Press Release

Ananda Offset Private Limited

February 27, 2017 Ratings Amount Facilities Rating1 Rating Action (Rs. crore) 10.75 CARE A-; Stable Long term Bank Facilities Reaffirmed (reduced from 13.53) (Single A minus; Outlook: Stable) 10.75 Total (Rupees Ten crore and Seventy Five lakh only ) Details of instruments in Annexure-1

Detailed Rationale & Key Rating Drivers The rating assigned to the bank facilities of Ananda Offset Pvt Ltd (AOPL) continues to derive strength from the considerable experience of the promoters with established track record, strong operational linkage with ABP Pvt Ltd (ABP; rated CARE A/ CARE A1+), a group company from which AOPL derives majority of its revenue in the form of printing income and conservative capital structure. The rating also factors in the marked improvement in financial performance in 9MFY17, though deteriorated in in FY16 (refers to period April 01 to March 31) The rating, however, continues to be constrained by relatively small size of the company and intense competition in the private radio FM industry. The ability of the company to increase advertising revenue from the radio business in the face of stiff competition & improve its profitability while maintaining capital structure will remain the key rating sensitivities.

Detailed description of the key rating drivers Key Rating Strengths Experienced promoters with strong group: ABP group has been in the business of publishing newspapers and magazines since 1922. The ABP group has evolved into a media conglomerate that has four 24-hour national TV news channels, 9 premier publications, leading book publishing house and mobile-based information services.

Strong operational linkage with ABP, from whom AOPL derives majority of its revenue in the form of printing income: The company receives printing and processing charges from ABP for printing popular Bengali magazines like ‘Desh’, ‘Sananda’, ‘Anandolok’, ’ and daily newspapers for ABP. Of late the company has started printing on job work basis, for customers other than ABP, though it continued to be minimal.

Improved performance of radio division in intensely competitive radio segment: Income from radio business of AOPL has gradually increased since inception due to higher ad revenues and growing popularity of its radio station. Ad revenue from radio grew from Rs.8.32 crore in FY15 to Rs.10.12 crore in FY16. Radio division earned operating profit for the first time in FY16 (Rs.1.1 crore) vis-à-vis losses in earlier years (segmental loss of Rs.0.3 crore in FY15).

Deterioration in financial performance in FY16; though improved significantly in 9MFY17 with conservative capital structure: Total operating income of AOPL witnessed marginal dip from Rs.40.3 crore in FY15 to Rs.39.2 crore in FY16 due to lower printing order received. PBILDT margin deteriorated from 11.34% in FY15 to 6.19% in FY16. The company incurred net loss of Rs.2.50 crore in FY16 (PAT of Rs.3.95 crore in FY15). However, the financial performance showed significant improvement in 9MFY17 compared to FY16. PBILDT margin improved from 6.19% in FY16 to 18.9% in 9MFY17. The improvement was on account of increase in the per page printing charges for orders from ABP.

The debt-equity and overall gearing ratios improved and stood comfortable at 0.03x and 0.25x respectively as on March 31, 2016 vis-à-vis 0.13x and 0.35x respectively as on March 31, 2015.

1Complete definition of the ratings assigned are available at www.careratings.com and other CARE publications 1 Credit Analysis & Research Limited

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Key Rating Weaknesses Relatively small sized company: AOPL is a relatively small sized company with a total operating income of Rs.39.18 crore and total capital employed of Rs.55.09 crore in FY16.

Intense competition from national level players playing in Bengali radio stream: Bengali radio stream continued to be highly competitive with pressure from national level players. In order to counter such competitive presence, AOPL also has tied up with Music Broadcast Pvt. Ltd. (the company which runs ‘Radio City 91.1 FM’ across major cities in ) through which, it acts as their agent to advertise various national level ads in through its radio station.

Analytical approach: Standalone with notching based on linkages with other group companies

Applicable Criteria Criteria on assigning Outlook to Credit Ratings CARE’s Policy on Default Recognition Rating Methodology: Factoring Linkages in Ratings Financial ratios – Non-Financial Sector

About the Company AOPL, incorporated in 1970, belongs to the ABP group - an established media conglomerate of the country. The company was promoted by Late Mr , son of Late Mr Prafulla Sarkar, the promoter of the group’s flagship company, ABP. AOPL is engaged in the business of printing various magazines/publications and newspapers of ABP on job work basis. The company is also into media and entertainment business through radio station ‘Friends 91.9 FM’ in Kolkata. AOPL is currently looked after by Mr Apurba Kumar Sengupta, Executive Director, under the overall guidance of Mr Aveek Sarkar and Mr Arup Sarkar, the current promoters of ABP.

In FY16, AOPL incurred a net loss of Rs.2.58 crore (PAT of Rs.3.95 crore in FY15), on total operating income of Rs.39.18 crore (Rs.40.37 crore in FY15). During 9MFY17 (provisional), AOPL earned a PBT of Rs.3.0 crore on a total operating income of Rs.34.2 crore.

Status of non-cooperation with previous CRA: Not Applicable

Any other information: Not Applicable

Rating History for last three years: Please refer Annexure-2

Note on complexity levels of the rated instrument: CARE has classified instruments rated by it on the basis of complexity. This classification is available at www.careratings.com. Investors/market intermediaries/regulators or others are welcome to write to [email protected] for any clarifications.

Analyst Contact: Name: Ms Richa Bagaria Tel: 033-4018 1653 Mobile : 9903470650 Email: [email protected]

**For detailed Rationale Report and subscription information, please contact us at www.careratings.com

About CARE Ratings: CARE Ratings commenced operations in April 1993 and over two decades, it has established itself as one of the leading credit rating agencies in India. CARE is registered with the Securities and Exchange Board of India (SEBI) and also recognized as an External Credit Assessment Institution (ECAI) by the Reserve Bank of India (RBI). CARE Ratings is proud of its rightful place in the Indian capital market 2 Credit Analysis & Research Limited

Press Release built around investor confidence. CARE Ratings provides the entire spectrum of credit rating that helps the corporates to raise capital for their various requirements and assists the investors to form an informed investment decision based on the credit risk and their own risk-return expectations. Our rating and grading service offerings leverage our domain and analytical expertise backed by the methodologies congruent with the international best practices. Disclaimer CARE’s ratings are opinions on credit quality and are not recommendations to sanction, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings/outlooks on information obtained from sources believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by CARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. In case of partnership/proprietary concerns, the rating /outlook assigned by CARE is based on the capital deployed by the partners/proprietor and the financial strength of the firm at present. The rating/outlook may undergo change in case of withdrawal of capital or the unsecured loans brought in by the partners/proprietor in addition to the financial performance and other relevant factors.

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Annexure-1: Details of Instruments/Facilities Name of the Date of Coupon Maturity Size of the Issue Rating assigned along Instrument Issuance Rate Date (Rs. crore) with Rating Outlook Fund-based - LT-Term Loan - - Sep. 2017 0.75 CARE A-; Stable Fund-based - LT-Cash Credit - - - 10.00 CARE A-; Stable

Annexure-2: Rating History of last three years No. Name of the Current Ratings Rating history Instrument/Bank Type Amount Rating Date(s) & Date(s) & Date(s) & Date(s) & Facilities Outstanding Rating(s) Rating(s) Rating(s) Rating(s) (Rs. crore) assigned in assigned in assigned in assigned in 2016-2017 2015-2016 2014-2015 2013-2014 1. Fund-based - LT-Term LT 0.75 CARE A-; - 1)CARE A- 1)CARE A- 1)CARE A Loan Stable (15-Oct-15) (14-Jan-15) (24-Oct-13) 2. Fund-based - LT-Cash LT 10.00 CARE A-; - 1)CARE A- 1)CARE A- 1)CARE A Credit Stable (15-Oct-15) (14-Jan-15) (24-Oct-13)

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