PRITISH NANDY COMMUNICATIONS LIMITED THE 30TH ANNUAL REPORT AND
ACCOUNTS 2023
OVERVIEW OF THE BUSINESS AND ITS ENVIRONMENT
During the year under review, two of our Companys new shows,
Season 1 of Modern Love Mumbai and Season 3 of the international Emmy nominated show Four
More Shots Please!, were premiered on Amazon Prime Video, on May 13, 2022 and October 21,
2022 respectively. Both the shows have earned widespread critical acclaim and immense
popularity since their release, and won multiple awards, including the Indian Telly
Streaming Awards 2022, Afaqs! Vdonxt Awards 2023 and E4M Play Streaming Media Awards 2023.
Additionally, the filming of a new young adult drama series for Amazon
Prime Video, set on a university campus, has commenced in Delhi on July 5, 2023.
The core strength of our Company comes from its creative team. This
team has been able to create, develop and ready multiple shows and films, thereby setting
up a resourceful pipeline of projects. Several of these have been shared with streaming
and studio partners, and having been accepted, are now in development and pre-production
stages with various partners. Relying on the same, we hope to take at least one more show
into production in this financial year. With streaming platforms continuing to grow
viewership, the immediate future of the content business looks stable and strong.
Particularly for a Company like ours which makes shows for global audiences. There is also
growing interest from across the world in content emerging from India. And it is likely
that India may soon emerge as an important source of global content in a world that is
increasingly cutting cord and switching over to streaming. Our familiarity with the
English language, our costs structure, our creative and technical talent, and the latest
tech innovations we have adopted give us a strong advantage. As indeed our skill as a
nation of formidable storytellers. The PNC film library is now streaming on multiple OTT
platforms, giving our earlier work a new life, a new audience apart from those who watch
these films on satellite television on the Star TV platform. This growing viewership
strengthens our Companys repute as Storytellers to the World.
DIGITAL AND WELLNESS: THE SUBSIDIARIES
The Company has two subsidiaries viz. PNC Digital Ltd and PNC Wellness
Ltd.
PNC Digital Limited
The principal business of this subsidiary is sourcing content for
digital streaming, setting up delivery systems for digital streaming and running the
business of content aggregation as well as any other technology business using the
internet as its primary delivery platform. This subsidiary explores new opportunities that
may emerge in the streaming business by leveraging the goodwill and stature of the PNC
brand. One of its roles can be that of an intermediary providing distribution services to
content makers. Considering there was nominal revenue generation during the year under
review, the Company has impaired value of its investment in this subsidiary by
17.55 lakh.
PNC Wellness Limited
This Subsidiary operates in the wellness business segment which it
pioneered in India when it opened Moksh: The Wellness Place in Mumbai. After a decade of
innovative activity, with rentals increasing and the wellness business, like many others,
shifting to digital platforms, Moksh was shut down. The subsidiary however continues,
intending to use the brands goodwill and reputation to build a digital opportunity
at an appropriate time. RISKS, CONCERNS AND THREATS
Like almost all businesses, the content business is also risk-prone.
Shifting audience tastes and lifestyle patterns, more so after the pandemic, continue to
ensure that the theatrical market remains unpredictable for films. Distributors are risk
averse and are reluctant to pay minimum guarantees upfront as are studios. The Company is
therefore currently focusing on entirely de-risked strategies for recovering its
investments in content. We currently make content that is pre-sold or commissioned. It is
however possible that we may, in the future, if and when the market returns to normal,
invest in shows and films where small investments may need to be made for a stake in the
IPR. The Company is constantly researching shifting audience tastes and trying to create
innovative products that can meet the expectations of a maturing viewership which expects
higher and higher standards of quality. For this, we are regularly updating our
technological skills as well as anticipating trends. Global content consumption offers
interesting insights as the new generation of viewers are increasingly watching the best
of global content on streaming platforms. The negatives of the Companys archived
filmed content are ageing and in the current digital scenario, can risk becoming
technology-obsolete. To counter this and continue to generate income from these films, the
Company has successfully digitized its entire films archive. Our films, some of them over
two decades old, continue to be shown on the best and most rewarding satellite and
streaming platforms available.
INTERNAL CONTROL SYSTEMS
The Company has appropriate internal control systems in place. These
systems constantly assess and vet creative ideas. There is collective responsibility at
every stage of decision making and a Corporate Leadership Team, led by the CEO that
includes representation from all key departments, examines and clears each project. The
Company has in place an adequate system of internal controls with documented procedures
covering all corporate functions. Systems of internal control are designed to provide
reasonable assurance regarding the effectiveness and efficiency of operations, the
adequacy of safeguards for assets, the reliability of compliance with applicable laws and
regulations. Adequate internal control measures are in the form of various policies and
procedures adopted by the management covering all important activities like revenue
management, production, purchase, finance, statutory compliances, human resources, systems
management, safety and audit. These policies and procedures are updated from time to time.
Compliance is monitored by internal audit. The effectiveness of internal controls is
reviewed through the internal audit process, which is undertaken for every operational
activity. The focus of these reviews is as follow:
Identify weakness and areas of improvement
Compliance with defined policies and processes
Safeguarding of tangible and intangible assets
Management of business and operational risks
Compliance with applicable statutes
Compliance with the PNC Code of Conduct
The business process under the supervision of the Audit Committee of
the Board oversees the adequacy of internal control environment through regular reviews of
the Internal Audit Report and monitoring implementations of internal audit recommendations
through the compliance reports submitted to them. The Company is faced with different
types of risks which need different approaches for mitigation. On a primary basis our
Company has identified and categorized the following risks: Operational risks like injury
to lead actor/s and/ or technical crew, loss by fire, high personnel turnover, piracy,
delay in production cycles for reasons beyond our control, censor certification,
litigation, recovery of pending dues, unanticipated technological shifts, shifting trends
in consumption patterns, and statutory and legal compliances. Financial risks like
shortage of working capital, diminution of asset values, data loss, inventory loss, bad
debts and theft/loss of cash and valuables. Intangible asset risks such as piracy, misuse
of intellectual property rights and injury to the PNC brand image. Depending on the
nature, impact and probability of the risk our Company has various mitigating solutions
like providing for contingencies, taking insurance cover wherever possible, devising
appropriate marketing strategies, aligning pay scale with industry standards, training
staff and offering growth opportunities, maintaining work-life balance, providing for
leisure, installing proper payment systems, ensuring effective project management, forming
multiple teams with experienced team leaders, ensuring that the content complies with
guidelines, ensuring proper contractual documentation of all acquired rights, ensuring
clarifications are disseminated swiftly in the event of any mis-reporting, identifying new
platforms, ensuring staff familiarity with the latest technology, identifying trends,
carrying out research, ensuring proper filing of statutory documents and returns, ensuring
proper budgetary planning and cash flow, complying with proper depreciation accounting
policy, ensuring timely replacement of technology at best prices, maintaining proper
inward and outward register for content, checking the library periodically, initiating
legal action whenever required, monitoring cash levels and installing cash safe investing
in liquid funds or fixed deposits, registering intellectual property with appropriate
authorities and monitoring and managing brand imaging.
FINANCIAL PERFORMANCE
During the year under review, the Company incurred a loss because some
of the projects which were in the pipeline, did not commence to plan, owing to
recessionary risk-aversion measures taken by our international partners. Hence costs and
overheads could not be fully absorbed. The Company continued to review advance for content
as in the past and has written off an amount of 47.86 lakh incurred on developing
content that is no longer viable to take up in the future in post pandemic scenario.
HUMAN RESOURCES
The Company is continuously building its talent base. Its Corporate
Leadership Team has qualified and experienced members drawn from different
specializations. The middle management cadre has been developed and strengthened. The
Company, as a policy, sees its core content making business essentially as project
management. It prefers to assemble talent teams for each content project and these teams
are disbanded once the project is complete. The talent bank that PNC has access to remains
independent and is yet available to the Company at short notice. The Company enjoys
cordial relations with its employees and the talent that it hires on a project basis.
CAUTIONARY STATEMENT
Statements in the Management Discussion and Analysis describing the
Companys objectives and expectations may be forward looking statements within the
meaning of applicable securities laws and regulations. Actual results could differ from
those expressed or implied.
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