Balaji Telefilms Ltd Management Discussions

Cautionary Statement:

Statements in this Management Discussion and Analysis of Financial Condition and Results of Operations of the Company describing the Companys objectives, expectations or predictions may be forward-looking within the meaning of applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events.

The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company assumes no

?–  responsibility to publicly amend, modify or revise forward-looking statements on the basis of any subsequent developments, information or events. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include changes in government regulations, tax laws, economic developments within the country and such other factors globally.

The financial statements are prepared as per the IND AS guidelines and comply with the Accounting Standards notified under Section 133 of the Companies Act, 2013. The management of Balaji Telefilms Limited has used estimates and judgements relating to the financial statements on a prudent and reasonable basis in order that the financial statements reflect in a true and fair manner the state of affairs and loss for the year.

Global Economic Overview

The global economy entered 2026 facing new headwinds. After withstanding higher trade barriers and elevated uncertainty through 2025, global activity was challenged by the outbreak of conflict in the Middle East. Assuming the conflict remains limited in duration and scope, the International Monetary Fund (IMF) projects global growth to slow to 3.1% in 2026 and 3.2% in 2027 - below recent outcomes and well under pre-pandemic averages and a deceleration from the estimated 3.4 percent achieved in 2025.

Advanced economies are expected to expand modestly, with the United States projected to grow 2.3% in 2026 and the euro area subdued at around 0.9%, while the United Kingdom slows before a gradual recovery. Global headline inflation is projected to tick up in 2026, largely on rising energy costs, before resuming its decline in 2027 - the IMF places global inflation near 4.4% in 2026. Rising commodity prices, firmer inflation expectations and tighter financial conditions are testing the resilience seen in recent years, with pressures concentrated in emerging market and developing economies, especially commodity importers.

The balance of risks is decisively to the downside. A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations around artificial intelligence-driven productivity, or renewed trade tensions could weaken growth and destabilise financial markets, while elevated public debt heightens vulnerabilities. World trade volume growth is expected to slow down in 2026 before rebounding in 2027.

Source: IMF Wo r ld Economic Outlook, Ap r il 2026 - Global Economy i n the Shadow of War

Indian Economic Overview

India continued to be the fastest-growing major economy, defying the global slowdown. Real GDP grew at a strong pace through FY 2025-26, with quarterly prints of 7.8% in Q1 FY 2025-26 and 8.2% in Q2 FY 202526 comfortably exceeding expectations, supported by robust domestic demand, resilient services activity, manufacturing expansion and sustained government capital expenditure. The Reserve Bank of India (RBI) has estimated full-year real GDP growth at around 7.6% for FY 2025-26 under the new GDP series, among the sharpest expansions in recent years.

Growth was underpinned by accelerating private consumption, a pick-up in gross fixed capital formation and elevated public expenditure, even as exports faced pressure from soft global demand and trade frictions. Easing food inflation and a phase of monetary easing - with the RBI lowering the repo rate to 5.25 percent -

supported discretionary and low-ticket consumption, which is particularly relevant for the media and entertainment sector.

Looking ahead to FY 2026-27, the RBI projects real GDP growth of 6.9%, assuming the impact of the West Asia conflict remains contained, with risks tilted to the downside owing to global uncertainties, higher imported crude oil prices and supply-chain challenges. Consumer price inflation for FY 2026-27 is projected at around 4.6%. Strong corporate and banking sector balance sheets, high-capacity utilisation and continued government capex are expected to keep growth momentum intact, keeping India among the fastest-growing major economies in the world.

Sou r ce: RBI p r ojections (Outlook Bus i ness, May 2026), ?–  RBI FY2025-26 GDP est i mate (DD News, Ap ri l2026)

Media and Entertainment (M and E) Sector

Overview: Indias Media and Entertainment (M and E) sector continued its expansion in 2025, growing 9% YoY to INR 2.78 trillion (around $ 32 billion), outpacing nominal GDP per-capita growth of 7.7%, according to the FICCI-EY Media and Entertainment Report 2026 - Stories, scale and impact: Unlocking Indias media and entertainment economy. Growth was driven primarily by digital media, advertising and live experiences, even as select segments faced regulatory and cost pressures. Excluding online gaming - which was impacted by the ban on real-money gaming - the sector grew 11.8%.

The defining structural shift of the year was the rise of digital media, which crossed the INR 1 trillion mark for the first time and overtook television to become the single largest segment of the industry - a milestone after television led for two decades. Digital advertising grew 26% to INR 947 billion, accounting for nearly two- thirds (63%) of total advertising revenues, as advertiser categories shifted spends toward performance-led, measurable and commerce-linked formats.

Looking ahead, the M and E sector is expected to grow to INR 3.3 trillion by 2028 (CAGR of over 7 %), with new media expected to account for over 50 % of total industry revenues - driven by digital media, live events, filmed entertainment and animation and VFX. Increasing smartphone penetration, the rapid adoption of Connected TVs, growth in regional-language content and the rise of experiential consumption are expected to continue reshaping the industry. As the sector moves toward a more converged ecosystem, hybrid revenue models combining advertising, subscription and commerce are expected to define its next phase of growth.

Sou r ce: FICCI-EYMandE Report2026(EYIndia newsroom, 24March2026)

Segment Reviews

Television Industry

Televisions total reach continued to grow even as its economics shifted decisively toward digital. Total TV households rose to 193 million in 2025 (from 190 million in 2024) and are expected to cross 200 million by 2028. Within this, linear Pay TV lost ground - falling by around 11 million subscriptions in 2025 - while Free TV grew by about 4.5 million and Connected TV by around 10 million. The number of television channels increased to 956, with around 65% of channels now Free-to-Air.

Linear TV revenues fell 9.2 % in 2025, declining for the fourth consecutive year. Linear TV advertising revenue declined 10.3 %, driven by an 11.5 percent drop in ad volumes as brands reallocated budgets toward point-of- sale advertising and as the ban on real-money gaming impacted sports. Linear TV subscription revenues decreased 8.3 percent, despite a 2.4 percent rise in TV subscription ARPU to an average of INR 288 (gross of taxes). Importantly, Connected TV advertising revenues grew 42 % to INR 99 billion, keeping the combined advertising revenue of Linear and Connected TV broadly stable at INR 362 billion. Average weekly television reach remained stable at around 745 million, with entertainment, music and movies accounting for 80 percent of viewership and non-Hindi content continuing to command over 50 percent of total viewership.

Looking ahead, linear TV revenues are expected to decline at a CAGR of 5 percent until 2028 (advertising falling at 7 percent and subscription at 3 percent), even as Connected TV advertising revenues grow at 18 % to reach INR 164 billion by 2028. The shift of viewership from linear television to YouTube and Connected TV remains the defining trend for the segment

Source: FICCI-EY M and E Report 2026 (Television chapter),?–  Balaji Telefilms Limited Telefilms Q4 andFY2025-26 Performance Update

Filmed Entertainment Industry

The film segment recorded a landmark year. Filmed entertainment revenues grew 9 percent to surpass INR 200 billion for the first time, reaching INR 205 billion in 2025. Domestic gross box office collections grew 14 percent from INR 114 billion in 2024 to an all-time high of INR 130 billion in 2025. A total of 1,972 films (including 270 dubbed films) were released in theatres during 2025, up 8 percent from 1,823 in 2024, while the screen count grew 1 percent to 10,033 screens. Admissions increased marginally by 1.4 percent to 868 million and 37 films earned INR 1 billion (INR 100 crore) or more at the box office. The average ticket price grew around 20 percent in 2025, with theatrical revenues rising 14 percent primarily on the back of higher ticket prices.

The industrys reliance on theatrical earnings deepened as ancillary revenue streams softened: digital/OTT rights values declined 8 percent and broadcast rights declined 10 percent, as buyers rationalised their slates, adjusted values based on theatrical performance and tightened control over OTT profitability. Of around 500 films that were released on OTT platforms in 2025, only 30 were direct-to-digital releases (down from 60 in 2024). Indias overseas footprint expanded, with 390 Indian films released across 40 countries (up from 359 films across 38 countries in the previous year).

The filmed entertainment segment is expected to grow at a 7 % CAGR to reach INR 253 billion by 2028, supported by lower-cost cinema infrastructure bridging the gap across thousands of Indian pin codes without cinema halls, redefined release windows to optimise theatrical monetisation while enabling simultaneous OTT releases in non-core markets and an increasing share of production (over star) costs as production houses prioritise quality.

Source: FICCI-EYM and E Report 2026 (F i lmed Entertainment chapter); Balaji Telef il ms Lim i ted Telef il ms FY2025-26 Indus t ry Overv i ew

Indian Video Over-The-Top (OTT) Industry

Digital media decisively overtook television to become the largest segment of Indias M and E industry, growing 30.5 percent in 2025 and becoming the first M and E segment to cross INR 1 trillion (INR 1 lakh crore). Indias OTT market alone crossed INR 272 billion in 2025. Digital advertising grew 26 % to INR 947 billion - accounting for nearly two-thirds (63 %) of total advertising - as advertiser categories led by FMCG, travel and pharma shifted spends from traditional to digital media. Digital subscription revenues grew 60 %, with video subscription revenues rising 61 % to INR 148 billion, as 143 million households paid for 216 million video OTT subscriptions.

Consumption metrics underscore the scale of the opportunity. Indians spent 1.2 trillion hours on their phones in 2025 (up 9 percent), with 59 percent of that time spent on media and entertainment. Video viewers increased by 4 percent (22 million) to reach 572 million, while 56 percent of all content produced for digital platforms was created in regional languages - up from 27 percent in 2020 - reflecting strong non-Hindi growth. Connected TVs crossed 68 million households, of which around 40 million were active each week, making CTV a central pillar of the large-screen digital shift. Premium live events continued to drive engagement spikes, with the 2025 IPL season recording an online reach of 652 million people.

Looking ahead, the digital media segment is expected to grow at a 14 percent CAGR to reach INR 1,640 billion by 2028, with Connected TV households crossing 90 million (of which around 67 million active weekly). Platforms are expected to concentrate on unique and local content, combining advertising with subscriptions for revenue, reusing old content on FAST (Free Ad- supported Streaming TV) channels and making money from all aspects of their intellectual property - while also seeing an increase in micro-drama and short videos as popular new formats.

Sou r ce: FICCI-EY M and E Report 2026 (D i g i tal Med i a chapter) consolidated labour codes (the Code on Wages, 2019; the Code on Social Security, 2020; the Industrial Relations Code, 2020; and the Occupational Safety, Health and Working Conditions Code, 2020) effective November 21, 2025; the incremental impact assessed by the Company has not been material. The continued policy focus on Indias creative economy provides a supportive backdrop for the sectors long-term growth.

Sou r ce: Bal a j i Telef il ms L i m it ed Telef il ms Aud i ted F i nancial Resul t s for the Quarter and Year ended Ma r ch 31, 2026 (No t es to Results)

Regulatory and Government

Developments j

During the year, the OTT application ALTT was discontinued on July 25, 2025, consequent to the directive of the Ministry of Information and Broadcasting (MIB), Government of India, to the intermediaries. As a strategic evolution of its digital presence, the Company launched a new OTT application, Kutingg, in September, 2025, comprising vertical short episode-based content. The Government of India also operationalised the four

I

Company Overview

Established in 1994, Balaji Telefilms Limited (referred to as Balaji Telefilms Limited Telefilms or the Company) stands as a pioneering force in the Indian television, film and digital entertainment industry. Founded by Mr. Jeetendra Kapoor and led by Mrs. Shobha Kapoor and Ms. Ektaa R. Kapoor, the Company has over three decades of industry presence. Its operations span television, movies and subscription- and advertising-based video-on- demand (SVOD/AVOD) segments, supported by a leading digital content business. The Company has produced over 200 TV shows (including DD and regional) and over 50 movies, alongside a growing slate of digital and short- form offerings and continues to command among the highest realisations per hour in television.

Resources and Liquidity

As on March 31, 2026, the consolidated net worth (equity attributable to owners of the Company) stood at approximately INR 623.9 crore, with total consolidated equity of approximately INR 621.1 crore. The Company maintained a healthy liquidity position, with over INR 163 crore in liquid cash held across banks and mutual funds, alongside a largely debt-light balance sheet. The Company is comfortable maintaining a minimum liquidity threshold of around INR 125-150 crore for its Motion Pictures business. The merger-led GST input credit of approximately INR 117 crore and the availability of brought-forward losses (expected to result in no material direct tax incidence over the next four to five years) further strengthen the Companys financial position.

During FY2025-26, the Company entered into a strategic long-term creative collaboration with Netflix and expanded its digital portfolio with the launch of new platforms and verticals - including Kutingg (vertical short-format OTT), AstroGuide (a premium astrology app), Balaji Studio (an agile production platform) and Hoonur (a talent management vertical) - reflecting a digital-first strategy that leverages Al, automation and intellectual property (IP).

Our Financial Overview

Source.?–  Balaji Telefilms Limited Telefilms Audited Consolidated Financial Results and Q4/FY 2025-26 Performance Update; Q4 and FY

2025-26 Earnings Concaii Transcript (May27, 2026)

Particulars J Cr.)	FY2025-26	FY2024-25
Revenue from Operations	210.8	453.1
Gross Margin	19.8	109.7
Gross Margin %	9.38%	24%
PBT	(64.02)	(10.2)
PAT	(49.6)	84.6
EPS ( Rs.)	(4.09)	8.41

Source: Balaji Telefilms Limited Telefilms Audited Consolidated Financial Results for the Quarter and Year ended March 31, 2026

Business Performance

Developments in Business During the Year

?€? Amalgamation Completed: The amalgamation of ALT Digital Media Entertainment Limited (ALT) and Marinating Films Private Limited (MFPL), both wholly owned subsidiaries, with the parent Company (effective date April 1, 2024). The merger is aimed at consolidating content production operations, enhancing operational efficiencies, strengthening the Groups financial position, unlocking growth potential and delivering a beneficial tax impact.

?€? Strategic Collaboration With Netflix: The Company entered into a long-term creative partnership with Netflix to develop diverse, high-quality content across formats, leveraging Balajis storytelling legacy and Netflixs global reach. The Lock Upp series is among the upcoming titles slated for the platform.

?€? Digital Platform Refresh: Following the

discontinuation of ALTT in July 2025, the Company launched Kutingg (vertical short-format OTT) in September 2025, alongside AstroGuide (a premium astrology app that clocked 2.5 lakh downloads within 24 hours of launch), Balaji Studio (an agile next-gen production platform) and Hoonur (a talent management vertical).

?€? Successful Theatrical Release: Bhooth Bangla emerged as a blockbuster hit with worldwide gross

Segment-wise Performance

box office of over INR 240 crore, with Vvan and Hero Ki Horroin among the upcoming releases.

Strong B2b Digital Order Book: The digital (commissioned) business carried an order book of over INR 350 crore with leading OTT platforms, with approximately INR 50 crore being added each quarter, providing strong forward revenue visibility. Of this, the Company expects to realise over INR 135 crore within a year.

Deepening Of Ott Partnerships: The Company expanded its collaboration with Netflix, with two new web series under development (a large-scale period drama and a premium show); Lock Upp and a show tentatively titled Koke are slated for release in FY2026-27. The Company also has a show in the pipeline in collaboration with Amazon and entered into a strategic collaboration with Vertigo TV (through the Balaji Studio model) to produce Hindi vertical micro-dramas for mobile-first audiences.

Merger-Led Tax Benefits: The integration of ALT and

Marinating Films resulted in a Goods and Services Tax (GST) input credit of approximately INR 117 crore, a direct cash benefit to the balance sheet. On account of brought-forward losses across businesses, the Company expects to have no material incidence of direct tax for the next four to five years.

Source: Balaji Telefilms Limited Telefilms Q4 and FY 2025-26 Performance Update / Media Release (May 26, 2026): Q4 and FY2025-26 Earnings Concall Transcript (May 27, 2026)

(FY 2025-26, Consolidated)	Revenue ( J Cr.)	EBITDA ( J Cr.)	Revenue Mix	(FY 2025-26, Consolidated)	Revenue ( J Cr.)	EBITDA ( J Cr.)	Revenue Mix	(FY 2025-26, Consolidated)	Revenue ( J Cr.)	EBITDA ( J Cr.)	Revenue Mix
Commissioned	163.9	(13.4)	76%	Movies	15.3	(31.2)	7%	Digital (B2C)	35.8	(19.4)	17%

(TV + Digital)

Commissioned (Television + Digital)

The Commissioned segment - comprising commissioned television and digital content - remained the largest contributor, accounting for approximately 76% of consolidated revenue with revenues of about INR 163.9 crore in FY2025-26. Overall demand for television content remained stable, with the Companys shows continuing to generate strong audience interest. Kyunki Saas Bhi Kabhi Bahu Thi 2 and Naagin 7 topped the TRP charts during the year. The Company maintained its leadership in prime-time television through marquee shows on Jiostar India, including Naagin 7, Kyunki Saas Bhi Kabhi Bahu Thi 2 and the capsule show Kyunki Rishton Ke Bhi Roop Badalte Hain.

The television business saw temporary softness during the year on account of show transitions and the broader paradigm shift away from traditional TV, with broadcaster investment into content moderating and show tenures shortening to a 6-9 month norm. Encouragingly, EBITDA in the television segment turned around sequentially, improving from a loss of INR 7 crore in Q3 FY 2025-26 to a profit of INR 4 crore in Q4 FY 2025-26. The Company is rebuilding its television pipeline to support a gradual recovery, while increasingly using commissioned (B2B) work for leading OTT platforms - expected to scale meaningfully in FY2026-27 - to compensate for the structural decline in the traditional television model.

Movies

The Films segment reported revenues of approximately INR 15.3 crore in FY2025-26, reflecting a lighter theatrical recognition year relative to FY2024-25. The marquee release Bhooth Bangla - directed by Priyadarshan and starring Akshay Kumar - emerged as a blockbuster with worldwide gross box office of over INR 240 crore and received an excellent audience reception. The Company has built a clear three-year content slate of 17 films, with four to six films planned for release each year; four films are slated for FY2026-27, of which three had already been pre-sold with around 99% of the cost of production recovered.

The Company continues to follow a de-risked, pre-sales- led business model, recovering almost the entire cost of production before a films release - with a significant share funded by the platforms - thereby reducing working capital requirements and risk exposure to theatrical performance, while focusing on the creation and retention of intellectual property that supports sequels. The increase in inventory during the year (to approximately INR 207 crore) is largely attributable to films under production, principally Bhooth Bangla, Vvan and Hero Ki Horroin; such inventory is amortised from the point of first (theatrical) monetisation and fully written off by the final leg of monetisation. The Company has reoriented its film strategy around turnaround time and return on capital, with a typical investment of around INR 125-150 crore deployed in Motion Pictures at any given time. Upcoming projects include Vvan and Hero Ki Horroin.

Digital

The Digital (B2C) business recorded revenues of approximately INR 35.8 crore in FY2025-26, representing about 17 percent of consolidated revenue. The Company is shifting from a pure SVOD model to a hybrid (SVOD and AVOD) approach to expand its subscriber base and subscription-based revenue. With the discontinuation of ALTT, the Company launched Kutingg, comprising vertical short episode-based content and AstroGuide, a premium astrology app with around 1.8 million app installs as part of its service-diversification strategy. The digital strategy is increasingly focused on YouTube and Meta (with over 11 million YouTube subscribers), B2B FAST channel placements to extend the content lifecycle, advertiser-funded programming and leveraging AI, automation and owned IP to drive growth.

A central achievement during the year was the sharp reduction in digital cash burn. Against an annual cash burn of approximately INR 125-145 crore at the digital business a couple of years earlier, the Company brought the cash loss down to around INR 0.5 crore per month (approximately INR 6 crore for the year), inclusive of newer launches, with the overall digital business expected to turn cash positive in FY2026-27. The Company is also building new growth verticals - including Balaji Studio (an independent-creator and studio model), the Meta content business and Hoonur, a talent-management agency with a pool of over 50 artists - alongside a captive in-house AI team that has developed short-form/ reels content and an AI music library and is being scaled to support production efficiency and VFX across formats.

Source: Balaji Telefilms Limited Telefilms Q4 and FY 2025-26 Performance Update; Audited Segmental Results (FY2025-26); Q4 and FY2025-26 Earnings Concall Transcript (May27, 2026)

Significant Changes in Key Financial Ratios

In accordance with the requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, details of significant changes (i.e. changes of 25% or more) in key financial ratios for FY2025-26 as compared to FY2024-25 are disclosed in the audited financial statements forming part of the Annual Report. The principal movements during the year were driven by the lower revenue base and theatrical recognition in FY2025-26 (Revenue from Operations of INR 210.8 crore versus INR 453.1 crore in FY2024-25), the swing from a profit after tax of INR 84.6 crore in FY2024-25 (which benefited from deferred tax asset creation on account of the merger of subsidiaries)

to a loss after tax of INR 49.6 crore in FY2025-26 and the resulting impact on profitability-linked ratios such as net profit margin, return on equity, return on capital employed and the interest coverage ratio.

Particulars	March 31, 2026	March 31,2025	% Change
Current Ratio	2.66	3.84	(30.73%)
Debt To Equity Ratio	0.02	0.01	100%
Interest Coverage ratio		0.85
Return on Equity Ratio	-0.07	0.16	(143.75%)
Inventory Turnover Ratio	1.11	2.13	(47.88%)
Trade Receivables Turnover	2.77	4.05	(31.60%)
Trade Payables Turnover Ratio	2.15	4.02	(46.52%)
Net Capital Turnover Ratio	0.57	1.13	(49.55%)
Return On Capital Employed	-0.09	-0.00	(100%)
Return On Investment	-0.07	-0.00	(100%)
Net Profit Ratio	-0.22	0.20	(210%)

The ratio table (Cur r ent Ratio, Debt-Equ i ty Ratio, Return on Equ i ty, Inventory Turnover, T r ade Receivables Turnover, Trade Payables Turnover, Net Cap i tal Turnover, Net P r ofit Ra t io, Re t u r n on Cap it al Emp l oyed and Retu r n on Investment) together w i th the pe r centage change and any e x planatory no t es for each ra ti o, should be rep r oduced here d ir ec t ly from the aud i ted financial statements for FY2025-26.

OPPORTUNITIES AND THREATS WITHIN THE INDIAN MANDE SECTOR

Opportunities Threats

?€? Digital Transformation: With digital media now the largest MandE segment, the rapid adoption of OTT, Connected TV and short-form formats enables content creators to reach wider audiences and explore innovative, hybrid monetisation models.

?€? Regional Expansion: Regional-language content accounted for around 56 % of digital content produced in 2025, offering significant scope to tap diverse language markets and audience preferences.

?€? Strategic Partnerships: Collaborations with

international studios and streaming platforms

- such as the Companys long-term partnership with Netflix - facilitate cross-border distribution of Indian content and open new revenue streams.

?€? Technological Innovations: Emerging technologies including AI, automation, AR and VR can lower production costs, accelerate timelines and enable more immersive storytelling and audience engagement.

?€? IP-led Monetisation: A 360-degree approach to IP

- spanning sequels, OTT spin-offs, FAST channels, gaming and merchandise - allows the Company to extract greater lifetime value from its content library.

?€? Economic Instability: Economic uncertainty,

geopolitical conflict and shifting consumer spending patterns can affect advertising budgets and discretionary entertainment spending.

?€? Regulatory Uncertainty: Evolving regulations

and Government interventions - such as recent Government directive discontinuing certain apps - pose uncertainties for the digital and broadcast businesses.

?€? Competition from Global Players: Global streaming platforms and the proliferation of user-generated content intensify competition for audience time and revenue.

?€? Technological Disruption: Rapid technological evolution and shifting consumer preferences require continuous innovation and investment to remain competitive.

?€? Pressure on Traditional Media Economics:

Continued decline in linear TV advertising and Pay TV subscriptions, along with softening digital and satellite rights values, can weigh on legacy revenue streams.

Risk Management

Balaji Telefilms Limited Telefilms Limited places strong emphasis on proactive and comprehensive risk management as a cornerstone of its operational strategy. The Company systematically identifies, assesses and addresses potential risks to safeguard its reputation, business continuity and financial health. Through effective controls and continuous monitoring, the Company strives to reduce both the likelihood and impact of adverse events. Some of the prominent risks associated with the M and E industry and the Companys mitigation approach include:

?€? Regulatory Risk: The Company works closely with regulatory authorities to proactively respond to policy changes while mitigating risks through diversified revenue streams, evidenced by its successful transition from ALTT to Kutingg.

?€? Piracy Risk: Advanced digital rights management solutions, coupled with coordination with law enforcement agencies, help prevent content piracy and protect revenue generation.

?€? Technological Risk: Ongoing investments in

innovation, artificial intelligence and automation enable the Company to adapt to technological advancements and evolving consumer behaviour.

?€? Censorship Risk: Ethical content development, compliance with regulatory norms and continuous engagement with authorities help preserve creative freedom while ensuring regulatory adherence.

?€? Economic Risk: A diversified revenue base and prudent cost management practices help reduce the impact of economic downturns on advertising revenues and consumer spending.

?€? Competition Risk: The Company enhances its market position through regionally relevant content and strategic collaborations with global platforms such as Netflix to broaden its reach and strengthen competitiveness.

?€? Talent Risk: Competitive remuneration, professional growth opportunities, an innovative work environment and the Hoonur talent-management vertical help attract, develop and retain skilled talent.

?€? Concentration Risk: A well-diversified portfolio across commissioned television, films and digital businesses, supported by a de-risked film strategy and a healthy B2B digital order book, minimises reliance on any single revenue stream.

?€? Data Privacy Risk: Strong data security frameworks safeguard consumer information while ensuring regulatory compliance and maintaining transparency in data management.

Human Resources

Balaji Telefilms Limited Telefilms recognises its workforce as a cornerstone of success in the dynamic media and entertainment industry and is deeply committed to their holistic development and well-being. As of March 31, 2026, the Company employed 105 individuals and followed a rigorous, inclusive recruitment process to attract top talent. Continuous learning is prioritised through on-the-job training, mentoring, coaching and safety workshops to keep employees industry-ready. To acknowledge employee contributions, the Company offers competitive salaries, performance-based incentives and comprehensive health benefits, with transparent, merit-based management of compensation, schedules and career progression. The Company also promotes wellness and social responsibility through employee engagement and community initiatives, reinforcing its commitment to both employee welfare and broader community engagement.

Internal Control Systems and Their Adequacy

Balaji Telefilms Limited has implemented a strong internal control framework designed to uphold financial integrity and safeguard assets across its operations. The Company enforces comprehensive internal financial control standards that ensure efficiency and adequacy across all functional areas. Regular reviews of statutory and internal audit findings by the Board of Directors enable timely identification of gaps and corrective actions. The

Audit Committee, comprising Board members, plays an active role in evaluating and enhancing the effectiveness of these controls. The Statutory Auditors, Deloitte Haskins and Sells LLP, have issued an audit report with an unmodified opinion on the audited financial results (standalone and consolidated) for the year ended March 31, 2026. Recognising the evolving nature of the business and regulatory environment, the Company remains committed to continuously updating its policies and procedures, ensuring its internal control systems remain robust, relevant and effective.

Source: Independent Auditors Report (Deioitte Haskins and Sells LLP) on FY2025-26 Financial Results

Outlook

Indias M and E sector outlook is structurally positive, with the industry projected to grow from INR 2.78 trillion (2025) to INR 3.3 trillion by 2028 at a CAGR of over 7 %, led by digital. Digital media - now the largest segment, having crossed INR 1 trillion - is set to reach INR 1.64 trillion by 2028 (14 % CAGR) and filmed entertainment to grow to INR 253 billion (7 % CAGR), even as linear TV declines around 5 % CAGR, partly offset by Connected TV advertising rising to INR 164 billion. Growth will be driven by rising smartphone and Connected TV penetration, regional and short-form content, live experiences, hybrid advertising-subscription-commerce models and AI adoption - supported by rising incomes and a young, digitally-native population.

Balaji Telefilms Limited continues to be a key player in Indias Media and Entertainment industry, leveraging its strong brand equity, rich content library and longstanding industry relationships. The Company has navigated structural changes in the industry, including the shift from traditional television to digital-first, IP-led content consumption. The successful amalgamation of ALT Digital Media Entertainment Limited and Marinating Films Private Limited, completed last year, has enhanced operational efficiencies, created resource synergies and is delivering tax benefits, expected to continue over the next four to five years.

FY 2025-26 has been a transformational, transitional year - one in which the Company built a stronger content pipeline, expanded its digital capabilities and repositioned itself for long-term growth across platforms. Pressure on the financial performance reflects industry headwinds, lower activity in the television segment and continued investment in the digital ecosystem; however, the Company has a strong future content pipeline. Balaji Telefilms Limited expects FY 2026-27 to be a year of execution, improved content monetisation and gradual business normalisation across segments, starting from the first quarter.

Over the next two to three years, the Company expects its business mix to shift meaningfully - evolving from a television production house into an intellectual-property- led content creator, with Motion Pictures expected to

become a large contributor to topline and profitability (driven by a 17-film, three-year slate and a de-risked, pre-sales-led model), followed by the digital business, while television remains an important backbone. The commissioned (television plus OTT/B2B) business is expected to scale on the back of premium shows for Netflix (including Lock Upp and Koke) and a show with Amazon, supported by a robust order book. The digital business is expected to grow on the back of newer formats such as vertical micro-dramas; plus the Balaji Studio model, the Meta content business, Hoonur (talent management) and AstroGuide are expected to complement growth.

Despite headwinds from regulatory uncertainties in digital media, intensifying competition from global players and continued pressure on traditional TV economics, Balaji is well positioned to leverage its strengths to capitalise on macro and sectoral opportunities. The Companys ability to balance creative innovation with disciplined execution, while focusing resources on the creation and monetisation of intellectual property and the leveraging of digital platforms, will be key to sustaining long-term value creation.

Source: Balaji Telefilms Limited Q4 and FY 2025-26 Performance Update; Q4 and FY2025-26 Earnings Concall Transcript (May27, 2026) FICCI-EY M and E Report 2026