Business Scenario

Confederation of Indian Industry (CII) has projected GDP growth of 8.5% as against 8.6% during last four years. CII believes that factors such as global moderation of growth, inflation, falling demand as a consequence to spiraling interest rates, appreciating rupee and significant supply shortages in the global and Indian economy may restrict the GDP growth in the current year to 8.5%.

Media Industry

According to the latest FICCI-PWC report, Indian Advertising spends in 2006 registered a growth of over 23% and there is immense potential for future growth. The Indian economy appears well entrenched to continue with the current momentum and media will be at the forefront of that growth. According to the report, the technological advancements and policy initiatives taken by the Indian Government that are encouraging the inflow of investment, and initiatives by private media companies will prove to be the key drivers for the Entertainment & Media industry.

Print media

Print media, with a projected size of Rs 232 billion by 2011 at a CAGR of 13 %, is now at Rs128 billion (Source: FICCI-PWC report). With the literate population on the rise, more people in rural and urban areas are reading newspapers and magazines today. Current estimates reveal that the reach of print media in India has increased to 222 million people and there is potential to convert balance 369 million literate people to newspaper readers.

Radio

Radio industry is projected to grow to Rs 17 billion by 2011 with CAGR of 28 % from present size of Rs 5 billion (Source: FICCI-PWC report). The effects of the government policy changes in 2005 were evident in 2006 with 245 licenses sold to private players and several new FM radio channels being launched across the country.

Management Analysis

The Company has reported a 3% decrease in its revenues to Rs 2471 lakh for the quarter under review as compared to Rs 2537 lakh for the corresponding quarter of last year driven primarily by dip in circulation revenue. The circulation revenue decreases due to a drop in cover price of "Mid-Day" from Re.3 to Re.2 in Mumbai.

The cost of printing has increased by 4% to Rs. 1152 lakh from Rs. 1113 lakh. This increase is due to operations in Delhi and Bangalore, which were absent during corresponding quarter of last year.

The company has been able to limit its news expenses at Rs. 57 lakh resulting into decrease of 25% as compared to Rs 76 lakh for the corresponding quarter of last year.

Staff cost has gone up by 21% at Rs. 734 lakh from Rs.608 lakh in the previous year as a result of new additions, which were absent during corresponding quarter of last year.

Selling and Distribution expenses have decreased by 25% to Rs. 218 lakh in the Q1 under review as against last year. These expenses were high during Q1 of last year on account of Bangalore Mid-Day launch.

Rent, rates and taxes remained stable at Rs. 87 lakh despite of rent expenses on Delhi office during current year.

Other expenses have declined by 4% to Rs. 222 lakh from Rs. 231 lakh as compared to the Q1 FY 07.

Surplus from operations is Rs. 1 lakh in the quarter under review as compared to Q1 of last year Rs. 131 lakh. This is mainly on account of building sizable circulation of new editions at Bangalore & Delhi during current year.

Other income increased by 269% from Rs. 55 lakh in Q1 FY07 to Rs. 203 lakh in Q1 FY08. Increase in other income is primarily due to income from mutual fund investments and foreign exchange gain on ECB loans resulting from appreciation of Rupee against Dollar.

EBIDTA has shown a jump of 10% from Rs.186 lakh in the Q1 FY07 to Rs.204 lakh during the Q1 FY08.

The Company's finance cost remained stable, increasing marginally to Rs. 38 lakh in Q1 FY08 as compared to Rs. 37 lakh in Q1 FY07.

Depreciation has increased by 34% from Rs. 77 lakh in Q1 FY07 to Rs. 103 lakh in Q1 FY08. This increase is due to newly set up printing facility at Rabale.

PBT has decreased of 11% at Rs. 64 lakh as against Rs. 72 lakh.

The PAT for the quarter under review, when compared with corresponding period last year has increased by 36% from Rs. 33 lakh to Rs. 44 lakh, translating into an EPS of Rs. 0.09.

Group Results:

The Group has recorded a top line of Rs. 2807 lakh in the quarter under review as compared to Rs. 2762 lakh in the corresponding quarter of the previous year showing a growth of 2%.

EBIDTA has decreased from Rs. 56 lakh to a loss of Rs. 110 lakh

Loss Before Tax has gone up by 142% at Rs. 644 lakh against a loss of Rs. 266 lakh in a quarter on quarter basis.

The loss After Tax has increased from Rs. 217 lakh to a loss of Rs. 523 lakh.

News Media:

The topline for the quarter at Rs. 2471 lakh is a decrease of 3% over the topline of Rs. 2537 lakh for Q1 FY 07. As explained earlier, this drop is on account of reduction of cover price of "MiD-DAY" in Mumbai.

The PBIT for this segment registered a loss of Rs.40 lakh for the quarter against a profit of Rs.103 lakh in the corresponding period last year. This is due to our losses because of new launches and stagnancy in revenues.

Delhi edition is launched during the current quarter with fresh look replicating our Mumbai model. Both the new editions i.e. Bangalore & Delhi have reached to sizable mass in terms of circulation in this quarter.

Outdoor

There were no operations in the current year since we have closed down this division.

Film(Black Friday)

There was no further release of the film in any form during the quarter under review hence segment has not clocked any revenue and there has been no amortisation of expenses.

Radio:

The radio topline posted a rise of 55% in Q1 FY08 to Rs. 366 lakh against Rs. 236 lakh in corresponding quarter of previous year.

The Loss after Tax at Rs. 568 lakh is 128% higher than the Loss of Rs. 250 lakh reported for the corresponding quarter in FY07. This is on account of new stations, which were not in operations during Q1 of last year.

Looking forward

Print

After spreading footprint in new metros i.e. Delhi & Bangalore, our target is to attract national advertiser to monetize our efforts in creating these brands to earn high returns.

Radio

We aim to strengthen our brand "Radio One" and monetise listener base created in existing markets i.e. Mumbai, Bangalore, Delhi & Chennai

We will launch Radio Stations in Pune, Ahmedabad and Kolkata during the year.