PVR Ltd Management Discussions.


PVR Limited (the Company) is Indias largest and most premium multiplex player with distinguished portfolio of cinema formats, ranging from mainstream to Luxe, Directors Cut, Playhouse, PVR ICON to PVR Superplex. The Company is leveraging cutting-edge technology to serve its customers the best movie-viewing experience with IMAX, Onyx, 4DX and Enhanced Cinema Experience (ECX). The Company also offers exclusive experiential offerings, including P[XL], a premium, extra-large screen experience and D-Box that offers motion-effect recliners. PVR Limited, along with its subsidiaries, is an integrated film and retail brand, with interests in box office collections, film distribution, Food and Beverage (F&B) outlets at its cinemas, and manufacturing and distribution of gourmet popcorn.

The Company has pioneered the transformational journey of Indias love for the movies from single screens to multiplexes. Its focus on customer experience, technology and innovations, strategically

located cinemas, leadership across key operating metrics, consistent financial performance, experienced leadership team (promoters, key managerial personnel and senior management) make it steer ahead of peers in the Indian film exhibition industry.

FY 2019-20 was a significant year in the Companys growth story, as it crossed borders and expanded to Colombo, Sri Lanka with a nine-screened premium property. Currently, the Company operates in two countries with 845 screens in 176 properties in 71 cities across India and Sri Lanka. With its expansive cinema circuit, the Company served over 1,017 lakh patrons in FY 2019-20. Importantly, the financial and operating results of the Company for FY 2019-20 were impacted in a limited manner on account to measures taken by the government/regulatory bodies, which includes closure of cinemas from March 11, 2020 onwards, to prevent the spread of COVID-19.

pvrs presence

Countries Screen Properties Total seats Cities States & UT
2 845 176 181,917 71 22


Global economy

The global economy experienced a mixed Calendar Year (CY) 2019. While the first half experienced slow growth due to the spill-over effects of a weak Q4 CY 2018, the second half recorded a modest recovery, with the overall growth coming in at 2.9% compared to 3.6% in CY 2018. CY 2019 saw the global economy encounter multiple uncertainties - a delayed Brexit, trade uncertainties, oil-market volatilities and geopolitical risks. These risks cumulatively led to significant deceleration in growth. Across countries, these uncertainties weighed on consumer confidence and business sentiment, dampening investment decisions and are likely to remain a key drag on the global growth going forward, unless addressed with synchronised efforts from all economies.

The growth in Advanced Market Economies (AMEs) declined from 2.2% in CY 2018, to 1.7% in CY 2019. The US economy was a major growth engine among advanced nations in CY 2019 and is projected to have grown by 2.3% during the same period.

The growth in the Emerging and Developing Economies (EMDEs) declined to 3.7% in CY 2019, from 4.5% in CY 2018, largely due to growing trade restrictions dampening business confidence and investment plans. The Chinese economy witnessed the lowest growth in 30 years, amidst a continued trade war with the US and persistently high inflation numbers due to swine flu. Growth was largely muted for the rest of emerging economies, due to market-specific reasons.

While CY 2020 started on a strong note with the US-China trade conflicts reaching phase one agreement and the uncertainty around Brexit fading, the outbreak of the COVID-19 pandemic, originating in China and spreading across the world, prompted most countries to impose a lockdown to break the chain of transmission. The containment measures severely impacted economic activities across the globe in Q1 CY 2020.


region-wise growth estimates (%)

Region CY 2018 CY 2019 CY 2020 (P) CY 2021 (P)
World 3.6 2.9 -4.9 5.4
AMEs 2.2 1.7 -8.0 4.8
EMDEs 4.5 3.7 -3.0 5.9
ASEAN 5.3 4.8 -2.0 6.2
US 2.9 2.3 -8.0 4.5
Euro Area 1.9 1.2 -10.2 6.0
UK 1.3 1.4 -10.2 6.3
China 6.7 6.1 1.0 8.2
Japan 0.3 0.7 -5.8 2.4
Russia 2.5 1.3 -6.6 4.1

(Source: International Monetary Fund (IMF))

According to the IMF, it is likely that in 2020 the global economy will experience its worst recession since the Great Depression, surpassing that seen during the global financial crisis a decade ago.

It is anticipated that the global economic growth would decline by 4.9% in CY 2020, amidst The Great Lockdown forcing almost all the economies towards a recession. There is an estimate that over 170 countries will witness a negative per capita income growth during CY 2020. Many countries would face multiple crisis, including health shock, weak domestic economy, low external demand, capital flow reversals and commodity market fallouts, risking worse outcomes.

With an underlying assumption that the pandemic recedes, and the containment measures unwind by 2H CY 2020, the IMF predicts the global economy to grow by 5.4% in CY 2021.

Indian economy

India continues to be one the worlds most resilient economies, which is growing consistently, despite challenges, uplifting millions from poverty and bringing them into the folds of mainstream economy. According to Ministry of Statistics and Programme Implementation of the Government of India, Indias economy is estimated to have grown by 4.2% in FY 2019-20, against 5.9% in FY 2018-19. The slower growth can be largely attributed to weak domestic consumption, liquidity crunch and sluggish manufacturing and construction activities. Besides, lower demand in the export markets also dragged down capacity utilisation of industries and dried up fresh investments.

During the year, the Government of India undertook proactive initiatives such as reducing corporate tax rates and offering credit guarantee for financially sound NBFCs. The Reserve Bank of India (RBI) reduced interest rates significantly to inject liquidity into the economy.

After staying within the RBIs target range, CPI inflation spiked to six-year high of 7.59% in January 2020, which prompted it to halt rate cuts. By March 2020, retail inflation reached 5.91% and the wholesale inflation stood at 1%. Soon after the green shoots of a recovery became visible, the COVID-19 pandemic hit India in Q4 FY 2019-10 and destroyed hopes of an early turnaround.

However, the long-term potential of the economy remains intact.

The enormous economic package amounting to 20 lakh crore (~10% of Indias GDP) announced by the Government of India, and the containment measures undertaken to limit the outbreak are commendable and keep faith for long-term growth potential.

Impact of COVID-19

COVID-19 has impacted lives and livelihoods across borders. It is likely to continue to have this severe and unprecedented effect on the world until a cure/ vaccine is made available or people develop natural immunity towards it. The measures to prevent its spread includes social distancing, which is being strictly imposed by governments.

In India, the government used a stringent lockdown to contain the spread of the diseases. Although quite effective in containing restrictions on social gathering and the nationwide lockdown affected 1.3 billion people residing in India and significantly affected industries, including entertainment businesses, especially cinema. All businesses faced supply chain disruptions, steep decline in consumption demand and investments. Besides, uncertainty in the informal sector and large cash flow gaps for corporates will aggravate this challenges to a quick economic recovery.

Synchronised government and RBI measures focus on stabilising economy

The government was responsive to the woes of the economy due to the COVID-19 disruption. It announced a comprehensive package equivalent to ~10% of Indias GDP for a faster economic revival. This included the initial interim package of 1.7 lakh crore with direct cash and food benefits to provide relief to daily wage earners, informal sector workers and farmers. For the salaried class, there were relaxation in the EPF terms and collateral-free lending for women SHGs.

The RBI synchronised efforts and announced major rate cuts, along with a host of measures, including reduction in CRR, long-term repo operations, six-month moratorium on all term loans and interest on working capital loans, as well as special liquidity funding, to provide relief to the economy. Other measures include special hassle-free lending and capital infusion packages for MSMEs and a change in their definition, issue of immediate pending income tax refund orders, special emergency health response package and relaxation in statutory and compliance matters. Additionally, to give a fillip to domestic industry, the government initiated Atmanirbhar Bharat (Self-Reliant India) movement.


The IMF forecasts Indias economy to contract by 4.5% in FY 2020-21. The governments focussed attitude and the economic package to bolster the economy will help spur growth and build a self-reliant India. The resilience of the Indian economy also finds validation in the latest economic outlook of the IMF, which estimates that Indias GDP is likely to grow by 6% in FY 2021-22, as the COVID-19 impact recedes.

The synchronised efforts from the government and central bank will also add up to provide more relief to the Indian economy. A recent KPMG report (April 2020) expects the economic recovery in India to be smoother and faster than other advanced economies.

(Source: IMFs WEO, June 2020)


Media & Entertainment (M&E) industry

Indias M&E industry has been characterised by rapid transformation towards digitalisation. Wider access, open adoption and democratisation of content have paved way for newer players, bringing more vibrancy to the already diverse market, with novel offerings and business models.

revenue growth rate summary

FY 2019

FY 2020

FY 2021 (E)

FY 2022 (E)

Revenue Growth (in 000 crore) % (in 000 crore) % (in 000 crore) % (in 000 crore) %
Digital ii.. 24 14.0 23 15.2 9 17.7 16
TV 71.9 6 80.7 12 73.3 -9 81.1 11
Radio 2.8 12 2.5 -11 2.0 -18 2.5 23
Print 32.3 5 30.9 -4 24.2 -22 29.3 21
OOH 3.9 15 4.0 3 2.8 -30 3.4 22
Films 19.6 12 22.4 8 12.2 -45 19.7 62
Overall 142.9 9 155.7 9 130.2 -16 154.8 19

(Source: CRISIL, April 2020)

Growth drivers

Direct-to-consumer segments gaining momentum

According to April 2020 CRISIL report, the overall M&E industry in India grew by 9% in FY 2019-20, on the back of phenomenal growth in digital segment, aptly supported by television. While digital grew by 23% to 14,000 crore, television continued rule to the 1,55,700 crore M&E industry contributing 80,700 crore (over 50%) at 12% growth rate. The traditional segments of mass entertainment - radio and print de-grew by 11% (to 25,000 crore) and 4% (to 30,900 crore), respectively.

Industry growing faster than overall GDP

FY 2019-20 witnessed the M&E industry outpace the overall GDP growth rate of India, growing by 9% to reach 1,55,700 crore. While Indian entertainment is being consumed in over 150 countries across the globe through television, movies and digital platforms, there is a growing demand for original content in Indian homes through OTT platforms.

Subscriptions marching ahead of advertising

During FY 2019-20, subscriptions moved significantly ahead of advertising, as the latter remained muted in H2 CY 2019 due to a sluggish pace of the economy, which led to subdued festive ad spending. While advertising de-grew marginally by 0.14% from 71,200 crore in FY 2018-19 to 71,100 crore in FY 2019-20, the subscriptions grew by 17.99% from 71,700 crore in FY 2018-19 to 84,600 crore in FY 2019-20.


According to a CRISIL Report (April 2020), COVID-19 is expected to affect the M&E segment significantly, as revenues are expected to slip by 16% (~? 25,000 crore) from 1,55,700 crore in FY 2019-20 to 1,30,200 crore in FY 2020-21. Ad spends are expected to plummet ~18% in FY 2020-21, as corporates shift focus on controlling costs. The impact may vary across sub-segments, with digital growing at a slower pace and TV and print being cushioned with subscription revenues. The recovery of OOH - cinema, events and sports would be an uphill task, as social distancing norms take relevance. However, empirical data suggests a V-shaped recovery in FY 2021-22, as consumption revives.

Filmed entertainment

India is the 7,h largest box office market in the world, grossing US$ 1.6 billion revenues in box office collections, equating with the UK, South Korea and France box office collections in CY 2019. While the US/ Canada continue to reign with US$ 11.4 billion (a drop from US$ 11.9 billion in 2018), China grossed next at US$ 9.3 billion.

India has the worlds largest film industry in terms of number of movies produced in a year (Source: IBEF). It has 400 production and corporate houses involved in film production. During CY 2019, ~1,833 films were released in India, a rise of 3.3% vis-a-vis ~1,777 movies during CY 2018. Overall, the filmed entertainment segment in India grew by 14.29% in FY 2019-20 to 22,400 crore, even though the screen count declined by 1% to 9,527 screens in 2019.

domestic box office collections

Particulars FY 2018-19 FY 2019-20 FY 2020-21 (E) FY 2021-22 (E)
Domestic theatricals 13.5 15.1 6.2 12.2
International theatricals 1.6 1.9 0.8 1.5
C&S rights 3.4 4.2 4.6 4.9
In-film advertisement 1.1 1.2

0.5 1.1

Total 19.6 22.4 12.2 19.7

breakup of domestic theatricals into different languages and their comparison with the company is as follow:

India PVR PVR Share (%) PVR Share (%)
Language 2018 Mix (%) 2019 Mix (%) Growth (%) 2018 Mix (%) 2019 Mix (%) Growth (%) 2018 2019
Hindi 4,392 45 4,831 44 10 1,056 56 1,162 53 10 24 24
Hollywood# 1,222 12 1,595 15 31 384 20 509 23 33 31 32
Regional 4,196 43 4,522 41 8 442 24 510 24 15 11 11
Total 9,810 100% 10,948 100% 12% 1,882 100% 2,181 100% 16% 19% 20%

(Source: Ormax Box Office Report, 2019 referred for India numbers; compared with PVR Results)

#Note: Hollywood Box office includes all language versions.

• Total GBOC in India crossed 10,000 crore mark in CY 2019; PVR contributed ~20% of this surpassing 2,000 crore in GBOC

• Hindi was the largest segment with 44% mix in the overall Indian GBOC; it constituted more than half the GBOC for PVR

• PVR market share in Hollywood content is higher than industry benchmark

• In CY 2019, PVR enjoys 32% market share in Hollywood GBOC and 24% in Hindi segment. PVRs overall market share stands at 20%

• PVRs consolidated its market share in 2019 by ~100 bps led by gains in Hollywood (+1%)

• Hollywood, the second biggest segment after Hindi significantly raised its GBOC share in CY 2019 both for PVR and India

• Total footfalls across languages in CY 2019 crossed the 100 crore mark, growing by 9% over the previous year. PVR breached the

10 crore mark, serving 20% more patrons than 2018. Better than industry growth resulted in PVRs admit share rising from 10% in 2018 to 11% in 2019.

Expanded share of Hollywood

The Hollywood box office collection contribution to total domestic theatricals was 13%, which was 33% higher at 16 billion, as against CY 2018 collection of 12.2 billion. Avengers: Endgame was the highest grossing Hollywood movie of all time in India, with gross collections of 4.3 billion. three other movies found place in the top 10 grossing Hollywood movies of all times and a total of four Hollywood movies made to the 100-crore club during 2019.

Rise of the 200 crore club

CY 2019 witnessed the rise of 200 crore club, as six Hindi movies made to this list as opposed to three in CY 2018. In fact, three Hindi movies crossed 300 crore collections. The 100 crore club was occupied by 17 Bollywood films. War emerged as one of Indias all-time Bollywood blockbusters, grossing 3.4 billion at the box office.

Regional movies

CY 2019 witnessed revenue contribution of 50.4 billion in domestic theatricals as against 47.9 billion in 2018, while the number of regional films released was 1,460, which were 80% of the total films released in India in CY 2019.

Growth drivers

Government support initiatives

The central government provided relief to the sector in January 2019 with rationalisation of GST rates from 28% and 18% to 18% and 12% for ticket prices more than 100 and lower than 100, respectively. The state governments also supported the industry re-introducing the tax-free film concept. Under this mechanism, state governments waive off their share of GST on socially impactful films, providing impetus to production of such movies. CY 2019 witnessed Mission Mangal, Super 30, Panipat and Tanhaji: The Unsung Warrior receive these benefits.

regional movies

Released in India during FY2019-20

Film Facilitation Office (FFO) to ease moviemaking

The Ministry of Information and Broadcasting has setup a Film Facilitation Office (FFO) in National Film Development Corporation (NFDC) to enable domestic and international movie producers with a single window clearance and facilitation mechanism. This initiative will strengthen Indias position as an ideal film-making destination on the global entertainment map.

Quality content valued over star power

Thought-provoking movies have been gaining popularity for the last few years, strengthening the fact that only star-power is not essential for a successful movie. Though, star-studded movies can bring in good opening at the box office, the ultimate success of a film depends on the content and storyline. CY 2019 continued this trend with success of movies like Dream Girl, Bala, Chhichhore, etc. signifying that a good concept, great treatment and small budget movie also has a scope for tremendous success at the box office.

Exhibition infrastructure

The Indian movie exhibition infrastructure comprises two important elements: single screens and multiplexes. Both avenues cater to distinct markets and their respective segments. While the single screens rule the rural hinterlands and small towns, the multiplexes cater to slightly bigger towns and towards an aspirational segment.

It is a contradictory datapoint that though India produces the highest number of movies globally on an annual basis, yet it has one of the most under-penetrated markets in terms of screen density. Even more paradoxical is the fact that the already under-penetrated market has reduced the total number of screens from 9,601 in CY 2018 to 9,527 in CY 2019. This decline is primarily because single screens in the Hindi heartland are shutting down, as movies continue to be made for multiplex audiences that resonate less with the non-metro viewers. However, multiplexes were offsetting the declines with deeper penetration across smaller towns with population of ~3,00,000 - 4,00,000.

Film exhibition infrastructure continues to modernise

The number of people watching movies at cinema halls remained almost constant at 1,000 million in CY 2019. The repeat footfalls grew by 11.6% in CY 2019, due to the initiatives from film exhibitors. Leading multiplexes continue to add premium formats to cater to growing demand from audiences. Around one fourth of screen additions by multiplexes were in premium format. Large multiplex operators continue to invest in latest audio-visual technology, which enhances their USP in the location, enabling them to attract audiences easily. There is also a growing trend in multiplexes to operate mix formats - like premium and kid-focussed screens at a single property, attracting wider audiences.

Growth drivers

Rising disposable incomes

As per IBEF Report, the elite, effluent, aspirers and next-billion income classes are expected to grow at a CAGR (2017-2025) of 11%, 9%, 5% and 2%, respectively. These rising incomes would lead to more spends on entertainment and ultimately bring about a growth in the movie audiences at cinema halls.

Higher F&B contribution driving margins

The F&B segment continued to lead as the second-largest revenue source for multiplexes. This segment has brought in decent growth for the multiplexes, with innovative restaurant-like menus that go beyond the usual popcorn and colas, with gourmet offerings, celebrity chefs and automated kiosks, effectively satiating the demand for a meal within the cinema itself. Globally, the ticket to non-ticket ratio is 1:1. However, in India non-ticket revenues are barely 40-50% of the ticket revenues, representing a huge scope for growth.

Multiplexes evolving as event destinations

Indian multiplexes are innovating with newer offerings to widen their reach for destination-based events like exclusive parties, live events, franchisee meets, product launches, etc. Live sports events being broadcasted at multiplexes, private screening concept, as well as weekly calendars for jazz bands and stand-up comedies are some of the newer offerings by the leading multiplex chains to stay ahead of the curve.


Leading multiplexes have footprint in ~70 towns, whereas movies are released in 400-450 towns, representing a huge headroom for growth. However, the lockdown is expected to impact box office collection of exhibitors during FY 2020-21. Footfalls are expected to be weaker even post lockdown due to safety and health concerns among people. This may lead producers to defer releases unless occupancy improves or move them to TV/OTT platforms to release their working capitals. According to a CRISIL report (April, 2020), the expected duration for recovery post lockdowns for multiplexes is ~5 months.

With rising OTT popularity, movie producers will focus more on releasing films with better visual effects, higher quality camera work, special sound effects and/or 3D effects to generate a pull for audiences towards cinema houses. Multiplexes are already bracing up their infrastructure for this scenario with super premium offerings, mix formats at a single property, investing in technology to offer a distinguished experience to the customers.


FY 2019-20 witnessed robust growth driven by strong performance of content. The Company was able to maintain its position in the industry across all operating parameters due to the following:

• Leader in terms of screen count, admissions and operating revenues

• Pan-India presence with diversified operations across geographies and content

• Highest occupancy among all leading multiplexes in the country

• Highest Average Ticket Price (ATP) and Spend Per Head (SPH) among all leading multiplexes in the country

• Highest revenue and EBITDA per screen among all leading multiplexes in the country.

Key events of FY 2019-20

• The COVID-19 pandemic has disrupted business and will adversely affect operations and results of operations

The outbreak of COVID-19 is subjecting India and the world to extreme stress and uncertainty. Amidst the tumult of this unprecedented period, the Companys priority has been to safeguard the health and well-being of its employees, customers and communities at large while continuing the business operations with responsibility and care.

I. Impact of COVID-19 pandemic on the business

• Beginning March 11, 2020, the Company started closing its screens in accordance with the order passed by various regulatory authorities and within a few days most of its cinemas across the country were shut down

• Since Cinema Exhibition is the only business segment, Company is currently not generating any revenue from admissions, food and beverage sales or other revenue and cash flow from operations

• Having said that it upholds its cash outflow commitments, including employee salary pay-outs, other overheads, as well as payments for older working capital. This has and will continue to have significant negative impact on profitability and liquidity during the lockdown and even thereafter till business comes back to normalcy

• Further once the cinemas are re-opened, the Company may not be able to run its establishments at normal capacity utilisation levels on account of social distancing measures that cinemas may be required to follow as well as health concerns that the patrons may have. Therefore, the Companys revenue and cash flow generation may be impeded even once it is allowed to restart operations.

II. Financial impact of one-off expense

Company has taken one-time write-off of perishable inventory of 183 lakh in Mar20, on account of spoilage due to closure of cinemas pursuant to COVID-19.

III. Operational steps to ensure continuity

Key measures undertaken in view of COVID-19 crisis:

• Employees are connected through secured remote access to ensure continued operations and Work From Home (WFH) has been facilitated wherever possible. Robust IT controls have been put in place to ensure data privacy, cyber threats and confidentiality

• The Company has undertaken review of financial impact of COVID-19 and related developments on the business. Basis the review, the Company doesnt see any risk

of impairment of its assets, given the measures being pursued to safeguard/mitigate related risks

• The Company is undertaking decisive action to mitigate the adverse impact of COVID-19 on businesses by:

A. Implementing cost reduction strategies

B. Enhancing liquidity

C. Cash-flows management

A. Implementation of cost reduction

Expenses Remarks The Company has taken significant measures to reduce its personnel cost, including:
Personnel cost
• Salary cuts across various levels in the organisation during the period of lockdown
• Reduction in headcount
• Decision on increments deferred
Rental and Common Area • Written to developers for waiving rental and CAM charges for the lockdown period
Maintenance (CAM) cost • In discussion with developers for reducing rentals post re-opening
• Invoked force majeure clause in its agreements
Electricity charges • Electricity and water charges drastically reduced due to the closure of cinemas
• Certain state governments have even waived off minimum load charges
Other overheads • Significant reduction in other overheads
• Contracts like housekeeping/security suspended till cinemas are closed
• All discretionary spends like advertising, non-essential expenses are kept on hold

• Expect to achieve a significant reduction of 70%-75% in the Companys fixed costs expenses during the period of closure of cinemas

• All these initiatives are reviewed through a regular CFO review and approval process for all outgoing procurement and payment requests.

B. Liquidity enhancement

• Additional borrowings: The Company raised additional borrowings from existing bankers to shore up liquidity. As on March 31, 2020, the Company had cash and bank balance of 316 crore. As on June 7, 2020 the cash and bank balance was 227 crore (including undrawn bank lines)

• Announcement of rights issue: The Board of Directors of the Company approved a Rights Issue for an amount of up to 300 crore as confidence capital to shore up the capital base

C. Cash flow management

• Working capital payments: Working with suppliers and vendors to negotiate an alternative payment schedule for clearing opening outstanding

• Capital expenditure: All capex spends have currently been put on hold

• Debt obligation: The Company accepted the relief offered by the RBI with respect to the moratorium on interest and principal repayment between March 2020 and August 2020.

The Company will continue to take all measures necessary to further reduce the impact at all cost levels, including fixed costs and outgoing cash flows.

IV. Operational preparedness for re-opening

Multiplex Association of India (MAI), under the aegis of Federation of Indian Chambers of Commerce and Industry (FICCI) has submitted enhanced safety and precautions plan for cinemas to Information & Broadcasting Ministry and various state governments. Some of the measures stated in the representation are:

• Minimal human contact

• Adhering to all social distancing norms and guidelines

• Patrons will be seated basis Government directives

• Disinfecting all possible areas of the cinema premises

• Body temperature checks with infrared scanners

• Masks mandatory and PPE kits made available for purchase

• Hand sanitisers to be placed at all strategic locations

• All point of sales will have demarcated directives.

Detailed presentation submitted by MAI is available on the Companys website www.pvrcinemas.com.

V. Re-opening schedule

We are in continuous touch with local authorities for re-opening of our cinema halls. However, as per ministry guidelines, cinema halls are still not allowed to start operations.

• Merger update

The merger scheme of SPI Cinemas with the Company received approval from regulators during the year.

Accordingly, The Company has given effect to the accounting treatment in the books of account as per acquisition method per Indian Accounting Standard (Ind AS) 103 Business Combinations, as prescribed by Section 133 of the Companies Act, 2013. Consequently, the standalone and consolidated financial figures for the year ended March 31, 2019, which were earlier approved by the Board of Directors at their meetings held on May 10, 2019 have been restated to give effect to the scheme. Please refer the financial statements for further details.

• Expansion into Sri Lanka

The Company made its International debut, with the opening of a nine-screen cinema at Colombo, Sri Lanka. Redefining movie viewing experience, the property has premium formats like PVR Luxe, a luxury cinema format and PVR Playhouse, among others.

9-screened cinema

Debut vehicle in Colombo, Sri Lanka

• Increasing share of premium formats

The Company continued premiumising its network by adding premium screens/seats. It launched PVR Sapphire at PVR Pacific D21 Mall, Delhi, a new premium category cinema experience in addition to PVRs bouquet of Luxe and Directors Cut. PVR Sapphire has best-in-segment theatrical technologies, along with F&B menu like Bento & Bowl; a dedicated box-office and personalised hospitality services on request.

As on March 31, 2020, 11% of the Companys screen portfolio is premium. The following are the premium screens as on March 31, 2020:

Format Screens
Gold Class/Luxe 37
DC 4
4DX 18
Playhouse 13
P[XL] 8
Onyx 1
Sapphire 4
Total 94
11% of our screen portfolio is premium

• Technological advancements

The Company collaborated with Canadian motion technology player D-BOX Technologies Inc. for D-BOX motion seats that offer a more immersive experience while watching the movie. Currently, these seats are installed in PVR Select City Walk, Delhi and PVR Infinity Mall, Mumbai. War, Jumanji 2: The Next Level, Frozen II, Ford V Ferrari, Street Dancer are some of the movies that released in D-Box-enabled format.

• QIP offering

During the year, the Company completed fund raising through a QIP offering amounting to 500 crore.

The offering saw participation from top sovereign and pension funds and marquee domestic investors. The issue price was fixed at 1,719.05 per equity share (including a premium of 1,709.05 per equity share). The Companys total stake dilution through this placement is ~6%.

The key objective of the issue was towards repayment/ pre-payment of a part of the Companys outstanding indebtedness; funding strategic expenditure towards expanding screen network; general corporate purposes and other corporate exigencies; including but not limited to

funding balance milestone based payments in relation to its acquisition of SPI Cinemas; long- and short-term working capital requirements; strategic investments/acquisitions and expenditure towards refurbishment of its existing cinemas. Accordingly, the Company utilised QIP fund in below manner:

Particulars Amount ( in crore)
Gross fund received through QIP 500
QIP issue expenses 10
Net proceeds 490
Fund utilisation
- Debt repayment 297
- Capex and general corporate purpose 133
Closing QIP fund as on March 31, 2020 60

The Company filed Placement Document dated October 29, 2019 detailing risk factors, the Companys strength and strategies, industry overview, business overview and its financial position, among other details, as required under the SEBI (Issue of Capital & Disclosure Requirements) Regulations 2018, which is available on the Companys website and on stock exchanges.

• ind AS 116 Lease

With effect from April 1, 2019, the Company adopted the new Accounting Standard Ind AS 116 Leases.

The new standard has a significant impact on financial statements, including:

• Accounting to shift from operating lease model (off balance sheet) to finance lease model (on balance sheet)

• Present value of future rentals are recognised as Right of Use (RoU) asset and its corresponding Lease liability

• RoU to be amortised on a straight-line basis over the lease period; lease payments to be apportioned between finance charge and reduction of the lease liability

• Significant impact on reported KPIs, including EBITDA, EBITDA margin, PBT, EPS and accounting ratios

• No economic impact on the business

• NET impact on cash flow is Nil.

The impact of standard on various KPIs can be understood in following manner.

KPIs IMPACT Amount ( in lakh) COMMENTS
Rent * 50,004 Lease expense will be reduced and will be accounted as depreciation and interest expense.
EBITDA T>t 50,004 As lease expense will now be accounted as depreciation and interest expense, EBITDA will increase.
EBITDA margin t 15% With increase in absolute EBITDA and no change in revenue, EBITDA margin is naturally going to increase under the new accounting standard.
Depreciation and amortisation * 30,831

Lease expense will now be split under depreciation and interest expense. Hence, depreciation and interest expense will see an increase under the new accounting standard.

Interest expense t 32,806
PAT * 10,202 Basis the standard, lease expenses will be front loaded, hence, net profit for the earlier years will be lower. However, over the term of the lease, there will be no impact on the net profit.
Right-Of-Use(ROU)* t 249,229 The standard requires to create lease liability and corresponding right to use asset to account for future
Lease liability* * 327,416 lease liability. Basis which balance sheet will be asset rich with corresponding heavy indebtedness.
Impact on opening equity* * 50,866 As Company has adopted retrospective method of adoption of Ind AS 116, cumulative impact (net of tax) is adjusted from opening reserve.
Cash outflows No Impact


The accounting standard shift will not lead to overall cash flow impact, though operating cash flow will improve at the expense of financing activity cash flows.
Operations of the Company No Impact There will be no change in operations and economics of the business. The business will run as usual.

*as on April 1, 2019

• Loyalty @ PVR

PVR PRIVILEGE, the flagship loyalty programme of the Company continues to gain scale. As on March 31, 2020, it had over 100 lakh members since its launch, which is a significant jump from a base of ~46 lakh as on March 31, 2019. The Company would continue to invest in this programme and intends to work on making this programme the most admired loyalty programme in the country.

Key features of PVR PRIVILEGE are:

• Free Privilege Popcorn on first transaction of 100 or greater

• Customer earns 5 points for every 100 spend on tickets and F&B items

• Once 50 points get accumulated, it turns into a voucher, which can be redeemed at cinema counters or digital platforms for purchase of tickets and/or F&B items

• Exclusive privileges like birthday bonuses, invitation to events and premieres etc.

Particulars As on March 31, 2020 As on March 31, 2019
Loyalty members ~112 lakh ~46 lakh

• New screen openings

The Company operationalised the following cinemas during FY 2019-20:

N- Cinema No. Date of Opening Screens
1 PVR Suraj Chanda Tara, Amritsar April 22, 2019 6
2 PVR Downtown Mall, Kolkata April 26, 2019 3
3 PVR Vegas Mall, Gorakhpur April 30, 2019 4
4 PVR Uthandi Mall, Chennai June 7, 2019 10
5 PVR Preston Mall, Hyderabad June 28, 2019 4
6 PVR Gaur City Mall, Noida July 12, 2019 9
7 PVR GMS City Centre Mall, Satna August 15, 2019 3
8 PVR Riddhi Siddhi Mall, Sri Ganganagar August 28, 2019 3
9 PVR One Galle Face Mall, Colombo November 8, 2019 9
10 PVR Vegas Mall, Delhi November 15, 2019 12
H PVR Cosmo Mall, Zirakpur January 13, 2020 4
12 PVR Nilamber Triumph Mall, Vadodara February 21, 2020 5
13 PVR Pacific D21 Mall, Delhi March 6, 2020 6
14 PVR Orion Uptown Mall, Bengaluru March 6, 2020 5
15 PVR Treasure Island Mall, Indore March 14, 2020 4
Total 87

• Branding initiatives

• Renewed partnership with Kotak for co-branded credit card

• Launched the PVR brand film to celebrate its customers and their delight stories.

scot analysis

Strengths Challenges
• Largest theatre network across India with strong brand equity • Dependency on development of malls for growth
• Strategically located cinemas • Continuous technology evolution
• Diversified product offerings and premium guest experience • Dependency on movie performance
• Leadership position across key operating metrics • Controlled ticket price in some states
• Consistent financial performance • Regulatory changes
• Asset-light model with no ownership of cinema premises
• Experienced promoters and senior management team with an established track record
• Usage of cutting-edge technology such as Dolby stereo sound system, digital cinema technology for unmatched customer experience
• High entry barriers
Opportunities Threats
• Young demographics of India ideal for consumption of films • The COVID-19 pandemic has disrupted the business and will adversely affect operations and results of operations
• Large untapped Indian market, with significant headroom to increase network across the country
• Increasing competition in the industry
• Growing discretionary spending, especially on entertainment by consumers • Challenges in securing strategic locations on commercially viable terms
• Large film industry with more than 1,500 films released each year • Piracy and live-streaming videos may reduce the number of cinema customers
• Diversified content (Bollywood, Hollywood and regional) • Competition from alternative content and movie distribution channels, including OTT content and home-videos, movie DVDs, and others may result in a decline in cinema attendance and limit ticket pricing
• Rising trend of successful content-based smaller budget movies
• Termination/non-renewal of lease agreements
• Allowing outside food within cinemas, may increase security risk and lower F&B revenue


FY 2019-20 was a year of strong performance for the Company, even as India faced a cyclical slowdown. PVRs strong brand, its focus on expanding presence and innovative spirit enabled the Company to stay resilient during these tough market conditions.

The discussion in this section relates to the standalone financial results pertaining to the year ended March 31, 2020. The financial statements of Company have been prepared in accordance with the Indian Accounting standards (Referred to as Ind AS), prescribed under Section 133 of the Companies Act, 2013, read with the Companies (Indian Accounting Standards) Rules as amended from time to time. Significant accounting policies used in the preparation of the financial statements are disclosed in the notes to the standalone financial statements. Further, the standalone financial results for the year ended March 31, 2020 are not strictly comparable with corresponding results for the year ended March 31, 2019 on account of adoption of Ind AS 116 Leases with effect from April 1, 2019 and SPI Cinemas numbers are reported for 12 months in FY 2019-20, however, in FY 2018-19, SPI Cinemas numbers are included post acquisition i.e. August 17, 2018.

The table below gives an overview of the standalone financial and operating results for FY 2019-20 compared with FY 2018-19.

The Company eliminated the impact of Ind AS 116 from earnings and balance sheet and then compared it with last year numbers to show actual growth/de-growth in numbers.

Particulars March 31, 2020 Reported Ind AS 116 Adjustment* March 31, 2020 Adjusted* % of Revenue March 31, 2019 % of Revenue Growth/ De-growth
Revenue from operations 3,28,436 - 3,28,436 99% 3,03,935 99% * 8%
Other income 4,286 - 4,286 1% 3,150 1% ? 36%
Total Income 3,32,722 3,32,722 100% 3,07,085 100% * 8%
Movie exhibition cost 77,021 - 77,021 23% 71,165 23% * 8%
Consumption of food and beverages 25,927 - 25,927 8% 23,514 8% ? 10%
Employee benefits expense 38,166 - 38,166 11% 32,686 11% * 17%
Other operating expenses 80,774 50,004 1,30,778 39% 1,18,944 39% ? 10%
Total expenses 2,21,000 50,004 2,71,892 82% 2,46,309 80% * 10%
EBITDA 1,10,834 (50,004) 60,830 60,776 ? 0%
EBITDA Margin (%) 33% 18% 20% * -2%
Finance costs 47,984 (32,806) 15,178 5% 12,775 4% ? 19%
Depreciation and amortisation expense 53,306 (30,831) 22,475 7% 18,164 6% * 24%
Profit before tax 9,544 13,633 23,177 29,837 * -22%
PBT Margin (%) 3% 7% 10% * -3%
Tax expense 6,528 3,431 9,959 3% 10,828 4% * -8%
Profit after tax 3,016 10,202 13,218 19,009 * -30%
PAT Margin (%) 1% 4% 6% * -2%
Operating Numbers
Locations (Nos.) 175 175 164 ? 7%
Screens (Nos.) 836 836 763 ? 10%
Admits (lakh) 1,015 1,015 993 ? 2%
Gross ATP 204 204 207 * -1%
Net ATP 171 171 165 ? 3%
Gross SPH 99 99 91 ? 9%
Occupancy % 35% 35% 36% * -1%

*Proforma numbers I. Revenue

Total revenue increased by 8% or 25,637 lakh during the year ended March 31, 2020 as compared to previous year ended March 31,

2019. Total revenue comprises the following:

A. Income from sale of movie tickets

Income from sale of movie tickets increased by 6% or 9,045 lakh during the year ended March 31, 2020 as compared the previous year ended March 31, 2019. Primarily the increase is on account of:

(i) New screens made operational during the year

(ii) Admits increased by 2% and Net ATP increased by 3%; the growth in footfall was led by strong content performance of

movies like Dream Girl, Bala, Kabir Singh, Mission Mangal, Avengers: Endgame, The Lion King, Chhichhore, Super 30, Saaho, Kesari, Good Newwz, Tanhaji and others. Further, the Company lost some admits due to closure of cinema since mid-March 2020 due to COVID-19, strong content like Sooryavanshi was scheduled to release during this period

(iii) Content diversification by admits:

Language FY 2019-20 (%) FY 2018-19 (%)
Hindi 55 58
English 16 13
Regional 29 29

B. Income from sale of F&B

Income from sale of F&B increased by 12 % or 9,969 lakh during the year ended March 31, 2020 as compared to the previous year ended March 31, 2019. The increase was mainly due to addition of new cinemas and increase in Spend Per Head (SPH) by 9%.

C. Advertising revenue

Advertising revenue increased by 6% or 2,213 lakh during the year ended March 31, 2020 as compared to previous year ended March 31, 2019.

D. Convenience fees

Convenience fees increased by 32% or 4,158 lakh during the year ended March 31, 2020 as compared to previous year ended March 31, 2019. The ticketing agreement with Bookmyshow and Paytm got renewed in July, 2018 and SPI Cinemas was acquired in August 2018. Therefore, last year proportionate revenue was accounted and however, in the current year full 12 months revenue is accounted.

E. Other operating revenue and other income

Other operating revenue, including other income increased by 2% or 252 lakh during the year ended March 31, 2020 as compared to previous year ended March 31, 2019. It includes income from movie production and distribution, food court income, gaming income, management fees, interest income and other non-operating income.

II. Expenses

Total expenses increased by 12% or 32,297 lakh during the year ended March 31, 2020 as compared to previous year ended March 31, 2019. Total expense comprises following:

Note: (Percentages denotes expense as a percentage to Total Revenue)

A. Movie exhibition cost

Movie exhibition cost increased 8%, or 5,856 lakh, during the year ended March 31, 2020 compared to the year ended March 31, 2019 primarily due to increase in revenue from sale of movie tickets. This cost is fully variable and linked to sale of movie tickets.

Particulars FY 2019-20 (%) FY 2018-19 (%)
Movie exhibition cost (as a % to Box office Revenue) 45 44

B. Consumption of F&B

The consumption of F&B increased 10%, or 2,413 lakh during the year ended March 31, 2020 compared to the year ended

March 31, 2019 primarily due to increase in revenue from sale of F&B. This cost is fully variable and is linked to sale of F&B.

Particulars FY 2019-20 (%) FY 2018-19 (%)
Cost of goods sold (as a % to F&B revenue) 27 28

C. Employee benefit expenses

Employee benefit expenses increased 17%, or 5,480 lakh, during the year ended March 31, 2020 compared to the year ended March 31, 2019 primarily due to the opening of new screens, annual increment and accounting for SPI Cinemas employee cost for 12 months as against partially (from date of acquisition) in last financial year.

D. Rent and Common Area Maintenance (CAM)

Rent and CAM expenses increased 15%, or 9,534 lakh, during the year ended March 31, 2020 compared to the year ended March 31, 2019 primarily due to opening of new screens, and accounting for SPI Cinemas property rental and CAM for 12 months as against partially (from date of acquisition) in last year and escalations on some properties.

E. Other operating expenses

Other operating expenses primarily includes Electricity and water charges, repairs and maintenance, movie production, distribution and print charges, marketing expenses, rates and taxes, security service charges, travelling and conveyance, legal and professional fees and other expenses. The increase in operating expenses were commensurate to the increase in the scale and size of the business due to expansion and addition of new cinemas during the year. The expense increased 4% or 2,300 lakh for the year ended March 31, 2020 as compared to March 31, 2019.

F. Finance cost

At 5% of total revenue, finance cost is an important expense.

It includes interest on debentures, term loan, banks and other financial charges.

G. Depreciation and amortisation expense

Depreciation and amortisation expenses account for 7% of total revenue. The expenses increased 24% or 4,311 lakh, primarily on account of increase in depreciable assets resulting from maintenance capex and capex incurred for opening new cinemas and accounting for SPI Cinemas property depreciation for 12 months as against partially (from date of acquisition) in last year.

Balance Sheet

The following table set forth selected items from the standalone balance sheet:

Particulars ( in lakh) March 31, 2020 March 31, 2019

Growth/ De-growth

Reported Reported
Non-current assets 6,63,826 3,44,034 * 93%
Current Assets 69,414 35,645 ? 95%
Total 7,33,240 3,79,679 t 93%
Equity and liabilities
Equity 1,46,322 1,47,572 * -1%
Non-current liabilities 4,61,907 1,28,902 ? 258%
Current Liabilities 1,25,011 1,03,205 21%
Total 7,33,240 3,79,679 93%

Increase in assets and liabilities and decrease in equity is primarily on account of adoption of Ind AS 116 lease.

I. Non-current assets

Non-current assets includes property, plant and equipment, goodwill, intangible assets, capital work-in-progress, interest in joint ventures, security deposits to mall developers, deferred tax assets and other non-current assets. The increase in non-current assets is due to capital expenditure incurred for renovation and for new cinemas and security deposit given to mall developers on signing for new properties.

II. Current assets

Current assets include inventories, trade receivables, cash and cash equivalents and other current assets. Its increase is on account of 31,335 lakh crore cash held by the Company as on March 31, 2020 as against 2,144 lakh of cash held last year.

III. Equity

Equity comprises equity share capital and reserves and surplus. This increased primarily on account of 50,000 lakh of capital

received during the year through QIP and profits earned during the year.

IV. Non-current Liability

Non-Current liability includes borrowings, non-current portion of gratuity and leave encashment liability, deferred tax liability and other non-current liabilities. This decreased primarily due to recognition of revenue against outstanding convenience fees advance received from Bookmyshow and Paytm last year under ticketing agreement and prepayment of debt from QIP funds. This decrease is partly set-off by 6,118 lakh related to classification of deferred consideration related to SPI Cinemas acquisition as non-current.

V. Current liability

Current liability includes short-term borrowings, trade payables, other financial liabilities, current portion of gratuity and leave encashment, and other current liability. This increase has been in line with the increase in overall business.


Particulars Formula Unit FY 2019-20 FY 2018-19
Debtors Turnover Ratio Advertisement Income/Average Trade Receivables in days 167 159
Inventory Turnover Ratio Sale of food & Beverages/Average F&B Inventory in days 7 6
Interest Coverage Ratio EBIT/Finance cost times 1.2 3.3
Current Ratio Current Assets/Current liabilities times 0.6 0.3
Debt Equity Ratio Debt/Equity times 0.9 0.9
EBITDA Margin EBITDA/Total Income % 33% 20%
Operating Profit Margin EBIT/Total Income % 17% 14%
Net Profit Margin Profit after tax/Total Income % 1% 6%
Return on Net Worth Profit after tax/Equity % 2% 13%


1) For computing above ratios reported standalone numbers are considered.

2) FY 2019-20 ratios includes impact of Ind AS 116 Leases.


Corporate governance is an integral part of the Company. It facilitates the pursuit of excellence, growth and value creation. It continuously endeavours to leverage the available resources for translating opportunities into reality. During the year under review, the Board

of Directors, Management and employees continued their focus on these objectives through the adoption and monitoring of prudent business plans, monitoring of major risks of the Companys business. The Company pursues policies and procedures to satisfy its legal and ethical responsibilities. Its philosophy is to achieve business excellence and optimise long-term shareholders value on a sustained basis by

ethical business conduct. The Company is committed to transparency in all its dealings and places strong emphasis on business ethics.

The Companys philosophy on corporate governance is driven by its desire towards attainment of the highest levels of transparency, accountability and equity, in all the field of its operations, and in all its dealings with its stakeholders - from shareholders and employees to the government, lenders etc. The Company believes that all its operations and actions must serve the goals of enhancing overall enterprise value and safeguarding the shareholders trust.

Internal control systems and their adequacy

The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. The Companys internal control system is commensurate with the size, scale and complexity of its operations. Further, the Audit Committee interacts with the statutory auditors, internal auditors and management in dealing with matters within its terms of reference.

During the year, such controls were assessed and no reportable material weakness in the design or operations were observed.

The Company has appointed Ernst & Young LLP to oversee and carry out an internal audit of its activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the Audit Committee. The conduct of the internal audit is oriented toward the review of internal controls and risks in its operations, accounting and finance, procurement, employee engagement, travel, insurance, etc.

The Audit Committee reviews reports submitted by internal and statutory auditors. Suggestions for improvement are considered and the Audit committee follows up for corrective action. The Audit Committee also meets the statutory auditors to ascertain, inter alia, their views on the adequacy of the internal control system and keeps the Board of Directors informed of its major observations periodically.

Based on its evaluation (as defined in Section 177 of Companies Act, 2013 and Clause 18 of SEBI Regulations 2015), the Companys Audit Committee has concluded that as at March 31, 2020, its internal financial controls were adequate and operating effectively.

The same is also confirmed by auditors through their report on Internal Financial Control.

Risk Management

Risk Management forms an important part of the business. The Company has a well-defined risk management framework approved by its Board of Directors. The prudent risk management practices enable the Company to effectively identify, assess, strategies and mitigate the risks.

Listed below are the key risks with their anticipated impact on the Company and their mitigation strategies:

Key risks Description Mitigation strategy
Political and economic risk The Company derives its revenue from customer discretionary spending, which is linked to their earnings. Political disruption or volatile economic conditions may adversely affect that outlook, resulting in reduced spending that could restrict revenue growth opportunities. The Company monitors political and economic environment closely. Through promotions, offers and other value propositions, the Company can mitigate this risk.
Reputation risk In the consumer-focussed industry, brand is key. Bad customer experience could lead to negative publicity, resulting in boycotts and declining sales. The Company believes that customer service is its core value and takes stringent steps that adhere to its service policies such as enhancing the F&B menu, bringing global cinema technology for Indian customers such as IMAX and 4DX, customer care, employing trained manpower at its theatres, and offering attractive incentives and discounts for the patrons.
Business model change risk Rapidly evolving technologies are changing technology consumption patterns, giving rise to entirely new business models and therefore new kinds of competitors. This is resulting in increased demands on the Companys agility to keep pace with changing customer expectations. Failure to cope may result in loss of market share and impact business growth. The Company understands the dynamics of the evolving M&E sector and accordingly invests in innovations such as Onyx, 4DX, Playhouse, IMAX Screens, ticket cancellation, Alexa etc. The Company conducts regular market surveys to stay on top of the upcoming and current market trends. Adding to the expertise is its senior management team with an average rich experience of over 10 years in the sector.
Property risk The Company could incur losses on account perils such as earthquake, fire, flood, terrorism, etc. The Company has in place adequate insurance coverage to save against this risk.
Technological risk The Company faces the risk of being unable to adapt to the evolving technologies. All the cinemas at the Company are equipped with state-of-the- art technology and offer premium visual and sound experience in a luxurious ambience. They also offer other facilities such as QR code-based paperless ticketing and ticket cancellations. Moreover, the Company will continue to adopt the latest technology to provide premium movie-watching experience to its customers.
Key risks Description Mitigation strategy
Litigation risk Given the scale of the Companys operations, litigation risks can arise from commercial disputes, employee-related matters and tax-related disputes. The Companys rising profile and scale also makes it a target to litigations without any legal merit. This risk is inherent to doing business and commensurate with the risk faced by other players similarly placed in the industry. In addition to incurring legal costs and distracting management, litigations garner negative media attention and pose reputation risk. Adverse rulings can result in substantive damages. Internal processes and controls adequately ensure compliance with contractual obligations and the protection of intellectual property. They also ensure that potential disputes are promptly brought to the attention of the management and dealt with appropriately. The Company has a team of in-house counsels. Further, it also uses services of highly reputed law firms to advise on legal matter. There is a robust mechanism to track and respond to notices as well as defend the Companys position in all claims and litigations.
Non-compliance risk The Company has to comply with laws across India, where each state has its own local laws and compliances, which include taxation, no objection certificates, clearances, approvals, health safety and environment regulations, anti-corruptions laws, data privacy, etc. Failure to comply could result in penalties and reputational damage. Internal processes and controls adequately ensure compliance with tax and other regulations.
Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companys exposure to the risk of changes in market interest rates relates primarily to the long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings.
Currency risk Currency risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of the change in foreign currency exchange rates. The majority of the Companys revenue and expenses are in Indian Rupees. Management considers currency risk to be low and does not hedge its currency risk.
Legal, taxation and accounting risk The Company is presently involved into various judicial, administrative, regulatory and litigation proceedings concerning matters arising in the ordinary course of business operations including but not limited to personal injury claims, landlord-tenant disputes, commercials disputes, tax disputes (including entertainment tax subsidy and other direct and indirect tax matters like GST, service tax, sales tax etc.), employment disputes and other contractual disputes. Many of these proceedings seek an indeterminate amount of damages. In situations where management believes that a loss arising from a proceeding is probable and can reasonably be estimated, the Company records the amount of the probable loss. As additional information becomes available, any potential liability related to these proceedings are assessed and the estimates are revised, if necessary. The Company employs in-house counsel and uses third-party tax and legal experts to assist in structuring significant transactions and contracts. The Company also has systems and controls that ensure the timely delivery of financial information in order to meet contractual and regulatory requirements and has implemented disclosure controls and internal controls over financial reporting, which are tested for effectiveness on an ongoing basis.
Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix accounts for available internal credit risk factors such as the Companys historical experience for customers. Based on the business environment in which the Company operates, management considers that the trade receivables (other than government dues) are in default/doubtful if the payment is outstanding for more than 270 days and more than 365 days in case of government dues.
Liquidity risk Liquidity risk is the risk that the Company will encounter when facing difficulties in meeting obligations associated with its financial liabilities. The Company monitors this risk by using a liquidity planning tool. The Companys objective is to maintain a balance between continuity of funding and flexibility using bank overdrafts, bank loans, debentures, finance leases and advance payment terms. The Companys liquidity management process includes the following:
• Day-to-day funding, managed by monitoring future cash flows to ensure that requirements can be met
• Maintaining rolling forecasts of the Companys liquidity position on the basis of expected cash flows
• Maintaining diversified credit lines.


The Companys strategy is to further expand its screen network, with a focus on increasing premium formats composition in the portfolio.

The Company is dedicated to enhancing customer experience and delight through innovative offerings across different segments and enhance its box office and non-box office revenues.