C O M PA N Y I N F O R M AT I O N R E P O R T

11 April 2017
Stock Info
Prime Focus Ltd. Rs 92
Sector: Media & Entertainment Delivering Profitable Growth, outperforming global peers BSE : 532748/NSE: PFOCUS
Prime Focus is one of the worlds largest independent & integrated media services players with distinct leadership across its three
Stock Info flagship businesses i.e. global creative services (visual effects, 3D conversion, animation), technology (Media ERP, cloud-enabled
Market Cap (Rs mn) 27,527 services) and India FMS (production, post-production & creative services). PFL has delivered robust growth over the last ~5 years ttm
52 W High- Low 47-95 revenues of Rs 19.7bn as on Dec16 (2.5x of FY12s) by successfully adopting organic & inorganic strategies to strengthen its
BSE/NSE Symbol 532748/ PFOCUS
comprehensive bouquet of techno-creative services to the most sophisticated customers in India and abroad. A truly global company,
Shares (mn) 299
PFL derives 80%+ revenues from overseas, servicing top Hollywood studios, broadcasters and M&E companies via its unparalleled
Face Value (Rs) 1
WorldSourcing model. The company delivered stellar performance in Q3FY17 with revenue up 8% YoY at Rs 5.1bn, EBITDA up 71% YoY
Stock Returns at Rs 1.2bn taking EBITDA Margin to 24%, much above the mid-term target of 20% and posted +ve pat of Rs 227mn.
% change PFL Nifty Media
1 month
PFL is poised for accelerated profitable growth with higher scale, larger & more visible order books and increasing delivery from low
10% 5%
3 months 25% 18% cost centres. At CMP of Rs 92, PFL trades at a high discount of ~33% to its peers on SOTP ttm EV/EBITDA method, presenting an
6 months 34% 7% attractive play on the growing global M&E industry.
12 month 74% 40% Distinct leadership across businesses - All businesses on high growth trajectory:
Shareholding Pattern (Dec16) Creative arm - Prime Focus World (PFW) is a tier 1 player for VFX and Animation and leading player in 3D conversion with two consecutive Oscar wins to its
Promoters 35.0% name. Revenues have grown 3.2x from Rs 4.6bn in FY12 to Rs 14.8bn (ttm Dec16) with an order book of over $250 mn, up from ~$100 mn levels in 2014.
RMW 35.1% PFW now contributes 75% to ttm revenues and has an EBITDA margin of 23% (quarter ending Dec16)
SCPE 22.0% Technology arm - Prime Focus Technologies (PFT) is a pioneer & leader in cloud-based solutions for the global Media & Entertainment (M&E) industry
Public & Others 7.9% offering a unique blend of decades of M&E insights and IT expertise. It has grown non-linearly - up 10.1x to Rs 3.4bn (ttm Dec16) since FY12 and the
business has significant stickiness with ~71% annuity mix. PFT is replicating its domestic success globally and has built a robust order book - $200 mn and has
Consolidated
sustained EBITDA margin of 25-30%. PFT raised ~$10 mn from Ambit Pragma PE at an enterprise valuation of ~$200 mn in August 2016.
FY14 FY16
Financials, FY12 FY13 FY15 9MFY17 India FMS (Film and Media Services), PFL is a leading player in the fast growing Indian M&E market with revenue of Rs 1.7bn (ttm Dec16) contributing 8% to
( Rs mn) (15 M) (9M) revenues. Has sustained a high EBITDA margin in the range of 30-40%.
Revenue 7,719 7,622 10,814 16,076 13,828 14,999
WorldSourcing model provides unmatched competitive edge: PFLs global delivery model of 22 offices in all major content markets with 8,000+ workforce
# of employees 4,200 4,300 5,500 6,000 7,000 8,000
enables rapid scaling, execution and high profitability by sharing work across lower cost regions. This has enabled high EBITDA margin, much above the ~10%
Rev per empl.* 1.8 1.8 1.6 2.7 2.6 2.5
range of other VFX providers.
EBITDA Margin 28.7% 23.0% 18.3% 17.3% 15.0% 20.9%
PAT Margin 12.9% -2.7% 2.2% -18.2% -7.8% 5.9%
In high growth M&E segments:
Cash Profit** 1,704 796 1,574 (710) 923 2,932 Creative: The $3.5 bn VFX/ Animation 3-D market is fast growing (10% 5-year CAGR) driven by favourable performance of VFX-heavy movies globally.
D/E (x)*** 1.0 1.2 1.1 0.9 1.2 2.0 Technology: Total M&E Technology spend at $38.8 bn in 2015, is expected to grow to $44.3 bn in 2017. Digital Content Solutions is an $11.1 bn opportunity
expected to grow to $12.9 bn in 2018.
*FY14 , FY16 & 9MFY17 figures are annualised to give
comparable numbers India FMS: The Indian Media and Entertainment industry grew 12.8% YoY in 2015 and is expected to grow at ~15% CAGR to reach Rs 2,260bn by 2020.
1
** Cash profit is calculated as PAT+Depreciation
*** DE Ratio is calculated as Net Debt to Equity
 Strong relationships with marquee clients: Clients include some of the biggest Hollywood studios - Warner Bros, Marvel, Universal Studios, Paramount, Lucasfilm, Sony, Twentieth
Century Fox, Legendary Pictures, DreamWorks; as well as broadcast networks like Disney, GEE, Cricket Australia, Star India, Viacom 18, Associated Press; & innovative digital platforms
such as Amazon Prime, Hotstar, Voot, HOOQ and more.
Unique positioning versus competition: PFW has made its way into the list of global tier 1 VFX providers that is characterised by a few large players doing more than 50% of the work,
bagging high-end, high-value VFX projects. In technology services, PFT is one of the few players with strong IT credentials and a deep understanding of M&E industry. PFL, has captured
a leading share of domestic VFX Industry and film, TV and advertisement spend in India and owns one of the largest integrated studio facilities in Bollywood with a capacity of ~1/4th of
the capacity of the Mumbai studio market.
Worked on some of the highest grossers: Hollywood movies like Captain America: Civil War ($1.1 bn in box office revenues worldwide), Spectre ($0.9 bn), Batman v Superman: Dawn of
Justice ($0.9 bn), Fantastic Beasts and Where To Find Them ($0.8 bn) Mission: Impossible - Rogue Nation ($0.7 bn), The Hunger Game Mockingjay Part 2 ($0.7 bn) and Bollywood hits
like Dangal (Rs 7.4bn), Bajrangi Bhaijaan (Rs 6.3bn), Prem ratan Dhan Payo (Rs 4.3bn), etc.
Successfully completing integration post transformational transactions: In 2014 and 2015, the Company undertook 4 transformational transactions (i.) merger of PFW with Double
Negative (DNeg) one of the worlds foremost providers of VFX and (ii.) acquisition of Gener8 - global leader in 3D conversion to create the largest integrated creative services provider
of Hollywood, (iii.) merger of India FMS with RMWs FMS business and (iv.) PFTs acquisition of DAX, a leading provider of cloud-based production workflow to achieve deeper
penetration in North America. PFL is focussing on cross-sell opportunities from the above transactions - i.e. Stereo conversion to existing VFX clients, CLEARTM to DAX clients, Equipment
rental and studio rental to India Post production clients.
Experienced management: In line with the companys expanding global footprint the founder, Mr. Namit Malhotra, relocated to Los Angeles and then to London to drive global business
growth. He is born into a family of three generations of working Bollywood professionals. Mr. Ramakrishnan Sankaranarayanan, who heads the Technology arm has over 22 years of
experience in the IT industry whereas Mr. Vikas Rathee- Group CFO has over 17 years in Corporate Finance, Investment Banking, Capital Markets and M&A across the U.S., Europe and
Asia. Apart from this, the global team includes Alex Hope (UK), Mathew Holben (UK) founders of DNeg - Ellen Walder (Head Global Delivery VFX) and Graham Jack (CTO).
Robust financial performance as integration nears completion: Within 33 months of the transactions, PFLs revenue has scaled up to Rs 19.7bn, up 2.5x from FY12. Cost consolidation
and optimisation has led to EBITDA Margins reaching ~24% in Q3FY17, much above mid-term target of 20%. TTM Cash Profit (PAT + Dep) at Rs 2.9bn is over 1.7x the FY12s Cash Profit
of Rs 1.7bn; Cash Profit margin at 15%. Strong relationship with leading Hollywood studios resulted in significant improvement in debtor days, at 36 (TTM Dec16). Prudent funding of
expansion via equity has resulted in a marginal increase in debt, plans to pare down debt via proceeds from non-core assets sale and cash from operations.
Poised for robust growth in both revenues & margins: Creative segment has an order book of over $250 mn that will be executed over the next 9-12 months, providing strong revenue
visibility. PFT will continue on its non-linear trajectory with a $200 mn order book and recent ~$10 mn investment from Ambit Pragma PE. With major integration costs already incurred,
and increasing delivery from low cost centres, PFL should benefit from further margin expansion.
Trading at attractive valuations: We have valued the three divisions separately on EV/EBITDA method comparing with relevant peer average, and added the same to value PFL.
Sum of the parts (SOTP) Valuation EV/EBITDA PFL holding in
TTM EBITDA EV PFL EV
In Rs Mn Multiple subsidiaries The stock is currently trading at TTM
Creative Services 2,693 15.5 41,782 93% 38,857
PFT 905 18.8 17,019 70% 11,913 EV/EBITDA multiple of 9.5x and an EV of
India FMS 669 14.6 9,785 100% 9,785 Rs 40.5bn, that is at a steep 33% discount
Total 4,267 60,555 to the SOTP valuation of Rs 60.6bn.
Current EV 40,531
Discount 33% 2
About Prime Focus

3
 Prime Focus. . . . one of the worlds largest independent & integrated media services players
Stock Info
Prime Focus Limited (PFL) has emerged as a globally renowned Indian MNC. The Rs 19.7bn (ttm Dec16)
Business Offerings:
Creative Services:
conglomerate derives 80%+ of its revenue from the overseas and is working at the cutting edge in all its
Visual Effects businesses. PFL boasts of a client list that includes the whos who of Hollywood and global broadcasting as
3D Conversion well as Bollywoods best. With all three businesses poised for stellar growth the camera is rolling!
Animation Revenue Contribution
Business Segments:
Tech/Tech Enabled Services:
CLEARTM Media ERP Suite Creative Services: Prime Focus World (PFW), the creative services arm of PFL, has become the house of
Cloud-based Media Services choice for Visual Effects (VFX) and Stereo Conversion (2D to 3D) Services for Tier-1 Hollywood Studios. 26%
India FMS: The Company is tier 1 global VFX player and leading player in Stereo Conversion. The VFX team
Visual Effects | Digital worked on an unprecedented number of major VFX projects, including four of the top ten highest-
Intermediate grossing movies of 2016 (Captain America: Civil War, Batman v Superman: Dawn of Justice, Fantastic 75%
Colour Grading | Advertising Beasts and Where To Find Them and Suicide Squad). PFW won the Oscar for best VFX for the 2nd
Services | Picture Post consecutive year for Ex Machina.
Camera Equipment Rental
Shooting Floors & Sound Stages Tech/Tech Enabled Services: Pioneer in Media ERP solutions with CLEARTM, leader in cloud-based
solutions for global M&E Industry. Uniquely advantaged with decades of M&E insights, PFT owns and 17%
Corporate Structure: operates the worlds first Media ERP Suite, which manages content and enterprise workflows. PFT also
offers SLA (service-level agreement) based suite of media processing and monetization services. PFT
Prime Focus Ltd. works with major content owners like Disney, Warner Bros., Legendary Pictures, Fox, Eros International, 83%
(India) STAR TV, Star Sports, Discovery Channel, National Geographic Channel, HBO, BBC, Google, Amazon,
Unilever, Sony Entertainment, Colors, Hindustan Unilever Limited, JWT, Starz Entertainment, Nestle, etc.
Prime Focus Prime Focus 93% PFL and
Technologies World N.V. 7% DNeg India FMS Services: Leading player in the fast growing Indian market - working with top Bollywood
Shareholders1 production houses. Bollywood VFX team delivered a total of 12,000 VFX shots for over 30 films in the 0
70% PFL, 5% Ambit Double last year. PFL is one of the largest camera equipment rental companies in India with its huge inventory 8%
Pragma, rest held Negative of over 40 high-end film cameras. PFL owns an integrated studio with ~25% of the capacity of the
by management
Mumbai studio market. PFL was the first company to introduce Digital Intermediate technology to the
Indian film industry, and has provided colour grading services for almost 500 films.
1- Fully diluted is subject to Macquarie Equity
conversion, Horizon Coast Equity conversion and 91%
adoption of the ESOP scheme

4
Only listed company, with strong leadership across businesses - PFW and PFL
PFW (Creative Services) PFL (India FMS)
PFW becomes the leading, independent Tier 1 VFX provider Only end-to-end Media service provider in India
The global VFX industry is largely fragmented with more than 500 firms vying for a Post the merger PFL captured the leading share of the VFX
share of the pie. There is a clear segmentation among players, with key large players Industry and film and advertisement spend in India.
(doing more than 50% of the work), with mid to small level players doing the rest. PFL
has made its way into the list of Tier 1 players bagging high end, high value VFX
projects.
Prime Prasad Ramoji
Focus Studios Filmcity
Revenue > ~$150 mn
Industrial Light and Magic
Top 5 involved in > 55% of Top 25
Technicolor Shooting
VFX-heavy films (2014-2016)
PFW Stages
Mostly studio backed / well funded Weta Digital
Controls < 25-30% of market
Film Lab

Post, DI and
Revenue from $50-150 mn Post only
Sony Imageworks VFX
Medium size firms Deluxe Entertainment
Controls < 20-25% of market Cinesite, Framestore,
2D 3D
Digital Domain

Restoration
Revenue < $50 mn
New players/small-size firms (< 10 Camera
employees), in-house VFX of Other fringe players Rental
production houses
Technology/
Remaining 45-55% of market BPO services

VFX Industry Landscape

5
Only listed company, with strong leadership across businesses - PFT

Tech/Tech Enabled Services

Services
Company Key Media Asset Media Available
Transformation Localization Data & Analytics
Name Geographies Management ERP on cloud
Services Services Services
India, the U.S., UK &
PFT
South Africa
Deluxe The U.S. & UK
The U.S., UK, Germany,
Ericsson
France, Spain
The U.S., UK, France,
Dalet
Germany
North America,
Avid
Europe
North America,
Accenture
Europe, Asia
Extreme
Reach
North America
North America,
Encompass
Europe
SDI Media North America, Europe

6
 Robust business model, enhanced efficiencies via WorldSourcing
Stock Info
Unique WorldSourcing delivery model: PFLs WorldSourcing model through its large global network (22 global offices) across all
Global Industry Recognition major content markets and employing over 8,000 personnel, enables PFL to provide highest work quality, fastest time to market
at optimal costs. PFLs extensive network helps to maximise global efficiencies such as low cost skilled labor, and other economic
factors such as tax breaks and low trade tariffs. For e.g.
2 consecutive Oscar wins for The U.S. Largest Hollywood market, HQs of larger M&E players Sales, Client engagement, TV content production & VFX
Interstellar &
Canada - Tax incentives, cultural synergy
Ex Machina
UK Tax incentives, local TV & Commercial market leading to higher utilisation
India Low-cost skilled labour
Unique Creative cum Technology DNA: One of the few players to provide full bouquet of creative and technology based media
Marquee Clients for Creative Services services. The company brings together a unique blend of Media and IT skills backed by decades of understanding of the global
media and entertainment industry.
A-level Pedigree: PFL has won 2 consecutive Oscars as well as multiple awards in Creative services. It delivered bundled services
(Visual effects and Stereo Conversion services) for some of the years biggest blockbusters, such as Captain America: Civil War
(box office collection $1,153 mn), Batman v Superman: Dawn of Justice (box office collection $872 mn), Fantastic Beasts and
Where To Find Them (box office collection $811 mn) and delivered 5 of the top 10 Hollywood blockbusters of 2015. On the
technology side, some of the biggest broadcast networks and brands run on CLEARTM - hybrid cloud enabled media ERP platform
owned and operated by PFT.
Marquee clientele: The Companys clients include some of the biggest studios in the world, such as Warner Bros, Marvel,
Marquee Clients for Tech/Tech Enabled Universal Studios, Paramount, Lucasfilm, Sony, Twentieth Century Fox, Legendary Pictures, and DreamWorks; broadcast
Services networks such as Disney, GEE, Cricket Australia, Star India, Associated Press; Digital Platforms such as Hotstar, Voot, HOOQ,
Amazon Prime and more.
Robust revenue model: The company enjoys consistent revenue on the back of a stable and long term order book in VFX and
higher annuity revenue contribution on the technology side. In VFX an average project fetches revenue in the range of $5 - 40
mn and is executed over 6-9+ months. In Creative Services the Company has increased visibility on its order book, with over
$250 mn in project work to be executed over next 9-12 months. In Technology Services the Company has a robust order book of
over $200 mn to be executed over next 2-3 years with strong contribution from annuity business. In India FMS business, the
revenue per project is increasing on the back of comprehensive offering from the company which includes production, post
production and Creative services. 7
WorldSourcing model provides unmatched competitive edge
Large global network providing highest quality, fastest time to market and most efficient pricing Other global Tier-1 Creative Services providers have
mostly local offices PFL has advantage of higher
margins & quicker turnarounds with 24X7 operations
Canada and low cost delivery centers
Tax incentives
Language and cultural No of
similarities Company Name Locations Comments
Offices

San Francisco,
Industrial Light Singapore,
4 NA
India and Magic Vancouver &
Low cost labour London
UK Present in 32 Operating at EBITDA
High quality talent Technicolor NA
Tax incentives Countries margin of 7%
Strong domestic TV and
commercials market Weta Digital 1 New Zealand

Posted de-
Los Angeles & growth and
Digital Domain 2
Vancouver losses of $ 23 mn
in 2015
Sony Vancouver &
2
Imageworks Culver City

4 continents | 5 time zones | 14 locations | 24/7 365 days

Other VFX players are operating in the below 10% margin range, however PFL is operating at a high EBITDA margin of 24% due to WorldSourcing
8
Led by experienced Management Team
Management with multiple years of industry experience:

Mr. Namit Malhotra, Executive Chairman & Group CEO: As the founder of Prime Focus, Namit has been responsible for the strategy, growth and success of Prime Focus from
its modest beginnings in Mumbai in 1997 to its current position as the worlds largest independent and integrated media services powerhouse. Actively seeking out projects
that will expand the strengths of the Company, and challenging the team to push themselves to the next level, Namit is devoted to nurturing talent and ambition, and
delivering world-class creative and technical services.

Mr. Ramakrishnan Sankaranarayanan, Managing Director, Prime Focus Limited, Founder & CEO, Prime Focus Technologies: In his role as MD of Prime Focus Limited, he is
responsible for all operations and business lines throughout India, and as Founder & CEO of PFT, he is responsible for the pioneering ERP system tailor made for M&E
companies globally. With over 22 years of rich experience performing technical, strategy, customer service, marketing, sales and general management roles in the IT industry,
Ramki has solid experience in the deployment of technology within the M&E sector. Prior to starting PFT in 2007, he was the CEO of Subex Technologies.

Mr. Vikas Rathee, Group CFO: Vikas has over 17 years in Corporate Finance, TMT (Telecom, Media and Technology) Investment Banking, Capital Markets and M&A across the
U.S., Europe and Asia. Before this, Vikas was Head - Corporate Finance and M&A at Suzlon Energy, Principal - TMT Investment Banking at Bank of America Merrill Lynch and
Executive Director - TMT Investment Banking at ABN AMRO. Vikas is a CFA, an MBA in Finance from the R.H. Smith School of Business, University of Maryland and an
Engineering graduate from Delhi Institute of Technology, Delhi University.

Mr. Nishant Fadia, Group Chief Operating Officer: Nishant took up this role in August 2014 and is responsible for identifying new expansion opportunities and driving overall
operational efficiencies for the group. Before this, for 14 years as its first CFO, Nishant was the face of Prime Focus to the financial community. He took the company public in
2006. Nishant is a Chartered Accountant from the Institute of Chartered Accountants of India (ICAI) and CPA from the American Institute of Certified Public Accountants
(AICPA) in the U.S.

Alex Hope (UK) Co-Head of VFX, MD DNeg: Alex has over 18 years of experience in the VFX industry and was awarded an OBE for this contribution to the VFX industry in
2011.

Mathew Holben (UK) Co-Head of VFX, CEO DNeg: Mathew primarily oversees management and business development for Double Negative. He has been instrumental in the
setup of the Companys new state-of-the-art London facility and the launch of three important divisions: Double Negative Films, Double Negative TV and Feature Animation.

9
 Successfully pursued organic & inorganic strategy taking the game to a whole new level
PFW-DNeg merger catapults
to tier 1 global VFX company
PFW - Gener8 partnership
augments leading position in
3D conversion market
PFT-DAX acquisition
strategic expansion into the
U.S.
PFL-RMW merger builds
distinct Leading position in
Indian Market
Landmark transactions in FY14 & FY15 enhanced scale and leadership across business segments
In June 14, PFW merged with DNeg, one of the worlds foremost providers of VFX, thereby creating
one of the largest Independent Tier I VFX services firm in the world. The merger has positioned the
company closer to the customer, as well as provided cross-sell opportunities of 3D conversion and
VFX services to the combined clientele
Acquisition of Gener8s 3D business (a global leader in 3D conversion market) further augments its
leading position. The two companies together enjoy market share of ~30% in the Hollywood stereo
conversion market
PFL merged its India FMS with RMWs FMS assets and acquired Indias largest integrated studio with
~25% of the capacity of the Mumbai studio market, 30% stake in Digital Domain and Lowry Digital
amongst others
In Mar14, PFT acquired DAX, a leading provider of cloud-based production workflow to achieve
deeper penetration in North America via cross selling services to DAX Clients
launching new products & services
PFW - opened new facility in Vancouver and new animation facility in Mumbai
PFT launched DAX Production Cloud first of its kind for dailies and production workflows;
Optimiser for Amazon Web Services and Promo Operations for Adobe Premier Pro
PFL relaunches its Advertising Services in Mumbai
and increased cross-selling of combined offerings - Stereo conversion to existing VFX clients,
CLEARTM to DAX clients, Equipment rental and studio rental to India Post production clients
10
Robust financial performance. . . higher scale, increasing margins as integration completes
(All figures are in Rs Mn)

Revenue Revenue (Rs Mn Per Employee) EBITDA

16,076 4,500
EBITDA Margin
50.0%
14,999 45.0%
13,828 2.7 2.6
4,000

2.5 40.0%
3,500
3,128
10,814 3,000 2,785 35.0%

1.8 1.8 30.0%

7,719 7,622 1.6 2,500 2,214 2,071
1,982 25.0%
2,000 29% 1,753
20.0%
23%
1,500
21% 15.0%
18% 17%
1,000
15% 10.0%

500
5.0%

0 0.0%
FY12 FY13 FY14* FY15 FY16** 9MFY17 FY12 FY13 FY14* FY15 FY16* 9MFY17* FY12 FY13 FY14* FY15 FY16** 9MFY17
* FY14 financials represent 15 months & FY16 represent 9 months *Figures are annualised to give comparable numbers * FY14 financials represent 15 months & FY16 represent 9 months

EBITDA (Rs Mn Per Employee) Cash Profit (PAT+Depreciation) Net Debt to Equity Ratio

3,500 25%

2,932
3,000 22% 20%

0.5 0.5 2,500 15% 20%

2.5

0.5 15%
2.0
0.4 2,000 1,704 10% 1,574 2.0
0.4
10%
1,500

0.3 923
1.5 1.2 1.1 1.2
1,000 796 5%
1.0 0.9
7% 1.0
500
0%

-
0.5

(500)
FY12 FY13 FY14 FY15 FY16 9MFY17 -5%

-
-4%
FY12 FY13 FY14* FY15 FY16* 9MFY17* FY12 FY13 FY14 FY15 FY16 Dec'16
(1,000)
(710) -10%

*FY14, FY16, 9MFY17 figures are annualised to give comparable numbers *Dec 16 debt is as per Ind AS, which considers certain part of
Cash Profit Margin 11
preferred instruments as debt
Prudent expansion with focused approach on debt management

aa DebtDebt
(In Rs Mn) aa Debt composition as on Dec16
Working
Rs Mn Capital, 13%
Macq+AID, Finance
24% Lease, 11%
14,695 14,671 14,968
13,077 12,725
11,377 Loan Against
Shares, 2%

Reliance Cap OCDs, 8%

- ICD, 8%
Buyers
Credit, 1%
Sep'15 Dec'15 Mar'16 June'16* Sep'16* Dec'16
SCPE NCDs, Term Loans,
13% 21%

Prudent approach
PFL RMW merger enabled an equity infusion that helped to fund DNeg merger, thereby lowering the debt requirement
45% of debt is held by equity/quasi-equity investors i.e. Standard Chartered, Reliance Capital, Macquarie and AID Group
Focussed towards debt reduction
Proceeds from sale of non core assets used/ to be used towards debt reduction;
Sold LA building worth $20 mn (~Rs 1.3bn) sales proceed were primarily used towards debt reduction
Divested illiquid stake in Digital Domain subsidiary in exchange for net stake worth of $30 mn (marketable securities) in Digital Domain,
proceeds will be used mainly to retire debt as and when monetised
Second part of the transaction for $20 mn in marketable securities is still in process
Also undertook various initiatives such as release of trapped cash (e.g. security deposits), internal accruals
Constant efforts towards reducing high cost India debt via re-financing with cheaper and longer-tenure debt, current blended interest cost is 10%
Net Debt (Debt-Cash) at Rs 13,020 mn as on Dec16, lower than compared to Rs 14,138 mn in Sep16
Note:
*June16 onwards figures are in compliance with IndAS which treats Macquarie, AID preferred equity instruments to the tune of $47 mn as debt as opposed to equity in the case of Indian GAAP
Sept debt excludes loan of $11.3 mn; for which documentation is completed in the quarter to clear existing long term liability. 12
Business Segments

13
PFW emerges as worlds largest independent creative services provider, comprises 75% of total
revenue
Stock Info
Tier-1 Visual Effects Player & 30%
Market Share in 3D Conversion market
Won 2nd Consecutive Oscar for Ex
Machina
Working with top Hollywood studios
like Universal, Marvel, Walt Disney,
Warner Brothers
Contributes 75% to overall ttm
revenue as on Dec16
Order book as on Dec16 at $250 mn+
PFW has become house of choice for Creative Services i.e. Visual Effects (VFX) and Stereo Conversion (2D to 3D)
services for tier 1 studios.
Services Offered: Marquee Clients:
Visual Effects (VFX): Prime Focus is a
leading visual effects services provider to
Hollywood, Bollywood and other major
content markets for film, broadcast and
advertising content
Stereo Conversion (3D Conversion): PFW is Top Grossers:
the leading player in 3D conversion
services. Its proprietary View-D process
for stereo conversion is highly sought after
in Hollywood for its quality and speed
Animation Services: From script to screen,
PFW partners with production companies Robust Order Book:
and brands to develop and deliver
beautifully animated computer graphics
(CG) content, offering the scale and
experience to deal with projects of any
size
14
PFW . . . . key competitive strengths of the company
Stock Info
Stable Revenue Leading industry position: PFW is one of the top 4 global VFX players post the DNeg merger. Its strategic
Quarterly Revenues in Rs Mn partnership with Gener8 further augments its leading position in Stereo Conversion (3D Conversion) segment,
wherein both combined enjoy market share of 30% of the Hollywood conversion market.
4,031
3,823
3,381 3,465 3,519 Proven expertise: The Company bagged its second consecutive VFX Oscar for Ex Machina, following last years
win for Interstellar.
Deeper engagement with leading studios: PFW works closely and have deepened engagement with leading
Hollywood clients like Marvel, Universal, Warner Brothers, Fox, Sony, Disney and Legendary.
Bundled offering- The Company is continuously increasing cross-sell via its bundled offering (VFX & 3D
conversion services). In FY16, Prime Focus offered bundled VFX and 3D offerings to blockbuster movies such as
Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Captain America: Civil War ($1,151 mn), Batman v Superman: Dawn of Justice ($872 mn), Alice Through
The Looking Glass, In The Heart Of The Sea and The Hunger Games: Mockingjay Part 2.
Increasing EBITDA Margin
Robust revenue model, consistent revenue: The quality of revenue has improved with consistent quarterly
Quarterly EBITDA in Rs Mn
23% 25%
revenues in FY16, reduced seasonality, and increased visibility. TTM Revenue has increased to Rs 14.8bn (as on
Dec16, contributing 75% of total revenue).
18% 871
Enhanced margins- Various integration efforts taken by the management have resulted in increasing EBITDA
20%

16% 16%
13%
614 640
568
15% margin to 23% in Q3FY17.
432
10%
Poised for robust growth - PFL has a long term and robust order book of over $250 mn which includes movies
such as Pacific Rim: Uprising, Justice League, Dunkirk, The Mummy, Wonder Woman, Fast 8, The Great Wall
5%
etc.
Dec-15 Mar-16 Jun-16 Sep-16 Dec'16
0%

15
 in the sizable and growing global Media and Entertainment industry

Global E&M spend growing at 5.1%

2016 Top 5 International
Globally, E&M revenues growing at CAGR of 5.1%
2.50 110.00

2.2
Box Office Markets ($ bn)
The global spending on Media and Entertainment is expected to grow
105.00

2.00

1.7
104.6 China 6.6 at a compound rate of 5.1% from $1.6 tn in 2014 to $2.1 tn in 2019.
100.00

1.50

Japan 2.0 Digital advertising, video games, broadband and cinema are expected
95.00

India 1.9
90.00

1.00

85.00
to be the fastest growing segments during 2015-19. The industry will
0.50
85.6 80.00
U.K. 1.7 witness a major shift during these years as spending in digital media
France 1.6 will overtake the spending in physical media accounting for over 50%
- 75.00

2014 2019 Source: Theatrical Market Statistics 2016 by MPAA of total media spending by 2019. Rising smartphone and internet
Global E&M Spend ($tn) penetration would be the major growth drivers for rise in digital media
Global Filmed Entertainment Revenue ($bn) spending.
Source: Global entertainment & media outlook (2014-2019) by PwC
Global box office collections ($bn) Global box office reached $38.6 bn in 2016
Global box office collections reached $38.6 bn in 2016 up 1% YoY. US/
Canada box office grew 2% YoY to reach $11.4 bn. The international
25 26 27 27 box office remained steady at $27.2 bn despite stronger dollar and
22 24
21 slowed growth in China. Box office in Asia Pacific grew 5% YoY to reach
$14.9 bn driven by Japan (27% YoY) and India (28% YoY) while China
declined 1% YoY in US currency (up 4% YoY in local currency).
11 10 11 11 10 11 11

2010 2011 2012 2013 2014 2015 2016

Cinema screens increased by 8% YoY globally to reach ~164,000 out of
U.S./Canada International
which 95% screens are digital.

Source: Theatrical Market Statistics 2016 by MPAA

16
 VFX and 3D in-demand services
Stock Info

VFX presents a key growth opportunity

The market for visual effects globally is estimated at $2.1 bn in 2013, growing at a 10% CAGR over the last 5 years. The market is expected to continue to grow at a steady pace
as VFX has become an integral part of the film production process. 90% of top grossers in last 3 years were VFX heavy. All figures are in $ Mn
2016 Top Grossers Worldwide 2015 Top Grossers Worldwide 2014 Top Grossers Worldwide
Captain America: Civil War 1,153 Star Wars: The Force Awakens 2,068 Transformers: Age of Extinction 1,104
Rogue One: A Star Wars Story 1,050 Jurassic World 1,670 The Hobbit: The Battle of the Five Armies 956
Finding Dory 1,028 Furious 7 1,516 Guardians of the Galaxy 773
Zootopia 1,024 Avengers: Age of Ultron 1,405 Maleficent 758
The Jungle Book (2016) 967 Minions 1,159 The Hunger Games: Mockingjay - Part 1 755
The Secret Life of Pets 876 Spectre 881 X-Men: Days of Future Past 748
Batman v Superman: Dawn of Justice 873 Inside Out 858 Captain America: The Winter Soldier 714
Fantastic Beasts and Where To Find Them 811 Mission: Impossible - Rogue Nation 682 Dawn of the Planet of the Apes 711
Deadpool 783 The Hunger Games: Mockingjay - Part 2 653 The Amazing Spider-Man 2 709
Suicide Squad 746 The Martian 630 Interstellar 675
Note: Highlighted movies are the ones on which Prime Focus has worked upon. Source: Box Office Mojo

Growing demand for 3D content Increasing no. of Global 3D Screens (000)

Legacy movie conversion opportunity in the U.S.
US/Canada EMEA Asia Pacific Latin America
In 2016, the global growth in digital 3D screens was 17% Library film titles with major studios 35,000
compared to 15% in 2015. The global proportion of 3D In 3D (1%) 3,50
87.2
digital screens increased to 56% of all digital screens. Asia-
74.6 Conversion opportunity ($5 mn per movie) $1.8 bn
Pacific has the highest proportion of 3D digital screens at 64.8
78%. 53.1
The 3D box office collection in U.S./Canada was $1.6 bn 45.5
36.3 New releases movie (2016) conversion opportunity in the
in 2016, comprising 14% of total box office. Number of 3D
U.S.
film releases in U.S. Canada was 52 in 2016 compared to
40 in 2015. In 2016, 9 out of top 10 and 19 out of top 25 In 3D 52
films were released in 3D, compared to 6 and 14 Conversion opportunity ($8 mn per movie) $416 mn
respectively in 2015. 2011 2012 2013 2014 2015 2016
Source: Company estimates
Source: Theatrical Market Statistics 2016 by MPAA
17
 PFT . . . leader in Media ERP solution
Stock Info
Leader in cloud solutions for Media
& Entertainment industry
PFT, technology subsidiary of PFL, brings together a unique blend of Media and IT skills backed by a deep understanding of the
global media and entertainment industry. CLEAR, PFTs award-winning Hybrid Cloud-enabled Media ERP Suite and Cloud Media
Services help broadcasters, studios, brands, sports and digital organizations drive creative enablement, enhance ecosystem
efficiencies and sustainability, reduce cost and realize new monetization opportunities
Unique & comprehensive product + services approach

Acquired DAX, a leading provider of Products Services

Cloud Media ERP Data Services
cloud-based production in Mar14 Cloud MAM Meta-data
International tech revenue Broadcast Cloud Analytics
DX Production Cloud
contribution up at 34% (9MFY17) Distribution Cloud Content Localization

from 24% 2 years back Operations Cloud Content Transformation

High Annuity Revenue contribution
of ~71%
Growing at non-linear growth rate
up ~10X in last 5 years, while
maintaining EBITDA in the range of
Playout Cloud Digitization & QC
Playout Monitoring Content Preparation
Content Remastering
Digital and OTT Platforms Editorial & Packaging
Servicing marquee clients across the content value chain..
Broadcasters

25-30% Studios

Content Content Content Content

Creation Transformation Distribution Exhibition
Brands

Service
Providers
18
 PFT growing non-linearly post successful global scale up
Stock Info
Revenue PFT, has grown ~10X to Rs 3.4bn (ttm Dec16) revenue from FY12 with ~ 2,200 employees. PFT is growing robustly in
Quarterly Revenues in Rs Mn international markets and the key competitive strengths of PFT are:
907
839 850 Leadership: Leader in cloud solutions for Media & Entertainment industry and pioneer in ERP solutions with CLEARTM
803 794
Sticky revenue model: High annuity revenue contribution of 71% along with 34% contribution from international revenue
Continues to invest in expanding product offering: Launched new product such as DAX production cloud, Cloud MAM, and
added other various features like Amazon Optimizer, Industry-First Promo Versioning Automation Module for Adobe Premiere
Pro CC, etc.
Fast growing clientele: Added new marquee clients like Crown Media, FX Network, Tru TV, SABC, HOOQ, Global Eagle
Entertainment, Miramax, Cricket Australia, Turner and Amazon
Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 In all leading on-demand mobile video platforms Hotstar, Voot, Hooq, Amazon Prime etc.

EBITDA & EBITDA Margin Strong financials: 9MFY17 revenue grew by 18%, while EBITDA margin remained stable in the range of 25-30% in spite of
product and marketing investments
Quarterly EBITDA in Rs Mn
28% 28% Robust order book: Order book is currently at $200 mn and is growing on account of strong traction in domestic and
28% 30%

26% 28% international markets, led by PFTs recent product launches and marketing efforts
25% 26%

255 24%
Fully funded to fuel future growth: Raised ~$10 mn of funding from Ambit Pragma Private equity (PE) fund in PFT, valuing it at
228 235
219 22% an enterprise value of $200 mn. The capital, will be used for gaining deeper penetration & growth in strategic markets such as
196
20% North America & EMEA with increased sales and marketing efforts
18%

16%

14%

12%

10%

Dec-15 Mar-16 Jun-16 Sep-16 Dec'16

19
Growing need for content management solutions for E&M industry
Total M&E Technology Spend Total addressable market is expected to grow at Media ERP can save M&E firms up to 5% of revenue
CAGR of 5%
$ bn

2015 2017 12.9

$38.8 bn $44.3 bn 12.3
500 9.3% 10%

11.7 450

400

350

4.5%
11.1 300

Demand is growing for digital content 250

200
5%

150

10.6 100

50

To meet increased demands for digital content with the lowest cost of ownership, 0%
-

Broadcast Operations & Broadcast Operations &

content creators and distributors can no longer rest on existing and independently
Engineering (US Engineering (PFT's
functioning systems that result in islands of automation. Going digital is simply not 2014 2015 2016 2017 2018
Broadcasters) Indian Client)
enough, there is a need for content enterprises to become hyper digital, bringing 2014 2015 2016 2017 2018
together departments, vendors and distributors under one system, to face the
North America, the largest market while
digital realities and be prepared for the continued changes that lie ahead.
Asia and Latin America, fastest growing Cloud-enabled services expected to grow
With 800 mn iTunes users, 75 mn subscribers on Netflix, six bn hours of video
markets at 46%
watched per month on YouTube, and 19% of U.S. millennials using Amazon Prime,
content owners are in a mad race to get content to digital platforms faster, cheaper
and to make it quickly discoverable. Latin
America, 8%
Growing numbers of digital outlets globally have acutely driven the need for content 23%
Asia North
owners to embrace the cloud, not only to service the required volume and speed of 16%
Pacific, America,
content delivery, but to capture the attention of fickle digital consumers that have a 11%
24% 41% 8%
myriad of content options available at their fingertips. By virtualizing content supply 5%
chain operations, freeing up human bandwidth and maximizing operational
EMEA, 27%
efficiencies, an effective ERP solution can bring in savings in operating costs to the 2014 2015 2016 2017 2018
tune of millions of dollars while implementing an effective business process
management across the enterprise, enabling monetization and adding new revenue Cloud Services as percent of total market
streams.

20
 India FMS continues to dominate on home turf
Stock Info
Leading player in fast growing Indian
Market
Offering complete media services
across the spectrum i.e. production,
post-production and creative services
Contributes 8% to overall ttm revenue
as on Dec16
Achieved strong growth and higher
margins in price competitive
Bollywood market
Prime Focus has long been a force to be reckoned with in the Indian Film Industry, wherein the company
enjoys enhanced leadership.
One of the largest camera equipment rental companies in India, EQR services, with its huge inventory
of over 40 high-end feature film cameras, has established itself as the undisputed market leader in the
camera rental industry
Owns an integrated studio with ~25% of the capacity of the Mumbai studio market
In FY16, Indian VFX team delivered a total of 12,000 VFX shots for over 30 films including some of some
of the biggest Bollywood movies of the year, including Bajrangi Bhaijaan, Prem Ratan Dhan Payo,
Neerja, Brothers, Welcome Back and Housefull 3
Delivered post production services for some of the highest-grossing films of 2016 like Dangal, M.S.
Dhoni: The Untold Story, Housefull 3, Ae Dil Hai Mushkil, Rustom, etc.
Digital Intermediate (DI) team delivered grading services on over 60 films last year
Offering complete media services across the spectrum. . Excellent relationships with Indian studios &
broadcasters. .

Strong relationship with Bollywood

studios like Balaji, Yashraj Films, Eros
International etc. Film Film Film Shooting Film chemical Editing/Color
Studios Equipment treatment Correction

Restoration & Digital 2D to 3D Animation VFX & Animation

image Distribution
enhancement

21
 India FMS sustains high margins driven by strong delivering capabilities
Stock Info

Revenue India FMS team worked on some of the biggest Bollywood movies of the year, including Bajrangi
Quarterly Revenues in Rs Mn Bhaijaan, Prem Ratan Dhan Payo, Neerja, Brothers, Welcome Back and Housefull 3
428 445
395 386
373 Key competitive strengths in India FMS segment are:
Offering complete bouquet of media services: India FMS segment offers complete media services
across the spectrum i.e. production (equipment rental and line production), post-production
(digital intermediate/colour grading and picture post) and creative (visual effects, 3D conversion
and animation) services.
Increased scale and improved quality of revenue:
Revenue for the segment is at Rs 1.7bn(TTM Dec16) contributing 8% to overall revenues
Dec-15 Mar-16 Jun-16 Sep-16 Dec-16
Offering services across the spectrum resulting in higher revenue per project as a result of
EBITDA & EBITDA Margin cross selling
Quarterly EBITDA in Rs Mn High margin in price competitive Indian market: EBITDA margin is sustained in the range of 30-40% -
testimony of PFLs quality offering
300

46% 50%

44%
250

39%
45%
Strong order book: Order book consists of movies like Robot 2, Rangoon, Bang Bang Reloaded, Half
194
Girlfriend, Tubelight, Jagga Jasoos, Raabta, etc.
40%
200 180 33%
166 35%

150 27% 129 30%

102
25%
100

20%

50

15%

0 10%

Dec-15 Mar-16 Jun-16 Sep-16 Dec-16

22
 Indian M&E industry revenues to double at Rs 2,260bn by 2020
Stock Info

E&M revenues to grow at CAGR of 14% Film revenue to grow at 10% CAGR Animation, VFX, Post Production on higher growth curve
2,260 227
Rs bn Rs bn
CAGR CAGR
In Rs bn 2011 2015 2020
(2011-15) (2015-20)
138 Animation services 7.1 8.3 12.5 4% 8.5%
1,157 125 126
112
918
1,026 93 Animation
728 821 production 4.2 5.6 8.4 7.5% 8.4%
VFX 6.2 14.4 45.1 23.5% 25.7%
Post-production 13.5 22.8 42 14% 13%
Total 31 51.1 108 13.3% 16%
2011 2012 2013 2014 2015 2020 2011 2012 2013 2014 2015 2020

Source: FICCI-KPMG Indian Media and Entertainment Industry Report 2016

The Indian Media and Entertainment industry grew by 12.8% in 2015. Television sector recorded growth of 14.2% to reach Rs 542.2bn led by strong growth (17%) in
advertising. Film sector grew 9.3% led by strong growth in the Hollywood and Regional releases while Bollywood remained flat. The Indian film industry, with 1,000-1,500
productions per annum, is one of the largest globally.

The Indian film industry is expected to grow at a compound rate of 10.5% and to achieve this growth the industry needs to put more emphasis on content of the movie given
changing consumer tastes. The industry also needs to look at innovative models for building infrastructure and alternative sources of revenue streams.

The past decade has witnessed the Indian animation industry move up the value chain from an outsourcing model to creating its own intellectual property and co-productions.

The VFX industry in India is witnessing rapid transformation with maturing technology, techniques and output aided by experience from Hollywood outsourcing projects. An
increasing number of mainstream Bollywood movies are resorting to use of VFX as an important story telling tool. A gamut of opportunities is opening up for the VFX industry
in India due to increasing outsourcing demand, use of VFX in primetime television shows and in advertising.

23
All businesses set for higher growth
Recent integration initiatives have set the momentum
1. Cross selling across businesses i.e. Stereo conversion services to
existing VFX clients, CLEARTM to DAX clients, equipment rental
and studio rental to India post production clients led to YoY TTM
Dec16 revenue growth of 6%
2. Cost consolidation post merger to eliminate duplications: Closed
PFWs London & Vancouver VFX operations and pruned
operations in India to remove cost duplications
3. Divestiture of non-core Assets Divested UK Post Production
business to remove the drag on consolidated results, stake sale in
Digital Domain, sale of LA building, etc. - cash generated to be
used towards debt reduction
4. Enhanced execution from tax advantaged and lower cost centres
DNeg opened a facility in Vancouver and Mumbai and shut down
its Singapore facility to take advantage of low cost execution
capacity in India which has resulted in taking the EBITDA margin
to 24% (Q3FY17), much above the mid-term target of 20%
aa for higher growth in all 3 businesses
Strong Growth Ahead:
Combined order book of over $450 mn +
Continued cross selling and bundled offerings in
Creative and Technology services to drive revenue
growth
Funds raised from Ambit for PFT to be used towards
marketing & product investments which will further
fuel future growth in technology business
Margins Expansion:
Enhanced execution from lower cost centres such as
India and Vancouver (more and more VFX work to be
delivered from India) will continue to facilitate margins
expansion
Debt Reduction:
Strong focus to pare down debt via proceeds from sale
of non-core assets and cash from operations
With limited capex plans, above drivers will result in
increasing shareholder value. . .
24
 All 3 businesses need to be valued separately at SOTP, PFL trades at ~33% discount
Stock Info
Trading at a valuation discount of 33% to peers
Peers For Creative Services Peers For Tech/Tech Enabled Services Peers For India FMS
Company Name TTM EV/ EBITDA
Company Name EV/EBITDA Company Name TTM EV/EBITDA
Dolby cinema 13.3
Walt Disney 11.3 Hexaware 10.5 PVR 22.7
Beijing Enlight Media 29.7 Persistent Systems 9.3 DB Corp 10.9
Viacom 10.4 Inovalon Holdings Inc 20.6 HT Media 10.3
21st Century Fox 10.2 Realpage 34.8 Average 14.6
Imax Corp 18.3 Average 18.8
Average 15.5

Prime Focus Valuation

Based on a SOTP analysis (sum of the parts),
EV/EBITDA Enterprise PFL holding in Prime Focus is trading at discount of 33%.
(In Rs Mn) TTM EBITDA PFL EV
Multiple Value subsidiaries PFT, technology subsidiary of Prime Focus, raised
Creative Services 2,693 15.5 41,782 93% 38,857 funding of $10 mn valuing it at an enterprise
PFT 905 18.8 17,019 70% 11,913 value of $200 mn
India FMS 669 14.6 9,785 100% 9,785 The Company has clear and sustainable
Total 4,267 60,555 leadership in its business segments, and is
Current EV 40,531 growing strongly with improving margins, a
strong reason for the stock to command
Discount 33% premium.
Note: Valuation multiples are calculated as on 11 th April 2017

25
Annexures

26
 Shareholding Pattern
Stock Info
Institutional Investors Invested in PFL
Shareholding Pattern
November 2012
Standard Chartered Private Equity subscribed to 36,549,990 equity shares of PFL on a
preferential basis for an aggregate amount of $35 mn at price of Rs 51.75 per share
Others
Public, The Company also issued Rupee-denominated Non-Convertible Debentures (NCDs) on a
7.9% private placement basis, equivalent of $35 mn to the PE firm
SCPE, Promoter In September-15, Standard Chartered Private Equity bought ~29.1mn shares from Reliance
22.0% s, 35.0% MediaWorks for Rs 1,513mn at price of Rs 52 per share

March 2013
AID Partners Capital Limited, a private equity firm focused on buyout opportunities and
expansion capital primarily in media and entertainment sector invested $10 mn in Prime
RMW,
Focus World NV (PFW), valuing it at $250 mn
35.1%

June 2013
As on 31st Dec- 2016 Outstanding shares Macquarie Capital, the principal investing arm of the Macquarie Group, further infused $38
299mn mn into PFW, valuing it at an enterprise Value of $300 mn

April 2015
Reliance Capital invested Rs 1.2bn in Prime Focus ltd at a price of Rs 52 per share, subscribing
to 23mn shares

Aug 2016
Ambit Pragma PE invested ~$10 mn in PFT, valuing it at an enterprise value of $200 mn. The
growth capital, will be used for gaining a deeper penetration and growth in strategic markets
such as North America and EMEA with increased sales and marketing efforts 27
Prime Focus. . . . Journey from domestic niche player to Global Diversified Leader...

Won Academy Award

for Best VFX for Ex
Machina
Completed merger
with RMWs FMS
Merger of PFW &
business
Investment by DNeg
AID Partner in Completed 2016
3D Conversion of Prime Focus acquisition of DAX in
Star Wars E1; PFT World PFT
digitizes & JV to enter China
transforms Star market 2015
TVs content 2 Platinum Awards as
operations 2014 part of the 2015
through CLEAR MarCom Awards
Launch of View-D Won 87th Academy
and CLEAR (Media Award for Best VFX Best VFX for Bajrangi
Entry into the
First high-end ERP Platform) 2013 Raised OCDs in PFT for Interstellar Bhaijaan & Kick
U.S. through
finishing, scanning & acquisition of Announced merger Increased # of Offered bundled
recording & DI Post Logic and with RMWs media facilities from 16 to services for Batman v
systems player in Frantic Films 2011-12 services Arm 21 Superman, Captain
India & only VFX Investment by
Equity infusion of Employee count America: Civil War
company to operate 2009-2010 Macquarie
Won the largest Rs.2.4bn by reached 6000+ Strategic partnership
a motion-control rig
VFX order in Reliance and PFT-strengthens its with Gener8
history of PFL Sin Promoters global presence
2006-2007 8,000+ employees
Animation launched post DAX
First to convert City 2 across 22 facilities
an entire film - Investment by SCPE acquisition
1997-2004 Launch of PFTs
Clash of the FCCB successful digital playout
Entry into UK Titans - to 3D. redemption business -
market CLEAR Starsports.com
IPO of Prime Focus recognized as
Ltd on BSE Best of IBC

28
Key business risk factors
Pricing pressure in Hollywood and Bollywood industry
Increasing competition in the Hollywood and Bollywood industry impacts pricing which in turn has an impact on margins
Mitigation: The risk is mitigated by off-shoring some parts of the projects to locations with cost advantages as the company has a unique
WorldSourcing model with global network of 22 offices across all major content markets employing over 8,000 personnel
Lumpy nature of 3D projects
The Stereo Conversion business of the company is project driven. Thus any delay in a project on the part of the film maker effects the revenue
growth of the Company and also adds to lumpiness on a quarter on quarter basis
Mitigation: Mitigated by increasing share of VFX contracts in the order book which are long term in nature and also increasing share of PFT (71%
annuity revenue) on account of continued non linear growth rate
Changing consumer preference for 3D content
After the success of Avatar, the success of 3D movies did not pick up as expected. Any decline in consumer preference for 3D could impact the
revenue growth of the Company
Mitigation: There has been a huge revival in 3D format demand in last year; 8 of the 10 highest grossing films of 2015 were released in 3D
Volatility in Foreign Exchange
Sharp currency movements could impact the profitability of the Company given that a major chunk of the revenue is generated in the UK and North
America whereas a majority of the costs are in Indian Rupee
Mitigation: The Company has an experienced and efficient foreign exchange management team undertaking continuous monitoring of currency
markets

29
Stock Info

Financial Annexures

30
 Consolidated (Historical) Profit & Loss Statement
Stock Info

(Rs Mn) FY'12 FY'13 FY14* FY15 FY16**

Revenues 7,719 7,622 10,814 16,076 13,828
Payments to and provision for employees 1,692 3,084 5,070 9,264 8,590
Technician fees 1,936 766 817 278 247
SG&A, other expenses 1877 2,019 2,945 3,750 2,920
Total Expenses 5,505 5,869 8,832 13,291 11,757
EBITDA 2,214 1,753 1,982 2,785 2,071
Forex Gain(loss) 145 68 381 (373) 325
EBITDA (including Exch. Gain (net)) 2,359 1,821 2,363 2,412 2,396
Depreciation 711 999 1,332 2,211 2,007
Other Income 57 107 79 196 120
EBIT 1,705 928 1,110 396 509
Finance Costs 348 418 687 727 820
Non-operating costs 37
Profit before tax and Exceptional Items 1,357 510 424 (331) (348)
Exceptional Items/ Prior period items 29 1,077 174 2,475 835
Profit before tax 1,328 (567) 250 (2,806) (1,183)
Tax 300 (398) 71 325 236
Profit after tax before minority interest 1,028 (169) 179 (3,131) (1,419)
Minorities Interest and others 35 35 (64) (209) (335)
Reported PAT 993 (203) 243 (2,922) (1,084)

Key Ratio's FY'12 FY'13 FY14* FY15** FY16***

EBITDA Margin 29% 23% 18% 17% 15%
EBITDA (including Exch. Gain (net)) 31% 24% 22% 15% 17%
Net Margin 13% -3% 2% -18% -8%
Total Expenditure/ Revenues 71% 77% 82% 83% 85%
Personnel Cost/ Total Operating Income 47% 51% 54% 59% 64%
Other Expenditure/ Total Operating Income 24% 26% 27% 23% 21%
**FY16 comprises of nine month period from July 1, 2015 to March 31, 2016
*FY14 has been extended to 15 months ending June, hence figures are not comparable with FY13
31
 Historical Balance-Sheet (Consolidated)
Stock Info
(Rs Mn) FY'12 FY'13 FY'14 FY'15 FY'16
Shareholder's Equity
Share Capital 139 185 185 299 299
Reserves and Surplus 4,690 5,358 7,190 10,819 9,251
Money Received against Warrents 139 -
Total equity capital 4,967 5,544 7,375 11,118 9,550
Liabilities
Non-Current Liabilities
Long Term Borrowings 1,234 3,306 5,701 5,774 6,602
Minority Interest 451 641 1,612 1,540 1,322
Deferred Tax Liability 268 131 119 93 125
Other Long Term Liabilities 43 177 606 3,926 3,192
Long Term Provisions 7 13 14 49 65
sub-total 2,003 4267 8,052 11,381 11,306
Current Liabilities
Short-Term Borrowings 1,499 2,995 1,774 2,424 4,265
Trade Payables 1,474 610 1,325 2,505 2,012
Other Current Liabilities 3,333 1,750 1,710 6,350 6,999
Short-Term Provisions 1 1 472 102 149
sub-total 6,307 5356 5,280 11,380 13,426
Total Liabilities and Owner's Equity 13,277 15,167 20,708 33,880 34,282
Non Current Assets
Tangible assets Net block 5,444 5,512 6,322 8,071 6,693
Intangible assets Net block 3,059 3,105 3,330 5,276 5,452
Capital Work in Progress 21 206 41 3 9
Intangible assets under development 35 63 157 441 499
Total Fixed Assets including WIP 8,560 8,887 9,850 13,792 12,653
Goodwill on consolidation 1,271 8,030 8,317
Non Current Investments 0 0 0 857 885
Deferred Tax Assets 601 1,129 584 625
Long-term Loans and Advances 362 802 939 1,646 1,646
Other Non-current Assets 220 169 1 1 -
Total Long Term Assets 9,141 10,459 13,189 24,910 24,125
Current Assets
Current Investments 1 1 1
Inventory 6 4 0 6 6
Trade Receivables 2,936 2,549 3,853 3,756 4,184
Cash and cash equivalents 314 491 225 616 1,135
Other Current Assets 451 1,032 1,706 2,647 3,422
Short term Loans and Advances 427 631 1,735 1,945 1,410
Total Current Assets 4,135 4,708 7,519 8,970 10,157 32
Total Assets 13,277 15,167 20,708 33,880 34,282
Historical key ratios. . . .

TTM TTM
Profitability (%) FY'12 FY'13 FY'14 FY'15 FY'16 Turnover Ratios FY'12 FY'13 FY'14 FY'15 FY'16 Dec'16
Dec'16
Net Fixed Asset turnover (x) NA 0.9 0.9 1.4 1.4 1.6
EBITDA margin 29% 23% 18% 17% 15% 20% Receivables turnover (x) 2.6 3.0 2.2 4.3 4.4 10.2
Pre-tax margin 17% -7% 2% -17% -9% 0% Receivable Days 139 122 163 85 83 36
Net margin 13% -3% 2% -18% -8% 0% Payables turnover (x) 3.7 9.6 5.3 5.3 7.8 12.1
Return on avg. Equity NA -4% 3% -32% -14% 1% Payables Days NA 38 68 69 47 30
Return on avg. Capital employed excl
WIP NA 10% 7% 2% 4% 6% Liquidity & Solvency Ratio FY'12 FY'13 FY'14 FY'15 FY'16 Sep'16
ROA NA -2% 2% -22% -12% 1% Current Ratio 0.9 2.0 2.1 1.0 1.1 1.0
Net Debt to Equity 1.0 1.2 1.1 0.9 1.2 2.4
Leverage Ratio 2.7 2.7 2.8 3.0 3.6 5.7
TTM
Expenses Ratios (% of sales) FY'12 FY'13 FY'14 FY'15 FY'16 Net Debt / EBITDA 2.3 3.8 5.0 3.5 4.2 3.8
Dec'16
Interest Coverage 4.9 2.2 1.6 0.5 0.6 1.0
Personal expenses including
47% 51% 54% 59% 64% 61%
technician services
TTM
SG&A Others 24% 26% 27% 23% 21% 20% Per Share Numbers (Rs) FY'12 FY'13 FY'14 FY'15 FY'16
Dec'16
Earnings per share 7.2 (1.1) 1.0 (9.8) (4.8) 0.3
Cash Earnings per share 12.3 4.3 6.8 (2.4) 4.1 9.8
Book Value per share 34.8 29.9 39.8 37.2 32.0 20.8

Note: FY16 comprises of nine month period from July 1, 2015 to March 31, 2016
FY14 has been extended to 15 months ending June, hence figures are not comparable with FY13
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 Historical Cash Flow Statement
Stock Info

(Rs Mn) FY'12 FY'13 FY'14 FY'15 FY'16 (Rs Mn) FY'12 FY'13 FY'14 FY'15 FY'16
Net Profit/(Loss) before Tax, after Purchase of Fixed Assets (1,876) (1,508) (2,262) (3,195) (2,232)
exceptional items, before extraordinary 1,328 (567) 250 (2,806) (1,183)
items Proceeds from sale of FA 87 173 26 170 1,362
Add Depreciation and amortization 711 999 1,332 2,211 2,007 Proceeds from sale of current investments - 2
Loss /(Gain)on sale of fixed assets/assets Proceeds from sale of non-current
68 9 61 (1) 75 2 - (34)
discarded investments
Loss /(Gain)on sale of investments - (2) 453 Gener8 Digital Media Corp (171) (81)
Interest income (18) (45) (27) (21) (52) Double Negative Holdings Limited (1,919) (117)
Unrealised Foreign Exchange (Gain)/Loss Proceeds from sale of subsidiary - Prime 13
(97) 4 (101) (145) (193)
(net)
Consideration towards business acquisition of
Foreign exchange loss on repayment of (125)
823 Sample
FCCBs
Purchase of investments in subsidiaries (47) - -
Loan to Prime Focus London Plc written 1,353
ICDs given and received back 26 (12) (155) 25
Dividend Income (0) (0) (0) (0) -
Margin money and FDs 21 (30) 85 (178) 35
Assets written off 78
Interest expense 348 418 624 668 741 Interest received 33 55 16 7 44
Dividends received 0 0 0 0
Bad debts written off 80 185 39 38 1
Cash from Investing activities- B (1,755) (1,320) (2,415) (5,284) (989)
Provisions for doubtful debts - 210 87 (75) (0)
Stock option expense 108 68 43 Receipts from equity fund raise (net of
2 2,825 2,091 2,394 -
expenses)
Write-off of receivable from the Economic 210
Sundry balances written back, tax written, Proceeds from Long term borrowing 724 2,696 1,788 304 136
(21) 3 (6) (31) (4)
misc exp written off Repayment of Long term borrowing (554) (4,806)
Operating Cash flow before Working Cap 2,400 2,036 2,445 1,712 1,645
(Decrease) / Increase in other liabilities 791 275 (152) 1,214 84
Proceeds from short term borrowing (net) 346 1,467 (1,473) 494 1,783

(Increase)/Decrease in Debtors 767 (975) (2,286) (428) Interest paid (403) (489) (623) (650) (685)
(Increase)/Decrease in Other Assets (1,450) (1,051) (1,630) (2,574) (367) Dividends paid
Cash from Financing activities- C 115 1,694 1,783 2,543 1,234
(Increase)/Decrease in Inventories 2 4 (2) (1)
Increase(Decrease) in Trade payables (1,734) 687 4,350 (484) Effect of change of exchange on cash and cash
110 (370) 24 2 12
Cash from working capital 1,741 294 380 2,414 450 equivalents - D
Direct Taxes Paid (77) (120) (121) (287) (154)
Operating Cash flow- A 1,664 174 259 2,127 296 Change in Cash= A+B+C+D 135 177 (350) (613) 554

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Consolidated (Quarterly) Profit & Loss Statement
% QoQ
Particulars (Rs Million) Dec'16 Dec'15 % YoY Variance Sep'16 9M FY17
Variance
Net sales / income from operations 5,072 4,685 8% 4,665 9% 14,999
Total Expenditure 3,849 3,970 -3% 3,925 -2% 12,019
Personnel Cost (including technician fees) 2,760 2,905 -5% 2,955 -7% 8,962
Other Expenditure 1,089 1,064 2% 970 12% 3,057
Income from write back 0 0 NM 148 NM 148
EBITDA 1,223 716 71% 888 38% 3,128
Foreign exchange gain/(loss) 8 77 -89% -96 NM -78
EBITDA (including Exch. Gain (net)) 1,232 793 55% 792 56% 3,051
Depreciation & amortization 653 617 6% 701 -7% 2,044
ESOP 113 7 1509% 53 113% 172
EBIT 465 169 175% 38 1130% 834
Other Income 8 7 15% 24 -66% 44
Interest & Finance charges 229 311 -26% 325 -30% 858
PBT Before Exceptional Items 244 -135 NM -264 NM 20
Exceptional Items- Expenditure/ (Income) 0 60 NM 41 NM -977
PBT 244 -194 NM -305 NM 997
Tax Expense -38 28 NM 90 NM 58
Minority Interest 55 -38 NM -34 NM 52
PAT 227 -184 NM -361 NM 887
Other Comprehensive Income -274 -685 NM 23 NM -452
Total Comprehensive Income -47 -870 NM -338 NM 435
Key Ratios Dec'16 Dec'15 Sep'16 9M FY17
EBITDA Margin 24.1% 15.3% 19.0% 20.9%
EBITDA (including Exch. Gain (net)) 24.3% 16.9% 17.0% 20.3%
Net Margin 4.5% -3.9% -7.7% 5.9%
Total Expenditure/ Revenues 75.9% 84.7% 84.1% 80.1%
Personnel Cost/ Total Operating Income 54.4% 62.0% 63.3% 59.8%
Other Expenditure/ Total Operating Income 21.5% 22.7% 20.8% 20.4%

Note:
Financials for Quarter ending Dec16 and Sep16 are in compliance with Indian Accounting Standard (Ind AS), consequently Dec15 Financials are restated to comply with Ind AS to make them comparable.

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 Balance-Sheet as on Sep 30, 2016 (Consolidated)
Stock Info

Consolidated Consolidated
Particulars (In Rs Mn) 30.09.2016
Particulars (In Rs Mn) 30.09.2016 Unaudited
Unaudited Equity
(a) Equity share capital 299
1. Non-current assets
(b) Other equity 5,909
(a) Property, plant and equipment 7,518
Equity attributable to equity holders of the Parent 6,208
(b) Capital work-in-progress 31
Non-controlling interests 1,082
(c) Goodwill 9,963
7,290
(d) Other intangible assets 5,203
Liabilities
(e) Intangible assets under development 628
1. Non-current liabilities
(f) Financial assets - (a) Financial liabilities
(i) Investments 1,963 (i) Borrowings 9,106
(ii) Loans - (ii) Others 3,948
(iii) Others 1,143 (b) Deferred tax liability (net) 1,097
(g) Other non-current assets 548 (c) Provisions 172
(h) Deferred tax asset (net) 939 (d) Other non-current liabilities -
27,936 14,323
2. Current assets
2. Current liabilities
(a) Inventories 7 (a) Financial liabilities
(b) Financial assets - (i) Borrowings 2,187
(i) Trade receivables 1,933 (ii) Current maturities of long-term borrowings 4,120
(ii) Cash and cash equivalents 489 (iii) Trade payables 1,313
(iii) Bank balances other than (ii) above 131 (iv) Others 5,672
(iv) Loans 67 (b) Provisions 19
(v) Others 2,912 (c) Current tax liability 170
(c) Other current assets 1,619 (d) Other current liabilities -
7,158 13,481
Total assets 35,094 Total equity and liabilities 35,094

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