Net Pix Shorts Digital Media Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS REPORT

INTRODUCTION:

Our business was originally being run as a proprietorship named M/s. First Step Entertainment Capital. Further, our Company was incorporated on June 2019, as a public limited company under the name Net Pix Shorts Digital Media Limited under the provisions of the Companies Act, 2013 with the Registrar of Companies, Mumbai with a vision to corporatize the business. The business takeover of M/s. First Step Entertainment Capital (Proprietor Mr. Danish Zakaria Aghadi) was affected along with the incorporation of our Company such that our Promoter Mr. Danish Zakaria Aghadi was allotted 16,00,000 equity shares in lieu of his proprietor capital through the Companys first Memorandum.

Our Company is a Technology based entertainment company operating in the niche segment of online short film contents and publishing the same on various digital online portals and OTT platforms. The online digital media industry is a continuously evolving technological industry and we endeavour to exploit these technological advances to reach audiences in India and globally with entertaining, socially relevant and heart-felt content.

GLOBAL INDUSTRY OVERVIEW

Global Media and Entertainment industry

The global Media and Entertainment market is valued at US$3,120.21 billion in 2026 and is projected to reach US$5,637.76 billion by 2035, at a CAGR of 6.79%. The expansion is being driven by the movement of audiences onto digital platforms, with more than 5.3 billion internet users consuming digital content daily in 2025. Video is the leading format in this shift, making up 82% of total internet traffic, while streaming platforms account for 61% of all digital entertainment consumption. Alongside video, social media has become a major channel of engagement, recording over 4.9 trillion content interactions during the year.

By segment, video and animation content is the largest at 38% of consumption, followed by social media at 27%. Regionally, Asia Pacific leads with 41% of global media consumption, ahead of North America at 29%, Europe at 23% and the Middle East and Africa at 7%. Distribution, however, remains concentrated, with the top five media corporations controlling 56% of global premium content distribution and 48% of platforms operating in streaming services.

Technology is steadily reshaping how content is produced and delivered. Around 71% of platforms have integrated AI driven recommendations, 68% have adopted AI based content creation tools and 63% have expanded their short form video offerings. These gains are balanced against user side pressures, as 42% of users report content overload and 36% report subscription fatigue.

Global Textile and Apparel Market

The global textile market was valued at US$1,007.9 billion in 2025 and is projected to grow from US$1,007.9 billion in 2025 and is projected to grow from US$1,065.45 billion in 2026 to US$ 1,955.50 billion by 2034, at a CAGR of 7.11%. Textile products comprise flexible materials made from natural and synthetic fibres, yarns and fabrics, woven or knitted into various forms and used across clothing, home furnishings, medical and other applications.

In regional terms, Asia Pacific accounted for the largest share of the market at 44.17% in 2025. By textile form, synthetic fibres held the leading position with a share of 68.05% in 2026, while residential applications accounted for 64.03% of end use demand in the same year.

Sustainability has emerged as the defining trend shaping demand in this market. Consumers are increasingly favouring fabrics with a lower environmental impact, such as organic cotton, biodegradable fibres and recycled materials, prompting manufacturers and brands to invest in research and development of bio fabricated and circular economy driven fabrics. This shift is opening growth avenues across fashion apparel, home textiles and sportswear. Alongside sustainability, innovation in smart textiles, wearable and antibacterial fabrics, 3D printing and automation continues to support the expansion of the industry.

INDIAN INDUSTRY OVERVIEW

Media and Entertainment industry

The Indian Media and Entertainment industry rests on two broad pillars. The traditional segment comprises television, print, radio, filmed entertainment and out of home media, while the digital segment covers OTT video, online gaming, digital audio, animation and VFX, and creator led content. Taken together, the industry grew 9.1% year on year to Rs 2,78,500 crore in 2025 and is projected to reach Rs 2,86,500 crore in 2026 and Rs 3,30,000 crore by 2028, at a CAGR of approximately 5.8%.

It is the digital segment that is driving the expansion. Digital media reached US$ 13.13 billion in 2025 and is expected to account for around 38% of total advertising spend, placing it on par with television. Within this segment, OTT platform revenues are projected to grow at a CAGR of 14.9% to Rs 35,061 crore by FY28, the highest among the top fifteen global markets, while online gaming and sports is expected to grow at a CAGR of 19.2% to Rs 39,583 crore by FY28 and music at a CAGR of 22.0% to Rs 10,899 crore by FY28. Animation and VFX, which supports content production across both pillars, is expected to grow from Rs 10,300 crore in 2024 to Rs 14,700 crore by 2027.

Irrespective of the segment, participants in the industry operate across a common three stage chain. Content is first created by production houses, independent studios and digital creators. It is then aggregated on OTT platforms, television channels and social media channels, which curate and package it for their audiences. It finally reaches viewers through broadband, DTH, smart televisions and mobile phones. The scale of the first stage is substantial, with India producing close to 200,000 hours of television, film and OTT content every year and releasing more than 1,900 films in 2025. Cost remains a key advantage at this stage, as animation and VFX work in India costs 40% to 60% less than in Western countries, supported by approximately 2,60,000 skilled professionals.

Content so distributed is monetised through two principal revenue streams, advertising and subscription. The advertising market is projected to grow 9.7% in 2026 to Rs 2,01,891 crore, placing India among the ten largest advertising markets globally. Subscription revenue is expected to rise alongside it, with video OTT households expanding from 143 million to approximately 191 million and adding around Rs 8,500 crore in digital subscription revenue.

Underpinning both the distribution stage and these revenue streams is the reach of the countrys infrastructure and the viewing habits it has enabled. The broadband subscriber base reached 106.59 crore as at the end of March 2026, and connected smart televisions are expected to number 40 to 50 million, with about 30% of viewing on such screens comprising gaming, social media and short form video. This shift towards digital consumption has in turn created a distinct creator led layer within the industry, with 2 to 2.5 million active digital creators influencing US$350 billion of annual consumer spending, projected to exceed US$1 trillion by 2030, while 600 to 650 million Indians are expected to consume short form video for 55 to 60 minutes a day.

Textile and Apparel Industry

The Indian textiles sector is among the oldest and most diverse industries in the country, spanning traditional handwoven clusters to capital intensive mills and supported by a broad fibre base covering cotton, jute, silk and wool as well as polyester, viscose and acrylic. The decentralised power loom, hosiery and knitting segment remains its largest component, which is the segment most directly relevant to readymade garments and hosiery goods. The industry employs over 45 million people and produces approximately 22,000 million pieces of garments annually. It contributes about 2% of Indias GDP and around 11% of manufacturing gross value added as at February 2026, and this contribution to GDP is expected to double to approximately 5% by the end of the decade.

India is the worlds largest producer of cotton, with production in the 2025-26 season estimated at 292.15 lakh bales of 170 kg each, giving domestic garment manufacturers a secure raw material base. On the trade side, total exports of textiles and apparel including handicrafts stood at US$35.52 billion in FY26 against imports of US$8.49 billion. Ready Made Garments formed the largest share of exports at US$15.77 billion, or 44%.

Within the domestic market, home textiles are projected to grow from US$11.18 billion in 2025 to US$16.76 billion by 2031, at a CAGR of 7.08%, offering an additional avenue alongside wearing apparel. Demand across the apparel segment is being supported by casualwear and athleisure, social media trends, rising disposable incomes and the expansion of e-commerce. The sector continues to receive policy support through the Scheme for Integrated Textile Parks, the Technology Upgradation Fund Scheme and the Mega Integrated Textile Region and Apparel Park scheme. Sustainability and innovation are emerging as defining themes over this period, as companies adopt eco friendly processes and recyclable fibres in line with global trends, while integrated textile hubs encourage value addition and modernisation across the value chain.

OPPORTUNITIES AND THREATS:

Opportunities

- Expanding audience base:

The continued growth in digital connectivity is widening the pool of viewers available to digital content producers. Indias broadband subscriber base stood at 106.59 crore as at the end of March 2026, and reach is expected to deepen further as the next phase of 5G expansion progresses, following TRAIs recommendations of February 2026 on the valuation, reserve price and auction framework for spectrum. Every addition to this connected base directly enlarges the addressable market for content distributed through OTT platforms and social media channels.

- Government policy support:

The sector is receiving policy support on two fronts. The FDI limit has been raised from 74% to 100%, easing access to foreign capital and opening the way for international collaboration in content production. On the skilling side, the Union Budget FY27 proposes AVGC Content Creator Labs in 15,000 schools and 500 colleges with an investment of Rs 250 crore, which is expected to build a wider base of trained creative professionals in the coming years.

- Growing avenues for monetisation:

Advertising funded viewing has become the principal route through which the digital audience is monetised, as it removes the price barrier for viewers while allowing platforms to build scale. The AVoD market grew from Rs 8,549 crore in 2020 to Rs 26,975 crore in 2024 and is projected to reach Rs 53,784 crore by 2030, creating a steadily widening revenue pool for content made for digital distribution.

- Untapped value and production capability:

The entertainment sector is estimated to hold Rs 50,724 crore of value that remains unrealised and can be unlocked by FY30 through international collaboration, adoption of technology and new approaches to content creation. The Animation and VFX sector is growing in parallel from US1.3billioninFY23toUS1.3billioninFY23toUS 2.2 billion by FY26, giving content creators access to higher production quality at competitive cost.

The Companys entry into apparel and textiles opens a further set of opportunities alongside those in its media operations.

- Online sales channels in apparel:

Digital distribution is reshaping how textile and apparel products reach buyers, allowing manufacturers to move beyond their traditional geographies and sell to global buyers and distributors directly. This transformation also permits smaller manufacturers to diversify their sales channels and attract both buyers and suppliers. For the Company, this route draws directly on the digital reach and audience engagement it has built in its media business.

- Policy support and raw material security in textiles:

The textile sector permits 100% FDI under the automatic route, and the Union Budget 2026-27 allocated Rs 5,279.01 crore to the Ministry of Textiles while continuing the five-year Cotton Mission aimed at improving cotton productivity and strengthening MSME driven competitiveness. Domestic cotton production is projected to reach around 7.2 million tonnes, or approximately 43 million bales, by 2030, securing the raw material base for garment manufacturers.

- Cost competitiveness and market access:

India holds a comparative advantage in skilled manpower and cost of production relative to other major textile producing countries, supported by the ready availability of cotton, wool, silk and jute. Market access is widening in parallel, with the Union Minister of Commerce and Industry, Mr. Piyush Goyal, having stated that the India–United Kingdom Free Trade Agreement opens transformative opportunities for the textiles, leather and footwear sectors, enhancing their competitiveness and visibility in the UK market.

Threats:

- Content piracy and intellectual property infringement:

Unauthorised use and redistribution of content remains the most direct threat to revenue in the sector. Approximately 27% of global digital content is affected by piracy, and around 35% of media companies have reported unauthorised redistribution of their content across streaming and social platforms. Legal exposure is also rising, with the U.S. Copyright Office reporting a 15% increase in intellectual property infringement cases in media and entertainment during 2023.

- Regulatory and data protection compliance:

Content laws differ across jurisdictions, creating compliance burdens for producers distributing across markets. Regulatory compliance challenges affected 32% of international content providers, while about 28% of media companies faced difficulties in complying with data privacy regulations such as GDPR in 2024, which in turn limits the scope for personalised content delivery. Data security concerns have also affected 29% of OTT users amid rising cyber threats.

- Dependence on platforms and algorithms:

Content creators distributing through third party platforms have limited control over how their content is surfaced and monetised. Around 41% of content creators reported difficulties in monetisation arising from algorithm dependency and platform restrictions, while content moderation requirements have raised operational complexity by 33% across social media platforms.

- Subscription fatigue and content overload:

Rising numbers of platforms and overlapping content have begun to strain consumer spending and attention. Approximately 42% of users reported difficulty in managing multiple streaming subscriptions, 36% reduced their spending because of overlapping content availability and 33% of households cancelled at least one streaming service on account of pricing complexity and content redundancy. Advertising overload has separately affected 29% of social media users, reducing engagement time.

The apparel and textile business carries a distinct set of risks arising from its dependence on physical raw materials.

- Volatility in cotton prices: Cotton is among the most essential raw materials used in fabric production, and instability in its price affects the entire chain. When cotton prices rise, manufacturers face higher production costs, which are either passed on through higher prices for finished goods or absorbed as reduced margins. Smaller manufacturers are particularly exposed to this pressure, and it remains a recognised constraint on growth in the textile market.

SEGMENT–WISE OR PRODUCT-WISE PERFORMANCE:

Our Company is a Technology based entertainment company operating in the niche segment of online short film contents and publishing the same on various digital online portals and OTT platforms. The online digital media industry is a continuously evolving technological industry and we endeavour to exploit these technological advances to reach audiences in India and globally with entertaining, socially relevant and heart-felt content.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

RISKS AND CONCERNS

The Companys business is subject to the following principal risks:

- Concentration of revenue: The Company operates in a single segment and its total income for the year was Rs 63.57 Lakhs. The revenue base is not diversified and is sensitive to the loss of any single counterparty.

- Dependence on third party platforms: Content is monetised through platforms over which the Company has no control. Changes in their algorithms, content policies or payout terms can affect monetisation without notice.

- Content piracy: Unauthorised copying and redistribution of digital content remains a persistent feature of the industry and enforcement across jurisdictions is slow and expensive.

- Regulatory and data protection compliance: The Company is subject to content regulation and to data protection obligations under the Digital Personal Data Protection Act, 2023 and the rules framed thereunder, which continue to evolve.

- Transition risk: Control of the Company changed during the year and an alteration of the object clause is placed before the members at the ensuing Annual General Meeting. There can be no assurance as to the timing on which any new activity will commence or the revenue it will generate.

- Risks in the proposed line of activity: The activities contemplated are in a field in which the Company has no operating history, are more working capital intensive than the existing business, and are exposed to volatility in cotton and other input prices, to competition from organised players and imports, and to inventory obsolescence.

RISK MANAGEMENT

Your Company reviews and streamlines its operational and business risks on a continuous basis.. Risks identified by the management are placed before the Board of Directors, and the internal audit function reports to the Audit Committee and the Board on the adequacy of controls in the areas within its scope. The Audit Committee reviews the internal audit findings and monitors the implementation of corrective action.

During the year under review the Company reduced its long term borrowings substantially and closed the year with a stronger liquidity position, which the management regards as reducing its exposure to refinancing risk. Should the activities contemplated by the proposed alteration of objects be commenced, the risk framework will be extended to cover procurement, inventory, credit and supplier concentration.

GOVERNMENT INITIATIVES

The digital content sector continues to receive support through liberalisation of foreign investment and through skilling initiatives directed at the animation, visual effects, gaming and comics segment.

In the textile and apparel sector, 100% foreign direct investment is permitted under the automatic route. The Union Budget 2026-27 allocated Rs 5,279.01 crore to the Ministry of Textiles and announced an Integrated Programme for the Textile Sector comprising the National Fibre Scheme, the Textile Expansion and Employment Scheme, the National Handloom and Handicraft Scheme, the Tex-Eco Initiative and Samarth 2.0. The Budget also continues support for the five year Cotton Mission announced in December 2025, directed at improving cotton productivity and reducing import dependence. The Production Linked Incentive Scheme for textiles, the PM Mega Integrated Textile Region and Apparel Parks Scheme and the Technology Upgradation Fund Scheme continue to support capacity creation. On the export side, the RoSCTL and RoDTEP Schemes have been extended beyond 31st March, 2026, and the India-United Kingdom Comprehensive Economic and Trade Agreement provides Indian textile and clothing products duty free access to the United Kingdom market.

OUTLOOK

The Company closed the year under review with a return to profitability and with a materially stronger balance sheet following the repayment of the greater part of its long term borrowings. The digital content industry continues to expand, supported by growth in broadband connectivity and in the consumption of short form video.

Subject to the approval of the members to the resolutions set out in the Notice convening the ensuing Annual General Meeting and to the receipt of all consequential statutory approvals, the Company proposes to direct its resources towards the distribution and trading of garments, hosiery and allied textile and retail products. The Indian textile and apparel sector offers a substantial addressable market supported by a domestic raw material base and sustained policy support. The commencement, scale and timing of any such activity remain subject to the said approvals, and the Company will report on the progress of these proposals in subsequent periods.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Revenue from operations for the year stood at Rs 56.67 Lakhs as against Rs 47.15 Lakhs in the previous year and other income at Rs 6.90 Lakhs as against Rs 0.16 Lakhs. Total income accordingly rose to Rs 63.57 Lakhs from Rs 47.31 Lakhs, and total expenses to Rs 59.46 Lakhs from Rs 54.40 Lakhs. The Company recorded a profit after tax of Rs 0.39 Lakhs as against a loss of Rs 3.77 Lakhs. Earnings per share, basic and diluted, stood at Rs 0.00 for the current as well as for previous year..

The principal movements in the balance sheet during the year were as under:

Particulars	31.03.2026	31.03.2025	Movement
Shareholders funds	586.65	586.26	0.39
Long term borrowings	96.13	796.55	(700.42)
Current liabilities	1.18	38.69	(37.51)
Inventories	490.16	809.04	(318.88)
Cash and cash equivalents	153.33	5.77	147.56
Other non-current assets	–	563.85	(563.85)
Total assets	683.96	1,421.49	(737.53)

Long term borrowings were reduced by Rs 700.42 Lakhs during the year, funded principally from the realization of other non-current assets of Rs 563.85 Lakhs and the reduction of inventories by Rs 318.88 Lakhs. Total assets accordingly reduced from Rs 1,421.49 Lakhs to Rs 683.96 Lakhs while shareholders funds were substantially unchanged. Net cash generated from operating activities was Rs 850.77 Lakhs as against net cash used of Rs 592.82 Lakhs in the previous year, and net cash used in financing activities was Rs 700.42 Lakhs, representing the repayment of borrowings.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

Your Company follows a policy of building strong teams of talented professionals. People remain the most valuable asset of your Company. The Company recognizes people as its most valuable asset and the Company has kept a sharp focus on Employee Engagement. The Companys Human Resources is commensurate with the size, nature and operations of the Company.

DETAILS OF KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR:

Ratio	2025-26	2024-25	Change	Reason for variance
Current Ratio	557.87	21.51	2,493%	Current liabilities reduced from Rs 38.69 Lakhs to Rs 1.18 Lakhs on settlement of trade payables.
Debt-Equity Ratio	0.16	1.36	(88)%	Long term borrowings reduced from Rs 796.55 Lakhs to Rs 96.13 Lakhs.
Inventory Turnover	0.07	0.04	75%	Revenue increased while inventories reduced from Rs 809.04 Lakhs to Rs 490.16 Lakhs.
Trade Receivables Turnover	3.29	1.75	88%	Revenue increased from Rs 47.15 Lakhs to Rs 56.67 Lakhs while receivables were unchanged.
Net Profit Ratio	0.61%	(7.97)%	107.65%	Profit of Rs 0.39 Lakhs against a loss of Rs 3.77 Lakhs in the previous year.
Trade Payables Turnover	(16.64)	4.15	(501)%	Trade payables reduced from Rs 32.13 Lakhs to Rs 0.81 Lakhs, and net purchases for the year were negative.
Net Capital Turnover	0.08	0.06	33%	Revenue increased while net working capital was unchanged.
Return on Capital Employed	0.89	(0.93)	195.70%	Earnings before interest and tax against a loss in the previous year, with lower capital employed.
Return on Net Worth	0.07%	(0.64)%	110%	Profit after tax against a loss in the previous year, net worth unchanged.
Interest Coverage Ratio	N.A.	N.A.	N.A.	Not applicable. No finance cost was incurred.
Operating Profit Ratio	N.A.	N.A.	N.A.	Not applicable.
Debt Service Coverage Ratio	N.A.	N.A.	N.A.	Not applicable.
Return on Investment	N.A.	N.A.	N.A.	Not applicable. The Company has not made any investment or placed any fixed deposit.

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF. –

The Return on Net Worth for F.Y. 2025-26 is 0.07 and for F.Y. 2024-25 is (3.77)% The reason for decrease in the ratio is Due to loss in the current year.

FORWARD-LOOKING STATEMENT:

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, any epidemic or pandemic, and natural calamities over which we do not have any direct/indirect control.

For and on behalf of the Board

Net Pix Shorts Digital Media Limited

Sd/-

Danish Zakaria Aghadi

Managing Director

DIN – 05017846

Place: Mumbai

Date: 04-09-2026