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MANAGEMENT DISCUSSION & ANALYSIS

INDUSTRY REVIEW GLOBAL ECONOMY The world economy experienced in the past two years, encountered demand from advanced economies, subdued growth for another new headwinds during 2013 on both but tighter nancial conditions will consecutive year in 2013. The global international and domestic fronts. dampen domestic demand growth. economy grew by approximately 2.9% in 2013, its slowest rate since Recently, the global economy has INDIAN ECONOMY 2009. Underperformance in the world begun to look much healthier. Because The Indian economy weathered the economy was observed across almost of their scale, a recovery in advanced global nancial crisis rather well and all regions and major economic economies is likely to boost global quickly recovered from the decline in groups. Most developed economies growth to 3.6% in 2014, accelerating growth rate in 2008-09 to a healthy continued struggling in an uphill to 3.9% in 2015, according to World growth that averaged around 9% battle against the lingering effects Economic Outlook of International annually in 2009-10 and 2010-11. of the nancial crisis, grappling in Monetary Fund (IMF). In the emerging ’s Gross Domestic Product grew particular with the challenges of markets and developing economies, by 4.7% during FY2014, as against 4.5% taking appropriate scal and monetary growth is projected to pick up in the previous scal year of FY2013. policy actions. A number of emerging gradually from 4.7% in 2013 to about The World Economic Outlook (WEO) economies, which had already 5% in 2014 and 5.3% in 2015. Growth update released by the International experienced a notable slowdown will be helped by stronger external Monetary Fund (IMF) in January 2014 22 Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements 23 nent industry sub- 1,786 billion by 2018. 1,786 billion by ` t from increasing digitisation increasing t from environment, the industry continued environment, bene to services. and products media of Gaming and digital advertising were the two promi growth strong which recorded sectors base. smaller a on albeit 2013, in estimates KPMG-FICCI to According digital advertising is upto 2018, CAGR the highest expected display to sub-sectors other all while 27.7%, of in a a CAGR at grow expected to are the industry is Overall, range of 9-18%. of 14.2% a CAGR expected register to to touch 918 billion ` a subdued operating subdued operating a INDIAN MEDIA & ENTERTAINMENT INDUSTRY Entertainment Indian Media & The moderate a registered industry (M&E) to touch of 11.8% growth GDP sluggish despite was This 2013. in which impactedgrowth consumer by spend advertising and demand was majorly growth The corporates. and print media television driven by 72% for accounted together which grown having revenues, industry of in respectively, and 8.5%, by 12.7% Amidst 2013. undertaken Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Q1 Q2 8.0% 6.0% 4.0% 2.0% 0.0% 12.0% 10.0% ation observed recently, point to a ation observed recently, GROWTH RATE IN INDIA’s GDP IN INDIA’s RATE GROWTH Annual Report 2013-14 Report Annual Source: RBI Database Source: has estimated a better year ahead for for ahead year better a estimated has reform Several economy. Indian the been have measures large several of clearance including projectsCommittee the Cabinet by which should help onInvestment, and investment the economy revive resurgence addition, In sentiments. prospects in the revival of exports, of in moderation and economy global in economy Indian the for outlook better in 2014-15 vis-à-vis 2013-14. MANAGEMENT DISCUSSION & ANALYSIS

SIZE OF INDIA’S MEDIA & ENTERTAINMENT INDUSTRY OVERALL 2012 2013 GROWTH 2014P 2015P 2016P 2017P 2018P CAGR INDUSTRY IN 2013 (2013-18) SIZE OVER (%) 2012 (%)

TV 370.1 417.2 12.7% 478.9 557.4 672.4 771.9 885.0 16.2%

PRINT 224.1 243.1 8.5% 264.0 287.0 313.0 343.0 374.0 9.0%

FILMS 112.4 125.3 11.5% 138.0 158.3 181.3 200.0 219.8 11.9%

RADIO 12.7 14.6 15.0% 16.6 19.0 23.0 27.8 33.6 18.1%

MUSIC 10.6 9.6 -9.9% 10.1 11.3 13.2 15.1 17.8 13.2%

OOH 18.2 19.3 5.9% 21.2 23.1 25.2 27.5 30.0 9.2%

ANIMATION 35.3 39.7 12.5% 45.0 51.7 60.0 70.2 82.9 15.9% AND VFX

GAMING 15.3 19.2 25.5% 23.5 28.0 32.3 36.1 40.6 16.2%

DIGITAL 21.7 30.1 38.7% 41.2 55.1 69.7 88.1 102.2 27.7% ADVERTISING

TOTAL 821 918 11.8% 1039 1201 1390 1580 1786 14.2%

Source: FICCI-KPMG Indian Media and Entertainment Industry Report 2013; All Figures in ` Billion

THE TV INDUSTRY GREW BY 12.7% TO ` 417 BILLION IN 2013. THIS WAS PRIMARILY DRIVEN BY HIGHER SUBSCRIPTION REVENUES WHICH GREW BY 15% IN 2013 TO ` 281 BILLION. THIS GROWTH WAS PARTIALLY OFFSET BY A LOWER GROWTH OF 8.8% IN THE ADVERTISING REVENUES.

24 Balaji Telefilms Limited About Us

SIZE OF INDIAN TELEVISION INDUSTRY

885 Business Overview 900 800 772 253 700 672 221 600 567 195 479 500 417 172 370 Billion 400 152 551 632 Our People

` 329 297 136 In 257 125 477 300 241 395 103 116 327 200 82 88 281 245 100 194 214 158 169 - 2008 2009 2010 2011 2012E 2013P 2014P 2015P 2016P 2017P 2018P MD&A SUBSCRIPTION REVENUE ADVERTISEMENT REVENUE

Source : KPMG in India Analysis, Industry discussions conducted by KPMG in India Note: Figures are rounded to nearest integers and may not add up exactly to column totals

INDIAN primarily driven by higher subscription MSOs and broadcasters, it is expected Directors’ Report TELEVISION INDUSTRY revenues which grew by 15% to ` 281 to take another 2-3 years for them to billion, partially offset by lower growth witness the subsequent growth in The Indian television (TV) industry of 8.8% in the advertising revenues. subscription revenues and Average went through several key fundamental Revenue per User (ARPU) driven by shifts in 2013. This impacted its The television advertising had to cope appropriate channel packs, premium current operating environment and with the economic slowdown which content channels, high de nition will determine its growth prospects caused the corporates to cut their channels, pay-per-view and other Governance in the near future. The TV industry advertisement spends. In addition, value added services. grew by 12.7% to ` 417 billion in 2013, the operating environment further got affected by the Quality of Service GROWTH DRIVERS regulation introduced by The Telecom The content producers are also set to Regulatory Authority of India (TRAI) in capitalise on cable digitisation drive Financial Statements March 2013, capping the duration of and improvise their business model. advertisement to 12 minutes per hour. Digitisation has pushed content producers to invest more in content, The subscription revenues continued upgrade the content quality, offer to bene t from increasing digitisation customised and localised content and of cable in Phase I & II cities. In launch of new premium channels with addition to better transparency due reduced carriage fees. Furthermore, to digitisation of cable, TRAI also the content producers are also focussed its attention on improved increasingly recognising the need for subscriber addressability for which it owning Intellectual Property (IP) rights. directed all Multi-system Operators A majority of the TV programmes (MSO) to maintain their subscriber currently produced in India are management system (SMS) after commissioned, where the IP rights for collection of customer application the content and the characters remain forms (CAF) and proper customer with the broadcaster. Owning of IP veri cation. The MSOs also started rights will help the content producers moving their subscribers from net to gain from multi-platform content billing to gross billing which includes monetisation through licensing entertainment tax and service tax in content and formats in international the bill amount. While the digitisation markets, dubbed or remade versions of cable has achieved the transparency on regional language channels, and and subscriber addressability for the digital media. Annual Report 2013-14 25 MANAGEMENT DISCUSSION & ANALYSIS

PENETRATION OF CABLE & SATELLITE IN HOUSEHOLDS INDIAN FILM INDUSTRY The Indian lm industry continued 250 to display its consistent performance 95% year over year in 2013 both in terms 200 191 of content and box of ce collections. 161 There has been a signi cant growth 154 backed by differentiated content, 150 larger releases across digital screens and aggressive promotions by 86% Million 100 production houses. The growing `

In 84% box of ce collections indicate the 50 audiences’ growing appetite for differentiated content. This has resulted in shift in industry focus - from ‘blockbuster’ movies to movies 2012 2013 2018P driven by good quality niche and TV HOUSEHOLDS C & S PENETRATION OF TV HOUSEHOLDS thematic content. Rapid development of the digital infrastructure including digital movie prints and expansion Source : KPMG in India Analysis, Industry discussions conducted by KPMG in India of multiplexes, has helped the content to reach the audience in the CABLE & SATELLITE SUBSCRIBER BASE most effective manner. Increasing corporatisation of production houses 200 181 has also resulted in higher investment 173 165 10 and focus in content development. 180 157 9 148 9 160 139 9 Furthermore, formation of alliances 130 9 140 9 75 119 9 72 between production houses 44 56 70 120 105 8 37 from various regional markets has 5 34 100 31 enhanced the availability of quality 28 25 content through exchange of talent Million 80 6 19 40

` 5 60 and movie remakes in different In 60 91 81 87 languages. The increased focus on 40 68 74 69 68 55 content development has however 20 31 resulted in higher production 55 5 - costs. Corporatisation is leading the 2010 2011 2012 2013 2014P 2015P 2016P 2017P 2018P industry to become more prudent and structured with greater emphasis ANALOG CABLE DIGITAL CABLE DTH OTHER DIGITAL on acquisition of script, planning, Source : KPMG in India Analysis, Industry discussions conducted by KPMG in India budgeting and nancing activities. Various family run production houses, The television penetration in India 16% over 2013-18, to reach ` 885 in order to expand while controlling touched 60% in 2013 implying 161 billion in 2018. Revival in economic costs, have started developing in- million TV households. The number growth, increasing penetration of TV house producers and providing them of Cable & Satellite (C&S) subscribers households, greater transparency and with a platform to produce lms. was 86% of the total TV households higher ARPU through digitisation, will and is expected to grow to 95% of be the key benefactors driving the the TV households by 2018. While television industry growth. While the the digitisation of cable is quickly television advertising is expected to expanding across India, digital cable grow at a CAGR of 13% over 2013- offered by MSOs continues to retain 18, subscription revenues are set to a larger share of analogue subscribers, be the major driver of growth for as they provide higher number of broadcasters and MCOs, growing channels and a better quality of signal at an estimated CAGR of 18% from at lower price. 2013 to 2018. Increase in the declared subscriber base and higher revenue Going forward, the television industry share are expected to drive up the is expected to grow at a CAGR of share of subscription to total revenues from 67% in 2013 to 71% in 2018. 26 Balaji Telefilms Limited About Us

SIZE AND PROJECTIONS OF INDIA’s FILM INDUSTRY REVENUES 2012 2013 2012- 2014P 2015P 2016P 2017P 2018P CAGR 13 (YoY (2013-18) GROWTH) (%) (%) Business Overview DOMESTIC 85.1 93.4 9.8% 102.2 116.9 133.3 146.3 160.2 11.4% THEATRICAL

OVERSAES 7.6 8.3 9.4% 9.4 10.3 11.4 12.0 12.7 8.9% THEATRICAL HOME VIDEO 1.7 1.4 -18.0% 1.2 1.0 0.9 0.8 0.7 -13.0%

CABLE & 12.6 15.1 20.2% 16.1 18.4 20.9 23.0 25.2 10.7% SATELLITE RIGHTS Our People ANCILLARY REVENUE 5.4 7.0 29.3% 9.1 11.7 14.7 17.8 21.0 24.7% STREAMS TOTAL 112.4 125.3 11.5% 138.0 158.3 181.3 200.0 219.8 11.9% All Figures in ` Billion The Indian lm industry touched Act of 2013, constituted by the Ministry revenue including print and television

` 125.3 billion in 2013. Domestic of Information & Broadcasting (MIB) is expected to improve as corporates MD&A theatres continued to be the major has proposed to address the issue of restore their advertising budgets. As contributor accounting for 75% of intellectual property theft by declaring the TV digitisation gains traction pan industry revenues. Wider acceptance piracy as a non-bailable offense. The India, broadcasters and MSOs are set of digital technology, with around Ministry has made it mandatory for to gain from increasing subscription

80-100% of lms being digitally the multiplex owners to screen anti- revenues thus reducing their reliance Directors’ Report distributed and 90-95% of theatre piracy clips and violation of which on cyclical advertising revenues. TRAI screens digitised, and larger number will have implications on the license has proposed increasing foreign direct of movie screens across India, have issued to multiplex owners. The investment (FDI) limits in hosts of been the key revenue drivers for committee has also recommended a ne broadcast subsectors such as broadcast the domestic theatrical segment. extending from ` 500,000 to ` 2.5 million carriage service, television content With more than 4,500 screens across and an imprisonment up to 3 years for services and FM radio. This could lead to the country, it has been possible to unauthorised duplication of certi ed lms. increased investor interest in the sector manage a wider and coordinated which is already getting enlarged by Governance release of movies across the country. While digitisation of movies and the digitisation drive. movie screens has led to the domestic Overseas theatres contributed only 7% theatre growth in recent years, the Changing lifestyles and increasing of the total revenues. North America, U.K. next wave of growth is now expected penetration of internet-enabled and the Middle East are the key markets to result from rapid expansion of mobile devices are setting the stage Financial Statements accounting for around 80 percent of multiplex infrastructure in India. This for digital media in India. According the total overseas revenues. Of late, in turn is a function of performance to TRAI, the number of subscribers the industry is experiencing increasing of real estate industry and growth of accessing Internet on mobile devices demand from new markets such as organised retail in India. Furthermore, was 176.5 million in June 2013, Japan, South Korea and Peru where factors such as rapid urbanisation, increasing from 143 million in March lms are distributed with subtitles in penetration of multiplex in tier II and 2013. The double-digit growth is the native language. C&S rights formed III cities, increasing sophistication likely to continue in 2015. Increasing a major portion of revenues for lm in production and marketing of Internet penetration is also leading producers and accounted for 12% of lms and audiences’ preference for to TV channels offering their mobile the industry revenues. C&S revenues differentiated content, are together applications, live TVs on websites, a grew 20.2% in 2013 with average C&S expected to help the industry sustain trend in line with developed countries rights for high budget its growth over the next few years and with high Internet penetration. movies being sold at an average of be worth ` 219.8 billion by 2018. ` 400-500 million compared to The Indian M&E industry shall continue ` 300-400 million in 2012. to bene t from India’s favourable INDUSTRY OUTLOOK demographics. Being one of the While digitisation of movies has With the gradual economic recovery youngest nations in the world, with reduced piracy to certain extent, it expected post the general elections, high content consumption, strong still continues to remain one of the the Indian M&E industry is expected content creation and favourable major concerns of the lm industry, to display an improved performance. regulatory framework, India is an accounting for 55 percent of revenue Advertising revenue which contributes attractive investment destination for loss due to piracy. The Cinematograph around 50 percent of the total media global M&E companies. Annual Report 2013-14 27 MANAGEMENT DISCUSSION & ANALYSIS

COMPANY OVERVIEW: OUR TELEVISION BUSINESS

OUR WELL-SPREAD REACH ACROSS GECs AND VARIOUS REGIONS AND OUR STRATEGIC TIE-UPS WITH A HOST OF CHANNELS MAKE US PREDICTABLE, WHILE OUR CONTINUED FOCUS ON COST OPTIMISATION GIVES US SUSTAINABILITY. A HEALTHY PIPELINE OF FORTHCOMING PROJECTS GIVES US A POSITIVE UPSIDE, MAKING OUR TV BUSINESS MORE SCALEABLE.

Television entertainment has been TRPs, a testimony to our industry the foundation stone for our business. standing. Going forward, we aim to Fiscal year 2013-14 has been one of make inroads into the regional space the best years for Balaji Tele lm’s TV too by creating content in southern business in terms of number of shows, languages, besides in Bangla and quality of content and operating Marathi. We have a deep pipeline margins. This has been the only year of long-format and short-format TV in the history of Balaji when each series with a strong foothold across quarter posted positive cash ows. channels, giving us clear visibility of Our TV shows are among the top- revenues and screen space over the rated across entertainment channels next few years. and are constantly raking in higher

28 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements 29 Life Ok Life il 28, 2013 il 28, December 7, 2013 7, December MTV NCE RUNNING TILL CHANNEL September 14, 2013 14, September 2013November 25, 2013 3, December 2014 20, May 2014April 4, 2014April 15, 2014 PresentJune 24, 2014 17, August V Channel 2014 July 18, 2014August, Present Present NA Plus Star MTV NATV Zee Colors V Channel OK Life June 1, 2009June 1, 2011 30, May 2012January 30, 2013 09, March 2013June 18, Present 2013July 7, 2014 July 10, 2013 23, May 2013 9, September Apr PresentTV Sony TV Sony PresentTV Zee 2014 9, February V Channel TV Zee DD National GUMRAH (SEASON 4) UNTITLED YE HAI MOHABBATEIN MTV (SEASON 2) WEBBED MERI TUMSE HI GUMRAH (SEASON 3) BANDHAN PAVITRA MTV (SEASON 1) WEBBED OF AN CONFESSIONS INDIAN TEENAGER PAVITRA HAIN LAGTE BADE ACHHE WAADA TERA HUA KYA EK THI NAAYIKA TV SHOW RUNNING SI Annual Report 2013-14 Report Annual OUR TV SHOWS ON AIR DURING FY2014 ON TV SHOWS OUR MANAGEMENT DISCUSSION & ANALYSIS

OUR TELEVISION BUSINESS: OPERATIONAL OVERVIEW

CURRENTLY ON AIR

Premiered: June 2013 Jodha Akbar is a 16th century love princessi anddd daughter h of f the h KiKing of f Lead Actors: , story about a political marriage Amer, was the one to value emotions. of convenience between Mughal Once married, Akbar embarked on the Paridhi Sharma, emperor Akbar and the Rajput journey of true love. Akbar’s biggest Genre: Historical love story princess Jodha. Being hard-nosed, challenge was in winning the love of Channel: Zee TV rough, tough and heartless, Akbar Jodha, which was hidden deep below kept expanding his empire at the resentment and extreme prejudice. cost of other’s lives, emotions and love. Whilst Jodha, the ery Rajput

Premiered: April 2014 Lead Actors: Shabbir Ahluwalia, Genre: Family Drama Channel: Zee TV

Kumkum Bhagya is about a women- revolves around their love lives. Pragya centric Punjabi family based in likes Suresh who is a simple guy, Chembur. The underlying concept whereas Bulbul dreams about Abhi. of the show is about how different Being a rockstar, Abhi is obsessed people come together from different with money and fame and does not backgrounds and perspectives and believe in love. Pragya, on the other yet adjust into each other’s lives. The hand, believes in love and money family’s two daughters, Pragya and doesn’t matter much to her. Bulbul, are poles apart and the story

30 Balaji Telefilms Limited About Us Business Overview Our People

Ye Hai Mohabattein is a love story Premiered: December 2014 between a mother and a child who Lead Actors: , Divyanshi Tripathi are brought closer to each other through a unique bond and under Genre: Fiction weird circumstances. It is this bond Channel: Star Plus that also brings Raman and Ishita into MD&A each other’s lives. A Tamilian, Ishita has boss, a much richer and suave person. love blooms for Roohi due to which been abandoned by her ancé and The wife Shagun leaves behind 4-year Ishita agrees to marry Raman. He would-be parents-in-law due to her old Roohi, but since she looks exactly agrees as he too is scared of losing his inability to bear a child. Raman, who is like her mother, Raman neglects the daughter in the custody to his wife. a Punjabi was once an affable person, child. Amidst the hilariously turbulent Through the test of time, Raman and Directors’ Report but is now hardened by the cruel end friction between the Punjabi and Ishita not only share each other’s pain, of his marriage as his wife marries his South Indian family, Ishita’s motherly but love too blossoms between them. Governance Financial Statements Premiered: September 2013 Lead Actors: Yash Tonk, Hritu Dudani Genre: Family Drama Channel: DD National

Pavitra Bandhan is a metaphorical take on the story of a young and free-spirited woman whom destiny and circumstances push into a situation, which is like a dark and endless night. She has to face the situation all alone and is constantly lightening up other people’s lives. The TV show is a poignant and passionate tale of this young woman. It is not a love story, but a story about love set in the backdrop of the beautiful landscapes of and the enriched Bengali culture.

Annual Report 2013-14 31 MANAGEMENT DISCUSSION & ANALYSIS

OUR TELEVISION BUSINESS: OPERATIONAL OVERVIEW

CURRENTLY ON AIR

Premiered: May 2011 Lead Actors: , Genre: Mature love story Episodes Completed: 644 Channel: Sony TV Bade Acche Lagte Hain is a love story class family and is sensible, philosophical takes a 20-year leap, their daughter between two completely different and mature. The story is about how their Pihu and several other antagonists are kind of people, Ram Kapoor and Priya dislike for each other slowly changes to introduced. The show ended in July Sharma. Ram Kapoor is a well-reputed, respect, and eventually love. However, 2014 with the theme on how their love rich and powerful businessman in his every time Priya and Ram grow closer, stands the test of time, after years of a early 40s, while Priya is from a middle- situations drive them apart. After story turbulent love life.

Premiered:P id June 2009 Lead Actors: , , Genre: Family drama Episodes Completed: 1,352 Channel: Zee TV Pavitra Rishta is the story of Manav the story showcased the lives of their on their grown-up grand-children. It Deshmukh, a mechanic, and his wife children, adopted daughter Purvi and shows the marriage of the daughter of Archana, an uneducated young woman, her marriage with business tycoon Sohan, Manav and Archana’s son; and and how they fall in love and marry Arjun Digvijay Kirloskar. After another that of their grand-daughter Ankita with each other. Following an 18-year leap, 20-year leap, the story now focusses business tycoon Naren Karmarkar.

Premiered: July 2013 Anchored By: Genre: Thriller Episodes Completed: 32 Channel: MTV

Webbed is a TV show hosted by Kritika internet is a great place to make friends, real-life plots, spread awareness against Kamra depicting real-life stories to but is not bereft of faceless predators. the viscous web. It helps convey the create awareness on cyber abuse. The Every like, share, comment, tweet has a message effectively and demonstrates propagates the thinking and formula: butter y effect and the power to change how crimes are committed in the deep “Think before you click”, depicting how someone’s life. The stories, inspired from dark world of the World Wide Web.

32 Balaji Telefilms Limited About Us Business Overview Our People

Premiered: July 2013 Gumrah aims at touching the core event. The story focusses on the teenage Anchored By: Karan Kundra teenage issues prevailing in India. Every psyche of how and why a teenager gets MD&A Genre: Thriller episode deals with a new teenage carried away and committed a crime at Episodes Completed: 32 problem, which is based on a real-life a small age. Channel: Channel V Directors’ Report Governance

Premiered: November 2013 Confessions of an Indian Teenager showcased. Each episode has a different Genre: Teen Drama is a show that gives strong hope to story and is based on some real-life Financial Statements Episodes Completed: 52 teenagers. The show not only focusses problems faced by teenagers in India. Channel: Channel V on teenage issues, but provides adequate resolution to each problem

Mehta, who also helps Ranveer get himself educated. Gradually, Ranveer’s Premiered: June 2014 The main protagonist of Meri Aashiqui sharp talent and quick thinking is Lead Actors: Shakti Arora, Tumse Hi is Ranveer. At the age of 10 noticed and he becomes Mehta’s ‘right hand’ man. Mehta entrusts Ranveer the Radhika Madan years, he falls in love with Ishaani who is 9-years old, even as he is dealing with job of making Ishaani and Chirag, the Genre: Family Drama son of one of Mehta’s friend, fall in love. Channel: Colors his mother’s death. Ironically, Ranveer’s father Kamlesh bags the job of that of With great honesty, Ranveer ful ls this a driver with Ishaani’s father Harshad responsibility. But as the story progresses, Ishaani realises Ranveer’s love for her. Annual Report 2013-14 33 MANAGEMENT DISCUSSION & ANALYSIS

OUR BUSINESS STRATEGIES AND KEY PERFORMANCE AREAS IN TELEVISION WE ARE PRESERVING WHAT WE’VE BUILT AND SCALING NEW HEIGHTS BY STRENGTHENING OUR PROGRAMMING LINE-UP

We have proven our content move up from its No. 4 to the No. 2 slot Pavitra Rishta to the 6.30 pm slot. On capabilities and established a niche among entertainment channels. the immediate horizon, Meri Aashiqui market position, driven by the type Tumse Hi was recently aired on Colors. and quality of content delivered BEING PACE-SETTERS There are two new shows slated to be through a mix of our top-rated broadcasted in August. One of these TV shows. Amongst our new shows, Ye Hai is a cult show titled starring Sonali Mohabbatein, the family drama Bendre, and Apurva Jodha Akbar, which premiered on Zee launched in December 2013 on Star Agnihotri and will be featured on Life TV in June 2013, scaled an impressive Plus is raking in a TRP of 3. It has clocked OK. Another show will be aired soon TRP, emerging as the No. 2 TV show the record of being the show with the on Sony’s new channel PAL. Besides across all entertainment channels. It is largest time spent on any channel another family drama, we are working rapidly nding place among the top- with an average of 19 minutes. In on another one on the lines of a teen rated shows on Indian television. Being April this year, we launched Kumkum show depicting the lives of 8-9 school the highest rated historical drama on Bhagya on Zee TV at 9.00 pm, shifting kids and their transition to college. the small screen, it enabled Zee TV our ongoing top-rated TV show

34 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements 35 cient planning tability. tability. This ensures we do ensures This tability. OUR FUTURE SLATE FOR FY2015 AND FOR FY2015 SLATE OUR FUTURE INTO VISIBILITY GIVES US GOOD FY2016 TO AIM WE FUTURE. OUR NEAR-TERM LEAST 6-7 NEW HIGH-QUALITY, AT LAUNCH DIVERSE GENRES OF SHOWS HIGH-CONCEPT TV SCALING UP OUR CHANNELS. ACROSS HELPS US FURTHER VOLUME CONTENT OPTIMISE COSTS. ensures the highest productivity and the highest productivity ensures houses output among all production India. across BETTERING OUR MARGINS our to add us help strategies Our TV show, new any to Prior line. bottom shoots mock conductwe workshops, actors, our with rehearsals dress and helping us plan better and enhance our pro not waste too much time on the the on time much too waste not trimming down our production sets, Cost optimisation costs even further. ef of result a been has and execution of each project. Our Our project. each of execution and has been new show on Doordarshan competitive prices, highly at executed enhancing our pro xed cient planning and execution Annual Report 2013-14 Report Annual ATTAINING ATTAINING COST EFFICIENCIES the in TV shows of slate A healthy an increased pipeline leads to and cost rationalisation scope for focus to continue We optimisation. of our on optimum utilisation manpower, resources, production sets, occupation in production staff, among machines, editing building, creation in investing of Instead others. refurbishing are we sets, of new as the basic Even ones. existing cost of each project the remains of economies achieving are we same, scale costs set and reducing through monitor to continue We amortisation. weekly costs an MIS that through the at even regularly gets viewed Our infrastructure is level. promoter’s judiciously and being utilised more kept fully in control. are our costs Our ef MANAGEMENT DISCUSSION & ANALYSIS

OUR BUSINESS STRATEGIES AND KEY PERFORMANCE AREAS IN TELEVISION

EXPLORING DIVERSE GENRES AND CONTENT INNOVATION TO DRIVE GROWTH IN VIEWERSHIP

WHILE LONG-FORMAT FAMILY DRAMAS HAVE BEEN OUR KEY GROWTH DRIVER, WE ARE NOW EXPLORING DIVERSE GENRES. OUR AIM IS TO PROVIDE FRESH, INNOVATIVE AND DIFFERENTIATED CONTENT TO AVOID CLUTTER AND DRIVE GROWTH IN VIEWERSHIP. OUR CONTINUED SUCCESS WILL DEPEND ON HOW WELL WE DIFFERENTIATE OURSELVES FROM COMPETITION. OUR OBJECTIVE IS TO CREATE A BASKET OF ASSORTED AND INNOVATIVE TV SHOWS THAT APPEAL TO OUR EXISTING AUDIENCES AND HELP US WIN NEW ONES.

At Balaji, we have well established different TV shows, not limiting the youth. Confessions of an Indian ourselves as the leading TV ourselves to conventional saas-bahu Teenager, a show we launched on production house in long-format TV serials with mass orientation. Our Channel V based on cyber abuse, shows. Having been credited for our mantra is to deliver differentiated and has been widely appreciated. We successful K-series saas-bahu shows fresh content to audiences without successfully created a niche with which created a loyal viewer base, we compromising on quality. careful positioning through youth- are experimenting with short-format, focused content. As we move ahead, season-based and high-concept EXPLORING TV will continue to be our mainstay shows to satiate viewers’ growing business. Although we have achieved appetite. We are focusing on genres as DIVERSE GENRES scale in our TV business, going forward diverse as thriller, youth, horror, reality After the successful launch of three our aim will be to establish meticulous and teen crime in the GEC space, seasons of our popular show Gumrah, forward planning that allows us the the most watched genre on Indian its 4th season is slated to take off luxury of uninterrupted revenue television. Our new programming on Channel V. Based on teen crime, streams with as many GECs and niche line-up includes niche and radically this sensational thriller is aimed at channels as possible.

36 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements

37 , we again , Kudummbam cant inroads in cant inroads Kahin Kisi Roz Earlier, our Tamil TV our Tamil show Earlier, prime-time TV moved had Sun on with later, pm; 10.00-10.30 to band TV show in the Hindi GECa thriller space 11.30-11.00 to prime-time changed developing are We band. time pm our presence and strengthening signi and making new through markets regional the Marathi and Bangla South, in launches programming. Bade Acche Lagte Bade Acche Ye Hai Mohabbatein Ye shows too are pulling in are shows too which runs on Sony TV, prime- TV, which on Sony runs Having established an undisputed undisputed established an Having we TV domain, the in leadership on building new concentrating are already We have prime-time slots. turning of reputation the earned TV slots with our prime-time around With our hit and shows. top-rated TVsuccessful series BEING CHANGERS SLOT AND CHANNEL DRIVERS Hain TRP. a 1.5 time moved to the 10.30-11.00 pm pm 10.30-11.00 the to moved time with Now slot. prime-time migrated we Plus, onStar Despite band. time 11.00-11.30 to back pm, 11.00 as late as premiered being 3, of TRP a managing is show new this while repeat Annual Report 2013-14 Report Annual MANAGEMENT DISCUSSION & ANALYSIS

COMPANY OVERVIEW: OUR MOVIES BUSINESS WE UTILISED THE YEAR FY2014 IN UNDERSTANDING THE SCIENCE BEHIND THE ART OF MAKING MOVIES. WE GAINED BETTER UNDERSTANDING OF THE MOST PRODUCTIVE TICKET SIZE PER INVESTMENT THAT IS APPROPRIATE FOR BALAJI. MOST OF OUR MOVIES IN FY2014 RAKED IN AN OPERATING PROFIT. OUR FUTURE FILMS ARE SURE TO BE YIELDING ASSETS GIVING US SUPERIOR RETURNS.

Even as Television continues to be our ‘Bread & Butter’, Movies clearly represents an upside opportunity. Our key growth drivers have been innovative ideas and great packaging. With our television business as our backbone, the movies vertical has enabled us to evolve as one of the leading entertainment houses. During the year, we produced 6-7 movies across genres and of various ticket sizes. We collaborated with the best industry talent to pool collective wisdom in the interest of creating high-quality, high-concept product.

38 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements 39 YEAR AND MONTH OF RELEASE 2013 August, 2013 May, 2013 April, 2014 April, 2014 May, 2014 June, i Sinha 2013 July, , Ileana D’Cruz, Ileana D’Cruz, Dhawan, Varun Fakhri Nargis Juneja, Ashish Gupta, Siddharth Kaur Mundi Simran Kapoor, Shraddha Malhotra, Sidharth Deshmukh Riteish Sunny LeoneSunny Akhtar, Farhan Imran Khan, Kumar, Akshay Sinha Sonakshi Sonaksh Singh, Ranveer , , 2014 February, Manoj Bajpai, Tusshar, , , 2014 March, , KI KUKU MATHUR JHAND HO GAYI AT SHOOTOUT RELEASES IN FY2015 RAGINI MMS-2 RAGINI TIME IN MUMBAIONCE UPON A DOBAARA MOVIERELEASES IN FY2014 ACTORS Annual Report 2013-14 Report Annual OUR MOVIE SLATE DURING FY2014 AND FY2015 DURING FY2014 SLATE OUR MOVIE MANAGEMENT DISCUSSION & ANALYSIS

OUR MOVIES BUSINESS: OPERATIONAL OVERVIEW

RELEASED IN FY2014

Release Date: March 21, 2014 Genre: Horrex Actors: Produced By: ALT Entertainment Director: Bhushan Patel

When a young enthusiastic crew and MMS). Little did the team know that an over-the-top lm director, Rocks, the house was haunted by twin ghosts. visit a farmhouse on the outskirts The horror turns real and menacing of to make a horror-thriller as strange and creepy things begin lm, the director casts Sunny Leone, to happen on the sets and amongst a famous adult lm entertainer, as his the crew as there is a bigger, untold lead to play the character of Ragini. truth. Ragini MMS-2, a sequel to the He also casts Satya, a young and biggest sleeper hit of 2011, provided bitter man, as the lm’s writer, who a thrilling cinematic experience for has researched the previous incident the youth, laced with music, spooks with Ragini for his novel. He decides to and sensuousness. It outperformed shoot this lm at the actual location, at the box of ce and created new where the Ragini event had occurred benchmarks for the genre. earlier, as seen in the original (Ragini

This delightful and intimate romantic comedy, shot in Mumbai and Australia, peeks into the life of the newly-married Sid and Trisha ghting for space in their marriage. A sequel to , this one starring and Vidya Balan is the story of a newly-married couple in an urban set-up.

The iconic characters, Sid and Trisha, come to life in the sequel as husband and wife. Sid has beaten his fear of marriage and Trisha has nally gotten around to saying her vows the third time round. The movie Release Date: February 28, 2014 is about how the ‘now married’ couple Genre: Romance, Drama succeeds in addressing the impossible Actors: Farhan Akhtar, Vidya Balan task of coping with each other’s fantasies and realities. Produced By: & Pritish Nandy Communications Director: Saket Chaudhary 40 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements

41 Once Once Dobaara

. The The movie . lm was different from from different lm was was a sequel to the 2010 hit was a sequel to the Once Upon A Time In Mumbai Upon A Once Time in Mumbaai Upon a crime of underbelly the on light sheds capital entertainment the Mumbai, in The of India. power a about was which prequel, its romantic a was one This struggle. underlining the mentor-protege trail relationship. elds and lmed mostly on the most loved and and the most loved is was a period drama drama period a was is Singh and . Sinha. Singh and Sonakshi period romance inspired by by inspired period romance riller Balaji Motion Pictures Balaji Motion Pictures Balaji Motion Pictures Balaji Motion Pictures

August 15, 2013 15, August 2013 July 5,

Vikramaditya Motwane Milan Luthria lm of the year.

Ranveer Singh, Sonakshi Sinha Sonakshi Singh, Ranveer , Sonakshi Sinha, Sonali Bendre-Behl, Imran Khan Imran Sonali Bendre-Behl, Sinha, Sonakshi Kumar, Akshay Romance Romance Romance, Th Romance, is an epic period love story the which marks rst-time pairing of Ranveer & Phantom Annual Report 2013-14 Report Annual It was an old-fashioned It was an Last Leaf. The American author O’Henry’s betrayal heart-break, – of lovers two of story uplifting Th redemption. and ultimate Lootera the with Dalhousie, and Bengal rural in 1950s in set then. prevalent system zamindari the of backdrop movie was shot on 35mm and The emerald mansions, in cavernous locations as It emerged hills. snow-covered acclaimed Genre: Genre: Actors: By: Co-Produced Director: Release Date: Genre: Genre: Actors: By: Co-Produced Director: Release Date: MANAGEMENT DISCUSSION & ANALYSIS

OUR TELEVISION BUSINESS: OPERATIONAL OVERVIEW

RELEASED IN FY2014

Release Date: May 2013 Release Date: April 2013 Genre: Action, Crime, Thriller, Drama Genre: Supernatural Thriller Actors: John Abraham, Anil Kapoor, Actors: Emraan Hashmi, Konkona Sen Kangana Ranaut, Tusshar, Manoj Bajpai, Sharma, Huma Qureshi, Kalki Koechlin Produced By: ALT Entertainment Produced By: Balaji Motion Director: Kannan Iyer Pictures & White Feather Films Director:

The multi-starrer gangster ick, a Set in contemporary Mumbai, Ek Thi prequel to , Daayan narrated a believable story was based on the rst police encounter of a magician who is a master in his of Manya Surve who took on Dawood craft. Woven beautifully between the Ibrahim and challenged his supremacy world of magic, occult and suspense, over Mumbai. The movie dramatised the movie made for compulsive the rst-ever registered encounter viewing, providing some spine-chilling of Surve by , one of thrills at short gaps. It was one of the most realistic presentations of an the most unique horror movies to have encounter that the Indian judiciary has been launched in Indian lm industry ever witnessed. The movie was based in a long time. It was addressed on S. ’s account of the as a new concept movie and rise and fall of a ma a don in Mumbai widely appreciated by the audiences of 1970s, projected in his book ‘Dongri and critics. to Dubai’. The movie was a mass entertainer with smart dialogues and a stylised cinematic version of what is a journalist’s account of the true story.

42 Balaji Telefilms Limited About Us Business Overview

RELEASED IN FY2015 Our People MD&A Directors’ Report

Release Date: April 4, 2014 Release Date: May 30, 2014 Release Date: June 27, 2014 Genre: Comedy, Romance Genre: Comedy, Drama Genre: Romance, Thriller Governance Actors: Varun Dhawan, Ileana Actors: Siddharth Gupta, Ashish Actors: , Shraddha D’Cruz, Juneja, Simran Kaur Mundi Kapoor, Produced By: Balaji Motion Pictures Produced By: Balaji Motion Pictures Produced By: Balaji Motion Pictures Director: & Getaway Films Director: Director: Financial Statements

A romantic action-comedy, Main Kuku Mathur ki Jhand Ho Gayi Guru is a quiet, tough and ruthless Tera Hero is the story of 21 year-old (KMKJHG) is an entertaining slice- man with a dark past. He meets Aisha Seenu. He goes to to prove of-life feature, revolving around two who despite suffering from a terminal his mettle, and once there, he falls friends Kuku Mathur and Ronnie illness, lives life to the fullest. Guru in love with Sunaina, who is being Gulati in a suburban middle class falls in love with Aisha and the two blackmailed by an immoral cop into colony of . The two friends have eventually get married and move to marrying him. As Sunaina falls in love passed their Class 12 exams and Mumbai. Miraculously, Aisha shows with Seenu, she is kidnapped by a don are celebrating their good scores. an improvement in her medical in called Vikrant. Apparently, Although he dreams of opening a condition, but is unfortunately killed. Vikrant’s daughter is also in love with restaurant, Kuku gets the job of an Guru is shocked to learn about the Seenu. He then goes to Bangkok to assistant on a Bhojpuri music video killer who is a quirky and seemingly rescue Sunaina, the love of his life, and set. On the other hand, Ronnie’s father innocuous, middle-class man. The rest to get rid of the Don’s love-obsessed gifts him with a blouse-and-petticoat of the story is about what prompted daughter. This rst-time pairing of shop to run. The crux of this charming this man to murder Aisha and how father and son (David and Varun) and heart-warming coming-of- does Guru succeed in getting even was a huge USP and left the viewers age movie is about friendship in with him. The movie is ranked among enthralled, generating tremendous modern times. the year’s biggest blockbusters. excitement and curiosity.

Annual Report 2013-14 43 MANAGEMENT DISCUSSION & ANALYSIS

OUR BUSINESS STRATEGIES AND KEY PERFORMANCE AREAS IN MOVIES CATERING TO MASS SENSIBILITIES THROUGH DIFFERENTIATED CONTENT AND A DIVERSE MOVIE SLATE

AT BALAJI MOTION PICTURES, WE RECOGNISE THE POWER OF CONTENT. WE ARE DABBLING WITH DIFFERENTIATED CONTENT, DIVERSE SENSIBILITIES AND HAVE BECOME A MAGNET FOR TALENT. WE REMAIN PROUD OF OUR SCRIPT BANK. OUR CREATIVE SENSIBILITIES AND CONTENT CAPABILITIES ARE OUR KEY STRENGTHS. WE AIM TO CATER TO DIVERSE GENRES – FAMILY ENTERTAINMENT FORMATS, EDGE-OF-THE-SEAT, THRILLER, YOUTH-ORIENTED AND NICHE CONTENT.

A prime growth driver for our movies RELEASES vertical is our highly innovative ideas ON THE UPSWING – storylines that appeal to mass sensibilities. Unlike earlier when the From 3 movie releases during FY2013, success of a lm hinged on its star- we scaled up and doubled to 6 cast, recent times have proven that releases during FY2014. We produced Indian audiences have matured. They and successfully released Ek Thi Dayan, are appreciating lms driven by strong Shootout at Wadala, Lootera, Once scripts and not necessarily star power. Upon a Time in Mumbai Dobaara, The year gone by too reinforced the Shaadi Ke Side Effects and Ragini MMS- idea that good content sells, no matter 2. By virtue of the number of releases, what. Our movies proved that content we emerged as one of India’s Top is king and overpowers everything. As 5 movie production houses. Going a creative powerhouse, our belief lies forward, we plan to release 4-5 movies in the power of an idea, which re ects in FY2015. Of these, Main Tera Hero, in our diverse slate of movies. creating a strong brand franchise to Kuku Mathur Ki Jhand Ho Gayi and Ek help our audiences connect with us Villain have already released. Given our better. We are leveraging our brands slate approach, at any given point of OUR Kya Kool Hain Hum and Ragini MMS time we have as many as 15-20 movies ROBUST MOVIE SLATE to build a franchisee model with in various stages of development. Our portfolio of movies enhanced a key strategic thrust on sequels our top line to new records, while and series. We embraced diverse enhancing bottom line too. We subjects and different genres. We gradually scaled up our movie have been able to gain credibility production and created an ecosystem, as an established production house that ensures a steady pipeline of movies that can win audiences across over the next few years. We believe in age-groups. 44 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements 45 Annual Report 2013-14 Report Annual MANAGEMENT DISCUSSION & ANALYSIS

OUR BUSINESS STRATEGIES AND KEY PERFORMANCE AREAS IN MOVIES WE LEVERAGE ON SUPERB PACKAGING, EFFECTIVE MARKETING AND SMART FINANCING TO INCREASE OUR SCALE

The year gone by was all about We maintain our Above-The-Line pre-selling the movie’s music, satellite evangelising our movies and (ATL) costs and economies of scale and overseas rights. We de-risk to the leveraging innovative marketing optimally. We subject ourselves to maximum level by increasing our strategies for promotion. For the rigorous budgeting for each movie non-theatre revenues. We negotiate promotion of super-natural thriller to ensure adequate return ratios. with TV channels and music companies Ek Thi Daayan, we created 16 hours We consciously choose shooting for best rates for satellite and music of TV programming aired through locales where we get rebates, rights. The entire production cost for the 8-series show Ek Thi Naayika on such as Mauritius. We leverage our Main Tera Hero was covered through Life OK, casting lead actresses of our co-production model to build our lm non-theatre revenues. Our overseas popular long-format shows on TV. slate and pool creative wisdom. For theatre rights for Shaadi Ke Side Effects For Shaadi Ke Side Effects, the movie’s example, a proposed co-production earned from also lead actors Farhan Akhtar and Vidya between Balaji Tele lms and Dharma helped us improve our revenues. For Balan advised audiences on marriage- Productions promises to be the Ragini MMS-2, we covered the entire related issues as marriage counsellors. biggest creative partnership in the production cost from theatre revenues For Ragini MMS-2, our lead actress industry, which would enhance terms and also earned a handsome pro t. Sunny Leone teased audiences across of trade as well. India by performing to “The Baby Doll” STRENGTHENING song on a live cage dance. DERISKING BY DISTRIBUTION ENHANCING NON- CAPABILITIES SMART FINANCING… THEATRE BUSINESS Our highly-experienced distribution THE WAY TO BE Our theatre revenue growth is resulted in stable revenues from Since our movie budgets are not over- strongly driven by pre-sales. Our distribution business. Besides Mumbai, priced, we did not incur any table objective continues to be to cover we also distributed our own movies in losses. We consciously keep costs low, nearly 50% of production cost from the Delhi territory selectively. Our aim manage day-to-day budgets, maintain our non-theatre business. We have is to capture territories with potential MIS with a lean, yet effective, team. optimised our risk-return trade-off by and set up our own distribution at 46 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Reportepo Governance Financial Statements 47 WE UNDERSTAND THE WE UNDERSTAND FOR CUSTOMISED, NEED TAILOR-MADE TO FORUMS MARKETING AND AUDIENCES ATTRACT INCREASE VIEWERSHIP. AND INNOVATIVE CLUTTER-BREAKING HAS BEEN MARKETING KEYS ONE OF OUR THE TO SUCCESS AT OFFICE. BOX nding upon nding jab and over over jab and Rajasthan Annual Report 2013-14 Report Annual Mysore, Pun Mysore, we take However, a course of time. calls depe distribution our scrutiny and feasibility study for for study feasibility and scrutiny our every Going new forward, release. studying the distribution we are to how strategise to effectively model in insights Our revenues. our enhance us will enable to optimise this business potential. earning our revenue MANAGEMENT DISCUSSION & ANALYSIS

EXPANDING THE BASKET DARING TO BE DIFFERENT

BOLT MEDIA LIMITED IS ALL ABOUT DOING DIFFERENT THINGS, DIFFERENTLY. BESIDES DOING DIFFERENTLY-POSITIONED TV SHOWS, WE ARE EXPANDING OUR PROFILE TO INCLUDE SHORT- FORMAT TV SERIES IN YOUTH AND HUMOUR GENRE, PRODUCT ADVERTISEMENTS, EVENTS, AND VARIOUS OTHER FORMATS EFFECTIVELY.

Having completed one year of operations, Bolt Media Limited has established itself well in the entertainment fraternity and is well acknowledged for its deliverables under the Balaji stable. During the year under review, Bolt Media created and put on air two TV shows. Ye Jawaani Tara Riri, a 78-part series for a bi-weekly show on Channel V, is a coming-of-age story of three brothers. Love by Chance, a weekly episodic romcom on Bindaas TV, opened with the best launch TRPs witnessed in the last couple of years. The show’s theme is how love happens by chance, when least expected. The light-hearted show comprises 26 delightful love stories of

48 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements 49 ed their true true ed their mari, Chhavi Chhavi mari, under the show under were , , Anjali Kiran Bedi, Kapoor, Ekta were Ku Deepika Bhagwat, created This others. among Rajavat, opportunitiesmore of working TV more producing India, J&J with 5 web- and creating commercials based advertisements. BEYOND TV BEYOND AFP an signed we year, the During major products consumer with Johnson India (J&JJohnson & India) TV Life a specialised show for create to from We conceptualised the show OK. on how show focussed The a scratch. women successful achiev Some of calling in the light of change. the women covered Rakht is a 26-series neo- Annual Report 2013-14 Report Annual couples who bumped into each other couples who bumped into by chance love a chance. and still gave TV of our shows created in FY2014 Two of getting aired now in the process are Among these, broadcasters. by while a 10-series epicis documentary; Dharma Kshetra mythological courtroom drama. courtroom drama. mythological are we shows, short-format Besides TVin making series also specialising serious about and are the youth for in a big the humour genre exploring Bolt by its capabilities, Poised way. by line top its double to aims Media the end of FY2015. MANAGEMENT DISCUSSION & ANALYSIS

EXPANDING THE BASKET NEW AVENUES, NEW PLATFORMS

HAVING TAPPED THE TV & FILM PLATFORMS SUCCESSFULLY, WE AIM TO FURTHER ENGAGE WITH OUR AUDIENCES AND PROVIDE THEM WITH A MORE APPEALING PLATFORM TO VIEW OUR CONTENT. OUR OBJECTIVE IS TO LEVERAGE THE DIGITALGITAL PLATFORM TO BE ABLE TO REACH OUT TO YOUNGER AUDIENCESDIENCES AASS WELLWELL..

HavingHaving achieved success in creating contentcontent for the TVTV and lms domain, wee aarere nnowow takingtakin a pioneering step in creatingcreating ororiginaligina content dedicated forfor ththehe didigitalgig tal memedium – a ‘ rst’ in the industry.industry. WeW havehav entered into an agreementagreemene t withwiith YouTubeY to leverage an additional platform to showcase our content. We are creating a new revenue model by creating original series for the web, starting with 3 shows and slowly expanding our portfolio. We mean to tap varied genres such as drama, comedy, non- ction, documentary and thriller.

For this, we aim at exploring the co-production model in a meaningful way. We are joining our hands with several small-time and fresh content

50 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance Financial Statements 51 oopers and and oopers advertisements of eement with YouTube YouTube with eement lms. The channelThe has raked lms. revenues throughThe advertising. as such content showcases channel behind-the-scenes, teasers, trailers, bl making-of-the-movie, full to addition in scenes deleted length (and subscribers lakh 1.2 over in additional generating growing), into we entered In FY2014, revenues. another joint agr Hindustan major FMCG the and per this As (HUL). Unilever Limited YouTube on content our agreement, will be preceded by manufactured products FMCG various HUL has bought In return, by HUL. attractive an at inventory channel our premium. lms over lm catalogue, catalogue, lm lms as well as ix, ix, Vuclip, Digitainment, we joined hands with YouTube in YouTube we joined hands with January 2013 to create an exclusive movies showcase to channel Motion Pictures Balaji by produced on channel BMPL The (BMPL). Limited serves both as a promotional YouTube our upcoming for tool earn we where generator a revenue new international platforms such platforms new international and iTunes Prime, Amazon Hulu, as DailyMotion. THE YOUTUBE CONNECTION monetise our better To our content through platforms such such platforms through content our Big as Spuul, We others. among BoxTV, and Singtel our released recently also rst TV Annual Report 2013-14 Report Annual production successfully house to foray the for creation original content into we have Over years, the last few web. our monetising and syndicating been and content across all digital platforms these through revenues our increasing been licensing We have platforms. LEVERAGING LEVERAGING PLATFORMS OTHER amongst the are We producers. We are nurturingWe are their producers. by potential and talent immense and produce they shows funding infrastructure and by utilising Balaji’s keep costs To production equipment. also leveraging are we economical, earlier an at actors of bank Balaji’s pricing format. MANAGEMENT DISCUSSION & ANALYSIS

HUMAN RESOURCES LEADING EFFECTIVE CHANGE

WE BELIEVE IN HAVING A LEAN, YET EFFECTIVE, WORKFORCE. WE MOTIVATE OUR EMPLOYEES TO BE ENTREPRENEURIALLY DRIVEN. RATHER THAN HIRING LARGE TEAMS WITH SINGLE POINT OF ACCOUNTABILITY, WE ENCOURAGE OUR PEOPLE TO BE ACCOUNTABLE FOR THEIR OWN WORK. WE BELIEVE IN IDENTIFYING STAR PERFORMERS AND MAKING THEM THE LEADERS FOR TOMORROW.

By virtue of being in the media & abilities. We, as an organisation, cherish within our employees. We motivate entertainment industry, HR@Balaji our employees’ diversities and multi- employees to be independently Tele lms Limited deals with a great fariousness. In addition to this, our driven and empower them to deal of people with pedigree. Human open-door policy encourages our innovate and ideate freely. Instead of Resource is not a mere department employees to interact directly with hiring large teams with a single point or support system for recruiting the senior management. The policy of accountability, we encourage each employees, but a signi cant function not only ensures quick information single employee to be accountable within the organisation which ow to the lowest level, it also results for their own individual work. Having a partners with Business Teams. It is not in faster turnaround time with no lean, yet effective, workforce is our key just an organisation offering careers, scope for red tapism and bureaucratic mantra. The belief not only makes our but an institution in itself. delays in the decision making process. human capital more liable, but also enables them to enjoy the upsides. UNITY IN DIVERSITY THINK LIKE AN Employees are our strategic assets ENTREPRENEUR GROWTH – our key to success. Each employee Employees at Balaji Tele lms Limited STORY@BALAJI at Balaji Tele lms Limited is special drive their own domain along with the We offer our employees an exponential and unique in his/her own way. We Senior Management. A key policy we growth story and a rewarding have a diverse employee base – a internally follow is that of inculcating career within the system which is combination of creative people and a sense of entrepreneurial spirit performance driven and proves to those with technical and functional 52 Balaji Telefilms Limited About Us Business Overview

be gratifying over a period of time. culture and to help our employees aim of making them the “Leaders We also acquire regular perception identify their goals in a collaborative of Tomorrow”. Through elaborate and feedback from employees on and proactive manner. and extensive campus placements practices, culture and career growth, from reputed institutes, we hand Our People which is then used to set an edi ce TALENT ACQUISITION & pick each employee matching with in formulating our HR activities. Our MANAGEMENT exact skill-sets. In the forthcoming objective is to make our company ‘the year, we envisage in building our Our aim is to clearly stand out as most preferred workplace’. We hand human capital to an effective Rewards an organisation which attracts the hold each new employee, providing & Recognition programme which best talent which is pedigreed. As them quick and valuable insights is strictly adhered to rewarding part of succession planning, we about the organisation. The aim “Star Performers” and creating an

hire employees and nurture them MD&A behind this is to ensure their seamless atmosphere of appreciation. within the organisation with the transition within the organisation’s Directors’ Report Governance Financial Statements

Annual Report 2013-14 53 MANAGEMENT DISCUSSION & ANALYSIS

MANAGEMENT OUTLOOK

Globally, the Indian M&E industry is We realise that the ‘Balaji’ brand is OUR AIM IS GROWTH, one of the fastest growing and we getting bigger each day. We aim aim to leverage the growth prospects to experiment with new business SUSTAINABILITY AND optimally. The industry in India, and monetisation models and WEALTH CREATION particularly in mature markets, is in a leverage every single opportunity FOR SHAREHOLDERS. differentiated stage of evolution. The that comes our way. We aim to focus potential for growth in this sector is on collaboration and innovation WE HAVE A STRONG signi cantly higher. to achieve our vision and drive VISIBILITY OF OUR FILM unprecedented growth in viewership We are looking at successfully ramping in the TV and movies segment. AND TV SLATE FOR up our numbers. Our aim is growth, 2015 AND 2016 WHICH sustainability and wealth creation With our audiences having begun for shareholders. We have a strong patronising the Balaji brand, our key UNDERPINS A POSITIVE visibility of our lm and TV slate for 2015 focus is pro ts. Since most of our OUTLOOK. WE AIM and 2016 which underpins a positive shows are still driven by Ekta Kapoor, TO EXPERIMENT outlook. For both these segments, we aim to be process-driven, rather we are going the long-drawn path than personality-driven. Also, having WITH NEW BUSINESS of creating content in-house from a achieved scalability, we will focus on AND MONETISATION scratch. We want to emerge as a media becoming sustainable and predictable powerhouse. We aim to be recognised in this business and leverage every MODELS AND as content creators in movies too by opportunity that comes our way and LEVERAGE EVERY creating cutting-edge and box of ce TV will continue to be our mainstay. SINGLE OPPORTUNITY commercially successful cinema. THAT COMES OUR WAY.

OUR STRATEGIC PRIORITIES IN FY2015  Creating newer show formats for television content through a wholly-owned subsidiary  Creating original and diverse show content to retain leadership  Exploring opportunities across channels and languages  Creating lms across budgets – leveraging our brand, scale and presence  Building our marketing and distribution capabilities  Creating a diverse movie slate to capture audiences across genres  Leveraging opportunities in regional markets by expanding network

54 Balaji Telefilms Limited About Us Business Overview Our People MD&A Directors’ Report Governance RISKS &

CONCERNS Financial Statements Our audit committee ensures statutory and regulatory control and transparency of all nancial disclosures. Our internal audit team monitors and enhances operational ef ciencies and ensures optimum effectiveness of the Company.

Piracy of content produced can adversely affect our revenues and pro tability. The lm industry has set up the Anti-Piracy Society to combat this peril. Delays or cost over- runs can impact the completion and release of our lms. Further, the unorganised nature of this industry can impact revenues. However, an inclination towards corporatisation of our industry, better planning and execution can help us mitigate these risks. Annual Report 2013-14 55