Jagran Prakashan Ltd Management Discussions.


This report contains forward-looking statements, which may be identified by their use of words like ‘plans, ‘expects, ‘will, ‘anticipates, ‘believes, ‘intends, ‘projects, ‘estimates or other words of similar import. All statements that address expectations or projections about the future, including but not limited to statements about the Companys strategy for growth, product development, market position, expenditure, and financial results, are forward-looking statements. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Companys actual results, performance or achievements could thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.


India has emerged as one of the fastest growing major economy in the world. The GDP growth of India averaged the highest among major economies of the world at 7.3% from FY 2014-15 to FY 2016-17. There is no denying the fact that the current growth rate is pretty impressive but we must also be mindful that our economy is nowhere near our neighbouring economy China which was more or less equal to our size in the late eighties. To recover the lost ground and materialise our dream of becoming a prosperous nation, we need to grow much faster and for that we have to put in place a concrete plan and acquire necessary implementation skills. Income inequality and lack of job opportunities need to be addressed on urgent basis as these are the most significant risks to sustaining even the current growth rate in long term. Doing too many things at the same time and the speed at the cost of impact shall not help much in the direction of achieving our desired goal.

However, constant efforts have been taken towards strengthening the momentum of reform, and the year also witnessed steps undertaken towards resolution of problems associated with non-performing assets of the banks, liberalisation of FDI etc. Governments continued focus on entrepreneurship, innovation, Make in India, Skill India is promising an upward growth trajectory for the nation. India has gained the Top 5th spot as a global investment economy.(Source: Economic Survey 2017-18).

In FY 2017-18, the reported 6.5% growth rate was the lowest in past 3 years, owing to the lingering impact of demonetisation and implementation related issues of the Goods and Services Tax (GST). GST is a life changing event in the Countrys history and will benefit the economy in medium to long term in many ways but its implementation along with demonetisation has hit us so hard that while the global economy was expanding at a faster pace, we had a lower growth. Reforms are welcome but the countries with low per capita income, like India, need to constantly balance growth and reforms as loss of growth even for a couple of years is unaffordable and could be a serious push back to the Country for years.

We also believe that the adverse impact of slowing economy on discretionary spend was far greater than the growth number suggests and this is what hurt industry the most.

Nonetheless, the outlook for India remains positive, underpinned by robust private consumption and public investment. Indias GDP growth is projected to accelerate to 7.4% in FY 2018-19, which with the support of state and general elections should lift the consumer confidence so that they increase their spend on discretionary items as well. Inflation has once again started raising head and may dampen the rising spirit of consumers in short term if the steps are not taken to arrest it.


After China, Indian advertising industry is envisaged to be the second fastest growing market in Asia. Currently, Indias advertising revenue is reported to be about 0.40 per cent of GDP as against global average of nearly 1%. Per capita spend by an Indian is estimated to be less than 15% of spend in China, 3% of spend in UK and 2% per capita spend in USA, which gap is disproportionately far higher than the per capita income gap. These data clearly suggest that there is huge potential for growth for the entire industry and we can unlock this potential for all and sundry provided we are able to grow the income for everyone. The traditional as well as new media both have opportunities to grow, with new media growing at faster pace in terms of percentage than the traditional media primarily due to far lower base on the one hand and their far lower penetration on the other hand.

Indian Media and Entertainment Industry is amongst the fastest growing industry in the economy. It witnessed a growth of almost 13% and reached at Rs1.5 Trillion (USD 22.7 Billion) in 2017. With its current trajectory, the industry is expected to cross Rs2 _rillion (USD 31 Billion) by 2020, at a CAGR of 11.6%.

In FY 2017-18, the industry faced pressures due to one after the other macro-economic developments causing unprecedented disruptions. However, the industry maintained its resilience, continued investment in expansion in the hope of bright future and made contribution in the economic growth.

The industry, being one of the major job providers and a meaningful player in the economy, has support from the government. Government of India is taking efforts for digitising the cable distribution sector in order to bring transparency in the sector and has also increased the FDI limit from 74 percent to 100 percent in cable and DTH satellite platform. Also, to enable easy access to institutional finance, the film industry was granted the status of Industry.

Once again, the digital media recorded the highest growth over 2016, with major share of the pie still going to multinational internet giants who depend for content on print. (Source: FICCI 2018). Sooner than the later, the industry needs to collaborate and strategise to realise true value for its content not only from them but also from the other aggregators, whose businesses are thriving on the strength of our content, which they are getting almost free.

The film segment grew at 27% with the growing popularity of Indian films in global markets. Increase in the demand for global content resulted in growth of the animation, VFX and post-production segment, where India has become known for its high quality and efficiencies. The animation and VFX segment has shown a growth of 23% whereas online gaming showed growth of 18% over 2016, backed by expanded and strengthened digital infrastructure.

The Event management was another high growth sector, recording growth of 16% over 2016, buoyed by increased below-the-line spends across tier II and III cities, growth in sports events, premium properties and activations. This sector is poised to be on high growth trajectory and should grow at a rate which will be second to only digitals growth rate.

Digitisation of television homes and the growing popularity of the properties like IPL coupled with non-fiction shows (particularly in regional languages) resulted in 11% growth over 2016 for the Television segment.

None of the other media platforms could register double digit growth. This was primarily due to their significant dependence on local revenues, government and real estate. Local revenues and real estate were adversely impacted by the lingering impact of demonetisation, GST implementation related issues causing disruption in business and implementation of RERA (Real Estate (Regulation and Development) Act). GST and RERA are expected to stabilise soon. The growth in print industry was further slowed down as GST was levied on advertisement revenue for the first time. Advertisers, especially the local ones, could not increase their spend so much in an otherwise unsupportive economic environment that they could give normal growth to the print industry in addition to meeting the GST burden.

The year 2017 witnessed advertisement growth being outstripped by subscription growth which is good sign for sustainability of the industry. The subscription revenues, favourably impacted by cable TV digitisation and increased adoption of OTT platforms, enjoyed a 15% growth in 2017 whereas advertising revenues grew under 10% owing to multiple reasons and their cascading effects. RERA, demonetisation, GST and crack down by government on informal economy with associated outcomes were some of the primary reasons for poorer growth in advertisement revenues. However, in medium to long term, these measures are expected to formalise economy and help the industry as well.


Heading towards an Rs2 _rillion (USD 31 Billion) industry by 2020, the M&E industry looks promising owing to the growing disposable income and increasing per capita GDP which has been leading to increased consumer spends. Social acceptance has made media and entertainment an indispensable part of an individuals life. Although advertisement continues to be bread and butter for the industry and will grow exponentially, the most heartening is focus on increasing subscription revenues which will continue to provide a stable source of income as it is not impacted by economic slowdowns. The significantly increased digital content consumption presents M&E companies with an exciting opportunity to develop businesses and cater to the new generation of Indian digital consumers.(Source: FICCI 2018, IBEF)

The years 2016-17 and 2017-18 are aberrations. They do not give guidance for future because of one-off events and happenings. Since the potential for growth of all media and entertainment sectors remains high as discussed above, there is no reason why any of the sectors remains subdued for a long period of time. We, therefore, expect that even those media and entertainment sectors in the industry which registered a meagre growth in past 2 years will return to normal growth path sooner than later.


Print Industry suffered primarily on account of lingering impact of demonetisation, far bigger than teething problems in implementation of GST, RERA and lower advertisement spend by government. The industrys dependence on local market and sectors such as pharma which thrive on cash economy were hard hit first by demonetisation and then GST, resulting in advertisers cutting down or completely stopping advertisement spend. Doing the business in new tax regime itself was a challenge especially for those advertisers who do not have access to consultants, robust organisational structure and computer. Lack of clarity on taking input credit and increased working capital requirement due to tax outgo from their pocket added to their woes. They were reluctant to even discuss their marketing plans; much less releasing advertisements. As a result, the growth in advertisement revenue for the fiscal was negative, which is the outcome of exceptional developments never ever witnessed by the industry in its history. With GST settling down and enough cash back in the economy, the normal growth, further aided by the elections, should start returning sooner than later.

While the industry reported negative growth, it was successful in recovering levied GST of 5% from the advertisers over and above the advertisement charges and had this burden not been imposed, the industry could have reported some growth.

Cover prices were dropped in certain parts of the country such as Bihar and part of Uttar Pradesh due to increased competitive intensity whereas they remained same or increased in other parts.

As stated elsewhere hereinabove, the performance of the industry for FY 2017-18 is no indication of its future potential in India. As reported by Audit Bureau of Circulation, circulation is on rise year after year and has risen nearly by 5% in past decade. Similarly, Indian Readership Survey 2017 has proved that Print Industry in India continues to be on its growth path with more and more people reading the newspaper. As per the report, print media has added whopping 110 Million readers since 2014. The maximum growth has been witnessed in age group of 12 to 19 with penetration level increasing from 28% to 42% in the age group of 12-15 and from 38% to 50% in the age group of 16-19. Further, readership growth in rural areas was 14.4% as against 8.3% in urban areas. The report further shows that the penetration of newspapers in India is just 39% and those who read newspaper only online are just 0.6%.

These findings are encouraging for the industry which will grow on its strength of credibility, localness, reach and ease in accessibility due to unique door delivery system prevalent in India.


The radio industry witnessed a growth in penetration due to the launch of 162 new FM radio stations across the country in FY17. This led to increased advertisers interest in the medium with radio now able to provide a deeper reach for national advertisers and a cost effective suitable reminder medium for local advertisers. With the localisation of content across so many stations, the share of local advertising has now increased from 20-30 percent in 2000s to the current level of 60 percent.

To further expand the penetration of radio, in December 2017 the Cabinet gave approval for e-auction of Batch 3 of private FM radio Phase III. Under this batch, the Government is expected to auction 683 radio frequencies in 236 cities with a potential to generate revenue of Rs11,000 Million. This will lead to further proliferation of radio in smaller cities, thus becoming an alternative local medium with an increased listener base. The industry is also working on implementing its own measurement across 21 cities, pilots of which are expected to begin in 2018.

Financial year 2018 however, continued to see the effect of demonetisation and with the further headwinds of GST implementation issues, the radio industry grew only by 6.5% in 2017 as against the expected growth of 16.3%

The Industry is expected to reach at Rs33.8 Billion by 2020 by expanding, finding new audiences via mobile and video, increase in the realisations etc.(Source: FICCI 2018)

One of the key assets that radio companies have developed over the years are their radio jockeys (RJs) and deeply local and live information they give to their listeners. Popular RJs have a deep connect with their listeners and can build communities with high engagement levels due to the credibility of information they provide at a local level. With these attributes and its newly enhanced reach, it is expected that the medium continues to grow in relevance both for advertisers and listeners.


In 2017, digital advertising grew by ~30%, and now contributes 17 percent of the total ad spends in India. It is expected to reach ~22 percent by 2020 with smartphone penetration reaching around 33%. India ranks fourth after US, China and Indonesia in terms of digital ad spends. Digital advertising primarily comprises search, social, display, video advertising and classifieds. The current revenue model is majorly based on advertising rather than subscription. Subscription, which is currently estimated to be around 3% of total digital revenues is projected to grow to 9% by 2020 which augurs well for the media companies and shall make digital business model profitable. (Source: FICCI 2018)


The Group comprises Company, its two operating subsidiaries and two operating associates. Subsidiary Midday Infomedia Limited (MIL) is a publisher of English daily Midday, Gujrati daily Midday Gujrati and Indias largest read Urdu daily Inquilab. Its operations are primarily in Mumbai, although its Urdu daily is published and circulated in various towns of north including Delhi. The other operational subsidiary is Music Broadcast

Limited (MBL) which operates FM radio in the brand name of Radio City from 39 stations across 13 states. The two operating associates viz. X-pert Publicity Private Limited and Leet OOH Media Private Limited are in the outdoor business and are not significant.

In addition, during the year the Company had another subsidiary Diaspack Techbuild Limited (formerly known as Naidunia Media Limited) upto January 16, 2018. It did not have any operations for years and was therefore disposed of by selling its shares to the Companys erstwhile promoters as discussed in the Board Reports.

The year FY 2017-18 witnessed Indian Readership Survey after nearly four years since 2014. Groups flagship newspaper ‘Dainik Jagran has once again been found to be the largest read newspaper of the country across all languages. Dainik Jagran continues to hold its numero- uno position in the print industry of the country since 2003.

As far as financials are concerned, it has been a tough year for whole of the industry and the Group was no exception because it depends for its revenue on print business to the extent of about 80% of the total revenues. There was a drop in print revenues but other two core businesses viz. Radio and Digital posted growth of nearly 10% and 15% respectively. Another outstanding performance came from outdoor advertising that registered a growth of 22%. However, event and activation business was also sufferer like print in the year 2017-18. As a result of near flat revenue, there was drop in profits in-spite of the fact that outdoor business reported best ever profits, radio could report operating margins higher than targeted for the year, Naidunia did better than the previous year and there was growth of less than inflation in cost.

MBL, post Initial Public Offering in March 2017, has strengthened its balance sheet which gives it sufficient financial ability to look for inorganic growth opportunities. MBLs Board has since approved acquisition of a FM radio station at Kolkata for an acquisition price of Rs35 Crore subject to approval by Ministry of Information & Broadcasting, Government of India. MBL did not have any radio station in Kolkata which is one of the top five FM radio markets in the country. During the year MBL had a growth in net profit of 41%.

Another subsidiary MIL which is in print business had de-growth in advertisement revenue as well as profits owing to the circumstances and developments discussed under the heading ‘Print Industry of this chapter.

Two associates which are in outdoor business had stable operations with no material increase / decrease in the revenues and profits.

Although the Company had drop in profits, the management believes that it is not because of any fundamental change in the business and is solely attributed to certain unprecedented regulatory developments, which had a negative impact on the entire industry and therefore the shareholders should continue to be rewarded, given the continuing robust cash accruals and the liquidity of the Company. Accordingly, the management has proposed another buyback worth Rs293 Crore which is expected to be completed within July 2018. In addition, the Companys Board has also proposed a dividend pay-out of Rs3 per share for the year 2017-18.

Coming to the balance sheet of the Group, it continues to be strong with hardly any debt. CRISIL has reaffirmed its credit rating AA+ Stable for long and medium term and A1+ for short term in respect of the Company, AA(-)/stable for long term in respect of MIL and AA Stable for long term in respect of MBL.


Recognising Groups leadership position in different fields of operations, various distinguished bodies like AIMA, INMA, WAN IFRA, Abbys, ACEF, Golden Mikes, WOW etc. have bestowed 190 Awards upon the Group during the year as follows:

Brand/Division No. of Awards Won during FY 2017-18
Dainik Jagran 104
Radio City 64
Dainik Jagran- Inext 2
Jagran Solutions 5
Jagran Engage 1
Jagran New Media 5
Jagran IT Team 5
Individual & Group level Awards 4
Group Total 190

Dainik Jagran Awards FY 2017-18

Award No. of Awards
Global Media Awards, INMA 4
Asian Media Awards, WAN-IFRA 3
Abby Awards 9
Golden Awards of Montreux 4
WOW Awards 4
Indian Marketing Awards 8
Indian Content Marketing Awards 2
ACEF Global Customer Engagement 17
Hermes Creative Awards 19
Mcube Awards 3
DMA Asia Echo Awards 2
Kyoorius Awards 1


Award No. of Awards
DMA Create Effect Awards 5
Lisbon International Advertising 2
APAC Customer Engagement Forum 9
- Branding & Marketing
APAC Customer Engagement Forum 6
- Rural Marketing
APAC Customer Engagement Forum 5
- CSR Awards
International Film Business Awards 1
Total 104


Radio City Awards FY 2017-18
Award No. of Awards
IRF 12
Limca 1
Golden Mikes 8
ACEF Asia Pacific Consumer Awards 4
NYF New York Festival Radio Awards 3
Goa Fest 7
One Show Pencil award - New York 2
ACEF - CSR and Branding marketing 3
DOD Awards 1
Radio 4 Child awards 2
Nanhi kali 20
Total 64


DainikJagran - Inext Awards FY 2017-18
Award No. of Awards
e4m BW Applause Awards 1
PMO India Letter of appreciation 1
Total 2
Jagran Solutions Awards FY 2017-18
Award No. of Awards
Total 5
Jagran New Media Awards FY 2017-18

No. of Awards

Digixx Award


Global Digital Marketing Awards


Digi-Pub Awards





Jagran Engage Awards FY 2017-18
Award No. of Awards
Outdoor Advertising Convention 1
Total 1
Jagran IT Team Awards FY 2017-18
Award No. of Awards
BIG CIO 100 Award in recognition of exemplary technology initiatives & IT Leadership at the BIG CIO Show and Awards 1
Dataquest Digital Leader 2018 for contribution to ushering in Digital initiatives to the Enterprise. 1
IT Head and JPL were featured among 50 Digital Leaders in the DQ CIO Handbook of 2018. 1
Jagran Prakashan Ltd was awarded the IDC Insights Award 2017 in the Media category for Excellence in Operations in recognition for leveraging Technology to improve Business Operations. 1
Jagran Prakashan Ltd was honoured with the CIO 100 Award for Enterprise Excellence in Business Technology for using technology in innovative ways to deliver Business value. 1
Total 5

Individual Awards during FY 2017-18

1 AIMA Managing India Award to the CEO, Jagran Prakashan Ltd for Outstanding Contribution to Media

2 "Corporate Media Excellence" Award by Amity University to the CMD & Editorial Director, Jagran Prakashan Ltd

3 ‘Indian Media Person of the Year – Print by Brands Academy to the COO, Inext

4 Jagran New Media HR Head - Felicitated among the Top 100 minds in Training and Development


The management regularly reviews various businesses operational and functional risks. It has instituted appropriate control procedures to mitigate those risks. The Groups senior management team identifies risks and accordingly the steps are taken to mitigate them. The management works to make optimum use of the technology to strengthen the controls, minimise or eliminate human intervention in various processes to the extent possible and thereby mitigates the operational and reporting risks.

As on date, the management identifies following risks:-


Low and uneven growth in personal incomes, high inflation, high interest rate and uncertainty of any nature in the environment will hurt the overall consumer sentiment which will negatively impact the consumption and thus media industry.

Management Perception

Macro-economic conditions are not in control of any management and not only the Company but the entire industry and the economy would also suffer, if the consumption is adversely impacted. However, as the past records show, the Company has always succeeded in keeping the impact minimum in the adverse circumstances and it would continue to do so even in future.


The Company derives 70-75% of total revenue from advertisement. Shortfall in expected growth in revenue for any reason will disproportionately reduce the growth in profits or result in lower profits as advertisement revenue has high operating leverage.

Management Perception

This risk is applicable to the entire industry and its impact cannot be fully nullified. However, the management recognises the risk and keeps evaluating the possibility of increasing the cover price as and when possible and more particularly at a time when advertisement revenue is under pressure. The management also works to save costs wherever it is feasible.


Indias print market is highly fragmented; there is stiff competition, which challenges the profit earning capacity of a print company. Similarly, other media platforms, especially digital are also posing a threat.

Management Perception

The management believes that the print media has its own inherent advantages like credibility, local content, easy accessibility etc. Besides this, it has still very low penetration. Inspite of fragmentation, latest Indian

Readership Survey has reported that Dainik Jagran continues to be the largest read newspaper across all languages which position it has been maintaining since 2003 without break. The Survey also reveals that in past 3 years, newspapers have added 110 Million readers to a base of 290 Million in 2014 which establishes that print media in India has no threat from any of the mediums. In fact, looking at current penetration level, it is clear that the print media has huge potential for growth. However, increased intensity in competition may cause drop in cover price and entail additional promotional expenses to maintain market share but reduced cover prices do not continue for long.


Newsprint as the primary raw material represents a significant portion of overall expenses. It was 32.7% in 2018 and 31.8% in 2017of total operating revenue of the print business of the Group. Any significant movement in newsprint prices will adversely impact the profitability.

Management Perception

Newsprint prices have already increased substantially and will impact results of Fiscal 2018-19 accordingly. We however do not expect any significant increase in future. In any case, for imported newsprint, the Company has already entered into contract good for one years requirement and fixed the price. To mitigate the impact, the Company and its competitors have agreed to increase cover prices in certain areas and the Company will explore possibility of increasing prices even in those areas where the competitors may not agree, provided it will not hurt the Company strategically. We hope that increase in cover prices should significantly off-set impact of increase in newsprint prices.


If the Group is unable to maintain its position and scale up its operations, it may not be able to attract planned revenue. Further, it may face fierce competition for revenue from local as well as international giants like Google and Facebook which have lions share in digital pie.

Management Perception

The Groups digital strategy has seen positive momentum and the results obtained (operational as well as financial) are as per managements expectations. With rich regional content, the management feels the Company is well placed as compared to competition. Further, despite competition, the Company has delivered growth and performed better than its peers.


Adequate internal control has been put in place in all areas of operations. The role and responsibility of all managerial positions are established, monitored and controlled regularly. All transactions are authorised, timely recorded and reported truly and fairly.

The Group has incorporated operational changes as well as checks and balances in systems and processes which were required in the new GST regime. They have not only ensured compliance but also strengthened the existing processes in some respects.

For better controls, certain Mobile Initiatives backed with OTP authentication and auto-SMS authentication have been deployed. These Apps like Billing, Cash Collection, etc. have brought about a secured, easy-to-use and online connectivity with executives on the field and also boosted the efficiency of the Enterprise.

To ensure adherence to the laid-down systems, apart from internal reporting and monitoring, the Company has put in place formal Internal Audit System commensurate with the size and nature of the business. Internal audit is conducted by big 4 accounting and consultancy firms and they periodically submit their report to the management through the audit committee.

The Group is fully committed to continually work in strengthening the systems and processes so as to achieve the highest degree of transparency, efficiency and accuracy in reporting, monitoring and decision making and has done so during the year as well as part of an ongoing exercise.

Segment performance

The Company did not have any reportable segment other than print under Accounting Standard 17 on Segment Reporting as notified under the Companies Act.


The figures have been rounded off to nearest lakh of rupees.

(A) The Company (Standalone)
(i) Profit and Loss

(Rs in Lakh - rounded off to nearest lakh)

FY 2017-18 Percentage (In relation to Revenue from Operations) FY 2016-17 Percentage (In relation to Revenue from Operations)
Revenue from Operations 189795 100.00 190008 100.00

Revenue from operations

Advertisement revenue accounts for 74.4% (previous year 74.6%) and Circulation revenue accounts for 23.9% (previous year 22.8%) of the total print and digital revenue, digital being an integral part of the print business.

Revenue from operations was flat. The lingering impact of demonetisation and GST implementation related issues were the main causes impacting the discretionary spend and consequently our revenues. While outdoor and digital grew by 21.6% and 16.7% respectively, other revenues viz. circulation revenue, advertisement revenue, job work and revenues from event management and activation business could not grow. Amongst various newspaper brands, Naidunia registered growth in circulation as well as advertisement revenues but other brands had some de-growth. In case of Naidunia, there was a growth in circulation as well as per copy realisation which was positive. Lower circulation revenues in case of Dainik Jagran was on account of drop in per copy realisation due to the increased intensity of the competition in certain areas. However, in second half of the year increase in cover price was taken in some of such areas but it was not enough to compensate the loss in revenue already suffered till that date.

Outdoor and event revenues were also adversely impacted for the reasons stated above but outdoor could still register growth due to new properties taken and some pick up in business witnessed in second half of the year.


(Rs in Lakh- rounded off to nearest lakh)

FY 2017-18 Percentage (In relation to Revenue from Operations) FY 2016-17 Percentage (In relation to Revenue from Operations)
Cost of Raw Materials consumed* 63692 33.56% 62444 32.86%
Employee Benefits 29404 15.49% 27198 14.31%
Other Expenses 49863 26.27% 47729 25.12%
Total 142959 75.32% 137371 72.30%
Operating Profit 46836 24.68% 52637 27.70%
Depreciation and 8235 4.34% 8166 4.30%
Net Finance Costs (1478) (0.78%) (2006) (1.06%)
Finance Costs 1201 0.63% 1978 1.04%
Less: Other Income 2679 1.41% 3984 2.10%
Profit Before Tax (PBT) 40079 21.12% 46477 24.46%
Taxation 13478 7.10% 14871 7.83%
Profit After Tax (PAT) 26601 14.02% 31606 16.63%

* Includes increase/decrease in stock, which is insignificant.

Cost of Raw Materials consumed

Raw Material comprises newsprint and ink. Increase in newsprint cost due to price rise was significantly compensated due to better yield of ink achieved through improved efficiency as well as lower cost due to input tax credit which was not available earlier. Balance increase is primarily due to increase in volume as a result of higher circulation.

Employee Benefit

Employee cost increased by 8.1%. Increase was primarily due to annual increments and increase in Gratuity liability due to the legislative change.

Other Expenses

Other expenses increased merely by about 4.5% and that too primarily because of higher investment in digital business and higher scale of outdoor advertising business. In fact, rest of the expenses hardly increased during the year. These expenses represent production, direct expenses relating to businesses other than print, bad debts and provisions therefore, marketing and administrative expenses. Some of these like direct expenses relating to other businesses viz. outdoor, event/activation and digital are variable, some like power and fuel and stores are semi variable and remaining expenses like promotion/publicity, freight on newspaper distribution, communication cost and repairs are more or less fixed in nature and do not change due to change in scale of business unless the change is material. Fixed expenses include expenses which are controllable and the management continues to keep vigil on these expenses and adopt necessary measures to reduce these expenses, if the circumstances warrant, always keeping in view the long term interest of the business. Control over these expenses has played a major role in containing the drop in profits which was due to the factors and market conditions not in our control.

Operating Profit

Operating profit and operating margins were lower due to de-growth in print revenues as discussed above. In continuation of the previous fiscal, this was again an exceptional year which should not be read to get guided for future. According to the latest Indian Readership Survey, the industry has added 11 Crore readers since 2014 when it had 29 Crore readers; its penetration is just 39% and the growth in readers was across all age groups with maximum growth reported in age group of 12 -19.

Depreciation and Amortisation

Depreciation is provided as per the written down value method, as against the straight line method adopted by the peers. As a result, the depreciation remains significantly higher in the initial years. There is hardly any increase in the current year.

Income tax expenses decreased as compared to the previous year due to lower profit.

Finance Cost has decreased on account of lower borrowings and repayment of loans

Other Income

Other income primarily comprises treasury income, miscellaneous income and profit on sale of assets. The current years income is lower due to lower investments in consequence of distribution of surplus funds aggregating nearly Rs400 Crore amongst the shareholders during the year.

(ii) Balance Sheet

(Rs in Lakh - rounded off to nearest lakh)

FY 2017-18 FY 2016-17
Total Equity 152131 167023
Total Non-current Liabilities 15409 13927
Total Current Liabilities 36798 40347
Total Equity and Liabilities 204338 221297
Total Non-current Assets 136927 157347
Total Current Assets 67411 63950
Total Assets 204338 221297

Total Equity comprises of Equity Capital, Reserves and surplus and Equity component. The Equity component represents the contribution from the promoter company in form of interest rate concession on the non-convertible debentures subscribed by it. The Equity Capital and Reserves and Surplus both have undergone change due to buyback of 1.55 Crore equity shares @ Rs195 per share as well as profit for the year. Another buyback of 1.50 Crore equity shares @ Rs195 per share has also since been approved by the Board in its meeting held on April 27, 2018 which is subject to remaining statutory approvals. The outgo from this buyback is aggregating to about 293 Crore.

Total Non-current Liabilities represent leave encashment obligations and deferred tax liabilities. These liabilities have increased primarily due to increase in deferred tax liabilities and gratuity liability due to upward revision in its limit under statute. Increase in deferred tax liability is primarily due to increase in trade receivables.

Total Current Liabilities represent short term borrowings, trade payables, other current liabilities including current tax liability and employee benefit obligations and financial liabilities. Trade payables and other liabilities mainly represent the liability for material, unpaid expenses, interest accrued, but not due and security deposits from newspaper agents and statutory liabilities, such as deduction of provident fund from the employees and TDS. The Company has been regular in depositing statutory dues as well as paying its other liabilities on due dates.

These liabilities have decreased primarily due to repayment of outstanding debentures which were classified in the last year as current liability as these were repayable within one year from the last balance sheet date.

Non-current Assets comprise fixed assets, investments with maturity exceeding one year, investment in subsidiaries and associates, investment properties and other current assets realisable/expected to be realised after one year. In the current year, there was no significant addition. However, certain existing immovable properties have been identified as surplus for sale in future and accordingly these have been classified as Investment Properties. These assets are lower than the previous year primarily due to redemption of mutual fund units necessitated by buyback/dividend distributed during the year.

Capital work in progress primarily includes buildings under construction.

Total Current Assets represent investments with maturity of less than one year, trade receivables and inventories besides short term advances, current assets and cash and bank balances. These have increased marginally because of increase in debtors which is primarily due to inordinate delay in payment by government and classification of certain investments from long term to short term which have since been realised.

(i) Profit and Loss

(Rs in Lakh - rounded off to nearest lakh)

FY 2017-18 Percentage (In relation to Revenue from Operations) FY 2016-17 Percentage (In relation to Revenue from Operations)
Revenue from Operations 230398 100.00% 228295 100.00%
Operating Cost 172084 74.69% 164340 71.99%
Operating Profit 58315 25.31% 63955 28.01%
Less: Depreciation 13608 5.91% 12889 5.65%
Net Finance Costs (1959) (0.85%) (614) (0.27%)
Finance Costs 2711 1.18% 3504 1.53%
Less: Other Income 4670 2.03% 4118 1.80%
Add: Share of net profit of associates accounted for using the equity method 4 0.00% 6 0.00%
Profit Before Tax 46670 20.26% 51686 22.64%
Taxation 15572 6.76% 16754 7.34%
Profit After Tax (PAT) 31098 13.50% 34932 15.30%
Add: Exceptional items - - - -
PAT after Exceptional items 31098 13.50% 34932 15.30%
Less/(Add): Share of 1114 0.48% 171 0.07%
Minority Interests in Profits /
Add: Other comprehensive income (40) (0.02%) (357) (0.16%)
Profit for the Year 29944 13.00% 34404 15.07%


(ii) Balance Sheet

(Rs in Lakh - rounded off to nearest lakh)

FY 2017-18 FY 2016-17
Total Equity 228710 239121
Total Non-current Liabilities 27032 26430
Total Current Liabilities 43439 58307
Total Equity and Liabilities 299181 323858
Total Non-current Assets 205132 215423
Total Current Assets 94049 108435
Total Assets 299181 323858
(iii) Consolidated cash flow statement
The summary of cash flows is as follows:

(Rs in Lakh - rounded off to nearest lakh)

FY 2017-18 FY 2016-17
(A) Net Cash Surplus/(Deficit) from operating activities 39065 47738
(B) Net Cash Surplus / (Deficit) from investing activities 10171 (41930)
(C) Net Cash Surplus/(Deficit) from financing activities (60528) 6307
(D) Net Surplus/(Deficit) (other than surplus generated from operating activities) (B) + (C) (50357) (35623)
(E) Net Increase/(Decrease) in cash and cash equivalent (A) + (D) (11292) 12115

The section titled as "the Company, its Subsidiaries and Associates" of this Chapter lists out the entities that have been considered while compiling the consolidated financial statements and define the relationship of each entity with the Company.

In this Section, percentages have been rounded off to nearest number

Consolidated Profit and Loss

1) The contribution of subsidiaries Music Broadcast Limited and Midday Infomedia Limited in revenue, operating profit, profit before tax and profit after tax of the Group was as follows:-

Music Broadcast Ltd. (%)

Midday Infomedia Ltd. (%)

FY 2017-18 FY 2016-17 FY 2017-18 FY 2016-17
(i) Revenue 13 12 5 5
(ii) Operating profit 17 14 3 3
(iii) Profit before tax 16 11 3 3
(iv) Profit after tax 17 10 2 3

Note: The above figures are without eliminating intra group transaction which is insignificant and will not materially change the same.

2) Please refer to section titled "the Company, its Subsidiaries and Associates" for the discussions on performance of subsidiaries and associates.

Consolidated Balance Sheet

1. Total Equity has reduced by Rs104 Crore inspite of consolidated net profit of Rs311 Crore which was mainly due to buyback of 1.55 Crore fully paid up equity shares @ Rs195 per share aggregating to Rs302 Crore and distribution of dividend of Rs93 Crore by the Holding Company.

2. Total Non-current Liabilities increased due to less than 1.5% increase in deferred tax liabilities.

3. Total Current Liabilities have been reduced from Rs583 Crore to Rs434 Crore primarily on account of repayments of secured non-convertible debentures by Holding Company as well as subsidiary MBL. The total amount so paid was Rs175 Crore.

4. Total Non-current Assets have reduced by Rs103 Crore primarily on account of depreciation on fixed assets including intangible assets and encashing some of the investments on maturity.

Total Non-current Assets also include goodwill of Rs337.72 Crore which has arisen mainly on consolidation and relates to the acquisition of Naidunia print business in the year FY 2011-12 and radio business in the year FY 2015-16. The goodwill is tested for impairment at the end of every financial year and no such impairment has yet been observed. In addition to goodwill, there are intangible assets aggregating to Rs534.23 Crore. These intangible assets are computer software, brand, migration fees relating to radio business and part of consideration paid for acquisition of radio business that has been allocated to radio licences while consolidating the accounts. These intangible assets are being amortised on the basis of their useful lives.

5. Total Current Assets have decreased by nearly Rs144 Crore in-spite of increase in debtors which was primarily due to delayed payment by the government. The decrease in current assets is mainly due to reduction in cash and bank balances from Rs349 Crore to Rs117 Crore. The decrease in cash and bank balances as well as non-current investments is due to utilisation of funds for the purpose of buyback and dividend as discussed above.

Consolidated Cash Flow Statement

In continuation of the previous year, cash generation from operations continues to be robust. The Company, its Subsidiaries and Associates all are generating cash from operations and are in position to pursue organic as well as inorganic growth opportunities on their own.


Relationship with employees was cordial. Some of the business units improved their ratings under Great Place to work survey.

The Group continuously works to provide work environment that encourages free expression of opinion, decision making and responsible execution of the task.