PVR Inox Ltd

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Dear Shareholders,

As PVR completes 25 years, our heart is filled with gratitude for all the stakeholders without whose continued support this journey would not have been possible. From opening India's 1st multiplex in Delhi to being India's largest theatrical exhibition company, we have made considerable strides in transforming the landscape of the moviegoing experience.

With FYRs 22 behind us, we are hopeful that the 3rd wave of COVID-19 witnessed by India in January 2022 was the last that we see of the pandemic. There is no doubt that the past two years was the most trying period for our business. But, we were confident that the theatrical exhibition industry having withstood innumerable challenges in the past would bounce back dynamically in FY23.

In the last few months, the re-opening of theatres without any restrictions have been extremely promising, as audiences are clamouring to come back to theatres. Audiences are clamouring to come back to theatres. The pace of recovery of admissions once new content was released, post the 2nd wave and especially the 3rd wave has exceeded our expectations. Big budget Hollywood tentpole like Spiderman-No way Home which was released in the month of December 2021has grossed $1.89 billion till date. Domestic releases like RRR in March 2022 and KGF 2 in April 2022 have grossed ' 1,100+ crores and Rs 1,200+ crores respectively in the Global box office collections. And with the excellent content line up that we have for the rest of this year, we hope that this momentum would continue.

During the year, as our operations continued in 'fits and starts' post the 2nd wave and the 3rd wave of COVID-19, the focus of the Company was cost optimisation and preserving liquidity as we tide through the turbulent times. The Company brought down its cash burn significantly by reducing its fixed costs and also seeking significant discounts from its landlord partners, as our operations were impacted. The new screen roll outs during the year were restricted to only 29 screens as we pushed the handover of new screens for fitouts to the next fiscal year.

We shifted gears as we came out of the 3rd wave of COVID-19 and have ramped up operations in a significant way as we saw audiences come back to theatres. We have also recommenced our Capex programme and intend to open approximately 120-125 screens in FY23.

Our teams continued to take significant initiatives around the business as we recommenced operations during the year. Apart from screening new movies during the year, we continued to experiment with alternate forms of content in our cinemas.

This included broadcasting India's first In-Cinema Esports live tournament in partnership with Nodwin, live screening of the ICC Men's T20 World Cup 2021 across 75+ cinemas in 25+ cities, and exclusive partnership for live screening of a concert by the sensational K-Pop band - Bangtan Sonyeondan (BTS) from Seoul at select 46 cinemas in 25 cities across India.

We continued to build on our F&B products portfolio with several new introductions including our range of premium quality Gourmet Gelatos under the brand name 'PVR V-Frozen', Bento Box Meals in Indian and Asian cuisines across our cinemas, 'Ready to Cook' popcorn 'Popmagic', and premium coffee 'V-Roast'. These initiatives are a part of the 'Ready to Eat' food segment that PVR is aggressively targeting for growth.

We continue to invest in our loyalty programme 'PVR Privilege' which has 14.6 million loyal patrons and introduce new initiatives to inculcate loyalty amongst patrons. We are currently piloting a programme which allows subscribers to watch movies on weekdays by paying a monthly subscription fees. We also launched a Kotak - PVR co-branded debit card last year. The card provides a host of benefits to users right from the cash back on issuance of the card, higher reward points for transactions at PVR, along with the ability to redeem points for tickets & F&B at PVR.

We took a landmark step in our journey on 27th March, 2022 when the Board of Directors of PVR and INOX Leisure approved an all stock amalgamation of INOX with PVR. The amalgamation is subject to the approval of the shareholders of both the companies and other such regulatory approvals, as may be required. We are currently in the process of seeking these approvals and hope to complete this merger in the current fiscal year. We are personally thrilled about the merger as it will bring together two of India's best cinema brands to deliver an unparalleled consumer experience with a network of approximately 1,550 screens, as on date. The combination would augur well for the growth of the Indian cinema exhibition industry, besides ensuring tremendous value creation for all stakeholders, including customers, real estate developers, content producers, technology service providers, the state exchequer and above all, the employees. With consumers at the core of the decision, the merger would focus on leveraging the strengths of both the organisations to provide an exceptional customer service and cinema experience to Indian moviegoers. While strongly countering the adversities posed by the advent of various OTT platforms and the after-effects of the pandemic, the combined entity would also work towards taking world-class cinema experience closer to the consumers in Tier 2 and 3 markets. As part of the merger agreement, both me and Sanjeev will be appointed as the Managing Director and Executive Director respectively for a term of five years and we will continue to drive the day-to-day affairs of the combined entity.

We continue to experiment and reinvent the wheel at PVR, so that the brand remains at the 'top of the mind' for our consumers when it comes to watching movies in India. As we celebrate 25 years of PVR's inception, we continue to remain confident about our business's prospects and the milestones PVR will achieve over the next 25 years.