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Silly Monks Entertainment Ltd.

BSE: 535043 Sector: Media
NSE: SILLYMONKS ISIN Code: INE203Y01012
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Silly Monks Entertainment Ltd. (SILLYMONKS) - Director Report

Company director report

To

The Members

M/s. Silly Monks Entertainment Limited.

Your directors have pleasure in presenting their Eighth (08th) AnnualReport on the business and operations of the company together with the auditedfinancial statements along with the report of the Auditors for the financial year ended 31stMarch 2021.

1. FINANCIAL RESULTS:

The performance of Silly Monks on consolidated and standalone basis for the currentyear in comparison to the previous year are as under:

CONSOLIDATED PERFORMANCE OF SILLY MONKS:

(Rs. in Lakhs)

Particulars 2020-2021 2019-20
Revenue from Operations 2257.42 3238.88
Add: Other Income 23.46 17.79
Total Revenue 2280.88 3256.67
Expenses
Employee Benefit Expenses 323.97 375.27
Depreciation 82.63 80.93
Finance Charges 0.25 -
Other Expenses 2527.39 2615.31
Total Expenses 2934.24 3071.51
Net Profit / Loss Before Tax (PBT) (653.36) 185.16
Current Tax - 57.82
Previous Year Income Tax Short Provision 0.43 -
Deferred Tax (108.82) 11.97
MAT Credit Entitlement - -
Net Profit /Loss (PAT) (544.98) 115.37
Earnings Per Share (5.34) 2.15

Your Company along with its 100% Foreign Subsidiary posted financial results duringthe year under review. Consolidated Turnover is Rs. 2257.42 Lakhs and the net loss (PBT)of the Company is Rs. 653.36 Lakhs.

STANDALONE PERFORMANCE OF THE COMPANY:

(Rs. in Lakhs)

Particulars 2020-21 2019-20
Revenue from Operations 1305.01 2221.63
Add: Other Income 10.30 8.69
Total Revenue 1315.31 2230.32
Expenses
Employee Benefit Expenses 323.97 375.27
Depreciation 78.63 77.00
Finance Charges 0.25 -
Other Expenses 1434.50 1591.02
Total Expenses 1837.36 2043.29
Net Profit / Loss Before Tax (PBT) (522.05) 187.03
Current Tax - 57.82
Previous Year Income Tax Short Provision 0.43 -
Deferred Tax (108.53) 11.69
MAT Credit Entitlement - -
Net Profit/Loss (PAT) (413.95) 117.52
Earnings Per Share (4.05) 2.19

2. COMPANY PERFORMANCE

During the FY 2020-21 the total income stood at Rs.1315.31 lakhs as compared toRs.2230.32 lakhs in the previous FY 2019-20 registering decrease of 41.025 %. During theFY 2020-21 the revenue from operations stood at Rs.1305.01 lakhs as compared toRs.2221.62 lakhs in the previous FY 2019-20 registering decrease of 41.25 %. Profitbefore tax (PBT) during the FY 2020-21 stood at Rs. (522.05) lakhs as compared toRs.187.03 lakhs in the previous FY 2019-20 registering decrease of 378.34%. Profit Aftertax (PAT) during the FY 2020-21 stood at Rs. (413.95) lakhs as compared to Rs. 117.52lakhs in the previous FY 2019-20 registering decrease of 451.29 %.

The Company is looking forward to increasing its profits in the coming financial yearswith the support of all the stakeholders of the Company.

3. DIVIDEND

The Company based on the Board's recommendation paid an interim dividend of Rs.0.50/-per share (i.e. 5% of the face value) for the Financial Year (FY) 2020-21.

The Board does not recommend any final dividend and therefore the 05% interim dividendpaid is to be considered as the dividend for the FY 2020-21.

4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND(IEPF)

Your Company did not have any funds lying unpaid or unclaimed which were required to betransferred to Investor Education and Protection Fund (IEPF) under section 125 ofCompanies Act 2013.

5. TRANSFER TO RESERVES

During the FY 2020-21 the Company has not transferred any amount to Reserves and theloss for the year has been retained in the profit and loss account.

6. SUBSIDIARIES

Dream Boat Entertainment Pte Limited (Hong Kong)

Dream Boat Entertainment Limited is a wholly Owned Subsidiary of the Companyincorporated in Hong Kong involved in the business similar to that of the Company.

The statement containing the salient features of the financial statements ofSubsidiary Pursuant to SubSection 3 of Section 129 of the Companies Act 2013 in FormAOC-1 is herewith annexed to this report and marked as Annexure I. Thestatement also provides the details of performance financial position of the subsidiary.

Your Company does not have any Associate Companies or Joint Ventures.

7. CORPORATE SOCIAL RESPONSIBILITY (CSR)

As the Company does not fall under the criteria specified under Section 135 of the Actand the rules made there under the Company does not have any CSR policy and Company didnot constitute any CSR Committee and did not spend any amount under corporate socialresponsibility.

8. DIRECTORS & KEY MANAGERIAL PERSONAL

8.1 Director Retiring by Rotation

In accordance with the provisions of Section 152 of the Companies Act 2013 Mr.Tekulapalli Sanjay Reddy Managing Director of the Company being longest in the officeamongst the Directors liable to retire by rotation and is proposed to retire at theensuing Annual General Meeting and being eligible has offered himself for re- appointmentat the said meeting of the Company.

8.2 Changes in the Board of Directors and the Key Managerial Personnel

During the year FY 2020-21 there are no changes in the Board of Directors and theKey Managerial personnel

8.3 Declaration by Independent Directors

The Company has received requisite declaration from all the Independent Directors ofthe Company stating that they meet the criteria of independence prescribed under section149(6) of the Companies Act 2013 and Regulation 25 of SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015.

8.4 Separate Meeting of Independent Directors

In accordance with the provisions of Schedule IV to the Act and Regulation 25(3) of theSEBI (LODR) 2015 separate meetings of the Independent Directors of the Company were heldon 4th February 2021 to discuss relevant items including the agenda items asprescribed under the applicable laws. The meetings were attended by all the IndependentDirectors of the Company.

8.5 Annual Performance Evaluation

Pursuant to the provisions of the Companies Act 2013 and SEBI (Listing Obligations andDisclosure

Requirements) Regulations 2015 the Board has carried out the annual performanceevaluation of its own Performance the Directors individually as well as the evaluation ofthe working of its Audit and other Committees.

A structured questionnaire was prepared after taking into consideration inputs receivedfrom the Directors covering various aspects of the Board's functioning such as adequacyof the composition of the Board and its Committees Board culture execution andperformance of specific duties obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directorsincluding the Chairman of the Board who were evaluated on parameters such as level ofengagement and contribution independence of judgement safeguarding the interest of theCompany and its minority shareholders etc. The performance evaluation of the IndependentDirectors was carried out by the entire Board. The performance evaluation of the Chairmanand the Non-Independent Directors was carried out by the Independent Directors who alsoreviewed the performance of the Secretarial Department. The Directors expressed theirsatisfaction with the evaluation process.

9. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

Related Party Transactions entered into during the financial year under review aredisclosed in Notes forming part of standalone financials under the head Related PartyDisclosures (AS 18). These transactions were at an arm's length basis and in theordinary course of business.

During the FY under review transactions were conducted by the Company pursuant to theAgreements entered into with its Related Parties during previous years; the same were onan arm's length basis and in the ordinary course of business. There were no materiallysignificant Related Party Transactions with the Company's promoters directors managementor their relatives which could have had a potential conflict with the interests of theCompany. Form AOC-2 containing a note on the aforesaid Related Party Transactionsis enclosed herewith as Annexure II to this report.

The policy on Related Party Transactions as approved by the Board may be accessed onthe Company's website in the investors section.

10. AUDITORS

10.1 Statutory Auditors:

M/s. Ramasamy Koteswara Rao and Co LLP (Formerly Known as M/s. Ramasamy 18KoteswaraRao & Co.) (Registration No. 010396S/S200084) were appointed at the 06thAnnual General Meeting as the Statutory Auditors of the Company for a term of five yearsto hold office till the conclusion of the 11th Annual General Meeting of theCompany. They have confirmed their eligibility for the F.Y. 2021-22 under Section 141 ofthe Companies Act 2013 and the Rules framed thereunder.

10.2 Internal auditors:

M/s. Murali and Sumeet Chartered Accountants (Firm Registration No. 010590S) wereappointed in the Board meeting held on 16th June 2021 as recommended by theAudit Committee to conduct the Internal Audit of the Company for the financial year2021-22 as required under section 138 of the Companies Act 2013 and rules madethereunder.

10.3 Secretarial Auditors:

M/s. P.S. Rao & Associates Practicing Company Secretaries were appointed toconduct the Secretarial Audit of the Company for the financial year 2020-21 as requiredunder Section 204 of the Companies Act 2013 and Rule 9 framed thereunder. The SecretarialAudit Report in form MR-3 for the financial year 2020-21 forms part of this Report as "AnnexureIII".

A Secretarial Compliance Report for the financial year ended March 31 2021 oncompliance of all applicable SEBI regulations and circulars/guidelines issued thereunderwas obtained from M/s. P.S. Rao & Associates Practicing Company Secretaries and thesame has been submitted to the stock exchange (NSE).

The Board has appointed M/s P.S. Rao & Associates Practicing Company Secretariesas Secretarial Auditors of the Company for the financial year 2021-22.

10.4 Cost Audit

The provisions of Section 148 of the Companies Act 2013 read with the Companies (Costand Audit) Rules 2014 and Rule 14 of the Companies (Audit and Auditor) Rules 2014 arenot applicable to the Company.

11. COMMENTS BY THE BOARD ON EVERY QUALIFICATION RESERVATION OR ADVERSE REMARK ORDISCLAIMERS:

Statutory Auditors:

As there is no qualification reservation or adverse remark in the reports given by theStatutory Auditors your directors need not provide any clarification on the same.

Secretarial Auditors:

There is no qualification reservation or adverse remark in the reports given by theSecretarial Auditors except in respect of delay in submission of Annual Report forFinancial year 2019-2020 to the Stock Exchange (NSE) by 3 days. In the above statedregard your directors clarified that it is an unintentional delay caused due to immediateclosure of office premises for two working days for sanitisation because of COVID positivecases in the secretarial department of the Company. In this regard Company has filed awaiver of penalty request with the stock exchange and the stock exchange has consideredthe request of the company and is in the process of Initiating the refund of penalty paidby the Company.

12. REPORTING OF FRAUDS

During the year under review there was no instance of fraud review which required theStatutory Auditors to report to the Audit Committee and /or Board under Section 143(12) ofthe Companies Act 2013 and the rules made thereunder.

13. Meetings of the Board

Five Meetings of the Board of Directors were held during the year complying with theCompanies Act 2013 SEBI Listing Regulations and Secretarial Standards on board Meeting.The particulars of the meetings held and attended by each Director are detailed in theCorporate Governance Report which form part of this report.

14. COMMITTEES

The Company as on date of the report has the following Committees:

1. Audit Committee;

2. Nomination and Remuneration Committee; and

3. Stakeholder Relationship Committee.

The Composition date and attendance of members of such committee meetings has beenprovided in the Corporate Governance Report annexed with the report.

15. NOMINATION AND REMUENRATION POLICY

A committee of the Board named as "Nomination and Remuneration Committee" hasbeen formed in compliance with Regulation 19 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 and pursuant to the provisions of section 178 of CompaniesAct 2013. The main object of this Committee is to identify persons who are qualified tobecome directors and who may be appointed in senior management of the Company recommendto the Board their appointment and removal and shall carry out evaluation of every

Director's performance recommend the remuneration package of both the Executive andthe Non-Executive Directors on the Board and also the remuneration of Senior Managementone level below the Board. The Committee reviews the remuneration package payable toExecutive Director(s) makes appropriate recommendations to the Board and acts in terms ofreference of the Board from time to time.

On the recommendation of the Nomination and Remuneration Committee the Board hasadopted and framed a Remuneration Policy for the Directors Key Managerial Personnel andother Employees pursuant to the provisions of the Companies Act 2013 and SEBI ListingRegulations. The policy can be accessed in the investors section of the company's website.

16. PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS MADE BY THE COMPANY UNDER THEPROVISIONS OF SECTION 186 OF THE COMPANIES ACT 2013

Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Companies Act 2013 read with Companies (Meetings of Board and its Powers)Rules 2014 are given in the notes to the Financial Statements.

17. DEPOSITS

During the year under review Your Company has not accepted any deposits within themeaning of Section 73 of the Companies Act 2013 read with the Companies (Acceptance ofDeposits) Rules 2014.

Your Company has received declarations with respect of loans received from thedirectors of the company stating that the amount is not being given out of funds acquiredby them by borrowing or accepting loans or deposits from others.

18. 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 31stMarch 2021 the applicable Accounting Standards have been followed along with properexplanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give true andfair view of the state of affairs of the Company at the end of the financial year ended 31stMarch 2021 and of the profit and loss of the Company for the year

iii) The Directors have taken proper and sufficient care for their maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.

iv) The Directors had prepared the annual accounts for the F Y 2020-21 on a ‘goingconcern' basis;

v) The directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

vi) The directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

19. SHARE CAPITAL

The Authorised Share Capital of the Company as on date of Balance Sheet is Rs.110000000/- divided into 11000000 equity shares of Rs.10/- each.

During the year under review the Company has not issued shares with differentialvoting rights sweat equity shares or Employee Stock Options.

20. Annual Return

The Annual Return of the Company as on March 31 2021 is available on the Company'swebsite and can be accessed at https://sillymonks.com/annual-report/

21. MANAGEMENT DISCUSSION AND ANALYSIS

Pursuant to Regulation 34 (2) (e) of SEBI (LODR) Regulations 2015 a report onManagement Discussion & Analysis is herewith annexed as Annexure IV.

22. RISK MANAGEMENT POLICY

Risk management is the process of identification assessment and prioritization ofrisks followed by coordinated efforts to minimize monitor and mitigate/control theprobability and/or impact of unfortunate events. The Company has initiated a process ofpreparing a comprehensive risk assessment and minimization procedures. The major risks arebeing identified by the Company in areas of operations financial processes humanresources and statutory compliances.

The Company has developed and implementing a risk management policy which includes theidentification therein of elements of risk which in the opinion of the board may threatenthe existence of the Company.

23. CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUTGO:

a) Conservation of Energy Technology Absorption:

The particulars prescribed by section 134(3)(m) the Companies Act 2013 pertaining todisclosure measures taken in relation to conservation of energy and technology absorptionare not applicable.

b) Foreign Exchange earnings and Outgo:

Foreign Exchange Earnings: Rs. 39276974/- Foreign Exchange Outgoings: Rs. 88585.13/-

24. HUMAN RESOURCES:

Your Company considers its Human Resources as the key to achieve its objectives.Keeping this in view your Company takes utmost care to attract and retain qualityemployees. The employees are sufficiently empowered and such work environment propels themto achieve higher levels of performance. The unflinching commitment of the employees isthe driving force behind the Company's vision. Your Company appreciates the spirit of itsdedicated employees.

Particulars of Employees (Section 197 of the Companies Act 2013 read with theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014) Informationin accordance with the provisions of Section 197 of the Act read with the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 regarding remunerationand other details is annexed as ‘Annexure V' to this Report.

25. CORPORATE GOVERNANCE:

The Company has in place a system of Corporate Governance. A separate report onCorporate Governance along with Auditors' Certificate regarding compliance of conditionsof corporate governance set out by the Securities and Exchange Board of India (SEBI) underListing Regulations is annexed to this Annual Report.

26. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has an adequate system of internal financial controls with reference tofinancial statements including but not limited to safeguard and protection of assets fromloss their unauthorized use or disposition. All the transactions were properlyauthorized recorded and reported to the Management. The Company is following all theapplicable Accounting Standards for properly maintaining the books of accounts andreporting in the financial statements. Your Company continues to ensure proper andadequate systems and procedures commensurate with its size and nature of its business.

27. LISTING AND DEPOSITORY FEE

Your Company has paid Annual Listing Fee for the financial year 2021-22 to NationalStock Exchange of India Ltd according to the prescribed norms & regulations. Companyhas also paid Annual Custody Fee to National Securities Depository Limited and Issuer Feeto Central Depository Services (India) Limited for the financial year 2020-21.

28. ESTABLISHMENT OF VIGIL MECHANISM / WHISTLE BLOWER POLICY FOR DIRECTORS ANDEMPLOYEES:

Your Company promotes ethical behavior in all its business activities and has put inplace a mechanism wherein the employees are free to report illegal or unethical behaviouractual or suspected fraud or violation of the Company's Codes of Conduct or CorporateGovernance Policies or any improper activity to the Chairman of the Audit Committee of theCompany or Chairman of the Board. The Whistle Blower Policy has been duly communicatedwithin your Company. Under the Whistle Blower Policy the confidentiality of thosereporting violation(s) is protected and they are not subject to any discriminatorypractices. No personnel have been denied access to the Audit Committee in this regard. TheVigil Mechanism and Whistle Blower Policy may be accessed on the Company's websitewww.sillymonks.com.

29. POLICY ON SEXUAL HARASSMENT:

Your Company has always provided a safe and harassment free workplace to everyindividual working in its premises through various policies and practices. Your Companyalways endeavors to create an environment that is free from discrimination and harassmentincluding sexual harassment. Your Company has been actively involved in ensuring that theclients and all the employees are aware of the provisions of the POSH Act 2013 and therights available to them there under. Your Company has adopted policy on prevention ofsexual harassment of women at workplace in accordance with The Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013. As per the said Policy anInternal Complaint Committee (ICC) has duly constituted by the Company. During thefinancial year ended March 31 2021 the company has not received any complaintspertaining to sexual harassment. The policy adopted by the Company for Prevention ofSexual Harassment is available on its website at www.sillymonks.com.

30. PARTICLARS OF EMPLOYEES

The information required pursuant to Section 197 (12) read with Rule 5 (1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 in respectof employees of the Company is herewith annexed as Annexure- VI.

In terms of Rule 5(2) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 the Company does not have any employee who is employed throughoutthe financial year and in receipt of remuneration of Rs. 120 Lakhs or more or employeeswho are employed for part of the year and in receipt of Rs. 8.50 Lakhs or more per month.The Company does not have any employee who is employed throughout financial year or partthereof who was in receipt of remuneration in financial year under review which inaggregate or as the case may be at a rate which in the aggregate is in excess of thatdrawn by the Managing Director or Whole-Time director and holds by himself/herself oralong with his/her spouse and dependent children not less than 2% of the equity shares ofthe Company.

31. OTHER INFORMATION

(i) Shifting of registered office of the Company within the local limits of the City:

The board of directors of the company passed resolution by circulation on 27thMarch2021 and approved the shifting of registered office of the company within the locallimits of the city from

4th Floor Ektha Towers plot No. 2&3

Whitefields Kondapur

Hyderabad 500084

Telangana" to

Sundarayya Vignana Kendram (SVK)

Gachibowli Hyderabad Rangareddi

Telangana India-500032 "

with effect from April 01 2021.

(ii) Significant and material orders passed by the regulators

No significant and material orders have been passed during the year under review by theregulators or courts or tribunals affecting the going concern status and Company'soperations in the future.

(iii) Material Changes & Commitments

Due to the Global Coronavirus (COVID-19) pandemic your Company is forced totemporarily reduce the remuneration paid to employees Senior Management and ExecutiveDirectors till the time as the management deems fit for ensuring financial health of theCompany.

(iv) Change in Nature of business if any

There is no change in the nature of business of the Company during the year underreview.

(v) Compliance with Secretarial Standards

Your Company has complied with the secretarial standards i.e. SS-1 and SS-2 relatingto Meetings of the Board of Directors and General Meetings respectively issued by theInstitute of Company Secretaries of India and notified by the Ministry of CorporateAffairs.

(vi) Details of application made or any proceeding pending under the Insolvency andBankruptcy Code 2016 (31 of 2016) during the year along with their status as at the endof the financial year:

Neither any application was made nor any proceedings are pending under the IBC 2016during the year ended on 31st March 2021.

32. ACKNOWLEDGMENT AND APPRECIATION:

Your directors express their sincere appreciation to all the stakeholders of theCompany for the trust confidence and support bestowed on the Company. The Board ofDirectors is also grateful to the subsidiary company for its contribution towards thegrowth and success of the Company.

The Board of Directors assures to uphold the Company's commitment towards acting withhonesty integrity and respect and to be responsible and accountable to all thestakeholders of the Company. Further your directors convey their appreciation for thewhole hearted and committed efforts by all its employees. Your directors gratefullyacknowledge the ongoing co-operation and support provided by the Central and StateGovernments Stock Exchanges RBI and other Regulatory Bodies.

By Order of The Board of Directors
For Silly Monks Entertainment Limited
Sd/-
Ratnakar Rao Chepur
Place: Hyderabad Chairman
Date: 01.09.2021 DIN: 08744674

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