INOX LEISURE LIMITED ANNUAL REPORT 2006-2007 CHAIRMAN'S REPORT CHAIRMAN'S STATEMENT Dear Shareholders, We look back with satisfaction on an eventful and successful FY 2006-07 - a landmark year for INOX, both strategically and operationally. Our stakeholders and employees have good reason to be proud of last year's accomplishments: * Our turnover for the year ended March 31, 2007 went up by 49% YOY to Rs.16248 lacs. * Our properties under operation went up to 14 in FY06-07 from 9 at the beginning of the year. * Footfalls were up 48% to 9283496 in FY 06-07 from 6268669 in FY 05-06. * We declared a maiden dividend of 10% As INOX Leisure Ltd. continues to expand with tremendous momentum, what sets us apart is a deep commitment to innovation and the ability to tap into the needs and aspirations of our patrons. In 2006, INOX Leisure Ltd. successfully navigated different market environments without losing momentum in meeting our goals. It was also a year that validated the strategies we began implementing more than five years ago - widening our reach geographically, while maintaining strict operating discipline and keeping a keen eye on the bottom line. Our acquisition of Calcutta Cinema Private Limited (CCPL) marked the beginning of the consolidation phase in the multiplex industry. This merger has now been approved by the High Courts of both Gujarat and Kolkatta, and is now awaiting the completion of procedural formalities. Our partnership with the Pantaloon Group is the first of its kind in India and INOX at Milan Mall, Santacruz will be the 1st single screen from INOX and the first property launched as a result of this tie up. We are accustomed to setting the pace for this industry when it comes to big ideas and innovations. That will not change, and neither will our commitment to building long-term, sustainable value for our stockholders. We have big opportunities ahead of us and an enormous responsibility towards stockholders, customers and employees. We are committed to making the most of your investment and to delivering industry leading innovation and performance. In closing, I would like to thank you on behalf of the Board of Directors for your trust and support. We will do everything in our power to live up to the expectations placed in us for 2007. Sincerely, P.K. Jain Chairman