advance multitech ltd share price Management discussions

Annexure C to Board Report

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2023.

1. Industry Structure and developments.

Textile Industry:

During the period under the review, the Company had been operating in Manufacturing of Rubber Belts and Conveyor Belts.

The textiles manufacturing business is a pioneer activity in the Indian manufacturing sector and it has a primordial importance in the economic life of the country. Growth in sector depends on consumer spending and there are multiple factors affecting consumer spending like actual and perceived economic condition, disposable income, employment and consumer credit availability. The government has been pushing for indigenous production through ‘Make in India campaign to bring down imports.

2. Opportunities and Threats

Opportunities

• Low cost skilled labour

• Presence across the value chain

• Growing domestic market

• Recent government efforts to promote the industry.

Threats

• Effect of historical government policies

• Tech obsolescence. Quality is not consistent

• Delay in delivering the goods at the right time.

3. Segment —wise or product-wise performance:

The Company operates in a single segment of activity viz. textile and hence the segment reporting is not applicable to the Company.

4. Outlook

The outlook for the coming year 2022-23 looks promising for the Chemicals business at this point in time. Demand is showing signs of improvement and with a price advantage due to our best negotiation abilities we are likely to perform well. However, global recession and market condition may have an impact on our business to suffer which in turn can have bearing on profitability.

5. Risks and Concerns

Your Company had put a risk management framework in place post a comprehensive review of its risk management process. Your Company takes a fresh look at the risk management framework through our Audit Committee at least once in a year. The review involved understanding the existing risk management initiatives and assessment of risks in the businesses as the relative control measures and arriving at the desired counter measures keeping in mind the risk appetite of the organization. The audit Committee has periodically reviewed the risks in the business and recommended appropriate risk mitigating actions.

The business of the Company is likely to be affected by various internal and external risks enumerated as under:

• Our operations are significantly located in the Ahmedabad Region and failure to expand our operations may restrict our growth and adversely affect our business

• Our success depends largely upon the services of our Promoter, Directors and other key managerial personnel and our ability to attract and retain them.

• Company has credit risk on Trade Receivables and advanced unsecured loans to various parties. Company manages credit risk through continues monitoring of credit limits.

• The prices we are able to obtain for the products that we trade depend largely on prevailing market prices.

• We face intense competition in our businesses, which may limit our growth and prospects.

• Global economic, political and social conditions may harm our ability to do business, increase our costs and negatively affect our stock price.

• Global recession and market conditions could cause our business to suffer.

• Tax rates applicable to Our Company may increase and may have an adverse impact on our business.

• Political instability or changes in the Government could adversely affect economic conditions in India generally and our business in particular.

As a responsible employer, to ensure occupational safety and employment standards, your Company maintains strict safety and quality control programs to monitor and control these operational risks.

6. Internal Control System and their adequacy

The Company maintains adequate internal control systems, which provides, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of companys assets. Internal Controls are adequately supported by internal audit and periodical review of by the management. The audit committee meets periodically to review with the management and statutory auditors, financial statements. The Audit Committee also meets with the internal auditors to review adequacy /scope of internal audit function, significant findings and follow up thereon and finding of abnormal nature.

7. Discussion on financial performance with respect to operational performance.

Figure for the current year was quite satisfactory. The consolidated revenue for the year is decreased by 15.19% to Rs. 8,69,32,237 as compared to Rs. 10,01,35,136 during the last year. The net profit after tax Increased by 98.76%. The net profit after tax Increased from Rs. 9.15 lacs to Rs. 740.54 lacs.

8. Material developments in human resources/ Industrial Relations front, including number of people employed.

Relations with the employees of the Company at various levels remained harmonial during the year under the review. The Company is making its best efforts to retain and attract talented employees. During the year under the review, the Company has complied with all legislative provisions of labour laws. The number of employees of the company as of 31^st March, 2023 was 31.

9. Other Disclosures:

a. Basis of related party transaction:

During the year under the review, there were related party transactions.

b. Disclosure of Accounting treatments:

The Company has followed all relevant Indian Accounting Standards while preparing the financial Statements.

c. Board Disclosures - Risk Management:

The Company has developed comprehensive risk management policy and same is reviewed by the Audit Committee, which in turn, informs the Board about the risk assessment and minimization procedures. Major risks identified for the Company by the management are Currency fluctuation, Compliance, Regulatory changes, Manufacturing & Supply, Litigation, Information Technology and new capital investments return. The management is however, of the view that none of the above risks may threaten the existence of the Company as robust Risk mitigation mechanism is put in place to ensure that there is nil or minimum impact on the Company in case any of these risks materialize. Since the risk control frame work is new to Indian

Corporate Culture, it is being strengthened on continuous basis using the outside professional help.

d. Proceeds from public issues, right issues, preferential issues etc.:

Not applicable, as no capital has been raised by the Company in last 5 Years.

Besides above, there was no instance of non-compliance of any matter related to the capital markets during the last three years.