The Honble National Company Law Tribunal, Mumbai Bench,
(“NCLT”), had vide its order dated December 20, 2019 (“Admission
Order”) admitted the application for the initiation of the Corporate Insolvency
Resolution Process (“CIRP”) of Sri Adhikari Brothers Television Network Limited
(“Company”) in terms of the Insolvency and Bankruptcy Code, 2016
(“Code”) read with the rules and regulations framed thereunder, as amended from
time to time. Further, the NCLT vide its Order dated December 20, 2019 (“Appointment
Order”) has appointed Mr. Vijendra Kumar Jain, having IP registration No.
IBBI/IPA-004/IP- P00721/2017-18/11253, as the Interim Resolution Professional
(“IRP”) for the CIRP of the Company, and he was subsequently confirmed as
Resolution Professional (“RP”) in the first meeting of the Committee of
Creditors (CoC) held on 15 January, 2020.
The Committee of Creditors approved the Liquidation of the Company in
the COC meeting held on 24 August, 2021. Pursuant to this approval, Honble NCLT approved
the liquidation vide order dated 16th December 2021 and the liquidator, namely "Mr.
Ashish Vyas" was appointed vide modification order dated 4 January, 2022. The
modified liquidation order was uploaded and received on 21st January 2022.
An appeal was filed by the erstwhile management with Honble
NCLAT, challenging the liquidation order passed by Honble NCLT, Mumbai and for
consideration of the Resolution Plan filed by the Appellant. The Honble NCLAT passed
an order dated 31st January, 2022, whereby the Liquidation of the Company was stayed and
it was directed that the Resolution Plan filed by the erstwhile management be presented to
the CoC.
Upon the directions received from the NCLAT, the Resolution
Professional (RP) had placed the updated Resolution Plan dated 16 August, 2022 submitted
by M/s. SAB Events & Governance Now Media Ltd, M/s. Marvel Media Pvt Ltd, Mr. Kailash
Adhikari and Mr. Ravi Adhikari (Consortium) for Sri Adhikari Brothers Television Network
Limited before the CoC of the Corporate Debtor for e-voting. The said resolution plan was
approved with 93.5% voting in the 9 Meeting of the Committee of Creditors of Sri Adhikari
Brothers Television Network Limited. Approved. After obtaining majority approval from
Creditors the Resolution Plan has been submitted before NCLT for its approval.
Further Note that the Resolution Professional does not have any control
over the books of accounts of the Subsidiary, Westwind Realtors Private Limited and even
after repetitive reminder the results of the Subsidiary, has not been provided to the RP.
Forward-looking statements
The Company is in Corporate Insolvency Resolution Process. Resolution
Professional (RP) had placed the Resolution Plan dated 16 August, 2022 submitted by M/s.
SAB Events & Governance Now Media Ltd, M/s. Marvel Media Pvt Ltd, Mr. Kailash Adhikari
and Mr. Ravi Adhikari (Consortium) before the CoC of the Corporate Debtor for e-voting.
The said resolution plan was approved with 93.5% voting in the 9th Meeting of the
Committee of Creditors of Sri Adhikari Brothers Television Network Limited. Approved.
After obtaining majority approval from Creditors the Resolution Plan has been submitted
before NCLT for its approval. The future outlook of the Company will depend on approval of
Resolution Plan by Honble NCLT.
Indian Macroeconomics scenario
The World Bank states that after real GDP contracted in FY 2020-21 due
to the COVID-19 pandemic, growth bounced back strongly in FY 2021-22, supported by
accommodative monetary and fiscal policies and wide vaccine coverage. Consequently, in
2022, India emerged as one of the fastest growing economies in the world, despite
significant challenges in the global environment including renewed disruptions of supply
lines following the rise in geopolitical tensions, the synchronized tightening of global
monetary policies, and inflationary pressures.
In FY 2022-23, Indias real GDP expanded at an estimated 6.9
percent. Growth was underpinned by robust domestic demand, strong investment activity
bolstered by the governments push for investment in infrastructure, and buoyant
private consumption, particularly among higher income earners. The composition of domestic
demand also changed, with government consumption being lower due to fiscal consolidation.
Media and Entertainment Industry
All segments of the M&E sector in India experienced significant
growth in 2022, leading to a total revenue increase of INR 348 Billion (19.9% YoY) to
reach INR 2.1 trillion. The industry experienced growth momentum across both traditional
media and digital, online gaming and VFX segments. This growth was driven by technology
advancement with widespread adoption of smartphones and internet, globalization, content
diversity, evolving generational behavior and supporting Government policies. With such
strong momentum, the industry is well-positioned to achieve its projected growth rate of
11.5% in 2023, reaching INR 2.34 trillion and a CAGR of 10.5% to reach INR 2.83 trillion
by 2025.
Traditional media which includes television, print, filmed
entertainment, OOH, music, radio, contributed to 58% of M&E sector revenues in 2022,
while digital media emerged as the second-strongest segment, contributing INR 132 Billion
and increasing its share of the M&E sector from 16% in 2019 to 27% in 2022.
Content Creation
India is set to have the largest base of social media content creators
in 2023, with the number reaching over 100 million this year, said a report published by
influencer marketing firm Zefmo. It is predicted that the country had at least 80 million
creators in 2022.
According to Zefmos report, the organized influencer marketing
sector is set to reach 3000 crore in FY23-24, while revenue share of micro-influencers
will increase from 9% in FY 2022-23 to 14% in FY 2023-24. It also noted that the payouts
to influencers from brand campaigns is growing, as are the length of brand campaigns
themselves. The October report from Kalaari had said that only about 1.5 lakh of
Indias creators were able to earn over $200 per month.
Typically, a micro-influencer is someone who has between 1,000 and
100,000 followers.
Television:
Television advertising grew 2% to end 2022 just behind its 2019 levels,
on the back of volume growth. Subscription revenue continued to fall for the third year in
a row, experiencing a 4% de-growth due to a reduction of five million pay TV homes and
stagnant consumer-end ARPUs. While linear viewership declined 7% over 2021, 8 to 10
million smart TVs connected to the internet each day, up from around 5 million in 2021.
Print:
The year 2022 was a period of recovery as well as a challenging one for
the print industry. While on one hand, a majority of players surpassed pre-Covid levels in
terms of advertising revenue in several markets, a rise in newsprint prices did have an
adverse impact on the business.
However, as we begin 2023 industry leaders are optimistic that the
sectors challenging period has passed. Newsprint prices too have stabilised and is likely
to drop further in the upcoming months.
The print segment grew 10% in 2022 to reach 85% of the prepandemic
levels. Advertising revenues grew 13% in 2022. Overall ad insertion volumes increased 16%
over 2021. However, advertising revenues were still 17% below preCOVID-19 levels as rates
remained impacted. Advertising in English publications recovered to 71% of pre COVID-19
levels, while advertising in Hindi and regional language publications recovered to around
90%. Share of advertising to total income of print segment stood at 67%, up from 63% in
2020
Digital Industry:
Digital media grew 30% in 2022.
Telecom subscriptions remained stable at 1.17 billion in 2022. Internet
penetration increased by 4% to 866 million subscriptions in December 2022. With over 800
million broadband subscriptions, India has the second largest broadband subscriber base in
the world, after China. Smartphone users reached 538 million in 2022. Growth has tapered
down since mid-2021 since the average cost of buying a smartphone increased, resulting in
just 35 million new smartphone additions during 2022. 32 million Indian households had a
wired broadband connection. On average, 25 million smart TVs connected to the internet
each month. However not more than 8 to 10 million of them connected to the internet on a
daily basis.
Digitalized communities and social engagement
Digitalized communities are becoming more prominent, with brands and
platforms integrating the ‘go live feature into their marketing strategies to
build online communities. Responsibility is becoming increasingly important, with
platforms offering opportunities to share relevant content and measure its impact. Social
algorithms are enabling users to engage in ways that go beyond the follower count.
Growth Outlook:
The Indian TV industry has seen moderate growth in 2022. TV channel
count stood at a total of 885, out of which 353 were free and 532 were paid. This momentum
can be attributed to increasing creativity in TV programming, rising demand and a boost in
budgets for feature films, resulting in improved quality. Moreover, the industry has
welcomed new talent and broadened its scope by being open to Indian English writers. The
industry is further benefiting from increased access to broadband internet across the
country. Thereby enabling the broadcasters building stronger subscription revenue products
through customer centric bundles.
Company Profile:
Sri Adhikari Brothers Television Network Limited (SABTNL) is a listed
public-limited Company incorporated in 1994. The Company is a media company and operates
in the field of content production and syndication of content to various broadcasters,
aggregators and satellite networks.
Financial Performance - Overview
During the year under review, the Company incurred Loss before tax of
Rs. 2,126.64 Lakh as against Loss before tax of Rs. 2,126.15 Lakh in the previous
financial year. The Loss after tax was Rs. 2,126.64 Lakh during the FY 2022-23 as against
Loss after tax of Rs. 2,124.50 Lakh in the previous financial year.
Critical accounting policies:
The principles of revenue recognition are as under:
Revenue from sale of program/content rights is recognized when the
relevant program/content is delivered.
In respect of Interest Income, it is recognized on a time proportion
basis taking into account the amount outstanding and the rate applicable.
Segment wise Performance
The Company is operating in single primary business segment i.e.
Content Production and Syndication. Accordingly, no segment reporting as per Accounting
Standard 17.
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 therefor, including:
| Ratios |
2022-23 |
2021-22 |
| Debtors Turnover |
Note 1 |
Note 1 |
| Inventory Turnover |
Note 1 |
Note 1 |
| Interest Coverage Ratio |
Negative |
Negative |
| Current Ratio |
0.03 |
0.02 |
| Debt Equity Ratio |
(1.82) |
(2.31) |
| Operating Profit Margin (%) |
Note 1 |
Note 1 |
| Net Profit Margin (%) |
Note 1 |
Note1 |
Note 1: The Company did not generate any sales in the year 2022-23
& 2021-2022 hence it is not possible to calculate ratios related to sales such as
Debtor Turnover, Inventory Turnover, Operating Margin and Net Profit Margin.
Note 2: Debt Equity Ratio is calculated as Total Liabilities (Current+
Non-current)/ Total Equity. There is more than 25% change in Debut Equity ratio due to
loss incurred in current year.
OPPORTUNITIES AND THREAT
The Company is currently under Corporate Insolvency and Resolution
Process.
Opportunities:
Largest Industry: The Indian film industry is one of the largest
globally with a history of steady growth. With films being the most popular form of mass
entertainment in India, the film industry has witnessed robust double-digit growth over
the past decade.
Learning Curve: The immense experience of the promoters in the media
industry has proved to be an added advantage in understanding the taste of audience and
producing differentiated contents.
Digitization and Convergence: Digital platforms like DTH, digital
cable, IPTV and convergence media is expected to transform the landscape of the industry
by enabling players to leverage on cross media synergies and attract a whole set of new
viewers. Each platform is expected to create its own demand for audio and video content.
Challenges and Threats:
External Risk:
Competition from other players Company operates in highly competitive
environment across all its business segments that are subject to innovations, changes and
varying levels of resources available to each player across segment. Failure to remain
ahead of the curve or respond to competition may harm the business.
Differentiated Products: Due to increase in the number of production
house, the project produced needs to be unique to attract viewers. Also, with a view to
produce differentiated content, the production cost also increases.
Production cost: The risk of getting the production getting extended
the projected date or the risk of over spending during production. It requires large
outlays of money that cannot be recovered if the project fails at any stage. Delay in
planned release also shoots the whole production cost high.
Piracy: Piracy continues to be one of the major issues affecting the
Indian film industry with an annual loss of substantial revenues. Over time, movie piracy
has shifted from CDs and DVDs to online platforms. The modus-operandi involves use of
sophisticated smartphones and camcorders to record films in theatres and then publish them
on websites. With increased penetration of smartphone devices and cheaper data charges,
the situation is becoming worse each year.
Internal risk:
Change in Consumer Preference Risks:
The taste of the viewer is changing rapidly; accordingly, the
production has to match with the expectation of the audience. Many a times even after much
work on the project, the project doesnt appeal the target audience as the target
audience preferences are bound to change. The level of creativity required for the
audience targeted varies with the available options to the consumers.
Technological Risks:
Rapidly evolving technology and changing consumer preferences can make
it difficult to attract and retain customers.
Regulatory Matters:
The business may have a positive or a negative impact on the revenues
in future due to changes in the regulatory framework and tax laws as compared to the
current scenario.
Consumer analytics has become indispensable: Analytics is being used
extensively across the M & E now, as the organisations look to evolve their business
models and address various challenges emerging in competitive markets. Analytics is being
used to gauge the effectiveness of marketing efforts and thus helps in strategizing
accordingly to achieve maximum Return on Marketing Investment (ROMI). With the evolution
in technology, data availability increases and organisations need to invest significantly
in gathering, analyzing and interpreting data to optimise customer engagement.
Artist attrition risk:
The reason for which the Companys content is preferred by the
audience includes artist attraction also. These artists are an important part for the
content produced by the Company. The attrition of these artists could affect the consumer
preferences.
Revenue Risks
The Company earns revenue either by selling commissioned programs or
Syndication of various content to various broadcasters, aggregators and satellite
networks.
The sustainability of the programs is mainly dependent on the concept,
content and the technical expertise. Apart from this, Television Rating Points (TRP) is
one of the key indicators, which decide the popularity of the program as well as
sustainability of the program.
Internal Controls and Adequacy of those controls
RP cannot comment on the adequacy of the internal controls of the
Company as the Company is currently under CIRP and it does not have any operations.
Human Resources
As on March 31, 2023, the company has 1 permanent employees on its
payroll.
Exports
The Company is dealing in the contents and mainly in the domestic
market
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