Spacenet Enterprises India Ltd Management Discussions

The Management Discussion and Analysis Report should be read in conjunction with the audited standalone and consolidated financial statements of Spacenet Enterprises India Limited ("Spacenet" or "the Company") and the notes forming part thereof for the Financial Year ended 31st March, 2026.

In this Report, references to the "Company" relate to Spacenet Enterprises India Limited on a standalone basis, while references to the "Group" include the Company and its subsidiaries and controlled entities whose financial results have been consolidated with those of the Company.

1. ECONOMIC OVERVIEW

Global Economic Overview

The global economy continued to operate in an environment of moderate growth, geopolitical uncertainty, trade-policy changes and volatile commodity and energy markets during the period under review. Global supply chains remained sensitive to disruptions in major trade corridors, while fluctuations in energy, metal, agricultural and freight prices affected procurement costs, working-capital requirements and business margins.

The International Monetary Fund estimated global growth at approximately 3.0% for 2025. The latest July 2026 update projects global growth of 3.0% in 2026 and 3.4% in 2027, while noting that growth remains uneven and that geopolitical conflict, energy-price shocks and financial-market repricing continue to pose downside risks.

For trading and distribution businesses, the operating environment emphasised the need for:

• Disciplined procurement and pricing;

• Effective counterparty and credit-risk assessment;

• Efficient working-capital deployment;

• Diversified supplier and customer relationships;

• Close monitoring of foreign-exchange and commodity-price movements; and

• Resilient logistics and supply-chain arrangements.

Commodity markets remained exposed to abrupt changes in energy availability, transportation costs, weather conditions and geopolitical developments. The World Banks April 2026 Commodity Markets Outlook highlighted renewed volatility across energy, fertiliser, metals and other commodity categories, reinforcing the importance of robust risk management for commodity-linked businesses.

Indian Economic Overview

India remained one of the fastest-growing major economies during FY 2025-26. According to the Provisional Estimates released by the Ministry of Statistics and Programme Implementation, real GDP grew by 7.7% during FY 2025-26, compared with 7.1% during FY 2024-25. Nominal GDP grew by 8.9%, while real GVA recorded growth of 7.9%.

Growth was supported by domestic consumption, investment activity, infrastructure expenditure, services and continued digitalisation. Indias cumulative merchandise and services exports during FY 2025-26 were estimated at US$860.09 billion, compared with US$825.26 billion during FY 2024-25, representing estimated growth of 4.22%.

The Indian business environment nevertheless remained subject to commodity-price fluctuations, interest-rate movements, regulatory changes, supply-chain constraints and global geopolitical developments. These factors directly influence trading margins, inventory cycles, receivable collections and financing requirements.

2. INDUSTRY STRUCTURE AND DEVELOPMENTS Commodity Trading and Distribution

Commodity trading is influenced by domestic and international demand, production levels, weather conditions, government policies, import and export restrictions, currency movements, freight costs and the availability of credit.

During FY 2025-26, commodity markets continued to experience price and supply volatility. Participants were required to maintain disciplined exposure limits, evaluate counterparties, monitor receivables and manage procurement cycles carefully.

Indias continuing infrastructure development, industrial growth, urbanisation and consumption demand offer opportunities for trading and distribution businesses. At the same time, intense competition, narrow margins and market volatility require companies to focus on transaction quality, customer relationships, efficient working-capital management and risk-adjusted returns.

Service and Technology-enabled Business Environment

Technology-enabled services continued to expand with increased adoption of digital workflows, automation, data-driven decision-making and electronic customer interfaces.

At the Group level, service income became an increasingly important component of operations during FY 2025-26. Consolidated service revenue increased substantially during the year, indicating a broader revenue mix and reducing exclusive dependence on the traditional trading segment.

The sector nevertheless remains exposed to rapid technological changes, cybersecurity risks, data- protection requirements, reliance on third-party service providers, regulatory developments and the need for continued investment in systems and skilled personnel.

Real Estate and Allied Investment Activities

During the year, the Company established:

• Spacenet Realty Core LLP; and

• Spacenet Urban Realty LLP.

Both entities were incorporated on 12th November, 2025, with the Company holding a 99.90% economic interest in each entity. The entities were established as special-purpose vehicles for evaluating real estate and allied investment activities.

As at 31st March, 2026, these LLPs had not commenced material operations and did not own material revenue-generating assets. Accordingly, they did not make a material contribution to the Groups revenue during the year.

3. COMPANY OVERVIEW

On a standalone basis, the Company continues to operate primarily in the trading of commodities and allied business activities. Considering the nature and manner in which the standalone operations are reviewed by the management, the Company operates as a single reportable business segment at the standalone level.

At the consolidated level, the Group has a broader operating profile comprising two principal business streams, namely Trading of Goods and Service Income. The consolidated financial statements reflect the operations of the Company together with the following entities forming part of the Group:

• Thalassa Enterprises Limited;

• Winteg People Solutions Private Limited;

• Spacenet Tradetech HK Limited;

• Spacenet Enterprises FZCO;

• Spacenet Realty Core LLP; and

• Spacenet Urban Realty LLP.

During FY 2025-26, the Group witnessed a gradual shift in its revenue mix, with the service-oriented business recording stronger growth and becoming an increasingly important contributor to the consolidated operations. While the standalone trading business remained relatively moderate during the year, the diversified operations of the Group supported an improvement in overall consolidated performance.

The Company continues to focus on strengthening its existing businesses while evaluating opportunities that can broaden its operating base, improve revenue quality and support sustainable long-term growth.

4. SEGMENT-WISE PERFORMANCE

At the consolidated level, the Group operates through Trading of Goods and Service Income segments.

The trading business continued to remain an important part of the Groups operations. Although the overall scale of trading activity moderated during the year, the segment maintained a positive contribution to the Groups operating performance. Management continues to focus on transaction quality, commercial discipline and efficient deployment of working capital within this business.

The service segment demonstrated strong growth during the year and emerged as a significant contributor to the Groups consolidated operations. The improvement reflects the increasing contribution from the Groups service-oriented businesses and the benefit of a more diversified operating model.

Overall, the segment performance during the year reflects a progressive change in the Groups business mix, with service activities supplementing the traditional trading business and contributing meaningfully to consolidated growth and profitability.

5. FINANCIAL AND OPERATIONAL PERFORMANCE

A. Standalone Performance

The standalone performance of the Company during FY 2025-26 reflected a moderation in the scale of its trading operations as compared with the previous year. Consequently, operating revenue and profitability at the standalone level were relatively lower.

The Company, however, continued to maintain profitable operations during the year. Income from sources other than core trading activities provided additional support to the overall financial performance.

The management remains focused on improving operating efficiencies, maintaining appropriate cost controls, optimising working capital and evaluating business opportunities capable of generating sustainable returns.

B. Consolidated Performance

The consolidated performance of the Group remained encouraging during FY 2025-26, supported particularly by the strong growth in service income and improved contribution from the Groups diversified operations.

The expansion of the service business enabled the Group to achieve better overall revenue and profitability despite comparatively moderate standalone trading activity. The consolidated results also demonstrate the benefit of operating through multiple business streams rather than relying predominantly on a single source of revenue.

Going forward, the Group intends to focus on strengthening businesses with scalable operating potential, improving margins, maintaining financial discipline and ensuring that expansion is supported by appropriate risk management and capital allocation practices.

6. BALANCE SHEET AND CASH-FLOW POSITION Standalone Position

During the year, the Companys balance sheet expanded primarily on account of investments in property, plant and equipment, investments, loans and other long-term assets. The Company also continued to maintain a strong equity base.

Borrowings increased during the year to support business and investment requirements. Accordingly, management continues to place emphasis on prudent borrowing, timely debt servicing, liquidity management and ensuring that capital is deployed towards opportunities capable of generating appropriate returns.

The Company generated positive cash flows from its operating activities. At the same time, investments made towards assets and other strategic requirements resulted in investing cash outflows, which were supported through a combination of internal resources and financing arrangements.

Consolidated Position

At the consolidated level, the Groups asset and equity base strengthened during the year, reflecting the expansion of its overall operations and investments.

The Group continued to generate positive cash flows from operating activities, providing support for its business requirements and growth initiatives. Investments undertaken during the year were directed towards strengthening the Groups operating and strategic asset base.

As the scale of operations expands, the Group remains focused on liquidity management, disciplined capital allocation, monitoring of borrowing levels and periodic evaluation of returns generated from investments and deployed capital.

7. SIGNIFICANT DEVELOPMENTS DURING FY 2025-26

During FY 2025-26, the Company continued to focus on strengthening its existing business operations, improving organisational capabilities and evaluating opportunities for sustainable expansion and diversification.

As part of its long-term growth strategy, the Company undertook various initiatives aimed at broadening its business base, strengthening its corporate structure and creating platforms for pursuing opportunities in existing and allied sectors. The Company also continued to evaluate strategic investments, partnerships and new business opportunities based on their commercial viability and long-term potential.

The Company remained focused on employee engagement, retention and alignment of employee interests with long-term shareholder value, including through its employee incentive framework and other organisational initiatives.

The Company also took preparatory steps towards expanding its presence in new and allied areas of business through appropriate entities and investment structures. Such initiatives are being pursued in a phased and prudent manner, taking into consideration market conditions, capital requirements, regulatory considerations and expected returns.

Overall, the developments during the year reflect the Companys continued emphasis on business expansion, diversification, operational strengthening and long-term value creation, while maintaining appropriate financial and risk-management discipline.

8. OPPORTUNITIES

The principal opportunities available to the Company and the Group include:

Growth in domestic consumption and infrastructure

Indias continuing economic growth, infrastructure development and industrial activity are expected to support demand for agricultural, industrial and other commodities.

Expansion of service income

The significant increase in consolidated service revenue during FY 2025-26 demonstrates the potential to develop a more diversified revenue profile. The Group may seek to strengthen scalable service offerings while maintaining appropriate margins, customer concentration controls and regulatory compliance.

Digitalisation of trading and business processes

Technology can improve customer onboarding, transaction processing, reconciliation, recordkeeping, risk monitoring and management information systems. Continued digitalisation may support operating efficiency and reduce manual intervention.

Improved working-capital management

Disciplined receivable collection, inventory management, supplier negotiations and credit assessment can release capital, reduce financing costs and improve returns.

Evaluation of new business opportunities

The corporate framework established through the new LLPs and subsequent amendments to the Companys objects enables the Company to evaluate additional opportunities. Any such opportunity should be pursued only after appropriate commercial, legal, financial, technical and regulatory due diligence.

9. THREATS, RISKS AND CONCERNS Commodity-price risk

Changes in commodity prices may affect procurement costs, sales realisations, margins and the valuation of inventories or contractual exposures.

Counterparty and credit risk

Delayed payment or default by customers or counterparties could adversely affect cash flows, profitability and working-capital requirements.

Liquidity and financing risk

The increase in borrowings and capital deployment during the year heightens the importance of cashflow planning, debt servicing and the timely recovery of investments and receivables.

Foreign-exchange risk

The Group has overseas subsidiaries and international exposure. Adverse movements in foreign- exchange rates may affect reported earnings, asset values and cash flows.

Regulatory risk

The Company and its subsidiaries operate within evolving legal and regulatory frameworks. Changes in taxation, import-export restrictions, financial regulations, data-protection requirements and listing obligations could affect business operations and compliance costs.

Technology and cybersecurity risk

Reliance on technology systems and third-party service providers exposes the Group to system failures, cyber incidents, data loss, unauthorised access and business interruption.

Investment and execution risk

Investments in new businesses, assets, subsidiaries or special-purpose entities may involve delays, cost overruns, regulatory approvals, market risks and uncertainty regarding expected returns.

Supply-chain and geopolitical risk

Trade-route disruptions, freight-cost movements, geopolitical conflicts, weather events and availability of supplies may affect procurement and delivery schedules.

Human-capital risk

The Companys ability to attract and retain appropriately skilled personnel is important for operational efficiency, compliance, risk management and business growth.

10.OUTLOOK

For FY 2026-27, the Company intends to maintain its focus on its established trading operations while strengthening the performance and governance of its service-led businesses.

The principal management priorities are expected to include:

• improving trading margins and transaction quality;

• strengthening customer and supplier relationships;

• managing receivables, liquidity and debt prudently;

• improving returns on investments and deployed capital;

• strengthening internal controls, cybersecurity and compliance;

• evaluating suitable opportunities within the Companys permitted business objects; and

• pursuing expansion only after satisfactory due diligence and receipt of requisite approvals.

Subsequent to the close of FY 2025-26, the Board and shareholders approved an increase in authorised share capital, an expansion of the Companys object clause and an enabling authorisation for raising funds through permissible modes. These approvals provide corporate flexibility but do not, by themselves, represent completion of a fund raise, commencement of a new project or deployment of funds into any particular business.

Accordingly, the outlook should remain measured and should avoid representing proposed sectors or enabling approvals as completed operating businesses.

11.INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established internal control systems commensurate with the nature, scale and complexity of its operations. The internal-control framework is intended to provide reasonable assurance regarding:

• safeguarding of assets;

• accuracy and completeness of accounting records;

• prevention and detection of fraud and errors;

• authorisation and recording of transactions;

• compliance with applicable laws and policies; and

• timely preparation of reliable financial information.

Operational and financial processes are supported by defined approval mechanisms, maker-checker controls, role-based access, reconciliations and periodic management review.

The Audit Committee reviews financial results, internal-audit findings, related-party transactions, internal- control matters and the adequacy of corrective actions.

The Company continues to review and strengthen its systems in response to changes in business activities, technology, regulatory requirements and organisational structure.

12. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES

The Company considers its employees an important part of its long-term growth and governance framework. During the year, emphasis continued to be placed on:

• merit-based recruitment;

• employee training and skill development;

• performance evaluation;

• workplace health and well-being;

• diversity and equal opportunity;

• ethical conduct; and

• alignment of employee interests with organisational objectives.

The Spacenet Employee Stock Option Scheme 2021 continued to operate as a long-term employee incentive and retention mechanism. During the year, 30,60,000 equity shares were allotted upon exercise of vested options and a further 2,60,000 options were granted to eligible employees.

The Company seeks to maintain a professional and inclusive work environment and to develop the capabilities required for trading, finance, technology, compliance and emerging business activities.

13. KEY FINANCIAL RATIOS AND RETURN ON NET WORTH

Based on the standalone audited financial results, the indicative ratios are:

Ratio	FY 2025-26	FY 2024-25	Approximate change	Principal reason
Trade Receivables Turnover	2.01	4.10	(50.89)%	Elongated collection cycle and higher billing towards the close of the year
Inve ntory Turn ove r	263.44	290.85	-9.42%	Not Applicable
Interest Coverage Ratio	7.37	70.58	(89.56%)	Increase in finance cost from Rs.5.77 lakh to Rs.50.42 lakh
Current Ratio	2.68	3.69	(27.42%)	Increase in current liabilities relative to current assets
Debt-Equity Ratio	0.17	0.01	Significant increase	Increase in non-current and current borrowings
Operating Profit Margin	4.06%	4.00%	1.61%	Broadly stable operating profitability
Net Profit Margin	0.03	0.03	-	Not applicable
Return on Net Worth	1.66%	2.19%	(24.09%)	Lower standalone PAT together with an increase in net worth

The standalone net worth of the Company increased from Rs.13,807.72 lakh as at 31st March, 2025 to Rs.14,456.82 lakh as at 31st March, 2026. However, standalone profit after tax declined from Rs.301.49 lakh to Rs.239.62 lakh. Consequently, return on net worth decreased during the year.

14.DISCLOSURE OF ACCOUNTING TREATMENT

The standalone and consolidated financial statements of the Company have been prepared in accordance with the Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013, read with the applicable rules made thereunder and other generally accepted accounting principles in India.

The Company has not followed any accounting treatment materially different from that prescribed under the applicable Indian Accounting Standards. The accounting policies and relevant explanatory notes form part of the financial statements.

15.CAUTIONARY STATEMENT

This Management Discussion and Analysis Report contains statements relating to the Companys objectives, expectations, estimates, outlook, strategies, plans and future performance. Such statements are forward-looking in nature and are based on assumptions and information available to the management as at the date of this Report. Actual results may differ materially from those expressed or implied due to economic conditions, commodity-price movements, geopolitical developments, changes in government policies and regulations, foreign-exchange fluctuations, competitive conditions, technology developments, cybersecurity events, credit risks, business execution risks and other factors beyond the control of the Company. The Company undertakes no obligation to revise or update forwardlooking statements except as required under applicable law.