Zinema Media & Entertainment Ltd Management Discussions

The Company has forayed into the media industry attracted by its lucrative margins and ease of operations. This report presents the Managements perspective on the industry environment, business performance, risk position and outlook of the Company for the financial year 2025-26, and should be read in conjunction with the Companys audited financial statements and other disclosures forming part of this Annual Report.

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

1.1 Industry Overview

Global growth in the media and entertainment industry has moderated from the exceptional post-pandemic rebound of the earlier part of the decade to a steadier, more measured pace, with industry-wide revenue growth stabilizing in the mid-single digits over the medium term. Studios, video streamers and broadcasters continue to face the reality of their own market disruption as they seek profitable growth in a more competitive environment. They compete not only with each other for attention, time and revenue, but increasingly with social media, user-generated content, gaming and live/experiential entertainment, all of which continue to gain share of consumer time and advertising spend.

Streaming platforms have moved decisively toward hybrid monetization, combining subscription (SVOD), advertising (AVOD), free ad-supported television (FAST) and live programming rather than relying on subscriptions alone, as consolidation among global streaming and studio players continues to reshape the competitive landscape. At the same time, artificial intelligence has moved from a recommendation-engine feature to a broader driver of personalization, content production and audience measurement across the industry, even as it raises new questions around content authenticity and rights. Social and user-generated platforms continue to blur the line with traditional TV viewing, and the creator economy has matured into a more structured, platform-integrated part of the ecosystem, though creator incomes remain uneven.

Gaming continues to be woven through every part of the media and entertainment industry rather than sitting apart from it, from mobile and casual titles to large multiplayer and narrative-driven experiences, and is expected to keep drawing significant consumer attention and investment. Alongside this, consumers are increasingly seeking live and immersive experiences-concerts, sporting events and interactive formats-as a counterweight to fragmented on-demand viewing. Taken together, video, social, gaming, messaging and live/interactive formats are converging into a single ecosystem of engagement that the Company continues to monitor closely.

1.2 Music Industry

The music industry, both globally and in India, remains one of the fastest-growing segments within media and entertainment. India has emerged as one of the largest markets in the world by volume of on-demand audio and video streams, with the domestic recorded-music and streaming segment continuing to post strong double-digit growth, driven by rising smartphone and data penetration, the popularity of regional and vernacular content, and a rapidly expanding base of independent artists. Industry trends for the year point to platforms deepening investment in personalized discovery, closer integration between streaming, short-form video and live events, growing importance of transparent royalty and metadata systems, and continued mainstreaming of AI-assisted music creation and production tools, alongside a renewed industry-wide focus on quality and sustainable monetisation over sheer volume of releases.

The Management believes these trends present a relevant adjacency for the Companys existing media and entertainment platform. Potential avenues that the Company may evaluate include curating and distributing regional and independent music content through its platform, supporting emerging artists through content and promotional partnerships, exploring sync-licensing and cross-promotion opportunities between music content and the Companys other media offerings, and participating in the broader shift toward live and experiential entertainment linked to music. Any expansion into the music segment would be undertaken in a measured manner and evaluated on its commercial merits, and the Company will make appropriate disclosures as and when concrete initiatives are approved by the Board.

1.3 Developments in the Industry

During FY 2025-26, the media and entertainment sector continued to be shaped by rising digital consumption, deeper convergence of video, music and social messaging platforms and intensifying competition for viewer attention and advertising spend. Streaming platforms continued to adopt hybrid monetisation models and reassess cost structures amid measured subscriber growth, while user-generated and creator-led content further expanded its share of viewership and advertising revenue. Continued large-scale consolidation among global studios and streaming platforms, growing use of artificial intelligence across content production, personalisation and rights management, and rising consumer demand for live and immersive experiences were also prominent themes during the year.

Looking ahead, the Company expects continued disruption from digital-first and AI-enabled content formats, greater integration between video, music and social messaging platforms and growing significance of the creator and live-entertainment economy. These developments are likely to shape both the competitive landscape and the growth opportunities available to the Company in the year ahead.

2. SWOT ANALYSIS a. Strengths When media industries tout their strengths, they often mean their customers rather than the journalism awards sitting on the trophy shelf. They might note their total volume of customers, or their market dominance in demographics that the business covets. Larger trends matter as well as specific ones-broadcast television, for instance, still rules if the broadest possible audience is the objective, even though its influence is not what it once was. Brand names can also be a strength: both customers and advertisers may want to be associated with media outlets considered elite news and entertainment sources.

b. Weaknesses Every media outlet engages in fierce competition for a larger share of audience, and at any given time, ratings or circulation figures represent a weakness for some industry sectors. Cost structure is a weakness in some traditional media businesses, where a shift in audience preferences has left a solid brand saddled with a bloated workforce and a narrowing customer base. New media entities can face a similar problem, with founders and investors pouring cash into a vision of the future that results in an unsustainable amount of red ink.

c. Opportunities Traditional media industries are looking to monetise their offerings on the internet, or to turn their free social media presence into an effective sales pitch for paid offerings. There are also time-honoured opportunities presented by the expansion of markets; combining the two, media outlets may find it profitable to specialise in niche content-including music and regional-language content-that is more popular outside their traditional geographic footprint, and to sell targeted web advertisements to generate the necessary revenue. Shifting consumer preferences, while often viewed negatively, also create opportunities for media organisations.

d. Threats Disruptive technologies pose a threat to media industries that have not been proactive in using them to their own benefit. User-generated content-whether a popular series of videos or the hottest social media platform of the moment-continues to take eyeballs away from established media industries. Fragmentation is a further threat for businesses that depend on a high volume of customers, as broadcast TV networks, radio and newspapers have found in particular. A business seeking the most comprehensive advertising coverage possible finds a leading local radio station less appealing when its ratings are far from what they once were.

3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Companys operations during FY 2025-26 constituted a three reportable business segment in the media and entertainment space, in accordance with the applicable Indian Accounting Standard on operating segments. Accordingly, no separate segment-wise or product-wise performance disclosure is presented for the year under review. The Management will continue to monitor the Companys operating structure and will provide segment-wise or product-wise performance disclosures in future reports if and when the Companys operations expand into multiple reportable segments or distinct product lines, including any expansion into music or other adjacent content categories.

4. OUTLOOK

During FY 2025-26, the Company continued to focus on its core operations in the media and entertainment space while remaining watchful of the industry developments discussed above. Overall business conditions during the year reflected the broader trends of digital disruption, AI-led personalisation, cross-platform competition for audience attention and evolving consumer preferences described elsewhere in this report. Looking ahead to FY 2026-27, the Company intends to consolidate its market position, evaluate opportunities arising from changing content-consumption patterns-including the continued growth of the music and streaming segment-and continue strengthening its internal processes and governance framework. The Management remains cautiously optimistic about the Companys prospects for the year ahead, subject to the risks and uncertainties set out under the Cautionary Statement at the end of this report.

5. RISKS AND CONCERNS

5.1 Risk Management Framework

The Company has a robust risk management framework to identify and evaluate business risks and opportunities. This framework seeks to create transparency, minimise adverse impact on business objectives and enhance the Companys competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels, including documentation and reporting, and comprises different risk models that help identify risk trends, exposure and potential impact at the Company level as well as separately for business segments. The Company has identified various risks and has mitigation plans in place for each risk identified. The Risk Management Policy of the Company is available on its website, www.zinema.co.in.

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of the Companys business, including adherence to the Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records, and timely preparation of reliable financial disclosures.

5.2 Key Risks Faced by the Company

The principal risks and concerns identified by the Company, together with the Companys approach to managing them, are summarised below:

i. Industry and competition risk: Intense competition from traditional media, streaming platforms, social media, theatres and user-generated content for audience attention and advertising revenue could impact the Companys market share and margins. The Company seeks to mitigate this risk by closely monitoring industry trends and adapting its offerings accordingly.

ii. Regulatory and compliance risk: Changes in laws and regulations applicable to the media and entertainment sector, including content, data-privacy, artificial intelligence and listing regulations, could increase compliance costs or restrict operations. The Company monitors regulatory developments and engages professional advisors to ensure timely compliance.

iii. Technology and content risk: Rapid changes in content-consumption technology, including the growing use of artificial intelligence in content creation, and the risk of unauthorised use or piracy of content could affect revenues. The Company continues to evaluate its technology infrastructure and content-protection measures.

iv. Revenue concentration risk: A reliance on one region and also limited on number of revenue streams or customers could expose the Company to volatility. The Company aims to diversify its revenue base over time, including by evaluating adjacent opportunities such as music content.

v. Human resource risk: Given the Companys small employee base, the loss of key personnel could affect operations. The Company seeks to maintain cordial employee relations and appropriate succession planning. vi. Economic and market risk: General macroeconomic conditions, including advertising spend cycles and consumer discretionary spending, could affect the Companys performance. The Company monitors macroeconomic indicators as part of its risk assessment process.

6. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has implemented a comprehensive system of internal controls and risk management for achieving operational efficiency, optimal utilisation of resources, credible financial reporting and compliance with applicable laws. These controls are reviewed regularly by both internal and external agencies for their efficiency and effectiveness. The Management information and reporting system for key operational activities forms part of the overall control mechanism.

The Company has retained the services of independent professional firms to function as internal auditors; their reports, and the effectiveness of internal control measures, are reviewed by top Management and the Audit Committee of the Board.

The Company believes that it has internal controls and risk management systems adequate to assess and monitor risks. The Companys management team monitors and manages risks by tracking trends that may affect the economic environment and actively assesses, on a routine basis, the market value of the Companys loan book. The Company seeks to monitor and control its risk exposure through a variety of separate but complementary financial and operational reporting systems, and believes it has effective procedures for evaluating and managing market, operational and other risks to which it is exposed.

7. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

7.1 Financial Performance

The Company s financial performance (Standalone and Consolidated) for the financial year 2025-26 is summarized below:

(Rs. In Lakhs)

	Standalone		Consolidated
Particulars	Year ended March 31, 2026	Year ended March 31, 2025	Year ended March 31, 2026	Year ended March 31, 2025
Revenue from Operations	468.08	33.25	468.08	33.25
Other Income	47.16	25.91	47.16	25.91
Total Income	515.24	59.16	515.24	59.16
Total Expenses	464.06	30.04	464.06	30.04
Profit/ (Loss) before tax	51.18	29.12	51.18	29.12
Tax Expenses	13.44	-	13.44	-
Profit (Loss) after Tax	37.74	29.12	37.74	29.12
Other Comprehensive Income	-	-	-	-
Total Comprehensive Income for the period	37.74	29.12	37.74	29.12

The Financial Statements as stated above are also available on the Company s website at www.zinema.co.in.

STATE OF AFFAIRS

During FY2025-26, Your Company on standalone basis has achieved Revenue from Operations of Rs. 468.08 Lakhs as against Rs. 33.25 Lakhs in FY2024-25. The Profit after Tax during the year stood at Rs. 37.74 Lakhs as against Rs. 29.12 Lakhs in FY2024-25.

During FY2025-26, Your Company on consolidated basis has achieved Revenue from Operations of Rs. 468.08 Lakhs as against Rs. 33.25 Lakhs in FY2024-25. The Profit after Tax during the year stood at Rs. 37.74 Lakhs as against Rs. 29.12 Lakhs in FY2024-25.

7.2 Key Financial Ratios

In terms of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios are set out below. The figures below are to be updated with the audited financial results for FY 2025-26 and FY 2025-26:

Ratio	FY 2024-25	FY 2025-26	% Variance	Reason for variance (if > 25%)
Debtors Turnover	0.96	12.04	1154.17%	Growth in Business
Inventory Turnover	N/A	N/A	N/A	N/A
Interest Coverage Ratio	N/A	N/A	N/A	N/A
Current Ratio	11.29	4.73	-58.10%	Growth in Business
Debt-Equity Ratio	0.11	0.79	618.18%	Growth in Business
Operating Profit Margin (%)	9.95%	6.50%	-34.67%	Growth in Business
Net Profit Margin (%)	87.59%	8.06%	-90.80%	Growth in Business

7.3 Return on Net Worth

Details of any change in Return on Net Worth (RONW) as compared to the immediately previous financial year, together with a detailed explanation thereof, are set out below. The figures below are to be updated with the audited financial results for FY 2025-26 and FY 2025-26:

Particulars	FY 2024-25	FY 2025-26	% Variance	Reason for variance
Return on Net Worth (RONW) (%)	3.28%	4.09%	24.70%	Growth in Business

8. DISCLOSURE OF ACCOUNTING TREATMENT

In the preparation of the financial statements for FY 2025-26, the Company has followed the treatment prescribed under the applicable Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other applicable provisions of the Companies Act, 2013. No treatment different from that prescribed under any Accounting Standard has been followed in the preparation of the financial statements for the year under review.

9. HUMAN RESOURCES

The Company firmly believes that human resources are an important instrument in communicating the Companys growth story to its stakeholders and play a vital role in its overall prospects. The Company accordingly takes all possible steps for the welfare of its manpower. Employee relations were cordial throughout the year, and as on 31st March 2026, the Company had 6 employees on its rolls.

There were no material developments on the human resource or industrial relations front during FY 2025-26, other than in the ordinary course of business. The Company continues to focus on maintaining a cordial working environment and will disclose any material development relating to its human resources, including changes in headcount, key managerial appointments or industrial relations matters, as and when they arise.

11. CAUTIONARY STATEMENT

This report may contain statements that the Company believes are, or may be considered to be, forward-looking statements describing the Companys objectives, plans or goals. All such forward-looking statements are subject to certain risks and uncertainties, including but not limited to government action, economic developments, risks inherent in the Companys growth strategy, and other factors that could cause actual results to differ materially from those contemplated by the relevant forward-looking statements.