Diksat Transworld Ltd Management Discussions.
Industry Structure and Developments:
The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues. The industry has been largely driven by increasing digitisation and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.
The Indian advertising industry is projected to be the second fastest growing advertising market in Asia after China. At present, advertising revenue accounts for around 0.38 per cent of Indias gross domestic product.
Indian media and entertainment (M&E) industry grew at a CAGR of 12.25 per cent from 2011-2017; and is expected to grow at a CAGR of 11.6 per cent to touch Rs 2,032 billion (US$ 31.53 billion) by 2020 from Rs 1,308 billion (US$ 19.46 billion) in 2016.The industry provides employment to 3.5-4 million people, including both direct and indirect employment in CY 2017.
The number of newspaper readers in India has increased by 38 per cent between CY 2014 and CY 2017 to reach 407 million. India is one of the highest spending and fastest growing advertising market globally.
The Foreign Direct Investment (FDI) inflows in the Information and Broadcasting (I&B) sector (including Print Media) in the period April 2000 - September 2017 stood at US$ 6.86 billion, as per data released by Department of Industrial Policy and Promotion (DIPP).
The Indian digital advertising industry is expected to grow at a Compound Annual Growth Rate (CAGR) of 32 per cent to reach Rs 18,986 crore (US$ 2.93 billion) by 2020, backed by affordable data and rising smartphone penetration.
India is one of the top five markets for the media, content and technology agency Wavemaker where it services clients like Hero MotoCorp, Paytm, IPL and Myntra among others
After bagging media rights of Indian Premier League (IPL), Star India has also won broadcast and digital rights for New Zealand Cricket upto April 2020.
Total number of Mergers and Acquisition deals increased to 63 in FY17 from 58 in FY16
The Telecom Regulatory Authority of India (TRAI) is set to approach the Ministry of Information and Broadcasting, Government of India, with a request to fastrack the recommendations on broadcasting, in an attempt to boost reforms in the broadcasting sector. The Government of India has agreed to set up the National Centre of Excellence for Animation, Gaming, Visual Effects and Comics industry in Mumbai. The Indian and Canadian Government have signed an audio visual co-production deal to enable producers from both the countries exchange and explore their culture and creativity, respectively.
The Government of India has supported Media and Entertainment industrys growth by taking various initiatives such as digitising the cable distribution sector to attract greater institutional funding, increasing FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms, and granting industry status to the film industry for easy access to institutional finance.
The Indian Media and Entertainment industry is on an impressive growth path. The industry is expected to grow at a much faster rate than the global average rate. Growth is expected in retail advertisement, on the back of factors such as several players entering the food and beverages segment, e-commerce gaining more popularity in the country, and domestic companies testing out the waters. The rural region is also a potentially profitable target.
The Media and Entertainment industry market is continuing to grow at a moderate rate of 10% to 11.5 % annually and with more awareness of quality media by the respective companies. The industry gap between the organized and the unorganized is predicted to be narrowing significantly which will make the competition healthy and reduce the tax burden on the organized industries thereby making it easier to penetrate the market and scale up.
- Digital Advertisements experienced maximum growth of 44.5%, to reach Rs 4350 crore in 2014; by 2019, it is expected to reach Rs 16,000 crore
Government: The government is controlling the Industry with suitable regulations for a fair play in the market. This gives full freedom to disclose the right information to the public. This gives the correct information to the public in full fairness.
The unacceptable information widely spread by other companies in the similar industry will try to manipulate the Media and entertainment market.
Manpower: One of the common problems of the industry is acquiring the right talent , training of its personnel , retention of the talented personnel.
New Entrants: More and more new organized players are entering into market which will increase competition among the TV viewers in organized sector also.
High Competition Era: The Media Industry has entered into the orbit of the high competition.
Risk and concerns:Stiff competition from the other players resulting in stiff competition in the market.
Internal Financial Control Systems and their adequacy:
The Company has aligned its current systems of internal financial control with the requirement of Companies Act 2013. The Internal Control is intended to increase transparency and accountability in an organizations process of designing and implementing a system of internal control. The Company has successfully laid down the framework and ensured its effectiveness. The Company has in place a well defined system to record data for accounting and management information purposes and connects to different locations for efficient exchange of information. It has continued its efforts to align all its processes and controls with global best practices.
Though the various risks associated with the business cannot be eliminated completely, all efforts are made to minimize the impact of such risks on the operations of the Company. Necessary internal control systems are also put in place by the Company on various activities across the organization to ensure that business operations are directed towards attaining the stated organizational objectives with optimum utilization of the resources.
DPV Associates, Chartered Accountants, the statutory auditors of the Company has audited the financial statements included in this annual report and has issued an attestation report on our internal control over financial reporting (as defined in section 143 of Companies Act, 2013).
The audit committee meets the statutory auditors of the Company to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the board of directors informed of its major observations periodically. Based on its evaluation (as defined in section 177 of Companies Act 2013), our audit committee has concluded that, as of March 31, 2018, our internal financial controls were adequate and operating effectively.
Material Developments in Human Resources/Industrial Relations Front, including number of people employed:
The Company always recognizes the importance of manpower. Company promotes employees and encourages them to make contribution toward company, family and nation at large. Company also encourages the employees to offer their creative suggestions for development in their respective areas which are thoroughly discussed in periodical meetings. The company enjoyed excellent relationship with workers and staff during the last year As on March 31, 2018 the company has 23 employees at its broadcasting division and administrative office. The Company has been maintaining cordial and healthy Industrial Relations, which has helped to a great extent in achieving the upper growth.
Statement in this Management and Discussion and Analysis Report describing the Companys objectives, projections, estimates and expectations may be forward looking statement and within the meaning of applicable laws and regulations. Actual results may or might differ materially from those either expressed or implied.
For and on behalf of Board of Directors
Diksat Transworld Limited
Dr. T. Dhevanathan Yadav
Chairman and Managing Director
Date: 29th May, 2018