Tips Music Ltd

To

The Members

Tips Industries Limited

The Board of Directors are delighted to present the twenty-eighth Annual Report along with Audited Financial Statements for the financial year ended March 31, 2024. The Management Discussion and Analysis is also included in this Report.

According to IMF's World Economic Outlook (October 2023), India overtook the UK as the fifth largest economy in nominal US$ market exchange rate terms in 2021 (FY22) due to its strong economic foundations, thriving domestic demand, careful financial management, high saving rates, and favourable demographic trends. It is projected to become the world's third largest economy by 2027 (FY28), crossing Germany and Japan.

Traditionally, the Media and Entertainment (M&E) sectors growth has been outperforming the nominal GDP growth rate of India. As per the FICCI–EY Media & Entertainment (M&E) Report 2024, the Indian M&E sector grew by 8% in CY2023 to INR 2.3 trillion (US$27.9 billion), 21% above its pre-pandemic levels. While television remained the largest segment, digital media is expected to overtake Television in 2024. The M&E sector is expected to grow 10.2% in CY2024 to reach INR 2.55 trillion and then grow at a CAGR of 10% to reach INR 3.08 trillion by 2026.

Except for TV, all M&E segments grew in 2023. Digital media and gaming grew by INR 122 billion and consequently, increased its contribution to the M&E sector from 20% in 2019 to 38% in 2023. Digital advertising grew 15% to reach INR 576 billion, or 51% of total advertising revenues. Consumption trends continued to favor digital media, social media, video and audio streaming and online gaming. Digital media continues to remain essential in shaping the future of the M&E Industry.

India's recorded music industry has grown rapidly in recent years and has been described as ‘the sleeping giant' of global music markets. The sonic landscape of the Indian music industry underwent a profound transformation in the year 2023. Despite the challenges, India's music publishing industry has shown promising growth. At the heart of this musical revolution is the influence of online music streaming platforms.

With the rise of streaming services, focus on regional and independent music, emphasis on user-generated content, blockchain, AR, VR, IoT, licensing, copyright reforms and stakeholder collaboration, the Indian music industry is rapidly evolving. These innovations and opportunities offer huge potential for labels, artists and consumers. As technology advances and consumer preferences evolve, India's music distribution landscape is likely to become more accessible, diverse and engaging, creating new ways for artists to connect with their audiences and thrive in the digital age.

Music streaming platforms are key players in the Indian market. The recorded music industry in India grew 10% to reach INR 24 billion as some music OTT platforms went pay and stopped or reduced their free services. 87% of revenues were earned through digital means. Music streaming's reach is only 185 million and paying subscribers are only 8 million. This provides substantial headroom to grow volumes as well as value. India is likely to be the market at the centre of attention of all large global music companies for this decade.

Music has the power to evoke powerful emotions and feelings in us that can shape our moods and outlooks on life. It's the key to unlocking the emotional power of sound and has a substantial impact not only on mood, but also on mind, body and overall health. As per IFPI's ‘Engaging with Music' 2023, a study that explores the ways that fans listen to, discover, and engage with music around the world, 71% of people say music is important to their mental health.

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

• Value of content

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

At end consumer prices : Does not include electronic products with embedded music.

Most importantly, Indian's spent 24.4 hours per week listening to music which is 18% higher than the global average of 20.7 hours. It is expected that Industry revenues will surpass INR 37 billion by CY2026 on the back of increasing digital revenues and performance rights.

Once aired, news bulletins and TV serials lose relevance very quickly. Viewers rarely revisit such content. Films hold a special appeal and can be repeatedly aired. Superhit films may be viewed multiple times by audiences. Such films attract audiences even many years after release.

Music lovers can be very passionate about their favorite music and may listen to their favourite songs multiple times a week. It is entirely possible that listeners hear their favorite 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 intellectual property rights. In the United States, music copyrights are protected for much longer periods.

IPR protection for such long durations allows music labels to exploit multiple monetization strategies over time. Catalogues benefit from technological evolution, inflation, 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 with minimum intermediation. Physical distribution channels for selling cassettes, CDs and DVDs have been disrupted. In today's digital world, every content owner can directly connect with the end consumer via the internet. This ability to reach large audiences directly has improved terms of trade for content owners vis-a-vis distributors and other content aggregators.

• Social Media

The M&E Industry is embracing the changes brought by social media. From music, movies, and podcasts to TV shows, video games and social media has quite an impact on the M&E Industry. Social media has created new revenue streams by enabling monetization of content, which has led to the democratization of entertainment. Streaming services have also created new markets for independent filmmakers, musicians, and creators, leading to a rise of new voices and perspectives in M&E Industry.

• Convenience

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

• Rising Data Consumption

The Ericsson Mobility Report- November 2023 (EMR) estimates that data usage per smartphone will increase from 31 GB/ month in 2023 to 75 GB/month in 2029. The report estimates total Mobile Data Traffic to grow at 16% CAGR between 2023 and 2029 in India. FICCI's M&E Report 2023 states that 58% of all video consumption was driven by music videos. Rising data consumption provides a tailwind for growth.

• More Subscribers

As per EMR, there were 95 crore smart phone subscriptions in India, Nepal and Bhutan in 2023 compared to 81 crore in 2021. This number is expected to touch 118 crore in 2029. According to TRAI, current tele-density in rural areas is only 59.5%. A lot of people are yet to be connected to smartphones and the Internet, so there is huge headroom for growth.

• Faster Networks and Cheap data

5G subscriptions are expected to grow from 13 crores at the end of 2023 to 86 crores in 2029. Higher speeds provide seamless user experience and improve adoption. Upgrading to faster connections will continue to drive an increase in content consumption. Total mobile phone connections are expected to grow to 127 crores in 2029. Given such low costs, data prices are no longer a hindrance to adoption of mobile Internet. EMR estimates data usage per smartphone to increase from 31 GB/Month in 2023 to 75GB/Month in 2029. Smart phones and video drive data consumption.

• Focus on User Generated Content

User Generated Content has become a major driver in the music industry. With the rise of social media and video platforms like YouTube and Instagram Reels, users are creating and sharing music covers, remixes and original compositions. Several record labels and streaming services have also started working with content producers using User Generated Content to promote music and reach audiences. In the future, User Generated Content is likely to play a more important role in music distribution as platforms and artists actively encourage and use user-generated content to reach a wider audience and create a more interactive music experience.

• Focus on regional and independent music

India is a diverse country with a rich musical heritage. Regional music, including folk, classical and indigenous genres, has a significant following in India. With the rise of streaming services, there have been renewed efforts to promote regional and independent music. Several platforms have curated playlists and dedicated regional music sections that allow artists to showcase their talent and connect with niche audiences. Independent music has also gained recognition as artists use social media and digital platforms to distribute their music, gain followers and monetize their content. This trend is likely to continue in the future as support for regional and independent music grows, leading to a more diverse and inclusive music scene in India.

TIPS, one of India's leading entertainment companies, has been engaged in the business of creation, acquisition and exploitation of audio-visual content of music library digitally in India and overseas through licensing on various platforms. One of the strongest assets of TIPS is its rich and evergreen music collection. Its large and diversified music library has a collection of over 30,000 songs across all genres and major languages. The Company has a widespread presence across leading global digital platforms such as YouTube, Spotify, Jio Saavn, Resso, Apple Music. Amazon Prime etc. As of March, 2024 on YouTube, Tips Music has more than 97 mn subscribers across its channels and received 194 billion views.

During the year under review, the Company's total revenue, including other income was INR 25,595.82 lakhs, higher by 33.22% over the previous year's revenue of INR 19,213.76 lakhs. The Net Profit after Tax for the year was INR 1,2716.70 lakhs, higher by 66.18% as compared to INR 7,652.16 lakhs in the previous year.

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

TIPS is confident that its music business will continue to deliver consistent growth and revenue. The Company has always been at the forefront of leveraging latest technology and innovation in the industry. The music library of the Company is one of the most exhaustive in the industry comprising a collection of evergreen and rich content of over 30,000 songs, which are available for streaming and download across leading digital marketplaces like iTunes and Google Play, as well as popular streaming platforms like YouTube, Spotify, Jio Saavn, Resso, Apple Music. etc.

During the financial year 2023-24, the Company has released 733 new songs. The music revenue for financial year 2023-24 was INR 24,158.07 lakhs as compared to INR 18,678.12 lakhs in the previous year, representing an increase of 29.34%.

The rise of YouTube has made a significant impact on the revenue streams of the music industry. In the last five years. YouTube views on our channel, Tips Official, have grown from 26.6 billion in FY 20 to 193.9 billion in FY 24.

The Company has been actively rewarding its shareholders by returning substantial free cash flow to shareholders. Based on the performance of the Company, the Board has declared and paid three interim dividends during the financial year 2023-24. First interim dividend of INR 1 (100%) per equity share, second interim dividend of INR 2 (200%) per equity share and third interim dividend of INR 3 (300%) per equity share, i.e. aggregating to a sum of INR 6 (600%) per equity share of face value of INR 1 each fully paid involving total cash outflow of INR 7,705.60 lakhs during the financial year 2023-24.

The Board of Directors did not recommend any final dividend for the financial year ended March 31, 2024.

The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available on the Company's website at https://tips.in/wp-content/uploads/2023/11/ Dividend-Distribution-Policy-Annexure-11.pdf

During the year under review, the company has not transferred any amount to General Reserve. For complete details on movement in Reserves and Surplus during the financial year ended March 31, 2024, please refer to the ‘Statement of Changes in Equity' included in the financial statements of this Annual Report.

At the beginning of the financial year 2023-24, the paid-up equity share capital of the Company was INR 12,84,26,590 divided into 1,28,42,659 equity shares of face value of INR 10 each.

• Sub-divided (split) of the equity share

Pursuant to the Special Resolution passed by the Members of the Company by way of Postal Ballot through electronic means on March 27, 2023, the Company sub-divided (split) its equity share of the face value of INR 10 each (fully paid-up) into 10 (ten) equity shares of face value of INR 1 each (fully paid-up) and consequent amendment in the existing Clause V (Capital Clause) of the Memorandum of Association of the Company and existing Clause 3 (Capital Clause) of the Association of the Company. The effect of change in face value of the share was reflected on the share price at the Stock Exchanges where the Company is listed i.e. BSE and NSE with effect from April 21, 2023 (Record date).

During the year the Company has not issued any Equity Shares with differential voting rights, Sweat Equity Shares and Employee Stock Options.

As of the date of this report, the paid-up equity share capital of the Company was INR 12,84,26,590 divided into 12,84,26,590 equity shares of INR 1 each.

The Board of Directors at its meeting held on February 28, 2024, has approved a proposal to buyback of up to 5,95,000 (Five Lakhs Ninety Five Thousand) fully paid-up equity shares of face value of INR 1 (Rupee One only) each of the Company representing up to 0.46% of the total issued and paid-up equity share capital of the Company at a price of INR 625 (Rupees Six Hundred and Twenty Five only) per equity share payable in cash for an aggregate amount of up to INR 37,18,75,000 (Rupees Thirty Seven Crores Eighteen Lakhs Seventy Five Thousand Only). The shareholders approved the same on April 4, 2024, by way of a special resolution through postal ballot. Letter of Offer was made to all eligible shareholders. The Buyback offer was commenced from April 26, 2024 and will be closed on May 3, 2024.

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

• Director Retiring by Rotation

In terms of Section 152 of the Companies Act 2013, Mr. Kumar Taurani, Director of the Company (DIN: 00555831), is liable to retire by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. Accordingly matter with respect to re-appointment is proposed in the Notice of 28th Annual General Meeting.

• Resignation of Independent Director

Mr. Amitabh Mundhra (DIN: 00014227) tendered his resignation from the post of Independent Director of the Company with effect from closure of business hours on April 29, 2024 due to other commitments. The Board places on record its appreciation for the invaluable contribution and guidance provided by him to the Company over the years.

• Appointment of Independent Director

The Board of Directors at its meeting held on April 29, 2024, based on the recommendation of Nomination and Remuneration Committee, approved the appointment of Mr. Rajan Singh

(DIN: 05339297) as an Additional Director designated Non-Executive Independent Director for a period of five years with effect from April 30, 2024 subject to approval of shareholders. Accordingly matter with respect to appointment is proposed in the Notice of 28th Annual General Meeting.

• Declaration by Independent Directors

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

In the opinion of the Board, they fulfil the condition for appointment as Independent Directors on the Board. Further, in the opinion of the Board, the Independent Directors also possess the attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5)(iiia) of the Companies (Accounts) Rules, 2014.

During the year under review, the Non-Executive Independent Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees for the purpose of attending meetings of the Board and Committees of the Company.

• Key Managerial Personnel

During the year, the Board of Directors of the Company its meeting held on September 25, 2023, based on the recommendation of Nomination and Remuneration Committee, appointed Mr. Hari Nair, as a Chief Executive Officer of the Company w.e.f. October 1, 2023.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the Key Managerial Personnel of the Company as on March 31, 2024 are Mr. Kumar Taurani, Chairman and Managing Director, Mr. Ramesh Taurani, Executive Director, Mr. Girish Taurani, Executive Director, Mr. Hari Nair, Chief Executive Officer, Mr. Sushant Dalmia, Chief Financial Officer and Ms. Bijal Patel, Company Secretary.

The policy of theCompany on directors' appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Companies Act, 2013, is available on our website at https://tips.in/wp-content/uploads/2023/11/Criteria-for-making-payments-to-non-executive-directors-Annexure-3.pdf

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the Company has conducted the Annual Performance Evaluation process, evaluating the performance of the Board, its Committees and all the individual directors (including Independent Director, Non-Independent Director & Chairman). The criteria of evaluation has been explained in the Corporate Governance Report forming part of this report.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

a) In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed and there are no material departures;

b) They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit of the Company for that period;

c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) They have prepared the annual accounts on a going concern basis;

e) They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; f) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

• Board Meetings

The Board of Directors of the Company met eight times during the financial year 2023-24 on April 3, 2023, May 12, 2023, July 25, 2023, September 4, 2023, September 25, 2023, October 18, 2023, January 23, 2024 and February 28, 2024.

• Committees of the Board

With a view to have a more focused attention on the business and for better governance and accountability, the Board has constituted the Committees viz. Audit Committee, Stakeholders Relationship Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Risk Management Committee.

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

• Appointment of Statutory Auditors

M/s. SSPA & Associates, Chartered Accountants (Firm Registration No. 131069W), were re-appointed as the Statutory Auditors of the Company, in the AGM held on September 23, 2019, for a period of five years till the conclusion of the AGM to be held in the year 2024. They have completed ten years as Statutory Auditors of the Company. The Board of Directors place on record their appreciation for the services rendered by M/s. SSPA & Associates as Statutory Auditors.

The provisions regarding rotation of auditors, as prescribed under the Act, are applicable to the Company. Hence, it is proposed to appoint M/s. MSKA & Associates, Chartered Accountants, (Firm Registration No. 105047W), as the Statutory Auditors of the Company, for a period of five years, to hold office from the conclusion of this 28th AGM till the conclusion of the 33rd AGM to be held for the financial year ended March 31, 2029, to the Members for their approval.

Accordingly, an item for appointment of M/s. MSKA & Associates as the Statutory Auditors of the Company is being placed at the ensuing AGM for approval of the Members. Information about the proposed appointment of statutory auditor is given in the Notice of AGM, which forms part of this Annual Report. The Board recommend their appointment to the Members.

• Statutory Auditors' Report

The Report given by the Statutory Auditors on the Financial Statements of the Company for financial year 2023-24 does not contain any qualification, reservation or adverse remarks and forms part of this Annual Report.

• Details in respect of frauds reported by auditors

No frauds have been reported by the Statutory Auditors during the financial year 2023-24.

• Appointment of Secretarial Auditors

Pursuant to the provisions of Section 204 read with rules made thereunder, M/s. N.L. Bhatia & Associates, Practicing Company Secretaries (UIN: P1996MH055800), have been appointed to undertake Secretarial Audit of the Company the financial year 2023-24.

• Secretarial Audit Report

In terms of Section 204 of the Companies Act, 2013, a Secretarial Audit Report given by the Secretarial Auditors in Form No. MR-3 is annexed with this Report as Annexure – A.

• Annual Secretarial Compliance Report

In accordance with Regulation 24A of the of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, A Secretarial Compliance Report for the financial year ended 2023-24 on compliance of all applicable SEBI Regulations and circulars/ guidelines issued thereunder, was obtained from M/s. N.L. Bhatia & Associates, Practicing Company Secretaries.

There are no qualifications, reservations or adverse remarks made by Secretarial Auditors in their Report.

Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable for the business activities carried out by the Company.

Pursuant to provisions of Section 138 read with rules made thereunder, M/s. Grant Thornton Bharat LLP and M/s. Maheshwari & Co, Chartered Accountants, (Firm Registration No. 105834W) were re-appointed as an Internal Auditors of the Company for the financial year 2023-24 to check the internal controls and functioning of the activities and recommend ways of improvement.

Internal Audit is carried out on a quarterly basis, and the report is placed in the Meetings of the Audit Committee and the Board for their consideration and direction. Their scope of work is as decided by the Audit Committee and the Board of Directors.

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. It has documented the procedures covering all financial and operating functions and processes. These have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring the reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with regulations.

Adequate internal control systems commensurate with the nature of the Company's business and size and complexity of its operations have been recognized. Internal control systems ensure the reliability of financial reporting, timely feedback on the achievement of operational and strategic goals, compliance with applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

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

The Company has in place a Risk Management Policy commensurate with the size of the Company, which provides for a robust risk management framework to identify and assess risks and take suitable action to mitigate and minimize the impact of such risks. The Risk Management Committee has been constituted to identify, monitor and report on the potential risks associated with the Company's business and periodically keeps the Board of Directors apprised of such risks and the measures taken by the Company to mitigate such risks. Accordingly, the Company has identified the risks that can impact its business performance and plans:

Copyright infringement remains a challenge for the music ecosystem. An estimated 27% of those surveyed used unlicensed methods to listen or obtain music in the past month, while 23% used illegal stream ripping services. The availability of quick remedies, including blocking orders, to tackle such pirate services is vital to protect the music industry and other creative industries. Furthermore, app stores and ISPs that host such services need to be proactive in recognizing this form of infringement and work with industry bodies to curb piracy. Piracy in the music ecosystem has reduced from 76% in 2018 to 73% in 2022 but is still higher than the global average of 30%.

70% of Indian listeners admitted to using stream-ripping websites, with this percentage being slightly higher among the 16-34 age group who preferred the simplicity and ease of use associated with stream ripping.

We create music content and demand for which depends substantially on user preferences that often change in unpredictable ways. There is no formula that will predict whether a given music will be successful.

• Digital / OTT Rights

India is second globally in the digital consumption of services, following China. As per the FICCI EY M&E Report 2024, Audio streamers will double from 185 to over 360 million. Paid subscriber base will grow from 7.5 million to over 15 million.

The market has the potential to grow the number of paid subscribers to 2-2.5x their current volume in three years (15 million) and four to five times in five years (35 to 40 million).

• International Services Take Lead Over Domestic Services

The preferred way to stream music reveals the prevalence of international services over domestic services. 46% of the respondents preferred YouTube for streaming their music, a trend that has continued since 2021, although this year recorded an 11% drop from 2021. This trend is also indicative of the peculiar preference of the Indian respondents to visually engage with music. 20.1% preferred Spotify while 7.9% preferred YouTube music.

• Rise of Streaming Services

Due to the widespread availability of affordable internet and smartphones, streaming services such as Spotify, Apple Music and JioSaavn have gained significant popularity among Indian consumers. These platforms offer a wide selection of songs, curated playlists and personalized recommendations that make music easily accessible to a wider audience. This offers huge opportunities for artists and labels to distribute their music on these platforms, reach huge audiences and generate revenue through streaming fees.

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

• Consumer Trends and Demographics

Consumers today engage with music in more ways than ever. In 2022, Indian consumers spent 24.4 hours listening to music each week compared to a global average of 20.7 hours. Data indicates that the hours spent listening to music can grow further. Consumption through paid audio streaming increased from 3.3 hours in 2021 to 4.3 hours in 2022. According to Nielsen, in 2019, teens and millennials in the United States listened to an average of 32.6 and 29.7 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 growth in consumer engagement. Younger consumers typically are early adopters of new technologies, including music-enabled devices.

Music permeates our culture across age groups, as evidenced by the footprint that music has across social media. According to the Recording Industry Association of America ("RIAA"), as of September 2022, 6 out of the top 10 most followed accounts on Twitter belong to musicians, and according to YouTube, the majority of videos that have achieved more than one billion lifetime views as well as the top 10 most watched videos of all time, belong to musicians. Further, according to MusicWatch Inc., 77% of music consumers across all age groups used social media for music in 2021.

The music industry as a whole is currently undergoing a transformation driven by Gen Z. According to Luminate, Gen Z is investing more time and money on music when compared to the average music listener. They spend 21% more hours and spend 18% more money on music annually compared to the average music listener. Gen Z listeners are also 28% more likely to pay for premium music subscriptions. One in four Gen Z listeners who are not currently paying for a streaming service intend to begin paying for one in the next 6 months.

According to a study conducted by visual capitalist in May 2021, 6 of the top 10 influencers across all social media platforms were musicians. As per the Recording Industry Association of America (RIAA), 9 out of 10 social media users do music related social media activity. This new monetization channel is showing great promise.

• Streaming Still in Early Stages

According to MIDIA, global paid music streaming subscribers totaled 737.9 million at the end of CY2023 and subscription revenue grew 11.2% to touch USD 13.98 billion. Paying subscribers are expected to cross 1 billion by 2027, mainly led by the Global South. Even at a billion, subscription accounts will represent only 12% of the humans on this planet. In terms of smartphone users, current subscriber numbers represent only 10.5%% of the 6.97 billion smartphone users globally, as per the EMR. The fast-growing population of paying subscribers is still only a small fraction of the reported user bases of large, globally scaled digital services such as Meta Platforms, which reported 3.98 billion monthly active users across its services as of December 2023, and YouTube, which has 2.7 billion users. As of February 01, 2024 YouTube reported having 100 million paying subscribers.

The United States, with a population of under 330 million, generated 1.45 trillion on-demand streams (both audio and video) in 2023, according to Luminate. India produced the second highest number of streams at 1.037 trillion streams, of which 463.7 billion were net new streams. It would be no surprise, If India becomes the largest streaming market by volume in a year or two.

The global music market derives 48.9% of revenues from paid subscriptions. In India, we expect to see advertisement-supported and subscription models co-exist. The evolution of Chinese markets over the past 8 years provides a firm basis for our belief that subscriptions will contribute substantial revenues in the near future.

According to IFPI, in 2013, China was ranked 21st in the world with total music industry revenues of approximately USD 82.6 million. The Indian music industry was much larger with revenues of USD 119.1 million at that time. Piracy in China was estimated to be over 95%. By the end of 2022, the Chinese market was ranked 5th in the world and expected to become the 2nd largest by 2031 as per latest MIDIA research predictions.

• Pricing improvements

Internationally streaming subscription prices had remained flat for over a decade as players focused on penetration. Paid streaming is now entering a new phase as players have started raising prices and curtailed free services in markets such as India.

The FICCI–EY Media & Entertainment Report 2024 expects paid subscribers for music streaming in India to cross 35 to 40 million in the next 4 to 5 years.

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

• Device Innovation

On average people access music in more than 6 different ways according to Universal Music Group. As per IFPI, Indian music listeners employ 11.4+ different methods to engage with Music, on average. We believe that the use of multiple devices is expanding listening hours by bringing music into more moments of consumers' lives; the different uses that these devices enable are also broadening consumers' exposure to new and different genres of music. The music that consumers listen to during a commute may be different from the music they listen to while they exercise, and different still from the music they play through a smart speaker while cooking a meal. Smart speakers enable consumers to access music more readily by using their voices. According to PwC, smart speaker ownership is expected to increase at a 38% CAGR from 2018 through 2023, reaching 440 million devices globally in 2023. Smart speakers are fueling further growth in streaming by converting more casual listeners into paid subscribers, drawn in by music as a critical application for these devices. According to Nielsen, 61% of U.S. consumers who use 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 growth of global social video applications such as TikTok, which features 15-second videos often set to music. TikTok has reportedly been downloaded more than 4.36 billion times since its launch in 2017. TikTok has reported 1.5 billion monthly active users at the end of 2023. Such applications have the potential for mass adoption, illustrating the opportunity for additional platforms 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 like Facebook and Instagram too. It illustrates the growing number of pathways through which performing artists and music labels may monetize their content. IMI reports that 19% of time spent on listening to music is on short form video apps, a close second to YouTube which accounts for 22% of such time.

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

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

As of March 31, 2024, the number of employees on the payroll of the Company was 50.

The statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate annexure forming part of this report.

Further, the report and the accounts are being sent to the Members excluding the aforesaid annexure. In terms of Section 136 of the Act, the said annexure is open for inspection and any Member interested in obtaining a copy of the same may write to the Company Secretary.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed with this Report as Annexure - B.

In compliance with the provisions of Section 177(9) of the Companies Act, 2013, the Board of Directors of the Company has framed the Whistle-Blower Policy/Vigil Mechanism Policy for Directors and employees of the Company to report their genuine concerns.

The Whistle Blower Policy is disclosed on the website of Company at https://tips.in/wp-content/uploads/2023/11/Whistle-Blower-PolicyVigil-Mechanism-Policy-Annexure-8.pdf

All contracts / arrangements / transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on arms' length basis and do not have potential conflict with interest of the Company at large.

The contracts / arrangements / transactions with related party which are required to be reported in Form No. AOC-2 in terms of

Section 134(3)(h) read with Section 188 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014 is annexed with this Report as Annexure - C.

The Policy on Related Party Transactions and on dealing with Related Party Transactions as approved by the Board is available on the Company's website and can be accessed at https://tips.in/ wp-content/uploads/2023/11/Policy-on-Related-Party-Transactions-Annexure-9.pdf

Members may refer to Note 34(8) to the Financial Statement which sets out related party disclosures pursuant to Ind AS.

During the year under review, the Company neither accepted any deposits nor there were any 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 of Deposit) Rules, 2014 and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

The particulars of Loans, Guarantees, and Investments have been disclosed in the Financial Statements read together with Notes annexed to and forming part of the Financial Statements.

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

• Conservation of energy

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act 2013, read with rule 8 of the Companies (Accounts) Rules 2014, in respect of conservation of energy have not been provided, considering the nature of activities undertaken 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 year are provided in Notes to the Financial Statement.

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

The Board has constituted a Corporate Social Responsibility ("CSR") Committee in terms of the provisions of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report forming part of this report.

The Board has framed a CSR Policy for the Company, on the recommendations of the CSR Committee, and the policy is available on the website of the Company at www.tips.in.

The Annual Report on CSR activities as required under Companies (Corporate Social Responsibility) Rules 2014, including a brief outline of the Company's CSR Policy, is annexed to this Report as Annexure – D.

In compliance with the Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI circulars issued from time to time, the Business Responsibility and Sustainability Report for the financial year ended March 31, 2024 has been separately furnished in the Annual Report and forms a part of this Annual Report.

Pursuant to Section 92(3) read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return of the Company as on March 31, 2024 is available on the website of the Company at https://tips.in/annual-returns/.

During the financial year, the Company has relocated the place to keep and maintain the books of accounts of the Company to a new location at 402, Everest Classic, Plot no. 390, Linking Road, Khar - West Mumbai 400052, Maharashtra, India w.e.f. February 12, 2024.

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (POSH Act) and Rules made thereunder, the Company has constituted Internal Committees to redress and resolve any complaints arising under the POSH Act. The Company has in place a Sexual Harassment Policy in line with the requirements of the POSH Act.

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

• No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status of the Company and or it's operations in future;

• No proceedings are made or pending under the Insolvency and Bankruptcy Code, 2016, as amended and there is no instance of one-time settlement with any Bank or Financial Institution;

• There has been no change in the nature of business of the Company;

• The Company has no holding company or subsidiary company, hence the provisions of Section 197(14) of the Act relating to receipt of remuneration or commission by the Whole-time Director from holding company or subsidiary company of the Company are not applicable to the Company.

Statements in this Board's Report and Management Discussion and Analysis describing the Company's objectives, projections, estimates, expectations or predictions may be forward-looking within the meaning of applicable securities, laws, and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company's operations include a change in government regulations, tax laws, economic and political developments within and outside the country and such other factors.

The Directors wish to acknowledge and place on record their sincere appreciation for the assistance and co-operation received from all the members, regulatory authorities, financial institutions, bankers, lenders, vendors and other business associates.

The Directors also recognize and appreciate all the employees for their commitment, commendable efforts, teamwork, professionalism and continued contribution to the growth of the Company.