COMPANY OVERVIEW:
Sungold Media and Entertainment Limited engaged in the business as entertainment
company and to organize, equip, arrange, write, manage, control, run, exhibit, distribute,
direct, provide and to produce, promote, project, participate, manipulate, treat, process,
prepare, alter, develop, expose, edit, make, remake, display, print, reprint, convert,
finish, buy, sell, run, import, export, and to act as syndication, broker, agent,
co-ordinator, distributor, organiser, proprietor, movie makers, copyright owners, video
right owners, audio right owners, theatre owners, dubbing right owners, cinema studio
owners, dance, music and provide complete technical. To own, undertake, carry on and
operate directly or indirectly in India and abroad the business of editors, publishing
producing, trading, commercial and industrial houses or for public in general in the
interest of public relations which may include any all subject of common interest and to
carry on the business of multilevel marketing , network marketing , digital marketing of
products/services/consultancy and other forms of marketing and electronic services or
devices including applications relating to media and entertainment.
MEDIA & ENTERTAINMENT INDUSTRY IN THE INDIAN ECONOMY:
The Indian media and entertainment (M&E) industry is a promising sector for the
economy and is making significant progress in terms of growth. The rise in digital
adoption, fast and affordable internet, a large smartphone and broadband userbase, and a
rise in sales of consumer durables like smartphones have contributed to the growth of the
sector. With "digital" holding the pen and outpacing all other segments,
sections like OTT, gaming, animation, and VFX are leading the M&E sector and are
expected to rule the market in the coming years. Indian OTT platforms are in the scaling
stage with strong subscription growth and significant investments in premium and original
content.
As per Crisil Report, during the year 2023-2024 Indian media and entertainment sector
is likely to grow 12-14 per cent to clock Rs 1.6 lakh crore revenue in FY24. "After
the pandemic, digital has become the second-largest segment after TV in terms of ad
spends. Together, they account for over three-fourths of the ad revenue for the M&E
sector, followed by the print segment with a one-fifth share."
As per the latest report by the PwC, India’s Media and entertainment Industry is
expected to reach Rs. 4,30,401 crores (US$ 53.99 billion) by 2026. Advertising revenue in
India is projected to reach Rs. 394 billion (US$ 5.42 billion) by 2024 .Television would
account for 40% of the Indian media market in 2024, followed by print media (13%), digital
advertising (12%), cinema (9%), and the OTT and gaming industries (8%).
Within the M&E sector, Animation, Visual Effects, Gaming and Comic (AVGC) sector is
growing at a rate of ~29%, while the audio-visual sector and services is rising at the
rate ~25%; is recognised as of one of the champion sectors by the Government of India. The
AVGC sector is estimated to grow at ~9% to reach ~Rs. 3 lakh crore (US$ 43.93 billion) by
2024, stated Union Minister of Commerce & Industry, Consumer Affairs & Food &
Public Distribution and Textiles.
Overall Television segment is expected to reach 826 Billion by 2024 growing at a CAGR
of 5% while the advertising segment is expected to grow at a CAGR of 8% and reach 394
Billion during the same period. This growth in television advertising will be driven by
entry of new advertisers, existing brands advertising on television, upward correction in
regional advertising rates and availability of new and fresh content.
The Indian media and entertainment industry is one of the fastest growing media
industries in the world and is projected to reach USD 100 billion by 2030, said by Apurva
Chandra, Secretary, Ministry of Information and Broadcasting (MIB). There is tremendous
growth in the Indian Media and Entertainment Industry. With the rising consumer demand and
improving advertising revenues, the Indian M&E (Media & Entertainment) is on the
cusp of a strong phase of growth. The Indian Industry is driven by increasing digitization
and higher internet usage over the last decade. The Internet has become a major source of
entertainment for a majority of people.
MARKETING INITIATIVES:
The Company has been working across regions to make brand in the industry. It strives
to differentiate itself from the others with its innovative ideas and brilliant execution.
The Companys mission is to drive engagement through trendy, youthful and quality content.
We are also actively engaged in promoting and developing new initiatives that engage
audience.
RECENT DEVELOPMENT/INVESTMENTS:
• Non-fungible tokens (NFTs) are emerging as a driving force for media companies
to expand their content and IP engagement among their audience. This is triggering a
future monetization model with markets maturing and the media sector welcoming these
changes. Media and entertainment companies are collaborating and forming relationships
with NFT specialists and marketplaces to design offerings that empower consumers to engage
in a new way with their favorite characters, movies, and TV show.
• Media and entertainment corporations are embracing and integrating emerging
technologies to capture the met averse mainstream and offer their audiences meaningful
viewing experiences.
• There has been a rise in video streaming platforms. In the last five years,
online searches for Amazon Prime Video have increased by 231%. Video streaming (SVoD)
revenue is anticipated to rise by over $139 billion per year by 2027. Hence it is no
surprise that many media companies are introducing new streaming services. Paid over-the-
top (OTT) platforms are emerging with incumbents, including Netflix, Hulu, and Amazon
Prime Video.
• Social media platforms are embracing their algorithms to boost engagement. The
live social media events are helping to spill over to other platforms, thus leading to the
creation of new communities. Consumers can join global communities that align with their
personal views on sustainability and responsibility. In 2023, brands will understand and
integrate this motivation to form online communities and encourage engagement and
adaptations. This will assist them in engaging with their consumers for future campaigns
and connecting with their chosen audience.
GOVERNMENT INITIATIVES:
• Government of India has taken various initiatives like 100 per cent FDI allowed
in teleports, multi-system operators, mobile TV, cable, and direct-to-home (DTH) satellite
platforms; 100 per cent FDI allowed in publishing/printing of scientific and technical
magazines/ speciality journals/ Periodicals under the government route and granting
industry status to the film industry for easy access to institutional finance, have
provided a boost to the sector.
• The governments plans to come out with a "Model Theatre Policy",
"single-window clearance for theatres", and set up an animation, visual effects,
gaming and comics (AVGC) task force indicate their intent to focus on the sector.
FUTURE OUTLOOK:
• In Indian economy the Indian Media and Entertainment industry is a growing
sector backed by rising consumer demand and improving advertising revenues. Over the last
decade, Indian Media and Entertainment industry has been driven by increasing dispensation
and higher internet usage.
• Mobile is continuing to grow and by 2023 is expected to account for about 81
percent (nearly $130 billion) of all online advertising, with mobile video advertising
becoming three times the size of non-mobile video advertising, according to a PwC report.
Television advertising revenue will have little growth in the coming years, about 0.3
percent by 2023, and radio advertising will have only marginally better growth by
comparison, of about 0.7 percent (to $18.4 billion) by 2023.
• Broadcast television will continue to experience significant changes as
television continues to be more interactive and customized for viewers. In the last
decade, the mandated change to digitized broadcasting coupled with the recession
diminished broadcasters’ revenue—the decrease in program spending led to layoffs
and a decline in employment. The trend toward online viewership of TV is expected to
continue, yet advertisers will continue to spend on TV advertising due to its ongoing
effectiveness. Online TV advertising spend was expected to grow from about $5 billion in
2019 to $5.8 billion in 2023. Advertisers will continue to face intense competition to
gain viewers attention through various media and mobile devices. By 2023, there will be
zero compound annual growth overall in the broadcast TV advertising sector and just .6
percent growth for cable networks, according to PwC.
• Indian OTT sector in the ‘scaling stage’ with strong subscription
growth and high investment in premium and original content. Despite Covid challenges,
India’s media and entertainment industry has revived to pre-Covid levels and is
expected to grow to $55-70 billion by 2030 at 10-12 per cent CAGR, according to a report
released by BCG-CII. The growth will be driven mainly by the OTT, gaming, animation and
VFX segments.
INTERNAL CONTROL:
The Company has a robust Internal controls framework, commensurate with the size of its
operations, geographical spread and changing risk complexity, impacted by varying internal
and external factors. The Companys internal control systems comprises policies and
procedures designed to ensure sound management of its operations, safekeeping of its
assets, optimal utilisation of resources, reliability of its financial information, and
compliance. The Company has appointed Chartered Accountant, to give independent,
objective, and reasonable assurance on the sufficiency and effectiveness of the Internal
Controls. The audit firm evaluates and tests the effectiveness and appropriateness of
internal controls on a regular basis. The Audit Committee is informed of significant audit
findings after the evaluation, and measures taken thereof. The various process owners
implement corrective measures in their respective domains based on internal audit results,
thereby strengthening controls. The Audit Committee approves the yearly internal audit
plan, examines the internal control systems sufficiency and effectiveness, assesses key
audit observations, and supervises the implementation of audit.
HUMAN RESOURCES:
The Company believes that employees are at the core of its strategies to achieve all
present and future organizational goals. The Company has consciously developed a positive
working atmosphere that provides a satisfying work environment, promotes career
progression and encourages employee safety. In the current financial year, we have focused
our efforts on enhanced learning and development programs, enhanced communications, making
our policies more employee friendly, and overall nurturing a culture of collaboration and
teamwork. Our concerted efforts to enable the growth of our employees along with the
Company, has helped us significantly in ensuring enhanced employee satisfaction in
Company.
OPPORTUNITIES/ ADVANTAGES :
The Indian media and entertainment (M&E) industry is one of the fastest growing
industries in the country. Its various segments, film, television, advertising, print and
digital have witnessed a tremendous growth in the last few years. The industry is highly
driven by strong consumption in non-metro and small cities, intense emergence of regional
media and burgeoning new media businesses and formats.
• ROBUST DEMAND:
According to a report published by IAMAI and Kantar Research, India internet users are
expected to reach 900 million by 2025, from ~622 million internet users in 2020,
increasing at a CAGR of 45% until 2025. The
advertising-based video on demand (AVoD) segment is expected to rise at a CAGR of 24%
to reach US$ 2.6 billion by 2025.
• ATTRACTIVE OPPORTUNITIES:
According to a FICCI-EY report, within the M&E sector, TV is expected to remain the
largest segment and likely to post a CAGR of 7% to Rs. 847 billion (US$ 12.01 billion) by
2023. The Indian mobile gaming market is poised to reach US$ 7 billion, in value, by 2025.
The Company foresee ample opportunities in Media & Entertainment industry. The
rapid urbanization is likely to boost metaphorical growth in years to come. All these
would ultimately generate a demand to boost local economies. Further, the various
government initiatives envisaging providing an experience to its citizen shall also offer
opportunity to the M&E player to grow in years to come. The envisaged opportunities
are discussed further. Your Company is favourably placed to participate in the
opportunities arising from the home-state that is considered the Growth Engine of India.
THREATS & RISKS:
1. Copyright and piracy issues
These challenges have been in the industry for a very long time now and it is very
difficult to bring justice even if the laws are all stringent and in place. With the rise
of digitisation, more big data problems have emerged such as sharing of account
information through which multiple users can view content from the same account, using the
password. It then becomes difficult for the production houses to categorise what genre of
content is favourable to an adult and to a child. Pinpointing on the demographic details
of an account user also becomes extremely difficult. Many people have started using the
content available on online platforms for their own use; pirate and spoof this data to
make it look like their own new creation and upload it to generate revenue. This is
another major issue faced by, in particular, the entertainment industry.
2. Cyber Attack Chatter
Attackers frequently use surface, deep and dark web chatrooms and forums to plan
attacks, choose targets and sell hacking services. This chatter can become useful
intelligence for media and entertainment agencies looking to thwart attacks on talent,
fans and brand before they occur. Early warning of stolen credentials, account hacking
attempts and impersonations is necessary to protect media brands and talent alike. Within
the media and entertainment industry, ZeroFox identified 450,000 incidents related to
cyber attack chatter within the specified time period.
3. Challenges with respect to taxation
Each business has to pay taxes, to the local government, to the state and the centre.
The Income Tax department comes very heavily on the defaulters, from huge amounts of fines
to even imprisonment. Taxation is a very slippery path and it is very important to be
cautious as to how the media industry grows and grows safely (without having being a
target to the tax structure). Hence it is very important that this industry has a very
sound section to manage taxes.
4. Adaptation challenges
Only a few percentages of players in the media industry are welcoming new technologies
to their area of work, while the majority are hesitant and are concerned about the
backfire or the trouble these new "uncommon" solutions will cause. This results
in dependency on outdated methodologies making it difficult for the players to communicate
business between themselves. Use of terms like "big data", "artificial
intelligence", "automation" etc have increased now more than ever,
particularly as reporting tools and yet we are resilient in adapting these technologies
for our benefit.
The above Management Discussion and Analysis Report is a forward looking Statement
based on the Company’s projections, estimates, expectations and perceptions within
the meaning of applicable Securities Law and Regulations. These statements reflect the
Company’s current views with respect to the future events and are subject to risks
and uncertainties. Actual results may vary materially from those projected here.
Significant factors that could make a difference to the Company’s operations include
domestic and international economic conditions, changes in Government regulations, tax
regimes and other statutes.
5. CAUTIONARY STATEMENTS:
Certain statements in the MDA section concerning future prospects may be
forward-looking statements which involve a number of underlying identified / non
identified risks and uncertainties that could cause actual results to differ materially.
In addition to the changes in the macro-environment, the CoVID-19 pandemic may pose
unforeseen, unprecedented, unascertainable and constantly evolving risk(s), inter-alia, to
the Company and the environment in which it operates. These forward-looking statements
represent only the Company’s current intentions, beliefs or expectations, and any
forward- looking statement speaks only as of the date on which it was made. The Company
assumes no obligation to revise or update any forward-looking statements, whether as a
result of new information, future events, or otherwise.
Disclaimer:
All data used in the MDAR have been primarily based on publicly available sources, and
discrepancies, if any, are incidental and unintentional.
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