PVR Ltd Management Discussions.

Company Overview

PVR Limited (PVR) is Indias largest multiplex player in India operating 854 screens across 173 properties.

PVR offers a diversified cinema viewing experience through its formats, including PVR Directors Cut PVR LUXE, PVR IMAX PVR P[XL] PVR Playhouse PVR 4DX PVR Onyx PVR Cinemas and pursuant to our acquisition and amalgamation of SPI Cinemas, Escape, Sathyam and Palazzo. The Company displays a variety of content to cater to various customer segments in India.

Apart from box office revenues, PVR also generates revenue from non-box office sources such as food and beverage sales, advertisement revenue, convenience fees, and income from movie production/ distribution.

Due to the disruptions created by the COVID-19 pandemic, the film exhibition industry had a difficult year in FY 2020-21. FY 2021-22 started with the onset of the 2nd wave but ended on a high with March 2022 witnessing a strong recovery in admissions. The swift recovery seen in Q3 and Q4 of FY 2021-22 validates our belief on the agility and strength of the Companys business to bounce back once new content is made available for release.

Despite a difficult macro climate during the past 2 years, PVR handled the challenges expertly and benefitted from proactive cost control, liquidity and Cash flow management.

Global economic review

The global economy is progressively putting the COVID-19 behind it. In CY 2021, global economy delivered 6.1% year-over-year growth, reflecting a strong recovery from -3.1% decline in CY 2020. The commencement of the vaccine rollout by the end of CY 2020, as well as the gradual lifting of lockdown restrictions in many countries, sparked a global economic recovery, which was aided by massive fiscal stimulus from governments and central banks in some countries.

Global trade growth remained strong in 2021, with the value of global commerce increasing in each quarter. The expansion of trade was not restricted to products. Through 2021, service trade increased significantly, eventually reaching pre-pandemic levels in Q4 2021. Overall, global commerce hit a new high of almost US$ 28.5 trillion in 2021, up approximately 25% from 2020 and up about 13% from the pre-pandemic level of 2019.

On the negative side, inflation has risen to record levels globally due to demand-supply mismatch and rising energy and food prices, accentuated by the Russia-Ukraine crisis.

World GDP Forecast

2020 2021 2022 (f)
World output -3.1 6.1 3.6
Advanced Economies -4.5 5.2 3.3
Emerging Market and Developing Economies -2 6.8 3.8
Emerging and Developing Asia -0.9 7.3 5.4

[Source World Economic Outlook, January 2022]

(f) forecast


CY 2022, global economy is projected to continue with its postpandemic recovery and grow at 3.6%, as per the IMF. Economic activity is expected to return to normalcy across most major economies. However, rising energy and food prices have restricted the ability of Governments and central banks to continue with their accommodative stance and the focus has now shifted to reining in inflation. As a results, interest rates have started to rise in advanced economies as well as in developing economies and more aggressive responses are expected going forward. Global trade has shown a strong but uneven recovery. After a sharp contraction of 8.1% in 2020, trade in goods and services is projected to expand by 9.4% in 2021 and 5.7% in 2022.

Infrastructure spending plans and renewable energy expenditures, such as solar and wind power, energy storage, and electric vehicles, have boosted demand forecasts. Furthermore, robust multilateral policy efforts, as well as vaccine deployment (including booster shots), and international liquidity, are likely to improve global economic prospects.

Indian economic overview

After a second wave of COVID-19 infections early last year, which negatively impacted activity and took a toll on individuals, Indias economy experienced a swift revival. With a quick vaccination programme roll-out and government support, India was able to contain the harm caused by the COVID-19s third wave. Upticks in a variety of metrics, such as the mobility index, direct tax revenues, increasing GST collections and electricity demand, indicate that the economy is growing. The IMF projects GDP growth of 8.9% in FY 2021-22 and 8.2% percent in FY 2022-23, making India one of the fastest-growing economies globally.

FY 2020-21 FY 2021-22 FY 2022-23
GDP -73 8.9 8.2
Inflation 6.2 5.4 4.5
Unemployment Rate 10.1 9.2 9.1

(Source: IMF, Ministry of Statistics and Programme Implementation; CMIE)


The Government of Indias focus continues to remain on normalising economic operations, as well as the rapid rollout of vaccination. Domestic consumption growth is expected to pick up after Q2 of CY 2022, given around 80% of population will be fully vaccinated by then. This could help boost private consumption, which is anticipated to rise by more than 10% this year. Investment rebounded substantially in 2021, increasing by more than 16%, and is predicted to rise by another 7% in 2022. Broad vaccine coverage including roll out of booster doses, gains from supply-side reforms, regulatory ease, strong exports growth, improvement in rail and road infrastructure and the availability of fiscal space to ramp up capital spending will aid in GDP growth.

The approval of Production Linked Schemes for 14 important sectors will also aid India in attracting investments, bolstering its position as the worlds fastest-growing emerging market. Aside from these variables, Indias economic story is expected to be driven in the near future by a favourable young demography and steady urbanisation.

Rising inflation can act as the joker in the pack. Central bank in a bid to control the raging inflation has already announced an increase in interest rates twice in a span of 35 days (in the 1st week of May and June 2022 respectively). It is trying to walk on a tightrope given the choices are compromising on economic growth or not allowing prices to spiral out of control.

Media & Entertainment industry

Media & Entertainment industry and specifically the cinema & multiplex industry is now again gaining traction with the opening of Malls and theatres as the severity of the pandemic recedes. The Indian M&E industry increased 16.4% in 2021 to Rs 1.61 trillion, still 11% below pre-pandemic 2019 levels. Television remained the largest segment, followed by digital media and then print.

2019 2020 2021 2022E 2024E CAGR 2021-2024
Television 787 685 720 759 826 5%
Digital media 221 235 303 385 537 21%
Print 296 190 227 241 251 3%
Online gaming 65 79 101 120 153 15%
Filmed entertainment 191 72 93 150 212 32%
Animation and VFX 95 53 83 120 180 29%
Live events 83 27 32 49 74 32%
Out of Home media 39 16 20 26 38 25%
Music 15 15 19 21 28 15%
Radio 31 14 16 18 21 9%
Total 1,822 1,386 1,614 1,889 2,320 13%

In 2021, advertising in the M&E sector recovered by 16% as compared to the 19% growth in the nominal GDP and 25% growth in the overall advertising sector. The M&E sector was impacted by the subdued consumer spends across film, events and television due to the pandemic. In the traditional segment, advertising revenue in 2021 grew across the four mediums of television, digital, print and OOH.

In Cinema advertising degrew in 2021 as compared to 2020. Digital advertising witnessed the highest growth in 2021 as compared to last year. Television, Print, Digital put together contributed 95% to the total ad spends in the country in 2021.


M&E sector is expected to grow 17% in 2022 and reach pre-pandemic levels of Rs 1.89 trillion and then grow at a CAGR of 11% to reach Rs 2.32 trillion by 2024 as the country slowly returns to normalcy. Digital, films and television will likely account for 2/3rd of this growth, followed by animation and VFX (14%) and online gaming (7%). Digital and online gaming market will benefit from the secular trend towards digital platforms and the rising penetration of smartphones and internet.

Market outlook

Globally film industry had a difficult year. Business picked up in the second part of the fiscal year as a result of the global immunisation drive and proactive government measures. In comparison to other developed and developing countries, Indias film exhibition industry is severely underscreened. Furthermore, the favourable demographic mix and increase in discretionary spending augur well for the multiplex industrys sustained expansion.

Box office momentum to continue in the near term. Footfalls returned quickly to 60% of pre-COVID levels by the end of Q3 FY 2021-22, owing to a slate of big-budget films that outperformed expectations in terms of box office receipts. The 3rd wave of COVID-19 had a shortterm influence on the performance, lasting about 6-7 weeks. Exhibitors growing momentum is expected to continue beyond March 2022.

US box office reports strong recovery

Global Box Office experienced a positive surprise. According to an analysis by Gower Street, 90% of screens are now open globally, with 95% of screens open in APAC. In terms of overall Box Office performance, China has rebounded to 82% of pre-pandemic levels in CY21, while the United States has only recovered to 35% in the same time frame. Gower Street is forecasting global box office collections of $31.5bn, which would mark a significant uplift to the previous two COVID-impacted years - $21.3 billion in 2021 and $11.8 billion in 2020.

Global Box Office by Region, 2017-2022 ($ billion)

2017 2018 2019 2017-2019 2020 2021 2022
Average Forecast
North America 11.1 11.9 11.4 11.5 2.2 4.5 8.7
China 7.9 9 9.3 8.7 3 7.3 7.7
International (exc. China) 21.9 20.9 21.6 21.5 6.6 9.5 15.l
EMEA 10.2 10.1 10.3 10.2 3.3 5.0 8.1
Asia Pacific (exc. China) 8.3 8.1 8.5 8.3 2.8 3.6 5.1
Latin America 3.4 2.7 2.8 3.0 0.5 0.9 1.9
Global 40.9 41.8 42.3 41.7 11.8 21.3 31.5

Except for China, other geographies have recovered 42% in CY21 compared to pre-pandemic levels. However, Box Office momentum accelerated in Q4CY21, aided by the release of Spiderman, which grossed $1.8 billion worldwide, the sixth highest grossing film in history. US Box Office revenues have reported a recovery of 68% versus pre-pandemic levels, largely in line with Indian multiplexes.

(Source: Elara Capital)

Healthy growth for Hindi box office in HIFY23E

Rise of OTT platforms

The OTT platforms saw a decent rise in the last two years, owing to the pandemic. The exhibition sector was severely harmed by the several months of shutdown, staggered opening of cinema halls with varying capacity caps, delays in obtaining approval for 100% occupancy in certain key states, and a lack of new releases. As a result, some films (from low to mid-budget) had chosen direct-to-OTT distribution since it allows film makers to monetise their inventory at an acceptable return on investment. Though, some large blockbuster films like Sooryavanshi Rs 83 etc. (which were scheduled to debut in 2020) waited for almost 18+ months for an opportunity to release on the big screen.

Due to the uncertainty around when 100% capacity would be allowed in cinemas, digital rights became the largest sector of the theatrical segment in 2020, growing at 86% year to year Rs 35.4 billion.

A direct-to-OTT release may suit small-to-medium budgeted films, but it may be a concern for big-budget films with big stars, given the irreplaceable theatrical viewing experience, lower subscription rates, lower RoI compared to a theatrical release, limited recreation options in India, and big actors lack of interest in a direct-to-OTT release because the small screen negatively impacts their brand value.

Domestic cinemas account for 50-55 % of the total revenue for film makers, while overseas cinemas account for 17-19%, with digital rights/OTT rights, satellite and music rights accounting for 10-12% and 10-17%, respectively. Hence, it is believed that both OTT and theatre will co-exist and rise of OTT will not be a threat to mainstream theatre.

Indian Filmed Entertainment

India is the worlds largest film producer, the worlds largest film market in terms of ticket sales, and the fifth-largest box office market in terms of revenue in 2020.

The performance of filmed entertainment market was weak in 2021 due to lockdowns and restrictions on exhibition and cinema operations across states. Despite that, more than 750 films were released in 2021, compared to only 441 in 2020. This number is still about half of 2019 levels. The value of digital rights doubled to Rs 40 billion from 2019.

Due to a lack of theatrical releases and softening prices, broadcast rights did not expand this year, and in-cinema advertising continued to decline. The Indian Bollywood film industry, valued at $2 billion in 2016, is projected to reach a size of $2.7 billion by 2023, after dropping to less than $1 billion in 2020.


The Rise - Part 1

(dubbed from Telugu) clocked Rs 108 crores

Filmed entertainment segment recovered 28% in 2021

2019 2020 2021 2022E CY23E
Domestic theatricals 115 25 39 75 105
Overseas theatricals 27 3 6 12 16
Broadcast rights 22 7 7 14 19
Digital/ OTT rights 19 35 40 48 69
In-cinema advertising 8 2 1 2 3
Total 191 72 93 150 212

Rs billion (gross of taxes) I EY analysis

Regional movies

Regional films are an important element of the Indian film industry and account for a large portion of overall box office receipts.

The total number of films released in 2021 were 757, an increase of 71% over 2020. Only 84 films were released in Hindi, with Telugu (204) and Tamil (152) having the highest number of releases. Fewer lockdowns in the south led to markets rebounding faster and touching 59% of their 2019 release levels.


(dubbed from Telugu) grossed Rs 274 crores

The exceptional performance of regional movies dubbed in Hindi in the latter half of 2021 and in 2022 took the entire industry by surprise. Hindi versions of:


dubbed from Kannada)

which has become the 2nd biggest movie in India after Bahubali 2 has collected Rs 434 crores till date.

Source for Box office data : Bollywoodhungama.com

For the multiplex & the exhibition industry as a whole, this changing trend of multilingual content doing well at a pan India level, reflects the growing acceptability of non-Hindi content amongst audiences. This is a welcome change that has emanated from the huge proliferation of OTT platforms and the subsequent consumption of foreign and regional content on these platforms over the past 2 years.

Box office revenues were dominated by South Indian films

Gross box office (Rs in billion)

Box office receipts

In 2021, gross box office receipts grew by 57% to Rs 39 billion with South Indian films accounting for Rs 24 billion due to more releases. In 2021, only five films including three films in regional languages, one Hindi and one English language crossed the Rs 1 billion mark, compared to a total of 32 films which surpassed this mark in 2019.

Five releases grossed Rs 1 billion or more at the box office

Indian multiplex industry overview

In India, the movie-going experience has changed dramatically in

Improving lifestyle: Footfall at multiplexes has increased as the lifestyle choices of a youthful and vast working population have improved. The lack of out-of-home entertainment options in India, combined with excellent audio and visual experiences, a pleasant atmosphere, wide variety of F&B offerings, comfortable seating, are some of the elements fueling this need.

Higher occupancy rate: The occupancy rate of multiplexes has doubled to 20% in December 2021 within a short time frame and further improved to 25% in the last quarter of FY 2021-22, though still below the 30% in pre-Pandemic times. The occupancy rate is expected to go back to pre-pandemic levels in FY 2022-23.

Superior technology: The implementation of the latest technologies in the market (video, audio, and seating, among others) ensures that multiplexes can provide a premium experience to their customers.

Increasing number of malls: Over the last decade, the number of malls has increased dramatically. Previously only found in Metros and Tier-I cities, they are now finding their way into Tier-II cities as well. The expansion of multiplexes will also be aided by this deepening footprint.

Single screens on the backfoot: At the start of the pandemic, India had a total of ~9,500 screens, with multiplexes accounting for ~3,200 screens and 55% of total box office receipts. The pandemic has taken a heavy toll on the industry with a significant impact on the single screen operations. These losses are projected to force closure of single screens across the country, increasing the share of multiplexes in the overall movie exhibition market.

Lack of Out of Home Entertainment options in India:

Multiplexes continue to remain the cheapest form of out of home leisure activity in India as compared to theme park visits, dining out and vacations.

GDP growth & per capita consumption: By 2030, India could become worlds third largest economy. Indias GDP growth rate has returned to pre-COVID levels and is expected to deliver the fastest growth among major economies in CY 2022 globally.

Business Overview

During the year under review, the Companys performance was adversely affected by the COVID-19 pandemic which resulted in lower occupancy levels in multiplexes in FY 2021-22. The operating performance rebounded strongly in the second half of the fiscal year, despite the third wave of the pandemic. Movies which released since the last week of February reported strong performance at the box office. Admissions for the month of March 2022 touched a post pandemic high of 90.5 lakhs. Towards the end of the FY 2021-22, average ticket prices and spend per head on food & beverages sustained at levels significantly higher than those prior to the pandemic. Overall, business is expected to grow in the coming quarters, supported by the growth in ATP and SPH already witnessed in Q3 & Q4 FY 2021-22, occupancy% reclaiming pre-COVID highs on the back of stellar content line-up, and the advertising income coming back to pre-pandemic level over the next few months.

PVR is well positioned to capitalise on the substantial pent-up demand. The Company is restarting its capex cycle from FY 2022-23 and has plans of opening ~125 screens this year, breaking its own record of opening 87 screens in a year in FY 2019-20. The Company had opened 29 screens across 5 properties in FY 2021-22.

Proposed Merger with INOX

On March 27, 2022, the Boards of PVR and INOX Leisure Ltd approved the merger of the two entities, which is subject to approval of the shareholders of PVR and INOX, stock exchanges, SEBI and other regulatory approvals.

As per the terms of the transaction, INOX will merge with PVR and INOX shareholders will receive 3 shares in PVR for 10 shares of INOX. Post the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR.

The merged entity would become the largest cinema exhibition company in India operating more than 1500 screens across 110 cities.


• Value creation for all stakeholders, including customers, real estate developers, content producers, technology service providers, the state exchequer and above all, the employees.

• Use the combined balance sheet strength to expand into Tier 2 and Tier 3 markets

• Realise material cost and revenue synergies

• Adequately respond to the threat from OTT platforms.

Terms of the Merger

• Post the merger, the promoters of INOX will become co-promoters in the merged entity along with the existing promoters of PVR.

• Post the merger, the Board of Directors of the merged company would be re-constituted with total board strength of 10 members and both the promoter families will have equal representation on the Board with 2 board seats each.

• Initial Management for 5 years: Ajay Bijli would be appointed as the Managing Director and Sanjeev Kumar would be appointed as the Executive Director. Pavan Kumar Jain would be appointed as the Non- Executive Chairman of the Board. Siddharth Jain would be appointed as Non-Executive Non-Independent Director in the combined entity.

• The combined entity will be named as PVR INOX Limited with branding of existing screens to continue as PVR and INOX respectively. New cinemas opened post the merger will be branded as PVR INOX

SCOT analysis

Strengths Challenges
Movie exhibition industry leader in India Absence of stringent piracy laws
Diversified products and services offerings and premium Sluggish real estate developments
Guest experience Long and tedious regulatory processes
Strategically-located cinemas
Strong relationships with developers
Stable financial position
Leadership position across key operating metrics
Experienced promoters and senior management team with in- depth industry know-how

Usage of superior technology such as Dolby stereo sound system, digital cinema technology for superior customer experience

Opportunities Threats
Low screens per capita, indicating headroom for growth Any further pandemic led disruption in operations
Young demographics driving the entertainment industry Rising popularity for live events and performances
Private screenings Bans, restrictions from Central Board of Film Certification
Recent box office success of dubbed regional content Delays in film production or releases
Growing disposable incomes New content distribution platforms like OTT platforms
Screening of Alternative content options such as online gaming events, musical concerts, Sporting events, etc.

Operational steps to ensure continuity

The key measures undertaken in view of COVID-19 crisis are:

PVR partnered with UFO Moviez to announce the installation of a cinema-specific air sterilisation device called UFO-Wolf AirMask. To ensure the safety of visiting patrons, it offers real-time air sterilisation providing protection against all kinds of harmful bacteria, viruses and microbes in the air and surfaces. It is successfully tested on SARS COVID-2 VIRUS at Rajiv Gandhi Centre for Biotechnology, Trivandrum, an ICMR recognised and ILAC Accredited Lab (International). This new technology is part of PVRs enhanced safety initiative PVR Cares that ensures that cinemas are safe in every possible way for both guests and staff across every touch point in their cinema journey.

Weve created detailed processes and guidelines to ensure a safe and sanitary atmosphere for our clients and employees.

Tickets are available on our website and mobile application, as well as partner websites and mobile applications, to facilitate contactless booking. Customers can also pay for tickets at the entrance gates by scanning fast response codes. Furthermore, we have stopped providing paper tickets and now exclusively provide booking confirmations by SMS and e-mail. Weve also included a fast response code-based meal ordering system, and included some healthy choices and selections with ingredients that help to boost immunity.

Weve also introduced the concept of private screenings, which is a premium and personalised offering in which a small group of audience members books the entire auditorium to enjoy the content of their choice.

"Best in Class" Standard Operating Procedures Developed

PVR developed "best in class" standard operating procedures to ensure complete safety of our consumers and employees from COVID-19. Some of the measures taken include:

Social Distancing

• Marked Queuing at Box office, security check, concessions, rest rooms, elevator etc.

• Staggered Audi seating

• Limited staff back of the house

Minimal Human Contact

• Disposable food containers and packaging

• Modified processes & procedures

• Digital transactions

Sanitisation and Cleanliness

• Deep cleaning and sanitisation of all surfaces - Box Office to Exit

• Advance sanitisation using ULV technology for long lasting protection

• Anti-microbial film on handles and bars

• 70+ cinema touch points to be sanitised every hour with colour coded dusters as per authorised grades

Health and Hygiene

• Temperature screening at entry

• Arogya App

• Regular staff health check

• Stringent hygiene protocol

• Entry restricted for employees and gusts with symptoms

• Staff awareness and training

Financial Initiatives to ensure Continuity

To mitigate the adverse impact of the pandemic on its operations, the Company during the year took some decisive actions to alleviate the damage: It proactively implemented cost optimisation measures, kept enhanced liquidity at all times on the balance sheet and prudently managed its cash flow.

1. Implementation of cost reduction

To mitigate the adverse impact of various lockdowns and pandemic induced disruptions in FY 2021-22, the Company continued with its fixed cost reduction measures, similar to what it had done in FY 2020-21. Steps taken for reduction of these costs and its outcome is summarised below (standalone basis).

Expense (Rs in lakhs) FY 2021-22 FY 2020-21 FY 2019-20 (pre Pandemic period) % Change (compared to prePandemic) Remarks
Rental and Common Area Maintenance (CAM) cost 46,792 20,774 72,9 8 8 (36%) Renegotiated contractual payments for discounts/waivers with mall developers, landlords, lessors, and partners. Received partial/ complete rental waivers/ discounts for the lockdown period and agreed for revenue share arrangements or discounts for the lockdown period till the end of FY 2021-22.
Personnel cost 25,602 20,742 38,166 (33%) Temporary workforce & compensation reduction across various levels in the organisation was done in H1 FY 2021-22.
Electricity & Water charges 10,274 5,566 20,477 (50%) Significant reduction in electricity and water expenses due to closure of cinemas and lower occupancy post re-opening. Few state governments waived off minimum load charges during the lockdown period.
Other overheads 20,739 13,818 37,314 (44%) Renegotiated terms for contracts pertaining to housekeeping and security. All discretionary expenses such as advertising, travel, administrative, capital expenditure, and other non-essential expenses were significantly reduced or deferred.
Total 1,03,407 60,900 168,945 (39%)

These numbers are after excluding the impact of Ind AS 116 - Leases

2. Cash flow management Working capital management

The Company in normal times runs a negative working capital business. In H1 FY 2021-22 (similar to FY 2020-21), we worked with our suppliers and vendors for alternate payment plans for our creditors outstanding balances. In addition, to make our working capital cycle more effective and preserve liquidity, we aggressively collected amounts owing to us from our debtors. We went back to the normal creditor payment and debtor collection cycle from H2 onwards.

Capital expenditure:

Similar to last year, capex in FY 2021-22 was limited to only those properties where we were in advanced stages of fitout. The Company opened only 29 new screens across 5 properties which is a far cry from the 87 screens it had opened in FY 2019-20. Details of screens opened during the year are as follows:

Name Date of Opening Screens Seats City State
PVR Ambience Gurgaon (in Existing property) 5-Aug-21 4 246 Gurgaon Haryana
PVR Jamnagar 3-Sep-21 3 706 Jamnagar Gujarat
PVR Makers Maxcity Mumbai 22-Oct-21 6 882 Mumbai Maharashtra
PVR Makers Maxcity Mumbai-Drive in (in Existing property) 5-Nov-21 1 Mumbai Maharashtra
PVR Sreekanya Narsipatnam 14-Jan-22 4 1,188 Narsipatnam Andhra Pradesh
PVR Friends Mall Jalandhar 17-Mar-22 6 730 Jalandhar Punjab
PVR Atrium Hyderabad 25-Mar-22 5 927 Hyderabad Telangana

The Company has since then recommenced its Capex plans and intends to open approximately 125 screens in FY 2022-23.

3. Liquidity Management

To mitigate the uncertainty around the pandemic and to maintain sufficient liquidity, the Company raised comfort capital in the form of debt during the year.

• In Q1 FY 2021-22 the Company raised Rs 20,000 lakhs under the ECLGS 3.0 scheme of the Government of India. Government under the ECLGS scheme has offered long-term loans, with reduced rates and a 2 year moratorium period to companies in all sectors that were impacted by the pandemic.

• Subsequently in Q2 FY 2021-22 the company raised Rs 23,000 lakhs through Market Linked Debentures (MLDs)

• In Q4 FY 2021-22, the Company raised Rs 12,500 lakhs through terms loans from scheduled commercial banks.

Total cash and bank balance in Consolidated financials as on March 31, 2022 was Rs 57,858 lakhs.


The impact on business in FY 2021-22 due to pandemic led disruption was similar to FY 2020-21 but lesser in intensity. PVRs relentless focus on managing costs and maintaining adequate liquidity enabled the Company to better navigate the challenging market conditions. The discussion in this section relates to the standalone financial results pertaining to the year ended March 31, 2022. The financial statements of the 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.

The table below gives an overview of the standalone financial and operating results for FY 2021-22 compared with FY 2020-21. Further comparative financials after adjusting for impact of Ind - AS 116 have also been reproduced below for both the financial years. The MD&A section below has been drafted basis the Ind AS 116 adjusted numbers for ease of understanding of the stakeholders.

Particulars (Rs in lakhs) March 31, 2022 IND AS 116 Adjustment March 31, 2022 March 31, 2021 IND AS 116 Adjustment March 31, 2021 Growth/ De-growth
Reported Adjusted Reported Adjusted
Revenue from operations 121,331 121,331 22,572 - 22,572 438%
Other income 31,074 (24,430) 6,644 47,275 (43,489) 3,786 75%
Total Income 152,405 (24,430) 127,975 69,847 (43,489) 26,358 386%
Movie exhibition cost 31,200 31,200 4,680 - 4,680 567%
Consumption of food and beverages 9,857 9,857 1,833 - 1,833 438%
Employee benefits expense 25,602 25,602 20,742 - 20,742 23%
Other operating expenses 44,057 33,748 77,805 28,271 11,887 40,158 94%
Total expenses 110,716 33,748 144,464 55,526 11,887 67,413 114%
EBITDA 41,689 (58,178) (16,489) 14,321 (55,375) (41,054) NM
EBITDA Margin (%) 27% (13%) 21% (156%)
Finance costs 49,394 (33,988) 15,406 49,347 (34,479) 14,868 4%
Depreciation and amortisation expense 59,442 (34,649) 24,793 56,349 (33,250) 23,099 7%
Profit before tax (67,147) 10,459 (56,688) (91,375) 12,353 (79,022) NM
PBT Margin (%) (44%) (44%) (131%) (300%)
Tax expense (19,312) 3,655 15,657 (19,025) 4,317 (14,708) NM
Profit after tax (47,835) 6,804 41,031 (72,350) 8,037 (64,313) NM
PAT Margin (%) (31%) (32%) (104%) (244%)
Operating Numbers
Locations (Nos.) 180 180 175 175 3%
Screens (Nos.) 862 862 833 833 3%
Admits (lakhs) 333 333 68 68 392%
Gross ATP 234 234 179 179 31%
Net ATP 194 194 148 148 31%
Gross SPH 124 124 95 95 30%
Occupancy % 22% 22% 10% 10% 116%

Total rent concessions received during year ended March 31, 2022 amounted to Rs 26,977 lakhs. Out of this Rs 24,430 lakhs is recognised in "Other income" after adjusting the rent expense of Rs 2,547 lakhs for the Year ended March 31, 2022. For more details, refer to Note 17 (e) of Notes to Accounts to the standalone financial statements.


Total Revenue increased by 386% or Rs 1,01,617 lakhs during the year ended March 31, 2022 as compared to previous year ended March 31, 2021 on account of FY 2020-21 being severely impacted by pandemic led disruption. Total Revenue comprised of following:

Rs in lakhs March 31, 2022 March 31, 2021 % Change
Income from sale of movie tickets 66,380 10,018 563%
Sale of food and beverages 38,082 6,104 524%
Advertisement income 7,201 1,777 305%
Convenience fees 7,560 3,738 102%
Other operating revenue and Other Income 8,752 4,721 85%
Total 127,975 26,358 386%

A. Income from Sale of Movie tickets

Income from the sale of movie tickets increased by 563% or Rs 56,362 lakhs during the year ended March 31, 2022, as compared to the previous year ended March 31, 2021. Primarily the increase was on account of quicker relaxation of restrictions post-COVID and more operational months in FY 2021-22 as compared to FY 2020-21.

(i) 29 new screens across 5 properties were made operational during the year;

(ii) Admits increased by 392% and Gross ATP increased by 31%; footfalls in FY 2020-21 were extremely low given that cinemas were closed for a large part of the year due to the pandemic. In FY 2021-22, Wave 2 started to dissipate and cinema operations resumed from JulyRs 21 end. Since then the cinemas continued to operate with limited capacity throughout the year. Superlative performance in the month of NovemberRs 21, DecemberRs 21 and MarchRs 22 on the back of new content releasing significantly improved the overall admissions and ATP figures for the complete year.

B. Income from Sale of Food and Beverages

Income from the sale of Food & Beverages increased by 524% or Rs 31,978 lakhs during the year ended March 31, 2022, as compared to the previous year ended March 31, 2021. The increase was mainly due to the cinema being allowed to operate for a major part of the year although with limited capacity and other restrictions. SPH witnessed a jump of 30% during the year ended March 31, 2022, as compared to the previous year ended March 31, 2021.

C. Advertising Revenue

Advertising revenue increased by 305% or Rs 5,424 lakhs during the year ended March 31, 2022, as compared to the previous year ended March 31, 2021.

D. Convenience fees

Convenience fees increased by 102% or Rs 3,822 lakhs during the year ended March 31, 2022, as compared to the previous year ended March 31, 2021. The increase was on account of significantly higher admissions in FY 2021-22 as compared to FY 2020-21.

E. Other operating Revenue and Other Income

Other operating revenue including other income increased by 85% or Rs 4,031 lakhs during the year ended March 31, 2022, as compared to the previous year ended March 31, 2021. 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 75% or Rs 79,283 lakhs during the year ended March 31, 2022, as compared to the previous year ended March 31, 2021, primarily on account of cinemas being operational for a larger period during the year. Total expense comprised of the following:

Particulars (Rs in lakhs) FY 2021-22 FY 2020-21 % Change
Variable Cost
Movie exhibition cost 31,200 4,680 567%
Consumption of food and beverages 9,857 1,833 438%
Total Variable Cost 41,057 6,513 530%
Fixed Cost
Employee benefits expense 25,602 20,742 23%
Rent and CAM 46,792 20,774 125%
Electricity and Water charges 10,274 5,566 85%
Other operating expenses 20,739 13,818 50%
Total Fixed Cost 103,407 60,900 70%
Finance Cost and Depreciation
Finance costs 15,406 14,868 4%
Depreciation and amortisation expense 24,793 23,099 7%
Total 184,663 105,380 75%

A. Movie Exhibition cost

Movie Exhibition cost increased by 567%, or Rs 26,520 lakhs, during the year ended March 31, 2022, compared to the year ended March 31, 2021, primarily due to an increase in revenue from the sale of movie tickets. This cost is fully variable and linked to the sale of movie tickets.

Particulars FY 2021-22 FY 2020-21
Movie Exhibition cost (as a % to Box office Revenue) 47.0% 46.7%

B. Consumption of food and Beverages

Consumption of food and beverages increased 438%, or Rs 8,024 lakhs during the year ended March 31, 2022, compared to the year ended March 31, 2021, primarily due to an increase in revenue from the sale of food and beverages. This cost is fully variable and is linked to the sale of Food & Beverages.

Particulars FY 2021-22 FY 2020-21
Cost of Goods sold (as a % to Food & Beverages Revenue) 25.9% 30.0%

C. Employee Benefit Expenses

Employee benefit expenses increased by 23%, or Rs 4,860 lakhs, during the year ended March 31, 2022, compared to the year ended March 31, 2021, primarily on account of removal of temporary salary cuts once cinemas were allowed to open post Wave 2.0. Still it is significantly lower than FY 2019-20 (pre-pandemic) due to the significant personnel cost reduction done in FY 2020-21 and no significant wage increments being given during the past 2 years.

D. Rent and Common area maintenance ("CAM")

Rent and CAM expenses increased 125%, or Rs 26,018 lakhs, during the year ended March 31, 2022, compared to the year ended March 31, 2021, primarily due to properties being operational for a longer period during the year as compared to last year.

E. Electricity & Water Charges

Electricity & Water expenses increased 85%, or Rs 4,708 lakhs, during the year ended March 31, 2022, compared to the year ended March 31, 2021, primarily due to properties being operational for a longer period during the year as compared to last year.

F. Other operating expenses

Other operating expenses primarily include Repairs and maintenance, Marketing expenses, Rates and taxes, Security service charges, Travelling and conveyance, Legal and professional fees, and other expenses. The expense increased by 50% or Rs 6,921 lakhs for the year ended March 31, 2022, as compared to March 31, 2021. The increase in operating expenses was in line with the opening of cinemas and operating them for a longer period of time as compared to last year.

G. Finance cost

Finance Cost includes Interest on Debentures, Term loan, Banks, and other financial charges. Finance cost increased by 4% or Rs 538 lakhs for the year ended March 31, 2022, as compared to March 31, 2021.

H. Depreciation and amortisation expense

Depreciation and amortisation expense increased by 7% or Rs 1,694 lakhs.

Balance Sheet

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

Particulars (Rs in lakhs) March 31, 2022 March 31, 2021
Ind AS 116 Adjusted Ind AS 116 Adjusted Growth/ De-growth
Non-current assets 358,537 357,400 0%
Current assets 81,105 96,200 (16%)
Total 439,642 453,600 (3%)
Equity and liabilities
Equity 214,784 253,174 (15%)
Non-current liabilities 110,681 113,578 (3%)
Current liabilities 114,177 86,847 31%
Total 439,642 453,600 (3%)

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.

II. Current Assets

Current Assets include Inventories, Trade Receivables, Cash and cash equivalents, and other current assets.

III. Equity

Equity comprises of Equity share capital and Reserves and surplus.

IV. Non-current Liability

Non-Current liability includes Borrowings, the non-current portion of Gratuity and leave encashment liability, deferred tax liability, and other non-current liabilities.

V. Current Liability

Current liability includes Short-term Borrowings, Trade payables, other financial liabilities, current portion of Gratuity and leave encashment, and other current liabilities.


Particulars Formula Units FY 2021-22 FY 2020-21
Current Ratio Total Current Assets / Total Current Liabilities times 0.57 0.87
Debt - Equity Ratio Total Debt / Total Equity times 1.08 0.73
Debt Service Coverage Ratio [Loss Before Tax + Dep & Amort. + Finance costs - Other Income] / [Finance Costs* + Principal Repay. of LT Debt] times 0.28 (1.05)
Return on Equity Loss For The Year / Average Total Equity % (30%) (44%)
Inventory Turnover Ratio Consumption of F&B / Average Inventory (F&B) times 5.87 1.29
Trade Receivables Turnover Revenue From Operations / Average Trade Receivables times 29.29 2.36
Trade Payables Turnover [Exhibition Cost + COGS + Other Operating Expenses] / Average Trade Payables times 3.54 1.44
Net Capital Turnover Total Income / [Total Current Assets -Total Current Liabilities ] times (2.51) (4.73)
Net Profit Ratio Loss For The Year / Total Income % (31%) (104%)
Return on Capital Employed EBIT = [Loss Before Tax + Finance Costs] / Capital Employed** % (10%) (21%)
Return on Investments Income Generated From Investments / Average Investments % 5% 3%


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

2) Ratios include impact of Ind AS 116 Leases.

*Interest on debentures, term loans and bank and others

**Total Equity +Total Borrowings-Other Intangible Assets - Goodwill


Companys unending pursuit of excellence in Corporate governance reflects in the value it has created for all stakeholders across the board over the past 25 years of its existence. To meet its legal and ethical obligations, the Company follows a set of policies and procedures that are decided by the Board in consultation with external consultants wherever required. Its philosophy is to produce sustained business excellence and maximise long-term shareholder value through ethical business practices. In all of its activities, the Company is devoted to transparency and places a significant focus on business ethics.

PVRs corporate governance is guided by the highest levels of openness, accountability, and equity in all its activities and relations with all stakeholders, including shareholders, employees, the government, and lenders. We think that all our operations and actions should be directed at increasing total company value and maintaining shareholder confidence.

Internal control systems and their adequacy

We have in place adequate controls, procedures and policies that ensure orderly and efficient conduct of its business, including adherence to its policies, safeguarding of its assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial information. Our 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 was observed.

We 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 our operations, accounting, and finance, procurement, employee engagement, travel, insurance, and other matters. The Audit Committee reviews reports submitted by internal and statutory auditors. Suggestions for improvement are considered and the Audit Committee follows them up for corrective action. The 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 of March 31, 2022, 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

Given the adverse impact of the pandemic over the past 2 years, risk management has gained significant prominence and is one of the key priorities for the Companys board.

During the year under review, the Board of Directors maintained their emphasis on managing all risks by monitoring key business decisions as well as guiding the management on how to mitigate risks during the pandemic.

Political and economic risk

Our profits are based on customer satisfaction and discretionary expenditure. Political or economic turmoil could have a negative impact on that perspective, resulting in lower expenditure and limiting revenue growth potential.

Mitigation: We are keeping a careful eye on the entire political and economic situation. Promotions, deals, and other value propositions help us to manage these risks.

Reputation risk

Our sector is very consumer-centric, and a poor customer experience can result in unfavourable press, boycotts, and revenue declines.

Mitigation: Our business model revolves around customer service, and we have strict policies in place to ensure that it is always at its best. Our F&B menu, introducing worldwide cinema technology to the Indian client through IMAX and 4DX, customer service, employing qualified employees at our theatres, and offering enticing incentives are all examples of how important customer service and reputation are to us.

Business model change risk

Rapidly emerging technologies are altering technology consumption habits, potentially exposing the Company to new competitors. This necessitates a high level of flexibility and adaptability on our part.

Mitigation: We understand the changing dynamics of the M&E industry and have made investments in modern advancements such as Onyx, 4DX, Playhouse, IMAX screens, ticket cancellation, and Alexa, among others. To keep up with changing industry trends, we perform frequent market studies.

Litigation risk

Given the scale of operations, litigation risks can arise from commercial disputes, employee related matters and tax related disputes. In addition to incurring legal costs and consuming management bandwidth, litigations garner negative media attention and pose reputation risk.

Mitigation: 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. It also uses services of highly reputed law firms to advise on legal matters. There is a robust mechanism to track and respond to all notices as well as defend the Companys position in all claims and litigations.

Property risk

We may experience losses owing to account risks such as earthquakes, fires, floods, and terrorism, as well as rent and CAM costs, as a result of COVID-19.

Mitigation: We have appropriate insurance coverage in place to protect us from natural disasters. To reduce rent and CAM costs during the period when operations were impacted by the pandemic, weve used the force majeure clause in different contractual agreements with mall developers, landlords, lessors, and partners.

Non-compliance risk

We must adhere to laws across India, where each state has its own set of rules and regulations, including taxation, no-objection certifications, clearances, approvals, health and safety regulations, environmental regulations, anti-corruption legislation, and data privacy, to name a few. Failure to comply could result in fines and a tarnished reputation.

Mitigation: To ensure compliance with tax and other rules, we have organised internal processes and implemented necessary controls.

Interest rate risk

Because of changes in market interest rates, the fair value or future cash flows of a financial instrument may fluctuate. Changes in market interest rates are always a concern for us, especially with long-term debt obligations with variable interest rates.

Mitigation: Interest rate risk is managed by maintaining a well- balanced portfolio of fixed and variable rate loans and borrowings.

Currency risk

Currency fluctuations may have an impact on our earnings.

Mitigation: We earn and spend most of our money in Indian rupees. We do not hedge our currency risk because we believe it is low.

Credit risk

The risk of financial loss to the Company if a client or counterparty to a financial instrument fails to meet its contractual commitments is referred to as credit risk.

Mitigation: We estimate impairment loss or gain using the predicted credit loss model. We use a provision matrix to calculate the expected credit loss allowance for trade receivables; the provision matrix considers available internal credit risk factors such as our historical experience with customers and the period of default or delay in recovery, and we create the necessary provisions based on that information.

Liquidity risk

This is the danger well face if we have trouble satisfying responsibilities related to our financial liabilities.

Mitigation: We use a liquidity planning tool to keep track of this risk. Our goal is to strike a compromise between the reliability of bank overdrafts and the flexibility of employing bank loans, debentures, financing leases, and advance payment arrangements. Since the onset of the pandemic the board has consciously taken a decision to carry adequate liquidity at all points in time.