Shalimar Productions Ltd Management Discussions

Pursuant to Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is as under:

Media & Entertainment industry

Introduction

The Media & Entertainment industry has immense power to influence, shape, and transform society. The industry is witnessing a massive transformation in the current scenario. It was a rollercoaster ride in the past few years for the whole industry when it came up with a few struggles, difficulties in producing content, the closure of cinema halls and a cut back in spending on advertisements during the pandemic. However, this situation was followed by a cycle of a strong revival. The agility and inclination to face and overcome challenges are being proven by this industry through the ways it has revived its charm and performed better than pre-pandemic. The core of this industry is to keep pace with the changing environment to produce quality and relatable content. The disruptive innovations that are at their peak are changing consumer behaviour, and technology is leading to a risk for the irrelevance of the media and entertainment industry. The popularity of YouTube videos, podcasts, Over-the- Top (OTT) media services, and digital broadcasting has given rise to a variety of occupations in the sector, including journalism, advertising, digital marketing, and public relations.

Some facts about the Media and Entertainment industry—

• Indias media and entertainment sector grew by about 9% in 2025 to approximately INR 2.78 trillion.

• Digital media became the largest segment of the Indian M&E sector in 2025 and crossed INR 1 trillion in revenues.

• Digital advertising grew by approximately 26% in 2025 to INR 947 billion and accounted for about 63% of total advertising revenues.

• Digital subscription revenues increased to approximately INR 163 billion in 2025, supported by growth in paid video and music subscriptions.

• The filmed entertainment segment recorded revenues of approximately INR 205 billion in 2025, with more than 1,900 films released during the year.

• The Indian M&E sector is expected to reach approximately INR 3.3 trillion by 2028, with digital media, live events, filmed entertainment and animation and VFX among the principal growth drivers.

Industry Overview and Opportunities

India continues to be one of the worlds largest digital-consumption markets. In 2025, broadband subscriptions crossed one billion, smartphone users were estimated at about 584 million and connected television households continued to expand, strengthening digital content consumption and distribution.

Indias telecom subscriptions reached approximately 1.23 billion in 2025, with broadband accounting for the overwhelming majority of internet access.

Continued investment in digital infrastructure, broadband, 5G and connected devices is supporting new distribution, advertising and subscription models across the media and entertainment sector.

• Regional-language content continues to be an important growth driver across television, films and OTT platforms, widening the addressable audience for Indian content.

• Paid video subscriptions in India increased to approximately 216 million in 2025 across around 143 million households.

• Digital consumption remains high, with Indians spending substantial time on mobile and connected-screen entertainment formats.

• Digital advertising was the principal advertising growth engine in 2025, reflecting the continued shift of advertiser spends towards measurable and commerce-linked digital formats.

The industry growth is being supported by various government initiatives, such as digitizing the cable distribution sector to attract greater institutional funding, increasing the FDI limit from 74% to 100% in cable and direct-to-home (DTH) satellite platforms, and granting industry status to the film industry for easy access to institutional finance. The Ministry of Information and Broadcasting set up Film Facilitation Office (FFO) which acts as a single window clearance and facilitation point for producers and production companies with a view to assisting them in getting the requisite filming permissions. In 2020, the government of India also announced the plan to support and develop a centre specifically for Animation, Visual-effects, Gaming, and Comic (AVGC).

Opportunities

India remains one of the worlds largest telecommunications and digital-consumption markets, with approximately 1.23 billion telecom subscriptions in 2025. In a country with 300 million households, there are around one-third of households who are still without television set and this data depicts that theres an opportunity for growth and development in the sector. The broadcasting industry can work as a powerful source which can educate, inspire, and empower viewers with strong opinions and views. Therefore, it is important that the government and industry work together to give every Indian home access to television.

Globally, the Animation, Visual-effects, Gaming and Comics (AVGC) sector is an industry of US$ 800 billion. However, India has a huge talent force supporting this industry while it accounts for less than one percent share in the industry. The AVGC sector has the potential to boom and become the next IT sector of India and the target could be around 5% in a year, which will be close to a US$ 40 billion opportunity. The same growth has the potential to create around 1,60,000 jobs across the nation. The gaming industry is booming as a high- growth segment along with the contribution of skill-based gaming. Under this segment, India has least percentage share if compared globally, however, India has a substantial growth opportunity with the availability of skills and policies supporting it.

Film making industry in India is being supported by nature itself, the opportunity expands with the beautiful and diverse locations and landscapes, good infrastructure, and high-quality manpower; India has all the ingredients required to unlock and expand this opportunity and become a preferred destination for international film shoots.

The opportunities are not only in India, but there is also an option to take Indian content to global audiences. South India has set a great example of the same across the globe as it has demonstrated that good content travels beyond boundaries and language barriers. India has a strong set of ecosystems of talent, production efficiencies and creative capabilities, and it generates huge opportunities to mark our strength and culture on the global stage. The industry can come together, explore, and create content that can break all global boundaries and become a storyteller to the world. The growth and stories of regional movies are better than other cumulative work. However, the industry has an opportunity to create masterpieces that can cross geographical boundaries and establish relatability around the globe. Moving towards print media, music, and radio, these subsectors continue to be important contributors to the industry. There are various changes in this industry with ongoing development and improvements.

Outlook

Indias media and entertainment sector returned to stronger growth in 2025, reaching approximately INR 2.78 trillion, supported by digital advertising, digital subscriptions and live experiences. The sector nevertheless remains uneven across segments as consumer preferences, regulation, content economics and technology continue to evolve.

The slowdown, caused in large measure by sluggish consumer spending, is pushing companies to reset expectations, refocus inward and seek ways to recharge growth. Theyre doing so by tapping into the many geographical and sectoral hotspots that offer opportunities and by harnessing emerging technology—in particular, by exploring the power of generative AI as an engine of productivity for the creative process.

The causes of the slowdown are many. For some key sectors, the surge in revenue and attention that they experienced early in the pandemic ran out of steam. The creation of podcasts, which was among the industrys major success stories during the pandemic, fell by an estimated 80% between 2020 and 2022.

The Indian Digital Ecosystem

According to the latest FICCI-EY industry assessment, Indias M&E sector reached approximately INR 2.78 trillion in 2025. Digital media crossed INR 1 trillion in revenues and became the largest segment, while digital advertising and subscriptions remained key drivers of growth.

Historical Segment-wise Revenue Share of the Indian M&E Sector

Segments	2019	2020	2021	2022	2023E	2025E	CAGR
							22-25
Television	787	685	720	709	727	796	3.9%
Digital Media	308	326	439	571	671	862	14.7%
Print	296	190	227	250	262	279	3.7%
Filmed Entertainmen t	191	72	93	172	194	228	9.8%
Online Gaming	65	79	101	135	167	231	19.5%
Animation and VFX	95	53	83	107	133	190	21.1%
Live Events	83	27	32	73	95	134	22.2%
Out of home Media	39	16	20	37	41	53	12.8%
Music	15	15	19	22	25	33	14.7%
Radio	31	14	16	21	22	26	7.5%
Total	1910	1476	1750	2098	2339	2832	10.5%

Note: All figures are gross of taxes (in Rs. billion) for calendar years Sources: EY

The Way Forward

The media and entertainment industry has seen robust growth with continuous improvement and various approaches as well. For the past two years, the industry has shown immense resilience and there has been a bounce back to the pre-covid scenarios. The pandemic undoubtedly created a disruption in the consumption habits of consumers. However, with the advent of ongoing digitalization and new technologies, the media and film industry is expected to show significant growth over the next few years. The strong growth in OTT, gaming, animation and VFX is cumulatively estimated to contribute to around US$ 55-70 billion by 2030. The industry continuously showcases multimodal growth with digital video leading to a consumption boom, however the potential growth depends on the realization of supply and demand side factors. The integration of content and advertisement is growing more prevalent as digital advertising moves toward more "interactive" commercials. Platforms for short-form video are expanding and offer advertisers a special value proposition. With a more than ten-fold increase in gaming companies over the past ten years, India is also growing as a talent hotspot. Over the past few years, this has caused a boom in VC funding for the industry. The filmed entertainment segment recorded strong revenues in 2025, supported by theatrical releases and continued demand for content. Future growth prospects include the expansion of content films, direct-to-digital releases, and regional box office growth. The development of the industrys infrastructure, intellectual capital, and financial incentives depends on the post-production, VFX, and animation sectors in India.

Company Overview

M/s. Shalimar Productions Limited (the "Company"), originally incorporated in 1985 and rebranded from Shalimar Agro Products Ltd to its current name in 2004, has long been a player in the media and entertainment industry. Over the years, the Company has made significant contributions to the production and acquisition of regional albums, films and other media content.

A significant part of the Companys operating history has involved the creation and acquisition of film, media and digital content. Portions of this library have been commercially exploited through various channels over time. However, the ability to generate recurring or incremental revenues from certain content assets has remained limited. The Company continues to explore additional avenues for re-packaging, licensing, syndication, platform distribution and other forms of exploitation with the objective of deriving further value from its existing content library.

In line with its vision to enhance its presence in the film and entertainment landscape, the Company launched the NJOYMAX OTT platform in January 2025. The Company has continued to devote management attention towards the development and commercialisation of its digital content initiatives, including NJOYMAX. While the platform and the underlying content library were envisioned to provide an additional avenue for digital exploitation, monetisation to date has been modest relative to the scale of the content available. Management continues to evaluate distribution partnerships, licensing arrangements, catalogue optimisation and other alternatives aimed at improving the reach and commercial utilisation of the library.

Going forward, the Company intends to continue assessing suitable opportunities for further exploitation of its existing content portfolio, having regard to audience preferences, platform demand, distribution opportunities and the evolving economics of content monetisation.

Financial Overview

Net Profit Ratio - (725.63%)

Current Ratio - 4.78

Debt Equity Ratio - 0.02

Trade Receivables Turnover Ratio - 0.05 times

Inventory Turnover Ratio - 0.01 times

Return on Capital Employed - (2.61%)

During FY 2025-26, revenue from operations was Rs. 16.44 lakhs as compared with Rs. 266.55 lakhs in FY 2024-25, and the Company reported a loss after tax of Rs. 119.27 lakhs. Significant movements in the above ratios primarily reflect the sharp reduction in operating revenue, the loss for the year and the increase in short-term borrowings.

Risk Management

The Company has established a risk management framework to identify, manage and mitigate risks arising from external and internal factors. A risk identification exercise is carried out periodically to identify various strategic, operational, financial and compliance related risks. These risks are evaluated for their likelihood and potential impact. Few risks and uncertainties that can affect the business include an accelerated shift in consumer preferences towards digital propositions, attraction and retention of right talent in new environment post the pandemic, adverse macroeconomic conditions including impact of geopolitical tensions influencing revenue growth and risk of newsprint price volatility & supply constraints resulting in higher direct costs. Further, an intense competitive landscape along with the risk of cyber threat and data breach remain some of the key concerns faced by the Company. The risks to the Company include, but are not limited to, the following factors:

• Consumer Preferences: Rapid shifts in consumer tastes toward digital content.

• Talent Acquisition: Challenges in attracting and retaining skilled professionals.

• Macroeconomic Conditions: Adverse economic factors and geopolitical tensions affecting revenue.

• Production Costs: Fluctuations in production costs and supply chain disruptions.

• Competition: Intense competition and pressure to differentiate offerings.

• Cybersecurity: Risks of cyber threats, data breaches, and technology advancements.

• Regulatory Compliance: Navigating complex regulations and ensuring compliance.

• Intellectual Property: Risks of IP theft, infringement, and licensing issues.

• Market Saturation: Oversaturation and fragmentation of the market.

• Revenue Volatility: Dependence on unpredictable advertising and subscription revenues.

• Content Quality: Risks of low-quality content damaging brand reputation.

• Expansion: Challenges in new market entry and localization.

Internal Control System & Adequacy

The Company has an effective system of internal controls corresponding with its size, nature of business and complexity of operations. The internal controls mechanism comprises a well- defined organizational structure with clearly laid out authority and responsibility matrix and comprehensive policies, guidelines and procedures governing the operations of respective functions. These controls have been designed to safeguard the assets and interests of the Company and its stakeholders and also ensure compliance with Companys policies, procedures and applicable regulations. The Company has an established Code of Conduct (CoC) framework and Whistle-blower mechanism, which is duly approved by the Board of Directors in compliance with the regulatory requirements.

Disclaimer

The information and opinions contained in this Management Discussion and Analysis Report (MDAR) are based on current expectations, estimates, and projections made by M/s. Shalimar Productions Limited (the "Company") as of the date hereof. These statements are forward-looking and inherently subject to uncertainties and risks, including but not limited to, changes in market conditions, economic factors, regulatory developments, and other risks as outlined in the risk factors section of this report. Actual results may differ materially from those expressed or implied in the forward-looking statements.

The Company assumes no obligation to update or revise any forward-looking statements or information, whether as a result of new information, future events, or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

This MDAR should be read in conjunction with the Companys financial statements and other disclosures, which provide a more comprehensive understanding of its financial performance and position.