Picturehouse Media Ltd Management Discussions

This Management Discussion and Analysis Report is a "forward looking statement" and forms part of the Annual Report of the Company. It Indicates the Companys movement in the external environment vis-a-vis its own strengths and resources detailing the Companys objectives and expectations.

• INDUSTRY STRUCTURE AND DEVELOPMENT

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making significant strides. The increasing availability of fast and cheap internet, rising incomes, and increasing purchases of consumer durables have significantly aided the industry. Indias media and entertainment industry are unique as compared to other markets. This significantly aided the countrys industry and made India leading in terms of digital adoption and provided companies with uninterrupted rich data to understand their customers better. India has also experienced growing opportunities in the VFX sector as the focus shifted globally to India as a preferred content creator.

• OPPORTUNITIES & THREATS Opportunities

In the times of crisis Over the top (OTT) has come as boom to the film makers as theatrical release of movies has reduced, which has adversely impacted the revenue generation of the corporates.

OTT is still a relatively new phenomenon, it still offers great opportunities for media companies, content providers and advertisers.

Threats

Externalities causing delays in production schedules, release dates and cancellations can have a significant impact on the companys revenue and growth prospects.

The increasing adoption of pirated content can have a significant negative influence on the business, and is a major threat.

Customers now have a greater variety of alternatives available at their disposal. This makes customer retention a huge challenge since they always seek various options at affordable prices.

• OUTLOOK

Looking forward, we will continue to focus on aligning our strategies to the evolving trends in the industry. We have adopted a strategic approach to recover a significant portion of production costs. Our priority is to deliver excellent value to all our stakeholders.

• RISKS AND CONCERNS

Your Company has an appropriate risk management system in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting.

A) Competition Risks:

The Media & Entertainment industry is facing intense competition due to the widespread adoption and popularity of video distribution platforms. These platforms offer unique engagement metrics and subscription fees, adding to the competition in the industry.

B) Operational Risks:

Operations risks include gap in demand and supply, attracting and retaining key personnel, global health outbreaks and information technology. The risk of demand and supply gap is mitigated through the capacity addition at the right time, de-bottlenecking of production lines including shifting of product mix to speciality products. We strive to nurture a working environment that fosters personal and professional growth to attract and retain key personnel. A failure or disruption in our information technology systems could disrupt our operations, compromise customer, employee, vendor and other data and could negatively affect our business. Although we attempt to mitigate these risks by employing a number of measures, our systems and networks remain potentially vulnerable to advanced and persistent threats.

C) Strategic Risks

Strategic risks can be in form of changes in consumer demand, competition, intellectual property challenges and key customer attrition. Our risk mitigation activities include staying ahead in the new product development curve, relying on the patent, trademark, copyright and trade secret laws of the countries in which we operate and non-disclosure agreements. Our Key Account Team works with the purpose to maintain good customer relationships and keep the attrition at manageable level.

D) Economic Environmental Risk

External events and factors beyond the control of the Company, such as politics, laws and regulations, can impact its business operations. Economic risk, on the other hand, refers to the potential loss of money on a foreign investment due to changes in business circumstances or macroeconomic variables, such as government policies or currency fluctuations.

• DISCUSSIONS ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

• INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has a proper and adequate system of internal controls to ensure that all the assets are safeguarded, protected from unauthorized use and the transactions are authorized, recorded and reported correctly. An independent internal audit and assurance firm appointed by the Company conducts periodic audits to ensure adequacy of internal control systems, adherence to management policies and compliance with laws and regulations. The scope of work of this firm includes internal controls on accounting, efficiency and economy of operations. Wherever necessary the inputs of the Statutory Auditors are also obtained to ensure efficiency of the operations and accounting.

• HUMAN RESOURCES

We believe that our employees are valuable resources working to drive the organizations growth. The strategic alignment of the Human Resource department to our business priorities is therefore critical. The Company takes pride in the commitment, competence, and dedication of its employees in all areas of the business. Attracting, developing, and retaining the right talent will continue to be a key strategic imperative, and the organization continues to maintain a steady focus towards that.

The Company is committed to nurturing, enhancing, and retaining its top talent through superior learning and organizational development, and by shaping a performance culture that brings out the best in our people.

• DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATION THEREOF, INCLUDING