T.V. Today Network Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

OVERALL GLOBAL AND INDIAN ECONOMY OVERVIEW

a GLOBAL ECONOMY

As per World Banks Global Economy Prospect, January 2023, the global economy in 2023 is expected to grow at a meagre rate of 1.7 per cent¹, which is the third weakest pace in nearly three decades. Persistent inflation has resulted in major central banks tightening policies at the fastest pace in more than 40 years. This has contributed to a downgrade in overall global growth, with the United States, the Euro area, and China all undergoing a period of pronounced weakness. Emerging markets and developing economies (EMDEs) are expected to suffer persistent losses to activity, with their forecast for 2023 being downgraded 0.8 percentage points to a subdued 3.4 per cent². Risks to the outlook include potential policy missteps and the combination of additional monetary tightening, softer growth, and falling confidence in an environment of elevated debt. Structural policy priorities include fostering stronger, more resilient growth, making substantial investments in all forms of capital, strengthening social protection systems, promoting gender equality, investing in human capital, and facilitating more resilient food systems.

INDIAN ECONOMY

As per World Banks biannual flagship publication, the India Development Update, despite signs of a fragile global economic outlook, Indias economy continues to exhibit resilience and remains one of the fastest-growing economies in the world. In FY 23, Indias GDP grew at a healthy rate of 7.2 per cent³, stronger than the earlier estimate of 7 per cent. India has also overtaken the UK⁴ as the fifth largest economy in nominal US market exchange rate terms in 2022 (FY23). India is expected to contribute 15 per cent of global growth in 2023, primarily attributed to Indias digitalization efforts and strong policy framework.

The Indian economys projected growth is expected to positively impact the M&E sector, which has demonstrated a faster recovery than the overall economy. The Ministry of Information and Broadcasting received a substantial allocation in Union Budget for FY2023-24. A total amount of Rs.4,692 crore was allocated to the ministry, highlighting governments recognition of sectors importance. Within this allocation, a significant share of Rs.2,808 crore was specifically designated for Prasar Bharti, emphasizing the governments commitment to strengthen public broadcasting, and ensuring overall industry development⁵. The resumption of fiscal consolidation and emphasis on transitioning to a green economy in the Union Budget of FY 2023-24 is further expected to create robust medium-term growth. The media industry is expected to continue to outperform the overall economy in periods of growth.

OVERVIEW OF THE INDIAN MEDIA & ENTERTAINMENT (M&E) SECTOR

The Indian economy has witnessed significant growth in recent years, and the countrys media and entertainment industry (M&E) is expected to contribute significantly to this growth. Indias M&E sector grew 20 per cent in 2022 to reach 2,10,000 crore⁶, 10 per cent above its pre-pandemic 2019 levels.

Indias share of spend on M&E as a percentage of GDP has increased from 0.79 per cent to 0.89 per cent in the last five years⁷, however, there is significant headroom for accelerated growth in comparison to global benchmarks given the increased investments, robust demand, favourable policies, and attractive opportunities.

Segment	2021	2022
Television	72	71
Digital Media	44	57
Print	23	25
Filmed Entertainment	9	17
Online Gaming	10	14
Animation and VFX	8	11
Live Events	3	7
Out of Home Media	2	4
Music	2	2
Radio	2	2
Total	175	210
Growth		19.9%

All figures are gross of taxes (in 000 crores) for calendar years.

Source: EY-FICCI Media and Entertainment Outlook, May 2023

Although television remains the largest segment, digital media has become a strong number two, and print has seen a resurgence. The filmed entertainment segment also recovered, overtaking online gaming to reclaim the fourth position.

The traditional media share of the M&E sectors revenues decreased from 71 per cent in 2019 to 58 per cent in 2022, with digital medias share increasing from 16 per cent to 27 per cent in 2022. The M&E sector is expected to continue growing at a rate of 11.5 per cent in 2023, reaching Rs.2,34,000 crore ($29.2 billion) and with a compound annual growth rate (CAGR) of 10 per cent, to reach Rs.2,83,000 crore ($35.4 billion) by 2025.

All M&E segments except for TV subscriptions grew in 2022, with digital media growing the most, contributing to 50 per cent of the total M&E sector when including data charges associated with digital consumption. Experiential segments, such as filmed entertainment and live events, also recovered in 2022. Overall, traditional media contributed to half of the growth, while the balance came from digital, online gaming, and VFX segments.

In times of growth, the M&E sector outperforms Indias nominal GDP. In FY23 when the sector grew by 20 per cent and nominal GDP grew by 15 per cent⁸.

KEY TRENDS SHAPING THE M&E INDUSTRY

a INCREASING DIGITAL CONTENT CONSUMPTION FUELLED BY REGIONAL PREFERENCES

Media consumption has been on the rise for a long time, and it continues to grow at an accelerated pace. In recent years, digital media consumption has seen the highest rate of growth, outstripping all other forms of media. With increasing hybrid work culture and improved internet connectivity, this trend has only intensified, as people are increasingly turning to digital media to keep themselves entertained and informed. This has led to an unprecedented surge in digital media consumption.

One of the key drivers of digital media consumption has been the proliferation of connected devices. Over the last five years, the penetration of connected devices has grown by four to five times⁹. This has made it easier for people to access digital content on the go and has also made it easier for them to stream content on their televisions. This has led to a shift in viewership patterns, with more people turning to digital platforms to watch their favourite shows and movies. This underscores the rising importance of media organizations to adapt and optimise their content delivery strategies to cater to evolving preferences of Indian audiences.

Despite the rise of digital media, regional content continues to dominate television viewership in India. More than 50 per cent of TV viewership¹⁰ is attributed to regional content, including General Entertainment Channels (GECs), music, and movies. Similarly, regional languages other than Hindi have a 35 per cent viewership share¹¹ on Over-the-Top (OTT) platforms.

Even sports, which is traditionally dominated by national-level events, has a 25 per cent viewership share¹² on regional channels. This underscores the importance of regional content and languages in India and highlights the need for media companies to cater to this segment of the market.

* SHIFTING PREFERENCE TOWARDS SNACKABLE CONTENT

In recent years, there has been a significant shift in consumer behaviour towards snackable content. This type of content, which is short, easily digestible, and visually engaging, has become increasingly popular due to several factors.

Firstly, consumers attention spans have decreased by 25 per cent to only 8 seconds¹³ , making engaging them in long-form content challenging. On the other hand, Snackable content is easily accessible, providing consumers with the convenience and accessibility they crave.

Secondly, snackable content is ubiquitous and predominantly free, available through multiple popular platforms such as social media, news apps, and gaming sites. The high volume of preferred microgenres is also a contributing factor, thanks to the ease and speed of content creation.

Finally, shorter videos and audios provide higher opportunities for viewer participation. This has led to the emergence of a new type of content that encourages viewers to interact and engage, leading to increased popularity and viewership.

As attention spans continue to decrease, businesses need to take note of this trend and adjust their marketing strategies accordingly. Providing snackable content is an excellent way to reach audiences who are always on the go and looking for quick, easily digestible information. By doing so, businesses can stay relevant and capture the attention of their target audience.

* INCREASING PREFERENCE FOR PREMIUM CONTENT

The trend of premium content finding more traction in digital media is an ongoing shift in consumer behaviour. With the rapid growth of SVOD subscriptions, which have increased by 16x-17x¹⁴ over the past five years, consumers are willing to pay for high-quality content. The desire for premium content is driven by increasing demand for exclusive and personalized experiences.

In particular, sports and tentpole productions are driving the growth of premium content. As consumers seek out more immersive and engaging experiences, they are willing to pay a premium price for access to live sports events or blockbuster movies. This has led to the rise of specialized streaming services or the production of high-value content that caters to these specific types of needs.

Personalization is also becoming an important factor in the Indian digital media landscape. Consumers want content that is tailored to their interests and preferences and are willing to pay for the convenience and relevance that comes with personalized experiences. This has led to the development of recommendation algorithms and content curation services that help consumers discover new content based on their viewing history and preferences.

Overall, the trend of premium content finding more traction in digital media is likely to continue in the coming years. As technology continues to evolve and new types of content become available, consumers will continue to seek out unique and personalized experiences that are worth paying for. This shift presents both challenges and opportunities for content creators and media companies, as they work to keep up with changing consumer demands and preferences.

PRODUCT-WISE PERFORMANCE AND INDUSTRY OUTLOOK

* TELEVISION

Television continues to be a significant platform for Indian households, holding its ground against the rise of digital media. In 2022, there has been a 1 per cent YoY increase in TV households, totalling 18 crore¹⁵, however, its viewership in terms of time spent on TV has declined by 7 per cent¹⁶ as compared to the previous year, with both Hindi-speaking markets and south markets witnessing a drop in viewership. This could potentially be reflective of a shift in consumer behaviour towards other entertainment options. The decline has been attributed to the availability of high- quality niche content on OTT streaming platforms, the popularity of YouTube and the growth of social media and gaming. As per BARC¹⁷, demographically, lower socio-economic classes saw the largest drop in viewership, while the highest drops were noted in the age group of 20 to 40 years. However, sports witnessed a growth in viewership on television, with non-cricket sports growing at a healthy 35 per cent¹⁸. The rise of regional content has also contributed to the continued success of TV in India. Regional channels own 52 per cent of GRP share¹⁹ in GEC, movies, and music, due to the growth of new languages, deeper content in regional languages, and attractive micro-genres.

In terms of content dissemination on TV, a majority of the content, approximately 72 per cent²⁰, was produced for general entertainment channels, resulting in over 114,000 hours of television content. Interestingly, this content is diversified in terms of languages, with around 20 per cent to 25 per cent in Hindi and the rest in regional languages. This showcases the broad spectrum of languages catered to by television programming.

In addition to news bulletins, news channels also contributed to the television landscape by producing over 36,000²¹ hours of non-news bulletins. These nonnews bulletins include content such as news-linked programs, documentaries, and specials. This indicates that news channels not only focus on delivering news but also provide viewers with a diverse range of supplementary content.

Furthermore, there has been a noticeable increase in the share of sports content on television, which now accounts for 3 per cent of the overall programming²². This rise in sports content can be attributed to the recovery of live events post-pandemic. It signifies a revival in sports programming and the return of exciting sports events to television screens.

Television subscription revenues also decreased by 4 per cent in 2022²³ due to a reduction in the paid subscriber base by around five million television homes, with cord-cutting and movement to free television being the major reasons for the fall in paid subscriptions. This trend highlights the continued challenge faced by TV service providers in maintaining subscription-based revenue streams. Free television continued to grow its base to reach an estimated 4.5 crore subscribers²⁴ on the back of less-expensive television sets, economic issues, and the addition of new channels to the platform.

Connected smart television sets continued their explosive growth, with several platforms and manufacturers providing advertising services on their smart TV platforms to the extremely desirable "top of the pyramid" audience. It is expected that connected smart TV sets will reach 4 crore by 2025²⁵, given the imminent large-scale roll-out of 5G services in India and the continued growth of wired broadband.

The report suggests that there could be a good case for parity-pricing between linear feeds on TV and OTT due to increased acceptance of permanent and temporary work-from-home culture creating a large "laptop audience" and a decrease in the reconnection of second TV sets.

a DIGITAL MEDIA

Digital Media experienced a 30 per cent²⁶ growth in 2022, with advertising revenue growing from Rs.38,300 crore in 2021 to Rs.49,900 crore in 2022, and subscription revenue also increasing from Rs.5,600 crore in 2021 to Rs.7,200 crore in 2022. The total revenue for the industry reached Rs.57,100 crore in 2022, with a projected increase to Rs.86,200 crore by 2025.

In terms of consumption trends, Indians spent an average of 4.9 hours per day²⁷ on their phones, which is a 32 per cent growth since 2019. Consumers spent a total of 74,800 crore hours on mobile in 2022, up 6.8 per cent from 70,000 crore hours in 2021²⁸. India remained the second-largest market by app downloads in 2022, with 2,890 crore apps downloaded²⁹, a growth of around 8 per cent over 2021. However, in terms of revenue, India lagged behind many smaller markets and did not feature in the top 20 revenue-generating markets in 2022.

It is also important to note that Indians spent 82 per cent of their time on mobile phone apps for media and entertainment³⁰, with social media apps being the most popular. In addition, the average mobile data usage per smartphone in India was 25GB per month in 2022 ³¹, and this is set to increase at a CAGR of 14 per cent to reach 54GB by 2028. This growth is driven by increased adoption of 4G and 5G, which grew to 74 per cent of total subscriptions as compared to 68 per cent in 2021. Media and entertainment, including news, books, music, video, and gaming, contribute to over 62 per cent of data consumption in India³².

As per EY-FICCI Media and Entertainment Outlook, May 2023, online video viewers increased by 6 per cent (3 crore) in 2022, reaching 53 crore, which is around 98 per cent of smartphone owners and wired broadband subscribers. The estimate is that video viewers will cross 62 crore by 2025. The most popular type of video consumed was music videos, with over 2,500 crore hours spent on entertainment apps³³. In terms of language content, it is important to note that 30 per cent of OTT originals were in regional languages in 2020, and this increased to 50 per cent in 2022.

Additionally, Indians love online sports, spending over 190 crore hours on online sports,³⁴ which is among the most time spent on online sports in the world. The number of online audio streaming users crossed 20 crore in 2022³⁵, with India having just 0.4 to 0.5 crore paid music streaming subscriptions projected to cross 0.8 crore paid subscriptions by 2025³⁶. The average time people spent listening to music increased by 3.8 hours per week from 21.9 in 2021 to 25.7 in 2022, and music consumed through paid audio streaming increased from 3.3 hours a week in 2021 to 4.3 hours a week in 2022³⁷.

In 2022 the online news audience reach grew to 47.3 crore³⁸ unique users across mobile and desktop users of news sites, portals, and aggregators, which is approximately 55 per cent of Internet users³⁹.

Social media platforms such as YouTube, WhatsApp, Facebook, and Instagram remained heavily connected to the news, with 63 per cent of visitors on news sites being redirected from social media platforms⁴⁰. Furthermore, the focus on vernacular languages and hyperlocal news content services continued to grow.

Although vernacular platforms remain lower in reach than national platforms, these platforms provide extremely high engagement. However, despite the launch and promotion of subscription products such as e-papers, ad-free news, and exclusive content, subscription revenues remained elusive in the online news industry. The main challenge is the abundance of free news platforms available, which makes it difficult for subscription-based models to gain traction and achieve scale. As a result, many news brands have resorted to syndication deals to generate revenue.

a RADIO

Radio segment revenues in India witnessed a 29 per cent growth in 2022, reaching Rs.2,100 crore, though the revenues were still 66 per cent of 2019 revenues⁴¹. There were 1,233 operational radio stations in the country, including 366 community radio stations⁴². Radio ad volumes increased by 25 per cent compared to the previous year, however, ad rates remained 20 per cent below their 2019 levels⁴³. Radio companies are focusing on integrated solutions, including content production, event IPs, social media, commissioned podcasts, audio stories, influencer marketing, etc., as a one-stop shop for their retail advertisers. Nevertheless, issues relating to listenership measurement, implementation of digital radio, and mandating the inclusion of FM receivers in smartphones need to be addressed to achieve the sectors true potential. The revenues of the radio segment are expected to recover to Rs.2,600 crore by 2025⁴⁴, and around a fifth will be non-FCT revenues.

However, radio companies face challenges due to restricted radio measurement in a few cities, no clear path forward for the implementation of digital radio, and top-end smartphones not incorporating FM radio receivers/chipsets. The ability to demonstrate reach and listenership is also low. Radio revenues are expected to continue recovering, driven by the SME advertiser segment, retail advertising, and non-FCT revenues. Non-FCT revenues are expected to grow by 8-10 per cent of private FM radio revenues by 2025. If digital radio is launched, it could grow the segment to Rs.6,000 crore by 2026⁴⁵, if implemented while keeping in mind the needs of all stakeholders.

a ADVERTISING

In 2022, the Indian advertising industry grew by 19 per cent⁴⁶, outperforming the nominal GDP growth of 15 per cent. The Indian advertising market surpassed the Rs.1,00,000 crore benchmark for the first time, indicating significant growth in this sector. As per GroupMs TYNY report, India ranked eighth in global ad spending, and it is expected to be the fastest-growing market among the top ten ad markets in 2023. TV and digital advertising contributed to 78 per cent of the total ad spend in India, while local media, including print, OOH, radio, and cinema, accounted for the remaining 22 per cent. Traditional media comprised 52 per cent of total advertising and digital media the balance 48 per cent, and as per EY estimates the total advertising will further grow by 12 per cent in 2023.

TV Advertising: TV advertising, which remained the most effective mass medium from an ad rate perspective, recovered by 2 per cent in 2022⁴⁷. As per TAM AdEX, Ad growth was observed across the volume, which grew by 2 per cent, while rates reduced marginally by 0.4 per cent on average, mainly post the Diwali festive season. Ad volumes significantly increased YoY in Q2 2022, which had been affected by the pandemic in 2021. However, despite events like FIFA World Cup 2022, ICC Mens T20 World Cup and Gujarat state elections being held in Q2 2022, caution overtook marketers sentiments, leading to a 4 per cent reduction in ad volumes⁴⁸ as global tech companies reduced their domestic discretionary spending due to economic forecasts, the ban on gaming, betting, and cryptocurrencies, and a shortage of supply in the automobile sector. FMCG and e-commerce contributed the most to the growth in ad spending on television⁴⁹.

TAM AdEX additionally reported that 9,245 advertisers⁵⁰ used television in 2022, resulting in an increase in the advertiser base for the first time in three years. Of these, 4,705 advertisers used only television as a medium for advertising and were not present in print and radio. Three of the top five genres that saw the highest increase in new advertisers pertained to regional languages. The widening of the advertiser base on sports genre is indicative of the growing interest and viewership of non-cricket sports in India.

Digital Advertising: Digital advertising in India has continued to grow rapidly, with digital ad spending increasing by 30 per cent in 2022, reaching Rs.49,900 crore⁵¹. Large advertisers contributed Rs.31,900 crore, while SMEs and long-tail advertisers contributed Rs.18,000 crore. As per TAM AdEX, the Ad insertions increased 52 per cent in 2022 vs 2021 and there were over 360 categories which had higher insertions on digital than on print, television, or radio. Programmatic advertising too witnessed a growth of 15.8 per cent as compared to 2021⁵². OTT platforms of broadcasters and news companies garnered over 8 per cent of digital ad revenues⁵³.

The SME advertiser base also grew significantly in 2022, with more than 800,000 SMEs advertising on large platforms, with spending as low as Rs.25,000 per year⁵⁴. Industry discussions indicate that this number is growing significantly and could reach a million advertisers within three years.

Eight categories spent over 20 per cent of their total ad spends on digital, with four categories spending over 30 per cent⁵⁵, while most categories increased spending on digital media in 2022 as compared to 2021. FMCG and e-commerce contributed to 58 per cent of the total digital ad spending, with FMCG tempering its digital spending as the effects of the pandemic wore off and physical channels recovered. Finally, various initiatives were made to increase rates, including guaranteed programmatic deals, floor prices for programmatic, native, contextual, and interactive ads, and more video content on textual platforms as it garnered a higher rate.

Radio Advertising: Radio Advertising witnessed a growth of 25 per cent in 2022⁵⁶ compared to the previous year, with a more even distribution of ad volumes across the year. More than 415 categories comprising 10,000+ advertisers and over 13,000 brands advertised on the radio during 2022. As per TAM AdEX, the retail/local advertisers share of ad volumes also increased by 10 per cent in 2022, to reach 49 per cent of total ad volumes in 2022. This reflects radio companies becoming one-stop marketing shops for larger retail clients and a soft national ad market for radio.

a DIGITAL INFRASTRUCTURE

Total telecom subscriptions in India remained stable at 1,117 crore in December 2022 compared to 1,117.8 crore in December 2021, with urban subscriptions comprising 56 per cent and rural subscriptions 44 per cent⁵⁷. The tele density number in India is now 85 per cent, but heavily skewed to 134 per cent in urban areas and just 58 per cent in rural areas. As per Ericsson Mobility Report, November 2022, 4G dominated Indian mobile subscriptions in 2022, with

72 per cent of subscriptions using 4G technology and another 2 per cent using 5G, while 26 per cent of subscriptions were still using 2G or 3G technology. Ericsson estimates that around 3 crore users upgraded their phones to start consuming 5G services by the end of 2022.

Internet penetration increased by 4 per cent in India in 2022, with 74 per cent of telecom subscriptions accessing the Internet, up from 68 per cent in December 2020⁵⁸. Growth for urban and rural Internet subscriptions was at 4 per cent and 5 per cent respectively in 2022.

A report published by Ookla in January 2023, indicates that Indian consumers can expect a median mobile internet connection speed of 18.26 Mbps via cellular networks and a median fixed internet connection speed of 49.09 Mbps. India has one of the lowest data charges for 1GB of mobile data in the world⁵⁹, which is the key reason for the growing telecom internet user base and the growth being witnessed across online entertainment, audio streaming, gaming, social media, etc. Despite low data prices, an estimated 30 crore feature phone users are yet to migrate to smartphones⁶⁰.

As per EY M&E Report 2023, the smartphone user base in India increased to ~54 crore in 2022 from ~45 crore in 2020, indicating penetration into around 38 per cent of the population.

The report estimates that 5G is expected to become dominant and reach 53 per cent of subscriptions by 2028, whereas 4G will still comprise 44 per cent of subscriptions due to the conversion from feature phones to smartphones. However, the growth has tapered down since mid-2021 as the average cost of buying a smartphone increased on account of the semiconductor shortage and a depreciating Rupee.

This resulted in smartphone manufacturers prioritizing higher-end models, adding just 4 crore new smartphone users in 2022.

While the number of daily internet connections is relatively lower, the popularity of CTVs is expected to grow in 2023 with the availability of free content such as IPL. In May 2022, over 6 crore people in India streamed YouTube on their TVs, and 30 per cent of instances involved viewers watching together⁶¹. Smart- connected TVs are expected to exceed 4 crore (daily active users) by 2025, thereby ending the monopoly of broadcasters on the large screen and leading to around 30 per cent of content consumed on large screens being social, gaming, digital, etc⁶².

DISTRIBUTION AND IMPACT ON BROADCASTERS

As on September 30, 2022, there are 1,747 MSOs registered with the Ministry of Information and Broadcasting (MIB)⁶³. Further, as per the data reported by MSOs and HITS operators, there are 12 MSOs & 1 HITS operator who have a subscriber base greater than one million.

A total of 885 private satellite TV channels have been permitted by Ministry of Information and Broadcasting for up-linking only/down-linking only/ both up-linking and down-linking, as on September 30, 2022. 60 per cent of channels were free-to-air as compared to 64 per cent in 2020, reflecting the impact of the NTO, where many broadcasters converted FTA channels into pay. News channels comprised 44 per cent of total channels.

As per the reporting done by broadcasters in pursuance of the Tariff Order dated March 3, 2017, as amended, out of 872 permitted satellite TV channels which are available for downlinking in India, there are 353 satellite pay TV channels as of 30th September 2022. Out of 353 pay channels, 254 are SD satellite pay TV channels and 99 are HD satellite pay TV channels.

Pay DTH has attained a total active subscriber base of around 6.66 crore. This is in addition to the subscribers of the DD Free Dish (free DTH services of Doordarshan). The total active subscriber base of pay DTH has inreased from 6.56 crore in September 2022 to 6.66 crore in December 2022.

a THE NEWS GENRE

After the suspension of publishing TV News ratings for almost a year and a half, the Broadcast Audience Research Council (BARC) was asked to resume the same based on an order from the Ministry of Information and Broadcasting on January 12, 2022, to ensure that the industry gets fair and equitable representation of true trends for the news genre.

Post resumption, the ratings were released for the period of Week 7 to Week 10. BARC India is calling it ‘Augmented Data Reporting Standards for ‘News and Special Interest genres. BARC India is reporting TV audience estimates on a four-week rolling average basis for all channels classified under a News or Special Interest genre, effective Week 10, 2022 (i.e., data released on Thursday, March 17^th, 2022).

a NEW TARIFF ORDER (NTO 2.0)

The Telecom Regulatory Authority of India (TRAI) notified amendments to the new tariff order (NTO 2.0) for the broadcast sector, which come into effect for consumers from February 1, 2023.

The implementation of NTO 2.0 was earlier put on hold after it had been met with stiff opposition from industry players. There were also concerns regarding the burden of higher subscription fees on consumers as broadcasters raised the prices of their popular channels.

a DD FREE DISH

Public broadcaster Prasar Bharati has mopped up Rs.1,069.60 crore from the e-auction of 65 MPEG-2 slots on DD Free Dish. The broadcasters total revenue has seen a 66 per cent jump compared to last years auction.

The auction saw the participation of broadcasters from different genres. However, the big four networks Hindi general entertainment channels Star Utsav, Zee Anmol, Sony Pal and Colors Rishtey stayed out of the auction.

OPPORTUNITIES AND THREATS

a OPPORTUNITIES

The news and media industry is an ever-evolving landscape, with advancements in technology and changing consumer preferences shaping its future. In this dynamic landscape, companies need to adapt and innovate to stay ahead of the curve, and below outlined are a few of the key opportunities for us to scale and grow in the coming years.

Al-led technology advantage:

The company sees AI as a game-changing opportunity for the industry to transform. By streamlining workflows, improving efficiencies, and increasing productivity, AI-powered automation can reduce the manual effort required for research and production, freeing up human resources to focus on creating more engaging content and improving the quality of news. Furthermore, AI can enable personalized experiences for users, leveraging AI-powered analytics, which provides invaluable insights into audience behaviour and preferences. This, in turn, can lead to significantly improved audience engagement.

Overall, the integration of AI technology has the potential to transform the company by optimizing operations, creating more captivating content, and providing a more immersive and personalized experience for audiences.

Growth from subscriptions as a revenue stream:

The emergence of subscription-based content models presents a lucrative opportunity for businesses as consumers increasingly prefer premium subscription products. The success of news subscriptions, generating Rs.120 crore in revenue⁶⁴, demonstrates the potential for exclusive and premium content offerings. The news subscription market is estimated to have 1.5 crore paid subscribers across all platforms, and this number is expected to double by 2025 ⁶⁵ with the introduction of more speciality news and custom knowledge products. Digital payment changes, particularly the adoption of UPI payments, have benefited subscription-based businesses, making it easier for customers to pay and renew subscriptions. Despite this, digital payments can still streamline subscription services and provide a seamless customer experience. Overall, the subscription-based model offers a promising opportunity for businesses to increase their customer base and revenue.

Digital, vernacular expansion:

The Company possesses a vast and diverse digital footprint, creating a tremendous opportunity to expand and monetize its business through third-party and proprietary platforms, such as the website and OTT. The Company is currently producing both traditional and digital-only content, but there is significant potential for growth in region-specific and special interest content, which the Company is actively exploring. By leveraging its existing digital presence and expanding its content offerings, the Company can capitalize on this opportunity to enhance its revenue streams and grow its audience base. This presents a high-impact opportunity for the Company to establish itself as a prominent player in the digital news and media landscape.

Short-form video: The rising preference for short- form video presents a significant opportunity for the company, especially in non-metro areas. In 2022, 65 per cent of short-form video users were from nonmetro regions⁶⁶, highlighting the potential for news companies to reach new audiences in these areas. In 2022, the average time spent per day on short video apps remained steady at 33 minutes⁶⁷, indicating a high level of engagement with this format. Moreover, 85 per cent of consumption was in Hindi and other regional languages, presenting an opportunity for the company to create content that resonates with these language-speaking audiences. The short-form video advertising market in India was Rs.400 crore ($50 million) in FY2022 and is projected to increase by Rs.640-720 crore ($80-90 million) by 2023⁶⁸, providing an opportunity for news companies to monetize this format. By embracing short-form video, news companies can tap into this growing trend, increase their audience engagement, and establish themselves as leaders in the digital media landscape.

International expansion: The rising global demand for Indias media content presents an opportunity for the company to explore international markets. By expanding globally, the company can diversify its revenue streams, increase brand recognition, and tap into a wide range of audience segments. This expansion opens doors to new sources of income as the company reaches a larger customer base and satisfies the growing demand for Indian media and news content. Moreover, venturing into international markets enables the company to establish a strong global presence and strengthen its reputation as a key player in the industry. This, in turn, fosters consumer trust and loyalty. Additionally, catering to diverse audience segments in different countries allows the company to offer a variety of content options that resonate with various cultures and preferences. Overall, expanding internationally presents a strategic opportunity for the company to thrive in the competitive global media landscape.

Increase in traffic on company-owned properties:

In addition to revenue from third-party platforms, the company recognizes a growing influx of traffic on its own properties as a valuable tool to enhance advertising effectiveness and gain deeper insights into our audiences. This presents an opportunity for the company to better cater to their needs and deliver a more personalised experience. The company plans to increase the traffic on company-owned properties through judicious marketing and organic initiatives

a THREATS

As the media industry continues to evolve and adapt to the ever-changing technological landscape, news publishers face a multitude of threats to their businesses. From the rise of third-party platforms and the emergence of new competitors to changes in advertising regulations and data privacy laws, the challenges are numerous and diverse. In this section below, we will explore some of the most pressing threats that news publishers currently face and how they can navigate these obstacles to maintain a competitive edge.

Declining TV viewership and evolving advertising landscape:

The consumption of traditional television is anticipated to decrease as viewers allocate less time to watching TV. This trend is also evident in the changing preferences of advertisers, who are shifting their focus from traditional television to digital advertising, which offers more precise targeting and measurable results. As a consequence, TV news media may experience a decline in advertising revenue.

Fragmentation of audience and platforms:

The emergence of smaller content providers setting up low-cost digital setups is a growing trend in the media industry. These platforms offer alternative sources of News and Entertainment, attracting a large share of the audience. With their loyal audiences, these platforms are now competing with traditional media firms, which poses a significant threat to both their revenue and audience engagement. This trend has been further exacerbated by the fact that the overall market has remained mostly flat. As a result, news publishers must take urgent action to address this threat and adapt to the changing market conditions to remain competitive and maintain their market position.

Lowering Ad yields on third-party platforms:

The emergence of third-party platforms like YouTube and Facebook has transformed the news publishing landscape, providing unprecedented opportunities for content distribution and audience engagement.

However, the cost of this exposure is steep, as these platforms compete with traditional media outlets for advertising revenue. In 2022, we witnessed a decline in ad prices and yields for news and media publishers. This downward trend poses a threat to the company to the incumbent revenue streams and requires immediate action to counter the adverse impact on their business.

Regulatory impact due to Ad-ban on certain categories:

The recent ban on betting, Crypto and gaming advertisements has emerged as a significant threat to news publishers, impacting their ad revenue streams. Although not uniformly adhered to by all publishers, separate advisories have been issued to TV channels, digital news publishers, and OTT platforms, advising them against displaying advertisements of online sports betting platforms and surrogate ads for offshore sports betting platforms in the guise of sports news websites, specifically targeting Indian audiences. As a result, companies will be forced to reassess their advertising strategies and find alternative revenue streams to make up for the loss of revenue from betting ads.

IP violation:

The rampant violation of intellectual property rights is posing a grave threat to the business of media and news companies. The proliferation of fake and poor-quality content has become a significant concern for news publishers, as their content is often stolen, plagiarized, or misused without permission. Such violations not only hurt their reputation but also affect their revenue streams as they stand to lose out on potential ad revenue. News publishers must take immediate action to protect their intellectual property and prevent unauthorized use of their content.

Privacy regulations:

News publishers all over the world are facing a new threat to their advertising business with the upcoming withdrawal of third-party cookies. Cookies have been instrumental in tracking user behaviour and providing valuable insights into audience preferences and demographics.

With their removal, news publishers will face a significant challenge in understanding their audiences needs and providing targeted advertising, leading to a potential impact on ad revenue. News publishers need to rethink and redirect their data strategy to capture more first-party data sources and explore second-party data partnerships, and this would require a higher focus on registrations, contests, and interactivity.

The Company is continuously monitoring the various threats which can hamper growth and are taking appropriate and effective steps in this regard

RISKS AND CONCERNS

The Companys enterprise risk management framework enables the achievement of the Companys strategic objectives by managing risks. The Risk Management Committee and the Board of Directors periodically review various external and internal business risks and their mitigation plans.

Our risk management framework follows a structured and comprehensive approach which allows us to periodically identify, monitor and mitigate these risks. This system provides assurance to the management that key risks are being properly identified and effectively managed in the company.

The risks are identified and monitored as a continuous process. The management ensures to make use of the best available technology to strengthen controls and minimise manual intervention in business processes that help the organisation in mitigating the operational and reporting risks.

As of date, the management identifies the following risks and made the corresponding mitigation plan:

1.COMPETITION RISK

Risk and impacts	Mitigation plan
Success of our news channels highly depends on viewership and our ability to innovate and remain competitive.	• Strategic initiatives and continuous investment to enhance the brand equity of the Company by focusing on sensible and credible news reporting; timely delivered content and continuous endeavour to innovative marketing strategies
With emergence of new entrants, competition risk is a sustained risk for our business.	• Presence in all major Hindi-speaking markets (HSM) and make continuous investments to expand it
	• Monitoring viewership trends and consumer preferences in order to develop the business strategies

2.CYBER SECURITY

Risk and impacts	Mitigation plan
With increasing use of technology in all spheres, there lies a risk of financial loss or disruption in operations due to failure of IT systems. Further, there can also be deliberate attempts breaching access to our IT systems.c	• Implementation of information security policy
	• Use of back up procedures
	• Upgrading all the systems with latest security standards
	• Quarterly security assessment of IT networks
	• Network access controls etc. are put in place
	• Coverage under cyber insurance policy

3. AVAILABILITY OF COMPETENT HUMAN RESOURCE

Risk and impacts	Mitigation plan
Attrition and nonavailability of required talent can affect the performance of the Company.	• Regular review and engagement on personal development plans of high performers and high potential employees
	• Focused talent development and carrying out staff welfare activities to attract and retain the best talent
	• Ensuring safe working conditions for all the employees and continuous focus on building a safety culture
	• Adequate coverage under Group Medical Policy, Life Insurance Policy etc.

4. LITIGATION RISK

Risk and impacts	Mitigation plan
Any default may attract penal provisions and may impact reputation of the Company. The Company may face litigation from third party by virtue of being in news industry.c	• Implementation of legal compliance monitoring system
	• In house legal experts as well as consultation with experts
	• Continuous monitoring of regulatory changes
	• Periodic reviews of the compliances
	• Commitment in complying with laws and regulations
	• Adherence to current regulatory norms is being ensured by following a bottom up approach

5. LOSS OF ASSETS OR PROFIT DUE TO NATURAL CALAMITIES

Risk and impacts	Mitigation plan
Climate change may lead to increase in frequency and severity of natural disasters (flood, earthquake etc.)	• Vulnerability assessment conducted for natural calamities and ensured all required protective measures
	• Adequate insurance coverage for all the natural calamities

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY OUTLOOK AND PERFORMANCE

a TELEVISION

Your Company has been continuously focusing on sustaining and enhancing its growth trajectory with the channels from the network including Aaj Tak, Aaj Tak HD, India Today TV and Good News Today. All four channels have a unique offering and are gaining market share, coverage and credibility with audiences as well as advertisers.

The endeavour is to maintain the wide reach and leadership position of News Channel Aaj Tak as the No. 1 choice, which it has been able to sustain for the last 23 years in a row since its very inception. Aaj Tak has established its supremacy as the nations No. 1 News channel in terms of BARC Viewership for the entire.

FY 22-23.

Aaj Tak has maintained its leadership among Hindi news channels in the new Audience Measurement System BARC with a total viewership of 85 crore Gross AMAs⁶⁹.

Aaj Tak has also maintained the pole position across major news breakouts and critical news broadcasts such as Independence and Republic Day celebrations, Honourable Prime Minister Narendra Modis Live Address at the India Today Conclave, Honourable President Droupadi Murmus election victory and swear-in, other national occasions, and even state-level critical breaking news such as Eknath Shinde being declared as Chief Minister of Maharashtra.

The year 2022 also marked the launch of our Premiere Show, Black and White, hosted by highly- revered news anchor Sudhir Chaudhary. Since its launch, the programme has been an audience favourite across all platforms. Almost entirely since its launch, the show had remained on top among YouTube Concurrent users⁷⁰. The programme also maintains its rich leadership on YouTube live stream where it has led the platform since its launch⁷¹.

Aaj Tak also introduced an "Industry-First" initiative of Artificial Intelligence (AI) driven news anchor, Anchor Sana, who appears consistently on the channel with news updates and reached to a whopping 4 crore viewers in the launch week itself⁷².

On similar lines, our English news channel, India Today Television has also obtained leadership positions in critical news and events such as Honourable Prime Minister Narendra Modis live address at the India Today Conclave, Congress leader Rahul Gandhis live address post his disqualification from Lok Sabha and Honourable Finance Minister Nirmala Sitharamans interview at our very own Budget Special Event. India Today Television regularly creates new milestones of concurrent users on YouTube Live stream.

Our new Hindi news channel Good News Today has the second highest reach among Hindi news channels⁷³ in freeview distribution platform and has been consistently ahead of many renowned news channels — Zee News, ABP News, Zee Hindustan, and Times Now Navbharat in terms of viewership⁷⁴.

Aaj Tak HD scored the highest Cume reach for the year among all HD channels⁷⁵. Aaj Tak HD has grown significantly in Q423 over Q323, maximum among top HD channels⁷⁶.

With the nation progressively moving on from the jolts of the two pandemic waves, Companys channels namely Aaj Tak, India Today Television, Aaj Tak HD and Good News Today have stood out during these critical periods for their non-stop dissemination of credible news. The beginning of this year also saw the outbreak of the Ukraine-Russia war, which has been continuing till now. Our reporters were the first ones from India to report live from the war zone. The same credible trustworthy reporting came to the fore during the Sri Lankan economic crisis where our channels made a mark with their superior coverage and analysis.

While the year was marred with multiple instances of violence/riots and communal conflicts, our channels ensured sensible, non-biased and fact-based reporting rather than sensationalizing news.

The year also marked the on-ground return of our marquee event - The India Today Conclave which was themed around The India Moment. Like previous years, this year also the Conclave was attended by influential personalities from the different spheres of society including business, politics, sports, entertainment, and social welfare. Some of the top names who spoke at the Conclave were Union ministers Amit Shah and S. Jaishankar, cricketing legend Sachin Tendulkar and popular actor Ram Charan who made waves at the Oscar awards. The highlight of the prestigious event was the concluding speech by Honourable Prime Minister Narendra Modi. During the prime ministers speech at the Conclave, both Aaj Tak and India Today observed enormous spikes and decimated competition with distant leads in YouTube streams⁷⁷.

Our other on-ground event is Agenda Aaj Tak, the biggest thought platform for debates and discussions in the Hindi heartland. The event took place in New Delhi on December 9 and 10, 2022 and brought together Indias most recognizable and celebrated names across the realms of politics, entertainment, business, and social welfare to ponder on the big questions that lie in store for India.

This year also saw a lot of political rivalries/ instabilities coming to the fore. The channels also provided a comprehensive non-stop coverage of the events that unfolded in Maharashtra in April, from the rebellion by Shiv Sena MLAs to the coronation of Eknath Shinde. Our reporters provided first-hand, swift reporting of the Bihar political crisis when Chief Minister Nitish Kumar parted ways with the BJP Similar high-quality reporting was seen during the Rajasthan political crisis.

Over the year, the network has done meticulous coverage of each state election, from Gujarat and Himachal Pradesh to the three north-eastern states to the municipality polls in Delhi. Apart from regular coverage of polling days and counting days, the channels did several on-ground events in all poll- bound states to understand the nerve of people. All these events saw the participation of the leadership of all key political parties.

Our Channels also covered special moments such as India celebrating RRRs thumping victory at the Oscars and Indias nail-biting victory against Pakistan at the T20 World-cup. With a commitment to social responsibility, our channels also took up a lot of social causes this year such as the famous "Mera Swabimaan" campaign, which ran on our Prime Time show Black & White.

v RADIO

104.8 Ishq FM is a popular radio station in India known for its romantic music and innovative soundscape that provides an immersive listening experience to its audience. It currently operates in Delhi, Mumbai, and Kolkata and has gained popularity by catering to the interests of its listeners. The radio jockeys create a loyal following and a human connection by interspersing humour and celebrity interviews, making it a favourite among the masses.

In 2022, Ishq FM focused on localizing its content and music, and its drive-time shows were revamped to cater to the local audience, which garnered a favourable response. With a focus on programming innovation and city-led content, the station executed several engaging initiatives, including a Gift Stock Exchange for Diwali, Azaadi Kiraye Se for Independence Day, and Voice of Ishq Talent Hunt in Kolkata to find worthy on-air talent.

The brand also hosted several public services initiatives, such as Samvidhan India, April Cool, Janta Claus, and Yeh Public Sab Janti Hai, to disseminate relevant information to the masses. Ishq FM became the first radio station in India to introduce the digitally popular music genre lo-fi on its airwaves, and it highlighted that the station plays maximum music per hour compared to any other radio station. The brand also hosted the Ishq Music Awards, celebrating music and romance together and felicitating the best of music artists, and organized concerts in Delhi and Mumbai with Nooran Sisters, Nizami Bandhu, and Papon.

In 2022, Ishq FM won five awards at the Golden Mikes and 25 awards at the ACEF Global Customer Engagement Forum & Awards, cementing its position as a leading radio station in India. With its focus on local content and innovative programming, Ishq FM continues to capture the hearts of its listeners, making it the go-to destination for romantic music in the country.

v DIGITAL

TVTN is the countrys pioneering news Company that has grown into the number one video general news publisher along with leadership in the broadcast and publishing arena⁷⁸.

In 2022, Aaj Tak was recognised as the worlds No.1 News channel to cross 5 crore subscribers on YouTube and was awarded a much-revered custom Play button, recognising this incredible achievement.

We have digital-first initiatives which are scaling fast and we are relentlessly focused on building, measuring, engaging, and monetizing exclusive assets produced by Indias most revered editorial team. Our goal is to understand, lead, and dominate the consumer pathway from trial to conversion through content personalization and curation.

Aaj Tak and India Today both were No.1 on the counting day of the Gujarat/ Himachal Pradesh state election on YouTube Live Streams⁷⁹.

IndiaToday.in is one of Indias most popular and widely read news websites. The website offers comprehensive coverage of the latest news and events across India and around the world, including politics, business, sports, entertainment, and technology. IndiaToday.in has been a trusted source of news and information for millions of readers since its inception. With its team of experienced journalists and experts, the website is known for its in-depth reporting, analysis, and investigative journalism.

The website has a strong social media presence, with millions of followers on Facebook, Twitter, and other platforms. This has helped it to reach a wider audience and engage with readers in real time. In addition to news and analysis, IndiaToday.in also offers a variety of other content, including videos, podcasts, and live streams. This help to keep readers up to date with the latest developments in real-time, as well as providing in-depth coverage of important issues.

In 20022, the Company launched India Today NE, a deicated website for the North east region. Apart from the launch of the website, we have also initiated an immersive ads section this year, which allows a user to interact with graphics.

Aajtak.in the website has continued to outshine the competition on its unstoppable journey as the nations leading multi-platform news medium becoming the Number 1 as per Similar Web News & Media Category Visits Data in the last six months. In its All-Industries category, aajtak.in has always maintained a position in the top five rankings, among Google, YouTube, Facebook, and Instagram.

As per the report, aajtak.in website tops the News and Media Market Leaders rankings list with monthly visits of 68.78 crore. The year 2023 has been a pivotal for news viewership from across genres both domestic and international news providing stickiness for digital viewership. The No 1 position is a direct result of the Companys focus on constantly complementing its trusted viewership base in the digital ecosystem.

Aaj Tak has established itself as the undisputed leader in Facebook Native Video Viewership. According to the latest data from Comscore Shareablee for March 2023, Aaj Tak has garnered an impressive 55.89 crore views, affirming its dominance in this space.

In addition to Facebook, Aaj Tak has also continued its leadership position in the Instagram ecosystem. The brand received a total of 4.81 crore actions in March 2023, further cementing its status as a major player in the social media landscape.

Moreover, Aaj Taks stronghold in the Twitter space remains unchallenged, with a total of 2.99 crore video views in March 2023. This impressive achievement is a testament to Aaj Taks commitment to excellence and underscores its position as a leading media organization.

Business Today, one of Indias leading business news websites, has continued to see steady growth in its user base over the past year. As per the Comscore statistics, the website has witnessed a 235 per cent growth in the number of unique users from April 2022 to March 2023. The website has consistently provided in-depth and timely coverage of business news and trends, ranging from the latest updates on the Indian economy, stock markets, start-ups, and technology to interviews with business leaders and experts.

In addition to news and analysis, Business Today also offers a variety of tools and resources to help entrepreneurs and business owners navigate the complex world of business. These resources include business guides, expert advice, and exclusive reports on industry trends and developments.

The websites success can be attributed to its commitment to providing accurate, unbiased, and relevant business news and analysis to its readers. As the Indian economy continues to grow, Business Today will continue to be a reliable source of information and insight for businesses and investors across the country.

a DIGITAL-FIRST

The company has two digital-first news platforms— Taks and The Lallantop. The Lallantop focuses on delivering news in Hindi and with its engaging content, presented in a narrative format, and has set new benchmarks in terms of video views and subscriptions while building strong relationships with its audience by creating content that resonates with them. On the other hand, Taks philosophy is "Aapki News, Aapke Liye, Aapke Time Par." The platforms portfolio consists of 22 digital-first video channels across 11 content genres and in six languages. Both Taks and The Lallantop have a digital-first approach and have established a strong presence across social media platforms.

The Companys digital-first channels collectively have a subscriber base of 8.16 crore on YouTube as of March 2023 and garnered 1,520 crore video views across social media platforms⁸⁰.

Among the top five channels in terms of subscription growth, Sahitya Taks subscriber base grew by 45 per cent, Mumbai Taks by 43 per cent, Gujarat Taks by 39 per cent, Astro Taks by 32 per cent, and Crime Taks by 28 per cent in FY 22-23.

The LallanTop YouTube channel has achieved significant growth over the past year, with the addition of 0.32 crore new subscribers, bringing the total to 2.43 crore. The channel has also garnered an impressive 200 crore views and a watch time of 13.87 crore hours. Taks YouTube channels also witnessed a significant increase in video views. Mumbai Tak had the highest growth among all Tak channels with a hike of 169 per cent, followed by Gujarat Tak with a 120 per cent increase, Rajasthan Tak with a 109 per cent jump, Astro Tak with a 98 per cent increase, Bihar Tak with an 88 per cent increase, and UP Tak with a 32 per cent jump in FY 22-23. The Tak business of the Company has a cumulative reach of 12.32 crore users and 46.07 crore page views across all websites from April 2022 to March 2023.

In 2022, The LallanTop received several awards and recognition, including the Most Popular Show award for "Interview—Kitabwaala", Most Popular Show award for "Sciencekari", and Best Show Host award for Saurabh Dwivedi in the category of News and Politics⁸¹.

Additionally, the Company has organised on-ground brand shows such as Gujarat Tak Baithak and MP Tak Baithak. Gujarat Tak Baithak was the first-ever event done by Gujarat Tak and was a huge success, resulting in another Gujarat Tak Baithak being organized in November 2022 in Ahmedabad. MP Tak Baithak was a part of MP Tak. The Company has also launched new websites for Gujarat Tak, Rajasthan Tak, Kisan Tak, and MP Tak, and new YouTube channels for Karnataka Tak and Kisan Tak, as well as a Crime Tak app.

FINANCIAL OVERVIEW

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year 2022-23, the news industry witnessed an unprecedented fall in the advertising volume, grown along with weak economic sentiments.

A brief analysis of Companys financial position and performance for the year has been presented here.

a A. ANALYSIS OF FINANCIAL POSITION

1. Equity share capital

The Company has an authorised share capital of Rs.134.00 Crore comprising of equity share capital and preference share capital of Rs.129.00 Crore and Rs.5.00 Crore respectively. Company has only one class of issued share capital i.e. equity share capital of Rs.29.83 Crore divided into 5,96,68,615 equity shares Rs.5 each. There has been no change in the share capital during the year.

2. Other equity

Other equity of the Company comprises of securities premium, capital reserve, general reserve and retained earnings. Securities premium, capital reserve, general reserve remained unchanged from previous year at Rs.54.04 Crore, (34.01) Crore and Rs.79.32 respectively.

Retained earnings is decreased to Rs.699.28 Crore as on March 31,2023 compared to Rs.1,028.80 Crore as at March 31,2022. Decrease is on account of special interim dividend for financial year 2022-23 and final dividend of financial year 2021-22 distributed during the year 2022-23.

During the current financial year, Company has declared an interim dividend of Rs.67 per share, amounting to a total payout of approx. Rs.400 Crore. This payout represents the highest interim dividend declared by the Company to date. In alignment with our commitment to creating value for our shareholders, we deemed it appropriate to distribute the surplus cash reserves by rewarding the shareholders who have invested in the Company.

3. Property, plant and equipment Additions to gross block

During the year, additions to gross block were Rs.28.35 Crore, comprising Rs.10.39 Crore on plant and machinery, Rs.9.31 crore in computers and Rs.4.91 Crore on vehicles, Rs.1.36 Crore on building, Rs.0.82 Crore on leasehold improvements, Rs.0.92 Crore on office equipment and Rs.0.64 Crore on furniture and fixtures.

Deletions to net block

During the year, we reduced Rs.1.94 Crore from the net block on account of disposal of various assets as against Rs.0.86 Crore in the previous year.

Capital commitments

Company has capital commitments of Rs.3.42 Crore as at March 31,2023, as compared to Rs.3.14 Crore as at March 31, 2022. The commitments are primarily for plant and machinery and computers.

Capital work-in-progress

Company has a capital work-in-progress of Rs.1.23 Crore as at March 31,2023. All the projects are within the ageing of less than 1 year.

4. Investment properties

Net block of investment properties as at March 31, 2023 is Rs.2.36 Crore as compared to Rs.2.26 Crore as at March 31, 2022. Decrease in net block is due to depreciation of Rs.0.05 Crore. There is an addition of Rs.0.15 crore.

5. Intangible assets

Intangible assets largely comprise licence fees for radio stations, production software and digital rights of various domains etc.

The carrying value of intangible assets as on March 31,2023 is Rs.37.56 Crore, whereas on March 31,2022, it was Rs.56.12 Crore. There is addition of Rs.3.14 Crore to production software and computer software during current year.

The Company has carried out a valuation of its radio business and the said valuation shows a decline of Rs.9.85 crore in the carrying amount of Radio licence fee. The reduction in the value of Radio licence fee has been recorded in year ended March 31, 2023 as an exceptional item.

6. Right-of-use assets and lease liabilities

Ind AS 116 - "Leases" requires a lessee to recognise liabilities and right-of-use assets for all leases, unless it is a low value/ short term lease. The Company has active lease arrangements for its registered office as well as various bureau offices.

The Company has right-of-use assets amounting to Rs.28.96 Crore and Rs.27.56 Crore as at March 31, 2023 and March 31, 2022 respectively. Correspondingly, it has lease liabilities of Rs.34.24 crore and Rs.31.80 Crore as at March 31,2023 and March 31,2022 respectively. Increase in both right-of-use assets and lease liabilities are on account of new lease arrangement entered by the Company during the year.

7. Financial assets

a. Investments

Investment majorly includes investment in 3 subsidiary companies. There is no movement in the investment except impairment of Rs.0.55 Crore of investment in Mail Today Newspapers Private Limited during the current year.

Investment in equity instruments of subsidiaries are carried at cost as per Ind AS 27 - Separate financial statements.

b. Trade receivables

Trade receivables amounted to Rs.212.26 Crore (including not due of Rs.132.16 Crore) as of March 31, 2023 compared to Rs.191.97 Crore (including not due of Rs.147.20 Crore) as of March 31,2022 respectively.

The Company applies the simplified approach permitted by Ind AS 109 - Financial Instruments to assess any required allowances. The application of simplified approach does not require the Company to track changes in credit risk of trade receivable. The Company calculates the expected credit losses on trade receivables using a provision matrix on the basis of its historical credit loss experience.

c. Cash and cash equivalents, Other bank balances and Bank Deposits

		(Rs. in Crore)
Particulars	As at March 31,2023	As at March 31,2022
Cash and bank balances	13.07	28.35
Bank deposits	452.90	815.07
Unpaid dividend accounts	0.60	0.29
Unspent corporate social responsibility account	0.60	-
Total	467.17	843.71

The Company has a restricted balance ofRs.9.31 Crore and Rs.0.65 Crore as at March 31,2023 and March 31, 2022 respectively. Restrictions are on account of bank deposits held as lien by the banks, unpaid dividend accounts and Unspent corporate social responsibility account. Other balances do not have any restriction of use. Lien on bank deposits are for issue of bank guarantee which were issued through non-fund based credit limit as on March 31,2022.

d. Loans

Company has outstanding loan given to employees ofRs.0.37 Crore andRs.0.55 Crore as at March 31,2023 and March 31,2022 respectively. Out of the total loans ofRs.0.37 Crore,Rs.0.22 Crore is recoverable in 12 months.

e. Other financial assets excluding Bank deposits

The details of other financial assets are as follows:

		(Rs. in Crore)
Particulars	As at March 31,2023	As at March 31,2022
Security deposits - non current	8.08	8.08
Security deposits - current	0.27	0.28
Claim recoverable - current	0.09	0.05
Total	8.44	8.41

Security deposits are given to the vendors in the normal course of business.

8. Other assets

		(Rs. in Crore)
Particulars	As at March 31,2023	As at March 31,2022
Capital advances	2.24	2.38
Prepaid expenses	36.72	18.85
Receivables against exchange of services	1.18	2.84
Unbilled Revenue	14.10	16.02
Balance with government authorities	18.98	14.86
Advances	13.29	10.47
Total	86.51	65.42

Increase in other expenses is majorly due to increase in prepaid expenses which are in the normal course of business.

9. Deferred tax assets

Company has a net deferred tax assets of Rs.16.45 Crore and Rs.11.96 Crore as at March 31, 2023 and March 31,2022 respectively on account of temporary differences. Temporary differences majorly relate to allowances for doubtful debts and advances, expenses disallowed under section 40(a) of the Income Tax Act, 1961 and differential depreciation on property, plant and equipment as per the Income Tax Act, 1961 and the Companies Act, 2013.

10. Income tax assets / liabilities

Company has a net current tax assets of Rs.65.75 Crore and Rs.60.34 Crore as at March 31, 2023 and March 31, 2022 respectively which relates to income tax refund receivable for various years. Increase is due to excess of TDS and advance tax over provision for tax for financial year 2022-23.

11. Trade payables

The Company has trade payables amounting to Rs.100.80 Crore and Rs.104.13 Crore as at March 31, 2023 and March 31, 2022 respectively. There is no major change in trade payable balance.

12. Other financial liabilities

The details of other financial liabilities are as follows:

		(Rs. in Crore)
Particulars	As at March 31,2023	As at March 31,2022
Security deposits	0.68	1.07
Unpaid dividend	0.60	0.29
Employee benefits payable	30.52	41.89
Capital creditors	0.50	1.40
Legal claim	7.01	7.01
Total	39.31	51.66

Employee benefits payable majorly includes managerial remuneration, accrued salaries and incentives to employees as a part of their annual compensation. Decrease in employee benefit payable is majorly on account of decrease in managerial remuneration.

13. Provisions

The Company has provision for gratuity and compensated absences of Rs.3.22 Crore and Rs.11.04 Crore respectively as at March 31, 2023. Gratuity and compensated absences were Rs.2.04 Crore and Rs.9.63 Crore respectively as at March 31, 2022. The provision for employee benefits is based on actuarial valuation of leave and gratuity benefits.

14. Other liabilities

		(Rs. in Cro re)
Particulars	As at March 31,2023	As at March 31,2022
Trade payables against exchange of services	8.56	5.63
Deferred revenue	24.47	19.65
Deferred government grant	0.49	0.21
Statutory dues payables (including provident fund and tax deducted at source)	20.68	22.77
Advances from customers	2.43	7.35
Total	56.63	55.61

The balances mentioned above are in the regular course of business.

a B. ANALYSIS OF FINANCIAL PERFORMANCE

The function-wise classification of the Standalone Statement of Profit and Loss is as follows:

					(Rs. in Crore)
Particulars	Year ended March 31, 2023	% of revenue	Year ended March 31, 2022	% of revenue	% Change
Revenue from operations	878.23	100.00	930.10	100.00	(5.58)
Production Cost	107.57	12.25	92.62	9.96	16.14
Employee benefits expense	326.53	37.18	278.02	29.89	17.45
Other expenses	313.04	35.64	314.68	33.83	(0.52)
EBITDA	131.09	14.93	244.78	26.32	(46.45)
Depreciation and amortisation expenses	41.28	4.70	42.33	4.55	(2.48)
Finance cost	3.34	0.38	2.64	0.28	26.52
Other Income	43.56	4.96	43.73	4.70	(0.39)
Profit before tax & exceptional items	130.03	14.81	243.54	26.18	(46.61)
Exceptional items	9.85	1.12	-	-	-
Profit before tax	120.18	13.68	243.54	27.73	(50.65)
Tax expense	32.12	3.66	61.82	6.65	(48.04)
Profit for the year	88.06	10.03	181.72	19.54	(51.54)

1. Revenue

Revenue from FY 2022-23 and FY 2021-22 are as follows:

			(Rs. in Crore)
Particulars	Year ended March 31, 2023	Year ended March 31, 2022	% Change
Income from advertisement and other related operations	794.82	852.54	(6.77)
Subscription income	63.97	62.30	2.68
Others	19.44	15.26	27.39
Total	878.23	930.10	(5.58)

Total decrease in revenue in FY 2022-23 is largely due to decrease in advertisement revenue due to decreased in Ad volume in various categories.

2. Expenses Cost of sales

Particulars	Year ended March 31, 2023	% of revenue	Year ended March 31, 2022	% of revenue	% Change
Revenues	878.23	100.00	930.10	100.00	(5.58)
Costs
Production costs	107.57	12.25	92.62	9.96	16.14
Employee benefits expense	326.53	37.18	278.02	29.89	17.45
Other expenses	313.04	35.64	314.68	33.83	(0.52)
Depreciation and amortisation expenses	41.28	4.70	42.33	4.55	(2.48)
Total costs	788.42	89.77	727.65	78.23	8.35

On a standalone basis, cost was 89.77% of revenues, compared to 78.23% during the previous year.

Production costs got increased by 16.14% in financial year 2022-23 compared to financial year 2021-22. This is largely on account of increase in reporting expenses, Subscription expenses, Freelancer fee, Equipment hire expenses, Technical fee for organising various television shows and events and other miscellaneous production expenses for organising more ground events this year. Last year cost was lower due to restricted operations on account of covid-19 in first half of the year.

Employee benefits expense got increased by 17.45% year-on-year basis. This increase is contributed by two factors largely; (i) on account of cyclical increments in compensation and; (ii) increase in human resources for expansion of existing business lines which mainly included digital operations.

Other expenses decreased slightly by 0.52% in Financial Year 2022-23 compared to Financial Year 2021-22. Depreciation and amortisation expenses have increased slightly, year-on-year basis, in line with additions to property, plant and equipment and Intangible assets.

3. EBITDA

The Earnings before Interest, Tax, Depreciation and Amortisation during the year was Rs.131.09 Crore, representing 14.93% of revenues, compared to Rs.244.78 Crore, representing 26.32% of revenues in the previous year. Such decrease at EBITDA level is due to decrease in revenue and increase in production expenses and employee expenses. EBITDA, as mentioned above, doesnt include other income.

4. Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on CSR activities. The corporate social responsibility projects undertaken during the year were focussed on plantation of trees, disaster management projects, promoting and providing access to education, livelihood enhancing projects and providing Healthcare and Sanitation Support.

In accordance with the requirements of Section 135 of the Act, the Company has a CSR Committee. The composition of the CSR Committee is provided in the Annual Report on CSR Activities, which forms part of this Report. Out of the total amount earmarked for CSR for financial year 2022-23 (i.e. Rs.4.43 Crore), the Company spent Rs.2.14 Crore during the year and transferred the balance amount of Rs.2.29 Crore, which was allocated to ongoing projects and remained unspent as on March 31, 2023, to CSR Unspent Account on April 20, 2023. A detailed reason for such unspent amount is provided in the Annual Report on CSR Activities.

In addition to the above, the Company spent Rs.1.09 Crore during the financial year 2022-23 (out of the unspent amount for financial year 2021-22). The remaining unspent balance for the said year is Rs.0.60 Crore as on March 31,2023.

5. Other income and finance cost

Our other income and finance cost for FY 2022-23 and FY 2021-22 are as follows:

			(Rs. in Crore)
Particulars	Year ended March 31, 2023	Year ended March 31, 2022	% Change
Other income	43.56	43.73	(0.39)
Finance costs	3.34	2.64	26.52

Other income for financial year 2022-23 primarily includes Interest income from Financial Assets of Rs.38.69 Crore. There is no major change in other income.

Finance costs of the Company largely includes interest on lease liabilities on account of Ind-AS 116 "Leases" and bank charges etc.

6. Provision for tax

We have provided for our tax liability. The applicable Indian corporate statutory tax rate for both the years ended March 31, 2023 and March 31, 2022 is 25.168%.

Particulars	Year ended March 31, 2023	Year ended March 31, 2022
Income tax expense ( in Crores)	32.12	61.82

7. Net profit after tax

Companys net profit decreased by 51.54% to Rs.88.06 Crore for the year ended March 31,2023 from Rs.181.72 Crore in the previous year. This represents 10.03% and 19.54% of total revenue for the years ended March 31, 2023 and March 31,2022, respectively.

8. Other comprehensive income

Other comprehensive income comprises remeasurement gains on defined benefit plans, net of taxes.

GROUP INFORMATION

Living Media India Limited is the holding Company of T.V. Today Network Limited, which is primarily engaged in publication of magazines.

Companys subsidiary, Mail Today Newspapers Private Limited organises events. The other subsidiary companies, T V Today Network (Business) Limited and Vibgyor Broadcasting Private Limited are yet to commence their operations.

KEY FINANCIAL RATIOS

As per SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018, the Company is required to give details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key sector specific financial ratios.

The Company has identified the following ratios as key financial ratios:

Ratio	Standalone			Consolidated
	FY 2022-23	FY 2021-22	% Change	FY 2022-23	FY 2021-22	% Change
(i) Current Ratio (times)	3.89	5.00	(22.18)	3.91	4.44	(11.96)
(ii) Debt Equity Ratio (times)	0.04	0.03	50.50	0.04	0.03	50.48
(iii) Interest Coverage Ratio (times)	39.93	93.25	(57.18)	39.99	93.17	(57.08)
(iv) Debtors turnover (days)	101.00	97.00	4.47	101.92	97.61	4.41
(v) Operating Profit Margin (%)	14.19	24.59	(42.28)	14.21	24.56	(42.14)
(vi) Net Profit Margin (%)	10.03	19.54	(48.68)	10.05	19.52	(48.51)
(vii) Basic EPS ()	14.76	30.46	(51.55)	14.79	30.42	(51.39)
(viii) Basic EPS (excluding exceptional items) ()	15.99	30.46	(47.50)	16.02	30.42	(47.34)

Ratios where there has been a significant change from FY 2021-22 to FY 2022-23.

Debt Equity Ratio

For computing this ratio, debt comprises lease liabilities only as there are no other outstanding debts as at the year end.

Increase in this ratio is largely on account of disbursal of special interim dividend of Rs.399.78 crore.

Interest Coverage Ratio

Decrease is largely on account of downfall in profit for the year.

Inventory Turnover

There is no inventory balance as at March 31, 2023 and March 31, 2022. Further, there is no cost of material consumed during the financial year 2022-23. Hence, inventory turnover ratio is not applicable for current year.

Operating Profit Margin

Operating profit margin has decreased due to decrease in operating profit.

Net Profit Margin

Net profit margin has decreased due to decrease in profit after tax.

Basic EPS

Basic EPS has decreased due to decrease in profit after tax, being equity share capital remained same.

Basic EPS (excluding exceptional items)

It has decreased due to decrease in profit after tax, being equity share capital remained same.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS

Your Companys employee strength as on March 31, 2023, was 2,506 (Full Time: 2,372, Consultant: 134). With human resources providing a strategic advantage in the media sector, the Company has taken steps to improve processes for better talent acquisition, performance evaluation, merit recognition, and higher productivity. The Company has also undertaken initiatives to build stronger employee engagement and talent retention. Core policies to enhance efficiencies have been implemented.