Your Directors have pleasure in presenting the Thirty First Annual Report together with the Audited Financial Statements of the Company for the financial year ended on 31st March 2019.
The consolidated and standalone financial performance of the Company for the financial year ended 31st March 2019 is summarized below:
(Amount in Rs. Lakhs)
For the Financial Year ended 31.03.2019
For the Financial Year ended 31.03.2018
|Total revenue from continuing operations||39505.04||17226.37||29373.98||15569.98|
|Earnings before finance costs tax depreciation & amortization and exceptional items from continuing operation||3379.73||1128.82||1887.55||(906.82)|
|Share of (profit)/loss of associates and a joint venture||(116.55)||-||(78.60)||-|
|Depreciation and amortization expense||1797.07||894.13||1697.16||934.10|
|Profit/(Loss) before tax from continuing operations||1204.05||219.43||(6839.81)||(6881.77)|
|Current Income Tax||1128.34||235.90||816.40||174.11|
|Income Tax adjustment for earlier years (net)||5.68||(53.25)||116.31||19.83|
|Deferred tax charge/ (credit)||(847.26)||(760.11)||(126.77)||(142.14)|
|Profit/(Loss) for the Year from continuing operation||917.29||796.89||(7645.75)||(6933.57)|
|Profit/(Loss) for the Year from discontinued operation||(9.15)||-||3176.04||-|
|Total profit/ (Loss) for the year||908.14||796.89||(4469.71)||(6933.57)|
|Other comprehensive income for the year||83.33||(3.39)||131.38||6.32|
|Total comprehensive income for the year||991.47||793.50||(4338.33)||(6927.25)|
|Share of Minority in profits / (losses)||308.12||-||(915.00)||-|
|Profit / (Loss) for the year attributable to equity shareholders||683.35||793.50||(3423.33)||(6927.25)|
Pursuant to the Comprehensive Scheme of Arrangement between Spice Mobility Limited (SML) Spice Digital Limited (SDL) Spice IOT Solutions Private Limited Mobisoc Technology Private Limited and Spice Labs Private Limited and their respective Shareholders and Creditors as approved by the Hon'ble National Company Law Tribunal New Delhi Principal Bench the assets and liabilities of Digital Technology Services (DTS) Business of SDL and the amalgamating companies (Spice IOT Solutions Private Limited Mobisoc Technology Private Limited and Spice Labs Private Limited) were transferred to and vested with the Company with effect from the appointed date viz. April 01 2017. Accordingly the previous year figures have been regrouped and/or rearranged wherever required to align with disclosure parameters of the Amalgamated Company.
PERFORMANCE REVIEW AND STATE OFTHE COMPANY AFFAIRS
After the implementation of the Comprehensive Scheme of Arrangement the Company is now in the business of Digital Technology Services (DTS Business) and is engaged in Enterprise Solutions encompassing Telco Support Solutions Government Centric Solutions Enterprise Messaging Mobility Software Solutions Traditional VAS etc. with data being the core of service delivery and is also providing managed services to mobile operators in India. The Company is also engaged in similar Service business through its subsidiaries in Africa Bangladesh Indonesia etc.
The Company through its wholly owned subsidiary `Spice Money Ltd' is also engaged in Financial Technology Services (Fintech Business). The Company at the standalone level has earned a total Income of Rs. 17226.37 lakhs for the year ended 31st March 2019 (Previous year Rs. 15569.98 lakhs). The Company has earned a profit of approx. Rs.796.89 lakhs for the year ended 31st March 2019 as against a loss of Rs. 6933.57 lakhs in the previous year ended 31st March 2018. The Company at the consolidated level achieved a total income of Rs. 39505.04 lakhs for the year ended 31st March 2019 as against Rs. 29373.98 lakhs for the previous year ended 31st March 2018. The profit after tax at the consolidated level for the year ended on 31st March 2019 is Rs. 917.29 lakhs (Previous Year loss of Rs. 7645.75 lakhs). In the previous year the loss includes Rs. 6746.23 lakhs on account of exceptional items pertaining to Discontinued Operations and other one-time charges.
HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES ASSOCIATES AND JOINTVENTURES
The Company as of March 31 2019 has 24 subsidiaries and 3 associates (including one associate of its subsidiary company). The highlights of the principal subsidiaries are given below:
(a) Spice Money Ltd. (Formerly known as spice Digital Ltd.) - This Company is in the fintech business conducted through retail network enabling domestic Money transfer Bill payments Ticketing etc. operating under licenses from RBI UIADI IRCTC like PPI (Pre-paid instruments) Bharat Bill Payment System (BBPS) AUA/KUA Ticketing etc. It achieved consolidated revenue of Rs. 14373 lakhs for the year ended 31st March 2019 (31st March 2018- Rs. 6057 lakhs) and reported a consolidated loss of Rs. 433 lakhs vis-a-vis profit of Rs. 6 lakhs in the previous year ended 31st March 2018.
(b) S Global services pte. Ltd. (Formerly sgic pte. Ltd.) - This Company is incorporated in Singapore and is in the business of Value Added Services and Digital Technology & Solutions and has a global presence operating through its subsidiaries both direct and step down subsidiaries. It achieved consolidated revenue of Rs. 9673.11 lakhs for the year ended 31st March 2019 (31st March 2018 Rs. 9467.95 lakhs). It reported a consolidated Profit after Tax for the year ended 31st March 2019 of Rs. 1280.85 lakhs (31st March 2018 Rs. 400.51 lakhs).
(c) Spice Digital Bangladesh- This Company is incorporated in Bangladesh and is in the business of Value Added Services and Digital Technology & Solutions. It achieved revenue of Rs. 299.34 lakhs for the year ended 31st March 2019 (31st March 2018 Rs. 208.13 lakhs) and Profit after Tax for the year ended 31st March 2019 of Rs. 49.09 lakhs (31st March 2018 Rs. 26.63 lakhs). The detailed performance and financial position of each of the subsidiaries and associate companies are given in Form AOC-1 attached to the Consolidated Financial Statements for the year ended 31st March 2019 and forms an integral part of the Annual Report.
COMPREHENSIVE SCHEMEOFARRANGEMENT BETWEEN THE COMPANYAND ITS SUBSIDIARY COMPANIES
The Hon'ble National Company Law Tribunal (NCLT) Principal Bench New Delhi vide its Order dated 20th May 2019 sanctioned the Comprehensive Scheme of Arrangement (Comprehensive Scheme or Scheme) between Spice Mobility Limited (SML) Spice Digital Limited (SDL) Spice IOT Solutions Private Limited Mobisoc Technology Private Limited and Spice Labs Private Limited and their respective Shareholders and Creditors.
The said Scheme has been made effective from 1st June 2019 with appointment date as 1st April 2017. As per the terms of the aforesaid Scheme DTS Business Undertaking of SDL has been demerged into the Company and Spice IOT Solutions Private Limited Mobisoc Technology Private Limited and Spice Labs Private Limited the subsidiary companies have got amalgamated with the Company. The implementation of the said Scheme has resulted into consolidation of similar businesses into SML making it a Digital Technology Service Business Company.
Consequently the two step down subsidiary companies S Global Services Pte. Limited Singapore (SGS) and Spice Digital Bangladesh Limited which were earlier subsidiaries of SDL and associates of SDL have become direct subsidiaries/associates of Spice Mobility Limited.
INCREASE IN AUTHORISED SHARE CAPITAL
Pursuant to the sanction of Comprehensive Scheme of Arrangement the Authorised Shares Capital of the Company has been increased from Rs. 990000000 (Rupees Ninety Nine Crores only) divided into 330000000 (Thirty Three Crores) Equity Shares of Rs. 3/- each to Rs. 1240500000/- (Rupees One Hundred Twenty Four Crores and Five Lakhs only) divided into 413500000 (Forty One Crores and Thirty Five Lakhs) Equity Shares of Rs. 3/- each and accordingly the Clause V of the Memorandum of Association of the Company stands altered.
INCREASE IN ISSUED SHARE CAPITAL AND ALLOTMENT OF SHARES
As per the Comprehensive Scheme of Arrangement the Board of Directors of the Company in its meeting held on 14th June 2019 has issued and allotted 38083 (Thirty Eight Thousand Eighty Three) Equity Shares of Rs.3/- each to the shareholders of Spice Digital Ltd and Spice Labs Private Limited towards consideration as provided in the said Scheme as detailed hereunder:
i. 25090 fully paid up equity shares of the face value of Rs. 3/- each to the shareholder of Spice Digital Limited as a consideration for demeger of DTS Business into Spice Mobility Limited and for remaining business of Spice Digital Limited and
ii. 12993 fully paid up equity shares of the face value of Rs. 3/- each to the shareholder of Spice Labs Private Limited as a consideration towards amalgamation of Spice Labs Private Limited into Spice Mobility Limited.
Consequent to the issue and allotment of the said 38083 Equity Shares of Rs. 3/- each the paid-up and issued equity share capital of the Company has increased from Rs. 683591946 (Rupees Sixty Eight Crores Thirty Five Lakhs Ninety One Thousand Nine Hundred and Forty Six only) divided into 227863982 (Twenty Two Crores Seventy Eight Lakhs Sixty Three Thousand Nine Hundred and Eighty Two) Equity Shares of Rs. 3/- each to Rs. 683706195/- (Rupees Sixty Eight Crores Thirty Seven Lakhs Six Thousand One Hundred and Ninety Five only) divided into 227902065 (Twenty Two Crores Seventy Nine Lakhs Two Thousand and Sixty Five) Equity Shares of Rs. 3/- each.
CHANGE IN OBJECT CLAUSE
Pursuant to the Comprehensive Scheme of Arrangement the main Object Clause III (A) of the Memorandum of Association of the Company has been altered and amended to include the objects as required to carry on the business activities of DTS Business Undertaking and other related businesses.
CHANGE IN NAME OFTHE COMPANY
After the implementation of the Scheme of Arrangement the DTS Business of SDL has been demerged into the Company and is now being carried out directly by the Company. The Company has launched its digital initiatives in the last 12 months under the DiGiSPICE brand and moving towards making it a leading Next GEN digital services and product Company. Accordingly to reflect properly the new business of the Company in its name the Board of Directors of the Company decided to change the name of the Company from Spice Mobility Limited to DiGiSPICE Technologies Limited. As required under the applicable laws the Company obtained the requisite approval of the shareholders by way of a Special Resolution passed through Postal Ballot. The Registrar of Companies Delhi has approved the change in name of the Company and issued a new Certificate of Incorporation on 8th August 2019 effecting the change of name of the Company from Spice Mobility Limited to DigispiceTechnologies Limited.
TRANSFER OF AMOUNT TO RESERVES
The Company has not transferred any amount to the Reserve during the Financial Year ended 31st March 2019.
The Board of Directors has recommended a dividend of 15% (Rs. 0.45/- per Equity Share of Rs.3/- each) on the Equity Shares for the financial year 2018-19. The Independent Non-Promoter Trust has waived-off its rights to receive dividend on its entire holding in the Company. The said dividend if approved by the shareholders would involve a cash outflow of Rs. 953.78 lakhs (excluding tax).
TRANSFER OF UNCLAIMED DIVIDEND AND SHARESTO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of the Investors Education and Protection Fund Authority (Accounting Audit Transfer and Refund) Rules 2016 notified by the Ministry of Corporate Affairs (MCA) as amended from time to time all shares in respect of which dividend has not been paid or claimed by the Shareholders for seven consecutive years or more are liable to be transferred to the Investors Education and Protection Fund (IEPF) established by the Central Government.
Accordingly during the year the Company has transferred 68471 equity shares pertaining to the Financial Year ended 2010-11 to the IEPF. The details of the shares transferred to IEPF is available on the website of the Company. The unclaimed and unpaid dividend relating to the financial year 2011-12 is due for transfer to the IEPF in the month of January 2020.
Once the aforesaid unclaimed dividend/ shares are transferred to IEPF the concerned shareholders can claim both the unclaimed dividend as well as the shares transferred to IEPF from the IEPF Authority by making an application in the prescribed Form and manner under the applicable Rules.
LISTING OF SECURITIES
The Equity Shares of the Company are presently listed on BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The Annual Listing Fee for the financial year 2019-20 has been paid to both the Stock Exchanges. The 38083 equity shares of Rs.3/- each issued and allotted pursuant to the Scheme of Arrangement have also been listed and admitted for dealing on both the Stock Exchanges.
As on 31.03.2019 Spice Connect Private Limited the holding Company holds 74.36% of the issued share capital of the Company which subsequent to the allotment of 38083 equity shares of Rs.3/- each in pursuance to the Scheme of Arrangement has gone down to 74.35%.
SUBSIDIARY COMPANIES JOINTVENTURES OR ASSOCIATE COMPANIES
In pursuance to the Scheme of Arrangement Spice IOT Solutions Private Limited the wholly owned subsidiary company of the Company & Mobisoc Technology Private Limited and Spice Labs Private Limited the step down subsidiaries of the Company through Spice Digital Limited (SDL) had been amalgamated with the Company. After allotment of the shares to the shareholders of SDL as provided in the said Scheme SDL has become a wholly owned subsidiary of the Company w.e.f. June 14 2019.
For carrying on the telecom related operations in Nepal the Company has incorporated `Digispice Nepal Private Limited' a wholly owned subsidiary company in Nepal on January 21 2019.
During the year Spice Digital Limited a subsidiary of the Company has divested its entire equity stake of 49% in Adgyde Solutions Private Limited (Adgyde). Consequently Adgyde has ceased to be a joint venture and associate of Spice Digital Limited. S Global Services Pte. Ltd. a step down subsidiary of the Company has acquired 70% stake in Fast Track IT Solutions Ltd. a Company incorporated under the laws of Bangladesh.
Consequent to issue of shares by Ziiki Media SA (Pty) Ltd (formerly known as Spice Digital South Africa (Pty) Limited) (Ziiki) the stake of Spice VAS (Africa) Pte. Limited (SVA) the step down subsidiary of the Company in Ziiki has gone down to 49% and accordingly Ziiki has ceased to be a subsidiary of SVA and has become an associate.
After closure of the Financial Year Spice VAS (Africa) Pte. Ltd. (SVA) a step down subsidiary of the Company has transferred its 100% stake in SVA (Mauritius) Pvt. Limited (SVAM). Accordingly SVAM has ceased to be a subsidiary of the Company.
Pursuant to Section 129 (3) of the Companies Act 2013 and Indian Accounting Standard - 110 issued by The Institute of Chartered Accountants of India Consolidated Financial Statement presented by the Company include the Financial Statements of its Subsidiaries and Associates Companies.
Upon receipt of request the Annual Accounts of the Subsidiary Companies and the related information will be made available to the members of the Company. These documents shall also be available for inspection at the registered office of the Company during the business hours up to the date of ensuing Annual General Meeting. The Financial Statements of Subsidiary Companies will be uploaded on the website of the Company www.digispice.com.
AUDITOR S AND AUDITORS' REPORT
Pursuant to the provisions of Section 139 of the Companies Act 2013 read with rules made thereunder M/s. Singhi & Co. Chartered Accountants (Firm Registration No. 302049E) were appointed as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of the thirtieth Annual General Meeting till the conclusion of thirty fifth Annual General Meeting of the Company to be held in the year 2023.
The Auditors' Reports for the financial year 2018-19 do not contain any qualification or reservation or adverse remark. The Notes on Financial Statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments. During the year no incidence of fraud as defined under Section 143(12) of the Companies Act 2013 which is required to be disclosed under Section 134(3) (ca) of the Companies Act 2013 has been reported by the Auditors to the Board of directors of the Company.
CASH FLOW STATEMENT
In conformity with the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Cash Flow Statement for the year ended on 31st March 2019 as prepared under the provisions of Indian Accounting Standard -7 as notified under Section 133 of the Companies Act 2013 is attached as a part of the Financial Statement of the Company.
NUMBER OF BOARD MEETINGS HELD DURINGTHE FINANCIALYEAR
During the financial year ended on 31st March 2019 Six (6) meetings of the Board of Directors were held on 17th May 2018 13th August 2018 5th October 2018 2nd November 2018 7th December 2018 and 5th February 2019. The details of number of meetings of the Board and its various committees attended by the directors are given in Corporate Governance Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Dr. (Ms.) Rashmi Aggarwal (DIN: 07181938) was appointed as an Additional Director in the category of Non-Executive Independent Director w.e.f. 2nd November 2018. Dr. Rashmi holds office upto the date of the ensuing Annual General Meeting of the Company and is eligible for appointment as an independent director. The resolution for her appointment as Independent Director of the Company for a period of 5 years w.e.f. 2nd November 2018 is being placed for approval of the members.
Mr. Subramanian Murali (DIN: 00041261) Director retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.
As required under Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 a brief resume details of experience and other Directorships/ Committee memberships/ Chairmanships held by the Directors in other Companies whose appointment/ re-appointment is due in the forthcoming Annual General Meeting (AGM) of the Company forms part of the Notice convening the 31st AGM. Pursuant to the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company has obtained a certificate from a company secretary in practice that none of the directors on the board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority and forms a part of this annual report.
During the year Mr. Hanif Mohamed Dahya resigned as Independent Director of the Company w.e.f. 7th February 2019 due to lack of time to attend any Board Meeting as per the regulatory requirement since he is based out of USA. Subsequent to the year end Mr. Umang Das resigned as Independent Director of the Company w.e.f. 7th August 2019 due to personal reasons and other commitments. Mr. Shrenik Mahendra Khasgiwala resigned as Non-Executive Director of the Company w.e.f. 7th August 2019 due to his new professional commitments. The Board of Directors places on record its sincere appreciation for guidance provided by them during their tenure as Directors of the Company.
In order to bring the expertise necessary to run the digital technology service business which the Company is focusing on the Board of Directors on the recommendation of Nomination and Remuneration Committee has appointed Ms. Preeti Das as a Chief Executive Officer of the Company w.e.f. 2nd November 2018.
Mr. Madhusudan Venkatachary resigned as Chief Financial Officer of the Company w.e.f. 4th December 2018. The Board of Directors in its meeting held on 7th December 2018 on the recommendation of Nomination and Remuneration Committee has appointed Mr. Rajneesh Arora as Chief Financial Officer of the Company with effect from that date. As per the provisions of Companies Act 2013 Mr. Dilip Modi Executive Chariman Ms. Preeti Das Chief Executive Officer Mr. Rajneesh Arora Chief Financial Officer and Mr. M. R. Bothra Company Secretary are the Key Managerial Personnel of the Company.
DECLARATION OF INDEPENDENCE
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act 2013 as well as Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
As required under Regulation 25 of the Listing Regulations the Independent Directors have also confirmed that they meet the criteria of independence and are not aware of any circumstance or situation which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
In terms of Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company familirises its directors about their role and responsibilities at the time of their appointment through a formal letter of appointment. Presentations are regularly made at the meetings of the Board and its various Committees on the relevant subjects. All efforts are made to keep Independent Directors aware of major developments taking place in the industry business the company operates in and relevant changes in the law governing the subject matter. The detail of familiarization programme as required under Listing Regulations is available at https://www.digispice.com/Familiarization_programme.pdf.
DIRECTORS' RESPONSIBILITY STATEMENT
Pursuant to the provisions of Section 134(5) of the Companies Act 2013 the Directors hereby confirm that:
(i) in the preparation of annual accounts for the financial year ended 31st March 2019 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 a true and fair view of the State of Affairs of the Company as at 31st March 2019 and of the profit of the Company for the period ended on that date;
(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the Directors have prepared the annual accounts on a going concern basis;
(v) the Directors have laid down proper internal financial controls to be followed by the Company and such internal financial control are adequate and were operating effectively;
(vi) the Directors had devised proper system to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
As required under Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 Management Discussion and Analysis (MDA) Report forms an integral part of this Report.
CORPORATE GOVERNANCE REPORT
A separate report on Corporate Governance is enclosed as a part of this Annual Report. The Company has appointed M/s. Sanjay Grover & Associates Practising Company Secretaries to conduct the Corporate Governance Audit of the Company. A Certificate from them regarding compliance with Corporate Governance conditions as stipulated under the relevant provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexed to the Report on Corporate Governance.
As required under Section 204(1) of the Companies Act 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company has appointed M/s. Sanjay Grover & Associates Practising Company Secretaries to conduct the Secretarial Audit for the financial year 2018-19. The Secretarial Audit Report received from them forms part of this Annual Report. The Secretarial Audit Report does not contain any qualification reservation and adverse remark.
DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has in place an established internal financial control system designed to ensure proper recording of financial and operational information and compliance of various internal controls and other regulatory and statutory compliances. Self-certification exercise is also conducted by which senior management certifies effectiveness of the internal control system of the company. Findings of the Internal Audit Report are reviewed by the top Management and by the Audit Committee invariably and proper follow up actions are ensured wherever required. The Company has designed and implemented Risk And Control Matrix (RACMs) including therein the process wise controls. It appointed an external agency to evaluate the prevalent internal control and risk management system. The Audit Committee ensures that the Company maintains effective risk management and internal control systems and processes. It provides its feedback and recommendation on the relevant matters to the Board. The Statutory Auditors and Internal Auditors also evaluate the system of Internal Controls of the Company and report to the Audit Committee. Appropriate steps are taken to bridge the gaps observed by them. The Auditors have reported that the present systems and processes of internal controls are adequate and commensurate with the size of the Company and nature of its business.
The Board on the recommendation of Audit Committee in its meeting held on 30th July 2019 has re-appointed M/s. GSA & Associates Chartered Accountants to act as Internal Auditors of the Company for the Financial Year 2019-20. The Internal Auditors directly report to the Audit Committee.
In compliance with the provisions of Section 177 of the Companies Act 2013 and Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Company has a duly constituted Audit Committee. The Board of Directors of the Company has re-constituted the Audit Committee w.e.f. 16th August 2019. The re-constituted Audit Committee comprises of the following Directors:
|1. Mr. Suman Ghose Hazra||- Chairman|
|2. Dr. Rashmi Aggarwal||- Member|
|3. Mr. Subramanian Murali||- Member|
The details of the terms of reference meetings held during the year attendance of directors at such meetings etc. are provided in Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE
The Board had constituted a Corporate Social Responsibility (CSR) Committee and on the recommendation of CSR Committee the Board approved the CSR Policy. The CSR Committee has also been entrusted with the responsibility of monitoring the implementation of the framework of the CSR Policy recommending to the Board the amount of expenditure to be incurred on CSR activities and ensuring that the implementation of the projects and programs is in compliance with the Corporate Social Responsibility Policy of the Company. The Board w.e.f. 16th August 2019 has re-constituted the CSR Committee. The re-constituted Corporate Social Responsibility Committee comprises of the following members:
|1. Mr. Dilip Modi||- Chairman|
|2. Mr. Subramanian Murali||- Member|
|3. Mr. Suman Ghose Hazra||- Member|
During the year the CSR Committee met once i.e. on 13th August 2018. All three members attended the meeting.
The Company was not required to spend any amount on CSR activities during the year 2018-19 under Companies (Corporate Social Responsibility Policy) Rule 2014. However pursuant to demerger of DTS Business Undertaking of Spice Digital Limited into the Company the CSR expenditure amounting to Rs.36.00 lakhs as spent by Spice Digital Limited during the financial year 2018-19 has been included in the financials of the Company. Accordingly Annual Report on the CSR activities undertaken by SDL during the year 2018-19 is attached (Annexure-1).
BOARD FINANCE COMMITTEE
The Board had constituted a Board Finance Committee and entrusted the said Committee with the functions to approve the borrowings making of loans creation of charge on the assets of the Company etc. The said Committee is also authorised to open close and make changes in signatories for the operation of the bank accounts. The said Committee consists of Mr. Dilip Modi as Chairman and Mr. Subramanian Murali and Mr. Suman Ghose Hazra as members of the Committee. During the year the said Committee met once on 8th June 2018 and all the members of the Committee were present in the meeting.
EXTRACT OFTHE ANNUAL RETURN
In compliance with Section 92(3) of the Companies Act 2013 read with Rule 12 of the Companies (Management and Administration) Rules 2014 the extract of the Annual Return in Form MGT-9 is attached (Annexure 2) as a part of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The details of Loans Guarantees or Investments made under Section 186 of the Companies Act 2013 are provided in the Notes forming part of the financial statements.
MAINTENANCE OF COST RECORDS
The Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act 2013.
During the year under review the Company has neither accepted nor renewed any deposits in terms of Chapter V of the Companies Act 2013.
PARTICULAR OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
During the financial year the Company has entered into various transactions with related parties. All related party transactions are undertaken in compliance with the applicable provisions of the Companies Act 2013 and the Listing Regulations.
All related party transactions are placed before the Audit Committee for its approval. The quarterly disclosures of transactions with related parties are made to the Audit Committee for its review. As required under the Companies Act 2013 and the provisions of Listing Regulations the Audit Committee has granted Omnibus approval for related party transactions which are repetitive in nature and fall within the criteria laid down for the purpose. In line with the requirements of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 the Related Party Transaction Policy and the Policy on Material Subsidiaries were amended. The amended `Policy on Related Party Transactions' dealing with such transactions and `Policy on Material Subsidiaries' as recommended by the Audit Committee and approved by the Board of Directors are uploaded on the website of the Company viz. www.digispice.com.
All related party transactions entered during the financial year were in the ordinary course of business. There were no material related party transactions entered by the Company with Directors KMPs or other persons which may have a potential conflict with the interest of the Company.
Since all the related party transactions entered into by the Company during the financial year were at arm's length basis and in the ordinary course of business and there was no material related party transaction ( i.e. a transaction exceeding 10% of the annual consolidated turnover as per the last audited financial statements) no detail is required to be given in Form AOC-2.
The details of the transactions with related parties are provided in the Notes to financial statements.
The Company as required under Section 177 of the Companies Act 2013 Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and SEBI (Prohibition of Insider Trading) Regulations 2015 has established Vigil Mechanism / Whistle Blower Policy for Directors and Employees of the Company.
The Whistleblower policy was amended in line with SEBI (Prohibition of Insider Trading) (Amendment) Regulations 2018 enabling employees to report instances of leak or suspected leak of Unpublished Price Sensitive Information.
This Policy has been established with a view to provide a tool to directors and employees of the Company to report to the management genuine concerns including unethical behavior actual or suspected fraud or violation of the Code of conduct of the Company. This Policy outlines the procedures for reporting handling investigating and deciding on the course of action to be taken in case inappropriate conduct is noticed or suspected. This Policy also provides for adequate safeguards against victimization of director(s)/employee(s) who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee in exceptional cases. The Audit Committee is authorized to oversee the Vigil Mechanism/ Whistle Blower Policy in the Company. The Company has not received any reference under the said policy during the year.
The Whistle Blower Policy is available on the Company's website at the link https://www.digispice.com/Vigil_Mechanism_Whistle_Blower_Policy.pdf
RISK MANAGEMENT POLICY
The Board of Directors on the recommendation of Audit Committee had adopted a Risk Management Policy for the Company to lay down the procedure to inform the Board members about the risk assessment and minimization. The Company is not mandatorily required to constitute a Risk Management Committee. As a good practice the Company regularly reviews the existing risk management system and major risks associated with different businesses of the Company. The Audit Committee oversees the Risk Management function and reviews the prevailing risk management framework in the Company periodically. The Board of Directors of the Company on the recommendation of the Audit Committee takes appropriate measures reviews the major risks associated with the Company and takes all requisite measures to minimize them.
The Board of Directors on the recommendation of the Nomination and Remuneration Committee of the Company had framed a Policy for Nomination and Appointment of Directors. As required under Section 178 of the Companies Act 2013 read with the Rules made thereunder and the Listing Regulations the Nomination and Remuneration Committee also recommended to the Board a Remuneration Policy for remuneration including ESOP to Directors Key Managerial Personnel and Senior Management Personnel and other employees of the Company which was duly approved by the Board. The Board on the recommendation of the Committee appoints the Senior Management Personnel from time to time.
The Nomination and Remuneration Policy was amended in line with the requirements of SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018. The key changes include inter alia addition of the definition of senior management along with recommendations about their remuneration. The Policy is directed towards a structure that provides adequate rewards and compensation to the employees at all level. The Remuneration Policy of the Company is available at https://www.digispice.com/Rem_Policy.pdf.
EMPLOYEES STOCK OPTIONS
During the year the Nomination & Remuneration Committee in its meetings held on September 18 2018 and February 5 2019 has granted 21381000 and 3439000 stock options respectively at an exercise price of Rs. 13.25 per option to the eligible employees as covered under the SML Employee Stock Option Plan 2018 (the Esop plan). The vesting of options granted will be in the ratio of 40:30:30 at the end of 1st 2nd and 3rd year from the date of respective grant and exercise period for vested options would be 3 years from the date of respective vesting. Each option entitles the holder to apply for one equity share of Rs. 3 /- each as per the terms of the ESOP Plan.
The Certificate from the Auditors of the Company stating that the ESOP Scheme has been implemented in accordance with the SEBI (Share Based Employee Benefits) Regulations 2014 (the Sbeb Regulations) and the resolutions passed by the members would be placed at the Annual General Meeting for inspection by members.
During the year there has been no change in the SML Employee Stock Option Plan 2018 of the Company.
The applicable disclosures as stipulated under the SBEB Regulations as on March 31 2019 with regard to the SML Employee Stock Option Plan 2018 of the Company are available on the website of the Company at https://www.digispice.com/ESOP_disclosure.pdf.
PERFORMANCE EVALUATION OFTHE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
Pursuant to applicable provisions of the Companies Act 2013 as amended from time to time the Nomination and Remuneration Committee has specified the manner for effective evaluation of performance of Board its Committees and individual Directors. The Board of Directors has carried out evaluation of performance of each of them. The Committee reviews its implementation and ensure the compliances thereof. As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 the Nomination and Remuneration Committee has also formulated a framework containing inter alia the criteria for performance evaluation of the entire Board of the Company its Committees and individual Directors including Independent Directors. The Committee has selected certain additional criteria for evaluation of Executive Director.
A structured questionnaire has been prepared covering various aspects of the functioning of the Board and its Committees such as adequacy of the constitution and composition of the Board and its Committees discharge of role and responsibility by the Board and its Committees frequency of the meetings regulatory compliances and Corporate Governance etc. Similarly for evaluation of individual Director's performance the questionnaire covers various aspects like his/her attendance at the meeting of Board and its Committees contribution in Board and Committee meetings execution and performance of specific duties obligations regulatory compliances and governance etc.
Board members had submitted their response on a scale of 1 (outstanding) to 5 (poor) for evaluating the entire Board Committees of the Board and of their peer Board members including Chairman of the Board.
The Independent Directors had met separately without the presence of Non-Independent Directors and the members of management and discussed inter-alia the performance of Non - Independent Directors and the Board as a whole and the performance of the Chairman of the Company after taking into consideration the views of Executive and Non-Executive Directors.
The Board of Directors has carried out evaluation of every Director`s performance including the Executive Director. The performance evaluation of the Independent Directors have been done by the entire Board excluding the Director being evaluated on the basis of performance and fulfilment of the independence criteria as specified under the Companies Act 2013 and the Listing Regulations.
POLICY ON PREVENTION OF SEXUAL HARASSMENT
As required under the Sexual Harassment of Women at Workplace (Prohibition Prevention and Redressal) Act 2013 the Company had a Policy on Prevention of sexual harassment of women at workplace and matters connected therewith. With a view to include certain changes in the existing policy the Board in its meeting held on 5th February 2019 has approved the revised Policy on Prevention of Sexual Harassment of women at workplace. The Company has complied with the provisions relating to the Constitution of Internal Committee.
No case of Sexual Harassment was filed or registered during the year under the Sexual Harassment of Women at Workplace (Prevention Prohibition & Redressal) Act 2013. Further Company ensures that there is a healthy and safe environment for every women employee at the workplace and made the necessary policies for safe and secure environment.
ORDERS PASSED BYTHE REGULATORS OR COURTS IF ANY
No significant and material orders were passed by the Regulators Courts or Tribunals impacting the going concern status and Company's operations in future.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Pursuant to provisions of Section 134 of the Companies Act 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 the details of Conservation of Energy Technology Absorption Foreign Exchange Earnings and Outgo are attached (Annexure- 3) which forms part of this report.
PARTICULARS OF EMPLOYEES
In terms of the provisions of Section 197(12) of the Companies Act 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 including any statutory modification(s) thereof for the time being in force the details of remuneration etc. of Directors Key Managerial Personnel and employees covered under the said Rules is attached (Annexure- 4) which forms part of this report.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the provisions of Secretarial Standard 1 (Secretarial Standard on meetings of Board of Directors) and Secretarial Standard 2 (Secretarial Standard on General Meetings) issued by the Institute of Company Secretaries of India.
Yours Directors would like to express their grateful appreciation for assistance and cooperation received from the Banks Government Authorities Customers Vendors and Members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services of the Executives Staff and Workers of the Company at all levels.
|For and on behalf of the Board of Directors of|
|Digispice Technologies Limited|
|(Formerly spice Mobility Limited)|
|Date: August 24 2019||Dilip Modi|
|Place: Noida||Executive chairman|