EROS-AR-2016-2017.Pdf
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PERFORMANCE ON 9 JULY, 2017, OUR CHAIRMAN AND NON- EXECUTIVE INDEPENDENT DIRECTOR OF THE COMPANY, MR. NARESH TRIBUTE TO CHANDRA, LEFT FOR HIS NARESH CHANDRA HEAVENLY ABODE. Remembering Mr. Naresh Chandra, our Chairman and Non-Executive Director A civil servant par excellence and a visionary leader, he rose to become the Cabinet Secretary in 1990, the highest position in the Indian Civil Service. In 1992, he was appointed Senior Advisor to the Prime Minister of India. He was the Governor of the state of Gujarat in 1995-1996 and India’s Ambassador to the United States of America during 1996- 2001. He also chaired the Committee on Corporate Audit and Governance, the Committee on Private Companies and Limited Liability Partnerships and the Committee on Civil Aviation Policy, for the Government of India. He was honoured with the Padma Vibhushan, a high civilian award by the President of India in 2007. Mr. Chandra was associated with the Company as Chairman since September 2009 and was also a member/chairman of various committees of the Board. The Company has immensely benefited from his guidance and support during his tenure. The Board of Directors and employees of Eros International Group deeply mourn this irreparable loss. CORPORATE OVERVIEW Passion for Performance_2 Passion Creates Possibilities_4 Operational Highlights_6 Financial Highlights_8 Executive Vice Chairman & Managing Director’s Message_10 Passion Creates Industry- Leading Content_12 Passion Drives a Diversified Portfolio 14_ Passion Sharpens Creativity_16 Passion Pushes the Technology Envelope_18 Content Slate_20 Board of Directors_22 STATUTORY REPORTS Directors’ Report_24 Management Discussion and Analysis_64 Corporate Governance Report_72 FINANCIAL STATEMENTS STANDALONE Independent Auditor’s Report_89 Balance Sheet_94 Statement of Profit and Loss_95 Statement of Changes in Equity_96 Cash Flow Statement_97 Notes _99 CONSOLIDATED PLATFORM Independent Auditor’s Report_141 Balance Sheet_146 AGNOSTIC Statement of Profit and Loss_147 Statement of Changes in Equity_148 Cash Flow Statement_149 APPROACH Notes _150 TO CONTENT Notice_195 MONETISATION HIGHLIGHTS FY2017 Revenues ` 14,453 MILLION EBIT ` 3,768 MILLION PAT ` 2,575 MILLION Diluted EPS ` 27.0 Passion for Performance Passion for Performance To cultivate differentiated and engaging content and entertain billions around the world. To run our business profitably and AT EROS, sustainably. To integrate our societal WE NURTURE role as a part of our business responsibility. AND CELEBRATE OUR PASSION. Key Competitive Strengths Business Development Team Marketing Team (L to R) Sujata Thapa, (L to R) Namrata Khedkar, Suraj Rao, Kumar Ahuja (President - Business Prerna Singh (CMO), Juhi Bhatt Development), Sabina Kriplani 2 Eros International Media Limited Annual Report 2016-17 It is the collective energy and excitement properties in various stages of OVERVIEW CORPORATE of our people to make our brand shine development and production which brighter with its universal appeal. will be monetised across film, merchandising and gaming amongst During the year, our passion translated others, over the next couple of years. into encouraging results and enhanced the value proposition for all stakeholders. We further focused our efforts towards investing in building our content library We extended reach via distribution in that can be monetised consistently. new markets, enriched our library and continued to focus on building our scale We also continued to expand our digital REPORTS STATUTORY to produce and co-produce a wider slate reach by providing our content to our of films across multiple languages. parent, Eros International Plc’s OTT Platform, Eros Now to further Trinity Pictures, India’s first franchise- expand global reach. driven studio, has five franchise Passion speaks many languages FINANCIAL STATEMENTS at EROS, and it determines the future course of our business. Sundari Ramamurthy Senior Vice President, Operations Legal Team All India Theatrical Distribution Team (L to R) Abhishek Kanoi, (L to R) Emanuel Battise, Rajesh Bhatia, Aamod Gupte (Group General Counsel) Nandu Ahuja (SVP - India Theatrical), Sachin Pawar, Kiran Sakpal, Vijay Tandalekar 3 Passion Creates Possibilities PASSION CREATES POSSIBILITIES Music and YouTube Team Corporate Strategy Team (L to R) Arpit Vijay, Niel Goel, Amit Sharma (Head - Music (L to R) Kinjal Palan (Chief Corporate & Telecom Relationships), Bindiya Gaonkar Strategy Officer), Hardik Padaria Key Competitive Strengths Established, worldwide, multi-channel distribution network with exciting Leading co-producer and opportunities in China, acquirer of new Indian film Turkey and Russia content, with an extensive film library Diversified revenue streams and pre-sale strategies mitigate risk promoting stable cash flow generation 4 Eros International Media Limited Annual Report 2016-17 We are a leading global enterprise in OVERVIEW CORPORATE For nearly four decades, we the Indian film entertainment industry who have acquired, co-produced and have translated our passion distributed some of the most successful into a force of creative energy. Indian films across formats. With an extensive and growing movie The result is content that excites, library comprising 2,000+ films, across genres, budgets and languages, our engages and endears a huge business model has evolved on the back of a refined content mix with clutter- REPORTS STATUTORY audience cross-section. breaking releases. Given the strength of our distribution capability, we have released a higher number of Indian language films nationally and internationally than any other film studio for many successive years. FINANCIAL STATEMENTS Public Relations Team (L to R) Amita Naidu (Head - PR), LISTING CODES Samarpita Samadar, Rahul Dubey BSE: 533261 NSE: EROSMEDIA ISIN: INE416L01017 Ability to acquire content in multiple languages and monetise effectively Strong and experienced management team with established relationships with key industry participants 5 CorporateOperational Overview Highlights Major Releases in FY2017 Ki & Ka Housefull 3 Nil Battey Sannata 24 Hindi Hindi Hindi Tamil Phobia & Jara Hatke Dishoom Sardaar Gabbar Singh Hindi Marathi Hindi Telugu Operational Highlights Theatrical revenues include Hindi Trinity Pictures, India’s first franchise- 44 releases of Ki & Ka, Housefull 3, driven studio has developed more Nil Battey Sannata, Dishoom, than twenty franchises across new FILMS RELEASED Happy Bhaag Jayegi, Baar Baar and diverse genres. Of these twenty Dekho, Banjo, Rock On 2, Kahaani 2 franchises, five are lined up for release (overseas), and regional films include in the next couple of years, including two 5 24 (Tamil), Sardaar Gabbar Singh Indo-China co-productions. (Telugu), Janatha Garage (Telugu), HIGH BUDGET C/O. Saira Banu (Malayalam), Baghtos Kay Mujra Kar (Marathi), 10 Chaar Sahibzaade2 (Punjabi), Double Feluda (Bengali) among MEDIUM BUDGET many others. 29 LOW BUDGET 6 Eros International Media Limited Annual Report 2016-17 CORPORATE OVERVIEW CORPORATE STATUTORY REPORTS STATUTORY Happy Bhag Jayegi Baar Baar Dekho Banjo Rock On 2 Hindi Hindi Hindi Hindi FINANCIAL STATEMENTS Chaar Sahibzaade 2 Kahaani 2 Double Feluda C/o Saira Banu Punjabi Overseas Bengali Malayalam Pre-sales as a de-risking strategy served Percentage of Income from well in FY2017. Around 96% of the cost Operations during FY2017 of the total film slate released in FY2017 was recovered through pre-sales across Television Theatrical all revenue streams including theatrical, & Others Revenues satellite and overseas. 31.1% 42.5% % Overseas Revenues 26.4% 7 Financial Highlights Financial Highlights Revenue ( ` in million) PAT margin expanded to 17.8%, compared to 14.7% in FY2016, primarily 10,744 11,396 14,410 16,257 14,453 due to higher contribution from catalogue revenues. FY2013 FY2014 FY2015 FY2016 FY2017 “For FY2017, the EBIT margin expanded to 26.1%, compared to 21.8% in FY2016.” Dinesh Modi Group Chief Financial Officer (India) Finance and Secretarial Team Standing (L to R) Saloni Parekh, Jinal Shah, Mudrika Desai, Sumit Agarwal, Bhavin Mehta, Hemal Shah, Sanjay Bohra 8 Eros International Media Limited Annual Report 2016-17 EBIT ( ` in million) Profit After Tax ( ` in million) Diluted EPS ( ` ) OVERVIEW CORPORATE 2,262 2,997 3,616 3,549 3,768 1,545 1,997 2,471 2,387 2,575 16.81 21.63 26.43 25.40 27.00 STATUTORY REPORTS STATUTORY FY2013 FY2014 FY2015 FY2016 FY2017 FY2013 FY2014 FY2015 FY2016 FY2017 FY2013 FY2014 FY2015 FY2016 FY2017 Diversified Revenue Mix FINANCIAL STATEMENTS % 42.5% 31.1% 26.4% Theatrical Television Overseas Revenues & Others Revenues Sitting (L to R) Surya Attal, Gaurav Bordia, Dimple Mehta (VP - Company Secretary & Compliance Officer), Anand Shankar, Dinesh Modi (Group CFO - India), Thakurdas Patidar, Hardik Suthar 9 Executive Vice Chairman & Managing Director’s Message Executive Vice Chairman & Managing Director’s Message Our pursuit of creative and operational excellence is our key competitive advantage. FY2017 continued that tradition and the Company reported an encouraging performance, despite the temporary impact on revenue from theatrical releases in the second half of the year. Diversified thinking This year audiences have been able to choose from a variety of releases. India’s film industry has experienced diverse growth with the exploration of high concept, new genres and relatable stories. Regional content continued to make encouraging headway and engage growing audiences. With the gradual emergence of Tier II and Tier III