PNC Media and Entertainment Ltd Management Discussions

OVERVIEW OF THE BUSINESS AND ITS ENVIRONMENT

During the year under review, Season 1 of the Companys Netflix original series The Royals successfully premiered on May 9, 2025 globally. It remained in the global top 10 shows of Netflix as well as was #1 on Indias top 10 shows and was the first Indian series to trend in Netflixs Global Top 10 Non-English TV Shows across 58 countries, marking a cultural moment for Indian content globally before being renewed for a season 2. Production of the second season of The Royals is currently under development and pre-production, scheduled to commence filming during the second quarter of this current financial year.

Also, during the year under review, Season 4 of the Companys Emmy nominated Amazon Prime original series Four More Shots Please successfully premiered on December 19, 2025 globally. The much loved fourth season drew in past fans and new audiences in equal measures from around the world, growing its fandom exponentially, with viewers celebrating its consistent success in championing unapologetic contemporary Indian women, female friendships and the city of Mumbai since its debut in 2019.

The Company continued to review advances for content as in the past and the Company has written off an amount of 47.21 lakh incurred in developing content that is no longer viable to take up in the future. During the year under review, the Company entered into a licensing agreement with Shemaroo Entertainment Limited for the global broadcasting and streaming rights of 18 titles from its content library for 11 years, to enable timely monetisation, for a consideration. As a consequence of the said licensing agreement, the Management reassessed the carrying value of its content library, taking into account the expected future revenues from relevant titles as well as other titles forming part of the content library, and an external valuation report obtained. Based on such reassessment and in accordance with the Companys accounting policy, the cost of the content of 1,756.09 lakh has been written down. The resultant impact has been disclosed as an exceptional item in the financial results. The aforesaid exceptional item does not have any impact on the cash flows of the Company and it does not have or make any continuing impact on your Companys regular operations going forward.

The Company, during 2016, received an arbitration award in its favour against White Feather Films (Proprietor Mr Sanjay Gupta). Subsequently, the matter was amicably settled to bring finality to the prolonged litigation, and the Company entered into consent terms with White Feather Films (Proprietor Mr Sanjay Gupta), which were filed before the Honble Bombay High Court. The Honble Court accepted the consent terms and, vide its order dated April 21, 2026, permitted White Feather Films (Proprietor Mr Sanjay Gupta) to sell one of its properties for payment of the settlement amount of Rs. 255 lakh to the Company. Pursuant to the said order, the Company received Rs. 255 lakh, and the balance amount of Rs. 62.53 lakh has been written off.

Work on new series and films continues in development and it is the Companys endeavor to take atleast two more productions on the floors, later this financial year.

The Companys objective continues to be to scale up our existing business primarily through continuing to create and make new content, both original series and movies, that top-rated global studios are ready to financially and operationally collaborate with. Simultaneously, we intend to leverage the content library across various platforms on a global scale. Our business model intends to remain predictable, scalable, and sustainable, ultimately leading to greater profitability.

DIGITAL AND WELLNESS: THE SUBSIDIARIES

The Company has two subsidiaries viz. PNC Digital Limited and PNC Wellness Limited

PNC Digital Limited

This subsidiary was kept in order to explore 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 who are struggling to shift from traditional media to digital, where our Company believes the future lies.

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, 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 even the new generation of Indian 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 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 of 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 financial 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 differenttypes . ofrisks which need different approaches formitigation 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 effectiveproject 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 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 initiating cash safe investing in liquid funds or fixed deposits, registering intellectual property with appropriate authorities and monitoring and managing brand imaging.

The Company has in place a Risk Management Policy, pursuant to provisions of Section 134 of the Act and Regulation 17 of SEBI Listing Regulations. The Company has an organizational structure for managing and reporting on risks. The senior management periodically reviews the risk management framework to keep it updated and address emerging challenges. Risk assessment and management procedures and status are discussed at the meetings of the Audit Committee and the Board of Directors of the Company. In terms of Regulation 21 of SEBI Listing Regulations, the constitution of Risk Management Committee was not applicable during the financial year 2025-26.

FINANCIAL PERFORMANCE

During the year under review, the Companys total income is Rs. 3,830.99 lakh with a net loss after tax of Rs. 1,258.87 lakh, which was mainly due to an exceptional item.

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.