Silly Monks Entertainment Limited · 2018-01-04 · Silly Monks Entertainment Limited Annual Report 2016-17 1 COMPANY INFORMATION BOARD OF DIRECTORS Shri. Tekulapalli Sanjay Reddy

Silly Monks Entertainment Limited

Annual Report 2016-17

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COMPANY INFORMATION

BOARD OF DIRECTORS Shri. Tekulapalli Sanjay Reddy Chairman & Managing Director Shri. Anil Kumar Pallala Whole Time Director Mrs. Swathi Reddy Non- Executive Non - Independent Director Shri. Sreenivasa Reddy Musani Non- Executive Non - Independent Director Shri. Katragadda Rajesh Independent Director Shri. Prasada Rao Kalluri Independent Director COMPANY SECRETARY & COMPLIANCE OFFICER Ms. Sushma Barla

CHIEF FINANCIAL OFFICER Shri. B. Narsing Rao Registered Office: Statutory Auditors:

301, Ektha Pearl, 2-17-89, B P Raju Marg, Kothaguda, M/s. Ramasamy Koteswara & Co.

Kondapur, Hyderabad – 500084, Telangana, India Chartered Accountants

Tele-Fax No. : 040 - 2300 4518 Firm Regn No. 010396S

BOARD COMMITTEES

Audit Committee:

Shri. Rajesh Katragadda Chairman Shri. Prasada Rao Kalluri Member Shri. Tekulapalli Sanjay Reddy Member

Nomination and Remuneration Committee:

Shri. Rajesh Katragadda Chairman Shri. Prasada Rao Kalluri Member Shri. Sreenivasa Reddy Musani Member

Stakeholders Relationship Committee:

Shri. Rajesh Katragadda Chairman Shri. Prasada Rao Kalluri Member Shri. Tekulapalli Sanjay Reddy Member



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Contents Page No.

NOTICE ....................................................................................................................................................3

ANNEXURE TO THE NOTICE ......................................................................................................................5

DIRECTORS’ REPORT.................................................................................................................................6

ANNEXURES TO DIRECTORS’ REPORT ...................................................................................................... 14

AUDITORS REPORT ON FINANCIAL STATEMENTS ..................................................................................... 25

BALANCE SHEET ..................................................................................................................................... 33

STATEMENT OF PROFIT & LOSS ACCOUNT ............................................................................................... 35

CASH FLOW STATEMENT ........................................................................................................................ 36

NOTES FORMING PART OF FINANCIAL STATEMENTS ............................................................................... 38

AUDITOR’S REPORT ON CONSOLIDATED FINANCIAL STATEMENTS ........................................................... 52

CONSOLIDATED BALANCE SHEET ............................................................................................................ 57

CONSOLIDATED STATEMENT OF PROFIT & LOSS ACCOUNT ...................................................................... 59

CONSOLIDATED CASH FLOW STATEMENT ............................................................................................... 60

ATTENDENDENCE SLIP ............................................................................................................................ 75

PROXY FORM ......................................................................................................................................... 76



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NOTICE

Notice is hereby given that the 04th Annual General Meeting of the Members of Silly Monks Entertainment

Limited will be held on Tuesday, the 26th September, 2017 at 11.30 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 the Audited Financial Statements of the Company for the year 2016-17 together with the Report of the Board of Directors and Auditors thereon; and the audited Consolidated Financial Statements of the Company for the year 2016-17.

2. To appoint a director in place of Mrs. Swathi Reddy, as She retires by rotation and being eligible offers herself for re - appointment.

3. To ratify the appointment of Statutory Auditors of the Company and to fix their remuneration and in this

regard, to consider and if thought fit, to pass with or without modification(s), the following resolution as an Ordinary Resolution:

“RESOLVED THAT pursuant to the provisions of Sections 139, 141, 142 and other applicable provisions of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, and the resolution passed by the members in their AGM held on 18.12.2014, the appointment of M/s. Ramasamy koteswara & Co., Chartered Accountants, (Registration No. 010396S), Hyderabad who were appointed as the Statutory Auditors of the Company to hold the office as such till the conclusion of 6th Annual General Meeting, be and is hereby ratified and the Board of Directors of the Company be and are hereby authorised to fix the remuneration payable to the Statutory Auditors for the audit of the accounts for the financial year ending March 31, 2018.”

By order of the Board of Directors

For Silly Monks Entertainment Limited

SD/-

Place: Hyderabad Sushma Barla

Date: 04th September, 2017 Company Secretary & Compliance Officer



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NOTES FOR MEMBERS:

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO

ATTEND AND ON A POLL TO VOTE INSTEAD OF HIMSELF/HERSELF. SUCH A PROXY NEED NOT BE A MEMBER OF THE COMPANY. A person can act as 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.

The instrument of Proxy in order to be effective, should be deposited at the Registered Office of the Company, duly completed and signed, not less than 48 hours before the commencement of the meeting. A Proxy form is sent herewith. Proxies submitted on behalf of the companies, societies etc., must be supported by an appropriate resolution/authority, as applicable.

2. The register of members and share transfer books of the company will remain closed from Friday the

22nd day of September 2017 to Monday the 25th day of September 2017 (both days inclusive).

3. M/s. Bigshare Services Pvt. Ltd, E-2/3 Ansa Industrial Estate , Saki Vihar Road, Sakinaka, Andheri (East), Mumbai -400072, the Registrar and Transfer Agent (RTA) of the Company. All communications in respect of share transfers and change in the address of the members may be communicated to them.

4. All the documents referred to in the Notice will be available to the members for inspection at the

Registered Office of the company between 10.30 A.M to 12.30 P.M on all working days from the date hereof up to the date of the Meeting.

5. Members/Proxies are requested to bring the attendance slip filled in for attending the Meeting.

By order of the Board of Directors

For Silly Monks Entertainment Limited

SD/-

Place: Hyderabad Sushma Barla

Date: 04th September, 2017 Company Secretary & Compliance Officer



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ANNEXURE TO THE NOTICE

INFORMATION IN RESPECT OF DIRECTORS SEEKING APPOINTMENT/ RE-APPOINTMENT AS REQUIRED

UNDER THE SECRETARIAL STANDARDS ON GENERAL MEETINGS ISSUED BY ICSI

Name of the Director Swathi Reddy

Date of first appointment on the Board 20th day of September, 2013

Date of Birth 09.02.1971 (46 Years)

Expertise in Specific Functional areas She has more than two decades of work experience

in the marketing sector.

Educational Qualification

She holds a degree in Bachelor of Commerce and

Master of Business Administration (MBA) from the

Osmania University of Hyderabad.

Directorships in other Companies

Dream Boat Entertainment Private Limited.

Foreign Companies:

Dream Boat Entertainment Pte Limited

Membership / Chairmanships of committees of

Other Boards (other than the Company) Nil

Details of Remuneration sought to be paid and the

remuneration last drawn by such person Nil

Shareholding in the Company as on 31.03.2017 She holds 11,000 Equity Shares of Rs.10/- each

Relation between Directors inter-se She is the wife of Mr. Tekulapalli Sanjay Reddy,

Chairman & Managing Director.

Number of meetings attended during the year Attended 13 out of 13 Board Meetings held during

the year



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DIRECTORS’ REPORT

To

The Members,

M/s. Silly Monks Entertainment Limited.

Your directors have pleasure in presenting their Fourth 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 31 March 2017.

1. FINANCIAL RESULTS:

The performance for the current year in comparison to the previous year are as under:

(Amount in Rs.)

Particulars Financial Year

2016-17

Financial Year

2015-16

Revenue from Operations 2,99,93,287 2,01,74,196

Other Income 2,30,172 13,980

Total Revenue 3,02,23,459 2,01,88,176

Total Expenses 2,64,92,233 1,92,16,218

Net Profit / Loss Before Tax (PBT) 37,31,226 9,71,958

Current Tax 7,10,985 2,00,740

Deferred Tax 4,22,317 1,06,045

MAT Credit Entitlement (17,423) -

Net Profit (PAT) 26,15,348 6,65,173

EPS 5.84 1.76

2. COMPANY PERFORMANCE

Your Company posted good financial results with a net profit of Rs. 26.15 Lakhs during the year under

review. Due to continuous efforts of the management the revenues of the company increased by 49.71%

to that of the previous year. The Company is looking forward to increase 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, 2017.



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4. DIVIDEND:

No Dividend was declared for the financial year ended 31st March, 2017 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. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of Subsidiaries/Associates in the prescribed format i.e. Form AOC-1 is provided as Annexure - I to this Report. The statement also provides the details of performance, financial position of each of the subsidiaries/associates.

6. STATUTORY AUDITORS: The Shareholders of the Company At their Annual General Meeting (AGM) held on 18th December, 2014, have appointed 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 (subject to ratification of the appointment by the members at every AGM held after that AGM) at such remuneration as may be decided by the Board of Directors. The Board recommends their appointment for ratification at the ensuring Annual General Meeting.

7. DIRECTORS & KEY MANAGERIAL PERSONAL:

7.1 Director Retiring by Rotation Mrs. Swathi Reddy retires by rotation at the forthcoming Annual General Meeting, and being eligible,

offers herself for re-appointment at the said Meeting of the Company.

7.2 Changes in the Board and Key Managerial Personnel

7.2.1 Board

Mr. Tekulapalli Sanjay Reddy, was appointed as the Chairman & Managing Director of the Company for

a period of 3 years with effect from 01.04.2017 and whose appointment was approved by the members

of the Company at the Extraordinary General Meeting held on 15th day of May, 2017.

Mr. Anil Kumar Pallala was appointed as the Whole Time Director of the Company for a period of 3 years

with effect from 01.04.2017 and whose appointment was approved by the members of the Company at

the Extraordinary Meeting held on 15th day of May, 2017.



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Mrs. Swathi Reddy, Executive Director of the Company, was redesignated as Non-Executive Director with

effect from 31st day of March, 2017, by the board of directors of the Company at their meeting held on

31st day of March, 2017.

The Board of Directors of the Company appointed Mr. Rajesh Katragadda and Mr. Prasada Rao Kalluri as

an additional directors in the capacity of Non – Executive Independent Directors of the Company at their

board meeting held on 31st day of March, 2017 and their appointment’s had approved by the members

of the Company at the Extraordinary General Meeting held on 15th day of May, 2017.

The Board of Directors of the Company appointed Mr. Sreenivasa Reddy Musani as an additional director

of the Company at their board meeting held on 31st day of March, 2017 and whose appointment was

approved by the members of the Company at the Extraordinary General Meeting held on 15th day of May,

2017.

As on the date of this report, the following are the Board of Directors of the Company:

SL. NO. NAME OF THE Director DESIGNATION

1. Tekulapalli Sanjay Reddy Chairman & Managing Director

2. Anil Kumar Pallala Whole Time Director

3. Swathi Reddy Non – Executive Directors

4. Sreenivasa Reddy Musani Non – Executive Directors

5. Rajesh Katragadda Non – Executive Independent Directors

6. Prasada Rao Kalluri Non – Executive Independent Directors

7.2.2 Key Managerial Personnel

The Board of Directors of the Company at their meeting held on 31st March, 2017, appointed Mr. Boda

Narsing Rao as Chief Financial Officer of the Company, with effect from 01st April, 2017.

Ms. Sushma Barla was appointed as a Company Secretary and Compliance Officer of the Company with

effect from 24th day of May, 2017.

As on the date of this report, the following are the Key Managerial Personnel of the Company:

SL. NO. NAME OF THE KMP DESIGNATION

1. Tekulapalli Sanjay Reddy Chairman & Managing Director

2. Anil Kumar Pallala Whole Time Director

3. Boda Narsing Rao Chief Financial Officer

4. Sushma Barla Company Secretary & Compliance Officer

7.2.3 Independent Directors

The Company has received necessary declaration from each Independent Director of the Company, that

they meet the criteria of independence prescribed under section 149(6) of the Companies Act, 2013 (the

Act).



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8. BOARD MEETINGS

The Board met Thirteen (13) times during the financial year 2016-17.

The following are the details of the Board Meetings:

9. COMMITTEES

a) AUDIT COMMITTEE: The Audit Committee of the Company was constituted pursuant to the Board Meeting held on 12th day of June, 2017, comprises the following Members: Shri. Rajesh Katragadda - Chairman Shri. Prasada Rao Kalluri - Member Shri. Tekulapalli Sanjay Reddy - Member

None of the recommendations made by the Audit Committee were rejected by the board. During the year under review the Audit Committee met on 04.09.2017.

b) NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Company was constituted pursuant to the Board Meeting held on 12th day of June, 2017, comprises the following Members: Shri. Rajesh Katragadda - Chairman Shri. Prasada Rao Kalluri - Member Shri. Sreenivasa Reddy Musani - Member

During the year under review, the Stakeholder’s Relationship Committee was not met.

Sl. No. Date of Board Meeting

1. 04.04.2016

2. 14.05.2016

3. 18.06.2016

4. 18.07.2016

5. 02.09.2016

6. 12.09.2016

7. 19.09.2016

8. 18.10.2016

9. 24.01.2017

10. 03.02.2017

11. 20.02.2017

12. 24.03.2017

13. 31.03.2017



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c) STAKEHOLDER’S RELATIONSHIP COMMITTEE

The Stakeholder’s Relation Ship Committee of the Company was constituted pursuant to the Board Meeting held on 12th day of June, 2017, comprises the following Members:

Shri. Rajesh Katragadda - Chairman Shri. Prasada Rao Kalluri - Member Shri. Tekulapalli Sanjay Reddy - Member

10. POLICY ON DIRECTOR’S AND KEY MANAGERIAL PERSONNEL APPOINTMENT AND REMUNERATION During the year, your Company has adopted the policy on Director’s Appointment and Remuneration. The objective of the policy is to ensure the executive directors and other employees are sufficiently compensated for their performance. The policy seeks to provide criteria for determining qualifications and positive attributes and independence of a director and also recommend a policy relating to the remuneration for the directors and key managerial personnel.

11. 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.

12. FIXED DEPOSITS: Your Company has not accepted any fixed deposits and as such no principal or interest was outstanding as on the date of the Balance sheet.

13. 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, 2017, 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, 2017 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; and



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v) 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.

14. 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 into 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 in Form AOC-2 is herewith annexed as “Annexure –II” to this report.

15. SHARE CAPITAL The Authorised Share Capital of the Company as on date of Balance Sheet is Rs. 55,00,000/- divided into

5,50,000 equity shares of Rs.10/- each.

The paid up share capital of the company as on date of balance sheet is Rs. 52,45,000/- divided into

5,24,500 equity shares of Rs. 10/- each.

During the year under review, the company has increased the Authorized Share Capital of the company,

from Rs. 55,00,000/- to Rs. 5,00,00,000/- at the Extraordinary General Meeting held on 15.05.2017.

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.

The paid-up Share Capital of the Company as on Date is Rs. 3,67,15,000/- divided into 36,71,500 equity

shares of Rs. 10/- each.

During the year under review, the Company has not issued shares with differential voting rights, sweat

equity shares or Employee Stock Options.

16. 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 – III” to this report.



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17. AUDITORS’ REPORT There are no qualifications, reservations or adverse remarks made by M/s. Ramasamy koteswara & Co., Chartered Accountants, Statutory Auditors in their report for the Financial Year ended 31st March, 2017.

18. 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. 2,42,05,282/- Foreign Exchange Outgoings: 0

19. MATERIAL CHANGES AFTER THE CLOSURE OF THE FINANCIAL YEAR:

During the year, 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 dated, 24th day of May, 2017 from the Registrar of Companies, for the state of Telangana and Andhra Pradesh. Pursuant to the approval of the members of the Company at the Extraordinary general meeting of the members of the Company held on 08th day of June, 2017, your Company has filled Draft prospectus with the National Stock Exchange of India Limited on 24th day of August, 2017 for the purpose of Initial Public offer comprising a fresh issue of 9,70,000 equity Shares and Offer for sale (OFS) of 2,90,000 equity Shares. The Company has obtained in-principle approval from the NSE dated 14th September, 2017 as the Company proposes to list its shares in SME platform of NSE (Emerge).

20. 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, 2017.

21. 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 2016-17.

22. 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



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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.

23. 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 the mitigating the risks and reporting mechanism of such risks. The risk management framework is reviewed periodically by the board.

24. PARTICLARS OF EMPLOYEES There are no employees who are covered under the provisions of Section 197(12) of the Companies Act, 2013 read with the Rule 5 Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and hence the statement in this respect has not been given.

25. 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.

BY ORDER OF THE BOARD OF DIRECTORS

FOR SILLY MONKS ENTERTAINMENT LIMITED

SD/- SD/-

TEKULAPALLI SANJAY REDDY ANIL KUMAR PALLALA

PLACE: HYDERABAD CHAIRMAN & MANAGING DIRECTOR WHOLE TIME DIRECTOR DATE: 04TH SEPTEMBER, 2017 DIN: 00297272 DIN: 02416775



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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

Information in respect of each subsidiary to be presented with (Amount In Rs.)

Sl. No. Particulars Details

1. Name of the Subsidiary Dream Boat Entertainment Pte.

Limited

Event Monks Entertainment

LLP

Monkstar Music LLP

2. Reporting period for the subsidiary concerned, if different from the holding company's reporting period

Not Applicable Not Applicable Not Applicable

3. Reporting currency and Exchange rate as on the last date of the relevant Financial year in the case of foreign subsidiaries

1 USD = 64.8144 Not Applicable Not Applicable

4. Share capital 80,000 1,00,000 5,00,000

5. Reserves & surplus 1,43,29,056 8,31,812 5,18,152

6. Total assets 3,07,58,966 9,91,111 11,10,300

7. Total Liabilities 3,07,58,966 9,91,111 11,10,300

8. Investments Nil Nil Nil

9. Turnover 10,76,18,245 9,51,200 8,11,022

10. Profit before taxation 1,16,84,371 1,30,604 2,51,900

11. Provision for taxation (Includes DTL/DTA) - 39,299 77,837

12. Profit after taxation 1,16,84,371 91,305 1,74,063

13. Proposed Dividend - -

14. % of shareholding 100% 64% 67%

None of the above subsidiaries have been liquidated or sold during the year.

Part “B”: Associates and Joint Ventures – NIL

The Company does not have any Associate Company / Joint Ventures.

As per my report of even date. For and on behalf of the Board of Directors

For Ramasamy Koteswara Rao & Co., Silly Monks Entertainment Limited

Chartered Accountants

Firm Regn No. 010396S

SD/- SD/- SD/-

(CV Koteswara Rao) Tekulapalli Sanjay Reddy Anil Kumar Pallala

Partner Chairman & Managing Director Whole Time Director

Membership No-028353 DIN: 00297272 DIN: 02416775

Place: Hyderabad

Date: 30.05.2017



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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)

Form for 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:

The Company has entered into a Lease agreement dated 04th day of December, 2013 with Mr. T. Sanjay Reddy & Mrs. Swathi Reddy directors of the Company for the premises of the previous registered office of the Company situated at G2, Namitha Nest, 1st Floor,1-89/A/16, Durgam Cherurvu Road, kavuri Hills, Madhapur, Hyderabad-500081 for the period of 3 years starting from 16th day of December, 2013 to 15th day of December, 2016. The lease period is completed with financial year 2016 - 17. The following are the details of the transaction.

Name(s) of the related party and

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 paid as

advances, if any

Mr. Tekulapalli Sanjay Reddy -Chairman & Managing Director

Rent paid (Expenses)

3 years –Concluded during the F.Y.2016-17

Lease of premises for a period of 3 years at a monthly rent of Rs.55,000/-

Existing Agreement - Not Applicable

Rs.2,50,000/- as Security Deposit

Swathi Reddy - Non - Executive Director

Rent paid (Expenses)

3 years –Concluded during the F.Y.2016-17

Lease of premises for a period of 3 years at a monthly rent of Rs.55,000/-

Existing Agreement - Not Applicable

Rs.2,50,000/- as Security Deposit



SD/- SD/-





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ANNEXURE – III

FORM NO. MGT 9 EXTRACT OF ANNUAL RETURN

As on financial year ended on 31.03.2017 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 Private Limited

4. Category/Sub-category of the Company Non-Government Company/ Private 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 No

7. Name, Address & contact details of the

Registrar & Transfer Agent, if any.

Not Applicable

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):

S. No. Name and Description of main products / services NIC Code of the

Product/service

% to total

turnover of the

company 1. Motion picture, video and television programme

production, sound recording and music publishing

activities (Publishing, Digital & Social Media)

59 100.00%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:

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)



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IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

a) Category-wise Share Holding:

Category of Shareholders No. of Shares held at the beginning of

the year [As on 31-March-2016]

No. of Shares held at the end of the

year[As on 31-March-2017]

%

Change

during

the

year

Demat Physical Total % of

Total

Shares

Demat Physical Total % of

Total

Shares

A. Promoters

(1) Indian

a) Individual/ HUF - 318,000 318,000 76.08 - 318,000 318,000 60.63 (15.45)

b) Central Govt. - - - - - - - - -

c) State Govt.(s) - - - - - - - - -

d) Bodies Corp. - - - - - - - - -

e) Banks / FI - - - - - - - - -

f) Any other - - - - - - - - -

Sub-total (A)(1) - 318,000 318,000 76.08 - 318,000 318,000 60.63 (15.45)

(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)

- 318,000 318,000 76.08 - 318,000 318,000 60.63 (15.45)

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):- - - - - - - - - -



18

2. Non-Institutions

a) Bodies Corp.

i) Indian - - - - - 106,500 106,500 20.31 20.31

ii) Overseas - - - - - - - - -

b) Individuals - - - - - - - - -

i) Individual shareholders

holding nominal share

capital up to Rs. 1 lakh

- - - - - - - - -

ii) Individual shareholders

holding nominal share

capital in excess of Rs 1

lakh

- 100,000 100,000 23.92 - 100,000 100,000 19.07 (4.85)

c) Others (specify)

Clearing Member - - - - - - - - -

Trust - - - - - - - - -

Non Resident Individuals - - - - - - - - -

Foreign Portfolio

Investors – Corporate

(FPI)

- - - - - - - - -

Sub-total (B)(2):- - 100,000 100,000 23.92 - 206,500 206,500 39.37 15.45

Total Public Shareholding

(B)=(B)(1)+ (B)(2)

- 100,000 100,000 23.92 - 206,500 206,500 39.37 15.45

C. Shares held by

Custodian for GDRs &

ADRs

- - - - - - - - -

Grand Total (A+B+C) - 418,000 418,000 100.00 - 524,500 524,500 100.00 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

shareholdi

ng during

the year

No. of

Shares

% of

total

Shares of

the

company

%of Shares

Pledged /

encumbere

d to total

shares

No. of

Shares

% of

total

Shares of

the

company

%of Shares

Pledged /

encumbere

d to total

shares

Promoters

1 Tekulapalli

Sanjay Reddy

253000 60.53% 0 240000 45.76% 0 (14.77%)

2 Anil Kumar

Pallala

54000 12.92% 0 50000 9.53% 0 (3.39%)

Total 307000 73.45% 0 290000 55.29% 0 (18.16%)



19

Promoter’s Group

3 Swathi Reddy 11000 2.63% 0 11000 2.10% 0 (0.53%)

4 Gaurika Reddy 0 0 0 6500 1.24% 0 1.24%

5 Karyampudi

Koti Sridevi

0 0 0 4000 0.76% 0 0.76%

6 Tekulapalli

Mahikaansh

Reddy

0 0 0 6500 1.24% 0 1.24%

Total 11000 2.63% 0 28000 5.34% 0 2.71%

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 01.04.2016 253000 60.53% - -

Changes during the year 31.03.2017 Transfer (13000) (2.48%) 240000 58.05%

At the end of the year 31.03.2017 - - 240000 58.05%

2. Anil Kumar Pallala




Promoter’s Group

3. Swathi Reddy

At the beginning of the year 01.04.2016 - 11000 2.63% - -

Changes during the year - - - - 11000 2.63%

At the end of the year 31.03.2017 - 11000 2.63%

4. Gaurika Reddy

At the beginning of the year 01.04.2016 - - - - -

Changes during the year 31.03.2017 Transfer - - 6500 1.24%

At the end of the year 31.03.2017 - - - 6500 1.24%

5. Karyampudi Koti Sridevi




20

Changes during the year 31.03.2017 Transfer - - 4000 (0.76%)

At the end of the year 31.03.2017 - - - 4000 (0.76%)

6. Tekulapalli Mahikaansh Reddy


Changes during the year 31.03.2017 Transfer - - 6500 1.24%


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 01.04.2016 - - - -

Changes during the year

14.05.2016 Allotment 7000

20.31%

7000

20.31%

18.06.2016 Allotment 7000 14000

18.07.2016 Allotment 7300 21300

12.09.2016 Allotment 7100 28400

19.09.2016 Allotment 7100 35500

18.10.2016 Allotment 7100 42600

24.01.2017 Allotment 3500 46100

03.02.2017 Allotment 3500 49600

20.02.2017 Allotment 7100 56700

24.03.2017 Allotment 30000 86700

31.03.2017 Allotment 19800 106500


2. Korrapati Ranganathasai


Changes during the year NA NA NA NA 100000 19.07%




21

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




2. Anil Kumar Pallala




3. Swathi Reddy


Changes during the year - - - - 11000 2.63%

At the end of the year 31.03.2017 - 11000 2.63%

4. Sreenivasa Reddy Musani

At the beginning of the year 01.04.2016 - NIL NIL NIL NIL

Changes during the year - - NIL NIL NIL NIL

At the end of the year 31.03.2017 - NIL NIL NIL NIL

5. Katragadda Rajesh




6. Prasada Rao Kalluri




7. Boda Narsing Rao




8. Sushma Barla






22

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 24,70,000 - - 24,70,000

ii) Interest due but not paid - - - -

iii)Interest accrued but not due - - - -

Total (i+ii+iii) 24,70,000 - - 24,70,000

Change in Indebtedness during the financial year

* Addition 76,43,000 - - 76,43,000

* Reduction 13,16,098 - - 13,16,098

Net Change 63,26,902 - - 63,26,902

Indebtedness at the end 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

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 36,00,000 21,00,000 57,00,000

(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

- - -



23

5. Others, please specify - - -

Total (A) 36,00,000 21,00,000 57,00,000

Ceiling as per the Act The provisions of Section 197 does not applicable during the Financial Year 2016-17

*As on 31st March, 2017, Mr. Tekulapalli Sanjay Reddy was appointed as the Chairman & Managing Director, for the F.Y. 2016-17 he has received the remuneration for the position of the Director not as a KMP

** As on 31st March, 2017, Mr. Anil kumar Pallala was appointed as the Whole Time Director, for the F.Y. 2016-17 he has received the remuneration for the position of the Director not as a KMP.

B. Remuneration to other Directors:

(Amount in Rs.)

Sl. No. Particulars of Remuneration Name of Directors

Total Amount 1. Independent Directors Katragadda

Rajesh

Prasada Rao

Kalluri

Fee for attending board committee meetings Nil Nil Nil

Commission Nil Nil Nil

Others, please specify Nil Nil Nil

Total (1) Nil Nil Nil

2. Other Non-Executive Directors Swathi

Reddy

Sreenivasa

Reddy Musani

-

Fee for attending board committee meetings Nil Nil Nil

Commissionv Nil Nil Nil

Others, please specify Nil Nil Nil

Total (2) Nil Nil Nil

Total (B)=(1+2) Nil Nil Nil

Total Managerial Remuneration Nil Nil Nil

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

Gross salary

(a) Salary as per provisions contained in

section 17(1) of the Income-tax Act, 1961

(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



24

4. Commission

- as % of profit

- others, specify

5. Others, please specify

Total (A)

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



SD/- SD/-





25

AUDITORS’ REPORT

To the Members of SILLY MONKS ENTERTAINMENT LIMITED (Formerly Known as SILLY MONKS ENTERTAINMENT PRIVATE LIMITED) Report on the Standalone Financial Statements We have audited the accompanying standalone 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, 2017, 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 “standalone 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 Standalone 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 Standalone 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



26

are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate 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 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 Standalone financial statements Opinion In our opinion and to the best of our information and according to the explanations given to us, the standalone 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, 2017, 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 standalone 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, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, 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;



27

(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. iv. The Company has provided requisite disclosures in its financial statement as to holdings as well as dealing in Specified Bank Notes during the period 8 November 2016 to 30 December 2016. Based on the audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management.

For Ramasamy Koteswara Rao & Co, Chartered Accountants Firm Registration Number: 010396S

SD/- Place: Hyderabad (C V Koteswara Rao) Date: 30-05-2017 Partner Membership No.028353



28

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, 2017)

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 in depositing undisputed



29

statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service 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, 2017 for a period of more than six months from the date on when they become payable.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, and value added tax outstanding on account of any dispute.

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. Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term Loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.

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.

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.



30



ANNEXURE B TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE 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 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, 2017 in conjunction with our audit of the standalone 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.



31

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 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



32

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, 2017, 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.


SD/- Place: Hyderabad (C V Koteswara Rao) Date:30-05-2017 Partner Membership No.028353



33

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 2017

Particulars Note No. 2016-17 2015-16

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

52,45,000 3,62,20,125

49,18,880 9,95,682

- 12,00,275

7,10,985 57,70,063

41,80,000 46,36,778

14,07,201 5,73,365

33,94,289 3,49,791 2,00,740

13,33,131

II 1 2

TOTAL 5,50,61,010 1,60,75,295

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

1,49,33,318 71,63,517 28,87,370

30,17,921

1,50,30,075

21,97,800 80,85,248 12,93,194

4,52,567

41,87,684 51,28,703

-

22,15,972 -

37,02,207 1,61,820 3,48,747 3,30,162

TOTAL 5,50,61,010 1,60,75,295

Significant Accounting Policies A

As per our report of even date attached



34

For Ramasamy koteswara Rao & Co Chartered Accountants Firm Regn No.010396S

For and on behalf of the Board Silly Monks Entertainment Ltd

SD/- (CV Koteswara Rao) Partner Membership No-028353

SD/- Tekulapalli Sanjay Reddy (Director) DIN: 00297272

Place: Hyderabad Date: 30.05.2017

SD/- Anil Kumar Plallala (Director) DIN: 02416775



35

STATEMENT OF PROFIT & LOSS ACCOUNT



STATEMENT OF PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH, 2017


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

2,99,93,287

2,30,172

2,01,74,196

13,980

3,02,23,459 2,01,88,176

75,75,510

1,14,05,136 3,57,573

20,29,845 51,24,169

2,64,92,233

52,70,492 78,50,856

4,95,643 15,10,424 40,88,803

1,92,16,218

37,31,226 9,71,958

7,10,985 4,22,317 (17,423)

2,00,740 1,06,045

-

26,15,348 6,65,173

5.84 5.84

1.76 1.76

Significant Accounting Policies





SD/-

Tekulapalli Sanjay Reddy (Director) DIN: 00297272


SD/-

Anil Kumar Plallala (Director) DIN: 02416775



36

CASH FLOW STATEMENT



STANDALONE CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017

Particulars For the Year Ended 31.03.2017

For the Year Ended 31.03.2016

A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before Tax Adjustments for: Depreciation 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)

37,31,226

20,29,845

3,57,573 (14,132)

9,71,959

15,10,424

4,95,643 -

61,04,512

8,50,484 44,36,931

(33,94,289) - -

15,04,406 (9,44,447) (1,04,982) (8,01,949)

(1,50,30,077)

29,78,026

1,24,059 9,42,991

33,94,289 (12,60,972)

1,45,000 (12,87,150)

(1,17,313) (15,463)

(3,92,000) -

(73,79,411) (2,00,740)

45,11,467 (1,02,692)

(75,80,151) 44,08,775

(1,78,85,230)

2,01,700

(38,99,859)

-

(1,76,83,530) (38,99,859)

35,11,679 (3,57,573)

3,00,33,000

(22,04,065)

(4,95,643) 22,80,000

3,31,87,107 (4,19,708)

79,23,426 1,61,822

89,208

72,614



37

Cash & Cash Equivalents at Beginning of Period Cash & Cash Equivalents at End of Period Cash & Cash Equivalents comprise: Cash in Hand Balance with Banks

80,85,248

1,49,298 79,35,952

1,61,822

26,249 1,35,572

As per our report of even date For Ramasamy koteswara Rao & Co., Chartered Accountants Firm Regn No.010396S








38

NOTES FORMING PART OF FINANCIAL STATEMENTS

Note 1

Share capital

Share Capital 2016-17 2015-16

Number Amount Number Amount

Authorised Equity Shares of ` 10/-each 550,000 5,500,000 500,000 5,000,000

Issued, Subscribed & Paid up Equity Shares of ` 10/- paid up each 524,500 5,245,000 418,000 4,180,000

Total 524,500 5,245,000 418,000 4,180,000

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period

Particulars 2016-17 2015-16

Number Amount Number Amount Shares outstanding at the beginning of the year 418,000 4,180,000 190,000 1,900,000

Shares Issued during the year 106,500 1,065,000 228,000 2,280,000

Shares bought back during the year - - - -

Shares outstanding at the end of the year 524,500 5,245,000 418,000 4,180,000

Shares in the company held by each shareholder holding more than 5 percent shares

Name of Shareholder

2016-17 2015-16

No. of Shares held % of Holding No. of Shares held

% of Holding

T. Sanjay Reddy 240,000 45.76% 253,000 60.53%

Sai Korrapati 100,000 19.07% 100,000 23.92%

Ektha.com Pvt Ltd 106,500 20.31% - -

Anil Kumar Pallala 50,000 9.53% 54,000 12.92%

T. Swathi Reddy 11,000 2.10% 11,000 2.63%

T Mahikaansh Reddy 6,500 1.24%

T Gaurik Reddy 6,500 1.24%

Sridevi 4,000 0.76%

524,500 100.00% 418,000 100.00%



39

Note 2

Reserves and surplus


A. Securities Premium Account

Opening Balance 3,900,000 3,900,000

(+) Addition During the Year 28,968,000 -

(-) Deletion During the Year - -

Closing Balance 32,868,000 3,900,000

B. Surplus

Opening Balance 736,778 71,604

(+) Current Year Transfer 2,615,348 665,173

(-) Written Back in Current Year - -

Closing Balance 3,352,125 736,778

Total 36,220,125 4,636,778

Note 3

Long Term Borrowings


(a) Secured loans

(i) From Banks 8,796,902 2,470,000 Less: Current Maturities of Long Term Borrowings (3,878,022) (1,062,799)

(b) Unsecure loans (i) From Related Parties Loan From Director - -

Total 4,918,880 1,407,201

Note 4

Short Term Borrowings


(a) Secured loans (i) From Banks - 3,394,289

Total - 3,394,289



40

Note 5

Trade payables


Sundry Creditors 1,200,275 349,791

Total 1,200,275 349,791

Note 6

Short Term Provisions


Provision for Current Tax 710,985 200,740

Total 710,985 200,740

Note 7

Other Current Liabilities


(i) Statutory Liabilities 45,564 63,306

(ii) Audit fee Payable 119,500 120,000

(iii) Advance from Customers - -

(iv) Others Payables 1,726,976 87,026

(v) Current Maturities of Long Term Borrowings 3,878,022 1,062,799

Total 5,770,063 1,333,131

Note 8

Non-Current Investment


Investment in Unquoted Shares

Long Term Investment 80,000 80,000

Investments in Partnership Firms

Long Term Investment in LLP s 2,937,921 2,135,972

Total 3,017,921 2,215,972



41

Note 10

Long Term Loans & Advances


Inter Corporate Deposits 10,972,575 Other Advances

2,530,000 -

Deposits Rental Deposit 1,500,000 - BSNL Deposit 2,500 - Coffee Day Deposit 25,000 -

Sub Total 1,527,500 -

Total 15,030,075 -

Note 11

Trade Receivables


(a) Trade receivables outstanding for a period

less than 6 months 2,197,800 3,702,207

Total 2,197,800 3,702,207

Note 12

Cash and cash equivalents


(a) Balances with banks

-Current Account 7,935,952 135,573

(b) Cash in hand 149,298 26,249

Total 8,085,250 161,822

Note 13

Short-term loans and advances


(i) Advance to Employees 14,182 20,782

(ii) Advance to Vendors 134,741 71,365

(iii) Other Deposits With Banks 559,091 -

(iv) Other Loans & Advances 585,180 256,600

Total 1,293,194 348,747



42

Note 14

Other Current Assets


(i) TDS receivables 332,452 227,470

(ii) Service Tax Input - -

(iii) Mat Credit Entitlement 120,115 102,692

Total 452,567 330,162

Note 15

Revenue from operations


Revenue from Sale of Goods Domestic Sales - Foreign Sales -

Revenue from Sale of Services Domestic Services 5,788,005 9,321,171 Foreign Services 24,205,282 10,853,025

Total 29,993,287 20,174,196

Note 16 Other Income


Interest Receivable on Fixed Deposit 30,859 7,614 Interest Received on Income Tax 955 6,366 Interest Receivable on Chintala Sports 177,295 - Profit on Sale Of Computers 17,242 Profit on Sale Of Fixed Assets 3,821 -

Total 230,172 13,980

Note 17

Direct Cost


Digital Marketing Expenses 6,680,387 4,809,036

Professional Charges 133,994 125,456

PRO's Charges 468,129 336,000

Voice Chat Expenses 293,000 -

Total 7,575,510 5,270,492



43

Note 18

Finance Cost


Interest Paid on Loans 357,573 495,643

Total 357,573 495,643

Note 19

Employee Benefits Expense


Salaries and incentives 5,481,514 7,677,714

Directors Remuneration 5,700,000 -

Staff welfare expenses 223,622 173,142

Total 11,405,136 7,850,856

Note 20 Other expenses


Electricity Charges 551,073 294,768

Administration Expenses 512,924 553,397

Office Expenses 438,692 533,623

Tours, Travelling and Conveyance Expenses 361,165 910,558

Registration Filing Fees 53,000 65,500

Printing & Stationery 91,351 33,692

Rent 2,356,376 1,386,000

Postage, Telephone and Internet 15,465 12,210

Foreign Exchange Loss 129,525 -

Processing Charges 20,584 -

Bank Charges 19,180 15,627

Business Promotion 204,877 8,919

Swacha Bharat Cess 21,793 -

Commission Charges 43,400 143,006

Repairs & Maintenance 242,835 57,875

Provision for Bad and Doubtful Debts - 23,628

Loss on Sale Of Fixed Assets 6,931 -

Audit fee 55,000 50,000

Total 5,124,169 4,088,803



44

Details of Deferred Tax For the FY 2016-17

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



45

Note 6 Amount in Rs

Fixed Assets

Gross Block Accumulated Depreciation Net Block

SL. No

Balance as at 1st

April 2016

Additions

Disposals Balance as at 31st March 2016

Balance as at 1st April

2016

Depreciation charge for the

year

On disposals

Balance as at 31st March 2016



Tangible Assets

1 Computer 2,023,816 753,114 213,725 2,563,205 1,154,574 634,448 119,267 1,669,755 893,450 869,242

2 Furniture’s and Fixtures

301,742 1,560,615 83,265 1,779,092 61,723 100,259 17,086 144,895 1,634,197 240,019

3 Office Equipment's

511,937 101,637 46,418 567,156 191,336 99,149 19,487 270,998 296,158 320,601

4 Recording Equipment

59,000 - 59,000 9,817 4,315 - 14,132 44,868 49,183

5 Vehicles 2,758,541 9,727,015 - 12,485,556 49,902 371,009 - 420,911 12,064,645 2,708,639

Total 5,655,036 12,142,381 343,408 17,454,009 1,467,352 1,209,180 155,840 2,520,691 14,933,318 4,187,684

Intangible Assets

1 Software's 337,634 401,334 738,968 266,156 93,562 - 359,718 379,250 71,478

2 Trademark 62,500 62,500 16,400 6,250 - 22,650 39,850 46,100

3 Copyrights 16,000 2,454,145 2,470,145 3,200 107,237 - 110,437 2,359,708 12,800

4 Content Development

6,136,156 6,136,156 1,137,831 613,616 - 1,751,447 4,384,709 4,998,325

Total 6,552,290 2,855,479 - 9,407,769 1,423,587 820,665 - 2,244,252 7,163,517 5,128,703

1 Capital Work in progress

- 2,887,370 - 2,887,370 - - - - 2,887,370 -



46

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 01/04/2016 9/30/2016 30/09/2016 31/03/2017

% Rs. Rs. Rs. Rs. Rs. Rs. Rs.

10% BLOCK

1. Furniture & Fittings 10% 180,048 43,000 1,517,615 70,000 1,670,663 105,186 1,565,477

15% BLOCK

1. Air Conditioner 15% 71,239 - - - 71,239 10,686 60,553

2. Vehicles 15% 2,480,292 - 9,727,015 - 12,207,307 1,101,570 11,105,737

3. Office Equipments 15% 144,564 36,137 65,500 20,000 226,201 35,018 191,183

25% BLOCK

1. Trademark 25% 26,988 - - - 26,988 6,747 20,241

2. Copy Rights 25% 9,000 1,116,845 1,337,300 - 2,463,145 448,624 2,014,521

3. Content Development 25% 4,116,377 - - - 4,116,377 1,029,094 3,087,283

60% Block

1. Computers & Softwares 60% 425,721 288,636 865,812 110,000 1,470,169 754,358 715,811

2. Recording Software 60% 6,608 - - - 6,608 3,965 2,643

TOTAL 7,460,837 1,484,618 13,513,242 200,000 22,258,697 3,495,247 18,763,450



47

MEASUREMENT AND DISCLOSURES AS PER ACCOUNTING STANDARDS

I. Significant Accounting Policies – (AS-1):

1. Company Overview:

Silly Monks Entertainment Limited (Formerly Known as Silly Monks Entertainment Private limited) FY 2016-17 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.

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.



48

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.

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



49

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.

II. 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


Net Profit/(Loss) attributable to Equity Share Holders 26,15,348 6,65,173

Opening No of shares 4,18,000 1,90,000

Shares issued during the year 1,06,500 2,28,000

Total no of Equity shares 5,24,500 4,18,000

Weighted Average Number of Equity Shares 4,48,100 3,59,442

Basic and Diluted Earnings per Share 5.84 1.85



50

The following is a summary of significant related party transactions:

a) Particulars of Transactions with related parties:

B. Disclosure on Specified Bank Notes Amt in Rs.

Particulars SBNs Other Denomination Notes Total

Closing Cash in Hand as on November 8, 2016 2,31,000 1,603 2,32,603

(+ ) Permitted receipts 2,98,000 - 2,98,000

(- ) Permitted Payments 2,37,000 678 2,37,678

(-) Amount deposited in banks 2,16,000 - 2,16,000

Closing Cash in Hand as on December 30, 2016 76,000 925 76,925

C. Provisions, Contingent Liabilities and Contingent Assets: – (AS-29):

Contingent Liabilities: i) Guarantees and letters of credit: Nil

ii) Bank Guarantees: Rs. Nil

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 1,97,94,934 1,16,72,024

2 Events Monks Entertainment LLP

Investment held in LLP

Capital investment

14,73,026 9,52,425

3 Monkstar LLP Investment held in LLP

Capital investment

14,64,896 14,87,546

4 Tekulapalli Sanjay Reddy

Director Salary 36,00,000 24,60,000

5 Anil Kumar Pallala Director Salary 21,00,000 13,20,000

6 Tekulapalli Sanjay Reddy

Director Rent Paid 3,03,187

6,93,000

7 Swathi Reddy Director Rent Paid 3,03,187 6,93,000

8 Ektha India Pvt Ltd Significant Control by Shareholder

Loan given 20,00,000 Nil

9 Ektha India Pvt Ltd Significant Control by Shareholder

Fixed asset Purchased

15,00,000 Nil

10 Vaaraahi Chalana Chitram

Significant Control by Shareholder

Share Application Money Received

Nil 4,00,000



51

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.

For RAMASAMYKOTESWARA RAO & Co. Chartered Accountants For & on behalf of the Board Firm Reg. No.010396S SD/-

SD/-

C V Koteswara Rao Tekulapalli Sanjay Reddy Partner Director Membership No.028353 DIN: 00297272

SD/-

Anil Kumar Pallala Place: Hyderabad Director Date: 30-05-2017 DIN: 02416775



52

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, 2017, 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



53

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

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, 2017, 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 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;



54

(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, 2017 taken on record by the Board of Directors of Holding Company none of the directors are disqualified

as on March 31, 2017 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;

(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.





55

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, 2017 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 on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.



56

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, 2017, 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.





57

CONSOLIDATED BALANCE SHEET



Consolidated Balance Sheet as at March 31, 2017

Particulars Note No. As at March 31,

2017

As at March 31,

2016

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

5,245,000 50,090,657

(83,030)

4,928,030 995,682

- 8,565,140

14,741,836 829,179

4,180,000 6,061,472

(200,780)

1,416,539 573,365

3,394,289 9,273,107 2,057,455

200,740

II 1 2

TOTAL 85,312,494 26,956,186

ASSETS Non-Current assets

Fixed assets i) Tangible assets ii) Intangible Assets iii) Capital Work-in-Progress

Long Term Loans & Advances Other Non Current Investments

Current assets Inventory Trade receivables Cash and cash equivalents Short-term loans and advances Other Current assets

14,933,318 12,148,015 4,054,088

15,030,075 120,115

- 11,377,493 25,741,108 1,435,714

472,568

4,187,683 10,800,146

- -

102,692

- 9,648,801 1,511,914

348,747 356,205

TOTAL 85,312,494 26,956,186

Significant Accounting Policies A




58



SD/- (CV Koteswara Rao) Partner Membership No - 028353






59

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, 2017


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

119,578,819 617,675

49,235,069 140,846

120,196,494 49,375,915

82,847,080 11,405,136

357,573 2,709,825 7,078,779

30,750,798 9,402,985

495,643 1,513,674 4,553,592

104,398,393 46,716,691

15,798,101 2,659,224

829,179 422,317 -17,423

200,740 106,045

-

14,564,028 2,455,130

Profit attributable to Minority Profit attributable to Owners

89,930 14,474,098

2,789,147 -334,017

VII Earnings per Equity Share:

1) Basic 2) Diluted

32.30 32.30

7.38 7.38

Significant Accounting Policies As per our report of even date attached









60

CONSOLIDATED CASH FLOW STATEMENT



Statement of Profit and Loss Account for the Year Ended 31st March, 2017

Particulars For the Year Ended 31.03.2017

For the Year Ended 31.03.2016

A. CASH FLOW FROM OPERATING ACTIVITIES: Net Profit before Tax Adjustments for: Depreciation Finance Cost Profit on Sale of Fixed Assets

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 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

16,430,433

2,709,825

357,573 -

2,660,163

1,513,674

496,452 (12,992)

19,497,831

(707,967) 12,684,380 (3,394,289)

- -

(1,728,692) (1,086,967)

(116,363) -

(15,030,075) (17,423)

4,657,297

9,796,110 (2,257,875)

3,394,820 (1,260,972)

145,000 (6,403,114)

(117,313) (81,447)

(392,000) - -

10,100,434 (200,740)

7,480,505 (102,692)

9,899,694 7,377,813

(18,857,418)

(9,088,954)

(18,857,418) (9,088,954)

3,511,491 (357,573)

30,033,000

(2,654,065)

(496,452) 4,485,231

33,186,919 1,334,715

24,229,195

1,511,914

(376,426)

1,888,340



61

Cash & Cash Equivalents at End of Period Cash & Cash Equivalents comprise: Cash in Hand Balance with Banks

25,741,109

255,078 25,486,030

1,511,914

154,086 1,357,827

As per our report of even date For Ramasamy koteswara Rao & Co., Chartered Accountants Firm Regn No.010396S








62

NOTES FORMING PART OF FINANCIAL STATEMENTS

Note 1

Share capital

Share Capital 2016-17 2015-16


Authorised

Equity Shares of ` 10/-each 550,000 5,500,000 500,000 5,000,000

Issued, Subscribed & Paid up

Equity Shares of ` 10/- paid up each 524,500 5,245,000 418,000 4,180,000

Total 524,500 5,245,000 418,000 4,180,000

Reconciliation of the number of shares outstanding at the beginning and at the end of the reporting period



Shares outstanding at the beginning of the year 418,000 4,180,000 190,000 1,900,000

Shares Issued during the year 106,500 1,065,000 228,000 2,280,000

Shares bought back during the year - - - -

Shares outstanding at the end of the year 524,500 5,245,000 418,000 4,180,000

Shares in the company held by each shareholder holding more than 5 percent shares

Name of Shareholder

2016-17 2015-16

No. of Shares held % of Holding No. of Shares held

% of Holding

T. Sanjay Reddy 240,000 45.76% 253,000 60.53%

Sai Korrapati 100,000 19.07% 100,000 23.92%

Ektha.com Pvt Ltd 106,500 20.31% - -

Anil Kumar Pallala 50,000 9.53% 54,000 12.92%

524,500 94.66% 4,07,000 97.37%

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.



63


(Formerly Known as Silly Monks Entertainment Private Limited) Notes Forming Part of Consolidate Financial Statement as at 31st March, 2017

Note 2

Reserves and surplus

Particulars As on 31.03.2017 As on 31.03.2016

Securities Premium Account

Opening Balance 3,900,000 3,900,000

Add: Securities Premium during the year 28,968,000 -

Sub Total 32,868,000 3,900,000

Surplus in statement of profit & Loss

Opening Balance profit & Loss account 2161472 71604

Add: Excess loss recognized in previous year 587088 -

Profit for the current year 14474098 2089867

Sub Total 17,222,657 2,161,472

Total 50,090,657 6,061,472

Note 3

Long Term Borrowings


Term Loans from Banks 8,796,902 2,470,000

Loans from Directors 9,150 -

Loans from Others - 9,338

Less: Current Maturities -3,878,022 -1,062,799

Total 4,928,030 1,416,539

Note 4

Short Term Borrowings


From Banks - 3,394,289

Total - 3,394,289



64

Note 5

Trade payables


Sundry Creditors Others 8,565,140 9,273,107

Total 8,565,140 9,273,107

Note 6

Other Current Liabilities


Current Maturities of Long Term Debt 3,878,022 1,062,799

Audit fee Payable 139,500 120,000

Statutory Liabilities 62,160 80,743

Advance from Customers -

Partners Current Accounts

TDS Payables -

Other Payables 10,662,154 793,914

Total 14,741,836 2,057,455

Note 7

Short Term Provisions


Provision for Income Tax 829,179 200,740

Other Provisions - -

Total 829,179 200,740

Note 8

Fixed Assets


Tangible Fixed Assets 14,933,318 4,187,683

Intangible Assets 11,706,261 10,351,428

Capital Work In Progress 4,054,088 -

Goodwill on Consolidation 441,754 448,718

Total 31,135,421 14,987,829



65

Note 9

Long Term Loans & Advances


Other Advances Inter Corporate Deposits 10,972,575 - Other Advances 2,530,000 -

Deposits Rental Deposit 1,500,000 - BSNL Deposit 2,500 - Coffe Day Deposit 25,000 -

Total 15,030,075 -

Note 09

Trade Receivables


Trade receivables outstanding for a period less than six

months from the date they are due for payment. -

Secured considered good 11,377,493 9,648,801

Less: Provision for doubtful debts -

A 11,377,493 9,648,801

Trade receivables outstanding for a period exceeding six

months from the date they are due for payment -

Secured considered good -

Less: Provision for doubtful debts -

B

Total (A+B) 11,377,493 9,648,801

Note 10

Cash and cash equivalents


Balances with banks 25,486,030 1,357,827

Cash in hand 255,078 154,086

Total 25,741,108 1,511,914



66

Note 11

Short-term loans and advances


Advance to Employees 14,182 20,782

Advance to Vendors 1,34,741 71,365

Other Deposits With Banks 5,59,091 2,56,600

Other Loans & Advances 7,27,700

Total 14,35,714 3,48,747

Note 12

Other Current Assets


TDS receivables 472,568 300,997

Mat Credit Entitlement 120,115 28,078

- 27,130

Total 592,683 356,205

Note 13

Revenue from operations


Revenue from Sale of Goods

Domestic Sales - -

Foreign Sales - -

Revenue from Sale of Services - -

Domestic Services 7,550,227 49,235,069

Foreign Services 112,028,592 -

Total 119,578,819 49,235,069

Note 14 Other Income


Interest on Fixed Deposit 30,859 7,614

Discount Received -

Interest Received on Income Tax 955 6,366

Interest Receivable on Chintala Sports 177,295

Profit on sale of assets 21,063



67

Foreign Exchange Gain 387,503 -

Other Income - 126,866

Total 617,675 140,846

Note 15

Direct Cost


Digital Marketing Expenses 62,216,616 29,274,790

Professional Charges 16,853,452 697,819

PRO's Charges 468,129 512,483

Event Expenses 779,500 201,931

Yupp TV Exp 2,236,383

Voice Chat Expenses 293,000

Shooting Expenses - 63,775

82,847,080 30,750,798

Note 16

Employee Benefits Expense


Salaries and incentives 11,181,514 9,229,843

Staff welfare expenses 223,622 173,142

Total 11,405,136 9,402,985

Note 17

Finance Cost


Interest Expenses 357,573 495,643

Total 357,573 495,643

Note 18

Depreciation


Depreciation for the Year 2709825 1513674

Total 2709825 1513674



68

Note 19

Other expenses


Electricity Charges 551,073 294,768

Administration Expenses 512,924 568,897

Rent 2,356,376 1,386,000

Office Expenses 446,771 633,939

Tours, Travelling and Conveyance Expenses 391,090 1,026,140

Registration Filing Fees 53,000 65,500

Printing & Stationery 91,351 33,692

Postage, Telephone and Internet 15,465 12,210

Processing Charges 20,584 -

Bank Charges 45,008 22,274

Business Promotion 204,877 8,919

Swacha Bharat Cess 21,793 -

Foreign Exchange loss 293,252 -

Commission 1,563,008 295,401

Repairs & Maintenance 242,835 57,875

Other expenses 197,441 74,350

Provision for Bad and Doubtful Debts - 23,628

Loss On Sale Of Equipment 6,931 -

Payment To Auditor - -

Audit fee 65,000 50,000

Total 7,078,779 4,553,592

NOTES FORMING PART OF THE CONSOLIDATED FINANCIAL STAEMENTS

1. Corporate Information Silly Monks Entertainment Limited (Formerly Known as Silly Monks Entertainment Private Limited) FY 2016-17 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

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)



69

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, 2017.

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.

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.



70

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.

i) There is Change in Accounting Policy of Treatment of Foreign Currency in case of Foreign

Subsidiary i.e. during the FY 2015-16 the Profit from Foreign Currency has been shown under

Reserve and Surplus but during the FY 2016-17 the Profit From Foreign Current Has Been Written

Off to Profit and Loss Account.

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.

f) Depreciation / Amortization Depreciation has been provided on Straight line basis except for Fixed Assets of subsidiaries Events



71

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 Rs. 5,000/- are depreciated at 100% in the year of acquisition Depreciation has been provided on Written down Value 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 invest 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.

i. Current Tax: Current tax is the amount of tax payable on the taxable



72

Income for the year as determined in accordance with the applicable tax rates and the

provisions of the Income Tax Act, 1961 and other applicable tax laws.

ii. Deferred Taxes: Deferred tax is recognized on timing differences, being the differences

between the taxable income and the accounting income that originate in one period and are

capable of reversal in one or more subsequent periods. Deferred tax is measured using the

tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred

tax liabilities are recognized for all timing differences. Deferred tax assets are recognized only

if there is virtual certainty supported by convincing evidence that there will be sufficient

future taxable income available to realize the assets. Deferred tax assets are reviewed at each

balance sheet date for their reliability.

j) Earnings per Share

Earnings per Share Basic earnings per equity share is computed by dividing the net profit for the year

attributable to the Equity Shareholders by the weighted average number of equity shares outstanding

during the year. Diluted earnings per share is computed by dividing the net profit for the year,

adjusted for the effects of dilutive potential equity shares, attributable to the Equity Shareholders by

the weighted average number of the equity shares and dilutive potential equity shares outstanding

during the year except where the results are anti-dilutive.

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.

3. 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.



73

(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.

For RAMASAMYKOTESWARA RAO & Co.

Chartered Accountants For & on behalf of the Board

Firm Reg. No.010396S

SD/-

SD/-

C V Koteswara Rao Tekulapalli Sanjay Reddy

Partner Director

Membership No.028353 DIN: 00297272

SD/-

Anil Kumar Pallala

Place: Hyderabad Director

Date: 30-05-2017 DIN: 02416775

S. No Nature of Transactions Key Managerial Personal/Relative

Others

2016-17 2016-17

1 Service Income (Dream Boat PTE Limited)

197.79 0

2 Capital Investment in LLP 29.37 0

3 Inter Corporate Loans 0 20.00

4 Loan Repaid 0 0

5 Loan Given 0 0

6 Rent Expenses 6.06 0

7 Director Remuneration 57.00 0

8 Fixed Assets Purchased 0 15.00



74

Note 6 Amount in Rs

Fixed Assets

Gross Block Accumulated Depreciation Net Block

SL. No


2016

Additions

Disposals Balance as

at 31st March 2016


2016

Depreciation charge for the year

On disposals

Balance as at 31st

March 2016

Balance as at 31st

March 2017

Balance as at 31st

March 2016 Tangible Assets

1 Computer 2,023,816 753,114 213,725 2,563,205 1,154,574 634,448 119,267 1,669,755 893,450 869,242

2 Furniture’s and

Fixtures 301,742 1,560,615 83,265 1,779,092 61,723 100,259 17,086 144,895 1,634,197 240,019

3 Office Equipment's 511,937 101,637 46,418 567,156 191,336 99,149 19,487 270,998 296,158 320,601

4 Recording Equipment

59,000 - 59,000 9,817 4,315 - 14,132 44,868 49,183

5 Vehicles 2,758,541 9,727,015 - 12,485,556 49,902 371,009 - 420,911 12,064,645 2,708,639

Total 5,655,036 12,142,381 343,408 17,454,009 1,467,352 1,209,180 155,840 2,520,691 14,933,318 4,187,684

Intangible Assets

1 Software's 337,634 401,334 738,968 266,156 93,562 - 359,718 379,250 71,478

2 Trademark 81,000 81,000 18,250 11,899 - 30,149 50,851 62,750

3 Copyrights 30,000 2,454,145 2,484,145 5,550 107,237 - 1,12,787 23,71,358 24,450

4 Content

Development 11330581 - 1,13,30,581 1,137,831 12,87,948 - 24,25,779 8,904,802 10,192,750

Total 1,17,79,215 28,55,479 - 1,46,34,694 14,27,787 15,00,646 - 29,28,433 11,706,261 10,351,428

1 Capital Work in

progress - 40,54,089 - 40,54,089 - - - - 4,054,089 -

Grand

Total(A+B+C) 1,74,34,251 19,051,949 343,408 36,142,792 2,895,139 2,709,826 155,840 5,449,124 30,693,667 14,539,112



75

ATTENDENDENCE SLIP 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 Tuesday, 26th day of September, 2017 at 11.30 A.M. 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)

http://www.sillymonks.com/



76

PROXY FORM 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 Tuesday, 26th day of September, 2017 at 11.30 A.M. at 301, Ektha

http://www.sillymonks.com/



77

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:

Sl. No. Resolutions For Against

1. To consider and adopt the Audited Financial Statements of the Company for

the year 2016-17 together with the Report of the Board of Directors and

Auditors thereon; and the audited Consolidated Financial Statements of the

Company for the year 2016-17.

2. To appoint a director in place of Mrs. Swathi Reddy She retires by rotation

and being eligible offers herself for re - appointment.

3. To ratify the appointment of Statutory Auditors of the Company and to fix

their remuneration and in this regard, to consider and if thought fit, to pass

with or without modification(s), the following resolution as an Ordinary

Resolution.

Signed this …………. day of ………………. 2017.

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

Documents

Silly Monks Entertainment Limited · 2018-01-04 · Silly Monks Entertainment Limited Annual Report 2016-17 1 COMPANY INFORMATION BOARD OF DIRECTORS Shri. Tekulapalli Sanjay Reddy