BOARD'S REPORT & MANAGEMENT DISCUSSION AND ANALYSIS

To,

The Members,

Tips Industries Limited

Your Directors are pleased to present the Nineteenth Annual Report along with the Audited Financial Statements for the financial year ended March 31, 2015. The Management Discussion and Analysis is also included in this Report.

OVERVIEW OF THE ECONOMY:

The Global economy continued with its challenge of building strong growth. According to the International Monetary Fund (IMF), the world global output for the year 2014 grew by a modest 3.4 per cent, same as 2013. Complex factors like the geo-political situation in Ukraine and the Middle East and uncertainty in Greece impacted growth. Another key event in the year was the dramatic fall in international oil prices, particularly since September 2014. This had a positive impact, driving consumption and reducing prices.

In India, the year 2014 was a year that will be remembered as a year of structural reforms. The new government initiated several reforms in core sectors like banking, insurance, infrastructure and defence. These had a positive cascading impact across sectors and industries. Investor and consumer confidence revived remarkably during the year. Moreover, with the new methodology for measuring GDP growth, the Indian GDP growth was revised to 7.3 per cent for the year 2014-15 compared to 6.9 per cent in the year 2013-14. Inflation remained at benign levels, falling to around 5 per cent toward the latter half of the year due to falling oil prices and below 5 per cent in April 2015.

THE INDIAN MEDIA AND ENTERTAINMENT INDUSTRY

The overall sentiments in the Indian M&E industry reflected the renewed positivity and optimism of the Indian economy. There were many positive developments for the M&E industry during the year. Digitisation continues with its rapid strides penetrating deeper into rural areas, helped by proliferation of low-cost smart devices and falling internet costs. One of the highlights of the year was the announcement of DIGITAL INDIA initiative by the government. A programme aimed at digitally empowering the society and knowledge economy.

The M&E industry grew by 11.7 per cent in 2014 to US$ 1,026 billion, as per report by FICCI-Frames 2015. Digital advertising continued its relentless march, growing by 44.5 per cent in 2014. This is hardly surprising, considering that in 2014, India topped as the world's fastest growing smartphone market. By the end of 2014, India already had around 116 million internet enabled smartphones, and by 2019, this is expected to rise to 435 million.

FILMS :

The year 2014 was a mixed year for the Indian film industry. While category A films continued to perform well at the box-office, other films did neither have compelling content nor the pull of a top-league actor to attract audiences. Content continues to remain central to the success of films, as audiences have become more discerning and selective, given the rising costs of tickets as well as availability of other entertainment platforms.

The main source of revenue remains domestic theatres, contributing as much as 74 per cent. During the year, domestic theatrical revenues suffered due to lack of content-oriented films. The gross box office collection of top 10 Hindi films in 2014 grew by 2.4 per cent over 2013. However, box office collection for the next 10 films dropped by 3 per cent.

There was a marked difference in the Cable & Satellite (C&S) rights acquisition strategy by broadcasters. Barring category A films, prices for C&S rights declined overall during the year.

The year 2014 saw a record number of regional films being produced. 287 Tamil movies were released during the year, followed by 255 Telugu movies in 2014. Compared to these, the number of Hindi movies released during the year was 216. The Marathi and Punjabi movies also had a significant year, with the animated Punjabi movie Chaar Saahibzaade generating INR 700 million at the box office.

MUSIC:

Music continues to remain a small but very critical stream for the M&E industry. The music industry was worth INR 9.8 billion in 2014, increasing by 2.3 per cent. It is expected to cross INR 10 billion in the year 2015, as per FICCI-Frames 2015 report.

The year 2014 saw many production houses raising the prices for the music rights of their films. During the year, music labels continued to acquire music rights much before the theatrical release of films. Digitatisation continues to be the key driver in the music space. Digital channels already account for more than 50 per cent of the overall size of the music industry in the country, while physical sales have fallen by around 30-35 per cent on a year-to-year basis.

The continued popularity of music streaming across digital marketplaces like iTunes and Google Play, and from streaming platforms like Saavn and Gaana, continue to drive digital consumption of music.

For the music industry, the long awaited and highly anticipated auction of Phase III of radio licenses also saw revival of proceedings. The first auctions are expected to take place in the latter half of 2015, with the government giving its go-ahead for partial auctions for 135 channels in 69 cities.

BUSINESS OVERVIEW :

With an unwavering focus on providing wholesome family entertainment, TIPS has emerged as one of the most respected and renowned companies in the Indian M&E industry. From humble beginning in 1975, the vision and venture of the founders - Mr. Kumar Taurani and Mr. Ramesh Taurani, has seem TIPS make rapid progress and evolve into a professional and corporate house with a presence across music, film production and distribution.

MUSIC continues to remain the forte of TIPS. The Company today boasts of a huge library with a collection of over 25000 songs across all genres and major languages. The music business of the Company continues to deliver strong performance. Powered by the growing penetration of digitisation, the music business of the Company holds massive potential for future growth as new technology, new consumption platforms and new delivery formats evolve, thus unlocking more value from the TIPS music library. The Phase III auction for radio licences slated to commence in 2015 are expected to open up yet more avenues for monetization of the Company's digital assets.

TIPS is also known for production of family entertainment films. TIPS films are always family entertainers providing clean, light-hearted and enjoyable experience for the family. Over the years, the Company has delivered some top box office hits like RACE, KISMAT CONNECTION, RACE2, AJAB PREM KI GHAZAB KAHANI, RAJA HINDUSTANI etc. TIPS is also a leading producer of Punjabi films with an enviable record an all time hit in Punjabi cinema.

PERFORMANCE REVIEW:

During the year, Tips came up with its production, a comedy film "Entertainment" on August 8, 2014 directed by writers-turned-directors Sajid-Farhad, starring Akshay Kumar, Tamanna Bhatia, Paresh Rawal, Johny Lever, Sonu Sood, Krushna Abhishek and others. The film was appreciated for screenplay, cinematography, dialogues and the actor's portrayal of their respective characters.

The Company's music business continues to smartly monetize the impressive music library. The Company was amongst the first in the industry to understand the huge implications of the digital revolution, and started digitising its entire library. Today, the Company has a digital library of over 25000 songs, which are available for streaming and download across leading industry digital marketplaces like iTunes and Google Play, as well as popular streaming platforms like Saavn and Gaana. The music revenue for the year 2014-15 was Rs. 3221.78 lacs as compared to Rs.  3052.19 lacs in the previous year.

The Company earned total revenue including other income of Rs.  10380.54 lacs as compare to the previous year of Rs. 10551.27 lacs. The net profit after tax for the year stood at Rs.  269.61 lacs as compared to the net loss of Rs.  1623.91 lacs in the previous year.

Your Directors recommend dividend of @ 10% (ten per cent) i.e. Rs. 1.00/- (one rupee) per share on 15358640 fully paid-up Equity Shares of Rs.  10/- each of the Company for the year ended March 31, 2015. The proposed dividend, if approved, at the Annual General Meeting, will absorb a sum of Rs.  153.59 lacs (Previous Year being Rs.  153.59 lacs) and dividend Tax of Rs. 31.27 lacs (Previous Year being Rs.  26.10 lacs).

TRANSFER TO RESERVES:

The Company transferred a sum of Rs.  20 lacs to the General • Reserve and an amount of Rs.  2324.88 lacs is retained in the Profit and Loss Account

SHARE CAPITAL:

The paid up Equity Share Capital as at March 31, 2015 stood at Rs.  1535.86 lacs. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2015, none of the Directors of the Company hold 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:

In compliance with the provisions of Clause 49 of the Listing Agreement, a separate report on Corporate Governance along with a certificate from the Auditors on its compliance, forms part of this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Cessation from Directorship:

Due to pre-occupied with her professional commitments, Ms. Sunita Menon, Independent Director of the Company has resigned from the post of directorship with effect from May 7, 2014.

The Board takes this opportunity to place on record its appreciation for the support and invaluable contribution made by Ms. Sunita Menon during her tenure as Independent Director of the Company.

Director Retiring by Rotation:

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

• Re - appointment of Managing Directors:

The Nomination & Remuneration Committee and the Board have approved the re-appointment of Mr. Kumar Taurani as Chairman & Managing Directors and Mr. Ramesh Taurani as Managing Director for period of 3 years w.e.f July 1, 2015 to May 31, 2018 . Approval of the shareholders is sought for the same in the ensuing Annual General Meeting.

• Appointment of Independent Directors and declaration of independence:

In compliance with the provisions of Sections 149, 152, Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Appointment and Qualification of Directors) Rules, 2014, Mr. Amitabh Mundhra, Mrs. Radhika Pereira and Mr. Vijay Agarwal were appointed as Independent Directors on the Board of Directors of the Company at the 18th AGM of the Company held on August 8, 2014, to hold office up to five consecutive years.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013.

• Appointment of Key Managerial Personnel:

Mr. Ishwar T. Gursahani, V.P - Legal & Corporate Affairs of the Company has been appointed as a Chief Financial Officer of the Company w.e.f. June 27, 2014.

Pursuant to the provisions of Section 203 of the Companies Act, 2013, the appointment of Mr. Kumar Taurani and Mr. Ramesh Taurani as Chief Executive Officer, Mr. Ishwar T. Gursahani as a Chief Financial Officer and Ms. Bijal Patel as a Company Secretary, were formalized as the Key Managerial Personnel of the Company.

BOARD EVALUATION:

Pursuant to the provisions of Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out performance evaluation. The manner in which the evaluation carried out has been explained in Corporate Governance Report.

In terms of Section 134(5) of the Companies Act, 2013, in relation to the audited financial statements of the Company for the year ended March 31, 2015, the Board of Directors hereby confirms that:

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) such accounting policies have been selected and applied consistently and the Directors 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, 2015 and of the profit/loss of the Company for that year;

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

(d) the annual accounts of the Company have been prepared on a going concern basis;

(e) internal financial controls have been laid down to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DETAILS OF BOARD AND COMMITTEES MEETING:

• Board Meetings:

The Board of Directors met five times during the financial year ended March 31, 2015 on May 9, 2014, June 27, 2014, August 8, 2014, November 12, 2014 and February 5, 2015. Details of the Board meetings and attendance of the directors are provided in the Corporate Governance Report, which forms part of this Annual Report.

• Committees of the Board:

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

RELATED PARTY TRANSCATIONS:

All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length basis. Thus Disclosure in form AOC-2 is not required.

Further, during the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions. All related party transactions are placed before the Audit Committee and Board for approval.

The details of the related party transactions as required under Accounting Standard - 18 are set out in note to the financial statements forming part of this Annual Report.

The Policy on Related Party Transactions as approved by the Board has been uploaded on the website of the Company. The web-link of the same has been provided in the Corporate Governance Report.

AUDITORS :

• Statutory Auditors:

M/s. SSPA & Associates, Chartered Accountants, (Firm Registration No: 131069W) who are Statutory Auditors of the Company hold office up to the forthcoming Annual General Meeting and are recommended for re-appointment to audit the accounts of the Company for the financial year 2015-16.

The consent of the Auditors along with certificate under Section 139 of the Companies Act, 2013 has been obtained from the auditors to the effect that their appointment, if made, shall be in accordance with the prescribed conditions and that they are eligible to hold the office of Auditors of the Company.

• Secretarial Auditors:

Provisions of Section 204 read with rules made thereunder, M/s. N.L. Bhatia & Associates, Practicing Company Secretaries (C.P No. 422) had been appointed to undertake Secretarial Audit of the Company. The report of the Secretarial Auditor is annexed herewith as Annexure I and forms part of this Report.

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

• Internal Auditors:

Pursuant to provisions of Section 138 read with read with rules made thereunder, the Board has appointed M/s. Maheshwari & Co., Chartered Accountants (Firm Registration No: 105834W), as an Internal Auditors of the Company to check the internal controls and functioning of the activities and recommend ways of improvement. The Internal Audit is carried out quarterly basis, the report is placed in the Audit Committee Meeting and the Board Meeting 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. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

INTERNAL CONTROL SYSTEMS

The Company has adequate internal controls systems in place commensurate with the nature of the Company's business, size and complexity of its operations. All processes are well-defined and properly documented. All transactions are properly recorded and all it is ensured that all expenses incurred are within defined budgetary allotments. The Company ensures all rules, laws and statutes are strictly followed and complied with. The Company regularly undertakes internal audit under the supervision of the Internal Audit committee. Any discrepancies or inconsistencies found during such internal audits are immediately corrected.

RISK MANAGEMENT:

In accordance with Clause 49 of the Listing Agreement, the Board has approved the Risk Assessment and Minimization Policy to avoid events, situations or circumstances which may lead to negative consequences on the Company's businesses,

and define a structured approach to manage uncertainty and to make use of these in their decision making pertaining to all business divisions and corporate functions. Key business risks and their mitigation are considered in the business plans and in periodic management reviews.

Some of the risks and threats that the company is exposed to are-

• Piracy Risk:

Piracy has been one of the biggest problems for the M&E industry globally. The industry has been working relentlessly to reduce this key threat. With the advent of internet and digitisation, this threat continues to be a major source of revenue loss for all the stakeholders in the industry.

The industry has been co-operating with the government to clamp down on this threat. During the year 2014, there was a 10 per cent reduction in piracy cases registered in India. The industry is increasingly leveraging latest advancement in technology to cope with this issue. An example of this is the use of Cube technology to catch film exhibitors and syndicates using pirated versions of films.

• Production Risk:

Production risks can be defined as the risk getting production extended the projected date or the risk of over spending during production. It requires large outlays of money that cannot be recovered if the project fails at any stage. The planned release may have to be delayed beyond schedule. Such delay in production may throw the whole production schedule out of gear and escalate the cost of the movie.

• Spiraling Costs:

The two largest cost components of a film are the fees of stars and the cost of promotion. The A list stars continue to command exorbitantly high fees, that can sometimes go as high as 40 per cent of the total budget of the film. Advertising and Promotions account for 15-20 per cent of the total film budget. With the theatrical revenue window narrowing down to the first weekend, most producers are forced to make this enormous marketing spend, as it has a direct impact on the box office collections of the film.

Infrastructure and Talent Development:

While India is the largest producer in terms of films produced, it lacks a long way behind in both infrastructure and talent development. For example, compared to 125 screens per million people in the USA, India still has only 7 screens per million people. In terms of other infrastructure too, India lags behind considerably. There are only four film cities in the country, indicating a huge gap. Opening more institutions like Film and Television Institute of India will go a long way in augmenting India's talent pool for the industry.

The opportunities observed are based on the trends noticed in past couple of years, which continues to be relevant. Some of the key ones are as follows:

• Digitisation:

Digitisation has impacted all aspects of the M&E industry -right from production to distribution to exhibition to sales of tickets. The next wave of growth in the overall M&E industry is expected to be driven by increased digitisation. Over the year, there have been far-reaching changes in the form of availability of low-cost smart devices and dropping data plans. In spite of this, India still has a low internet

penetration of around 19 per cent, indicating a huge growth potential. The advent of 4G services, the increasing adoption of 3G in urban areas and 2G in rural areas are all strong signals of the immense growth potential that will be unlocked by digitisation.

• Regional Markets:

The year 2014 saw a huge surge in production and release of regional films. From Tamil to Telugu and from Marathi to Punjabi, all the regional film markets performed excellently. The share of theatrical revenues from regional films has been rising from around 12-13% in 2013 to almost 20-21% in 2014, particularly in Tier 2 and Tier 3 cities, as per industry data.

• Overseas Theatricals:

The growing popularity of Bollywood films in the overseas markets is another growing opportunity. Over the year, new markets like China and Europe have seen a huge surge in interest in Hindi films. However, the share of overseas theatricals is still around 10-25 per cent, much lower than the almost 60 per cent for Hollywood films. As more and more new markets like Lebanon, Burma and Iraq continue to be mesmerised by Hindi films, the overseas theatrical avenue is poised for a big leap.

OUTLOOK:

India is back on the fast-track of economic growth. Both the International Monetary Fund (IMF) and the World Bank have forecast the country to grow at 7.5 per cent for the year 2015 and 7.8 per cent in the year 2016. The long-term structural reforms taken by the government will continue to drive further growth in the key sectors. Oil prices are expected to remain low in the short-term, easing pressure on inflation as well as prices. Investor confidence and sentiments are likely to remain positive.

The India M&E industry is also expected to continue with its growth trajectory. It is expected to grow at a Compounded Annual Growth Rate (CAGR) of 13.9 per cent from 2014-19, and reach INR 1,964 billion in 2019. The highest growth is expected to happen in the digital advertising space, which is expected to grow at a CAGR of 30.2 per cent from 2014-19, while the film and music segments are expected to grow at CAGR of 10 per cent 14 per cent in the same period.

AUDITORS' REPORT:

In the opinion of the directors, the notes to financial statements are self explanatory and adequately explain the matters, which are dealt within the Auditors' Report. In case of qualified opinion of the Auditors with respect to non-recognition of differed tax explained in note no. 33 of the notes to financial statements.

TIPS firmly believes in and has consistently practiced progressive HR values. The Company inculcates the values of transparency, professionalism and accountability in its operations to generate long-term benefits for its shareholders, customers, employees and society alike. At TIPS, there is consistent emphasis on each individual's sense of responsibility, while simultaneously as part of a team. This results in our people's ability to work in perfect harmony despite coming from different disciplines. As of 31 March 2015, the number of employees on our payroll was 59.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The information required under Section 197 of the Companies Act, 201 3 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is provided in Annexure  forming part of this report.

WHISTLE BLOWER POLICY /VIGIL MECHANISM POLICY:

Pursuant to provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors in its meeting held on November 12, 2014 has adopted a "Whistle Blower Policy/ Vigil Mechanism Policy" for directors and employees of the Company.

Details of the policy are provided in the Corporate Governance Report, which forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Pursuant to provision of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board has approved CSR Policy based on the recommendation of the CSR Committee. The Company has initiated activities in accordance with the said Policy, the details of which have been prescribed in Annexure III.

EXTRACT OF ANNUAL RETURN

Extract of the Annual Return in form MGT-9 pursuant to Section 92(3) of the Companies Act, 2013 for the financial year ended March 31, 2015 is provided in Annexure IV forming part of this report

DEPOSITS:

During the year 2013-14, The Company had accepted the deposits from public and members of the Company within the meaning of Section 58A of the Companies Act, 1956 read with rules made there under. The outstanding deposits as on March 31, 2014 were Rs. 46 lacs and the same has been repaid on or before March 31, 2015 in accordance with Section 74 of the Companies Act, 2013.

During the year 2014-15, the Company has accepted the deposits only from directors of the Company which are exempt as per the provision of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. The declarations have been obtained from the directors in terms of Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014. Details of the deposits accepted from directors are provided in notes to financial statement.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY:

Details of Loans, Guarantees and Investments are provided in the notes to Financial Statement.

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 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, Company has not absorbed or imported any technologies.

• Foreign exchange earnings & outgoings:

Details of foreign exchange earnings & outgoings of the company made during the year are provided in notes to financial Statement.

OTHER DISCLOSURE:

Your 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 material changes and commitments which could affect the Company's financial position have occurred between the end of the financial year of the Company and date of this report.

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

• No compliant received from any employee, pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and rules made thereunder.

CAUTIONARY STATEMENT:

Statements in this Board's Report and Management Discussion and Analysis describing the Company's objectives, 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 change in government regulations, tax laws, economic & political developments within and outside the country and such other factors.

ACKNOWLEDGEMENTS AND APPRECIATION:

Your Directors take this opportunity to express the sincere appreciation for the incredible support and overwhelming co­operation from bank, financial institutions, customers, suppliers and all other business associates of the Company.

Your Directors give their warm gratitude to the shareholders for their faith in the Company. The directors also sincerely appreciate the professionalism and dedication displayed by the employees of the Company.

For and on behalf of the Board of Directors

Sd/- Kumar S. Taurani

DIN: 00555831

Chairman and Managing Director

Place: Mumbai

Date: May 8, 2015