Padmalaya Telefilms Ltd Management Discussions

MEDIA AND ENTERTAINMENT INDUSTRY OVERVIEW

The Indian Media and Entertainment (M&E) industry remains one of the fastest-growing sectors of the economy. According to the Indian Brand Equity Foundation (IBEF) and industry reports, the sector is expected to continue its upward trajectory, driven by: ? Rising digital adoption and internet penetration, which have transformed the content consumption landscape; ? Growing advertising revenues across television, digital, and regional media; ? Expanding OTT platforms and subscription-based content models; ? Increased use of mobile devices and data affordability, making content more accessible; and ? A young demographic with increasing disposable incomes, creating strong demand for diversified entertainment offerings.

The digital segment is projected to remain a major growth driver, complemented by opportunities in regional content, gaming, and animation & VFX.

As per the Indian Brand Equity Foundation Report, the Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. The Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues. The industry has been largely driven by increasing digitization and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.

COMPANYS PERFORMANCE

Business Performance Review and Out-look for the current year

During the year under review, the Company has reviewed all its business divisions and the company could not reach to the expected level despite of all its efforts to strengthen its stand in the market. And your companys performance will be based on the economy of the country in the years to come.

PRINCIPAL RISKS AND UNCERTAINTIES

Piracy: Piracy of the produced content, under the purview of intellectual property rights, can adversely affect revenues and profitability.

Mitigation: Industry members have set up an Antipiracy Society (AACT) to fight the menace.

Strategic Response:

? Streamlining operations and rationalizing costs;

? Exploring collaborations and partnerships to optimize content monetization;

? Increasing focus on intellectual property (IP) creation to strengthen future revenue streams;

? Monitoring regulatory developments in broadcasting, digital distribution, and taxation for better compliance planning.

Outlook :

The Company expects FY 2025 26 to be a year of strategic consolidation, focusing on rebuilding its portfolio and strengthening its financial position. The future outlook is dependent on the pace of macroeconomic recovery, growth in advertising spends, and the Companys ability to leverage emerging platforms.

OPPORTUNITIES AND THREATS Opportunities:

? Rapid growth of the digital content ecosystem and OTT platforms offers monetization opportunities. ? Rising demand for regional content presents a scalable market for content producers. ? Increased adoption of technology-driven production tools and animation/VFX opens up export potential. ? Expanding global streaming markets enable Indian content creators to access wider audiences.

Threats:

? Persistent piracy and unauthorized content distribution impact revenues and profitability.

? Intensifying competition from both domestic and global players in the streaming and entertainment space. ? Regulatory uncertainties, including taxation and broadcasting policies, which may affect operations. ? Shifting consumer preferences and rapid technological changes requiring continuous innovation.

Principal Risks and uncertainties:

1. Piracy of Content:

Piracy remains a critical challenge, leading to revenue leakage and undermining intellectual property protection. Mitigation: Active engagement with industry associations, including the Anti-Piracy Society (AACT), deployment of technology-driven anti-piracy measures, and legal enforcement actions.

2. Market Volatility:

The Companys performance is closely tied to advertising spends and broader economic conditions, which remain volatile. Mitigation: Diversification of content formats and markets, along with tighter cost controls.

Regulatory Risks:

Frequent regulatory updates in broadcasting, taxation, and compliance increase complexity. Mitigation: Continuous monitoring of regulatory developments and strengthening of internal compliance frameworks.

By Order of the Board of Directors For PADMALAYA TELEFILMS LIMITED

Sd/- Sd/- G.V.Narasimaha Rao S Sreenivasa Rao CEO & Executive Director Director (DIN: 01763565) (DIN : 01691043)

Sd/- Place: Hyderabad MVRS Suryanarayana Date: 5 th September 2025 CFO & Compliance Officer