Colorchips New Media Ltd Management Discussions

Business Review:

The global economy remained resilient during 2025 despite continued geopolitical tensions, trade policy uncertainties, and elevated interest rates across major economies. While inflationary pressures moderated compared to the previous year, growth remained uneven across regions owing to tighter financial conditions, supply chain adjustments and subdued global trade.

According to the International Monetary Fund (IMF), global economic growth is estimated at 3.0% in 2025 and is expected to improve marginally to 3.1% in 2026. Emerging market and developing economies continued to outperform advanced economies, supported by resilient domestic demand and relatively stable inflation. Nevertheless, geopolitical conflicts, evolving trade policies and financial market volatility continue to pose downside risks to the global growth outlook.

India continued to maintain its position as one of the worlds fastest-growing major economies during FY 2025-26, supported by robust domestic consumption, sustained public investment, resilient services exports and continued digital transformation. According to the World Bank, Indias economy expanded by 7.6% in FY 2025-26, remaining the fastest-growing major economy despite heightened global trade uncertainties. Fiscal consolidation continued, the current account deficit remained manageable, and employment creation improved, supported by sustained public and private sector investments.

Indias digital economy continued to witness strong momentum during the year, driven by widespread digital adoption, rapid expansion of digital payment infrastructure and increasing technology-enabled services across sectors. Continued policy support for digital public infrastructure, innovation and ease of doing business has further strengthened Indias longterm economic outlook

Industry Structure & Developments and Outlook - Media and Entertainment Industry:

The Indian Media & Entertainment (M&E) industry continued its growth trajectory during 2025, driven primarily by digital media, advertising and live entertainment. According to the latest FICCI-EY Media & Entertainment Report, the industry grew by 9% during 2025 to reach ^2.78 trillion, outperforming earlier growth estimates and reflecting improved consumer demand, increasing digital consumption and recovery in advertising expenditure.

Digital media emerged as the largest segment of the industry, crossing ^1 trillion in revenues for the first time. Digital advertising registered a robust 26% growth and accounted for nearly two-thirds of the industrys advertising revenues, driven by increasing adoption of performance marketing, e-commerce advertising and data-driven advertising solutions. Live entertainment witnessed exceptional growth of 44%, supported by concerts, sporting events, exhibitions and large public gatherings.

Television continued to remain an important medium; however, traditional linear television advertising remained under pressure due to the migration of advertising spends towards digital platforms. At the same time, Connected TV (CTV) continued to expand rapidly, reflecting changing consumer viewing preferences and increasing consumption of OTT and digital content on larger screens.

The industry is expected to maintain a healthy growth trajectory over the medium term. According to the FICCI-EY Report, the Indian Media & Entertainment industry is projected to reach approximately ^3.3 trillion by 2028, growing at a CAGR of over 7%, with digital media, live events, filmed entertainment, animation, VFX and creator-led content expected to remain the principal growth drivers

Key growth themes include:

• Segment shifts: Digital media leads, followed by OOH, live events, and audio. Traditional and subscription revenues are under pressure.

• Advertising innovation: E-commerce, short-form video, and digital OOH are shaping the ad ecosystem.

• Emerging formats: Audio content is surging. Connected TV (CTV) and mobile apps continue to expand rapidly.

• Regulatory and competitive dynamics: Ongoing shifts in advertising patterns are influenced by evolving consumer preferences and regulatory scrutiny.

• Rapid adoption of Connected TV and premium digital content.

• Continued expansion of digital media and OTT platforms.

Outlook

The long-term outlook for the Indian Media & Entertainment industry remains positive. Increasing internet penetration, smartphone adoption, expanding digital infrastructure, favourable demographics, rising discretionary consumption and continued investments in digital technologies are expected to support sustainable growth across the sector.

Your Company continues to monitor these developments closely and remains focused on leveraging emerging opportunities, strengthening operational efficiencies and delivering sustainable value to all stakeholders

Internal Control System and their adequacy:

The Company through its management is responsible for establishing and maintaining adequate internal control over financial reporting commensurate with its size and nature of business. Our internal control systems are effective to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with the generally accepted principles of accounting. The internal control systems provide for well-defined policies, guidelines, authorizations and approval procedures.

Opportunities:

The way in which we consume news and entertainment has changed dramatically over the past decade, creating both challenges and opportunities for traditional broadcasters. Think about it: Millennial spend more time streaming content than watching it on television, and more than 30 percent of them are viewing shows on their mobile devices.

The following are the opportunities:

• The rising interest in shorter forms of content such as serialized web and YouTube segments that are a mere six to ten minutes in length.,

• Content creators have a relationship with the end consumer like never before and derived insights about users allow for content and ads to be more personalized.

• Companies that can figure out how to push discovery of their content to consumers or help them discover it for themselves will have a leg up in this competitive space.

Threats:

1. Competition from other countries like Taiwan, Philippines, Korea and China;

2. Ever changing technology;

3. Lack of awareness in foreign countries;

4. Inadequate funding for capex and investment in manpower;

5. Lack of support from government.

Challenges, Risks and Concerns:

Digitization forms a new business frontier, with geographical barriers to trade in Asia being leapfrogged by technology. The rapid growth of both domestic and cross-border e-commerce, and particularly smart phone-focused mobile commerce (m-commerce) has created real-time access to previously inaccessible markets across Asia. It has also catalyzed entire new business models and value chains, and added speed and dynamism to both B2B and B2C procurement processes. As a result, individual entrepreneurs and tech start-ups as well as regional and multinational firms can utilize a multiplicity of channels to interact with existing, newly acquired and prospective customers and clients at any time of the day or night. But the catalytic impact of digitization also brings unique challenges. Cutting through the cluttered desert of data engages the regions brightest analytical and marketing minds, while cross-border trading and trading in untapped areas within the same country can create unexpected logistical, distribution and after-sales service challenges.

As a result, the quest to seamlessly manage digital and traditional channels is becoming more complex and more resource-intensive, and choosing a specialist Market Expansion Services partner to help deliver real competitive advantage is a critical business decision.

Discussion on Financial Performance with respect to Operational Performance:

During the year under review the Company has achieved a turnover of Rs.38 Lakh, loss after tax for the current financial year was Rs.162 Lakhs. The paid-up capital of the Company as on March

31, 2026 is Rs. 17,00,99,000/- comprising of 1,70,09,900 equity shares of Rs. 10/- each. Kindly refer balance sheet for complete details and for details of key financial ratios along with explanation thereof. There is only a single segment. The Accounting treatment is in accordance with applicable Accounting standard. There is no different treatment from that prescribed in the accounting standard

Human Resources Development and Industrial Relations:

The Company firmly believes that Human Assets are more critical than physical and financial assets as they are the ones who manage and sustain the growth of physical and financial assets of the company. The Company is well on its way in establishing an integrated system of workforce, which endeavors to develop the capability of its employees that clearly aligns with the business objectives and performance. Further, we also encourage individual and team awards to sustain and institutionalize the various workforce practices. This helped in giving lots of encouragement to the workforce who have been striving hard to achieve various goals.

Cautionary Statement:

Statements in this Management Discussion and Analysis describing the Companys objective, projections, estimates and expectations may be forward looking statements within the meaning of applicable laws and regulations. Certain observations made on the industry and other players also reflect on opinion by the management and the management accepts no liability on such opinions. Actual results might differ materially from those either expressed or implied.