Balaji Cover 2007-08:Balaji Cover
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www.balajitelefilms.com A TRISYS PRODUCT, PRINTED BY MAGNA GRAPHICS (INDIA) LTD. Balaji Telefilms Limited ENTERTAIN MENTALLY Annual Report2007-08 FORWARD-LOOKING STATEMENT Corporate information In this Annual Report we have disclosed forward-looking We cannot guarantee that these forward-looking statements will information to enable investors to comprehend our prospects and be realized, although we believe we have been prudent in take informed investment decisions. This report and other assumptions. The achievement of results is subject to risks, Directors Registered Office statements - written and oral - that we periodically make contain uncertainties and even inaccurate assumptions. Should known or Jeetendra Kapoor Balaji Telefilms Limited forward-looking statements that set out anticipated results based unknown risks or uncertainties materialize, or should underlying C-13, Balaji House, Shobha Kapoor on the management’s plans and assumptions. We have tried assumptions prove inaccurate, actual results could vary materially Dalia Industrial Estate, Ekta Kapoor wherever possible to identify such statements by using words from those anticipated, estimated or projected. Readers should Opposite Laxmi Industries, such as ‘anticipate’, ‘estimate’, ‘expects’, ‘projects’, ‘intends’, bear this in mind. Tusshar Kapoor New Link Road, Andheri (West), ‘plans’, ‘believes’, and words of similar substance in connection Akshay Chudasama Mumbai – 400 053 with any discussion of future performance. Tel: +91 22 40698000 Dhruv Kaji Fax: +91 22 40698181/82 Pradeep Kumar Sarda Website: www.balajitelefilms.com Paul Aiello John Yu Leung Lau Regional Offices Chennai: Plot no. 38, K K Salai Ella Wong (Alternate Director to John Kavery Rangam Nagar, Lau) Saligramam, Chennai – 600 093 Chief Executive Officer Bangalore: Gurukrupa Bunglow R. Karthik Old No. 2916/E, New No. 23, 1st Cross, 2nd Stage, Vijaynagar Chief Financial Officer Bangalore – 560 040 Sandeep Jain Trivandrum: Ishara, T.C. 36/589 Company Secretary Perumthanni, Vallakkadavu, 14 Alpa Khandor P.O. Trivandrum – 695 008 Management’s Statutory Auditors Discussion and Deloitte Haskins & Sells Analysis 12 Snehal & Associates Internal Auditors 10 MD’s overview PSK & Associates Creative Director’s CONTENTS interview 22 Operational Review 02 08 26 Progress in 2007-08 Chairman’s Financial Review Overview 06 44 Our Board of Directors at Balaji 30 Financial Section Risk Management 16 Drivers of Balaji’s 37 growth Corporate Governance 34 Report Directors’ Report There are two ways to read what you have read on the cover of this annual report. And interestingly we mean it both ways. At Balaji, we think entertainmentally because that is what keeps us in business. At Balaji, we also see ourselves not just a producer of canned entertainment but as an entertainment ally, extending across languages, time slots and formats. Achievements PROGRESS IN 2007-08 Operations increase in hourly realisations from commissioned programs from Rs. 27.60 lacs in 2006-07 18.65% to Rs 32.75 lacs in 2007-08 programs ranking among the new programs launched top-50 on Hindi cable and 6 across various channels satellite channels (Source: TAM 19 ratings HSM MF4+(C&S) for week ended March 29, 2008) hours of total state-of-the-art studios programming during commissioned, taking the year 2 the total to 34 1571 Started a new division – the ‘Interactive Media Group’, with the objective of exploring more avenues in media space. With our first such initiative, the Global Indian TV Honours, we achieved phenomenal success and received overwhelming response increase in market capitalisation from Rs 82654 lacs (as on 31 March 2007) to Rs 128041 lacs (as 54.91% on 31 March 2008) Results increase in turnover from Rs 31746.68 lacs in 2006-07 3.62% to Rs 32896.85 lacs increase in post-tax profit from Rs 7942.82 lacs in 2006-07 10.71% to Rs 8793.31 lacs 2>3 Subsidiaries: Balaji Motion Pictures Ltd., a wholly owned subsidiary of the Company, released 3 movies during the year. Four new film projects i.e. Sarkar Raj, EMI, C Kkompany and Mission Istanbul, are ready for release in first two quarters of 2008-09. The Company achieved a turnover of Rs. 3653.21 lacs and profit after tax of Rs. 549.10 lacs in its first full year of operation. Balaji Telefilms FZE, a wholly owned overseas subsidiary, had moved production of "Khwaish" to Mumbai from December 2007. The Company achieved a turnover of Rs. 1558.29 lacs and profit of Rs. 289.04 lacs during the year. Consolidated financials 18.16% increase in turnover from Rs. 32021.68 lacs in 2006-07 to Rs. 37836.42 lacs in 2007-08 21.32% increase in profit after tax from Rs. 7925.07 lacs in 2006-07 to Rs. 9614.32 lacs in 2007-08. GLOBAL INDIAN TV HONOURS 4>5 Corporate information Our Board of Directors at Balaji Jeetendra Kapoor Popularly known as Jeetendra to millions of fans, Mr. Kapoor starred in more than 200 films in his illustrious 40 year film career. Beginning his career as a junior artiste with the legendary filmmaker V. Shantaram, Mr. Kapoor won several prestigious awards for his outstanding performance. He became the Company’s Chairman on 1st February 2000 and has been leveraging his decades-rich relationships with various television channels, artistes, directors and writers to drive the Company’s growth. Shobha Kapoor Rising in prominence as one of the most successful Indian television producers, Ms. Shobha Kapoor has been the Company’s Managing Director since 10th November 1994. She is responsible for overall operations of the Company. Ekta Kapoor Ms Ekta Kapoor has been the Creative Director of the Company since 10th November 1994. Ms Kapoor made a landmark contribution to India’s entertainment domain at a very young age. Since her debut as a producer and creative director at 19, she has been instrumental in developing concepts, writing scripts and enriching creative conversion. Akshay Chudasama Widely respected in industry circles for his deep insight into corporate laws, Mr. Chudasama has a rich experience in mergers and acquisitions, consumer protection, insurance sector privatisation, dispute resolution and cyber laws. He is the director of the Company since 17th July 2000. Dhruv Kaji Mr.Kaji is a chartered accountant with a professional experience of more than two decades. Serving as a financial advisor and management consultant with expertise in strategic planning, Mr. Kaji was appointed Director on 2nd September 2004. Possessing a rich experience in evaluating and guiding business projects in India and abroad, Mr Kaji was associated with Raymond Ltd. as the Finance Director and Pinesworth Holding Ltd. (Singapore) as the Executive Director. 6>7 Pradeep Kumar Sarda Chairman of the Sarda Group of Industries, Mr Sarda became the Director of the Company on 17th May 2004. He possesses a rich experience across multiple industry verticals, comprising paper, engineering, construction and real estate. He is also the Chairman of the Governing Board of Ecole Mondiale World School, Mumbai. Tusshar Kapoor Mr. Tusshar Kapoor is a management graduate from the University of Michigan and a reputed actor in Bollywood. Mr. Kapoor brings with him rich experience from the film industry. Paul Aiello Balaji Telefilms’ Director since 20th October 2006. Chief Executive Officer of STAR since March 2007. Joined the Star Group as President in July 2006. Prior to STAR, Paul worked for Morgan Stanley for nine years. Paul has a Ph.D in Economics from the University of Cambridge and a B.A. in Economics and International Relations from the University of Notre Dame, Indiana. He is directly involved in developing strategic and business directions and overseeing overall corporate functions. John Yu Leung Lau Balaji Telefilms Director since 24th January 2005. Oversees all financial matters at STAR, including corporate strategy, management and financial reporting, internal audit, treasury and tax. Heads the business development division. He is directly involved in identifying and developing growth opportunities. Ella Betsy Wong Ms Ella Betsy Wong is Executive Vice President and General Counsel of STAR Group. She heads the legal department, oversees all legal matters for the Group and advices on core business transactions, new business opportunities and partnerships. In addition, Ms Ella is involved in various corporate functions including business analysis and corporate governance. Chairman’s overview “Our work in progress is measurable and directly proportionate to our topline” Mr Jeetendra Kapoor reviews the Company’s performance in 2007-08. In the creative business, there is a premium on sustainability. A sustainability of revenues, margins, bottomline and the overall return on capital. An overview of our business landscape will provide an insight into why our prospects are attractive. Growth strengthening the prospects of committed India’s Rs 450-billion entertainment and content creators like us. media industry is expected to grow at an Concern average of 18% over the next five years. However, there are concerns and The small screen will continue to be an challenges across the horizon as well: integral part of the industry for an important reason: with a population of 112-million TV The Indian television distribution is still viewing households, India is already the dominated by analogue cable, highly third largest television market in the world, fragmented at the local cable operator growing annually at 7.5% and translating (LCO) and multi system operator (MSO) into a 54% penetration. With 12 million TV levels. India has over 40,000 last mile sets being acquired annually, it would be operators reaching 68 million households. reasonable to expect that the penetration Some 80% of these LCOs showcase a low will increase to 57% by end of 2008-09 average of 400-450 subscribers; and 64% by 2011-12. interestingly, eight large MSOs - only four corporate accounts for a significant 26% of As I see it, the DTH What does this mean for our business? the country’s C&S households.