advance metering technology ltd Management discussions

The world economics, in recent years, has faced numerous challenges ranging from the pandemic, the Russia-Ukraine conflict and weakening growth due to monetary tightening across nations. With the reopening of economics as COVID-19 subsided, the macroeconomic environment was greatly influenced by the ongoing geopolitical crisis. Headline inflation figures across global economics continue to remain elevated and above the threshold levels despite recent moderation. As a result of the synchronized monetary tightening measures adopted by the counties, global inflation is expected to be reduced, although more slowly than initially anticipated from 8% in 2022 to 7% in 2023 and 4.9% in 2024. The IMF predicts annual inflation of 4.6% and 8.1% for advanced and emerging economies respectively in 2023. Indias growth story has seen a substantial rebound from the pandemic era and continues to exhibit immense confidence.

INDUSTRY STRUCTURE AND DEVELOPMENT

Renewable Power Generation

Over the years, Renewable Energy (RE) sector in India has emerged as a significant generation capacity. While thermal power capacity addition has seen a slowdown, the Wind and Solar Energy sector has picked momentum. The Honble Prime Minister of India, at CoP 26 announced that India is committed to achieving 500-GW of installed electricity capacity from non-fossil fuel sources by the year 2030 and achieving net zero emission by 2070. Electricity is expected to continue to remain a key input in Indias GDP growth and Renewable Energy would have a dominant role to play in overall energy portfolio of the country. The substantially higher targets for RE capacity will ensure greater energy security, improved energy access and enhanced employment opportunities. With the accomplishment of ambitious targets set by the Government of India, majority of the energy requirement is likely to be met through clean sources of energy.

Energy Meters

The Prime Minister has approved the Reforms-based and Results-linked, Revamped Distribution Sector (RDSS) scheme to strengthen supply infrastructure in the power sector. The central aim of the smart meter national programme scheme upgrade Indias 250 million conventional meters with smart replacements and to address the massive Aggregate Technical & Commercial (AT&C) losses suffered by power distribution companies (DISCOMs) as a result of power theft, meter tampering, inaccurate billing and the length of time between a meter reading and a payment. Its estimated that DISCOMs lose more than INR 100000 Crs a year because of these issues.

Government is currently in the process of Implementation of Smart Metering Program to significantly improve the billing and collection efficiencies of Distribution Companies (DISCOMs). Smart Meters will be the foundation for smart grid programme which will be crucial to meet challenges of the newly evolving energy mix and the target of providing uninterrupted 24?7 power supply to every Indian.

Power Distribution Sector worldwide is rapidly adopting the Smart Metering Technology. This technology is futuristic and helps Distribution Companies in effective distribution operations as well as help utilities in managing dynamic and disruptive changes happening in the grids due to solar energy infusion, In India, itself, there are around 360 million consumers and smart metering adoption is in initial stage.

OPPORTUNITIES AND THREATS

India is expected to be an emerging market for smart phones. Under the Smart Meter National Programme, the Government of India has aimed to replace 250 million smart meters. This is a major business opportunity. However, interoperability issues with traditional metering, billing and collection systems need to be sorted out.

Total smart meters shipments from 2019 to 2025 could decline by as much as 28% due to Covid-19 ( worst-case scenario) and decline 3.2% over the next five years in the best case scenario.

INTERNAL CONTROL SYSTEM AND AUDIT

The company has an Internal control System, commensurate with the size, and scale of its operations. The Internal

Auditor monitors and evaluates the efficacy and adequacy of the Internal Control System in the company, its compliance with the operating systems, accounting procedures and policies of the Company.

FINANCIAL PERFORMANCE

The financial performance has been discussed in the Directors Report.

HUMAN RESOURCES

Your company recognizes the critical importance of its Human Capital.

Your Company undertakes significant initiatives to increase effectiveness and efficiency leadership training, performance management and talent development. The Human Resources Department works continuously for maintaining a healthy working relationship amongst the employees thus drawing the best out of the employees.

S. No Ratio	Numerator	Denominator	As at 31st March 2023	As at 31st March 2022	Variance	Comments
1 Current Ratio	Current Assets	Current Liability	4.83	1.24	288.30%	Major Reason for Increase in Current Ratio
						- During the current financial year Company has repaid directors loan and R.S Infosystems loan with interest (Current in nature).
						- During the current financial year Company has repaid Term Loan from Kotak (Current in nature).
						- Current portion of the lease liability increases due to related underlying assets (ROU Assets) has recognized in virtue of lease agreement.
						- During the current financial year Company has made payment of major creditors (Current in nature).
						- During the current financial year Company has received fund against property sale and made investment in Muntual funds and Fixed deposits (Current in nature). Major liabilities mentioned above decreased during the year impacting a increase in ratio
2 Debt-Equity Ratio	Total Debt	Share Holders Equity	0.03	0.15	-78.77%	Major Reason for decrease in Debt-Equity Ratio
						- During the current financial year Company has repaid directors loan and R.S Infosy stems loan with interest (Current in nature).
						- During the current financial year Company has repaid Term Loan from Kotak
3 Debt Service Coverage Ratio	Earnings available for debt Service	Debt Service	-38.23%	4.87%	-885.67%	Major Reason for decrease in Debt Service Coverage Ratio
						- During the current financial year Company has repaid directors loan and R.S Info systems loan with interest (Current in nature).
						- During the current financial year Company has repaid Term Loan from Kotak
4 Return on Equity Ratio	Net Profit after Tax and Pref. Dividend	Average Shareholder Equity	-11.25%	-2.76%	-307.48%	Major Reason for decrease in return on capital employed
						- During the financial year company has done the provisioning of investment in subsidiary, stock and trade receivable.
						- During the financial year 2022-23, The Company has not made provisioning of creditors as compared to last year. Hence losses has increased and Return on Equity Ratio is decreased.
5 Inventory turnover ratio	COGS or Sales	Average Inventory	2.02	1.82	10.84%	Not Required as variances is below 25%
6 Trade Receivables turnover ratio	Net Credit Sales	Average Trade Receivables	2.44	1.62	50.61%	Major Reason for Increase Trade Receivables turnover Ratio
						- During the financial year company has done the provisioning of trade receivable.
7 Trade payables turnover ratio	Net Credit Purchase	Average Trade Payables	0.88	0.31	186.28%	Major Reason for Increase Trade Payables turnover Ratio
						- During the current financial year Company has increased the sale of products hence purchases increases. Also during the current financial year Company has made payment of major creditors.
8 Net capital turnover ratio	Net Sales	Working Capital	0.44	3.02	85.55%	Major Reason for Increase Net Capital Turnover Ratio
						- During the current financial year Company has repaid directors loan and R.S Info systems loan with interest (Current in nature).
						- During the current financial year Company has repaid Term Loan from Kotak (Current in nature).
						- Current portion of the lease liability increases due to related underlying assets (ROU Assets) has recognized in virtue of lease agreement.
						- During the current financial year Company has made payment of major creditors (Current in nature).
						- During the current financial year Company has received fund against property sale and made investment in Mutual funds and Fixed deposits (Current in nature). Major liabilities mentioned above decreased during the year impacting a increase in ratio
9 Net profit ratio	Net Profit	Net Sales	-65.50%	-15.09%	62.90%	Major Reason for Increase Net Profit Ratio
						- During the financial year company has done the provisioning of investment in subsidiary, stock and trade receivable.
						- During the financial year 2022-23, The Company has not made provisioning of creditors as compared to last year. Hence losses has increased and net profit is decreased.
10 Return on Capital employed	EBIT	Capital Employed	-9.30%	-0.92%	-915.03%	Major Reason for Decrease in Return on Capital Employed
						- During the financial year company has done the provisioning of investment in subsidiary, stock and trade receivable.
						- During the financial year 2022-23, The Company has not made provisioning of creditors as compared to last year. Hence losses has increased and Return on Equity Ratio is decreased. Major liabilities mentioned above decreased during the year impacting a decrease in capital employed.

CAUTIONARY STATEMENT

The Management Discussion and Analysis describe companys projections, expectation; estimates are the forward looking statements within the meaning of securities laws and regulations and are subject to certain risks and uncertainties like regulatory changes, local, political and economic developments and other factors.