SANJAY REDDYCHAIRMAN & MANAGING DIRECTOR
We went on to establish our presence in sports and animation, as varied as it sounds. Having ac-quired majority stakes in InAni Media & Chintala Sports gives us a foot into the growing genres of animation and sports. Animation is still at its nascent stage in India and being there early is what we believe will set us apart in our offerings to the digital content space. With Chintala Sports, we ac-quired Telangana Premier Kabaddi League (TPKL), a regional avatar of the hugely popular Pro Ka-baddi League and are confident about the growing popularity for the sport catapulting us into the eye of sports leagues, so to speak.
Creatively we continue our mentoring of musicians under our growing music label, Monkstar Music, with music festivals like Fields of Love – which had 50 artistes playing across 3 genre stages in a single venue – and Monkey Town which propagates the Go Green initiative along with populariz-ing Indie music out of South India. We look forward to growing both these immensely popular prop-erties in the years ahead.
Creating unique content to add to our digital library has however remained our prime focus and we continue that with having created the first ever Telugu web-series on Amazon Prime, Gangstars. Two new movie productions are currently under way even as we speak.
Our promise to our shareholders at the time of going in for IPO was to create a pan India presence and we have taken the first steps towards that with functioning offices in Kochi and Chennai and further plans of expansion initially in South India and then across the country.
We look forward to having more stories to share with you the next time around! Here’s wishing us all a robust growth and brilliant year ahead!
Warm Regards
Sanjay ReddSanjay Reddy,Chairman and Managing Director, Silly Monks Entertainment Ltd.
Annual Report 2017-18
COMPANY INFORMATION
Board of Mr. Tekulapalli Sanjay Reddy Mr. Anil Kumar Pallala Mrs. Swathi Reddy Dr. Rama Koti Reddy Kondamadugula Mr. Prasada Rao Kalluri
Directors
Chairman & Managing Director Whole Time Director Non- Executive Non - Independent Director Additional (Independent) Director Independent Director
Chief Financial Officer Mr. Guna Venkat Rama Naidu
Company Secretary & Compliance Officer Ms. Sushma Barla
Registered Office: 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur, Hyderabad – 500084, Telangana, India. Tele-Fax No.: 040 - 2300 4518 Email:[email protected] www.sillymonks.com
Registrar and Share Transfer Agents M/s. Bigshare Services Pvt. Ltd, 306, Right Wing, Amrutha Ville, Opp. Yasodha Hospital, Somajiguda, Raj Bhavan Road, Hyderabad - 500 082, Email: [email protected] Website: www.bigshareonline.com
Statutory Auditors M/s. Ramasamy Koteswara and Co LLP Chartered Accountants Firm Regn. No. 010396S/S200084
Internal Auditors M/s. NSVR & Associates LLP Chartered Accountants Firm Regn. No. 008801S/S200060
Secretarial Auditors M/s. P. S. Rao & Associates Company Secretaries
Bankers ICICI Bank Ltd Citi Bank N.A. Axis Bank Ltd
Name of the Stock Exchange (Where the Company’s Equity Shares are Listed)
National Stock Exchange of India Limited – Emerge (SME Platform) Exchange Plaza, Plot No. C/1, G-Block, Bandra-Kurla Complex, Bandra (East),
Mumbai – 400051 (M.H.) (w.e.f. 18th January, 2018) NSE Symbol: SILLYMONKS
05TH Annual General Meeting Saturday, 29th September, 2018
at 10.00 A.M. at the registered office at 301,Ektha Pearl, 2-17-89, B P Raju
Marg, Kothaguda, Kondapur, Hyderabad, Telangana -500084, India
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BOARD COMMITTEES
Audit Committee: Dr. Rama Koti Reddy Kondamadugula Chairman Mr. Prasada Rao Kalluri Member Mr. Tekulapalli Sanjay Reddy Member
Nomination and Remuneration Committee: Dr. Rama Koti Reddy Kondamadugula Chairman Mr. Prasada Rao Kalluri Member Mrs. Swathi Reddy Member
Stakeholders Relationship Committee: Dr. Rama Koti Reddy Kondamadugula Chairman Mr. Prasada Rao Kalluri Member Mr. Tekulapalli Sanjay Reddy Member
CONTENTS PAGE NO. Notice .................................................................................................................................................................2
Annexure to the Notice .................................................................................................................................... 10
Directors’ Report .............................................................................................................................................. 18
Annexures to Directors’ Report ....................................................................................................................... 28
Auditors Report on Financial Statements ......................................................................................................... 55
Balance Sheet .................................................................................................................................................... 62
Statement of Profit & Loss Account .................................................................................................................. 63
Cash Flow Statement ........................................................................................................................................ 64
Notes Forming Part of Financial Statements .................................................................................................... 66
Auditor’s Report on Consolidated Financial Statements .................................................................................. 79
Consolidated Balance Sheet.............................................................................................................................. 84
Consolidated Statement of Profit & Loss Account ............................................................................................ 85
Consolidated Cash Flow Statement .................................................................................................................. 86
Notes Forming Part of Consolidated Financial Statements ............................................................................. 88
Attendendence Slip ........................................................................................................................................ 100
proxy Form ………………………………………………………………………………………………………………………………………………..101
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NOTICE
Notice is hereby given that the 05thAnnual General Meeting of the Members of Silly Monks Entertainment Limited will be held on Saturday, the 29th September 2018 at 10:00 A.M. at the registered office of the Company situated at 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur, Hyderabad – 500084, Telangana, India to transact the following business: ORDINARY BUSINESS: 1. To consider and adopt:
a) The audited Financial Statement of the Company for the financial year 2017-18 together with the
Report of the Board of Directors and Auditors thereon; and b) The audited consolidated Financial Statement of the Company for the year 2017-18.
2. To appoint a director in place of Mr. Tekulapalli Sanjay Reddy (DIN: 00297272), who is liable to retire by
rotation and being eligible, offers himself for re-appointment as a Director. SPECIAL BUSINESS: 3. Appointment of Dr. Rama Koti Reddy Kondamadugula (DIN: 00259576) as an Independent Director
To consider and if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution:
“RESOLVED THAT pursuant to the provisions of section 149, 150 and 152 read with Schedule IV and all other applicable provisions, if any, of the Companies Act, 2013 (“The Act”) and the Companies (Appointment and Qualification of Directors) Rules, 2014 (including any statutory modification(s) or re-enactment thereof, for the time being in force) Dr. Rama Koti Reddy Kondamadugula (holding DIN: 00259576), who was appointed as an Additional Director (Independent) of the Company by the Board of Directors as per Section 161(1) of the Act, at their meeting held on 29th day of May, 2018 and who holds office only up to the date of the ensuing Annual General Meeting, who has submitted a declaration that he meets the criteria of independence as provided in section 149(6) of the Act and the Company hereby approves the appointment of Dr. Rama Koti Reddy Kondamadugula, as Non-Executive Independent Director for a term of 5 (Five) consecutive years with effect from 29th September, 2018, whose office shall not be liable to retire by rotation.”
4. To Consider and approve the Increase in remuneration of Mr. Tekulapalli Sanjay Reddy, Chairman &
Managing Director of the Company. To consider and if, thought fit, to pass with or without modification(s), the following resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of section 196, 197 & 203, read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013 (“The Act”) and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including any statutory modifications or re-
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enactments thereof, and in partial modification to the approval of members of the Company accorded by way of Special Resolution dated 15th May 2017 for appointment of Mr. Tekulapalli Sanjay Reddy as Chairman & Managing Director of the Company with effect from 01st April 2017 for a period of 3 years, now, as per the recommendations of Nomination & Remuneration Committee and the board of directors, the approval of members of the Company be and is hereby accorded to increase the remuneration of Mr. Tekulapalli Sanjay Reddy, Chairman & Managing Director, up to Rs.78,00,000/- (Rupees Seventy Eight Lakhs Only) per annum inclusive of any remuneration directly or otherwise or by way of salary and allowances, performance based rewards/ incentives, with effect from 01st day of September, 2018 for the remainder of his tenure (i.e. up to 31st March 2020) (including remuneration payable in the event of loss or inadequacy of profits in any financial year during the tenure of his appointment) with authority to the Board of Directors to alter and vary the terms and conditions of the said appointment in such manner as may be agreed to between the Board of Directors and Mr. Tekulapalli Sanjay Reddy.” “RESOLVED FURTHER THAT even in the absence of or inadequacy of profits in any Financial Year, subject to the provisions of Schedule V of the Act and such other approvals as may be required, Mr. Tekulapalli Sanjay Reddy, be paid the remuneration as detailed above as minimum remuneration.” “RESOLVED FURTHER THAT except for the aforesaid revision in salary, all other terms and conditions of his appointment as Chairman & Managing Director of the Company, as approved by the Special resolution passed at the Extraordinary General Meeting of the Company held on 15th of May 2017 shall remain unchanged.”
5. To Consider and approve the Increase in remuneration of Mr. Anil Kumar Pallala, Whole Time Director of the Company. To consider and if, thought fit, to pass with or without modification(s), the following resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of section 196, 197 & 203, read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013 (“The Act”) and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including any statutory modifications or re-enactments thereof, and in partial modification to the approval of members of the Company accorded by way of Special Resolution dated 15th May 2017 for appointment of Mr. Anil Kumar Pallala, Whole Time Director of the Company with effect from 01st April 2017 for a period of 3 years, now, as per the recommendations of Nomination & Remuneration Committee and the board of directors, the Consent of the Members of the Company be and is hereby accorded to increase the remuneration of Mr. Anil Kumar Pallala, Whole Time Director, up to Rs.37,80,000/- (Rupees Thirty seven Lakhs and Eighty Thousand Only) per annum inclusive of any remuneration directly or otherwise or by way of salary and allowances, performance based rewards/ incentives, with effect from 01st day of September, 2018 for the remainder of his tenure (i.e. up to 31st March 2020) (including remuneration payable in the event of loss or inadequacy of profits in any financial year during the tenure of his appointment) with authority to the Board of Directors to alter and vary the terms and conditions of the said appointment in such manner as may be agreed to between the Board of Directors and Mr. Anil Kumar Pallala.” “RESOLVED FURTHER THAT even in the absence of or inadequacy of profits in any Financial Year, subject to the provisions of Schedule V of the Act and such other approvals as may be required, Mr. Anil Kumar Pallala, be paid the remuneration as detailed above as minimum remuneration.”
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“RESOLVED FURTHER THAT except for the aforesaid revision in salary, all other terms and conditions of his appointment as Whole Time Director of the Company, as approved by the Special resolution passed at the Extraordinary General Meeting of the Company held on 15th of May 2017 shall remain unchanged.
Registered Office: CIN: U92120TG2013PLC090132 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur, Hyderabad – 500084, Telangana, India.
By order of the Board of Directors For Silly Monks Entertainment Limited
Place: Hyderabad Date: 31st August 2018
Sd/- Ms. Sushma Barla
Company Secretary & Compliance Officer
NOTES FOR MEMBERS: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT ONE OR MORE
PROXIES TO ATTEND AND VOTE ON POLL INSTEAD OF HIM/HER AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. APPOINTING A PROXY DOES NOT PREVENT A MEMBER FROM ATTENDING THE MEETING IN PERSON IF HE/SHE SO WISHES.
2. A person can act as a proxy on behalf of members not exceeding fifty (50) and holding in the aggregate not more than ten percent of the total share capital of the Company carrying voting rights. A member holding more than ten percent of the total share capital of the Company carrying voting rights may appoint a single person as proxy and such person shall not act as a proxy for any other person or shareholder.
3. Proxies in order to be effective must be delivered at the Registered Office of the Company not less than 48 hours before the commencement of the meeting.
4. Corporate members intending to send their authorised representatives to attend the meeting are requested to send to the Company a certified copy of the Board resolution authorizing their representative to attend and vote on their behalf at the meeting.
5. The Explanatory Statement pursuant to section 102 of the Companies Act, 2013, which sets out details
relating to special business at the meeting, is annexed hereto. 6. Register of Members and Share Transfer Books of the Company will remain closed from Saturday, 22nd
September, 2018 to Saturday, 29th September, 2018 (Both the days inclusive). 7. Members seeking any information or clarification on the accounts are requested to send queries by E-mail
to the Company’s mail id [email protected] at least 10 days prior to the date of Annual General Meeting (AGM) to enable the management to reply appropriately at the AGM.
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8. M/s. Bigshare Services Private Limited, is the Registrar & Share Transfer Agent (RSTA) of the Company. All communications in respect of share transfers and change in the address of the members may be communicated to them. Their Email: [email protected].
9. Shareholders are requested to immediately notify any change in their address and also intimate their
active E-Mail ID to their respective Depository Participants (DPs) and to the Registrar and Share Transfer Agent of the Company viz. Bigshare Services Pvt. Ltd., 306, Right Wing, Amrutha Ville, Opp. Yasodha Hospital, Somajiguda, Raj Bhavan Road, Hyderabad - 500082, having email Id [email protected] to receive the soft copy of the annual report and all other communication and notice of the meetings etc., of the Company.
10. The Securities and Exchange Board of India (SEBI) has mandated the submission of Permanent Account
Number (PAN) by every participant in securities market. Members holding shares in electronic form are, therefore, requested to submit their PAN to their Depository Participants with whom they are maintaining their demat accounts. Members holding shares in physical form can submit their PAN details to the Company / STA.
11. Members holding shares in the same name under different Ledger Folios are requested to apply for
consolidation of such Folios and send the relevant share certificates to the Share Transfer Agent/Company. 12. Relevant documents referred to in the accompanying Notice are open for inspection by the members at
the Registered office of the Company on all working days (except Saturdays and Holidays), between 11.00 A.M. to 1.00 P.M. up to the date of Annual General Meeting.
13. Pursuant to the requirement of SEBI (Listing Obligations and Disclosures Requirement) Regulation), 2015 the Company declares that, the equity shares of the Company are listed on the Stock Exchange at NSE – Emerge (SME Platform).
14. The annual report for the financial year 2017-18 is being sent through email to those members who have
opted to receive electronic communication or who have registered their email addresses with the Company/depository participants. The members will be entitled to physical copy of the annual report for the financial year 2017-18, free of cost, upon sending a request to the Company Secretary at the registered office of the Company situated at 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur, Hyderabad – 500084, Telangana, India. For any Communication, the shareholders may also send request to the Company’s E-Mail Id: [email protected].
15. Shareholders may also note that the Annual Report for the year 2017-18 is also available on Company’s
website www.sillymonks.com. 16. Members who hold shares in physical form can nominate a person in respect of all the shares held by them
singly or jointly. Members who hold shares in single name are advised, in their own interest to avail of the nomination facility. Members holding shares in dematerialized form may contact their respective depository participant(s) for recording nomination in respect of their shares.
17. Members/Proxies are requested to bring the attendance slip filled in for attending the Meeting and copy
of Annual Report with them to attend the Meeting. Members are requested to come to the venue of the meeting well in advance for registration. No registration will be entertained after fifteen minutes from the
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scheduled time of the commencement of the meeting. The Proxy Form and the Attendance slip are enclosed with this notice.
18. As per Notification issued by Ministry of Corporate Affairs dated 19th of March, 2015 with reference to
the Companies (Management and Administration) Rules, 2014, Companies covered under Chapter XB and Chapter XC as per SEBI (ICDR) Regulations, 2009 will be exempted from e-voting provisions.
The Company is covered under Chapter XB of SEBI (ICDR) Regulations, as the Company listed its equity shares on National Stock Exchange of India Limited – Emerge (SME Platform). Therefore, the Company is not required to provide e-voting facility to its members. Though the Company is not required to provide E voting facility, for good Corporate Governance and for the benefit of shareholders the Company is providing E-Voting facility to the shareholders.
E-VOTING
The business as set out in the Notice may be transacted through electronic voting system and the Company is providing facility for voting by electronic means. Pursuant to the provisions of Section 108 of the Companies Act, 2013, read with the Companies (Management and Administration) Rules, 2014, the Company is pleased to offer e-voting facility as an alternate to its members to cast their votes electronically on all resolutions set forth in the Notice convening the 05th Annual General Meeting. The Company has engaged the services of Central Depository Services India Limited (CDSL) to provide the e-voting facility. The Members whose names appear in the Register of Members / List of Beneficial Owners as on 21st September 2018 (cut-off date), are entitled to vote on the resolutions set forth in this Notice. The e-voting period will commence on Wednesday, 26th September, 2018 (09:00 hrs) and will end on Friday, 28th September, 2018 (17:00 hrs). During this period, shareholders of the Company holding shares either in physical form or in dematerialized form, as on the cut-off date may cast their vote electronically. The e-voting module shall be disabled by CDSL for voting thereafter. Members will not be able to cast their votes electronically beyond the date & time mentioned above. The Company has appointed Mr. Jineshwar Kumar Sankhala, Practising Company Secretary to act as Scrutinizer to conduct and scrutinize the electronic voting process and poll at the Annual General Meeting in a fair and transparent manner. The members desiring to vote through electronic mode may refer to the detailed procedure on e-voting given hereunder.
A. The instructions for shareholders voting electronically are as under:
(i) The shareholders should log on to the e-voting website www.evotingindia.com.
(ii) Click on Shareholders.
(iii) Now Enter your User ID
a. For CDSL: 16 digits beneficiary ID, b. For NSDL: 8 Character DP ID followed by 8 Digits Client ID, c. Members holding shares in Physical Form should enter Folio Number registered with the
Company.
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(iv) Next enter the Image Verification as displayed and Click on Login. (v) If you are holding shares in demat form and had logged on to www.evotingindia.com and voted on an
earlier voting of any company, then your existing password is to be used.
(vi) If you are a first-time user follow the steps given below:
For Members holding shares in Demat Form and Physical Form
PAN Enter your 10-digit alpha-numeric PAN issued by Income Tax Department (Applicable for both demat shareholders as well as physical shareholders) • Members who have not updated their PAN with the Company/Depository
Participant are requested to use the first two letters of their name and the 8 digits of the sequence number in the PAN field.
• In case the sequence number is less than 8 digits enter the applicable number of 0’s before the number after the first two characters of the name in CAPITAL letters. Eg. If your name is Ramesh Kumar with sequence number 1 then enter RA00000001 in the PAN field.
Dividend Bank Details Or Date of Birth (DOB)
Enter the Dividend Bank Details or Date of Birth (in dd/mm/yyyy format) as recorded in your demat account or in the company records in order to login. • If both the details are not recorded with the depository or company please enter the
member id / folio number in the Dividend Bank details field as mentioned in instruction (iv).
(vii) After entering these details appropriately, click on “SUBMIT” tab. (viii) Members holding shares in physical form will then directly reach the Company selection screen.
However, members holding shares in demat form will now reach ‘Password Creation’ menu wherein they are required to mandatorily enter their login password in the new password field. Kindly note that this password is to be also used by the demat holders for voting for resolutions of any other company on which they are eligible to vote, provided that company opts for e-voting through CDSL platform. It is strongly recommended not to share your password with any other person and take utmost care to keep your password confidential.
(ix) For Members holding shares in physical form, the details can be used only for e-voting on the resolutions
contained in this Notice. (x) Click on the EVSN for the relevant Company i.e.., Silly Monks Entertainment Limited on which you
choose to vote. (xi) On the voting page, you will see “RESOLUTION DESCRIPTION” and against the same the option “YES/NO”
for voting. Select the option YES or NO as desired. The option YES implies that you assent to the Resolution and option NO implies that you dissent to the Resolution.
(xii) Click on the “RESOLUTIONS FILE LINK” if you wish to view the entire Resolution details.
(xiii) After selecting the resolution you have decided to vote on, click on “SUBMIT”. A confirmation box will
be displayed. If you wish to confirm your vote, click on “OK”, else to change your vote, click on “CANCEL” and accordingly modify your vote.
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(xiv) Once you “CONFIRM” your vote on the resolution, you will not be allowed to modify your vote. (xv) You can also take a print of the votes cast by clicking on “Click here to print” option on the Voting page. (xvi) If a demat account holder has forgotten the login password, then Enter the User ID and the image
verification code and click on Forgot Password & entering the details as prompted by the system. (xvii) Shareholders can also cast their vote using CDSL’s mobile app m-Voting available for android based
mobiles. The m-Voting app can be downloaded from Google Play Store. Please follow the instructions as prompted by the mobile app while voting on your mobile.
(xviii) Note for Non – Individual Shareholders and Custodians
• Non-Individual shareholders (i.e. other than Individuals, HUF, NRI etc.) and Custodian are required to log on to www.evotingindia.com and register themselves as Corporates.
• A scanned copy of the Registration Form bearing the stamp and sign of the entity should be emailed to [email protected].
• After receiving the login details a Compliance User should be created using the admin login and password. The Compliance User would be able to link the account(s) for which they wish to vote on.
• The list of accounts linked in the login should be mailed to [email protected] and on approval of the accounts they would be able to cast their vote.
• A scanned copy of the Board Resolution and Power of Attorney (POA) which they have issued in favour of the Custodian, if any, should be uploaded in PDF format in the system for the scrutinizer to verify the same.
(xix) In case you have any queries or issues regarding e-voting, you may refer the Frequently Asked Questions
(“FAQs”) and e-voting manual available at www.evotingindia.com, under help section or write an email to [email protected].
B. In case of members receiving the physical copy of notice of 05th Annual General Meeting by courier (for
members whose e-mail ids are not registered with the Company/Depositories): Please follow all the steps from S.No. (i) to S.No. (xvii) to cast vote.
C. General Instructions: (i) The voting rights of Members shall be in proportion to the shares held by them in the paid-up equity
share capital of the Company as on 21st September, 2018.
(ii) Members can opt for only one mode of voting, i.e., either by venue voting or e-voting. In case Members cast their votes through both the modes, voting done by e-voting shall prevail and votes cast through venue voting will be treated as invalid.
(iii) Members who do not have access to e-voting facility have been additionally provided the facility through Ballot Form. They may send duly completed Ballot Form to the Scrutinizer, Mr. Jinesh Kumar Sankala, Practising Company Secretary at the Registered Office of the Company so as to reach on or
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before the conclusion of the 05th Annual General Meeting or can carry the same to the AGM and deposit in the Ballot Box during the Meeting. Members have the option to request for physical copy of Ballot Form by sending an e-mail to [email protected] by mentioning their Folio No. / DP ID and Client ID.
(iv) The facility for voting through polling paper shall also be made available at the meeting and the members attending the meeting who have not already cast their vote by e-voting shall be able to exercise their right at the meeting.
(v) The member who cast their vote by e-voting prior to the meeting may also attend the meeting but shall not be entitled to cast their vote again.
(vi) The Scrutinizer, after scrutinising the votes cast at the meeting through poll and through remote e-voting will, not later than three days of conclusion of the Meeting, make a consolidated scrutinizer’s report and submit the same to the Chairman. The results declared along with the consolidated scrutinizer’s report shall be placed on the website of the Company www.sillymonks.com and on the website of www.cdslindia.com. The results shall simultaneously be communicated to the Stock Exchanges.
(vii) The result of the voting on the Resolutions at the Meeting will be announced by the Chairman or any other person authorized by him within two days of the AGM.
19. Brief profile of the directors (seeking appointment/re-appointment and/or whose remuneration is
proposed to be increased) as per SEBI (LODR) Regulations, 2015 and the Companies Act, 2013, is attached as an annexure to this notice.
20. The Route Map of the venue of AGM is given at the last page of Annual Report.
By order of the Board of Directors For Silly Monks Entertainment Limited
Place: Hyderabad Date: 31st August 2018
Sd/- Ms. Sushma Barla
Company Secretary & Compliance Officer
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ANNEXURE TO THE NOTICE
ADDITIONAL INFORMATION
Brief profile of the directors seeking appointment/re-appointment/change in the remuneration at the ensuing Annual General Meeting pursuant to Regulation 36 (3) of SEBI (LODR) Regulations, 2015
Name of the Director Tekulapalli Sanjay Reddy Date of first appointment on the Board 20th day of September, 2013 Date of Birth 29.06.1968 (50 Years)
Qualification, Experience & Expertise
Commerce graduate with a management degree in Marketing and Finance from Pune University. 28 years of rich experience in sales, distribution, programming and general management in Media, Internet and Entertainment industries. He is the founder and promoter of the Company.
Directorships in other Companies
• Dream Boat Entertainment Private Limited (Under the process of Strike off).
Foreign Companies: • Dream Boat Entertainment Pte Limited
No. & % of Shares held in the Company 14,68,800 equity shares i.e., 31.64%
Relation between Directors inter-se Husband of Smt. Swathi Reddy, Non-Executive Director.
Name of the Director Rama Koti Reddy Kondamadugula
Date of Birth 15.07.1961 (57 Years)
Date of first appointment on the Board He was appointed as an Additional Director by the Board of Directors of the Company at their Meeting held on 29th May 2018.
Qualification, Experience & Expertise
Ph.D. in Plant Sciences from Kakatiya University, India, M. Sc, Plant Sciences from Kakatiya University, Warangal, India and Post-Doctoral Research: plant biotechnology, University of Hyderabad, India and University of Bayreuth, Germany. He has over 24 years of experience across Biotechnology Industry.
Directorships in other Companies
• Sri Bioremedies Private Limited • Sri Greencover India Private Limited • Sri Lakshmi Agri Biotech Private Limited • Sri Biosphere Private Limited • Sri Power Transgen Private Limited • Sri Bioaesthetics Private Limited
No. & % of Shares held in the Company 7200 equity shares i.e.,0.155% Relation between Directors inter-se NA
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Name of the Director Anil Kumar Pallala
Date of Birth 18.01.1982 (36 Years) Date of first appointment on the Board 01st day of September 2014
Qualification, Experience & Expertise
Audio Engineer. He is a Founder, Ex-Director of Whacked Out Media Private Limited – one of leading MCN in the country, Promo/Music Producer of BIG 92.7 FM
Directorships in other Companies • Chintala Sports Private Limited • Inani Media Private Limited
No. & % of Shares held in the Company 3,00,000 equity shares i.e.,6.46% Relation between Directors inter-se NA
EXPLANATORY STATEMENT IN RESPECT OF THE SPECIAL BUSINESS PURSUANT TO
SECTION 102 OF THE COMPANIES ACT, 2013
Item No. 3: Appointment of Dr. Rama Koti Reddy Kondamadugula (DIN: 00259576) as an Independent Director In accordance with the provisions of Section 149 read with Schedule IV to the Companies Act, 2013, appointment of an Independent Director requires approval of members. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed that Dr. Rama Koti Reddy Kondamadugula be appointed as an Independent Director of the Company. The appointment of Dr. Rama Koti Reddy Kondamadugula shall be effective upon approval by the members in the Meeting. Dr. Rama Koti Reddy Kondamadugula is not disqualified from being appointed as a Director in terms of Section 164 of the Act and has given his consent to act as a Director. The Company has received a declaration from Dr. Rama Koti Reddy Kondamadugula that he meets the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act. In the opinion of the Board, Dr. Rama Koti Reddy Kondamadugula fulfills the conditions for his appointment as an Independent Director as specified in the Act. Dr. Rama Koti Reddy Kondamadugula is independent of the management and possesses appropriate skills, experience and knowledge. Brief resume of Dr. Rama Koti Reddy Kondamadugula (Dr. KRK Reddy): Dr. KRK Reddy is an entrepreneur and has done his Ph.D. in Plant Sciences from Kakatiya University, India, M. Sc, Plant Sciences from Kakatiya University, Warangal, India and Post-Doctoral Research: plant biotechnology, University of Hyderabad, India and University of Bayreuth, Germany. After post-doctoral research, Dr. Reddy started a private bio control laboratory at Hyderabad in the year 1994 with a focus to develop safe and green alternatives for agro chemicals for crop nutrition and protection. The in-House R&D of the company is well recognized by national and international research institutions.
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Dr. Reddy guided 50 postgraduates and 2 Doctoral students and filed 7 patents. He received several National and International awards for his contributions in research, innovations, product development with special reference to bio intensive integrated crop management to improve agricultural productivity. Dr. Reddy also happens to be member in over fifteen national and international societies and bodies as well as on the board of studies and biotech committees of Osmania University, Kakatiya University, Yogivemana University, Nagarjuna University, and Padmavathi Mahila University. Apart from this, he also served Department of Biotechnology, Govt. of India as member of task force on Biofertilisers and Biopesticides. Currently he is the member of FICCI-Telangana sub-committee on Agriculture and food processing and CII-Telangana task force on Agriculture. Dr. Reddy received several International, National and State level awards for his contribution in the field of agriculture technology and innovations. Keeping in view his vast expertise and knowledge, it will be in the interest of the Company that Dr. Rama Koti Reddy Kondamadugula is appointed as an Independent Director of the Company. Dr. Rama Koti Reddy Kondamadugula was appointed as an Additional Director by the Board in their meeting held on 29th May 2018. Dr. Rama Koti Reddy Kondamadugula is a member of the Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee of the Board of Directors of the Company. Dr. Rama Koti Reddy Kondamadugula holds 7200 shares in the Company. The Board consider that his continued association would be of immense benefit to the Company and it is desirable to continue to avail services of Dr. Rama Koti Reddy Kondamadugula as an Independent Director. Accordingly, the Board recommends the resolution in relation to appointment of Dr. Rama Koti Reddy Kondamadugula as an Independent Director, for the approval by the shareholders of the Company. Copy of the draft letter for appointment of Dr. Rama Koti Reddy Kondamadugula as an Independent Director setting out the terms and conditions is available for inspection by members at the registered office of the Company. Except Dr. Rama Koti Reddy Kondamadugula, being an appointee, none of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolution set out at Item No. 3. This Explanatory Statement may also be regarded as a disclosure under Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Your Directors recommend the Resolution for your approval.
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Item 4 & 5: To Consider and approve the Increase in remuneration of Mr. Tekulapalli Sanjay Reddy, Chairman & Managing Director and Mr. Anil Kumar Pallala as Whole Time Director of the Company. The members of the Company had appointed Mr. Tekulapalli Sanjay Reddy as Chairman & Managing Director and Mr. Anil Kumar Pallala as whole Time Director of the Company by means of passing a special resolution at their Extraordinary Meeting of the Company held on 15th May 2017 for a period of three years from with effect from 01st April 2017, in accordance with the provisions of Sections 196, 197, 203 read with Schedule V and other applicable provisions, if any, of the Companies Act, 2013. The performance of the Company during the Financial year 2017-18 has enhanced in comparison with the Previous year 2016-17. Company made considerable progress in terms of profitability and growth. Upon the recommendations of the Nomination & Remuneration Committee the Board of directors of the Company at their meeting held on 31st August 2018, increased the remuneration of Mr. Tekulapalli Sanjay Reddy and Mr. Anil Kumar Pallala as follows with effect from 01st September, 2018. The aforesaid Managerial remuneration for the said years falls within the purview of Section II of Part II of Schedule V of the Companies Act, 2013. Details of remuneration payable to the abovementioned Director is given below: Remuneration to Mr. Tekulapalli Sanjay Reddy:
Sl. No. Particulars Amount (Rs.) 1. Basic Salary Up to Rs.39,00,000/- 2. House Rent Allowance (HRA) Up to Rs. 19,50,000/- 3. Special Allowance Up to Rs. 19,50,000/-
Remuneration to Mr. Anil Kumar Pallala:
Sl. No. Particulars Amount (Rs.) 1. Basic Salary Up to Rs.18,90,000/- 2. House Rent Allowance (HRA) Up to Rs. 9,45,000/- 3. Special Allowance Up to Rs. 9,45,000/-
THE FOLLOWING ADDITIONAL DETAILED INFORMATION AS PER SECTION – II OF SCHEDULE V IS AS FOLLOWS: I. General Information: a) Nature of industry Media and Entertainment (Service Sector) b) Date or expected date of
commencement of commercial production.
Business commenced in the year 2013, since the Company is into service sector, hence there is no date of commercial production
c) In case of new companies, expected date of commencement of activities as per project approved by financial institutions appearing in the prospectus.
Not Applicable
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d) Financial performance based on given indicators.
Particulars 2017-18 2016-17 2015-16
Revenue 8,40,07,972 2,99,93,287 2,01,74,196 Profit before Tax 1,17,74,817 37,31,226 9,71,958 Provision for Taxation 22,43,691 7,10,985 2,00,740 Profit/(Loss) after tax 94,06,499 26,15,348 6,65,173
e) Foreign investments or collaborators, if any
“Dream Boat Entertainment PTE Limited” is a Wholly Owned Subsidiary of Silly Monks situated in Hong Kong.
II. Information about the appointee: a) Background details Mr. T. Sanjay Reddy, aged about 50
years, He is the founder and promoter of the Company is a Media Professional, Producer, Actor and known for leading some of the top TV Channels of India in the regional space. He possesses Post Graduation Degree in Business Administration with double specialization in Marketing as well as Finance from University of Pune.
Mr. Anil Kumar Pallala, aged about 36 years, is an Audio Engineer. He is Co-Founder of the Company. He is Founder & Ex-Director of Whacked Out Media Private Limited, incorporated in the year 2009 in Hyderabad, India.
b) Past remuneration The remuneration drawn by Mr. T. Sanjay Reddy during past Two Years is as follows:
The remuneration drawn by Mr. Anil Kumar Pallala during the past Two Years is as follows:
Financial Year
Amount (Rs.) Financial Year
Amount (Rs.)
2017-18 60,00,000 2017-18 30,00,000
2016-17 36,00,000 2016-17 24,00,000
c) Recognition or awards The Company has received various awards and recognition during his tenure as a Senior Executive of the Company. Company was the Winner of the Start-Up of the Year 2014 award by Silicon India & Best Start-Up Business Excellence Award 2017.
The Company has received various awards and recognition during his tenure as a Director of the Company. Company was the Winner of the Start-Up of the Year 2014 award by Silicon India & Best Start-Up Business Excellence Award 2017.
d) Job profile and his suitability Mr. T. Sanjay Reddy has been serving the Company since inception in the capacity of a Director. Over the period Company has grown up manifold on various parameters. This growth to the large extent is attributable to the
Mr. Anil Kumar Pallala has been serving the Company over a long period of time. The director has contributed a lot for the continuous growth of the Company. In view of their Vital position, the board proposes to increase their
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hard work and decision of the director. In view of their Vital position, the board proposes to increase their remuneration as detailed above. And he is fit and proper as Chairman & Managing Director of the Company
remuneration as detailed above. And he is fit and proper as Whole Time Director of the Company
e) Remuneration proposed As mentioned in item No.4 of the Notice.
As mentioned in item No.5 of the Notice.
f) Comparative remuneration profile with respect to industry, size of the Company, profile of the position and person
In the past few years, the remuneration of Senior Executives in the industry in general has gone up manifold. The proposed revision in the remuneration to Managing Director & Whole Time Director is purely based on merit. Further, the Board, perused the proposed revision in the remuneration of managerial persons in other companies comparable with the size of the Company, industry benchmarks in general, profile and responsibilities of Mr. Sanjay Reddy & Mr. Anil Kumar Pallala before approving their remuneration as proposed hereinabove.
g) Pecuniary relationship directly or indirectly with the Company, or relationship with the managerial personnel, if any
Mr. T Sanjay Reddy has no pecuniary relationship directly or indirectly with the Company or its managerial personnel other than his remuneration in the capacity of a Managing Director. He holds 14,68,800 equity shares i.e., 31.64% of the Company.
Mr. Anil Kumar Pallala has no pecuniary relationship directly or indirectly with the Company or its managerial personnel other than his remuneration in the capacity of a Whole Time Director. He holds 3,00,000 equity shares i.e., 6.46% of the Company.
III. Other information: a) Reasons of loss or inadequate
profits Since the Company has started its operations during the year 2013, Company has completed 5 years of its operations; the profits of the Company are increasing gradually. The profits of the Company are inadequate, though the profits have increased from the previous financial year.
b) Steps taken or proposed to be taken for improvement
The Company has initiated certain steps to improve the margins of the Company by expanding its operations broadly in Digital platform, Movie, web series & Short film production, content aggregation and customization and deployment of content in audio and video formats for mobile carriers, devices and music stores in Indian and global markets. During the year, the Company has also expanded its offices in Chennai & Kochi.
c) Expected increase in productivity and profits in measurable terms
Barring unforeseen circumstances, the Company hopes to increase the revenue and profits by improving margins in current year
IV. Disclosures: 1. The remuneration package of all the managerial persons are given in the respective resolutions.
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INFORMATION PURSUANT TO 1.2.5 OF THE SECRETARIAL STANDARD ON GENERAL MEETINGS (SS- 2) REGARDING DIRECTOR SEEKING APPOINTMENT:
Name of the Director Tekulapalli Sanjay Reddy Anil Kumar Pallala Age 50 years 36 years Qualifications Commerce graduate with a
management degree in Marketing and Finance from Pune University.
Audio Engineer
Experience 27 years of rich experience in sales, distribution, programming and general management in Media, Internet and Entertainment industries.
He is a Founder, Ex-Director of Whacked Out Media Private Limited – one of leading MCN in the country, Promo/Music Producer of BIG 92.7 FM
Terms and conditions of appointment or reappointment
Except for the aforesaid revision in salary, all other terms and conditions of his appointment as Chairman & Managing Director of the Company, as approved by the Special resolution passed at the Extraordinary General Meeting of the Company held on 15th of May 2017 shall remain unchanged.
Except for the aforesaid revision in salary, all other terms and conditions of his appointment as Whole Time Director of the Company, as approved by the Special resolution passed at the Extraordinary General Meeting of the Company held on 15th of May 2017 shall remain unchanged.
Last drawn remuneration Rs.60,00,000/- p.a. Rs.30,00,000/- p.a. Date of first appointment on the Board
20th day of September, 2013 01st day of September, 2014
No. of share held 14,68,800 Equity Shares 3,00,000 Equity Shares Relationship with Directors, Managers & KMP
Husband of Smt. Swathi Reddy, Non-Executive Director. Save and Except the aforesaid. Mr. T. Sanjay Reddy is not related to any of the directors of the Company.
Mr. Anil Kumar Pallala is Not related to any of the directors of the Company.
Number of Board Meeting attended during FY 2016
11 11
Other Directorship - Dream Boat Entertainment Private Limited (Under the Process of Strike off)
- Dream Boat Entertainment Pte Limited
- Chintala Sports Private Limited
- Inani Media Private Limited
Chairman/ Member of the Committees of Boards of other companies
N.A. N.A.
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Thus, the Board of Directors recommends the resolution set out at Item no. 4&5of the notice for your approval, by passing Special Resolution. Mr. Tekulapalli Sanjay Reddy & Mr. Anil Kumar Pallala and their relatives may be deemed to be interested in the respective resolutions proposing the appointments set out at Item No.4 and 5 in the Notice. Save and except the aforesaid, none of the Directors and Key Managerial Personnel of the Company and their relatives is concerned or interested, financial or otherwise, in the resolutions set out at Item No. 4 and 5 in the Notice.
By order of the Board of Directors For Silly Monks Entertainment Limited
Place: Hyderabad Date: 31st August 2018
Sd/- Ms. Sushma Barla
Company Secretary & Compliance Officer
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DIRECTORS’ REPORT To The Members, M/s. Silly Monks Entertainment Limited.
Your directors have pleasure in presenting their Fifth (5th) Annual Report on the business and operations of the company together with the audited financial statements along with the report of the Auditors for the financial year ended 31st March 2018.
1. FINANCIAL RESULTS: The performance of Silly Monks Group & Silly Monks (“The Company”) for the current year in comparison to the previous year are as under:
CONSOLIDATED PERFORMANCE OF SILLY MONKS GROUP: (Amount in Rs.)
Particulars Financial Year 2017-18 Financial Year 2016 -17 Revenue from Operations 15,66,29,082 11,95,78,819 Other Income 9,53,700 6,17,675 Total Revenue 15,75,82,782 12,01,96,494 Expenses 13,18,68,556 10,13,30,995 Operating Profit 2,57,14,226 1,88,65,499 Depreciation 38,11,792 27,09,825 Finance Charges 7,41,386 3,57,573 Net Profit / Loss Before Tax (PBT) 2,11,61,047 1,57,98,101 Current Tax 23,78,489 8,29,179 Deferred Tax 3,56,159 4,22,317 MAT Credit Entitlement (2,31,532) (17,423) Net Profit (PAT) 1,86,57,932 1,45,64,028
Your Company, along with its 100% subsidiary and two of its LLPs as a Group, posted good financial results during the year under review. Turnover of the Group is Rs.1,566.29 Lakhs and the net profit of the Company is Rs. 186.57 Lakhs.
STANDALONE PERFORMANCE OF THE COMPANY:
(Amount in Rs.) Particulars Financial Year 2017-18 Financial Year 2016 -17
Revenue from Operations 8,40,07,972 2,99,93,287 Other Income 9,53,700 2,30,172 Total Revenue 8,49,61,672 3,02,23,459 Expenses 6,91,67,602 2,41,04,815 Operating Profit 1,57,94,070 6118644 Depreciation 32,77,867 20,29,845 Finance Charges 7,41,386 3,57,573 Net Profit / Loss Before Tax (PBT) 1,17,74,817 37,31,226 Current Tax 22,43,691 7,10,985 Deferred Tax 3,56,159 4,22,317 MAT Credit Entitlement (2,31,532) (17,423) Net Profit (PAT) 94,06,499 26,15,348 EPS 2.43 0.73
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2. COMPANY PERFORMANCE Your Company posted good financial results with a net profit of Rs. 94.06 Lakhs during the year under review, an Increase of 259.67% over previous year. Due to continuous efforts of the management the Total Income of the company for the Current Financial year stood at Rs.849. 61 Lakhs as against previous Total Income of Rs. 302.23 Lakhs registering an increase of 180.09% over the previous year. The Company is looking forward to increasing its profits in the coming financial years with the support of all the stakeholders of the Company.
3. TRANSFER TO RESERVES The Company did not transfer any amount to the General Reserve for the Financial Year ended March 31st, 2018.
4. DIVIDEND:
No Dividend was declared for the financial year ended 31st March 2018 due to conservation of Profits for the future expansion of business of the Company.
5. SUBSIDIARIES: Dream Boat Entertainment Pte Limited (Hong Kong) Dream Boat Entertainment Limited is a wholly Owned Subsidiary of the Company incorporated in Hong Kong, involved in the business similar to that of the Company. The statement containing the salient features of the financial statements of Subsidiary, Pursuant to Sub-Section 3 of Section 129 of the Companies Act, 2013, in Form AOC-1 is herewith annexed to this report and marked as Annexure - I. The statement also provides the details of performance, financial position of the subsidiary. Your Company does not have any Associate Companies or Joint Ventures.
6. CORPORATE SOCIAL RESPONSIBILITY (CSR): The Company does not have any CSR policy and Company did not form any CSR Committee, as the provisions of section 135 of the Companies Act, 2013, pertaining to Corporate Social Responsibility are not applicable to the Company as the company does not fall under the criteria specified under Section 135 and the rules made there under.
7. DIRECTORS & KEY MANAGERIAL PERSONAL:
7.1 Director Retiring by Rotation In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Tekulapalli Sanjay Reddy, Managing Director of the Company, hereby retires by rotation at the forthcoming Annual General Meeting, and being eligible has offered himself for re-appointment at the said Meeting of the Company.
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7.2 Changes in the Board of Directors of the Company.
The Board at their meeting held on 22nd December 2017 appointed Mr. Venkata Kama Dixitulu
Dixitula as an Additional (Independent) Director of the Company.
Mr. Rajesh Katragadda, Non - Executive Independent Director and Mr. Sreenivasa Reddy Musani, Non-Executive Director of the Company have resigned from the position of directorship, with effect from 22.12.2017.
Later, Mr. Venkata Kama Dixitulu Dixitula, Additional (Independent) Director has resigned from the
position of Director with effect from 30th March 2018.
The Board of Directors have appointed Dr. Rama Koti Reddy Kondamadugula as an Additional Director of the Company at their board meeting held on 29th day of May 2018, who holds office till the ensuing Annual General Meeting. The Board based on the recommendation of Nomination and Remuneration Committee considered the appointment of Rama Koti Reddy Kondamadugula as an Independent Director subject to the approval of shareholders.
Accordingly, a resolution seeking approval of Shareholders for his as an Independent Director for a period of five years is included at Item No.3 of the Notice appointment convening the Annual General Meeting. As on the date of this report, the following are the Board of Directors of the Company:
7.3 Changes in Key Managerial Personnel
During the year under review Mr. Boda Narsing Rao is resigned as the Chief Financial Officer (CFO)
of the Company, with effect from 31st May, 2018.
The Board of Director of the Company on the recommendations of Nomination and remuneration Committee have appointed Mr. Guna Venkat Rama Naidu, as Chief Financial Officer of the Company with effect from 01st June, 2018.
7.4 Declaration by Independent Directors
The Company has received requisite declaration from both the Independent Director of the Company, that they meet the criteria of independence prescribed under section 149(6) of the Companies Act, 2013 (the Act).
8. STATUTORY AUDITORS: The Shareholders of the Company At their Annual General Meeting (AGM) held on 18th December 2014, have appointed M/s. Ramasamy Koteswara and Co LLP (Formerly Known as M/s. Ramasamy koteswara & Co.), Chartered Accountants, (Registration No. 010396S), Hyderabad, as Statutory Auditors of the Company to hold office from the conclusion of that AGM till the conclusion of the 06th AGM at such remuneration as may be decided by the Board of Directors
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9. SECRETARIAL AUDITORS:
Pursuant to the provisions of section 204 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of managerial personnel) Rules, 2014, as may be amended from time to time, M/s. P. S. Rao & Associates, Practicing Company Secretaries were appointed to conduct the Secretarial Audit of the Company for the financial year 2017-18.
10. BOARD MEETINGS
The Board met Eleven (11) times during the financial year 2017 -18. The following are the details of the Board Meetings:
11. COMMITTEES
The Company as on date of the report has the following Committees: 1. Audit Committee; 2. Nomination and Remuneration Committee; and 3. Stakeholder Relationship Committee. The Committees of the Company were constituted pursuant to the Board Meeting held on 12th day of June, 2017. Later due to Mr. Rajesh Katragadda, Non-Executive Independent Director and Mr. Sreenivasa Reddy Musani, Non-Executive Director and appointment of Mr. Venkata Rama Venkata Kama Dixitulu Dixitula as an additional (Independent) Director and the Committees were re-constituted by the board at their board meeting held on 22th December, 2017. Later due to resignation of Mr. Venkata Rama Venkata Kama Dixitulu Dixitula as an Additional (Independent) Director and appointment of Dr. Rama Koti Reddy Kondamadugula as Additional (Independent) Director, the Board at their meeting held on 29th May, 2018 has reconstituted the Committees. The Composition of the Committees as on the date of the report are as follows:
Sl. No. Date of Board Meeting
1. 24.05.2017 2. 30.05.2017 3. 01.06.2017 4. 12.06.2017 5. 23.08.2017 6. 04.09.2017 7. 06.11.2017 8. 22.12.2017 9. 26.12.2017
10. 15.01.2018 11. 30.03.2018
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a) Audit committee:
Sl. No. Name of the Director Position in the Committee 1. Dr. Rama Koti Reddy Kondamadugula Chairman 2. Mr. Prasada Rao Kalluri Member 3. Mr. Tekulapalli Sanjay Reddy Member
All the recommendations made by the Audit Committee of the Company have been considered and accepted by the Board of Directors of the Company.
b) Nomination and Remuneration Committee
Sl. No. Name of the Director Position in the Committee 1. Dr. Rama Koti Reddy Kondamadugula Chairman 2. Mr. Prasada Rao Kalluri Member 3. Mrs. Swathi Reddy Member
c) STAKEHOLDER’S RELATIONSHIP COMMITTEE
Sl. No. Name of the Director Position in the Committee
1. Dr. Rama Koti Reddy Kondamadugula Chairman 2. Mr. Prasada Rao Kalluri Member 3. Mr. Tekulapalli Sanjay Reddy Member
12. NOMINATION AND REMUENRATION POLICY:
A committee of the Board named as “Nomination and Remuneration Committee” has been constituted to comply with the provisions of section 178 of Companies Act, 2013 and to recommend a policy of the Company on directors' appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance and to recommend the same to the Board from time to time. The policy is also posted in the investors section of the company’s website.
13. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS MADE BY THE COMPANY UNDER THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013 Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.
14. DEPOSITS:
Your Company has not accepted any deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.
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15. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors’ confirm that:
i) In preparation of annual accounts for the financial year ended 31st March, 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31st March, 2018 and of the profit and loss of the Company for the year
iii) The Directors have taken proper and sufficient care for their maintenance of adequate accounting records in accordance with the provisions of the Companies Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.
iv) The Directors had prepared the annual accounts on a ‘going concern’ basis;
v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and
vi) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES During the FY under review, transactions were conducted by the Company pursuant to the Agreements entered into with its Related Parties during previous years; the same were on an arm’s length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or any related party which may have a potential conflict with the interest of the Company at large. The details of related party transactions which were entered during the previous year / current year are provided in Financial Statements, under the head measurement and disclosures as per the Accounting Standards.
The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 are given in Form AOC-2 is herewith annexed as Annexure –II to this report.
17. SHARE CAPITAL
The Authorised Share Capital of the Company as on date of Balance Sheet is Rs. 5,00,00,000/- divided into 50,00,000 equity shares of Rs.10/- each.
The paid-up share capital of the company as on date of balance sheet is Rs. 4,64,15,000/- divided into 46,41,500 equity shares of Rs. 10/- each. During the year, your Company has issued 31,47,000 Bonus Shares in the ratio of 6:1 i.e. 6 equity shares for every 1 equity share held to the shareholders by way of capitalization of Securities Premium Account.
Company came out with Initial Public Offer (IPO) by offering 9,70,000 equity shares of face Value of Rs. 10/- and a premium of Rs.110/- per share.
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During the year under review, the Company has not issued shares with differential voting rights, sweat equity shares or Employee Stock Options.
18. AUDITORS’ REPORT
There are no qualifications, reservations or adverse remarks made by M/s. Ramasamy Koteswara and Co LLP, Chartered Accountants, Statutory Auditors in their report for the Financial Year ended 31st March 2018. The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company under sub-section (12) of section 143 of the Companies Act, 2013, during the year under review.
19. SECRETARIAL AUDIT REPORT
There are no qualifications, reservations or adverse remarks made by M/s. P. S. Rao & Associates, Practicing Company Secretaries in their report for the Financial Year ended 31st March 2018. The secretarial audit report for F.Y. 2017-18 forms part of this Report as Annexure- III.
20. EXTRACT OF ANNUAL RETURN: An Extract of Annual return prepared in accordance with the provisions of the section 92 (3) of the Companies Act, 2013 in the form MGT-9 is Annexed as Annexure – IV to this report.
21. MANAGEMENT DISCUSSION AND ANALYSIS:
Pursuant to Regulation 34 (2) (e) of SEBI (LODR) Regulations, 2015, a report on Management Discussion & Analysis is herewith annexed as Annexure-V.
22. RISK MANAGEMENT POLICY The Company has developed and implementing a risk management policy which includes the identification therein of elements of risk, which in the opinion of the board may threaten the existence of the Company.
23. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo:
a) Conservation of Energy, Technology Absorption:
The particulars prescribed by section 134(3)(m) the Companies Act, 2013, pertaining to disclosure measures taken in relation to conservation of energy and technology absorption are not applicable.
b) Foreign Exchange earnings and Outgo: Foreign Exchange Earnings: Rs. 2,12,80,326/- Foreign Exchange Outgoings: 0
24. CONVERSION OF COMPANY FROM PRIVATE LIMITED TO PUBLIC LIMITED: During the year under review, the Company has converted from Private Limited Company to Public limited Company by passing a Special Resolution at the Extraordinary General meeting of the members of the Company held on 15th day of May 2017, and the Company has obtained fresh Certificate of Incorporation
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dated, 24th day of May 2017 from the Registrar of Companies, for the state of Telangana and Andhra Pradesh.
25. INITIAL PUBLIC OFFER (IPO): During the year under review, the Company has come out with an Initial Public offer of 12,60,000 (comprising a fresh issue of 9,70,000 equity Shares and Offer for sale (OFS) of 2,90,000 equity Shares) equity shares of Rs.10/- each at a premium of Rs.110/- per share.
Your directors are pleased to inform that, the Company has successfully completed its IPO. The issue got oversubscribed by 17.23 times. Company has received trading approval from NSE – Emerge and listed its shares on SME platform of NSE (Emerge) with effect from 18th January, 2018, having the symbol “SILLYMONKS”
26. MATERIAL CHANGES AFTER THE CLOSURE OF THE FINANCIAL YEAR:
Your directors of pleased to inform you that, the Company has acquired following Companies post closure of the Financial Year 2017-18.
Name of the Company Details of Shares acquired Date of Approval of Board INANI Media Private Limited 51% of the total paid up share capital
of the Company 19th July, 2018
Chintala Sports Private Limited 51% of the total paid up share capital of the Company
02nd August, 2018
Upon acquisition of shares in the aforesaid Companies, both the Companies have become Subsidiary Companies to your Company in terms of provisions of section 2 (87) of the Companies Act, 2013, by virtue shareholding.
27. HUMAN RESOURCES:
Your Company considers its Human Resources as the key to achieve its objectives. Keeping this in view, your Company takes utmost care to attract and retain quality employees. The employees are sufficiently empowered and such work environment propels them to achieve higher levels of performance. The unflinching commitment of the employees is the driving force behind the Company’s vision. Your Company appreciates the spirit of its dedicated employees.
28. CORPORATE GOVERNANCE REPORT:
As the securities of the Company are listed on National Stock Exchange of India Limited - SME platform Emerge, by virtue of Regulation 15 of securities and Exchange Board of India (Listing Obligations and Disclosure) Regulation, 2015 (The Regulations), the compliance with the corporate Governance provisions as specified in regulation 17 to 27 and Clause (b) to (i) of sub-regulation 2 of Regulation 46 and para C, D & E of Schedule V of the regulations, are not applicable to the Company. Hence the Corporate Governance does not form part of this Board’s report.
29. FORMAL ANNUAL EVALUATION OF PERFORMANCE OF THE MEMBERS OF THE BOARD AND COMMITTEES Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own
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Performance, the Directors individually as well as the evaluation of the working of its Audit and other Committees.
A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.
A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.
30. CHANGE IN THE NATURE OF BUSINESS: There was no change in the nature of business of your Company during the financial year ended 31st March, 2018.
31. SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations. Further, we confirm that there were no instances of fraud to be reported by the Auditors vide their Report for the FY 2017-18.
32. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
Your Company has an adequate system of internal financial controls with reference to financial statements, including but not limited to safeguard and protection of assets from loss, their unauthorized use or disposition. All the transactions were properly authorized, recorded and reported to the Management. The Company is following all the applicable Accounting Standards for properly maintaining the books of accounts and reporting in the financial statements. Your Company continues to ensure proper and adequate systems and procedures commensurate with its size and nature of its business.
33. VIGIL MECHANISM:
The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Group. The details of the Policy are posted on the website of the Company www.sillymonks.com.
34. RISK MANAGEMENT POLICY:
The Company is in the Process of adopting a policy on risk management. Your Company believes that managing the risk helps in maximizing the returns. The Company’s approach to addressing business risk is comprehensive and includes periodic review of such risks and frameworks for mitigating the risks and reporting mechanism of such risks.
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27
35. POLICY ON SEXUAL HARASSMENT: The company has adopted policy on prevention of sexual harassment of women at workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year ended March 31, 2018, the company has not received any complaints pertaining to sexual harassment.
36. PARTICLARS OF EMPLOYEES The information required pursuant to Section 197 (12) read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company is herewith annexed as Annexure- VI.
In terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company does not have any employee who is employed throughout the financial year and in receipt of remuneration of Rs. 120 Lakhs or more, or employees who are employed for part of the year and in receipt of Rs. 8.50 Lakhs or more per month. The Company does not have any employee who is employed throughout financial year or part thereof, who was in receipt of remuneration in financial year under review which in aggregate, or as the case may be, at a rate which in the aggregate is in excess of that drawn by the Managing Director or Whole time director and holds by himself/herself or along with his/her spouse and dependent children not less than 2% of the equity shares of the Company.
37. ACKNOWLEDGMENT AND APPRECIATION:
Your Directors take this opportunity to thank the Clients, shareholders, bankers, business associates for their consistent support and continued encouragement to the Company. Further your Directors convey their appreciation for the whole hearted and committed efforts by all its employees. Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central and State Governments, Stock Exchanges, RBI and other Regulatory Bodies.
By Order of The Board of Directors For Silly Monks Entertainment Limited
Place: Hyderabad Date: 31st August, 2018
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director DIN: 00297272
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28
ANNEXURES TO DIRECTORS’ REPORT ANNEXURE - I
Form AOC-1 (Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
Statement containing salient features of the financial statement of subsidiaries/associate companies /joint ventures
Part "A": Subsidiaries Subsidiaries Financial Highlights (Amount In Rs.)
Sl. No. Particulars Dream Boat Entertainment
Pte. Limited
Event Monks Entertainment
LLP
Monkstar Music LLP
1. Reporting period for the subsidiary concerned, if different from the holding company's reporting period
Not Applicable Not Applicable Not Applicable
2. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries
1 USD = 65.0815
Not Applicable Not Applicable
3. Share capital 80,000 1,00,000 5,00,000 4. Reserves & surplus 2,46,13,847 10,61,501 95,88,042 5. Total assets 3,99,80,580 17,23,347 1,05,74,401 6. Total Liabilities 3,99,80,580 17,23,347 1,05,74,401 7. Investments Nil Nil Nil 8. Turnover 8,85,59,420 31,14,286 40,76,342 9. Profit/Loss before taxation 1,02,92,947 (13,36,002) 4,29,285 10. Provision for taxation (Includes DTL/
DTA) - - 1,34,798
11. Profit after taxation 1,02,92,947 (13,36,002) 2,94,487 12. Proposed Dividend - - 13. % of shareholding 100% 64% 67%
None of the above subsidiaries have been liquidated or sold during the year.
Part “B”: Associates and Joint Ventures – Not Applicable
As per my report of even date. For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
Annual Report 2017-18
29
Annexure - II Form No. AOC-2
DETAILS OF RELATED PARTY TRANSACTIONS (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies
(Accounts) Rules, 2014)
This form is pertaining to disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in subsection (1) of section 188 of the Companies Act, 2013 including certain arms’ length transactions under third proviso thereto 1. Details of contracts or arrangements or transactions not at arm’s length basis: NIL
The company has not entered into any contract or arrangement or transaction which is not at arm’s length basis during the year under review.
2. Details of material contracts or arrangement or transactions at arm’s length basis:
Name(s) of the Related
Party
Nature of Relationship
Nature of contracts/
arrangements/ transactions
Duration of the
contracts / arrangement
/ transactions
Salient terms of the
contracts or arrangements
or transactions including the value, if any
Date(s) of approval
by the Board,
if any
Amount In Rs.
Dream Boat Entertainment Pte Ltd
Investment Held in Foreign Entity
Service Income 01.04.2015 - On going
Not applicable
Not applicable
1,95,92,826
Events Monks Entertainment LLP
Investment held in LLP
Service Charges Expense
01.04.2017 - On going
Not applicable
Not applicable
20,06,005
Monkstar LLP Investment held in LLP
Service Charges Expense
01.04.2017 - On going
Not applicable
Not applicable
33,08,887
By Order of The Board of Directors For Silly Monks Entertainment Limited
Place: Hyderabad Date: 31st August, 2018
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director DIN: 00297272
Annual Report 2017-18
30
ANNEXURE - III SECRETARIAL AUDIT REPORT
For the Financial Year ended on 31st March 2018 [Pursuant to Section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies
(Appointment and Remuneration Personnel) Rules, 2014] To, The Members, M/s. Silly Monks Entertainment Limited Hyderabad-500084 We have conducted the secretarial audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by M/s SILLY MONKS ENTERTAINMENT LIMITED (hereinafter called The Company) having its registered office situated at 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur Hyderabad – 500084. Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing my opinion thereon. Based on our verification of the Company books, papers, minute books, forms and returns filed and other records maintained by the company and also the information provided by the Company, its officers, agents and authorized representatives during the conduct of secretarial audit, We hereby report that in our opinion, the company has, during the audit period covering the financial year 2017-2018 complied with the statutory provisions listed here under and also that the Company has proper Board-processes and compliance-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter: We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31st March, 2018 according to the provisions of: (i) The Companies Act, 2013 (the Act) and the rules made there under, as applicable (ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made there under (iii) The Depositories Act, 1996 and the Regulations and Bye-laws framed there under; (iv) Foreign Exchange Management Act, 1999 and the rules and regulations made there under to the
extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
(v) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):- a) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011; b) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. c) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009; in connection with Public issue of Equity Shares d) The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations,
2014; (not applicable during the audit period) e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations,
2008; (not applicable during the audit period) f) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents)
Regulations, 1993 regarding the Companies Act and dealing with client;
Annual Report 2017-18
31
g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (not applicable during the audit period) and
h) The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (not applicable during the audit period) and
i) The SEBI (Listing Obligations & Disclosure Requirements) 2015, entered into by the Company with Stock Exchange; As Applicable.
Other specifically applicable laws to the Company: Cinematograph Act, 1952, Copyright Act, 1957 and the rules made thereunder, being laws that are
specifically applicable to the Company based on their sector/industry
We have also examined compliance with the applicable clauses of the Secretarial Standards issued by the Institute of Company Secretaries of India. During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above: We further report that The Board of Directors of the Company is duly constituted with proper balance of Executive Directors,
Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all Directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
All decisions at Board Meetings and Committee Meetings are carried out unanimously as recorded in the
minutes of the meetings of the Board of Directors or Committee of the Board, as the case may be.
• Meetings at shorter Notice, if any, are conducted with adequate consent of the Directors.
There are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
There were no such specific events/actions in pursuance of the above referred laws, rules, regulations,
etc., having a major bearing on the Company’s affairs. During the period under review the Company has complied with the provisions of the Act, Rules,
Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations.
- In certain cases, there was a delay in filling of forms with Registrar of Companies. We further report that: There are adequate systems and processes in the company commensurate with the size and operations of the company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
Annual Report 2017-18
32
We further report that during the Audit period, following events occurred which are having a major bearing on the Company’s affairs- The company has converted its Status from Private Limited to Limited Company during the Year. The Board of Directors was restructured; Independent Directors were appointed, and committees
were formed in terms of provisions of Companies Act, 2013 and SEBI Regulations. During the year, the Company has issued 31,47,000 Bonus Shares in the ratio of 6:1 i.e. 6 equity shares
for every 1 equity share held to the shareholders by way of capitalization of Securities Premium Account.
In the month of January 2018, the company has come out with an Initial Public Offer (IPO) and offered 12,60,000 equity shares comprising offer for sale of 2,90,000 (Two Lakhs and Ninety Thousand only) equity shares by the promoters of the Company (the Selling Shareholders) and Fresh Issue of 9,70,000 (Nine Lakhs and Seventy Thousand only) equity shares, at a face value of Rs.10/- (Rupees Ten Only) and at a premium of Rs.110/- (Rupees One Hundred and Ten only) per share.
The IPO got successfully subscribed by Public and Board has allotted 9,70,000 (Nine Lakhs and Seventy Thousand only) fresh equity shares at its meeting held on 15th January 2018 and the got its 46,41,500 equity shares listed at National Stock Exchange of India Limited - Emerge (SME Segment) w.e.f 18th January 2018.
This resulted in corresponding change in the capital structure of the Company.
For P S Rao & Associates Company Secretaries
Sd/- Jineshwar Kumar Sankhala
Company Secretary M. No: 21697 C P No: 18365
Place: Hyderabad Date: 25.08.2018
Annual Report 2017-18
33
ANNEXURE-IV FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN As on financial year ended on 31.03.2018
Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the Company (Management & Administration) Rules, 2014.
I. REGISTRATION &OTHER DETAILS:
1. CIN U92120TG2013PLC090132 2. Registration Date 20/09/2013 3. Name of the Company Silly Monks Entertainment Limited 4. Category/Sub-category of the Company Public Company/ Limited by Shares 5. Address of the Registered office &
contact details 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur Hyderabad - Telangana 500084, India. Email: [email protected]
6. Whether listed company Yes 7. Name, Address & contact details of the
Registrar & Transfer Agent, if any. Bigshare Services Private Limited 306, Right Wing, Amrutha Ville, Opp. Yasodha Hospital, Somajiguda, Raj Bhavan Road, Hyderabad - 500 082. Email Id [email protected]
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more
of the total turnover of the company shall be stated):
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
a) Category-wise Share Holding:
S. No. Name and Description of main products / services NIC Code of the Product/service
% to total turnover of the compan 1. Motion picture, video and television programme
production, sound recording and music publishing activities (Publishing, Digital & Social Media)
59 100.00%
Sl. No. Name and Address of the Company
CIN/GLN Holding/ Subsidiary / Associate
% of shares held
Applicable Section
1. Dream Boat Entertainment Pte Ltd.
NA Subsidiary 100% 2(87)
2. Monkstar Music LLP AAD-8082 Subsidiary 67% 2(87) 3. Event Monks
Entertainment LLP AAD-2703 Subsidiary 64% 2(87)
Annual Report 2017-18
34
Category of Shareholders
No. of Shares held at the beginning of the year [As on 31-March-2017]
No. of Shares held at the end of the year [As on 31-March-2018]
% Change during
the year
Demat Physical
Total % of Total
Shares
Demat Physical
Total % of Total
Shares A. Promoters (1) Indian a) Individual/ HUF - 318000 318000 60.63 1936000 0 1936000 41.71 (18.92) b) Central Govt. - - - - - - - - - c) State Govt.(s) - - - - - - - - - d) Bodies Corp. - - - - - - - - - e) Banks / FI - - - - - - - - - f) Any other - - - - - - - - - Sub-total (A)(1) - 318000 318000 60.63 1936000 0 1936000 41.71 (18.92) (2) Foreign a) NRI Individuals - - - - - - - - - b) Other Individuals - - - - - - - - - c) Bodies Corp. - - - - - - - - -
d) Banks / FI - - - - - - - - - e) Any other - - - - - - - - - Sub-total (A)(2) - - - - - - - - - Total Shareholding of Promoter (A)= (A)(1)+(A)(2)
- 318000 318000 60.63 1936000 0 1936000 41.71 (18.92)
B. Public Shareholding 1. Institutions a) Mutual Funds - - - - - - - - - b) Banks / FI - - - - - - - - - c) Central Govt - - - - - - - - - d) State Govt(s) - - - - - - - - - e) Venture Capital Funds
- - - - - - - - -
f) Insurance Companies
- - - - - - - - -
g) FIIs - - - - - - - - - h) Foreign Venture Capital Funds
- - - - - - - - -
i) Others (specify) - - - - - - - - - Sub-total (B)(1):- - - - - - - - - - 2. Non-Institutions a) Bodies Corp. i) Indian - 106500 106500 20.31 907509 0 907509 19.55 (0.76) ii) Overseas - - - - - - - - - b) Individuals - - - - - - - - - i) Individual shareholders holding
- - - - 679994
- 679994
14.65 14.65
Annual Report 2017-18
35
nominal share capital up to Rs. 1 lakh
ii) Individual shareholders holding nominal share capital in excess of Rs 1 lakh
- 100000 100000 19.07 906400 0 906400 19.52 0.45
c) Others (specify) Clearing Member - - - - 48397 - 48397 1.04 1.04 Market Maker - - - - 70800 - 70800 1.53 1.53 Trust - - - - 13200 - 13200 0.28 0.28 Non-Resident Individuals
- - - - 79200 - 79200 1.71 1.71
Foreign Portfolio Investors – Corporate (FPI)
- - - - - - - - -
Sub-total (B)(2):- - 206500 206500 39.37 2705500 0 2705500 58.28 11.57 Total Public Shareholding (B)=(B)(1)+ (B)(2)
- 206500 206500 39.37 2705500 0 2705500 58.28 11.57
C. Shares held by Custodian for GDRs & ADRs
- - - - - - - - -
Grand Total (A+B+C) - 524500 524500 100.00 4641500 0 4641500 100.00 0.00
b) Shareholding of Promoters/ Promoters Group:-
S. No.
Shareholder’s Name
Shareholding at the beginning of the year
Shareholding at the end of the year
% change
in shareho
-lding during
the year
No. of Shares
% of total
Shares of the
company
%of Shares
Pledged / encumber
ed to total
shares
No. of Shares
% of total
Shares of the
company
%of Shares
Pledged / encumber
ed to total
shares Promoters
1 Tekulapalli Sanjay Reddy
240000 45.76% 0 1440000 31.02 0 (14.74%)
2 Anil Kumar Pallala 50000 9.53% 0 300000 6.46 0 (3.07%) Total 290000 55.29% 0 1740000 37.48% 0 (17.81%)
Promoter’s Group 3 Swathi Reddy 11000 2.10% 0 77000 1.65% 0 (0.45%) 4 Gaurika Reddy 6500 1.24% 0 45500 0.98% 0 (0.26%) 5 Karyampudi Koti
Sridevi 4000 0.76% 0 28000 0.60% 0 (0.16%)
6 Tekulapalli Mahikaansh Reddy
6500 1.24% 0 45500 0.98% 0 (026%)
Total 28000 5.34% 0 196000 4.21% 0 (1.13%)
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36
c) Change in Promoters’ Shareholding (please specify, if there is no change):-
Particulars Date Reason Shareholding at the
beginning of the year Cumulative
shareholding during the year
No. of shares
% of total shares of
the company
No. of shares
% of total shares of
the company
Promoters 1. Tekulapalli Sanjay Reddy
At the beginning of the year
01.04.2017 240000 45.76% - -
Changes during the year 24.05.2017 Bonus Issue 1440000 39.22% 1680000 45.76% 15.01.2018 Offer for
Sale (IPO) (240000) 5.17 1440000 31.02%
At the end of the year 31.03.2018 - - 1440000 31.02% 2. Anil Kumar Pallala
At the beginning of the year
01.04.2017 50000 9.53% - -
Changes during the year 24.05.2017 Bonus Issue 300000 8.17% 350000 9.53% 15.01.2018 Offer for
Sale (IPO) (50000) (1.08%) 300000 6.46%
At the end of the year 31.03.2018 - - 300000 6.46% Promoter’s Group
3. Swathi Reddy At the beginning of the year
01.04.2017 - 11000 2.10% - -
Changes during the year 24.05.2017 Bonus Issue 66000 1.80% 77000 2.10% At the end of the year 31.03.2018 - 77000 1.66%
4. Gaurika Reddy At the beginning of the year
01.04.2017 - 6500 1.24% - -
Changes during the year 24.05.2017 Bonus Issue 39000 - 45500 1.24% At the end of the year 31.03.2018 - - - 45500 0.98%
5. Karyampudi Koti Sridevi At the beginning of the year
01.04.2017 - 4000 0.76% - -
Changes during the year 24.05.2017 Bonus Issue 24000 0.65 28000 0.76% At the end of the year 31.03.2018 - - - 28000 0.60%
6. Tekulapalli Mahikaansh Reddy At the beginning of the year
01.04.2017 - 6500 1.24% - -
Changes during the year 24.05.2017 Bonus Issue 39000 - 45500 1.24% At the end of the year 31.03.2018 - - - 45500 0.98%
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d) Shareholding Pattern of top ten Shareholders (Other than Directors, Promoters and Holders of GDRs and ADRs):
Particulars Date Reason Shareholding at the beginning of the year
Cumulative shareholding during
the year No. of shares
% of total shares of
the company
No. of shares
% of total shares of
the company
1. Ektha.Com Private Limited At the beginning of the year 01.04.2017 106500 20.31% - - Changes during the year 24.05.2017 Bonus Issue 639000 17.40% 745500 20.31% At the end of the year 31.03.2018 - - 745500 16.06% 2. Korrapati Ranganathasai At the beginning of the year 01.04.2017 100000 19.07% - -
Changes during the year 24.05.2017 Bonus Issue 600000 16.64% 700000 19.07% 15.01.2018 IPO
allotment 1200 0.03% 701200 15.11%
At the end of the year 31.03.2018 - - 701200 15.11% 3. Manoj Agarwal At the beginning of the year 01.04.2017 0 0
Changes during the year
15.01.2018 Purchase 22800 0.49 22800 0.49% 26.01.2018 Sale (4800) -0.10 18000 0.39% 02.02.2018 Purchase 101454 2.19 119454 2.57% 09.02.2018 Purchase 1411 0.03 120865 2.60% 16.02.2018 Purchase 893 0.02 121758 2.62% 16.03.2018 Purchase 642 0.01 122400 2.64%
At the end of the year 31.04.2018 122400 2.64% 4. Aryaman Capital Markets Limited At the beginning of the year 01.04.2017
Changes during the year
15.01.2018 Purchase 72000 1.55 72,000 1.55% 26.01.2018 Sale (10800) (0.23) 61,200 1.32% 02.02.2018 Purchase 3600 0.08 64,800 1.40% 09.02.2018 Purchase 1200 0.03 66,000 1.42% 16.02.2018 Sale (3600) (0.08) 62,400 1.34% 23.02.2018 Purchase 3600 0.08 66,000 1.42% 02.03.2018 Purchase 1200 0.03 67,200 1.45% 09.03.2018 Purchase 4800 0.10 72,000 1.55% 30.03.2018 Purchase 1200 0.03 73,200 1.58%
At the end of the year 31.04.2018 73,200 1.58% 5. Divi Satya Sayee Babu At the beginning of the year 01.04.2017
Changes during the year 15.01.2018 Purchase 3600 0.08 3,600 0.08 26.01.2018 Purchase 25200 0.54 28,800 0.62 09.02.2018 Purchase 1200 0.03 30,000 0.65
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38
23.02.2018 Purchase 2400 0.05 32,400 0.70 02.03.2018 Purchase 4800 0.10 37,200 0.80 09.03.2018 Purchase 6000 0.13 43,200 0.93
At the end of the year 31.04.2018 43,200 0.93 6. Vinod Lodha At the beginning of the year 01.04.2017
Changes during the year 15.01.2018 Purchase 19200 0.41 19,200 0.41 21.03.2018 Purchase 12000 0.25 31,200 0.67
At the end of the year 31.04.2018 31,200 0.67 7. Tradewell Capfin Private Limited At the beginning of the year 01.04.2017 Changes during the year 09.02.2018 Purchase 30000 0.65 30000 0.65 At the end of the year 31.04.2018 30000 0.65 8. Maverick Financial Services Private Limited At the beginning of the year 01.04.2017
Changes during the year
26.01.2018 Purchase 22800 0.49 22,800 0.49 09.02.2018 Purchase 6000 0.13 28,800 0.62 23.02.2018 Sale (28800) (0.62) 0 0.00 02.03.2018 Purchase 28800 0.62 28,800 0.62
At the end of the year 31.04.2018 28,800 0.62 9. Avinash Bhikaji Tawade At the beginning of the year 01.04.2017
Changes during the year
26.01.2018 Purchase 6000 0.13 6,000 0.13 02.02.2018 Purchase 6000 0.13 12,000 0.26 09.02.2018 Purchase 3600 0.08 15,600 0.34 02.03.2018 Purchase 2400 0.05 18,000 0.39 09.03.2018 Purchase 3600 0.08 21,600 0.47 16.03.2018 Purchase 3600 0.08 25,200 0.54 23.03.2018 Purchase 1200 0.03 26,400 0.57
At the end of the year 31.04.2018 26,400 0.57 10. JM Financial Services Ltd. At the beginning of the year 01.04.2017
Changes during the year
26.01.2018 Purchase 136800 2.95 136,800 2.95 02.02.2018 Sale (132654) (2.86) 4,146 0.09 09.02.2018 Sale (1411) (0.03) 2,735 0.06 16.02.2018 Purchase 20707 0.45 23,442 0.51 23.02.2018 Sale (10800) (0.23) 12,642 0.27 09.03.2018 Purchase 14400 0.31 27,042 0.58 16.03.2018 Sale (4242) (0.09) 22,800 0.49
At the end of the year 31.04.2018 22,800 0.49
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39
e) Shareholding of Directors and Key Managerial Personnel:
Particulars Date Reason Shareholding at the beginning of the year
Cumulative shareholding during the
year No. of shares
% of total shares of
the company
No. of shares
% of total shares of the
company
1. Tekulapalli Sanjay Reddy At the beginning of the year 01.04.2017 240000 45.76% - -
Changes during the year
24.05.2017 Bonus Issue 1440000 39.22% 1680000 45.76%
15.01.2018 Offer for Sale (IPO) (240000) 5.17 1440000 31.02%
At the end of the year 31.03.2018 - - 1440000 31.02% 2. Anil Kumar Pallala At the beginning of the year 01.04.2017 50000 9.53% - -
Changes during the year 24.05.2017 Bonus Issue 300000 8.17% 350000 9.53%
15.01.2018 Offer for Sale (IPO) (50000) (1.08%) 300000 6.46%
At the end of the year 31.03.2018 - - 300000 6.46% 3. Swathi Reddy At the beginning of the year 01.04.2017 - 11000 2.10% - - Changes during the year 24.05.2017 Bonus
Issue 66000 1.80% 77000 2.10%
At the end of the year 31.03.2018 - 77000 1.66% 4. Venkata Kama Dixitulu Dixitula At the beginning of the year 01.04.2017 - - - - - Changes during the year - - - - - - At the end of the year 31.03.2018 - - - - - 5. Prasada Rao Kalluri At the beginning of the year 01.04.2017 - - - - - Changes during the year - - - - - - At the end of the year 31.03.2018 - - - - - 6. Boda Narsing Rao At the beginning of the year 01.04.2017 - - - - - Changes during the year - - - - - - At the end of the year 31.03.2018 - - - - - 7. Sushma Barla At the beginning of the year 01.04.2017 - - - - - Changes during the year - - - - - - At the end of the year 31.03.2018 - - - - -
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40
V. INDEBTEDNESS - Indebtedness of the Company including interest outstanding/accrued but not due for payment.
(Amount in Rs.) Secured Loans
Excluding Deposits Unsecured
Loans Deposits Total
Indebtedness Indebtedness at the beginning of the financial year
i) Principal Amount 87,96,902 - - 87,96,902 ii) Interest due but not paid - - - - iii)Interest accrued but not due - - - - Total (i+ii+iii) 87,96,902 - - 87,96,902
Change in Indebtedness during the financial year * Addition - 40,36,000 - 40,36,000 * Reduction 87,96,902 - - 87,96,902 Net Change (87,96,902) - - (47,60,902)
Indebtedness at the end of the financial year i) Principal Amount - 40,36,000 - 40,36,000 ii) Interest due but not paid - - - - iii)Interest accrued but not due - - - -
Total (i+ii+iii) 0 40,36,000 - 40,36,000
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Amount in Rs.)
Sl. No. Particulars of Remuneration Name of MD/WTD/ Manager
Total Amount Designation CMD WTD 1. Gross salary Tekulapalli
Sanjay Reddy Anil Kumar
Pallala (a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961 60,00,000 30,00,000 90,00,000
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
- - -
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961
- - -
2. Stock Option - - - 3. Sweat Equity - - - 4. Commission
- as % of profit - others specify
- - -
5. Others, please specify - - - Total (A) 60,00,000 30,00,000 90,00,000 Ceiling as per the Act *
* Remuneration payable to Managerial Personnel exceeds the limits specified under Section 197 of the Companies Act, 2013.
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41
Approval of the members of the Company has obtained, by passing a Special Resolution at the Extraordinary meeting of the members of the Company held on 15th May 2017, to pay the remuneration to the Managerial Personnel as per the provisions of Section II of Part II of Schedule V of the Companies Act, 2013. B. Remuneration to other Directors:
(Amount in Rs.) Sl. No. Particulars of Remuneration Name of Directors
Total Amount 1. Independent Directors Venkata Kama Dixitulu Dixitula
Prasada Rao Kalluri
Fee for attending board committee meetings
- 65,000 65,000
Commission - - - Others, please specify - - - Total (1) - 65,000 65,000
2. Other Non-Executive Directors Swathi Reddy Total Fee for attending board committee meetings
- -
Commission - - Others, please specify - - Total (2) - - Total (B)=(1+2) - - Total Managerial Remuneration - - Overall Ceiling as per the Act - - -
C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD – Not Applicable
(Amount in Rs.) Sl. No. Particulars of Remuneration Name of Key Managerial
Personnel Total Amount 1. Designation CFO CS
Gross salary Boda Narsing Rao Sushma Barla
(a) Salary as per provisions contained in section 17(1) of the Income-tax Act, 1961
5,04,000 3,60,000 8,64,000
(b) Value of perquisites u/s 17(2) Income-tax Act, 1961
- - -
(c) Profits in lieu of salary under section 17(3) Income- tax Act, 1961
- - -
2. Stock Option - - - 3. Sweat Equity - - - 4. Commission
- as % of profit - others, specify
- - -
5. Others, please specify - - - Total (A) 5,04,000 3,60,000 8,64,000
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42
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES
Type Section of the
Companies Act
Brief Description
Details of Penalty / Punishment/ Compounding fees imposed
Authority [RD / NCLT/
COURT]
Appeal made, if any (give Details)
A. COMPANY Penalty
Punishment Compounding
B. DIRECTORS
Penalty Punishment Compounding
C. OTHER OFFICERS IN DEFAULT
Penalty Punishment Compounding
By Order of The Board of Directors For Silly Monks Entertainment Limited
Place: Hyderabad Date: 31st August, 2018
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director DIN: 00297272
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ANNEXURE-V MANAGEMENT DISCUSSION ANALYSIS a) COMPANY OVERVIEW In this digital era, the world is no longer what it used to be. It takes courage and flexibility to embrace that change. We at Silly Monks do just that! Drawing upon years of experience in the fields of technology, media, and content creation, we at Silly Monks Entertainment identify ourselves as an internet publishing, content creation, mobile distribution, marketing, advertising and strategic consulting company. Our eclectic team of young men and women from a range of backgrounds; highly educated and with street smarts, make a deadly combination. This helps us bring an element of uniqueness to our work. We are constantly growing and raising our standards to improve our performance. OUR BUSINESS LINES / MODEL ARE AS ARE AS ILLUSTRATED BELOW:
Google Ad word Digital Media Publishing Advertising Audio content Movie/Content Production Distribution Celebrities App Development Social Media management
Dream Boat Entertainment Pte Ltd Monkstar Music LLP Event Monks Entertainment LLP
(100% Subsidiary) (67% Subsidiary) (64% Subsidiary)
Formed as an SPV Company Live Band Performances, promoting Event Management in Hong Kong For the Music talent such as singers, bands or You Tube Business line. Composers for creative content creations
SILLYMONKS ENTERTAINMENT LTD
We are a ‘South India’ based entertainment & media startup with a focus of being a recognized & fast-growing player in areas such as digital media publishing, movie/content production, celebrities social media
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management, App development, Audio content Distribution, Google Ad word and online / digital Advertising, event management, and live band performances. Our main focus currently is Digital Media Publishing. We publish our content on various platforms such as YouTube, Facebook, Amazon, Vuclip etc. The contents that are being published over these platforms are either created by us i.e. by our in-house production or acquired through outright purchase or through syndicated method. In case of content which is bought by us, we own the copy rights of the content through an agreement with assignor and hence the publishing revenue is fully accrued to us. When the content is through syndication, we share the revenue with the content partner.
We are a Youtube MCN (Multi Channel Network). We have an exhaustive spread of creative endeavours. The Silly Monks creative team works towards creating interesting and innovative new content, including videos, music and movie-based entertainment. We also keep our radars on, to spot new talent and give them the break they truly deserve. Through inventive reprocessing and web optimization, we ensure the visibility and accessibility of our content. We also have trained professionals who maximize the profit and track unauthorized content duplication.
b) INDUSTRY STRUCTURE AND DEVELOPMENTS INDIAN ECONOMIC SCENARIO India has emerged as the fastest growing major economy in the world as per the Central Statistics Organisation (CSO) and International Monetary Fund (IMF). The Government of India has forecasted that the Indian economy will grow by 7.1 per cent in FY 2016-17. As per the Economic Survey 2016-17, the Indian economy should grow between 6.75 and 7.5 per cent in FY 2017-18. Digital Media Publishing Industry Global and Indian Economy Global Trends: Transition to On-Demand Content Media consumption across the globe is increasingly happening in digital formats. The increase in the number of devices capable of supporting digital media along with increasing internet access speed, has provided consumers with an option to access the media content of his choice be it information, entertainment or social activity anytime, anywhere. Media consumption in the US has shown tremendous increase and has seen a significant jump from traditional media to new (digital) media. The rise of digital media players such as Netflix, Hulu, Amazon, Apple TV, Roku, and Boxee, etc. are challenging the traditionally maintained supremacy of the television as the main entertainment hub. Mobile devices driving the digital consumption Online media consumption has shown tremendous growth over the past few years. Among the digital devices, mobile devices have taken over as the preferred medium of consuming online media. The smartphone market has seen an unprecedented growth in the last 5 years. Smartphone devices across the globe grew at a CAGR of 17% as compared to 9.5% growth in all mobile devices. Smartphones crossed 2 billion mark in 2014 and are expected to reach 4.6 billion by 2019. This increase in the number of mobile devices is making it easier for consumers to access music and video content on the go. In 2014, the smartphone mobile data traffic alone stood at 1.73 EB per month (69% of global mobile data traffic),
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which is expected to grow 10-fold from 2014 to 2019, a compound annual growth rate (CAGR) of 60%. Tablet mobile data traffic will grow 20-fold from 2014 to 2019 (CAGR of 83%) to reach 3.2 EB per month. The internet has been and continues to be a disruptive force impacting distribution and consumption channels for media. With better networks, coverage, and advanced technologies (3G, 4G / LTE) the data consumption across the globe has risen. Audio & Video drive the global digital media consumption Most of this data growth is attributed to different digital media especially the entertainment services like video, audio etc. Globally, video and audio traffic has dominated the internet data consumption for some years now. The devices used to access digital content have evolved in the last few years that have increased the array of platforms on which a user can stream audio and video content. Netflix share of internet traffic in North America increased further and accounted for 34% of data flowing to consumers during the peak times in first half of 2014. 2 Over-the-top (OTT) service providers like YouTube and Subscription-based digital content providers like Spotify have also acted as a catalyst in the growth of audio/video data streaming. The global audio and video traffic combined is expected to reach 82% of all internet traffic by 2018. Digital Media Landscape in India In line with global trends, the Indian consumer is increasingly consuming the content on digital platforms. This trend is observed for all type of content including news (text), music (audio), or video. Increasing internet penetration and mobile device proliferation and convenience of consuming the content anytime, anywhere are the key drivers for this trend. Rapidly increasing internet users India added 43 million internet users (20.5% growth) from October 2013 to September 2014 and total internet users crossed 254 million 6 in September 2014. Out of these, 235 million users accessed internet through mobile devices. The growth in internet users was seen both in rural and urban parts of India. Internet users in rural India is expected to reach 138 million by June 2015, while 216 million internet users are expected to be in urban India by then. With improved networks, better access to internet, multimedia service-capable mobile devices and application development ecosystem, more and more media consumption would happen on digital platforms. India has around 300,000 app developers and is already the second largest Android developer community in the world after the US. While the internet user base in India is growing at a rapid rate; most of these users (75%) belongs to the age group of less than 35 years. More than half of the app users in India are aged between 18 and 24 years and a further 29% between 25 and 35. 45% of these users reside in the top 4 metros.
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Higher spend on entertainment services by youth On an average, an internet connected user in India spends 14% of his or her time and 17% of his or her monthly spending on entertainment. Combined spend by an internet user on Mobile and Entertainment increased by 34% in two years from 2012 to 2014.
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India Media and Entertainment Industry The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making high growth strides. Proving its resilience to the world, the Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenues. The industry has been largely driven by increasing digitization and higher internet usage over the last decade. Internet has almost become a mainstream media for entertainment for most of the people.
Market Dynamics The Indian media & entertainment sector is expected to grow at a Compound Annual Growth Rate (CAGR) of 14.3 per cent to touch M 2.26 trillion (US$ 33.9 billion) by 2020, while revenues from advertising is expected to grow at 15.9 per cent to M 99,400 crore (US$ 14.91 billion).Over FY 2015-20, radio will likely grow at a CAGR of 16.9 per cent, while digital advertising will grow at 33.5 per cent. The largest segment, India’s television industry, is expected to grow at a CAGR of 15 per cent, while print media is expected to grow at a CAGR of 8.6 per cent. India is one of the highest spending and fastest growing advertising market globally. The Foreign Direct Investment (FDI) inflows in the Information and Broadcasting (I&B) sector (including Print Media) in the period April 2000 – December 2016 stood at US$ 6.3 billion, as per data released by Department of Industrial Policy and Promotion (DIPP). (https://www.ibef.org/industry/media-entertainment-india.aspx) The digital media entertainment sector is a niche space that is growing and will set the standards of things to come in the near future, globally. With media consumption across the globe increasingly happening in digital formats, marketers are shifting their advertising spends towards digital media There is a marked shift in consumer preferences towards digital media consumption as compared to traditional forms of media which include TV, print press, and radio. Silly Monks Entertainment is one of the leading Digital Entertainment Companies in India operating successfully since 2013, headquartered in Hyderabad. SMEL is associated with some of the biggest names in digital property management, OTT platforms, social media, movies, music ... and the list goes on – Facebook, YouTube, Google, Yahoo, Amazon, Yupp TV, VuClip, Spuul, Hungama, Idea among them. Along with all else, the team has worked with producers of some of the biggest blockbusters out of the Southern movie industry in recent times – viz. #Baahubali, #Rudramadevi, Shankar’s #I, #Aagadu, #Peruchazhi, #Kali, #Magalirmattum, #Garudavega, #GautamiputraSatakarni, #Mahanati; as well as producing the first ever Telugu web series for Amazon Prime, #Gangstars. Upping the ante, Silly Monks has consolidated a virtual monopoly in the Deccani movie world too. Keeping in trend with the industry space it occupies, SMEL has a strong presence in the Indie music and event space too. Operating in a fast evolving and competitive industry has its perks since the players define their own niches as they grow.
c) Segment-wise or product wise performance The segment wise performance of the company can be analyzed on the basis of the Audited Financial Statements for the financial year 2017-18 annexed with this report.
d) Opportunities and Threats:
In line with global trends, the Indian consumer is increasingly consuming the content on digital platforms. This trend is observed for all type of content including news (text), music (audio), or video. Increasing internet
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penetration and mobile device proliferation and convenience of consuming the content anytime, anywhere are the key drivers for this trend. Growth opportunities/ parameters for SMEL are based on the following:
• Rapidly increasing number of internet users • Higher spend on entertainment services by youth • Rising data consumption with smartphone penetration • Ever growing need for unique content for various segments • Increasing pan-India presence to garner more visibility and which helps in acquisiton of quality content
Only threats beyond our control could stop the juggernaut from it’s path. That is what we like to believe as we continue to grow. (d) Outlook
The team continues to rely on the core strengths of experience and a strategically qualified team of professionals, but more so with a strong focus on quality content we believe that we have became a well known brand name in the business of Digital Media Marketing. The growing market in that space gives us a larger playing field. The digital media entertainment space is as yet a niche space and yet with the foreseen growth, it can only get more interesting in the days ahead. Our main strategy is to continually build on the diverse content library and strong fiscal planning and growth projections. (e) Risks and Concerns Risks are a part of every growing entity and especially when it concerns businesses that are in a sunrise industry as ours. There are always risks and concerns and the only way to deal with them are to plan strategically. To be aware always of every risk potential is the only thumb rule we follow. However the main risks that would be incomparable in terms of our growth would probably be:
• Force Majeure – superior or overpowering force beyond control of mankind • Collapse of the Internet/ shutting down of Google / Facebook serverts • Facebook monetising content that may reduce YouTube viewership
e) Internal control systems and their adequacy
The Company has adequate and efficient internal control systems that provide protection of all the assets against losses from unauthorized use and for appropriate reporting of transactions. The Company has implemented proper controls which are reviewed at regular intervals to ensure that the authenticity of the transactions.
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f) Discussion on financial performance with respect to operational performance FINANCIAL CONDITION (STANDALONE) Capital Structure: The Paid-up Share Capital of the Company as on 31st March 2018 is Rs. 46,41,500 divided into 4,64,150 Equity Shares of Rs.10/- each fully paid up. Other Equity: The Reserves and Surplus of the company as on 31st March 2018 stand at Rs. 11,60,36,237/- as compared to Rs. 3,62,20,125 in the previous year. The increase of Reserves is due to Issue of Shares of Rs. 4,11,70,000 for the FY 2017-18. Fixed Assets: The Company invested on Fixed Assets Rs. 3,41,39,299 in the financial year 2017-18. Sundry Debtors: Sundry debtors increased to Rs. 2,60,24,443 as on 31st March 2018 as compare with previous year Rs21,97,800. These debtors are considered good and realizable. Cash and Bank Balances: Cash and Bank balances with Scheduled Banks stood to Rs. 6,07,64,008 as against Rs. 86,44,339 in the previous years. Loans and Advances: Long Term Loans and Advances is Rs. 1,55,90,593 as against Rs. 1,50,30,075 in the previous year. Short Term Loans and Advances is Nil as against Nil in the previous year. Current Liabilities: Current Liabilities as on 31st March 2018 is Rs. 62,08,994 as against Rs.76,81,323 in the previous Year. FINANCIAL CONDITION (CONSOLIDATED): Reserves and Surplus The Reserves and Surplus of the company as on 31st March 2018 stand at Rs. 13,95,41,982/- as compared to Rs. 5,00,90,657 in the previous year. Fixed Assets The Company invested on Fixed Assets Rs. 3,43,50,894 in the financial year 2017-18. Sundry Debtors: Sundry debtors increased to Rs. 4,15,80,732 as on 31st March 2018 as compare with previous year Rs1,13,77,493. These debtors are considered good and realizable. Cash and Bank Balances: Cash and Bank balances with Scheduled Banks stood to Rs.7,50,66,934 as against Rs.2,63,00,199 in the previous years.
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Loans and Advances: Long Term Loans and Advances is Rs.1,55,90,593 as against Rs.1,50,30,075 in the previous year. Short Term Loans and Advances is Nil as against Nil in the previous year. Current Liabilities: Current Liabilities as on 31st March 2018 is Rs. 1,52,53,852 as against Rs.2,41,36,155 in the previous Year. STANDALONE OPERATIONAL RESULTS: Turnover: During the financial year 2017-18 the turnover of the Company was Rs. 8,40,07,972 as against Rs. 2,99,93,287 in the previous year and income from other sources as on 31st March 2018 was Rs. 9,53,700 as against Rs. 2,30,172 in the previous year. Depreciation: The Company has provided Rs.32,77,867 for depreciation during the financial year 2017-18 as against Rs. 20,29,845 in the previous years. Provision for Tax: The Company has provided for tax Rs.4,35,978 in the financial year 2017-18 as against Rs.7,10,985 in the previous financial year. Net Profit: The Net Profit of the Company after tax is Rs.94,06,499 for the financial year 2017-18 as against Rs. 26,15,348 in the previous year. Earnings per Share: The Earnings per Share of the Company as on 31st March, 2018 is Rs. 2.43 per share for Face Value of Rs. 10 as against Rs. 0.73 per share for Face Value of Rs.10 in the previous year. CONSOLIDATED OPERATIONAL RESULTS: Turnover During the financial year 2017-18 the turnover of the Company was Rs. 15,75,82,782 as against Rs. 12,01,96,494 in the previous year and income from other sources as on 31st March 2018 was Rs. 9,53,700 as against Rs. 6,17,675 in the previous year. Depreciation The Company has provided Rs.38,11,792 for depreciation during the financial year 2017-18 as against Rs. 27,09,825 in the previous years. Provision for Tax: The Company has provided for tax Rs.23,78,489 in the financial year 2017-18 as against Rs.8,29,179 in the previous financial year.
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Net Profit: The Net Profit of the Company after tax is Rs.1,86,57,932 for the financial year 2017-18 as against Rs. 1,45,64,028 in the previous year. Earnings per Share: The Earnings per Share of the Company as on 31st March, 2018 is Rs. 4.92 per share for Face Value of Rs. 10 as against Rs. 4.03 per share for Face Value of Rs.10 in the previous year. (h) Material developments in Human Resources/Industrial Relations front including number of people employed Human capital Our employees are our most important assets. We believe that the quality and level of service that our professionals deliver are among the highest in the Digital Media services. We are committed to remaining among the industry’s leading employers. The Company has a mix of both experienced with 20 plus years in the industry as well as others with 10 plus and some with 2 to 3 plus years experience which gives us fresh lease and extra edge to the competitors. As on 31st March 2018, we had 22 employees in total. We have hired 9 employees between March 2017 and April 2018 (includes attrition). The key aspects of our HR practice include recruitment, training and development, and compensation. Recruitment The year 2017-2018 has been a very aggressive year for the company considering the Initial Public Offer. The Company had acquired good projects which required credible manpower in YouTube Creators, Social Media, App development, Mobile & OTT platforms, Brand Management, Film Productions, Digital promotions for films. We have hired efficient and experienced manpower from recruiters and employee referrals. We rely on a rigorous selection process involving technical interviews with senior management and HR interviews to identify the best applicants. This selection process is continually assessed and refined based on the performance tracking of past recruits. Compensation Our technology professionals receive competitive salaries and benefits. Overall compensation at the Company as compared to competitors is highly competitive. We believe to have best of talents in the organization as we deal with reputed projects. HR team is exploring possible options to include other health and reimbursement benefits to employees in the next 24 months as a long-term plan.
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CAUTIONARY STATEMENT: Statements in this management discussion analysis describing the Company’s objectives, projections, estimates, expectations 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 make difference to Company’s operations include economic conditions affecting the domestic market and the overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.
By Order of The Board of Directors For Silly Monks Entertainment Limited
Place: Hyderabad Date: 31st August, 2018
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director DIN: 00297272
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Annexure – VI
Details pertaining to Employees as required under Section 197(12) of the Companies Act, 2013
Statement of Particulars of Employees Pursuant to Provisions of Section 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
i) In the financial year, there was increase in the remuneration of Managing Director and Whole-Time
Director.
ii) In the financial year, there was no increase in remuneration of each Director other than Managing Director and Whole-Time Director, Chief Financial Officer and Company Secretary.
iii) In the financial under review, there was a increase of 29.69% in the median remuneration of employees.
iv) There were 10 permanent employees on the rolls of Company as on 31st March, 2018.
v) We herewith affirm that remuneration to the Directors and Key Managerial Personnel is as per the remuneration policy of the Company.
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Top 10 Employees in terms of remuneration:
Employee Name
Age Qualifications
Designation DOJ Remuneration
% of Increase
Experience
Last Employer
Relations with MGT
Tekulapalli Sanjay Reddy
50 MBA Chairman & Managing Director
01.04.2014 5,00,000 66.67% 27 Zee Entertainment
Husband of Mrs. Swathi Reddy, Non-Executive Director
Anil Kumar Pallala
36 Diploma Whole Time Director
01.09.2013 2,50,000 25% 16 Big 92.7 FM
-
Myneni Nagasri
32 B.A Head Mobile-vas
11.08.2016 1,25,000 No Increment
12 Vega Entertainment Pvt. Limited
-
Sridevi Koti Karyampudi
32 BPT Sr. manager (publishing)
01.09.2013 1,00,000 No Increment
11 Whacked Out
-
Vijay TR 47 B.com Head-news media
15.02.2018 1,00,000 N.A 25 UTV Entertainment
-
Naveen A 42 MBA Head- Digital mktg
16.02.2018 1,25,000 N.A 20 FCB ULKA -
Naveen .C 31 B.com Head-Acquisition
02.07.2016 53,750 No Increment
11 IQLIK -
Anindita Dhar
50 MBA Head-Marketing
20.10.2017 50,000 N.A 28 Netzrezepte.de
-
Narsing Rao B
34 MBA CFO 01.09.2013 42,000 33.95% 11 Wacked out
-
Sushma Barla
24 CS CS & Compliance officer
17.04.2017 30000 N.A 0 -
By Order of The Board of Directors For Silly Monks Entertainment Limited
Place: Hyderabad Date: 31st August, 2018
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director DIN: 00297272
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INDEPENDENT AUDITOR’S REPORT To the Members of SILLY MONKS ENTERTAINMENT LIMITED (FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Report on the Financial Statements We have audited the accompanying financial statements of SILLY MONKS ENTERTAINMENT LIMITED (FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED)(the “Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (together hereinafter referred to as “financial statements”). Management’s Responsibility for the Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes 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 frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place inadequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies
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used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its Profit and its cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central
Government of India in terms of sub-section (11) of section 143 of the Act, we give in the ”Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best of our Knowledge and belief were necessary for the purpose of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as
it appears from our examination of those books;
c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts)Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act;
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B” to this report;
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
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(i) The Company does not have any pending litigations to which would have an impact on its financial position.
(ii) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
For Ramasamy Koteswara Rao and Co LLP Chartered Accountants Firm Registration No: 010396S/S200084
Sd/- Place: Hyderabad (C V Koteswara Rao) Date: 29-05-2018 Partner Membership No-028353
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Annexure A to the Auditors’ Report (referred to in paragraph 1 of our Report of even date to the Members of “SILLY MONKS ENTERTAINMENT LIMITED (FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED)” for the year ended (March 31, 2018) On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that;
i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, (b) All fixed assets have been physically verified by the management during the year in accordance with a phased program of verification which, in our opinion is reasonable having regard to the size of the company and the nature of its assets. According to the information furnished to us, no material discrepancies have been noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company does not have any immovable properties so reporting under this clause is not applicable to the Company.
ii. The Company is a service company, primarily rendering digital marketing services. Accordingly, it does not hold any physical inventories. Thus, paragraph 3(ii) of the Order is not applicable to the Company.
iii. The Company has granted loans to parties covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').
a. In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the parties listed in the register maintained under Section 189 of the Act were not, prima facie, prejudicial to the interest of the Company.
b. In the case of the loans granted to the parties listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the principal and interest as stipulated.
c. There are no overdue amounts in respect of the loan granted to parties listed in the register maintained under section 189 of the Act.
iv. In our opinion and according to the information and explanations given to us, the company has
complied with the provisions of section 185 and 186 of the Companies Act, 2013 In respect of loans, investments, guarantees, and security.
v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and
the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of
the Act, for any of the services rendered by the Company.
vii. (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular is depositing undisputed statutory dues including Income Tax, Sales Tax, Value Added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2018 for a period of more than six months from the date on when they become payable.
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59
(b) According to the information and explanation given to us, there are no dues of income tax, Sales tax, Service tax, duty of customs, duty of excise, Value Added Tax and any other laws outstanding on account of disputes.
viii. The Company has not defaulted in any repayment of loans or borrowings from any financial institution, banks, government or debenture holders during the year. Accordingly, paragraph 3(viii) of the Order is not applicable.
ix. According to the information and explanations given to us the company had raised Rs. 1,118.39 lakhs by way of Initial Public Offer out of which the company has utilised Rs.546.39 lakhs for the purpose for which it was raised and a sum of Rs.572.00 Lakhs have been temporarily parked in fixed deposit with bank.
x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company or on the company by the officers and employees of the Company has been noticed or reported during the year.
xi. According to the information and explanations given by the management, the managerial
remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
xii. In our opinion, the Company is not a Nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
xiii. According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
xiv. According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has made the preferential allotment and private placement of shares during the year under review and complied with applicable provisions of the companies Act, 2013.
xv. According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.Accordingly, the provision of clause 3 (xv) of the Order is not applicable to the Company and hence not commented upon.
xvi. According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company and hence not commented upon.
For Ramasamy Koteswara Rao and Co LLP Chartered Accountants Firm Registration No: 010396S/S200084
Sd/- Place: Hyderabad (C V Koteswara Rao) Date: 29-05-2018 Partner Membership No-028353
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60
ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THEFINANCIAL STATEMENTS OF SILLY MONKS ENTERTAINMENT LIMITED (FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) To the Members ofSILLY MONKS ENTERTAINMENT LIMITED (FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) We have audited the internal financial controls over financial reporting of SILLY MONKS ENTERTAINMENT LIMITED (FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) (“the Company”) as of March 31, 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient
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61
and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Ramasamy Koteswara Rao and Co LLP Chartered Accountants Firm Registration No: 010396S/S200084
Sd/- Place: Hyderabad (C V Koteswara Rao) Date: 29-05-2018 Partner Membership No-028353
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62
BALANCE SHEET SILLY MONKS ENTERTAINMENT LIMITED
(FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Flat No. 301, EKTHA PEARL, 2-17-89, B P RAJU MARG, KOTHAGUDA,
KONDAPUR,HYDERABAD,TELANGANA 500084 Standalone Balance Sheet as at 31st March 2018
Particulars Note No. 2017-18 2016-17 1 2 3 4
I 1 2 3
EQUITY AND LIABILITIES
Shareholders’ funds a) Share capital b) Reserves and surplus Non-current liabilities a) Long-term borrowings b) Deferred Tax Liability Current liabilities a) Short Term Borrowings b) Trade payables c) Short Term Provisions d) Other current liabilities
1 2
3
4 5 6 7
8
9 10
11 12 13 14
46,415,000 116,036,237
4,036,000 1,351,841
-
2,029,892 2,243,691 1,935,411
52,45,000 3,62,20,125
49,18,880 9,95,682
-
12,00,275 7,10,985
57,70,063 II 1
2
TOTAL 174,048,072 5,50,61,010 ASSETS Non-Current assets a) Fixed assets
i) Tangible assets ii) Intangible Assets iii) Capital Work-in-Progress
b) Non Current Investments c) Long Term Loans & Advances
Current assets a) Trade receivables b) Cash and cash equivalents c) Short-term loans and advances d) Other Current assets
12,139,404 17,804,198 20,389,995
13,324,953 15,590,593
26,024,443 60,764,008 2,102,540 5,907,938
1,49,33,318 71,63,517 28,87,370
30,17,921
1,50,30,075
21,97,800 86,44,339
734,103 4,52,567
TOTAL 174,048,072 5,50,61,010
Significant Accounting Policies A As per our report of even date attached
For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
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63
STATEMENT OF PROFIT & LOSS ACCOUNT SILLY MONKS ENTERTAINMENT LIMITED
(FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Flat No. 301, EKTHA PEARL, 2-17-89, B P RAJU MARG, KOTHAGUDA,
KONDAPUR,HYDERABAD,TELANGANA 500084 STATEMENT OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2018
Particulars Note No. 2017-18 2016-17 I II III IV V VI VII IX
Revenue from operations Other income Total Revenue (I + II) Expenses: Direct Cost Employee benefits expense Finance Cost Depreciation and amortization expense Other expenses Total expenses Profit before tax (III-IV) Tax expense: (a) Current tax (b) Deferred tax (c) MAT Credit Entitlement Profit (Loss) for the period (V-VI)
Earnings per equity share: 1) Basic 2) Diluted
15
16
17 18 19 6
20
21
84,007,972
953,700
2,99,93,287
2,30,172
84,961,672 3,02,23,459
40,553,663 15,508,869
741,386 3,277,867
13,105,070 73,186,855
75,75,510
1,14,05,136 3,57,573
20,29,845 51,24,169
2,64,92,233
11,774,817 37,31,226
2,243,691 356,159
(231,532)
7,10,985 4,22,317 (17,423)
9,406,499 26,15,348
2.43 2.43
0.73 0.73
Significant Accounting Policies As per our report of even date attached
For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
Annual Report 2017-18
64
CASH FLOW STATEMENT
SILLY MONKS ENTERTAINMENT LIMITED (FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED)
Flat No. 301, EKTHA PEARL, 2-17-89, B P RAJU MARG, KOTHAGUDA, KONDAPUR,HYDERABAD,TELANGANA 500084
STANDALONE CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2018 Particulars 2017-18 2016-17
A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before Tax Adjustments for: Depreciation IPO Expenditure Written Off Finance Cost Profit on Sale of Fixed Assets Operatine Profit Before Working Capital Changes Adjustments for Changes in Current and Non Current Liabilities and Assets
Increase/(Decrease) in Trade Payables Increase/(Decrease) in Other Current Liabilities Increase/(Decrease) in Short Tern Borrowings (Increase)/Decrease in Current Investments (Increase)/Decrease in Inventories (Increase)/Decrease in Trade Receivables (Increase)/Decrease in Short Term Loans & Advances (Increase)/Decrease in Other Current Assets (Increase)/Decrease in Non Current Investments (Increase)/Decrease in Long Term Loans & Advances
Cash Generated from Operating Activities Taxes paid Net Cash from Operating Activities (A)
B. CASH FLOW FROM INVESTING ACTIVITIES: Purchase of Fixed Assets Sale of Fixed Assets
Net Cash from Investing Activities (B) C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Long Term Borrowings Interest paid Proceeds from issue of shares
Net Cash from Financing Activities (C) Net Increase/(Decrease) in Cash and Cash Equivalents (A+B+C) Cash & Cash Equivalents at Beginning of Period
11,774,817
3,277,867
(4,820,387) 741,386
2,159,286
37,31,226
20,29,845
- 3,57,573 (14,132)
13,132,969
829,616 (3,834,651)
- - -
(23,826,643) (1,368,438) (5,455,371)
(10,307,032) (560,518)
61,04,512
8,50,484 44,36,931
(33,94,289) - -
15,04,406 (9,44,447) (1,04,982) (8,01,949)
(14,470,986) (31,390,067)
(479,452) (6,820,320)
(2,00,740) (31,869,519) (7,021,060)
(34,139,299)
3,352,754 (1,78,85,230)
2,01,700 (30,786,545) (1,76,83,530)
(882,880) (741,386)
116,400,000
35,11,679 (3,57,573)
3,00,33,000 114,775,734 33,187,106
52,119,670
8,644,338 8,482,516 1,61,822
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65
Cash & Cash Equivalents at End of Period Cash & Cash Equivalents comprise: Cash in Hand Balance with Banks in Current A/c Balance with Banks in Deposit A/c
60,764,008
290,680
3,072,556 57,400,773
8,644,338
1,49,295’
79,35,952 559,091
As per our report of even date For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
Annual Report 2017-18
66
NOTES FORMING PART OF FINANCIAL STATEMENTS Note 1 Share capital
Share Capital 2017-18 2016-17
Number Amount Number Amount Authorised Equity Shares of ` 10/-each 5,000,000 50,000,000 550,000 5,500,000 Issued, Subscribed & Paid up
Equity Shares of ` 10/- paid up each 4,641,500 46,415,000 524,500 5,245,000
Total 4,641,500 46,415,000 524,500 5,245,000
Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period
Particulars 2017-18 2016-17
Number Amount Number Amount Shares outstanding at the beginning of the year
524,500 5,245,000 418,000 4,180,000
Shares Issued during the year 970,000 9,700,000 106,500 1,065,000 Bonus Shares Issued during the year 3,147,000 31,470,000 Shares bought back during the year
- -
Shares outstanding at the end of the year 4,641,500 46,415,000 524,500 5,245,000
Shares in the company held by each shareholder holding more than 5 percent shares
Name of Shareholder 2017-18 2016-17
No. of Shares held % of Holding No. of Shares held
% of Holding
T. Sanjay Reddy 1,440,000 31.02% 240,000 45.76% Korrapati Ranganathasai 701,200 15.11% 100,000 19.07% Ektha.com Pvt Ltd 745,500 16.06% 106,500 20.31% Anil Kumar Pallala 300,000 6.46% 50,000 9.53%
Note 2 Reserves and surplus
Particulars 2017-18 2016-17
A. Securities Premium Account
Opening Balance 32,868,000 3,900,000
(+) Addition During the Year 106,700,000 28,968,000
(-) Bonus During the Year 31,470,000 -
(-) IPO Expenditure Written off 4,820,387
Closing Balance 103,277,613 32,868,000
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67
B. Surplus Opening Balance 3,352,125 736,778
(+) Current Year Transfer 9,406,499 2,615,348
(-) Written Back in Current Year
-
Closing Balance 12,758,624 3,352,125
Total 116,036,237 36,220,125
Note 3 Long Term Borrowings
Particulars 2017-18 2016-17 (a) Secured loans (i) From Banks - 8,796,902 Less: Current Maturities of Long Term Borrowings - (3,878,022) (b) Unsecure loans (i) From Related Parties Loan From Director 4,036,000 -
Total 4,036,000 4,918,880
Note 4 Short Term Borrowings
Particulars 2017-18 2016-17 (a) Secured loans (i) From Banks - -
Total - -
Note 5 Trade payables
Particulars 2017-18 2016-17
Sundry Creditors 2,029,892 1,200,275
Total 2,029,892 1,200,275
Note 6 Short Term Provisions
Particulars 2017-18 2016-17
Provision for Current Tax
2,243,691 710,985 Total 2,243,691 710,985
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68
Note 7 Other Current Liabilities
Particulars 2017-18 2016-17
(i) Statutory Liabilities 442,841 45,564 (ii) Audit fee Payable 169,500 119,500 (iii) Advance from Customers - - (iv) Others Payables 1,323,071 1726976 (v) Current Maturities of Long Term Borrowings - 3878022
Total 1,935,411 5,770,063
Note 9 Non-Current Investment
Particulars 2017-18 2016-17
Investment in Unquoted Shares
Long Term Investment 80,000 80,000 Investments in Partnership Firms
Long Term Investment in LLP s 13,244,953 2,937,921
Total 13,324,953 3,017,921
Note 10
Long Term Loans & Advances
Particulars 2017-18 2016-17 Inter Corporate Deposits 9,772,575 10,972,575 Other Advances 2,700,000 2,530,000
Deposits
Rental Deposit 1,560,000 1,500,000 Other Deposit 46,018 27,500 Deposits with Stock Exchange Authorities 1,512,000 -
Sub Total 3,118,018 1,527,500
Total 15,590,593 15,030,075
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69
Note 11 Trade Receivables
Particulars 2017-18 2016-17
(a) Trade receivables outstanding for a period
less than 6 months
26,024,443 2,197,800
Total 26,024,443 2,197,800
Note 12 Cash and cash equivalents
Particulars 2017-18 2016-17 (a) Balances with banks
-Current Account 3,072,556 7,935,952 -In Fixed Deposits 57,400,773 559,091
(b) Cash in hand 290,680 149,298
Total 60,764,008 8,644,341
Note 13 Short-term loans and advances
Particulars 2017-18 2016-17 (i) Advance to Employees 83,000 14,182 (ii) Advance to Vendors 1,519,540 134,741 (iii) Other Loans & Advances 500,000 585,180
Total 2,102,540 734,103
Note 14
Other Current Assets Particulars 2017-18 2016-17
(i) Balances with revenue authorities 4,685,290 332,452 (ii) GST (Net off) 871,001 - (iii) Mat Credit Entitlement 351,647 120,115
Total 5,907,938 452,567
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70
Note 15 Revenue from operations
Particulars 2017-18 2016-17 Revenue from Sale of Services
Domestic Services 6,27,27,645 57,88,005 Foreign Services 2,12,80,326 2,42,05,281
Total 8,40,07,971 2,99,93,287
Note 16 Other Income
Particulars 2017-18 2016-17 Interest Income on Fixed Deposit 953,700 30,859 Interest Income Others - 178,250 Profit on Sale Of Fixed Assets - 21,063
Total 953,700 230,172
Note 17
Direct Cost
Particulars 2017-18 2016-17
Digital Marketing Expenses 36,582,966 6,680,387
Professional Charges 2,092,719 133,994
PRO's Charges 422,400 468,129
Voice Chat Expenses 1,455,578 293,000
Total 40,553,663 7,575,510
Note 18
Employee Benefits Expense
Particulars 2017-18 2016-17
Salaries and incentives 6,278,490 5,481,514
Directors Remuneration 9,000,000 5,700,000
Staff welfare expenses 230,379 223,622
Total 15,508,869 11,405,136
Note 19
Finance Cost
Particulars 2017-18 2016-17
Interest Paid on Loans 741,386 357,573
Total 741,386 357,573
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71
Note 20 Other expenses
Particulars 2017-18 2016-17
Electricity Charges 652,418 551,073
Administration Expenses 417,923 512,924
Office Expenses 713,618 438,692
Tours, Travelling and Conveyance Expenses 694,878 361,165
Registration Filing Fees 548,897 53,000
Printing & Stationery 95,567 91,351
Rent 3,267,700 2,356,376
Service Charges (Exp) 3,536,111 -
Postage, Telephone and Internet 77,238 15,465
Foreign Exchange Loss - 129,525
Processing Charges - 20,584
Bank Charges 13,906 19,180
Business Promotion 88,563 204,877
Rates and Taxes 37,227 21,793
Commission Charges 117,000 43,400
Repairs & Maintenance 71,400 242,835
Loss on Sale Of Fixed Assets 2,159,286 6,931
Audit fee 50,000 55,000
Other Misc Expenses 180,780
Membership Fees 30,600 -
Interest on late payment of taxes 142,235 -
Vehicle Maintenance 209,723 -
Total 13,105,070 5,124,169
Details of Deferred Tax For the FY 2017-18
WDV of Assets under Companies act 29,943,601
WDV of Assets under Income Tax Act 25,417,854
Timing Differences 4,525,747
Preliminary Expenses -
Deferred Tax Liability 1,351,841
Deferred Tax Already Provided 995,682
Deferred Tax To Be Provided in P&L 356,159
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72
Note 8 Fixed Assets Amount in Rs
Fixed Assets
Gross Block Accumulated Depreciation Net Block
SL. No
Balance as at 1st April
2017
Additions
Disposals Balance as at 31st March 2018
Balance as at 1st
April 2017
Depreciation charge for the year
On disposals
Balance as at 31st March 2018
Balance as at 31st March 2018
Balance as at 31st March 2017
Tangible Assets 1
Computer 2,563,205 1,708,841 - 4,272,046 1,669,755 565,785 - 2,235,540 2,036,506 893,450
2 Furniture’s and Fixtures
1,779,092 17,000 - 1,796,092 144,895 170,958 - 315,853 1,480,239 1,634,197
3 Office Equipment's
567,156 69,000 - 636,156 270,998 113,943 - 384,941 251,215 296,158
4 Recording Equipment
59,000 106,975
165,975 14,132 10,226 - 24,358 141,617 44,868
5 Vehicles
12,485,556 - 6,258,541 6,227,015 420,911 1,014,580 746,501 688,990 5,538,025 12,064,645
6 Studio
- 2,793,596 - 2,793,596 - 101,794 - 101,794 2,691,802 -
Total
17,454,009 4,695,412 6,258,541 15,890,880 2,520,691 1,977,286 746,501 3,751,476 12,139,404 14,933,318
Intangible Assets
1 Software's 738,968 427,608
1,166,576
630,838 379,250 2 Trademark 62,500 -
62,500 359,718 176,019 - 535,737 35,705 39,850
3 Copyrights 2,470,145 11,513,654
13,983,799 22,650 4,145 - 26,795 13,366,561 2,359,708 4 Content
Development 6,136,156 -
6,136,156 110,437 506,801 - 617,238 3,771,093 4,384,709
Total 9,407,769 11,941,262 - 21,349,031 1,751,447 613,616 - 2,365,063 17,804,198 7,163,517
1 Capital Work in progress
2,887,370 17,502,625 - 20,389,995 - - - - 20,389,995 2,887,370
Annual Report 2017-18
73
COMPUTATION OF DEPRECIATION U/S 32 OF INCOME TAX ACT, 1961
Rate of WDV Additions Deletions TOTAL Depreciation WDV DESCRIPTION Dep As At Before After AS AT 01/04/2017 9/30/2017 30/09/2017 31/03/2018 % Rs. Rs. Rs. Rs. Rs. Rs. Rs. 10% BLOCK 1. Furniture & Fittings 10% 1,565,477 - 17,000 - 1,582,477 157,398 1,425,080 2. Studio 10% - 2,793,596 - - 2,793,596 279,360 2,514,236
15% BLOCK
1. Air Conditioner 15% 60,553
- 60,553 9,083 51,470
2. Vehicles 15% 11,105,737
3,940,293 7,165,444 1,665,861 5,499,584
3. Office Equipments 15% 191,183 7,500 61,500 - 260,183 34,415 225,768
25% BLOCK
1. Trademark 25% 20,241
- 20,241 5,060 15,181
2. Copy Rights 25% 2,014,521 2,343,870 9,169,784 - 13,528,175 2,235,821 11,292,354
3. Content Development 25% 3,087,283
- 3,087,283 771,821 2,315,462
40% Block
1. Computers & Softwares 40% 715,811 628,489 1,507,960 - 2,852,260 839,312 2,012,948
2. Recording Software 40% 2,643 106,975 - - 109,618 43,847 65,771
TOTAL 18,763,450 5,880,430 10,756,244 3,940,293 31,459,831 6,041,977 25,417,854
Annual Report 2017-18
74
NOTES FORMING PART OF THE STANDALONE FINANCIAL STAEMENTS A. Significant Accounting Policies– (AS-1):
1. Company Overview: Silly Monks Entertainment Limited (Formerly Known as Silly Monks Entertainment Private limited) Limited Company engaged in digital marketing solutions to businesses, agencies and online publishers. The Company connects Advertisers with their Audience across any form of Digital Media, using its massive local presence to deliver appropriate messages to the right audience, through the most relevant Digital channels. The Company was incorporated on 20th September, 2013 in Hyderabad and listed on NSE (MSME Segment) dated 18th January, 2018.
2. Basis of Preparation of Financial Statements:
The Financial statements have been prepared under the historical cost convention on accrual basis. The mandatory applicable accounting standards in India and the provisions of the companies Act, 2013 have been followed in preparation of these financial statements. All assets and liabilities have been classified as current or non-current as per the operating cycle criteria set out in the Revised Schedule III to the Companies Act, 2013.
3. Use of Estimates:
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
4. Revenue Recognition: Digital Marketing Services: a) The Contracts between the Company and its Customers are either time or material
contracts or fixed price contracts. b) Revenue from fixed price contracts is recognized according to the milestones achieved
as specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, condition and estimates profitability may result in revisions and corresponding revenues and cost are recognized in the period in which such changes are identified.
c) In respect of time and material contract, revenue is recognized in the period in which the services are provided.
d) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and revenue can be reliably measured.
e) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rates.
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75
5. Fixed Assets:
Tangible Assets: Fixed assets are carried at cost of acquisition less accumulated depreciation. Cost includes non-refundable taxes, duties, freight, borrowing costs and other incidental expenses related to the acquisition and installation of the respective assets. Intangible Assets: Intangible assets are recorded at consideration paid for acquisition and other direct costs that can be directly attributed, or allocated on a reasonable and Consistent basis, to creating, producing and making the asset ready for its intended use.
6. Depreciation: Depreciation on fixed assets is provided on straight-line method using the lives of assets given in Schedule II of the Companies Act, 2013.
7. Tax Expense: Income tax expense comprises current tax, deferred tax, Minimum alternative Tax.
Current tax The current change for income tax is calculated in accordance with the relevant tax regulations applicable to the company. Deferred tax Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the year. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have enacted or substantially enacted by the balance sheet date. Deferred tax asset is recognized only to the extent there is reasonable certainty that the assets can be realized in future. Minimum Alternative Tax (MAT) credit Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustments of future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal tax after the tax holiday period. Accordingly, it is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and asset can be measured reliably
8. Earnings Per Share: The earnings considered in ascertaining the companies earning per share comprise net profit after tax and includes the post-tax effect of any extra-ordinary/exceptional item is considered. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The no. of shares used in computing diluted earnings per share comprises the weighted average no. of shares considered for deriving basic earnings per share and also the weighted average no. of equity shares that could have been issued on the conversion of all dilutive potential equity shares.
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9. Other Notes to Accounts and Disclosures:
a) Related party disclosures (AS-18):
Related parties where control exists or where significant influence exists and with whom transactions have taken place during the current and previous Key Management Personnel represented on the Board • Tekulapalli Sanjay Reddy • Anil Kumar Pallala • Swathi Reddy • Sreenivasa Reddy Musani • Katragadda Rajesh • Prasad Rao Kalluri
Enterprises where principal shareholders/ directors have control or significant influence (“Significant interest entities”) • Dream Boat Entertainment Pte Ltd • Events Monks Entertainment LLP • Monkstar Music LLP
The following is a summary of significant related party transactions: a) Particulars of Transactions with related parties:
Particulars 2017-18 2016-17 Net Profit/(Loss) attributable to Equity Share Holders
94,06,499 26,15,348
Opening No of shares 5,24,500 4,18,000 Shares issued during the year 9,70,000 1,06,500 Bonus Shares Issued during the year
31,47,000 31,47,000
Total no of Equity shares 46,41,500 36,71,500 Weighted Average Number of Equity Shares 38,70,815 35,95,100 Basic and Diluted Earnings per Share 2.43 0.73
Sl. No.
Name of the Company/ Party
Relation with the Party
Nature of Transaction
During the Current
Year (In Rs.)
During the Previous
Year (In Rs.) 1 Dream Boat
Entertainment Pte Ltd Investment Held in Foreign Entity
Service Income
1,95,92,826 1,97,94,934
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77
b) The Details of Utilisation of IPO Proceeds
The Details of Utilisation of IPO Proceeds - Rs. 1118.39 Lakhs
(Net off IPO Related Expenses) are as Follows Amt in Lakhs Particulars As Per
Prospectus Unutilised Upto
31-03-2018 Unutilised Upto
31-03-2018 Expanding Content Portfolio 830.50 504.11 326.39 Setting Up Branches 245.61 - 245.61 General Corporate Purposes 42.28 42.28 - Total 1,118.39 546.39 572.00
Unutilised amounts of the IPO proceeds as at 31st March, 2018 have been temporarily parked in fixed deposit with bank.
c) Provisions, Contingent Liabilities and Contingent Assets: – (AS-29): Contingent Liabilities: i) Guarantees and letters of credit: Nil ii) Bank Guarantees: Rs. Nil
2 Dream Boat Entertainment Pte Ltd
Investment Held in Foreign Entity
Capital investment
80,000 80,000
3 Events Monks Entertainment LLP
Investment held in LLP
Service Charges Expense
20,06,005 0
4 Monkstar LLP Investment held in LLP
Service Charges Expense
33,08,887 0
5 Events Monks Entertainment LLP
Investment held in LLP
Capital investment
30,04,656 14,73,026
6 Monkstar LLP Investment held in LLP
Capital investment
1,02,40,297 14,64,896
7 Tekulapalli Sanjay Reddy Chairman & Managing Director
Salary 60,00,000 36,00,000
8 Anil Kumar Pallala Whole Time Director Salary 30,00,000 21,00,000 9 Tekulapalli Sanjay Reddy Chairman &
Managing Director Rent Paid Nil 3,03,187
10 Swathi Reddy Director Rent Paid Nil 3,03,187 11 Ektha India Pvt Ltd Significant Control by
Shareholder Loan given Nil 20,00,000
12 Ektha India Pvt Ltd Significant Control by Shareholder
Fixed asset Purchased
Nil 15,00,000
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78
d) General Notes to the financial statements:
The Previous year’s figures have been regrouped and recast wherever necessary to bring them in line with the current year’s figures. All the amounts presented in financial statements are in rupees except basic and diluted EPS & unless specified.
For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
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79
AUDITOR’S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS To the Members of SILLY MONKS ENTERTAINMENT LIMITED (Formerly Known as SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Report on the Consolidated Financial Statements We have audited the accompanying Consolidated financial statements of SILLY MONKS ENTERTAINMENT LIMITED ( Formerly Known as SILLY MONKS ENTERTAINMENT PRIVATE LIMITED (“the Holding Company”), its subsidiaries (‘the Holding Company and its Subsidiaries together referred to as the group”), which comprise the consolidated Balance Sheet as at March 31, 2018, the Statement of consolidated Profit and Loss, including the and consolidated Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information (together hereinafter referred to as “Consolidated financial statements”). Management’s Responsibility for the consolidated Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Consolidated financial statements that give a true and fair view of the financial position, financial performance including and consolidated cash flows in accordance with accounting principles generally accepted in India, as specified under section 133 of the Act., read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Consolidated financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit of the consolidated financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the consolidated financial statements that give a true and fair view in order to
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design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the consolidated financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the consolidated financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of consolidated affairs of the Company as at March 31, 2018, its consolidated Profit and consolidated cash flows for the year ended on that date. Other Matters The financial statements of subsidiaries have been audited by other auditors whose financial statements reflects total assets of Rs.5,22,78,328/- as at 31st March 2018 total revenues of Rs.9,57,50,048/- and total net profits of Rs. 92,23,118/- and whose reports have been furnished to us and our opinion is based solely on the reports of the other auditors. Our opinion is not qualified in respect of the above matter. Report on Other Legal and Regulatory Requirements 1. As required by section 143 (3) of the Act, we report, to the extent applicable, that:
a) We have sought and obtained all the information and explanations which to the best of our Knowledge and belief were necessary for the purpose of our audit;
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
c) The Consolidated Balance Sheet, Statement of Consolidated Profit and Loss and Consolidated Cash Flow Statement dealt with by this Report are in agreement with the books of account;
d) In our opinion, the aforesaid Consolidated financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts)Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended;
e) On the basis of written representations received from the directors of the Holding Company as on March 31, 2018 taken on record by the Board of Directors of Holding Company none of the directors are disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure” to this report;
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81
g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
For Ramasamy Koteswara Rao and Co LLP Chartered Accountants Firm Registration No: 010396S/S200084
Sd/-
Place: Hyderabad (C V Koteswara Rao) Date: 29-05-2018 Partner Membership No-028353
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82
ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OF SILLY MONKS ENTERTAINMENT LIMITED (Formerly Known as SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) To the Members of SILLY MONKS ENTERTAINMENT LIMITED (Formerly Known as SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) We have audited the internal financial controls over financial reporting of SILLY MONKS ENTERTAINMENT LIMITED (Formerly Known as SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) (“the holding company”) and its subsidiaries (‘the holding company and its subsidiaries together referred to as the group”) as of March 31st , 2018 in conjunction with our audit of the Consolidated financial statements of the company for the year ended on that date. Management’s Responsibility for Internal Financial Controls The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend
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83
on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting. Meaning of Internal Financial Controls over Financial Reporting A company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Inherent Limitations of Internal Financial Controls over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For Ramasamy Koteswara Rao and Co LLP Chartered Accountants Firm Registration No: 010396S/S200084
Sd/- Place: Hyderabad (C V Koteswara Rao) Date: 29-05-2018 Partner Membership No-028353
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84
CONSOLIDATED BALANCE SHEET SILLY MONKS ENTERTAINMENT LIMITED
(FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Flat No. 301, EKTHA PEARL, 2-17-89, B P RAJU MARG, KOTHAGUDA,
KONDAPUR,HYDERABAD,TELANGANA 500084 Consolidated Balance Sheet as at March 31, 2018
Particulars Note No. 2017-18 2016-17 I 1
2
3 4
EQUITY AND LIABILITIES Shareholders’ funds
Share capital Reserves and surplus
Minority Interest
Non-current liabilities Long-term borrowings Deferred Tax Liability
Current liabilities Short Term Borrowings Trade payables Other current liabilities Short Term Provisions
1 2
3
4 5 6 7
8
9
10 11 12 13
4,64,15,000 13,95,41,982
(4,66,810)
40,45,176 13,51,841
-
32,32,883 96,42,480 23,78,489
52,45,000 5,00,90,657
(83,030)
49,28,030 9,95,682
-
85,65,140 1,47,41,836
8,29,179
II 1 2
TOTAL 20,61,41,041 8,53,12,494 ASSETS Non-Current assets
Fixed assets i) Tangible assets ii) Intangible Assets iii) Capital Work-in-Progress
Non-current investments Long-term loans and advances Current assets Trade receivables
Cash and cash equivalents Short-term loans and advances Other Current assets
1,21,39,404 2,24,66,366 2,15,56,713
- 1,55,90,593
4,15,80,732 7,50,66,934 1,09,88,648
67,51,650
1,49,33,318 1,21,48,015
40,54,088 - 1,50,30,075
1,13,77,493 2,57,41,108
14,35,714 4,72,568
TOTAL 20,61,41,041 8,53,12,494 Significant Accounting Policies A As per our report of even date attached
For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
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85
CONSOLIDATED STATEMENT OF PROFIT & LOSS ACCOUNT SILLY MONKS ENTERTAINMENT LIMITED
(FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Flat No. 301, EKTHA PEARL, 2-17-89, B P RAJU MARG, KOTHAGUDA,
KONDAPUR,HYDERABAD,TELANGANA 500084 Statement of Consolidated Profit and Loss Account for the Year Ended 31st March, 2018
Particulars Note No. 2017-18 2016-17 I II III IV V
VI
Revenue from operations Other income Total Revenue Expenses: Direct Cost Employee benefits expense Finance Cost Depreciation and amortization expense Other expenses
Total expenses Profit before tax (II-III)
Tax expense: (a) Current tax (b) Deferred tax (c) MAT Credit Entitlement
Profit (Loss) for the period (V-VI)
13 14
15 16 17 18 19
15,66,29,082 9,53,700
11,95,78,819 6,17,675
15,75,82,782 12,01,96,494
10,46,15,100 1,55,08,869
7,41,386 38,11,792
1,17,44,588
8,28,47,080 1,14,05,136
3,57,573 27,09,825 70,78,779
13,64,21,734 10,43,98,393
2,11,61,047 1,57,98,101
23,78,489 3,56,159
(2,31,532)
8,29,179 4,22,317 (17,423)
1,86,57,932 1,45,64,028
Profit attributable to Minority Profit attributable to Owners
(3,83,780)
1,90,41,712
89,930
1,44,74,098
VII Earnings per Equity Share: 1) Basic 2) Diluted
4.92 4.92
4.03 4.03
Significant Accounting Policies As per our report of even date attached
For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
Annual Report 2017-18
86
CONSOLIDATED CASH FLOW STATEMENT
SILLY MONKS ENTERTAINMENT LIMITED (FORMERLY KNOWN AS SILLY MONKS ENTERTAINMENT PRIVATE LIMITED)
Flat No. 301, EKTHA PEARL, 2-17-89, B P RAJU MARG, KOTHAGUDA, KONDAPUR,HYDERABAD,TELANGANA 500084
Statement of Profit and Loss Account for the Year Ended 31st March, 2018 Particulars 2017-18 2016-17
A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before Tax Adjustments for: Depreciation/Amortisation IPO Expenditure written off Loss on Sale of Fixed Assets Interest paid
Operatine Profit Before Working Capital Changes Adjustments for Changes in Working Capital:
Increase/(Decrease) in Trade Payables Increase/(Decrease) in Other Current Liabilities Increase/(Decrease) in Other Long Term Liabilities Increase/(Decrease) in Current Investments (Increase)/Decrease in Inventories (Increase)/Decrease in Trade Receivables (Increase)/Decrease in Short Term Loans & Advances (Increase)/Decrease in Other Current Assets Increase/(Decrease) in Long Term Investments Increase/(Decrease) in Long Term Loans & Advances Increase/(Decrease) in Other Non Current Assets
Cash Generated from Operating Activities Taxes paid Net Cash from Operating Activities (A)
B. CASH FLOW FROM INVESTING ACTIVITIES: (Purchase)/ Sale of Fixed Assets (Purchase)/ Sale of Fixed Assets
Net Cash from Investing Activities (B) C. CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from/ (Repayment of) Borrowings Proceeds from Share Capital (including Share Premium) Interest paid
Addition/(withdrawal) of Capital by Minority Net Cash from Financing Activities (C)
Cash & Cash Equivalents at Beginning of Period
2,11,61,047
38,11,792
-48,20,387 21,59,286
7,41,386
1,64,30,433
27,09,825
- -
3,57,573 2,30,53,125
(53,32,257) (50,99,355)
- - -
(3,02,03,239) (1,01,12,026)
(61,58,967) -
(5,60,518) -
1,94,97,831
(7,07,967) 1,26,84,380 (33,94,289)
- -
(17,28,692) (10,86,967)
(1,16,363) -
(1,44,70,984) (17,423)
(3,44,13,237)
(5,97,648) 1,06,59,545
(2,00,740) (3,50,10,885) 1,04,58,785
(3,43,50,894)
33,52,754
(1,88,57,418)
-
(3,09,98,140) (1,88,57,418)
(8,82.854)
11,64,00,000 (7,41,386)
-
35,11,491
3,00,33,000 (3,57,573)
-
11,47,75,760 3,31,86,919
4,87,66,734 2,63,00,200
2,47,88,286
15,11,914
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87
Cash & Cash Equivalents at End of Period Cash & Cash Equivalents comprise: Cash in Hand Balance with Banks in Current A/c Balance with Banks in Deposit A/c
7,50,66,934
6,17,512 1,70,48,650 5,74,00,773
2,63,00,200
2,55,078 2,54,86,030
5,59,091
As per our report of even date attached
For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
Annual Report 2017-18
88
NOTES FORMING PART OF FINANCIAL STATEMENTS
Note 1 Share capital
Share Capital 2017-18 2016-17
Number Amount Number Amount Authorised Equity Shares of ` 10/-each 5,00,000 5,00,00,000 550,000 55,00,000 Issued, Subscribed & Paid up Equity Shares of ` 10/- paid up each 46,41,500 4,64,15,000 5,24,500 52,45,000
Total 46,41,500 4,64,15,000 5,24,500 52,45,000
Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period
Particulars 2017-18 2016-17
Number Amount Number Amount Shares outstanding at the beginning of the year 5,24,500 52,45,000 418,000
4,180,000
Shares Issued during the year 9,70,000 97,00,000 106,500 1,065,000 Bonus shares Issued during the year 31,47,000 3,14,70,000 - - Shares outstanding at the end of the year 46,41,500 4,64,15,000 524,500 5,245,000
Shares in the company held by each shareholder holding more than 5 percent shares
Name of Shareholder 2017-18 2016-17
No. of Shares held % of Holding No. of Shares held
% of Holding
T. Sanjay Reddy 14,40,000 3.01% 240,000 4.58% Sai Korrapati 7,01,200 1.51% 100,000 1.91% Ektha.com Pvt Ltd 7,45,500 1.61% 106,500 2.03% Anil Kumar Pallala 3,00,000 0.65% 50,000 0.95%
a) The Company has issued only one class of equity shares having a par value of Rs.10/- per share.
Each holder of share is entitled to one vote per share. The company does not declared any dividends.
Note 2 Reserves and surplus
Particulars 2017-18 2016-17
A. Securities Premium Account Opening Balance 3,28,68,000 39,00,000 Add: Securities Premium During the Year 10,67,00,000 2,89,68,000
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89
(-) Bonus During the Year 3,14,70,000 - (-) IPO Expenditure Written off Net Profit/(Loss) for the period - - Closing Balance 10,32,77,613 3,28,68,000 B. Surplus Opening balance 1,72,22,657 21,61,472 (+) Net Profit/(Net Loss) For the current year 1,90,41,712 1,44,74,098 Excess Loss - 5,87,088 Closing Balance 3,62,64,369 1,72,22,657
TOTAL 13,95,41,982 5,00,90,657
Note 3 Long Term Borrowings
Particulars 2017-18 2016-17 - Secured Loans Loan From Bank - 49,18,880 - 49,18,880 - Un Secured Loans From Related Parties 40,45,176 9,150
TOTAL 40,45,176 49,28,030
NOTE 4 Short Term Borrowings
Particulars 2017-18 2016-17
(a) Secured loans (i) From Banks - -
NOTE 5 Trade payables
Particulars 2017-18 2016-17
Sundry Creditors Others 32,32,883 85,65,140
TOTAL 32,32,883 85,65,140
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NOTE 6 Short Term Provisions
Particulars 2017-18 2016-17 Provision for Current Tax 23,78,489 8,29,179
TOTAL 23,78,489 8,29,179
NOTE 7 Other Current Liabilities
Particulars 2017-18 2016-17 (i) Audit fee Payable 1,94,500 1,39,500 (ii) Current Maturities of Long Term Borrowings - 38,78,022 (iii) Statutory Liabilities 10,27,674 62,160
(iv) Other Payables 84,20,306 1,06,62,154
TOTAL 96,42,480 1,47,41,836
Note 9 Long Term Loans & Advances
Particulars 2017-18 2016-17 Inter Corporate Deposits 97,72,575 1,09,72,575 Other Advances 27,00,000 25,30,000
Deposits Rental Deposit 15,60,000 15,00,000 Other Deposit 46,018 27,500 Deposits with Stock Exchange Authorities 15,12,000 -
Sub Total 31,18,018 15,27,500 TOTAL 1,55,90,593 1,50,30,075
Note 10 Trade Receivables
Particulars 2017-18 2016-17 (a) Trade receivables outstanding for a period less than 6 months
4,15,80,732 1,13,77,493
TOTAL 4,15,80,732 1,13,77,493
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Note 11 Cash and cash equivalents
Particulars 2017-18 2016-17 (a) Balances with banks -In Current Accounts 1,70,48,650 2,54,86,030 -In Fixed Deposit Accounts 5,74,00,773 5,59,091 (b) Cash in hand 6,17,512 2,55,078
TOTAL 7,50,66,934 2,63,00,199
Note 12 Short-term loans and advances
Particulars 2017-18 2016-17 Advance to Employees 83,000 14,182 Advance to Vendors 15,26,684 1,34,741 Other Loans & Advances 93,78,964 7,27,700
TOTAL 1,09,88,648 8,76,623
Note 13
Other Current Assets
Particulars 2017-18 2016-17
(i) Balances with revenue authorities 52,96,918 4,72,568 (ii) Mat Credit Entitlement 3,51,647 1,20,115 (iii) GST (Net off) 9,77,191 - (iv) Other Advances & Receivables 1,25,894 -
Total 67,51,650 5,92,683
Note 14 Revenue From Operations
Particulars 2017-18 2016-17 Revenue from Sale of Services
- From Domestic 6,63,82,162 75,50,227 - From Export 9,02,46,920 11,20,28,592
TOTAL 15,66,29,082 11,95,78,819
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Note 15
Other Income
Particulars 2017-18 2016-17 Interest Receivable on Fixed Deposit 9,53,700 30,859 Interest Income Others - 1,78,250 Profit on Sale of Fixed Assets - 21,063 Foreign Exchange Gain - 3,87,503
TOTAL 9,53,700 6,17,675
NOTE 16
Direct Cost
Particulars 2017-18 2016-17 Rupees Rupees Event Management Expenses 60,86,672 7,79,500 Digital Marketing Expenses 8,23,17,793 6,22,16,616 Professional Charges 1,43,32,657 1,68,53,452 PRO’s Charges 4,22,400 4,68,129 Yup TV Expenses - 22,36,383 Voice Chat Expenses 14,55,578 2,93,000
Total 10,46,15,100 8,28,47,080
Note 17
Employee Benefits Expense
Particulars 2017-18 2016-17 Rupees Rupees Salaries and incentives 62,78,490 54,81,514 Directors Remuneration 90,00,000 57,00,000 Staff welfare expenses 2,30,379 2,23,622
TOTAL 1,55,08,869 1,14,05,136
NOTE 18
Finance Cost
Particulars 2017-18 2016-17 Rupees Rupees Interest Paid on Loans 7,41,386 3,57,573
TOTAL 7,41,386 3,57,573
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NOTE 19 Other expenses Particulars 2017-18 2016-17 Rupees Rupees
Audit Fee 78,600 65,000
Electricity Charges 6,52,418 5,51,073
Administration Expenses 21,37,056 5,12,924
Office Expenses 7,14,313 4,46,771
Tours, Travelling and Conveyance Expenses 8,97,384 3,91,090
Registration Filing Fees 5,48,897 53,000
Printing & Stationery 96,007 91,351
Rent 32,67,700 23,56,376
Postage, Telephone and Internet 77,238 15,465
Foreign Exchange Loss (46,400) 2,93,252
Processing Charges - 20,584
Bank Charges 1,47,777 45,008
Business Promotion 88,563 2,04,877
Rates and Taxes 27,227 21,793
Commission Charges 1,17,000 15,63,008
Repairs & Maintenance 71,400 2,42,835
Membership Fees 30,600 -
Other Expenses 6,79,522 1,97,441
Loss on Sale Of Vehicles 21,59,286 6,931 TOTAL 1,17,44,588 70,78,779
Details of Deferred Tax for the FY 2017-18 WDV of Assets under Companies act 22,096,835 WDV of Assets under Income Tax Act 18,763,450 Timing Differences 3,333,384 Preliminary Expenses - Deferred Tax Liability 995,682
Deferred Tax Already Provided 573,365 Deferred Tax To Be Provided in P&L 422,317
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Note 8 Amount in Rs
Fixed Assets
Gross Block Accumulated Depreciation Net Block
SL. No
Balance as at 1st April
2017
Additions
Disposals Balance as at 31st
March 2018
Balance as at 1st
April 2017
Depreciation charge
for the year
On disposals
Balance as at 31st March 2018
Balance as at 31st
March 2018
Balance as at 31st March
2017
Tangible Assets 1
Computer 2,563,205 1,708,841
4272046.04
2235540 2036506 893450
2 Furniture’s and Fixtures
1,779,092 17,000 - 1796092 1,669,755 565,785
315854 1480238 1634197
3 Office Equipment's
5 67,156 69,000 - 636156 144,895 170,958
384940 251216 296158
4 Recording Equipment
59,000 106,975 - 165975 270,998 113,943
24358 141617 44868
5 Vehicles
1 2,485,556 -
6227015 14,132 10,226
688990 5538025 12064645
6 Studio
2,793,596 6,258,541 2793596 420,911 1,014,580 746,501 101794 2691802 0
Total
17,454,009 4,695,412 - 15890880.04 - 101,794
3751476 12139404 14933318
Intangible Assets
6,258,541
2,520,691 1,977,286 746,501
1 Software's 738,968 427,608
1166576 359,718 176,019
535738 630838 379250 2 Trademark 81,000
81000 30,149 5,411 - 35560 45440 50851
3 Copyrights 2,484,145 11,725,249
14209394 112,787 1,039,460 - 1152247 13057147 2371358 4 Content
Development 1 1,330,581 -
11330581 2,425,779 613,616 - 3039394 8291187 8904802
5 Goodwill 4 41,754 - 441754.4352 - 441754 441754 Total 14,634,694 12,152,857
26787551 2928433 1834506
4762939 22466366 12148015
1 Capital Work in progress
4,054,088 17,502,625 - 21,556,713 - - - - 21556713 4054088
Annual Report 2017-18
95
NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STAEMENTS
A. Significant Accounting Policies– (AS-1):
1. Corporate Information Silly Monks Entertainment Limited (Formerly Known as Silly Monks Entertainment Private Limited) is Limited Company engaged in digital marketing solutions to businesses, agencies and online publishers. The Company connects Advertisers with their Audience across any form of Digital Media, using its massive local presence to deliver appropriate messages to the right audience, through the most relevant Digital channels. The Company was incorporated on 20th September, 2013 in Hyderabad and listed on NSE (MSME Segment) dated 18th January, 2018.
2. Significant Accounting policies
a) Basis of Accounting and preparation of Consolidated financial statements:
The consolidation financial statement of the Company and its subsidiaries (together the Group) have been prepared in accordance with the Generally Accepted Accounting Principles in India (India GAAP) to Section 133 of Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules,2014 and the relevant provisions of the Companies Act,2013 (“the 2013 Act”) as Applicable. The consolidated financial statement has been prepared on accrual basis under the historical cost convention.
b) Principles of Consolidation:
The consolidated financial statements have been prepared on the following basis: a) The financial statements of the Company and its subsidiary companies have been consolidated on
a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances, intra-group transactions and resulting unrealized profits or losses on intra-group transactions as per Accounting Standard (AS) 21 - "Consolidated Financial statements" specified under Section 133 of Companies Act, 2013.
b) In case of associates where the Company directly or indirectly through its subsidiaries holds 20% or more of equity, Investments in associates are accounted under the equity method as per Accounting Standard(AS) 23 - Accounting for Investments in Associates in Consolidated Financial Statements" specified under Section 133 of Companies Act, 2013.
c) The financial statements of the subsidiaries, and the associates used in the consolidation are
drawn up to the same reporting date as that of the Company, i.e. March 31, 2018.
d) The excess of cost to the Group, of its investment in the subsidiaries over the Group's share of equity is recognized in the consolidated financial statements as Goodwill and tested for impairment annually. The excess of the Group's share of equity of the subsidiaries on the acquisition date, over its cost of investment is treated as Capital Reserve. The Goodwill / Capital reserve is determined separately for each subsidiary company and such amounts are not setoff between different entities.
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e) Minority interest in the net assets of the consolidated subsidiaries is identified and presented in
consolidated balance sheet separately from current liabilities and equity of the company.
f) Minority Interest in the net assets of consolidated subsidiaries consists of: i) The amount of equity attributable to minorities at the date on which investment in a
subsidiary is made; and ii) The minorities' share of movements in the equity since the date the parent subsidiary
relationship came into existence.
g) Minority interest in the net profit and loss for the year of consolidated subsidiaries is identified and adjusted against the profit after tax of the group. Intra-group balances and intra-group transactions and resulting unrealized profits / loss has been eliminated.
h) The consolidated financial statements are prepared to the extent possible using uniform
accounting policies for like transactions and other events in similar circumstances and are presented to extent possible, in the same manner as the Company's separate financial statements.
c) The following subsidiary companies are consolidated in the consolidated financial statements.
Name of Subsidiary Country Of Incorporation/
Residence Proportion of Ownership Interest/ Proportion of
Voting Power Held Events Monks Entertainment LLP India 64% Monkstar Music LLP India 67% Dream Boat Entertainment Pte Limited China 100%
d) Use of Estimates:
The preparation of the consolidated financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the consolidated financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.
e) Fixed Assets
Fixed assets are stated at cost of acquisition or construction less accumulated depreciation. Cost includes all incidental expenses related to acquisition and installation, other pre-operation expenses and interest in case of construction. Carrying amount of cash generating units / assets are reviewed at balance sheet date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount is estimated as the net selling price or value in use, whichever is higher. Impairment loss, if any, is recognized whenever carrying amount exceeds the recoverable amount.
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97
f) Depreciation / Amortization Depreciation has been provided on Straight line basis except for Fixed Assetsof subsidiaries Events Monks Entertainment LLP and Monkstar Music LLP, at the rate determined with reference to the useful lives specified in Schedule II of the Companies Act, 2013.The impact of the change in useful life of fixed assets has been considered in accordance with the provision of Schedule II. Assets acquired on lease are depreciated over the period of the lease. Leasehold improvements are amortized over the period of lease. Assets costing less than ` 5,000/- are depreciated at 100% in the year of acquisition Depreciation has been provided on straight line basis, at the Life’s specified in Schedule II of the Companies Act, 2013.
g) Investments :
Investments are valued at cost. Provision for diminution, if any, in the value of each investments in Subsidiary companies are valued as per accounting standard-21 accounting for Investments in subsidiaries in Consolidated Financial Statements. i.e. Investment recorded at cost identifying good will arising at Value of investment over the face value of the investment.
h) Revenue Recognition: Digital Marketing Services: f) The Contracts between the Company and its Customers are either time or material contracts or
fixed price contracts. g) Revenue from fixed price contracts is recognized according to the milestones achieved as
specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, condition and estimates profitability may result in revisions and corresponding revenues and cost are recognized in the period in which such changes are identified.
h) In respect of time and material contract, revenue is recognized in the period in which the services are provided.
i) Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and revenue can be reliably measured.
j) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable rates.
i) Taxes on Income:
Tax expenses for the year comprises of current tax and deferred tax. Current tax The current change for income tax is calculated in accordance with the relevant tax regulations applicable to the company.
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98
Deferred tax Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the year. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have enacted or substantially enacted by the balance sheet date. Deferred tax asset is recognized only to the extent there is reasonable certainty that the assets can be realized in future. Minimum Alternative Tax (MAT) credit Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustments of future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal tax after the tax holiday period. Accordingly, it is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and asset can be measured reliably.
j) Earnings per Share The earnings considered in ascertaining the companies earning per share comprise net profit after tax and includes the post-tax effect of any extra-ordinary/exceptional item is considered. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The no. of shares used in computing diluted earnings per share comprises the weighted average no. of shares considered for deriving basic earnings per share and also the weighted average no. of equity shares that could have been issued on the conversion of all dilutive potential equity shares.
k) Provisions & Contingent Liability
The Company recognizes a provision when there is a present obligation as a result of a past obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
Particulars 2017-18 2016-17 Net Profit/(Loss) attributable to Equity Share Holders 1,90,41,712 1,44,74,098 Opening No of shares 5,24,500 4,18,000 Shares issued during the year 41,17,000 1,06,500 Bonus Shares Issued during the year 31,47,000 31,47,000 Total no of Equity shares 46,41,500 36,71,500 Weighted Average Number of Equity Shares 38,70,815 35,95,100 Basic and Diluted Earnings per Share 4.92 4.03
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99
l) OTHER NOTES TO THE ACCOUNTS
i. Minority Interest Identified by considering Share of reserves (net of losses) relating to current year has been transferred.
ii. Related Party transactions
The flowing transactions were carried out with the related parties in the ordinary course of business during the year. (Rs. In Lakhs)
iii. The figures for the previous year have been regrouped wherever necessary to conform to
current year’s classification, Subsidiary company financials. All the amounts presented in financial statements are in rupees except basic and diluted EPS & unless specified.
For Ramasamy Koteswara Rao and Co LLP, Chartered Accountants Firm Regn No. 010396S/S200084 Sd/- (CV Koteswara Rao)
By order of the Board
Sd/- Tekulapalli Sanjay Reddy
Chairman & Managing Director Partner Membership No-028353 Place: Hyderabad Date: 29.05.2018
Sd/-
Boda Narsing Rao Chief Financial Officer
Sd/-
Sushma Barla Company Secretary
Sd/-
Anil Kumar Pallala Whole Time Director
S. No Nature of Transactions 2017-18 2016-17 1 Service Income 195.93 197.79 2 Investment made 133.25 30.17 3 Inter Corporate Loans 0 0 4 Loan Repaid 0 0 5 Loan Given 0 0 6 Rent Expenses 0 6.06 7 Director Remuneration 90.00 57.00 8 Service Expenses 53.15 0
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100
SILLY MONKS ENTERTAINMENT LIMITED
CIN: U92120TG2013PLC090132 Registered Office: 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur,
Hyderabad – 500084, Telangana, India Website – www.sillymonks.com Email – [email protected]
ATTENDANCE SLIP FOR ANNUAL GENERAL MEETING
(To be surrendered at the venue of the meeting) I, certify that I, am a registered shareholder/proxy/representative for the registered shareholder(s) of Silly Monks Entertainment Limited. I, hereby record my presence at the Annual General Meeting of the shareholders of Silly Monks Entertainment Limited held on Saturday, 29th day of September, 2018 at 10.00 A.M. at the registered office of the Company situated at 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur, Hyderabad – 500084, Telangana, India.
Reg. Folio No. DP ID* No. of Shares Client ID*
*Applicable if the shares held in electronic form Name & Address of Member
_________________________________ Signature of Shareholder/Proxy/Representative (Please Specify)
Annual Report 2017-18
101
SILLY MONKS ENTERTAINMENT LIMITED
CIN: U92120TG2013PLC090132 Registered Office: 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur,
Hyderabad – 500084, Telangana, India Website – www.sillymonks.com Email – [email protected]
Form No. MGT-11
PROXY FORM
[Pursuant to section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies (Management and Administration) Rules, 2014]
CIN U92120TG2013PLC090132
Name of the company SILLY MONKS ENTERTAINMENT LIMITED
Registered office 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur, Hyderabad – 500084, Telangana, India.
Name of the member(s)
Registered Address
Email Id
Folio No / Client ID DP ID : I /We, being the member(s) of____________ shares of the above-named company, hereby appoint 1. Name
Address Signature
E-mail Id
or failing him
2. Name
Address Signature
E-mail Id
or failing him as my / our proxy to attend and vote (on a poll) for me / us and on my / our behalf at the Annual General Meeting of the Company to be held on Saturday, 29th day of September, 2018 at 10.00 A.M. at 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur, Hyderabad – 500084, Telangana, India and at any adjournment thereof in respect of such resolutions as are indicated below:
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102
Sl. No. Resolutions For Against 1. To consider and adopt:
a) The audited Financial Statement of the Company for the financial year 2017-18 together with the Report of the Board of Directors and Auditors thereon; and
b) The audited consolidated Financial Statement of the Company for the year 2017-18.
2. To appoint a director in place of Mr. Tekulapalli Sanjay Reddy (DIN: 00297272), who is liable to retire by rotation and being eligible, offers himself for re-appointment as a Director.
3. Appointment of Dr. Rama Koti Reddy Kondamadugula (DIN: 00259576) as an Independent Director
4. To Consider and approve the Increase in remuneration of Mr. Tekulapalli Sanjay Reddy, Chairman & Managing Director of the Company.
5. To Consider and approve the Increase in remuneration of Mr. Anil Kumar Pallala, Whole Time Director of the Company.
Signed this …………. day of ………………. 2018. Signature of shareholder: _________Signature of Proxy holder(s): __________ Note: This form of proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the Meeting.
Affix Revenue Stamp
Annual Report 2017-18
103
ROUTE MAP OF THE VENUE OF 05TH ANNUAL GENERAL MEETING Address: 301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, Kondapur,
Hyderabad – 500084, Telangana, India