Fone4 Communications (India) Ltd Management Discussions

Annexure-IV

Overview

Your Directors are pleased to present the Management Discussion and Analysis Report for the year ended 31st March, 2024.

The Management Discussion and Analysis have been included in consonance with the Code of Corporate Governance as approved by The Securities and Exchange Board of India (SEBI). Investors are cautioned that these discussions contain certain forward-looking statements that involve risk and uncertainties including those risks which are inherent in the Companys growth and strategy. The company undertakes no obligation to publicly update or revise any of the opinions or forward-looking statements expressed in this report consequent to new information or developments, events or otherwise. The main business of the Company is e-commerce and E-retail.

Industry Structure & Development

E-Commerce Industry: The e-commerce market in India has enjoyed robust growth of almost 55 per cent for the last six years. Though e-commerce has been around since fifteen years, the pertinent environs are now finally in place to drive such market ahead. The Indian e-commerce industry has been on an upward growth trajectory. After a surge in digital adoption during COVID-19, the Indian e-commerce market is estimated to be worth over $55 Bn in Gross Merchandise Value in 2021. By 2030, it is expected to have an annual gross merchandise value of $350 bn. Further, as of 2021, more than 348 Mn users were conducting online transactions, and nearly 140 Mn were shopping online.

Young demography, increasing internet and smartphone penetration, and relatively better economic performance are some key drivers of this sector. With 830 Mn users, India is currently the 2^nd largest internet market. In 2021, digital wallets were the leading payment method for e-commerce transactions with a share of 45.4%

Opportunities and Threats

E-Commerce Industry: The growing internet user base in India due to affordable data prices offered by telecom companies represents one of the key factors driving the market. Moreover, there is a rise in the advancement of technologies, such as digital payments, hyper-local logistics, analytics driven customer engagement, and digital advertisements across the country. This, along with the rapid digitalization in the country, is propelling the growth of the market. In addition, several initiatives undertaken by the Government of India, such as digital India, skill India, startup India, and make in India, are contributing to the growth of the market. Besides this, the introduction of Paytm payment bank in India with zero charges on online transactions, no minimum balance requirement, and free virtual debit card is positively influencing the market. Apart from this, key market players are extensively investing in research and development (R&D) activities to introduce offline retail stores for promoting private labels in fashion and electronics, which is bolstering the growth of the market in the country.

Risk and Concerns

E-Commerce Industry: Since the transactions happen online, the buyer cannot physically touch or feel the product. This of course makes the transaction riskier. Pictures, although often are representative of the product, dont always depict the exact product. Along with this, there is no way to make sure if the item being shipped to you is free from defects or not.

Online transactions are heavily dependent on payment methods like credit and debit cards etc. These details are extremely sensitive and can have precarious consequences if not used securely. Phishing sites are sites which pretend to be a website which it is not and these are extremely common nowadays. They have the primary aim to steal sensitive information like CVV numbers, passwords, bank details, etc.

A general theory in microeconomics tells us that consumers always try to maximise their utility. However, behavioural economics tells us that this is not always the case and transactions by consumers do not always maximise their utility.

Adequacy of Internal Control System

To provide reasonable assurance that assets are safeguarded against loss or damage and that accounting records are reliable for preparing financial statements, management maintains a system of accounting and controls including an internal audit process. Internal controls are supported by management reviews.

The Board of Directors have an Audit Committee that is chaired by an Independent Director. The Committee meets periodically with Management, Internal Auditor, Statutory Auditors to review the Companys program of internal controls, audit plans and results, recommendations of the auditors and managements responses to those recommendations.

Human Resources Development/Industrial Relations

Human resources are valuable assets for any organization. The employees of the Company have extended a very productive cooperation in the efforts of the management to carrying the Company to greater heights. The Company is giving emphasis to upgrade the skills of its human resources and continuous training down the line is a normal feature in the Company to upgrade the skills and knowledge of the employees of the Company.

Cautionary Statement

The Statement in this Management Discussion and Analysis report, describing the Companys outlook, projections, estimates, expectations or predictions may be "Forward looking Statements" within the meaning of applicable securities laws or regulations. Actual results could differ materially from those expressed or implied

	For & on behalf of
	Fone4 Communications (India) Limited
Sd/-	Sd/-
Sayyed Hamid	Sayyed Imbichi Haris Sayyed
Managing Director	Director
DIN- 05167876	DIN- 08395581
Date: 04-09-2024
Place: Kerala