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Directors Report of DiGiSPICE Technologies Ltd.

Mar 31, 2023

The Directors have pleasure in presenting the 35th (Thirty Fifth) Annual Report together with the Audited Financial Statements of your Company (''the Company'' or ''DiGiSPICE'') for the financial year ended on 31st March, 2023.

Financial Results

The consolidated and standalone financial performance of the Company for the financial year ended 31st March, 2023 is summarised below:-

(Amount in Rs. Lakhs)

Particulars

For the Financial Year ended 31st March 2023

For the Financial Year ended 31st March, 2022

Consolidated

Standalone

Consolidated

Standalone

Total revenue from continuing operations

1,01,532.88

5,497.18

99,060.62

11,252.30

Other Income

2,711.09

970.02

2,070.14

807.72

Earnings before finance costs, tax, depreciation & amortization and exceptional items from continuing operation

1,256.01

(336.87)

3,532.74

34.63

Share of (profit)/loss of associates and a joint venture

1.30

-

(10.81)

-

Depreciation and amortization expense

2,543.88

402.75

1,989.95

257.00

Finance costs

129.76

58.32

117.82

94.01

Exceptional items

471.07

-

100.00

-

Profit/(Loss) before tax from continuing operations

(1,887.40)

(797.94)

1,314.16

(316.38)

Tax expenses

- Current Income Tax

132.86

-

492.50

10.25

- Income Tax adjustment for earlier years (net)

(4.74)

-

(84.57)

58.39

- Deferred tax charge/(credit)

139.77

300.00

266.02

-

Profit/(Loss) for the year from continuing operation

(2,155.29)

(1,097.94)

640.21

(385.02)

Profit/(Loss) for the Year from discontinued operation

(8.37)

-

29.77

-

Total Profit/(Loss) for the year

(2,163.66)

(1,097.94)

669.98

(385.02)

Other comprehensive income for the year

215.05

(32.38)

(80.05)

27.73

Total comprehensive income for the year

(1,948.61)

(1,130.32)

589.93

(357.29)

Share of Minority in profits/(losses)

(102.39)

-

67.91

-

Profit/(Loss) for the year attributable to equity shareholders

(1,846.22)

(1,130.32)

522.02

(357.29)


Performance Review and State of the Company Affairs

During the financial year ended 31st March, 2023, the Company was primarily engaged in the Information and Communication Technology business (''Digital Technology Services'') providing Technology solutions and communication platform to domestic/ international Telecom Operators and Enterprises. The Company, through its material subsidiary ''Spice Money Limited'' (''Spice Money''), is engaged in providing Financial Technologies Services, through Tech enabled hyper local payments network platform accessed by its authorised agents /merchants, including cash deposit, cash withdrawal, balance enquiry, bill payment services, Aadhar enabled Payment Services (''AePS''), Mini ATM services, Air time recharge, POS services, railway ticketing services, Enterprise cash drop services and other related services.

The Company, at the consolidated level, achieved a total income of I 1,04,243.97 Lakhs for the year ended 31st March, 2023 as against I 1,01,130.76 Lakhs for the previous year ended 31st March, 2022. The profit after tax at the consolidated level from continuing operations for the year ended 31st March, 2023 is I (2,155.29) Lakhs as against profit after tax of I 640.21 Lakhs in the previous year ended 31st March, 2022.

The Company, at the standalone level, has earned a total income of I 6,467.20 Lakhs for the year ended 31st March, 2023 as against I 12,060.02 Lakhs for the previous year ended 31st March, 2022. The Company has incurred a loss of I (1,097.94) Lakhs for the year ended 31st March, 2023 as against a loss of I (385.02) Lakhs in the previous year ended 31st March, 2022.

During the year under review, revenue from Digital Technology Services Segment (''DTS Segment'') was I 6,743.42 Lakhs (including inter segment revenue) as against I 13,298.40 Lakhs during previous year. Revenue from the Financial Technology Services segment (''FTS'') was I 94,881.93 Lakhs during the year as against I 85,823.61 Lakhs during previous year. The revenue from FTS constituted more than 90% of the consolidated revenue from continuing operations.

The Board of Directors of the Company, in its meeting held on 7th April, 2023 approved, in principle, to exit DTS Segment. This is in keeping with the repositioning of the overall group strategy to focus on Financial Technology Services opportunities, mainly through its subsidiary Spice Money and other group entities. Consequently, DTS Segment has been classified as discontinued operations with effect from 1st April, 2023 in the books of the Company and the discontinued operations results are being shown separately in the financial results published to Stock Exchanges for the first quarter ended 30th June, 2023.

Accordingly, the performance of continuing operations is provided in the Management Discussion and Analysis Report.

Subsidiary Companies, Joint Ventures or Associate Companies

During the financial year ended 31st March 2023:

- S Mobility Pte. Ltd., a step down subsidiary of the Company, registered in Singapore, was struck off from the Register of Accounting and Corporate Regulatory Authority, Singapore and ceased to exist effective 4th July, 2022.

- Hindustan Retail Private Limited (''HRPL''), a direct wholly owned subsidiary of the Company, acquired from New Spice Sales and Solutions Limited (''NSSSL''), a direct wholly owned subsidiary of HRPL, 100% equity stake in Cellucom Retail India Private Limited (''CRPL''). Consequent to above, CRPL became a direct wholly owned subsidiary of HRPL, and an indirect wholly owned subsidiary on the Company.

The Company had total 24 subsidiaries (8 direct subsidiaries including material subsidiary and 16 step down subsidiaries) and 2 associates as on 31st March, 2023.

After the close of financial year:

- Entire investment of the Company in HRPL, was sold by the Company. Consequently, HRPL along with its two subsidiaries viz. NSSSL and CRPL, all being inoperative, ceased to be subsidiary(ies) of DiGiSPICE with effect from 1st June, 2023.

- S Mobility (HK) Limited, a wholly owned subsidiary registered in Hong Kong was dissolved by deregistration and hence, ceased to exist with effect from 28th April, 2023.

Pursuant to provisions of Section 129(3) of the Companies Act, 2013 (the ''Act'') and Indian Accounting Standard -110 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiaries and Associate Companies.

Holding Company

As on 31st March, 2023, Spice Connect Private Limited, the holding company, holds 73.18% of the issued, subscribed and paid up share capital of the Company.

Highlights of Performance of Subsidiaries, Associates and Joint Ventures

The performance highlights of Spice Money, material subsidiary is given below:

Spice Money is one of the India''s largest tech-enabled Hyper Local payments Network offering various services like Cash Deposits, Cash Withdrawal, Balance Inquiry, Bill Payments, Aadhaar Enabled Services, Airtime Recharge, POS Services, Railway Ticketing Services, Cash Management Services etc. through its authorised agents.

It achieved a total income of I 96,132.31 Lakhs for the year ended 31st March, 2023 (31st March, 2022: I 86,840.89 Lakhs). It reported a net loss of I (617.65) Lakhs for the year ended 31st March, 2023 (31st March, 2022: I 1,230.21 Lakhs).

The salient features of the 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, 2023 and forms an integral part of the Annual Report.

Further, pursuant to the provisions of Section 136 of the Act and Regulation 46 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations''), financial statements of subsidiary Companies are available on the Company''s website at www.digispice.com.

the unpaid dividend account are liable to be transferred to the Investor Education and Protection Fund Authority (''I EPF Authority'') established by the Central Government of India. Further, all shares in respect of which dividend has not been encashed or claimed by the shareholders for seven consecutive years or more from the date of declaration are also liable to be transferred to the IEPF Authority.

During the year under review, the Company was not liable to transfer any unclaimed/unpaid dividend/ shares to IEPF Authority.

The shareholders whose dividends /shares which have been transferred to IEPF Authority during any previous years, may claim such dividends /shares from IEPF Authority by submitting an online application in the prescribed ''Web Form IEPF 5'' available on the website, www.iepf.gov.in and also send duly signed physical copy, to the Company, along with requisite documents as prescribed in the ''Web Form IEPF 5'' and the IEPF Rules.

Auditors

Pursuant to the provisions of Section 139 of the Act read with rules made thereunder, M/s. Singhi & Co., Chartered Accountants (Firm Registration No. 302049E), were appointed as the Statutory Auditors of the Company to hold office for a period of five consecutive years from the conclusion of the 30th Annual General Meeting (''AGM'') till the conclusion of 35th AGM of the Company to be held in the calendar year 2023. Their existing terms as Statutory Auditors will be completed at conclusion of the ensuing 35th AGM.

The Board recommends to Shareholders appointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, having ICAI Firm Registration No. 301003E/E300005, as the Statutory Auditors of your Company to hold office from the conclusion of 35th AGM till the conclusion of the 40th AGM. The Company has received the eligibility, consent letter and other relevant confirmations / declarations from M/s. S. R. Batliboi & Co. LLP, Chartered Accountants, including a confirmation that their appointment, if made, would be within the limits as specified under provisions of Section 139 of the Act.

The Company has received a special notice in terms of provisions of Section 140(4) of the Act to consider the appointment of M/s. S. R. Batliboi & Co. LLP, Chartered Accountants as the Statutory Auditors of the Company for a term of five consecutive years from the conclusion of ensuing 35th AGM till conclusion of 40th AGM to be held in calendar year 2028, in place of retiring Statutory Auditors, M/s. Singhi & Co., Chartered Accountants.

Your Board of Directors place on record appreciation of M/s. Singhi & Co., Chartered Accountants for the valuable services rendered by them as Statutory Auditors of your Company.


Cash Flow Statement

In conformity with the provisions of the Act and Regulation 34 of the Listing Regulations, the Cash Flow Statement for the year ended on 31st March, 2023 as prepared under the provisions of Indian Accounting Standard - 7 as notified under provisions of Section 133 of the Act is attached as a part of the Financial Statements of the Company.

Share Capital

As on 31st March, 2023, the authorised capital of the Company stood at I 12,405 Lakhs divided into 41,35,00,000 equity shares of I 3/- each.

During the year under review, the Company has issued and allotted 6,06,800 equity shares of I 3/- each under DTL Employees Stock Option Plan-2018 (Erstwhile ''SML Employees Stock Option Plan-2018''). As on 31st March, 2023, paid-up equity share capital of the Company was I 6,946.24 Lakhs (divided into 23,15,41,406 fully paid-up equity shares of I 3/- each).

After closure of the financial year, the Company has allotted 21,700 equity shares of I 3/- each under DTL Employees Stock Option Plan-2018, till the date of this report. Consequently, the paid-up equity share capital of the Company has increased to I 6,946.89 Lakhs (divided into 23,15,63,106 fully paid-up equity shares of I 3/- each) as on date of this report. The said equity shares rank pari-passu with the existing equity shares of the Company.

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 2023-24 has been paid to both the Stock Exchanges.

Transfer of amount to Reserves

The Company has not transferred any amount to the Reserves during the financial year ended 31st March, 2023.

Dividend

In view of the losses during the year, your directors do not recommend any dividend to the shareholders.

The ''Dividend Distribution Policy'' in terms of the Regulation 43A of the Listing Regulations is available on the Company''s website at https://investorrelations.digispice.com/ articles/845005173 Dividend%20Distribution%20Policy.pdf

Transfer of unclaimed dividend and equity shares to Investor Education and Protection Fund

Pursuant to provisions of Sections 124 and 125 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (''IEPF Rules''), dividend which remains unpaid/unclaimed for a period of seven years from the date of its transfer to

Auditors'' Report

The Auditors'' Reports for the financial year 2022-23 does not contain any qualification, reservation, adverse remark or disclaimer. The report is enclosed with the Financial Statements.

Secretarial Audit

As required under provisions of Section 204(1) of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended and Regulation 24A of the Listing Regulations, the Company has appointed M/s. Sanjay Grover & Associates, Company Secretaries, to conduct the Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer. The Report forms part of this Annual Report.

Pursuant to Regulation 24A of the Listing Regulations, every listed company is required to annex with its annual report the Secretarial Audit Report of its material subsidiaries incorporated in India. In compliance with the said requirement, the Secretarial Audit Report for the financial year 2022-23 of Spice Money, a material subsidiary of the Company, forms part of the Annual Report.

Reporting of frauds by auditors

During the year, no incidence of fraud as defined under provisions of Section 143(12) of the Act, which is required to be disclosed under Section 134(3)(ca) of the Act, has been reported by the Statutory Auditors and Secretarial Auditors to the Audit Committee or Board of Directors of the Company.

Internal Auditors

The Board, on the recommendation of Audit Committee, in its meeting held on 19th May, 2023, re-appointed M/s. GSA & Associates LLP, Chartered Accountants, as Internal Auditors of the Company for the quarter ended 30th June, 2023.

Further, in the meeting held on 27th July, 2023, the Board appointed M/s. T R Chadha & Co LLP, Chartered Accountants, as Internal Auditors of the Company for internal audit of the period from 1st July, 2023 to 31st March, 2024, on the recommendation of the Audit Committee.

The Internal Auditors directly report to the Audit Committee.

Number of Board Meetings

During the financial year ended 31st March, 2023, six (6) meetings of the Board of Directors were held on 16th April, 2022, 25th May, 2022, 26th May, 2022 (adjournment of meeting commenced on 25th May, 2022), 10th August, 2022, 11th November, 2022 and 25th January, 2023. The details of attendance of the Directors in said meetings are given in the Corporate Governance Report, which forms part of the Annual report.

Directors and Key Managerial Personnel (''KMP'')

At present Mr. Rohit Ahuja, Executive Director, Mr. Vinit Kishore, Chief Financial Officer and Ms. Ruchi Mehta, Company Secretary and Compliance Officer are designated as the KMP of the Company in compliance with provisions of Section 203 of the Act.

The changes in Directors and KMP during the year ended 31st March, 2023, were as under:

Appointments:

(a) Ms. Ruchi Mehta was appointed as the Company Secretary and Compliance Officer of the Company with effect from 15th April, 2022;

(b) Mr. Chandrachur Ghosh was appointed as the Chief Executive Officer of the Company with effect from 14th November, 2022; and

(c) Mr. Mrutyunjay Mahapatra (DIN: 03168761) was appointed as an Additional Director in the category of Non-Executive Independent Director with effect from 21st December, 2022. The Shareholders of the Company approved the appointment of Mr. Mrutyunjay Mahapatra as Non-Executive Independent Director of the Company through postal ballot on 19th March, 2023.

Resignations:

(d) Mr. M.R. Bothra, Vice President Corporate Affairs & Company Secretary resigned with effect from the close of business hours of 14th April, 2022;

(e) Mr. Suman Ghose Hazra (DIN: 00012223), Non-Executive Independent Director, resigned from Directorship with effect from end of the day of 29th September, 2022; and

(f) Mr. Chandrachur Ghosh resigned from the office of Chief Executive Officer of the Company with effect from close of business hours of 31st January, 2023.

The Board places on record its sincere appreciation for their contributions to the Company.

There is no change in Directors or KMP after the close of the financial year till date of this report.

Mr. Dilip Modi (DIN: 00029062), Non-Executive Director of the Company, whose office is liable to retire by rotation at the ensuing AGM and, being eligible, offers himself for re- appointment.

Dr. (Ms.) Rashmi Aggarwal (DIN:07181938) was appointed as a Non-Executive Independent Director of the Company for first term of five consecutive years from 2nd November, 2018 to 1st November, 2023, by the Shareholders at their 31st AGM held on 27th September, 2019. Her first term as Non-Executive Independent Director of the Company will expire on 1st November, 2023.

The Nomination and Remuneration Committee (''NRC'') and the Board at their respective meetings held on 27th July, 2023, after taking into account the performance evaluation of Dr. (Ms.) Rashmi Aggarwal during first term and considering her knowledge, acumen, experience including proficiency, skills and based on declaration of independence, eligibility etc. and consent received from her, has recommended to the Shareholders her re-appointment for second term of five consecutive years. In opinion of the Board, she is a person of integrity and possesses the relevant expertise and experience (including the proficiency) and fulfills the conditions specified in the Act and Rules made thereunder and the Listing Regulations for reappointment as an Independent Director, she is independent of the management and her re-appointment as an Independent Director for the second term would be of benefit to the Company.

As required under Regulation 36 of the Listing Regulations, the relevant provisions of the Act and Secretarial Standard on General Meetings, a brief resume, nature of expertise / details of experience and other Directorships/ Committee memberships/Chairmanships held by Mr. Modi and Dr. Aggarwal in other Companies etc., forms part of the Notice convening the 35th AGM.

Pursuant to the Regulation 34 read with Schedule V of the Listing Regulations, 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 Securities and Exchange Board of India/Ministry of Corporate Affairs or any such statutory authority, forms a part of this annual report.

Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under provisions of Section 149(6) of the Act, as amended. In accordance with the requirements of Regulation 25 of the Listing Regulations, the Independent Directors have also confirmed that they meet the criteria of independence as provided in the Regulation 16(1)(b) of the Listing Regulations 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.

The Board is of the opinion that the Independent Directors possess requisite integrity, expertise, experience and proficiency and are independent of the Management of the Company.

In terms of provisions of Section 150 of the Act read with rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, as amended, Independent Directors of the Company have confirmed that they have registered themselves with the Independent Director''s Databank as maintained by the Indian Institute of Corporate Affairs, Manesar (''IICA'').

Mr. Mrutyunjay Mahapatra and Dr. (Ms.) Rashmi Aggarwal, Independent Directors of the Company are exempted from the requirement to undertake online proficiency self-assessment test and Mr. Mayank Jain has successfully completed the test.

Meeting of Independent Directors

A separate meeting of the Independent Directors was held on 22nd March, 2023, without the presence of Non-Independent Directors and the members of management. Independent Directors have discussed, inter-alia, the performance of Non-Executive Non-Independent Directors including, the Chairman of the Company, Executive Director and the Board as a whole, after taking into consideration, the views of Executive and Non-Executive Directors. The Independent Directors gave their detailed feedback on the Board evaluation and performance of the directors evaluated by them and made suggestions for further improvement.

Committees of the Board of Directors

As on 31st March, 2023, there were Six (6) Committees of the Board of Directors, viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee, Corporate Social Responsibility Committee and Investment Committee.

The details of the terms of reference, meetings held during the year under review, attendance of directors/members and other matters of the Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee and Risk Management Committee are provided in Corporate Governance Report, which forms part of the Annual Report.

The Board constituted the Investment Committee and reconstituted other Committee(ies) from time to time to perform such functions as assigned by the Board during the year under review.

After the close of the financial year, the Board of Directors constituted a ''Structure Committee''. The said Committee was assigned the responsibility for necessary actions, including appointment of consulting firm(s) with appropriate expertise and of international standing, and evaluate options to create a suitable structure and report to the Board for

necessary perusal and corporate actions. The name of ''Investment Committee'' was changed to ''Investment and Finance Committee''.

Audit Committee

In compliance with the provisions of Section 177 of the Act and Regulation 18 of the Listing Regulations, the Company has a duly constituted Audit Committee. The Audit Committee comprises of the following Directors as at 31st March, 2023:

1.

Mr. Mrutyunjay Mahapatra -

Chairman

2.

Dr. (Ms.) Rashmi Aggarwal -

Member

3.

Mr. Subramanian Murali -

Member

Mr. Suman Ghose Hazra had resigned as a Member and Chairman of the Committee with effect from the end of the day of 29th September, 2022 on account of personal reasons.

Mr. Mayank Jain was nominated as the Chairman of the Committee from 21st October, 2022 to 15th January, 2023.

Mr. Mrutyunjay Mahapatra was appointed as a Member and Chairman of the Audit Committee w.e.f. 16th January, 2023.

During the year, the Audit Committee has made several recommendations including quarterly Financial Results and Financial Statements, appointment of Internal Auditors, Statutory Auditors, Secretarial Auditors and other statutory matters and the Board accepted all the recommendations made by the Audit Committee.

Risk Management Committee and Risk Management Policy

The Board of Directors has a Risk Management Committee comprising the following members:

1

Mr. Rohit Ahuja -

Chairman

2

Mr. Mayank Jain -

Member

3

Dr. (Ms.) Rashmi Aggarwal -

Member

4

Mr. Vinit Kishore -

Member

5

Ms. Ruchi Mehta (w.e.f. 15th April, 2022) -

Member

Mr. M. R. Bothra was a member of the Committee till 14th April, 2022.

The Risk Management Committee has been entrusted with responsibility of monitoring and reviewing the Risk Management Policy and framework, ensuring that appropriate methodologies, processes and systems are in place and recommending to the Board any amendments or modifications thereof.

The Company has a Risk Management Policy in place, which establishes a structured and disciplined approach to risk management, in order to guide management on risk related issues. The policy lays down the principles and procedures to identify, evaluate, monitor and minimise the risk associated with the business of the Company. As a good practice, the management regularly identifies the risks associated with different businesses of the Company and implements the risk control system and processes. The Board of Directors, on recommendation of the Audit and Risk Management Committee(s), reviews the major risks associated with the business of the Company and ensures that appropriate systems / frameworks for risk management are in place.

The Audit Committee also evaluates and oversees risk management framework relating to financial reporting process, disclosures of financial information, internal controls, compliance, financial and risk management policies.

A detailed disclosure on various Risk factors associated with businesses of the Company is given in Management Discussion and Analysis Report.

Corporate Social Responsibility

As required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, the Annual Report on the Corporate Social Responsibility (''CSR'') activities in the prescribed format, consisting inter-alia, the composition of CSR Committee and web link of the CSR policy, is provided in Annexure - 1 of this report.

The CSR Committee has 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 CSR Policy of the Company.

During the year under review, the CSR Committee met once i.e. on 24th May, 2022. All Committee Members attended the meeting.

Performance Evaluation of the Board, its Committees and Individual Directors

As per the relevant regulations of the Listing Regulations and provisions of the Act, the Nomination and Remuneration Committee (''NRC'') formulate the criteria and the manner for effective evaluation of performance of the entire Board and its Committee and individual Directors and decided that it will be done by the Board itself internally.

The Committee reviews its implementation and ensures the compliances thereof.

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 roles and responsibilities by the Board and its Committees, succession plan for Board Members and Senior Management, frequency of the meetings, regulatory compliances and Corporate Governance, etc. Similarly, for evaluation of individual directors'' performance including for independent directors, the questionnaire covers various aspects like his/ her attendance at the meetings of Board and its Committees, contribution in Board and Committee meetings, execution and performance of specific duties, obligations, regulatory compliances and governance, adequate and timely disclosures, etc. The said questionnaires are reviewed by the NRC.

Board members had submitted their response on a scale of 1 (poor) to 5 (outstanding) for annual evaluation of the entire Board, Committees of the Board and of their peer Board members, including Chairman of the Board.

The Board of Directors has carried out formal annual 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 fulfillment of the independence criteria as specified under the Act and the Listing Regulations.

Directors'' Responsibility Statement

Pursuant to the provisions of Section 134(5) of the Act, the Directors hereby confirm that:

(i) in the preparation of annual accounts for the financial year ended 31st March, 2023, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(ii) they 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, 2023 and of the profit / loss of the Company for that period;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down proper internal financial controls to be followed by the Company and such internal financial control are adequate and were operating effectively; and

(vi) they have devised proper system to ensure compliance with the provisions of all applicable laws and such systems are adequate and operating effectively.

The financial statements have been prepared in accordance with the Indian Accounting Standards (Ind-AS) prescribed under provisions of Section 133 of the Act read with rules made thereunder.

These affirmations are based on the system of Company on internal control and compliance, the report of internal, statutory and secretarial auditors, including the audit of internal financial controls over financial reporting by the Statutory Auditors and the reviews performed by management and the relevant board committees, including the audit committee.

Management Discussion and Analysis Report

In terms of Regulation 34 of the Listing Regulations, Management Discussion and Analysis (''MDA'') Report forms an integral part of this Report.

Business Responsibility & Sustainability Report (''BRSR'')

The Company has not been part of the top 1000 Companies based on market capitalization as on 31st March, 2022 of the Stock Exchanges, where the equity shares of the Company are listed, hence, BRSR reporting is not applicable to the Company.

Corporate Governance Report

A separate report on Corporate Governance is enclosed as part of this Annual Report.

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 had appointed an external agency to conduct review, testing and verify the prevalent internal financial 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. In opinion of the Statutory Auditors, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at 31st March, 2023.

Annual Return

In accordance with the provisions of Sections 92(3) and 134(3)(a) of the Act, the Annual Return (Form MGT-7) for the financial year 2022-23, is available on the Company''s website at link https://investorrelations.digispice.com/files/ Annual-return-2022-23.pdf

Particulars of Loans, Guarantees or Investments

The details of Loans, Guarantees or Investments made under provisions of Section 186 of the Act are provided in the Note 43 of the Standalone Financial Statements.

Maintenance of cost records

Business activities of the Company are not covered under the ambit of Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, hence, the Company is not required to maintain cost records as specified by the Central Government under above said provisions.

Public Deposits

During the year under review, the Company has neither accepted nor renewed any deposits in terms of Chapter V of the Act and no amount of interest or principal was outstanding as on 31st March, 2023.

Particular of Contracts or Arrangements with Related Parties

All related party transactions, undertaken during the year under review, are in compliance with the applicable provisions of the Act and the Listing Regulations. Further, no contracts, arrangements or transactions entered into during the reporting year required approval from Shareholders.

As required under the Regulation 23 of Listing Regulations, all related party transactions are placed before the Audit Committee for its approval. 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. The details of transactions with related parties are placed at the Audit Committee quarterly for its review.

The ''Policy on Related Party Transactions'' dealing with such transactions and ''Policy for determining Material Subsidiaries'' are uploaded on the website of the Company viz. www.digispice.com.

There were no related party transactions entered into by the Company with Directors, KMPs or other related parties which may have a potential conflict with the interest of the Company.

During the reporting period:

- All contracts / arrangements / transactions with related parties were at arm''s length basis and all contracts / arrangements with related parties were in the ordinary course of business;

- No material contracts / arrangements / transactions were entered into with related parties exceeding 10% of the annual consolidated turnover as per the last audited financial statements of the Company.

The disclosure of related party transactions as required under provisions of Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for the year ended 31st March, 2023 and hence does not form part of this report. The details of the transactions with related parties are provided in Note 36 of standalone financial statements and Note 41 of the consolidated financial statements. Disclosures of transactions with Spice Connect Private Limited (Promoter) who hold 10% or more shareholding in the Company, are provided in the Note 36 of the Standalone Financial Statements.

Vigil Mechanism

Pursuant to provisions of Section 177 of the Act, Regulation 22 of the Listing Regulations and Regulation 9A(6) of the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, the Company has established ''Vigil Mechanism/ Whistle Blower Policy'' for Directors and Employees and other stakeholders.

This Policy has been established with a view to provide a tool to directors and employees of the Company and other stakeholders 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) or employee(s) or any other person who avails of the mechanism and also provides

Compliance with Secretarial Standards

The Company has complied with the provisions of Secretarial Standard - 1 (Secretarial Standard on meetings of the Board of Directors) and Secretarial Standard - 2 (Secretarial Standard on General Meetings) issued by the Institute of Company Secretaries of India.

Material changes and commitments, if any, affecting the financial position of the Company

The Board of directors of Company, in its meeting held on 7th April, 2023 has approved, in principle, to exit the Digital Technology Services Segment. This is in keeping with the repositioning of the overall group strategy to focus on Financial Technology Services opportunities, mainly through its subsidiary Spice Money and other group entities.

Shareholders of the Company have also granted their approval for sale/disposal of investment(s)/ asset(s)/ property(ies)/undertaking(s) on 25th May, 2023 through postal ballot.

for direct access to the Chairman of the Audit Committee in exceptional cases. The Audit Committee is authorised to oversee the Vigil Mechanism/ Whistle Blower Policy in the Company. The Company has not received any concerns/ grievances under the said policy during the year under review.

The Vigil mechanism/Whistle Blower Policy is available on the Company''s website at the link https://investorrelations. digispice.com/files/SML-WBP-01-04-2019.pdf

Company''s policy on Directors'' appointment and Remuneration

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee (''NRC'') of the Company, had framed a Policy for nomination and appointment of Directors. As required under provisions of Section 178(3) of the Act and Regulation 19 read with Schedule II of the Listing Regulations, the NRC also recommended to the Board the policy on remuneration, including stock options to Directors (excluding Independent Directors), Key Managerial Personnel and Senior Management Personnel and other employees of the Company, which was duly approved by the Board. The policy in terms of Section 178(3) of the Act is available at https://investorrelations.digispice.com/information. php?page=policies.

The Board on the recommendation of the NRC appoints the Senior Management Personnel from time to time.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees to Independent Directors, allotment of shares against options allotted under ESOP scheme and reimbursement of expenses, wherever applicable.

Employees Stock Option Plan

The Nomination and Remuneration Committee (''NRC'') in its meetings held on 18th September, 2018, 5th February, 2019 and 1st August, 2022 had granted Options under DTL Employees Stock Option Scheme - 2018 (Erstwhile ''SML Employees Stock Options Scheme - 2018'') (''ESOP Scheme'') to eligible employees.

During the year under review, (a) the name of the ESOP Scheme of the Company was changed from ''SML Employee Stock Options Scheme - 2018'' to ''DTL Employee Stock Option Scheme 2018''; and (b) in order to provide the maximum benefits to the employees covered under the ESOP Scheme, the exercise period of options has been extended to a period of 5 (Five) years, from the 3 (Three) years from the respective vesting for the options granted on 18th September, 2018 and 5th February 2019, under the ESOP Scheme.

The Certificate issued by the Secretarial Auditors of the Company as required under Regulation 13 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, confirming that the ESOP Scheme has been implemented in accordance with the said Regulations and the resolutions passed by the members, would be made available at the AGM for inspection by members.

The applicable disclosures as on 31st March, 2023, as stipulated under the aforesaid Regulations, with regard to the ESOP Scheme of the Company are available on the website of the Company at https://investorrelations. digispice.com/files/ESOP-Disclosure-2023.pdf

Particulars of Employees

In terms of the provisions of Section 197(12) of the Act read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, the details of remuneration and other details of the Directors, KMP and employees covered as mentioned under the said rule is annexed as Annexure - 2 which forms part of this report.

Policy on Prevention of Sexual Harassment

The Company has consistently been putting its effort to create a safe working environment for every employee particularly women employees. Towards this effort and as per requirement under the Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013, as amended, the Company has put in place a Policy on ''Prevention of Sexual Harassment at Workplace''. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee.

The statement of complaints filed, disposed of and pending as on 31st March, 2023 is provided in the Corporate Governance Report.

Significant and Material Orders passed by the Regulators, Courts or Tribunal

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

The information pursuant to provisions of Section 134 of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014, as amended, related to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo is given as Annexure - 3.

Proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016)

There is no proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016.

Acknowledgements

Your Directors would like to express their grateful appreciation for continued support 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 employees of the Company at all levels.


Mar 31, 2018

BOARD''S REPORT

Dear Shareholders,

Your Directors have pleasure in presenting the Thirtieth Annual Report together with the Audited Financial Statements for the financial year ended on 31st March, 2018.

FINANCIAL RESULTS

The consolidated and standalone financial performance of the Company for the financial year ended 31st March, 2018 is summarized below:-

(Amount In Rs. Lakhs)

PARTICULARS

For the Financial Year ended 31.03.2018

For the Financial Year ended 31.03.2017

Consolidated

Standalone

Consolidated

Standalone

Total revenue from continuing operations

29373.98

778.50

28840.25

17089.96

Earnings before finance costs, tax, depreciation & amortization and exceptional items from continuing operation

1887.55

(667.77)

4549.99

406.40

Share of (profit)/loss of associates and a joint venture

78.60

-

45.20

-

Depreciation and amortization expense

1697.16

494.32

2020.01

696.75

Finance costs

205.37

12.63

27.37

19.46

Exceptional items

6746.23

(807.89)

812.09

8453.93

Profit/(Loss) before tax from continuing operations

(6839.81)

(366.83)

1645.32

(8763.74)

Tax expenses

Current Income Tax

816.40

-

1320.03

-

MAT Credit Entitlement for the year

-

-

-

-

Income Tax adjustment for earlier years (net)

116.31

-

(61.03)

(13.34)

Deferred tax charge/ (credit)

(126.77)

-

(235.50)

Profit/(Loss) for the Year from continuing operation

(7645.75)

(366.83)

621.82

(8750.40)

Profit/(Loss) for the Year from discontinued operation

3176.04

-

(4471.77)

-

Total Profit/ (Loss) for the year

(4469.72)

(366.83)

(3849.95)

(8750.40)

Other comprehensive income for the year

131.38

2.87

(642.05)

3.19

Total comprehensive income for the year

(4338.33)

(363.96)

(4492.00)

(8747.21)

Share of Minority in profits / (losses)

(915.00)

-

(483.34)

-

Profit / (Loss) for the year attributable to equity shareholders

(3423.33)

(363.96)

(4008.66)

(8747.21)

PERFORMANCE REVIEW AND STATE OF THE COMPANY AFFAIRS

The Company, through its subsidiaries, is engaged in the following businesses:

a) Digital Technology services - offering managed services, Enterprise Messaging, Mobility Software Solutions, etc. with digital services being the central focus. The operations cover various countries including India, Africa, Bangladesh, South East Asia and Latin America. The Company is also working with various enterprises in developing and managing technology platforms connecting and managing their customers.

b) Digital financial services (Fintech) under the brand name "Spice Money", providing assisted financials services to the semi urban and rural population of India to drive financial inclusion in the country. Some of the services offered by the Company are domestic Money transfer, Bill payments, Ticketing etc. operating under licenses issued by RBI, UIADI, IRCTC etc.

Discontinuation of retail business: During the year, the Company, in line with its vision to transform into a Digital Technology services company, exited the hardware and multi brand retails business, which was operated under the brand "Spice Hotspot". The financial results of this business for the year is reported under "Discontinued Operations" in the consolidated financials.

The Company, at the standalone level, has achieved a total Income of Rs.778.50 lakhs for the year ended 31st March, 2018 (Previous year Rs.17089 lakhs). The Company has incurred a loss of Rs.367 lakhs for the year ended 31st March, 2018 as against a loss of Rs.8764 lakhs in the previous year ended 31st March, 2017.

The Company, at the consolidated level, achieved a total income of Rs.29374 lakhs for the year ended 31st March, 2018 as against Rs.28840 lakhs for the previous year ended 31 "March, 2017. The loss after tax at the consolidated level for the year ended 31st March, 2018 is Rs.7646 lakhs (Previous Year Profit of Rs.622 lakhs) which includes loss of Rs.6746 lakhs on account of exceptional items pertaining to "Discontinued Operations" and other one-time charges.

COMPREHENSIVE SCHEME OF ARRANGEMENT BETWEEN THE COMPANY AND ITS SUBSIDIARY COMPANIES

The Board of Directors of the Company in its meeting held on 22nd December, 2017 subject to necessary approvals, approved Comprehensive Scheme of Arrangement between Spice Mobility Limited, Spice Digital Limited, Spice IOT Solutions Private Limited, Mobisoc Technology Private Limited and Spice Labs Private Limited and their respective Shareholders and Creditors.

The said Scheme, inter alia, involves:

a. Demerger of Digital Technology Services (DTS) Business Undertaking of Spice Digital Limited into Spice Mobility Limited; and

b. Amalgamation of Spice IOT Solutions Private Limited, Mobisoc Technology Private Limited and Spice Labs Private Limited with Spice Mobility Limited.

The restructuring proposed under the said Scheme is expected to build a stronger and sustainable business and would result in consolidation of similar business under one entity and also enable the Company to achieve its ambition of becoming a leader in digital technologies in India and other emerging markets.

Further, the FinTech Business is at a nascent stage and has tremendous scope to grow in the future. It would also require significant investments in marketing, brand building, creating reach etc. The Restructuring proposal will help manage this business in a separate entity to enable getting growth capital and strategic investors into the business.

Pursuant to the directions of the Hon''ble NCLT, a meeting of the Equity Shareholders of the Company will be held on 15th October, 2018 for the purpose of approving the proposed Scheme.

SALE OF ENTIRE STAKE IN OMNIVENTURES PRIVATE LIMITED

Omniventures Private Limited (OVPL) was a wholly owned subsidiary of the Company and had two subsidiaries namely Spice Online Private Limited (SOPL) and Hotspot Sales & Solutions Private Limited (HSSPL) through which the Retail Business was being operated.

The Multi brand retail business of the Company had been continuously incurring losses and in spite of various steps taken by the management in the past, had not yielded desired results due to inherent challenges in the retail industry as a whole in terms of intense competition, falling margins, emergence of online channels etc. The Board of directors in its meeting held on 22nd December, 2017 had approved the sale of entire stake in OVPL and after obtaining the approval from the shareholders, the Company exited from Retail Business. Consequently, OVPL, SOPL and HSSPL ceased to be the subsidiaries of the Company.

SHIFTING OF REGISTERED OFFICE

The Board, subject to necessary approvals, had approved to shift the registered office of the Company from the State of Uttar Pradesh to the National Capital Territory (NCT) of Delhi. As required under the provisions of Companies Act, 2013, the Company obtained the approval of the shareholders through Postal Ballot. Subsequently, after getting the approval of Central Government (Power delegated to Regional Director), the Company has shifted its registered office to Delhi.

HIGHLIGHTS OF PERFORMANCE OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company, as of March 31, 2018, has 26 subsidiaries and 4 associates (including a joint venture) of its subsidiary Companies. The highlights of the principle subsidiaries are given below:

Spice Digital Ltd. - This Company is in the business of Digital Technology & Solutions and has a global presence, operating through its subsidiaries, both direct & step down subsidiaries. It achieved consolidated revenue of Rs .28115 Lakhs for the year ended 31st March, 2018 (31st Mar 2017- Rs. 25011 lakhs). It reported a consolidated Profit after Tax of before exceptional items Rs.59.6 lakhs vis-a-vis Rs.1340 lakhs in the previous year ended 31st March, 2017. The Consolidated PAT for the year ended 31st March, 2018 is loss of Rs.6136 lakhs (Previous year Profit of Rs.528 Lakhs).

Hotspot Sales & Solutions Pvt Ltd. -This Company is in the Multi Brand Handset Retail business operating through more than 100 retail stores across the company and was a step down subsidiary till 12th Feb 2018. Hotspot achieved revenue of Rs.33342 lakhs for the period ended 12th Feb, 2018 (till the day it was a subsidiary) and the loss aftertax is Rs.2310 lakhs.

Results of retail business through Hotspot Sales & Solutions Pvt Ltd. have been shown as part of "Discontinued Operations" in the consolidated financials of the Company.

The detailed performance and financial position of each of the subsidiaries and associate companies are given in Form AOC-I attached to the Consolidated Financial Statements for the year ended 31st March, 2018 which forms part of the Annual Report.

TRANSFER OF AMOUNT TO RESERVES

The Company has not transferred any amount to the Reserve during the Financial Year ended 31st March, 2018.

DIVIDEND

In view of losses during the year under review, your directors do not recommend any dividend to the shareholders.

TRANSFER OF UNCLAIMED DIVIDEND AND SHARES TO 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, the Company has transferred 5,38,257 equity shares pertaining to the Financial year ended 2008 - 09 and 37,562 shares pertaining to the Financial year ended 2009 - 10 to the IEPF. The unclaimed and unpaid dividend relating to the financial year 2010-11 is due for transfer to the IEPF in the month of November, 2018.

As required under the said Rules, the Company has sent individual letters to the shareholders who have not claimed or encashed their dividend for seven or more consecutive years. The detail of shares due for transfer to the IEPF is available on the website of the Company viz. www.spicemobility.in.

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 2018-19 has been paid to both the Stock Exchanges.

HOLDING COMPANY

As on 31.03.2018, Spice Connect Private Limited, the holding Company, holds 74.36% of the issued share capital of the Company.

SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year, the Company has acquired additional 10.78% stake in Spice Digital Limited (SDL), a subsidiary of the Company, taking its total stake to 99.98% in that Company. The entire stake in Kimaan Exports Private Limited (KEPL) has been sold to SDL, consequent to which KEPL has become a step down subsidiary of the Company.

During the year, SDL, a subsidiary of the Company, has acquired the balance 0.10% stake in Mobisoc Technology Private Limited, making it a 100% subsidiary of SDL and has also acquired 30% stake in Luharia Technologies Private Limited, which, subsequent to the closure of Financial Year has been sold by it. Further, during the year SDL has divested its entire stake in Sunstone Eduversity Private Limited and Spice Labs Private Limited, a step down subsidiary of the Company, has divested its entire stake in Exponentially I Mobility, a Limited Liability Partnership (LLP).

During the year, Omnia Pte. Limited, Singapore (''Omnia''), a step down foreign subsidiary of the Company, has purchased 100% stake in PT Spice Digital Indonesia, (''Indonesia''), another step down foreign subsidiary of the Company, from S Global Services Pte. Limited, Singapore (''SGS'').

Further, during the year SGS and Spice VAS (Africa) Pte. Limited, (''SVA''), both step down foreign subsidiaries of the Company, incorporated and existing under the laws of Singapore, have entered into a Share Subscription and Purchase Agreement, whereby SGS transferred its entire shareholding in the Omnia Pte. Limited, another step down foreign subsidiary in Singapore to SVA against issue of SVA''s shares to SGS, as agreed between SVA & SGS. Consequently, after allotment of shares as agreed between SVA & SGS, Omnia Pte. Limited and its subsidiary i.e. PT Spice Digital Indonesia, Indonesia has become subsidiaries of SVA and step down subsidiaries of SGS and will continue to be the step down subsidiaries of the Company, and SGS stake in SVA has increased from-70% to 80%.

The Memorandum of Understanding (MOU) entered in the previous year between that Spice VAS (Africa) Pte. Limited, Singapore (''SVA'') and SVA (Mauritius) Pvt. Limited, Mauritius (''SM''), both step down foreign subsidiaries of the Company, for transfer of SVA entire stake in 7 foreign subsidiaries to SM was terminated. Accordingly, all the 7 subsidiaries continue to be the step down subsidiaries of the Company through SVA.

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 shareholders 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.

AUDITORS AND AUDITORS'' REPORT

M/s. B S R & Co., LLP, (Firm Registration Number 10I248W/W-100022), Chartered Accountants, who was appointed as the Statutory Auditors of the Company in the 29th AGM held on 26th September, 2017, has resigned as the Statutory Auditors of the Company w.e.f. September 26, 2018 due to the reason that the cost estimated by them and the proposed fee is not commensurate with the efforts and time needed to carry out the audit, resulting a casual vacancy in the office of the Statutory Auditors of the Company. The Board of Directors, on the recommendation of the Audit Committee, has filled up the casual vacancy caused due to the aforesaid resignation by appointing M/s. Singhi & Co. (Firm Registration Number 302049E), Chartered Accountants, as the Statutory Auditors of the Company, to hold the office w.e.f. October 5, 2018 till the conclusion of the ensuing AGM of the Company. Since, the said casual vacancy in the office of Statutory Auditors was by way of resignation of Statutory Auditors, the appointment to fill the said vacancy by the Board also need approval of the shareholders of the Company.

On the recommendation of the Audit Committee, the Board, in its meeting held on October 5, 2018 has, also subject to the approval of the shareholders, recommended the appointment of M/s. Singhi & Co. having Firm Registration Number 302049E as the new Statutory Auditors of the Company for a term of five consecutive years commencing from the conclusion of ensuing 30th AGM till the conclusion of 35th AGM to be held in the year 2023. Accordingly, the requisite items relating to the appointment of M/s. Singhi & Co., Chartered Accountants, to fill the casual vacancies and also to appoint as the Company''s Statutory Auditors, have been included in the Notice of AGM for approval of the members. The Company has received a confirmation from M/s. Singhi & Co., to the effect that their appointment, if made, would be in accordance with the provisions of the Companies Act, 2013 and they have also confirmed that they are not disqualified for appointment as Statutory Auditors of the Company.

The Auditors'' Reports for the financial year 2017- 2018 do not contain any qualification or reservation. 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, 2018 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 DURING THE FINANCIAL YEAR

During the financial year ended on 31st March, 2018, five meetings of the Board of Directors were held on 19th May 2017, 8th August 2017, 3rd November 2017, 22nd December 2017 and 14th February 2018. 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

The Board of Director in its meeting held on 17th May, 2018, on the recommendation of Nomination and Remuneration Committee, has appointed Mr. Shrenik M Khasgiwala, in the category of Non - Executive Non - Independent Director and Ms. Jayashree Vaidhyanthan in the category of Independent Director. Mr. Shrenik M Khasgiwala has been appointed as Additional Director and holds office up to the date of ensuing Annual General Meeting of the Company and is eligible for appointment as Director. The resolution for his appointment as a Director liable to retire by rotation is being placed for approval of members.

On the recommendation of Nomination and Remuneration Committee, the Board has, subject to the approval of shareholders, re-appointed Mr. Dilip Modi (DIN:00029062) as an Executive Director of the Company for a period of three year w.e.f. 30th November, 2018 and decided to continue him as Executive Chairman of the Company. Mr. Dilip Modi is also an Executive Director of Spice Connect Private Limited, the holding Company and receives remuneration from that Company. Mr. Dilip Modi retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. His re-appointment as Executive Director is also due for approval of the shareholders at the ensuing Annual General Meeting.

Ms. Preeti Malhotra resigned as the Director of the Company w.e.f. 21st February, 2018. Subsequent to the year end, Ms. Jayashree Vaidhyanthan, resigned as Independent Director of the Company w.e.f. 12th August, 20l8.The Board of Directors places on record its sincere appreciation for guidance provided by them during their tenure as Directors of the Company.

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 re-appointment is due in the forthcoming Annual General Meeting (AGM) of the Company, forms part of the Notice convening the 30th AGM.

As per the provisions of Companies Act, 2013, Mr. Dilip Modi, Executive Director, Mr. Madhusudan V., 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.

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 programs for familiarisation of Independent directors can be accessed on the Company website at the link http://spicemobility.in/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, 2018, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the State of Affairs of the Company as at 31st March, 2018 and of the loss 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; and

(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.

SECRETARIAL AUDIT

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, the Company has appointed M/s. Sanjay Grover & Associates, Practising Company Secretaries, to conduct the Secretarial Audit for the financial year 2017-18. 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. Internal Audit has been conducted throughout the organization by qualified outside Internal Auditors. 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 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 Company has designated and implemented Risk And Control Matrix (RACMs) including therein the process wise controls. The Statutory Auditors and Internal Auditors 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.

CHANGE IN INTERNAL AUDITOR

During the year, M/s. Bansal Dalmia & Company, Chartered Accountants, resigned as Internal Auditors of the Company. The Board, on the recommendation of Audit Committee, in its meeting held on 14th February, 2018 has appointed M/s. GSA & Associates, Chartered Accountants, to act as Internal Auditors of the Company for the remaining part of the Financial year 2017-2018 (i.e. from 14th February, 2018 to 31st March, 2018) and for the Financial year 2018 - 2019.

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 Board of Directors of the Company had constituted the Audit Committee. The Audit Committee comprises of the following Directors:

1.

Mr. Suman Ghose Hazra -

Chairman

2.

Mr. Hanif Mohamed Dahya

Member

3.

Mr. Subramanian Murali -

Member

4.

Mr. Umang Das -

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 Corporate Social Responsibility Committee comprises of the following members:

1.

Mr. Dilip Modi

- Chairman

2.

Mr. Subramanian Murali

- Member

3.

Mr. Umang Das

Member

During the year, the CSR Committee met once i.e. on 8th August, 2017. All three members attended the meetings. Though the Company was not required to spend any amount on CSR activities during the year 2017-18, as required under Companies (Corporate Social Responsibility Policy) Rule, 2014, Annual Report on Corporate Social Responsibility Activities for the year 2017 -18 is attached (Annexure- I).

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 advised to open, close and make changes in authorities 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 twice i.e. on 26th September, 2017 and on Ist November, 2017 and all the members of the Committee were present in the meeting.

SHARE AWARD AND WELFARE COMMITTEE

The Board, with a view to facilitate the disposal of equity shares held by the Independent Non Promoter Trust and Independent Non Promoter (Spice Employee Benefit) Trust and deal with other related matters, had constituted ''Share Award and Welfare Committee''. The said Committee consists of Mr. Umang Das as Chairman and Mr. Hanif Mohamed Dahya and Mr. Suman Ghose Hazra, Independent directors, as members of the Committee and during the year had a meeting on 19th May, 2017.

EXTRACT OF THE 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 (I) of Section 148 of the Companies Act, 2013.

PUBLIC DEPOSITS

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.

Al| 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 SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Audit Committee has granted Omnibus approval for appropriate related-party transactions in accordance with the criteria laid down for the purpose.

The ''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.spicemobility.in

All related party transactions entered during the financial year were in the ordinary course of business except the sale of investment in Kimaan Exports Private Limited, a wholly owned subsidiary, to Spice Digital Limited, another subsidiary company and were on arm''s length basis. There were no material related party transactions entered by the Company with Directors, KMP''s or other persons which may have a potential conflict with the interest of the Company.

The details of the transactions with related parties are provided in the Notes to financial statements.

During the year, the Company has entered into a transaction which is on arm''s length basis but not in the ordinary course of business, the details of which are given below in Form AOC - 2 as prescribed under Section 134 (3) (h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014:

Details of material transaction at arm''s length basis

S.No.

Particulars

Information

a

Name(s) of the related party and nature of relationship

Spice Digital Limited, a subsidiary company

b

Nature of transactions

Sale of investment in Subsidiary

c

Duration of the transactions

One time Transaction

d

Salient terms of the transactions including the value, if any:

Sale of shares of a subsidiary company, based on an independent valuation for a total consideration of Rs.6276 lakhs

e

Date(s) of approval by the Board, if any

16th March 2017

f

Amount paid as advance, if any

Full Consideration received

The above related party transaction was entered into after getting the approval of shareholders as required under Section 188 of the Companies Act, 2013.

VIGIL MECHANISM

The Company, as required under Section 177 of the Companies Act, 2013 and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has established "Vigil Mechanism / Whistle Blower Policy" for Directors and Employees of the Company.

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 or the Policy. 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 http://spicemobility.in/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.

REMUNERATION POLICY

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 Remuneration Policy for Directors, Key Managerial Personnel and other employees is attached (Annexure -3) to this Report.

EMPLOYEES STOCK OPTIONS

Keeping in mind the objectives of attracting key employees of the Company and inducing key employees to continue with the Company and encourage them to increase their efforts to make the Company''s business more successful, the Nomination Remuneration Committee of the Company has recommended to the Board ''SML Employees Stock Option Plan- 2018'' ("ESOP Plan"). The Board of Directors of the Company, subject to the approval of members of the Company and such other approval as may be necessary, has approved ESOP Plan and issuance of a maximum of 2,53,18,220 Equity shares of Rs. 3/- each of the Company under the said Plan.

The Company has obtained the requisite approvals of members of the Company by way of Postal Ballot on 12th February, 2018. The Company has also obtained the in- principle approval for the said Plan from both the Stock Exchanges i.e. BSE Limited and National Stock Exchange of India Limited. The Company has not granted any ESOP till 31st March, 2018.

Subsequent to the closure of Financial Year 2017- 2018, the Nomination and Remuneration Committee of the Company in its meeting held on 18th September, 2018 has approved the Grant of 2,13,81,000 stock options under ESOP Plan of the Company at an exercise price of Rs. 13.25 per share to the eligible employees as defined under the said Plan. Each option entitles the holder to apply for one equity share of Rs. 3 /- each as per the terms of the ESOP Plan.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEE AND INDIVIDUAL DIRECTORS

Pursuant to applicable provisions of the Companies Act, 2013 and the read with the Companies (Amendment) Act, 2017, the Nomination and Remuneration Committee has specified the manner for effective evaluation of performance of Board, its Committee and individual Director. The Board of Directors has carried out evalution of performance of each of them. The NRC 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 I (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 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.

SEXUAL HARASSMENT POLICY

As required under the Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013, the Company has a Policy on Prevention of sexual harassment of women at workplace and matters connected therewith and has also complied with the provisions relating to the Constitution of Internal Complaints 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 for women employees.

ORDERS PASSED BY THE 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- 4) 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- 5) which forms part of this report.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the provisions of Secretarial Standard - I (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.

ACKNOWLEDGEMENTS

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

Spice Mobility Limited

Date: 5th October, 2018

Dilip Modi

Place: Noida

Executive Chairman


Mar 31, 2015

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Seventh Annual Report together with the Audited Financial Statements and Accounts for the financial year ended on 31st March, 2015.

FINANCIAL RESULTS

The consolidated and standalone financial performance of the Company for the financial year ended 31st March, 2015 is summarized below:-

(Rs.'000)

PARTICULARS For the Nine months period ended 31.03.2015 Consolidated Standalone

Total revenue 16,042,829 229,368

Earnings before interest, tax, depreciation & (377,965) 20,566 amortization and exceptional items

Depreciation and amortization expense 214,369 38,799

Finance costs 12,442 264

Exceptional items 2,376,514 3,346,607

Profit/(Loss) before tax (2,981,290) (3,365,104)

Tax expenses

Current tax (Minimum Alternative Tax) 73,962 -

MAT Credit Entitlement for the current year (614) -

Deferred tax charge/ (credit) 2,373 -

Tax adjustment for earlier years 7,080 -

Profit/(Loss) for the Period (3,064,091) (3,365,104)

Share of Minority in profits / (losses) 10,370 -

Share in Profit of Associate companies 121

Profit / (Loss) for the year attributable to equity (3,074,340) (3,365,104) shareholders

Balance brought forward from previous year 1,621,412 1,202,048

Reversal of proposed dividend on - - equity shares

Reversal of corporate dividend tax - -

Profit available for appropriation (1,452,928) (2,163,056) Appropriations:

Interim dividend - -

Tax on Interim Dividend - -

Net Surplus in the Statement of Profit & Loss (1,452,928) (2,163,056)

PARTICULARS For the Financial year ended 30.06.2014 Consolidated Standalone

Total Revenue 21,273,407 1,017,357

Earnings before intrest,tax, depreciation& 331,962 89,943 amortaisation and exceptional items

Depreciation and amortaisation expenses 349,723 51,007

Finance costs 11,788 1,254

Exceptional items 203,401 13,890

Profit/(Loss) before tax (232,950) 23,792 Tax expenses

Current tax(Minimum Alternative Tax) 46,439 (23,500) MAT Credit Entitlement for the current year (1,051) -

Defferd tax charge/(credit) (2,673) -

Tax adjustment for earlier year 423 1,800

Profit/(Loss)for the period (276,088) 45,492

Share of monitery in profit/(loss) 5,410 -

Share in Profit of Associate companies - -

Profit/(Loss)for the year attributable to equity shareholders (281,498) 45,492

Balance brought forward from previous year 1,896,411 1,150,057

Reversal of proposal dividend on equity share 9,625 9,625

Reversal of corporate dividend tax 31,777 31,777

Profit Available for appropriation 1,656,314 1,236,951

Appropriation:

Interim dividend 29,833 29,833

Tax On Interim Dividend 5,070 5,070

Net Surplus in the Statement of Profit & Loss 1,621.412 1,202.048

PERFORMANCE REVIEW AND STATE OF THE COMPANY AFFAIRS

The Company has subsidiaries which are engaged in the following business:

- Sale of 'Spice' branded feature and smart phones. The focus during the year has been to launch a series of low to medium end smart phones.

- Organised retail business with shops under the Brand 'Spice Hotspot' which is engaged in sale of multi-brand mobile handset and accessories.

- Value Added Service (VAS) business involving providing managed services to mobile operators in India, Africa, Bangladesh and LATAM countries.

During the period, the Company achieved a revenue of Rs.229 million for the Nine months ended 31st March, 2015 as against Rs.1,017 million for the year ended 30th June, 2014.The Company has incurred a loss of approx. Rs. 3365 million during the period ended on 31st March, 2015 as against a profit of Rs.45 million in previous year.

At the consolidated level the Company achieved a revenue of Rs. 16,043 million for the nine months period ended 31st March 2015 as against Rs.21,273 million for the year ended 30th June 2014. The loss after tax for the period ended on 31st March 2015 is Rs. 3,074 Million as against loss of Rs.282 Million for year ended on 30th June, 2014.

DIVIDEND

In the absence of adequate profit during the year under review, your directors do not recommend any dividend to the shareholders.

LISTING OF SECURITIES

The Equity Shares of the Company are presently listed on BSE Limited (BSE) and National Stock Exchange of India Ltd (NSE).The Annual Listing Fee for the Year 2015-16 has been paid to both the stock exchanges.

DELISTING OF EQUITY SHARES OF THE COMPANY

The Company had received a letter of intent from Smart Ventures Private Limited (SVPL), the Holding Company and Promoters of the Company, to make a voluntary delisting offer in pursuance to SEBI (Delisting of Equity Shares) Regulations, 2009 ("Delisting Regulations") to the public shareholders of the Company for delisting the Equity Shares of the Company from BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) where the equity shares of the Company are presently listed.

The Board of Directors has, subject to the approval of the members of the Company and such other approvals/sanctions as may be required in this connection, approved the proposal received from SVPL to voluntary delist the Equity Shares of the Company from both the Stock Exchanges.

The Company obtained the shareholders' approval for Voluntary Delisting of the Equity Shares of the Company by way of special resolution which was duly approved with the requisite majority of shareholders as prescribed under Regulation 8(1)(b) of the Delisting Regulations. The Company also obtained the in principle approval for Voluntary delisting of the Equity shares of the Company from both the Stock Exchanges.

The Company has subsequently received a letter from SVPL communicating its decision to put on hold any step in the direction of delisting of the equity shares of the Company till further notice.

HOLDING COMPANY

During the year, the name of the Holding Company of your Company has been changed from Smart Venture Limited to Smart Ventures Private Limited as it got converted into a Private Company w.e.f. 21 st August, 2014. As at 31.03.2015, the holding Company held 74.36% of the issued share capital of the Company.

SUBSIDIARY COMPANIES, JOINT VENTURES OR ASSOCIATE COMPANIES

During the year, no Company has become or ceased to be a subsidiary of the Company. However, Spice Digital Limited, a subsidiary of the Company, has acquired 26% stake in Vavia Technologies Private Limited, 38.53% stake in Anytime Learning Private Limited and 26% stake in Creative Function apps Labs Private Limited. Consequent to the said acquisitions, these companies have become Associate Companies of Spice Digital Limited.

Pursuant to Section 129 (3) of the Companies Act, 2013 and Accounting Standard - 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statement presented by the Company include the Financial Statements of its Subsidiaries and the associates.

The performance and financial position of the subsidiaries and associates are given in Form AOC-1 attached to the Consolidated Financial Statements for the year ended March 31,2015.

Upon receipt of request, the Annual Accounts of the Subsidiary Companies and the related information will be made available to the shareholders of the Company. These documents shall also be available for inspection at the registered office of the Company during business hours up to the date of ensuing Annual General Meeting.

PUBLIC DEPOSITS

During the year under review, the Company has neither accepted nor renewed any deposits in term of Chapter V of the Companies Act, 2013.

AUDITORS AND AUDITORS' REPORT

M/s. S.R. Batliboi & Co. LLP Chartered Accountants (Firm Registration No.: 301003E),who are the Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is proposed to appoint M/s. S.R. Batliboi & Co. LLP as Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting (AGM) until the conclusion of Twenty- Eight Annual General Meeting of the Company.

The Company has received a consent and confirmation from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for reappointment within the meaning of Section 141 of the said Act.

The Notes on Accounts referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 31st March, 2015 is attached as a part of the Annual Accounts of the Company.

NUMBER OF BOARD MEETINGS HELD DURING THE FINANCIAL yEAR

During the financial year ended on 31st March, 2015, four meetings of the Board of Directors were held on 27th August, 2014, 14th November, 2014, 2nd January, 2015 and 10th February, 2015. The details of number of meetings of the Board and its various committees attended by the Directors is given in Corporate Governance Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

On the recommendation of Nomination and Remuneration Committee, the Board has appointed Mr. Subramanian Murali, Mr. Suman Ghose Hazra and Mr. Umang Das as Additional Directors w.e.f May 7,2015.

Mr. Subramanian Murali has been appointed as Non-Executive Director and holds office up to the date of ensuing Annual General Meeting of the Company and is eligible for appointment as Director. The resolution for appointment of Mr. Subramanian Murali as a Director liable to retire by rotation is being placed for approval of members.

Mr. Suman Ghose Hazra and Mr. Umang Das were appointed as Additional Directors in the category of Independent Director. Pursuant to the provisions of Section 149 of the Companies Act, 2013, Independent Directors are not liable to retire by rotation. The resolutions for appointment of Mr. Suman Ghose Hazra and Mr. Umang Das as Independent Directors for a term of 5 (five) years are being placed for approval of the members.

As required under Clause 49 of Listing Agreement, 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 AGM.

Mr. Saurabh Srivastava resigned as the Director of the Company w.e.f. 27th December, 2014. Subsequent to the year end, Mr. Subroto Chattopadhyay and Mr. Rajul Garg, resigned as Directors of the Company w.e.f. 15th May, 2015 and Mr. Kashi Nath Memani resigned from Directorship w.e.f 1st June, 2015.The Board of Directors places on record its sincere appreciation for guidance provided by them during their tenure as Directors of the Company.

Ms. Preeti Malhotra retires by rotation at the ensuing Annual General Meeting and being eligible offers herself for re-appointment.

As per the provisions of the Companies Act, 2013, Mr. Prashant Bindal has been appointed as Chief Executive Officer (CEO) of the Company w.e.f. August 27, 2014. Mr. Prashant Bindal, Chief Executive Officer, Mr. Madhusudan V, Chief Financial Officer and Mr. M.R. Bothra, Company Secretary are 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 Clause 49 of the Listing Agreement.

FAMILIARIZATION PROGRAMME FOR INDEPENDENT DIRECTORS

The Company familirizes 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.

The detail of programmes for familiarization of Independent directors with the Company, their roles, right, responsibility in the Company, nature of the industry in which the Company operates, business model of the Company and related matters can be accessed on the Company website at the link http://spicemobility.net/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, 2015 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, 2015 and of the loss 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; and

(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

Management Discussion and Analysis (MDA) Report, as required under Clause 49 of the Listing Agreement, 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, Practicing Company Secretaries, to conduct the Corporate Governance Audit of the Company. A Certificate from them regarding compliance with Corporate Governance norms stipulated in Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

SECRETARIAL AUDIT

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 the Company has appointed M/s Sanjay Grover & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit for the financial year 2014-15.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.

AUDIT COMMITTEE

In compliance with the provisions of Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board of Directors of the Company has reconstituted the Audit Committee. The reconstituted Committee comprises of the following Directors:

1. Mr. Suman Ghose Hazra - Chairman

2. Mr. Hanif Mohamed Dahya - Member

3. Mr. Subramanian Murali - Member

4. Mr. Umang Das - Member

All the member of the Committee are financially literate and having the requisite financial management expertise. Further, all recommendation of Audit Committee were accepted by the Board of Directors.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

During the year, the Board of Directors of the Company has reconstituted the Corporate Social Responsibility Committee. The reconstituted CSR Committee comprises of the following members:

1. Mr. Dilip Modi - Chairman

2. Mr. Subramanian Murali - Member

3. Mr. Umang Das - Member

The CSR Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, monitoring the implementation of the framework of the CSR Policy, recommending to Board the amount of expenditure to be incurred on CSR activities and ensuring that the implementation of the projects and programmes is in compliance with the Corporate Social Responsibility Policy of the Company.

Accordingly, the CSR Committee has formulated and recommended to the Board CSR Policy of the Company. The Board has approved the CSR policy and as per the CSR Policy, the Company has incurred requisite expenditure on the identified activities.

As required under Companies (Corporate Social Responsibility Policy) Rule, 2014, Annual Report on Corporate Social Responsibility Activities for the year 2014 -2015 is attached (Annexure- 1 ).

EXTRACT OF THE ANNUAL RETURN

In compliance with Section 134(3) of 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 standalone financial statement.

PARTICULAR OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the financial year, the Company has entered into transactions with related parties.

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.

The '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-wwwspicemobility.in

All related party transactions entered during the financial year were in the ordinary course of business and were on arm's length basis. There were no material related party transactions entered by the Company with Directors, KMP's or other persons which may have a potential conflict with the interest of the Company.

The details of the transactions with related parties are provided in the notes to standalone financial statement.

Since all related party transactions entered into by the Company during the financial year were on arm's length basis and in the ordinary course of business and there was no material related party transaction entered by the Company during the year, no details are required to be provided in Form AOC – 2 prescribed under Section 134 (3) (h) of the Companies Act, 2013 read with Rules 8(2) of the Companies (Accounts) Rules, 2014.

VIGIL MECHANISM

The Company, as required under Section 177 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, has established "Vigil Mechanism /Whistle Blower Policy" for Directors and Employees of the Company.

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 or the Policy.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 whistle Blower Policy is available on the Company's website at the link: http://spicemobility.net/Vigil_Mechanism_Whistle_Blower_Policy.pdf

RISK MANAGEMENT POLICY

Your Directors have adopted a Risk Management Policy for the Company. The Audit Committee and the Board of Directors of the Company take appropriate measures to minimize risk. The Audit Committee ensures that the Policy for Risk Management is adopted across the Company in an inclusive manner.

DIRECTORS' NOMINATION AND APPOINTMENT POLICY AND REMUNERATION POLICY

The Board of Directors, on the recommendation of the Nomination and Remuneration Committee of the Company, framed a Policy for Nomination and Appointment of Directors.The Nomination and Remuneration Committee has also recommended to the Board a Remuneration Policy for remuneration to Directors, Key Managerial Personnel and Senior Management Personnel and other employees of the Company, which was duly approved by the Board.The Policy of the Company for appointment of Directors is attached (Annexure - 3) and Remuneration Policy for Directors, Key Managerial Personnel and other employees is attached (Annexure - 4) to this Report.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEE AND INDIVIDUAL DIRECTORS

Pursuant to applicable provisions of the Companies Act, 2013 and the Listing Agreement with Stock Exchanges, the Board, in consultation with its Nomination and Remuneration Committee, has formulated a framework containing, inter – alia, the criteria for performance evaluation of the entire Board of the Company, its Committee and individual Directors, including Independent Directors.

A structured questionnaire has been prepared, covering various aspects of the functioning of the Board and its Committee, 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 Committee, 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) – 5 (poor) for evaluating the entire Board, respective Committees of which they are members 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 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 Nomination and Remuneration Committee has carried out evaluation of every Director's performance. The performance evaluation of all the Independent Directors have been done by the entire Board, excluding the Director being evaluated.

EMPLOYEES STOCK OPTIONS DETAILS

The Company does not have any employees' stock option schemes.

SEXUAL HARASSMENT POLICY

As required under the Sexual Harassment of Women at Workplace (Prohibition, Prevention and Redressal) Act, 2013, the Company has a Policy on Prevention of Sexual Harassment of women at workplace and matters connected therewith. During the year, no case of Sexual Harassment was reported pursuant to the said Act and Policy

ORDERS PASSED By THE REGULATIORS 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.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place an established internal 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. Internal Audit has been conducted throughout the organization by qualified outside Internal Auditors. Findings of the Internal Audit Report are reviewed by the top Management and by the Audit Committee and Proper follow up actions are ensured wherever required. The Statutory Auditors have evaluated the system of Internal Controls of the Company and have reported that the same are adequate and commensurate with the size of the Company and nature of its business.

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- 5) 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 Rules 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the details of remuneration etc. of directors, Key Managerial Personnel and employees is attached (Annexure- 6 ) which forms part of this report.

ACKNOWLEDGEMENTS

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

Spice Mobility Limited

Date : 13th August, 2015 Dilip Modi

Place: Noida Chairman


Jun 30, 2014

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Sixth Annual Report together with the Audited Financial Statements and Accounts for the financial year ended on 30th June 2014.

FINANCIAL RESULTS The consolidated and standalone financial performance of the Company for the financial year ended 30th June 2014, is summarized below:-

(Rs.''000)

PARTICULARS For the Financial year ended 30.06.2014 Consolidated Standalone

Total revenue 21,273,407 1,017,357

Earnings before interest, tax, depreciation & 128,561 76,053 amortization

Depreciation and amortization expense 349,723 51,007

Finance costs 11,788 1,254

Profit/(Loss) before tax (232,950) 23,792

Tax expenses

Current tax (Minimum Alternative Tax) 46,439 (23,500)

MAT Credit Entitlement for the current year (1,051) -

MAT credit entitlement written off - -

Deferred tax charge/ (credit) (2,673) -

Tax adjustment for earlier years 423 1800

Profit/(Loss) for the Period (276,088) 45,492

Share of Minority in profits / (losses) 5,410 -

Profit / (Loss) for the year attributable to (281,498) 45,492

equity shareholders

Balance brought forward from previous year 1,896,411 1,150,057

Reversal of proposed dividend on equity shares 9,625 9,625

Reversal of corporate dividend tax 31 777 31 777

Profit available for appropriation 1,656,315 1,236,951

Appropriations:

Proposed Equity Dividend - -

Interim dividend 29,833 29,833

Tax on Proposed Equity Dividend - -

Tax on Interim Dividend 5,070 5,070

Transfer to General Reserve

Net Surplus in the Statement of Profit & Loss 1,621,412 1,202,048



PARTICULARS For the Financial year ended 30.06.2013 Consolidated Standalone

Total revenue 18,844,928 7,439,140

Earnings before interest, tax, depreciation & 560,612 786,861 amortization

Depreciation and amortization expense 362,548 81,681

Finance costs 10,331 1,430

Profit/(Loss) before tax 187,733 703,750 Tax expenses

Current tax (Minimum Alternative Tax) 142,016 69,022

MAT Credit Entitlement for the current year (7,640) -

MAT credit entitlement written off 8,978 8,978

Deferred tax charge/ (credit) 2,449 -

Tax adjustment for earlier years (4,779) -

Profit/(Loss) for the Period 46,709 625,750

Share of Minority in profits / (losses) (7,821) -

Profit / (Loss) for the year attributable to 54,530 625,750 equity shareholders

Balance brought forward from previous year 2,257,130 909,415

Reversal of proposed dividend on equity shares - -

Reversal of corporate dividend tax 28,771 28,771

Profit available for appropriation 2,340,431 1,563,936

Appropriations:

Proposed Equity Dividend 300,273 300,273

Interim dividend - -

Tax on Proposed Equity Dividend 81.172 51.031

Tax on Interim Dividend - -

Transfer to General Reserve 62,575 62,575

Net Surplus in the Statement of Profit & Loss 1,896,411 1,150,057

During the year, the Company achieved a revenue of Rs. 1,017 million for the Financial year ended 30th June, 2014 as against Rs. 7,439 million for the year ended 30th June, 2013. The Company has earned a profit of approx. Rs.45 million during the financial year ended on 30th June, 2014 as against a profit of Rs. 626 million in previous year.

The Mobile Handset business of the Company has been transferred to Spice Retail Limited (SRL), a Wholly Owned Subsidiary of the Company, as a going concern w.e.f. 1st July, 2013 by way of slump sale and accordingly the financials of the financial year ended on 30th June, 2014 are excluding the figures of that business and are not comparable with the corresponding financial year.

The Consolidated Financial Statements of the Company have been prepared as per Accounting Standard (AS) 21 notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The Consolidated Financial Statements include the financial statements of the Company and its subsidiary Companies.

At the consolidated level the Company achieved a revenue of Rs.21,273 million for the financial year ended 30th June 2014 as against Rs. 18,845 million for the year ended 30th June 2013. The loss after tax for the financial year ended on 30th June, 2014 is Rs.282 Million as against profit of Rs.55 million for year ended on 30th June, 2013.

The Company, on the devices business, focused on the introduction of smart phones as part of its portfolio and further consolidated

its feature phone business and also invested in the second half in brand building through enhanced media spends and distribution infrastructure to grow the business. The company also launched Android Stores in a strategic partnership with Google and upgraded its Spice Hotspot Stores; continued focus on working capital management ensured that Cash Balance is maintained and operations remain healthy.

The VAS business has stabilized from the effect of TRAI Regulations and at the same time has diversified into the Enterprise Mobility Space.

BUY BACK OF EQUITY SHARES

With a view to enhance returns to investors and overall shareholders'' value by returning cash to shareholders in an efficient and investor friendly matter, the Board of Directors of your Company in its meeting held on 19th June, 2013 approved the Buy-back of Company''s fully paid-up equity shares of Rs.3/- each, at a price not exceeding Rs. 75/- per equity share, subject to a maximum of 1,10,00,000 (one crore ten lac) equity shares, up to an aggregate maximum amount of Rs.60 Crores which was within the limit of 10% of paid up equity capital and free reserves as prescribed under the Companies Act, 1956. The said buy back of equity shares was done from open market through stock exchange mechanism in accordance with the provisions contained in Section 77A and other applicable provisions of the Companies Act, 1956 and provisions contained in the SEBI (Buy Back of Securities) Regulations, 1998 as amended from time to time.

In pursuance to that, the Company commenced Buy back of its Equity Shares with effect from 10th July, 2013 and the same was closed on 13th May, 2014. The Company has bought back and extinguished 1,02,22,303 equity shares of Rs. 3/- each of the company pursuant to this buy-back offer. Accordingly, the issued and paid up share capital of the Company has reduced to Rs.68,35,91,946/- divided into 22,78,63,982 Equity Shares of Rs.3/- each as on 30.06.2014.

DIVIDEND

The Company has paid an interim dividend of 5% (i.e. Rs.0.15 per Equity share of face value of Rs.3/- each), declared by the Board of Directors of the Company at its meeting held on 1st November, 2013 on the paid-up Capital of the Company. Independent Non Promoter Trust which holds 35,301,215 equity shares of the Company had waived off its right to receive dividend on these equity shares held by them. Accordingly, interim dividend was not declared on these shares. With a view to drive business growth, your directors do not recommend any further dividend for the financial 2013-14 and place before you to confirm the interim dividend paid earlier.

CHANGE OF NAME OF THE COMPANY

With a view to further strengthen the "Spice" brand visibility in the minds of the consumers, the name of the Company has been changed from ''S Mobility Limited'' to ''Spice Mobility Limited'' with effect from 21st July, 2014. The Company is engaged in the business of trading and distribution of mobile handsets of "Spice" Brand through its subsidiaries. Spice is the registered trademark of the Company.

LISTING OF SECURITIES

The Equity Shares of the Company are presently listed on BSE Limited (BSE) and National Stock Exchange of India Ltd (NSE). The Annual Listing Fee for the Year 2014-15 has been paid to both the stock exchanges.

HOLDING COMPANY

During the year, the name of the Holding Company of your Company has been changed from S i2i Mobility Private Limited to Smart Ventures Private Limited w.e.f. 22nd July, 2013 which got converted into a Public limited Company w.e.f. 29th November, 2013.

As at 30.06.2014, Smart Ventures Limited (formerly S i2i Mobility Private Limited) held 74.36% of the issued share capital of the Company. The Holding Company has again got converted into a Private Limited Company w.e.f. 21 st August, 2014.

SUBSIDIARY COMPANIES

During the year, Spice VAS (Africa) Pte Ltd, a step down subsidiary of the Company has issued 2,18,610 and purchased its own 9,040 Ordinary Shares. Consequently the effective stake of the Company in this subsidiary Company has reduced from 65.25% to 62.09%.

During the year, Spice Digital Bangladesh Limited, a step down subsidiary of the Company has also issued 30,860 shares to Spice Digital Limited, a subsidiary of the Company. However, there is no change in the stake of the Company in this subsidiary Company as a result of the said issue of shares.

The Ministry of Corporate Affairs (MCA) vide its General Circular No. 2 dated 8th February, 2011 granted a general exemption under Section 212(8) of Companies Act, 1956 to companies from attaching the Accounts etc. of their subsidiary companies in the Annual Report subject to fulfillment of certain conditions prescribed therein. The necessary information relating to subsidiary companies have been disclosed in the consolidated balance sheet. The annual accounts of the subsidiary companies and the related detailed information shall be made available to the members of the Company seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept open for inspection by any member of the Company at the Registered Office of the Company on any working day during business hours.

The Statement relating to Subsidiary Companies pursuant to Section 212 of the Companies Act, 1956 is attached as a part of the Annual Accounts of the Company.

FIXED DEPOSITS

During the year under review, the Company has not accepted any Deposits from the public within the meaning of Section 58A of the Companies Act, 1956 or Section 73 of the Companies Act, 2013 as applicable.

AUDITORS AND AUDITORS'' REPORT

M/s. S.R. Batliboi & Co. LLP Chartered Accountants (Firm Registration No.: 301003E), who are the Statutory Auditors of the Company, holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and the Rules made thereunder, it is proposed to appoint M/s. S.R. Batliboi & Co. LLP as Statutory Auditors of the Company from the conclusion of the ensuing Annual General Meeting (AGM) until the conclusion of Twenty- seventh Annual General Meeting of the Company.

The Company has received a consent and confirmation from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for reappointment within the meaning of Section 141 of the said Act.

The Statutory Auditors in the Annexure to the Auditors'' Report has mentioned about a slight delay in deposit of statutory dues in a few cases. Steps have been taken to ensure that all such delays are eliminated in future.

The Notes on Accounts referred to in the Auditors'' Report are self explanatory and do not call for any further comments.

CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 30th June, 2014 is attached as a part of the Annual Accounts of the Company.

COST COMPLIANCE REPORT

Pursuant to the Companies (Cost Accounting Records) Rules, 2011 as notified by Ministry of Corporate Affairs on 3rd June, 2011 read with the relevant Circulars/ Notifications issued by the concerned statutory authorities, a Compliance Report for the financial year 2012-13, duly certified by a cost accountant, along with the Annexure as prescribed under the said Rules, was to be submitted to the Central Government. Accordingly, the Cost Compliance Report for the financial year 2012-13, certified by M/s Sanjay Gupta & Associates, Practicing Cost Accountants, was filed with the Central Government.

DIRECTORS

Dr. Bhupendra Kumar Modi resigned as Director and Chairman of the Company w.e.f. 18th February, 2014. The Board of Directors places on record its sincere and whole hearted appreciation for his excellent leadership during his tenure as Chairman of the Company which enabled the Company to achieve tremendous growth in its business and expand globally. As a part of succession planning within the group, Mr. Dilip Modi was appointed as the Chairman of the Company w.e.f. 18th February, 2014.

Mr. Dilip Modi retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Pursuant to the provisions of the Companies Act, 2013, Independent Directors are required to be appointed in accordance with Section 149 of the said Act and that the requirement of retirement by rotation shall not be applicable to the Independent Directors. Accordingly, the resolutions for appointment of Mr. Subroto Chattopadhyay, Mr. Kashi Nath Memani, Mr. Saurabh Srivastava, Mr. Rajul Garg and Mr. Hanif Mohamed Dahya as Independent Directors for a term of 5 (five) years are being placed for approval of the members in the ensuing Annual General Meeting.

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 Clause 49 of the Listing Agreement with the Stock Exchanges.

As required under Clause 49 of Listing Agreement, 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 AGM.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, the Directors hereby confirm that:

(i) in the preparation of annual accounts for the financial year ended 30th June 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors had 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 30th June 2014 and of the profit of the Company for the period ended on that date;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is enclosed as a part of this Annual Report. The Company has appointed M/s. Sanjay Grover & Associates, Practicing Company Secretaries, to conduct the Corporate Governance Audit of the Company. A Certificate from them regarding compliance with Corporate Governance norms stipulated in Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

SECRETARIAL AUDIT

As a measure towards good Corporate Governance Practice, the Company has appointed M/s Sanjay Grover & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit for the financial year 2013-14. The Secretarial Audit Report received from them forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

In compliance with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of the Company at its Meeting held on 8th May, 2014 has constituted a Corporate Social Responsibility Committee (''CSR Committee''). The CSR Committee comprises of the following members:

1. Mr. Dilip Modi - Chairman

2. Ms. Preeti Malhotra - Member

3. Mr. Saurabh Srivastava - Member

The CSR Committee has been entrusted with the responsibility of formulating and recommending to the Board, a Corporate Social Responsibility Policy indicating the activities to be undertaken by the Company as specified in Schedule VII of the Companies Act, 2013, monitoring the implementation of the framework of the CSR Policy, recommending to Board the amount of expenditure to be incurred on CSR activities and ensuring that the implementation of the projects and programmes is in compliance with the Corporate Social Responsibility Policy of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement is given in Annexure-A and forms an integral part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, are annexed hereto in Annexure-B and forms an integral part of this Report.

PARTICULARS OF EMPLOYEES

In terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the names and particulars of employees as prescribed thereunder are required to be given in the Directors'' Report. However, pursuant to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the members of the Company excluding the aforesaid information.The same would be made available for inspection at the Registered Office during working hours for a period of twenty one days before the date of Annual General Meeting. Any member interested in obtaining a copy of the same may write to the Company Secretary.

ACKNOWLEDGEMENT

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 Spice Mobility Limited

Date: 27th August, 2014 Dilip Modi Place: Noida Chairman


Jun 30, 2013

The Directors have pleasure in presenting the Twenty Fifth Annual Report together with the Audited Financial Statements and Accounts for the financial year ended on 30th June 2013.

FINANCIAL RESULTS

The financial performance of the Company for the financial year ended 30th June 2013, is summarized below:-

(Rs.Rs.000)

For the Financial year For the Financial year PARTICULARS ended 30.06.2013 ended 30.06.2012 (12 months) (15 months)

Total revenue 7,439,140 10,236,007

Earnings before interest, tax, depreciation & amortization 786,861 (376,236)

Depreciation and amortization expense 81,681 88,439

Finance costs 1,430 2,422

Profit/(Loss) before tax 703,750 (467,097) Tax expenses

Current tax (Minimum Alternative Tax) 69,022

Deferred tax charge/ (credit) 6,846

MAT credit entitlement written off 8,978

Profit/(Loss) for the Period 625,750 (473,943)

Balance brought forward from previous year 909,415 1,753,464

Reversal of proposed dividend on equity shares 52,952

Reversal of corporate dividend tax 28,771 8,590

Profit available for appropriation 1,563,936 1,341,063

Appropriations:

Proposed Equity Dividend 300,273 304,178

Tax on Proposed Equity Dividend 51,031 49,345

Transfer to General Reserve 62,575 78,125

Net Surplus in the Statement of Profit & Loss 1,150,057 909,415

During the year, the Company achieved a revenue of Rs.7,439 million for the Financial year (12 months) ended June, 2013 as against Rs.10,236 million for the 15 months period ended June, 2012. The Company has earned a profit of approx Rs.626 million during the financial year ended on 30th June, 2013 as against a loss of Rs.474 million in previous year showing a complete turnaround in the business of the Company.

The year witnessed strong improvement in Gross margin due to substantial cost reduction and well planned product portfolio.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared as per Accounting Standard (AS) 21 notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The key financial highlights of the consolidated financial results for the year ended 30th June, 2013 is summarized below:

(Rs. Rs.000)

For the Financial year For the Financial year PARTICULARS ended 30.06.2013 ended 30.06.2012 (12 months) (15 months)

Total Revenue 18,844,928 27,628,622

Profit Before Tax 187,733 73,373

Profit/(Loss) for the period (after minority interest) 54,530 (97,098)

At the consolidated level the Company achieved a revenue of Rs.18,845 million for the financial year (12 months) ended June 2013 as against Rs.27,629 million for the 15 months period ended June 2012. The profit after tax for the financial year ended on 30th June, 2013 is Rs.55 Million as against loss of Rs.97 million for 15 months period ended on 30th June, 2012. Consolidated revenue is low but with better profitability due to higher margins and lower overheads.

On the devices business front, the Company has focused on profitability during the year. The Company undertook series of initiatives in cost rationalization, better product portfolio, expanding distribution network, opening of new format of Retail outlets etc. which helped improve profitability of the Company. Focused initiatives around inventories and overhead control led to healthier operation and better profitability.

The VAS business continued to be affected by stringent TRAI regulations which resulted into drop in domestic revenues by approx. 50%. However, significant efforts were made to get additional revenues in the same space outside India, notably in Africa. Growth in international revenues and cost optimization measures initiated earlier led to improved profitability.

BUY BACK OF EQUITY SHARES

With a view to enhance returns to investors and overall shareholders'' value by returning cash to shareholders in an efficient and investor friendly matter, the Board of Directors of your Company in its meeting held on 19th June, 2013 approved the Buy-back of Company''s fully paid-up equity shares of Rs.3/- each, at a price not exceeding Rs. 75/- per equity share, subject to a maximum of 1,10,00,000 (one crore ten lac) equity shares, up to an aggregate maximum amount of Rs.60 Crores which is within the limit of 10% of paid up equity capital and free reserves as prescribed under the Companies Act, 1956. The said buy back of equity shares is being done from open market through stock exchange mechanism in accordance with the provisions contained in Section 77A and other applicable provisions of the Companies Act, 1956 and provisions contained in the SEBI (Buy Back of Securities) Regulations, 1998 as amended from time to time.

In pursuance to that, the Company commenced Buy back of its Equity Shares with effect from 10th July, 2013. Till 31st December, 2013; 1,02,20,403 Equity Shares of Rs.3/- each have been bought back by the Company, out of which 1,02,20,203 equity shares have been duly extinguished. Accordingly, the issued and paid up share capital of the Company has reduced to Rs. 68,35,98,246/- divided into 22,78,66,082 Equity Shares of Rs.3/- each as on the said date.

SALE OF MOBILE HANDSET BUSINESS TO SPICE RETAIL LIMITED

Pursuant to the approval of the members of the Company obtained by way of Postal Ballot, the Board of Directors of your Company in its meeting held on 28th June, 2013 decided to sell/ transfer the Mobile Handset business of the Company as a going concern to Spice Retail Limited, a Wholly Owned Subsidiary of the Company, by way of slump sale w.e.f. 1st July, 2013. The Board of Directors of your Company is of the opinion that transferring the Mobile Handset Business of the Company to Spice Retail Limited, which is in the retail distribution of multi brand mobile handsets and accessories ("Retail Business") would enable the Company to synergise and consolidate its business of distribution of mobile handsets of Spice Brand with "Retail Business" of Spice Retail Limited in a single entity leading to cost efficiencies and also increased revenues and profitability.

CLOSURE OF UNITS AT BADDI, HIMACHAL PRADESH

The Company had two units at Baddi, Himachal Pradesh, predominantly for manufacturing feature phone handsets. With the fast changing technology scenario and shift to 3G Smart Phones in cellphones business, it was found unviable to manufacture phones in these units. Further, your Company is in the process of changing the business focus from mobile to mobile internet and in future the Company will be focusing on new technologies like 3G, 4G etc., which will enable the consumers to have rich mobile internet experience.

Keeping this in view, the Company has decided to close down/dispose off both the Units (i.e. Unit I and Unit II) in Baddi. It is believed that the same would not have any impact on the performance of the Company as the Company is engaged in the distribution of the mobile handsets under the brand name ''SPICE'' and 100% of the mobile handsets distributed are contract manufactured and customized as per the Indian market requirement before importing.

DIVIDEND

Your Directors are pleased to recommend a dividend @ 50 % on the paid-up Equity Share Capital of the Company (i.e. @ Rs.1.50 per share) for the financial year (12 months) ended on 30th June 2013. Independent Non- Promoter Trust which holds 35,301,215 Equity Shares of the Company has waived off its right to receive dividend on 34,100,000 equity shares held by them and accordingly no dividend has been recommended on these shares for the financial year ended on 30th June 2013.

Subsequent to year end, the Board of Directors of your Company has also declared interim dividend of 5% (i.e. Rs.0.15 per Equity share of face value of Rs. 3/- each) on the paid-up Capital of the Company for the financial year ending June 30, 2014. Independent Non Promoter Trust which holds 35,301,215 equity shares of the Company has waived off its right to receive dividend on these equity shares held by them. Accordingly, interim dividend has not been declared on these shares.

LISTING OF SECURITIES

The Equity Shares of the Company are presently listed on BSE Limited (BSE) and National Stock Exchange of India Ltd (NSE). The Annual Listing Fee for the Year 2013-14 has been paid to both the stock exchanges.

HOLDING COMPANY

Subsequent to year end, the name of the Holding Company of your Company has been changed from S i2i Mobility Private Limited to Smart Ventures Private Limited w.e.f. 22nd July, 2013 which got converted into a Public Limited Company w.e.f. 29th November, 2013.

As at 30.06.2013, Smart Ventures Private Limited (formerly S i2i Mobility Private Limited) held 71.17% of the issued share capital of the Company. Further, consequent to the extinguishment of equity shares bought back in pursuance to the on-going Buy-back Offer of equity shares by the Company, the shareholding of the Holding Company has increased to 74.36% as on 31.12.2013.

SUBSIDIARY COMPANIES

During the year, Spice Digital Limited, a Subsidiary of the Company, has subscribed for 100% equity (except one share) in Spice Digital Bangladesh Limited. Accordingly this Company has become a step down subsidiary of the Company. Further, during the year, Spice Digital Limited has bought back 3,118,701 equity shares from its shareholders resulting in increase in Company''s shareholding in the said subsidiary from 82.7% to 89.2%.

Spice VAS (Africa) Pte Ltd, a step down subsidiary of the Company has issued 32,770 Equity shares to eligible Employees and granted 91,530 share awards to be exercised over a period of three years in accordance with the share award scheme of that Company. The Share capital of S GIC Pte Ltd, a step down subsidiary of the Company, has been reduced by an amount of 3.2 million SGD from 18,935,600 SGD divided into 18,935,600 fully paid up ordinary shares to 15,735,600 SGD divided into 15,735,600 fully paid up ordinary shares.

The Ministry of Corporate Affairs (MCA) vide its General Circular No. 2 dated 8th February, 2011 granted a general exemption under Section 212(8) of Companies Act, 1956 to companies from attaching the Accounts etc. of their subsidiary companies in the Annual Report subject to fulfillment of certain conditions prescribed therein. The necessary information relating to subsidiary companies have been disclosed in the consolidated balance sheet. The annual accounts of the subsidiary companies and the related detailed information shall be made available to the members of the Company seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept open for inspection by any member of the Company at the Registered Office of the Company on any working day during business hours.

The Statement relating to Subsidiary Companies pursuant to Section 212 of the Companies Act, 1956 is attached as a part of the Annual Accounts of the Company.

FIXED DEPOSITS

During the year under review, the Company has not accepted any Deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

AUDITORS AND AUDITORS'' REPORT

M/s. S.R. Batliboi & Co., Chartered Accountants (Firm Registration No.: 301003E), who are the Statutory Auditors of the Company has been converted into LLP and its name has been changed to S.R. Batliboi & Co. LLP. S.R. Batliboi & Co. LLP holds office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

The Statutory Auditors in the Annexure to the Auditors'' Report has mentioned about a slight delay in deposit of statutory dues in a few cases. Steps have been taken to ensure that all such delays are eliminated in future.

About the observation of the Statutory Auditors regarding non payment of Madhya Pradesh Entry Tax and Chattisgarh entry tax, the Company would like to inform that the Company is in discussion with tax authorities. Depending upon the outcome, the company will take appropriate action in this matter.

The Company had incurred cash losses in the immediately preceding financial period. However, no losses has been incurred during the current year. Losses of previous year pertain to demand challenge faced by the industry at large.

An accountant of the Company had misappropriated funds amounting to Rs.709 thousand during the year under audit. The Company is in process of recovering it from the employee and the concerned bank.

The Notes on Accounts referred to in the Auditors'' Report are self explanatory and do not call for any further comments.

CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 30th June, 2013 is attached as a part of the Annual Accounts of the Company.

COST COMPLIANCE REPORT

Pursuant to the Companies (Cost Accounting Records) Rules, 2011 as notified by Ministry of Corporate Affairs on 3rd June, 2011 read with the relevant Circulars/ Notifications issued by the concerned statutory authorities, a Compliance Report for the financial year 2011-12, duly certified by a cost accountant, along with the Annexure as prescribed under the said Rules, was to be submitted to the Central Government. Accordingly, the Cost Compliance Report for the financial year 2011-12, certified by M/s Sanjay Gupta & Associates, Practicing Cost Accountants, was filed with the Central Government.

DIRECTORS

Mr. Rajul Garg and Mr. Hanif Mohamed Dahya have been appointed as Additional Directors w.e.f. 26th August, 2013. The status of Ms. Preeti Malhotra has been changed from Executive Director to Non- Executive Director w.e.f. 13th February, 2013.

Mr. Kashi Nath Memani and Mr. Saurabh Srivastava retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

As required under Clause 49 of Listing Agreement, brief profile, 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 AGM.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors'' Responsibility Statement, the Directors hereby confirm that:

(i) in the preparation of annual accounts for the financial year ended 30th June 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgements 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 30th June 2013 and of the profit of the Company for the period ended on that date;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is enclosed as a part of this Annual Report. The Company has appointed M/s. Sanjay Grover & Associates, Practicing Company Secretaries, to conduct the Corporate Governance Audit of the Company. A certificate from them regarding compliance with Corporate Governance norms stipulated in Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

SECRETARIAL AUDIT

As a measure towards good Corporate Governance Practice, the Company has appointed M/s Sanjay Grover & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit for the financial year 2012-13. The Secretarial Audit Report received from them forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement is given in Annexure-A and forms an integral part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, are annexed hereto in Annexure-B and forms an integral part of this report.

PARTICULARS OF EMPLOYEES

In terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the names and particulars of employees as prescribed there under are required to be given in the Directors'' Report. However, pursuant to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the members of the Company excluding the aforesaid information. The same would be made available for inspection at the Registered Office during working hours for a period of twenty one days before the date of Annual General Meeting. Any member interested in obtaining a copy of the same may write to the Company Secretary.

ACKNOWLEDGEMENT

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.

For and on behalf of the Board of Directors of

S Mobility Limited

Date: 3rd January, 2014 Dr. B K Modi

Chairman


Jun 30, 2012

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Fourth Annual Report together with the Audited Financial Statements and Accounts for the financial year (Fifteen Months) ended on 30th June 2012.

FINANCIAL RESULTS

The Board of Directors of the Company has extended the current financial year of the Company by 3 months with the current financial statements covering 15 months period from 1st April 2011 to 30th June 2012.The financial performance of the Company for the financial year ended 30th June 2012 is summarized below:-

(Rs.'000)

For the Financial For the Financial PARTICULARS year ended year ended 30.06.2012 31.03.2011 (15 months) (12 months)

Total revenue 10,236,007 9,708,400

earnings before interest, tax, depreciation & amortization (376,236) 958,067

Depreciation and amortization expense 88,439 16,743

Finance costs 2,422 6,763

(Loss)/Profit before tax (467,097) 934,561

Tax expenses

Current tax - 157,901

Fringe benefits tax credit for earlier years - (12)

Deferred tax charge/ (credit) 6,846 (4,582)

(Loss) / Profit for the Period (473,943) 781,254

Balance brought forward from previous year 1,753,464 673,612

Balance brought forward of Spice Televentures Private Ltd. pursuant to - 800,635

Scheme of Amalgamation

(Loss) after tax for the period 1st January 2010 to 31st March 2010 of Spice - (80,092)

Televentures Private Ltd. pursuant to Scheme of Amalgamation

Reversal of Dividend pursuant to Scheme of Amalgamation - 70,813

Reversal of proposed dividend on equity shares 52,952 -

Reversal on tax on proposed dividend reversed 8,590 -

Profit available for appropriation 1,341,063 2,246,222

Appropriations:

Proposed dividend 304,178 357,130

Tax on dividend 49,345 57,503

Transfer to General Reserve 78,125 78,125

Net Surplus in the Statement of Profit & Loss 909,415 1,753,464

During the year, the Company achieved a revenue of Rs. 10,236 million for the 15 months period ended June 2012 as against Rs.9,708 million for the 12 months period ended March 2011. The Company has incurred a loss of approx Rs. 474 million during the financial year ended on 30th June, 2012 as against the profit of Rs. 781 million in previous year.

With a view to switch as a leader in mobile internet space and to grab the opportunity in mobile handset market particularly to tap the new developments expected in mobile handset industry including 3G introduction, the Company made major investments in people and marketing resulting in higher Manpower and Administrative cost. During the year, the depreciation of Rupee against Dollar by more than 20% resulted in erosion of margins of the Company. Some high end models introduced by the Company also did not do well resulting in liquidation of stock at a reduced margin leading to losses during the year.

Your Company is taking a number of steps to improve its market position especially by constantly undertaking innovations towards enriching its product portfolio and rationalization of costs through reduction in manpower and other administrative cost and it is confident that these will yield positive results in the current fiscal.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared as per Accounting Standard AS 21 notified under the Companies (Accounting Standards) Rules, 2006 (as amended). The key financial highlights of the consolidated financial results for the year ended 30th June 2012 is summarized below:

(Rs '000)

PARTICULARS For the Financial For the Financial year ended year ended 30.06.2012 31.03.2011 (15 months) (12 months)

Total Revenue 27,670,847 20,506,770

Profit Before Tax 73,373 1,415,147

Profit/(Loss) for the period (97,098) 1,040,317

At the consolidated level the company achieved a revenue of Rs. 27,671 million for the 15 months period ended June 2012 as against Rs.20,507 million for the 12 months period ended March 2011. The loss after tax for the 15 months period ended on 30th June, 2012 is Rs 97 Million as against profit of Rs. 1,040 million for 12 months period ended on 31st March, 2011. The drop in margins during the year at the consolidated level is attributable to significant margin erosion in device business as mentioned above, failure of certain products at the high end of our range resulting in liquidation of stock and Reduction in revenue share and margin on the VAS segment due to market situation.

The multi brand retail business achieved an impressive revenue growth over the previous year. The retail business achieved turnaround at EBITDA level by earning EBITDA of Rs. 83 million this year against a loss of Rs. 126 million previous year. The loss (PAT) has further reduced to Rs. 46 million for fifteen months period ended on 30th June, 2012 as compared to loss of Rs. 327 million previous year. The number of stores have increased to 869 across 172 cities in India.

The VAS business witnessed decline in profits and margins due to the implementation of stringent Regulatory Guidelines and consistent rationalization on the revenue shares by the telecom operators. During the year, the VAS business has been further expanded in Africa region and the international revenue from the VAS business has continued to grow to 17% of the total VAS revenue as against 7% in the previous year.

DIVIDEND

Despite the losses incurred in the current financial year, your Directors are pleased to recommend a dividend @ 50 % on paid-up Equity Share Capital of the Company (i.e. @ Rs. 1.50 Per share) for the 15 months period ended on 30th June, 2012 to be paid out of the accumulated profits of the Company. Independent Non- Promoter Trust which holds 35,301,215 Equity Shares of the Company has waived off its right to receive dividend on the equity shares held by them and accordingly no dividend has been recommended on these shares for the financial year ended on 30th June 2012.

LISTING OF SECURITIES

The Equity Shares of the Company are presently listed on BSE Limited (BSE) and National Stock Exchange of India Ltd (NSE). The Annual Listing Fee for the Year 2012-13 has been paid to both the stock exchanges.

HOLDING COMPANY

During the year, Spice Global Investments Private Limited has transferred its entire shareholding in the Company to its wholly owned subsidiary Company "S i2i Mobility Private Limited" and accordingly "S i2i Mobility Private Limited" has become the holding Company of your Company. As at 30.06.2012, S i2i Mobility Private Limited holds 71.14% of the issued share capital of the Company.

SUBSIDIARY COMPANIES

During the year, the Company has incorporated a wholly owned subsidiary in the name of S Mobility Pte. Limited in Singapore. Spice VAS (Africa) Pte. Limited, a step down subsidiary of the Company, has acquired/established Spice VAS Zambia Limited, Spice VAS Tanzania Limited and Spice Digital South Africa Pty Limited as its subsidiaries and accordingly these three Companies have also became step down subsidiaries of the Company. Hindustan Retail Private Limited, a Subsidiary of the Company, has incorporated a wholly owned subsidiary in the name of S Retail Middle East FZE.

Subsequent to the end of financial year, the Company incorporated a wholly owned subsidiary in the name of "S Mobile Devices Limited" and has obtained an enabling approval of the members of the Company through Postal Ballot to sell or transfer the whole or part of the undertaking(s) pertaining to mobile handset business of the Company, as a going concern or otherwise to said Company. Further, Hindustan Retail Private Limited has acquired entire share capital of Spice Online Retail Private Limited and consequently this Company has become a step down subsidiary of your Company. Hon'ble High Court of Himachal Pradesh vide its order dated 10th July, 2012 approved the Scheme of Amalgamation of Spice Distribution Limited with Spice Retail Limited (both subsidiaries of the Company) and the said Scheme became effective w.e.f. 31st July, 2012. The appointed date of the said scheme is 1st April, 2011.

The Ministry of Corporate Affairs (MCA) vide its General Circular No. 2 dated 8th February, 2011 granted a general exemption under Section 212(8) of Companies Act, 1956 to companies from attaching the Accounts etc. of their subsidiary companies in the Annual Report subject to fulfillment of certain conditions prescribed therein. The necessary information relating to subsidiary companies have been disclosed in the consolidated balance sheet. The annual accounts of the subsidiary companies and the related detailed information shall be made available to the members of the Company seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any member of the Company at the Registered Office of the Company on any working day during business hours.

The Statement relating to Subsidiary Companies pursuant to Section 212 of the Companies Act, 1956 is attached as a part of the Annual Accounts of the Company.

FIXED DEPOSITS

During the year under review, the Company has not accepted any Deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

AUDITORS AND AUDITORS' REPORT

M/s. S.R. Batliboi & Co., Chartered Accountants (Registration No.: 301003E), who are the Statutory Auditors of the Company, shall hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received a letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

The Statutory Auditors in the Annexure to the Auditors' Report has mentioned about a slight delay in deposit of statutory dues in a few cases. Steps have been taken to ensure that all such delays are eliminated in future.

About the observation of the Statutory Auditors regarding non payment of Madhya Pradesh Entry Tax, the Company would like to inform that the matter is pending in a legal petition in the Hon'ble High Court of Madhya Pradesh. Depending upon the outcome of the Court case, the Company will take appropriate action in this matter.

The Company has incurred cash losses in the current period. The cash loss is primarily due to the demand challenge faced by the industry at large, foreign exchange loss due to depreciation of Indian Rupee vis-a-vis US$ and liquidation of slow/non moving models. This is seen as a temporary blip and the Company is taking adequate measures to address these issues effectively.

The Notes on Accounts referred to in the Auditors' Report are self explanatory and do not call for any further comments.

CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 30th June 2012 is attached as a part of the Annual Accounts of the Company.

DIRECTORS

During the year, Mr. Dilip Modi has resigned from the post of the Managing director of the Company w.e.f. 9th February, 2012. However, Mr. Modi continues to be a director on the Board of the Company. The Board of Directors places on record its sincere appreciation for the leadership provided by him in his capacity as Managing Director of the Company in achieving the tremendous growth in spite of difficult and challenging business and market scenario.

During the year, Mr. Rajiv Makhni was appointed as an additional Director of the Company w.e.f 9th February, 2012 who resigned from the Board w.e.f. 14th September, 2012. Mr. Thomas Henrik Zilliacus, Ms. Divya Modi, Mr. Devendra Raj Mehta and Mr. Krishan Lal Chugh have resigned from the post of the Director of the Company w.e.f 9th February, 2012; 17th July, 2012; 22nd October, 2012 and 5th November, 2012 respectively. The Board of Directors places on record its sincere appreciation for the guidance and contribution provided by them to the Company during their tenure as Directors of the Company.

Dr. Bhupendra Kumar Modi and Ms. Preeti Malhotra retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

As required under Clause 49 of Listing Agreement, brief profile, details of experience and other Directorships / Committee memberships held by the Directors in other Companies, whose re-appointment is due in the forthcoming Annual General Meeting (AGM) of the Company, forms part of the Notice convening AGM.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 2I7(2AA) of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, the Directors hereby confirm that:

(i) in the preparation of annual accounts for the financial year ended 30th June 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors had selected such accounting policies and applied them consistently and made judgements 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 30th June 2012 and of the loss of the Company for the period ended on that date;

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors had prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is enclosed as a part of this Annual Report. The Company has appointed M/s. Sanjay Grover & Associates, Practicing Company Secretaries, to conduct the Corporate Governance Audit of the Company. A certificate from them regarding compliance with Corporate Governance norms stipulated in Clause 49 of the Listing Agreement is annexed to the Report on Corporate Governance.

SECRETARIAL AUDIT

As a measure towards good Corporate Governance Practice, the Company has appointed M/s Sanjay Grover & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit for the financial year 2011-12. The Secretarial Audit Report received from them forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement is given in Annexure-A and forms an integral part of this report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 2I7(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules I988, are annexed hereto in Annexure-B and forms an integral part of this report.

PARTICULARS OF EMPLOYEES

In terms of Section 2I7(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the names and particulars of employees as prescribed thereunder are required to be given in the Directors' Report. However, pursuant to the provisions of Section 219(1) (b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the members of the Company excluding the aforesaid information. The same would be made available for inspection at the Registered Office during working hours for a period of twenty one days before the date of Annual General Meeting. Any member interested in obtaining a copy of the same may write to the Company Secretary.

ACKNOWLEDGEMENT

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.

For and on behalf of the Board of Directors of

S Mobility Limited

Date: 5th November, 2012 Dr. B K Modi

Chairman


Mar 31, 2011

Dear Shareholders,

The Directors have pleasure in presenting the Twenty Third Annual Report together with the Audited Statement of Accounts for the financial year ended on 31st March 2011.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March 2011 is summarized below:–

For the year ended For the year ended

PARTICULARS 31.03.2011 31.03.2010

(Rs.'000) (Rs.'000)

Net Turnover and Other Income 9,681,952 10,482,930

Profit before Financial Expenses, Depreciation & Tax 964,416 1,093,487

Financial Expenses 13,112 10,736

Profit after Financial Expenses but before Depreciation & Tax 951,304 1,082,751

Depreciation / amortization 16,743 10,757

Profit before Tax 934,561 1,071,994

Provision for tax

Current Tax 234,000 359,950

Less: MAT credit entitlement (59,985) –

Income Tax Adjustment for earlier years (16,114) 650

Fringe Benefits Tax credit for earlier years (12) –

Deferred Tax (Credit) /Charge (4,582) 6,312

Net Profit for the year 781,254 705,082

Balance brought forward from previous year 673,612 170,022

Balance brought forward of erstwhile Spice Televentures Pvt. Ltd. pursuant to 800,635 – Scheme of Amalgamation

Loss after tax for the period 1st January 2010 to 31st March 2010 of erstwhile Spice (80,092) – Televentures Pvt. Ltd. pursuant to Scheme of Amalgamation

Reversal of Dividend pursuant to Scheme of Amalgamation 70,813 –

Profit available for appropriation 2,246,222 875,104

Appropriations:

Proposed dividend 357,130 111,957

Tax on dividend 57,503 19,027

Transfer to General Reserve 78,125 70,508

Surplus carried to Balance Sheet 1,753,464 673,612

During the year, the Company witnessed a volume growth in the devices sold by the Company to 5.53 million, as against 4.87 million previous year, a 13.55% increase and the net profit of the Company was Rs. 781 million as against the net profit of Rs. 705 million during the previous year ended 31st March 2010, a 10.78% increase. Due to the intense competition and inflationary conditions, Average Selling Price (ASP) of the Company's devices came under pressure which has adversely impacted the revenue and gross margin of the Company. We took a number of steps to improve our competitive position, especially by innovating and launching smart phones and integrating business of Mobility offering Devices, Mobile VAS, Digital lifestyle, Retail and Mobile Internet Applications under one umbrella of S Mobility Limited, consequent to the merger of Spice Televentures Private Ltd. with the Company.

Your Company has adopted strategies similar to large global players having Retail and VAS as their independent support system. Adapting and customizing these highly successful strategies and models in India has enabled the Company to build a strong foundation and create a unique position for itself in the Indian telecom and mobile internet space.

AMALGAMATION OF SPICE TELEVENTURES PVT. LTD. WITH THE COMPANY

The Hon'ble High Court of Allahabad vide its order dated 2nd November 2010 approved the amalgamation of Spice Televentures Pvt. Ltd. (STPL), the holding company, with the Company. After filing of the order from the Hon'ble High Court of Allahabad with Registrar of Companies, Uttar Pradesh and Uttarakhand on 4th November 2010, STPL stands amalgamated with the Company with effect from that date. In pursuance to the Scheme of Amalgamation, the authorized share capital of the Company has increased from Rs. 51 Crores to Rs. 99 Crores divided into 33 crore equity shares of Rs. 3/- each. Further, the Company has allotted 16,34,48,285 equity shares of Rs. 3/- each to the shareholders of STPL on 13th November 2010 and the issued share capital of the Company stands increased from Rs. 22,39,14,000/- divided into 7,46,38,000 equity shares of Rs. 3/- each to Rs. 71,42,58,855/- divided into 23,80,86,285 equity shares of Rs.3/- each.

CONSOLIDATED FINANCIAL STATEMENTS

The key financial highlights of the consolidated financial results for the year ended 31st March 2011 is summarized below:

Rupees in Million

PARTICULARS For the year ended For the year ended Growth (%age) 31.03.2011 31.03.2010

Total Income 20,481 12,537 63.36%

Profit Before Tax 1,415 888 59.35%

Net Profit for the year 1,040 526 97.72%

The Consolidated Financial Statements of the Company prepared as per Accounting Standard AS 21 and Accounting Standard AS 27, consolidating the Company's Accounts with its subsidiaries and Investment in a Joint Venture have also been included as a part of the Annual Report.

During the year under review, the Consolidated Total Income of the Company along with its subsidiaries is Rs. 20,481 million registering a growth of approximate 63% over the previous year and Net Profit for the year has almost doubled to Rs. 1,040 million as against Rs. 526 million for the previous year ended 31st March 2010.

The main business other than the Mobile Devices in which your Company deals directly are Multi Brand Retail of Personalised Mobility Products, and Value Added Services (VAS).

The multi brand retail business under Spice Hotspot brand achieved an impressive revenue growth of 44% over the previous year with the increase in same store growth and expansion of reach to 786 stores across all major cities in India. There has also been a significant reduction in loss for the year to Rs. 327 million as compared to Rs. 655 million in the previous year.

VAS business recorded a revenue growth of 20 % over previous year and profit after tax also increased by 15%. The Company rolled out various new services like live Aarti, live FM etc. which received very good response from the customers.

DIVIDEND

Your Directors are pleased to recommend a dividend @ 50% on increased paid-up Equity Share Capital of the Company (i.e.@ Rs. 1.50 per share) for the year ended on 31st March 2011.

MANUFACTURING FACILITY FOR MOBILE HANDSETS AT BADDI, HIMACHAL PRADESH

During the year under review, the Company manufactured four different models of mobile handsets including latest models of Qwerty type phone. As an on going basis, newer models are being identified to be manufactured. Development and indigenization of parts and accessories has commenced. This will help reduce the material and consequently manufacturing costs and the Company will be able to offer more competitively priced handsets to the customers.

CHANGE OF NAME OF THE COMPANY

The name of Company has been changed from Spice Mobility Limited to "S Mobility Limited" with effect from 7th June 2011. The "S" symbol signifies a digital brand opening up a window to the vast mobile internet opportunity the Company has ahead of it. It is vibrant and open symbol in line with our vision and values. The new name of the Company further reinforces that we are in mobile device business which allows our users to lead a digital life style.

CHANGE OF REGISTERED OFFICE OF THE COMPANY

The Registered Office of the Company has been shifted from D-1, Sector-3, Noida - 201301 (U.P.) to "S Global Knowledge Park", 19A & 19B, Sector- 125, Noida-201301 (U.P.) w.e.f. 30th May 2011.

LISTING OF SECURITIES

The Equity Shares of the Company are presently listed on Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE). The equity shares allotted to the shareholders of STPL were listed on NSE & BSE w.e.f. 26th November 2011. The Annual Listing Fee for the Year 2011-12 has been paid to both the stock exchanges.

HOLDING COMPANY

After amalgamation of STPL with the Company and allotment of shares in pursuance to the Scheme of Amalgamation, Spice Global Investments Pvt. Ltd., has become the holding Company of your Company and is now holding 68.65% of the issued share capital.

SUBSIDIARY COMPANIES

On becoming effective the Scheme of Amalgamation of STPL with your Company, all the subsidiaries of STPL i.e. Spice Digital Limited (and its subsidiaries namely Mobisoc Technology Pvt Ltd., Spice Labs Pvt Ltd., Spice Mobile VAS Pte. Ltd., Spice VAS (Africa) Pte. Ltd., and Spice Digital Nigeria Ltd.), Spice Distribution Limited and Hindustan Retail Private Limited (and its subsidiaries namely Spice Retail Limited and Cellucom Retail India (P) Ltd.) have become the subsidiaries of your Company.

Since then, the Company has acquired 100% stake in Kimman Exports Pvt. Ltd. and incorporated a wholly owned subsidiary in the name of S Mobility (HK) Ltd. in Hongkong. The Company has sold 90% stake in Spice Distribution Limited to Hindustan Retail Private Limited, another 100% subsidiary of the Company. Spice Digital Ltd., a subsidiary of the Company, has acquired 100% stake in Beoworld Sdn. Bhd. through its subsidiary Spice Mobile VAS Pte. Ltd and 80% stake in Spice VAS Kenya Limited through Spice VAS Africa Pte. Ltd., a step down subsidiary of Spice Digital Limited. Spice VAS Africa Pte Limited has also incorporated Spice VAS Uganda Ltd. with 75% stake and Spice VAS Ghana Ltd. as 100% wholly owned subsidiary.

The Ministry of Corporate Affairs (MCA) vide its General Circular No. 2 dated 8th February, 2011 has granted a general exemption under Section 212(8) of Companies Act, 1956 to companies from attaching the Accounts etc. of their subsidiary companies in the Annual Report subject to fulfillment of certain conditions prescribed therein. The Board of Directors in its meeting held on 30th May 2011 has given its consent by passing the necessary resolution for not attaching the Balance Sheet, Profit and Loss Account, Directors' Report, Auditors' Report and other documents of the subsidiary companies with the Balance Sheet of the Company. The necessary information relating to subsidiary companies have been disclosed in the consolidated balance sheet. The annual accounts of the subsidiary companies and the related detailed information shall be made available to the members of the Company and also those of subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall also be kept for inspection by any member at the Registered Office of the Company and that of the concerned subsidiary companies.

FIXED DEPOSITS

During the year under review, the Company has not accepted any Deposits from the public within the meaning of Section 58A of the Companies Act, 19 56.

AUDITORS AND AUDITORS' REPORT

M/s. S. R. Batliboi & Co., Chartered Accountants, who are the Statutory Auditors of the Company, shall hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letter from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

There has been a slight delay in a few cases of deposit of statutory dues as per the Auditors' Report. The Company is further strengthening its processes so that such delays are avoided in future. The Notes on Accounts referred to in the Auditors' Report are self explanatory and do not call for any further comments.

CASH FLOW STATEMENT

In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 31st March 2011 is attached as a part of the Annual Accounts of the Company.

DIRECTORS

Pursuant to the Scheme of Amalgamation of STPL with the Company, Mr. Devendra Raj Mehta and Ms. Divya Modi have been appointed as Directors of the Company w.e.f. 4th November, 2010. Mr. Thomas Henrik Zilliacus and Mr. Vijay Brijendra Chopra have been appointed as Additional Directors on the Board w.e.f. 4th April, 2011. Mr. Saurabh Srivastava has been appointed as Additional Director w.e.f. 30th May 2011.

Mr. Vijay Brijendra Chopra has resigned from the Board w.e.f. 1st May, 2011. The Board of directors place on record its sincere appreciation for the guidance and assistance provided by him during his tenure as director of the Company. In terms of Section 260 of the Companies Act, 1956 Mr. Devendra Raj Mehta, Ms. Divya Modi, Mr. Thomas Henrik Zilliacus and Mr. Saurabh Srivastava hold office upto the date of ensuing Annual General Meeting and are eligible for appointment as directors of the Company.

Mr. Dilip Modi and Mr. Subroto Chattopadhyay retire by rotation at the ensuing Annual General Meeting and being eligible offer themselves for re-appointment.

As required under Clause 49 of Listing Agreement, brief profile, details of experience and other Directorships / Committee memberships held by the Directors, whose appointment/re-appointment is due in the forthcoming Annual General Meeting (AGM) of the Company, forms part of the Notice convening AGM.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA), of the Companies Act, 1956, with respect to the Directors' Responsibility Statement, the Directors hereby confirm that:

(i) in the preparation of annual accounts for the year ended 31st March 2011, 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 judgements 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 2011 and of the profit of the Company for the year 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts on a going concern basis.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is enclosed as a part of this Annual Report. The Company has appointed M/s. Sanjay Grover & Associates, Practicing Company Secretaries to conduct the Corporate Governance Audit of the Company. A certificate from them regarding compliance with Corporate Governance norms stipulated in Clause 49 of the Listing Agreement is annexed to the report on Corporate Governance.

SECRETARIAL AUDIT

As a measure of good Corporate Governance Practice, the Company has appointed M/s. Sanjay Grover & Associates, Practicing Company Secretaries, to conduct the Secretarial Audit for the year 2010-11. The Secretarial Audit Report received from them forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement is given in Annexure-A and forms an integral part of this report.

GROUP FOR INTERSE TRANSFER OF SHARES

For the purpose of Regulation 3(1)(e)(i) of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 read with Section 2(ef) of the Monopolies and Restrictive Trade Practices Act, 1969, the persons included within the definition of "Group" are given separately in the Annual Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, are annexed hereto in Annexure-B and forms an integral part of this report.

PARTICULARS OF EMPLOYEES

In terms of Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, the names and particulars of employees as prescribed thereunder are required to be given in the Directors' Report. However, pursuant to the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Annual Report is being sent to all the members of the Company excluding the aforesaid information. The same would be made available for inspection at the Registered Office during working hours for a period of twenty one days before the date of Annual General Meeting. Any member interested in obtaining a copy of the said Statement may write to the Company Secretary at the Registered Office of the Company.

ACKNOWLEDGEMENT

Your 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.

For and on behalf of the Board of Directors of

S Mobility Limited

Date: 6th August, 2011 (Dr. Bhupendra Kumar Modi)

Chairman


Mar 31, 2010

The Directors have pleasure in presenting the Twenty Second Annual Report together with the audited Statement of Accounts for the financial year ended on 31st March 2010.

FINANCIAL RESULTS

For the year For the period

ended 31.03.2010 ended 31.03.2009

PARTICULARS (12 months) (15 months)

(Rs.000) (Rs.000)

Net Turnover and Other Income 10,482,930 6,778,232

Profit before Financial Expenses, Depreciation & Tax 1,093,487 49,697

Financial Expenses 10,736 26,825

Profit after Financial Expenses but before Depreciation & Tax 1,082,751 22,872

Depreciation 10,757 7,206

Profit before Tax 1,071,994 15,666

Current Tax 360,600 9,901

Fringe Benefit Tax - 2,884

Deferred Tax Charge/(Credit) 6,312 (7,379)

Net Profit 705,082 10,260

Balance brought forward from previous year 170,022 183,339

Profit available for appropriation 875,104 193,599

Proposed dividend 111,957 20,152

Tax on dividend 19,027 3,425

Transfer to General Reserve 70,508 -

Surplus carried to Balance Sheet 673,612 170,022

The Board of Directors are pleased to state that during the year ended on 31st March 2010, the Company has made best use of the market forces and has taken advantage of the business opportunities that has come its way. During the 12 months period under review, the Net Turnover of the Company was Rs. 10,482.93 million as against previous period of 15 months Net Turnover of Rs. 6,778.23 million. The Profit after tax for the year was Rs. 705.08 million as compared to Rs. 10.26 million during the previous period of 15 months ended on 31st March 2009. The improvement in performance of the Company may be attributed to greater focus on achieving operating efficiencies, cost containment and concentration on products with high margins. Today, the Company has a substantial presence and market share in India and strong presence in countries such as Nepal, Bangladesh, Sri Lanka and Uganda amongst several other markets.

DIVIDEND

Your Directors are pleased to recommend a dividend @ 50% on the paid-up Equity Share Capital of the Company (i.e.@ Rs. 1.50 per share) for the year ended on 31st March 2010.

COMMENCEMENT OF MANUFACTURING FACILITY FOR MOBILE HANDSETS AT BADDI, HIMACHAL PRADESH

During the year under review, the Company commenced the manufacturing of Mobile Handsets at the factory premises of the Company situated at Baddi, Distt. Solan, Himachal Pradesh. With this, the Company became the first Indian Mobile Phone brand to commence local manufacturing of mobile phones in India. With lower manufacturing cost of handsets and economies of scale, the Company would be able to tap a larger share of the Mobile Handsets market. This will also enable the Company to create an aspirational brand at the entry level mobile phones, by offering affordable yet feature rich handsets with innovative solutions and pre-embedded contents. This would result in increased competitiveness and raising the returns on deployed capital.

LISTING OF SECURITIES

The Equity Shares of the Company are presently listed on The Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Annual Listing Fee for the Year 2010-11 has been paid to the stock exchanges.

CHANGE OF NAME OF COMPANY

The name of the Company was changed from Spice Mobiles Ltd. to Spice Mobility Ltd. with effect from 7th June 2010. The new name of the company reflects the wide diversity of business that it transacts and undertakes including mobile devices, technology, development, trade and services.

HOLDING COMPANY

During the year ended on 31st March 2010, Spice Televentures Private Limited (STPL), presently our holding Company has made an open offer to the equity shareholders of the Company as required under the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997. Post closure of the open offer by STPL and acquisition of entire shareholding of other promoters, STPL is now holding 63.25% of the paid up capital of the Company and has become holding company of the Company w.e.f. 11th July 2009.

AMALGAMATION OF SPICE TELEVENTURES PRIVATE LIMITED WITH THE COMPANY

With the view to achieve synergies of operations, optimum utilization of resources and control of costs, the Board of Directors decided to amalgamate Spice Televenture Pvt. Ltd. with Spice Mobility Limited w.e.f. 1st January 2010.

The Company fi led an application with the Honble High Court of Allahabad and the application has also been filed by Spice Televentures Pvt. Ltd. with the Honble High Court of Delhi for their approval to the said amalgamation.

The Honble High Court of Allahabad by its order dated 26th August 2010 sanctioned the Scheme of Amalgamation between Spice Televentures Pvt. Ltd. and Spice Mobility Limited. The matter is now listed for hearing with Honble High Court of Delhi on 24th September 2010.

SUBSIDIARIES

Presently, there are no subsidiaries of the Company. Post amalgamation of Spice Televentures Private Limited with the Company (as mentioned above), all the subsidiaries of Spice Televentures Private Limited shall become the subsidiaries of the Company.

FIXED DEPOSITS

During the year under review, the Company has not accepted any Deposits from the public within the meaning of Section 58A of the Companies Act, 1956.

CONSOLIDATED FINANCIAL STATEMENTS

Since there is no subsidiary of the Company at present, hence no consolidated financial statements have been prepared.

DIRECTORS

Mr. Parikshit Bhasin resigned from the Board of Directors w.e.f. 28th October 2009 and Mr. Subramanian Murali was appointed on 29th October 2009 as Director in casual vacancy caused by the resignation of Mr. Bhasin. Mr. Radha Krishna Panday, Mr. Ram Nath Bansal, Mr. Kunal Ahooja and Mr. Vivek Bali resigned from the Board of Directors w.e.f. 23rd April 2010. Mr. Subramanian Murali and Mr. Hanif Mohamed Dahya resigned from the Board w.e.f. 24th April 2010. The Board of Directors place on record its sincere appreciation for the guidance and assistance provided by them during their tenure as Directors of the Company.

Mr. Krishan Lal Chugh, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re- appointment.

Dr. Bhupendra Kumar Modi, Mr. Kashi Nath Memani, Mr. Subroto Chattopadhyay and Ms. Preeti Malhotra were appointed as Additional Directors on the Board of the Company on 24th April 2010. In terms of Section 260 of Companies Act, 1956, they shall hold office upto the date of ensuing Annual General Meeting and are eligible for appointment as Directors of the Company. The Company has received notices under Section 257 of the Companies Act, 1956, alongwith the requisite deposit from the Shareholders proposing their candidature for the office of the Director of the Company, liable to retire by rotation. Further, Mr. Dilip Modi and Ms. Preeti Malhotra have been appointed as Managing Director and Executive Director of the Company respectively w.e.f. 24th April 2010.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA), of the Companies Act, 1956, with respect to the Directors’ Responsibility Statement, the Directors hereby confirm that:

(i) in the preparation of annual accounts for the year ended 31st March 2010, 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 judgements 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 2010 and of the profit of the Company for the year 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 this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; and

(iv) the Directors have prepared the annual accounts on a going concern basis.

AUDITORS AND AUDITORS’ REPORT

M/s. S.R. Batliboi & Co., Chartered Accountants, who are the Statutory Auditors of the Company, shall hold office until the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment.

The Company has received letters from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

There has been a slight delay in a few cases of deposit of statutory dues as per the Auditors’ Report. The Company is further strengthening its processes so that even such minor delays do not occur in future. The Notes to Accounts referred to in the Auditors’ Report are self explanatory and do not call for any further comments.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is enclosed as a part of this Annual Report. The Company has appointed Sanjay Grover & Associates, Practicing Company Secretary to conduct the Corporate Governance Audit of the Company. A certificate from them regarding compliance with Corporate Governance norms stipulated in Clause 49 of the Listing Agreement is annexed to the report on Corporate Governance.

CASH FLOW ANALYSIS

In conformity with the provisions of Clause 32 of the Listing Agreement, the Cash Flow Statement for the year ended on 31st March 2010 is annexed hereto.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report as required under Clause 49 of the Listing Agreement with the Stock Exchanges is given in Annexure-A and forms an integral part of this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988, are annexed hereto in Annexure-B and forms an integral part of this report.

PARTICULARS OF EMPLOYEES

In terms of Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules 1975, as amended, the names and other particulars of the employees who, if employed throughout the year were in receipt of remuneration of Rs. 24,00,000 per annum or if employed for a part of financial year, were in receipt of remuneration at Rs. 2,00,000 per month are set out in Annexure-C, and forms an integral part of this report.

ACKNOWLEDGEMENT

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.

FOR AND ON BEHALF OF THE

BOARD OF DIRECTORS OF SPICE MOBILITY LIMITED

(Dr. Bhupendra Kumar Modi)

Date : 30th August 2010

Chairman

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