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DigiSpice Technologies Ltd.

BSE: 517214 Sector: Telecom
NSE: DIGISPICE ISIN Code: INE927C01020
BSE 00:00 | 24 Jan 42.75 -2.20
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NSE 00:00 | 24 Jan 42.65 -2.20
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OPEN 43.50
PREVIOUS CLOSE 44.95
VOLUME 21781
52-Week high 114.05
52-Week low 29.20
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Mkt Cap.(Rs cr) 983
Buy Price 0.00
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Sell Price 0.00
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OPEN 43.50
CLOSE 44.95
VOLUME 21781
52-Week high 114.05
52-Week low 29.20
P/E
Mkt Cap.(Rs cr) 983
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

DigiSpice Technologies Ltd. (DIGISPICE) - Auditors Report

Company auditors report

To the members of digispice technologies limited (formerly known asspice mobility limited) report on the audit of the standalone financial statementsopinion

We have audited the accompanying standalone financial statements ofdigispice technologies limited ("the company") which comprise the balance sheetas at march 31 2021 the statement of profit and loss including other comprehensiveincome statement of change in equity the cash flow statement for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as "thestandalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the companies act 2013 ("the act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in india of the state of affairs of the company as at march 31 2021its loss including the other comprehensive income the changes in equity and its cashflows for the year ended on that date.

Basis for opinion

We conducted our audit of the standalone financial statements inaccordance with the standards on auditing (sas) as specified under section 143(10) of theact. Our responsibilities under those standards are further described in the‘auditor's responsibilities for the audit of the standalone financialstatements' section of our report. We are independent of the company in accordancewith the ‘code of ethics' issued by the institute of chartered accountants ofindia together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the act and the rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the code of ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.

Key audit matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for thefinancial year march 31 2021. These matters were addressed in the context of our audit ofthe standalone financial statements as a whole and in forming our opinion thereon and wedo not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.

S. N. Key audit matter Auditor's response
1. Revenue recognition How our audit addressed the key audit matter:
For the financial year ended 31 march 2021 the company Has recorded revenue of rs. 11122.80 lakhs. The accounting Policies for revenue recognition are set out in note 2.4 (d) Our audit approach consisted testing of the design and Operating effectiveness of the internal controls and Substantive testing as follows:
And the different revenue streams of the company have been Disclosed in note 21 to the standalone financial statements.
- Selected samples of continuing and new contracts and
It involves certain key judgements relating to identification Of distinct Performance Obligations Determination Of Transaction price of the identified performance obligations The appropriateness of the basis used to measure revenue Recognized over a period. Revenue recognition is susceptible Tested the operating effectiveness of the internal control Relating to identification of the distinct performance Obligations and determination of transaction price.
We carried out a combination of procedures involving Enquiry and observation reperformance and inspection Of evidence in respect of operation of these controls.
To the higher risk that the revenue is recognized when Performance obligation has not been completed. This was An area of focus for our audit and the area where significant Audit effort was directed. - Tested the relevant information technology systems' Access and change management controls relating to Contracts and related information used in recording Revenue.
- Selected samples of continuing and new contracts and Performed the following procedures:
Read analyzed and identified the distinct performance Obligations in these contracts.
Compared these performance obligations with That identified and recorded by the company.
Considered the terms of the contracts to determine The transaction price including any variable Consideration to verify the transaction price used to Compute revenue and to test the basis of estimation Of the variable consideration.
Samples in respect of revenue recorded for time and Material contracts were tested using a combination
Of customer acceptances subsequent invoicing and Historical trend of collections and disputes.
Sample of revenues disaggregated by type and Service offerings was tested with the performance Obligations specified in the underlying contracts.
Sample of revenues disaggregated by type and Service offerings was tested with the performance Obligations specified in the underlying contracts.
Performed analytical procedures for reasonableness Of revenues disclosed by type and service offerings.
We found the company's revenue recognition to be consistent With its accounting policy. We are satisfied that the company's Revenue has been appropriately recognized and disclosure in The relevant accounting period.
2. Income and deferred taxes How our audit addressed the key audit matter:
The company has carried current tax assets of rs. 4614.64 Lakhs and deferred tax assets of 1643.22 lakhs as at March 31 2021. The accounting policies for current and Deferred tax recognition are set out in note 2.4 (e) and The breakup of deferred tax have been disclosed in note 14 to the standalone financial statements. Also refer note No. 32 35c and 35d of standalone financial statements. There is significant judgement involved in accounting for Taxes particularly given jurisdiction in which the company Operates and exposures to income tax laws in india. This Gives rise to complexity and uncertainty in respect of the Calculation of income taxes deferred tax positions. Due to Significance to the standalone financial statements as a whole Combined with the judgement and estimation required to Determine their values the evaluation of current tax and Deferred tax assets is considered to be a key audit matter. We assessed the adequate implementation of the policies and Controls regarding current and deferred tax. We evaluated the Design and implementation of controls in respect of provisions For current tax and the recognition and recoverability of Deferred tax assets. We examined the procedures in place for The current and deferred tax calculations for completeness And valuation and audited the related tax computations and Estimates in the light of our knowledge of the tax circumstances.
We performed an assessment of the major items impacting the Company's tax expense balances and exposures. In respect Of deferred tax assets we assessed the appropriateness Of management's assumptions and estimates including the Likelihood of generating sufficient future taxable income to Support deferred tax assets on tax losses carried forward and Mat credit entitlement which shall be available for utilization In future. We found that tax provision and deferred tax assets Are appropriately recognized and disclosed in the standalone Financial statement.
3. Valuation of trade receivables How our audit addressed the key audit matter:
We refer to note 9 and note 2.4 (q) to the standalone Financial statements. As disclosed in notes to the standalone financial Statements the company assesses periodically and at each Reporting date the expected credit loss associated with Its receivables. When there is expected credit impairment We obtained an understanding of the company's credit Policy for trade receivables process of approvals and terms And conditions and evaluated the process for identifying Impairment indicators. We have reviewed and tested the ageing Of trade receivables and management's assessment on the Credit worthiness of selected customers for trade receivables.
The amount and timing of future cash flows are estimated Based on historical current and forward-looking loss Experience for assets with similar credit risk characteristics. We further discussed with the key management on the Adequacy of the allowance for credit losses recorded by the Company and reviewed the supporting documents provided
The carrying amount of trade receivables of the company By management in relation to their assessment. We have also Reviewed adequacy and appropriateness of allowance for credit Impairment based on available information. Based on our audit Procedures performed we found management's assessment of The recoverability of trade receivables to be reasonable and the Disclosures to be appropriate.
Was rs. 3018.76 lakhs as at march 31 2021. We focused On this area because of its significance and the degree of Judgement required to estimate the expected credit loss And determining the carrying amount of trade receivables As at the reporting date.
4. Valuation of non-current investments How our audit addressed the key audit matter:
As disclosed in note 6 to the financial statements. As at march 31 2021 the total carrying amount of non- Current investments was rs. 8281.49 lakhs. Non-current Investments in unquoted equity shares. Impairment of Unquoted non-current investments involves significant Estimation uncertainty subjective assumptions and the Application of significant judgment. This was an area of focus For our audit and the area where significant audit effort was Directed. Our audit procedures included updating our understanding of The processes employed by the company for accounting and Valuing their non-current investments. We have verified that The company was the recorded owner of all investments. Our Audit procedures over the valuation of the investments included Reviewing valuation of all investments held as at march 31 2021. Based on the audit procedures performed we are satisfied with Existence and valuation of investment.

Other information

The company's board of directors are responsible for the otherinformation. The other information comprises the information included in thecompany's annual report but does not include the standalone financial statements andour auditor's report thereon.

The annual report is expected to be made available to us after the dateof this auditor's report. Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other information we are requiredto report that fact. When we read the annual report if we conclude that there is amaterial misstatement therein we are required to communicate the matter to those chargedwith governance and take necessary actions as applicable under the applicable laws andregulations.

Responsibilities of management for the standalone financial statements

The company's board of directors is responsible for the mattersstated in section 134(5) of the companies act 2013 ("the act") with respect tothe preparation of these standalone financial statements that give a true and fair view ofthe financial position financial performance cash flows and changes in equity of thecompany in accordance with the accounting principles generally accepted in indiaincluding the indian accounting standards specified under section 133 of the act readwith the companies (indian accounting

Standards) rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the actfor safeguarding the assets of the company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the company or to ceaseoperations or has no realistic alternative but to do so.

The board of directors are also responsible for overseeing thecompany's financial reporting process.

Auditor's responsibilities for the audit of the standalonefinancial statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with sas will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with sas we exercise professionaljudgment and maintain professional skepticism throughout the audit. We a lso:

? identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

? obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the companies act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

? evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

? conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on thecompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the company to cease to continue as a going concern.

evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements for the financial year ended march 31 2021 and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on other legal and regulatory requirements

1. As required by the companies (auditor's report) order 2016("the order") issued by the central government of india in terms of sub-section(11) of section 143 of the act we give in the "annexure a" a statement on thematters specified in paragraphs 3 and 4 of the order.

2. As required by section 143(3) of the act we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were Necessary for the purposes of our audit;
(b) In our opinion proper books of account as required by law have been kept by the company so far as it appears from our Examination of those books;
(c) The balance sheet the statement of profit and loss including other comprehensive income statement of change in equity And the cash flow statement dealt with by this report are in agreement with the books of account;
(d) In our opinion the aforesaid standalone financial statements comply with the indian accounting standards (ind as) specified Under section 133 of the act;
(e) On the basis of the written representations received from the directors as on march 31 2021 taken on record by the board Of directors none of the directors is disqualified as on march 31 2021 from being appointed as a director in terms of section 164 (2) of the act;
(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements and the Operating effectiveness of such controls refer to our separate report in "annexure b" to this report;
(g) The company has paid/provided for remuneration to its directors in compliance with the relevant provisions of section 197 Of the act;

(h) with respect to the other matters to be included in theauditor's report in accordance with rule 11 of the companies (audit and auditors)rules 2014 as amended in our opinion and to the best of our information and according tothe explanations given to us:

I. The company has disclosed the impact of pending litigations on its financial position in its standalone financial Statements refer note 35c and 35d to the standalone financial statements;
Ii. The company did not have material foreseeable losses in long-term contracts including derivative contracts;
Iii. There has been no delay in transferring amounts required to be transferred to the investor education and protection Fund by the company.
For singhi & co.
Chartered accountants
Firm reg. No. 302049e
Bimal kumar sipani
Place: noida (delhi-ncr) Partner
Date: june 09 2021 Membership no.088926
Udin: 21088926aaaahk4937

Annexure a referred to in paragraph 1 of our report of even date on theother legal and regulatory requirements (re: digispicetechnologies limited)

(i) a. The company has maintained proper records showing fullparticulars including quantitative details and situation of property Plant &equipment.

B. The company has a planned programme of physical verification of itsproperty plant and equipment by which all its property plant and equipment arephysically verified once in three years. In accordance with this programme no physicalverification its property plant and equipment was conducted during the year. In ouropinion this periodicity of physical verification is not reasonable having regard to sizeof the company and nature of its assets.

C. The title deed of immovable properties included in property plantand equipment right of use assets and investments property are held in the name of thecompany except land & building having carrying value of rs. 279.54 lakhs and buildinghaving carrying value of rs 275.39 lakhs as on march 31 2021 acquired in earlier yearpursuant the scheme of arrangement is yet to be transferred in the name of the company(refer note no. 38 of standalone financial statements).

(ii) the company has no inventory as on march 31 2021. Thereforeprovisions of clause 3(v) of the order are not applicable to the company.

(iii) the company has converted money receivable from a subsidiarycompany pursuant the scheme of arrangement (refer note no. 38 of standalone financialstatements) into loan during the year. The terms and condition of this loan notprejudicial to the interest of the company. No principal amount were due during the year.Interest on the loan has been received wherever became due during the year. The companyhas not granted any loan to any other company firms limited liability partnership or anyother parties covered in the register maintained under section 189 of the companies act2013 during the year.

(iv) the company has complied with the provisions of section 186 of thecompanies act 2013 in respect of loans granted/renewed during the year. The company hasnot granted any loan or guarantee given or security provided under section 185 of thecompanies Act 2013 and no investment made guarantee given or security provided undersection 186 of the companies act 2013 during the year.

(v) the company has not accepted any deposit covered under sections 73to 76 of the companies act 2013 during the year. Therefore provisions of clause 3(v) ofthe order are not applicable to the company.

(vi) the maintenance of cost records prescribed under the section 148(1) of the act read with companies (cost records and audit) rules 2014 was not applicableto the company. Therefore provisions of clause 3(vi) of the order are not applicable tothe company.

(vii) a. According to the records of the company the company isgenerally regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax goods and service tax sales tax servicetax duty of customs duty of excise value added tax cess and other material statutorydues deducted/ accrued in the books with the appropriate authorities. There were noundisputed outstanding statutory dues as at the yearend for a period of more than sixmonths from the date they became payable.

B. According to the records of the company there are no duesoutstanding of income tax sales tax service tax duty of customs duty of excise andvalue added tax on account of any dispute other than the followings:

Name of the Statute Nature of Dues Amount (rs. In lakhs)* Period to which the amount Relates (financial year) Forum where dispute is Pending
Income tax act 1961 Income tax 246.28 2008-09 Supreme court
Finance act 1994 Service tax 223.28 April 2008 to march 2009 Appellate tribunal chandigarh

* including interest and penalty and after deduction of amountdeposited.

Note: enhancement of income matters remanded back to itat pertaining toa.y. 2011-12 of rs. 685.42 and remanded back to assessing officer pertaining to ay 2010-11of rs. 423.39 lakhs is not included above.

(viii) the company has not defaulted in repayment of dues to banks. Thecompany did not have any borrowing from government and financial institution and dues todebenture holders.

(ix) during the year the company did not raise any money by way ofinitial public offer or further public offer (including debt instruments). The company hasnot raised any term loan during the year.

(x) based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given to us no fraud by the company or no fraud on thecompany by its officers and employees has been noticed or reported during the year

(xi) the company has paid/provided for remuneration to its directors incompliance with the relevant provisions of section 197 of the act.

(xii) according to the information and explanations given to us thecompany is not a nidhi company. Therefore provisions of clause 3(xii) of the order arenot applicable to the company.

(xiii) according to the information and explanations given to us andbased on our examination of the records of the company transactions with related partiesare in compliance with section 177 and section 188 of the companies act 2013 whereapplicable and details of such transactions have been disclosed in the standalonefinancial statements as required by the applicable accounting standards.

(xiv) the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year. Thereforethe provisions of clause 3(xiv) of the order are not applicable to the company.

(xv) according to the information and explanations given to us thecompany has not entered into any non-cash transactions with directors or persons connectedwith them. Therefore the provisions of clause 3(xv) of the order is not applicable to theCompany.

(xvi) the company is not required to be registered under section 45-iaof the reserve bank of india act 1934.

For singhi & co.
Chartered accountants
Firm reg. No. 302049e
Bimal kumar sipani
Place: noida (delhi-ncr) Partner
Date: june 09 2021 Membership no.088926
Udin: 21088926aaaahk4937

Annexure b

Report on the internal financial controls under clause (i) of sub -section 3 of section 143 of the companies act 2013 ("the act")

We have audited the internal financial controls with reference tostandalone financial statements of digispice technologies limited (‘thecompany") as of march 31 2021 in conjunction with our audit of the standalonefinancial statements of the company for the year ended on that date.

Management's responsibility for internal financial controls

The company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over the financialreporting criteria established by the company considering the essential components ofinternal control stated in the guidance note on audit of internal financial controls overfinancial reporting issued by the institute of chartered accountants of india. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the companies act 2013.

Auditor's responsibility

Our responsibility is to express an opinion on the company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the guidance note on audit of internalfinancial controls over financial reporting (the "guidance note") and thestandards on auditing issued by icai and deemed to be prescribed under section 143(10) ofthe companies act 2013 to the extent applicable to as audit of internal financialcontrols both applicable to an audit of internal financial controls and both issued bythe institute of chartered accountants of india. Those standards and the guidance noterequire that we comply with ethical requirements of and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls withreference to financial statements was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to standalonefinancial statements and their operating effectiveness. Our audit of internal financialcontrols with reference to standalone financial statements included obtaining anunderstanding of internal financial controls with reference to standalone financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the company's internalfinancial controls system with reference to standalone financial statements.

Meaning of internal financial controls over financial reporting

A company's internal financial control over financial reportingwith reference to these financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financialreporting with reference to these financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany ; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorization of management and directors of the company ; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the company's assets that could have a materialeffect on the financial statements.

Inherent limitations of internal financial controls over financialreporting

Because of the inherent limitations of internal financial controls overfinancial reporting with reference to financial statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to financialstatements to future periods are subject to the risk that the internal financial controlsover financial reporting with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the company has in all material respects an adequateinternal financial controls system with reference to standalone financial statements andsuch internal financial controls with reference to standalone financial statements wereoperating effectively as at march 31 2021 based on the internal control over thefinancial reporting criteria established by the company considering the essentialcomponents of internal control stated in the guidance note on audit of internal financialcontrols over financial reporting issued by the institute of chartered accountants ofindia.

For singhi & co.
Chartered accountants
Firm reg. No. 302049e
Bimal kumar sipani
Place: noida (delhi-ncr) Partner
Date: june 09 2021 Membership no.088926
Udin: 21088926aaaahk4937

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