When you‘re hot you‘re hot. Other media companies may struggle with financials in a depressed market scenario but no so Balaji Telefilms Ltd. The seven-year-old production company registered a net profit of Rs 66.24 million on net sales of Rs 236.20 million in the results announced for the second quarter ended 30 September 2001.

While cost of production and telecast fees remained at the same level as Q1, staff costs almost doubled to Rs 4.3 million compared to Rs 2.6 million in the last quarter. "This is due to the increase in programming hours," says Balaji company secretary Ajay Patadia.

The company managed to continue its pace of growth. Though net sales remained at the same level as the last quarter, the bottom line improved as net profit margins have gone up from 20 per cent to 28 per cent.

The other income in the quarter has gone up from Rs 0.28 million to Rs 5.2 million, principally through dividends earned from its investments in bonds and mutual funds. "The company has invested close to Rs 160 million in mutual funds," says Patadia.

Other expenses have gone up from Rs 8.1 million in Q1 to Rs17.5 million in Q2.

One aspect that is worth noting is that there was no interest component in this quarter. "Our company has achieved the target of being a debt free company," clarified Patadia.

The board has also declared an interim dividend of Rs 2.50 per share (25 per cent on an equity share of par value of Rs 10/-), the payment date being 12 November, 2001.

The figures of the corresponding quarter of the previous year have not been drawn since the listing requirements were not applicable.

The company owned by the family of former film star Jeetendra Kapoor expects to rake in a turnover of close to Rs 1000 million at the end of the current financial year, CEO Sanjay Dosi pointed out in a recent interview with indiantelevision.com.

Obviously the production house will continue to bank on its tried and tested formula of the weepy family drama that it expects will keep it laughing all the way to the bank.

Broadcasters can relax somewhat now that the Revenue Department has ruled that commission paid to advertising agencies will not be included in the value of taxable service in respect of broadcasting services.

Broadcasting companies, slapped with a five per cent service tax in July this year, had been unsure about whether the commission to ad agencies was to be included in the taxable service.

The companies had made a representation to the finance ministry claiming that a service tax on the commission amount, if levied on both the ad agency and the broadcasters, would be tantamount to double taxation. The revenue department has now clarified that service tax is separately leviable on the commission or discounts received by the ad agencies for placing the advertisements in print or electronic media.

Usually, the gross amount paid by broadcasting agencies is indicated in the invoices raised by them on the ad agency. The commission or discount, which is usually around 15 per cent of the gross amount given to the ad agency, is deducted and the net amount payable by the ad agency to the broadcasting agency is indicated.

The finance ministry, which examined the industry‘s representations, has clarified that the value of taxable service is the amount received by the broadcaster for providing the service.

According to Ramesh Narayan, president of the Advertising Agencies Association of India, service tax had been imposed on ad agencies three years ago, an imposition which amounted to 0.75 per cent of their revenues. Agencies were not happy about the charge, which he claims is a cumbersome levy and was passed on through advertisers.

The new notification, which concerns the broadcasting companies, clearly stipulates that the 15 per cent commission due to agencies will not be included in the value of taxable service, he says.

Nickelodeon may not be a "happening" channel in India in but that is not the case everywhere. The Viacom-owned kids channel is currently running a new interactive initiative in the UK that lets viewers choose their viewing schedule via their remote control and pick the programmes they want to watch for a whole week by voting for their favorite show and then seeing it half an hour later. The initiative went into play yesterday and will run for a week.

Using an application developed by NDS Group (a News Corporation company) as part of Nickelodeon‘s successful "Watch Your Own Week" event, Nickelodeon will let its viewers vote interactively for the schedule, an NDS release says.

Viewers will be presented with three of their favourite programmes every half an hour from 8 am until 8 pm and encouraged to choose between them by presenters. Votes will be cast using the interactive application, via the BSkyB platform, which will determine what is shown next on the channel. Kids can also enter in a competition to win one of the following prizes: Playstation 2, Sony personal recordable minidisc player or a Palm Pilot personal organiser by submitting their telephone number.

Each new selection of programmes will see a fresh round of voting and Nickelodeon viewers can choose to enter a prize draw after their choice is made. Cost warnings will appear on-screen, while security systems shall ensure that only one vote is possible per session.

Kids can also vote online at www.nick.co.uk or via the telephone. Nickelodeon anticipates that over a quarter of a million votes will be received via the NDS Value@TV application during the half term special, in addition to those collected via telephone, internet and SMS. Kids are the ultimate early adopters of new technology and iTV provides a new means of connecting with them.

Nickelodeon can increase viewer retention through this innovative interactive content, which, ultimately, will result in increased revenue.