more by intangibles than tangibles and more so, in the news paper industry. Moreover, the objective of the management in the above process is to help a realistic assessment of company''s real economic value done at any given point of time. In view of these reasons and substantial information and inputs with statistical and mathematical support, the company and its management are quite confident that there would not be any shortfall requiring any provisioning or any impact on the loss reported for the year under subject. The parties are in the process of concluding the transfer of ownership over the brands to the Company to the extent of Rs 2,905.32 crores where only few technicalities are left and hence, these amounts are shown under the Head "Intangible Assets under Development -Brand" on the Assets side under Fixed Assets with corresponding liability in the form -of borrowings have been reinstated in the Balance Sheet.

Note No.27.13:

The Company''s operations of "odyssey" dealing in retail trading outlets in the products like books, publications, periodicals, toys,.

Compact Disks and music CDs etc., has been severely affected due to heavy competition from the online merchandised sales and the same coupled with adverse market conditions, forced the company to scale down its operations and discontinue the sales outlets at various places in order to rationalize the business operations by reducing the losses. The Management feels that scaling down the "Odyssey" operations will arrest further losses on the above count of business. Hence a sum of Rs.65.91 Crores has been written off towards termination of lease deposits, assets, loans and advances etc and steps are initiated to recover some of the lease deposits and loans and advances due from outlet owners.

NoteNo.27.14:

The Company has been making serious efforts to resolve outstanding issues with banks, financial Institutions and NBFCs and creditors and is confident of resolving the issues by way of restructuring of the loan/interest accrued as per the scheme with the lenders/Creditors and the company is taking steps to defend the legal cases/winding up petitions filed by various creditors/lenders. None of the winding up petition was so far admitted. All the claims are contested and in few cases, the company raised counter claims too.

Note No.27.15,27.16and 27.17:

The Board of Directors has taken note of the observations of Auditors which are self explanatory in nature.

The notes and remarks of Auditors" are self-explanatory and therefore do not require any further clarifications.

Reply to the qualification made by the Auditors under paragraph f )(i) of their Audit report as regards "going Concern "assumption: - The assets and liabilities are recorded on the basis that the entity will be able to realize its assets and discharge the liabilities in the normal course of business. Merely because, some commercial decisions of the Management did not yield the required results should not be considered as factor to doubt the going concern assumption. The main business of the Company is not affected by the adverse conditions reported by the Auditors in their report. The Company challenged the action of BCCI and raised the dispute as also, claimed compensation/damages for the loss caused by the actions of BCCI and presently, these matters are under Arbitration. There are receivables representing the share of central revenues due from BCCI and the same have not been remitted so far to the Company. The downward trend and slowdown in the economy resulted in losses to the Odyssey business. Hence the decision to scale down the operations on the above count has helped the company to curtail further losses and save it from being pushed into major crisis and irretrievable situation. Next issue is the winding petitions filed by some of the creditors. So far, none of the petition filed seeking to wind up the company was admitted as such, no adverse inferences can be drawn against the Going concern assumption. The Company is contesting all the cases. The management has been taking stock of the situation regularly and adjusting its priorities to tide over the difficulties. The company will be in a position to discharge its liabilities and continue the operations without any interruption. In view of these reasons the management is advised that there is no threat to the Going Concern status of the company

Note 27.18 read with Paragraph No. 4 (f) (v) of the Audit report relating to non-disclosure of details as regards the principal overdue and interest etc., the same are awaited from the parties. Some of the parties preferred legal routes and some others are reconciling the figures. The Company has all the data and once the confirmation is received from the parties, necessary details will be furnished.

Rest of the observations of the Auditors is self explanatory and they are noted for guidance and compliance.

Fixed Deposits

During the year under review, your company has neither invited nor accepted any deposits from the public.

Statutory Auditors

The Company''s Statutory Auditors M/s. C. B. Mouli & Associates, Chartered Accountants, hold office up to the conclusion of the forthcoming Annual General Meeting. It is proposed to re- appoint M/s. C. B. Mouli & Associates, Chartered Accountants, Statutory Auditors of the Company to hold office from the conclusion of this Annual General Meeting until the conclusion of the next Annual General Meeting of the Company. The necessary resolution seeking approval of Statutory Auditors has been incorporated in the notice convening the Annual General Meeting.

Particulars of Employees

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules 1975 as amended from time to time forms part of this report. However, as per the provisions of Section 219(1) (b)(iv) of the Act, the Report and Accounts are being sent to all members excluding the statement containing the particulars of employees to be provided under section 217(2A) of the Act. Any member interested in obtaining such particulars may write to the Company Secretary/ Compliance officer at the Registered Office of the Company.

Directors'' Responsibility Statement

Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956 with respect to "Directors'' Responsibility Statement", it is hereby confirmed;

(I) that in the preparation of the annual accounts for the financial year ended 30"'' September, 2012, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:

(iv) that the directors had prepared the annual accounts for the financial year ended 30th September,2012 on a going concern basis.

Conservation of Energy, Technology Absorption

Particulars regarding conservation of energy, technology absorption are not applicable to printing and publishing of newspapers and periodicals.

Foreign Exchange Earnings and Outgo

In accordance with the provisions of Section 217(1 )(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is provided as under:

(Rs. in Rupees)

Particulars 2011-12 2010-11 Foreign Exchange Earnings 15,24,94,924 Nil

Foreign Exchange Outgo 285,36,02,418 223,04,82,000

Acknowledgements

The Directors take this opportunity to thank Company''s customers, suppliers, bankers, financial Institutions for their consistent support to the Company. Your Directors express their appreciation for the dedicated and sincere services rendered by the employees of the Company at all levels. Your Directors also wish to express their gratitude to the Shareholders for the confidence reposed by them in the Company and for the continued support and co-operation.

For and on behalf of the Board

T.Venkattram Reddy

Chairman

Secunderabad, February 22,2013

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Mar 31, 2011

Dear Shareholders,

The Directors take pleasure in presenting the 9th Annual Report and the Audited Accounts of your Company for the year ended 31st March, 2011 together with the Auditors' Report thereon.

Financial Results

Your Company's summarized financial results for the year under review is as under:

(Rs. in Lakhs)

Particulars 2010 - 11 2009-10

Total Revenue 1,03,091.48 92,194.54

Profit before interest, tax and depreciation 34,747.12 48,102.12

Less: Interest and financial charges 5,901.16 4,512.53

Profit before depreciation & tax 28,845.96 43,589.59

Less: Depreciation 5,157.35 4,224.85

Profit before tax 23,688.61 39,364.74

Tax charge (current and deferred) 7,430.31 13,272.93

Net profit for the year 16,258.30 26,091.81 Appropriations & Adjustments:

Dividend (including dividend tax thereon) – 8,532.71

Effect of change in treatment of franchise rights/others 5,136.48 96.04

Transfer to debenture redemption reserve 5,000.00 1,302.12

Transfer to general reserve 6,000.00 3,000.00

Surplus for the year 121.82 13,160.94

Balance in Profit & Loss Account 52,616.65 39,455.71

Balance carried forward 52,738.47 52,616.65

The above results for the year under review are not strictly comparable with that of the previous year, as the figures for the year under review includes the results of the subsidiaries viz., Deccan Chargers Sporting Ventures Ltd., Netlink Technologies Ltd. and Odyssey India Ltd. which were amalgamated with the company.

Amalgamation of subsidiaries

During the year under review company's subsidiary Netlink Technologies Limited was amalgamated with the company pursuant to a Scheme of Amalgamation sanctioned by the Hon'ble High Court of Andhra Pradesh vide its Order dated 9th March 2011; and the other two subsidiaries viz., Deccan Chargers Sporting Ventures Limited and Odyssey India Limited were amalgamated with the company pursuant to a Scheme of Amalgamation sanctioned by the Hon'ble High Court of Andhra Pradesh vide its Order dated 15th April 2011. The effective dates of the aforesaid Scheme of Amalgamation are 11th April 2011 and 4th May 2011 respectively.

The Appointed Date of amalgamation under both the Schemes being 1st April 2010, the financials for the year under review have been prepared after giving effect to the Amalgamation.

Dividend

In view of the ongoing buyback programme and the need to conserve liquid resources of the company, your Directors do not propose payment of dividend for the year under review.

Management Discussion and Analysis

A detailed Management Discussion and Analysis covering operations review and outlook is provided in the Annual Report.

Buy back of Equity Shares

In terms of the provisions of Companies Act, 1956 and the Securities and Exchange Board of India (Buy Back of Securities) Regulations,1998 and pursuant to the approval of shareholders obtained by Postal Ballot and the approval of SEBI, the Company announced its Offer to buy back a minimum of 1,00,00,000 equity shares, a maximum of 3,45,00,000 equity shares at a price per share not exceeding Rs.180/- at a total outlay not exceeding Rs.270 crores through stock market mechanism. The buy back offer commenced on 16th May 2011 and the scheduled closing is on 3rd January 2012 or such other earlier date as the Board may decide in this regard.

Pursuant to the aforesaid Buy Back Offer the Company, as of date of this report, has bought back 2,61,73,133 Equity Shares and out of which 1,87,82,870 Equity Shares has been extinguished and the remaining 73,90,263 Equity Shares are being extinguished in due course.

Ratings for Term Funding

During the year CARE has reaffirmed 'PR1 ' for short term funding & 'AA' for long term funding signifying high-credit quality and low credit risk, which signifies high degree of safety with regard to timely payment of interest and principal on the instruments.

Directors

Mr. Krishan Premnarayen, Mr. T. Vinayak Ravi Reddy, and Mr. G. Kumar retire by rotation at the ensuing annual general meeting and being eligible have offered themselves for reappointment.

Report on Corporate Governance

As required under Clause 49 of the Listing Agreement with the Stock Exchanges a report on Corporate Governance is given in the Annual Report. Certificate of the Auditor regarding compliance with the conditions of corporate governance is also given.

Fixed Deposits

During the year under review, your company has neither invited nor accepted any deposits from the public.

Statutory Auditors

M/s. C B Mouli & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office, in accordance with the provisions of the Act up to the conclusion of the forthcoming Annual General Meeting. The Company has received letter from M/s. C B Mouli & Associates, Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (IB) of the Companies Act, 1956, and that they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

Particulars of Employees

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules 1975 as amended from time to time forms part of this report. However, as per the provisions of Section 219(1) (b)(iv) of the Act, the Report and Accounts are being sent to all members excluding the statement containing the particulars of employees to be provided under section 217(2A) of the Act. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Directors' Responsibility Statement

Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956 with respect to "Directors' Responsibility Statement", it is hereby confirmed;

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2011, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:

(iv) that the directors had prepared the annual accounts for the financial year ended 31st March, 2011 on a going concern basis.

Conservation of Energy, Technology Absorption

Particulars regarding conservation of energy, technology absorption are not applicable to printing and publishing of newspapers and periodicals.

Foreign Exchange Earnings and Outgo

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is provided as under and the details of which is mentioned in Note No. 3.3 of the Notes to the Accounts.

(Rs. in Lakhs) Particulars 2010-11 2009-10

Foreign Exchange Earnings Nil Nil

Foreign Exchange Outgo 22,304.82 18,232.85

Acknowledgements

The Directors take this opportunity to thank Company's customers, suppliers, bankers, financial Institutions for their consistent support to the Company. Your Directors express their appreciation for the dedicated and sincere services rendered by the employees of the Company at all levels. Your Directors also wish to express their gratitude to the Shareholders for the confidence reposed by them in the Company and for the continued support and co-operation.

For and on behalf of the Board

T. Venkattram Reddy

Chairman Secunderabad, August 13, 2011

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Mar 31, 2010

Your Directors take pleasure in presenting the 8th Annual Report and the Audited Accounts of your Company for the year ended March 31, 2010 together with the Auditors Report thereon.

Financial Results

Your Companys summarized financial results for the year under review is as under:

(Rs. in Lakhs)

Particulars 2009-10 2008-09

Total Revenue 92,194.54 85,761.52

Profit before interest, tax and depreciation 48,102.12 31,092.54

Less: Interest and financial charges 4,512.53 7,093.11

Profit before depreciation & tax 43,589.59 23,999.43

Less: Depreciation 4,224.85 3,206.13

Profit before tax 39,364.74 20,793.30

Tax (current, fringe and deferred) 13,272.93 6,786.21

Net profit for the year 26,091.81 14,007.09

Appropriations:

Dividend (including dividend tax thereon) 8,532.71 5,729.89

Transfer to debenture redemption reserve 1,302.12 (8,371.77)

Transfer to general reserve 3,000.00 1,400.00

Balance carried forward to next year 13,256.98 15,248.97

Financial Review

Your company has been able to post a satisfactory performance during the year under review. The total revenues registered an increase of 7.5% from Rs.85,761.52 lakhs to 92,194.54 lakhs with profit after tax increasing by 86% from Rs.14,007.09 lakhs to Rs.26,091.81 lakhs.

Amalgamation of subsidiaries

During the year under review companys subsidiaries Sieger Solutions Ltd., Asianage Holdings Ltd. and Deccan Chronicle Bangalore Limited (which became a subsidiary during the year under review) were amalgamated with the company pursuant to a Scheme of Amalgamation sanctioned by the Honble High Court of Andhra Pradesh vide its Order dated 12th March 2010. The Appointed Date of amalgamation being 1st April 2009, the financials for the year under review have been prepared after giving effect to the Amalgamation.

Dividend

Your Directors do not propose payment of further dividend for the year under review and recommend for your consideration the confirmation of 3 Interim Dividends of Re.1/- per share each declared on 31st July, 2009; 30th October, 2009; and 29th January, 2010 respectively and already paid to the shareholders.

Buy back of Equity Shares

In terms of the provisions of Companies Act, 1956 and the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 and pursuant to the approval of shareholders obtained by Postal Ballot and the approval of SEBI, the Company announced its Offer to buy back a minimum of 1 crore equity shares, a maximum of 3.5 crores equity shares at a price per share not exceeding Rs.100/- at a total outlay not exceeding Rs.180 crores through stock market mechanism. The buy back offer commenced on 12th August 2009 and closed on 25th January, 2010.

Pursuant to the said Buy Back Offer the Company bought back and cancelled 26,54,761 Equity Shares of Rs.2/- each of an aggregate face value of Rs.53,09,522/-. Consequently, the Paid up Equity Share Capital of the Company as on March 31, 2010 stood reduced to Rs.48,44,45,568/- comprising of 24,22,22,784 Equity Shares of Rs.2/- each.

FCCB Conversion

During the current year, holder(s) of 3,000 Foreign Currency Convertible Bonds (face value - USD 1,000 each) opted for conversion of the bonds into equity shares. Pursuant to the option exercised and in accordance with the terms of issue of these bonds, 12,49,435 Equity Shares of Rs.2/- each were allotted on 14th May, 2010. Consequently the paid up equity capital of the company with effect from 14th May, 2010 stands increased to Rs.48,69,44,438/- comprising of 24,34,72,219 equity shares of Rs.2/- each. With the aforesaid conversion the entire 54,022 FCCBs issued by the company stands converted.

Ratings for Term Funding

During the year CARE has reaffirmed ‘PR1+ for short term funding & ‘AA for long term funding signifying high-credit quality and low credit risk, which signifies high degree of safety with regard to timely payment of interest and principal on the instruments.

Subsidiary Companies

Deccan Chargers Sporting Ventures Limited, Odyssey India Limited and Netlink Technologies Limited are subsidiaries of the company. Netlink Technologies Limited a step down subsidiary, became a direct subsidiary of the company during the year consequent to amalgamation of its holding company viz., Sieger Solutions Ltd. with the company. Ministry of Corporate affairs has granted approval under section 212(8) of the Companies Act, 1956, exempting the Company from attaching with the Annual Report of the Company, copies of the reports of the board of directors and auditors, balance sheet and profit & loss account of subsidiary companies.

Pursuant to Accounting Standard 21, notified under Companies (Accounting Standards) Rules, 2006, Consolidated Financial Statements presented by the Company include the financial information of the subsidiary companies. The Company will make available the audited annual accounts and related details of its subsidiaries upon request by any member of the company.

These documents will also be available for inspection during business hours at the registered office of the company and the subsidiary companies concerned.

Directors

Mr. T. Venkattram Reddy and Mr. T. Vinayak Ravi Reddy have been appointed as Chairman and Vice Chairman for a period of 5 years with effect from 16th May, 2010 on fresh terms. Mr. PK. Iyer and Mr. N. Krishnan have been appointed as Vice Chairman and Managing Director of the company with effect from 16th May, 2010 for a period of 5 years. The above appointments are subject to the approval of members at the ensuing annual general meeting.

Mr. T Venkattram Reddy, Mr. PK. Iyer and Mr. M. Sukumar Reddy retire by rotation at the ensuing annual general meeting and being eligible have offered themselves for reappointment.

Report on Corporate Governance

Your Company is committed to maintain the highest standards of Corporate Governance. As required under Clause 49 of the Listing Agreement with the Stock Exchanges a report on Corporate Governance is given in the Annual Report. Certificate of the Auditor regarding compliance with the conditions of corporate governance is also given.

Management Discussion and Analysis

A detailed Management Discussion and Analysis is provided in the Annual Report.

Fixed Deposits

During the year under review, your company has neither invited nor accepted any deposits from the public.

Statutory Auditors

M/s. C B Mouli & Associates, Chartered Accountants, Statutory Auditors of the Company, hold office, in accordance with the provisions of the Act up to the conclusion of the forthcoming Annual General Meeting. The Company has received letter from M/s. C B Mouli & Associates, Chartered Accountants to the effect that their appointment, if made, would be within the prescribed limits under Section 224 (IB) of the Companies Act, 1956, and that they are not disqualified for such appointment within the meaning of Section 226 of the Companies Act, 1956.

Particulars of Employees

Information as per Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of employees) Rules 1975 as amended from time to time forms part of this report. However, as per the provisions of Section 219(1) (b)(iv) of the Act, the Report and Accounts are being sent to all members excluding the statement containing the particulars of employees to be provided under section 217(2A) of the Act. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Directors Responsibility Statement

Pursuant to provisions of Section 217 (2AA) of the Companies Act, 1956 with respect to "Directors Responsibility Statement", it is hereby confirmed;

(i) that in the preparation of the annual accounts for the financial year ended 31st March, 2010, the applicable Accounting Standards have been followed along with proper explanations relating to material departures;

(ii) that the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

(iii) that the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:

(iv) that the directors had prepared the annual accounts for the financial year ended 31st March, 2010 on a going concern basis.

Conservation of Energy, Technology Absorption

Particulars regarding conservation of energy, technology absorption are not applicable to printing and publishing of newspapers and periodicals.

Foreign Exchange Earnings and Outgo

In accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the information relating to foreign exchange earnings and outgo is provided as under and the details of which is mentioned in Note No. 3.3. of the Notes to the Accounts.

(Rs. in Lakhs)

Particulars 2009-10 2008-09

Foreign Exchange Earnings Nil Nil

Foreign Exchange Outgo 18232.85 30644.53

Acknowledgements

The Directors take this opportunity to thank Companys customers, suppliers, bankers, financial Institutions for their consistent support to the Company. Your Directors express their appreciation for the dedicated and sincere services rendered by the employees of the Company at all levels. Your Directors also wish to express their gratitude to the Shareholders for the confidence reposed by them in the Company and for the continued support and co-operation.

For and on behalf of the Board T. Venkattram Reddy

Chairman Secunderabad, August 13, 2010