Silly Monks Entertainment Ltd Management Discussions

a) COMPANY OVERVIEW

We are a ‘South India based entertainment & media with a focus of being a recognized & fast-growing player in areas such as video creators/influencers/movie/series/music/other content production, content distribution, content marketing on digital and traditional mediums and movie/celebrity brand partnerships.

Our primary focus currently is Content production, marketing and distribution on Digital media and traditional mediums. We publish content on various digital platforms such as YouTube, Facebook, Amazon, Netflix etc. We also distribute or syndicate the content on satellite channels, cinema theatres, airborne and other offline platforms.

All the said content is either created by us, i.e. by our in-house production or acquired through outright purchase or aggregated on a revenue share method. Produced or acquired Content 100% rights, all revenues generated from such content is fully accrued to us.

When we aggregate content from third parties content partners for distribution, we share the revenue with the content partner.

Through YouTube, Facebook, Instagram and other social media channels we are building communities in various genres like music, food, wellness, devotional etc., We distribute and monetise all the content produced by the creators in all possible publishing mediums to maximise the revenue. The more the fan base, the more branded content revenue opportunities will unlock.

Silly Monks Studios (Movie/Series Production): We have co-produced Telugu Movies like Maa Vintha Gadhaa Vinuma, George Reddy, 24 Kisses, Happy Ending and few movies co-produced with Vaaraahi

Chalana Chitram like Oohalu Gusagusalade

‘Dikkulu Choodaku Ramayya, & Tungabhadra.

Upcoming release in 2025

In our studio division, we identify stories, develop, pitch and onboard project independent investors, produce, market and distribute/sell the project on various mediums. With our expertise, we are bridging between film directors/writers, investors & the platforms and making it a viable and profitable business. In this model SillyMonks retains 20-30% asset holding in each project that we are developing. One film project is ready to release and 7+ projects are under development stage and pitching stage. We bring content production and distribution expertise. We are currently developing many movie concepts in south India along with potential film directors and setting up the complete project end-to-end. We will be collaborating with potential project investors to execute the plans and maximize the film business.

Apart from our promoters Mr. Tekulapalli Sanjay Reddy & Mr. Anil Kumar Pallala, our Company has got angel investment from well-renowned personalities such as;

1) Mr. Ranganathasai Korrapati, who is a Telugu film Producer and distributor known for his works predominantly in Telugu cinema.

2) Mr. Sreenivasa Reddy Musani who is chairman and MD of Hyderabad-based Ektha Group which operates in Information Technology, Engineering, Business Process, Data Processing, Multimedia & Real Estate.

Range of our Products & Services

Our products and services can be summarized as illustrated below:

Our primary focus is on Video Creators, Influencers, Content production, marketing and distribution. Content which we publish over various platforms is Movies, music, short films, short videos, web Series and a creator video. Income from content publishing on YouTube constitute a significant portion of Digital Media Publishing. We have published over 100+ movies like Act 1978, Bombhaat, Trail and many more on Amazon Prime. We extending our distribution partnership with more OTT plaforms and also dubbing the content into multi-lingiual.

Amir Khans Sitare Zameer Par has pioneered a new path for the film industry by premiering directly on YouTube, the worlds largest OTT platform by user base. The YouTube TVOD model is set to be a disruptive force in movie distribution and with Dreamboat already partnered with YouTube, we are at the forefront of this transformation.

YouTube

Dream Boat Entertainment LLC is one of the top enterprise partners (MCN - Multi-Channel Network) with YouTube. On YouTube, Income generates through monetization of content. Monetization of content means, enabling YouTube to place an advertisement and generate revenue.

YouTube enables every content creator to publish his/her content to monetize. We own a few channels and we also aggregate 3rd party channels into our network (MCN).

When a 3^rd party YouTube channel connects his/her channel to Dream Boat MCN network, we bring together the advantages of professional tools like copyright management, collaborations, brand associations, cross-promotions for better monetization. A state of the art ‘Audio/video studio to help indigenous, but popular, YouTubers.

Dream Boat shares an agreed revenue share generated with content partners. This amount varies contractually.

Branded content is another stream of revenue that we generate when we collaborate with brands to promote their products.

OTT Platforms:

We produce content, acquire content and aggregate content (Movies, Series, short films etc.,) to distribute on a revenue share or a fixed license fee. We also distribute the content produced for YouTube on OTT platforms.

Mobile VAS (Value added services) is another medium for our digital content publishing. With the increase in number of smartphone users in India, this is one of the rapidly growing platforms for Digital Media Publishing. We have entered into an alliance with Idea cellular, PDL for Content License & Distribution on various streaming platforms like Apple music, spotify etc.,

Silly Monks earns the revenue in the form of License Fees from mobile networks and streaming platforms which was agreed in the agreement between two & when content is being published by Mobile VAS and streaming platforms, the end user subscribes for the service by paying subscription fees. This is the revenue source to Mobile networks.

Silly Monks has an alliance with music apps such as ‘Saavn / Gaana / PDL and various mobile networks to publish songs to stream and CRBTs (Caller ring back tones), wherein we provide the audio content to Saavn, which is then published through Saavn. We have started acquiring film music and independent music aggressively in South India.

We also publish the same content on YouTube Music.

Content Life Cycle

Celebrity Digital Management:

Social Media

We make strategies for movie production houses and creators to create content for social media and YouTube to engage the followers and subscribers of the celebrity. We generate revenue from monetizing the content on the said platforms and also collaborate with various brands for brand endorsements and generate revenue.

Facebook, Instagram, Twitter, YouTube are the top platforms for celebrities, quickly gaining importance in terms of total users and traffic. These platforms present a unique marketing opportunity for businesses through the creation of verified accounts for celebrities. As more people explore social media, social networking sites have become some of the critical online sources they use to learn more about products, organizations, artists and world events. We manage celebrities over social media platforms. Income will be generated through these platforms by monetizing the content and brand associations. No. of followers and subscribers with good engagement on the platforms decides the revenues.

Production House Management and film Content Digital marketing and Advertising:

Movie Marketing/Promotions:

We are associated as a digital partner with top movie production houses like Hombale Films, Vyjayanthi Movies, Vaaraahi Chalana Chitram, Gunaa TeamWorks, Vibri Media, Sukumar Writings, Prakash Raj Productions, Swapna Cinemas and many more, working on movies like KALKI 1 & 2, Salaar, Kantara, Pradha and many more where we give 360 degree solutions in marketing and promotions, produce exclusive promotions content around the film story to create momentum for the films and drive audience to the theatres. We generate revenue by providing marketing strategy, creative services, advertising, influencer promotions & creator collaborations.

We manage the majority of the movie production house in South India. Our role is to manage the brand of the production house on digital platforms, market their films, monetise the content produced by the production house on digital platforms like OTT platforms (Amazon Prime), YouTube branded channel

We also do online advertising for films with Google AdWords. Google AdWords is one of the most effective ways to reach new customers and grow your business. Google AdWords is the online advertising platform owned and operated by Google. AdWords is also the largest and most widely used online advertising network in the world, and millions of businesses advertise online using AdWords to reach new customers and grow their business. Advertisers who choose to use Google AdWords can target users across two main networks the search network, and the Display network.

Brand Partnerships Division

At Silly Monks, we have built a robust Brand Partnerships division with dedicated teams in Mumbai and Delhi the hubs of Indias leading brands and agencies. We work closely with top media agencies such as GroupM and Havas Play, ensuring seamless collaborations between brands and the entertainment industry.

Our expertise goes beyond traditional brand tie-ups. We design comprehensive brand solutions including in-film integrations, sponsorships, and marketing collateral associations, creating impactful partnerships that deliver value for both brands and films.

With strong associations as marketing partners to prestigious production houses like Hombale Films and Vyjayanthi Movies, we are driving brand partnerships for marquee titles such as Kantara, Kalki, Salaar, and Champion, alongside a growing slate including Mirai, Telusu Kadha, Mowgli, Chiru 157, and many more.

By positioning brand partnerships as a significant revenue stream alongside traditional OTT and satellite rights we are reshaping how films unlock value beyond box office. Each collaboration facilitated by Silly Monks generates substantial revenue share, strengthening both our partners projects and our own growth trajectory.

INDIAN MEDIA AND ENTERTAINMENT INDUSTRY

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is making significant strides. The increasing availability of fast and cheap internet, rising incomes, and increasing purchases of consumer durables have significantly aided the industry. Indias media and entertainment industry are unique as compared to other markets. The industry is well known for its extremely high volumes and rising Average Revenue Per User (ARPU). This significantly aided the countrys industry and made India leading in terms of digital adoption and provided companies with uninterrupted rich data to understand their customers better.

India has also experienced growing opportunities in the VFX sector as the focus shifted globally to India as a preferred content creator.

Proving its resilience to the world, Indian M&E industry is on the cusp of a strong phase of growth, backed by rising consumer demand and improving advertising revenue. According to a FICCI-EY report, the advertising to GDP ratio is expected to reach 0.4% by 2025 from 0.38% in 2019.

Market Size

As per PWC Entertainment & Media Outlook 2023 - 2027 - India Perspective.

5G rollout presents a huge opportunity in Indias mobile-first market

Content streaming is growing most rapidly in emerging pockets, where the combination of large historically underserved rural population and strong demand for local and sports content present major opportunities. The growth opportunity in India is high with the countrys biggest telecommunication operators forecasting that the nationwide rollout of 5G capability will be complete by the end of 2024.

Smartphone ownership in India is set to grow by 125 million across the forecast period to 888 million, which is 62.52% of Indias population.

Regional language content can secure wins for content players In an overcrowded and competitive market,

Regional content that caters to the countrys linguistic diversity will stand out.

Recent development/investments

Recent Developments in the Media and Entertainment Industry are:

The India B2B market has been buoyant and is set to become the fastest-growing market globally. The ongoing adoption of digital channels for purchasing goods and services, and the rising middle class in India (globally the second largest) will underpin growth and emergent consumption trends on which B2B market growth relies.

India bucked the global trends again this year and has emerged as the fastest-growing newspaper market, with both print and digital segments registering a CAGR of 3.212%. Compared to 2021, newspaper revenue declined in 2022. India is also the second fastest growing consumer book market in the Asia Pacific region (China being the first), with non-fiction books the clear choice for Indian readers.

Deals will continue to be a means of gaining scale. In February 2023, the Competition Commission of India (CCI) conditionally approved the USD 10 billion merger between two large media conglomerates, paving the way for the creation of one of Indias largest conglomerates spanning television channels, digital platforms and content production.

Road Ahead

The Indian M&E industry is on an impressive growth path. The industry is expected to grow at a much faster rate than the global average rate. This can be majorly credited to rising incomes, increasing internet penetration and a growing push toward digital adoption. In the long run, growth is the M&E industry is expected in retail advertisement on the back of several players entering the food and beverages segment, E-commerce gaining more popularity in the country, and domestic companies testing out the waters. Indias rural regions are expected to be the next regions for growth.

India has also gotten on board with 5G and is already planning for 6G well ahead of the future. This push towards digital adoption especially in the rural regions will provide advertisers and publishers with an immense opportunity to capture untapped markets and help grow Indias media and entertainment industry forward. By 2025, the healthcare industry is expected to reach US$ 372 billion. Indias digital economy is estimated to reach US$ 1 trillion by 2025. By the end of 2023, Indias IT and business services sector is expected to reach US$ 14.3 billion with 8% growth.

Note: Conversion rate used for March 2025 is Rs. 1 = US$ 0.012

References: Media Reports, Press Releases, Press Information Bureau, Department for Promotion of Industry and Internal Trade (DPIIT), Crisil report Source: https://www.ibef.org/industry/services.aspx

SEGMENT-WISE OR PRODUCT WISE PE

The segment wise performance of the company can be analyzed on the basis of the Audited Financial Statements for the financial year 2024-25 annexed with this report.

a) OPPORTUNITIES AND THREATS:

In line with global trends, the Indian consumer is increasingly consuming the content on digital platforms. This trend is observed for all type of content including news (text), music (audio), or video. Increasing internet penetration and mobile device proliferation and convenience of consuming the content anytime, anywhere are the key drivers for this trend. Growth opportunities/ parameters for SMEL are based on the following:

Rapidly increasing number of internet users

Higher spend on entertainment services by youth

Rising data consumption with smartphone penetration

Ever growing need for unique content for various segments

Increasing pan-India presence to garner more visibility and which helps in acquisition of quality content Only threats beyond our control could stop the juggernaut from its path. That is what we like to believe as we continue to grow.

b) OUTLOOK

The team continues to rely on the core strengths of experience and a strategically qualified team of professionals, but more so with a strong focus on quality content we believe that we have become a well-known brand name in the business of Digital Media Marketing. The growing market in that space gives us a larger playing field.

The digital media entertainment space is as yet a niche space and yet with the foreseen growth, it can only get more interesting in the days ahead. Our main strategy is to continually build on the diverse content library and strong fiscal planning and growth projections.

c) RISKS AND CONCERNS

Risks are a part of every growing entity and especially when it concerns businesses that are in a sunrise industry as ours. There are always risks and concerns and the only way to deal with them are to plan strategically. To be aware always of every risk potential is the only thumb rule we follow. However, the main risks that would be incomparable in terms of our growth would probably be:

Force Majeure superior or overpowering force beyond control of mankind

Collapse of the Internet/ shutting down of Google / Facebook servers

Facebook monetising content that may reduce YouTube viewership

d) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate and efficient internal control systems that provide protection of all the assets against losses from unauthorized use and for appropriate reporting of transactions. The Company has implemented proper controls which are reviewed at regular intervals to ensure that the authenticity of the transactions.

e) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL

PERFORMANCE

STANDALONE FINANCIAL CONDITION:

Capital Structure: The Paid-up Share Capital of the Company as on 31^st March, 2025 is Rs.10,23,54,000/- divided into 1,02,35,400 Equity Shares of Rs.10/- each fully paid up.

Reserves and Surplus: The Reserves and Surplus of the company as on 31^st March, 2025 stand at Rs (140.16) lakhs as compared to Rs. (164.10) lakhs in the previous year. Property, Plant and Equipment: The value on Property, Plant and Equipment stood at Rs. 21.75 lakhs in the financial year 2024-25 as compared to Rs. 17.77 in the previous year.

Trade Receivables: Trade Receivables of the stood at Rs. 65.15 lakhs as on 31^st March, 2025 as compare with previous year Rs. 80.10 lakhs. These debtors are considered good and realizable.

Cash and Bank Balances: Cash and Bank balances with Scheduled Banks stood to Rs. 3.73 lakhs as against Rs. 165.88 lakhs in the previous year.

Loans and Advances: Long Term Loans and Advances is Rs. 297.31 lakhs as against Rs.297.31 lakhs in the previous year.

Current Liabilities: Current Liabilities as on 31^st March, 2025 is Rs. 57.80 lakhs.

CONSOLIDATED FINANCIAL CONDITION:

Reserves and Surplus

The Reserves and Surplus of the company as on 31^st March, 2025 stand at Rs (262.25) lakhs as compared to Rs. (283.10) lakhs in the previous year.

Property, Plant and Equipment

The Company investments on Property, Plant and Equipment Rs. 21.75 lakhs in the financial year 2024-25 as compared to Rs. 17.77 lakhs in the previous year.

Trade Receivables: Trade Receivables of the stood at Rs. 68.29 lakhs as on 31^st March, 2025 as compare with previous year Rs. 84.01 lakhs. These debtors are considered good and realizable.

Cash and Bank Balances:

Cash and Bank balances with Scheduled Banks stood to Rs. 69.69 lakhs as against Rs. 197.07 Lakhs in the previous years.

Loans and Advances:

Long Term Loans and Advances is Rs. 297.31 lakhs as against Rs. 297.31 lakhs in the previous year.

Current Liabilities: Current Liabilities as on 31^st March, 2025 is Rs. 248.21 lakhs.

STANDALONE OPERATIONAL RESULTS:

Turnover:

During the financial year 2024-25 the turnover of the Company was Rs. 537.53 lakhs as against Rs. 732.94 lakhs in the previous year and income from other sources as on 31^st March, 2025 was Rs. 13.25 lakhs as against Rs.3.87 lakhs in the previous year.

Depreciation:

The Company has provided Rs. 44.70 lakhs for depreciation during the financial year 2024-25 as against Rs. 88.08 lakhs in the previous year.

Provision for Tax:

The Company has provided nil tax provision in the financial year 2024-25.

Net Profit:

The Net Profit of the Company after tax is Rs. 20.14 lakhs for the financial year 2024-25 as against Rs. 4.76 lakhs in the previous year.

Earnings per Share:

The Earnings per Share of the Company as on 31^st March, 2025 is Rs 0.20 per share for Face Value of Rs.10/- as against Rs. 0.08 per share for Face Value of Rs.10 in the previous year.

CONSOLIDATED OPERATIONAL RESULTS:

Turnover

During the financial year 2024-25 the turnover of the Company was Rs. 2624.31 lakhs as against Rs. 2,219.29 lakhs in the previous year and income from other sources as on 31^st March, 2025 was Rs. 13.25 lakhs as against Rs. 3.89 lakhs in the previous year.

Depreciation

The Company has provided Rs. 44.70 lakhs for depreciation during the financial year 2024-25 as against Rs. 88.08 lakhs in the previous years.

Net Profit:

The Net Profit of the Company after tax is Rs. 20.22 lakhs for the financial year 2024-25 as against Rs. (0.21) lakhs in the previous year.

Earnings per Share:

The Earnings per Share of the Company as on 31^st March, 2025 is Rs. 0.20 per share for Face Value of Rs.10/- as against Rs. (0.00)/- per share for Face Value of Rs.10/- in the previous year.

f) Material developments in Human Resources/Industrial Relations front including number of people employed

HUMAN CAPITAL

Our employees are our most important assets. We believe that the quality and level of service that our professionals deliver are among the highest in the Digital Media services. We are committed to remaining among the industrys leading employers.

The Company has a mix of both experienced with 20 plus years in the industry as well as others with 10 plus and some with 2 to 3 plus years experience which gives us fresh lease and extra edge to the competitors.

As on 31st March 2025, we have 47 employees in total (32 Whole-Time Employees, 15 - Contract employees). We have hired approximately 7 employees between April 2024 to March 2025.

The key aspects of our HR practice include:

Recruitment

Training and developments

Compensation.

HUMAN CAPITAL VALUE CHAIN WORKING ETHICALLY AND UPHOLDING HUMAN RIGHTS:

Our human capital interventions are dynamic driven having different groups working here like:

Social media marketing

Digital Marketing/Promotions

YouTube creators

Company Secretary & Legal

Content Department

Mobile & OTT platform

Film Productions

Networking

Financial Department

Human Resources

Graphic Designing

RECRUITMENT

Attracting and recruiting the best-in-class talent, while ensuring long term people sustainability is a key business objective. We are an equal opportunity employer and focus on meritocracy and innovate creative at all stages of the hiring and which required credible manpower in YouTube Creators, Social-Media, App development, Mobile & OTT platforms, Brand Management, Film Productions, Digital promotions for films.

In FY 2025, we moved towards digitalizing and exploring new talents to get the best out for the hiring process to our organization. Company have hired efficient and experienced manpower from recruiters and employee referrals. Company rely on a rigorous selection process involving technical interviews with senior management and HR interviews to identify the best applicants. This selection process is continually assessed and refined based on the performance tracking of past recruits.

COMPENSATION/REMUNERATION:

Our technology professionals receive competitive salaries and benefits. Overall compensation at the Company as compared to competitors is highly competitive. We believe to have best of talents in the organization as we deal with reputed projects.

HUMAN RIGHTS & VALUES AT SM:

Silly Monks is committed to protecting and respecting Human Rights and remedying rights violations in case they are identified. Providing equal employment opportunity, ensuring distributive, procedural and interactional fairness, creating a harassment-free, safe environment and respecting fundamental rights are some of the ways in which we do so.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS:

Financial	Formula	Standalone		Deviation	Reason for Change
Ratios		2024-25	2023-24	(%)
					Not applicable.
Debtors	[Revenue from operations/	7.40	2.41	-23.12%
Turnover Ratio (times)	Average Trade receivables]
Inventories Turnover Ratio (times)	[COGS/Average Inventories]	-0.08	-4.35	146.06%	The increase in ratio is attributable to increase in closing inventory.
Interest Coverage Ratio (times)	[EBIT/Finance Cost]		-	-	-
Current Ratio (times)	[CurrentAsset/Current Liability]	7.25	4.86	119.09.%	The increase of ratio is mainly attributable to decrease in current liabilities compared to previous year.
Debt Equity Ratio (times)	[Debt/Shareholders Equity]	0.03	-	-47.64%	The decrease in ratio is mainly attributable to decrease in total debt compare to previous year.
Operating Profit Margin Ratio (%)	[EBIT/Revenue from Operations]		-	-	-
Net Profit Margin (%)	[Profit After Tax/Revenue from Operations]	3.75	0.65	477.21%	The increase in ratio is mainly attributable to increase in profit after tax and decrease in net sales.
Return on Networth (%)	[Profit for the year (before exceptional items and after tax)/Net Worth]	2.28	0.02	310.69%	Increase in profit during the year.

CAUTIONARY STATEMENT:

Statements in this management discussion analysis describing the Companys objectives, projections, estimates, expectations may be forward looking within the meaning of applicable securities-laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could make difference to Companys operations include economic conditions affecting the domestic market and the overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and other incidental factors.

		By Order of The Board of Directors
		For Silly Monks Entertainment Limited
	Sd/-	Sd/-
Place: Hyderabad	Tekulapalli Sanjay Reddy	Anil Kumar Pallala
Date: 03-09-2025	Managing Director	Whole Time Director
	DIN: 00297272	DIN: 02416775