Prime Focus Ltd Management Discussions

Management Discussion & Analysis

Section 1 Company Profile

Established in 1997, Prime Focus Limited (hereinafter referred to as PFL or the Company) offering comprehensive end-to-end post-production services, has emerged as a leader in media creation across the globe. The Company offers various aspects of the creative, technology, production, and post-production functions with expertise in visual effects, stereo 3D conversion, animation, technology products & services, production equipment rental, soundstages digital intermediate, and picture post. This allows storytellers to focus on their creative vision and produce high- quality content with PFL effectively managing requirements of top talent, advanced technology, and valuable resources. The Company, along with its group, provides employment to over 9,200 professionals spread across 23 locations globally.

The Company has a distinguished clientele spread across the globe, including top Hollywood studios, Over-The-Top (OTT) providers, broadcasters, advertisers, and production houses. To foster creativity, PFL collaborates with content creators, with an aim to provide exceptional quality, effective work systems, and price optimization. The Company earns revenues primarily from Hollywood, with significant contributions from major studios such as Disney, Warner Bros., Marvel, Paramount, Universal, and Netflix.

Prime Focus Technologies (PFT) and Double Negative-(DNEG) are PFLs subsidiaries, involved in the business of offering comprehensive services, including creative, technology, and high-end production services. The DNEG acquisition (in July 2014) positioned the Company as a prominent player in the visual effects and animation industry, while resulting in several award wins for DNEG recognizing its exceptional work in VFX. DNEG remains committed to expanding its geographical footprint for its visual effects and animation businesses, further strengthening its position as a global media powerhouse.

During the year, the Companys Al-driven technology vision took a major leap. Brahma, the Al technology company, acquired Metaphysic, a pioneer in generative Al. Brahma is integrating DNEGs award-winning VFX technology, Zivas cutting edge tools for the creation of digital humans and creatures, Metaphysics Al neural performance tools, and CLEAR?s advanced Al-driven platform to create a suite of products that are expected to revolutionize the creation of lifelike, Al-powered digital humans with applications across industries, from education, to healthcare, interactive experiences, entertainment, and beyond.

Section 2

Financial Year 2024-25 Highlights

• The Company won several industry awards and witnessed significant additions to the team, recognizing its expertise in visual effects and strengthening DNEGs leadership as a creative powerhouse in the media field. The Company remains committed to set new benchmarks and improve its financial performance in the global filmmaking industry.

• PFLs consolidated revenue stood at Rs.3,599 crores, while Adjusted EBlTDA stood at 1,027 crores for FY 2024-25. The Company continues to attract renowned clients and has contributed to major Hollywood film franchises and top OTT shows of the year.

Project pipeline Highlights

DNEGs Strong Pipeline of Work

1. Ramayana

2. The Cat in the Hat

3. Eden

4. Heads of State

5. Bad Fairies

6. Mercy

7. Motor City

8. Animal Friends

9. The Angry Birds Movie 3

10. Mortal Kombat 2

11. Dong Ji Dao

12. How To Train Your Dragon

13. The Last of Us - Season 2

14. Klara and the Sun

15. Cardboard

16. Play Dirty

17. Citadel - Season 2

18. lT: Welcome to Derry

19. Gen V - Season 2

ReDefines Strong Pipeline of Work

1. The Strangers: Chapter 2

2. Dust Bunny

3. Toxic: A Fairy Tale for GrownUps

4. Havoc

5. Talking Tom

6. Bollywoof

7. Tom & Jerry: Forbidden Compass

8. Heroes ln Training

9. Walk Off The Earth

10. Jack Stalwart

11. Thama

12. Border2

13. lkkis

Section 3

Economy Overview Global Economy

The world economy grew at 3.3% in 2024 at similar levels in 2023 amidst on going geopolitical tensions. There was a noticeable disparity in growth across countries, with a pick-up seen in the US in contrast to slower growth witnessed in the Euro region. As per IMF, global headline inflation is expected to decline to 4.3% and 3.6% in 2025 and 2026, converging to the target earlier in advanced economies than in emerging markets and developing economies (EMDEs).

World Economic Output (%)

	2024	2025	2026P
World Output	3.3	2.8	3.0
Advanced Economies	1.8	1.4	1.5
United States	2.8	1.8	1.7
Euro Area	0.9	0.8	1.7
Japan	0.1	0.6	0.6
United Kingdom	1.1	1.1	1.4
Canada	1.5	1.4	1.6
Emerging Market and Developing Economies	4.3	3.7	3.9
Emerging and Developing Asia	5.3	4.5	4.6
China	5.0	4.0	4.0
India	6.5	6.2	6.3
ASEAN-5 (Indonesia, Malaysia, Philippines, Thailand, Vietnam)	4.6	4.0	3.9

Source: IMF World Economic Outlook April 2025

Growth in the United States is expected to slow to 1.8% in 2025, on account of greater policy uncertainty, trade tensions, and softer demand momentum, whereas growth in the Euro area is expected at 0.8%. In emerging market and developing economies, growth is expected to slow down to 3.7% in 2025 and 3.9% in 2026, with significant downgrades for countries affected most by recent trade measures, such as China.

World GDP growth is estimated at 2.8% in 2025 and at 3% in 2026, led by the swift escalation of trade tensions and extremely high levels of policy uncertainty. A series of new tariff measures by the United States and countermeasures by its trading partners have been announced and implemented, leading to a global trade war-like situation. New challenges arise as global commodity prices become volatile, supply chains may witness disruption, and global economic growth may slow down. Easing tensions in the Middle East and a ceasefire between Russia and Ukraine are expected to impact the global economy positively.

Source: IMF - World Economic Outlook April 2025

Indian Economy

The Indian economy exhibited strong resilience and emerged as one of the fastest-growing major economies in the recent past. Robust domestic demand, structural reforms, and policy support have paved the way for economic growth amidst global uncertainties. According to the Provisional Estimates, Indias GDP growth is expected to be 6.5% in FY 2024-25, lower than the 9.2% GDP growth in FY 2023-24. Manufacturing, services, and infrastructure investment sectors witnessed good traction. Strong export growth was seen in pharmaceuticals, textiles, and engineering goods.

Year	GDP growth in % YoY
FY 2017-18	6.8
FY 2018-19	6.5
FY 2019-20	3.9
FY 2020-21	-5.8
FY 2021-22	9.7
FY 2022-23	7.6
FY 2023-24	9.2
FY 2024-25 PE	6.5

Inflation in November 2024 was 5.8%, well above the RBIs target of 4%. Continued global supply chain disruptions and commodity price volatility heightened inflationary pressure in FY 2024-25. However, with gradual easing, retail inflation reduced to its slowest pace in over six years (since August 2019) in March 2025 to 3.34% on the back of lower food prices. This paved the way for rate cuts by the RBI. The RBIs Monetary Policy Committee while maintaining a neutral stance, reduced the repo rate by a total of 100 basis points to 5.5% in FY 2024-25 led by three rate cuts of 25 bps on 7th February 2025 and 9th April 2025 each, and by 50 bps on 6th June 2025. Consumer Price Index (CPI) inflation for FY 2024-25 is projected at 4.9% compared to 5.4% in FY 2023-24.

According to the State of Indias Digital Economy Report 2024, released by ICRIER, India now ranks third in the world for digitalization of the economy. The digital economy is growing at a fast pace, contributing 11.74% to the national income in FY 2022-23 and expected to reach 13.42% by FY 2024-25. By 2030, Indias digital economy is projected to contribute nearly one-fifth of the countrys overall economy, outpacing the growth of traditional sectors. According to the Ministry of Communications, total telephone connections in India rose from 93.3 crore in March 2014 to over 120 crores in April 2025, with tele-density increasing from 75.23% to 84.49% by October 2024. Internet connections jumped from 25.15 crore in March 2014 to 96.96 crore in June 2024. Strong mobile network supports 116 crore users in 2025 with data costs dropping from 308 per GB in 2014 to just 9.34 in 2022, making the internet more affordable for everyone.

According to the Ministry of Finance, in April 2025, over 1,867.7 crore UPI transactions worth Rs.24.77 lakh crore were made in one single month. Nearly 46 crore people and 6.5 crore merchants use UPI. According to the ACI Worldwide Report 2024, India handled 49% of global real-time transactions in 2023. UPI is now live in over seven countries, boosting global digital payments and financial inclusion.

According to the RBI, the Indian economic growth is estimated at 6.7% in FY 2025-26. The governments push for digitalization, financial inclusion, and ease of business has attracted FDI primarily due to the production- linked incentive (PLI) schemes to boost domestic manufacturing. Other factors indicating robust growth in FY 2025-26 include healthy monsoon prospects, expected recovery in industrial activity, and positive household consumption trends aided by the recent tax reliefs.

Source: Press Information Bureau - doc2025530560501.pdf: doc2025630578601.pdf

Section 4

Global Media & Entertainment (M&E) Industry Landscape

The M&E industry has always been at the forefront of technological innovation. The uncertainty surrounding the broader economy has had a bearing on the M&E industry led by constrained consumer spending. Advertising is emerging as the leading powerhouse of the global M&E industrys revenues. This transformation is expected to continue as AI transforms delivery models, democratizes content production, serves highly curated content experiences, and reduces barriers to entry. During the year, the global M&E sectors total revenue edged towards US$3 trillion growing by 5.5% to US$ 2.9 trillion in 2024 from US$ 2.8 trillion in 2023. By 2029, the sector is expected to grow at 3.7% CAGR to reach US$ 3.5 trillion.

This highly resilient sector will continue to expand steadily amid seismic technology changes as user engagement becomes more intense, with the sectors growth rate exceeding that of the global economy. Global advertising and consumer revenue which were almost at parity in 2023, are expected to witness US$300 billion more advertising led revenue than consumer spending by 2029.

Global M&E Industry Revenue (USS trillion)

Excluding connectivity revenues (e.g., mobile service subscriptions), the US continued to dominate the global M&E market by revenue. The United States M&E industry is forecasted to grow at 3.8% CAGR till 2029, lagging below the global average of 4.2%. China, the second largest M&E market, is expected to grow at 6.1% CAGR primarily led by 8.9% CAGR growth in its internet advertising segment. The fastest growing markets globally continue to be in developing markets, including India, Saudi Arabia and Indonesia, all with CAGRs above 7.5%. In India, similar to that in Chian, growth will majorly be driven by internet advertising, expected to grow at 15.9% CAGR driven by expanding internet penetration, rising 5G connectivity, and the popularity of social media and short-form video content. More mature markets such as Austria, Finland and Switzerland will see revenue growth well below the global average, recording 1-2% CAGRs.

Amongst the three major M&E categories - connectivity, advertising, consumer, advertising is expected to grow fastest at three times as fast (6.1% CAGR) as the consumer category (2%) trough 2029. Amid heightened industry competition and constrained consumer spending, growth for paid or subscription products is expected to slow, particularly in mature markets. Advertising is forecasted to represent a significant driver of revenue growth at large. As advertising garners more market share overall, the value it generates will be dispersed to new places, driven by technological innovations and shifting consumer behavior. Digital advertising is becoming increasingly popular with growing focus on targeted advertising, thus commanding higher rates. Digital formats, which accounted for 72% of overall ad revenue in 2024, will rise to account for 80.4% in 2029, with new technologies including AI and hyper-personalization expected to drive higher further. High growth areas include retail search advertising in e-shopping, rising from 32.7% in 2024 to 45.5% in 2029, and advertising in video games, rising from 32.8% in 2024 to 38.5% in 2029.

Global consumer spending on combined over-the-top (OTT) video and pay TV will grow from US$291.3 billion in 2024 to US$318.5 billion in 2029, representing 1.8% CAGR. In 2027, a tipping point will be passed as consumer revenue from OTT video (encompassing both subscription video-on-demand [VOD] and transactional VOD) exceeds that from traditional pay TV for the first time. A few global streaming players including Amazon, YouTube, Paramount+, HBO Max, etc have morphed into hybrid SVOD (subscription video on demand) and virtual pay TV providers, while steadily expanding their content, functionality and features. Routinely, these players, have increased their subscription fees over the years, narrowing their traditional price advantage over traditional pay TV offerings such as cable, without stalling their own growth trajectory. OTT platforms have coalesced around ad-supported plans as a key engine for growth. But OTT revenue growth is flattening too due intense competition and customer resistance to higher costs.

GenAI is significantly influencing the M&E sectors with majority of searches by consumers and businesses routed through generative AI (GenAI) engines like ChatGPT and DeepSeek. Google is posting AIgenerated summaries of search results at the top of every page. AI search platforms have the potential to eventually monetize their audience through ads. Advertising agencies are calling for SEO to be redefined to cater to chatbots and AI agents rather than regular search crawlers. AIs ability to drastically reduce cost, development time and risk is like a game changer. The implications of using GenAI to augment the production of video advertising are equally profound. The resulting cost and time savings in content creation, combined with the ongoing maturation of data-driven, addressable, programmatic TV, will democratize the TV advertising ecosystem, spurring growth in the connected TV segment. Advances in generative AI are permitting small and medium-sized enterprises to access the sort of connected TV ad spots that had previously been beyond their budgets.

Indian Media and Entertainment (M&E) Sector

Indias technological strengths animation, VFX are positioning it to become a global hub for content production. By investing in intellectual property and nurturing talent, India can lead the way in global content creation. In 2024, the Indian media and entertainment (M&E) sector made global impact with wins and nominations at Cannes and the Oscars, recognizing India as a production hub, boasting of VFX masterpieces. The year saw a resurgence of cinema, greater adoption of regional content, and use of technology to enhance production and distribution. According to the FICCI EY report, "Shape the Future- Indian media & entertainment is scripting a new story" the Indian M&E sector witnessed a relatively modest 3.3% growth, growing by 81 billion to reach 2.5 trillion (US$29.4 billion). The sector contributed 0.73% to Indias GDP. Breaking televisions 25-year hold on the pole position, digital media overtook television for the first time to become the largest segment, contributing 32% of M&E sector revenues. This historic milestone marks the dawn of a new era, where digital platforms redefine the creation, distribution, and monetization of content.

2024 witnessed 3.3% M&E sector growth with half of the ten segments experiencing growth. Digital channels drove significant growth, while traditional areas faced more challenges amid shifting consumer behaviors. M&E was traditionally synonymous with providing knowledge and as a means of escapism. It has now evolved into a multifaceted provider of value, catering to the diverse needs of consumers through four key tenets of information, escapism, materialism, and self-actualization. This comprehensive approach has become the new benchmark for media and content companies, as consumers increasingly evaluate the utility they receive across these dimensions.

New media, including digital media and online gaming, grew 12% and constituted 41% of the M&E sectors revenues in 2024 over 38% in 2023. Digital media, live events and OOH media led the growth. Core traditional media (television, print, radio and music) together saw their revenues drop by 3% and their share of the total M&E sector fall to 41%. Outside the home media (comprising filmed entertainment, live events and OOH media) grew at a combined 3%, and constituted 14% of the total M&E sector. Animation and VFX segment fell 9.4% due to global supply chain issues, mainly in the US due to the writers strike.

Indian M&E Industry: Size and projections (in Rs.billion)

Source: FICCI EY

Linear television revenues fell for the second year in a row, despite viewership remaining largely flat. Advertising revenue fell 6% on the back of a corresponding fall in ad volumes and over 10% fall in advertisers on the medium. Subscription revenues fell 3% due to a reduction in six million Pay TV homes as both Free TV and Connected TV homes grew. Connected TVs (whose revenues are included under digital media) grew to around 30 million, up from 23 million in December 2023.

India saw the release of nearly 200,000 hours of content across various mediums. Television, excluding news bulletins, constituted nearly 97% of the total, at 190,903 hours. Films and OTT platforms contributed 2% and 1% of the content, respectively amounting to 4,048 hours and 2,620 hours respectively. General Entertainment Channels (GEC) contributed 65% of total hours on TV (excluding news bulletins) in 2024. 64 more films were released in 2024 as compared to 2023, taking total film releases to over 1,600 (excluding around 200 dubbed versions), of which 500 films released on OTT platforms. However, only 60 films released directly on digital platforms. High-cost OTT content volumes fell 12% in 2024 as platforms aimed for profitability; 48% of content released on OTT platforms was in regional languages, with an increase in dubbed and subtitled content.

Digital advertising grew 17% to reach 700 billion in 2024, accounting for 69% of total advertising revenues, as several categories increased the share of their ad spends on digital media. Between 800,000 and 1.2 million SME and long tail advertisers spent 258 billion on digital media, primarily for performance advertising on search, social media and e-commerce platforms. Of the total, share of ad revenues generated by e-commerce platforms increased to 147 billion, or 21% of total digital advertising (16% in 2023) as more brands used online channels like Amazon, Flipkart, Jio, Nykaa, Myntra etc., to drive brand awareness and sales, these platforms seen as being closest to the point of consideration and purchase. Sports, entertainment and news OTT platforms garnered 10% of digital ad revenues, led by Jio Cinema and Disney+ Hotstar.

Digital subscription grew 15% to reach 102 billion on the back of continued investment by media companies across film, music, episodic and news content. The number of Indian households who pay for one or more digital subscriptions reached around 50 million in 2024. Video subscriptions comprised 90% of total subscription income, while audio and news subscriptions garnered 7% and 3% respectively, an indication that exclusive content, as provided by video OTT platforms, is critical to generate subscription revenues. Paid video subscriptions increased by 11 million, to 111 million across 47 million households in India.

Overall, subscription revenue fell 16 billion to 965 billion with only digital media witnessing 13 billion growth while all other media fell by an aggregate of 29 billion. Across segments, subscription was focused on the top-end of the consumer pyramid, which resulted in a heavily concentrated subscription base. The top 40-50 million households are estimated to be powering most digital and film subscriptions, while online gaming and print have a wider audience of between 70-100 million homes, and linear TV has the largest paid reach at 111 million homes. Share of subscription reduced from 43% of total M&E sector revenues in 2019 to 39% in 2024.

Indian Film Industry

In 2024, some of the largest Hindi cinema stars had no releases, while those who did release films found limited success at the box office. Poor performance of large budget Hindi films, as well as some South films, led to a drop in overall box office collections. A fewer number of hits drove a larger proportion of revenues, with over 70% of total box office earnings being delivered by the top 10 films. Uncertainty and consolidation in the television segment and cost-cutting by some large OTT platforms had a far-reaching impact on the value of rights purchased for TV and OTT releases. The film entertainment segment experienced a 5% decline, to 187 billion.

Film Entertainment Revenues by segments

			(In Rs.Billion)
Segment	2022	2023	2024
Domestic theatricals	105	120	114
Overseas theatricals	16	19	20
Digital/ OTT rights	33	35	31
Broadcast rights	14	15	13
In-cinema advertising	5	e	9
Total	172	197	187

INR billion (gross o( taxes) : EY estimates

Source: EY estimates

In 2024, 1,823 films (including 204 dubbed films) released in theaters across languages and dubbed versions, compared to 1,796 releases in 2023. The highest number of films were released in Telugu (323), Tamil (252), Kannada (242), Hindi (221) and Malayalam (204). South Indian language film releases reduced by 3%, while other language releases increased by 11%. Over 100 films released in English, making India a key international market for Hollywood. Cinema admissions continued to decline from around 900 million in 2023 to just over 857 million in 2024, down 5%, though average ticket prices continued to increase from 130 in 2023 to 134 in 2024. Screen count increased 2% to reach 9,927 screens led by Maharashtra which added 50 new screens (5% increase), Kerala which added 36 new screens (5% increase), Rajasthan (8% increase) and Gujarat (2% increase) where both the states added 20 new screens.

Film releases by language (including dubbed versions) (in Units)

Source: FICCI EY - Comscore

Gross box office collection dipped to INR114 billion in 2024 from INR120 billion in 2023. The industry is encountering challenges in digitizing its ticketing and data collection processes, with some single-screen, rural and small-scale theater chains still relying on manual tickets and data submissions, raising issues around credibility of box office data. Some studios believed that the practice of producers or distributors purchasing tickets for their own movies to show a better opening performance had increased.

Around 500 Indian films released on digital platforms in 2024, up 20% over 2023. However, the number of films releasing on digital platforms continued to trail theatrical releases as several OTT platforms focused on profitability during 2024 and used films largely as subscription revenue drivers. The number of direct to digital releases showed a nominal increase from 57 in 2023 to just 60 in 2024 (12% of all Indian OTT film releases) as platforms rationalized their direct to digital premiums, de-risked their expensive rights purchases and, in some cases, understood that theatrical performance was required to market the film for OTT platforms as well.

Source: FICCI EY

In 2024, 36 films grossed Rs.1 billion or more, same as in 2023. South Indian films led monetization at the box office. Other language films comprised 22 south Indian language films and one Punjabi language film. Hindi films earned 13% less in 2024, but that included Hindi-dubbed versions of some south Indian films. Net of those, theatrical revenues of original Hindi films reduced 37% from Rs.51 billion to Rs.32 billion, a fact that many industry discussions attributed to the lack of quality writers. 359 films released across 38 countries, up from 339 movies in 2023, which were also released in 38 countries. International theatricals generated a gross box office collection of Rs.20 billion, up 5%. While significant progress has been made in growing overseas theatricals independently, the film industry tapped into the China market in 2024, with films like 12th Fail and Maharaja. Also, the film Jawan was released in Japan during November 2024.

Source: FICCI EY

Uncertainty on account of mergers between Viacom18 and Disney, and between Sony and Zee impacted sale of broadcast rights. In-cinema advertising grew 20% to Rs.9 billion due to increased focus on such sales by the merged PVR-INOX exhibition chain, and the scarcity of avenues to reach affluent theater-going audiences. In future, the film entertainment segment is expected to reach Rs.213 billion by 2027 led by return of releases of movies of big stars/ production houses, along with more mass films, providing a boost to domestic and international theatrical revenues. The TVOD opportunity is also expected to scale, given the proliferation of new platforms and digital payments. Uncertainties due to mergers have now receded, leading to stabilization of broadcast rights volumes. However, declining viewership of premiers as well as falling movie genre viewership could keep rights values at the lower end in 2025. Overall, it is expected that the base of moviegoers will increase from under 100 million to 120 million by 2027, on the back of continued growth in per capita disposable income and growth in affluent households from the current 45 to 50 million to around 55 million.

Animation, VFX (Virtual Effects) and Post-Production

In 2024, the animation, VFX and post-production segment contracted by 9% reaching industry revenue of Rs.103 billion, heavily impacted by domestic uncertainty and global demand challenges. While both animation and VFX were affected, post-production experienced continued growth. The global decline in commissioning TV and OTT animation shows, coupled with cost-cutting measures and shifting priorities, disrupted the animation outsourcing pipelineto India in 2024. DecliningPayTVad revenues, mergers between large buyers, and restructuring of operations led to delays in new show commissioning, adversely affecting domestic animation production. Broadcasters prioritized financial prudence, limiting investments in new animation projects preferring syndicated foreign content, moving away from investments in original Indian programming.

Source: FICCI EY

In 2024, as the global animation industry recalibrated, Indian studios bolstered their presence at key events like MIPCOM and Annecy to reposition themselves for future opportunities. The Indian pavilion at MIPCOM, organized by SEPC, the Ministry of Information & Broadcasting and the Ministry of Commerce, hosted over 235 delegates from over 70 companies and independent professionals. Despite this increased visibility, participants raised concerns about declining global investments in kids content, highlighting a challenging environment for project financing. Indian animation moved beyond products created for children, creating specific popular content for adults like Season 2 of KTB Bharat Hain Hum, seasons 3 to 5 of The Legend of Hanuman, etc. Artificial Intelligence is still in its early phases of integration into the animation pipeline, especially for theatrical and long-form content. AI tools accelerated pre-production processes like storyboarding and animatics by 30% to 60%, while enabling rapid asset creation for short-form projects in one-tenth the time. Larger studios invested in proprietary AI solutions to streamline asset creation and crowd simulations, positioning themselves for scalability and efficiency in a changing market landscape.

The global VFX segment experienced a reset in 2024 as production volumes fell by 10% in 2024, reducing VFX demand across the Americas (24%), EMEA (7%) and APAC (15%). The slowdown caused by the strikes and market disruptions in 2023 persisted through 2024. Greenlighting of projects and production resumed at a slower pace than anticipated, reflecting a fundamental shift in the industrys operating dynamics. OTT platforms scaled back aggressive content spending, with annual growth slowing to 2%. Financial constraints, such as declining profitability, rising costs and market saturation, forced platforms to adopt a more cautious approach. Renewals of successful franchises were prioritized over riskier new originals, with investments focusing on broad-appeal content to maximize ROI. These factors collectively reduced the volume of international VFX projects outsourced to India. While the global VFX market struggled, the domestic segment offered some resilience, keeping Indian studios active despite revenue growth remaining muted due to lower-paying domestic projects. The Indian VFX market expanded with increasing adoption in films and episodic content. The use of additional VFX is now expected to be systemic and will continue in 2025. High- budget domestic films currently allocate up to 30% of their budgets to VFX, while mid-budget projects spend around 15-19%. VFX studios are increasingly depending on IPOs as the preferred route for capital infusion. Indian VFX studios are also exploring global expansion.

The post-production industry in India grew 16% YoY to Rs.27 billion. Demand for localizing international content increased, as several OTT platforms saw increased consumption of international titles, which were dubbed in up to eight Indian languages. Localization remained crucial for repurposing domestic content as well, particularly tentpole content, which was released in multiple languages and films, are now being launched in several languages across national themes. The demand for higher quality ad films, and more social media and short video marketing, added to the demand for post-production services. There has been a significant step up in the use of AI which reduces dubbing timelines and costs, eliminating reliance on manual voice recording sessions. AI-powered dubbing is used for films, Interactive Voice Response (IVR), audiobooks, advertising, conferences and presentations. YouTube introduced a feature allowing creators to dub videos in English, French, German, Hindi, Indonesian, Italian, Japanese, Portuguese and Spanish.

The year 2024 firmly established itself as a milestone for re-releases in Indian cinema, with nearly 80 films re-released. Remastering of classic movies for re-release includes processes of audio enhancement with upgrades to surround sound (Dolby Atmos, DTS:X), noise reduction and dialogue clarity improvements and visual restoration including frame repairs, grain removal, color correction, 4K/ 8K upgrades and format compatibility for 2D, 3D, or IMAX.

The segment has the potential to reach Rs.147 billion by 2027 as India cements its position as the content back office of the world. Higher growth potential will require increased investment in creating tech IPs to position India as a hub of innovation. There is imminent need for capital to build unique capabilities and achieve scale to support global studios. Increasing number of outbound acquisitions by domestic studios as they team up with foreign studios to source global work, tech capabilities and IP is expected to drive growth. India has ready availability of skill set for the growing VFX opportunity on experiences, covering areas like stagecraft, virtual events, theme parks and holo-concerts. For India to succeed in the global market, the focus on customer experience, across quality and reliability, will be crucial. Indian studios can unlock anime opportunities through partnering with Japanese studios to co-produce high-quality anime content, developing anime-inspired Indian IPs for global and local audiences, collaborating with e-commerce and retail platforms for licensed merchandise distribution and creating anime-themed mobile games and digital experiences based on Indian stories. The central government approved National Centre of Excellence (NCoE) will position India as a global AVGC-XR hub, attracting foreign investments. AI is expected to increasingly automate manual processes with a legal framework for AI adoption expected, enabling studios to confidently integrate AI into content production workflows. AI adoption not only enhances efficiency but can also enhance quality and production. Adoption of AI in areas such as cleaning, coloring, compositing and other currently manual areas can have a significant impact on outsourcing to India. The ability to innovate consumer facing revenue streams and build AI IP that positions India as the go-to destination for content services will be the cornerstone for success, ensuring survival and prosperity of the segment in a competitive, technology-driven future.

Industry Outlook

Driven by digital acceleration, evolving consumer preferences, and cutting-edge technologies there has been a rapid shift from linear to digital entertainment, which is reshaping content creation, distribution, and consumption, unlocking new opportunities for growth and global influence. Indias M&E sector is poised to expand its footprint as a content powerhouse, fueled by innovation, strategic investments and a resilient creative ecosystem. The M&E sector is expected to grow by 7.2% to reach Rs.2.68 trillion by 2025, and then grow at 7% CAGR to reach 3.07 trillion by 2027. New media will provide 68% of this growth, followed by live events (12%) and animation and VFX (8%). By 2030, large screens will cross 200 million, and small (phone) screens will reach almost 700 million, creating a large base of consumers hungry for content and information. The 3:1 ratio in favor of small screens underlines the need for short video content, short-form content, social media and real-time news products, which is expected to see significant innovation in the next few years. India is poised to become the third-largest M&E market globally by 2028, on the back of this frenetic activity. India is also emerging as a preferred media outsourcing hub much like its dominance in IT services. Cloud- driven applications and digital advertising shifts are prompting traditional players to reinvent business models leading to increased mergers and strategic partnerships.

Section 5

Company/Business Overview

PFL has cemented its footing as the largest independent diversely integrated media services powerhouse. The journey to become an internationally recognized institution, started in Mumbai in 1997 under the aegis of Mr. Namit Naresh Malhotra. With three decades of rich industry experience, PFL brings together creativity and technology to deliver world-class solutions across film, television, advertising, etc. PFLs success in media creation is attributable to its strong business model and skilled workforce. The Companys offerings boast of award-winning visual effects (VFX), animation and immersive experiences to our pioneering creative technology solutions, to our production and post-production services, were proud to be at the forefront of transforming the way that content is created.

The Company and its subsidiaries operate across various Indian cities including Bengaluru, Chennai, Goa, Hyderabad, Kolkata, Mohali, Mumbai, Noida, Bhubaneswar, Patna, Pune, Thiruvananthapuram, Visakhapatnam and Rajahmundry. The Company has strong presence in international markets in Barcelona, Budapest, London, Los Angeles, Montreal, New York, Sofia, Sydney, Toronto, Vancouver, and Leeds. The extensive domestic as well as global network of PFL enables proactive marketing and leverages region-specific advantages effectively.

Products and Services

PFL has three primary revenue streams:

• Creative services, including visual effects, stereo 3D conversion, animation, and production and postproduction services such as equipment rental, digital intermediate, picture post, shooting floors, and sound stages.

• Tech/Tech-Enabled Services, which offers streaming platforms, studios, and broadcasters AI technology and media services powered by the cloud that help them enable creativity, efficiency, and, most importantly, revenue generation.

• Leasing or renting of properties and/or assets, along with allied services.

The Company provides extensive product and service solutions to major studios, broadcasters, and advertising sectors globally. PFL has forged collaborations with prominent studios and consistently delivered successful high-end franchise films.

Providing Comprehensive Services

International Presence:

With widespread global presence across 4 continents, 7 time zones, and 23 locations, PFL executes projects around the clock, 365 days a year. Approximately 84% of PFLs total revenue comes from its international business. The Companys strong technological expertise, strong sales team, unique World Sourcing delivery model global Digital Pipeline allows it to cater to global clientele.

Marquee Clientele

PFL serves a diverse clientele across the entire media industry value chain and product lifecycle. Some of its prominent clients include globally renowned Hollywood and Indian studios and media corporations:

• Studios Amazon MGM Studios, Lionsgate, Crunchyroll, Disney, Marvel, Universal Studios, Netflix, Paramount, Sony, Twentieth Century Fox, Legendary Pictures, and DreamWorks.

• Broadcast networks: Channel 4, ITV, Sinclair Broadcast Group, A&E Networks, Warner Bros. Discovery, Hearst, Paramount, Crunchyroll, Insight TV, JioHotstar and Tegna.

• Others: ICC, BCCI, Cricket Australia, JWT, Lowe Lintas, Netflix, Amazon, and Sky.

Key Businesses

Double Negative (DNEG)

2025 has been a landmark year for DNEG, solidifying our legacy of excellence in visual effects. Our groundbreaking work on Dune: Part Two dominated the awards season, earning multiple top honours. At the 96th Academy Awards?, DNEG secured its eighth Oscar? for Visual Effects for Dune: Part Two, a testament to our relentless pursuit of innovation and storytelling excellence. This victory was accompanied by wins at the BAFTA Awards and Critics Choice Awards, cementing our reputation for groundbreaking creativity. Our expertise was further recognised at the VES Awards 2025, where Dune: Part Two secured four major wins, celebrating our achievements in environment creation, CG cinematography, effects simulations, and compositing & lighting.

Reflecting on 2024, DNEG was honoured at the 70th Indian National Film Awards with two prestigious accolades: Best Film in AVGC for Brahmastra - Part One: Shiva and Best VFX Supervisor. Our talent was also acknowledged at the AEAF Awards, where we secured Silver in the Feature Film VFX category for Furiosa: A Mad Max Saga and Bronze for Godzilla x Kong: The New Empire.

Beyond these accolades, DNEG delivered groundbreaking visual effects for marquee shows, including Furiosa: A Mad Max Saga, Kalki 2898 AD, and Venom: The Last Dance—each project exceeding expectations and captivating audiences with its stunning visuals and compelling storytelling.

As we continue to push creative and technological frontiers, 2025 stands as another defining year for DNEG, reaffirming our commitment to excellence in visual effects.

Film VFX

DNEG continues to enjoy strong working relationships with the major Hollywood studios and to nurture partnerships with some of the most creative and well-respected directors working in Hollywood today, including:

• Christopher Nolan: Batman Begins, The Dark Knight, Inception, The Dark Knight Rises, Interstellar, Dunkirk, Tenet, Oppenheimer

• Denis Villeneuve: Blade Runner 2049, Dune: Part 1, Dune: Part 2, The Odyssey

• Edgar Wright: Shaun of the Dead, Hot Fuzz, Scott Pilgrim Vs. The World, Grindhouse, Worlds End, Baby Driver, Last Night in Soho

• David Yates: Harry Potter and the Half-Blood Prince, Harry Potter and the Order of the Phoenix, Harry Potter and the Deathly Hallows: Part 1 & 2, Fantastic Beasts and Where to Find Them, Fantastic Beasts: The Crimes of Grindelwald

• Francis Lawrence: The Hunger Games: Catching Fire, The Hunger Games: Mockingjay - Part 1 & 2, Red Sparrow, Slumberland

• George Miller: Furiosa: A Mad Max Saga

• Ron Howard: In The Heart of the Sea, Rush, Eden

• Bong Joon Ho: Mickey 17 Episodic VFX

Our Episodic VFX offering empowers creators worldwide with access to DNEGs exceptional talent, cutting-edge technology, and robust infrastructure for streaming and broadcast projects. Backed by a dedicated team of VFX supervisors, producers, and artists with deep expertise in episodic storytelling, we continue to deliver outstanding work that has earned industry recognition, including a Primetime Emmy and multiple Visual Effects Society awards.

Standout Episodic projects in the last year include:

• The Boys - Season 4

• Time Bandits

• The Lord of the Rings: The Rings of Power - Season 2

• Skeleton Crew DNEG Animation

DNEG Animation is where creativity and innovation come together. Our teams passion for creating world-class animation shines through in everything we do—from the diverse styles of the animated films we bring to life, to the way we collaborate seamlessly across our global studios and mentor and train our talented crews. Built on the dedication and artistry of our people, we strive to push the boundaries of animation by telling captivating stories and developing compelling characters. Every project we undertake is an opportunity to further the craft and bring unique worlds to life in new and exciting ways. From complex graphic novel adaptations to beautifully stylised films, we are dedicated to furthering the craft of animation.

Looking ahead, DNEG Animation is proud of our continued collaboration as an animation partner for Warner Bros. Pictures Animation, as well as Locksmith Animation, with their upcoming feature animation Bad Fairies and animated short Cardboard.

DNEG Animations recent works include That Christmas, The Garfield Movie, Under the Boardwalk, Nimona, Entergalactic, and Rons Gone Wrong, The team is currently in production on The Cat in the Hat Cardboard, Bad Fairies, The Angry Birds Movie 3, and more.

Project Highlights

Bollywood

• Kalki 2898 AD

• Munjya

• Yudhra

• Devara: Part 1

• Chhaava

• Emergency

• Sky Force

• Maidaan

• Jigra

• Khel Khel Main

• Stree 2

• Vicky Vidya Ka Woh Wala Video

• Loveyapa

• Baby John

• Agni

• Chandu Champion

• Ulajh

• Mere Husband Ki Biwi

• Fateh

• Vedaa

• Azaad

• Bastar

Hollywood

• The Garfield Movie

• Furiosa: A Mad Max Saga

• The Boys - Season 4

• Those About To Die

• Time Bandits

• Borderlands

• Yo Gabba GabbaLand!

• The Lord of the Rings: The Rings of Power - S2

• LoveFrom, MONCLER

• Venom: The Last Dance

• Here

• Skeleton Crew

• That Christmas

• The Gorge

• Abigail

• Tuesday

• Ripley

• Those About to Die

• Bureau 749

• Mary

• The Penguin

• William Tell

• Back in Action

• Saving Bikini Bottom: The Sandy Cheeks Movie

• Plankton: The Movie

• Mickey 17

Awards

• Won the Oscar? for Visual Effects for Dune: Part Two

• Won the BAFTA Award for Special Visual Effects for Dune: Part Two

• Won the Best Visual Effects at the Critics Choice Award for Dune: Part Two

• Won four Awards at the VES Awards 2025 for Dune: Part Two

• Outstanding Created Environment in a Photoreal Feature - The Arrakeen Basin

• Outstanding CG Cinematography - The Grounded Cinematography of Arrakis

• Outstanding Effects Simulations in a Photoreal Feature - Atomic Explosions and Wormriding

• Outstanding Compositing & Lighting in a Feature - Wormriding, Geidi Prime, and the Final Battle

• Won VES Award for The Penguin under Outstanding Compositing & Lighting in an Episode - After Hours

• Ziva VFX honoured with 2025 SciTech Academy Award?

o Honoured at the 70th Indian National Film Awards

o National Film Award for Best Film in AVGC (Animation, Visual Effects, Gaming, and Comics) for Brahmastra - Part One: Shiva

o National Film Award for Best VFX Supervisor: Honoring Jaykar Arudra, Viral Thakkar, and Neelesh Gore for Brahmastra - Part One: Shiva

• Won Silver in the Feature Film VFX category for Furiosa: A Mad Max Saga at AEAF Awards

• Won Bronze in the Feature Film VFX category for Godzilla x Kong: The New Empire at AEAF Awards

• DNEG 360 and Dimension won the Best Virtual Production Award at the Broadcast Tech Innovation Awards

• Metaphysic.ai won Emerging Technology Award at the VES Awards for Here

Prime Focus Technologies (PFT)

CLEAR? AI: Smarter, Faster Content Operations

At NAB 2025, PFT unveiled CLEAR? AI Agents and AI Applications, designed to deliver real results in post-production and content supply chain workflows. CLEAR? AI is purpose-built for video content highlighting the capabilities of these innovations to enable visible ROI for their AI investments today.

AI Agents

Content Discovery

Smarter search with multimodal AI that understands context—not just keywords.

• Search Agent: Intuitive, semantic search for quick asset retrieval

• Metadata Agent: Turns raw data into monetisable insights.

• Conversational AI: Enables natural language queries and task execution.

Content Studio

Automated short-form content creation and localisation.

• Highlights Agent: Creates snackable content from long form videos

• Reframe Agent: Converts horizontal videos into square and vertical formats

• TSK Agent: Auto-generates titles, synopses, and keywords.

• Thumbnail Agent: Suggests high-impact cover visuals.

• Localize Agent: Delivers subtitles, dubs, and captions at scale. Content Automation

Accelerated, compliant content prep for global delivery.

• Segmentation: Identifies important content segments like skip intro markers, end credits etc.

• Deduplication: Eliminates redundant assets.

• Compliance: Flags violations against moderation norms.

• Conform: Combines multiple audios, videos, subtitles and text to create a ready to distribute global master file.

AI Applications

Beyond AI Agents, PFT also showcased powerful AI Applications designed to manage content, tasks, and workflows. With applications like AI- powered collaboration for dailies and context-aware MAM, CLEAR? AI applications allow teams to do more with less, while significantly reducing operational costs.

• Smart MAM - Simplify workflows and amplify revenue

• Video Collaboration - A powerful creative collaboration platform that lets you review and edit faster with AI

• Supply Chain - Title-based visibility for seamless collaboration across suppliers

Media Services

Localisation- Make the world your market with subtitling, dubbing, and accessibility services in 60+ languages—powered by expert teams and a global network of native-language studios for authentic, culturally resonant storytelling.

Fulfillment- Delivering unmatched quality at scale with compliance, restoration, QC, and packaging services—executed seamlessly through the power of CLEAR? and CLEAR? AI for global platform readiness.

Techno-Creative Services- Expertly produced, perfected in post, and promoted to success through world-class postproduction, versioning, content marketing, and branded storytelling—delivered via global hubs in LA, NY, Mumbai, and beyond.

Key Wins and News

• Fremantle Selects Prime Focus Technologies and Amazon Web Services to build its global content supply chain

• CNBC Arabia selects PFTs CLEAR? AI for streamlining content operations

• Prime Focus Technologies provides localization services for Ramayana: The Legend of Prince Rama with Geek Pictures

• Prime Focus Technologies strengthens presence in Malaysia with Tiara Vision Partnership

• Prime Focus Technologies launches CLEAR^? Content Studio AI Agents, leveraging NVIDIA technology for the future of storytelling

• Prime Focus Technologies expands Southeast Asia presence with strategic partnerships in Indonesia and the Philippines

• Prime Focus Technologies and STAGE Partner to revolutionize media asset management with AI-Driven solutions

Awards & Accolades

• Ramki S., Founder & Global CEO of PFT, received the Hermes Lifetime Achievement Award from the Entertainment Globalization Association (EGA) for revolutionizing AI-powered media localisation and content supply chains.

• CLEAR? AI Content Studio Agents won the 2025 NAB Show "Product of the Year" Award in the AI/Machine Learning category, reaffirming PFTs leadership in AI-powered content solutions.

• Six PFTians were recognised in the EGA Top 100 list, spotlighting excellence in localization:

• Ramki S. (Leadership)

• Jyothi Nayak (Leadership & Operations)

• Muralidhar S. (Technology)

• Radhika Vora and Eric Rudd (Business Development)

• Mallika Poojari (Operations)

• Radhika Vora, VP - Sales & Business Development, received the Rise Award in the Sales category, recognizing her leadership, innovation, and entrepreneurial impact.

• In collaboration with The Walt Disney Company and Picture Shop, PFT won Best Restoration of the Year for the 4K UHD restoration of Snow White and the Seven Dwarfs at the HPA Awards 2024.

• PFT earned a Bronze Medal from EcoVadis, rising from the 64^th to the 83^rd percentile globally and moving from the Top 26% to the Top 9% in the Media and Entertainment sector.

• Employer Awards

• Awarded the prestigious Great Place to Work? certification

• Recognized as one of the Top 50 Happy Companies to Work For

• Named a Most Preferred Workplace by Marksmen Daily

• Honored with the Maharashtra State Best Employer Brand Award 2025

Section 6

Financial Highlights of FY 2024-25 (Consolidated Audited Financials)

The Income from operations declined from 3,951 crore to 3,599 crore in FY 2024-25 due to macroeconomic and industry challenges, which affected the companys revenues. The Creative Services, including India FMS, contributed about 90% of the total revenue for the year, while the Tech/Tech-Enabled Services contributed about 10% during the year under review. The adjusted EBITDA saw a increase from 479 crore to 1,027 crore in FY 2024-25. The adjusted EBITDA margin increased to 28.5% in FY 2024-25 from 12.1% in FY 2023-24.

Financial Highlights of FY 2024-25 (Consolidated Audited Financials):

• The Companys total income amounted to 3,825 crores, compared to 4,167 crores for the year ending March 31, 2024.

• The adjusted EBITDA margin stood at 28.5%.

• Cash Profit (PAT + Depreciation + non-cash employee stock option expense) reached 61.4 crore, with a Cash Profit Margin of 1.7%.

• Creative Services (Including India FMS) total revenue contributed 3,219 crores in FY 2024-25, representing 90% of Group revenues.

• Total revenue for Tech/Tech-Enabled Services contributed 380 crores in FY 2024-25.

• Net Debt (Debt - Cash) as of March 2025 stood at 4,021 crores (after adjusting for operating lease liabilities).

Key Changein Financial Ratios

Ratios	Units	Consolidated
		31-Mar-25	31-Mar-24	Change	Remarks
1. Debtors turnover	Times	8.70	7.71	13%	Continued focus on improving collection efforts
2. Inventory turnover	Times	NA	NA		Not Applicable
3. Interest coverage ratio	Times	0.94	(0.05)	(1926%)	Improvement in operating margins during the year due to production efficiencies
4. Current ratio	Times	0.67	1.33	(50%)	Current liability as of Mar-25 include borrowings due withing next 12 months, which were subsequently extended
5. Debt equity ratio	Times	6.68	9.80	(32%)	Improvement owing to fresh equity infusion from external investors
6. Operating profit margin (%)	Percentage	14.34%	(0.73%)	(2056%)	Improvement in operating margins during the year due to production efficiencies
7. Net profit margin (%)	Percentage	(12.95%)	(12.43%)	4%	Adversely impacted due to exceptional costs of INR 380 cr during the year
8. Return on net worth	Percentage	(60.39%)	(94.67%)	(36%)	Adversely impacted due to exceptional costs of INR 380 cr during the year

Section 7 Business Strategy

The Company has established its niche globally as a premier one-stop destination for post-production services. Its offerings include innovative solutions in post-production, creativity, and technology. With an unwavering focus to become a prominent independent service provider, PFL relentlessly strived to strengthen its brand equity and achieve global expansion through a strategic approach focused on acquiring key businesses. PFL is committed to sustaining its consistent and profitable growth, driven by the following factors:

• Anchor in Creative Services: PFL is one of the market leader in Creative Services and the preferred provider of graphically enhanced solutions.

• Global Expansion and Diversification: PFL aims to strengthen its global presence by diversifying its content and expanding its geographical reach.

• Cross-Selling and Revenue Optimisation:

The Company focuses on enhancing cross-selling opportunities by integrating VFX, 3D, and high-end CG animation services to drive revenue while controlling costs.

• Tech-Enabled Services Growth: PFL will further expand its client base by offering tech-enabled services and enhancing revenue from existing clients. Additionally, the Company prioritizes incorporating new modules and analytics into its product line.

• Financial Strategy: PFL and its subsidiaries will continue evaluating equity and debt financing options to unlock value across the group. The Company emphasizes growth and business efficiency to enhance shareholder wealth.

Section 8 Outlook

By 2027, new media (digital + online gaming) will comprise 46% of M&E sector revenue, while traditional media (TV + print + film + radio + OOH) will contribute 41% of total M&E sector revenues. As digital media keeps growing relentlessly, there emerges huge scope for innovation, consolidation, new business models and partnerships. Interactivity and gamification have proliferated all segments of the M&E sector. Every M&E segment is now conducting events. Digital integrations across music, radio, news and OOH are helping grow traditional segments; WhatsApp is reshaping communication.

Global content announcements are expected to rebound in 2025 and given Indias talent pool and cost advantage, we expect the animation and VFX segment to recover sharply in 2025 and 2026. National and state initiatives will further incentivize foreign production in India and drive growth and talent development, positioning India better in the international markets. Private and government investments in AI will lead to innovation in Animation and VFX capabilities and help position Indias capabilities more strongly. OTT platforms focus on profitability will lead to higher quality paid content, and this will grow the domestic VFX and post-production business.

Companies will move to 360-degree monetization of content viz., IP (particularly franchise content) will be monetized more widely across not just film, TV and OTT, but also across Free TV, gaming, music and merchandising. Content created for the cinema screens with a large fan base will generate derivative content such as OTT series extensions, prequels and sequels, side stories, interactive games and even related events, with the original film helping to market the derivative content.

Almost all large Indian M&E companies have been using AI to drive efficiencies Common use cases we have observed, and expect to see more of, include: Automated scriptwriting and storyboarding VFX automation AI- assisted localization and dubbing Personalized content recommendations Dynamic content editing and enhancement, including for news across different formats and audiences AI-driven music composition, particularly for games and background scores Advertisement targeting and use of synthetic media for marketing campaigns Creative talent reskilling to enable them to use AI for content creation and manipulation will be key to enabling cost efficiencies.

The base of movie-goers is expected to increase from under 100 million to 120 million by 2027, on the back of continued growth in per capita disposable income and growth in affluent households from the current 45-50 million to around 55 million. As digital platforms focus on growing subscription revenues, their demand for tentpole films, and those which are made for affluent multiplex audiences, both will remain strong, though values would be range-bound for most non-premium, mid-sized and nonconcept films which could find it hard to get sold. The TVOD opportunity is also expected to scale, given the proliferation of new platforms and digital payments. Uncertainties due to mergers have now receded, aiding stabilization of broadcast rights volumes. Declining viewership of premiers as well as falling movie genre viewership could keep rights values at the lower end in 2025. A lot of unsold content from 2023 and 2024 could get sold as originals on digital platforms.

Given the niche segment of Indias film watching population, and the growth of larger screens at home, high quality films are expected to be made for theatrical releases. Films with a large amount of VFX, high- concept films, and larger-than-life stories will be created with increasing frequency, while smaller budget films with limited special effects will find it increasingly difficult to find release windows. At the other end of the paradigm, broadcasters will commence producing/ commissioning films in the sub 15 million cost range, particularly for FTA and regional channels.

Section 9 Opportunities & Threats

2024 saw a 12% fall in premium OTT content, and 2025 is expected to see significant pressure on costs as well, as Pay TV homes continue to decline, and OTT platforms struggle for profitability. The expectation is that a TV++ cost model will evolve for longer-run episodic content for OTT platforms. The era of blanket rights being given to buyers will come under challenge. Production houses will, eventually, only give a specific restricted set of rights to buyers in lieu of reduced revenues.

The opportunity for video to grow is large, given the expected growth in the number of screens. By 2030, large screens will cross 200 million, and small (phone) screens will reach almost 700 million, creating a large base of consumers hungry for content and information. With the continuous erosion of cable and growth in wired broadband, the next few years will underline the need to be active across all four platforms - cable, DTH, Free TV, wired broadband, for studios and IP owners. The potential introduction

of direct-to-mobile (D2M) television services will increase the relevance of television outside the home and during transit. Free TV will remain a temporary medium viz., it will gain audiences as more families come out of poverty and into the lower middle class, and it will lose audiences as the middle-class families move up the value chain.

Subscribing households will grow from 47 million to over 65 million by 2027 as per capita income increases and smart TV penetration continues to grow, subject to low-cost broadband availability. Bundling will play a significant role in growing subscriptions, with both telco packs and multi-package/ platform bundles being important; we expect to see more business or library combinations to ensure platforms are in the top two to three subscription preferences of households.

As news consumption shifts to online video and text, and as the youth consume news on social and other platforms, news media will need to rethink their content, monetization, and measurement strategies. Content will need to be created multi-format and multi-media, and separately for younger audiences and for different segments Alternate revenue streams like IP, branded content, and exclusive products will be introduced.

Underutilization of technology leaves significant inefficiencies in the production pipeline, limits scalability in distribution, and reduces the effectiveness of marketing efforts, ultimately hindering the industrys growth and competitiveness. It is expected that the use of GenAI in content production, across background scores, backgrounds, storyline creation, translation, budgeting and other areas will increase substantially. Technologies like geo-restriction will create new monetization windows for regional and other films dubbed-language versions, enabling less affluent audience to watch content in parallel to the main theatrical release. In marketing, personalized campaigns leveraging AI, location data and analytics could better target audiences, driving engagement and maximizing ROI.

Section 10

Risks and Concerns

The Companys comprehensive Risk Management framework ensures safeguarding the business from various foreseeable potential internal and external risks. The framework effectively monitors, analyses and mitigates the various risks to business operations. For managing various organizational risks, the Company devises and executes adequate mitigation plans in response to any risk. The Company keeps a close watch on the emergence of a new threat /risk by observing changes in both internal and external environments.

Industry Specific Risk

Risk: Being a part of the media sector, the Company is exposed to various external risks like dynamic business environment, evolving consumer preferences, and change in regulatory policies. These events can directly affect the profitability and sustainability of business. In the event of strikes in the media industry, the Company faces disruption in production schedules, thereby delaying deliveries, and affecting efficiency. Such hinderances diminish brand equity and business growth.

Mitigation Strategy: The global media and entertainment industry is poised for humungous growth with fast paced adoption of digital technology led by the ever-increasing rise in demand for digital content. Expanding media sector reach into the hinterlands, non-urban and regional consumer bases, provides additional growth opportunities. PFL enjoys an edge over competition with its diverse portfolio, robust order book, and widespread global reach, allowing the Company to face any challenge to the M&E industry, more efficiently and effectively.

Competition Risk

Risk: Given the lucrative growth prospects of the M&E industry, there is heightened competitive intensity. With advancements in Artificial Intelligence leading to ease in handling production, content creation, and market dynamics, all players, both domestic and international, are stepping up their game. This poses risk to Companys market position.

Mitigation Strategy: The Company follows the strategy of world- source delivery model which helps strengthen its ability to provide high- quality work on time. The Company has stepped up its efforts further and improved its presence in delivering high-end services to major Hollywood and Bollywood production houses. Dynamic proprietary inventions, effective market initiatives, and technological progress enables the Company to have a healthy moat against competition. Close and continuous engagement with studios and international media service providers coupled with unwavering focus on diversification and originality enables the Company to ensure it remains continuously motivated and ahead of competition.

Talent Retention Risk

Risk: Human resource is a crucial part of organizational success. The Companys operations may get disrupted in case of high attrition rate, inadequate skillset of employees, overstaffing / understaffing, improper work environment and disturbances in industrial relations. Limited number of schools teaching visual effects impacts the hiring capacity and poses risk of losing talent to competition.

Mitigation Strategy: The Companys HR policy has embedded industry best practices with an aim to provide a safe and nurturing work place. To attract, retain, and develop a diverse range of talented individuals PFL offers competitive pay and offers various training and development programs across levels. HR policies strive to strike a balance between individual goals and organizational goals to ensure high retention rate.

Profitability Risk

Risk: Due to low operating margins, the M&E industry is grappling with profitability risks. This pressure can mount due to delays in new content releases and higher costs for procuring professional talent.

Mitigation Strategy: PFL has diversified its presence across five continents. The Company constantly invests in research and implements new technology for margin improvement. The Company enjoys preference from major production studios due to its track record of producing awardwinning, critically acclaimed films that achieve high public recognition and lucrative returns. With a view improve margins and profitability, PFL resorts to various cost control measures and workforce rationalization.

Cyber Security Risk

Risk: With the ongoing digital revolution, cybersecurity has become major concern for the Companys long-term viability. Targeted attacks, security breach, ransomware threats, and phishing have highlighted the significance of safeguarding the Companys information technology infrastructure and data.

Mitigation Strategy: The Companys strong IT department is well- equipped to adopt robust enterprise-wide cybersecurity procedures with risk-mitigation program and a quick response plan. To enhance employee awareness, several phishing campaigns are undertaken. The Company regularly upgrades and backs up its network, and the incident response plan is continuously developed and updated. The Company follows a fixed policy for using personal devices at work. PFL remains committed to strengthen security controls and safeguard all sensitive data.

Section 11 Internal Control Systems and their Adequacy

The Company has devised a robust internal control framework in accordance with the nature and size of the organization, and the magnitude and complexity of the industry it operates in. The Company has put in place strong policies and procedures to ensure that it conducts business with integrity, transparency and accountability, amidst the dynamic corporate environment. Well strategized internal controls ensure strict adherence to rules and regulations, safeguarding of assets, mitigating risks, timely preparation of reliable financial statements, accurate and complete account keeping, and prevention and detection of fraud and errors. Internal controls are subject to regular monitoring and assessment for continuous improvement. Giving due importance to highest standards of corporate governance, the Company undertakes thorough compliance and ethical conduct. Such strong ethical practices, enable the Company to garner trust from all stakeholders.

Section 12 Human Resources

Human resource is a crucial engine of growth for any organization. PFL is committed to prioritize employee well-being and professional development. Its agile HR practices & policies are guided by the principles of transparency, integrity and accountability. The focus remains to ensure the best interests of the employees and recognize their efforts towards enhancing organizational innovation and efficiency. PFL attributes its growth and success to its dedicated workforce. The Company ensures that its employees are offered with ample training and opportunities to succeed in their professional careers, through various initiatives like performance appraisals, learning programs, and talent management frameworks. The Companys doctrine centers around individual care and empowerment. Top leadership has adopted an inclusive approach ensuring the workforce is equipped with necessary skills for success. PFL fosters a safe, positive, agile supportive, transparent, inclusive, equal, and motivated work environment with open door policy. Employees are encouraged to communicate, share ideas, and collaborate, promoting a sense of belonging and ownership. PFL remains committed to improve employee satisfaction, boost confidence, and impart a sense of belonging. Talent identification and development are crucial for the organization. With a view to promote in-house talent, the Company strives to identify emerging leaders and provide adequate training to groom future leaders. PFL ensures that its workforce remains adaptable, and equipped to navigate the challenges of a rapidly changing business. As of March 31, 2025, the Company and its group employed more than 9,200 individuals.

Section 13 Cautionary Statements

This report contains statements that may be "forward looking" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to the Companys future business developments and economic performance. While these forwardlooking statements indicate our assessment and future expectations concerning the development of our business, several risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. The Company undertakes no obligation to publicly revise any forward- looking statements to reflect future / likely events or circumstances.