Overview
Broadcast Initiatives Limited (Live India) (BSE Code: 532816, NSE Code: BROADCAST- EQ)
is one of Indias largest media Company. Live India a flagship channel which has the
largest news network across India in Hindi Speaking Market (HSM) news genre. Live India
Channel is available on major cable operators in PAN India and DTH Platforms.
Media Industry
As per FICCI-KPMG Indian Media and Entertainment Industry Report 2015, the Indian Media
and Entertainment Industry witnessed a moderate growth in 2014. The industry grew from Rs.
918 billion in 2013 to Rs. 1,026 billion in 2014, registering a growth rate of 12%.
Television sector grew from Rs. 417 billion in 2013 to Rs. 475 billion in 2014,
registering a growth of 14%. Total advertising spend across media was Rs. 414 billion in
2014 contributing to 40% of Media and Entertainment industry revenues. In light of the
continued economic growth, advertising revenues saw a growth of 14% in 2014. On account of
improving monetization due to digitization, in 2014, subscription revenues grew at
annualized growth rate 16%.
It was another landmark year for the television industry in many ways. Financial year
2015 saw the formation of the viewership measurement system by Broadcast Audience Research
Council (BARC). BARC is expected to deliver superior viewership data on account of more
relevant classification parameters (NCCS instead of SEC), tracking of substantially higher
viewership universe (~150 Mn Households) including rural households, as well as higher
quality of data monitoring through audio watermarking of channel feeds.
Business Profile
Live India is an integrated media Company engaged primarily in broadcasting and content
development, production and its delivery via satellite. The Company has presently 8
regional news bureaus across PAN India. These bureaus are located at Delhi, Chandigarh,
Srinagar, Bhopal, Ahmadabad, Patna, Lucknow and Jaipur. Live India is also the pioneer in
the national markets which serve content across the nation.
Leadership in HSM News Genre:
In the Hindi Speaking Market (HSM) news genre, Live India is the flagship product from
Broadcast Initiative Limited. The HSM space continued to see sustained competition between
the top news channels with extremely dynamic channel rankings. Live India continued to
have a leading share in the HSM news genre. Some key shows during the year under review
are as follows:
Live 50: Collage of top 50 news of the moment, packed in aggressive packaging and
catering to the people who wants to have maximum news in minimum time. Top 50 news
collects best news for the viewers so that they can stay informed even without sitting in
front of tv all day long.
Sport Track: Sport Track is the comprehensive coverage of sports news around the world.
The show brings all the action of sports on and off the field, packaged for youth
interested in knowing the briefs and details of the sporting event of the day.
Live India Aaj: A unique show that prepares the news agenda of the day and highlights
three big news events of the day. Aaj is watched by the people who are aware about the
current affairs and willing to know what can be the highlights of the day even before the
news breaks out.
Master Mind: Master Mind is the weekly investigative show, unearthing the big scams of
the nation. The show brings out the shocking news from different part of the nation and
provides regular dose of investigative journalism which is missing from the action in
Hindi News Genre. Master Mind is one of the kind shows on any other Hindi News Station and
has made its impact in the short period after launching it.
Parag Dil Se: Parag Dil se is one on one interview based show hosted by our
Entertainment Editor Mr. Parag Chapekar. It is a light hearted celebrity based show.
Parag Ka Punch: Every Friday our Entertainment Editor Mr. Parag Chapekar gives his
critical view on the latest release of Bollywood movies in "Parag Ka Punch".
Rahasya: The weekly show brings stories that became legends as soon as they appeared,
stories that are mostly unheard, not routine UFO sighting stories, but difference
interesting and sometimes scary stories.
Delhi Live: Delhi Live as name suggests is half an hour comprehensive news bulletin of
Delhi. The show carries the top story of Delhi, which covers all the aspects and
dimensions of the day.
Election Coverage: Under the banner of Abki Baar Kiski Sarkar channel did major
coverage of 2014 loksabha elections. The coverage included constituency profile of major
constituencies, interviews of big politicians & Street shows etc.
Delhi election coverage was also done on massive scale by designing several shows under
the banner Delhi Ka King Kaun.
Under the banner of Tau Aur Bhau channel did major coverage of Maharashtra and
Haryana election. The show was planned in such a way that two politically and culturally
different state blended together in a programme. A well known Marathi artist Mr. Jayant
Gadekar covered the Maharashtra election as a character of Bhau and his counterpart in
Haryana was Mr. Sangram Singh, who presented himself as a Tau. Both have covered the
election in their respective state with local flavor and dialect. The programme was widely
appreciated.
Cricket World Cup 2015: Cricket world cup 2015 was covered in the show named as Abki
Baar Champion Kon. The cricket legends Mr. Dilip Vengasarkar, Mr. Inzamamul Haq and Mr.
Surinder Khanna are the Panelists for the show. Ms. Roshni Chopra was the lead host of the
show.
Operation Mahabharat: Live India carries out sting operation to reveal theft of digital
confidential information. Information thefts from countrys banks have become rampant.
Records of mobile companies are being sold openly in the market. To probe this further,
undercover reporters of Live India investigated it for 10 months. Christened Operation
Mahabharat, the aim of the entire operation was to reveal how touts throughout the country
are selling confidential information of people. The investigation caught 12 such persons
who indulged in this fraud. Live Indias hidden cameras caught those making deals with the
reporters who posed as clients for buying confidential information.
Business Strategy
The key elements of Live India strategy during the year were to (i) take appropriate
steps to safeguard its leadership position in a fiercely competitive environment (ii)
rationalise on costs across different heads (iii) fortify its expansion in the national
markets (iv) maintain consistently high standards of Corporate Governance (v) additional
revenues from digitization.
Appropriate steps to safeguard its leadership position in a fiercely competitive
environment: The reorganization of regional news bureaus has helped to ensure that in a
highly fragmented environment, the network maintained and grew its dominance. The Company
aims to further enhance the market share through a planned content lineup for news based
programme.
Rationalise on costs across different heads: The belief at the Company has always been
that higher spends will not necessarily result in sustained incremental viewership. Even
in the wake of competition, the network maintained its cost structures, though with
increased competition our costs also moved up. Better negotiations with suppliers and
stricter control on distribution spends will help in further keeping costs under check.
Fortify its growth in the national markets: During the year, the Company undertook
various initiatives to further strengthen its dominance in national Hindi Speaking Markets
in news genre by entering into deals with new platform operators. In line with this growth
strategy, the Company planned to launch various news based programme.
Corporate Governance: Live India firmly believes that good governance is critical for
sustaining corporate development, increasing productivity and competitiveness and creating
shareholders wealth. The governance process should ensure that the available resources are
utilised in a manner that meets the aspirations of all its stakeholders. The Companys
essential charter is shaped by the objectives of transparency, professionalism and
accountability. The Company continuously endeavors to improve on these aspects on an
ongoing basis. While the increasing emphasis on transparency and accountability, standards
have been set by various governing bodies on disclosure as well as judiciousness in
conduct.
Additional revenues from digitization: The Company has relaunched its digital editions
in February, 2015 under the umbrella of Live India Digital. India is a fast digitizing
market. The completion of the digitization process in Phase I and Phase II cities and the
rollout in Phase III and Phase IV cities is seen as a positive step that should lead to a
boost in the subscription revenues in the future.
Risk Factors
Competition from other players: The Company operates in highly competitive environment
that is subject to innovations, changes and varying levels of resources available to each
player in each segment of business.
Ever changing trends in Media Sector: It may not be possible to consistently predict
changing audience taste. Peoples tastes vary quite rapidly along with the trends and
environment they live in. This makes it virtually impossible to predict whether a
particular show of news based programme would do well or not.
Cost of programming might affect its bottom line: The urge to compete and provide the
best content to viewers would have to incur high expenditure to provide an impetus on its
news based programming. The increase in costs might not necessarily perk up its revenues
in the same proportion.
Macroeconomic environment: Macroeconomic environment can be a potential source of risk.
Moderate growth, along with high inflation, can adversely impact advertising revenues of
the Company.
Increased competitive environment in the Hindi Speaking Market (HSM) Space: The HSM
news genre is the one of the key genres for all advertisers and hence is most lucrative to
all the TV broadcasters. Any new competition in the space can have an impact on the
Companies revenues.
Dependency on hiring and retaining highly qualified employees: The Company believes
that the future success depends in large part on continued ability to hire, develop,
motivate and retain qualified employees and other qualified personnel needed to provide
services to our customers. Competition for skilled personnel in the media industry remains
intense.
Extract of Policy on Risk Management
"At Broadcast Initiatives Limited, the task of risk management is to continuously
evaluate and monitor all business opportunities, threats and risks to ensure the
achievement of objectives and business continuity."
The Board of Directors of the Company and the Audit Committee of the Board shall review
the risk management policy of the Company from time to time so that management controls
the risk through properly defined network. The Audit Committee of the Board shall monitor
and review the overall risk management plan and perform such other functions as may be
necessary for effective implementation of the Risk Management Policy for the Company. Head
of Departments shall be responsible for implementation of the risk management system as
may be applicable to their respective areas of functioning and report to the Audit
Committee.
Media & Broadcasting Industry: The television and broadcasting industry has
recorded growth especially in the new media sectors, animation, Films and Music, mainly
due to digitization. Diversification is the key to growth and sustenance of Industry.
Media and Broadcasting is no exception. While there are opportunities available for
growth, there are also some hurdles on the way. The sector is largely disorganized and
fragmented and there is lack of distribution infrastructure.
With the help of new technology the Media and Entertainment, there is a need for
innovation as per the requirement of the audience. The changes in the way media is
consumed are being driven by factors such as emerging gaming platforms and innovation in
technological devices such as tablets. Convergence of media, e-commerce and emergence of
an application economy are the expected trends likely to emerge. Availability of
infrastructure and appropriately pricing content across these new media platforms are
expected to be critical success factors for the Indian market.
Risk Management: Risk management is a part of the Companies financial reporting process
and one of the most significant measures of internal control. At Broadcast Initiatives
Limited the task of risk management is to continuously evaluate and monitor all business
opportunities, threats and risks to ensure the achievement of objectives and business
continuity.
The Board of Directors carries the primary responsibility for the Companies risk
management. The Board of Directors considers the most significant identified risks and is
in charge of defining the Companies risk appetite. The Audit committee approves the risk
management principles of the Company and monitors the efficiency of the risk management
systems. The Audit committee also discusses the management reports on significant risks
and the Companys exposure to them as well as considers the plans to minimize risks. The
Audit Committee of the Board is responsible to monitor and review the overall risk
management plan and perform such other functions as may be necessary for effective
implementation of the Risk Management Policy for the Company.
The Chief Executive Officer and Managing Director, the Executive Team and other Senior
Management Person in the Company at organizational levels are responsible for carrying out
daily risk management. In each department, a head of the department is a responsible
person for risk management and reporting on risk management operations.
The risk management process is a means to identify risks, develop risk management
measures and report the risks. Risk management is part of the Companies internal control
and, thus part of good corporate governance. The Company sets limits to and procedures for
quantitative as well as qualitative risks in writing in its risk management system. The
most significant risks and uncertainties for the Company is define as risks events or
circumstances that could prevent reaching a strategic, operative or economic objective.
The risks are classified as strategic, operative and financing risks.
Strategic risks: The most important strategic risks for the Company is a significant
drop in viewership, a decrease in advertising sales and a significant rise in distribution
costs. Changes in the overall economy are reflected in the development of advertising
sales.
Advertising sales major part of the revenue of the Company. There are also
geography-specific risks related to the development of the market, business and the
economic growth with regards to developing businesses. In the long term, the media
business is transforming with changes in media usage and new technologies. The Companies
strategic objective is to react to this challenge by renewing its business and developing
new businesses.
Operative risks: Disturbances of information technology and communications as well as
disruption of distribution are the most important operative risks. The risks of
information technology and communications are reviewed and managed in cooperation with the
operating people and the business units as well as cooperation partners. Especially the
technical operation and vulnerability of the digital business is closely monitored in the
entire media industry.
In media, it is important to prevent disruptions of operations in advance by means of
good management and safety culture as well as with the help of guidelines. Back-up plans
are made in preparation for interruptions. The increasing compliances and legal norms may
lead to additional costs for the distribution. Therefore, the Group aims to further
improve the efficiency of its distribution activities in order to maintain a competitive
edge.
Financing Risks: The Chief Financial Officer of the Company is responsible for the
financing. The centralized financing and investment function takes care of the operative
financing for the Company. The function includes the management of payments and liquidity,
funding and investments. The payments are centralized.
Risk Management System: As a diversified enterprise, the Company has always had a
system- based approach to business risk management. Backed by strong internal control
systems, the current risk management framework consist of the following elements:
• The Corporate Governance Policy clearly lays down the roles and responsibilities
of the various entities in relation to risk management. A range of responsibilities, from
the strategic to the operational is specified in the Governance Policy. These role
definitions, inter alia are aimed at ensuring formulation of appropriate risk management
policies and procedures, their effective implementation and independent monitoring and
reporting by Internal Audit.
• A combination of centrally issued policies and divisionally evolved procedures
brings robustness to the process of ensuring business risks are effectively addressed.
• Appropriate structures have been put in place to effectively address the
inherent risks in businesses with unique and relatively high risk profiles.
• A strong and independent Internal Audit Function at the corporate level carries
out risk focused audits across all businesses, enabling identification of areas where risk
managements processes may need to be improved. The Audit Committee of the board reviews
internal Audit findings, and provides strategic guidance on internal controls. Monitors
the internal control environment within the Company and ensures that Internal Audit
recommendations are effectively implemented.
• The combination of policies a process as outlined above adequately addresses the
various risks associated with the Companies businesses. The senior management of the
Company periodically reviews the risk managements framework to maintain its
contemporariness so as to effectively address the emerging challenges in a dynamic
business environment.
Financials Results of Operations
Total Revenue: Total Revenue for the financial year 2014-2015 is Rs. 1217.22 Lacs.
Total Expenditure: Total expenditure increased by Rs. 2525.52 Lacs from Rs. 4129.24
Lacs in financial year 2013-2014 to Rs. 6654.76 Lacs in financial year 2014-2015.
Operational/ Production Cost: Operational cost increased by Rs. 304.77 Lacs from Rs.
150.33 Lacs in financial year 20132014 to Rs. 455.10 Lacs in financial year 2014-2015.
Increase in operating cost is due to volatile news based programming cost and related
expenses.
Personnel Cost: Personnel cost has increased by Rs. 371.86 Lacs from Rs. 1524.30 Lacs
in financial year 2013-2014 to Rs. 1896.16 Lacs in financial year 2014-2015.
Financial Cost: Financial cost has reduced by Rs. 53.12 Lacs from Rs. 67.16 Lacs in
financial year 2013-2014 to Rs. 14.04 Lacs in Financial year 2014-2015.
Depreciation and Amortization: Depreciation and amortization expenses increased by Rs.
41.51 Lacs from Rs. 758.84 Lacs in financial year 2013-2014 to Rs. 800.35 Lacs in
Financial year 2014-2015.
Loss for the Period: Loss for the financial year 2014-2015 is Rs. 5351.41 Lacs.
Sources of Funds
Share Capital: The Authorized Share Capital of the Company is Rs. 50,00,00,000 /-
(Rupees Fifty Crores only) divided into 5,00,00,000 (Five Crore) Equity Shares of Rs. 10/-
(Rupees Ten only) each.
The paid-up share capital of the Company is Rs. 25,31,40,000 (Rupees Twenty Five Crores
Thirty One Lacs Forty Thousand only) divided into 2,53,14,000 (Two Crores Fifty Three Lacs
and Fourteen Thousand) Equity Shares of Rs. 10 each.
Loan Funds: Total loan funds (Inter Corporate Deposits) as on March 31, 2015 stood at
Rs. 15368.05 Lacs up from Rs. 11805.17 Lacs. These loan funds are long term borrowing
taken by the Company from group promoter Company for obtaining business benefits and
operational efficiency.
Long term liabilities and provisions: Long term provisions pertaining to retirement
benefits and leave encashment have reduce by Rs. 19.79 Lacs from Rs. 150.75 Lacs as on
March 31, 2014 to Rs. 130.96 Lacs as on March 31, 2015.
Application of Funds
Long term loans and advances: The long term loans and advances increased by Rs. 176.82
Lacs from Rs. 1135.61 Lacs as on March 31, 2014 to Rs. 1312.43 Lacs as on March 31, 2015.
The increase is mainly on account of Service Tax set off receivables.
Current Assets: Current Assets mainly represent Trade Receivables, Cash & Bank
Balances, Short term loans and advances, current investment and Other Current Assets. The
decrease in current assets by Rs. 970.00 Lacs from Rs. 893.37 Lacs as on March 31, 2014 to
Rs. 1863.37 Lacs as on March 31, 2015, is mainly on account of receipt of Trade
Receivables.
Cautionary Statement
Statements in the Management Discussion and Analysis describing the Companys
objectives, projections, estimate and expectation may be forward-looking within the
meaning of applicable laws and regulations. Actual results might differ materially from
those expressed or implied.
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