To

The Members,

M/s. Silly Monks Entertainment Limited.

The directors have pleasure in presenting their Fifth (5^th) 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^st March 2018.

1. FINANCIAL RESULTS:

The performance of Silly Monks Group & Silly Monks (“The Company”) for the current year in comparison to the previous year are as under:

CONSOLIDATED PERFORMANCE OF SILLY MONKS GROUP:

(Amount in Rs.)

Your Company, along with its 100% subsidiary and two of its LLPs as a Group, posted good financial results during the year under review. Turnover of the Group is Rs.1,566.29 Lakhs and the net profit of the Company is Rs. 186.57 Lakhs.

STANDALONE PERFORMANCE OF THE COMPANY:

(Amount in Rs.)

2. COMPANY PERFORMANCE

Your Company posted good financial results with a net profit of Rs. 94.06 Lakhs during the year under review, an Increase of 259.67% over previous year. Due to continuous efforts of the management the Total Income of the company for the Current Financial year stood at Rs.849. 61 Lakhs as against previous Total Income of Rs. 302.23 Lakhs registering an increase of 180.09% over the previous year. The Company is looking forward to increasing its profits in the coming financial years with the support of all the stakeholders of the Company.

3. TRANSFER TO RESERVES

The Company did not transfer any amount to the General Reserve for the Financial Year ended March 31^st, 2018.

4. DIVIDEND:

No Dividend was declared for the financial year ended 31^st March 2018 due to conservation of Profits for the future expansion of business of the Company.

5. SUBSIDIARIES:

Dream Boat Entertainment Pte Limited (Hong Kong)

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

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

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

6. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company does not have any CSR policy and Company did not form any CSR Committee, as the provisions of section 135 of the Companies Act, 2013, pertaining to Corporate Social Responsibility are not applicable to the Company as the company does not fall under the criteria specified under Section 135 and the rules made there under.

7. DIRECTORS & KEY MANAGERIAL PERSONAL:

7.1 Director Retiring by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013, Mr. Tekulapalli Sanjay Reddy, Managing Director of the Company, hereby retires by rotation at the forthcoming Annual General Meeting, and being eligible has offered himself for re-appointment at the said Meeting of the Company.

7.2 Changes in the Board of Directors of the Company.

- The Board at their meeting held on 22^nd December 2017 appointed Mr. Venkata Kama Dixitulu Dixitula as an Additional (Independent) Director of the Company.

- Mr. Rajesh Katragadda, Non - Executive Independent Director and Mr. Sreenivasa Reddy Musani, Non-Executive Director of the Company have resigned from the position of directorship, with effect from 22.12.2017.

- Later, Mr. Venkata Kama Dixitulu Dixitula, Additional (Independent) Director has resigned from the position of Director with effect from 30^th March 2018.

- The Board of Directors have appointed Dr. Rama Koti Reddy Kondamadugula as an Additional Director of the Company at their board meeting held on 29^th day of May 2018, who holds office till the ensuing Annual General Meeting. The Board based on the recommendation of Nomination and Remuneration Committee considered the appointment of Rama Koti Reddy Kondamadugula as an Independent Director subject to the approval of shareholders.

Accordingly, a resolution seeking approval of Shareholders for his as an Independent Director for a period of five years is included at Item No.3 of the Notice appointment convening the Annual General Meeting.

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

7.3 Changes in Key Managerial Personnel

- During the year under review Mr. Boda Narsing Rao is resigned as the Chief Financial Officer (CFO) of the Company, with effect from 31^st May, 2018.

- The Board of Director of the Company on the recommendations of Nomination and remuneration Committee have appointed Mr. Guna Venkat Rama Naidu, as Chief Financial Officer of the Company with effect from 01^st June, 2018.

7.4 Declaration by Independent Directors

The Company has received requisite declaration from both the Independent Director of the Company, that they meet the criteria of independence prescribed under section 149(6) of the Companies Act, 2013 (the Act).

8. STATUTORY AUDITORS:

The Shareholders of the Company At their Annual General Meeting (AGM) held on 18^th December 2014, have appointed M/s. Ramasamy Koteswara and Co LLP (Formerly Known as M/s. Ramasamy koteswara & Co.), Chartered Accountants, (Registration No. 010396S), Hyderabad, as Statutory Auditors of the Company to hold office from the conclusion of that AGM till the conclusion of the 06^th AGM at such remuneration as may be decided by the Board of Directors

9. SECRETARIAL AUDITORS:

Pursuant to the provisions of section 204 of the Companies Act, 2013, read with Companies (Appointment and Remuneration of managerial personnel) Rules, 2014, as may be amended from time to time, M/s. P. S. Rao & Associates, Practicing Company Secretaries were appointed to conduct the Secretarial Audit of the Company for the financial year 2017-18.

10. BOARD MEETINGS

The Board met Eleven (11) times during the financial year 2017 -18.

The following are the details of the Board Meetings:

11. COMMITTEES

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

1. Audit Committee;

2. Nomination and Remuneration Committee; and

3. Stakeholder Relationship Committee.

The Committees of the Company were constituted pursuant to the Board Meeting held on 12^th day of June, 2017. Later due to Mr. Rajesh Katragadda, Non-Executive Independent Director and Mr. Sreenivasa Reddy Musani, Non-Executive Director and appointment of Mr. Venkata Rama Venkata Kama Dixitulu Dixitula as an additional (Independent) Director and the Committees were re-constituted by the board at their board meeting held on 22^th December, 2017.

Later due to resignation of Mr. Venkata Rama Venkata Kama Dixitulu Dixitula as an Additional (Independent) Director and appointment of Dr. Rama Koti Reddy Kondamadugula as Additional (Independent) Director, the Board at their meeting held on 29^th May, 2018 has reconstituted the Committees.

The Composition of the Committees as on the date of the report are as follows:

a) Audit committee:

All the recommendations made by the Audit Committee of the Company have been considered and accepted by the Board of Directors of the Company.

b) Nomination and Remuneration Committee

c) STAKEHOLDER’S RELATIONSHIP COMMITTEE

12. NOMINATION AND REMUENRATION POLICY:

A committee of the Board named as “Nomination and Remuneration Committee” has been constituted to comply with the provisions of section 178 of Companies Act, 2013 and to recommend a policy of the Company on directors’ appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters and to frame proper systems for identification, appointment of Directors & KMPs, Payment of Remuneration to them and Evaluation of their performance and to recommend the same to the Board from time to time. The policy is also posted in the investors section of the company’s website.

13. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS MADE BY THE COMPANY UNDER THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

14. DEPOSITS:

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

15. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134 (5) of the Companies Act, 2013 Your Directors’ confirm that:

i) In preparation of annual accounts for the financial year ended 31^st March, 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended 31^st March, 2018 and of the profit and loss of the Company for the year

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

iv) The Directors had prepared the annual accounts on a ‘going concern’ basis;

v) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

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

16. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the FY under review, transactions were conducted by the Company pursuant to the Agreements entered into with its Related Parties during previous years; the same were on an arm’s length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or any related party which may have a potential conflict with the interest of the Company at large.

The details of related party transactions which were entered during the previous year / current year are provided in Financial Statements, under the head measurement and disclosures as per the Accounting Standards.

The particulars of contracts or arrangements with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 are given in Form AOC-2 is herewith annexed as Annexure -II to this report.

17. SHARE CAPITAL

The Authorised Share Capital of the Company as on date of Balance Sheet is Rs. 5,00,00,000/- divided into 50,00,000 equity shares of Rs.10/- each.

The paid-up share capital of the company as on date of balance sheet is Rs. 4,64,15,000/- divided into 46,41,500 equity shares of Rs. 10/- each.

During the year, your Company has issued 31,47,000 Bonus Shares in the ratio of 6:1 i.e. 6 equity shares for every 1 equity share held to the shareholders by way of capitalization of Securities Premium Account.

Company came out with Initial Public Offer (IPO) by offering 9,70,000 equity shares of face Value of Rs. 10/- and a premium of Rs.110/- per share.

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

18. AUDITORS’ REPORT

There are no qualifications, reservations or adverse remarks made by M/s. Ramasamy Koteswara and Co LLP, Chartered Accountants, Statutory Auditors in their report for the Financial Year ended 31^st March 2018.

The Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company under sub-section (12) of section 143 of the Companies Act, 2013, during the year under review.

19. SECRETARIAL AUDIT REPORT

There are no qualifications, reservations or adverse remarks made by M/s. P. S. Rao & Associates, Practicing Company Secretaries in their report for the Financial Year ended 31^st March 2018. The secretarial audit report for F.Y. 2017-18 forms part of this Report as Annexure- III.

20. EXTRACT OF ANNUAL RETURN:

An Extract of Annual return prepared in accordance with the provisions of the section 92 (3) of the Companies Act, 2013 in the form MGT-9 is Annexed as Annexure - IV to this report.

21. MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to Regulation 34 (2) (e) of SEBI (LODR) Regulations, 2015, a report on Management Discussion & Analysis is herewith annexed as Annexure-V.

22. RISK MANAGEMENT POLICY

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

23. Conservation of Energy, Technology absorption, Foreign Exchange Earnings and Outgo:

a) Conservation of Energy, Technology Absorption:

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

b) Foreign Exchange earnings and Outgo:

Foreign Exchange Earnings: Rs. 2,12,80,326/Foreign Exchange Outgoings: 0

24. CONVERSION OF COMPANY FROM PRIVATE LIMITED TO PUBLIC LIMITED:

During the year under review, the Company has converted from Private Limited Company to Public limited Company by passing a Special Resolution at the Extraordinary General meeting of the members of the Company held on 15^th day of May 2017, and the Company has obtained fresh Certificate of Incorporation dated, 24^th day of May 2017 from the Registrar of Companies, for the state of Telangana and Andhra Pradesh.

25. INITIAL PUBLIC OFFER (IPO):

During the year under review, the Company has come out with an Initial Public offer of 12,60,000 (comprising a fresh issue of 9,70,000 equity Shares and Offer for sale (OFS) of 2,90,000 equity Shares) equity shares of Rs.10/- each at a premium of Rs.110/- per share.

Your directors are pleased to inform that, the Company has successfully completed its IPO. The issue got oversubscribed by 17.23 times.

Company has received trading approval from NSE - Emerge and listed its shares on SME platform of NSE (Emerge) with effect from 18^th January, 2018, having the symbol “SILLYMONKS”

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

Your directors of pleased to inform you that, the Company has acquired following Companies post closure of the Financial Year 2017-18.

Upon acquisition of shares in the aforesaid Companies, both the Companies have become Subsidiary Companies to your Company in terms of provisions of section 2 (87) of the Companies Act, 2013, by virtue shareholding.

27. HUMAN RESOURCES:

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

28. CORPORATE GOVERNANCE REPORT:

As the securities of the Company are listed on National Stock Exchange of India Limited - SME platform Emerge, by virtue of Regulation 15 of securities and Exchange Board of India (Listing Obligations and Disclosure) Regulation, 2015 (The Regulations), the compliance with the corporate Governance provisions as specified in regulation 17 to 27 and Clause (b) to (i) of sub-regulation 2 of Regulation 46 and para C, D & E of Schedule V of the regulations, are not applicable to the Company. Hence the Corporate Governance does not form part of this Board’s report.

29. FORMAL ANNUAL EVALUATION OF PERFORMANCE OF THE MEMBERS OF THE BOARD AND COMMITTEES

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own Performance, the Directors individually as well as the evaluation of the working of its Audit and other Committees.

A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgement, safeguarding the interest of the Company and its minority shareholders etc. The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Secretarial Department. The Directors expressed their satisfaction with the evaluation process.

30. CHANGE IN THE NATURE OF BUSINESS:

There was no change in the nature of business of your Company during the financial year ended 31^st March, 2018.

31. SIGNIFICANT OR MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no orders passed by the Regulators / Courts which would impact the going concern status of your Company and its future operations. Further, we confirm that there were no instances of fraud to be reported by the Auditors vide their Report for the FY 2017-18.

32. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

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

33. VIGIL MECHANISM:

The Company has a Whistle Blower Policy framed to deal with instance of fraud and mismanagement, if any in the Group. The details of the Policy are posted on the website of the Company www.sillymonks.com.

34. POLICY ON SEXUAL HARASSMENT:

The company has adopted policy on prevention of sexual harassment of women at workplace in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the financial year ended March 31, 2018, the company has not received any complaints pertaining to sexual harassment.

35. PARTICLARS OF EMPLOYEES

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

In terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company does not have any employee who is employed throughout the financial year and in receipt of remuneration of Rs. 120 Lakhs or more, or employees who are employed for part of the year and in receipt of Rs. 8.50 Lakhs or more per month.

The Company does not have any employee who is employed throughout financial year or part thereof, who was in receipt of remuneration in financial year under review which in aggregate, or as the case may be, at a rate which in the aggregate is in excess of that drawn by the Managing Director or Whole time director and holds by himself/herself or along with his/her spouse and dependent children not less than 2% of the equity shares of the Company.

36. ACKNOWLEDGMENT AND APPRECIATION:

Your Directors take this opportunity to thank the Clients, shareholders, bankers, business associates for their consistent support and continued encouragement to the Company.

Further your Directors convey their appreciation for the whole hearted and committed efforts by all its employees.

Your Directors gratefully acknowledge the ongoing co-operation and support provided by the Central and State Governments, Stock Exchanges, RBI and other Regulatory Bodies.

By Order of The Board of Directors

For Silly Monks Entertainment Limited

Sd/-

Tekulapalli Sanjay Reddy

Place: Hyderabad Chairman & Managing Director

Date: 31^st August, 2018 DIN: 00297272