Radaan Mediaworks (I) Ltd Management Discussions

Global Overview:

The global economy continues to navigate a dynamic landscape, encountering a blend of challenges and opportunities. Demonstrating remarkable resilience, it undergoes a steady but gradual recovery, albeit with regional disparities. According to the International Monetary Fund (IMF), global growth maintained a modest rate of 3.2% in CY 2023. Multiple factors, including ongoing geopolitical conflicts, inflation, a sluggish recovery in China, volatility in energy and food markets, and elevated interest rates, have led to a slowdown in global economic growth. Furthermore, the crisis in the Red Sea route has caused the biggest diversion of global trade in decades, resulting in higher logistical costs, shipment delays, elevated fuel and commodity prices, and industry-wide disruptions.

Despite these challenges, signs of stable growth, strong economic performance in the United States and several major emerging market and developing economies, coupled with inflation reaching target levels in advanced economies, indicate a reduced likelihood of a severe economic downturn. Furthermore, other positive factors include the diminishing impact of previous energy price shocks and a significant resurgence in labour supply in many advanced economies. Global inflation, a key concern over the past three years, continues to recede at a faster pace from 8.7% in CY 2022 to 6.8% in CY 2023. Despite headline inflation experiencing a decline from its unprecedented peaks, core inflation has remained persistent and is expected to decline gradually. The price of Brent crude oil averaged USD 83 per barrel in CY 2023, down from USD 101 per barrel in CY 2022. However, the spot price of Brent crude oil averaged USD 90 per barrel in April 2024 due to escalating tensions in the Middle East, attacks on Russian refineries and anticipated voluntary production cuts by OPEC+ until the end of June 2024. Despite the major economic shocks, global trade has been resilient in recent years. Merchandise trade experienced a decline of 1.2% in CY 2023 as import demand in real terms fell sharply in Europe, declined in North America and remained flat in Asia. However, imports surged in the Middle East and the Commonwealth of Independent States (CIS) region.

Region-wise growth (%)

Region	CY 2023	CY 2024(P)	CY 2025(P)
Global Economy	3.2	3.2	3.2
Advanced Economies (AEs)	1.6	1.7	1.8
Emerging Markets and Developing Economies (EMDEs)	4.3	4.2	4.2

(P - Projections)

(Source: International Monetary Fund

Indian Economy:

Amid a challenging global economic landscape and deteriorating geopolitical conditions, India has been a bright spot. It is the fifth- largest economy in the world and is poised to retain its position as the worlds fastest-growing major economy. Its GDP growth remained robust at 7.6% in FY 2023-24 as against 7.0% in FY 2022-23, supported by robust domestic demand, moderate inflation, a stable interest rate environment, and strong foreign exchange reserves. Furthermore, an accelerated pace of economic reforms and increased capital expenditure facilitated construction activities and created extensive employment opportunities across the country. The International Monetary Fund (IMF) commended Indias economic resilience, robust growth, and notable progress in formalization and digital infrastructure. Indias G20 presidency in 2023 has demonstrated its capability to cater to global needs and provided a platform to address global concerns. India positioned itself as an attractive destination for investments in energy transition initiatives.

Growth of the Indian Economy

	FY 2021-22	FY 2022-23	FY 2023-24 (E )
Real GDP growth (%)	9.1	7.0	7.6

(E- Estimates)

(Source: Ministry of Statistics & Programme Implementation)

Indias economic outlook is optimistic, with robust domestic demand, a broad-based revival in manufacturing and services sectors, increased capital expenditure and proactive policy measures by the government, and positive business and consumer sentiments, providing impetus to the growth momentum going forward. According to the IMF, the Indian economy is expected to advance steadily at 6.8% in FY 2024-25 and 6.5% in FY 2025-26. The RBIs forecast is more optimistic, projecting a higher GDP growth of 7.0% for FY 2024-25. As per the Reserve Bank of Indias forecast, CPI inflation is expected to decline to 4.5% in FY 2024-25. However, volatile food prices hinder the trajectory of disinflation and obscure the inflation forecast.

There are potential risks to Indias economic trajectory stemming from factors such as escalating geopolitical conflicts, political stability, fluctuations in global financial markets, geoeconomic fragmentation, and climate-related shocks. However, Indias favourable geopolitical positioning enables it to leverage supply chain diversification and reshoring, enhancing global competitiveness and boosting exports. Additionally, the significant increase in capital expenditure for infrastructure development, with a focus on railway corridor projects, roads and logistics promises to revolutionize multi-modal connectivity nationwide and drive economic growth.

India is also striving to achieve sustainability goals through decarbonization and leveraging growing investment and trade opportunities through enhanced technology transformation and improved governance to ensure inclusive and broad-based growth. Amid a volatile global macro environment, the Indian economy is poised to emerge as one of the global economic powerhouses and become the third-largest economy in the world by 2030.

(Source: IMF Economic Outlook, April 2024; Economic Times)

Media & Entertainment Industry:

The Indian Media & Entertainment (M&E) sector is set for substantial growth, with a projected 10.2% increase, reaching Rs. 2.55 trillion (US$ 30.8 billion) by 2024 and a 10% CAGR, hitting Rs. 3.08 trillion (US$ 37.2 billion) by 2026. Advertising revenue in India is projected to reach Rs. 330 billion (US$ 3.98 billion) by 2024. The share of traditional media (television, print, filmed entertainment, OOH, music, radio) stood at 57% of the media and entertainment sector revenues in 2023. According to a report by ICRA, the revenue for the print media industry is expected to grow by 8-10% in FY24.

The countrys entertainment and media industry is expected to see a growth of 9.7% annually in revenues to reach US$ 73.6 billion by 2027. In the year 2023, the revenue from subscriptions for over-the-top video platforms across India amounted to approximately US$ 0.88 billion. This was expected to peak at over US$ 1.2 billion by 2026.

According to Media Partners Asias Asia Pacific Video & Broadband Industry 2024 report, Indias video market, encompassing both TV and digital, is projected to grow from $13 billion in 2023 to $17 billion by 2028. The Indian media and entertainment sector posted a robust 19.9% growth in 2022 and crossed the Rs. 2 trillion (US$ 24 billion) mark in annual revenue for the first time led by a sharp jump in the digital advertising mop-up.

In 2024, the projected revenue in the Digital Media market in India is expected to reach US$ 10.07 billion. It is expected to contribute 38% to the overall advertising industry in India, on par with television. The OTT segment is likely to grow at a remarkable CAGR of 14.1% to reach Rs. 21,032 crore (US$ 2.55 billion) in 2026. Subscription services, which accounted for 90.5% of revenue in 2021, are projected to account for 95% of revenue by 2026.

By 2025, the number of connected smart televisions are expected to reach 40-50 million. 30% of the content viewed on these screens will be gaming, social media, short video, and content items produced exclusively for this audience by television, print and radio brands. By 2025, 600-650 million Indians, will consume short-form videos, with active users spending up to 55 to 60 minutes per day.

OTT video services market (video-on-demand and live) in India is likely to grow US$ 4.1 billion in 2024 and reach US$ 7 billion by 2027, driven by rapid developments in online platforms and increased demand for quality content among users.

Company Overview:

We have long history of telling stories that seek to influence and inspire the consumers, for customers such as our Broadcasters. We generate ratings and viewership on a consistent basis, for talent we offer the ability to become household names and pursue their ambitions.

The Company and its subsidiary are primarily into television content production, majorly operating in southern regional languages and also engaged in content for OTT platforms. Being in the business for more than two decades, people look upon us for top notch content.

We have made history by providing some of the best and most loved shows in all southern languages. Over the years, we have garnered numerous appreciation and awards for our productions, which are the testimonial of our hard work and dedication.

Radaan presently operates commissioned model of content production though Company prefers sponsorship model, thereby retaining the IP rights for future exploitation in other platforms. The Broadcasters business model is operating almost on funded basis. The opportunity hitherto available on exploitation of IP rights is now completely closed due to the change in the business model. This has hampered our digital footing on a daily basis. Company turned its concentration to produce more on OTT and to create its own space as like in TV sector. Over-the-top players are now more interested to invest for future growth, Company has pipelined original programs for digital streaming through various leading OTT players.

Television Program telecast during 2023-24:

Program Name and Language	Broadcasting Channel	Category
Ponni C/o Rani #	Kalaignar TV	Daily Series
Kizhakku Vaasal $	Vijay TV	Daily Series
Thayamma Kudumbathaar @	DD T amil	Daily Series

# telecast ended during the financial year

$ commenced during the month August 2023 and concluded in April 2024 @ commenced during the financial year

Human Resources

The Company fosters a performance-oriented work culture and offers amongst the best opportunities in the industry for professional as well as personal growth of its employees. Over the years, the company has built up a strong human resource structure. The Company has qualified and experienced team of professionals in creative, production, finance, legal & secretarial and HR & admin. The Company usually outsources talents and technicians for the project based on the project need and expectation outcome of the content.

Infrastructure

Radaan has own post production facilities to meet its own demand on execution of projects. These facilities comprise of seven edit suites including one film competent edit, five voice studios including one RR & FX and one exclusively for Final Mastering. The hardware and software have been sourced to meet quality demands from time to time. The companys state of the art non linear editing suites from Matrix and Discreet Logic run on powerful SGI and IBM workstations connected by a sophisticated broadband network.

Financial Overview:

The discussion and analysis given below relate to the audited financial statements of the Company and should be read in conjunction with them and related notes for the financial year ended 31st March 2024.

The financials of the only subsidiary company viz., M/s.Radaan Media Ventures Pte. Ltd., Singapore did not have any business / operational activities. However, the same has been considered for the consolidated financial statements and also included for the discussion and analysis.

Financial Position:

Property, Plant & Equipment

During the year, after depreciation property, plant & equipment stood at Rs.50.34 lakhs (Previous year Rs. 52.49). The Company added Rs.96.05 Lakhs on standalone basis, to its gross block of fixed assets, being borrowing cost capitalized for acquiring Land & Building (CommercialApartment Under-Construction). The Companys net block of fixed assets was Rs.1,844.22 Lakhs (Previous year Rs. 1,748.17 Lakhs) on standalone basis. The subsidiary company doesnt have any fixed assets and the consolidated position of fixed assets was same as of standalone figures.

Non-current Investment

Investments in Subsidiaries and Associates: - During the year 2023-24 and previous year 2022-23, there is no diminution in the carrying value of investment in Radaan Media Ventures Pte. Ltd. Consequently, the carrying value of those investments remains at Rs.9.35 Lakhs.

Other Investments: - The carrying value of other investment as at end of current financial year was Rs.0.30 Lakhs (previous year end Rs.72.38 Lakhs) both on standalone and consolidated basis.

Non-current loans and Advances

The carrying value of long term loans and advances as at the end of current financial year was stood at Rs. 20 Lakhs on standalone basis (previous year end Rs. 22.00 Lakhs). The consolidated sum of long-term loans and advances were same as of the standalone figures.

Other Non-current Financial assets

The carrying value of other non-current financial assets representing Gratuity and Leave Encashment Plans as at end of current financial year was Rs.48.46 Lakhs (previous year end Rs.43.62 Lakhs) both on standalone and consolidated basis.

Other Non-current Assets

Other non-current assets, comprising of prepaid taxes, statutory and other deposits stood at Rs.484.51 lakhs for the current year as compared to Rs.451.65 lakhs of the previous year. The consolidated sum of other non-current current assets was same as of the standalone figures.

Deferred Tax Assets

Net deferred tax assets resulted from timing difference of depreciation on fixed assets and provision on reversal of FCT, on standalone basis was Rs.44.82 lakhs as at the current balance sheet date against Rs.41.79 lakhs as at the previous balance sheet date. The subsidiary company has not recognized any deferred tax assets / liabilities and the consolidated sum was same as of the standalone figures.

Inventories

Inventories on standalone basis, representing work in progress were increased from Rs. 806.30 lakhs to Rs.1024.53 lakhs, and consolidated inventories were same as of the standalone figures.

Trade Receivable

All the debtors are generally considered good and realizable and necessary provision has been made for debts considered to be bad and doubtful. As at the end of current financial year debtors on standalone basis were increased to Rs.282.85 lakhs from Rs.103.77 lakhs, of which, debts outstanding for more than six months were at Rs.25.56 lakhs (net of provisions and written-off) and other debts were increased to Rs.257.29 lakhs from Rs.78.21 lakhs. The consolidated balance of trade receivables of current financial year was same as of the standalone figures.

Cash and Cash Equivalent:

As at the current balance sheet date, the cash and bank balances were decreased, on standalone basis to Rs.14.96 lakhs from Rs.20.54 lakhs, and on consolidated basis, the same as of standalone figures.

Short-term loans and Advances

Short term loans and advances as at the end of current financial year on standalone basis stood at Rs.25.71 lakhs as againstRs.25.41 lakhs of the previous year and on consolidated basis increased from Rs.6.95 lakhs to Rs.7.25 lakhs.

Other Current Assets

Other Current Assets of current financial year on standalone basis increased and stood at Rs.30.36 lakhs from Rs.15.52 lakhs and the consolidated figures remain as same as standalone figures.

Share Capital

There was no change in share capital of the Company during the financial year 2023-24.

Securities Premium

The securities premium was remained unchanged at Rs.753.66 lakhs, both in standalone and consolidated statements.

Retained Earnings:

The retained earnings at the end of current financial year on standalone basis was stood at (-) Rs.2,978.68 lakhs as against (-) Rs. 2,988.21 lakhs of previous year, resulting from current year operating losses. On consolidated basis the retained earnings at the end of current financial year was stood at (-) Rs.3,010.14 lakhs as against (-) Rs. 3018.00 lakhs of previous year balance sheet date.

Other Reserves:

The foreign currency translation reserve in the consolidated statements was stood at (-) Rs.4.52 lakhs as against previous financial year of (-) Rs.4.51 lakhs at the current balance sheet date. Capital reserve in the consolidated statements was increased from Rs.3.01 lakhs as at end of previous financial year to Rs.3.00 lakhs at the current balance sheet date.

Non-current Borrowings:

The non-current borrowings as on 31st March 2024 were increased from Rs.2296.64 lakhs to 2531.51(including current maturities of long term borrowings, unsecured loans from directors and borrowings from other corporate. The consolidated non-current borrowings were same as of the standalone position after adjusting inter- company transactions.

Other Non-current Financial liabilities

Other long term financial liabilities, comprising of customer advances and deposits were increased on standalone basis from Rs.322.32 lakhs to Rs.341.37 lakhs and the consolidated position was same as of standalone, since the subsidiary had no such liabilities.

Current Borrowings

The current borrowings secured loan towards working capital requirement was decreased from Rs.661.58 lakhs as on previous year to Rs.562.55 lakhs as on 31st March 2024. Since the subsidiary company doesnt have any working capital borrowings other than loan from holding company, which was adjusted for inter-company transaction, the consolidated current borrowings were same as of standalone position.

Trade payables

The trade payables comprising of sundry creditors as at 31st March 2024, on standalone basis increased from Rs. 609.06 lakhs to Rs.880.26 lakhs, and on consolidate basis increased from Rs. 612.55 lakhs to Rs.885.43 lakhs.

Other Current Financial liabilities

Other current financial liabilities comprising of salary payable, taxes and PF/ESI payable was increased on standalone basis from Rs.173.23 lakhs as on previous balance sheet date to Rs.358.32 lakhs as on current balance sheet date. The consolidated position of other current liabilities was same as of standalone position.

Financial Performance:

Revenue

The total income for the current financial year was increased to Rs.2137.50 lakhs as against Rs. 1244.48 lakhs of the previous year on standalone. On consolidation for the current financial year was increased to Rs.2137.50 lakhs as against Rs.1245.42 of the previous year. The standalone income from operation for the financial year was Rs.2133.17 lakhs as against Rs. 1243.37 lakhs, and other income was stood at Rs.4.33 lakhs for the current year as against Rs. 1.11 lakhs of the previous year. The other income of the previous year was mainly on account of other miscellaneous income. As there was no change in the operational income on consolidation, the other income was stood at Rs.4.33 lakhs for the current year as against Rs.2.05 lakhs of the previous year.

Expenses

The operating expenses both in standalone and consolidated basis were increased during the year, to Rs. 1555.81 lakhs from Rs.808.13 lakhs. The administration expenses incurred was decreased from Rs. 359.25 lakhs to Rs.316.04 lakhs and on consolidation of the subsidiary company, the administration expenses were Rs. 359.26 lakhs during the previous financial year as against Rs.317.71 lakhs for the current financial year.

The current finance cost for the year was stood at Rs.306.36 lakhs as against Rs. 242.80 lakhs of the previous year, for the standalone and on consolidated basis it stood at Rs.306.38 as against Rs. 242.86 lakhs of the previous year.

Depreciation and amortization expense for the year was decreased on standalone basis from Rs.7.11 lakhs to Rs.5.69 lakhs. As the subsidiary company has no fixed assets, the impact on consolidation of depreciation and amortization expenses was nil and reflects the same figures.

Profitability

During the year, on standalone basis, Operating Loss before Interest, Depreciation, Tax and Exceptional Items (EBITDA) was increased to (Rs.265.63 Lakhs), from the operating loss (EBITDA) of (Rs.77.10 Lakhs) of the previous year, and on consolidated basis, the operating losses (EBITDA) during the year was increased and stood at (Rs.263.96 Lakhs) from the operating loss (EBITDA) of (Rs.78.04 Lakhs) of the previous year.

Net Loss after Tax (PAT) of the Company for the year on standalone basis was Rs.43.38 Lakhs, as against net loss (PAT) of Rs. 169.81 Lakhs of the previous year, and on consolidated basis, the Net Loss (PAT) during the current year was stood at Rs.45.047 Lakhs as against net loss (PAT) of Rs. 168.93 Lakhs of the previous year.

Basic and Diluted Earnings / (Loss) Per Share [EPS] computed based on number of equity shares outstanding, as on the Balance Sheet date, is a profit of Rs.0.02 per share [Previous year: Loss of Rs.0.31 per share] both on standalone and consolidated basis.

Cash Flow

Cash flow from operating activities

In the current financial year the company on standalone basis generated a net cash of Rs.322.05 lakhs in operating activities, as against utilization of Rs. 147.95 lakhs in previous financial year. On consolidated basis the net cash generated in operating activity was Rs.322.05 lakhs as against cash utilization of Rs. 147.92 lakhs. Other components are provided in cash flow statement.

Cash flow from investing activities

The company has made both on standalone and consolidated basis, a net cash outflow of Rs.4.59 lakh during the year against Rs. 68.21 lakh during the previous year on investing activities. Other components are provided in cash flow statement.

Cash flow from financing activities

The net cash outflow on standalone basis from financing activities during the current financial year was Rs.323.04 lakhs as against inflow of Rs. 223.35 lakhs during the previous year. On consolidated basis the net cash outflow from financing activities was Rs.323.06 lakhs against inflow of Rs. 223.28 lakhs during the previous year. Other components are provided in cash flow statement.

Key Financial Ratios - The detailed financial ratio be referred to in Note no: 49 E in the notes on account of Standalone financials together with basis and reasoning in the case of 25% variation between previous year and current year ratio.

SCOT Analysis

Strengths	Challenges:
a. Good HR, among others highly talented Creative Team	a. Controlling cost of production
b. State of the art infrastructure	b. Augmentation of customer base
c. Successful Track Record in Tele-serials	c. Dependence on limited talents for creative content
d. Brand Value	d. Retention of talent
e. Fully integrated operations	e. Changing tastes of the viewers / audience
Threats:	Opportunities:
a. Non-availability of adequate skilled Technicians	a. Emerging OTT platforms
b. Non-availability of fully reliable viewership rating system	b. Expansion of new media trend and usage
c. Low entry barriers	c. Increased no of TV content viewers across various platforms
d. Changing government policies	d. Increasing Indian Diaspora across the world
e. Piracy	e. Improved technology thereby increased access

Internal Control

The Company has strong internal control system commensurating with its size and nature of operation which provide reliable financial and operational information, compliance of applicable statutes, safeguarding of assets, executing transactions with proper authorizations and ensuring compliance of corporate policies. Highest standard of internal control is ensured by regular audit by the internal auditors. The significant observations made in the internal audit reports on internal control measures, if any, are implemented based on the recommendation of Audit Committee of the Board. The statutory auditors of the Company have issued an attestation report on the internal control over financial reporting as stated under section 143 of the Companies Act, 2013.

Risks and concerns

The company depends on deliverables of standard content and exploitation. Relationship with broadcasting channel and any difference of understanding could have material adverse effect on production and telecast of programs.

Company generates revenues from production and assignment of content on a funded basis, which slashes away IP rights of content and thereby denying exploitation of content in all means. Popularity and maintain / attracting viewership are a key for success and any failure could harm business or prevent from growing, which either directly or indirectly could have a material adverse effect on the business prospects, financial condition and results of operations. The viewership rating may also dependent cnmeasurement methodologies which is an external factor to the company.

The companys business depends in part on the adequacy, enforceability and maintenance of intellectual property rights in the entertainment products and services. Piracy of the Companys content, products and intellectual property could result in a reduction of the revenues that the Company receives from the legitimate sale, licensing and distribution of its content and products. The Company devotes substantial efforts to protecting its content, products and intellectual property, but there can be no assurance that the Companys efforts to enforce its rights and combat piracy will be successful.

The substantial revenues for content is generated from the sale of advertising spots by the channel, subscribers for OTT platforms and a decrease in advertising expenditures and drastic fall in subscribers could reduce the demand for the Content, as a cascading effect. Declines in consumer spending due to weak economic conditions could also indirectly negatively impact the advertising revenues by causing downward pricing pressure on advertising because advertisers may not perceive as much value from advertising if consumers are purchasing fewer of their products or services.

The Companys businesses are subject to a variety of laws and regulations. The Company could incur substantial costs to comply with new laws, regulations or policies or substantial penalties or other liabilities if it fails to comply with them. In addition, if there are changes in laws that provide protections that the Company relies on in conducting its business, it would subject the Company to greater risk of liability and could increase its costs of compliance.

	For and on behalf of Board of Directors
Date : 14th August, 2024 Place: Chennai	Sd/-	Sd/-
	V.Selvaraj	R.Radikaa Sarathkumar
	(DIN : 00052444)	(DIN : 00238371)
	Non-Executive Chairman	Managing Director