CMD Address on

SEA TV NETWORK
By: Akashdeep Saxena 085 and Swati Sinha 152 (Turnitin: zero percent similarity) About the company SEA TV NETWORK is a reputed name in the city of Agra when it comes to television services and local media. Being an ISO 9001: 2000 certified company trading on the BSE, its major operations consist of providing Multi System Operator services to the various local cable operators of the city and areas around. Due to good planning and implementation of incoming technologies, SEA TV has been able to register a commendable growth rate and become the undisputed leader in its city of operations. a. Macroeconomic Outlook The media and entertainment industry in India is on a growing track with the last year showing 12% year on year growth. Its net worth now stands at a considerable INR 728bn. Due to growing penetration in the tier II and III cities, the growth has been constant for the last few years along with inflow of various new media business. The industry is expected to show a healthy growth of 15% in the coming year. The industry is seeing new domains such as animation, VFX, digital media and new media taking up larger part of the market share than ever before. Moreover, after the phase 3 licensing, radio is certain to show a considerable growth in a very short time. Though declining, print will still be the second most important medium. Not only these, the film industry has well has been able to post impactful results with number of films crossing the Rs 100cr mark on the box office and even the cable and satellite rights reaching a whopping Rs 30cr plus as per the latest FICCI report. Thus at a total spend of Rs 30,000 crore for 2011, the spend on advertisements is expected to grow by 13% yet again in the coming fiscal, though it may be lesser than the 17% it recorded last year. b. Industry Scenario: As TRAi has cleared way for organized cable distribution after its recent enforcement of conditional access and digitization in the metros, the cable market has emerged as a highly attractive area for business. Due to heavy pricing of the DTH and IPTV services, the customers are back to local cable operators who can offer the same channels with digital quality at a much cheaper price. In home entertainment in India is completely driven by cable services with a 70% say in the Indian households. With further consolidation and organization on the sector, economies of scale will come into play and allow better consumer surplus. In India, there are currently only five players that make up most of the organized cable market: Asianet, Hathaway, W&W India, DEN Network and Incable Network. SEA NETWORK

is not a part of this list as it operates at a much smaller scale. With the upcoming flurry of consolidations after digitization, the number of Multi System Operators is on a rise. The 5 major MSOs named here take up around 28% of the total subscribers in India. The sector has around 6000 MSOs and 60,000 Local cable operators currently but with coming times, the latter will be on a fall as consolidation shall engulf them and hence the number of MSOs will go up. So far the former systems are concentrated only in the Tier I where digitztion is a must. c. Company Performance With a revenue of Rs 1849.41lacs over the last fiscal, the company posted a PAT of Rs 121.7 lacs. The same figures last year were Rs 1177.17 lacs and Rs 168.13 lacs respectively. Though the PAT is lower, the net profits have been almost the same. Issued and paid up capital is the same for this year as it was to the last year at Rs 12.02 crore. Due to constant scaling up and growth opportunities to new media, there has been growth in total income as compared to previous years. The company has a channel named Jinvaani which is doing considerably good and itself has helped consolidate a considerable growth and result in overall profitability. FINANCIAL PERFORMANCE (all figures in INR lacs) Particulars for the year 31 March 2012 31st March 2011 ended Total income 1278.88 1174.49 Profit (Loss) before dep. 252.11 326.10 and taxes Less depreciation 86.39 68.52 Less provision for taxes 51.02 91.59 Add deferred tax credit Profit (Loss) After Tax 114.69 166.00 d. Future outlook of the company The company seems prepared for the incoming compulsion of digitization under the latest broadcasting guidelines issued by the ministry. The conditional access system is currently applicable to the four major metros and is expected to knock on the doors of Tier II and III cities in the coming 3 years. Sea TV has updated its systems to implement the same. Thus Local Cable Operator systems are being now moved to Multi System Operator (MCO) which will be their prime model of operations. In the next five years, Sea TV aims to be the leader in organized cable operator market.