chandamama india ltd Management discussions

CHANDAMAMA INDIA LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS Results of Operation: Profitability of the Company has increased substantially. While the Company made a Cash Profit of Rs 48.98 Lakhs, the Net Profit stood at Rs. 39.43 Lakhs, which is 60% higher than the previous year figure. This is made possible by rationalising the production process and introduction of New Cost Re-engineering Methodologies. BUSINESS REVIEW: The spiralling Newsprint Prices sent shockwaves to the entire Publishing Industry. The Cost per Tonne of Imported Paper continued to rise when compared to that of the precious year. Unable to absorb the increase in input costs, the entire Publishing Industry witnessed price revision by all the players. And your Company could be no exception. While retaining the price of English Magazine, the price of Junior Chandamama is revised with effect from February 2006 to Rs. 15/- from Rs.13/- previously. Similarly, the price of all the Regional language editions was revised to Rs. 13/- from its previous figure of Rs.12/- with effect from February 2006 during the year under review. The increase in the input costs of paper and printing coupled with the lacklustre support of the Advertisers towards the Print Medium, forced all the players to take a re-look at their costs. Accordingly, the clients of our Print Syndication Division, opted either for the in-house generated Contents or switched to cheaper substitutes. This trend is reflected in our Syndication revenue falling from Rs. 23.25 lakhs during the previous year to Rs. 8.22 lakhs during the year under review. The Singapore Ambulimama, a Bi-Lingual Magazine, which was running profitably, ran into difficulties with its Overseas Distributor. Accordingly, the magazine got suspended during the year. Efforts of the Management to identify another Distributor in the territory of Singapore, has yielded positive results and your company has Just tied up with singapore Tamil Teachers Union (STTU) to distribute the magazine. MOU WITH TIMES INTERNET LTD. (INDIA TIMES.COM): Your Company has entered into an MOU with TIMES INTERNET LTD. (INDIA TIMES.COM) for the distribution of its content over Internet, Mobile, SMS, MMS, & Voice Based Services. As per the MOU, India Times would provide their 8888 Service as a platform for showcasing & Distribution of Chandamamas Content. Accordingly, India Times would market the concept of A Chandamama Story of the Day on the India Times Voice Portal. ADVERTISEMENT & SUBSCRIPTION: Despite the lacklustre support of the Advertisers to the Print Media, your company booked Net paid Advertisements of Rs.50.75 Lakhs as against Rs.48.89 Lakhs during the previous year. Similarly revenue from Subscription also increased to Rs.19.79 lakhs from Rs.17.64 lakhs during the previous year. WEB & MULTIMEDIA: The Growth of Web & Multimedia Division has been impressive with a Total Revenue of Rs.32.69 lakhs as against Rs. 18.37 lakhs during the previous year. Outlook for the year 2006-2007: As the growth of Web & Multimedia Division of the company has been consistent over the years, the Management shall be focussing on the Web & Multimedia Division and also would endeavour to make its Content available across all the New age Medium including SMS and Voice Based Services. A step in this direction is the MOU that your company has entered into with Times Internet to distribute its Products through the 8888 Service in their FM Channel. Your Company would be looking for more such strategic tie up with leading National and International players in the Children segment.