TV18 Broadcast Ltd Management Discussions.

FORWARD LOOKING STATEMENTS

Statements in the Management Discussion and Analysis, which describe the Companys objectives, projections, estimates, expectations, may be ‘forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could influence the Companys operations include economic developments within the country, demand and supply conditions in the industry, input prices, changes in government regulations, tax laws and other factor such as litigation.

COMPANY OVERVIEW

‘TV18 Broadcast Limited, a subsidiary of Network18, manages its primary business of broadcasting. TV18 runs the largest news network in India, spanning business news (4 channels with market leadership), general news (1 each in English and Hindi) and regional news (14 channels across India, including joint venture News18-Lokmat). Marquee brands like CNBC-TV18, CNBC Awaaz and CNN-News18 are part of this news bouquet.

Network18 Media & Investments Limited is one of Indias most diversified Media and Entertainment conglomerates. It has interests across television, digital content, filmed entertainment, e-commerce, magazines and allied businesses.

TV18s entertainment subsidiary Viacom18 (a joint-venture with Viacom Inc) operates an array of entertainment channels. The entertainment portfolio comprises Hindi general entertainment channels, English entertainment, movies, youth and musical entertainment, kids genre and seven regional entertainment channels as well. This includes leading properties like Colors, MTV and Nickelodeon. The Group has a presence in the movie business too, which it operates through Viacom18 Motion Pictures.

TV18s Infotainment subsidiary AETN18 (a joint venture with A+E Networks) operates factual entertainment and lifestyle channels named History TV18 and FYI TV18 respectively.

TV18 and Viacom18 have also formed a multi-platform content asset monetisation entity Indiacast, which drives domestic and international channel distribution, placement services and content syndication for the Groups channels and for other broadcasters as well.

INDIAN ECONOMY

The third quarter of FY 2017-18 witnessed Indias climb back on a growth trajectory, making it the fastest-growing major nation in the world. After dropping sharply to a three-year low of 5.7% in the first half of FY17, it recovered smartly to 7.2% in the quarter ended December 2017. This has been viewed by most as a sign that the economy has adjusted to the two recent policy shocks – demonetisation and implementation of GST – and is ready to resume its high growth path.

In its World Economic Outlook Update, the International Monetary Fund (IMF) also remains optimistic about Indias growth potential. It has forecasted Indias GDP growth at 7.4% for FY18 and expects that to accelerate to 7.8% in FY19.

INDIAN MEDIA AND ENTERTAINMENT

Industry overview

Mirroring good growth in the economy, the Media & Entertainment (M&E) industry posted robust growth, in 2017, reaching Rs 1.5 trillion, according to the ‘FICCI-Frames - 2018 report, Re-imagining Indias M&E sector. More noticeably, all segments of the industry posted growth, with digital media clocking the highest rise of 24.9% and print bringing up the rear with 5.7%. The year was also characterised by strong elements of consolidation and innovation on the back of digital, both for consumers and all along the content supply chain.

The increasing popularity of mobile cameras, internet and the easy and affordable access to information and computing power in hand-held devices has changed the dynamics of media consumption and production. Now, more than ever, the M&E industry has become more inclusive and democratic.

Advertising budgets followed the changing content consumption patterns of consumers and this drove the digital segment to the top of the growth list. The films segment also saw strong growth, aided along by international revenues generated by Indian films. With the re-emergence of India as an efficient and high quality outsourcing destination, animation, VFX and post production business also saw good growth. With the rising incidence of sporting meets and events (conferences, exhibitions, etc.), especially in tier II and III cities, the events segment maintained its strong pace of growth. The television segment gained traction on the back of digitisation of television homes. It also got mileage from non-fiction programming, particularly in regional languages.

Overall, the M&E sector grew faster than Indias GDP, reflecting the increase in disposable incomes resulting from relatively stable economic growth. According to the FICCI-Frames report, Re-imagining Indias M&E Sector – March 2018, the M&E sector continues to show great potential, and is expected to grow on the back of Indias need for escapism, knowledge and social acceptance. Media and entertainment has become a necessity of life, and provides exciting opportunities for existing and new companies as it heads towards a Rs 2 trillion (USD 31 billion) industry by 2020.

Revenue growth in different segments of the M&E sector

Overall industry size (for calendar years) CY2016 CY2017 CY2018E CY2020E CAGR
2016-20
Television 594 660 734 862 9.8%
Print 296 303 331 369 5.7%
Filmed entertainment 122 156 166 192 11.9%
Digital media 92 119 151 224 24.9%
Animation and VFX 54 67 80 114 20.4%
Live events 56 65 77 109 18.0%
Online gaming 26 30 40 68 27.5%
Out of Home media 32 34 37 43 7.7%
Radio 24 26 28 34 8.6%
Music 12 13 14 18 10.6%
Total 1,308 1,473 1,660 2,032 11.6%

All figures are gross of taxes ( Rs in billion)

Growth Drivers

Rise in Digital Subscription and Digital Advertising Spends FY17 saw a powerful rise of 50% in Digital subscription. As per industry estimates, quoted by the FICCI-Frames 2018 report, there are around 2 million paid digital subscribers across application providers, and between 1 and 1.5 million customers who have moved entirely to digital media consumption. By 2020, the number of digital-only consumers is expected to rise to 4 million. Availability of niche content, global content, increased OTT-only content, sports and falling data charges will drive the wider adoption of subscribers.

A parallel phenomenon is the rise of advertising spends on digital. As screens and internet broadband penetration increases, alongside a fall in data rates, there was a parallel increase in the consumption of content and rise in time spent on digital media. Following this trend, some advertising spends did shift to digital medium, as per the FICCI report. Consequently, digital advertising comprised 17% of the total advertising spends in 2017. Going forward, by 2020, the share of digital advertising is expected to grow to 22%, making Digital the third largest segment of the Indian M&E sector (after Television and Print), ahead of even Filmed Entertainment.

Television posts good growth in revenue and penetration TV penetration in India continued to grow to reach 64% (183 million households), accounting for about 780 million viewers. With digitisation, the monetisation of this viewership became more transparent. DAS markets clocked an increase in ARPU, which is now flowing to MSOs and distributors more seamlessly.

ARPU in DAS markets
Phase Customer ARPU range
(in Rs , gross of tax)
I 250-350
II 200-325
III 150-225
IV 125-200

Source: Industry discussions, EY analysis

Revenue sharing

Stakeholder Before digitisation After digitisation
Consumer ARPU 100% 100%
LCOs 65%-80% 45%-55%
MSOs 10%-20% 15%-25%
Broadcasters 10%-20% 20%-30%

Source: Industry discussions

This year, the full impact of BARCs enhanced rural panel weightage became apparent. Some genres, such as Infotainment, English News and English Entertainment saw a reduction in their viewership. However, the increase in weightage to rural India registered a higher viewership of kids content compared to the previous year.

International taste for high budget Indian films A combination of high growth in overseas theatrical releases (particularly in China), growth in satellite rights values and domestic box office collections rendered a growth of 27% in the Indian film industry. Movie releases like Baahubali and Dangal propelled growth in both the domestic and international markets.

The success of Baahubali last fiscal is likely to drive the creation of high budget Hindi and regional movies in the years to come. However, domestic box office collections should be able to adequately support such higher investments. In addition, Indias current screen density of less than 10,000 screens compares poorly with developed media markets, like the US, and even China.

While the current success in the international markets points to promising times ahead, the limited release of foreign films in China, due to regulations, could limit the growth in overseas markets. Lastly, the success of films is not linear; it depends largely on the number and types of releases.

Better measurement and analytics of viewership Broadcast Audience Research Council (BARC) is a joint industry body of broadcasters, advertisers and advertising agencies. Because of its ability to measure viewership habits of both Rural and Urban TV households, through BAR-O-Meters seeded in a growing number of TV households across the country, BARC has unlocked considerable insights into a vast majority of Indias media and entertainment preferences. Keeping up with the convergence in the M&E industry, BARC will be launching its combined TV plus digital measurement system "EKAM". This will create a uniform currency to measure performance across both mediums.

OUTLOOK FOR THE MEDIA INDUSTRY

With the recovery and fast growth in the Indian economy, the prospects of the Indian M&E industry look bright. In fact, it is expected to grow at a higher pace than even the economy in the medium term. Largely driven by sentiment, ad spends by companies are expected to increase in 2019 and beyond and advertisements account for around 50% of the M&E industrys revenues. Additionally, export-led entertainment companies are expected to gain from global growth.

THE INDIAN TELEVISION INDUSTRY

Overview

The Indian Television industry grew 11.2% (9.8% net of taxes) from Rs 594 billion to Rs 660 billion in 2017. Its advertising revenues, which comprise 40% of revenues, grew to Rs 267 billion while revenue from distribution (i.e. consumer spend), which comprises the remaining 60%, grew to Rs 393 billion.

According to EY estimates, advertising is 41% of industry revenues today (72% of broadcaster revenues) and this is expected to grow to 43% of total revenues by 2020 (75% of broadcaster revenues).

According to the FICCI-Frames report, TV viewership has grown 21% across all age groups. In terms of content, 54% of content viewed is in the GEC genre, followed by movies, which comprise 23% of total content viewed. News and music account for 7% and 6%, respectively.

Revenue performance of the Television sector

Stakeholder 2016 2017 2018E 2020E
Advertising 243 267 304 368
Distribution 351 393 430 494
Total 594 660 734 862

Gross of taxes ( Rs in billion)

At present, ~36% of Indian households are yet to get television screens. As these are bottom of the pyramid households, they would tend to move first towards free and sachet products.

There are 877 licensed private satellite TV channels, of which 389 are news channels and 488 are non-news channels; in terms of subscription, 300 were pay channels and 577 were Free To Air (FTA). During 2017, 11 fresh channel licenses were issued. The local cable operator universe comprises over 60,000 operators.

Trends in the TV industry

According to a ‘BARC – FICCI Frames report - 2018, The changing face of TV in India, the Hindi GEC category leads all other channels with a reach of 499 a week, with Hindi movies close on its heels with 471. In the GEC genre, while the three top choices for urban India were talent search/feats/ reality show, drama/soap, mythological/costume dramas, those in the rural areas put drama/soap at the top of the list, followed by mythological/ costume dramas and finally talent search/feats/ reality shows. In the sports genre, while cricket still remains the most popular sport watched on TV, local sport Kabaddi is fast gaining share.

The evening prime time contributes to over 30% for Hindi, English and Regional News. However, Morning Time contributes maximum to News in Andhra Pradesh and Tamil Nadu.

Advertising

Increases in advertising revenue driven by volumes and premium properties

According to BARC, the number of advertisers on TV grew to 12,964 and ad volumes grew to 70 million insertions, in 2017. Total ad revenue grew 10% (8.7% on a net of tax basis), from Rs 243 billion to Rs 267 billion. This was largely driven by increased volumes on the back of the launch of more channels, particularly in the FTA space. At the same time, the ad revenue of premium properties such as sports, prime time content, film premieres and reality TV also grew.

Top 10 channel genres account for 47% of total ad volumes Almost half of the total ad volumes (47%) came from the top 10 channel genres, with 30% coming from Hindi channels and the balance 17% from Tamil, Telugu and Bangla. Hindi Movies as a genre clocked the largest advertisements, helped along by the launch of several FTA movie channels on DD Free Dish. Nevertheless, regional channels are outpacing many other genres in terms of growth, leading large broadcasters to consider enhancing their regional channel offerings.

Free Dish offerings rake in ad revenues

Large private broadcasters saw a growth to over Rs 20 billion in advertising revenues from their Free Dish offerings, largely on account of the fast growth of this facility but also partly due to the increased rural weightage used by BARC. These channels have a large reach and are often some of the most viewed channels in the country. Since the captive audience of these channels is different from that of the pay TV channels, advertisers wishing to use television to reach out to lower NCCS audiences, particularly in rural areas, see good opportunity in advertising on them.

News channels thrived on events

A lions share of 40% of revenues for certain channel genres, particularly business and regional news, came from events and activations. Over the past few years, there has been a steady rise in the number of awards, contests, etc. It has been estimated that over 650 events are telecast on news channels in India annually. Bundling of sponsorship with advertising time has emerged a cost-effective formula for sponsors.

Slot sales remain steady

Slot sales volumes to advertisers continued to hold for many channels with the launch of additional FTA and pay channels in the news, GEC and movies genres. These have high distribution in HSM and regional markets and have created inventory availability. As a result, they generate estimated revenue of between Rs 5 and 8 billion.

Distribution

Fragmented distribution market

There are an estimated 60,000 local cable operators (LCOs) and more than 6,000 multi-service operators (MSOs) in the distribution segment in India. There were six pay direct-to-home (DTH) operators and Doordarshans free satellite service in operation. In addition, there was one Headend-in-the-sky (HITS) operator. The DTH companies and 10 largest MSOs dominated the market, serving around 65% of pay TV homes.

Steady growth in TV-viewing households

Clocking a 3.5% growth over the previous year, TV penetration in India reached 64%, taking the total number of TV-viewing households to 183 million in 2017. This translates into approximately 780 million viewers. 83% of the total TV households were paying households.

Stakeholder 2016 2017
Cable 100.5 98.5
DTH* 49 52
HITS 0.5 1.5
Free TV 26 31
Total 176 183

(Television households in millions)

*Net of temporarily suspended subscribers, which if included, could grow the subscriber base to around 65 million.

Digitisation resulted in increased customer ARPU As anticipated, digitisation led to higher collections from end customers, across all DAS markets. This, in turn, led to an increase in revenue received by MSOs and broadcasters. Prior to digitisation, revenue leakages adversely impacted MSOs as LCOs tended to under-report the number of subscribers to retain higher margins. However, now transparency has increased and MSOs have greater clarity on the number of active consumers of every

LCO. This has led to an increase in the bargaining capacity of MSOs.

TV-owning TV Penetration
Homes (mn) (%)
Rural India 99 52
All India 183 64

The elimination of channel aggregators and distributors has also culminated in better bargaining power for MSOs and thereby better revenue to distributors. Their collections from digitised LCOs in the DAS I and DAS II markets now ranges from Rs 80 to Rs 125 per subscriber per month. In the DAS III markets, their collections also grew significantly from Rs 50 to Rs 80 per subscriber per month from the earlier range of Rs 30 to Rs 50.

MSOs and broadcasters see improved revenue streams With the introduction of digitisation, the revenue dynamics of the entire distribution have changed. With enhanced transparency at the LCO level, MSOs have gained and so have broadcasters. According to EY, there has been a concerted push towards the implementation of a prepaid model by several leading MSOs. Having invested in implementing B2B online portals, they are pushing LCOs to transact online on a prepaid basis. Currently, though the prepaid models are only implemented by a handful of large MSOs, that too only in some markets. Nevertheless, the trend is likely to catch on with other MSOs too as it streamlines billing and reduces collection efforts significantly.

ARPU under pressure despite growth in DTH subscribers During 2017, the number of active DTH subscribers in India grew by over three million largely on account of digitisation in DAS III and DAS IV markets. However, due to various factors - demonetisation, implementation of GST, the introduction of low value packs for rural markets, attempts to counter the competition from Free Dish providers - ARPUs have been _at at around Rs 220 per month, despite muted increase in package prices. The upside for broadcasters is that the visibility of their content has improved. Although they have not been able to monetise this yet, as incomes rise, there is scope to leverage their household presence with advertisers.

OTT viewership continues to grow

The gap between the cost of watching an hour of TV on broadband and traditional cable or DTH has significantly reduced, thanks to the fall in broadband pricing. However, with the assumption that an average TV household watches over three hours of content a day, it is currently still more expensive to watch TV using broadband, especially if watched on a large television screen.

Nevertheless, EY estimates that by 2020, there would be around 4 million people who primarily depend on OTT platforms for their content. With an eye on the future, many distribution companies are investing in broadband to mitigate this risk, which shall potentially lead to increased ARPU.

Subscription revenue of broadcasters increased Broadcasters witnessed an increase in subscription revenues from Rs 90 billion in 2016 to Rs 99 billion in 2017. This was largely due to long-term contracts with escalation clauses, digitisation of TV households and increased transparency. International subscription revenues faced stagnant rates on account of the increased number of consumer offerings and remained stable at around Rs 20 billion in 2017.

Content

Interactivity keeps gaining in popularity

Interactivity is perhaps the most significant trend in the Indian TV industry in 2017. It contributed to making TV content truly immersive. Shows like the Jio Ghar Baithey Jeeto Jackpot contest for Kaun Banega Crorepati, generated considerable interest in viewers. In addition, interactivity enhanced audience stickiness and increased the time spent on linear TV.

Increasing cost of content

A combination of factors including more TV channels, several OTT players like Amazon Prime, Viu, Alt, Net_ix, etc. has increased the overall demand for content. Although Indian broadcasters produce over 1,00,000 hours of content annually across languages and formats, newer players are investing higher amount per episode (albeit for much smaller quantities of content) and are tying up with leading talent. The increase in cost is expected to impact the cost of film acquisition more than cost of episodic content.

Increased values of satellite rights

Broadcasters paid around 18% more for satellite rights in 2017. Large increases were seen for blockbuster films, particularly in the regional language space. While movie channels generated 23% of total viewership, movies on regional channels also generated significant revenues.

Export of content an emerging opportunity Indian broadcasters receive a steady stream of subscription revenue as well as advertising revenue from Indian television that is exported to over 150 countries across the globe. News channels have also now become available in over 70 countries.

In addition to channels that cater to Indian diaspora in Indian languages, there is a growing opportunity for dubbed Indian content in countries like Africa, Middle East and Eastern Europe.

Regional language content leads growth in viewership Data from BARC indicates that growth in languages like Punjabi, Oriya, Bhojpuri, Assamese and Gujarati is almost twice the rate of growth of languages like Hindi, Tamil, Telugu, etc. Broadcasters increasingly intend to provide better quality and fresher content to regional consumers.

Merchandising and Licensing saw good growth As per capita incomes rose and the middle class segment grew, the opportunity for licensing and merchandising of characters increased too, particularly for childrens characters and sports leagues. This revenue source is expected to continue growing, despite the parallel growth of pirated products. Media companies have begun to provide products across multiple price points. Merchandising is led by international characters from Disney, Viacom18 and Turner, but local characters also captured the fancy of Indian audiences and correspondingly increased licensing opportunities.

Conclusion

Looking ahead, the Indian M&E sector is expected to grow strongly on the back of favourable socioeconomic and demographic indicators. The rapid pace of digital adoption will add considerable fuel to this growth. At the same time, the value chain within the industry will continue to evolve and continuous innovation and adaptation to this dynamic scenario will determine the survival and success of players within the industry.

Strategic advantages and competitive strength

Network18 is a media and entertainment powerhouse with its foothold in television, Internet, filmed entertainment, digital business, magazines, mobile content and allied businesses.

• Network18s TV channels touch lives of 70 Crore Indians, representing 90% of the TV universe. 1 in every 2 Indians is a consumer of our content

• The broadest News Network in India, with unmatched coverage through 20 channels spreads across 15 languages and 26 states. (#2 News Network by viewership)

• The fastest growing Entertainment network in India, with leadership channels in Hindi, English, Kids and Music genres. (#3 Entertainment network ex-sports by viewership)

• Digital properties are used by 80 mn+ people. 1 in 5 internet user in India is on Network18 websites or apps

OPERATING STRATEGY

TV18s operating model is driven by its zeal to provide consumers with best-in-class media and entertainment products that set new benchmarks in creative excellence, fair journalism and audience engagement.

STRATEGIC INITIATIVES UNDERTAKEN

TV18s leadership and growth aspirations stem from an inherently high-quality portfolio of properties, a relentless drive for garnering market-share, and a concerted effort to utilise synergies and push efficiencies across its owned and afiliate media (traditional & digital) and telecom portfolio. With those aims, the following were events during the year that shall enable better management of the portfolio.

TV18 took operational control and raised its stake to 51% in entertainment JV Viacom18 (Mar 18). The partners believe that in the fast-evolving Media & Entertainment landscape in India, TV18 can drive value-addition and synergies across the multi-platform group comprising broadcast, digital, filmed and experiential entertainment and media businesses. Viacom continues to hold 49% in Viacom18, and shares TV18s vision for scalability and enhanced efficiency at Viacom18. Viacom18 is now a subsidiary of TV18.

Umbrella brand "News18" for all general News channels: With the rebranding of remaining 5 ETV and IBN Lokmat regional channels, the process of having a unified brand "News18" for all 17 of our general news channels (in 15 languages covering 26 states) is complete. This makes the News18 network the largest general news brand in the country.

Colors Tamil launched in mid-February: Colors Tamil fills a vital whitespace in our regional entertainment portfolio, in a highly competitive market. Its fresh subjects and cinematic-quality content are being well-received. The channel launched with 22 hours of original programming per month, and will ramp-up in content and improve distribution over the year. It has garnered 5% viewership share, and made strong inroads in urban markets like Chennai.

CNBC-TV18s digital destination CNBCTV18. com/CNBCTV18 app launched on April 6, 2018. This is a premium digital platform offering important and useful news and information about the stock market, business and economy, including fresh perspectives on entrepreneurship, leadership to audiences. It also offers video-feed/clips of the channel.

CNBC-TV18

CNBC-TV18 continued to redefine the English Business News genre by offering the most comprehensive, insightful and in-depth coverage on all the significant economic and financial events that transpired throughout the year.

The channel continued to dominate the Budget day programming with 79% channel share1. Also during the Union Budget, CNBC-TV18 emerged bigger than any English News channel in India, thus cementing its reputation as Indias Budget headquarters yet again. Key developments in the corporate world like the implications of GST roll-out, Punjab National Bank scam, the Bank recapitalisation plan and many more were covered through a 360 degree approach. On the international front, the channel hosted exclusive conversations with likes of Netfix CEO Reed Hastings, Uber CEO Dara Khosrowshahi and Microsoft Founder Bill Gates. Special on-ground coverage with shows such as Bad Medicine, Whats Ailing Rural India and Budget Caravan amongst others improved the audience connect.

The longest running automobile awards continued its legacy for the 18th straight year as CNBC-TV18 Overdrive Awards again brought the automobile industry under one roof. The 13th India Business Leaders Awards congregated the biggest names in the political, financial and corporate universe. CNBC-TV18s celebrated 16 years of its flagship property "Young Turks" with a special summit.

CNBC-TV18 was adjudged the Best Business channel at the ENBA awards, and the show India Business Hour won the Best Business Programme award.

CNBC Awaaz

CNBC Awaaz celebrated its 13th anniversary on January 13, 2018. The channel, through its most trusted anchors and experts, offered a wide range of news covering politics, economy, sports, entertainment and much more in the language of their choice.

CNBC Awaaz further consolidated its position in the Hindi Business News space during FY 2017-18 and has achieved a strong leadership position with 69 per cent channel share2. On the Union Budget day, CNBC Awaaz witnessed a massive viewership share of 80%3 which further peaked to 90% during the Finance Ministers speech4 .

During the year, in addition to the news coverage and other on-ground events, CNBC Awaaz did exclusive interviews with the big faces in the political arena like Arun Jaitley (Finance Minister), Nitin Gadkari (Minister for Road Transport and Highways and Shipping), Suresh Prabhu (Ministry of Commerce & Industry and Civil Aviation), and from the business and financial arena like A. M. Naik (Group Executive Chairman – L&T Group), Dr. Rajiv Kumar (Vice Chairman – NITI Aayog), Adi Godrej (Chairman – Godrej Group) and many such notable business leaders.

As a testimony to its commitment towards best-in-class coverage of news from business and political segment, CNBC Awaaz was awarded the Best Hindi Business News channel and two other awards at ENBA 2017, Awards. The channel also won an award for Excellence in Business & Economic Journalism at Ramnath Goenka Awards.

CNBC-Bajar

CNBC-Bajar, Indias first Gujarati business news channel, completed three successful years of engaging with Indias most vibrant community.

CNBC-Bajar connects with all stakeholders in Gujarat through its extensive news coverage, on-ground events like ‘The Gujarat Real Estate Awards and exclusive interviews/debates with decision makers from the political and corporate space.

In addition to the Business and Financial news reporting, CNBC-Bajar did an in-depth coverage of the Gujarat Election.

General News

CNN-News18

Aimed at disrupting the English news genre, the evening primetime on the channel was revamped through introduction of new shows like ‘The Big Debate and Kishore Ajwani hosted ‘Bottomline".

The channel did extensive coverage of various political and civil events during the year like elections in states of Himachal Pradesh and Gujarat and the Union Budget. CNN News18 did a special 9 part series on app-based cabs, and broke the aviation scam story too.

CNN News18 did a socially-relevant sting operation showcasing how drug peddlers continue to thrive in the state of Punjab and an investigation showcasing children turning into drug-addicts in Delhi.

The other initiatives include 11th edition of CNN News18 Indian of the Year Award thus recognising Indians whose contribution has strengthened the foundation of our society. The channel also partnered the Hindustan Times Leadership summit.

News18 India

Backed by its unbiased and extensive editorial coverage, the channel has made phenomenal strides wherein its ranking in the Hindi news space has moved to #3 in a 13 channels genre5, versus #8 a year back. Also, during the evening prime time News18 India regularly tops the urban viewership charts, beating legacy leaders.

On the programming front, through news reporting, interviews and debates, News18 India extensively covered key events in the political and civil space like Gujarat and Himachal elections and Delhi MCD elections. During 5 state elections, News18 India brought back its much applauded show ‘Lapete Mein Netaji and made it part of the regular programming.

The channel also undertook special investigative stories like a reality check on government hospitals and doctors of Uttar Pradesh; Operation Talaq Nahin Dunga - a special show which highlighted the plight of Muslim women who have unsuccessfully been seeking a divorce under Triple Talaq and many more stories across various walks of life.

News18 India supported the inaugural edition of the Marquees 2017 that recognised the best in the field of marketing as the Presenting Sponsor.

The channel also did a partnership with Hindustan Newspaper for their event - Shikhar Samagam.

News18

News18 is designed to give global audiences a window into India. The channel is present in the United States, Canada, United Kingdom, Singapore, and the Middle East. News18 is a destination for definitive news for the Indian diaspora, a community of high achievers seeking Indian news and for ethnic conglomerates with business interests in India.

Regional News

News18 Regional Network

TV18 currently operates a bouquet of 14 regional news channels covering 26 states and offering news in 15 languages. The most significant achievement has been that regional news network of TV18 has become the largest regional news network in India, reaching out to 59.7 crore audiences6 across the country. The viewership share of the News18 Regional news network (as a % of overall TV News viewership) has also near-doubled to ~4.5%. This is backed by impactful editorial and the distribution footprint of the channels which comprises over 1,200 reporters.

The re-branding of regional channels operating under the erstwhile ETV and IBN brands to News18 was completed during the fiscal year. The News18 brand was unveiled during one of Network18s biggest thought leadership events ‘News18 Rising India Summit where the keynote address was made by the Prime Minister of India. In addition to the re-branding, the channels were revamped from the programming and the look and feel perspective.

With strong feet on ground, election reporting has been the strength of News18 regional channels and it strives to bring election results first to its viewers.

The series of "Rising" events in different states is another milestone for the News18 Network. The noteworthy thing about these events is that it allows for an open dialogue between the political leadership and other key stakeholders of the respective states.

History TV18

History TV18 ranked a close no. 2 in the Factual Entertainment Genre in mega cities.

History TV18 continued with its long-term strategy to showcase local content and created some compelling path-breaking content. The hugely successful OMG! Yeh Mera India entered its 4th season and shows such as Special Operation India Surgical Strikes and Myanmar signalled our foray into military contemporary history.

History TV18 also featured a new series tailor made for the Govt. of Chhattisgarh titled OMG! Chhattisgarh 2. The series was a sequel to the hugely successful OMG! Chhattisgarh launched last year.

History HD launched last year and within the first week emerged as the No.1 Factual entertainment channel in HD beating legacy players by a very healthy margin.

FYI TV18

On the heels of tasting early success, FYI TV18 continued the momentum by adding more shows to the library. In addition to the key pillars of Food, Space and Relationships, the line-up also included shows on Travel and Fashion, giving the audience an assortment of lifestyle shows to choose from.

The international line-up included shows such as ‘Andy Bates: Brazilian Streets Feasts, ‘Chow Masters, ‘Get Swankd, ‘Tropical Gourmet, ‘Good Spirits, ‘Trip Testers to name a few and also returning season of well received shows such as ‘Food Porn and ‘Tiny House Nation. The year also saw the return of the immensely successful show "Small Budget Big Makeover" for its second season.

On the digital front, the channels delivered exemplary growth, recording the highest video consumption and engagement across factual and lifestyle channels respectively.

Colors

Colors has always been at the forefront of pioneering differentiated and disruptive content. With an engrossing line-up of distinctive programming, Colors has continued to entertain and engage its audiences across all demographics and strata, thus creating maximum buzz and maintaining Leadership position in the Pay Hindi General Entertainment genre. For the entire FY18, Colors is the No. 1 channel (YTD) amongst pay GECs. It has been ranked No.1 across several weeks during this fiscal, including a consistent and strong Leadership position in last 13 consecutive weeks(ii). In FY18, Colors showcased the 8th edition of the adventurous non-action show ‘Khatron Ke Khiladi and the 11th season of Indias biggest non-scripted reality show, ‘Bigg Boss – both garnered the top 2 highest launch viewership numbers, respectively, across all non-action shows launched in FY18(iii). Both shows have been No.1 weekend non-action shows. Bigg Boss Finale has been the highest rated finale across any Hindi GECs. The 2nd season of Indias first ever live singing reality show ‘Rising Star, opened as the 3rd highest rated non-action show for FY18 and goes on to become the highest rated non-action currently on-air across Hindi GECs in the 2nd week of its launch itself. The biggest impact mythological show ‘Mahakali, has been No. 1 in the slot since launch(iv). Shows such as ‘Shakti, ‘Udaan and the recent launches ‘Tu Ashiqui & ‘Ishq Mein Marjawa have been regularly ranked among the Top 10 action shows in the genre and have gone on to become leaders in their respective slots. Popular events such as ‘IIFA Awards and ‘Indian Television Academy Awards ensured that Colors was a preferred entertainment choice for viewers. Colors HD was the No. 1 HD channel for the year(v).

Rishtey

Rishtey is Viacom18s second Hindi mass entertainment offering in India. A free-to-air channel, targeting the Rural Hindi speaking Markets. It is the No. 3 Hindi General entertainment channel(vi) and currently ranks No. 4 in the rural free-to-air Hindi Speaking Market. It features the choicest shows from the existing Colors content library – from action, non-action and reality shows.

Rishtey Cineplex

Rishtey Cineplex, a premium Indian movie destination for great cinematic experiences, is the first-of-its-kind movie channel launched by Viacom18 in May 2016. The channel, provides its viewers the ultimate movie-watching experience while showcasing enriching, engaging and entertaining content to the viewers. It is the No. 2 channel (out of 24 channels)(vii) and has been ranked No.1 across few weeks(viii) in the Rural Hindi Speaking Market. It is the No. 4 Hindi Movie channel across Hindi Speaking Market(ix). With the tagline of ‘Filmein MUST Hain, the channel features multi-genre films including the latest blockbuster hits from Viacom18s wide library of choicest films.

MTV India

MTV is an iconic and multi award winning youth brand that is irreverent, fun, innovative, passionate and optimistic, encouraging and inclusive. It was the No. 1 Youth channel for the year[i]. The channel had several successful shows during the year such as ‘Splitsvilla X, ‘Roadies Rising and ‘Indias Next Top Model S3 (which all became No. 1 shows[ii]). While the channel owns a highly successful original IP ‘MTV Roadies, which was launched in FY04 and has its 15th season ongoing, MTV continues to be a leader in introducing new formats in India with the launch of Dropout (Worlds first show to form a startup on TV) and Troll Police (Indias 1st show that catches and confront online ‘trolls). MTV builds on its legacy of music with 7 years of MTV Unplugged and also introduced a new array of differentiated youth content through strategic partnerships with Super Fight League and U-Cypher. MTV is also one of the biggest youth brands on social media with approx. 45 million fans on FB and has been the pioneer of what we call ‘Branded Content today. MTV has successfully created impactful and award-winning content and platforms for clients such as Air BnB, Havells, HP, Nestle, Renault among several others.

MTV Beats

MTV Beats was launched in September 2016 as a 24x7 Bollywood Music channel with unique daily thematic play-listing. The channel has garnered an audience reach of 410 million plus in this year(iii) Music programming has been bolstered on the channel with the launch of celebrity lead music slots such as Fit Stop with Sunny Leone, House Party with Badshah and Dil Beats with popular cover band Sanam. Content like Baba Ki Chowki, which reached over 200 million viewers across TV

& Digital(iv), and Gaano ka Rafu Centre with Sahil Khattar add diversity to the channel programming.

English Entertainment

Vh1

Vh1 provides viewers with their daily dose of International music, Hollywood, pop culture and lifestyle. Since its inception in January 2005, Vh1 has grown tremendously. The channel ranked No. 1 at an All India level in FY18. Vh1 has been committed to bringing to Indian audiences the best of International music genres such as EDM, punk, rock, reggae, hip hop, pop, jazz etc. and world awards such as the Grammy Awards, Brit Awards, Golden Globe Awards and Europe Music Awards. VH1 also airs the biggest talent hunts from across the world such as ‘Britains Got Talent, ‘American Idol and ‘X Factor. The channel was also the live TV streaming partner for Global Citizen Festival India in FY16. This year, Vh1 also hosted a Ticket To Ride Contest where one lucky winner got a once in a lifetime opportunity to watch The Grammys Live at Madison Square Garden in New York City!

Comedy Central

Comedy Central was launched in FY12 and is Indias first 24-hour English language comedy channel. With marquee properties such as ‘Friends, ‘Young Sheldon, ‘The Mindy Project, popular shows such as ‘Suits and ‘Brooklyn Nine-Nine, globally acclaimed talk shows such as ‘Tonights show starring Jimmy Fallon and ‘Graham Norton Show and various popular unscripted shows such as ‘Wipeout and ‘Impractical Jokers. Comedy Central is the chief comedy destination in India. It ranked No. 1 in FY18.

Colors In_nity

Launched in July 2015, Colors In_nity redefined the English Entertainment genre by blazing a new path for TV viewing with unique programming disruptors like 3 episodes back to back for todays ‘binge audience, Instant Premieres (screening episodes a few hours after they air internationally) and In_nity On-Demand where viewers chose from shows like Orange is the New Black, Mozart in the Jungle etc. to binge. The lineup was curated by - Team COLORS INFINITY, KARAN JOHAR & ALIA BHATT. The channel boasts of homegrown content with shows like ‘The Stage (Indias 1st English singing talent show), Vogue BFFs & Top Model India along with a strong programming line-up of award winning shows (Mr. Robot, Fargo, Better Call Saul, etc.) from the house of the biggest studios such as NBC, Warner, FOX, CBS, Sony and Lions Gate. The channel line-up includes shows of the likes of ‘Flash, ‘Arrow, ‘My Kitchen Rules, ‘Americas Got Talent, ‘Shark Tank, ‘Orange Is The New Black Riverdale to name a few. Starting off as the 6th in the pecking order, the channel is currently a strong #3 in GEC with a 100% increase in viewership in FY18[i].

Regional Entertainment

Colors Kannada

Colors Kannada continues to be the # 1 channel and a dominant force in the Kannada general entertainment genre. Colors Kannada continues to enhance the family viewing experience through its distinctive and differentiated content which mirrors the culture and spirit of Karnataka. With top notch quality and skilful story telling shows such as "Agnisakshi", "Puttagowri Maduve", and "Radha Ramanna" continue to be a rage among viewers while innovative non-action shows such as "Family Power", "Super Minute Championship" and "Anubandha Awards" offer a complete entertainment package to viewers.

Colors Super

Colors Super - Viacom18s second Kannada general entertainment channel, has grown rapidly to enter the top tier Kannada general entertainment genre in FY18. Bigg Boss Season 5 on Colors Super further fortified channels position and cemented its place as a prime destination for special and unique content. With its exciting mix of diverse and unique content like "Bigg Boss", "Nagakannike", Super Talktime" and "Majabharata", Colors Super continues to offer a superlative family viewing experience.

Colors Marathi

Colors Marathi continued to occupy # 2 position in the Marathi general entertainment genre in FY18. With its engrossing line-up of fresh and exciting action content like "Ghadge & Sunn", "Radha Prem Rangi Rangli" and innovative non-action content like "Sur Nava Dhyas Nava", Colors Marathi continues to delight audiences across all demographics. On weekends too, Colors Marathi fortified its position with tentpole events like "Filmfare Awards", "Maharashtra State Awards" and "Mirchi Music Awards" among others.

Colors Bangla

Colors Bangla is the fastest growing channel in the Bengali general entertainment space. The channel echoes the traditions and progressive values of the market through its differentiated and intriguing content which includes compelling shows such as "Shubho Drishti", "Manosa", "E Mar Gurudakshina" and "Resham Jhapi".

Colors Gujarati

Colors Gujarati, the # 1 Gujarati channel continues to be the preferred destination for quality Gujarati content that reflects the ethos and traditions of Gujarat. Colors Gujarati has successfully made inroads through its diverse and differentiated content offerings like "Savaaj – Ek Prem Garjana", "Mahek" and "Lakshmi Sadaiv Mangalam". The channel also continues to enthral the audiences with special content such as "Live telecast of Navratri from Mumbai, Baroda and Surat" and "Ahmedabad Food Festival".

Colors Oriya

Colors Oriya continues to enthral its audiences through its diverse and engaging content. Shows such as "Marichika", "Kajol Lata" and "Sanja Salita" continue to delight the audiences with its intriguing and differentiated content. Colors Oriya continues to be among the top 3 Odia general entertainment channel in the market.

Colors Tamil

Colors Tamil is Viacom18s newest channel and aims to change the game in the Tamil general entertainment genre. Colors Tamil will focus on content that is differentiated, thought-provoking and socially conscious. The channel will offer a range of action and non-action programmes spanning from mainstream dramas, reality shows, comedy shows to fantasy shows. Colors Tamil will dish out cinema style entertainment with shows such as "Sivagami", "Perazhagi", "Velunatchi" and never seen before reality shows like "Enga Veetu Maapillai" and "Colors Super Kids".

Kids Entertainment

Nickelodeon

Nickelodeon has been the No. 1 channel in the kids category since August 2014 and continues to rule supreme. The Channel is home to the best and funniest in kids entertainment with chartbusters ‘Motu Patlu and the newly launched blockbuster Gattu Battu. Nickelodeons thought leadership comes from its pioneering ability to create larger than life and ‘one of a kind properties like the Nickelodeon Kids Choice Awards or the specially created made for TV movies that consistently captivate audiences. The channel has the unique ability of being able to connect with kids through numerous touchpoints beyond TV. In addition to above the line, below the line, online and experiential the franchise has a school contact program reaching out to more than 900 schools across multiple cities in the country. Nickelodeon engages with kids throughout the year with innovative campaigns such as the ‘Nickelodeon Best Friendshake Contest, ‘Nickelodeon Lift Your Gift Contest and pro socio campaigns such as Together for Good. Special made for online, viral campaigns such as Teachers Day D Se Dab, Childrens Day and 12 days of Christmas celebrations have connected greatly with the tech savvy kids of today. Www.Nickindia.com receives close to 1.2 million average page views in a month. The website hosts more than 400 games and numerous videos that keeps the kids engaged through various interactivities throughout the year. The Nick India community on Facebook has over 2 million fans. As of January 2018, Nickelodeon reaches out to 33 Million kids.

Sonic

Sonic serves the right combination of Action and Comedy. The channel boasts of a strong content line-up featuring shows such as the homegrown hero ‘Shiva, ‘Pakdam Pakdai and international favourites like ‘Power Rangers & ‘Shaun the Sheep. 360 degree innovative tent pole engagements such as ‘Sonic Triple Fun in South Africa Contest, ‘Sonic School With Toons Contest & ‘Sonic Im on TV contest has managed to strike the right chord with kids all over the country because of its omnipresent marketing with Pan-India touchpoints ranging from cross channel TV, print, vans, schools, malls, online and ambient. Sonic also boasts of a highly interactive online community through www.sonicgang.com, and 5.10 lakh fans on Facebook.

Nick Jr.

Nick Jr. is ‘the smart place to play that believes in ‘education and ‘entertainment going hand-in-hand and is aimed at young parents and preschoolers. The channel strengthened its audience engagement through digital and on ground activations. Its internationally acclaimed shows such as ‘Dora the Explorer, ‘Paw Patrol and ‘Peppa Pig foster motor, memory, math and language development in a child and have emerged as an integral part of every preschoolers life.

Nick HD+

Positioned for discerning HD households for kids of all ages from 2 – 14 years, Nick HD+, the 1st Kids High Definition entertainment channel was launched in Dec 2015. It showcases a wide array of content in high definition from the local and international library of Nickelodeon - from the local chartbusters such as Motu Patlu and Pakdam Pakdai to the evergreen favourites and international heavyweights such as Shaun the Sheep, Dora the Explorer, SpongeBob Square Pants and Power Rangers. Additionally, there are shows telecast exclusively on Nick HD+ such as ‘The Penguins of Madagascar ‘Kung Fu Panda ‘Teenage Mutant Ninja Turtles and many more.

Digital Ventures

VOOT is Viacom 18s Premium ad-supported video on demand platform. With a premium content library of more than 50,000 hours spanning Viacom18s network channels (full episodes and exclusive content), VOOT Kids and VOOT Originals, the platform caters to the varying needs of a discerning digital audience across segments. With 35 million monthly active users (MAUs) VOOT is consistently amongst the top 3 ad-supported video platforms in the country (App Annie) month on month, making it a clear front runner in the category. VOOT was recently awarded the coveted ‘Best of 2017 apps by the iOS App Store and its Progressive Web App product was awarded the IBC Global Innovation Award 2017 in Amsterdam. VOOT continues to take the leadership mantle on innovation, across content, technology and marketing, aimed at providing an immersive experience for its users.

Filmed Entertainment

Viacom18 Motion Pictures has been the only Indian studio catering to the dynamic needs of the Indian audiences through powerful and relevant cinema. The studio has scaled the heights of success this year with ‘Toilet Ek Prem Katha, a movie highlighting the sanitation issues in India and the recent box office success ‘Padmaavat which was the first Indian film to have an IMAX 3D release. Viacom18 Motion Pictures has also successfully ventured into the Marathi cinema industry with ‘Aapla Manus. The studio also experimented with the horror genre ‘The House Next Door which released in three languages – Hindi, Tamil & Telugu.

Experiential Entertainment

Integrated Network Solutions

Integrated Network Solutions (INS), through its live events division LIVE Viacom18 and brand solutions division BE Viacom18, brings a unique and impactful experience to brands through a combination of multi-dimensional marketing platforms. Live Viacom18 has created and scaled up Live IPs of Viacom18s iconic brands across Music and Comedy. The 5th edition of Vh1 Supersonic, Indias No 1 multi-genre Music festival, with the largest roster of headliners ever and the most diverse curation of international music, was organised by LIVE Viacom18 in Feb 2018 in Pune with exceptional results. With award-winning campaigns for the PMO on Civil Services Day for Department of Administrative Reforms and Public Grievances and previously for Odisha and Arunachal Pradesh Tourism among other initiatives and the super successful AR Rahman Encore 4-city tour, INS continues to provide a compelling range of engagement platforms for brands and spectacular live experiences for audiences.

Consumer Products

Viacom18 Consumer Products is a significant and one of the fastest growing players in the licensed merchandise industry. Present across 50+ categories across 80+ licensees and distributed across more than 10,000+ outlets, the CP business caters to all lifestages from pre-schoolers to youth and adults. FY18 was a year when Viacom18 CP strengthened its domination of the pre-school segment by stabilising Dora, rapidly scaling up Peppa Pig and acquiring Masha and the Bear with Paw Patrol slated to launch very soon. On the Youth side, Flyp@MTV cafes expanded from 1 to 3 across the country with launches in Mumbai and Chandigarh.

Content Asset Monetisation

IndiaCast

IndiaCast is a JV between TV18 and Viacom18, and manages content monetisation for TV18, Viacom18 and other broadcasters with three clear mandates:

Domestic: IndiaCast manages domestic distribution of the channels from Viacom18, TV18 and Eenadu Television (ETPL) across various platforms such as Cable (digital and analog), DTH, HITS and IPTV. It also ensures best-in-class availability and reach of all channels by strategically managing key aspects of carriage and placement. Indiacast has recently signed with Turner for distribution of its channels in India & Nepal.

International: IndiaCast monetises content/ programmes for TV18, Viacom18 across territories and platforms. In addition, we also distribute channels of ETPL across territories except US. With 22 international beams and its content syndication capabilities, IndiaCast has managed to reach the Asian diaspora and international audiences spanning across 145+ countries. With a rich content library of 50,000+ hours across genres, IndiaCast syndicates content from the Group in over 35 languages (including Hebrew, Russian, Serbian, Bosnian, Albanian, Macedonian, Kazakh, Swahili, Spanish, and English among others).

Digital: IndiaCast also manages digital initiatives of the Group. It is responsible for linear channel distribution to OTT platforms and telecom operators for mobile consumption.

CORPORATE SOCIAL RESPONSIBILITY

At TV18, Corporate Social Responsibility (CSR) is embedded in the long-term business strategy of the Company. The Companys CSR initiatives help elevate the quality of life of millions, especially the disadvantaged sections of the society. TV18 seeks to transform peoples lives by promoting health and education and sports, the latter to empower the children and youth of the country.

Reliance Foundation acts as the funnel through which Network18 Group reaches out to empower people and deepen its social engagements. In FY 2017-18, the Company focussed on the following initiatives:

• "Young Champs" initiative aimed at providing training to sports persons to promote rural sports, Nationally recognised sports, Paralympic and Olympic sports

• Dhirubhai Ambani Scholarships Programme through which financial assistance for education was provided in over 15 states of the country

• Health Outreach Programme through which preventive health was promoted by setting up ‘Static Medical Units in Mumbai

FINANCIAL PERFORMANCE

TV18 Standalone

Particulars ( Rs crore) FY17-18 FY16-17 YoY
Operating Revenue 735 667 10%
Operating Expenses 579 545 6%
Operating EBITDA 156 122 28%
Other Income 30 37 -19%
EBITDA 186 159 17%
Finance Cost 19 19 2%
Depreciation 19 18 7%
PBT 148 123 21%
Tax 52 21 146%
PAT 96 101 -5%

• Operating revenue rose 10% YoY to Rs 735 crore, driven by growth of our Hindi General News channel, and Business News continuing to perform well.

• Operating expenses growth was contained at 6% YoY, led by a focus on cost efficiency. The focus was accentuated during the seasonal and macro-driven weakness in advertising environment during H1FY18.

• Operating EBITDA improved to Rs 156 crore (up 28% YoY) as a result of operating leverage. However, full tax rate applicable for the whole of FY18 implied that profit after tax fell 5% YoY to Rs 96 crore.

TV18 Consolidated

Particulars ( Rs crore) FY17-18 FY16-17 YoY
Operating Revenue 1,475 979 51%
Operating Expenses 1,417 948 49%
Operating EBITDA 58 31 85%
Other Income 29 43 -33%
EBITDA 87 74 18%
Finance Cost 27 22 20%
Depreciation 69 56 22%
PBT before Profit of JVs / associate -9 -4 NM
Profit of JVs / associate 69 35 97%
PBT 60 31 95%
Tax 52 25 107%
PAT 8 6 40%
Minority -1 -13 NM
PAT (after Minority) 9 19 -54%

• Operating revenue rose 51% to 1,475 crore, and Operating EBITDA jumped 85% to Rs 58 crore Profitability levels continued to be impacted by gestation losses of properties launched over the past 3 years.

• The sharp revenue escalation is led by the impact of TV18 acquiring control of entertainment JV Viacom18 during the last quarter of the fiscal.

• On a comparable basis (by consolidating Viacom18 throughout), TV18 revenue rose 16% in FY 2017-18.

Comparable (restated) operating EBITDA also rose to Rs 240 crore, compared to Rs 170 crore last fiscal, led by a revival in advertising in 2HFY18 and a stellar year for movie production.

Restated ( Rs crore) FY17-18 FY16-17 YoY
Operating Revenue 4,813 4,142 16%
Operating EBITDA 240 170 41%

HUMAN RESOURCE DEVELOPMENT

Your Companys Human Resource Management systems and processes are aimed at attracting, developing, nurturing and retaining its single largest asset – Human Capital. It continues to focus on creating an engaging and high-performance work culture and a strong talent pipeline.

In the Talent Acquisition space, your Company further strengthened its Employer brand on campus and in the job market through multiple initiatives. We expanded our base of campuses that we visit for recruitment and were the employer of choice across all premiere journalism schools. The campus selection process was further standardised and refined, with the combination of psychometric tools and multiple selection rounds. To speed up the time-to-productivity of the trainees, a comprehensive induction and on-boarding programme was deployed, which provides cross-functional exposure to the new joiners.

The rigour of the selection process was improved by introducing background verification process for the senior hires. Additionally, your Company was able to achieve significant savings in the replacement costs of new hires.

Our journey of making the HR function more technology-driven continues on track. While SAP was launched in the last financial year, we continued to improve the system to enhance its employee friendliness. A Mobility platform (app) was launched this year to facilitate the processing of travel, attendance, leaves, reimbursements etc.

Our people are the key to truly realising the organisations potential. We continually strive to enable employees to realise their own potential within the organisations setup, by providing growth opportunities and extensive trainings. The learning and development initiatives of your Company are forward-looking and work towards not just bridging the skill-competency gaps but equally towards equipping employees with skills for the future. We deployed a leading online learning platform to provide our employees easy access to a vast library of engaging courses and help them achieve their personal and professional goals. Also, to encourage growth of internal talent and cater to the evolving aspirations of our employees, internal movements were facilitated through internal job postings.

Your Companys Performance Management system and processes contribute vastly towards enhancing the business performance as well as the employees engagement levels and their perception of fairness. We ensured that the organisation level goals were cascaded down to employees through a structured goal-setting process. The assessment process has constructive feedbacks and identification of development areas as its cornerstone – which helps guide employees towards the journey of improvement. Performance is also linked commensurately with the reward mechanisms. Initiatives were undertaken to ensure high employee engagement and involvement, and to promote employee health and well-being, while developing a more inclusive culture.

As of March 31, 2018, there were 3,000 employees on the rolls of your Company.

Headcount

As of March 31, 2018 As of March 31, 2017
TV18 1,873 1,849

In the coming year, the focus will be on further automation and technology improvements. A comprehensive framework around succession planning, leadership and career development would be deployed to develop a new breed of future leaders.

RISK MANAGEMENT

TV18 maintains a robust system of internal controls, commensurate with the size and complexity of its business operations. The system provides, inter alia, a reasonable assurance of protection against any probable loss of the Companys assets as a result of misuse of powers by those who are in a position to influence the working of the business verticals of the organisation. It ensures that the transactions of its business operation are recorded in all respects in a fair and transparent manner. The Company has an external and independent firm of Internal Auditors to scrutinise its financials and other operations. The Internal Auditors report their findings directly to the Audit Committee, which forwards them to the concerned departments/ business verticals for taking corrective measures. Internal audit also ensures that applicable laws are being complied with in true spirit.

RISKS AND MITIGATION STRATEGY

Digitisation Regime

Timely implementation of the Governments phased digitisation regime is critical to the long-term growth of the television industry. With the completion of the process of seeding of set-top boxes for Phases I and II (and nearing the completion of Phase III as well), the challenge now is to boost last-mile billing and packaging. This will help multi-system operators (MSOs) increase the average revenue per user (ARPU) and also benefit broadcasters. In this scenario, channels with weak content could stand to lose out on account of poor consumer demand.

Regulatory Environment

The Indian broadcast industry is heavily regulated across a multitude of areas including distribution, taxation, etc. Any policy changes can have a material impact on the economic and strategic direction of the industry and may restrict TV18s ability to do business.

Competitive Forces

The emergence of digital media, along with growth of mobile and radio, is causing a shift in part of the advertising revenue away from television. With their greater local connect and more measurable reach index, such media are drawing in considerable advertising from sectors such as FMCG and BFSI.

Advertising Revenue

Advertising being a major source of revenue generation, any decline in advertising revenues could adversely impact TV18s revenue and operating results. TV18s primary revenue generation is linked with the sale of advertisements through television channels, which is dependent on the overall macroeconomic and industry conditions, market trends, public policy and government regulation, viewership, budgets of advertisers, among other factors. TV advertisement sales are also threatened by abrupt termination of contracts by advertisers, limits on advertising time, advertising shift to new media formats such as digital, etc.

Third-Party Relations/JV/Partnerships

TV18 has relationships and JVs with external partners whose long-term continuation it cannot assure. Sudden termination or deterioration of these relationships may materially and adversely affect TV18s operations and financial condition. The success of any future JVs and strategic relationships with third parties is also not assured, as every relationship comes with its own set of risks, including failure to recover the investment made in such initiatives.

Brand Recognition and Popularity

TV18s brand strength is one of its biggest assets and its success depends upon the popularity and recognition of its brands, as well as its ability to deliver original and compelling content and services that attract and retain viewers. Failure to sustain the brands, or excessive expenditure incurred in doing so, could seriously impact TV18s business and financial operations.

Mitigation Strategy

TV18 has an exciting portfolio of quality content and is continuously working on strengthening its content bouquet to reap the benefits of digitisation. Cognisant of the importance to remain abreast of changes in the regulatory environment, TV18 is constantly evolving its operational strategy to align it with the transforming dynamics of the industry in the context of policy changes. Strong risk mechanisms are in place to ensure continued high levels of operational efficiencies and effectiveness in the changed environment. TV18 is also expanding its portfolio and focussing on other forms of revenue by expanding in the digital space. It is also strengthening its processes and systems to ensure cost effectiveness. TV18 is further keeping a sharp focus on cost-control without sacrificing scale. It is also continuously expanding its content basket to capture advertising interest and revenue. TV18 has in place a strong risk management system and stringent organisation policies that its employees are required to adhere to at all times. This ensures that its reputation remains protected and maintained.

INTERNAL CONTROL SYSTEMS

TV18 has exhaustive internal control systems that are aligned to its business requirements. TV18 regularly monitors the risks and has in place focussed risk mitigation strategies. Internal and external audit teams continuously monitor the adequacy and effectiveness of the internal control environment across TV18 and the status of compliance with operating systems, internal policies and regulatory requirements. The Audit Committee meets periodically to review the adequacy and efficacy of the internal control systems.