Starcom Information Technology Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS OVERVIEW

The Company is a public limited company incorporated and domiciled in India and with its registered office at Bangalore, Karnataka, India. The Company has its primary listings on BSE Limited. The growth momentum of the Company has again picked up though the performance of the Company has been adversely affected owing to Covid restrictions. The company continues to attract top talent and win new customers and strengthen existing customer relationships. The Company is aspiring to be an eminent global IP driven solution provider in the MDM, Data quality, Business Intelligence and Data Analytics space.

MISSION

Our mission is to enable every organization to realize the power of their data with trust and speed. The suite of products from Starcom integrates data and applications in real time across cloud and big data environments, as well as traditional systems, allowing organizations to develop a unified view of their business and customers across organizational and technology silos. We are a key enabler of the data-driven enterprise where data is a strategic asset powering business.

Our flagship platform Star360 allows customers in any industry to improve business performance by using their data to create new insights and to automate business processes. Our customers rely on our software to better understand their customers to improve their sales, services and compliance. The amount of data available for decision making is increasing dramatically, and the technology to analyze and act on that data is becoming more capable and ubiquitous. The growing capabilities of cloud data warehouses have created a powerful and easy-to-use alternative to on-premise infrastructure that is accelerating the shift of data to the cloud and expanding the availability of big data and machine learning technologies to organizations of all sizes. At the same time, the increasing pace of business is driving the need for more real-time data processing and the need to make data-driven decisions throughout organizations, creating demand for self-service business and analytical applications. Data infrastructure has begun to shift to cloud platforms to enhance agility, elasticity, scalability, and time-to-value. As a result, organizations require agile, real-time data integration and integrity solutions that support their evolving needs.

Starcom products Star360, StarDQ and Star BI provide a comprehensive, flexible solution to address IT integration needs across industries. It works seamlessly across on-premise and cloud environments to connect both traditional and big data environments. Organizations canquickly integrate all forms of data across systems and applications at scale, with significantly improved performance and lower total cost of ownership than traditional data integration approaches. Star360 interoperates and natively integrates with cloud data platforms such as Amazon AWS and Microsoft Azure, while including extensive support for cloud data warehouses such as Amazon Redshift, Microsoft Azure Data Warehouse.

Our flexible architecture enables us to rapidly adopt new technologies as they emerge and support evolving cloud environments so that our customers can maximize the value of their data investments. Our technology allows our customers to manage both batch and real-time data processing and incorporate machine learning to leverage data for the automation of operational workflows. Our flexible cloud architecture allows organizations to operate in a cloud-based environment, in their on-premise datacenter, in private clouds, or in any hybrid combination.

We are in the early stages of four disruptive trends that are reshaping the IT industry:

The amount & availability of increasing data; adoption to Cloud & Big data technologies; and change in buying behavior are creating an increasing number of new opportunities for organizations to be data driven. It is now, more than ever, critical for organizations to have an IT strategy that enables them to leverage data to support their business initiatives. To do this, IT teams must be able to work with new data platforms and fluidly address high volume, IoT, Artificial Intelligence , Machine Learning initiatives with self-service and real-time scenarios.

PRODUCTS

Starcom Information Technology Limited is a leader for Automated data management and Customer 360 platform which includes Customer 360?, Data Quality, Business Intelligence &Data

AnalyticsProducts and Services.

STAR 160 An Interactive UI driven Self Service Customer 360 automated platform, serves as single point of contact for front-end Digital systems, CRM Systems, Business Intelligence, Call Center, Bots and Mobile Apps to deliver the comprehensive 360? view of the Customer. Star360 platform has an embedded StarDQto perform Data Quality activities such as Cleansing, Enrichment, Deduplication etc.

Star 360 features:

• Sourcing data from multiple databases pertaining to various LOBs running in silos.

• Manages the Cleansing, Standardization and Enrichment of data before homogenizing the same with a common reference database, based on fixed and custom rules

• De-Duplicates the Customer records sourced from multiple silos & produces a refined database repository which is single source of truth for all Customer related queries.

• Collates the connected data pertaining to Customers into the same database repository to make it as single point of reference about the associated relationships for the selected Customer.

• Offers Source to Target Visual Data Reconciliation.

• Offers UI based monitoring control panel to manage the internal processes with suitable reports and dashboards coupled with alerts and notifications.

sttVr )Q A powerful, real time automated enterprise solution for Data Cleansing, De- duping, Clustering and enriching the data. StarDQ has processed more than 1 Billion Customer Records, StarDQ is a completely Automated Data Quality engine which embeds into the customers existing business workflow and eliminates the need for any manual data quality teams and services.

With our Architecture customers can run the complete cleansing, enrichment and de- dupe process in 2-3 hours on daily incremental data sets with 10 Million historical records. Traditionally this activity would take days if not months for multiple data sets across various sources. The engine works on Scheduling basis and is timed to run every day after the working hours so that incremental data coming in daily gets de- duped with Historical Data and clustered during the night. StarDQ can implement specific Business Rules for each Dataset. The scalable architecture is the key feature of the product which easily handles millions of records and maintains the batch timings. The online verification module allows business users to access the Golden Records to get the credentials (unique/Duplicate) of the new record being created in the business system on a real-time basis.

Data Steward Module:

StarDQ engine provides enriched data and more accurate de-duplication results most of the time.If the input records dont meet the minimum criteria as per business rules, then those records get flagged as erroneous and will be not considered for de-duplication process. These erroneous records require manual intervention/ corrections [by means of Data Stewardship] to form better/meaningful clusters and standardization.

Data Steward Tool has two activities:

• Manual Data correction /enrichment for failure cases/erroneous records

• Manually correct any specific instances of wrong de-duplication/ clustering

^ Self Service business intelligence software empowers business users by turning data into actionable insights and enable organizations to improve their decision making. StarBI, an intelligent self-service Business Intelligence tool, allows you to discover trends, track KPIs and visualize data. Connect to multiple data sources, create and schedule reports & dashboards, set alerts and run predictive analytics with our drag-and-drop GUI in less than 10 clicks!

NISA In Computer Aided Engineering (CAE)/Finite Element Analysis (FEA) industry, we have NISA. Which is is one of the most comprehensive Finite Element Analysis suites available globally. NISA features a completely integrated pre/post- processing environment within a state-of-the-art GUI, seamless interoperability with leading commercial CAD software Computer Aided Engineering (CAE)/Finite Element Analysis (FEA) industry is a huge market globally, growing consistently across application areas and requirements, which is projected to grow consistently into the predictable future as well.

NISA Software Suite for FEA, has the potential to tap into this market by offering fast and accurate solutions in the areas of its core competency. NISA is one of the few, commercially available, mature and robust Finite Element Analysis (FEA) software that enjoys a long-standing presence in the arena of engineering analysis and design. NISA addresses the needs of varied industries like Aerospace, Automotive, Power and Energy, Oil and Gas, Marine Engineering, Sports goods, Electronic Packaging, Biomedical and Civil-Structural Engineering to name a few.

With NISA we can spread our Customer base to all corners of the Globe, specially with our flagship modules like NISA Mechanical, NISA Civil & NISA Design Studio.

DEFENCE The Defence Research & Development Organization (DRDO), Indias premier defence research organization, has over 50 laboratories under its aegis. Defence and Aerospace remains a critical sector for India - and for the success of key Government schemes like Make in India. With its mighty Defence industrial base, staggering Defence budget, we have found our sweet spot for growing our revenues. Our company has been a registered MSME vendor, serving 20 of the DRDOs with more than 100 successful projects in the past many years.

We have contributed successfully in key projects such as the Long Range Surface to Air Missile (LRSAM), the Astra Beyond Visual Range Missile (BVRM), Airborne Early Warning and Control System (AEW&CS) and the Rustom-II Unmanned Ariel Vehicle & Tejas, Advanced Light Combat. The Indian government has set the defence production target at US$ 25 billion by 2025 (including US$ 5 billion from exports by 2025). Accordingly, we have a big pipeline of upcoming projects limited only by our capacity to execute.

Opportunities & threats- Our Strengths:

We believe our Solutions address the markets for Automation, Master Data Management, which IDC estimates combined were $17 billion in 2016 and are forecasted to reach $23 billion in 2020. IDC forecasts the data integration and integrity market to grow from $6.0 billion in 2017 to $9.8 billion in 2022. We believe that these markets will further expand as a portion of spend on hand-coded integrations will transition to software-based integration solutions given the time consuming and expensive process of manual integrations coupled with the scarcity of personnel with the requisite technical skills. The transformative change in IT infrastructure is driving a dramatic shift to cloud platforms to address infrastructure and data warehousing needs. This is

driving rapid growth in cloud integration. According to IDC, the market for Cloud Data Integration and Integrity Software is forecast to reach $2.3 billion by 2022, representing a 30% CAGR from 2018. Our Star360 Platform is offered as both a SaaS or premise offering, and works seamlessly across a customers on-premise, cloud and hybrid environments to integrate data in real time from both traditional and big data environments. We enable organizations to unlock the value of their data to create real-time, predictive insights. Customers can use a single design environment to create intelligent data flows with machine learning algorithms that can process both batch and real-time streaming data to automate the delivery of insights.

Marketing

Our Marketing Team is responsible for increasing the awareness of Starcom Solutions, fostering the MDM community, generating demand, gathering market feedback and enabling our field sales team to effectively sell our solution. Free trial editions of our products are key drivers of awareness and initial usage. When deciding whether to purchase our Solutions, our customers primarily learn from white papers, webinars and third-party research before engaging with our sales team. It is a key mission of the marketing team to support and accelerate this learning process. The marketing team includes the following functions: SEO, Lead Generation, marketing communications, field marketing and product management .

Sales

We sell our software and services through both a direct sales force and indirect channel partners globally. We also offer our StarBI via a self-service e-commerce platform which typically does not require the involvement of sales personnel or partners. Our sales efforts are built on a land-and- expand sales model. To facilitate market adoption, we offer a free trial version of our products and these downloads become leads for our marketing and sales organization to develop and close. After an initial deployment, organizations often purchase more products, add licenses or expand usage to additional modules from Starcom Solutions. We sell our apps to organizations of all sizes and the majority of our sales are through our direct sales force. Our direct sales force includes an inside sales team which is closely aligned with a Field sales team. Post-sale, our customers are managed by a dedicated customer success team. Our customer success team is responsible for driving successful deployments, maintaining customer relationships, renewing existing contracts and identifying expansion opportunities within existing customers.

OUR STRATEGY

Our strategic objective is to build a sustainable organization that remains relevant to the agenda of our clients, while generating profitable growth for our investors. In order to do this, we will apply the priorities of renew and new to our own business and cascade it to everything we do.

Our Business strategy is based on a "land and expand" business model and is designed to capitalize on the ease of use, low up-front cost and collaborative capabilities of our software. To facilitate rapid adoption of our products, we provide fully-functional free trial versions of our products on our website and have created a Flexible and Simple Annual Subscription pricing model. After an initial trial or purchase, which is often made to target a specific business need at a grassroots level within an organization, the use of our products often spreads across departments, divisions, and geographies, via word-of-mouth, discovery of new use cases, and our sales efforts.

Our Growth Strategy - Key drivers:

• Maintain our technology leadership.

• Grow our customer base.

• Expand our ecosystem of partners.

• Continue to grow globally.

OUR COMPETITION

We experience competition in solution delivery and see a rapidly-changing marketplace with new competitors arising in new technologies who are focused on agility, flexibility and innovation.

We typically compete with other technology solution providers in response to requests for proposals. Clients often cite our industry expertise, comprehensive end-to-end solutions, ability to scale, superior quality and process execution, Global Delivery Model, experienced management team, talented professionals and track record as reasons for awarding us contracts.

1. Segment-wise Performance:

The segment-wise performance of the Company during the year is given below:

Particulars	Year ended 31st March 2024 (Amt in Lacs)
A. Segment Revenue
1. Test, Measurement & Embedded Solutions for Educational Sector	155.84
2. Data Quality Statistical & Analytics Software	23.98
Total Revenue	179.82
B. Segment Results
1. Test, Measurement & Embedded Solutions for Educational Sector	24.67
2. Data Quality Statistical & Analytics Software	14.38
Total	39.06
Less: Finance Charges	54.05
Unallocable Expenditure	391.12
Add: Exceptional Item
Total Profit Before Tax	(637.10)
Less: Tax Expenditure	131.49
Total Profit After Tax	(768.6)
C. Capital Employed
1.Test, Measurement & Embedded Solutions for Educational Sector	98.42
2. Data Quality Statistical & Analytics Software	2729.73
3.Unallocated	67.82
Total Capital Employed	2,895.99

2. Outlook:

In order to meet the changing market realities, our Company has been following the philosophy of providing the highest quality products and solutions at the lowest possible prices.

All endeavors are made to achieve possible cost reduction in every area of operations.

Our Companys philosophy is to provide high class quality products i.e. full value for money to consumers; this would greatly benefit in the long run.

Our Company believes in building and maintaining deep customer relationships and become a trusted business partner to global enterprises.

3. Risks and concerns:

The Company has been initiating various risk management programs to combat strategic, operational and financial as well as compliance-related risks across various levels of the organization. It includes risk assessment and mitigation at the company level, business / functional unit level, relationship level and project level. The risk management process is continuously improved and adapted to the changing global risk scenario. The agility of the risk management process is monitored and reviewed for appropriateness with the changing risk landscape. The process of continuous evaluation of risks includes taking stock of the risk landscape on an event driven as well as quarterly basis.

4. Internal Control systems and their adequacy:

The Company maintains adequate internal control system, which provides, among other things, reasonable assurance of recording the transactions of its operations in all material aspects and of providing protection against significant misuse or loss of Companys assets.

The Company has an adequate system of internal controls implemented for achieving efficiency in operations, optimum utilization of resources with analysis of data to strengthen it to meet the changing requirements. However, the Company is taking the necessary steps to improvise the documentation with respect to the specific policies and procedures and the IT Controls pertaining to internal financial controls over financial reporting.

5. Discussion on financial performance with respect to operational performance: Financial performance:

Particulars	2023-24 (Amount in Rs.)	2022-23 (Amount in Rs.)	Change (%)
Revenue from operations (1)	179.82	201.67	(10.83)
Other income (2)	0.17	0.33	(48.48)
Sub-total (1+2)	179.99	202.01	(10.90)
Total Expenditure	817.10	755.99	8.08
Profit/(Loss) before Tax	(637.11)	(553.98)	15.03
Profit/ (Loss) after Tax	(768.60)	(524.30)	46.59

There has been decrease of in the revenues of the Company as compared to the previous year by (10.83%). The total expenses got marginally increased by 8.08% from Rs.755.99 Lakhs in the previous year to Rs.817.10 Lakhs in the current year. However, the other income of the Company has reduced by (48.48%). During the current financial year the Company has recorded Loss after tax of Rs.(768.60) Lakhs as compared to the Loss after tax of Rs. (524.30) Lakhs in the previous year. The Company is expected to earn profits in the coming years.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Details of significant changes in key financial ratios are given as under:

Particulars	2023-24	2022-23	Variation (%)
i. Debtors Turnover	0.44	0.33	33.33
ii. Inventory Turnover	22.39	22.08	1.40
iii. Current Ratio	0.07	0.13	(46.15)
iv. Debt Equity Ratio	(1.13)	(1.82)	37.91
v. Operating Profit Margin	(198.26)	(228.94)	13.40
vi. Net Profit Margin	(427.42)	(259.54)	(64.68)
vii. Return on Net worth	(40.87)	(47.27)	(13.53)

Reason for change in 25% or more in key financial ratios as compared to the immediately previous financial year:

i. Debtors Turnover Ratio: During the year under review, the Debtors Turnover ratio increased mainly due to increase in collections and maintaining credit policies.

ii. Current Ratio: Decline in ratio is on account decrease in Trade Receivables and increase in short term borrowings

iii. Debt Equity Ratio: Sharp decrease on account of increase in borrowing & increase in Loss

iv. Net Profit Margin: The reduction in margin is due to decline in sales and provision for expected credit loss

6. Material developments in Human Resources/ Industrial Relations front:

In any services enterprise, employees form the core of an organization. We recognize the vitality of this stakeholder. A significant portion of our management focus is invested in engaging with our employees and improvement of services to the clients satisfaction.

During the year the Company has not reported any Management-Employee conflict. The Company is committed to create an appropriate climate, opportunities and systems to facilitate identification, development and utilization of employees full potential on a continuous basis.

Number of employees:

There were 27 (including KMP) permanent employees on the rolls of the Company as on 31st March 2024.

Cautionary Statement:

Certain statements made in the management discussion and analysis report relating to the Companys objectives, projections, outlook, expectations, estimates and others may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, projections and so on, whether express or implied. Several factors could make a significant difference to the Companys operations. These include economic conditions affecting demand and supply, government regulations and taxation, natural calamities and so on over which the Company does not have any direct control. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events.

Place: Bengaluru	For and on behalf of the Board of Directors
Date: 6th September 2024	Starcom Information Technology Limited
	Ziaulla Sheriff
	Chairman and Managing Director
	DIN:00002098