avance technologies ltd Management discussions

Overview

The importance of technology in our modern world means that the technology industry is a true force to be reckoned with. The sheer size of the industry makes it one of the dominant sectors in the global economy, and the rapid growth and rate of change within the industry make it a central player in developing business standards and regulations.

Technology is transforming businesses in every industry around the world in a profound and fundamental way. The digital transformation of every industry and every business, over the last several years, has laid the foundation to create optionality as we navigate the way forward. Our product portfolio offers such solutions for different areas of everyday life. We therefore see an opportunity here to expand our relevant market shares and to grow in these segments. We are developing new technologies, products, and business models that reduce energy usage and carbon emissions to unlock opportunities for the Company. Avance operates in markets in which the long-term trend is toward a balance between supply and demand.

Financial Performance Review:

(All amounts in Lakhs)

PARTICULARS	31st March, 2023	31st March, 2022
Total Income	3054.359	1153.192
Less: Total Expenses excluding Depreciation and tax	3004.086	1214.786
Profit before Depreciation & Tax	50.272	(61.594)
Less: Depreciation	0.00	0.00
Less: Exceptional Items	0.00	0.00
Profit/(Loss)before Tax	50.272	(61.594)
Less: Tax
i. Current Tax	9.672	0.00
ii. Deferred Tax	0.00	0.00
Profit/(Loss) after tax	40.600	(61.594)

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013. Further, the financial performance during the year under reference has been improved in terms of sales. Even though there has been a increase in the turnover, during financial year ended March 31, 2023, the Company has booked profit before Depreciation & Tax of Rs. 50.272 Lacs.

Key Financial Ratios

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018, the Company is required to provide details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor. The key financial ratios are given below:

Ratios	Financial year
	31st March 2023	31st March 2022
Debtors Turnover (in times)	17.18	9.59
Inventory Turnover (in times)	5.75	1.36
Interest Coverage Ratio (in times)	-	-
Current Ratio (in times)	0.75	0.82
Debt Equity Ratio (in times)	0.00	0.00
Operating Profit Margin (in %)	0.00	(0.05)
Net Profit Margin (in %)	0.01	(0.05)
Return on Net Worth (in %)	0.00	0.00

Opportunities & Strenghts

Your company is predominantly engaged in trading of IT products and peripherals. General economic conditions worldwide and, in particular, in the geographic regions in which Avance operates are a significant factor affecting the company?s earnings, since their effect on the industries in which Avance?s direct and indirect customers operate affects demand for our company?s products. There is ample growth opportunity for the company in the independent business market. Thus, your company is very confident of outperforming its peers on all the counts. Our longstanding relationship with our major customers has been one of the most significant factors contributing to our growth. Our commitments to quality and customer service practices have been strong contributing factors to our healthy customer relations.

Risk and Concerns

Avance faces risks and uncertainties typical to that faced by other peers in the industry, which could have a material impact on earnings and the ability to operate in the future. These are determined via robust assessment considering our risk context by the Board of Directors with inputs from the executive management. The Board is satisfied that these risks are being managed appropriately and consistently. The Company has in place a robust risk management framework that identifies and evaluates business risks and opportunities.

Human Resources/Industrial Relations

Your Company continued to focus on employee core connect, engagement, learning and development to build a workplace that is safe engaging and productive. All employees were presented with various learning opportunities to enhance career growth. The Company recognizes human resource as its most valuable asset and it has built an open, transparent and meritocratic culture to nurture this asset. The Company is of firm belief that the Human Resources are the driving force that propels a Company towards progress and success.

Your Company believes the fact that your organization is only as good as its employees. Your Company considers its human resources as its biggest asset and believes in People at the heart of its Human resource strategy which set the Company apart from Company?s peers. Your Company believes that employees continuously strive to make the organization as inclusive as possible. Employee relations continue to be cordial.

Outlook

We drive significant focus on enhanced productivity, innovative offerings to our customers to ensure continued customer satisfaction and we will continue to strengthen and upgrade our technology platforms, people and process capabilities. Fortifying our research content and serving our customers in the best of their interest will remain an integral part of our business strategy.

By drawing upon our accumulated knowledge and cutting-edge technology, and by nurturing new ideas for value creation, we will continue to be a trusted partner to our customers. We remain committed to enabling them meet their expectations, while ensuring our ethical practices and transparency. While there continue to be some uncertainties, the overall growth drivers are well in place for the Company to continue on a high growth trajectory with improving profitability.

Internal Control System and Adequacy

The company?s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These systems are designed to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized recorded and reported. The Company has an internal audit function, which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. The internal audit function team comprises of well-qualified, experienced professionals who conduct regular audits across the Company?s operations. The internal audit reports are placed before the Audit committee for consideration. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors, internal auditors and the independent Audit Committee of the Board of Directors

Cautionary Statement

Statements in the Management Discussion and Analysis describing the company?s objectives, projections, estimates and expectations may be ‘forward looking statements? within the meaning applicable under the securities laws and regulations. As ‘forward looking statements? are based on certain assumptions and expectations of future events over which the company exercises no control, the company cannot guarantee their accuracy nor can it warrant that the same will be realized by the company. Actual results could differ materially from those expressed or implied.

Significant factors that could make a difference to the company?s operations include domestic and international economic conditions affecting demand, supply and price conditions in the electricity industry, changes in government regulations, tax regimes and other statutes.