Balaji Telefilms Ltd Management Discussions

INDIAN ECONOMIC OVERVIEW

Indias sustained growth trajectoryhashelped largest economy in the world.countryemergeasthefifth-

Projections indicate an 7.6% GDP growth for 2023-24, marking the third consecutive year of over 7% growth. This improved growth is likely to be supported by narrowing gaps between rural-urban consumption and private-public capital expenditure. Furthermore, it may be bolstered by a favorable Rabi harvest, sustained profitability in manufacturing, resilience in services, and anticipated enhancements in household spending and private investment cycles.

The countrys retail inflation, measured by the Consumer Price Index (CPI), peaked at 7.79% in 2022-23 but began to decrease by the end of April 2023. By March 2024, headline CPI inflation had moderated to 4.85%, with declines observed in both food and core inflation.

Moving ahead, the Governments recent measures to control food prices are expected to further alleviate inflationary trends. The prospects of El Nino fading away and forecasts of a normal monsoon season suggest a favorable outlook for improved sowing of kharif, which bodes well for inflation mitigation.

OUTLOOK

The Indian economy is anticipated to contribute more than 15% to global growth in 2023-24. With the outlook of the economys per capita looking to increase substantially in the coming years, overall consumer spending is likely to stay positive. In addition, the favorable FDI policy in telecom and digital channels may positively impact investment trends across all segments, as India pursues its ambitious economic goals to become a USD 7 Trillion economy by 2030 and potentially become the worlds third-largest economy in the next three years. As a result, the countrys digital consumption is poised to play a pivotal role. The Governments vision to transform India into a developed nation by 2047 further highlights the sectors potential for growth and its contribution to the countrys economic evolution. Downside risks include a surge in commodity prices, geopolitical tensions, supply disruptions, and persistent inflation, leading to

(Source: RBI April Report, NSO, MoSPI Data)

MEDIA & ENTERTAINMENT (M&E) SECTOR

The Media & Entertainment (M&E) sector comprises multiple industries, which include television, film, radio, music, publishing, advertising, and digital media. Its core objective is to curate, produce, and disseminate content across diverse platforms, catering to the needs of audiences for information, entertainment, and engagement. The industry has a diverse range of offerings, from traditional media channels to digital platforms.Theseincludefilm, social media, and video games. Notably, the revenue streams for these channels are derived from various sources such as advertising and subscription-based models, leveraging a wide array of distribution channels.

Global Market Review

In 2023, the M&E market was valued at USD 2,507.25 Billion, while it is projected to grow to USD 2,706.24 Billion by 2024. This reflects a compound annual growth rate (CAGR) of 7.9%.

Furthermore, the M&E market value has been predicted to reach USD 3,545.76 Billion by 2028, while registering a CAGR of 7%. The forecasted growth can be attributed to several factors, such as the adoption of subscription models, the evolution of live events, growth in podcasting, development of interactive and immersive content, emphasis on sustainability in entertainment, and regulatory changes.

North America stands out as the foremost region with the highest media & entertainment market share. This can be accredited to the widespread demand for English content on a global scale. In comparison, the Asia-Pacific Europe, South America, the Middle East, and Africa have a lower contribution.

Emerging Global Trends

Smartphone Penetration: The increasing adoption of smartphones is fueling the entertainment and media market by providing users with easy access to content anytime, anywhere. As of March 2024, the number of smartphone users worldwide was 4.88 Billion, which indicated that 60.42% of the worlds population owned a smartphone.

Over-the-Top (OTT) Services: The global over-the-top (OTT) market size surpassed USD 251.6 Billion in 2023. Further, it is estimated to attain a value of USD 2,057.47 Billion by 2032, which translates to a CAGR of 26.30% from 2023 to 2032. As is evident from these figures, OTT services are transforming the entertainment landscape by providing personalized content streaming directly over the internet. This shift has been due to a significant leading OTT platforms.

Technological Advancements: Continuous advancements in technology are revolutionizing the of content creation and delivery processes. This field is leading to streamlined work-flows and increased efficiency. A prime example is the adoption of cloud-based solutions, which has reduced production time and costs by up to 30%.

AI-Powered Search Engines: The adoption of AI-powered search engine across various M&E platforms is revolutionizing user experiences through personalized content suggestions. AI-driven algorithms have improved the accuracy of content recommendations by 25%, enhancing user engagement. This improved performance is not only boosting audience engagement but is also expanding the user base. Thus, reflecting the industrys commitment to innovation.

VR Market Growth: The VR market is experiencing significant growth, particularly fueled by revenue from VR gaming. Despite its slow adoption in the initial stage owing to usability issues, there has been a steady rise in VR headset shipments with a recorded 14% increase in 2023. Moreover, a promising five-year CAGR of 36.2% is expected from 2023 to 2027. The boost in growth is likely to be propelled by the emergence of more capable standalone and tethered headsets, thereby enhancing spending on VR content and its degree of engagement.

Accessible Augmented Reality (AR): AR enables users to overlay virtual objects onto the physical world. This technological innovation is being increasingly integrated into standalone virtual reality (VR) headsets to create mixed reality (MR) devices. With a focus on accessibility to technology, more users are getting interested in augmented reality (AR), particularly since the pandemic. Some examples of the widespread adoption of AR include its use in popular photo- and video-sharing applications.

Generative AI: Generative AI is poised to transform the M&E industry, fundamentally reshaping content creation, distribution, and consumption processes. Its wide availability promises an increased engagement across the spectrum. The global M&E industry is expected to lead the way, as generative AI adoption advances, streamlines creative work-flows, boosts productivity and optimizes advertising strategies for increased revenue through precise and personalized campaigns.

Advertising-Supported Video-on-Demand (AVOD):

The global revenue from advertising-supported video-on-demand (AVOD) is projected to register a CAGR of 13.8%, reaching USD 54.8 Billion by 2027 from USD 28.7 Billion in 2022.

(Source: Precedence Report, PWC Report on Global M&E Sector)

Indian Market Review

The countrys M&E industry churns out 2,00,000 hours of content annually, which includes more than 1,700 films, 3,000 hours of premium OTT content and 20,000 songs. In 2023, the sector witnessed a commendable growth of over 8%, recording a market volume of over 2.3 Trillion. In the days ahead, the market is likely to demonstrate continued growth momentum, with a projected growth of 10% in 2024. The market size is then expected to reach 2.55 Trillion. A CAGR of 10% is predicted to propel the sector to 3.08 Trillion by 2026. This growth is primarily driven by increasing demand, technological advancements, and favorable government policies supporting the sectors expansion.

(Source: E&Y Report on Indian M&E Sector)

( Billion)*

Type of Media	2019	2022	2023	2024E	2026E	CAGR (2023-26)E
Television	787	709	656	718	766	3.20%
Digital Media	308	571	540	751	955	13.50%
Print	250	260	271	288	305	3.40%
Online Gaming	65	181	220	269	388	20.70%
Filmed Entertainment	191	172	197	207	238	6.50%
Animation and VFX	95	107	134	132	185	17.50%
Live Events	83	73	88	107	143	17.60%
Out of Home Media	39	37	42	47	54	9.35%
Music	15	22	24	28	37	14.70%
Radio	31	21	24	27	31	6.60%
Total	1,910	2,144	2,317	2,553	3,081	10.00%
Growth		21%	8%	10%

MACROECONOMIC GROWTH DRIVERS

Growth of the Indian Economy: As per the RBIs projections, India is likely to maintain an average growth rate of 7% over the next three years. This growth, in turn, will position the country as the third- catalyst largest economy globally and serve as a primary driving force for the Media & Entertainment sector. A rapidly growing economy can result in higher disposable income for consumers. This can help facilitate the increase in demand for entertainment across various mediums such as movies, music, and growth across various online television, among others.

Cultural Diversity and Preferences: India is a culturally diverse country with multiple languages, religions, and regional preferences. As such, media companies have a large headroom to cater to diverse audiences across the country by crafting content that resonates with different cultural groups. Demographic Dividend: As per a survey in 2023, 35% of Indias Gen Z users preferred to watch movies on their release day. Among them, 74% favored the theatrical experience owing to its high-quality audio and larger screen. India has the worlds highest population, with approximately 65% under the age of 35 years, constituting a substantial consumer base for the M&E sector. This vast, youthful audience eager 5G adoption alongside to engage with diverse content, signals a promising future for Indias M&E industry.

Increasing Urbanization: Indias urban population is growing rapidly, currently accounting for around 35-40% of the total population. This trend in urbanization is expected to continue, driving the demand for entertainment services, particularly in urban areas with higher disposable incomes.

Low Cost of Data: The most significant propelling the increase in Indias M&E user base is its affordable data pricing. The country offers one of the lowest data costs in the world, averaging only USD 0.2 per 1 GB of mobile data in 2023, compared to USD 6-7 in developed economies. This affordability has spurred significant entertainment streaming platforms.

Robust Advertisement Spending: In 2023, the spending on digital advertising soared by 15% to reach USD 576 Billion. This substantial increase constituted 51% of the total advertising revenues, emerging as a pivotal growth driver for the M&E industry. The Small and Medium Enterprises (SMEs) and long-tail advertisers majorly contributed to this surge, with contributions exceeding USD 200 Billion. Additionally, advertising earnings from e-commerce platforms amounted to USD 86 Billion, further fueling the sectors growth.

Boost in Digital Infrastructure: Indias thriving Telecom infrastructure is characterized by 1.19 Billion subscriptions and significant dominant 4G usage. As such, it serves as a key growth catalyst for the M&E sector. There has been a 50% surge in connected TV adoption, an expanding internet penetration, and a burgeoning broadband market boasting 904 Million subscriptions. These developments, coupled with the rise in smartphone users and increased usage time, have set the stage for accelerated growth in the M&E segment.

Increasing Digital Consumption: The burgeoning trend in the usage of smartphones in India, evident in the global time spent on phones and the second-highest app downloads, are potent drivers for the Media and Entertainment (M&E) segment. With Indians averaging 4.8 hours daily on phones in 2023, a 9% increase from 2020, and monthly mobile data usage per smartphone soaring by 24% to 31 GB, the M&E sector is primed for growth. Projections suggest a continued compound annual growth rate

(CAGR) of 16%, reaching 75 GB by 2029, signaling robust opportunities for digital content consumption and M&E sector expansion.

Globalization and International Trade: Indias M&E industry is increasingly engaging in international collaborations, co-productions, and content licensing agreements. For instance, the Indian film industry exports and territories, films generating significant markets.

(Source: E&Y Report on Indian M&E Market)

OPPORTUNITIES AND THREATS WITHIN THE INDIAN M&E SECTOR

Opportunities

Digital Transformation: The swift adoption of digital platforms presents opportunities for content creators to reach a wider audience and explore innovative monetization models.

Regional Expansion: The growing demand for regional content presents a scope for producers to tap into diverse language markets and cater to specific audience preferences.

Strategic Partnerships: Collaboration with international studios and streaming platforms can facilitate the cross-border distribution of Indian content and open new revenue streams.

Technological Innovations: Emerging technologies, such as augmented reality (AR), virtual reality (VR), and artificial intelligence (AI) can help in immersive storytelling and enhanced audience engagement. Content Localization: The adaptation of content to suit local tastes and cultural nuances can help

Indian M&E companies make a mark in international markets and attract a global audience.

Threats

Economic Instability: Economic downturns and varying consumer spending patterns can adversely affect advertising budgets and discretionary entertainment spending.

Regulatory Uncertainty: Evolving regulations and Government interventions pose uncertainties for the M&E sector, impacting investment decisions and operational strategies.

Competition from Global Players: International video streaming apps and increase in user-generated content platforms pose significant competition to domestic players, challenging market share and revenue streams.

Technological Disruption: Rapid technological advancements and changing consumer preferences require continuous innovation and investment to stay competitive in the rapidly evolving landscape.

Content Censorship: Increased scrutiny and censorship of content by regulatory bodies and interest groups pose challenges to creative freedom and expression, potentially limiting the diversity of content offerings.

(Source: E&Y Report on Indian M&E Market)

SEGMENT REVIEWS

Indian Television Industry

In 2023, despite a decline in Pay TV subscribers, the overall viewership witnessed a sustained increase. In fact, the television segment is set for significant growth in the future, propelled by the rising number of TV screens and the increasing viewership through connected TVs. The segment is set to expand further with the rise of broadband and 5G.

Advertising: In 2023, companies turned more cautious about their marketing expenditure amid fears of a recession and increased capital costs. Consequently, the television advertising sector experienced a downturn, with advertising revenue plummeting by 6.5%. This decline was compounded by a 2.6% decrease in overall advertising volumes, mainly due to the reduced brand presence on national channels. Apart from this, advertising rates witnessed an average decline of 4% as advertisers shiftedfocus shift in toward lower yield categories, reflecting the evolving dynamics within the advertising landscape.

Subscription: Distribution income within the television sector managed to grow by 2% in 2023, despite witnessing a reduction of 2 Million Pay TV homes. Concurrently, the Average Revenue Per User (ARPU) for Pay TV witnessed an increase of approximately 4%, reaching 274 per month. However, there were still several challenges in the industry, with piracy and under-declaration on the rise. These difficulties attributed to the inability to provide customers with information regarding the rise in channel prices, highlighting ongoing obstacles within the industry.

Viewership and Reach: During 2023, the TV viewing duration rose by 2%, with 899 channels providing audiences with more viewing choices. Notably, these channels included 61% free-to-air options. However, premium content saw a decline in viewership due to a fall in discretionary spending.

FUTURE OUTLOOK

By 2026, television revenues are forecasted to reach USD 765 Billion, exhibiting a compound annual growth rate (CAGR) of 3.2%. Concurrently, the market surge in connected TVs is likely to increase the total number of TV screens from 182 Million in 2023 to 202 Million by 2027. Looking beyond 2026, the proliferation of wired broadband and 5G connections is expected to rapidly expand the number of connected TVs, reaching 100 Million by 2030. This growth trajectory anticipates a decline in linear TV homes to 140 Million. Notably, the Million free TV homes, marking a significant viewing habits towards digital platforms.

(Subscriptions in Million)

Type of Pay TV	2023	2026E	2030E
Pay TV (Cable + DTH + HITS)	118	113	83
Free TV	45	50	57
Unidirectional TV	163	162	140
Connected TV (Bi- Directional)	20	40	70-100
Total TV	183	202	210-240

FILMED ENTERTAINMENT INDUSTRY

Indian Overview

The filmed experiencing remarkable growth in theatrical collections. This trend reflects a boost in audience engagement and spending, with revenues reaching an all-time high of 197 Billion. In 2023, the industry witnessed a substantial increase in theatrical releases, totaling 1,796 films showcasing a vibrant and active filmmaking landscape

(Subscriptions in Million^*)

Theatrical Right	2020	2021	2022	2023
Domestic	25	39	105	120
Theatricals
Overseas	3	6	16	19
Theatricals
Broadcast Rights	7	7	14	15
Digital/OTT Rights	35	40	33	35
In-Cinema	2	1	5	8
Advertising
Total	72	93	172	197

Challenges: Despite the overall growth in the industry, there has been a decline in admissions or the number of tickets sold for a particular movie or program. In fact, the number dropped from 944 Million to just over 900 Million, which suggested potential shifts in consumer preferences or external factors affecting attendance. Furthermore, while domestic theatrical revenues reached new heights, the softness in broadcast rights and struggles in film channel ratings posed additional hurdles to overcome.

Digital Transition: Amid these challenges, the industry is transitioning towards digital platforms. This is evident from the adjustments in the direct-to-digital premiums offered by M&E platforms. Another factor contributing to this transition is the decrease to digital in the number of films platforms. Moreover, several innovations in pricing, infrastructure, and distribution are underway. This signals the adaptability to evolve consumer behaviors and technological advancements.

Outlook: Looking ahead, the filmed sector is poised for continued growth. The projections for the sector anticipates a CAGR of 7% by 2026, with a market size as high as USD 238 Billion. This growth trajectory is expected to be driven by factors such as better financial conditions among audiences, the production of high-quality content for the masses, and ongoing innovations across various aspects of the industrys operations.

(Source: E&Y Report on Indian M&E Market)

INDIAN VIDEO OVER-THE-TOP (OTT) INDUSTRY

Video OTT subscriptions are projected to experience significant Million households in 2023 to 65 Million by 2027. With the total number of subscriptions forecasted at 138 Million, there are likely to be two subscriptions per household. The sustainability of ad-supported OTT models is also gaining popularity owing to the high costs associated with premium content. Consequently, more platforms are expected to transition towards subscription-based models or subsidize costs by bundling with data or e-commerce services. The introduction of more affordable subscription packages in the days ahead is expected to lead to a significant in the number of households subscribing to one or more SVOD services. In fact, this number is predicted to potentially reach 100 million by 2026. This strategy aims to make OTT subscriptions comparable to traditional TV costs to popularize OTT platforms among a broader audience further.

(in Million)*

Year	Paid Subscriptions	Household Subscription
2023	97	43
2024E	110	50
2026E	138	65

Bundling Strategies by ISPs and Telcos

The bundling of various OTT platforms by Internet Service Providers (ISPs) and telecommunications companies is expected to gain momentum in the coming years. These entities are anticipated to play a role similar to that of Direct-to-Home (DTH) service providers in the television sector.

Vernacular Contents

The share of vernacular content is forecasted to increase to 55% of the total content produced by OTT platforms. This growth can be attributed to the increased practice of dubbing and subtitling for the countrys diverse regional audience. However, the growth could also lead to increased costs for regional content production.

(Source: E&Y Report on Indian M&E Market)

GOVERNMENT POLICIES SUPPORT

The M&E sector plays a crucial role in Indias economy, contributing significantly to its growth and cultural landscape. Government policies aimed at supporting this sector have fostered innovation, investment, and job creation. Some key policies for the year under review are as follows:

Cinematograph Amendment Act, 2023: The

Cinematograph Amendment Act, 2023, is set to bolster growth in the M&E sector. This Act would help combat piracy, enable additional revenue streams through re-certificationfor TV exhibitions, clarify online piracy obligations for intermediaries, introduce age-based content suitability indicators, and streamline certification processes with indefinite validity. These measures collectively foster growth, innovation, and a safer digital environment within the industry.

Indian Telecommunications Act, 2023: The Indian

Telecommunications Act of 2023 has introduced a centralized framework for telecommunication services. This Act will likely enhance infrastructure and cybersecurity standards for the days ahead. In the Media & Entertainment sector, this Act can streamline content distribution, improve connectivity for streaming services, and facilitate efficient production and distribution networks.

Broadcasting Bill, 2023: The Broadcasting Bill, 2023, aimed at consolidating broadcasting laws, has extended its scope to include OTT services. The bill is likely to enhance regulatory clarity in the M&E sector. It will regulate several aspects of online news programs, ensuring their quality standards, fostering consumer trust and stimulating content production. Moreover, providing proportional penalties and accessibility guidelines could contribute to a more inclusive and compliant broadcasting environment. These features are likely to help bolster growth in the sector.

(Source: E&Y Report on Indian M&E Market)

COMPANY OVERVIEW

Established in 1994, Balaji Telefilms Limited (referred to as ‘Balaji Telefilms or ‘the Company) stands as a pioneering force in the Indian Television and Movie industry. Founded by Mr. Jeetendra Kapoor and led by Mrs. Shobha Kapoor and Ms. Ektaa R. Kapoor, the Company boasts over three decades of industry presence. It has been a pivotal player in the telefilm industry for over 25 years, having produced over 150 shows across multiple languages. Renowned for its successful productions, Balaji Telefilms remains dedicated to delivering quality entertainment across Hindi and regional genres.

Television

Balaji Telefilms is renowned for transforming Indian television, producing iconic shows like ‘Hum Paanch and ‘Kumkum Bhagya. The Company has maintained an unparalleled leadership position in television content. It prides itself in a rich legacy of hit shows and, to this day, has continued to resonate with evolving audience preferences.

Revenue for the Companys television business rose by 7% to 367 Crores in 2023-24, while EBITDA remained steady at 49 Crores. Production hours increased by 3% to 1,156 hours, and with 12 shows on air, further solidifying the Companys presence in the competitive television market. The performance of the said segment during the year forms part of this Annual Report.

Movies

Venturing into film production in Telefilms has quickly emerged as one of Indias leading movie studios. The Company collaborates with top-notch talent from the industry, delivering differentiated cinematic experiences. It caters to both theatrical and digital audiences while pushing the creative boundaries in storytelling to cater to its diverse audience.

Movies achieved 212 Crores in box officerevenue, up 23%, and 8x EBITDA growth to 19 Crores. The Company released 5 films: The performance of the said segment during the year forms part of this Annual Report.

Digital (ALTT)

Launched in 2017 as ALTT (formerly ALT Balaji), the digital platform of Balaji Telefilms, offers a diverse range of shows and movies, leveraging the Companys expertise to produce high-appeal original content. ALTT aims to create a dynamic digital space accessible across devices, providing personalized viewing experiences with features like watchlists and subtitles.

EBITDA loss reduced to 68% in 2023-24, and the digital business generated positive cash flow of approximately 10 Crores. Additionally, the Company launched 18 shows during the period, expanding its digital library to over 126 titles. The performance of the said segment during the year forms part of this Annual Report.

Discussion on Standalone Financial Performance with Respect to Operational Performance ( in Crores)

Particulars	2023-24	2022-23	Growth (in %)	Reason for Change
Revenue from Operations	578.83	517.17	11.92	Higher on account of increase in scale of operations
Gross Margin	110.44	86.06	28.32
EBIDTA	67.79	46.58	45.53
PBT	53.08	52.72	0.68
PAT	39.20	38.92	0.72

Key Financial Metrics

Particulars	2023-24	2022-23	Growth (in %)	Reason for Change
Current Ratio	1.65	1.91	(13.61)
Net Profit Margins	6.78%	7.53%	(9.96)
Debt-to-Equity Ratio	0.07	0.09	(26.81)	The Company has repaid major cash credit loan
Interest Coverage Ratio	6.53	7.99	(18.27)
Return on Net Worth	3.41%	3.51%	(2.88)	Marginal reduction in returns compared to previous year
Debtors Turnover Ratio	3.32	2.11	57.35	Due to increase in revenue which is mainly due to increase in scale of operation and shorter realization cycle
Inventory Turnover Ratio	2.73	2.74	(0.36)

RISK MANAGEMENT

Balaji Telefilms recognizes the critical importance of effective risk management across all aspects of its operations. By prudently identifying, analyzing, and implementing controls, the Company aims to mitigate potential risks that could impact its reputation, operations, or financial performance. Balaji Telefilms also continually monitors and evaluates the effectiveness of these controls, with the aim to minimize the likelihood and impact of adverse events. With this robust risk management program, the Company not only safeguards but also enhances its competitive edge in adapting to the dynamic business landscape. Some of the prominent risks associated with the M&E industry and the Companys mitigative approach include:

Risk	Impact	Mitigation
Regulatory Risk	Changes in regulations or Government policies can create several uncertainties for the M&E sector. These, in turn, can impact Balaji Telefilms creation, content distribution, and monetization strategies.	Balaji Telefilms continuously engages with regulatory bodies to anticipate and adapt to changes in regulations. The Company also diversifies its revenue streams to reduce vulnerability to regulatory shifts.
Piracy Risk	Rampant piracy, especially in the digital space, can lead to revenue losses for the Company, and its content creators and distributors.	Balaji Telefilms has robust digital rights management systems in place to safeguard content. The Company also collaborates with law enforcement agencies to identify and prosecute piracy offenders.
Technological Risk	advancements and shifts in consumer preferences can disrupt Balaji Telefilms traditional business model. As such, there is a need for constant adaptation to new technologies and investments therein.	Rapidtechnological in BalajiTelefilms research and development (R&D) to stay abreast of technological advancements. The Company implements innovative ideas to adapt content delivery methods and business models to the changing preferences of consumers.
Censorship Risk	The increased scrutiny and censorship of content by regulatory bodies or interest groups can restrict the Companys creative freedom and expression. Such challenges can impact content diversity and, in turn, audience engagement.	Balaji Telefilms maintains transparent content creation processes and adheres to regulatory guidelines throughout. The Company advocates for freedom of expression and engages with regulators continuously to address concerns collaboratively.
Economic Risk	Economic downturns or fluctuations in consumer spending patterns can affect advertising budgets and discretionary spending on entertainment. These shortages can impact the revenue streams for M&E companies.	Balaji Telefilms continuously diversifies revenue streams across advertising, subscription, and other revenue sources to mitigate the impact of economic adversities. The Company maintains cost controls and budget flexibility to adapt to changing market conditions.

 

Risk	Impact	Mitigation
Competition Risk	The entry of international streaming giants and the increasing prevalence of user- generated content platforms pose significant competition to domestic players. These developments can affect the Companys market share and revenue streams.	Balaji Telefilms introduces unique content offerings tailored to local audiences. The Company forges strategic partnerships with global players to get access to wider distribution networks and leverage their expertise.
Talent Risk	talented professionals in the M&E sector can be challenging. These challenges in effective human resources management can impact the quality and consistency of the Companys content production.	Recruitmentandretention BalajiTelefilms competitive salaries, benefits, and career development opportunities to attract and retain top talent. The Company fosters a positive work culture that values creativity and innovation.
Infrastructure Risk	especially in rural areas, can hinder the distribution and accessibility of media content. Such limitations and interruptions can limit the Companys market penetration and revenue potential.	Inadequateinfrastructure, in BalajiTelefilms infrastructure development for better content distribution especially in underserved areas. It explores partnerships with telecom companies to leverage existing networks.
Data Privacy Risk	The increasing digitization of content and consumer data can cause data security breaches and lead to privacy concerns. Such challenges can affect both the Company and its audiences.	Balaji Telefilms implements robust data security measures to protect consumer data from unauthorized access or breaches. The Company complies with data protection regulations and is transparent about data collection and usage practices.
Client Risk	The evolution of consumer preferences and behaviors, such as cord-cutting and ad-blocking, poses challenges for traditional revenue models. This requires the Company to adapt to new consumption patterns.	Balaji Telefilms constantly monitors consumer trends and adapts content offerings and distribution channels accordingly. The Company embraces digital transformation and invests in platforms that cater to evolving consumer preferences.

HUMAN RESOURCES

Balaji Telefilms acknowledges the pivotal role of the Companys workforce in the M&E industry, prioritizing their holistic development and well-being. As of March 31, 2024, the Company employed a total of 103 individuals.

Recruitment

Balaji Telefilms maintains a vigilant approach to recruitment, adhering to a stringent process to attract top talent in the industry. Alongside, it also fosters diversity and inclusivity throughout the workplace.

Training and Development

Recognizing the dynamic nature of the M&E industry, Balaji Telefilms invests in continuous training and development programs to equip employees with the latest skills and knowledge. These initiatives include on-the-job training, mentoring, coaching, and safety workshops to enhance workforce competency and preparedness.

Acknowledging Efforts

Balaji Telefilms values the dedication of the Companys employees and, as such, offers a comprehensive rewards program. This offering includes competitive salaries, performance-based bonuses, and health benefits that are meant to recognize and reward its employees hard work.

Managing Pay, Schedules, and Changes

The HR department meticulously manages employee compensation and schedules all through their tenure. In the process, it ensures fairness and transparency in performance appraisals, promotions, and salary adjustments based on merit.

Other Initiatives

Balaji Telefilms extends various benefits covering leisure, fitness, and social concerns in line with its commitment to employee welfare and community engagement. Initiatives such as Employee Donation Camps and Breast Cancer Awareness Programs exemplify the Companys dedication to employee well-being and community outreach.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Balaji Telefilms has established a robust framework of policies and procedures to govern its internal control processes. This feature emphasizes its and pivotal role safeguarding asset protection.

Standards for Internal Financial Control

The Company has instituted comprehensive standards to enforce internal financial controls throughout its organizational structure. These standards ensure adequacy and efficacy across different strategic support functions and operational domains.

Periodic Review of Audit Findings

The Board of Directors of Balaji Telefilms regularly reviews statutory and internal audit findings to identify any lapses in internal control mechanisms. This proactive approach enables timely corrective actions to address deficiencies and strengthen internal controls.

Active Audit Committee

The Audit Committee, comprising members of the Board of Directors, actively oversees the adequacy and effectiveness of internal control systems. It provides valuable insights and recommendations to enhance controls, ensuring theircontinuedefficiency.

Continuous Improvement

Balaji Telefilms recognizes the dynamic nature of internal control requirements and is committed to ongoing enhancement. The Company periodically reviews and updates policies and procedures to align with evolving industry standards and regulatory requirements. These measures ensure its internal control framework always remains relevant and effective.

CAUTIONARY STATEMENT

Information in the Management Discussion and Analysis that describes the Balaji Telefilms aims, or projections may be considered ‘forward-looking under applicable securities laws and regulations. Actual outcomes may differ significantly from those stated in the statement. Strong competition, leading to price cuts, high volatility in prices of major inputs products, changes in Government regulations, tax laws, economic developments within the country and other factors such as litigation and labor relations are all important factors that could affect the Companys operations.