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NOTES TO ACCOUNTS

DiGiSPICE Technologies Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 142.44 Cr. P/BV 0.49 Book Value (₹) 12.84
52 Week High/Low (₹) 15/6 FV/ML 3/1 P/E(X) 23.54
Bookclosure 27/09/2019 EPS (₹) 0.27 Div Yield (%) 7.20
Year End :2018-03 

NOTES TO THE STANDALONE FINANCIAL STATEMENT as at and for the year ended 31 March 2018

Quantitative disclosures fair value measurement hierarchy for assets as at 31 March 2017:

Date of valuation

Total

Quoted prices in active markets (Level I)

Significant observable inputs (Level 2)

Significant unobservable inputs (Level 3)

Assets measured at fair value:

Assets for which fair values are

disclosed (note 36):

Investment properties (note 4):

31 March 2017

5,543.19

-

-

5,543.19

Investment in equity/other instruments

31 March 2017

5.50

-

-

5.50

Loan and receivables

Loans

31 March 2017

0.73

-

-

0.73

Other Assets

31 March 2017

77.07

-

-

77.07

There have been no transfers between Level I and Level 2 during the year.

Quantitative disclosures fair value measurement hierarchy for liabilities as at 31 March 2017:

Date of valuation

Total

Quoted prices in active markets (Level I)

Significant observable inputs (Level 2)

Significant unobservable inputs (Level 3)

Labilities measured at fair value: Borrowings Other financial liabilities

31 March 2017

135.81

135.81

There have been no transfers between Level I and Level 2 during the year. 38. Financial risk management objectives and policies

The Company's principal financial liabilities comprise trade payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company's operations. The Company's principal financial assets include Loans, other financial assets, trade receivables, cash and cash equivalents and other bank balances that derive directly from its operations.The Company also holds FVTPL investments and investment in subsidiary companies measured at cost.

The Company is exposed to market risk, credit risk and liquidity risk. The Company's senior management advises on financial risks and the appropriate financial risk governance framework. The senior management provides assurance that the Company's financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company's policies and risk objectives. The Board of Directors reviews and agrees on policies for managing each of these risks, which are summarised below.

I) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTPL investments. Company is not effected by commodity risk.

The sensitivity analysis in the following sections relate to the position as at 3 I March 2018 and 31 March 2017.

The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt instruments are all constant.

The analysis exclude the impact of movements in market variables on the carrying values of gratuity and other post-retirement obligations, provisions.

The following assumptions have been made in calculating the sensitivity analyses:

The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2018 and 31 March 2017.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.The Company's exposure to the risk of changes in market interest rates relates primarily to the loan given, security deposits received/paid and borrowings.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company's profit before tax is affected through the impact on floating rate borrowings, as follows:

Increase/ (decrease) in basis points

Effect on profit/(Loss) before tax

As at 31 March 2018

Rs in 'lakhs'

50

4.86

Rs in 'lakhs'

-50

(4.86)

As at 31 March 2017

Rs in 'lakhs'

50

2.34

Rs in 'lakhs'

-50

(2.34)

The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable market environment.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.The Company's does not have a significant foreign currency risk.

Foreign currency sensitivity

The Company's exposure to foreign currency fluctuation is not material. Equity price risk

The Company's investment in unlisted equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities.The Company don't engage in active trading of equity instruments. Reports on the equity portfolio are submitted to the Company's senior management on a regular basis. The Company's Board of Directors reviews and approves all equity investment decisions.

At the reporting date, the exposure to unlisted equity securities at fair value is not material. 2) Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and other financial instruments. Trade receivables

Customer credit risk is managed subject to the Company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed and limits are defined in accordance with this assessment. At 31 March 2018, the Company had net outstanding of Nil (31 March 2017 : Rs 309.56 lakh) after allowance for bad and doubtful trade receivable.

An impairment analysis is performed at each reporting date on an individual basis for trade customers. The Company has not evaluated the concentration of risk with respect to trade receivable as there are no trade receivable balance as on date.

Financial instruments and cash deposits

Credit risk from balances with banks in accordance with the Company's policy. Investments of surplus funds are made only with approved counterparties and based on the Investment Policy of the Company. All investments are reviewed by the Company's Board of Directors on a quarterly basis.

3) Liquidity risk

The Company monitors its risk of a shortage of funds using a liquidity planning tool.

The Company's objective is to maintain a low debt exposure and at the reporting date as the Company did not have any borrowings.

The table below summarises the maturity profile of the Company's financial liabilities based on contractual undiscounted payments.

(Amount in 'lakhs']

Particulars

On Demand

Less than 3 Months

3-12 Months

1-5 Years

> 5 years

Total

As at 31 March 2018

Other financial liabilities

-

.

.

43.38

.

43.38

(non-current)

Other financial liabilities

45.97

56.94

.

-

.

102.91

(current)

Trade and other payables

-

318.47

-

-

-

318.47

Total

45.97

375.41

-

43.38

-

464.76

Particulars

On Demand

Less than 3 Months

3-12 Months

1-5 Years

> 5 years

Total

As at 31 March 2017

Other financial

.

-

.

135.81

-

135.81

liabilities(non-current)

Other financial

59.40

89.33

.

-

-

148.73

liabilities(current)

Trade and other payables

-

711.77

-

-

-

711.77

Provision for liability payout of step down Subsidiary Company*

3,350.00

3,350.00

Total

59.40

4,151.10

-

135.81

-

4,346.31

* Based on the maximum amount that can be called for under the financial guarantee contract. Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company's performance to developments affecting a particular industry.

In order to avoid excessive concentrations of risk,the Company's policies and procedures include specific guidelines to focus on the maintenance of a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Collateral

The Company has pledged part of its margin money deposits in order to fulfil the collateral requirements for the subsidiaries of the Company. At 31 March 2018 and 31 March 2017, the fair values of the deposits pledged were Rs. 200.00 lakh and Rs. 175.00 lakh respectively. The Counterparties have an obligation to return the security to the Company upon settlement of obligation by the subsidiary Company. There are no other significant terms and conditions associated with the use of collateral.

39. Capital management

For the purpose of the Company's capital management, capital includes issued equity share capital and all other equity reserves attributable to the equity holders. The primary objective of the Company's capital management is to maximise the shareholder Vajue.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital. The Company's policy is to keep the gearing ratio less than 50%.The Company includes within net debt, trade and other payables, less cash and cash equivalents.

Particulars

As at 31 Mar 2018

As at 31 Mar 2017

Rs. 'lakhs

Rs. 'lakhs

Trade payables

318.47

711.77

Other financial liabilities-current

102.91

148.73

Less: Cash and cash equivalents

1,098.75

170.45

Total debt

(677.37)

690.05

Equity share capital

6,052.49

5,420.43

Other equity

5,228.60

2,435.48

Total capital

11,281.09

7,855.91

Gearing ratio (debt / equity)

(6%)

9%

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 3 I March 2017.

40. Information pursuant to G.S.R. 308 ( E) dated 30 March 2017 issued by Ministry of corporate affairs:

Particulars (Amount in lakhs)

SBNs*

Other denomination notes

Other denomination notes

Closing cash in hand as on 08.11.2016

0.35

0.03

0.38

( )Permitted receipts

2.14

2.14

(-) Permitted payments

2.02

2.02

(-) Amount deposited in Banks

-

-

-

Closing cash in hand as on 30.12.2016

0.15

0.15

* For the purpose of this disclosure, the term 'Specified Bank Notes' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016."

The disclosures regarding details of specified bank notes held and transacted during 8 November 2016 to 30 December 2016 has not been made in the current year since the requirement does not pertain to financial year ended 3 I March 2018. Corresponding amounts as appearing in the audited financial statements for the year ended 31 March 2017 have been disclosed.

41. Loans in the nature of loans given to subsidiaries and companies in which directors are interested

Name of the Company

Balance as at 31 March 2018 (Rs. 'lakhs)

Balance as at 31 March 2017 (Rs. 'lakhs)

Maximum amount outstanding during the year ended 31 March 2018 (Rs. 'lakhs)

Maximum amount outstanding during the year ended 31 March 2017 (Rs. 'lakhs)

New Spice Sales and Solutions Limited

-

-

-

1,508.48

The loan given to New Spice Sales and Solutions Limited in previous year was for business purposes.

42. As on 31st March, 2018, Independent Non-Promoter (Spice Employee Benefit) Trust ('EBT') holds 10,201,417 (March 3 1, 2017: 11,901,752) equity shares of the Company, for the benefit of the employees of the Company, its associates and subsidiaries and Independent Non-Promoter Trust ('NPT') holds 15,912,776 (March 31, 2017: 35,281,215) equity shares of the Company for the benefit of the Company. These equity shares were transferred to the Trusts pursuant to the Scheme of amalgamation of Spice Televentures Private Limited ('STPL'),the erstwhile holding company, with the Company,_duly approved by High Court, Allahabad, at a value at which these equity shares were held in the books of STPL.

During the year the Company has received Rs.3450 lakh including surplus of Rs. 1399.12 lakh as a beneficiary,from the Independent Non-Promoter Trust including surplus arising from sale of its shares.The surplus fund would be utilised by the Company as per the terms of the Trust deed of Independent Non-Promoter Trust. Further, the Company has received Rs.342 lakh against receivables, from the Independent Employee Benefit Trust and includes surplus arising from sale of its shares .The above receipts are shown as part of the Trust Reserve.

Taking a conservative interpretation of "Ind AS 32" face value of shares held by these trusts has been deducted from equity and amount over and above face value has been shown as deduction under the head "Trust shares" separately in other equity.

43. Disclosure required under Section 186(4) of the Companies Act 2013

Particulars of corporate guarantees given as required by Section 186(4) of Companies Act, 2013

Particulars

As at 31 March 2017

Guarantees Given

Guarantees Withdrawn

As at 31 March 2018

Rs. 'lakhs

Rs. 'lakhs

Rs. 'lakhs

Rs. 'lakhs

Hotspot Sales and Solutions Private Limited

2,500.00

-

1,000.00

1500.00*

* Also refer (note 33C)

The Company has given corporate guarantee of Rs 1,000 Lakhs (3 I March 2017: Rs 2,600 Lakhs) and pledged fixed deposits of Rs 200 Lakhs (3 I March 2017: Rs 175 Lakhs) in respect of bill discounting/bank guarantee/overdraft facility taken by Hotspot Sales & Solutions Private Limited / Spice Online Private Limited (erstwhile subsidiaries of the Company)to the extent of Rs 600 Lakhs outstanding as on 3 I March 2018 where the Company is jointly and severally liable . Company has fully provided possible obligation against the said outstanding.

Details of Investments made (At cost or FVTPL):

Particulars

Opening investments as at 31 March 2017

Investments made during the year

Investments sold during the year

Closing investments as at 31 March 2018

Rs. 'lakhs

Rs. 'lakhs

Rs. 'lakhs

Rs. 'lakhs

Spice Digital Limited

889.74

6,340.68

-

7,230.42

43,339,475 (31 March 2017: 35,470,674) equity shares of Rs. 10 each fully paid up

Hindustan Retail Private Limited

39288.00*

2,950.00

-

42,238.00

422,380,000 (31 March 2017: 382,980,000) equity shares of Rs. 10 each fully paid up

Kimaan Exports Private limited (refer note 44(a))

4,562.12

-

4,562.12

-

Nil (31 March 2017: 20,000) equity shares of Rs. 10 each fully paid up

S Mobility (HK) Limited

0.64

-

-

0.64

10,000 (31 March 2017: 10,000) equity shares of HKD 1 each fully paid up

-

S Mobile Devices Limited

5.00

-

-

5.00

50,000 (31 March 2017: 50,000) equity shares of Rs. 10 each fully paid up

Omniventures Private Limited

1.00

-

1.00

-

Nil (31 March 2017: 10,000) equity shares of Rs. 10 each fully paid up

Spice IOT Solutions Private Limited

1.00

-

-

1.00

10,000 (31 March 2017: 10,000) equity shares of Rs. 10 each fully paid up

44,747.50

9,290.68

4,563.12

49,475.06

* The balance as at 3 I March 2017 includes share application money of Rs. 990 lakh paid by company against which shares have been alloted before signing of financial statements.

44. Deferred tax

The Company has carried out its deferred tax computation in accordance with Ind AS 12 'Income Taxes' notified under the Companies (Indian Accounting Standards) Rules, 2015.

Significant components & classification of deferred tax assets and liabilities are as follows:

Amount in Rs. Lakhs

Particulars

As at 31 March 2018

As at 31 March 2017

Deferred tax liabilities

Related to depreciation of fixed assets

72.47

364.35

Fair vale of financial assets

4.88

-

Total deferred tax liability (a)

77.35

364.35

Deferred tax assets

Provision for bonus

7.05

10.90

Provision for gratuity

8.70

7.85

Provision for leave encashment

7.80

7.73

Fair vale of fianncial laibilities

5.12

-

Provision for bad and doubtful debts

995.25

1,182.96

Carry forward losses

693.84

527.03

Carry forward Unabsorbed depreciation

541.38

565.94

Total deferred tax assets (b)

2,259.14

2,302.41

Net deferred tax assets/ (liabilities) (b-a)

2,181.79

1,938.06

Having regard to the accumulated losses. the Company has not recognised the net deferred tax assets in the absence of reasonable certainty at this stage that there will be sufficient future taxable income available to realize such assets.

(b) Reconciliation of effective tax rate

Particulars

As at 31 March 2018

As at 31 March 2017

Profit before tax

(366.82)

(8,763.74)

Income tax expense calculated at domestic tax rates applicable to profits

26.00%

(95.37)

30.90%

(2,708.00)

Tax effects of:

Effect related to Long term Capital Gains

121.48%

(445.61)

0.04%

(3.42)

Provision on expected liability reversed

-14.18%

52.00

-29.81%

2,612.26

Expenditure of capital nature

0.00%

-

-0.01%

0.72

Sales tax demanded paid

-2.66%

9.77

0.00%

-

Changes in tax rates related to prior years

-83.52%

306.36

0.00%

-

Others

19.32%

(70.87)

-9.78%

857.02

Deferred tax asset not recognised in statement of profit and loss

66.44%

(243.72)

-8.66%

758.58

(c ) Tax losses

As at 31 March 2018

Expiry date

As at 31 March 2017

Expiry date

Loss from business

2,668.63

31 March 2019 to 31 March 2027

1,705.59

31 March 2012 to 31 March 2020

Unabsorbed depreciation

2,082.24

Carried forward indefinitely

1,831.51

Carried forward indefinitely

Total

4,750.87

3,537.10

Potential tax benefit

1,235.23

1,092.96

45. (a) During the previous year Spice Mobility Limited has entered in the Share Purchase Agreement with Spice Digital Limited,

a subsidiary of the Company, to transfer the entire stake in Kimaan Exports Private Limited. Consequent to this Kimaan Exports Private Limited has ceased to be a wholly owned subsidiary of the Company and become a step down subsidiary. The Company has sold its investment in shares of Kimaan Limited of Rs 4562.12 lakh for Rs 6276.00 lakh and earned profit of Rs 1713.88.

(b) During the year the Board of Directors of the Company has approved the sale of entire stake in Omniventures Pvt Ltd. (OVPL), a wholly owned subsidiary of the Company, subsequently, the shareholders of the Company have also approved the same through postal ballot. Consequent to sale of stake in OVPL, OVPL and its subsidiary companies i.e. Spice Online Pvt. Limited and Hotspot Sales & Solutions Private Limited have ceased to be the subsidiaries of the Company with effect from 13 February, 2018.

(c) Previous year a step down subsidiary of the Company has discontinued its business operations. As the net worth of said company is fully eroded, the Company has made and impaired during the year an investment made through subsidiary of Rs 2,950.00 lakh (previous year : Rs 7,735.00) towards settlement of the liabilities of the step down subsidiary. The Company has reversed excess provision of Rs 400.00 lakh against provision of Rs.3,350.00 lakh made last year towards settlement of liabilities of the aforesaid step down subsidiary.

46. Details of dues to micro and small medium enterprises as defined under the MSMED Act, 2006

Particulars

As at 31 March 2018

As at 31 March 2017

a) the principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year

NIL

NIL

b) the amount of interest paid by the buyer under MSMED Act 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

NIL

NIL

c ) the amount of interest due and payable for the period (where the principal has been paid but interest under the MSMED Act, 2006 not paid);

NIL

NIL

d) the amount of interest accrued and remaining unpaid at the end of each accounting year

NIL

NIL

e) the amount of further interest due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under Section 23 of the MSMED Act 2006

NIL

NIL

As per our report of even date

For and on behalf of the board of directors of Spice Mobility Limited

FOR B S R & CO. LLP

Dilip Modi

Subramanian Murali

Chartered Accountants

Executive Chairman

Director

ICAI Firm registration number: 101248W/W- 100022

DIN: 00029062

DIN: 00041261

Vikram Ad van!

Suman Ghose Hazra

Madhusudan V.

Partner

Director

Chief Financial Officer

Membership no.: 091765

DIN: 00012223

Place : Noida

M R Bothra

Date : 17 May 2018

Vice President- Corporate Affairs and Company Secretary

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