Executive Vice Chairman & Managing Directors
Today our consolidated position as a market leader has been achieved primarily due toour experienced management team and the best industry talent.
FY2015 was a landmark year for the Company; and I am delighted to report that ouroverall performance has been extremely encouraging. It reflects the strength of ourstrategy in investing in content-driven films and leveraging our distribution rights on amulti-territory multi-platform basis. Today Eros stands on the threshold of asignificant opportunity. India's Media & Entertainment sector is evolving like neverbefore and so are the viewing preferences of audiences. The challenge is to feel thepulse of the new- age audience innovate aggressively and provide engaging entertainmentwith an edge.
India's Media and Entertainment (M&E) market is poised to grow at a CAGR of 13.9%from ' 1026 billion in FY2014 to reach ' 1964 billion by FY2019. Digital mediaadvertising in India grew by 44.5% in FY2014. The sector is also taking a cue from thecurrent Government's optimistic outlook on business sentiment strengthened by a strongvision of Digital India and taking the right initiatives to create Broadband HighwaysUniversal Access to Phones Public Internet Access Programmes etc.
The industry is on the cusp of a strong phase of growth driven by media convergenceand rising discretionary spends. Category-A films in Bollywood continue to hold sway overthe film industry. It is likely to be driven by increased consumption in Tier 2 and Tier 3cities along with continuous expansion of regional media and new digital mediabusinesses.
Equipped with a strong balance sheet size scale robust content and distributionstrategy Eros will continue to lead by capitalising on each and every opportunity thatpresents itself. We have a well organised dynamic business model that allows us torelease new films every year; and also steadily enrich our film library.
Moreover new film distribution across theatrical television and digital channelsalong with monetisation of the entire library provides us with diversified revenuestreams.
We co-produce acquire and distribute Indian films that have an immense appeal to adiverse audience spectrum. We have adopted the strategy to source content from multipleproducers / co-producers simultaneously which in turn allows us to build our film slateaggressively.
The relationships that we have cultivated with leading talent and production housesover decades has enabled us to succeed in a consistently evolving industry. It has led usto build an enormous library of over 2000 films comprising of Hindi as well as non-Hindilanguage films (Tamil Telugu Kannada Marathi Punjabi and other regional films). Thelibrary consists of recent as well as classic titles spanning different genres budget andlanguages.
Our performance during the year enabled us to reinforce our industry leadership.Revenues grew by 26.4% to ' 14410 million. These were driven by the box office successesof high-profile films like 'NH10' 'Badlapur' 'Tevar' 'Mary Kom 'Ek Villian 'SinghamReturns' 'Lingaa' 'Kochadaiyaan and Kaththi'. A total of 64 films were released duringthe year including 44 Hindi and 20 Tamil/ Telugu films. The extensive film library of over2000 films has been increasing its contribution year on year and in FY2015 cataloguerevenue contributed to 22% of the total income. Our EBIT during the year increased by20.6% to ' 3616 million driven by higher revenues and strong contribution fromhigh-margin catalogue sales.
We have excellent distribution capabilities that allow us to reach out to audiences inmore than 50 countries accessing the South Asian diaspora. These countries havesignificant demands for subtitled or dubbed Indian-themed entertainment. We seek to takeadvantage of our brand equity in Hindi films and thereby increase our non-Hindi filmbusiness by targeting regional audiences.
Technology is enabling innovation and more convenient ways to consume content in turncreating new revenue opportunities. In a changing media landscape access to high- qualityand differentiated content that consumers demand remains key to success. With the digitalparadigm being the future of entertainment we are focused on soon reaching a stage wherewe will benefit from digital revenues from ErosNow a platform owned by our parentcompany. ErosNow is at the forefront of this digital revolution with full access tolargest Indian film library music catch up TV and original content offering endlessentertainment.
In addition to our promising upcoming film slate we have launched a new motionpictures label called Trinity Pictures with a focus of making franchise films. Thislabel we believe will broaden audiences and help us in developing new revenue streamssuch as games and merchandising.
Today our consolidated position as a market leader has been achieved primarily due tothe experienced management team and the best industry talent we have and keep building on.The Eros management team consists of highly qualified and knowledgeable professionals withrelevant industry experience and together we are working towards building your Company.
Before I conclude let me thank all of you for your continued support andencouragement. We are committed to grow and create more value for all stakeholders with arenewed sense of optimism confidence and ambition.
Executive Vice Chairman and Managing Director