MEDIA, ENTERTAINMENT AND FILMS INDUSTRY GLOBAL OUTLOOK
India continues to be one of the fastest growing economies in the world. After the
temporary deceleration due to the impact of demonetization and implementation of Goods and
Services Tax (GST), the recovery in economic growth is now largely complete. It is
estimated that GDP grew at fastest in the world during relevant financial year; there were
several positive developments in the economy, which will further accelerate this growth
over the next few years. The long-delayed GST was finally implemented and it will go a
long way in improving the business environment in the country. Governments focus on
infrastructure development, banking reforms and affordable housing, amongst others, will
support the growth in the medium term. Growth in some segments of the rural economy has
been slower in the recent past. However, forecast of a normal monsoon bodes well for the
agriculture sector and would drive the rural consumption.
The Indian media and entertainment (M&E) industry witnessed another year of
all-round growth. The pace of growth marginally accelerated in relevant financial year,
despite the lingering effect of demonetization and the impact of GST roll-out. According
to the FICCI-EY Report (Report), M&E industry grew by 12.6% YoY. Despite the strong
growth over the past several years, Indias per capita entertainment consumption is much
lower than not only the developed markets but also countries with similar income levels.
This provides a significant head room for sustained growth driven by rising disposable
incomes and increasing access to entertainment content. According to the Report, the
Indian M&E industry is expected to grow at a CAGR of 11.3% to 2,032 billion over the
next three years, driven by growth in all the segments.
During the year, television increased its reach and engagement with the audience,
further enhancing its reputation as the default entertainment medium. Print media
continued to grow, albeit at as lower pace, due to multiple head winds faced during the
year. The movie industry surpassed all previous records riding on a strong performance at
both the domestic and the international box office. Online video consumption continued its
exponential growth due to the increased availability of affordable data and contenton
digital platforms. Following the auction of Phase III licenses, FM radio expanded into
newer cities. Live Events growth was led by premium properties, activations, and sports
events.
Your Company has started working towards production of Advertisement motion Pictures.
However it is in earlier stages, based on market Condition, management plans to expand
this segment.
DRIVERS OF GROWTH FOR INDIAN M&E AND FILMS INDUSTRY Rising Income:
• Indias per capita income at current prices grew 11.0% to reach Rs. 141,447 (US$
1960.46) IN FY 19AE.
• During 2017-2025, elite, affluent, aspires and next billion income classes are
expected to grow at a CAGR of 11%, 9%, 55 and 2% respectively.
Governments Initiatives:
• The Government carved out National Film Policy to mainly tap potential in the
Animation segment.
• The Government has set up the National Centre of Excellence for Animation,
Gaming, Visual effects and Comics industry in India.
• The Government will formulate a plan to increase media and entertainment export
to US$ 10 Billion in the next 5 years.
• The Government is taking efforts to boost "MAKE IN INDIA" initiative
in the media and entertainment industry.
BUSINESS REVIEW AND GROWTH PROSPECTS
Your Company is one of the Oldest Exhibition and Movie Processing Laboratory Companies
in southern India having a group presence (through other entities) of approximately 50
years. The Promoters have restructured the Board for two major reasons; to meet regulatory
requirements and to mitigate the risk with respect to Business Management, Management Up
gradation and to receive expert backing from veteran professionals in the Industry.
It has also been making efforts to revamp the complete compliance structure of the
Company to make it stakeholder friendly and ease of access to the Information.
The Company has also upgraded its websites to include online ticket bookings for its
Cinema Screens and ease to Customers for a simple and easy cinema experience.
The Company has also started identifying areas where it can set up multiplexes and
F&B store. The Company also plans to develop a unique brand name for its F&B
stores to make it attractive and easy recognition amongst its customers.
Your Company has started working towards production of Advertisement motion Pictures.
However it is in earlier stages, based on market Condition management plans to expand this
segment.
RISKS & CONCERNS
As it is normal and prevalent for any business, the Company also is likely to face
competition from existing companies. There can be risks inherent in meeting unforeseen
situations, not common in the industry. The biggest concern nowadays is the switchover of
customers/audience from physical to online segment. There is all of a sudden change in the
taste and preferences of the people due to covid pandemic. This needs to be noted and make
necessary efforts to have a stand in the industry.
Your Company is fully aware of these challenges and is geared to meet them. Your
Company also recognizes the risks associated with business and takes adequate measures to
address the associated risks and concerns.
Rising up to the new challenges will only be possible when we scale-up the brand chain
and put in efforts toward providing more and more satisfaction to the customers.
Risk: The Growth of Company is highly dependent on Income levels and Government
policies, which directly impact leisure and entertainment industry.
Mitigation: The Company expects no major and material change in Income levels and
thus the Foot fall shall not decrease in coming years.
Risk: Highly dependent on good films
Mitigation: The Company expects line up of good movies on basis of Internal
Industry sources and which shall stand attractive to all class of Audiences, which will
ultimately add to revenues of the Company.
Risk: High Capex to set up High Quality Screens
Mitigation: The Company seeks to set up Screens through Asset Light Model, where a
partnership with local HNIs and Ultra HNIs of areas will be planned resulting into low
capex and high income for the Company.
Risk: Identification of suitable location for New Cinemas and Multiplexes.
Mitigation: The Company currently have planned to expand its operations in Gujarat,
Maharashtra and Certain parts of Southern India. For precise location identification,
Company have hired one of the Leading Management Consultancy firms, who shall conduct spot
verification and thorough Due Diligence for measuring commercial viability of the
locations.
INTERNAL CONTROL SYSTEMS AND ADEQUACY
The Company has a system-based approach to risk management, anchored to policies and
procedures and internal financial controls aimed at ensuring early identification,
evaluation and management of key financial risks (such as market risk, credit risk and
liquidity risk) that may arise as a consequence of its business operations as well as its
investing and financing activities.
The Company has a proper and adequate internal control system to ensure that all assets
are safeguarded and protected against loss from unauthorized use or disposition and those
transactions are authorised, recorded and reported correctly. Accordingly, the Companys
risk management framework has the objective of ensuring that such risks are managed within
acceptable and approved risk parameters in a disciplined and consistent manner and in
compliance with applicable regulation. It also seeks to drive accountability in this
regard.
HUMAN RESOURCES
Vision believes that in order to effectively serve the stakeholders, the Companys
human resources play an integral role. To create value for our stakeholders who come from
diverse backgrounds, we need a diverse workforce where employees feel safe, work in an
inclusive and supportive environment. The Companys HR philosophy is to establish and
build a high performing organization, where each individual is motivated to perform to the
fullest capacity: to contribute to developing and achieving individual excellence and
departmental objectives and continuously improve performance to realize the full potential
of our personnel. Industrial relations are cordial and satisfactory.
We continuously strive to attract and retain the best talent from the local markets;
clearly define their roles and responsibilities; include them into robust performance
management systems; create an inspiring and rewarding work environment; engage them into
an inclusive work place; impart training and create development opportunities for
increasing employee knowledge and efficiency to make them future ready and to create
career opportunities.
CAVEAT
This section of the Annual Report has been included in adherence to the spirit
enunciated in the Code of Corporate Governance approved by the Securities and Exchange
Board of India. Shareholders and Readers are cautioned that in the case of data and
information are external to the Company, though the same are based on sources believed to
be reliable, no representation is made on its accuracy or comprehensiveness. Further,
though utmost care has been taken to ensure that the opinions expressed by the management
herein contain its perceptions on most of the important trends having a material impact on
the Companys operations, no representation is made that the following presents an
exhaustive coverage on and of all issues related to the same. The opinions expressed by
the management may contain certain forward-looking statements in the current scenario,
which is extremely dynamic, and increasingly fraught with risk and uncertainties. Actual
results, performances, achievements or sequence of events may be materially different from
the views expressed herein. Readers are hence cautioned not to place undue reliance on
these statements and are advised to conduct their own investigation and analysis of the
information contained or referred to in this section before taking any action with regard
to their own specific objectives. Further, the discussion following herein reflects the
perceptions on major issues as on date and the opinions expressed here are subject to
change without notice. The Company undertakes no obligation to publicly update or revise
any of the opinions or forward-looking statements expressed in this report, consequent to
new information, future events, or otherwise.
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