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Tips Industries Ltd.

BSE: 532375 Sector: Media
NSE: TIPSINDLTD ISIN Code: INE716B01011
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OPEN 1400.05
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VOLUME 344
52-Week high 2246.12
52-Week low 844.34
P/E 28.05
Mkt Cap.(Rs cr) 1,811
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Tips Industries Ltd. (TIPSINDLTD) - Director Report

Company director report

To

The Members

Tips Industries Limited

Your Directors are pleased to present the 25th Annual Report on the business andoperations of the Company together with the Audited Financial Statements for thefinancial year ended March 31 2021. The Management Discussion and Analysis is alsoincluded in this Report.

THE INDIAN MEDIA AND ENTERTAINMENT INDUSTRY

India's economy was hit hardest by the Covid-19 pandemic. Almost all the sectors havebeen adversely affected. Due to the pandemic and subsequent lockdowns Indian economygrowth was declining. Considering positive sentiments of the last two quarters of FY202021 the World Bank estimates that the Indian economy will recover by 5.4% in FY2021-22. However the surge in Covid-19 positive cases and the death toll starting April2021 may slow down the economy to some extent and may adversely impact the forecastgrowth.

Media and Entertainment (M&E) sector usually grows faster than GDR it also affectedand fell by 24% to Rs.1.38 trillion (US$18.9 billion) in effect taking revenues back to2017 levels. Digital and online gaming were the only segments which grew in 2020 adding anaggregate of Rs.26 billion and consequently their contribution to the M&E sectorincreased from 16% in 2019 to 23% in 2020.

Segment 2019 2020 2021E 2023E CAGR 2020-23
Television 787 685 760 847 7%
Digital media 221 235 291 425 22%
Print 296 190 237 258 11%
Online gaming 65 76 99 155 27%
Filmed entertainment 191 72 153 244 50%
Animation and VFX 95 53 74 129 35%
Live events 83 27 53 95 52%
Out of Home media 39 16 22 32 27%
Radio 31 14 23 27 24%
Music 15 15 18 23 15%
Total 1822 1383 1729 2234 17%

All figures are gross of taxes (Rs. in billion) for calendar years EY estimates Source:FICCI-EY Media & Entertainment (M&E) Report

The filmed entertainment segment saw an 80% decline across domestic and internationaltheatrical revenues on account of lockdowns and social distancing norms announced due toCOVID-19 pandemic.

• Music

Music permeates our culture across all age groups. Therefore India is certainly amongthe world's most exciting music markets. In the past few years the country has seen arapid transformation from physical products to digital services and the explosion ofdigital streaming services. The Indian Music market remained resilient in 2020 andrecorded Rs.15 billion in sales. Streaming revenues grew 15% however performance rightsrevenues declined 67% due to country wide lockdowns leading to overall flat industryrevenues. It is expected that Industry revenues will grow at a CAGR of 15% and cross Rs.23billion by 2023 on the back of increasing digital revenues and performance rights.

Category Revenue
Streaming 85.1%
Other Digital 5%
Physical 1.3%
Performance Rights 2.9%
Synchronisation 5.6%

Share of physical sales fell from 2% in 2019 to 1% in 2020. Sales of vinyl records havebeen growing for ten years globally but in India there's no market for that.

Digital revenues comprised 90% of total revenues up from 68% in 2019. Younger peopleare generally early adopters of technology and more likely to subscribe to music streamingservices. Music listeners aged 16-44 years are more likely to pay for audio streaming asthey prefer an ad-free experience the freedom to listen to anything at any time at theclick of a button. Convenience and availability of millions of songs for a small price isdriving penetration of subscription based music streaming services.

KEY ASPECTS OF THE MUSIC INDUSTRY

Music is part of the broader content industry that comprises news television serialsfilms and music. Each of these sub-segments has their own economic attributes andappropriate monetization methods.

• Value of content

Many factors determine the value of content. Content that can be monetized multipletimes naturally commands greater economic value. Music ranks at the top of the contentpyramid when ranked on repeated monetization.

Once aired news bulletins and TV serials lose relevance very quickly. Viewers rarelyrevisit such content. Films hold a special appeal and can be repeatedly aired. Superhitfilms may be viewed multiple times by audiences. Such films attract audiences even manyyears after release.

Music lovers can be very passionate about their favorite music and may listen to theirfavourite songs multiple times a week. It is entirely possible that listeners hear theirfavorite songs thousands of times over their lifetimes.

• Intellectual Property Rights (IPR)

The Copyright (Amendment) Act 2012 protects music copyrights for 60 years in India.This is the longest period of protection when compared to any other type of intellectualproperty rights. In the United States music copyrights are protected for much longerperiods.

IPR protection for such long durations allows music labels to exploit multiplemonetization strategies over time. Catalogues benefit from technological evolutioninflation and increased market penetration over such long periods.

• Impact of Internet

The internet has made it possible to access the entire global audience for content withminimum intermediation. Physical distribution channels for selling cassettes CDs and DVDshave been disrupted. In today's digital world every content owner can directly connectwith the end consumer via the internet. This ability to reach large audiences directly hasimproved terms of trade for content owners vis-a-vis distributors and other contentaggregators.

FACTORS AFFECTING GROWTH OF MUSIC INDUSTRY TODAY

• Convenience

Until the first decade of the current century music lovers had to carry devices suchas Walkmans or iPods or USB drives to hear music on the go. These and other functions havenow converged into a single device; the smartphone. Listeners no longer need to carryseparate devices; smartphone apps make music available 24x7 with a tap and a swipe.

• Rising Data Consumption

The Ericsson Mobility Report-June 2021 (EMR-21) estimates that data usage persmartphone will increase from 14 GB/month in 2020 to 40 GB/month in 2026. The reportestimates total Mobile Data Traffic to grow at 27% CAGR between 2020 and 2026 in India.FICCI's M&E Report 2021 states that news books music video and gaming accountedfor over 75% of data consumption in India. Rising data consumption provides a tailwind forgrowth.

• More Subscribers

As per EMR-21 there were 81 crore smart phone subscriptions in India in 2020. Thisnumber is expected to touch 124 crore in 2025. According to TRAI current tele-density inrural areas is only 59.5%. A lot of people are yet to be connected to smartphones and theInternet so there is huge headroom for growth.

• Faster Networks

The number of 4G connections are expected to rise from 68 crore to 83 crore by 2026. 5Gconnections are expected to be about 33 crore in 2026. Higher speeds provide seamless userexperience and improve adoption. Upgrading to faster connections will continue to drive anincrease in content consumption.

• Smarter Phones

Smartphones provide improved user experience for media consumption compared to featurephones. The Ericsson Mobility Report - June 21 estimates smartphone penetration in Indiagrew by 22.7% in 2020 over 2019. The number of smartphone users is expected to reach124.17 crore by 2025 from 81 crore in 2020. New users and upgrades from feature phones tosmartphones are both tailwinds for music consumption.

• Cheap Data

India has the lowest data costs in the world. Mobile subscribers in India get access to4G data at approximately Rs.5/GB. Given such low costs data prices are no longer ahindrance to adoption of mobile Internet. EMR - June 21 estimates data usage per smartphone to increase from 14.6 GB/Month in 2020 to 40GB/Month in 2026.

BUSINESS OVERVIEW

TIPS is a leading Company in the Media & Entertainment Industry engaged in theproduction and distribution of films and leveraging its audio content library digitally inIndia and overseas. The Company is also a leading producer of Punjabi films in thecountry. Founded in 1975 it is one of the oldest companies in the Indian M&EIndustry. Mr. Kumar Taurani and Mr. Ramesh Taurani the co-founders of TIPs arewell-known names in the Indian M&E space with a proven track record of producing filmsthat have wholesome entertainment for the entire family.

One of the strongest assets of TIPS is its rich and evergreen music collection. Itslarge and diversified music library has a collection of over 29000 songs across allgenres and major languages. The songs are digitized and available on all the leadingonline music stores applications and web platforms.

FINANCIAL RESULTS

The Company earned Total Revenue including Other Income of Rs.9542.22 lakh as comparedto the previous year of Rs.10881.93 lakh. The Net Profit after Tax for the year stood atRs.4346.88 lakh as compared to Rs.1133.93 lakh in the previous year.

The highlights of the Financial Results of the Company for the year under review alongwith the figures for the previous year are as follows:

(Rs. in Lakh)
Particulars 2020-21 2019-20
Income 9542.22 10881.93
Profit/(Loss) before Depreciation Interest Provision for Contingencies and Taxation 6005.67 1581.87
Less: Depreciation and Interest 83.26 146.29
Profit/(Loss) before Provision for Taxation Extraordinary and Prior Period year items 5922.41 1435.58
Less: Provision for Taxation
Current Tax 1473.91 323.00
Taxes in respect of earlier years 136.90 0
Deferred Tax (35.28) (21.35)
Profit/(Loss) after Provision for Taxation but before Extraordinary and Prior Period year items 4346.88 1133.93
Less: Prior Period Expenses 0 0
Profit/(Loss) after Taxation 4346.88 1133.93
Add: Balance Brought Forward 3957.24 2994.35
Profit/(Loss) after Taxation available for Appropriation 8304.12 4128.28
Transfer to General Reserves 0 0
Share Capital 1296.87 1431.87
Reserves & Surplus 8828.90 6605.94

PERFORMANCE REVIEW

TIPS is confident that its music business will continue to deliver consistent growthand revenue. The Company has always been at the forefront of leveraging latest technologyand innovation in the industry. The music library of the Company is one of the mostexhaustive in the industry comprising a collection of over 29000 songs which areavailable for streaming and download across leading digital marketplaces like iTunes andGoogle Play as well as popular streaming platforms like Saavn and Spotify. The musicrevenue for FY2020-21 was Rs.9053.00 lakh as compared to Rs.9792.10 lakh in the previousyear.

During the financial year ending March 31 2021 the Company in collaboration with 12thStreet Entertainment co-produced adventure horror-comedy film "Bhoot Police". Itwill be released on OTT platform during FY22. The Company expects to earn healthy profitsfrom this production.

SCHEME OF ARRANGEMENT AND DEMERGER

The Board of Directors at its meeting held on May 10 2021 have approved demerger offilm business undertaking of Tips Industries Limited (Demerged Company) by way of a Schemeof Arrangement and Demerger whereby the said business undertaking of Demerged Company willbe demerged into the Tips Films Limited (Resulting Company) as a going concern basis witheffect from the Appointed Date i.e. April 1 2021.

The Scheme along with necessary documents was filed by the Company on May 28 2021 andMay 312021 with BSE Limited (BSE) and National Stock Exchange of India Limited (NSE)respectively where the equity shares of the Company are listed.

The Directors believe that the Scheme is in the best interests of the respectiveentities and their respective stakeholders including its minority shareholders employeesand creditors.

DIVIDEND

The Directors recommend a final dividend of 20% i.e. Rs.2/- (Rupees Two) per share onfully paid-up Equity Share of Rs.10/- each of the Company. Dividend is subject to approvalof members at the ensuing Annual General Meeting and shall be subject to deduction ofincome tax at source.

The Board of Directors of the Company had adopted the Dividend Distribution Policy onJune 14 2021 in line with the SEBI (Listing Obligations & Disclosure Requirements)Regulations 2015. The Policy is uploaded on the Company's website at www.tips.in.

RESERVE

The Board of Directors has not recommended transfer of any amount to reserves and theamount of Rs.7935.21 lakhs is retained in the Profit and Loss Account.

SHARE CAPITAL

The paid-up Equity Share Capital as of March 31 2021 stood at 12968659 EquityShares.

During the year under review the share capital of the Company has reduced owing tobuyback of shares. The Company has bought back 1350000 fully paid-up equity shares ofthe Company of face value of Rs.10/- each during the buyback tendering period i.e. fromTuesday June 2 2020 to Monday June 15 2020 on a proportionate basis through thetender offer route at a price of Rs.140/- per Equity Share.

The Company has not issued shares with differential voting rights nor has granted anystock options or sweat equity. As of March 31 2021 none of the Directors of the Companyhold instruments convertible into equity shares of the Company.

REPORT ON PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES

The Company does not have any subsidiary associate and joint venture company.

CORPORATE GOVERNANCE REPORT

Pursuant to Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 a separate report on Corporate Governance alongwith a certificate from the Auditors on its compliance forms part of this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Director Retiring by Rotation

In terms of Section 152 of the Companies Act 2013 Mr. Kumar Taurani Director of theCompany is liable to retire by rotation at the ensuing Annual General Meeting and beingeligible offers himself for re-appointment. The Board recommends the same for yourapproval.

Re-appointment of Managing Directors

The Board of Directors of the Company on the recommendation of the Nomination andRemuneration Committee at their Meeting held on May 10 2021 approved the re-appointmentof Mr. Kumar Taurani as Chairman and Managing Director and Mr. Ramesh

Taurani as Managing Director for a period of one year with effect from June 12021. TheBoard recommends the re-appointment of Managing Directors for your approval.

• Re-appointment of Independent Director

Mr. Venkitaraman Iyer was appointed as Independent Director of the Company in the 20thAnnual General Meeting of the Company held on September 16 2016 for a period of 5 (five)consecutive years commencing from September 16 2016. The current term is due to expire onSeptember 15 2021.

Accordingly pursuant to the provisions of the Companies Act 2013 and based on therecommendation of the Nomination and Remuneration Committee the Board of Directors attheir Meeting held on July 27 2021 approved the re-appointment of Mr. Venkitaraman Iyeras Independent Director of the Company to hold office for second term of one year witheffect from September 16 2021 subject to the approval of shareholders.

• Declaration by Independent Directors

All Independent Directors have given declarations that they meet the criteria ofindependence as laid down under Section 149(6) of the Companies Act 2013 read with rulesmade thereunder and Regulation 16(1)(b) of SEBI (Listing Obligations and DisclosureReguirements) Regulations 2015.

Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Companies Act 2013 the Key ManagerialPersonnel of the Company as on March 312021 are Mr. Kumar Taurani Chairman and ManagingDirector; Mr. Ramesh Taurani Managing Director; Mr. Sunil Chellani Chief FinancialOfficer; and Ms. Bijal Patel Company Secretary.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act 2013 and the SEBI (Listing Obligationsand Disclosure Reguirements) Regulations 2015 the Board has carried out performanceevaluation. The manner in which the evaluation has been carried out has been explained inthe Corporate Governance Report.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134(3)(c) of the Companies Act 2013:

a. that in the preparation of the Annual Accounts for the year ended March 31 2021the applicable accounting standards have been followed along with proper explanationrelating to material departures if any;

b. the Directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company as at March 31 2021 and of the profitof the Company for the year ended on that date;

c. that the Directors have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d. the annual accounts have been prepared on a going concern basis;

e. that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and

f. that the Directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and operatingeffectively.

DETAILS OF BOARD AND COMMITTEE MEETINGS

• Board Meetings

The Board of Directors of the Company met five times during the financial year i.e.from April 1 2020 to March 31 2021 on July 24 2020 August 19 2020 November 92020 January 5 2021 and February 9 2021. Details of the Board Meetings and attendanceof the Directors are provided in the Corporate Governance Report which forms part of thisAnnual Report.

• Committees of the Board

With a view to having a more focused attention on the business and for bettergovernance and accountability the Board has constituted the Committees viz. AuditCommittee Stakeholders' Relationship Committee Nomination and Remuneration CommitteeCorporate Social Responsibility Committee and Demerger Committee.

The details with respect to the compositions roles terms of reference etc. ofrelevant committees are provided in the Corporate Governance Report of the Company whichforms part of this Annual Report.

AUDITORS

• Statutory Auditors

M/s. SSPA & Associates Chartered Accountants (Firm Registration No. 131069W) werere-appointed as the Statutory Auditor of the Company at the 23rd Annual General Meetingheld on September 23 2019 to hold the office for a period of 5 (five) years till theconclusion of the 28th Annual General Meeting to be held in the year 2024 in terms of theapplicable provisions of Section 139 of the Act read with the Companies (Audit andAuditors) Rules 2014.

The Notes to the Financial Statements are self-explanatory and do not call for anyfurther comments. There is no audit qualification reservation or adverse remark for theyear under review.

• Secretarial Auditors

Provisions of Section 204 of the Act read with rules made thereunder M/s. N.L. Bhatia& Associates Practicing Company Secretaries (UIN: P1996MH055800) have been appointedto undertake Secretarial Audit of the Company. The report of the Secretarial Auditor isannexed herewith as Annexure I and forms part of this Report.

The said report does not contain any observation or qualification which requires anyexplanation or comments from the Board under Section 134(3) of the Companies Act 2013.

• Internal Auditors

Pursuant to provisions of Section 138 of the Act read with rules made thereunder theBoard has appointed M/s. Maheshwari & Co. Chartered Accountants (Firm RegistrationNo. 105834W) as Internal Auditors of the Company to check the internal controls andfunctioning of the activities and recommend ways of improvement. Internal Audit is carriedout on a quarterly basis and the report is placed in the Meetings of the Audit Committeeand the Board for their consideration and direction. Their scope of work is as decided bythe Audit Committee and the Board of Directors.

INTERNAL CONTROL AND FINANCIAL REPORTING SYSTEMS

The Internal Financial Controls with reference to financial statements as designed andimplemented by the Company are adequate. It has documented the procedures covering allfinancial and operating functions and processes. These have been designed to provide areasonable assurance with regard to maintaining of proper accounting controls for ensuringthe reliability of financial reporting monitoring of operations protecting assets fromunauthorized use or losses and compliance with regulations.

Adequate internal control systems commensurate with the nature of the Company'sbusiness and size and complexity of its operations have been recognized. Internal controlsystems ensure the reliability of financial reporting timely feedback on the achievementof operational and strategic goals compliance with applicable laws and regulations andthat all assets and resources are acquired economically used efficiently and adequatelyprotected.

During the year under review no material or serious observations have been receivedfrom the Internal Auditors of the Company with respect to inefficiency or inadequacy ofthe controls.

RISK MANAGEMENT

TIPS has a well-defined policy to foresee identify and analyze risks and take suitableaction to mitigate and minimize the impact of such risks. Accordingly the Company hasidentified the followings risks that can impact its business performance and plans:

• Piracy

Copyright infringement remains a challenge for the music ecosystem. An estimated 27% ofthose surveyed used unlicensed methods to listen or obtain music in the past month while23% used illegal stream ripping services. The availability of quick remedies includingblocking orders to tackle such pirate services is vital to protect the music industry andother creative industries. Furthermore app stores and ISPs that host such services needto be proactive in recognizing this form of infringement and work with industry bodies tocurb piracy. Piracy in the music ecosystem has reduced from 76% in 2018 to 67% in 2019 andremained flat in 2020 but is still higher than the global average of 27%. China hassucceeded in curbing piracy with an estimated 96% of consumers listening to licencedmusic.

• Staggering shutdowns of cinema screens

An estimated 1000 to 1500 single screen cinema's have shut down bringing the overallscreen count in India down to 8000. Real estate developers supported exhibitors bylowering rentals and revenue share agreements. Launch dates for several cinema projectshave also been postponed. To survive multiplexes have introduced concepts of privatescreenings and hosted stand-up comedy shows. Expansion plans have been put on hold.

Since a lot of films could not be released several films opted to be released directlyon OTT platforms. This has resulted in revenue losses for filmmakers although digitalrights revenue grew 86% to Rs.35 billion. An absence of new music releases has alsoimpacted music labels. Only 441 films were released in 2020 as compared to 1833 in 2019.

OPPORTUNITIES

• Digital / OTT Rights

India is second globally in the digital consumption of services following China. Videosubscriptions grew 50% in 2020 as sports content went behind paywalls. Paid subscriptionscrossed 50 million and generated Rs.43.5 billion in revenues. Netflix invested Rs.30billion over 2019 and 2020 making India one of its largest production hubs. It hasannounced over 60 titles and launched 17 films and 11 web series in 2020 alone. OTTplayers are expected to spend Rs.19.2 billion on content in 2021. Over 2021-25 totalspend is expected to be Rs.300 billion. Over 500 original titles are expected to bereleased in 2021.

OUTLOOK

We believe the following secular trends will continue to drive growth in the recordedmusic industry.

• Consumer Trends and Demographics

Consumers today engage with music in more ways than ever. In 2020 Indian consumersspent 21.5 hours listening to music each week compared to 19.1 hours in 2019. Dataindicate that the hours spent listening to music can grow further. According to Nielsenin 2019 teens and millennials in the United States listened to an average of 32.6 and29.7 hours of music each week respectively above the 26.9 hours for all U.S. consumers.

Demographic trends and smartphone penetration have been key factors in driving growthin consumer engagement. Younger consumers typically are early adopters of newtechnologies including music-enabled devices.

Members of older demographic groups are also increasing their music engagement.According to an IFPI survey of 19 leading geographic markets in 2019 54% of 35 to 64 yearolds used a streaming service to listen to music in the past month representing anincrease from 46% in 2018 which was the highest rate of growth for use of streamingservices across all age groups.

Music permeates our culture across age groups as evidenced by the footprint that musichas across social media. According to the Recording Industry Association of America(RIAA) 9 out of 10 social media users do music related social media activity. This newmonetization channel is showing great promise. RIAA's earlier survey revealed that as ofSeptember 2019 7 out of the top 10 most followed accounts on Twitter belonged tomusicians and according to YouTube musicians owned the majority of videos that haveachieved more than 1 billion lifetime views and/or have made it to the top 10 most watchedvideos of all time.

• Streaming Still in Early Stages of Global Adoption and Penetration

According to IFPI global paid music streaming subscribers totalled 443 million at theend of 2020 and subscription revenue grew by USD 1.55 billion to touch USD 9.9 billion.Subscription accounts have grown 28.5% over 2020 to 443 million representing only 5.5% ofthe humans on this planet. In terms of smartphone users it represents only 7.3% of the6.06 billion smartphone users globally as per the the Ericsson Mobility Report 2021. Thefast growing population of paying subscribers is still only a small fraction of thereported user bases of large globally scaled digital services such as Facebook whichreported 2.85 billion monthly active users across its services as of March 2021 andYouTube which reported 2.3 billion unigue monthly users at the end of 2020.

The United States with a population of under 330 million generated 1.15 trillionon-demand streams (both audio and video) in 2019 according to Nielsen; continued growthis to be expected. That indicates the potential size of India's streaming market evenafter assuming substantially lower realizations when its population of 1.38 billion getsconnected to the Internet.

The global music market derives 46% of revenues from paid subscriptions. In India weexpect to see advertisement-supported and subscription models co-exist. The evolution ofChinese markets over the past 7 years provides a firm basis for our belief thatsubscriptions will contribute substantial revenues in the near future.

According to IFPI in 2013 China was ranked 21st in the world with total musicindustry revenues of approximately USD 82.6 million. The Indian music industry was muchlarger with revenues of USD 119.1 million at that time. Piracy in China was estimated tobe over 95%. By the end of 2020 the Chinese market was ranked 7th in the world withrevenues of USD 791.9 million. Subscription revenues in 2020 grew 55.8% over 2019.

• Pricing improvements

Internationally streaming subscription prices had remained flat for over a decade asplayers focused on penetration. Paid streaming is now entering a new phase as players havestarted raising prices. Spotify has recently raised subscription rates in 12 territoriesincluding US and UK. Other players are widely expected to follow suit. Amazon isexperimenting by offering its Amazon Music HD at premium pricing in the US since 2019.

The Indian Government's crackdown on piracy from 2012 and changing attitudes of Indianconsumers make it possible for the Indian music industry to follow a similar growthtrajectory. The FICCI—EY Media & Entertainment Report 2021 expects paidsubscribers for music streaming in India to cross 5 million by 2023.

As Indian OTT players inch closer towards public listing of their shares they may optto focus on subscription revenues. Bundling music with telecom services is also a viableoption to reach a much wider but lower income audience.

• Technology Enables Innovation and Presents

Additional Opportunities

Technological innovation has aided the penetration of music consumption acrosslocations including homes offices and cars as well as across devices includingsmartphones tablets wearables digital dashboards gaming consoles and smart speakers.These technologies represent advancements that are deepening listener engagement anddriving further growth in music consumption by forming new listening habits.

• Device Innovation

According to Nielsen as of August 2019 U.S. consumers listened to music across anaverage of 4.1 devices per week. We believe that the use of multiple devices is expandinglistening hours by bringing music into more moments of consumers' lives; the differentuses that these devices enable are also broadening consumers' exposure to new anddifferent genres of music. The music that consumers listen to during a commute may bedifferent from the music they listen to while they exercise and different still from themusic they play through a smart speaker while cooking a meal. Smart speakers enableconsumers to access music more readily by using their voices. According to PwC smartspeaker ownership is expected to increase at a 38% CAGR from 2018 through 2023 reaching440 million devices globally in 2023. Smart speakers are fuelling further growth instreaming by converting more casual listeners into paid subscribers drawn in by music asa critical application for these devices. According to Nielsen 61% of U.S. consumers whouse a smart speaker weekly to listen to music currently pay for a subscription as well.

• Format and Monetization Model Innovation

Short-form music and music-based video content has grown rapidly driven by the growthof global social video applications such as TikTok which features 15-second videos oftenset to music. TikTok has reportedly been downloaded more than 2 billion times since itslaunch in 2017. TikTok has reported 689 million monthly active users. Such applicationshave the potential for mass adoption illustrating the opportunity for additionalplatforms of scale to be created to the benefit of the music and entertainment industry.Short-form music and music based videos have become popular on social media platforms likeFacebook and Instagram too. It illustrates the growing number of pathways through whichperforming artistes and music labels may monetize their content.

The Media and Entertainment Industry in India continues to undergo a transformation.The rapid proliferation of mobile access is enabling on-demand anytime-anywhere contentconsumption nationwide. For global players across the M&E value chain looking for avibrant growth market India provides an exciting opportunity to reach digitally empoweredconsumers. India ranks as one of the fastest growing app markets globally a promisingscenario for subscription-based and ad-supported music apps.

HUMAN RESOURCES

TIPS has always believed that its people are its most valuable assets. The Companyensures that all its employees enjoy a safe and healthy working environment. The Companyhas a strong emphasis on values based on integrity excellence and passion. We havealways had a mutually respectful and appreciative relationship with all our employees.

As of March 31 2021 the number of employees on the payroll of the Company was 50.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information required under Section 197 of the Companies Act 2013 read withCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respect ofemployees of the Company is provided in Annexure II forming part of this report.

WHISTLE-BLOWER POLICY / VIGIL MECHANISM POLICY

The Company has adopted a Whistle-Blower Policy/Vigil Mechanism Policy for Directorsand employees to report their genuine concerns. Details of the policy are provided in theCorporate Governance Report which forms part of this Annual Report.

RELATED PARTY TRANSACTIONS

All transactions with related parties were reviewed and approved by the Audit Committeeand Board. The details of the related party transactions as per Ind AS 24 are set out inNotes to the Financial Statements forming part of this Report.

The details of material transaction entered into by the Company with related partiesreferred to in sub-section (1) of Section 188 of the Companies Act 2013 is disclosed inForm No. AOC-2 as Annexure III.

The Company has adopted a Related Party Transactions Policy. The policy as approved bythe Board is uploaded on the Company's website.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Corporate Social Responsibility Committee is constituted in accordance with theprovisions of Section 135 of the Companies Act

2013 read with rules made thereunder.

Pursuant to provision of Section 135 of the Companies Act 2013 read with the Companies(Corporate Social Responsibility Policy) Rules

2014 the Board has also framed a CSR Policy for the Company on the recommendations ofthe CSR Committee and the policy is available on the website of the Company atwww.tips.in.

The Annual Report on CSR activities as required under Companies (Corporate SocialResponsibility) Rules 2014 including a brief outline of the Company's CSR Policy isannexed to this Report as Annexure IV.

DEPOSITS

During the year under review the Company neither accepted any deposits nor there wereany amounts outstanding at the beginning of the year which were classified as 'Deposits'in terms of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposit) Rules 2014 and hence the requirement for furnishing of details of depositswhich are not in compliance with the Chapter V of the Companies Act 2013 is notapplicable.

PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS BY COMPANY

The particulars of Loans Guarantees and Investments have been disclosed in theFinancial Statements read together with Notes annexed to and forming an integral part ofthe Financial Statements.

EXTRACT OF ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read withRule 12 of the Companies (Management and Administration) Rules 2014 the extract of theAnnual Return of the Company for the Financial Year March 31 2021 is uploaded on thewebsite of the Company and can be accessed at www.tips.in.

SECRETARIAL STANDARDS

The Company has complied with the Secretarial Standards issued by the Institute ofCompany Secretaries of India.

FRAUD REPORTING

During the year under review no instances of fraud were reported by the Auditors ofthe Company.

CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Conservation of energy

The particulars as required under the provisions of Section 134(3) (m) of the CompaniesAct 2013 read with rule 8 of the Companies (Accounts) Rules 2014 in respect ofconservation of energy have not been provided considering the nature of activitiesundertaken by the Company during the year under review.

• Technology absorption

During the year the Company has not absorbed or imported any technologies.

Foreign exchange earnings and outgoings

Details of foreign exchange earnings and outgoings of the Company made during the yearare provided in Notes to the Financial Statement.

INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of the Companies Act 2013 read with the Investor Educationand Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016("The Rules") the Company had sent individual notices and also advertised inthe newspapers seeking action from the shareholders who have not claimed their dividendsfor past seven consecutive years i.e. for final dividend of the financial year ended2012-13 and thereafter had transferred such unpaid or unclaimed dividends.

Unclaimed dividend for FY 2013-14 will fall due for transfer to the IEPF on September12 2021. Those Members who have not encashed their dividends for FY 2013-14 are requestedto claim it from the RTA of the Company immediately. Those Members who have not so farclaimed their dividend for the subsequent financial years are also advised to claim itfrom the Company or the RTA of the Company.

The Company has uploaded the details of the unpaid and unclaimed amounts lying with theCompany on the website of the Company www. tips.in and also on the website of theMinistry of Corporate Affairs www.mca.gov.in.

OTHER DISCLOSURES

The Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

• No material changes and commitments which could affect the Company's financialposition have occurred between the end of the financial year of the Company and the dateof this report

• No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations in future

• No complaint received from any employee pursuant to the Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and rules madethereunder.

CAUTIONARY STATEMENT

Statements in this Board's Report and Management Discussion and Analysis describing theCompany's objectives projections estimates expectations or predictions may beforward-looking within the meaning of applicable securities laws and regulations. Actualresults may differ materially from those expressed in the statement. Important factorsthat could influence the Company's operations include a change in government regulationstax laws economic and political developments within and outside the country and suchother factors.

ACKNOWLEDGEMENTS AND APPRECIATION

The Directors wish to acknowledge and place on record their sincere appreciation forthe assistance and co-operation received from all the members regulatory authoritiescustomers financial institutions bankers lenders vendors and other businessassociates.

The Directors also recognize and appreciate all the employees for their commitmentcommendable efforts teamwork professionalism and continued contribution to the growth ofthe Company.

For and on behalf of the Board of Directors
Kumar S. Taurani
Chairman and Managing Director
Place: Mumbai (DIN: 00555831)
Date: July 27 2021

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