Balaji Telefilms Limited Annual Report 2019-20

Entertainment – like never before! Years ago, we discovered our passion Our desire to be a household name pushed us to curate stories that resonated with the masses and we challenged ourselves to dream bigger, setting the for storyteling. foundations for new milestones and greater goals. As we celebrated our achievements and accomplished As we learnt to walk the talk – ideas extraordinary feats, we continued to spread our wings, were translated to action and the Balaji to spin the wheel of entertainment – faster and better Telefilms of today was born – reshaping and than before. reinvigorating the world of entertainment. Diversifying our offerings from television content to movie production and on-demand video services, we promptly evolved and transformed to expand our reach. While the changes in newer mediums of entertainment are unmistakable, we remain focused on understanding our audience, genres and markets to propel relentless growth.

Identifying a vast opportunity landscape, is now perfectly poised to fulfil its role as a content innovator and collaborator – to formulate a rejuvenating blend of exciting entertainment for the Indian masses. Table of Content

Alt Digital Media Entertainment Limited

Board’s Report ...... 289 Independent Auditor’s Report ...... 307 Corporate Information ...... 05 Balance Sheet ...... 314 Corporate All About Balaji Telefilms ...... 06 Financial Statement Of Profit And Loss ...... 315 01 Business Performance ...... 08 03 Statement Of Cash Flows ...... 316 Overview Our cherished legacy of 25 years and counting ...... 10 Statements Statement Of Changes In Equity ...... 318 Message from the Promoters ...... 12 Notes ...... 319 Message from the Group COO and Group CFO ...... 16 Balaji Telefilms Limited

Blueprint of our success ...... 20 Standalone Financials Navigating Change – Thinking about Tomorrow ...... 22 Independent Auditor’s Report ...... 115 Marinating Films Private Limited Our value creation model ...... 24 Balance Sheet ...... 124 Board’s Report ...... 352 More Choices ...... 26 Statement Of Profit And Loss ...... 125 Independent Auditor’s Report ...... 363 Growing Strength to Strength: Business Segment overview ...... 28 Statement Of Cash Flows ...... 126 Balance Sheet ...... 370 Awards & Recognition ...... 38 Statement Of Changes In Equity ...... 128 Statement Of Profit And Loss ...... 371 Board of Directors ...... 46 Notes ...... 129 Statement Of Cash Flows ...... 372 Consolidated Financials Statement Of Changes In Equity ...... 373 Independent Auditor’s Report ...... 177 Notes ...... 374 Balance Sheet ...... 184 Statement Of Profit And Loss ...... 185 Chhayabani Balaji Entertainment Private Limited Statement Of Cash Flows ...... 186 Board’s Report ...... 393 Statement Of Changes In Equity ...... 188 Independent Auditor’s Report ...... 405 Notes ...... 190 Balance Sheet ...... 412 Statement Of Profit And Loss ...... 413

Balaji Motion Pictures Limited Statement Of Cash Flows ...... 414 Statement Of Changes In Equity ...... 415 Board’s Report ...... 243 Notes ...... 416 Independent Auditor’s Report ...... 255 Balance Sheet ...... 262 Management Discussion & Analysis ...... 50 Statement Of Profit And Loss ...... 263 AGM Notice ...... 436 Statutory Board’s Report ...... 61 Statement Of Cash Flows ...... 264 02 Corporate Governance Report ...... 88 Statement Of Changes In Equity ...... 265 Reports Business Responsibility Report ...... 109 Notes ...... 266 BALAJI TELEFILMS LIMITED Corporate Overview Statutory Reports Financial Statements

Corporate Information

Board of Directors Group Chief Operating Secretarial Auditors Officer and Chief Mr. Kapoor MMJB & Associates LLP Chairman Executive Officer (ALT (DIN: 00005345) Digital) Registered Office

Mrs. Mr. Nachiket Pantvaidya C-13, Balaji House, Managing Director Dalia Industrial Estate, (DIN: 00005124) Group Chief Financial Opp. Laxmi Industrial Estate, Ms. Officer New Link Road, Andheri (West), Joint Managing Director – 400 053, Maharashtra. (DIN: 00005093) Mr. Sanjay Dwivedi Tel: +91-22-40698000, Fax: +91-22-40698181/82 Mr. Duraiswamy Gunaseela Rajan E-mail: [email protected] Independent Director Group Head Secretarial Website: www.balajitelefilms.com (DIN: 00303060) Mrs. Simmi Singh Bisht CIN: L99999MH1994PLC082802 Mr. Arun Kumar Purwar Independent Director Senior Management Registrar & Share (DIN: 00026383) Transfer Agent Balaji Mr. Anshuman Thakur Mr. Ketan Gupta Non-Executive Director Chief Operating Officer (Television) KFin Technologies Private Limited (DIN: 03279460) (formerly known as Karvy Fintech Mr. Stephen Daniel Private Limited) Telefilms Ms. Jyoti Deshpande Group Head – HR Selenium Tower B, Non-Executive Director Mrs. Chloe Ferns Qureshi Plot No 31 & 32, Gachibowli, (DIN: 02303283) Creative Director (Television) Financial District, Limited Mr. Pradeep Kumar Sarda Nanakramguda, Serilingampally, Ms. Tanusri Das Gupta Hyderabad – 500 032, Telangana. Independent Director Creative Executive V.P. Digital (DIN: 00021405) Tel: +91-040-6716 2222, 79611000 Ms. Ruchikaa Kapoor Fax: +91-040-23440674 Mr. Virendra Babubhai Dalal Head-Marketing & Branding Toll Free No: 1800-3454-001 Independent Director (Motion Pictures) E-mail: [email protected] (DIN: 00247971) Website: www.kfintech.com Mr. Vimal Doshi Mr. Devender Kumar Vasal Head-Distribution Independent Director (Motion Pictures) Bankers (DIN: 06858991) Mr. Baljit Chaddha Yes Bank Limited Mr. Ramesh Sippy Mr. Manjit Sachdev ICICI Bank Limited Non-Executive Director Creative Directors (ALT Digital) HDFC Bank Limited (DIN: 00652881) Axis Bank Limited Mrs. Divya Dixit Mr. Ashutosh Khanna Oriental Bank of Commerce Vice President-Marketing Independent Director State Bank of India (ALT Digital) (Till July 22, 2020) Central Bank of India (DIN: 03153990) Dr. Archana Hingorani Statutory Auditors Additional Director Price Waterhouse Chartered (Non-Executive Independent) Accountants LLP (W.e.f. August 28, 2020) (DIN: 00028037)

04 Entertainment - like never before! Annual Report 2019-20 05 BALAJI TELEFILMS LIMITED Corporate Overview Statutory Reports Financial Statements

All About Balaji Telefilms With over two decades of industry experience, Values the Company has been instrumental in formulating a popular narrative for the masses. From television shows that captured Balaji Telefilms Limited the imagination of millions to commercially successful films, the Company has constantly (Balaji Telefilms) is STORYTELLING explored varied platforms of entertainment to among the We always delight our audience excite and entertain its audience. with our content and the way we deliver it to them The Company has also pioneered the leading subscription-based video-on-demand service with the launch of ALTBalaji, an extremely popular format that stroked the binge-watching habit of viewers across cultural milieus. PASSION entertainment We go that extra mile because Vision we love what we do providers in India. To consistently provide delightful and innovative INTEGRITY entertainment We are honest and ethical in all experiences by our dealings engaging audiences and nurturing talent.

COMPASSION Our brands We care about our people, we listen, we take the initiative to understand what each one of us wants and work together as a team

EXCELLENCE We push the bar and never settle for second-best

06 Entertainment - like never before! Annual Report 2019-20 07 BALAJI TELEFILMS LIMITED Corporate Overview Statutory Reports Financial Statements

Business Performance

Profit & Loss Metrics

Revenue from operations EBITDA Earnings per share Total Assets (Rs. in lacs) (Rs. in lacs) (Rs.) (Rs. in lacs)

FY 2015-16 25,685 FY 2015-16 5,833 FY 2015-16 4.88 FY 2015-16 68,115.97

FY 2016-17 40,850 FY 2016-17 280 FY 2016-17 3.87 FY 2016-17 69,216.97

FY 2017-18 41,658 FY 2017-18 5,310 FY 2017-18 1.79 FY 2017-18 104,266.65

FY 2018-19 44,030 FY 2018-19 1,472 FY 2018-19 1.99 FY 2018-19 109,697.61

FY 2019-20 57,663 FY 2019-20 12,416 FY 2019-20 5.72 FY 2019-20 121,368.71

17.56% 5 year CAGR growth 16.31% 5 year CAGR growth

EBITDA Margin PAT (in %) (Rs. in lacs)

FY 2015-16 23 FY 2015-16 3,704

FY 2016-17 1 FY 2016-17 2,940

FY 2017-18 13 FY 2017-18 1,630

FY 2018-19 3 FY 2018-19 2,012

FY 2019-20 22 FY 2019-20 5,787

1900 bps Y-o-Y growth 9.76% 5 year CAGR growth

PAT Margin Revenue per hour (in %) (Rs.)

FY 2015-16 14 FY 2015-16 24.7

FY 2016-17 7 FY 2016-17 28.9

FY 2017-18 4 FY 2017-18 33

FY 2018-19 5 FY 2018-19 38

FY 2019-20 10 FY 2019-20 37

500 bps Y-o-Y growth 8.42% 5 year CAGR growth

08 Entertainment - like never before! Annual Report 2019-20 09 BALAJI TELEFILMS LIMITED Corporate Overview Statutory Reports Financial Statements

Our cherished legacy of 25 years and counting

25 years ago we set foot in the world of entertainment – believing in our ability to deliver inspiring and entertaining content. From releasing our first thriller on Zee TV to creating a unique brand of daily soaps, we witnessed phenomenal success over the course of the next few years. As Balaji Telefilms continued to grow and set new benchmarks with every passing year, we challenged ourselves to create an impact and achieved milestones that appeared unreachable when we started off. Throughout our journey, we proved to the world that change is afoot. Our relentless desire to materialise our dreams, urged us to accomplish the impossible. Today, as we look back, we can only cherish a proud legacy of television, films and new-age entertainment, encouraging us to dream bigger and foster an even greater ambition to shape the world of entertainment.

10 Entertainment - like never before! Annual Report 2019-20 11 BALAJI TELEFILMS LIMITED Corporate Overview Statutory Reports Financial Statements

Dear shareholders,

It is indeed a pleasure to present the film entertainment segment topped viewership charts across the financial report of your in 2019. The sector continues to channels. Along with supplying Company for FY 2019-20. We grow at a rate faster than the GDP a steady stream of mainstream would like to express our deep of India, driven primarily by growth content, we like to experiment and gratitude towards each and every in subscription-based business break the stereotype with new one, for supporting us and putting models and India’s attractiveness shows like Naagin on primetime your faith in the Company. As we as a content production destination. and the relaunch of extremely witness a particularly difficult time, Rising consumer demand and popular shows like Kasautii Zindagii amidst a global pandemic, we hope improved advertising revenue also Kay 2, after a decade. you and your loved ones are safe contributed to the growth of this and sound. sector. The rapid proliferation of Moreover, our movies have been mobile internet is also enabling accepted and appreciated for From our humble beginnings to the on-demand entertainment offering a differentiated cinematic establishing a successful business, ecosystem. Growing at a CAGR of experience. During the year, we have consistently paved the 10%, the sector is expected to cross our movie ‘Dream Girl’ received way to our viewers’ hearts with INR 2.4 trillion (US$ 34 billion) by phenomenal success and critical our sustained efforts. It enables 2022. acclaim. This shows our hunger us to register strong performances to satiate viewers’ needs by year after year and in FY20, we Your company, after two decades delivering unconventional formats/ delivered good growth despite of delivering quality entertainment, stories that touch a chord with our challenging circumstances. The now reiterates its position as a audience. strength of our traditional business leading content production house. coupled with our continuous focus With an unmatched expertise to Simultaneously, our subscription- on ALTBalaji allows us to sustain entertain audiences and a proven based OTT video streaming service ability to gauge the pulse of the long-term growth. continues to grow exponentially. masses for over 25 years, we ALTBalaji has become one of the The Indian Media and have successfully diversified our frontrunners in this space and Message from the Entertainment (M&E) industry offerings from television to movies at the moment ranks in top 5, has made significant strides and to an extremely exciting digital among the paid video on demand contributed significantly to the format – that promises to take service in India. With the largest Promoters country’s economic growth. A surge entertainment anywhere any time. in content consumption has been original Hindi content library, we observed as digital infrastructure, Our TV shows are deeply ingrained have a highly engaged audience, quantum of content produced, in India’s socio-cultural fabric and recording an average watch time and per-capita income improved for long, we have created characters of over 60 minutes per day. To The strength of our traditional substantially in 2019. The sector and stories that have become further scale our operations, we grew by almost 9% to reach INR1.82 household names. Our habit of have collaborated with Zee5 to business coupled with our trillion (US$25.7 billion) during the telling stories that resonate with co-produce 60+ Originals over the year.1 While television and print the common man, have secured next 2 years. The content will be continuous focus on ALTBalaji retained its position as the two our position as a dominant player available on both platforms and will largest segments in the M&E sector, in the Indian entertainment market. ensure long-term sustainability in a allows us to sustain long- digital media became the third Over the years, we have created challenging business environment largest segment after it overtook blockbuster shows that have where conserving cash is critical. term growth. 1https://www.ey.com/en_in/news/2020/03/media-and-entertainment-industry-in-2019-grew-by-almost-9-percent-to-reach-inr-1-82- trillion#:~:text=The%20TV%20industry%20grew%20from,over%2020%25%20in%20certain%20cases.

12 Entertainment - like never before! Annual Report 2019-20 13 BALAJI TELEFILMS LIMITED Corporate Overview Statutory Reports Financial Statements

Our television business delivered the other two movies -Judgementall people and have paid wages on great performance during the Hai Kya and , also did time. Moreover, we also renounced year and Balaji Telefilms delivered well at the box office. Our project a part of our salaries to fund our 4 out of the Top 5 shows. We pipeline at the moment consists talent pipeline. also recorded 18% Prime Time of movies like Dolly Kitty Aur viewership share, making Balaji the Woh Chamakte Sitare, Our constant efforts to curate number 1 content producer in India. 2, KTina and . Keeping specialized content keeps However, the last quarter of FY20 in mind the current situation and us confident about veritable posed some challenges due to the ongoing lockdowns in the country business growth. As we channel COVID-19 outbreak. Production due to the COVID-19 pandemic, our resources to successfully was completely halted around restrictions on theatrical releases navigate challenges, we remain March 18, 2020 and we lost about have been imposed. Therefore, we motivated to overcome hurdles and 13 days of production. Despite this, plan to release Dolly Kitty Aur Woh seize opportunities in a dynamic we had a strong content line up and Chamakte Sitare on Netflix and we industry. With the right people and a good rating during the year. We continue to explore other options the best strategic alliances, we are also successfully premiered some for taking movies closer to our poised to take Balaji on the route to of our digital shows from ALTBalaji viewers. success. on TV, keeping the wheels of We take this opportunity to entertainment running as usual. To mitigate the effect of the pandemic on our business, we have acknowledge the hard work, We also delivered exceptional undertaken efforts to re-negotiate dedication and sincerity of our performance in our movie business with our vendors, actively managed people. We would also like to this year and going forward, we receivables and have resorted to convey our heartfelt appreciation aspire to maintain this successful pay cuts in some instances. But, for our valued shareholders track record. In FY20, Dream Girl despite the imminent troubles, for always encouraging and proved to be a commercial hit and we have constantly stood by our supporting us.

14 Entertainment - like never before! Annual Report 2019-20 15 BALAJI TELEFILMS LIMITED Corporate Overview Statutory Reports Financial Statements

Message from the Group COO and Group CFO

player in the digital consumer/ ALTBalaji, our digital B2C platform, technology space targeted at mass continues to reaffirm its market India. Our business portfolio across dominance as a preferred mass traditional TV, movies and a future Hindi content platform fulfilling focused ALTBalaji keeps us in a the promise of delivering content unique position in straddling three anytime, anywhere. When it media businesses targeted at mass comes to entertainment, the Indian India. audience is no longer bound to schedules and locations, rather For 25 years, we have successfully preferences in favour of a seamless, gauged the pulse of our audience on-the-move experience continues and today, we are confident about Nachiket Pantvaidya Sanjay Dwivedi to dominate the new-age viewer. our ability to deliver unmatched It has led to a phenomenal rise Group COO and CEO of Alt Digital entertainment experiences and Group Chief Financial Officer in viewership and subscription, Media Entertainment Limited offer exceptional value to all our consistently adding users from the stakeholders. untapped markets of Tier-2 and Tier- 3 cities of India. Dear shareholders, Business segment review With a focus on targeting the Hindi FY 2019-20 was both an exciting During the year under review, speaking audiences across India, of films such as Dream Girl and challenging year for us. As the Balaji’s TV production business ALTBalaji continues to appeal to reinstates our ability to consistently ecosystem for content creation sustained its growth, clocking audiences of all age groups. We are deliver box office hits. For us, talent and delivery morphed multi-fold to more than 823 hours of showtime, During the constantly diversifying our content and content go hand in hand. As a ALTBalaji suit evolving audience preferences, an improvement of 8% year-on- across genres and consistently year under result, we promote new talent and continues to grow at Balaji Telefilms, we focused on year. Maintaining high margins producing the most amount of review, Balaji’s focus on producing 4 to 5 films in a building capabilities to capitalize and profitability, the realisations content for our OTT platform, exponentially, year. It not only allows us to remain on the explosive growth of digital remained strong at Rs. 37 lakhs per TV production launching at least 2 shows per profitable, but also enables us to revenues were at entertainment platforms, especially hour as we recorded a significant month. business sustained explore new business opportunities. Rs. 77 Crore from OTT services. market share for several prime ALTBalaji remains one of the top 4 time shows. We have consistently its growth, clocking At Balaji Telefilms’, we follow Rs. 41 Crore in paid Apps in India and offers one of While we continued to create managed to keep our TV ratings more than 823 certain thresholds for producing the best and affordable option for FY 2018-19 content across formats, we high for the entire year, despite the or co-producing movies under our hours of showtime, our subscribers. Our unmatched recognized the need to be future- launch of new shows and several banner. To keep our margins intact, leadership as the best and the largest ready. Looking at the constant popular shows coming to an end. an improvement of we believe in selectively picking growth of the digital medium, 8% year-on-year. promising projects, like our recent player in the Hindi OTT market 3 years ago we had a vision to Our movie business too delivered co-production, ‘Ek Villain 2’. We largely rests on our ability to track establish ourselves as a dominant an exceptionally good performance. also as a policy enter into pre-sales our audience preferences. We rely player in this space and start As an experienced player in this agreement to ensure profitability on customer analytics to understand a digital B2C business. With segment, we continue to leverage from the time a movie is approved audience behaviour and accordingly, the launch of ALTBalaji, we are our expertise to deliver hits year after for production. curate appealing content. pursuing our ambitions to be a key year. The commercial performance

16 Entertainment - like never before! Annual Report 2019-20 17