TV Vision Ltd Management Discussions

ANNEXUREI

Indian Macroeconomics scenario

(Source: FICCI report on Media & Entertainment dated March 2024)

Indias media & entertainment sector is innovating for the future. Indian M&E sector grew by 8% in 2023, reaching INR 2.3 trillion (US$ 27.9 billion), 21% above its pre-pandemic levels in 2019.

New media, comprising digital and online gaming, emerged as the frontrunner in growth, contributing INR 122 billion of the overall increase of INR 173 billion, and consequently, increased its contribution to the M&E sector from 20% in 2019 to 38% in 2023.

Experiential (outside the home and interactive) segments continued their strong growth in 2023, and consequently, online gaming, filmed entertainment, live events, and OOH media segments grew at a combined 18%, contributing 48% of the total growth. With the exception of television, which experienced a marginal decline of 2%, all other segments experienced positive growth in 2023.

Media and Entertainment Industry:

(Source: FICCI report on Media & Entertainment dated March 2024)

India is a unique market where the M&E sector distinguishes itself through a harmonious fusion of tradition and innovation. Here, technology-enhanced entertainment channels, OTT platforms, AI-powered newsreaders, traditional print media, flagship films, and short-form content not only coexist but thrive together, showcasing the vibrant diversity and dynamic growth of our industry. The Government of Indias thrust on improving digital infrastructure in the country combined with our ambition to be at the forefront of the next big technological thrust in media and entertainment, our sector is primed for a massive transformation.

Key highlights:

Indian advertising reached INR1.1 trillion:

Digital advertising grew 15% in 2023 and surpassed traditional advertising for the first time. Social, sports, e-commerce and SME advertisers will continue to drive the growth in the sector moving forward.

A billion screens by 2030:

India is expected to have almost a billion active screens by 2030. Of these, around 240 million will be large (TV, laptop, PC), while the remaining will be small (mobile phones, phablets). Pay TV, Free TV, and Connected TV are expected to emerge as significant markets, each comprising between 60 to 80 million homes. The 3:1 ratio in favour of mobile phones will sustain the demand for short videos and social commerce.

Online gaming is expected to reach INR 388 billion by 2026:

The segment will see growth across all its verticals, including esports, fantasy sports, casual gaming, and other games of skill to reach an estimated 150 million daily use INR Revenue growth will be led by mobile-based real-money gaming and casual gaming.

Market Dynamics:

According to FICCI report, The Indian Media and Entertainment sector that touched Rs.2.3 trillion in 2023, is expected to grow at a compound annual growth rate (CAGR) of 10% to reach Rs.3.08 trillion by 2026.

However, the growth of Rs.17,300 crore last year was half of the Rs.37,100 crore growth that took place in 2022, mainly due to headwinds in advertising during the first half of the year.

Except for television, all M&E segments grew in 2023, but the share of traditional media (television, print, filmed entertainment, live events, out of home, music, radio) stood at 57% of M&E sector revenues, down from 76% in 2019.

On the other hand, new media (digital and online gaming) grew the most, providing Rs.12,200 crore of the total growth, and consequently, increased its contribution to the M&E sector from 20% in 2019 to 38% in 2023.

The M&E sector is expected to grow 10.2% to reach Rs.2.55 trillion by 2024, while television, digital media, filmed entertainment and animation and VFX are estimated to touch Rs.71,800 crore, Rs.75,100 crore, Rs.20,700 crore and Rs.13,200 crore, respectively.

As far as specific segments go, television advertising fell 6.5% due to a slowdown in spending by gaming and D2C (direct-to- consumer) brands, which impacted revenues for premium properties.

Television: Linear viewership increased by 2% over 2022, the number of smart TVs connected to the internet each week rose to 19 to 20 million, up from around 10 million in 2022. Television advertising declined by 6.5% due to a slowdown in spending by gaming and D2C brands, impacting revenues for premium properties. The Hindi speaking market (HSM) experienced softness, resulting in a 3% overall ad volume de-growth. However, subscription revenue saw growth after three years of decline, driven by price increases, despite a decrease of two million pay TV homes.

Digital advertising: Digital advertising grew 15% to reach INR 576 billion, constituting 51% of total advertising revenues. This figure includes advertising by SME and long-tail advertisers totalling over INR 200 billion, and advertising earned by e- commerce platforms amounting to INR 86 billion.

Digital subscription: Digital subscription grew 9% to reach INR 78 billion accounting for a third of 2022s 27% growth, as premium cricket properties were moved in front of paywalls. Paid video subscriptions decreased by two million in 2023 to 97 million, across 43 million households in India. However, paid music subscriptions grew from 5 million to 8 million, generating INR 3 billion, while online news subscriptions generated INR 2 billion.

Government Initiatives

(Source: https://pib.gov.in/PressReleaseIframe)

Government of Indias focus is on creating a conducive environment for the Media & Entertainment (M&E) industry to thrive.

GoI has recognized the pivotal role M&E segment plays in shaping our society, influencing our perspectives, and reflecting our collective efforts. This industry is renowned for its creativity, innovation, cultural richness, and it serves as a beacon for not only our nation, but also for the world. This sector resonates deeply with the diverse tapestry of the Indian life and it transcends boundary and fosters unity amongst diversity for a country as diverse as ours, I & B Secretary stated in press release.

He further said that many initiatives are being taken by Government of India and the State Governments to promote the Media and Entertainment sector, like Amendments to the Cinematograph Act, Information Technology Intermediary Guidelines, Digital Media Ethics Code (Rules), enhanced FDI limits in cable at DTH sectors and others. A lot of reforms have been brought in the TV Broadcasting sector, like uplinking and downlinking guidelines that ensure Ease of Doing Business and ease of compliance.

Growth Outlook:

(Source: https://www.ibef.org/industry/media-entertainment-india)

M&E is a unique segment having growth and employment intensity embedded in it, and at the same time it is a sunrise sector from the point of view of disruptions happening in the sector. This sector plays an important role as a multiplier for our economy.

India is currently going through a phase of digital transformation, M&E sector is also witnessing rapid shifts which is happening with the availability of online media content. Accessibility of content over the internet has come with the availability of fairly affordable smartphones and data across every nook and corner of the country. Speaking about digital infrastructure, he informed that India has 90 crore internet users, 60 crore+ smartphones and 4 crore+ connected TVs.

The Indian Media & Entertainment (M&E) sector is set for substantial growth, with a projected 10.2% increase, reaching INR 2.55 trillion (US$ 30.8 billion) by 2024 and a 10% CAGR, hitting INR 3.08 trillion (US$ 37.2 billion) by 2026. Advertising revenue in India is projected to reach INR 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.

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.

The Indian media and entertainment sector posted a robust 19.9% growth in 2022 and crossed the INR 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.

Advertising revenue in India is projected to reach INR 330 billion (US$ 3.98 billion) by 2024.

Company Profile:

TV Vision Limited, a Sri Adhikari Brothers Enterprise, is engaged in the TV Channel Broadcasting business. The Company has completed 17 years of pioneering Indian Media and Entertainment Industry and growing at a rapid rate. The Company has listed its Equity Shares on Bombay Stock Exchange and National Stock Exchange w.e.f. 15th September, 2016. The Company has been reporting a decent operating and financial performance, despite of challenging market situation.

During the fiscal year as a listed Company, the total consolidated revenue is INR 5836.16 lakhs. EBITDA is INR (579.04) Lakh.

The mainstream broadcasting channels are MASTIII, MAIBOLI and DABANGG. The Company remained focus on enhancing business from existing advertisers as well as adding new advertisers to widen the client base. The same was evident from repeat business and higher number of new clients.

MASTIII - the flagship channel from the networks bouquet has completed 14 years of broadcasting and continues its successful run as the industry leader with unparalleled consistency in the Bollywood music genre being Indias No.1 Music & Youth Channel. The channel has a universal appeal caters to a variety of music lovers of various age groups becoming the most loved Music channel in India.

MAIBOLI: the numero uno Marathi Music Channel from your Company has completed 10 glorious years of broadcast and has kept viewers spellbound and how! Its dominance over its peers is unparalled and it continues to keep audiences charmed. It is known for its excellent on-air packaging & well-coordinated programmed time bands. Maiboli has over a period of time captured the imagination of the Marathi viewing population and has positioned itself as a formidable brand not only amongst viewers but also advertisers.

DABANGG is the Bhojpuri Regional Entertainment Channel has continued to maintain its key position amongst its competitors. The Channel has completely added authentic regional flavor in its programming while focusing on Bhojpuri music & movie content for the Channel.

Opportunities & Strength:

Customer Preference: The immense experience of the promoters in the broadcasting industry has proved to be an added advantage in understanding the taste of audience and telecasting differentiated contents which are based on consumer behavior.

New Channels to be launched: Growth in number of channels especially in niche/regional categories will give the Company new opportunities to expand and create various genres of programming based on demand.

Growing Advertiser Base - Company continuously puts in best possible efforts to grow its audiences and advertiser base to maximize revenues.

Digital Platforms - Companys effort to expand into digital media platforms and new age media contents can lead to future growth.

Government Initiatives: The Government is taking various initiatives that support the M&E industrys growth such as increase in FDI limit from 74 per cent to 100 per cent in cable and DTH satellite platforms, digitizing the cable industry to get more institutional funding, and granting industry status to the film industry.

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 channels the content broadcasted needs to be unique to attract viewers. Also, with a view to produce differentiated content, the production cost also increases.

Low Entry Barriers: Vast plethora of channels is available at viewers disposal which has given rise to increased competition. Consistency: Consistency of programming quality is essential to maintain targeted revenues.

Availability of advertisement run time: In order to maintain the revenue income, the Company continuously need have maximum advertisement run time, any shift in the same may affect directly to the revenue of the Company.

Growing viewership of digital mediums: The growing viewership of digital medium can lead to drop in television viewership which in turn can negatively affect channel reach and ratings.

Rise in Cost of DD Free Dish: There has been a substantial increase in cost of channel placement on DD Free Dish DTH which is indispensable for the company. Such cost escalation can pose a threat to the existence of business.

Internal risk:

Change in Consumer Preference Risks: The Content carried by the Company on its channels need not appeal the target audience always 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.

Channel Distribution Risk: The Company distributes its channels in the target market through MSO, DTH, cable operators etc. Any shift in the distribution network could affect the viewership of the channels.

Technological Risks: Advancement of the technology for creation of the content and distribution of channel is necessary with the new technologies being adopted by the competitors.

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.

Management continuously monitors and makes efforts to arrest decline or adverse output on any of these factors.

Consolidated Financials:

Disclosure of Accounting Treatment:

The Financial Statements of the Company for the year ended March 31,2024 have been prepared in accordance with the Indian Accounting Standards (IND AS) prescribed under Section 133 of the Companies Act, 2013 read with relevant rules issued thereunder and other accounting principles generally accepted in India and there is no change in the same.

1. Share Capital:

As on March 31,2024, the Authorized Share Capital of the Company stood at INR 5,500 lakhs divided into 5,499 lakhs comprising of 549.9 lakhs Equity Shares of INR 10/- each and INR 1.00 lakh comprising of 0.1 lakh Preference Shares of INR 10/- each.

During the financial year under review, there was a change in the paid-up capital of the Company. The Company had received an application from Sri Adhikari Brothers Assets Holding Private Limited, (warrant holder) for the conversion of 20,00,000 warrants of INR 10/- each of the Company into 20,00,000 Equity Shares of INR 10/- each of the Company, during the aforesaid period. Subsequently, the Company has allotted 20,00,000 (Twenty Lakhs) Equity Shares pursuant to the conversion of 20,00,000 (Twenty Lakhs) Warrants on July 06, 2023.

Consequent to the allotment of the Equity Shares pursuant to above mentioned conversion, the paid-up share capital of the Company stood increased to INR 3875.45 lakhs divided into 3,87,54,500 Equity Shares of INR 10/- each fully paid-up and INR 1.00 lakh comprising of 0.1 lakh 0.01% Non-Convertible Non-Cumulative Redeemable Preference Shares of INR 10/- each fully paid-up.

2. Reserves and Surplus:

The total Reserves and Surplus as at March 31, 2024 amounted to INR (15,566.57) lakhs. The reserves include Capital Reserves of INR 8,553.05 lakhs, Security Premium Reserve of INR 1,884.30 lakhs, Retained earnings of INR (25,919.64) lakhs and deficit as per the statement of Profit and Loss of INR (84.28) lakhs.

3. Financial Liabilities- Non Current Liability

The Financial Liabilities as at March 31,2024 amounted to Nil.

4. Financial Liabilities- Current Liability

The Financial Liabilities as at March 31,2024 amounted INR 10,700.49 lakhs is term loan from banks.

5. Fixed Assets:

Depreciation of INR 1,693.53 lakhs was charged to the statement of Profit and Loss. The Net Block of Tangible Fixed Assets and Intangible Fixed Assets as on March 31,2024 was INR 13.79 lakhs and INR 4,192.23 lakhs respectively.

6. Revenues:

The Company earned total revenues of INR 5,836.16 lakhs during the year ended March 31,2024 as against INR 7,126.92 lakhs of the previous year ended March 31,2023.

Critical accounting policies

The principles of revenue recognition are as under:

Revenue from advertisements is recognised on telecast basis and revenue from sale of program/content rights is recognised when the relevant program/content is delivered.

Segment wise Performance

The Company is operating in single primary business segment i.e. Broadcasting. Accordingly, no segment reporting as per Accounting Standard - 17 has been reported.

Internal Controls and Adequacy of those controls

Adequate systems of internal controls that commensurate with the size of operation and the nature of business of the Company have been implemented. Risks and controls are regularly viewed by senior and responsible officers of the company that assure strict adherence to budgets and effective use of resources. The internal control systems are implemented to safeguard Companys assets from unauthorized use or disposition, to provide constant check on cost structure, to provide financial and accounting controls and implement accounting standards.

Human Resources

Human capital is a very important asset in a media Company. The Company has a professional and healthy work culture built around strong corporate values. It also encourages and supports its employees to upgrade their skills on a continual basis. Over the years, the Company has built up a human resource structure, which has enabled the Company to grow and take up challenges. The Company has a qualified team of professionals.

As on March 31,2024, the Company had 65 permanent employees on its payroll.

Details of significant changes in key financial ratios:

TV VISION LTD. (standalone)

Ratios	Formula Used	2023-24	2022-23
Debtors	Turnover Revenue from operations / Average Debtors	4.26	4.26
Inventory	COGS / Average Inventory Turnover	0.00	112.25
Interest Coverage Ratio	Earnings before Interest and Tax / Interest Expense	(23.03)	(13.59)
Current Ratio	Current Assets / Current Liabilities	0.14	0.14
Debt Equity Ratio	Debt / Equity	(0.97)	(1.13)
Operating Profit Margin (%)	EBITDA / Revenue from operations	(0.10)	0.00
Net Profit Margin (%)	PAT without exceptional items / Revenue from operations	(0.41)	(0.28)
Return on net worth (%)	PAT without exceptional items / Total Equity	0.20	0.21

Debt Equity Ratio: The debt of the Company has increased compared to previous year, due to which there is a change in ratio

Debt Service Coverage Ratio: The loss and debt of the Company has increased as compared to previous year due to which there is a change in ratio

Net Capital Turnover Ratio: The turnover of the Company has reduced as compared to previous year due to which there is a change in ratio

Net Profit Ratio: The loss of the Company has increased as compared to previous year due to which there is a change in ratio.

Cautionary Statement

Statements in the Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations may be "forward-looking statement" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.