indian broadcasting foundation report in low... · 2019. 11. 10. · indian broadcasting foundation...
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INDIAN BROADCASTING FOUNDATION(Not for Profit)
CIN: U74899DL1999NPL101705
Regd. Office: B-304, Third Floor, Ansal Plaza, Khel Gaon Marg, New Delhi - 110 049Tel: 91 11 4379 4400 Fax: 91 11 4379 4455
Website: www. ibfindia.com E-mail : [email protected]
MESSAGE FROM THE PRESIDENT-IBF
3
Man Jit Singh
I am delighted to present the 15th IBF Annual Report as television broadcasting completes another year of challenges and change. Amongst the major initiatives undertaken were the funding and setup of the Broadcast Audience Research Council (BARC), the continued success of self regulation under the Broadcast Content Complaints Council (BCCC), the continued work on Digitisation, representations against the adverse tax environment the industry faces and representations to TRAI ranging from the 12-minute advertising cap to tariffs for commercial establishments to the issue of local cable channels.
Broadcast Audience Research Council, a joint undertaking by AAAI, ISA and IBF, is one of the most significant efforts IBF made last year. The IBF board and leading broadcasters committed to providing corporate guarantees, liens or cash to cover the IBF funding of BARC and if necessary the entire funding of BARC. A substantial portion of that funding is in place and the remaining is in process. BARC has chosen to use Dutch watermarking technologist, Civolution as its measurement backbone. Over 250 channels managed by IBF members have paid for the technology to embed the watermarks on their content. Médiamétrie, the French audience measurement system, is providing the metering technology blueprint, which is being manufactured for BARC by one of the world's most renowned technology companies. In addition, 25 other vendors have been appointed to provide all the products and/or services required to provide viewership measurement. Even with all this complexity BARC remains largely on track and will be fully operational in early 2015.
Justice A P Shah's leadership of BCCC ended in December 2014 and the Broadcast Industry owes him a huge vote of thanks for establishing and maintaining the independence and reputation of BCCC. The Board invited Justice Mukul Mudgal to take over as the BCCC Chairperson. Justice Mudgal has been chairing BCCC since January 2014. His commitment to Freedom of Speech and Expression has helped BCCC set guidelines for Broadcasters and as a result complaints keep declining. In addition, Justice Mudgal led an interactive session to train broadcasters and content creators in South India to understand BCCC guidelines and improve compliance with related norms. At the same time IBF members continue to comply 100% with BCCC rulings.
The Ministry of Information and Broadcasting remains committed to Digitisation and has established a renewed task force to move things along. However the new Minister has indicated he would like to see set top boxes for Phase 3 and 4 be manufactured in India and is committed to make sure India is competitive in this area but as a result digitisation may follow the availability of domestically manufactured set top boxes. IBF engaged a consulting firm to conduct a two-staged study on Digitisation. Stage one is to make a representation on why there should be no push back in Digitisation - this document is ready. State two will result in identifying gaps in what happened in phases 1 and 2 of DAS implementation so that these can be corrected from a policy, regulatory, and implementation perspective across the value chain. These representations will be made to the Government in August and September 2014.
IBF continued to make representations on the adverse tax situation faced by broadcasters. IBF made a detailed representation on entertainment and other state and central taxes issues with the Revenue Secretary in the Ministry of Finance where the representation was prepared by KPMG along with several broadcaster CFOs. IBF also took up related distribution and transponder taxation issues in the representation. While the Government did not address these issues in its interim budget announced in July 2014 IBF will pursue relief and make a more detailed representation soon so that taxation related administrative issues can be resolved at the earliest.
IBF continues to work with the I&B Ministry and the new Minister. An early representation to the new Minister on Licensing has started moving the process forward. The Ministry has assured IBF that about 30 licenses shall be issued soon and about 130 licenses should get issued by the end of September 2014. IBF has unequivocally voiced that signal protection for broadcasters should be comprehensive and include the Internet. IBF has made several related representations to both, the Ministry of Information and Broadcasting and the Ministry of Human Resources.
Since the 12-minute notification and the notification on aggregation, TRAI has worked through its consultation process to notify on tariffs for commercial subscribers wherein it has clarified on the distinction between domestic and commercial subscribers but effectively disallowed broadcasters to charge differently to commercial subscribers. The IBF board made a representation to TRAI, which is under consideration. National security concerns have resulted in a consultation process to legitimise local channels and allow greater freedom for distributors/platform operators to participate in broadcasting. IBF's position on this vital matter is to either ensure a level playing field is provided or that a separation between broadcast operations and distributors/platforms be maintained.
In June 2014, Officers of the IBF board and some members were involved in establishing a strategy for broadcasting. Two key takeaways from the discussions - IBF needs to voice a vision for television broadcasting that can help unlock significant value to viewers, partners, communities and broadcasters and create an engine for employment; IBF needs to expand its connect with the Government by engaging with the Prime Minister's Office and with the Ministries of Finance, Human Resources, Commerce and
Trade, Telecommunications, Law, Information and Broadcasting and the Regulator to ensure there is alignment from all sides on what the Industry needs.
I continue to be optimistic about the growth of the broadcasting business in India. While the challenges will be many we are moving to where television penetration will move from the current 65% of households to 85 to 90% penetration offering growth potential to all. Once Digitisation is implemented across the country and becomes fully operational all members of the value chain and particularly consumers will benefit. IBF must be instrumental in guiding these efforts and educating all constituents on these benefits. IBF should continue engaging with transponder services, advertisers, agencies and MSOs/LCOs/distributors to ensure the value chain is aligned to improving industry value. As has been witnessed in the past, an aligned industry can achieve almost anything. The IBF membership is working through great adversity but I for one am confident that there is an end in sight and that our members will see benefits in the not too distant future.
As I hand over office as President, I want to personally thank all the Members for the support they have given the IBF. I want to thank the Board and Office Bearers in particular, for their guidance and for all the hard work they have put in. In particular I want to thank our Working President Punit whose tireless efforts on behalf of the members has made this last year's achievements possible.
Sincerely,
Man Jit SinghPresident-IBF
MESSAGE FROM THE PRESIDENT-IBF
4
thNotice is hereby given that the 15 Annual General Meeting (AGM) of the Members of Indian Broadcasting Foundation will be held at Aftab Mahtab (below lobby level), The Taj Mahal Hotel, No.1, Man Singh Road, New Delhi – 110 011 (Phone : 011 2302 6162) on Wednesday, 10 September 2014 at 1100 hours to transact the following business:
1. To receive, consider and adopt the audited statement of Income & Expenditure Account for the year ended 31 March 2014 and the audited Balance Sheet as at that date together with the reports of the Board of Directors and the Auditors thereon and for the purpose, to pass with or without modification(s) the following resolution as an Ordinary Resolution:
“RESOLVED THAT the Balance Sheet as at 31 March 2014 and Income and Expenditure Account for the period ended on that date, together with Auditor's Report and Directors' Report thereon, be and are hereby approved and adopted”.
2. To re-appoint M/s S. S. Kothari Mehta & Co., Chartered Accountants, as Statutory Auditors of the Foundation, to hold office from the conclusion of this meeting until the conclusion of the sixth Annual General Meeting from this Annual General Meeting and to fix their remuneration and for the purpose, to pass with or without modification(s) the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of Section
139 of the Companies Act, 2013 and the Companies (Audit
& Auditors) Rules, 2014 and pursuant to the
recommendations of the Board of Directors, M/s. S.S.
Kothari Mehta & Co., Chartered Accountants (Registration
No.000756N), be and are hereby re-appointed as auditors of
the Company, to hold office from the conclusion of this AGM thtill the conclusion of 20 AGM of the Company (subject to
ratification of the appointment by the members at every
AGM) at such remuneration plus service tax, out-of-pocket,
travelling and living expenses, etc., as may be mutually
agreed between the Board of Directors of the Company and
the Auditors.”
ORDINARY BUSINESS
3. To elect members of the Board of Directors. Details of directors retiring are given below:
I. To appoint a Director in place of Mr. I. Venkat, Eenadu TV (DIN 00089679), who retires by rotation at this Annual General Meeting and being eligible has offered himself for re-appointment,
II. To appoint a Director in place of Mr. Siddharth Jain, Turner International (DIN 03178997), who retires by rotation at this Annual General Meeting and being eligible has offered himself for re-appointment,
III. To appoint a Director in place of Mr. N. P. Singh, Bangla Entertainment (DIN 03335912), who retires by rotation at this Annual General Meeting and being eligible has offered himself for re-appointment,
A. The following members of the Board are retiring by rotation as per Clause 25 of the Articles of Association of Foundation:
B. The following co-opted members of the Board are retiring as per Clause 23 of the Articles of Association:
C. IBF Secretariat is in the process of receiving nomination forms from the members eligible for election to the IBF Board. The list of nominees would be shared with IBF members before the AGM.
By order of the Board of Directors ofIndian Broadcasting Foundation
Man Jit Singh
IV. To appoint a Director in place of Mr. Sunil Lulla, Times Television Network (DIN 00110266), who resigned creating a Casual Vacancy in the Board and who would have retired by rotation at this Annual General Meeting.
i. Mr Ranjan Thakur, Prasar Bharati
ii. Mr K V L Narayan Rao, NDTV
iii. Mr Markand Adhikari, Sri Adhikari Brothers
President-IBF
Place : New DelhiDate : 01 August 2014
NOTICE
5
1. Member entitled should provide Board Resolution under Section 113 of the Companies Act 2013 authorising person(s) who will represent them at the Annual General Meeting (AGM). Such person(s) shall be deemed to be member present in person.
2. A Member entitled to attend the AGM is entitled to appoint a proxy to attend and vote in the AGM on his/her behalf and the proxy need not be a Member. The proxy form, in order to be valid must be deposited at the Registered Office of the Foundation not later than 48 hours before the commencement of the meeting.
3. No person other than the authorised representative of the Member entity or his/her duly appointed proxy as aforesaid shall be entitled to attend the AGM of the Foundation.
4. As per the Article 2(A)(1) of the Articles of Association of the Foundation, only Full (Regular) Members or their proxies are entitled to vote during the AGM.
NOTES
6
5. Members are requested to bring their copy of the Annual Report to the Meeting.
6. Members desirous of having any information on Accounts are requested to send their written queries to IBF at its Registered Office, at least seven days before the date of the AGM, to make the required information available at the meeting.
7. No member shall be entitled to be present or to vote on any resolution or otherwise participate in the proceedings at the AGM or upon a poll, to be reckoned in a Quorum whilst any money due from such Member to the Foundation remains unpaid 30 days after a bill or a notice of demand in writing has been sent to such Member for explanation.
8. Members/Proxies attending the meeting are requested to bring the attendance slip, as appended to this Notice, duly filled in and present the same at the venue of the Annual General Meeting. No photocopies of the attendance slip will be accepted.
DIRECTORS' REPORT TO THE MEMBERS
7
The Directors have pleasure in presenting the 15th Annual Report of your Foundation together with Audited Accounts for the period from 1 April 2013 to 31 March 2014.
Your Foundation has reported an Income from Subscription of Rs7,24,00,000 and Voluntary Contribution of Rs1,38,56,810. Besides that contributions income has been recognised for a specific project i.e., Self Regulatory Guidelines Fund Rs73,28,086. Interest earned on fixed deposit of Rs1,15,69,454 and Expenditure incurred of Rs4,44,78,242 (excluding amount utilised from the Self Regulatory Guidelines Fund) during the period ending 31 March 2014. Out of the excess of Rs 5,34,24,581, an amount of Rs3,08,76,804 (net of Rs87,59,156 utilised out of Special Reserve) has been transferred to Special Reserve.
The number of Members of the Foundation as at 31 March 2014 was 57.
M/s S. S. Kothari Mehta & Co., Chartered Accountants, Statutory Auditors of the Foundation, hold office until the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment. The Foundation has received letter from them to the effect that their appointments, if made, would be within the limit prescribed under Section 141 of the Companies Act 2013 and also that they are not otherwise disqualified within the meaning of Section 141 of the Companies Act 2013, for such appointment.
The Statutory Auditors' Report on the Accounts of the Foundation for the financial year ended 31 March 2014 is self explanatory and does not require further comments in the Directors' report.
Information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 2013 read with the
Financial Review
Membership of the Foundation
Auditors & Auditors' Report
Report on Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc.
Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Conservation of Energy and Technology Absorption is not disclosed as the same is not applicable to the Foundation, being a Foundation. Foundation has no foreign exchange earnings and outgo during the period.
In terms of the provisions of Section 217(2A) of the Companies Act 1956, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report.
However, having regard to the provisions of Section 219 (1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Foundation and others entitled thereto. Any member interested in obtaining such particulars may write to the Deputy Director at the registered office of the Foundation.
Pursuant to Section 217(2AA) of the Companies Act, 1956, it is hereby confirmed:
(i) that in the preparation of the annual accounts, the applicable accounting standards had been followed;
(ii) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Foundation at the end of the accounting year and of the surplus of the Foundation for that year;
(iii) that the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Foundation and for preventing and detecting fraud and other irregularities;
(iv) that the Directors had prepared the annual accounts on a going concern basis.
Particulars of Employees
Directors' Responsibility Statement
DIRECTORS' REPORT TO THE MEMBERS
8
Acknowledgements
The Board of Directors wish to place on record their appreciation for the support and cooperation extended by every Member of the Foundation, the Secretariat, its
Bankers, and valuable contribution made by the Consultants, Counsels and officials of the Member Companies.
For and on behalf of the Board of Directors ofIndian Broadcasting Foundation
-sd- -sd- -sd- -sd-
President Working President Vice President Vice President
-sd-
Treasurer
Place : New DelhiDate : 01 August 2014
Man Jit Singh Punit Goenka Rajat Sharma Rahul Johri
K V L Narayan Rao
PROXY FORM
9
FORM NO. MGT.11Proxy Form
[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]
(Not for Profit)
CIN: U74899DL1999NPL101705Regd. Office: B-304, Third Floor, Ansal Plaza, Khel Gaon Marg, New Delhi-110 049
Tel: 91 11 4379 4400 Fax: 91 11 4379 4455Website: www. ibfindia.com E-mail : [email protected]
15th Annual General MeetingWednesday, 10 September 2014
Name of the member: ________________________________________________________________________________
Registered address: _________________________________________________________________________________
E-mail Id: __________________________________________________________________________________________
Folio No/ Client Id: __________________________________________________________________________________
DP ID:____________________________________________________________________________________________
I being the member of the above named Company, hereby appoint
1. Name: ________________________________________________________________________________________
Address:_______________________________________________________________________________________
E-mail Id:______________________________________________________________________________________
Signature:_________________________, or failing him
2. Name: ________________________________________________________________________________________
Address:_______________________________________________________________________________________
E-mail Id:______________________________________________________________________________________
Signature:_________________________
as my/our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the 15th Annual General Meeting of the Company, to be held on Wednesday, 10 September 2014 at 1100 hrs at Aftab Mahtab (below lobby level), The Taj Mahal Hotel, No.1, Man Singh Road, New Delhi – 110 011 and at any adjournment thereof in respect of such resolutions as are indicated below:
Resolution No.
1
2
3
Signed this ___________________day of _______________ 2014
Signature of shareholder
Signature of Proxy holder(s)
Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.
Indian Broadcasting Foundation
ATTENDANCE SLIP
11
Indian Broadcasting Foundation(Not for Profit)
CIN: U74899DL1999NPL101705Regd. Office: B-304, Third Floor, Ansal Plaza, Khel Gaon Marg, New Delhi-110 049
Tel: 91 11 4379 4400 Fax: 91 11 4379 4455Website: www. ibfindia.com E-mail : [email protected]
15th Annual General MeetingWednesday, 10 September 2014
(To be filled in BLOCK LETTERS)
Name of the Member Representative___________________________________________________
I hereby record my presence at the 15th Annual General Meeting of the Indian Broadcasting Foundation held on
Wednesday, 10 September 2014 at 1100 hrs at Aftab Mahtab (below lobby level), The Taj Mahal Hotel, No.1, Man Singh
Road, New Delhi – 110 011.
Members folio Signature of the Member Representative along with Name(To be signed at the time of handing over this slip)
Note : Please fill the Attendance slip and hand it over at the entrance of the meeting hall.
BROADCASTING: INDUSTRY OVERVIEW
13
Indian Media and Entertainment Industry growth
In 2013, the Indian Media and Entertainment Industry registered a growth of 11.8% YoY to clock Rs 91,800 crore in revenues. The industry started to see some benefits of digitisation in media products and services and growth in regional media. Television remained the largest medium, while segments like Internet, radio and films grew rapidly. Print performed well in 2013 with 8.5% YoY growth compared to 7.3% YoY growth in the previous year and remained the second largest segment after TV. Radio clocked a strong 15% growth YoY with robust advertising growth. Industry forecasts suggest that digital advertising is expected to have the highest CAGR of 27.7%, while all other sub sectors are expected to grow at a CAGR in the range of 9-18% over the next five years. Overall, the industry is expected to register a 14.2% CAGR to touch Rs1,78,580 crore by 2018. Clearly, the potential is much larger.
Advertising growth subdued in 2013
Advertising spend saw a slight improvement in growth to 10.9% YoY in 2013 (~ 9.1% in 2012 and ~13% in 2011) despite continued stagnancy and lower GDP growth. Ad-spend is expected to record 13.9% CAGR over the next five years with Digital, Radio and TV doing well. The first half of 2013 was healthy because of increase in FMCG spends, state elections and better performance of IPL-6. The second half witnessed sudden slowdown due to rupee depreciation, and other macro-economic factors. The Print sector currently accounts for 44.9% (46% in 2012) of total ad spend while TV is at 37.5% (38% in 2012). The first half of 2014 is expected to be good owing to the recently held elections and expectations of increased spending by FMCG, automobile and financial services sectors. There is still a lot of headroom for growth across all media channels in India, be it TV, print, radio, cinema, out-of-home or digital.
Overall industry
size (Rs. crore) 2008 2009 2010 2011 2012 2013
Sector as
a % of
total in
2013
Growth
in 2013
over
2012 2014P 2015P 2016P 2017P 2018P
Sector as
a % of
total in
2018
CAGR
2013-18
TV 24,100 25,700 29,700 32,900 37,010 41,720 45% 13% 47,890 56,740 67,240 77,190 88,500 50% 16%
Print 17,200 17,520 19,290 20,880 22,410 24,310 26% 8% 26,400 28,700 31,300 34,300 37,400 21% 9%
Films 10,440 8,930 8,330 9,290 11,240 12,530 14% 11% 13,800 15,830 18,130 20,000 21,980 12% 12%
Radio 840 830 1,000 1,150 1,270 1,460 2% 15% 1,660 1,900 2,300 2,780 3,360 2% 18%
Music 740 780 860 900 1,060 960 1% -9% 1,010 1,130 1,320 1,510 1,780 1% 13%
OOH 1,610 1,370 1,650 1,780 1,820 1,930 2% 6% 2,120 2,310 2,520 2,750 3,000 2% 9%
Animation and VFX 1,750 2,010 2,370 3,100 3,530 3,970 4% 12% 4,500 5,170 6,000 7,020 8,290 5% 16%
Gaming 700 800 1,000 1,300 1,530 1,920 2% 25% 2,350 2,800 3,230 3,610 4,060 2% 16%
Digital Advertising 600 800 1,000 1,540 2,170 3,010 3% 39% 4,120 5,510 8,810 8,810 10,220 6% 28%
Total 57,980 58,740 65,200 72,840 82,040 91,810 100% 12% 103,850 120,090 140,850 157,970 178,590 100% 14%
Source: KPMG FICCI Frames 2014, IBF Research
Indian Media and Entertainment Industry size and projections
Advertising revenue and projections
Source: KPMG FICCI Frames 2014, IBF Research
Overall industry
size (Rs. crore) 2008 2009 2010 2011 2012 2013
Sector as
a % of
total in
2013
Growth
in 2013
over
2012 2014P 2015P 2016P 2017P 2018P
Sector as
a % of
total in
2018
CAGR
2013-18
TV 8,200 8,800 10,300 11,600 12,480 13,590 37% 9% 15,200 17,200 19,500 22,100 25,300 36% 13%
Print 10,800 11,040 12,600 13,940 14,960 16,260 45% 9% 17,900 19,900 22,200 24,800 27,500 40% 11%
Radio 840 830 1,000 1,150 1,270 1,460 4% 15% 1,660 1,900 2,300 2,780 3,360 5% 18%
OOH 1,610 1,370 1,650 1,780 1,820 1,930 5% 6% 2,120 2,310 2,520 2,750 3,000 4% 9%
Digital 600 800 1,000 1,540 2,170 3,010 8% 39% 4,120 5,510 6,970 8,810 10,220 15% 28%
Total 22,050 22,840 26,550 30,010 32,700 36,250 100% 11% 41,000 46,820 53,490 61,240 69,380 100% 14%
BROADCASTING: INDUSTRY OVERVIEW
14
Television
The Indian Television sector witnessed quite some action in 2013 - cable TV digitisation, TRAI's release of regulations regarding the 12-minute ad cap, discussion papers on cable monopoly, distribution of channels and DTH renewal. The sector also switched from TV rating points (TVR's) to TV viewership per thousand (TVT's) and decidedly moved forward rapidly on the creation of BARC. Macro-economic slowdown saw companies reducing their ad spend. In 2013, the TV sector was estimated at Rs41,700 crore which was a growth of 12.7% YoY and is expected to grow at 16.2% CAGR to reach Rs88,500 crore by 2018. Aided by digitisation and the consequent increase in average revenue per user (ARPU), the share of subscription revenue is expected to increase.
The number of TV households in India increased to 16.1 crore in 2013, implying a TV penetration of 60%. The number of cable and satellite subscribers were 13.9 crore. Excluding DD Direct, the number of paid cable and satellite subscribers is estimated to be 12.5-13 crore. This cable and satellite subscriber base is expected to grow to 18.1 crore by 2018, representing 95% of TV households. Of this, paid cable and satellite base is expected to be 17.1 crore in 2018, representing 90% of TV households.
TV Industry size
Growth in number of C&S households
21 22 22 22 22 23 23 24 24 12 13 14 15 15 16 19 19 19
70%
73% 73%
76%
84%
86%
89%
91%
95%
65%
70%
75%
80%
85%
90%
95%
-
5
10
15
20
25
30
2008 2009 2010 2011 2012 2013 2016P 2017P 2018P
in c
rore
Total households TV households C&S penetration of TV households
Source: KPMG FICCI Frames 2014, IBF Research
Population growth taken at 1% (CAGR for 2004-2013) and 1 household is considered as 5.5 members throughout the calculation
Source: KPMG FICCI Frames 2014, IBF Research
15,800 16,900 19,400 21,400 24,500 28,100 32,700
39,500 47,700
55,100 63,200
8,200 8,800 10,300
11,600 12,500
13,600
15,200
17,200
19,500
22,100
25,300
24,000 25,700 29,700
33,000 37,000
41,700
47,900
56,700
67,200
77,200
88,500
2008 2009 2010 2011 2012 2013 2014P 2015P 2016P 2017P 2018P
Rs.
cro
re
Advertisement revenue Subscription revenue
BROADCASTING: INDUSTRY OVERVIEW
15
Cable TV Digitisation
As of 2012, China accounted for the highest number of TV households in the world, followed by USA and India. However, in terms of Cable and Satellite TV digitisation, developed countries such as the USA and Japan lead with more than 80% digitisation. Countries across the world have been pushing for Cable and Satellite digitisation. There has been a rapid increase in the number of TV households over 2008-12.
Country-wise Distribution of TV Households in 2012,Total TV Households = 140 Crore
Source: Ofcom, IBF Research
35
1215
5 5 4 4
60
China US India Brazil Russia Japan Indonesia RoW
in c
rore
TV in 2012Households
Source: Ofcom, IBF Research
4.4
8.5
23
2
0.5
2.5
15.5
11.5
5.5
43.5 3.5
2.5
in c
rore
Rapid increase in digital TVHouseholds, 2008-12
2008 2012Source: Ofcom, IBF Research
2008 2012China11%
USA22%
India4%
Japan7%
Germany5%
Brazil1%
UK6%
RoW44%
Source: Ofcom, IBF Research
Country-wise market share of digital TV Households
China25%
USA8%
India11%
Brazil3%
Russia4%
Japan3%
Indonesia3%
RoW43%
China20%
USA15%
India7%
Japan5%
Germany4%
Brazil4%
UK3%
RoW42%
BROADCASTING: INDUSTRY OVERVIEW
16
Cable TV digitisation in India
Digitisation is one of the key progress areas on which the entire value chain of television, sporting events and film, is pinning its hopes on. The phase 1 and 2 of digitisation has been partly successful with the rollout of set top boxes except in Chennai, Coimbatore and Hyderabad. As per industry discussions 90% of cable and satellite households has been digitised in phase 2. MSOs have reported completion of collection of consumer application forms (CAF) in phase 1 cities while in phase 2 cities completion is at different stages in different cities with TRAI extending deadline. TRAI has also directed MSOs and LCOs to start itemised gross billing in phase 1 cities except Chennai from December 2013. ~7.5 crore homes will get digitised in phase 3 and 4.
Phase Parliamentary approval for analogue shutdown
Digital cable STBs rolled out
Digitisation including DTH
Gross billing Rollout of channel packages
Phase 1 Jun-12 ~ 8 million 98% Started in Delhi in January2014, Mumbai and Kolkata expected to start in February - March 2014
Started
Phase 2 Mar-13 ~ 14 million 90% Expected to start from April 2014
Not yet started
Phase 3 & 4 Dec-14 ~ 3 million 40-50% Not yet started Not yet started
Digitisation Update
Strong opportunity for both digital cable and DTH players
Source: KPMG FICCI Frames 2014, IBF Research
Like phase 1, MSOs performed strongly in phase 2 as churn of analogue subscribers to DTH was minimal. Both the phases saw 70% share going to digital cable and 30% going to DTH. Offering higher number of channels and better quality with no increase in prices helped MSOs achieve this. Though subscriber addition of DTH was challenging, ARPUs increased ~12-15% YoY in 2013 due to price hikes and increased HD penetration. Apparently, Cable did not witness any significant rise in ARPU.
In phase 1, digital cable ARPU grew 15-20% YoY at subscribers' end, while phase 2 did not witness any material increase. As per MSOs, there was no significant increase in ARPUs received by them, though ARPUs increased at the subscribers' end. Overall, the DTH sector had ~0.3 crore additions net of churn in 2013, taking its subscriber base to 3.7 crore from 3.4 crore in 2012.
ARPU to increase for both cable and DTH
ARPU (Rs. Per month)
2013 2014P 2015P 2016P 2017P 2018P
Digital cable 175 196 225 248 273 301
DTH 200 220 242 266 292 322
Source: KPMG, Industry discussions, IBF Research
Source: Ministry of Information and Broadcasting, KPMG, MxM TV Survey, MPA, IBF Research
68 74 69 6855
31
5 5 5
56 19 25
40
60
8187 91
28
31
3437
44 56 7072
75
5
8
99
99
99
10
106
119
131139
148156
165173
181
2010 2011 2012 2013 2014P 2015P 2016P 2017P 2018P
Other Digital DTH Digital cable Analog cable
in m
illio
n
BROADCASTING: INDUSTRY OVERVIEW
17
Focus on gross billing, phase 3 and 4
MSOs are focusing on moving to itemised gross billing. They are likely to consolidate in phase 1 and 2 before going to phase 3 and 4. The tussle between MSOs and LCOs over billing responsibility has been the key reason for this delay. The liability to collect entertainment tax will not lie on LCO while the issue of service tax is still unresolved. Phase 1 and 2 markets that account for 75% of carriage fees witnessed a drop, but has returned to substantive increases again.
Phase 3 and 4 has a requirement of 6.5 crore set-top box deployment, which will pose greater logistical challenges as compared to phase 1 and 2 where MSOs deployed 3 crore set-top boxes. LCOs play an important role in the success of digitisation of the sector and therefore, engaging them at every level is critical.
Broadcasting sector faced several challenges in 2013 impacted by economic slowdown and regulatory changes. New channel launches were limited also due to delayed approval of new licenses by Ministry of Information and Broadcasting.
Total TV advertisement revenue market grew 9% YoY in 2013 (versus estimated 11% YoY) affected by TRAIs 12-minute ad cap. TV ad revenue is expected to post CAGR of 13% over 2013-18.
Hindi GECs, which had advertisement inventory of 14-16 minutes per hour, compensated the decline in inventory by taking commensurate hikes in advertisement rates.
Subscription revenue is expected to drive growth registering 26% CAGR over 2013-18. Share of subscription revenues to total revenues of broadcasters is expected to increase to 46% in 2018 from 34% in 2013. Increase in subscriber base declaration and higher revenue share will drive subscription revenue.
Subscription to drive growth for broadcasters
FMCG companies remain dominant TV advertisers despite slowdown
TV advertisement spend clocked 9% YoY growth in 2013 and is expected to record ~13% CAGR over 2013-18. Despite slowdown in economy, FMCG companies increased their advertisement and promotion spends by 15-20% YoY. 9 out of top 10 advertisers on TV are FMCG companies.
While FMCG companies increased their advertisement spend, economic slowdown compelled many companies to cut their advertisement expenditures. Sectors like real estate, consumer durables, automobiles, financial services and travel and hospitality were a few to cut their advertisement spend.
Overall 2013 was one of the toughest years in the recent past in terms of advertisement growth. The bearish view on macro situation and general cynicism adversely affected growth.
12,500 13,600 15,200 17,200 19,500 22,100
25,300 5,700
6,900 8,700
12,000
16,600
19,100
22,000
18,200 20,500
23,900
29,200
36,100
41,200
47,300
2012 2013 2014P 2015P 2016P 2017P 2018P
Broadcasting Industry size
Subscription revenue Advertisement revenue
Source: KPMG FICCI Frames 2014, IBF Research
Personal care23%
Food and beverages24%
Services12%
Hair care7%
Auto8% Healthcare
7%
Accessories6%
Household products5%
Telecom/ Internet service providers
4%
Laundry4%
2012
Personal care26%
Food and beverages22%
Services13%
Hair care8%
Auto7%
Healthcare6%
Accessories5%
Household products5%
Telecom/ Internet service providers
4%
Laundry4%
2013
Source: KPMG FICCI Frames 2014, IBF Research
Rs.
cro
re
Top categories advertising on TV
BROADCASTING: INDUSTRY OVERVIEW
18
Hindi GEC remains dominant
Hindi GEC enjoyed 30% viewing share in 2013, up from 29.3% in 2012. Overall advertisement growth was in 13-15% range in 2013 in this genre. Regional channels accounted for 23.1% viewing share in 2013 (lower from 26.4% in 2012).
Advertisement growth in regional channels in 2013 was lower than Hindi GECs as their higher inventory of 18 to 22 minutes per hour got reduced to 12 minutes as per TRAI’s mandate.
The South India market accounts for 35% of all C&S subscribers in the country. Tamil Nadu has the highest penetration of cable and satellite and is the largest advertisement market in South India (four states).
In an environment of slow advertisement growth and general economic slowdown, established models such as Hindi and regional GECs are getting rewarded, with advertising spend flocking to maintain mainstream channels, which are considered safer bets.
Regional entertainment
Regional entertainment channels, which consists mostly of the regional GECs, regional movies and regional music, accounted for 23% viewership share in 2013. This was lower to 26.4% share in 2012.
Advertising growth in regional channels in 2013 was weaker than the Hindi channels on account of higher advertising inventory decline due to 12 minutes advertisement cap. When compared to Hindi GECs, which had 14-16 minutes of ad inventory to an hour before 12 minutes kicked in, their regional counterparts were sitting on 18-22 minutes of inventory per hour. The regional movie channels were sitting on even higher inventory with 22-24 minutes per hour. Some even went up to 30 minutes.
The key drivers of growth in the regional broadcasting space continue to be richness of content, better cultural fit and better engagement in contrast to mass-conscious Hindi programming.
Share of channel genres at all India level
Genre Viewership share by genre, 2013 (%)
AdEx share by genre, 2013 (%)
Hindi GEC 30.0% 27.1%
Hindi movies 15.1% 6.7%
Hindi news 3.3% 8.6%
Kids 7.5% 4.2%
Music 3.6% 4.1%
Infotainment 1.2% 2.0%
English entertainment 1.1% 4.5%
English news 0.1% 5.2%
Regional music 1.7% 1.5%
Regional GEC 18.0% 16.2%
Regional news 3.6% 7.9%
Regional movies 3.4% 2.1%
Sports 2.6% 4.0%
Others 8.6% 6.0%
Source: KPMG FICCI Frames 2014, IBF Research
Viewership Share of Regional Channels - 2013
Tamil27%
Telugu24%
GujaratiBhojpuri1%
Marathi14%
Kannada12%
Bengali11%
Malayalam6%
Others3%
Oriya1%1%
Source: KPMG FICCI Frames 2014, IBF Research
BROADCASTING: INDUSTRY OVERVIEW
19
Investment in sports on the rise
The share of sports genre increased to 2.6% in 2013 from 2.2% in 2012 in total viewership. Major broadcasters have renewed their investments. While the genre continues to be driven by acquisition of rights for cricket, non-cricket properties also witnessed uptick.
Star Sports announced investments of Rs20,000 crore to expand sports coverage in India over a 5 year period and paid ~ Rs200 crore to sponsor India's cricket team till 2017.
Ten Sports also acquired rights of cricket played in Sri Lanka for US$60 million (~ Rs360 crore) till 2020.
Key sports rights acquired in 2013
Sports Tournament Broadcaster Group
Contract Tenure
CRICKET IPL digital distribution Star Sports 2014
International cricket in Sri Lanka Ten Network 2014-2020
Pakistan Vs Sri Lanka in UAE Sony Six 2013
India - New Zealand cricket series Sony Six 2014
Asia Cup Star India 2014
FOOTBALL FIFA World Cup Sony Six 2014-2018
UEFA European Football Championship (EURO)
Sony Six 2016
FIFA World Cup qualification Sony Six 2014
UEFA EURO 2016 qualification Sony Six 2016
FIFA confederation cup Star India 2013
FIFA World Cup 2018 European qualifiers Sony Six 2018
OTHERS Australian Open Sony Six 2015-2019
Summer Olympics, Brazil Star India 2016
Winter Olympics, Russia Star India 2014
Youth Olympics Games Star India 2014
Super Fight League Star India 2013-2017
TNA Wrestling Sony Six NA
Tour De France Ten Network till 2016
Source: KPMG FICCI Frames 2014, IBF Research
TRAI guidelines for channel aggregators
TRAI issued guidelines governing relationship between channel aggregators and distributors (MSOs and DTH operators). MSOs and DTH operators complained about broadcasters forming a cartel through content aggregators because of which they have to pay for weaker channels bundled with stronger ones.
As per the new ruling, broadcasters can continue to use channel aggregators as agents, but only broadcasters themselves can publish the reference interconnection offer (RIOs). Broadcasters also need to insure that agents do not alter the bouquets as offered in the RIO. However,
broadcaster companies belonging to the same group can bundle their channels. A six-month timeline was given to the broadcasters to amend the same. Now with two broadcasters disallowed to bundle their channels, it will curtail their bargaining power and reduce the negotiating power of smaller channels.
The deals activity in Media and Entertainment industry had a lacklustre performance in 2013. It recorded 26 transactions in 2013 versus 35 transactions in 2012. Deal value was also lower in 2013, as the nine reported deal values totalled ~ US$224 million (~Rs1,344 crore) versus US$1.5 billion (~Rs8,000 crore) in 2012.
Investment trends
The overall investments in the sector grew consistently between 2010 and 2012 on the back of market consolidation, digitisation, portfolio diversification, the strengthening presence in regional markets and digital media. During this phase deal value grew from US$693 million (~Rs3,500 crore) in 2010 to US$1.5 billion (~Rs8,000 crore) in 2012. However, amid the economic uncertainty in 2013, investors adopted a more cautious approach resulting in a slowdown in transaction volume and value.
Source: Bloomberg, KPMG, IBF Research
Deals in Media & Entertainment by Sector 2013
Source: Bloomberg, KPMG, IBF Research
42
35
26 1,017
1,541
224
2011 2012 2013
Investment Trends in Media & Entertainment
Number of deals Deals value (US$ million)
BROADCASTING: INDUSTRY OVERVIEW
20
Date Target Name Target Sector Acquirer Name
Merger & Acquisition
March Convonix Systems Digital Publicis Groupe
April End To End Marketing Solutions Advertising McCann Worldgroup India
May Webchutney Studio Digital Dentsu Media & Holdings India
September Business World Magazine Print Private Investors
October Maurya TV TV Broadcast Zee Media Corporation
October HomeShop18 TV Broadcast GS Home Shopping, Network 18 Media
October Beehive Communications Advertising Publicis Groupe
December iStrat Software, MarketGate Digital Publicis Groupe
Private Equity Investments
March Star CJ Network India TV Broadcast Providence Equity Partners
May DEN Netowrks TV Distribution Goldman Sachs Capital Partners
August TVC Skyshop TV Broadcast Morpheus Capital Advisors
September Tata Sky TV Distribution Tata Capital
October Komli Media India Digital Peepul Capital
Source: Bloomberg, KPMG, IBF Research
Key transactions in 2013
Television continues to witness a significant portion of the overall deal value especially from private equity players.
• DEN Networks, one of India's leading cable TV distribution companies received an equity infusion of US$100 million (~Rs660 crore) from Goldman Sachs.
• Tata Capital invested US$40 million (~Rs240 crore) in Tata Sky.
• Providence Partners acquired a 50% stake in Star CJ Network India from Star Group for an undisclosed amount.
• TVC SkyShop, another television shopping channel raised ~US$6 million (~Rs36 crore) from Morpheus Capital.
Consolidation has continued to drive deal activity within the space especially within the regional markets. Zee Media has announced the acquisition of Maurya TV, a regional infotainment channel catering to Bihar- Jharkhand market.
Advertising19%
Digital42%
Print16%
TV broadcast15%
TV distribution8%
BROADCASTING: INDUSTRY OVERVIEW
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Cable broadband: the vast untapped potential
The on going digitisation process is expected to sharply increase cable subscription revenues over longer term for MSOs. However, untapped potential of the high-margin broadband business (EBITDA margins of ~30-35% vs. 15-20% in cable) is immense and is being ignored by investors. Currently, there are just ~10 lakh cable broadband subscribers out of ~10 crore cable TV households. In terms of reach of cable broadband, Hathway Cable and Datacom enjoys the first-mover advantage. Hathway is the first MSO to launch the high-speed Docsis 3.0 (data over cable services interface specifications) technology, which has already resulted in its broadband ARPU increasing by Rs30 in the past six months to Rs340.
Gauging this opportunity, DEN Networks and SITI Cable are also planning to launch Docsis 3.0 services. Reliance Jio is planning an aggressive launch of 4G services shortly. If executed suitably, cable broadband will be a vital margin lever for the MSOs and value accretive in the long run.
As per TRAI, the broadband subscriber base stood at 6.087 crore subscribers as of March 2014. Of these, 1.486 crore were wired broadband subscribers. Out of this, ~10 lakh are cable broadband subscribers. Currently, MSOs are focusing on seeding boxes, ensuring proper implementation of packaging and gross billing in Phase 1 and 2 cities. One key revenue stream, which presents immense opportunity for MSOs, is the cable broadband business. Hathway has been the only MSO, which has been able to make some inroads in the cable broadband business. Apart from Hathway, You Telecom has significant presence in cable broadband. Other national MSOs like IMCL, DEN Networks and SITI Cable have limited presence in the broadband business. Given the under-penetration of Internet and, more specifically, broadband in India, there is ample scope for expansion.
Industry dynamics
Digital media and its upswing
Keeping pace with the changing consumer behaviour and increased access to digital devices, the digital ecosystem evolved to new levels during 2013. The digital ad spend accounted for 8.3% of the total ad spends of Rs36,250 crore in 2013, registering a growth of 38.7%, faster than any other ad category. Mobile, social and video emerged as leading categories in advertising owing to proliferation of smartphones, 3G and off-deck mobile apps.
It is estimated that the total Internet user base will reach 49.4 crore by the end of 2018 as against 93.8 crore TV viewers in the same year. This means that the Internet user population will be approximately 53% of the total number of TV viewers in the country in 2018 compared to 27% in 2013. This shift towards digital media is important for digital media strategists to consider, in order to balance their marketing budgets between online media and traditional TV. Digital media presents an opportunity to engage specific target segments in a more cost effective way as opposed to the mass outreach afforded by traditional TV.
3.79
2.11
1.21
0.490.36
0.230.12 0.04
Hathway You Telecom Asianet Ortel GTPL Incable Siti Cable DEN
Broadband subscribers: Amongst national MSOs (in lakh)
Source: TRAI performance indicator report - December 2013, IBF Research
Source: International Telecommunication Union 2012, IBF Research
Broadband subscription and penetration of top 10 countries - 2012
17.4
8.7
3.52.7 2.4 2.1 2 1.83 1.82 1.3
13%
28% 28%
34%
38%
34%
15%
38%
9%
1%
0
China USA Japan Germany France UK Russia SouthKorea
Brazil India
%
in c
rore
Subscription Penetration
79.182.5
85.788.6
91.393.8
21.423.9
29.5
37.742.2
49.4
2013 2014P 2015P 2016P 2017P 2018P
in c
rore
India internet vs. TV penetration, 2013-2018P
TV Viewers Internet Users
Source: KPMG FICCI Frames 2014, IBF Research
BROADCASTING: INDUSTRY OVERVIEW
22
The number of mobile Internet users have grown steadily and is estimated to have reached 13 crore at the end of 2013. The same is expected to reach 35 crore by the end of 2018. Consumer preferences have shifted towards the need to access information on the go, and mobile Internet seems to address this need. This is supported by the fact that the amount spent on mobile Internet as a % of total amount spent on mobile grew from 43% in 2012 to 45% in 2013. On an average, users spent Rs173 on mobile Internet usage out of the total average mobile bill of Rs387 in 2013.
1315.8
20.2
25.1
29.9
35.3
2013 2014P 2015P 2016P 2017P 2018P
in c
rore
Mobile internet users in India, 2013-2018P
Source: KPMG FICCI Frames 2014, IBF Research
Source: KPMG FICCI Frames 2014, IBF Research
57% 55%
43% 45%
2012 2013
Percentage spent on mobile internet, 2012-13
Voice Mobile Internet Spend
Digital advertising in India grew ~38.7% and touched Rs3,010 crore in 2013. Indian mobile advertising is expected to grow 50% and reach Rs510 crore in revenue by end of 2014. Digital marketers are recognising this trend and are now considering to or are already on their way to execute 'Mobile-first' branding and customer engagement strategies. The ad spend in digital media is set to grow at 37% to reach Rs4,120 crore in 2014. Google and Facebook account for close to half of the advertising revenue spent online in Asia. 50% of the online advertising revenues are garnered by Google in India and Facebook has now become a force to reckon with.
TRAI’s regulation and HD channels with shorter breaks on TV are driving advertisers Online
New regulations from TRAI, combined with the increasing adoption of HD channels that feature shorter ad breaks, are forcing a decrease in supply of advertising time on TV and an obvious increase in rates by channels. All leading TV channels, in order to compensate for the lost revenues, increased ad rates.
Marketing budgets are not increasing enough and from a relative cost perspective, driving advertisers to increase their investments in digital platforms at a rate higher than that observed for TV. Digital ad spend is estimated to grow at a CAGR of 27.7% from the year 2013 to 2018 against estimated 13.2% CAGR for TV ad spend. There are likely to be more ads on TV that will mention 'Watch the rest on YouTube' and growth of 'second screen apps' to shift users to digital platforms.
Source: KPMG FICCI Frames 2014, IBF Research
13,600 15,200 17,200 19,500 22,100 25,300
3,010 4,120 5,510 6,970 8,810 10,220
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2013 2014 2015 2016 2017 2018
-
TV ad spend Digital ad spend
Digital ad spend vs TV ad spend in India, 2013-2018P, Rs crore
Media and Entertainment in South India
South Indian Media and Entertainment industry is estimated at Rs23,900 crore in 2013 and is estimated to grow at 16% CAGR over the medium term to reach Rs43,600 crore by 2017. Strong demand for regional content driven by rising per capita income, increasing aspirations of the Tier-2 cities, rapid technology advancements have resulted in evolving this regional media and entertainment sector.
Television56%
Print28%
Radio2%
New Media3%
Film11%
South India M&E Market by Medium, 2013
Source: Deloitte, IBF Research
BROADCASTING: INDUSTRY OVERVIEW
23
TV subscription market in South India (Rs crore)
2013 2014 2015 2016 2017 CAGR 2013-17
Tamil Nadu 3,200 4,200 5,300 6,500 7,700 25%
Andhra Pradesh 3,000 3,700 4,600 5,600 6,500 22%
Karnataka 1,800 2,300 2,800 3,400 4,000 22%
Kerala 1,000 1,200 1,500 1,800 2,100 22%
Total 9,000 11,400 14,200 17,300 20,300 23%
Source: Deloitte, IBF Research
Source: Deloitte, IBF Research
% share of states in South India's population vs. subscription revenues
29%
34%
24%
13%
36%
33%
20%
11%
Tamil Nadu Andhra Pradesh Karnataka Kerala
% share of South Indian population % share of South Indian subscription revenues
Market size of TV industry in South India (Rs crore)
2013 2014 2015 2016 2017 CAGR 2013-17
Subscription revenue 9,000 11,300 14,200 17,300 20,300 23%
Ad revenue 4,000 4,600 5,300 6,000 6,800 14%
Content revenue 500 600 700 800 900 14%
Total 13,500 16,500 20,200 24,100 28,000
Source: Deloitte, IBF Research
20%
Source: Deloitte, IBF Research
TV channels launched post August 2012
Channel Genre Language Broadcaster10TV News Telugu Co-operative news channelCaptain News News Tamil Captain Media NetworkMathrubhumi News News Malayalam Mathrubhumi GroupRaj News News Kannada Raj TV NetworkMedia One Infotainment Malayalam Madhyamam Broadcasting Ltd.Kappa TV Music Malayalam, Tamil,
Hindi, EnglishMathrubhumi Group
Surya Music Music Malayalam Sun TVSuvarna Plus GEC Kannada Asianet
Tamil Nadu36%
Andhra Pradesh31%
Karnataka19%
Kerala14%
Split of South India M&E Market by States, 2013
Source: Deloitte, IBF Research
Within the southern markets, TV is the largest medium accounting for 56% of the sector during 2013. State-wise, Tamil Nadu accounts for 36% of the market, while Andhra Pradesh accounts for 31% of the market.
Tamil Nadu Media and Entertainment industry is worth Rs8,400 crore in 2013 and is expected to grow at a CAGR of 17% over 2013-17. Growth is expected to be marginally higher than other states with all four media platforms expected to grow faster in Tamil Nadu. Andhra Pradesh is the second largest market with a size of Rs7,100 crore and is expected to grow at 16% CAGR over 2013-17E to reach Rs12,700 crore.
The South Indian TV sector is valued at Rs13,500 crore in 2013 and is expected to grow at a CAGR of 20% over the next four years driven by on going digitisation. Subscription revenues, which currently account for 66% of the sector, are likely to increase to 73% by 2017 as digitisation benefits accrue.
Television sector in South India is expected to grow at a CAGR of 20%
TV subscription revenues to grow at 23% CAGR over 2013-17
TV subscription market in South India is valued at Rs9,000 crore in 2013 and is expected to grow at a CAGR of 22.7% over the medium term to reach Rs20,300 crore. Growth in subscription revenues will be driven by digitisation as ultimately every TV in the country will be mapped.
Tamil Nadu and Andhra Pradesh collectively account for 70% of the TV sector's subscription revenues. Although Andhra Pradesh is the most populous state in South India, Tamil Nadu contributes the largest proportion of subscription revenues owing to the high Cable and Satellite penetration. In Tamil Nadu, Cable and Satellite penetration is 90%, which is substantially higher than Andhra Pradesh's Cable and Satellite penetration of about 70%.
New channel launches in South India in last one year
With regional broadcasting emerging as a growing stream of revenue for broadcasters, South India has witnessed several new channel launches over the last one year across states and genres. Further, with digitisation on the cards, broadcasters are investing in niche content to drive revenues.
The future, where Consumers are in control
An ever-expanding array of channels, platforms, devices, experiences and choice is positioning consumers to dictate the future of television for the foreseeable future. The real meaning of this should be about what that control means for the future of television - for storytelling, monetisation and the relationships among viewers and the various entities in the media supply chain. There are six major trends to look out for. Each of these trends will require more probing and has profound implications for media companies' systems, processes and organisations.
The trends that drive the future
The Media and Entertainment industry is undergoing a seismic shift. The pace of technological change is accelerating so quickly that finding the right balance between addressing today's daily operational challenges and planning for the next big thing can be a struggle. Many Media and Entertainment executives are so focused on the critical issues they need to address today that looking forward is nearly impossible. And yet, looking forward is what Media and Entertainment executives need to do if they want to survive, innovate and prosper.
1. Storytelling will evolve to make better use of an
"omniplatform" environment
Metadata that enables synchronisation between screens is a key enabler to this experience. Initiatives such as the Coalition of innovative Media Measurement's (CIMM) and Trackable Asset ID (TAXI) will help; however, this has implications for almost every system in a media company's supply chain, from content creation and preparation through to sales, traffic and distribution. Omniplatform programming will strain digital supply chains even further.
BROADCASTING: INDUSTRY OVERVIEW
24
58%
47%
39%
28% 28%
14%
Laptop Internet connected TV Desktop Smartphone Tablet iPod Touch
Devices used to view online TV among US digital video viewers, by type, March 2013, % of respondents
Source: Advertising Bureau, IBF Research
eMarketer , 29 April 2013, citing data from Interactive
2. Ubiquitous screens will demand greater content mobility
Content providers will want to measure engagement and captivation across not just multiple platforms, but also multiple screens to determine how to optimise the experience and ad placements. More screens mean more potential opportunities for ad impressions, provided the experience is carefully calibrated and tuned for a multiscreen lifestyle.
3. Social dynamics and synergistic experiences will drive more
event based viewing
Although consumers will continue to demand time and place shifted viewing, Media and Entertainment companies may want to consider creating event windows to drive relationships with content franchises and deliver value to advertisers that is "DVR-proof." For example, Sify is piloting experiment with the show Defiance. Defiance is both a show and a video game, but they were produced at the same time with an interactive experience between the two. The show will influence both game dynamics and television. This creates an opportunity to hold viewers' attention at a scheduled time. Some may be watching the show; others may be playing the game. Still others will attempt to do both at once.
4. Innovation in program discovery and television controls will
drive new techniques to cut through the clutter
Content providers will have to engage in "content discovery optimisation," similar to today's search engine optimisation practices where content is continuously tuned so that the broadest possible audience can discover it at the right time. This will need to go far beyond the descriptive show metadata and into parameters, such as sentiment of show, optimum watching circumstances (screen size, etc.) and shared creative heritage.
5. Bingeing will drive more innovation in measurement and
personalisation
Media and Entertainment companies will need to measure bingeing (where a viewer consumes several hours of the same back to back content in a single sitting) more granularly than broadcast television is measured today. Using data analytics, companies can then package the right experiences for advertisers and monetise them directly by building a model that caters to different types of binge viewers. The challenge to be solved is obtaining this data from distribution partners.
BROADCASTING: INDUSTRY OVERVIEW
25
6. New entrants demanding unique content will drive
innovation beyond the traditional studio system
New relationship models will enable a larger number of players within the Media and Entertainment industry to take more creative risks. The corresponding impact on systems to track and calculate rights, profits and participations and revenue realisation will have to account for an even more complex fabric of participants and interested parties.
Methods used by US TV viewers to binge-view TV, February 2013
63%
52% 51%
44%41%
15% 14% 15%
Used online subscription service
Watched on network or cable website
Rented or bought DVD or Blu ray box set
Watched on DVR
Have used at least once to binge view Primary way to binge view
Source: eMarketer, 18 April 2013, citing data from MarketCast, IBF Research
IBF: THE YEAR GONE BY
26
Significant improvement in collection of advertising dues
Collection of advertising revenues is a process which yields better collections for IBF members. The process has to be streamlined, followed and adhered to continuously. Over the years, the process has been followed diligently and it has resulted in consistent improvement in collections from the members of Advertising Agencies Association of India (AAAI). Dues reported by IBF member channels as on 65th day have witnessed a decline of nearly 40% to Rs101 crore (up to 31 March 2014 billing) as compared to last year's figure of Rs167 crore (up to 31 March 2013 billing). This was achievable in a bad economic cycle when ad spend witnessed a slow growth last year.
Source: IBF Credit and Collections MIS data, IBF Research
The success of the Committee can primarily be attributed to:
a) Methodical implementation of policies and advisories
b) Improved MIS
c) Constant follow-up with agencies/clients and reconciliation
In South India, in view of the repeated requests from Kerala based IBF members, the Kerala Chapter of the Committee has initiated its re-engagement with locally based agencies/clients for streamlining payments in the region. The dynamics of the Kerala market are quite different in terms of payouts by the clients and the agencies and channels were finding it difficult to get payments recovered in time. IBF's intervention has resulted in improved collections which is reflected in the chart below. Dues reported on the 65th day which stood at Rs19.80 crore (up to 31 October 2013 billing) when the Committee started regular review early this year, have now come down by 50% to Rs10 crore (up to 30 April 2014 billing).
Source: IBF Credit and Collections MIS data, IBF Research
This year the Committee also intends to focus on the following aspects:
a) Workflow automation
b) Improved agency and client management - studying credit worthiness
c) Revenue assurance by way of securities, undertakings and guarantees
The decision of Ministry of Home Affairs (MHA) of reviewing security clearance of television channels after every three years is an obsolete process which hindered the growth of the broadcast industry. IBF took up the issue strongly with the Ministry of Information and Broadcasting (MIB) and raised concern over the unprecedented delay in grant of permissions for additional channels where security clearance subsists in favour of the Company and its board of directors.
After several representations from IBF and NBA, MIB has decided to do away with the practice. The new guidelines suggest no fresh security clearance requirement in case security cleared Company (with security cleared directors) seeks permission for additional TV channel(s) within the validity period of security clearance. Accordingly, it has been decided to grant permission to eligible companies where security clearance is available in favour of the Company and its directors on the Board within the validity period.
The Legal Committee has been a strong backbone to IBF and plays a compelling role in providing direction not only to the Foundation but also the Board of Directors to initiate important policy related activity. The Committee has
Channel licensing issues
Legal and Regulatory Affairs Committee
Improvement in Kerala Region Collections
Rs.
Cro
res
(ap
pro
x)
8
148
6 2 29
167
18
75
7 2 512
101
0
20
40
60
80
100
120
140
160
180
Outstanding from AAAI agencies
Rs.
Cro
res
(ap
pro
x)
0.14
66
21
5
20
0.16
4
0.42 0.34 0.26
5
10
0
5
10
15
20
25
0-30 days
0-30 days
30-60 days
30-60 days
Mar - 13 Mar - 14
Oct - 13 Apr - 14
60-90 days
60-90 days
90-120 days
90-120 days
120 days & above
120 days & above
Total Undisputed
Total Undisputed
Disputed
Disputed
BROADCASTING : AN INDUSTRY IN TRANSITION
27
supported IBF in actively participating in all important Consultation Papers issued by TRAI. It has taken a lead in IBF's challenge to amendments in the Copyright Act which adversely affects broadcasters copyright on content. Several challenges in various Courts during the phased implementation of Digitisation were dealt with incisive and speedy intervention. The challenges were nipped in the bud thereby helping progress the process of Digitisation. With the support of the Committee the IBF has taken the lead in advocating with the TRAI the need to shift to a more market related tariff regime and eventual forbearance. The Legal Committee is also entrusted with the responsibility of advising, briefing and suggesting to the appearing lawyers the line of argument to be taken in specific cases where litigation is inevitable.
The self-regulatory Council has completed three years of successful operation. The IBF Board of Directors ratified the appointment of Justice (Retired) Mukul Mudgal, former Chief Justice of Punjab and Haryana High Court, as the new BCCC Chairperson on 13 February 2014. Mr. Naseem Ahmad, Chairperson of National Commission for Minorities, also came on board as a BCCC Member in place of retiring Chairperson, Mr. Wajahat Habibullah.
So far, the Council has held 36 Meetings. Until July 2014, BCCC had received more than 19,200 complaints, of which it needed to and adjudicated on 2,304 specific complaints. The Council also issued two more Advisories - 'Portrayal of Disabled Persons in TV Programmes' and 'Depiction and Use of National Flag, National Anthem, National Emblems and Map of India' on 3 April 2014. The total number of Advisories issued by BCCC has now gone up to 12.
On 7 April 2014, the Council organised a special interactive session in Chennai for the benefit of Tamil, Telugu, Kannada and Malayalam channels. It was attended by legal, S&P, content and creative teams of various networks. Well-known actors Ms. Suhasini Mani Ratnam and Ms. Radhika Sharat Kumar attended the session, besides acclaimed media critic Sadanand Menon.
Under the Chairmanship of Mr Punit Goenka, Broadcast Audience Research Council (BARC) India is well on course to commence viewership measurement by the end of this year.
BARC has inked agreements with Netherlands based technology and solutions provider Civolution for
Broadcasting Content Complaints Council
Viewership Measurement
watermarking the content for the world's single largest viewership measurement platform. BARC had earlier chosen the TV-meter system of Médiamétrie, the audience measurement Company for television, radio, cinema and the Internet in France. The two companies will provide the technology foundation for BARC.
BARC aims to address a population of over one billion, of which over 750 million have access to television in some form. This will be the first fully digital viewership measurement system employed directly by the Indian broadcast industry.
The Broadcasting Sector has been under severe tax pressure on several fronts. Particularly, the vagaries of vastly varying entertainment tax at the state level, the double taxation in several areas by both, state and centre, and the issue of roylaties/fees for technical services charged for content and connectivity/transponder leases from foreign service providers is genuinely debilitating and the Foundation in consultation with KPMG and several CFOs of member channels made a detailed presentation to the Revenue Secretary prior to the interim budget announcements by the new Government in July 2014.
Other than this, we have made a detailed representation to Minister of Information and Broadcasting, Mr Prakash Javadekar on continuing with the Digitisation policy and strict adherence to timelines. Though the Minister has openly stated that domestic/indigenous manufacturers of set top boxes would be given importance, he has gone on record to say that digitisation would not be postponed. However, considering the lack of time, we feel that the deadline for implementation of Phase 3 and 4 would be pushed out by about a year.
As directed by the Board, IBF has engaged Media Partners Asia to do a two-phased study on digitisation: phase one would focus on the benefits accrued to the stakeholders from the earlier two stages of digitisation and why digitisation is essential for the growth of the industry. The second part would concentrate on identifying bottlenecks from a policy, regulatory and legal frame work to all components of the value chain.
We welcome Mathrubhumi and Writeman Media as the new Ad-Hoc Members of IBF.
Government Interface
New Members
IBF: THE YEAR GONE BY
INDEPENDENT AUDITOR'S REPORT
28
To The Members of Indian Broadcasting Foundation
Report on the Financial Statements
Management's Responsibility for the Financial Statements
Auditor's Responsibility
We have audited the accompanying Financial Statements of Indian Broadcasting Foundation as at 31 March 2014 which comprise the Balance Sheet as at 31 March 2014 and Income and Expenditure Account for the year then ended and notes to the Financial Statements comprising of a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation of these Financial Statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (“the Act”) read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Financial Statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of the material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company's preparation and fair
presentation of the Financial Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the Financial Statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanations given to us, the Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:
a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2014 and
b) In the case of the Income & Expenditure account, of the Surplus for the year ended on that date.
This report does not include a statement on the matters specified in paragraph 4 of the Companies (Auditor's Report) Order, 2003 [as amended by the Companies (Auditor's Report) (Amendment) Order, 2004] issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, since in our opinion and according to the information and explanations given to us, the said Order is not applicable to the Company.
As required by section 227(3) of the Act, we report that:
a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;
c) The Balance Sheet and Income and Expenditure Account dealt with by this Report are in agreement with the books of account;
Opinion
Report on Other Legal and Regulatory Requirements
INDEPENDENT AUDITOR'S REPORT
29
d) In our opinion, the Balance Sheet and Income and Expenditure Account comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;
e) On the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors are disqualified as on 31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;
For S. S. Kothari Mehta & Co.Chartered AccountantsFirm Regn. No. 000756N
-sd-Naveen Aggarwal
Partner(Membership No. 094380)
Place : New DelhiDate : 01 August 2014
Particulars Note No As at 31 March 2014Amount (Rs.) Amount (Rs.)
(1) Member's Funds
(a) Entrance Fee 2 13,750,000 12,750,000
(b) Reserves and Surplus 3 129,959,251 76,534,670
(2) Non-Current Liabilities
(a) Long Term Provisions 4 2,704,397 2,181,336
(3) Current Liabilities
(a) Other Current Liabilities 5 41,858,983 49,988,096
(b) Short Term Provisions 6 27,640 16,603
Total 188,300,271 141,470,705
(1) Non-Current Assets
(a) Fixed Assets
(i) Tangible Assets 7 24,976,511 25,636,134
(ii) Intangible Assets 8 24,025 19,396
(b) Non-Current Investments 9 1,500,000 1,500,000
(c) Long Term Loans and Advances 10 9,650 10,300
(d) Other Non-Current Assets 11 14,248,860 28,025,387
(2) Current Assets
(a) Cash and Bank Balances 12 107,095,231 73,244,909
(b) Short Term Loans and Advances 13 32,918,437 7,903,034
(c) Other Current Assets 14 7,527,557 5,131,545
Total 188,300,271 141,470,705
The notes are an integral part of the Balance Sheet This is the Balance Sheet referred to in our attached report of even date
As at 31 March 2013
I. EQUITY AND LIABILITIES
II. ASSETS
BALANCE SHEET AS AT 31 MARCH 2014
30
For and on behalf of the Board of Directors ofIndian Broadcasting Foundation
ForChartered AccountantsFirm’s Regn. No. 000756N
S.S. Kothari Mehta & Co.
-sd- -sd- -sd- -sd-
Partner President Working President Vice PresidentMembership No. 094380
-sd- -sd- -sd-Place : New DelhiDate : 01 August 2014 Vice President Treasurer Secretary General
Naveen Aggarwal Man Jit Singh Punit Goenka Rajat Sharma
Rahul Johri K V L Narayan Rao Shailesh Shah
INCOME & EXPENDITURE ACCOUNT FOR THE YEAR ENDED 31 MARCH 2014
31
Particulars Note No For the Year ended For the Year ended31 March 2014 31 March 2013Amount (Rs.) Amount(Rs.)
I. Subscription 15 93,584,896 57,229,719
II. Other Income 16 11,646,013 9,919,680
III. Total Revenue (I+II) 105,230,909 67,149,399
Employee Benefit Expense 17 22,969,580 11,951,602
Depreciation and Amortisation Expense 18 827,007 829,391
Other Expenses 19 28,009,741 33,363,562
IV. Total Expenses 51,806,328 46,144,555
V. Surplus/(Deficit) Before Tax(III-IV) 53,424,581 21,004,844
VI. Tax Expense:
(1) Current Tax - -
(2) Deferred Tax - -
VII. Surplus/(Deficit) for the Year (V-VI) 53,424,581 21,004,844
The notes are an integral part of the Financial Statements.
This is the Income & Expenditure Account referred to in our attached report of even date
Income:
Expenditure:
For and on behalf of the Board of Directors ofIndian Broadcasting Foundation
ForChartered AccountantsFirm’s Regn. No. 000756N
S.S. Kothari Mehta & Co.
-sd- -sd- -sd- -sd-
Partner President Working President Vice PresidentMembership No. 094380
-sd- -sd- -sd-Place : New DelhiDate : 01 August 2014 Vice President Treasurer Secretary General
Naveen Aggarwal Man Jit Singh Punit Goenka Rajat Sharma
Rahul Johri K V L Narayan Rao Shailesh Shah
NOTES TO FINANCIAL STATEMENTS
32
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: -
1. BASIS OF PREPARATION:
2. REVENUE RECOGNITION
3. FIXED ASSETS AND DEPRECIATION
These Financial Statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis based on going concern. These Financial Statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956.
All assets and liabilities have been classified as current or non-current as per the Company's operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
Subscription from the members is recognised on accrual basis considering the reasonable certainty for the ultimate collection.
Additional contribution received for specific projects have been recognised as income to the extent the same has been utilised for the respective projects and balance unutilised portion has been shown as other current liability.
Voluntary Contributions are accounted on receipt basis.
a. Tangible Assets
a. Tangible Assets are stated at acquisition cost inclusive of all related and other incidental expenses net of accumulated depreciation.
b. Depreciation on Tangible assets is provided on Straight Line Method on pro-rata basis at the rates specified in Schedule XIV (as amended) to the Companies Act, 1956. In the case of assets costing up to Rs5,000, depreciation is charged at the rate of 100% in the year of purchase.
b) Intangible Assets
a. Intangible Assets are stated at acquisition cost inclusive of all related and other incidental expenses net of accumulated amortisation.
b. Intangible assets are amortised over a period of 5 years from the date of acquisition on straight line basis.
Investments are classified into long term or current. Long term investments are stated at acquisition cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are valued at lower of cost and market rate on individual investment basis.
a) Retirement benefits in the form of Provident fund / Pension Schemes is defined contribution schemes and the contributions are charged to the Profit & Loss Account of the year when the contributions to the respective funds are due.
b) Leave Encashment liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.
c) Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation made at the end of each financial year.
d) Actuarial gains / losses are immediately taken to Profit & Loss Account and are not deferred
The Company is exempt from tax on income under Section 11 of the Income Tax Act, 1961; hence no provision has been made for the same.
4. INVESTMENTS
5. RETIREMENT BENEFITS
6. TAXATION
7. FORFEITURE OF ENTRANCE FEE
8. PROVISIONS, CONTINGENT LIABILITY & CONTINGENT ASSETS
Forfeited entrance fee is transferred to Capital Reserve in the case of removal or resignation of any member.
a) Provisions involving substantial degree of estimation in measurement are recognised when the present obligation resulting from past events give rise to probability of outflow of resources embodying economic benefits on settlement.
b) Contingent liabilities are not recognised and are disclosed in notes.
c) Contingent assets are neither recognised nor disclosed in Financial Statements.
d) Provisions are reviewed at each Balance sheet date and adjusted to reflect the current best estimates.
The presentation of Financial Statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect reportable amount of assets and liabilities on the date of Financial Statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the year in which the results are known / materialised.
9. USE OF ESTIMATES:
NOTES TO FINANCIAL STATEMENTS
33
NOTES TO FINANCIAL STATEMENTS
34
2 Entrance Fees
3 Reserves and Surplus
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Opening Balance 12,750,000 9,750,000
Add: Received during the year 1,000,000 3,500,000
Less: Forfeited during the year - 500,000
Total 13,750,000 12,750,000
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Capital Reserve:
Opening Balance 2,000,000 1,500,000
Add: Transferred from Entrance Fee - 500,000
Closing Balance 2,000,000 2,000,000
Special Reserve:
Opening Balance 28,436,471 17,917,751
Add : Transferred from Income & Expenditure Account (Net) 30,876,804 10,518,720
Closing Balance 59,313,275 28,436,471
General Reserve
Opening Balance 17,829,800 17,829,800
Closing Balance 17,829,800 17,829,800
Surplus/( Deficit )
Opening Balance 28,268,399 17,782,275
(+) Surplus/(-) Deficit for the current year 53,424,581 21,004,844
Less : Transfer to Special Reserve (Net) (30,876,804) (10,518,720)
Closing Balance 50,816,176 28,268,399
Total 129,959,251 76,534,670
NOTES TO FINANCIAL STATEMENTS
35
4 Long Term Provisions
5 Other Current Liabilities
6 Short Term Provisions
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Provision for Employee Benefits
Leave Encashment 1,224,375 1,083,989
Gratuity 1,480,022 1,097,347
Total 2,704,397 2,181,336
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Other Payables
Self Regulatory Guidelines Fund 11,069,489 5,697,575
Broadcast India Survey Fund 26,695,117 39,632,118
Other Payables 3,296,287 2,767,948
Statutory Dues Payable 798,090 1,890,455
Total 41,858,983 49,988,096
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Provision for Employee Benefits
Leave Encashment 13,304 8,296
Gratuity 14,336 8,307
Total 27,640 16,603
NOTES TO FINANCIAL STATEMENTS
36
Bala
nce
asat
1 A
pril
2013
Add
ition
sD
educ
tions
/A
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Bala
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Dep
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Bala
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31
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31
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Bala
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31
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Gro
ss C
arry
ing
Val
ueA
mou
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s.)
Dep
reci
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nA
mou
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s.)
Net
Car
ryin
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alue
Am
ount
(R
s.)
Com
pute
rs H
ardw
are
870
,116
1
36,7
91
80,
600
926
,307
5
28,0
67
104
,099
8
0,60
0 5
51,5
66
374
,741
3
42,0
49
Mot
or V
ehic
les
959
,000
-
-
9
59,0
00
242
,115
9
1,10
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3
33,2
20
625
,780
7
16,8
85
Furn
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& F
ixtu
re 1
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2
2,00
0 -
1
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8
88,1
19
109
,637
-
9
97,7
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819
,694
9
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31
Offi
ce E
quip
men
ts 1
,018
,749
4
6,29
9 6
4,08
0 1
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2
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598
21,
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290
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7
10,4
66
775
,842
Ele
ctri
cal f
ittin
gs 6
66,1
25
-
-
666
,125
2
34,9
24
31,
641
-
266
,565
3
99,5
60
431
,201
Offi
ce B
uild
ing
25,
555,
612
-
-
25,5
55,6
12
3,09
2,78
6 4
16,5
56
-
3,50
9,34
2 2
2,04
6,27
0 2
2,46
2,82
6
Tot
al
30,
865,
052
205
,090
1
44,6
80
30,9
25,4
62
5,2
28,9
18
821
,636
1
01,6
03
5,9
48,9
51 2
4,97
6,51
1 2
5,63
6,13
4
Prev
ious
Yea
r 3
0,54
1,46
8 3
52,0
84
28,
500
30,
865,
052
4,4
21,7
93
825
,861
1
8,73
6 5
,228
,918
25
,636
,134
2
6,11
9,67
5
Com
pute
r So
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e 2
10,0
48
10,
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-
220
,048
1
90,6
52
5,3
71
-
196
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2
4,02
5 1
9,39
6To
tal
210
,048
1
0,00
0 -
2
20,0
48
190
,652
5
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-
1
96,0
23
24,
025
19,
396
Prev
ious
Yea
r 2
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48
-
-
210
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1
87,1
22
3,5
30
-
190
,652
1
9,39
6 2
2,92
6
8.
In
tang
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Ass
ets
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Add
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Bala
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Gro
ss C
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Val
ueA
mou
nt (R
s.)
Am
ortisa
tion
Am
ount
(R
s.)
Net
Car
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alue
Am
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7.
Ta
ngib
le A
sset
s
Part
icul
ars
Part
icul
ars
9 Non Current Investments
10 Long Term Loans and Advances
11 Other Non Current Assets
12 Cash and Bank Balances
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Other Investments (valued at cost unless otherwise stated)
Investment in Equity Instruments (Non Trade, Unquoted)
150000 Equity Shares (Previous yr. 150000) of Broadcast Audience 1,500,000 1,500,000Research Council (100% subsidiary)
Total 1,500,000 1,500,000
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Unsecured, Considered Good
Security Deposits 9,650 10,300
Total 9,650 10,300
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Other Bank Balances (Refer Note No.12.1)
Fixed Deposit 14,000,000 27,000,000
Interest Accrued 248,860 1,025,387
Total 14,248,860 28,025,387
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Cash & Cash Equivalents
Cash on Hand 17,816 8,972
Balances with Scheduled Banks in :in Saving Account 9,177,415 1,307,170
Other Bank Balances
Fixed Deposits with Bank (Refer Note No.12.1) 97,900,000 71,928,767
Total 107,095,231 73,244,909
NOTES TO FINANCIAL STATEMENTS
37
NOTES TO FINANCIAL STATEMENTS
38
12.1
13 Short Term Loans and Advances ( Unsecured, Considered Good)
14 Other Current Assets
Particulars As at 31 March 2014 As at 31 March 2013Amount (Rs.) Amount (Rs.)
Fixed Deposits with Bank
Upto 12 months maturity from date of acquisition 40,000,000 43,728,767
Maturity more than 12 months but within one year from the reporting date 57,900,000 28,200,000
Shown as Current Assets 97,900,000 71,928,767
Maturity more than 12 months but after one year from 12 months from the reporting date 14,000,000 27,000,000
Shown as Non-current Assets 14,000,000 27,000,000
Total 111,900,000 98,928,767
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Loans and Advances to Related Parties
Expenses Reimbursements receivable from Subsidiary Company 125,134 83,271
Other Loans and Advances
Prepaid Expenses 604,284 80,875
Share Application Money 28,500,000 4,500,000
TDS recoverable 2,190,613 1,825,799
Service Tax input Recoverable 549,947 1,413,089
Sundry Debtors 948,459 -
Total 32,918,437 7,903,034
Particulars As at 31 March 2014 As at 31 March 2013 Amount (Rs.) Amount (Rs.)
Interest Accrued 7,527,557 5,131,545
Total 7,527,557 5,131,545
NOTES TO FINANCIAL STATEMENTS
39
15 Subscription
16 Other Income
17 Employee Benefit Expenses
18 Depreciation & Amortisation
Particulars For the Year ended For the Year ended31 March 2014 31 March 2013Amount (Rs.) Amount (Rs.)
Membership Subscription 72,400,000 41,050,000
Subscription for:
Self Regulatory Guidelines Fund 7,328,086 7,802,219
Broadcast India Survey Fund - 8,377,500
Voluntary Contribution From Members 13,856,810 -
Total 93,584,896 57,229,719
Particulars For the Year ended For the Year ended31 March 2014 31 March 2013Amount (Rs.) Amount (Rs.)
Interest Income 11,569,454 9,915,501
Interest on Income Tax Refund 76,559 4,179
Total 11,646,013 9,919,680
Particulars For the Year ended For the Year ended31 March 2014 31 March 2013Amount (Rs.) Amount (Rs.)
Salaries and Wages 21,839,446 11,452,178
Contribution to Provident and Other Funds 905,640 393,778
Staff Welfare Expenses 224,494 105,646
Total 22,969,580 11,951,602
Particulars For the Year ended For the Year ended31 March 2014 31 March 2013Amount (Rs.) Amount (Rs.)
Depreciation on Tangible Assets 821,636 825,861
Amortisation on Intangible Assets 5,371 3,530
Total 827,007 829,391
NOTES TO FINANCIAL STATEMENTS
40
19 Other Expenses
Particulars For the Year ended For the Year ended31 March 2014 31 March 2013Amount (Rs.) Amount (Rs.)
Expenses on Special Projects:
Self Regulatory Guidelines Expenses 7,328,086 7,652,819
Broadcast India Survey Expenses - 8,377,500
Research Expenses 8,759,156 -
Production Cost for Digitalisation Campaign - 3,211,391
Indian Television Fest, Goa - Expenses Written Off - 8,474,616
IBF's Website Expenses 325,000 1,824
Legal & Consultancy Charges 7,520,362 2,098,305
Travelling & Conveyance Expenses 1,011,996 1,123,816
Repair & Maintenance:
- Building 930,529 866,323
- Plant & Machinery 56,732 48,517
Auditor's Remuneration
- Audit Fees 150,000 125,000
- Tax Matters 26,000 24,663
- Out of Pocket Expense 5,500 5,500
Rates & Taxes 110,099 84,505
Fixed Assest Written Off 43,077 -
Board Meeting Expenses 154,362 42,172
Conference & Meeting Expenses 331,973 135,335
Books & Periodicals 26,165 84,544
Loss on Sale of Fixed Assets - 9,764
Car Maintenance Expenses 138,797 69,480
Communication Expenses 279,015 246,590
Electricity & Water Charges 168,100 145,470
Printing & Stationery 109,524 111,884
Miscellaneous Expenses 535,268 346,840
Entertainment Expenses - 76,704
Total 28,009,741 33,363,562
OTHER NOTES TO ACCOUNTS
41
20. The Company is a Small and Medium Sized
Company as defined in the general Instructions in
respect of Accounting Standards notified under the
Companies Act, 1956. Accordingly, the Company has
complied with the Accounting Standards as applicable
to Small and Medium Sized Company.
21. Special reserve has been created under Section 11 of
the Income Tax Act, 1961, by transferring the
unutilised amount in excess of 15% of the total income
for the purpose of construction of the building/office
of the Company, to carry out research and other works
relating to the interest of the Company and setting up
of branch offices in other parts of India.
Further, during the year, Company has incurred
expenditure of Rs87,59,156 for the purpose of doing
research on impact of television on India, which is
utilised from special reserve created under Section 11
of the Income Tax Act, 1961, by transferring the
unutilised amount in excess of 15% of the total income
in the previous years . Accordingly, this amount has
been appropriated from special reserve after netting
off the amount required in above paragraph.
22. In the opinion of the management, the value on
realisation of current assets, loans & advances in the
ordinary course of activities would not be less than the
amount at which they are stated in the Balance Sheet
and provisions for all known liabilities has been made.
23. Sundry Creditors include Rs25,88,555 collected from IBF members as contribution towards expense sharing incurred by Joint Working Committee of IBF and AAAI in pursuance to the agreement dated 26 March 2008.
In accordance with the Accounting Standard on Employee Benefits (AS 15) (Revised 2005) notified by the Companies (Accounting Standards) Rules, 2006, the following disclosures have been made:
a. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at last drawn salary plus dearness allowance for each completed year of service. The Scheme is unfunded.
b. The Company has a defined benefit leave encashment plan, which is unfunded. Every employee, from the date of joining gets 12 leaves in year for each completed year of service subject to maximum of 240 leaves with an encashment capping of 90 days on exit.
The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the Balance Sheet for the respective plan (as per Actuarial Valuation as on 31 March 2014).
24. Employee Benefits
Net employee benefit expense (recognised in the Statement of Profit & Loss for the year ended 31 March 2014)
2013-2014 2012-2013
Particulars Leave Gratuity Leave GratuityEncashment Encashment
Current Service Cost 2,91,579 5,06,937 1,59,964 2,90,113
Interest Cost on Benefit Obligation 83,014 84,030 98,143 1,19,395
Expected return on Plan Assets Past Service Cost - - - -
Actuarial (gain) / loss recognised in the year (2,29,199) (2,02,263) 4,63,307 10,97,665
Net Benefit Expense 1,45,394 3,88,704 7,21,414 15,07,173
2013-2014 2012-2013
Particulars Leave Gratuity Leave GratuityEncashment Encashment
Present Value of Defined Benefit Obligation 12,37,679 14,94,358 10,92,285 11,05,654
Fair Value of Plan Assets - - -
Net Asset / (Liability) recognised in (12,37,679) (14,94,358) (10,92,285) (11,05,654)the Balance Sheet
Particulars 2013-2014 2012-2013
Leave Gratuity Leave GratuityEncashment Encashment
Opening Defined Benefit Obligation 10,92,285 11,05,654 12,91,352 15,70,981
Interest Cost 83,014 84,030 98,143 1,19,395
Past Service Cost - - - -
Current Service Cost 2,91,579 5,06,937 1,59,964 2,90,113
Benefits Paid - - (9,20,481) (19,72,500)
Actuarial (gain) / loss on Obligation (2,29,199) (2,02,263) 4,63,307 10,97,665
Closing Defined Benefit Obligation 12,37,679 14,94,358 10,92,285 11,05,654
Particulars 2013-2014 2012-2013
Discount Rate 9.30% 7.60%
Rate of Increase in Compensation 10% 10%
Rate of Return on Plan Assets - -
Average Outstanding Service of Employees up to Retirement (years) 18.05 17.97
OTHER NOTES TO ACCOUNTS
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Net Asset / (Liability) recognised in the Balance Sheet as on 31 March 2014
Changes in the present value of Defined Benefit Obligation are as follows:
The principal assumptions used in determining leave liability and gratuity liability for the Company'splan is shown below:
The estimates of future salary increases considered in actuarial valuation, take account of inflation, seniority, promotionand other relevant factors, such as supply and demand in the employment market.
Contribution to Defined Contribution Plans:
Particulars 2013-2014 2012-2013
Provident Fund / Pension Fund 9,05,640 3,93,778
OTHER NOTES TO ACCOUNTS
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25. Disclosure in pursuance of AS-18 (Related Party Disclosures):
A) Name of Parties
i) Subsidiary of the Company Broadcast Audience Research Council
B) Transactions with Related Parties
S.N Name of Party Nature of Transaction 2013-2014 2012-2013
1. Broadcast Audience Research Investment in Shares Nil NilCouncil
Share Application Money given 2,40,00,000 45,00,000
Reimbursement paid on behalf of Broadcast 41,863 83,271
Audience Research Council
Closing Balances
Investment 15,00,000 15,00,000
Short Term Loan & Advances 2,86,25,134 45,83,271
26. There are no Micro and Small Enterprises, to whom the Company owes dues as at 31 March 2014. This information as required to be disclosed under Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. Further during the year also Company has not paid any interest to any such parties.
27. Figures of the previous year have been rearranged/regrouped to conform with those of current year.
28. Financial figures have been rounded off to the nearest of Rupee.
For and on behalf of the Board of Directors ofIndian Broadcasting Foundation
ForChartered AccountantsFirm’s Regn. No. 000756N
S.S. Kothari Mehta & Co.
-sd- -sd- -sd- -sd-
Partner President Working President Vice PresidentMembership No. 094380
-sd- -sd- -sd-Place : New DelhiDate : 01 August 2014 Vice President Treasurer Secretary General
Naveen Aggarwal Man Jit Singh Punit Goenka Rajat Sharma
Rahul Johri K V L Narayan Rao Shailesh Shah
NOTES
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