Spacenet Enterpr Management Discussions


GLOBAL ECONOMIC OVERVIEW

Global economic growth slowed down to 3.4% in 2022 as per International Monetary Fund (World Economic Outlook Apr 2023) compared to 6.2% in 2021. The year saw geopolitical uncertainty with the prolonged Russia-Ukraine conflict and economic challenges leading to disruptions in the global supply chain and elevated inflation with increase in commodity and energy prices. This prompted central banks to aggressively tighten their monetary policy, which further impacted economic activity

Analysts estimate that 2023 will continue to see the above issues playing out leading to a further slowdown in economic growth and a mild recession in the UK as well as potentially in the Euro area.

The UK has been impacted by an increase in cost-of living, dampening households purchasing power Andon sumption, as well as tighter fiscal and monetary policy. Current estimates project global recovery in the second half of 2023, with moderation of inflation and re-opening of the Chinese economy.

We have already started seeing cooling-off of fuel and commodity prices as well as global container Freight rates.

However, risks remain to this outlook with the stress seen in banking systems in the US and Europe in The last few months, potentially getting aggravated with extended high inflation levels and triggering Further rounds of rate hikes and adversely impacting the business environment. There is also continued uncertainty on a resolution of the Russia-Ukraine conflict further impacting energy markets and disrupting the supply demand balance

INDIAN ECONOMY REVIEW

Despite global volatility, the Indian economy grew by 6.8% in 2022 – making it the fifth largest economy globally in terms of nominal GDP (US dollars). This growth has been supported by: (1) reduction in Covid-19 cases leading to opening up of the economy; (2) expansion of manufacturing footprint by both global and Indian firms, aided by Government policies (eg Production Linked Incentive (PLI) Scheme, PM Gati Shakti, corporate tax cuts); (3) capex recovery; and (4) cyclical upturn in many sectors (eg Banking, Auto). Indias digital infrastructure has strengthened in the last few years and the widespread adoption of real-time digital payments is estimated to have unlocked 0.56% of GDP1

However, inflation headwinds were also felt by the Indian economy with increase in crude oil prices and we saw interest rate hikes done were by the Reserve Bank of India to control inflation. The Indian rupee weakness against the US dollar also added to the inflationary pressures.

According to the International Monetary Fund, Indian economy is projected to deliver robust growth of 5.9% for 2023, highest amongst the emerging economies, driven by strong domestic demand and healthy consumption growth supported by an improvement in labour market conditions, increasing consumer confidence, an expected recovery in rural demand and higher purchasing power with moderating of inflation. In the Union Budget for FY2023-24, the government announced a 33% increase in capex allocation to INR 10 trillion, which is expected to boost private investments. The Budget has also targeted a lower fiscal deficit in FY2023-24 at 5.9% and the government has committed to bringit down to below 4.5% by FY2025 -26.

Risks to the outlook remain with weakness in the global economy impacting exports, volatility in food and crude oil prices, slowdown in private consumption and aggressive monetary tightening by global central banks to moderate inflation

For India, 2022 was special. It marked the 75th year of Indias Independence. India became the worlds fifth largest economy, measured in current dollars.

In real terms, the economy is expected to grow at 7 per cent for the year ending March 2023. This follows an 8.7 per cent growth in the previous financial year. The rise in consumer prices has slowed considerably. The annual rate of inflation is below 6 per cent. Wholesale prices are rising at a rate below 5 per cent. The export of goods and services in the first nine months of the financial year (April – December) is up 16 per cent compared to the same period in 2021-22.

The Indian economy, however, appears to have moved on after its encounter with the pandemic, taging a full recovery in FY22-23 ahead of many nations and positioning itself to ascend to the pre-pandemic growth path in FY23

The Capital Expenditure (Capex) of the central government, which increased by 63.4 per cent in the first eight months of FY23, was another growth driver of the Indian economy in the current year, crowding in the private Capex since the January-March quarter of 2022

A sustained increase in private Capex is also imminent with the strengthening of the balance sheets of the Corporates and the consequent increase in credit financing it has been able to generate.

Indias recovery from the pandemic was relatively quick, and growth in the upcoming year will be supported by solid domestic demand and a pickup in capital investment

The financial system stress experienced in the second decade of the millennium, evidenced by ising nonperforming assets, low credit growth and declining growth rates of capital formation, caused by excessive lending witnessed in the first decade-plus, is now behind us. Aided by healthy financials, incipient signs of a new private sector capital formation cycle are visible.

More importantly, compensating for the private sectors caution in capital expenditure, the government raised capital expenditure substantially. Budgeted capital expenditure rose 2.7X in the last seven years, from FY16 to FY23, re-invigorating the Capex cycle. Structural reforms such as the introduction of the Goods and Services Tax and the Insolvency and Bankruptcy Code enhanced the efficiency and transparency of the economy and ensured financial discipline and better compliance.

GLOBAL TRADE

The World Trade Organization (WTO) in October 2022 had projected the world merchandise trade volume to grow by 3.5 per cent in 2022 and 1.0 per cent in 2023, as compared to a high growth of 9.7 per cent in 2021. While the forecast of 3.5 per cent for 2022 is slightly better than 3.0 per cent forecasted in April 2022, the forecast of 1.0 per cent for 2023 is a sharp fall from 3.4 per cent forecasted in April 2022.

Significant regional disparities persist, with some regions falling well short of the global average. The latest projections of WTO show the Middle East to have the strongest trade volume growth in 2022 for export as well as imports.

However, both exports and imports of Commonwealth of Independent States (CIS) is projected to record negative growth in 2022.

Global trade after witnessing a strong recovery post-pandemic is slowing sharply, as the global economy faces multiple challenges. Global trade, especially goods trade slowed in 2022 as supply chains continued to get disrupted by the lingering effects of the pandemic along with the geopolitical tensions. As per World Trade Organization (WTO), world merchandise trade volume is expected to grow 3.5 per cent in 2022 and 1.0 per cent in 2023, as compared to 9.7 per cent in 2021.

The WTOs current forecast of 3.5 per cent growth in the volume of world merchandise trade in 2022 is slightly stronger than the 3.0 percent forecast in April. In contrast, the forecast of 1.0 per cent for 2023 is a significant decrease from the earlier projection of 3.4 per cent. There are numerous and inter-related risks to the forecast on account of rising uncertainties and deteriorating economic conditions

Trade patterns have varied across regions/ countries. On the export side, the Middle East is expected to record the strongest growth followed by Africa, North America, Asia, Europe and South America in 2022. In contrast, CIS exports are expected to decline in 2022. On the import side too, Middle East is expected to record highest growth, followed by North America, Africa, South America, Europe and Asia

INDIAS MERCHANDISE TRADE

Indias Merchandise exports had shown resilience and continue to offer bright prospects for Indias growth revival, despite multiple challenges. Merchandise exports touched a record US$ 422 billion in 2021-22 surpassing the US$ 400 billion target set for the year and registering an impressive growth of 44.62 per cent over US$ 291.8 billion during 2020-21. A national effort with whole of Government approach and interactions with all stakeholders -line Ministries/ Departments, State Governments, Indian Mission abroad, Export Promotion Councils, Exporters and Industry Associations were held to achieve this target. A similar approach has again been followed to monitor and boost exports in 2022-23. During April-December 2022 (QE), merchandise exports were US$ 332.76 billion as against US$ 305.04 billion during April-December 2021.

Merchandise imports during 2021-22 registered an increase of 55.43 per cent from US$ 394.44 Billion in 2020-21 to US$ 613.05 Billion in 2021-22. Imports during April- December 2022 stood at US$ 551.70 billion as compared to US$ 441.50 billion during April- December 2021.

The trade deficit in 2021-22 was estimated at US$ 191.05 billion as against the deficit of 102.63 billion in 2020-21. In April-December 2022, t rade deficit increased to US$ 218.94 billion from US$ 136.45 billion in April-December 2021.

The services sector has been the dominant sector in Indias GDP, with significant contribution to exports and FDI. The pandemic has had a significant impact on the economic growth, however, the services sector has shown resilience to the economic disruptions. Services exports in 2021-22 stood at US$ 254.53 billion as compared to US$ 206.09 billion in 2020-21, with a growth of 23.5 per cent. Indias services export is estimated at US$ 235.81 billion during April- December 2022 as compared to US$ 184.65 billion during April-December 2021, a positive growth of 27.71 percent.

Services imports were US$ 147.01 billion in 2021-22 as compared to US$ 117.52 billion in 2020-21, with a growth of 25.09 per cent. The estimated value of imports during April- December 2022 was US$ 134.99 billion as compared to US$ 105.45 billion during April- December 2021. A surplus of US$ 107.52 billion and US$ 100.82 billion was generated in services trade in 2021-22 and April- December2022 respectively.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Commodity Markets:

The Economic Survey 2022-23 comes when global uncertainties are rife. Barely had the pandemic receded, and the war in Ukraine broke out in February 2022. Prices of food, fuel and fertiliser rose sharply. As inflation rates accelerated, central banks of advanced countries scrambled to respond with monetary policy tightening. Many developing countries, particularly in the South Asian region, faced severe economic stress as the combination of weaker currencies, higher import prices, the rising cost of living and a stronger dollar, making debt servicing more expensive, proved too much to handle.

In the second half of 2022, there was a respite for governments and households. Commodity prices peaked and then declined. In the near term, the acute pressure was relieved, although prices of some commodities (e.g., crude oil) remain well above their pre-pandemic levels. For countries dependent on imports, priced and payable in dollars, a global slowdown led by the United States (US) offers a triple relief. Commodity prices decline, and US interest rates peak, as does the US dollar. Capital and current account imbalances abate

The countrys retail inflation had crept above the RBIs tolerance range in January 2022. It remained above the target range for ten months before returning to below the upper end of the target range of 6 per cent in November 2022. During those ten months, rising international commodity prices contributed to Indias retail inflation as also local weather conditions like excessive heat and unseasonal rains, which kept food prices high.

The government cut excise and customs duties and restricted exports to restrain inflation while the RBI, like other central banks, raised the repo rates and rolled back excess liquidity.

Inflationary pressures dominated the global economic landscape in FY23. The build-up of price pressures occurring in tandem with the economic recovery in FY22 from the pandemic was long viewed as transient. It was expected to abate as supply chains normalised. The debate on said transience was put to rest by the conflict that erupted in Europe in February 2022. It resulted in commodity prices soaring and added significantly to the prevailing inflationary pressures.

This development has triggered the current sharp and synchronous monetary tightening cycle Setting the context, this chapter will review Indias monetary developments and the performance of the financial system in the current financial year

The Russia-Ukraine conflict triggered disruptions to the supply of commodities, especially energy, base metals and food commodities. As a result, a sudden jump in the prices of crude oil and some base metals like Nickel and Aluminium was witnessed. However, commodity prices have seen a sharp correction as the Federal Reserve started increasing interest rates in March 2022 to combat rising inflation. Compared to 31st March 2022, the price of MCX iCOMDEX Base Metal Index declined by 19.1 per cent by the end of November 2022, followed by the bullion index (-3.5 per cent) and Energy index (-1 per cent). The prices of Aluminium, Copper, Zinc and Nickel at MCX also declined as of November 2022, compared to March 2022.

Indias inflation management has been particularly noteworthy and can be contrasted with advanced economies that are still grappling with sticky inflation rates. Due to the anticipated slowdown in advanced economies, inflation risks coming from global commodity prices are likely to be lower in FY24 than in FY23

FINANCIAL SERVICES & FIN-TECH INDUSTRY

In recent times, Indias mature and well-diversified financial sector has been expanding rapidly on the strength of Technology, policy and regulatory facilitation. There has been an influx of new entities and the range of offerings and geographic reach have been increasing too.

FICCI characterised Indias financial sector as one of the fastest growing sectors in the economy, pointing out that it has witnessed increased private sector activity, including an explosion of foreign banks, insurance companies, mutual funds, and venture capital and investment institutions.

Today, the financial services industry in India comprises new-age Fin-tech start-ups and payment banks,in addition to more conventional entities like commercial banks, insurance companies, non-banking financial companies, cooperatives, pension funds, mutual funds and other smaller financial entities. There have been various initiatives by the government, RBI, SEBI and other regulators, to ensure that the Indian financial sector evolves into a strong, transparent and resilient system that meets the financial needs of individuals as well as enterprises, across the country.

Competition has played a role in the development of the sector too. With the introduction of several new instruments and products as well as the entry of new players, even existing players have had to upgrade their product offerings and distribution channels.

Financial intermediaries are also moving to internationally acceptable norms and this has given a fillip to the development and modernisation of the financial sector

As a fallout of the pandemic, all segments of the financial services industry were pushed to innovate and adopt technology in products and services, processes and operations and for customer connect. A wave of digital transformation swept over the industry and with it, every Indian with a smartphone and internet connectivity gained access digitally to a range of products and services including application of loans, completing e-KYC, opening bank accounts, etc.

Going forward, the key engines that will drive the Indian financial services industry forward will be:

Growing demand on account of rising incomes

Overall economicgrowth Innovation and customisation in products and services

Policy support, which can facilitate greater efficiency and Transparency in every segment

Greater financial inclusion of both individuals and enterprises, which have hitherto been outside the net of the formal financial sector.

DIGITAL TECHNOLOGY ROLE IN THE FIN-TECH INDUSTRY

Over the years, Indias financial sector landscape has become more digital, making it more accessible and friction-free for users. According to a report by Niti Aayog, titled ‘Connected Commerce: Creating a Roadmap for a Digitally Inclusive Bharat, India is seeing an increasing digitalisation of financial services, with consumers shifting from cash to cards, wallets, apps, and UPI, thanks largely to the advent of Fin-tech companies and availability of economical internet connectivity and smartphones.

The growth and expansion of the Fin-tech ecosystem in India is being aided by a number of factors, including the growing availability of smartphones, increased internet access, and high-speed connectivity.

Through specialised software and algorithms, Fin-tech companies have been enabling the financial sector to manage their operations, processes and customer interfaces.

More importantly, they have addressed critical structural issues afflicting Indian financial services to enable increased outreach, improved customer experiences, reduced operational friction and greater adoption and usage of the digital channels.

Looking ahead, the opportunity for Fin-tech lies in expanding the market, shaping customer behaviour, and effecting long term changes in the financial industry.

A report by Boston Consulting Group and FICCI report, titled ‘India Fin-tech: A $100 billion Opportunity states that India is well-positioned to achieve a Fin-tech sector valuation of US$ 150-160 billion by 2025, implying a US$ 100 billion in incremental value creation potential.

To achieve this goal, Indias Fin-tech sector will need investments of US$ 20-25 billion over the next few years, according to the report.

Niti Aayog foresees India emerging as the hub of digital financial services globally, with solutions like UPI growing tremendously and being hailed as instrumental in bringing affordable digital payment solutions to the last mile.

SPACENET OUTLOOK

Spacenet enterprises India Limited is engaged in the business of development of Software tools and platforms providing fast, flexible and reliable commodities trading tools and to invest, acquire and to deal in gold, and other commodities of all kinds, agricultural or otherwise, finished or unfinished goods and to take delivery and hold them as permitted under Securities Contracts Regulation Act (SCRA) 1956 and the rules made there under.

Further the company will Build, Invest, Support and unlock the value of Fin-tech Companies Powering Trade-Fi Solutions & Trade-Fi Services.

Trade finance has historically been a specialist financing type, the specialist knowledge has led to specialised traders who have a knowledge of re-selling or transferring the commodity risk and the company Leverage the technology and specialist approach in structured trade and commodity market Cover Forex Risk, we arrange Import/Export supply chain finance Offer Buyers Credit/Suppliers Credit from major Banks Complete Supply chain cycle Work with the best Commodity companies, Traders, Bankers, Industries, Insurers, Re-insurers and power the whole supply chain financing in order to maintain client confidence Registered and work with all the RBI approved Fintech TREDS platforms

OPPORTUNITIES

Given the slew of reforms being witnessed in the commodity derivatives market, your Company sees a number of opportunities coming its way and has the potential to reap the benefits thereof as and when they present themselves. A number of these opportunities are arising from positive policy action directed at the growth and Development of the commodity derivatives market.

SEBI Board has approved FPIs participation in commodity derivative market and soon SEBI will be issuing guidelines in this regard. When this important category of institutional participants is allowed in Indias commodity derivatives market, this can enhance the depth in the market and also inject much-needed liquidity in the far-month contracts.

Invoice discounting/ Bill discounting platforms:

97% of the SMEs in India experienced late payment on the Invoices. 56% of Indian MSME are dealing with working capital issues due to the late payment on their invoices. Invoice discounting is a source of working capital finance for the seller of goods on credit. Bill discounting is an arrangement whereby the seller recovers an amount of sales bill from the financial intermediaries before it is due. Such intermediaries charge a fee for the service. This practice of discounting bills globally is much more prevalent than we think and has been a recognized mode of alternative financing in the developed nations. With the changing time, a need for seamless working capital flow has been identified on a global level.

Bill discounting is becoming the best form of getting working capital as there are no collaterals, and it is cost-effective and time-efficient. It also gives the added benefit of using the hidden items in balance sheet, such as receivables, to get the much needed cash. And with SMEs emerging on a daily basis, bill discounting and its advantages have become the need of the hour. The gap between the funding requirement in India and the availability is as wide as Rs 2.9 trillion! So obviously, a need arose to bridge the gap. Since traditional banking systems werent able to keep up with the pace of changing trends, alternative financing solutions such as invoice discounting came up to solve the working capital issues

Invoice discounting/ bill discounting is an alternative way of lending. Invoice discounting is the practice of using a companys unpaid accounts receivable as collateral for a loan, which is issued by a finance company.

Your company is focusing to be an aggregator in this field and your company have good access to corporate companies and will connect the Banks & NBFCs to get the working capital funding for MSMEs/SMEs and small vendors.

The market size of Indian invoice discounting market is around USD 100 billion. The small and medium enterprises are discounting bills worth more than Rs 1,200 crore a month as they try to improve their working capital needs with the Non-Banking Finance Companies holding back from lending. So the need for an aggregator who can connect the buyer with multiple investors is added advantage and your company has initiated for a successful aggregator in the invoice/bill discounting markets.

THREATS

Cybersecurity Threats

Cyber security threat is increasingly becoming critical with new threats that seek to exploit any vulnerability in the systems of Exchanges and Clearing Corporations. In view of such threats, your Company is continuously monitoring, evaluating and implementing various security solutions for early identification, detection, quick protection, response and recovery from all such cyber-attacks.

The financial services landscape in India is largely controlled by banks and NBFCs.

The role of private banks has been crucial and the governments role in issuing new banking licenses was an important inflection point.

However, there is still a huge gap between demand and supply of finance, especially for small and mid-sized companies. Of course, lending against collateral is one way to solve it, but the time to disperse fund and availability of collaterals, are always a burden to MSME vendors and small service Business to regulate the working capital.

As the bill /invoice discounting business is an emerging and new arena it definitely take some time to understand by all range of business entities.

various units based on their preparedness and the strength of their Business Continuity plans.

SEGMENT–WISE PERFORMANCE.

Your company is engaged in the business of development of Software tools and platforms providing fast, flexible and reliable commodities trading tools and to invest, acquire and to deal in gold, and other commodities of all kinds, agricultural or otherwise, finished or unfinished goods and to take delivery and hold them as permitted under Securities Contracts Regulation Act (SCRA) 1956 and the rules made there under and also engaged in the business of Trade finance and Fin-tech.

Financial performance & Operational performance

Financial performance & Operational performance of your Company for the year ended on 31st March, 2023 on Standalone and consolidated basis is summarized below:

A.Standalone Basis: (Rs.in Lakh)

Standalone Financial Results

Particulars

2022-2023 2021-2022
Total Income 14252.79 4054.05
Total expenses 13982.39 3965.83
Profit / (Loss) after tax 281.18 76.13
Earnings per share - par value of Rs. 1 per share
Basic 0.05 0.03
Diluted 0.05 0.03

Financial Highlights:

For the financial year ended March31, 2023, your Company had reported total income of Rs. 14252.79 Lakhs as against Rs. 4054.05 Lakh during the previous financial year ended March31, 2022. The Company incurred a Net Profit of Rs. 281.18 Lakh for the financial year ended March31, 2023 as against Net profit of Rs. 76.13 Lakh during the previous financial year ended March, 2022.

B.Consolidated basis:

Particulars

Consolidated Financial Results

2022-2023 2021-2022
Total Income 14495.45 4377.95
Total expenses 14243.84 4294.59
Profit / (Loss) after tax 262.39 70.60
Earnings per share - par value of Rs. 1 per share
Basic 0.5 0.03
Diluted 0.5 0.03

Financial Highlights:

For the financial year ended March31, 2023, your Company had reported total income of Rs. 2833.58 Lakhs as against Rs. 4377.95 Lakh during the previous financial year endedMarch31, 2022.

The Company incurred a Net Profit of Rs. 108.97 Lakh for the financial year ended March31, 2023 as against Net profit of Rs. 70.60 Lakh during the previous financial year ended March, 2022.

The Consolidated Financial Statements of your Company for the FY 2022-23 are prepared in compliance with the applicable provisions of the Companies Act, 2013 (‘the Act), Indian Accounting Standards (‘Ind AS) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same shall also be forms part of this Annual Report.

RISKS AND CONCERNS

Risk Mitigation

Your Company is exposed to both internal as well as external business risks. Your Company has a comprehensive risk management system in place, which is tailored to the specific requirements of its diversified businesses, considering various factors, such as the size and nature of the inherent risks and the regulatory environment of the individual business segment or operating company.

The risk management system enables it to recognize and analyze risks early and take appropriate actions. The senior management of your Company regularly reviews the risk management processes of your Company for effective risk management.

Your Company is subject to risks arising from interest rate fluctuations. Your Company maintains its accounts and reports its financial results in rupees. As such, your Company is exposed to risks relating to exchange rate fluctuations. The Corporate Risk Management Cell works with the businesses to establish and monitor the specific profiles including strategic, financial and operational risks.

We believe that our multi-location operations also allow us to leverage the competitive advantagesof each location to enhance our competitiveness and reduce geographic and political risks in ourbusinesses.

Risks from Technology:

Your Company is dependent for technology on third party vendors for services that are important to its business. As such, any interruption in or cessation of an important supply or service by any third party can have an adverse effect on its business and operations. Any failure to keep pace with industry standards in technology and respond to participant preferences can also have an adverse effect on the business and operations.

Besides, your Company has commenced the process of migrating to a new technology platform, availing the services of a new technology service provider. Any improper, unplanned or delayed migration to the new platform can have consequent negative impact on any or some of the operational aspects.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Board of Directors of your Company has put in place various internal controls systems to be followed by your Company to ensure that the internal control mechanisms are adequate and effective. The Board has also put in place state-of-the-art technology and has automated most of the key areas of operations and processes to minimize human intervention.

The design, implementation and maintenance of adequate internal financial controls are such that it operates effectively and ensures the accuracy and completeness of the accounting records and their presentation gives a true and fair view of the state of affairs of your Company and are free from material misstatements, whether due to error or fraud.

The operational processes are adequately documented with comprehensive and well defined SOPs which also include the financial controls in the form of maker and checker with separate individuals.

The Board with a view to ensure transparency, has also formulated various policies and has put in place appropriate internal controls for the procurement of services, fixed assets, monitoring income streams, investments and financial accounting.

Internal control measures include adherence to systemic controls, information security controls as well as role based/ need based access controls. Further, the existing systems and controls are periodically reviewed for change management in the situations of introduction of new processes / change in processes, change in the systems, change in personnel handling the activities etc.

The Audit Committee of your Company, comprising majority of Independent Directors periodically reviews and recommends the unaudited quarterly financial results and annual audited financial statements of your Company to the Board for its approval. Further, all related party transactions are placed before the Audit Committee and are reviewed by it after deliberations.

Your Company has strong internal control systems and best in class processes commensurate with its size and scale of operations.

Financial control is effectively managed through Annual Budgeting process and its monitoring is carried out through monthly review for all operating & service functions.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

Your Company continues to attract, retain and nurture talented workforce in its endeavour to be an employer of choice. Cultural integration being an integral part of management philosophy,

Your Company believes that employees form an integral part of the organization for sustained growth and strive to create a work environment that fosters high performance culture. In todays competitive world, equity based compensation is considered to be an integral part of employee compensation Across sectors which enables alignment of personal goals of the employees with organizational objectives by participating in the ownership of the Company through share-based compensation scheme/plan.

Your Company fully recognizes the same and therefore wants its employees to participate and share the fruits of growth and prosperity along with the Company and intends to reward, attract, motivate and retain employees and Senior management of the Company for their high level of individual performance and for their efforts to improve the financial performance of the Company with the objective of achieving sustained growth of the Company and creation of shareholders value by aligning the interests of the eligible employees with the long-term interests of the Company.

With the above objective, the Board of Directors of your Company is implementing "SPACENET Employee Stock Option Scheme 2021

Under "SPACENET Employee Stock Option Scheme 2021 the eligible employees shall be granted employee Stock Options in the form of Options which will be exercisable into equity shares of the Company.

Your Company believes in the safeguarding health of the employees and hence during the COVID-19 Pandemic last year, your company took a health insurance policy for the employees in case they undergo hospitalisation.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AND RETURN ON NETWORTH:

Pursuant to amendment made in Schedule V to the SEBI Listing Regulations, details of significant changes in Key Financial Ratios and any changes in Return on Net Worth of the Company (on standalone basis) including explanations therefor are given below:

Particulars

FY ended 31st March, 2023 FY ended 31st March, 2022 Changes between Current FY & Previous FY Explanation (in case any change of 25% or more as compared to the immediately previous financial year)

Debtors Turnover

4.78 2.25 112.56% Primarily due to increase in revenue from operations
Inventory Turnover NA NA NA

Interest Coverage Ratio

NA NA NA No change of 25% or more as compared to the immediately previous financial year
Current Ratio 1.99 2.47 -19.26%
Debt Equity Ratio - 0.07 NA
Operating Profit Margin (%) 0.02 0.02 3.62%
Net Profit Margin (%) 0.02 0.02 3.62%

Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof: -

Return on Net Worth for the FY 2022-23 is – 5.34% Return on Net Worth for the FY 2021-22 is - 2.24%

Disclosure of Accounting Treatment:

The Company has prepared financial statements which comply with IndAS applicable for periods ending on March 31, 2023, together with the comparative period data as at and for the year ended March 31, 2022, as described in the summary of significant accounting policies.

Primarily, a treatment different from that prescribed in an Accounting Standard has not been followed in the preparation of financial statements.

However, as regards amendments to certain accounting standards, the applicability / effect on the financial statement has been evaluated and been treated accordingly as explained in Notes to the standalone Financial Statements.

Further, the financial statements represent a true and fair view of the underlying business transactions

CAUTIONARY STATEMENT

In this annual report some future developments which are expected to be implemented have been given. This has been done with a view to help investors better understand the Companys future prospects and make informed decisions while interacting with the Exchange. This annual report and other written and oral statements made from time to time may contain such forward looking statements based on managements current plans and assumptions. It cannot be guaranteed that any forward-looking statement will be realised, although, we believe, we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and inaccurate assumptions. Should ‘known or ‘unknown risks or uncertainties materialise, or should the underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. Investors should bear this in mind when they consider forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

For Specenet Enterprises India Limited

For Specenet Enterprises India Limited

Sd/-

Sd/-

Sethurathnam Ravi

Satya Srikanth Karaturi

Chairman

Whole Time Director

DIN:00009790

(DIN: 07733024)

Date:12-08-2023

Place: Hyderabad