Entertainment Network (India) Ltd Management Discussions

A. MEDIA INDUSTRY STRUCTURE AND DEVELOPMENTS

Macroeconomic Scenario Global Economy

The Global economic growth showcased remarkable resilience in the financial years of 2023 and 2024, growing at a steady rate of 3.2%, as reported by the International Monetary Fund (IMF). This stability was influenced by several factors, including stringent monetary policies by major economies across the world aiming to controlling inflation, ongoing geopolitical tensions and a sluggish recovery of China. The impact of climate change became more pronounced, resulting in economic losses from severe weather conditions. Several measures undertaken by major economies to control inflation such as lower commodity prices, favourable supply conditions and stringent monetary policies decreased global inflation from 8.7% in FY 2022 to 6.8% in FY 2023.¹

The projected outlook for the global economy suggests that it will maintain the same growth rate of 3.2% throughout FY 2024 and FY 2025. Advanced economies are expected to experience a modest uptick in growth, driven by a recovery within the eurozone, while emerging markets and developing economies are expected to maintain stable growth, albeit with regional disparities. Global inflation is expected to decline from 6.8% in 2023 to 5.9% in 2024 and further to 4.5% in FY 2025. Major economies are likely to achieve their inflation targets sooner compared to the developing economies. Despite these stable projections, the ongoing adjustments in economic policies across the globe and the persistent challenges in key sectors suggest a cautious outlook for the near term.

Source: IMF WEO_ Apr 2024

Indian Economy

The Indian economy exhibited robust growth in FY 2024, with real GDP rising from 7.0% in FY 2023 to 8.2% in FY 2024 with dynamic growth driven by advancements in both manufacturing and services sectors and bolstered by strong investment inflows and rising consumer demand. Inflation expected to decline, further supporting economic stability. Enhanced integration into global value chains is likely to boost exports, aided by improvements in the global trade environment. The upcoming year will benefit from expanded infrastructure spending, rising private sector investments, a strong service sector, and improved consumer confidence. This momentum is likely to strengthen in fiscal 2025 with better exports, higher manufacturing productivity, and increased agricultural output.

India?s rapid growth is supported by infrastructure investments and fiscal discipline, including a 17% rise in capital expenditure for FY2024. Stable interest rates should encourage private investment, while fiscal consolidation aims to reduce the deficit to 5.1% of GDP in FY2024 and 4.5% in FY2025. Despite a widening current account deficit due to higher imports, foreign direct investment is expected to rebound in FY2025, with goods exports recovering as global conditions improve.

Outlook

The prospects of the Indian economy are promising, supported by continued enhancement of macroeconomic fundamentals, robust financials, corporate sectors and a flexible external sector. The government?s emphasis on capital expenditure and fiscal discipline coupled with positive sentiment among consumers and businesses bodes well for investment and demand. The alleviation of supply chain pressures, widespread softening in inflation and early signs of an above-average southwest monsoon indicate a favourable inflation outlook for FY 2025.

Source: Asian Development Bank_ Outlook Apr 2024, RBI Annual Report 2023-24

Industry Overview

Global Advertisement Industry

According to Dentsu?s Global Ad Spend Forecasts, Global advertising spend is projected to grow by 5.0% in 2024, up from 3.3% in 2023, projecting a total of $754.4 billion. This growth is fuelled by improving prospects in key markets including the UK, Germany, US, Japan, and France. Digital advertising is set to exceed previous growth expectations, with a 7.4% rise, capturing 59.6% of global spend. Notably, retail media and paid social are expected to see double-digit growth. The US presidential election is forecast to contribute significantly, accounting for around a third ($11 billion) of the additional ad spend in 2024.

In the top 12 markets, inflation-adjusted growth is expected to be 2.6% in 2024, with media inflation showing signs of easing but still high for TV and popular digital video formats like social video. Digital channels remain the fastest growing, with significant increases in retail media (+32.0%), paid social (+13.7%), and programmatic (+10.9%). Television, despite a slight contraction in its share of total spend to 22.5%, is expected to grow by 2.6% to $170.0 billion. This is driven by connected TV?s impressive 24.2% increase, which offsets a minor decline in broadcast television spend. Other media channels like out-of-home, audio, and cinema are also expected to see growth, while print continues to decline.

Looking ahead, the outlook for global ad spends in 2024 is positive, with growth expected to match or outpace GDP progression in the top 12 markets. The US is predicted to be the fastest growing region at 5.9%, showing significant dynamism. Asia-Pacific?s growth rate is projected to accelerate to 4.2%, with China and India leading the charge. EMEA is forecasted to grow by 4.0%, with the UK (+6.0%), Germany (+3.4%), and France (+4.0%) showing upward revisions. Travel and transport, benefiting from the post-pandemic rebound, and media and entertainment, driven by the proliferation of content and streaming services, are expected to be the fastest-growing industries. As the media landscape becomes increasingly digital and data-driven, there are vast opportunities for connecting people and brands, driving growth for businesses.

Indian Advertisement Industry

In 2023, Indian advertising grew by 7%, reaching INR 1.1 trillion, with digital advertising surpassing traditional media for the first time and accounting for 52% of total ad spend. Factors driving this shift include the rise of 5G, increasing per capita income, and a growing SME advertiser base. Despite this, traditional media such as print, radio, and cinema are also expected to see healthy growth. Advertising is forecasted to grow by 10% in 2024, reaching INR 1.25 trillion, and continue at a 9% CAGR until 2026, with digital media growing at 14% and traditional media at 5%. Key growth drivers include increasing per capita income, reducing income inequalities, rural growth, and a growing middle class.

Segmental growth will be driven by factors such as the rise of 5G; increased smartphone penetration; and active CTV homes for digital; and premium content for TV; access to educated audiences and event revenues for print; growth in digital OOH screens and transit media for OOH; mandated radio receivers in mobiles and SME advertising for radio; and a strong slate of theatrical releases for cinema. Digital media?s share of total ad spend is expected to reach 57% by 2026, with significant contributions from SME and long-tail digital advertising spends.

Segmental Development

Digital Media

India recorded 1.19 billion telecom subscriptions, showcasing a stable digital infrastructure. Despite 5G?s rapid growth, with 130 million subscriptions, 4G remains dominant. Connected TV grew by 50% alongside rising internet penetration, and the broadband market reached 904 million subscriptions. Smartphone usage increased, with average usage time rising, though India lagged in monetizing the 26.4 billion app downloads, with users spending half their time on social media. Video viewership expanded, with content platforms focusing on localizing popular genres like drama, action, and thrillers. Enhanced digital engagement shifted content consumption and advertising patterns, with digital ad spending growing by 15% in 2023 to reach INR 576 billion. By 2026, the digital segment is projected to reach INR 955 billion, with a greater emphasis on governance.

Digital segment to grow to INR 955 billion by 2026 at a 13.5% CAGR. It is expected to overtake television as the largest segment by 2024. Some reasons that will drive this growth are mentioned below: SME and long-tail advertising to grow from INR 208 billion in 2023 to INR 304 billion by 2026.

E-commerce advertising to reach INR 150 billion by 2026. Entertainment and sports OTT platforms to generate INR 80 to INR 90 billion in ad revenue.

News OTT and music ad revenues to struggle without loyal audiences.

Subscription revenues to hit INR 114 billion by 2026, with a 13% CAGR.

Paid video subscriptions to rise to 138 million across 65 million households by 2026.

TVOD could exceed INR 10 billion by 2026.

Music subscriptions to double to 15 million by 2026. Content focus to shift towards tentpole properties and low-cost content.

Television

The television segment has experienced contrasting trends recently. Despite a decline in pay TV subscriptions, the total number of TV viewers is increasing. Although advertising revenue has decreased, the number of TV screens is rising, and the segment is expected to have a positive outlook. Growth in connected TV viewership will continue with the expansion of broadband and 5G. While the sector faces opportunities for growth, it will also contend with competition from social media, gaming, and short videos.

Television advertising is expected to grow at 3.6% CAGR to INR 330 billion by 2026, boosted by news TV ad recovery, strong regional channel performance, increased sports investment, and rising per capita income. Risks include the lack of new revenue sources and competition from free digital platforms and social media. Subscription revenue is forecasted to reach INR 435 billion by 2026, growing at 2.9% CAGR, supported by increased TV households and low-cost options. Challenges include migration to connected TV platforms, LCO focus on broadband, and competition from OTT and social media. Total television revenue is projected to grow at 3.2% CAGR to INR 765 billion by 2026, with potential changes after that.

Print

Print media is recovering post-COVID-19, with newspapers and magazines showing modest growth. The segment is expected to stabilise in readership over the next three years. To sustain this growth, opportunities lie in targeting specific audience segments, adopting innovative pricing strategies, and diversifying revenue streams.

The print media sector is forecasted to reach INR 288 billion by 2026, growing at 3.4% CAGR. Advertising will rise at 4.7% CAGR, while subscription revenue will grow slightly by 0.7% CAGR. Lower newsprint costs and increased events revenue will support growth. The sector must enhance home delivery, engage younger audiences, diversify revenue, and leverage first-party data to remain competitive.

Music Steaming Industry

In 2023, the Indian music industry saw continued strong engagement with audiences, particularly through streaming platforms, where film music remains the leading category. The market grew by 10%, reaching INR 24 billion, though this rate of growth was slower compared to previous years. This slowdown is partly due to a shift from free to paid services by some music OTT platforms, which has reduced the availability of free content. Despite this, film music continues to dominate with a 64% share of total consumption, though this represents a decline from around 80% three years ago. The rise of artist-driven music, including popular genres like Punjabi music, now makes up 27% of consumption and is also gaining traction internationally.

Digital revenues, including income from streaming platforms, YouTube, short videos, social media, and telecom operators, grew by 9% in 2023 and account for 87% of the total music segment revenue. While the audience for music streaming reached 185 million, only 7.5 million were paid subscribers, an increase from 5 million subscribers the year before. This number is expected to grow significantly, with projections suggesting the paid subscriber base could reach 15 million by 2026 or 2027.

Looking ahead, the music industry is projected to grow at a compound annual growth rate (CAGR) of 15%, potentially reaching INR 37 billion by 2026. This growth will be supported by an expanding smartphone user base, increased subscription video-on-demand (SVOD) services, higher concert revenues, and a rise in international consumption of Indian music. The paid subscriber base could grow to 35-40 million over the next five years.

Key Insight: Although free and ad-supported music models currently lead the market, the future of the industry lies in subscriptions. There is substantial growth potential in the paid subscriber base, which is expected to expand significantly in the coming years, signalling a shift towards greater monetization and consumer investment in music streaming services.

Source: EY M&E report 2024

B. RADIO INDUSTRY _FUTURE OUTLOOK, OPPORTUNITIES AND THREATS_

1. Indian Radio Industry

The radio segment in India is steadily recovering from the slowdown caused by the COVID-19 pandemic. While it has not yet returned to pre-2019 revenue levels, growth is being propelled by strategic hyper-localization efforts. However, the sector faces challenges such as the inconsistent availability of radio capabilities in smartphones, which impacts reach across all media sectors. Despite these obstacles, significant growth opportunities exist for radio in India, provided the sector adopts and implements effective strategies.

Operational Landscape

Total Stations: India boasts a total of 1,313 operational radio stations.

Private FM Broadcasters: There are 36 private FM broadcasters operating 388 FM radio stations across 113 cities.

All India Radio: Prasar Bharati?s All India Radio operates 479 stations broadcasting in 23 languages and 179 dialects. These stations cover approximately 92% of the country?s area and reach over 99% of the population.

Community Radio Stations: As of June 2023, there are 446 operational community radio stations, marking an increase from 366 stations in the previous year.

Regulatory Initiatives

Advertisement Rates

In September 2023, the government approved a significant 43% increase in base rates for advertisements on private FM radio stations. This adjustment is particularly noteworthy as it is the first rate revision in eight years, the previous one being between December 2015 and March 2023.

TRAI Recommendations

The Telecom Regulatory Authority of India (TRAI) has put forth several recommendations aimed at revitalizing the FM radio sector:

Broadcasting News and Current Affairs: TRAI has recommended allowing private FM radio operators to broadcast news and current affairs programs, limited to 10 minutes per hour. This move is expected to enhance content diversity and attract a wider audience.

License Fee Structure: A proposal has been made to remove the non-refundable one-time entry fee (NOTEF) and extend the FM license period by three years. Additionally, TRAI has suggested calculating the annual license fee as 4% of the Gross Revenue (excluding GST), delinking it from the NOTEF. This is anticipated to reduce the financial burden on broadcasters and encourage new entrants into the market.

FM Receivers in Smartphones: TRAI recommends mandating the availability of FM receivers on all mobile handsets, including smartphones. Ensuring that FM radio functionality is enabled and not disabled in devices will significantly increase the medium?s reach, especially among younger demographics who predominantly use smartphones for media consumption.

Advertising Trends

Ad Volume Growth

The year 2023 witnessed a robust 19% increase in radio ad volumes compared to 2022. The advertising landscape featured: Categories and Advertisers: A diverse range of 426 categories with over 10,000 advertisers and 13,615 brands utilized radio for advertising. Notably, 4,400 advertisers were new to radio, having no presence on TV, print, or digital platforms.

Ad Rates: Despite the increase in volume, ad rates experienced an average decline of 8%. This reduction is attributed to the high volume of ads and lower yields, particularly prevalent in smaller towns.

Retail Advertising Surge

The share of retail and local advertisers increased by 28%, driven by: Retail Segment Recovery: The post-pandemic recovery of the retail sector has spurred increased advertising activities.

Digital Advertising Costs: Escalating costs of city-centric digital advertising have made radio a more attractive medium for local businesses.

National Advertisers: While the share of national advertisers decreased, their ad volumes still grew by 10%. The top spending categories included services, retail, and automotive sectors, collectively accounting for 51% of the total ad spend.

Non-FCT Revenues

Non-Fixed Commercial Time (Non-FCT) revenues have become a significant contributor to the overall earnings of large radio companies, accounting for 20-25% of total revenue. Key drivers of Non-FCT revenues include: Event Intellectual Properties (IPs): Hosting and sponsorship of events have emerged as lucrative revenue streams. Brand Activation: Engaging consumers through experiential marketing campaigns has gained traction.

International Music Streaming: Diversifying into music streaming services has opened new avenues for monetization.

Digital Marketing: Leveraging digital platforms for advertising and promotions has complemented traditional radio broadcasting revenues.

Key Challenges

Measurement Limitations

The current measurement of radio listenership is confined to a limited number of cities, which hampers the ability of broadcasters to effectively demonstrate their reach and audience engagement levels to potential advertisers. This limitation poses a significant challenge in attracting substantial advertising investments, especially from national advertisers seeking wide coverage.

Smartphone Integration Issues

A considerable number of high-end smartphones are not equipped with FM radio receivers, which restricts the medium?s accessibility and reach. Without regulatory mandates to include FM functionality in all smartphones, radio broadcasters risk losing potential audiences who primarily consume media through mobile devices.

Digital Radio Implementation

The absence of a clear and comprehensive roadmap for the implementation of digital radio poses a significant hurdle. Ensuring a transition to digital formats that protect the interests of all stakeholders, including broadcasters, advertisers, and listeners, is essential for the future sustainability and growth of the industry.

Pending License Fee Reforms

Despite TRAI?s recommendation for an annual license fee of 4% of gross revenue (excluding GST), this reform has not yet been implemented. The delay in adopting this recommendation continues to place a financial strain on broadcasters, especially smaller players struggling with profitability.

Authorization for News Broadcasting

The radio industry is still awaiting final approval to broadcast news and current affairs programs for 10 minutes each hour. Granting this authorization would align radio with other media platforms and enhance its content offerings, thereby attracting a broader audience base.

Outlook

The radio industry is poised for steady growth, with revenues projected to reach INR 27 billion by 2026. Several factors are expected to drive this growth:

Increased SME and Retail Advertising: Small and medium-sized enterprises (SMEs) and retail businesses are anticipated to increase their advertising spend on radio, leveraging its cost-effectiveness and local reach.

New Brand Launches: The introduction of new products and services will create additional advertising opportunities for radio broadcasters.

Non-FCT Revenue Opportunities: Expansion into event IPs, digital marketing, and international music streaming will continue to bolster Non-FCT revenues, expected to comprise 25% of total revenue by 2026.

Government Advertising: The increased Directorate of Advertising and Visual Publicity (DAVP) rates for government ads will benefit the sector, particularly in the context of upcoming elections.

Regional Content and Influencer Marketing: Radio?s focus on creating regional content and leveraging local influencers will enhance engagement and open new revenue streams.

Despite these positive indicators, the industry must address ongoing challenges such as rate recovery and the development of effective measurement metrics to attract and retain national advertisers.

2. Important Legal Developments in FM Radio Industry in FY2024

There are several significant legal developments unfolded in the radio industry:

Statutory Licensing (SL) for Music and connected Litigations:

In December 2020, private FM broadcasters secured a favorable music royalty rate through the provisions of Section 31D (Statutory Licensing - SL) of the Copyright Act. This development played a crucial role in curbing the monopolistic practices of music labels and significantly reduced the royalty payment burden on broadcasters. The initial order from the Intellectual Property Appellate Board (IPAB) was valid for one year, expiring on September 30th, 2021. As the expiration approached, broadcasters filed an application in the Hon?ble Delhi High Court in September 2021 to extend these rates. They successfully secured the continuation of the existing rates until the court establishes new SL rates. These proceedings are currently pending and are expected to be addressed in the coming year.

The music labels, dissatisfied with the SL rates, have exerted considerable effort to prevent FM broadcasters from benefiting from these rates. Several labels have filed appeals challenging the fairness of the SL rates, but they have yet to obtain any relief. Additionally, labels have pursued infringement claims against broadcasters by focusing on the technicalities of Rule 29(4) under the Copyright Rules 2013. They argue that broadcasters are not adhering to the procedures outlined in the rule, procedures that are widely recognized as burdensome and, in some cases, impractical if interpreted strictly. Despite these challenges, the FM industry has managed to ensure uninterrupted music broadcasts.

To overcome these legal obstacles, FM broadcasters filed writ petitions in the Hon?ble Madras and Hon?ble Bombay High Courts, challenging both the constitutionality and the interpretation of the Copyright Rules. While the Hon?ble Madras High Court upheld the constitutionality of Rule 29(4) and made some conflicting observations, the industry remains determined to pursue this matter to the Hon?ble Supreme Court. A Special Leave Petition against the Madras High Court?s decision has been admitted by the Hon?ble Supreme Court, and a detailed hearing is expected in the coming months. These proceedings are anticipated to bring much-needed clarity and help avoid further roadblocks in the smooth exercise of broadcasters? statutory licensing rights.

In the meanwhile, in a big relief for the FM broadcasters, a single bench of Delhi High Court has recently held in one of the suits filed by music labels, that the new statutory notice formats adopted by the FM Radio broadcasters are in compliance with the requirements of the Copyright Rules 2013 and as such there is no threat of any injunctions to be brought on operation of any FM broad henceforth. This is development will in all probabilities end the hurdle in exercise of Statutory License rights for FM Radio Broadcasters.

161^st Parliamentary Standing Committee Report – (Dated 20th July 2021)

The Committee submitted its report on the topic of ‘Review of the Intellectual Property Rights Regime in India? and inter-alia recommended that DPIIT should amend Section 31D of Copyrights Act for including ‘internet or digital broadcasters? under the purview of Statutory License. DPIIT subsequently invited suggestions from stakeholders on the above recommendation. The FM Broadcasters have submitted their respective written submissions to the DPIIT on 28^th September 2021 supporting the same.

3. Important regulatory matters concerning the radio industry

TRAI Recommendations on Consultation Paper on ‘Issues relating to FM Radio Broadcasting?:

To deliberate on the issues referred to by Ministry of Information and Broadcasting (MIB) and concerns raised by Association of Radio Operators of India (AROI), the Telecom Regulatory Authority of India (TRAI) had issued a Consultation Paper (CP) on ‘Issues related to FM Radio Broadcasting? on 9^th February 2023. Extensive written comments and counter comments on the CP were given by radio broadcasters including our Company (ENIL) on 9^th March 2023 and 23^rd March 2023 respectively. Subsequently, an Open House Discussion was held through video conferencing mode on 26^th April 2023 in which the Company participated and advocated its views on the CP.

Consequently, after detailed study of the representation of the industry, TRAI published its recommendations on the CP to MIB on September 05, 2023.

In a big win for the industry, TRAI concurred with FM industry?s concerns and made some very important recommendations in favour of the radio industry, a gist of which is as follows:

TRAI recommended that the annual license fee of a FM radio channel should be de-linked from Non-Refundable One Time Entry Fee (NOTEF). The license fee should be calculated as 4% of the Gross Revenue (GR) of the FM radio channel during the respective financial year. GST should be excluded from Gross Revenue (GR). This recommendation when implemented, will have a huge positive impact on revenues of radio operators. TRAI recommended that the Government may take appropriate measures to provide relief to the FM radio operators to address challenges posed due to COVID-19 pandemic. TRAI recommended that Private FM Radio Operators should be allowed to broadcast news and current affairs programs.

Mandatory availability of FM receivers on all mobile handsets including Smartphones: Functions or features pertaining to FM radio should remain enabled and activated on all mobile handsets having the necessary hardware. Built-in FM radio receiver in mobile handset must not be subjected to any form of disablement or deactivation. This recommendation if implemented, will result in larger audience reach for FM radio amongst the people using smartphones, which is increasing by each passing day, and people will no longer be dependent on their car receivers to listen FM radio. This is also expected to translate in increase in ad-revenues. Also, more importantly this move will also help the efforts of National Disaster Management Authority (NDMA) to reach maximum people for help in case of a natural disaster, since FM broadcast as known to be most robust and reliable means of communication in such situations and sustain even when other mediums like internet and TV networks fail. This was duly appreciated by TRAI and NDMA in its respective recommendations and accordingly an advisory to this effect was also published by MeITY on its website, advising all mobiles manufacturers to ensure availability of FM receivers on all type of mobile handsets in India.

A Standing Committee, headed by a senior officer of Joint Secretary or above level, is recommended by TRAI to oversee and monitor the compliance of enabling the FM Radio in Mobile Handsets.

4. Radio broadcasters adjust to the digital boom

Most radio broadcasters have begun integrating digital products into their revenue portfolios. Many of these broadcasters feature local radio jockeys who are prominent personalities in their respective cities, often boasting substantial followings on social media platforms. Radio stations themselves maintain active social media pages. As advertisers increasingly allocate budgets to digital platforms, radio broadcasters have adapted by including their RJs? social media pages in their advertising proposals.

Major radio broadcasters have a significant following on their national Facebook and Instagram pages. Additionally, each company maintains a substantial subscriber base on their You Tube channels. ENIL alone boasts 27.1 million followers on its national Facebook pages, 14.2 million followers on its national Instagram pages, and has 19.9 million subscribers on YouTube across its various channels.

5. Taxation of Live and Non-live Broadcasting Content

In recent judgments, the Delhi High Court determined that broadcasting rights for "live events" do not qualify as "copyright" under Indian copyright law. Consequently, payments for such rights cannot be classified as royalty under Indian income-tax law. Additionally, regarding the division of payments between "live" and "non-live" fees, the Court noted that if contracting parties clearly specify and agree to separate fees, and payments are made accordingly under distinct categories, such division cannot be deemed unjustified or arbitrary. The Court thus upheld a fee split of 95% for "live" transmission and 5% for "non-live" transmission as agreed upon by the parties in their contract. This ruling could impact media rights agreements involving sports bodies and commercial rights holders, particularly where contractual terms do not separately distinguish between payments for "live" and "non-live" rights².

C. OPERATING PERFORMANCE

1. ENIL Acquires Music Streaming Platform Gaana

On December 1, 2023, ENIL achieved a major milestone with the acquisition of Gaana, a leading music streaming service. This strategic acquisition significantly enhances our capabilities in the audio entertainment market by merging FM radio expertise with Gaana?s robust digital streaming platform.

This move underscores our commitment to digital transformation and our goal of delivering a superior subscription-based audio experience. Gaana?s strong presence in India?s music streaming sector complements our existing digital initiatives, including the Mirchi Plus platform, which was launched during the COVID-19 pandemic. This platform had demonstrated our adaptability and innovation in digital audio storytelling.

With Gaana now part of our portfolio, we are positioned to:

Enhance Market Leadership: The integration of Mirchi and Gaana, supported by our extensive industry experience, establishes ENIL as a dominant force in India?s audio entertainment sector. This acquisition allows us to redefine our digital strategy, reach new audiences, and explore additional revenue opportunities.

Offer a Comprehensive Audio Experience: By offering terrestrial FM radio and digital streaming, our dual approach enables us to lead the audio entertainment market. This integration ensures a seamless and engaging experience across both traditional and digital channels.

Elevate Content and Curation: The synergy of ENIL?s expertise in music curation and storytelling with Gaana?s extensive music library allows us to provide a richer and more engaging content experience. This combination ensures high-quality, diverse content that aligns with the evolving preferences of our audience.

Strengthen Industry Relationships: The merger enhances our ability to manage relationships with music labels, facilitating the delivery of high-quality content and innovative features. This strengthened position will help us maintain strong industry connections and drive future growth.

Together, Mirchi and Gaana are set to redefine the audio entertainment landscape, meeting the diverse needs of listeners and adapting to emerging trends such as connected cars and subscription-based models. This integrated approach reaffirms ENIL?s commitment to delivering exceptional audio content and solidifies our leadership in the industry.

2. Radio Shines as Media Industry Faces Challenges

In FY24, the media sector faced substantial challenges due to global macroeconomic conditions, which affected both revenue and margins across various media segments. Television and print media displayed underwhelming performance throughout the year. However, the radio industry emerged as a notable exception, showcasing exceptional resilience and growth. The company capitalised on this trend, starting the fiscal year with a significant boost in profitability. Although there was a slight decline in revenue, primarily attributed to the lack of major TV properties and a strategic pivot towards more profitable events, the Company successfully enhanced its EBITDA and margins through stringent cost-saving measures.

Overall FY24 was a good year for the radio industry, which picked up strength steadily during the year. Throughout the year, Radio outshined the other media mediums, which faced a challenging environment. Pricing for the industry has bottomed up and there are early signs of green shoot visible, which can further pick up during upcoming festival season. On the other hand, volumes have been quite strong during the year, and picked up further towards the end on account of higher government spending on the back of general elections. Government and Political category is expected to remain strong on the back of upcoming state-level elections. However, overall, the business is turned more towards the retail segment as compared to big corporates, which is true to the nature of the radio medium. Within that, real estate, BSFI, education and auto are few of the sectors which are doing well.

Volumes have already crossed the pre-Covid levels leading to improved utilisation levels. Along with the demand and consumption sentiments, higher utilisation is also one of the pre-cursors for the improvement in the pricing.

The radio segment, a significant part of our business, exhibited outstanding growth with a revenue increase of 10.8% during FY24, led by strong volumes growth. Radio industry as a whole saw strong uptick in volume growth however, as a market leader we were at the front end of this momentum. We clocked volume growth of 15.5% during FY24. Volumes have crossed the pre-Covid levels, leading to improvement in utilisation levels. This has helped in restricting the downfall in prices, which have stabilised during the year.

Non-FCT business had a roller coaster ride during FY24. The H1 is seasonally weaker period for the solutions business as compared to H2. The same phenomena were witnessed in FY24 as well. The start of the year was comparatively weak for the segment however it picked up pace in the second half of the year. Overall, we witnessed a growth of 8% in non-FCT revenues.

Improved overall performance led to improved profitability.

During the year, we acquired the business of Gaana, which gave further wings to focused digital segment. We have now become a complete entertainment company in terms of audio streaming platform. We have already started the process of integrating our own Mirchi Plus platform with Gaana and are seeing encouraging early signs of adoption.

3. EBITDA Expansion: Encouraging Improvement

We have restated our past numbers on account of IND AS 103, to incorporate results from the earliest period of the acquired business. Led by higher revenues, and maintaining efficiency in costs, we were able to report robust improvement in our profitability. While the journey to regain our pre-pandemic EBITDA levels remains ongoing, we are steadfast in our pursuit of continued growth, enhanced efficiency, and sustained profitability. Without Digital Platform, our EBITDA moved to INR 125.4 Cr in FY24. Consequently, we have witnessed improvement in our profitability and registered margins of ~27.6% during FY24.

The Company maintained solid profitability, with PAT rising to INR 50.6 crores for the fiscal year, highlighting a substantial improvement from the previous year.

Our strategy for solutions business focuses on prioritizing profitability by concentrating solely on events that are lucrative, even if it means foregoing significant revenue opportunities like the Mirchi Music Awards. This approach led to the absence of major TV properties, impacting revenues, but it ensures long-term profitability and improving margins.

With a strategic focus on optimizing operational performance, we are confident in our ability to navigate challenges and drive the organization towards even greater success in the coming years.

4. Radio witnessed healthy volume growth

Our core sector witnessed healthy growth during FY24, on the account of strong volumes throughout the year. The segment grew by 10.8% YoY in FY24. Volumes grew by 16.4% and have surpassed pre-Covid levels. The overall radio industry grew by 17.4% in FY24.

We continued to enjoy the market leadership enjoy and gained further marker share in FY24., which now stands at 24.0% vs 25.9% in FY23.

Led by strong volume growth, we have been able to improve our utilisation rates as well which now stands at 80.6% at the end of FY24.

Pricing has remained steady during the year. We have witnessed early signs of shoot and believe that the declining phase is now over. We expect marginal improvement in pricing in 2HFY25 at the time of festivals.

5. Digital and Investment Strategy

Throughout FY24, the digital segment played a pivotal role in the Company?s strategic evolution. Digital revenues saw notable growth, rising from 9.7% of FCT revenues in Q2 to 15.3% in Q4, following the acquisition of Gaana. The Company invested significantly in its digital initiatives, including an additional INR 6.4 crores in Gaana, which demonstrated strong growth across various metrics.

6. ENIL?s international business North America

ENIL launched its first station in the US on India?s Republic Day, Jan 26^th, 2019, in the tri-state area of New York, New Jersey, and Connecticut via a brand licensing arrangement with a local partner, using HD radio technology. Due to challenges encountered in HD technology and effectiveness to attract advertisers across several cities in the US, we decided to call off this arrangement in FY2021 except for New Jersey.

In July 2021, we explored opportunity in another city of US and launched station in San Francisco, followed by the launch of the Dallas station in April 2022. In January 2023, we made the deliberate decision to exit San Francisco due to revenue shortfalls, which were directly attributed to persistent transmission issues that our partner was unwilling to resolve.

As on March 2024, our presence in US is with initially launched terrestrial station of New Jersey frequency and two online stations US – Mirchi Telugu & New York Online catering to South Asian radio in US.

ENIL introduced the Mirchi Plus app in mid-February 2022, marking a significant expansion of its digital presence. The app is readily accessible for users on both Apple and Android platforms, making it easy to download and use across the USA and Canada. In Canada, ENIL recognized the demand for Punjabi content and launched a dedicated online station, "Yo Punjabi," which has quickly become the leading station for Punjabi-speaking audiences in the region. Moreover, the accessibility of ENIL?s content extends beyond mobile devices. US-based listeners can also enjoy ENIL?s stations through Amazon Alexa, allowing for a seamless listening experience through voice-activated smart speakers. This multi-platform availability reflects ENIL?s commitment to reaching its audience wherever they are, providing a mix of music, entertainment, and cultural content that resonates with the South Asian community across North America

UAE

Radio Mirchi was launched in the UAE in January 2012 through a brand licensing agreement with Abu Dhabi Media Corporation (ADMC). Over the years, it became a favourite among listeners, being repeatedly voted UAE?s most loved Hindi Station in the Masala Awards. In terms of listenership, ENIL outperformed other stations across the UAE, regardless of language—be it Arabic, Hindi, English, Malayalam, or others.

However, the brand licensing and content agreements with ADMC were terminated in June 2020. In March 2021, Radio Mirchi made a comeback in the UAE market, this time in partnership with Dolphin Recording Studio. The collaboration led to a significant transformation, as the former Suno FM was rebranded into the new Mirchi 102.4 FM. This strategic move allowed ENIL to reestablish its presence and continue its legacy in the UAE.

In FY23, ENIL significantly ramped up its involvement in events and activations, which had been limited in FY22 due to the pandemic. Key initiatives include Mirchi Terminal and Mirchi Jam—the latter being a talent hunt aimed at colleges and schools. These initiatives are designed to engage listeners more deeply and are expected to further enhance Mirchi?s listenership by tapping into local talent and creating vibrant community events

The launch of the Mirchi Plus app in the UAE in mid-February 2022 marked a significant expansion of ENIL?s digital offerings in the region. The app has been met with a positive response, reflecting the strong brand presence and loyal listener base that ENIL has cultivated over the years in the UAE.

The Mirchi Plus app provides users with a comprehensive entertainment experience. In addition to streaming Mirchi UAE, the app features 12 local stations from various regions of India, catering to the diverse tastes of the South Asian diaspora in the UAE.

Moreover, for those who prefer online listening, Mirchi UAE is accessible via the web at www.mirchi.ae, ensuring that the station is easily available to a broad audience across multiple platforms. This strategic move reinforces ENIL?s commitment to being accessible to its audience in as many ways as possible, solidifying its position as a leading entertainment brand in the UAE.

Bahrain

ENIL made its debut in Bahrain with a local partner (Adline Media Network), under brand licensing arrangement after September 2019 our partner decided to surrender the license. ENIL secured license in June 2020 after making a bid with Ministry of Information Affairs (MIA), Kingdom of Bahrain.

On May 9th, 2021, through a 100% owned subsidiary called Mirchi Bahrain WLL, we relaunched Brand Mirchi in Bahrain. We have been increasing our business in radio through high-margin activation business, client response and audience feedback has been very good. It is to be noted that ENIL is the only private station (across languages and formats) in Bahrain.

In July 2023 MIA conducted auction for Operation of Indian Entertainment Radio FM Channel, Kingdom of Bahrain. ENIL participated and won the bid with revised license fees as quoted in auction to operate the FM channel for a period of five years till December 2028.ENIL has now become the exclusive private FM channel catering to

Bollywood and South Asian content within the Kingdom of Bahrain.

The Mirchi Plus app was also launched in Bahrain in mid-February 2022 and has garnered a positive reception from listeners. Additionally, Mirchi Bahrain is accessible online at www.mirchi.in/radio/bahrain, offering a convenient way for audiences in Bahrain to enjoy ENIL?s content.

Qatar

ENIL, Global Entertainment Network Limited (GENL), Marhaba FM, and Mr. Salem Fahad S E Al-Naemi entered in shareholder arrangement to operate a radio station in Doha, Qatar. In March 2021, ENIL invested in GENL which resulted 49% stake in the Company. As a result of this investment, ENIL is entitled to 75% of the distributable profits.

GENL is operating business in Doha in accordance with the terms and conditions set out in the Agreement. In March 2021, the station?s launch was marked by a highly positive reception from both listeners and advertisers, demonstrating its successful entry into the market and the strong appeal it has generated among its target audience under the brand name "MirchiOne" as per the terms and conditions agreed between GENL and Marhaba FM.

In the past three years, Mirchi One has become the top choice for both listeners and advertisers in Qatar, with rapid business growth. We are leaders in radio revenue and have developed a strong activation business with multiple established IPs in the market.

The Mirchi Plus app was also launched in Qatar in mid-February 2022 and has been warmly received by listeners. Mirchi Qatar is accessible online at www.mirchi.in/radio/ qatar, providing a convenient platform for the audience in Qatar to enjoy Mirchi?s content.

Future expansion into other countries

With the growing trend of consumers shifting towards digital platforms for audio content, ENIL?s strategy for international expansion is increasingly focused on digital avenues. This transition opens substantial opportunities for Brand Mirchi, particularly in advertising and subscription models. The potential to capture a larger audience and generate revenue through these digital channels in international markets is substantial and holds significant promise for the brand?s global growth.

In March 2024, the Board of Directors approved the acquisition of up to a 50% equity stake in Ninety-nine Audiovisual Media Production LLC, a Saudi Arabia-based company, by investing up to five million Saudi Riyal (SAR). The completion of this transaction is contingent upon meeting certain conditions precedent and obtaining any necessary regulatory approvals.

7. Awards & Recognitions *

ACEF Global Customer Engagement Awards

Gold for campaign ‘Iravigalai Thedi (In Search of Gods)? for the award category Podcast, subcategory being Society- Culture.

Gold for campaign Konkal ki Kotha Bole for the award category Podcast, subcategory being Storyteller – Drama.

Gold for campaign ‘Radio Humsafar? for the award category Mobile Marketing, subcategory being Effectiveness.

Gold for ‘Mumbai Ki Awaaz Jeeturaj? for the award category Individual Excellence Honor, subcategory being Celebrity RJ of the Year Award.

Gold for campaign ‘Splash? for the award category BTL Activation, subcategory being Creativity.

Gold for campaign ‘Mirchi Freshers? for the award category BTL Activation, subcategory being Promotions.

Gold for campaign ‘RJ bane Tj (Terrain Jockey)? for the award category Online Media, subcategory being Promotions.

Gold for campaign ‘Saffola 40 under 40? for the award category Influencer Marketing, subcategory being Successful use of CSR Activity Joint Gold for Mirchi Manisha and Radio Mirchi for the award category Individual Excellence Honor, subcategory being Social Media Engagement Leader Silver for campaign ‘Sunday Suspense (Hindi)? for the award category PODCAST, subcategory being Storyteller - Drama Silver for campaign ‘Celerio Mileage Challenge? for the award category Radio, sub category being Effective Silver for campaign ‘Celerio Mileage Challenge? for the award category Influencer Marketing, subcategory being Effective.

Silver for Mirchi Darling Swetha for the award category Individual Excellence Honor, subcategory being RJ of the Year-Regional Silver for campaign ‘Spell Bee? for the award category BTL Activation, subcategory being Promotions. Silver for campaign ‘Spell Bee? for the award category Television, subcategory being Creativity.

Silver for campaign ‘The Dubai Dialogue Season 2? for the award category Podcast, subcategory being Society- Culture.

Silver for campaign ‘McDonalds Junior NTR ka Junior? for the award category Experiential Marketing, subcategory being Promotion.

Silver for the award category Most Admired Social Message, subcategory being Promotion.

Bronze for campaign ‘Mirchi Freshers? for the award category BTL Activation, subcategory being Creativity.

India Audio Summit & Awards 2024

The award for Society & Culture - Best Regional Show was given for ‘Iraivigalai Thedi (In Search of Gods - Journey to Koovagam)? The award for Travel - Best Show was given for ‘The Dubai Dialogue Season 1?.

The award for Horror & Thriller - Best Show was given for Sunday Suspense (Hindi) The award for Horror & Thriller - Best Regional Show was given for Sunday Suspense Bangla The award for Crime Drama - Best Show was given for ‘Ek Tha Legend - Story of Sidhu Moosewala? The award for Crime Drama - Best Produced was given for ‘Ek Tha Legend - Story of Sidhu Moosewala? The award for Crime Drama - Best Regional Show was given for ‘Konkal Ki Kotha Bole?? The award for Fiction - Best Produced was given for ‘Curse of Yeti? The award for Best RJ Zonal - South was given for ‘Flower Bhi/ Fire Bhi? The award for Best Client Activation (On-Air and On-Ground Campaign) was given for ‘Celerio Mileage Challenge?.

The award for Best Celebrity Show On-Air was given for ‘Azaadi Ki Kahani Mirchi Ki Zubaani?.

The award for Best Afternoon Show was given for ‘Suno Sayema?.

The award for Best CSR Initiative/ Local Community Connect Initiative was given for ‘Ee Sala Vote Namde?.

E4m Golden Mikes Awards 2023

The award for campaign ‘Har Ghar Tiranga - Mirchi Tiranga Yatra? under the award category Effectiveness, sub-category being Most Effective Ad/ Campaign on Radio The award for campaign ‘ISL Radio Football Rivalry 2022? under the award category Effectiveness, subcategory being Most Effective Ad/Campaign on Radio The award for campaign ‘Mcdonald?s Chicken Big Mac? under the award category Effectiveness, subcategory being Best Use of Radio for Launch/ Relaunch The award for ‘RJ Gaurika Launch - Flower Bhi, Fire Bhi? under the award category Best Use of Radio for Launch/Relaunch Effectiveness, sub-category being Best Use of Radio for Launch/Relaunch

The award for campaign ‘Baba Car Dev? under the award category Creativity, sub-category being Best Single Commercial- Automobiles The award for campaign ‘Mcdonald?s Chicken Big Mac? under the award category Creativity, subcategory being Best Campaign The award for campaign ‘Har Ghar Tiranga - Mirchi Tiranga Yatra? under the award category Creativity, sub-category being Best Campaign The award for campaign ‘SL Radio Football Rivalry 2022? under the award category Innovation, subcategory being Best Innovation on Radio The award for campaign ‘Tata Salt - Har Sawal Uthega? under the award category Innovation, subcategory being Best Use of Radio in an Integrated Media Plan The award for campaign ‘Har Ghar Tiranga - Mirchi Tiranga Yatra? under the award category Innovation, sub-category being Best Use of Radio in an Integrated Media Plan The award for campaign ‘Har Ghar Tiranga - Mirchi Tiranga Yatra? under the award category Innovation, sub-category being Best Use of Sponsorship in an On-Air/On-Ground Radio Campaign The award for campaign ‘ISL Radio Football Rivalry 2022? under the award category Promotion, subcategory being Best on Air Promotion for/by a Brand- Multiple Station The award for campaign ‘Tata Salt - Har Sawal Uthega? under the award category Promotion, subcategory being Best on Air Promotion for/by a Brand- Multiple Station The award for campaign ‘Har Ghar Tiranga - Mirchi Tiranga Yatra? under the award category Promotion, sub-category being Best on Air Promotion for/by a Brand- Multiple Station The award for campaign ‘Har Ghar Tiranga - Mirchi Tiranga Yatra? under the award category Promotion, sub-category being Best Sponsored on Air Promotion by a Network of Radio Stations for Self / Brand The award for campaign ‘Bridgestone Sturdo Long Drives? under the award category Promotion, subcategory being Best Promotion on Digital for / by a Brand.

The award for campaign ‘Kya haal Bhopal shows Relaunch? under the award category Broadcasters, sub-category being Best on Air Promotion by a Single Radio Station for Self The award for campaign ‘Sun Siren Sun? under the award category Broadcasters, sub-category being Best Public Service Initiative by a Broadcaster.

Mommy Awards 2023

Runner up for the best regional campaign Cadbury Perk Chaapless Champion Abby?s 23

Bronze for Innovation on Radio for the campaign McDonald?s Big Mac, Big Mistakes

IAA Olive Crown Awards

Silver for Gala Cleanest Transition Videos Ever for the campaign #WhyJustCleanHome in the digital award category

* Source:

https://globalcustomerengagement.com/Winners2024.html https://www.radioandmusic.com/iasa/ https://e4mevents.com/golden-mikes-2023/ https://mad-over-marketing.com/the-mommys-2023-winners/#intro https://theadvertisingclub.net/wp-content/uploads/2023/05/Abby-Awards-2023-Media-l-Website-l-Metals.pdf https://iaaindiachapter.org/GalleryImages/IAA-Olive-Crown-Awards-2023/Winners%20-%20OCA%202023.pdf

8. HR Initiatives:

In FY24, one of the biggest accolades received was Great Place to Work (GPTW) certification for ENIL. The Certification validated our belief in people practices and culture of ENIL.

Investment in People Development:

This year apart from regular training and development initiatives we focused on developing our middle management leadership. We designed and conducted DevelopmentCentrebasedontheidentifiedcompetencies. This was followed by finalizing development plans for each individual. This helped focusing on development of people at leadership position and also on their career goals.

We conducted online and classroom trainings to upskill people. We also kept emphasis on online learning via our learning app ‘Mirchi classroom? – by launching Massive Open Online Courses (MOOC) learning via which we enabled consumption of many courses for a large set of employees. This benefited in gaining knowledge on various topics. Apart from MOOC learning, regular online induction programs or webinars, facilitated by in-house subject matter experts were conducted. Around 70% of our people were trained via in-person and online training.

To improve personal effectiveness, we have a yearly feedback mechanism that helps managers reflect on their work styles and ways to improve working relationships with teams. The feedback results are followed by workshops where improvement areas and action points are decided.

We have an AI BOT called ‘Amber?, which reaches out to our people at regular intervals. These conversations with Amber give us a complete view on matters such as organization, culture, career progression, learning, and job satisfaction. These conversations help us reflect and design better people practices and processes. For the year FY24, our NPS scores were in the range of 85%.

Our People and their Growth: As a philosophy, we have always looked at internal talent first for any career and job opportunities that come up. We have a defined promotion policy & in combination with our robust performance management practices, we promote around 15% of our workforce every year. Regular career conversations & structured 3rd party led development centers along with various other data points of experience, and past performance are collated to plan for succession into key roles & also for grooming promising middle managers for bigger roles in the Company.

D. RISKS, CONCERNS AND CHALLENGES FACING THE COMPANY

Market Risk:

The Media and Entertainment industry, particularly radio, operates with high operating leverage due to its significant fixed costs. While costs can be reduced, doing so requires considerable time and effort. During an economic downturn, radio companies are among the first to be impacted, as their revenues decline rapidly while costs decrease more gradually. In contrast, newspaper companies can quickly reduce costs by cutting the number of pages, lowering paper quality, and printing fewer copies, while TV companies can reduce costs by scaling back show production. On the upside, when the economy recovers, radio companies experience profit growth more quickly than other media. To mitigate such market risks, ENIL implemented various cost-cutting initiatives during the pandemic, which enabled a swift improvement in its EBITDA levels.

Slowdown in the Radio Industry:

The traditional media industry, including radio, is facing significant challenges due to digital disruption. In the developed world, the newspaper industry has been heavily impacted, but radio and TV have shown more resilience. In India, although the TV industry has been resilient, it is gradually losing viewers to digital OTT platforms. A similar trend is emerging in radio. Many mobile phones, particularly high-end models, are being released without FM tuners, forcing users to rely on OTT apps for music consumption, making it difficult for radio companies to target younger audiences. However, the increasing penetration of cars and traffic congestion has led to higher radio consumption in vehicles. Although digital products have entered the car segment, their penetration remains low. FM radio, on the other hand, has a natural advantage by offering infotainment, companionship through RJs, and ease of use.

Declining Listenership:

Radio broadcasters, in an attempt to offset the reduction in effective rates, are airing more advertisements, which has deteriorated the listener experience. If this trend is not addressed promptly, it could further drive listeners to digital platforms.

Dependency on Music Labels:

We took control of Gaana?s operations on December

1, 2023, and this has become a key focus area for the business moving forward. The success of this venture hinges on maintaining a strong music library and achieving a profitable Average Revenue Per User (ARPU). Content is a significant cost, accounting for approximately 70% of revenue. Controlling these costs will be challenging and will depend on securing long-term, sustainable agreements with music labels.

Operational and Financial Risk: The Company?s Risk Management Framework is regularly reviewed by the Board, with new risks being added as necessary. The management identified the pandemic as a black swan event that disrupted our business. As a strategic response to better handle future black swan events, the Company has decided to accelerate its transformation toward a digital-first approach. Nonetheless, the Company remains vulnerable to other unforeseen black swan events.

E. SEGMENT WISE FINANCIAL PERFORMANCE

Management Discussion and Analysis of the Company?s operations together with the discussion on financial performance with respect to operational performance should be read in conjunction with the financial statements and the related notes.

1) ENIL

In FY 2024, there were promising signs of recovery from the impacts of previous economic challenges; however, the progress towards fully capitalizing on this recovery was hindered by various disruptions such as geopolitical tensions and high inflation, which affected economies globally. While revenues rebounded during the year, driven primarily by increased volumes that surpassed previous levels, pricing remained subdued. The combination of geopolitical tensions and inflationary pressures constrained pricing, making it difficult for businesses to fully restore their revenue levels. Despite these obstacles, the overall economic recovery demonstrated positive momentum.

Radio Segment

The overall business was primarily driven by radio ad volumes and contributions from the digital segment. Excluding the digital platform, revenues grew by 10% in FY2024, reaching Rs 453.7 crores, while EBITDA increased by 34.5% to Rs 125.4 crores. Profit before tax (PBT) after exceptional items, saw a significant improvement, rising from Rs 1.8 crores in FY2023 to

Rs 62.6 crores in FY2024. Similarly, profit after tax (PAT) increased from Rs 2.4 crores in FY2023 to Rs 50.6 crores in FY2024.

Digital Segment

Total revenues from the digital business reached

Rs 6.9 crores in FY2024, marking a 58.2% year-on-year increase from Rs 33.6 crores in FY2023.

2) Subsidiary Companies

Kindly refer to the Para 34 of the Board of Directors? Report relating to the operations of the Subsidiary Companies.

GENERAL

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has a system of internal controls to ensure that all its assets are properly safeguarded and not exposed to risks arising out of unauthorized use or disposal. The Internal Control system is supplemented by programs of internal audit to ensure that the assets are properly accounted for, and the business operations are conducted in adherence to laid down policies and procedures. The internal control system also focuses on processes to ensure integrity of the Company?s financial accounting and reporting processes and compliance with the Company?s legal obligations. The Company has a well-defined risk management programme for identifying and mitigating risks across all the functions, which is reviewed by the Risk Management Committee, Audit Committee and Board of Directors of the Company periodically.

The Company has an Audit Committee of the Board of Directors which meets regularly to review inter-alia risk management policies, adequacies of internal controls, the audit findings on the various segments of the business, the financial information and other issues related to the Company?s operations. The Company has adopted Integrated Reporting. The information related to the Integrated Reporting forms part of the Management Discussion & Analysis.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

Specific need-based training and development programs for employees at all levels were imparted in order to optimize the contribution of the employees to the Company?s business and operations. Occupational health safety and environmental management are given utmost importance. As on March 31, 2024, the employee strength (on a permanent roll) of the Company stood at 916. Kindly refer to Para C: Operating Performance - HR Initiatives for other details relating to Human Resources.

Cautionary Statement

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Company?s objectives, projections, estimates and expectations, may constitute ‘Forward Looking Statements? within the meaning of applicable laws and regulations. Our Company undertakes no obligation or liability to update or revise any forward-looking statements publicly, whether as a result of new information, future events or otherwise actual results, performance, or achievements could differ materially from those either expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements and read in conjunction with financial statements included herein.

Disclaimer: All the data used in the initial sections of this report has been taken from publicly available resources, and discrepancies, if any, are incidental & unintentional.

KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS:

Details of significant changes (i.e., change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations:

Ratio	FY2024	FY2023
Debtors Turnover Ratio	3.7	4.2
Inventory Turnover Ratio	NA	NA
Interest Coverage Ratio	NA	NA
Current Ratio	1.9	1.1
Debt Equity Ratio	NA	NA
Operating Profit Margin (%)	18.7%	-18.5%
Net Profit Margin (%)	5.1%	-34.1%
Return on Average Net Worth (%)	4.0%	-24.6%

Note: Since the financials have been reinstated for the current year and previous year as per Ind AS 103 to reflect the comparative figures, the ratios of existing business are not comparable.