ANNUAL REPORT 2000 - 2001
SAREGAMA INDIA LIMITED
THERE COMES A TIME IN THE AFFAIRS OF MEN, SAID THE BARD, WHICH, WHEN TAKEN
AT THE FLOOD, LEADS ON TO A FORTUNE... SAREGAMA INDIA LIMITED IS PRECISELY
AT THAT MOMENT IN THE HISTORY OF ITS EXISTENCE. THE COMPANY HAS REACHED A
CRITICAL THRESHOLD OF SUCCESS - MARKET SHARE AND FINANCIAL HEALTH - WHICH
IT MUST NOW LEVERAGE AND EMERGE AS THE WORLD'S PREMIER INDIAN MUSIC
COMPANY. THIS IS HOW WE EXPECT TO DO IT.
Over the last few years, Saregama adequately explored the predictable means
of generating incremental growth. Result: a 17.3 per cent growth in volume
in 2000-01 over the previous financial year.
While this performance would have delighted most people, we at the company
are clearly unimpressed. Because, in our opinion, we have only touched
upon the alaap of what promises to be a rich and rewarding raga of success.
To accelerate growth over the foreseeable future, Saregama will need to
think out of the box - to manage its available catalogue with more
creativity than it has done in the past, move its music closer to consumers
(instead of the reverse) and take its music to places it has never been
Saregama's growth in excess of the politely incremental can only transpire
if the company evolves its market focus. From the well-penetrated urban to
the under-explored rural. As a result, starting from the latter half of
2001-02, Saregama expects to re-orient its pricing, supply chain and
distribution model to generate an increasing component of its income from
the rural geographies of the country.
Growth alone will not be enough. Saregama will need to bring its cost
structure down to a point where it can absorb a trough (at worst) without
bleeding resources and ride a crest by maximising the surplus.
Over the last year, Saregama embarked on the exercise to benchmark its
costs in line with the global industry standards. This benchmarking - an
interplay between people, assets and distribution - will ensure that the
organisation is continuously rightsized for a reasonable throughput of
Saregama also expects to accelerate this throughput through the creative
management of content whose copyright costs have already been expensed.
This is expected to translate the incremental revenue into profits for the
The new Saregama is equipped to address the challenge of this 'bigger-
better-stakeholder' cycle. Partly because it,is a re-invented company with
a new spirit. More transparent. More energetic. More responsive.
+ Reflected in a stronger IRR orientation across the organisation.
+ Reflected in a change in the mood from the lethargic to the proactive,
resulting in a pipeline of nearly ten films by highly visible film markets
for release in 2002-03.
+ Reflected in a workplace that is more international in its outlook - more
responsible, more professional, more demanding.
The company expects to complete the virtuous cycle through the attractive
reward of its shareowners.
Saregama expects to unleash value more aggressively through the use sound
of strategy (explained earlier). The company expects to report its
performance completely and transparently to shareowners. The company
expects to incorporate Best Practices and protect value through a more
aggressive Corporate Governance process.
While we have already embarked on the initiatives, the results will start
getting noticed from the later part of the current financial year and into
the next. As a result, the current year is expected to be one of
consolidation while we expect to see attractive growth from 2002-03 onwards
We expect that this re-invention - our third in three years - will have two
outcomes. A more predictable business model, higher profits and increased
value for shareowners over the foreseeable future. And the willingness to
re-invent ourselves yet again by the time you get next year's annual