Spacenet Enterprises India Ltd Management Discussions

ECONOMIC OVERVIEW

GLOBAL ECONOMIC OVERVIEW

In 2023, the global economy exhibited unexpected resilience despite facing significant challenges, including concerns about stagflation and recession. Economic activity remained robust, with inflation rates descending from their mid-2022 peak. This resilience was bolstered by higher-than-anticipated government spending and household consumption, along with an unforeseen expansion in labour force participation.

Central banks across the globe implemented interest rate hikes to restore price stability, while adjustments in mortgage and housing markets mitigated the immediate impact of these rate hikes.

The global growth rate for 2023 stood at a steady 3.2%. Although modest by historical standards, this rate reflects the resilience of the global economy amidst high borrowing costs, reduced fiscal support, and geopolitical tensions, including the Russia-Ukraine War and the Red Sea Crisis.

Despite expectations of declining inflation, it remained a concern, particularly in emerging markets, where economies are predicted to return to inflation targets more slowly than their advanced counterparts

Global Outlook:

Projections from the International Monetary Fund (IMF) suggest that the global economy is poised to expand by 3.2% in both 2024 and 2025. Building on the resilience shown in 2023, there is potential for gradual improvement and a return to a more robust growth trajectory. Inflation is expected to decline gradually, especially in advanced economies, as central banks begin to ease policies. Furthermore, increased multilateral cooperation to tackle issues like climate change and geo-economic fragmentation could foster shared prosperity. By collaborating to facilitate the transition to green energy and promoting inclusive growth, nations can contribute to a more resilient and equitable global economy

Domestic Indian Economic Review

The Indian economy expanded impressively by 7.6% during FY2023-24, driven by robustness across various sectors. Consumer confidence surged, as indicated by the RBI?s household survey, reflecting growing household optimism.

Enterprise surveys supported this sentiment, highlighting favourable business conditions, increased production levels, and improved employment prospects. The economy demonstrated vigorous activity, supported by strong GDP growth and corroborated by high-frequency indicators such as e-way bills, toll collections, and automobile sales

The labour market showed improvement, with the unemployment rate declining to 7.6% in March 2024. The organized sector, in particular, saw increased job creation, enhancing employment opportunities across the country.

Agricultural activities also contributed significantly to rural employment, particularly with the onset of the rabi harvest, which led to decreased demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Fiscal management remained prudent, with the gross fiscal deficit of the Union government within estimates and direct tax collections growing by 21.6%.

Inflation moderated throughout the fiscal year, with both food and core inflation easing. While rural inflation experienced a marginal uptick, urban inflation moderated, with the all-India CPI stabilizing at 4.9% in March 2024.

Domestic Outlook

The Reserve Bank maintained its GDP growth forecast at 7.0% for FY2024-25. India is on the course to become the world?s third-largest economy by 2030, driven by strong domestic consumption, visible structural demand, and a robust corporate and banking sector. The country?s recovery is powered by shifts to renewable energy, improved trade policies, significant infrastructure investments, and digitalization. With comprehensive strategic reforms, India is poised for sustained economic growth.

INDUSTRY STRUCTURE AND DEVELOPMENTS

GLOBAL COMMODITY TRADE

Global Commodity Trade Overview (FY 2023-2024)

1. Energy Commodities (Oil, Gas, Coal):

Oil: The global oil market saw significant fluctuations due to geopolitical tensions, OPEC+ production cuts, and the energy transition. While demand recovered post-pandemic, price volatility remained high, especially with ongoing conflicts like the Russia-Ukraine war impacting supply routes.

Natural Gas: LNG (Liquefied Natural Gas) markets experienced increased demand, particularly in Europe, due to reduced Russian pipeline gas supplies. Asia remained a significant consumer, with China and India leading the demand surge.

Coal: Despite global efforts to reduce coal dependence, demand in emerging markets remained strong. High energy prices led some countries to revert to coal, driving up trade volumes.

2. Agricultural Commodities:

Grains (Wheat, Corn, Soybeans): The grain market faced supply chain disruptions, weather-related challenges, and geopolitical factors impacting production in key regions like Ukraine, Russia, and the U.S. Prices remained elevated due to these uncertainties. Soft Commodities (Coffee, Cocoa, Sugar): The soft commodity markets were influenced by changing weather patterns, especially in key producing regions in Latin America and Africa. Inflationary pressures and supply chain constraints affected global trade volumes.

3. Metals and Minerals:

Base Metals (Copper, Aluminium, Zinc): The metal markets were driven by industrial demand, especially from China and other emerging economies. The energy transition and the push for electric vehicles increased demand for metals like copper and lithium. Precious Metals (Gold, Silver): Gold remained a safe-haven asset amid global economic uncertainty and inflation fears. Silver, with its dual role as a precious and industrial metal, saw increased demand in the green energy sector.

Rare Earth Elements: The trade in rare earth elements continued to be strategically important, especially in the context of U.S.-China trade relations and the global push for technological advancements.

4. Supply Chain and Logistics:

The global supply chain faced challenges due to ongoing geopolitical tensions, the aftermath of the pandemic, and the increasing focus on sustainability. Shipping costs, port congestions, and labour shortages impacted trade flows across all commodities.

5. Sustainability and ESG (Environmental, Social, Governance):

ESG considerations increasingly influenced commodity trade, with more companies and countries focusing on sustainable sourcing, reducing carbon footprints, and ensuring ethical practices in supply chains. This trend is expected to continue influencing trade patterns in the coming years. FY 2023-2024 has been a year of adaptation and transformation for global commodity markets. The interplay of economic recovery, geopolitical developments, and evolving trade policies has created a complex environment. Stakeholders in the commodity trade industry must navigate these changes with agility and foresight to capitalize on opportunities and mitigate risks

DOMESTINC COOMODITY TRADE

In FY 2023-2024, India?s commodity trade has navigated a complex landscape characterized by global economic uncertainties, shifting supply chains, and evolving trade policies. India has maintained its position as a major player in global commodity markets, with significant developments across various commodity sectors.

The financial year 2023-2024 was a mixed period for Indias commodity trade, marked by both challenges and progress across various sectors.

Exports:

Indias total merchandise exports experienced some difficulties during the year, particularly in the first quarter of 2023-24. Exports faced a steep decline, with a notable 22% drop in June 2023, marking one of the sharpest declines in recent years. This decline was driven by global economic uncertainties, including fluctuating oil prices and reduced demand from major markets. Overall, the government had set a target range for exports, but achieving these goals was challenging given the global economic environment.

Despite these challenges, India continued to pursue an ambitious export strategy, aiming to reach a target of USD 2 trillion in total exports by 2030, with goods and services each contributing USD 1 trillion. The countrys focus remained on diversifying export markets and enhancing the competitiveness of Indian products globally.

Imports:

On the import side, India saw fluctuations driven by global price changes, particularly in energy and raw materials. The reduction in global oil prices led to a significant decrease in petroleum imports. However, the country maintained robust forex reserves, which at the end of March 2024 could cover more than 10 months of projected imports.

Sectoral Performance:

The agriculture sector showed resilience, growing at an average rate of 4.18% annually over the past five years. The industrial sector also demonstrated strong growth, expanding by 9.5% in FY2023-24. The services sector continued to be the largest contributor to the economy, accounting for 55% of the GDP. Overall, Indias commodity trade in FY 2023-24 reflected the global economic challenges but also highlighted the countrys efforts to sustain growth and manage inflation effectively

FY 2023-2024 has been a year of adaptation and strategic maneuvering for India?s commodity trade. The interplay of global economic conditions, domestic policies, and market trends has created both opportunities and challenges. As India continues to strengthen its position in global commodity markets, stakeholders must stay agile and informed to navigate this evolving landscape.

Fin-Tech Industry Business Review for the Financial Year 2023-24

The Indian FinTech industry saw significant developments during the financial year 2023-2024, marking both challenges and growth opportunities across different segments.

Key Highlights:

1. Funding Landscape:

The Indian FinTech sector secured the third position globally in terms of funding during Q1 2024, raising $551 million. This marked a 59% increase from Q4 2023, though it represented a 57% drop compared to Q1 2023. The significant fluctuations in funding highlight both the resilience and the evolving nature of the sector

2. Growth of Specific Segments:

Alternative Lending, RegTech, and Banking Tech were the top-performing sub-sectors within FinTech. Alternative Lending alone accounted for 89% of the total funding in Q1 2024, with a remarkable 290% growth from the previous quarter. The rise in digital banking and widespread adoption of UPI (Unified Payments Interface) have played crucial roles in this expansion

3. Government Support and Regulatory Environment:

The government continued to support the FinTech industry, particularly through initiatives aimed at enhancing financial inclusion. For the upcoming budget, the FinTech industry is advocating for GST exemptions for smaller players, especially those targeting Tier II and III cities. This would help reduce costs and encourage broader adoption of digital financial services

4. Future Outlook:

The enterprise FinTech segment is expected to grow significantly, with projections estimating a market size of $20 billion by 2030, up from $2.7 billion in 2022. This growth will be driven by the ongoing digital transformation in banking, particularly in retail and MSME segments.

Overall, the Indian FinTech industry continues to be a dynamic and rapidly evolving sector, with strong government support, increasing funding, and a focus on innovation driving its growth.

Bill Discounting Flatform Business Review for the Financial Year 2023-24

The Bill Discounting industry in India experienced notable growth in the financial year 2023-24, driven by increased adoption of fintech platforms and the push for digitization. Bill discounting, a financial solution allowing businesses to receive early payment on invoices, has become increasingly crucial for maintaining cash flow, especially among SMEs (Small and Medium Enterprises).

Key Trends and Developments:

1. Increased Digitization:

Indian bill discounting platforms have seen a rise in digitization, improving the speed and efficiency of transactions. However, the process still lags behind more developed markets like the US and UK, where fintech innovations like blockchain and AI are more widely integrated.

2. Market Growth:

The bill discounting market in India grew steadily, bolstered by the expanding fintech sector, which has made these services more accessible to a broader range of businesses. Platforms like Credlix have been instrumental in providing quick and easy access to funds for Indian businesses.

3. Regulatory Influence:

The Reserve Bank of Indias (RBI) guidelines continue to shape the industry. While these regulations ensure stability and fairness, they also contribute to longer processing times compared to markets with fewer restrictions

4. Discount Rates:

The discount rates in India typically ranged between 8% to 15% annually, depending on the financial standing of the creditor and other factors. These rates are generally higher than those in the US and UK, where competition and market maturity have pushed rates lower. Overall, the Indian bill discounting sector in FY 2023-24 made significant strides, especially with the support of fintech innovations, though it still faces challenges in efficiency and regulation when compared to global counterparts.

OPPORTUNITIES AND THREATS FOR THE COMMODITY TRADING BUSINESS IN INDIA

The commodity trading business in India presents a mix of opportunities and threats as it navigates through a rapidly evolving economic and regulatory environment.

Opportunities:

1. Growing Demand for Commodities:

India?s burgeoning population and economic growth are driving increased demand for commodities such as energy, metals, and agricultural products. The expansion of infrastructure projects and urbanization are further boosting the demand for industrial commodities like steel, cement, and coal.

2. Technological Advancements:

The adoption of advanced technologies like AI, big data, and blockchain in commodity trading platforms is enhancing efficiency, transparency, and risk management. These technologies are helping traders make better-informed decisions and streamline operations.

3. Government Initiatives:

The Indian government has been supportive of the commodity trading sector by implementing policies that promote transparency and efficiency. Initiatives like the National Agriculture Market (eNAM) and the launch of commodity-specific exchanges have made it easier for traders to access markets and improve price discovery.

4. Global Market Integration:

As India continues to integrate with global markets, there are increasing opportunities for Indian traders to engage in international commodity trading. This globalization allows traders to tap into new markets, diversify their portfolios, and mitigate risks associated with domestic market fluctuations.

5. Sustainability and ESG Focus:

With a growing focus on environmental, social, and governance (ESG) factors, there is an opportunity for traders to align with sustainable practices. This can include trading in carbon credits, renewable energy certificates, and other eco-friendly commodities, which are gaining traction globally.

Threats:

1. Regulatory Risks:

The commodity trading industry in India is subject to a complex and evolving regulatory framework. Changes in government policies, taxation, and import/export restrictions can significantly impact profitability and operations. For instance, sudden changes in export tariffs or bans on certain commodities can disrupt trading activities.

2. Market Volatility:

Commodity markets are inherently volatile, influenced by factors such as geopolitical tensions, currency fluctuations, and changes in global supply and demand dynamics. Indian traders are particularly vulnerable to global price swings, which can lead to significant financial losses.

3. Infrastructure Challenges:

Despite advancements, India still faces infrastructure bottlenecks that can impede the smooth functioning of commodity trading. Inadequate storage facilities, transportation inefficiencies, and supply chain disruptions can affect the timely delivery and quality of commodities.

4. Competition:

The Indian commodity trading sector is becoming increasingly competitive, with both domestic and international players vying for market share. This intense competition can squeeze profit margins and make it difficult for smaller traders to survive.

5. Environmental and Climate Risks:

Climate change poses a significant threat to the commodity trading business, particularly in agriculture. Erratic weather patterns, droughts, and floods can impact crop yields and disrupt the supply chain, leading to price volatility and supply shortages.

In summary, while the Indian commodity trading sector is poised for growth with various emerging opportunities, it also faces substantial risks that require careful navigation and strategic planning.

OPPORTUNITIES AND THREATS FOR THE FINTECH BUSINESS IN INDIA

The Indian FinTech industry is one of the fastest-growing sectors in the country, driven by a confluence of factors such as increased digital adoption, supportive government policies, and a growing demand for financial inclusion. However, the industry also faces several challenges that could impact its growth trajectory.

Opportunities:

1. Expanding Digital Economy:

India?s rapidly expanding digital economy, with increasing internet penetration and smartphone usage, presents a significant opportunity for FinTech companies. The growth of digital payments, online banking, and e-commerce creates a vast market for FinTech solutions, especially in underserved areas.

2. Financial Inclusion:

FinTech companies have the opportunity to tap into the unbanked and underbanked population in India. By offering innovative financial products like microloans, digital wallets, and low-cost insurance, FinTech firms can help bridge the financial inclusion gap, reaching rural and semi-urban areas where traditional banking infrastructure is limited.

3. Government Support:

The Indian government has been supportive of the FinTech sector through initiatives like Digital India, Jan Dhan Yojana, and the Unified Payments Interface (UPI). These initiatives have laid the groundwork for a thriving FinTech ecosystem, encouraging innovation and facilitating easier access to financial services.

4. Partnerships with Traditional Financial Institutions:

Collaboration between FinTech companies and traditional banks can create synergies that benefit both parties. FinTech?s can leverage the vast customer base and trust associated with traditional banks, while banks can use innovative FinTech solutions to enhance their service offerings and customer experience.

5. Rising Investment and Innovation:

The Indian FinTech sector continues to attract significant investments, both from domestic and international investors. This influx of capital is driving innovation and allowing companies to scale quickly. With ongoing advancements in technology, there are opportunities for FinTech?s to introduce new products and services, such as blockchain-based solutions, AI-driven financial planning tools, and more.

Threats:

1. Regulatory Challenges:

The FinTech industry operates in a highly regulated environment, with frequent changes in policies that can create uncertainty. For instance, the Reserve Bank of Indias (RBI) guidelines on digital lending, data protection, and KYC (Know Your Customer) norms can impact the operations and scalability of FinTech companies. Regulatory compliance can be costly and complex, especially for smaller players.

2. Cybersecurity Risks:

As FinTech companies handle vast amounts of sensitive financial data, they are prime targets for cyberattacks. Breaches in data security can erode customer trust and lead to significant financial losses. Ensuring robust cybersecurity measures is crucial, but it also adds to operational costs.

3. Intense Competition:

The Indian FinTech market is highly competitive, with numerous startups and established players vying for market share. This intense competition can lead to price wars, reduced margins, and increased customer acquisition costs. Additionally, the entry of global tech giants into the Indian market poses a threat to local FinTech firms.

4. Customer Trust and Adoption:

While digital adoption is on the rise, there are still segments of the population that are hesitant to use digital financial services due to concerns about security and privacy. Building and maintaining customer trust is essential for the sustained growth of FinTech companies.

5. Economic Uncertainty:

Macroeconomic factors such as inflation, interest rate fluctuations, and global economic instability can impact the growth of the FinTech sector. Economic downturns can reduce consumer spending, increase default rates on loans, and lead to tighter access to capital, all of which can affect FinTech businesses. In conclusion, while the Indian FinTech industry is poised for significant growth with ample opportunities, it must also navigate various challenges, including regulatory hurdles, cybersecurity threats, and intense competition. Companies that can innovate, adapt, and build trust will be well-positioned to succeed in this dynamic landscape.

OPPORTUNITIES AND THREATS FOR THE BILL DISCOUNTING BUSINESS IN INDIA

The Bill Discounting business in India is gaining momentum, particularly with the increasing digitization of financial services and the growing need for efficient cash flow management among businesses. However, this sector also faces several challenges that could impact its growth and sustainability.

Opportunities:

1. Rising Demand from SMEs:

Small and Medium Enterprises (SMEs) in India often face liquidity constraints due to delayed payments from their customers. Bill discounting offers an attractive solution by providing immediate cash flow against pending invoices. As more SMEs seek to optimize their working capital, the demand for bill discounting services is expected to rise significantly

2. Growth of FinTech Platforms:

The proliferation of FinTech platforms in India has made bill discounting more accessible and efficient. These platforms leverage technology to streamline the process, reduce paperwork, and offer faster turnaround times. As digital adoption increases, these platforms are likely to attract more businesses looking for quick and easy financing options

3. Government Initiatives and Support:

The Indian government?s push for financial inclusion and support for MSMEs (Micro, Small, and Medium

Enterprises) provides a favourable environment for the growth of the bill discounting market. Initiatives like the Trade Receivables Discounting System (TReDS) are designed to help MSMEs access credit easily and at competitive rates, thus fostering the bill discounting industry.

4. Integration with Global Markets:

As Indian businesses increasingly engage in international trade, there is a growing need for global trade finance solutions, including bill discounting. This presents an opportunity for Indian firms to tap into the global market, offering services tailored to the needs of exporters and importers.

Threats:

1. Regulatory Hurdles:

The bill discounting sector is subject to stringent regulations by the Reserve Bank of India (RBI) and other financial bodies. Any changes in regulatory policies, such as modifications in credit assessment norms or tightening of KYC requirements, can pose challenges to the growth and scalability of bill discounting services.

2. Economic Uncertainty:

The bill discounting business is highly sensitive to economic cycles. During periods of economic downturn, businesses may face delays in receivables, increasing the risk of defaults. This uncertainty can lead to higher discount rates and tighter credit conditions, which could deter businesses from opting for bill discounting services.

3. Competition from Traditional Banking:

While FinTech platforms have made inroads into the bill discounting space, traditional banks still dominate the market. Banks often have the advantage of established customer relationships and more comprehensive financial services, which can make it difficult for standalone bill discounting platforms to compete.

4. Credit Risk and Fraud:

Bill discounting involves the risk of the underlying invoices being fraudulent or the debtor defaulting on payment. Despite advances in credit assessment tools, these risks remain a significant concern for service providers. Managing credit risk effectively while maintaining competitive discount rates is a crucial challenge.

5. Technological Disruptions:

While technology offers significant opportunities, it also brings the threat of disruption. FinTech companies need to continually innovate to stay ahead, as new technologies and platforms can quickly make existing models obsolete. Additionally, cybersecurity threats pose a risk to the integrity and reliability of digital bill discounting platforms.

In summary, the bill discounting business in India has substantial growth potential, driven by the needs of SMEs, advancements in FinTech, and supportive government initiatives. However, the sector must navigate challenges such as regulatory changes, economic volatility, and competition from traditional financial institutions to fully capitalize on these opportunities.

SPACENET OUTLOOK

Spacenet Enterprises India Limited had a notable financial year in 2023-2024, with significant growth and strategic advancements. The company reported a remarkable increase in net profit year-on-year, highlighting its successful business strategies and operational efficiencies.

This growth is attributed to its core business in trading agricultural and non-agricultural commodities, alongside strategic investments in tech-driven ventures such as Billmart Fintech Pvt Ltd and String Metaverse

Ltd. Spacenet has a diversified business model, primarily involved in commodity trading but with a growing focus on investing in and supporting innovative technology companies.

Spacenet portfolio includes ventures in fintech, AI, PropTech, and GameFi, which are expected to drive future growth.

For the financial year 2023-2024, Spacenet Enterprises India Limited experienced notable financial and strategic developments.

Strategic Initiatives:

Investment Plans: Spacenet announced plans to raise 100 crore through a preferential issue to invest in five new-age tech companies across sectors like fintech, neo banking, AI, proptech, and GameFi. These investments aim to create substantial shareholder value and capitalize on emerging technological trends.

Expansion: The company continues to focus on enhancing its fintech capabilities, including expanding its stake in fintech platforms like BillMart.com and investing in AI and proptech ventures. These strategic moves are expected to drive growth and further strengthen its market position.

Overall, Spacenet Enterprises India Limited is leveraging its financial technology expertise to diversify its investments and expand its influence in various emerging tech sectors, positioning itself for future growth and profitability.

Spacenet focus on high-growth sectors and strategic investments has enabled it to improve its profitability and set the stage for future expansion. The company is well-positioned to capitalize on technological trends that are expected to shape the next decade, aiming to create substantial value for its shareholders.

6. Outlook for 2024-2025

Looking ahead, Spacenet Enterprises India Limited is well-positioned to capitalize on emerging opportunities. company strategic focus will remain on market expansion, & operational excellence and anticipate continued growth in the coming year.

7. Conclusion

The financial year 2023-2024 has been marked by significant progress and resilience. company strategic initiatives and operational improvements have laid a strong foundation for future success. company remain committed to delivering value to stakeholders and navigating the dynamic business landscape with agility and innovation

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, 2024 on Standalone and consolidated basis is summarized below:

A. Standalone Basis:

	Standalone Financial Results
Particulars	2023-2024	2022-2023
Total Income	10301.940	14252.79
Total expenses	9569.310	13982.39
Profit / (Loss) after tax	720.100	281.18
Earnings per share - par value of Rs. 1 per share
Basic	0.130	0.05
Diluted	0.130	0.05

Financial Highlights:

For the financial year ended March31, 2024, your Company had reported total income of Rs. 10301.940 Lakhs as against Rs. 14252.79 Lakh during the previous financial year ended March31, 2023. The Company incurred a Net Profit of Rs. 720.100 Lakh for the financial year ended March31, 2024 as against Net profit of Rs. 281.18 Lakh during the previous financial year ended March, 2023.

B. Consolidated basis: (Rs.in Lakh)

	Consolidated Financial Results
Particulars	2023-2024	2022-2023
Total Income	12855.630	14495.45
Total expenses	11774.100	14243.84
Profit / (Loss) after tax	1068.360	262.39
Earnings per share - par value of Rs. 1 per share
Basic	0.200	0.05
Diluted	0.200	0.05

Financial Highlights:

For the financial year ended March31, 2024, your Company had reported total income of Rs. 12855.630 Lakhs as against Rs. 14495.45 Lakh during the previous financial year ended March31, 2023. The Company incurred a Net Profit of Rs. 1068.360 Lakh for the financial year ended March31, 2024 as against Net profit of Rs. 262.39 Lakh during the previous financial year ended March, 2023.

The Consolidated Financial Statements of your Company for the FY 2023-24 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 analyse 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 advantages of each location to enhance our competitiveness and reduce geographic and political risks in our businesses.

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 today?s 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.

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, 2024	FY ended 31st March, 2023	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	3.70	4.78	-22.66%	-
Inventory Turnover	437.77	31,041.91		Due to increase in average inventory (CY 20.92 Lakhs & PY 0.42 Lakhs)
Interest Coverage Ratio	NA	NA	NA	-
Current Ratio	11.80	1.99	492.26%	Due to substantial discharge of trade payables and other current liabilities compared to the previous year
Debt Equity Ratio	-	-	NA	-
Operating Profit Margin (%)	6.99%	1.97%	254.19%	Due to increase in operating profit
Net Profit Margin (%)	6.99%	1.97%	254.19%	Due to increase in operating profit

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 2023-24 is 7.11% Return on Net Worth for the FY 2022-23 is - 5.34%

Disclosure of Accounting Treatment:

The Company has prepared financial statements which comply with IndAS applicable for periods ending on March 31, 2024, together with the comparative period data as at and for the year ended March 31, 2023, 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 Company?s 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 management?s 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.